July 29, 1999

Glenwood of Woodland HOA
c/o Mr. Bret A. Donaldson
Estates Association Services, Inc.
7902 Gerber Road, Suite 316
Sacramento, CA 95828-4300

Re: Glenwood of Woodland v. Road 98 Development

Dear Members:

This letter will update you on the status of the litigation with the developer, Road 98 Development Group, about the construction problems at your homes. I am pleased to announce that a settlement has been reached with Road 98 Development Group. It has agreed to pay the Association $975,000 in settlement of the present litigation.

At the last settlement conference, the Board of Directors reviewed the facts of the case. The Association had recently received an unfavorable ruling on a Motion for Summary Judgement and there were two more Motions for Summary Judgement pending on similar issues. Based on the advice of counsel and in order to avoid the expense of preparation for trial and the possibility of an unfavorable outcome, the Board agreed to accept Road 98's settlement offer.

Additional terms of the settlement are that Road 98 is to provide the settlement agreement and release to the Association by July 14, 1999 and settlement funds are to be deposited with the Association's counsel in trust for the Association by July 29, 1999. Additionally, the Association is not to disclose the terms of the settlement to any defendants until the settlement documents have been signed.

We will work to achieve a prompt resolution of these matters.

Very truly yours,


Jane K. Penhaligen


cc: Ann Rankin, Esq.