To: Bedfordshire Unit Owners

From: Bedfordshire Board of Trustees

This letter is to:

1. Update you on the status of our pending projects
2. Note the Bank financing arrangements we have made
3. Inform you of the assessment payment alternatives that will be available to unit owners
4. Ask that you indicate, not later than March 13, how you plan to handle your assessment.

We have engaged a registered architectural firm with deep experience in the work that we will be doing. Their services and actions are fully insured for our protection. Their responsibilities will be as follows:

1. Review our final bid specifications and modify them as necessary

2. Help us evaluate the final bids and make our vendor selection(s).
3. Perform on-site supervisory and payment approval roles for the duration of the projects to insure that we get and pay for precisely what we have contracted for.

We remain on target to begin work in early April, weather permitting.

We have chosen WarrenBank (a specialist in condominium lending) to finance this project. During the period of the work, we will satisfy our financial obligations in the following order:

1. Bills will be paid first from the front-end, lump sum assessments we receive from those unit owners choosing that payment option. Note: We are committed to treating everyone as equitably as possible regardless of how they choose to handle this obligation. To do that, we need to figure out a manageable way to have those who choose the Bank financing option to pay some level of "implied interest"- probably to the Reserve Fund- during the period of time when the association’s obligations are being satisfied by the front-ended lump sum funds. The reasoning is that whose who elect the lump sum option may be paying interest on a Home Equity Line and, for sure, they are losing either interest and/or potential gains on the amount of the lump sum were it residing in a savings or investment vehicle instead of having been spent. With a level playing field our objective, we will make a decision on this matter at the next Trustee’s meeting.
2. We will then activate what amounts to an interest only line of credit (also referred herein as a "construction loan") that will be drawn upon as needed until our projects are complete. It will carry a floating interest rate of Prime plus .5 %.
3. Upon completion of the work, the outstanding amount of the "construction" loan will be converted to a 3-year term (amortizing) loan at a fixed rate of 7% or Prime plus .5%, whichever is higher.

In our entire WarrenBank relationship, the borrower will be Bedfordshire Condominium Trust and the loan will be secured by an assignment of all common area charges. The loan will have no prepayment penalty. Finally, WarrenBank requires that we deposit (in an interest bearing account) at least $100,000 of our current Reserve Fund for the life of the loans.

Final assessments per unit will reflect each unit’s beneficial interest.

While we continue to estimate an assessment in the neighborhood of $20,000 per unit, it is important to understand that it is impossible to project precise final costs. For example, we may find that our trim replacement assumptions are overly conservative and that, as a result, we will spend less than we have

budgeted for. On the other hand, once some current roofs are removed, we may uncover more underlying damage than we have assumed thus necessitating a larger expenditure than planned for that ingredient. Similarly, our budget for oversight (based upon an hourly charge) may turn out to be high or low depending upon how things progress. To manage this as best we can, we will include (as noted at the October 1, 2001 meeting) a contingency in our total cost estimate. Total cost projections (and hence assessments) will be based upon the most complete data we can assemble. Assessments will be communicated as soon as we have them finalized, which should be in early to mid April.

We have investigated a variety of payment options and combinations. Candidly, the accounting and record keeping becomes overly cumbersome as options increase. Thus, we voted to provide two options:

For those choosing to pay in a single, up-front lump sum payment: the total assessment will be the sum of the estimated construction/repair costs (based upon signed contract prices and the contingency) plus non-financing related expenses (legal and other professional fees, including the architectural oversight noted previously). Those choosing this option will be asked to pay it rather quickly. We do not know the exact date but it is likely to be by April month-end.

For unit owners choosing to finance their assessment: the total cost will be the unit-specific assessment as noted above plus each unit’s beneficial share of all financing related costs. Unit owners choosing this option will pay their assessment in monthly installments directly to Alpine Management. Alpine’s bills will be amended to note separately the monthly condominium fee, the assessment installment payment and the total due. As with late condominium fee payments, assessment payments that are late will carry an interest penalty.

Those who utilize our WarrenBank financing arrangements might see their monthly payment change if a unit is sold during the construction period. If a sale occurs within that time frame, the unit’s assessment must be paid in full in order to get a 6D certificate issued and hence get the transaction consummated. If that occurs, the assessment payoff received will be applied to reduce the amount of the construction loan. Once the term loan is in effect, assessments will not change. The amount of the unit-specific assessment should not be confused with the "total cost" to those who elect the bank financing option.

So that we can begin to set up the necessary mechanics and tracking process, we need to know, by March 13, how each unit owner intends to pay their assessment.

If, for some reason, final costs exceed the total assessment, we will first turn to then current Reserve Fund to meet any additional obligations. That is another reason that we voted to leave it intact. If our final costs turn out to be less than anticipated, we will not refund any monies. Rather, they will be retained in the Reserve Fund for future use.

We recognize that these financing ingredients can be confusing, so please let one of us know if you have questions. Again, a salute to Dick Bonz and Lou DiNapoli who have done an incredible amount of work on the construction aspects of this project and to Fred Aufiero for his efforts in getting the oversight and financing in place.

Please either email your intention or return the following form to Alpine Management with your preference checked not later than March 13, 2002. Thank you for your input, cooperation and patience as this project continues to unfold.