Introduction: RE: H.O.W. BUILDER REPRESENTATION GROUP Dear Builder-Member of Home Owners Warranty Insurance Company: The purpose of this letter is to introduce you to and summarize the status of the Home Owners Warranty Insurance Company receivership and liquidation proceedings and the representational offering related as requested HOWIC and its parent company, Home Owner’s Warranty Corporation, were formed several decades ago to provide warranty insurance for builders to home buyer customers. In 1994, the Insurance Commissioner for the Commonwealth of Virginia determined that HOWIC was insolvent, and therefore put HOWIC and related companies into receivership. HOWIC stopped writing insurance at that point. Since then, HOWIC was run by a Special Deputy Receiver retained by the Virginia Insurance Commissioner. The Special Deputy Receiver, who is paid a significant annual fee, has spent the past ten years collecting monies owed to HOWIC and resolving claims against HOWIC, especially home owner warranty claims. Now, most of those claims have been paid and the remaining assets of HOWIC, if any, need to be distributed to final creditors and the owners of HOWIC. The Receiver has put forth a plan of liquidation that proposes to pay to the qualifying member-builders of HOWIC a portion of the remaining assets of HOWIC, based on several formulas. The application for the plan indicates that there may be substantial surplus after payment to creditors. These formulas include, inter alia, a portion reserved for ownership participation, and another portion related to each individual Builder’s account profitability using mathematical formulas relating to the loss experience. The Receiver has opined that there are 6026 Builder-Members who are eligible for distribution from the liquidation. There are a number of eligibility requirements to participate in this liquidation. The most salient feature is that a builder had to have insurance with HOWIC as of the date of the Receivership in 1994. It would appear that the Receiver has great latitude in determining not only eligibility for a distribution, and approving claims but even more importantly the timing of any distribution. For example, the Receiver has up to five years to institute his plan of liquidation, and may seek additional time. Time is money and five years is a long window. We believe that acting together as a united builder voice, we could more effectively press the Insurance Commissioner for an expedited liquidation and builder payouts. As representatives of Builder-Members having claims to the liquidation fund and in addition to attempting to press the Deputy Receiver to expedite the distribution of that fund, we shall: Assist Builder claimants in the claims process, including in matters related eligibility, identification of claimants, confirming or filing claims through initial determination, collecting and remitting distribution for Builder clients. In response to the inquiry of J. Roger Glunt, we have agreed to represent individual Builder-Members for a Contingent Fee of twenty-five percent (25%) of each client’s proceeds. Our fee structure and the terms of this engagement are set forth in greater detail in our Representation Contingent Fee Agreement. We have enlisted local counsel in Richmond, Virginia who is conversant with the workings of the administrative bodies in the Virginia government, including the Virginia Insurance Commissioner’s office. We have also included on our team a former executive of H.O.W. In other words, we have assembled an experienced team of attorneys and industry experts for this undertaking. Thank you for your inquiry. Should you have any questions, comments or concerns, please feel free to contact me. Jerald R. Cureton, Esq. jcureton@curetonclark.com Cureton Clark, P.C. 3000 Midlantic Drive, Suite 200, Mount Laurel, NJ 08054 856-824-1001 856-824-1008 (Fax)