Letter to the Editor

22 October 2009

Flag Luxury Properties (Anguilla), LLC
C/o Flag Luxury Properties
650 Madison Avenue
15th Floor
New York, New York 10022

Attention: Mr. Robert F.X. Sillerman,
Chairman & CEO

Dear Mr Sillerman

Re: Default Notice Pursuant to
Section 7 of the Lease
Addendum.

I am writing this letter on behalf of the Government of Anguilla to Flags Luxury Properties (Anguilla), LLC, for your attention. I am informed that the persons to whom it should normally be addressed are no longer with the company. I regret that I have to address this letter for your attention in light of your medical circumstances. I hope this letter finds you in improved health.

We in the Government continue to express the concern of the Government of Anguilla that Flags Luxury Properties (Anguilla), LLC (the company) as Lessee/Assignee under the Lease Addendum to RL-8 Form Lease (Lease) and/or under the Deed of Variation (Deed) relating to the Leasehold interest at West End, Anguilla, has failed, or is failing or refusing, to maintain or upkeep the Golf Course (by not watering the same being part of the improvements under said Lease and/or Deed) in reasonably good repair and condition pursuant to section 7 (Repairs and Maintenance) of the said Lease and/or Deed.

In the circumstances, pursuant to Section 15 (Defaults and Remedies), the Government hereby serves Default Notice on Flags Luxury Properties (Anguilla) LLC, as Lessee/Assignee aforesaid, that it requires the Lessee/Assignee to comply with Section 7 of the said Lease and/or Deed failing which the Government may take any remedy available to it under the said Lease and/or Deed.

The Government requires the Lessee/Assignee to comply with this Default Notice within a reasonable time namely, seven (7) days of the service of this Default Notice upon you failing which the Government may take any remedy available to it under the said Lease and/or Deed without further notice to the Lessee/Assignee.

We await the company’s compliance with this Default Notice.


Yours faithfully


………………………….
Dr. Wilhelm C. Bourne
Attorney General

Copied to:
Mr William Manning
Hon Osbourne Fleming, Chief Minister
Hon Victor F. Banks, Minister of Finance
Dr Aidan Harrigan, Permanent Secretary, Ministry of EDICT