ADC Financing Robert Canter Vice President The Columbia Bank October 17, 2007

Loan Types Residential acquisition, development and construction loans. Construction loans include provisions for speculative and/or model units. Acquisition and development loans are for developers, preferably with lots pre-sold to creditworthy third-party homebuilders, or for homebuilders that will build-out projects within 24 months.

Product Types Single family, townhouse and condominium house types from a single unit to more than 200 unit projects. The housing types must be competitively priced, and must be compatible in style and features with the surrounding community and competing projects.

Advance Rates Construction loans may be advanced up to 80% LTV for pre-sold units, and up to 75% LTV for speculative/model units. Acquisition and development loans may be advanced up to 75% LTV. LTV will be established at sales price or appraised value, whichever is lower. Interest reserves and loan fees may also be included.

Appraisals Form appraisal reports may be used to determine the value of specific house types. Narrative appraisal reports will be required when absorption exceeds one year. All appraisal reports must be prepared by an appraiser on the bank’s approved appraiser list.

Loan Term Individual speculation construction loans may have a term up to 12 months. Project loans may have a term up to 36 months, including extension options.

Advances Construction loan funds may be drawn weekly, if construction progress is rapid. Acquisition and development loans may be drawn twice monthly. In some instances, the loan officer will make site inspections and approve funding requests for construction loans. Development project draws will normally be inspected by a qualified third- party inspector. Appropriate documentation may be required to support funding requests.

Release Amounts Single family houses are released at 100% funds advanced plus interest reserve allocated per unit. Townhouses/condo units are released at 110% to 115% of loan amount per lot. Lots are released at 115% to 130% of loan amount per lot. Upon full repayment of acquisition and development loans, releases will continue to be collected to cash secure any letter of credit exposure

Pricing Pricing will normally be based upon the bank’s prime rate of interest plus.50% to 1.50%, plus loan fees of 50 to 100 basis points per annum. Repayment is interest only monthly, with principal upon the earlier of maturity or delivery of a finished lot/completed house. Loans will be competitively priced given the economics of the specific project, financial strength of the sponsors and market conditions.

Personal Guarantees Guarantees of completion and repayment (with confessed judgment) are normally required on each loan.

ADC Financing Necessary Items for Submission of a Loan Package

General Loan Request (proposed amount, borrowing entity, term requested, etc.) Brief Project Overview Competitive Market Analysis Cash flow Analysis Biographies of principals and/or key employees Articles of Incorporation/Bylaws/Operating Agreement

Property Information Ownership History Legal Description Status of Entitlements Land Purchase Agreement Plat Soils Report Environmental Assessment

Product Overview Site Development Plans and/or Construction Plans and Specifications Detailed Cost Breakdown Marketing Plan and Pricing

Financial Reports “Enterprise” financial statement and tax returns for past two full years, plus current interim Guarantor financial statement on the bank’s form, plus two most recent tax returns “Enterprise” project report Banking references

My Personal Advice Every land developer and homebuilder has a niche product they know and successfully sell. Banks have niche loan products they build the bank upon. Although most banks offer ADC Financing, find a bank with a specialty in this type of lending and you’ll benefit from the knowledge and experience of that bank’s ADC lenders.