Newco, LLC

Newco, LLC
Troubled Real Estate Asset Management Specialists Business &Marketing Plan

1111 Main St Ste 700 Vancouver, WA 98660 Phone: 503-254-6000 Contact: Dennis Lynch Bradley Lawrence

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

Newco, LLC Business & Marketing Plan

Table of Contents
EXECUTIVE SUMMARY .........................................................................................................................................4 MARKETING OBJECTIVES ..........................................................................................................................................4 SERVICES ...................................................................................................................................................................4 RESOURCES NEEDED ..................................................................................................................................................4 PROJECTED OUTCOMES .............................................................................................................................................4 STRATEGIC FOCUS AND PLAN ............................................................................................................................5 GOALS .......................................................................................................................................................................5 CORE COMPETENCY ..................................................................................................................................................5 SITUATION ANALYSIS ............................................................................................................................................5 INTERNAL FOCUS.......................................................................................................................................................5 EXTERNAL FOCUS .....................................................................................................................................................5 COMPETITIVE ............................................................................................................................................................5 TECHNOLOGICAL .......................................................................................................................................................5 ECONOMIC .................................................................................................................................................................5 REGULATORY ............................................................................................................................................................5 INDUSTRY ANALYSIS/TRENDS ...................................................................................................................................6 COMPETITOR ANALYSIS ............................................................................................................................................6 COMPETITIVE BARRIERS ............................................................................................................................................6 COMPANY ANALYSIS .................................................................................................................................................7 COMPANY STRENGTHS & OVERALL MARKETING STRATEGIES ..................................................................................7 COMPANY RESOURCES ..............................................................................................................................................7 CUSTOMER ANALYSIS & CHARACTERISTICS .............................................................................................................7 MARKET FOCUS .......................................................................................................................................................7 TARGET MARKETS.....................................................................................................................................................7 POINTS OF DIFFERENCE .............................................................................................................................................7 MARKETING PROGRAM ........................................................................................................................................8 BRANDING .................................................................................................................................................................8 PRICING .....................................................................................................................................................................8 ADVERTISING ............................................................................................................................................................8 PERSONAL SELLING ...................................................................................................................................................8 PUBLICITY .................................................................................................................................................................8 WHO WILL DO THE MARKETING ..............................................................................................................................9 FACILITIES REQUIRED ...............................................................................................................................................9 SALES DATA ..............................................................................................................................................................9 SALES FORECASTING METHODS USED ......................................................................................................................9 SALES ESTIMATES .....................................................................................................................................................9 COSTS ........................................................................................................................................................................9 PROJECTIONS ......................................................................................................................................................... 10 FINANCIAL PROJECTIONS......................................................................................................................................... 10 FINANCIAL INFORMATION SYSTEMS NEEDS ............................................................................................................ 11 ORGANIZATION ..................................................................................................................................................... 11

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

ii

Newco, LLC Business & Marketing Plan

IMPLEMENTATION PLAN ................................................................................................................................... 11 PEOPLE REQUIRED ................................................................................................................................................... 12 TIMING .................................................................................................................................................................... 12 SPECIFIC SEQUENCE OF INITIAL ACTIVITIES AND EVENTS ....................................................................................... 12 APPENDIX A: BIOGRAPHICAL SKETCHES OF KEY PERSONNEL ........................................................... 13 APPENDIX B: SUPPORT MATERIAL ................................................................................................................. 13

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

iii

Newco, LLC

Executive Summary
Newco, LLC has been formed to provide solutions to Northwest banks and other real estate lenders in managing and turning around troubled real estate assets. Through extensive knowledge of regulatory accounting, and REO and Special Asset Management experience, as well as strong analysis, problem-solving, negotiation and communication skills, Newco solves difficult real estate and mortgage asset problems for our clients, and generates substantial fee-based revenues as a result. Newco helps banks and other lenders by shouldering the burden of resolving complicated and difficult problems that those banks and other institutions do not have the resources, people or time to solve on their own, and managing the troubled assets to successful resolution.

Marketing Objectives
To generate revenues by providing fee-based troubled real estate asset turnaround services to Northwest banks and other real estate lenders. We provide much needed skills and abilities to the market, which is now seeing increasing demand for these services.

Services
Financial and market real estate analysis, forward forecasting of real estate market trends, problem asset analysis, resolution implementation, asset management, regulatory accounting adherence, negotiation, coordination and communication with parties involved, including full documentation of all actions and results. Resolution implementation includes negotiating realistic borrower repayment schedules, negotiating Deeds in Lieu, pursuing Foreclosures, repositioning properties, and other services as needed and as agreed with Lender.

Resources Available
Highly qualified and experienced primary real estate turnaround and troubled asset management specialists, with the ability to quickly ascertain an assets problems, propose solutions, and implement plans, assisted by high quality administrative/office/operations personnel. These resources are available from Newco.

Projected Outcomes
Successful management, refinance, turnaround, equity investment and/or sale of troubled real estate assets for a variety of clients.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

Newco, LLC

Strategic Focus and Plan

To successfully solve complex troubled real estate asset problems that lenders and/or borrowers are unable or unwilling to solve on their own.

Goals
To become well known locally and regionally for the ability to turnaround troubled real estate assets, and troubled businesses attached to troubled real estate assets, and to manage them to a successful exit strategy.

Core Competency
Deep knowledge of regulatory accounting, quick and thorough problem analysis skills, high level communication and negotiation skills, comprehensive management ability, Special Asset Management experience, and the ability to close a complex and difficult sale.

Situation Analysis
The real estate market continues to be troubled. Property values in have decreased slightly or leveled in the last 12 months, and financing is still difficult to find. Many, if not all local and regional banks that have made loans on real estate still have troubled loans in their portfolios. Banks and other lenders often do not have the manpower or experience to most effectively manage and turn around troubled REO and Mortgage assets.

Internal Focus
Dennis Lynch has deep knowledge of regulatory accounting, and many years of experience in real estate lending, primarily in commercial and investment real estate, as well as extensive turnaround and management experience. Bradley Lawrence has many years of commercial real estate finance experience, and two years of direct Special Asset Management and Turnaround experience, as well as high level computer skills, and high level oral and written communication skills.

External Focus
Many opportunities for turnaround of troubled real estate assets are available in our market, and are projected to increase over the next 12 18 months or more.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

Newco, LLC

Competitive
As we provide solutions to local and regional banks and other lender, we become much more well known for solving real estate asset problems, and will be likely referred additional business.

Technological
Technology requirements are relatively simple and minimal to effectively do this work; desktop and/or laptop computers, printers, faxes and cell phones. Limited staff with the same items can assist in documentation, recordkeeping and billing.

Economic
The national economy is considered to be out of recession at this time, but most consumers do not feel or behave as if that is the case. Regionally and locally, economies are still somewhat depressed. Real estate development and construction grew much faster than historical averages for several years before the current slowdown. Banks and other investors made many real estate loans, including loans for land development and construction of residential and commercial improvements, when market growth was strong. The next several years are expected to see slower real estate appreciation, and slower sales and absorption of most types of real estate products.

Regulatory
The primary regulatory issues concern regulatory accounting, in which our team has an extremely qualified lead individual, Dennis Lynch.

Industry Analysis/Trends
Small and large banks will increasingly make use of inside and outside help to work out troubled real estate assets, as more assets will become troubled in 2011. Inside help is necessarily limited, so outside help will be a larger growth area.

Competitor Analysis
Competitors come largely from inside banks, and from legal, business and real estate consultants currently working in the Northwest. Very few competitors will come to this area from outside the Northwest, as there are as many or more troubled real estate assets in other areas of the country as there are currently here.

Competitive Barriers
Regulatory accounting is the single largest competitive barrier to working for banks in this area.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

Newco, LLC

This is an area in which our company has proven expertise, which many other potential turnaround specialists do not.

Company Analysis
Our combined regulatory accounting, finance and turnaround expertise positions us extremely well to gain business from banks, and to successfully turn around and manage troubled assets held by banks.

Company Strengths and Overall Marketing Strategies

Our strengths will be our ability to effectively and efficiently solve troubled asset problems for a variety of clients. We will be marketing our ability to successfully execute on turnarounds of troubled assets.

Company Resources
With the primary members of the troubled asset resolution team, Newco may be constrained as to how much business can be handled effectively. Newco can leverage partners strengths and abilities by delegating tasks to other team members and staff.

Customer Analysis & Characteristics

Marketing decisions are always be made with the client in mind. Newcos focus is on meeting client needs in order to build successful long-term exchange relationships. Satisfying clients and providing genuine value to them is Newcos reason for existence.

Market Focus
Lienholders of debt or owners of equity in troubled real estate assets, particularly large commercial and investment type assets.

Target Markets
Local and regional banks, savings and loans, and other institutions and lenders, including private lenders, that have loaned funds on commercial or investment real estate.

Points of Difference
Our greatest strength will be our key members deep knowledge of regulatory accounting, and our key members experience in successful turnarounds and asset management.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

Newco, LLC

Marketing Program
The primary members will network with known contacts in the Northwest banking industry, particularly with Portland and Vancouver Metro area banks and other lending institutions, including private lenders.

Branding
Newco is the go-to resource in the Southwest Washington and Northwest Oregon area for troubled real estate asset workout and turnaround solutions. Our ability to provide start to finish workouts, and to include adherence to regulatory accounting regulations, will provide us with an identity that includes high competence and a successful resolution track record. Newco will grow and maintain the brand by delivering quality turnaround service and reducing banks and other lenders number and dollar amount of troubled assets, and improving lenders balance sheets.

Pricing
Newcos pricing strategy is measured and appropriate to the market, and includes the following: One fee level for troubled assets. A higher fee level for NOD to Foreclosure Sale assets. A higher fee level for REO assets. Potential success fee for maintaining or improving an assets category ranking. An hourly rate for miscellaneous work, or for work on assets smaller than a set amount.

Advertising
Newcos advertising may include classified ads in the Sunday Portland Oregonian business section, display ads in the Portland Business journal, and web-based advertising. Members of Newco will have the ability to judge the need for advertising initially as we network with banking contacts and determine the amount of business to be generated from that method,

Personal Selling
Personal selling is the key element in gaining business from the target banks and other lending institutions and entities. Newco members will necessarily be interacting with bank employees and directors on many levels to gain referrals for the business.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

Newco, LLC

Publicity
Newco will not need publicity, but may decide to seek some generic publicity to help expand and solidify our reputation in the business community and generate more business referrals. Any considered publicity will be positive, generic stories of success provided to receptive news media locally, to include the Business Journal.

Marketing Responsibility
The primary members will be networking with business and banking contacts to generate referrals, and will work together to determine other methods to generate new business. Repeat business and referral business will also increase total business as we become known in the community for fixing troubled real estate assets.

Facilities Required
Simple office space, already in use by the members, will suffice initially. The primary members will determine when changes or additions to existing office facilities are required.

Sales Data
Sales Forecasting Methods Used
Sales forecasting methods will necessarily begin with conservative estimates based on personal knowledge by the primary members, and will be augmented as Newco gains experience in this market cycle.

Sales Estimates
Initial estimates include the ablility to generate between $15 Mil and $20 Mil in portfolio value of troubled real estate assets from which fees are billed.

Costs
Initial costs are low, and as business grows, administrative assistance, travel and legal costs may increase. The primary members will initially bear minimal costs individually. Client pricing and billing will include reimbursement of these costs. Long term assignments with known cost structures may include these costs above asset management fees in client billing, or may be absorbed by asset management fees, to be determined by the primary members.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

Newco, LLC

Projections
Financial Projections
Estimate: Jume 1, 2011 Total Assets under Newco management (estimated) Of those (estimated); Assets: Troubled (late payments, lender concerns): $7,000,000 Assets: NOD to First Foreclosure Sale Date: Assets: First Foreclosure Sale Date to REO: Annual Fees for Service Assets: Troubled (late payments, lender concerns): 1.00 % Assets: NOD to First Foreclosure Sale Date: Assets: REO: Total Annual Fees for Service: 1.50 % 2.00 % $70,000 $105,000 $140,000 $315,000 $7,000,000 $6,000,000 $20,000,000

Fees to be determined by asset amount managed annually, calculated and paid monthly. Newco may also include a success fee for certain work, determined by time to dispose of asset, or ability to keep a trouble asset from becoming an REO property, or other criteria determined by agreement between Newco and clients. Newco may also include an hourly rate of approximately $150 per hour or more for smaller tasks, or for work for a lender that does not include management of assets over $10,000,000.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

10

Newco, LLC

Financial Information Systems Needs

Our financial system will consist of proprietary bookkeeping records and systems, and Newcos individual tax and accounting professionals. Initially Newco be organized as an LLC, with primary members owning equal shares, and each member responsible for their own minimal costs, and tax, legal and accounting professionals. Newco may decide to combine one or more of those efforts in the future.

Organization
Dennis Lynch will be the initial primary contact with banks and other lending institutions, as his experience and contacts with banks in this role in the past gives him an advantage in this area. Bradley Lawrence will be brought into those relationships at inception or as needed to take charge of specific troubled assets, with direction from the bank clients and from Dennis Lynch. Bradley Lawrence will also network and develop referrals from other banks and other lenders, which will be brought to the company. Dennis Lynch will direct initial strategy on turnarounds for banks with regard to all regulatory accounting and other bank needs.

Implementation Plan
Newcos business plan is only useful if action is taken. The primary members agree to immediately network and make specific industry contacts to generate additional business between January 20 and February 1, 2009, and to begin work on specific turnarounds immediately upon generating the business. Dennis Lynch may bring Bradley Lawrence into a working relationship with him on turnaround work he currently has in hand at his need and at his sole discretion.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

11

Newco, LLC

Personnel Required
We have all the people required to start this venture. All primary members and staff are highly qualified, extremely competent and eager to move forward in this venture.

Timing
The time to begin is now. The market needs this service, and needs our combination of talents and abilities. There are now many troubled real estate assets, and more real estate assets will become troubled in the next 6 to 12 months. Newco has the opportunity now to become the leader in our region in troubled real estate asset turnaround and management.

Specific Sequence of initial Activities and Events

All primary members make phone calls and emails, and to network to generate business referrals. Primary members determine appropriate pricing strategy for each new client based on the client need discovered through client interviews. Primary members divide the work as appropriate. Primary members divide fees generated equally, and agree on treatment of expenses for each asset management contract. Primary members own equal shares of the LLC, and each have one vote in matters of the LLC. The LLC is a pass-through for all tax purposes. Primary members use their existing office space, except for meetings at existing primary members offices as needed. Primary members agree to evaluate needed changes in office space or location regularly.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

12

Newco, LLC

Appendix A: Bio & References of Key Personnel

Bios to be included.

Appendix B: Support Material

Support material to be included.

PROPRIETARY and CONFIDENTIAL INFORMATION: Do Not Distribute

13