NOTES FROM TOUR AND MEETING WITH

THE CLIFFS COMMUNITIES ON 9/5/08

RE: The Cliffs at High Carolina

Swannanoa and Fairview, NC

Information provided by Jim Anthony, Pres. and CEO of The Cliffs Communities, Inc.

The development is 3000 – 3200 acres. The Cliffs is done buying property except for one small parcel (approx. 25 acres) that they would still like to purchase. There will be approx. 1200 – 1500 single family & multi-family homesites. Single family homesites will average greater than 1 acre each. Estimate is that 60 – 80% of the homes will be on the Fairview side.

Swannanoa will be the primary entrance to the development; Fairview will be a secondary entrance. Distance from the top of the mountain to Exit 59 in Swannanoa is approx. 4 miles, and should be driveable in 10 minutes. The “Parkway” (main road through the development) runs up the Swannanoa side and down the Fairview side and will be 24 – 26’ wide. It is estimated that the majority of the traffic will enter and exit the development from the Swannanoa side. The Parkway is not yet completed, but it is expected that the grading for the final piece connecting Swannanoa with Fairview will be done by the end of April.

The Cliffs has purchased commercial properties at Exit 59 in Swannanoa (Patton Cove Road). Stores, restaurants, or other amenities built on these properties will be available to the general public, as well as to residents of the Cliffs development.

No wells will be dug in the development. All homesites and Cliffs buildings (clubhouse, etc.) will be on Asheville city water. The development and golf course will be designed to avoid any negative effects on streams and waterways. No sedimentation should be added to streams and rivers as a result of this development.

It is expected that 400,000 gallons of water per week will be needed to irrigate the golf course. Water for golf course irrigation will come from 3 sources:

• Effluent (recycled city water from homes and other buildings)

• Captured rain water (stored in cisterns)

• Lake Tsuga (an existing lake located within the development)

The Cliffs will be on the cutting edge of research into ways to reduce use of water, pesticides and fertilizers on the golf course, and to find organic alternatives to traditional fertilizers and pest controls. They are currently partnering with Clemson University on research in these areas. They have pursued Audubon certification at their other golf courses, and expect to do that at this golf course as well.

This development will have a higher percentage of property placed in a conservation easement than any other Cliffs development.

There will be a heliport on the Fairview side of the development, near the clubhouse. No cell tower is planned.

Many aspects of home design and construction at Cliffs properties are governed by internal rules (known as Architectural Review Committee, or ARC standards) that all homeowners must comply with. The ARC standards will be stricter at this development than at any of the other existing Cliffs developments.

There will be no street lighting in the development. Exterior lighting on the homes is controlled by the ARC standards for the development, and all lighting is required to be “down” lighting.

ARC standards also limit the height and placement of the homes – standards are more stringent on lots that are more visually prominent. All homes are required to be painted in earth tones.

The Cliffs will invest in the surrounding communities. The company gives community grants through a Cliffs fund called the Carolina Legacy Trust. Communities are encouraged to apply for funding. Rick Fisher is the director of this program.

Notes compiled by Carol Groben.