Q: Why is Pathfinder interested in purchasing my Palm Harbor One, LLC Loan Share? How does Pathfinder make money?

A: Pathfinder will purchase your Loan Share at a discount in anticipation of receiving a favorable return on investment following (i) USA Commercial Mortgage’s (“USACM”) emergence from bankruptcy or (ii) foreclosure of the Palm Harbor One property. In the event of purchase of the property following foreclosure or receipt of deed in lieu of foreclosure, Pathfinder is prepared to operate the property as an apartment complex and eventually market the units as condominiums. Pathfinder’s principals have substantial real estate investment and operating experience. As such, Pathfinder is prepared to maintain its investment in the Palm Harbor One project for several years, if necessary, in order to generate an appropriate return on its investment.

Q: Why should we sell our Loan Share?

A: Pathfinder will provide you with a way to immediately turn an otherwise illiquid investment into cash. Furthermore, by selling, you would no longer have to contend with the risk, expense and uncertainty of the USACM bankruptcy process nor continue to expend valuable time or money to follow and monitor the bankruptcy proceeding in order to protect your rights. According to the Las Vegas Review-Journal, $550,800 is spent each week on attorneys, interim managers and other professionals associated with the USA Capital bankruptcy case.

Q: Why should we sell our Loan Share to Pathfinder?

A: Pathfinder operates in a straightforward fashion and provides prompt payment for Loan Shares. Other companies that may be seeking to purchase Loan Shares may not operate in a transparent fashion and may not pay creditors in what we consider to be a timely manner. If you receive other offers, Pathfinder recommends that you read all letters and assignment agreements carefully to ensure that you will be paid in a timely fashion.

Q: Is Pathfinder affiliated with or hired by USA Commercial Mortgage Company, Compass Partners, LLC or the developer, Palm Harbor One, LLC?

A: No. Pathfinder is an independent investment company that is NOT affiliated with or hired by either USACM or its affiliates or the bankruptcy trustee, Compass Partners, LLC or Palm Harbor One, LLC, the developer.

Q: How much of my original investment could I recover by selling my Loan Share to Pathfinder?

A: We believe that by selling your remaining Palm Harbor One, LLC Loan Share to Pathfinder, you could potentially recover as much as 57.26% of your initial investment through a combination of amounts paid to you to date (approximately 14.36% as of August 1, 2007) and the amount Pathfinder will pay. By our calculations, Direct Lenders to Palm Harbor One, LLC have remaining principal balances equal to about 85.64% of their original loan amounts.

Q: How can we be assured that Pathfinder will pay us?

A: Pathfinder is a reputable company whose principals have been engaged in corporate finance and real estate investment since the mid-1980s. Pathfinder has teamed up with Contrarian Capital Management, LLC, an investment company with over $5.0 billion under management and extensive experience evaluating and investing in distressed debt and real estate. If you have further questions, do not hesitate to contact us.

Pathfinder processes all transactions through Chicago Title Insurance Company, the leading U.S. title company and one of the largest national escrow agencies. Chicago Title, founded in 1847, has a solid reputation for integrity. More information on Chicago Title can be found at www.ctic.com.

Q: How much will I have to pay for escrow expenses?

A: Nothing. Pathfinder pays all escrow expenses connected with the Palm Harbor One, LLC transaction.

Q: How does Pathfinder determine its offer price?

A: Our offer price is based on several factors, including the face value of the loans, the financial condition of USACM, our estimate of the current value of the Palm Harbor One property, our assessment of the financial condition of Palm Harbor One, LLC, the Palm Harbor One borrower, and its principal, Joe Lilly, our estimate of the term of the USACM and the Palm Harbor One bankruptcies, the estimated costs of disputing matters concerning the Palm Harbor One, LLC loan with Compass Partners, LLC, our perception of the risks inherent in the transaction and our anticipated return requirements. We have also considered the cost of deferred maintenance and other necessary improvements to prepare the property for future sale, legal costs related to USACM and enforcing the Mortgage, operating expenses and vacancy costs due to the challenges of managing a mixed owner/renter complex, and our potential liability for any previously unpaid Home Owner Association fees.

Q: Why has Pathfinder’s offer price been reduced?

A: Our offer price has been reduced because of the considerable deterioration in the Florida real estate market, the severe dislocation in the equity and debt markets – particularly the mortgage markets – and the recent Palm Harbor bankruptcy. Pathfinder also believes that it is unlikely that the borrower will be able to secure new financing with which to repay the loan, given the borrower’s history, the fractured nature of the project (part condo/part rental) and the fact that the project is in bankruptcy.

Q: How long will it take for Pathfinder to pay us?

A: Pathfinder will make all payments through the escrow division of Chicago Title Insurance Company. Pathfinder pays all escrow expenses. Standard payment method will be by check issued by Chicago Title within five business days of our receipt and review of your documents. Alternatively, we can send your payment by wire transfer or overnight mail for a nominal fee. Since you are concurrently transferring an interest in the Mortgage encumbering real property, it is important that we coordinate that process through an escrow account to insure that legal ownership to that interest is properly documented and transferred.

Q: What else will we have to do to transfer our loans to Pathfinder?

A: Once Pathfinder receives your properly completed and signed acceptance of our offer and Assignment, no further action will be required. Pathfinder files all Notices of Transfer of Claim with Pinellas County, Florida and the U.S. Bankruptcy Court.

Q: Do you have any requirements for the sale of our loans?

A: Pathfinder requires that you have a valid economic interest in the loan that has not been previously sold, transferred, assigned, pledged, objected to or satisfied. Pathfinder recommends that you check your records carefully prior to accepting our offer. Pathfinder reserves the right to review the validity of any Loan Share presented and may refuse to purchase it for any reason.

Q: If I keep my Loan Shares, won’t I be repaid soon?

A: The Borrower did not repay the Palm Harbor One, LLC loans when they came due in December, 2006. Consequently, the Palm Harbor One, LLC loans are currently classified by USACM as “Maturity Default”. Since that time, Compass has rejected the Borrower’s request to modify the loan by extending the term to August, 2007 and further reducing the permitted release prices. This creates significant hardship for the Borrower, who will have difficulty closing sales, even if he is able to attract prospective buyers and put units under contract.

Furthermore, each month, approximately $100,000 of default interest accrues on the loan. Compass Partners, LLC has taken the position that this default interest accrues to the benefit of Compass, NOT to the direct lenders. Furthermore, Compass’ position is that Compass is entitled to recover such default interest, late fees and other expenses associated with collection before payments – including principal or regular interest – are made to direct lenders. We believe this puts Compass’ interest at odds with the interests of the direct lenders and creates a situation where a payoff by the Borrower is unlikely. Pathfinder believes it highly likely that a foreclosure action will be required to enforce the lenders’ rights under the loans and that the Borrower will shortly file bankruptcy.

Pathfinder has conducted extensive due diligence on the USACM bankruptcy, the Palm Harbor One, LLC loans, Palm Harbor One, LLC, the developer of the Palm Harbor One, LLC project and its principals and believes there is a substantial risk of continuing default on the Palm Harbor One, LLC loan. We also believe that the recent decline in the Tampa area condominium market is continuing to reduce the value of the property. In August, 2007, the borrower filed for Chapter 11 bankruptcy. The bankruptcy filing only adds to the risk and uncertainty surrounding this project.

Q: Can’t we simply foreclose on Palm Harbor One?

A: The foreclosure process and its timing are highly uncertain, particularly in light of USACM’s bankruptcy proceedings and the recent transfer of the servicing rights to Compass Partners, LLC. Since Compass stands to collect default interest, they have little incentive to foreclose. In the event Compass is able to foreclose on Palm Harbor One in a reasonable period of time (which is extremely uncertain, given their lack of action to date on commencing the foreclosure process, Pathfinder has further concerns about the underlying real estate asset and what are likely to be significant expenses associated with a foreclosure and subsequent ownership of the property.

In particular, under Florida law, foreclosure must occur through a litigation process. Notwithstanding the current default maturity status of the loan, it is highly likely that the borrower will object to the foreclosure and attempt to exert significant delays on the process, including possibly the filing of its own bankruptcy proceeding. The foreclosure process itself is likely to result in the incurrence of over $200,000 in additional fees (including legal expenses, documentary transfer taxes to the State of Florida and title insurance premiums, among others). Moreover, we have been advised that successor ownership of the project following a foreclosure action could result in significant additional costs and individual liability exposure. Pathfinder is prepared to undertake that risk. These additional costs include up to six months of Homeowner’s Association dues for each of the approximately 368 unsold units, expenses associated with refurbishing and leasing up the large number of vacant units in the project, and most importantly, the individual liability exposure for construction defects and related claims arising from the sale of the condominium units (both prior sales as well as any new sales) as successor in interest to the developer (Borrower).

Pathfinder evaluated the multi-family apartment and condominium markets in Palm Harbor and Pinellas County and observes a significant increase in the number of available condominiums being offered for sale as of February, 2007. Consultations with experts in multi-family sales in western Florida indicate that the market has experienced a price decline of up to 40% over the last 9-12 months. Based on the competitive environment, Pathfinder believes there is substantial uncertainty as to whether the Palm Harbor One, LLC units can be sold as condominiums in a reasonable period of time, even at substantial discounts to the already reduced prices currently sought by the developer. Based on its analysis, Pathfinder believes many of the units now being marketed as condominiums in western Florida, including many of the currently unsold Palm Harbor One, LLC units, will instead return to the rental market, further depressing rental rates and increasing vacancy rates.

Q: What is happening to the rental income on the unsold Palm Harbor One, LLC units?

A: Approximately 85% of the Palm Harbor One units remained unsold. We are aware of only one partial lien release (e.g. one sale) in the past seven months. Less than half of the unsold units were being rented by the Borrower (developer) with the rest remaining vacant. The Borrower has been collecting rents but has not been making principal or interest payments on the Palm Harbor One, LLC loans since December, 2006.

Q: Why is the developer in default on the Palm Harbor loan?

A: The developer purchased Palm Harbor One at the very peak of the market. In addition to the decline in the western Florida condominium market, the developer was restricted by the terms of the loan to certain “release prices” for the sale of condominium units at the project. These prices, while perhaps reflective of market conditions in 2005, are not reflective of current market conditions. Most recently, Compass Partners, LLC refused to permit a modification to the loan.

Q: Does Pathfinder have account or invoice numbers to help me reconcile the claim to my books and records?

A:  Pathfinder is an independent investment company that is not affiliated with or hired by USACM, Compass or their affiliates. Therefore, we do not have full access to the books and records of USACM or Compass. No account information, invoice numbers or other details are available from Pathfinder.

Q: If I sell my Loan Share, can I take a tax loss deduction on my income tax returns?

A: Losses sustained on investments are typically deductible on federal and state income tax returns in the year the loss is realized. Since we are not able to provide legal or accounting advice, we strongly urge you to consult with your accountant or tax advisor for specific tax guidance.

Q: What happens if the Bankruptcy Court trustee tries to recover monies that were previously paid to me?

A: Pathfinder believes that Palm Harbor One, LLC Direct Lenders were not overpaid on their Palm Harbor One loans and should not be subject to recovery of overpayments. Certain Palm Harbor One investors who also have loans in other USACM properties where overpayments were made may be subject to recovery by the Bankruptcy Court trustee. We suggest you consult with your attorneys for specific legal guidance in this area.

Q: Are payments received from Pathfinder subject to recovery in the event the Bankruptcy Court trustee seeks to recover monies that were previously paid to Palm Harbor One lenders?

A: Pathfinder is purchasing Palm Harbor One, LLC loans on a non-recourse basis, meaning we can not look to you for a return of our purchase price unless you have previously sold, encumbered, assigned or otherwise had your loan share satisfied. Furthermore, we would be responsible for the repayment of any interest that USA Commercial Mortgage prepaid to you on account of this note.

Q: What if we do not have documents to support our Loan Share?

A: Please contact Pathfinder for further instructions.

Q: What if we disagree with the amount Pathfinder lists as our Loan Share?

A: Pathfinder will review any documentation you may have to support a revision of your claim amount. After such documentation is approved, Pathfinder may forward a revised offer to you.

Q: What if we receive additional payments on Palm Harbor One, LLC between now and the date we conclude a purchase and sale transaction with Pathfinder?

A: Pathfinder has based its offer on your Palm Harbor One, LLC loan balance as of January 31, 2007. In the event USACM makes payments for Palm Harbor One, LLC prior to the closing of a transaction, your loan balance and the amount of our payment would be adjusted accordingly.

Q: Pathfinder’s offer has expired. Will Pathfinder still purchase my claim?

A: Pathfinder’s tender offer for Palm Harbor expired May 4, 2007. Pathfinder has no plans to extend the tender offer period. If we do extend the tender offering period, we will attempt to notify all of the persons holding Loan Shares. Pathfinder is continuing to purchase loan shares from lenders who contact Pathfinder.

Q: Are you interested in purchasing other USA Commercial Mortgage loans?

A: At the present time, we are only purchasing Palm Harbor One, LLC Loan Shares and the Loan Shares in Bay Pompano, LLC and Gramercy Court, LLC, but may be interested in purchasing other USACM loans in the future. If you would like to email a listing of your other USACM loans to info@pathfinderpartnersllc.com, we will review it and contact you if we are interested in purchasing your interest any such Loan Shares.