Sequence of Events Penn Matilda Loan

1. Sequence of EventsPenn Matilda Loan • BGC made agreed upon interest only payments to PPND from July 2000 – July 2003 • Payments against the principal amount of $42,000 were set to begin July 2003 • BGC stopped making any payments to PPND relating to Penn-Matilda • PPND called BGC inquiring why payments had stopped. BGC stated that it was their intent to sell the property in 2003 and that PPND would be fully paid once a buyer is identified and closing occurs. • In January 2004, BGC asked PPND to forgive the entire balance of $42,000. PPND denied the request in a phone conversation and through a letter dated 1/6/04. • Later that same month, BGC contacted PPND asking for partial loan forgiveness, stating that a buyer has been found. PPND was told that without any form of loan forgiveness, the deal would die.

2. Sequence of EventsPenn Matilda Loan • PPND’s Real Estate Committee agreed to accept $20,000 as payment in full of the outstanding principal amount of $42,000. Future interest payments due of $13,162 would not be collected. • PPND sent a letter to BGC dated 1/23/04 stating that it would support the proposed development in BGC’s neighborhood by accepting $20,000, payable at closing. • Months went by after not hearing anything and PPND called BGC in early Spring asking on the status of the closing. BGC stated that the closing was scheduled to occur in approximately 3 weeks.

3. Sequence of EventsPenn Matilda Loan • Again time went by and after not hearing anything, PPND once again contacted BGC about the status of the closing. BGC informed PPND that the closing had occurred and was surprised that PPND did not receive its $20,000. BGC did state that there was confusion at the closing and that two different settlement sheets were presented, one including a payment of $20,000 to PPND and one that did not. When asked by PPND why BGC did not speak up at the closing and protect PPND’s interests, BGC stated that PPND made a mistake and should have leined the property • PPND left messages with both the developer who purchased the property and the purchaser’s attorney. Mr. Herkey Pollock’s secretary called saying Mr. Pollock was on vacation but would call when he returned. No phone call was received.

4. Sequence of EventsPenn Matilda Loan • On July 2, 2004, PPND sent a letter to BGC stating that the agreement between PPND and BGC was violated since funds were not disbursed to PPND at closing. PPND gave BGC approximately one week to make good on the agreed upon $20,000 payment. If no payment was received, the agreement would be considered null and void and the entire debt of $42,000 plus interest would be re-instated. • On July 19, 2004, PPND received two checks from the developer who purchased the building. The first for $13,500 was deposited right away. The 2nd for $6,500, was held until August 6, 2004 per the developer’s request and deposited. • A final settlement sheet forwarded to PPND by BGC (upon PPND’s request) showed that BGC made approximately $15,000 from the deal. This was a surprise to PPND since they were told that unless PPND forgave a significant portion of the loan to BGC, the developer would walk away.

8. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Minimum Threshold Criteria: - Financial Stability - Performance - Active & Engaged Board of Directors - Staff Capacity Investment Committee Meeting 11/10/04

9. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Financial Stability: • - Cash Flow/Break-even Analysis by Business Lines & by Organization. • - ROI. • - Financial Sheets separated by Business Lines. • - Consolidated Organizational Financial Sheets. • - Loan schedules. • - Line of Credit Detail. ( when was it obtained? Terms? Avg. amt. Outstanding? No. of days Outstanding? ) • - Work in Progress Reporting. Investment Committee Meeting 11/10/04

10. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Performance: • - Concrete Measures for Success – Activities/Milestones/Verifications/Targets. • - Inclusion of several scenarios for more risky or uncertain ventures. Investment Committee Meeting 11/10/04

11. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Active & Engaged Board of Directors: • - Board buy-in and implementation roles within the Business Plan. • - Board has established policies relating to the Business Plan. • - Appropriate Committee structures and/or Advisory Boards. • - Board profile is representative of cultural & occupancy demographics of the community. Investment Committee Meeting 11/10/04

12. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Staff Capacity: • - Staff time v. Output. Realistic timeframe for implementation. • - Collaboration with other professionals for tech. Assistance. • - Identification of risks & inefficiencies within organization. • - Is a new organizational structure required for the venture? Are new technologies or capital improvements required for the venture? Investment Committee Meeting 11/10/04

13. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Scoring Criteria: • - Private Partnerships. (15 points) • - Collaboration. (10 points) • - Links to Jobs/Education. (20 points) • - Business Plan. (25 points) • - Leverage. (30 points) Investment Committee Meeting 11/10/04

14. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Private Partnerships: (15 points) • - Impacts on Financial Statements. • - Human Resources/staff capacity & information systems. • - Identification of trends & positioning for a competitive advantage. (product refinement & implementation to desired market.) • - Industry partnerships to strengthen Organization’s foundation. Investment Committee Meeting 11/10/04

15. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Collaboration: (10 points) • - Community Connectedness. • - Board structure encourages a balanced representation of the community & attracts motivated individuals. (financial contributors?) • - Collaboration to complement in-house staff capacity. • - Joint marketing initiatives. Investment Committee Meeting 11/10/04

16. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Links to Jobs/Education: (20 points) • - Program linkages. • - Program specialization & outsourcing of some programs to other organizations (collaboration). • - Programs are financial complements to each other. • - Board involvement (liaisons to broader community & identification of potential partnerships.) • - Programs are closely tied to the organization’s mission. Investment Committee Meeting 11/10/04

17. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Business Plan: (25 points) • - Core Business lines with respect to the Organization’s Mission, Strategic Plan, and Financial stability. • - Strong understanding of the Organization’s Profit & Cost Centers. • - Linkages between programs within the Organization/within the neighborhood to create efficiencies & funding opportunities. • - Demonstrates an improvement and/or growth of the product over the 3 year period. • - Community support for this program – desired service that addresses a need by leveraging assets. • - Staff alignment – movement of staff for optimal organizational stability. Investment Committee Meeting 11/10/04

18. Organizational Capacity Assessment ToolsTIER 1 : BUSINESS PLAN FUNDING • Leverage: (30 points) • - Core Business lines impact on Organization’s Operating & Project Funding. • - Initial sources of funds – Initial uses of funds. • - Risk thresholds for Core Business Lines. • - Achievability of funding ratios – likeliness to receive national, state, federal funding beyond PPND. Investment Committee Meeting 11/10/04