IRREVOCABLE LETTER OF CREDIT

Date of Letter of Credit:

Letter of Credit Number:

Customer: (name & address)

Hereinafter referred to as “Buyer”

Issuing Financial Institution:

Hereinafter referred to as “Issuing Bank”

Beneficiary: Crimson Cliff Townhomes, Inc.

90 Hilltop Drive

Bayfield, CO 81122

Hereinafter referred to as “Beneficiary”

Amount (U.S. Dollars):

Expiration Date: December 24, 2006 (See #1 below)

At the request of and for the account of (insert Buyer’s name), we hereby establish this Irrevocable Letter of Credit in the amount of $ (“Letter of Credit”) in favor of Crimson Cliff Townhomes, Inc. (“Beneficiary”) relative to an Agreement For Purchase and Sale agreement for Model Unit No. of Crimson Cliff Townhomes , entered into between Crimson Cliff Townhomes, LLC, as Seller, and Buyer, dated (see Agreement For Purchase and Sale agreement – hereinafter referred to as “Purchase Agreement” - attached to and to become a part of this Letter of Credit ) in accordance with the terms and conditions hereinafter set forth.

1. EXPIRATION. This Letter of Credit shall expire at the close of business the earlier of December 24, 2006 or the first business day after the expiration of 60 days from the day of tender of a Certificate of Occupancy for the Unit, as more particularly described in section 8 of the Purchase Agreement.

2. MAXIMUM CREDIT. The maximum aggregate credit available under this Letter of Credit shall be $ .

3. DRAWING. The Drawing in respect of payment hereunder shall not exceed the Maximum Credit.

4. DOCUMENTS TO BE PRESENTED. Funds under the Letter of Credit are available to Beneficiary against:

Ø Beneficiary’s sight draft stating on its face “Drawn Under (insert Issuing Bank name) Irrevocable Letter of Credit No.; and

Ø An affidavit signed by an authorized representative of Beneficiary stating:

a. “Beneficiary hereby certifies that the Buyer has failed to comply with the terms and conditions of the Purchase Agreement and has been declared in default there under.

b. The extent and nature of the default.

5. METHOD AND NOTICE OF PRESENTMENT. The documents required in paragraph 4 for demand of payment (“Demand for Payment”) must be delivered for payment under this Letter of Credit and may be delivered to the Issuing Bank in person, by mail, or by an express delivery service. Demand for Payment shall be presented on any Business Day at the Issuing Bank office. The Demand for Payment shall be deemed to have been presented on the date actually received by the Issuing Bank. “Business Day” means any day other than Saturday, Sunday, or legal holiday on which banking institutions in the State in which the Issuing Bank is domiciled are authorized or required by law to close.

6. TIME AND METHOD FOR PAYMENT. If Demand for Payment is made in strict conformity with the terms and conditions hereof, payment shall be made to the Beneficiary on the next succeeding Business Day. Payment under this Letter of Credit shall be made in immediately available funds, and payable to the Beneficiary.

7. GOVERNING LAWS AND CUSTOMS. This Letter of Credit, except as expressly provided herein, incorporates and is governed by the provisions of the Uniform Customs and Practices for Documentary Credits, International Chamber of Commerce Brochure No. 400, and where not inconsistent therewith, to Article Five of the Uniform Commercial Code of the State of Colorado.

8. IRREVOCABILITY. This Letter of Credit is irrevocable.

9. COMPLETE AGREEMENT. This Letter of Credit, including any exhibits hereto, sets forth in full the terms of this undertaking. Reference in this Letter of Credit to other documents or instruments is for identification purposes only, and such reference shall not modify or affect the terms hereof or cause such documents or instruments to be deemed incorporated herein.

10. ASSIGNABILITY. As a condition of the Beneficiary’s/Seller’s construction and development financing, this Letter of Credit and the Purchase Agreement will be assigned to the Pine River Valley Bank, 848 E. Second Ave. Durango, CO 81301

(Insert Issuing Bank name)

_______________________________________________

(insert name/title/)