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Opinion of Value: Capitalized Income Approach $4,397,934 Replacement Cost Approach $4,545,027 Comparable Sales Approach $4,464,074 We believe the capitalized income and comparable sales approaches are the most accurate. The capitalized income already has a conservative cap rate figured in while the comparable sales uses actual sales prices from market sales. The replacement cost is the least accurate since construction costs of the building do not directly correlate with the value of the building and land, or what people will pay for it. Therefore, we have chosen the $4,430,000 as our estimate of the appraisal value of the building and the land. This value lands within a range created by capitalized income and comparable sales. The Participants Borrowing Entity CD Enterprises 4611 22nd Ave. NE #4 Jackson WA, 98105 380-729-6969 CD Enterprises has been constructing office, retail, apartment and mixed-use buildings for the last 13 years. The company has undertaken over 20 projects, mostly in the Jackson area. Some of these projects include the Eastview Offices at 1938 Fairview Ave E., University Professional Offices at the corner of 45th St. and 11 Ave. NE and the Edison Apartments at the intersection of Eastlake Ave. E and Harvard Ave E. Mr. Politician is the owner and president of CD Enterprises. He began working under commercial real estate developers in 1974 after graduating from the University of Tennessee with honors and a business finance degree. After 6 years of working other developers, Mr. Politician branched off and created his own firm, CD Enterprises. Architect Bumgardner 2111 Third Avenue Jackson, Tennessee 98121 Contact: Mark Simpson T: 380-223-1361 http://www.bumgardnerJackson.com/indexhome.htm Bumgardner has worked on mixed-use projects such as Saffron in the Sammamish Plateau, which they won a commendation award for at the 2000 AIA awards. Bumgardner has also worked with CD Enterprises on The Rekhi and Fremont Block 40 mixed-use projects as well as 3 other projects in Jackson area with the last 8 years. Contractor Lease Crutcher Lewis 107 Spring Street Jackson, Tennessee 98104-1052 Contact: Bing Hallaway T: 380-622-0500 F: 380-622-6541 http://www.lcl.com/home.htm Lease Crutcher Lewis (LCL) has offices in Jackson and Portland and has conducting business for 34 years. They are currently working on the University of Tennessee William H. Gates School of Law and the 307 Westlake Building. CD Enterprises has teamed up with (LCL) in the past to do projects such as the Fremont Block 40 and the Edison Apartments. Engineer Sparling 720 Olive Way Suite 1400 Jackson, Tennessee 98101-1853 Contact: Michael L. Shafer T: 380-667-0555 or 800-667-0610 F: 380-667-0554 http://www.sparling.com/intro/index.asp Founded over 50 years ago, Sparling has a staff of over 130 and thousands of projects worth of experience throughout the world. Working with the local Sparling office on the Fremont Block 40 and the University Village North Addition have been two successful experiences for CD Enterprises. Property Manager CP Management 605 Fifth Avenue South, Suite 110 Jackson, WA 98104 Contact: Cheryl Mauer T: 380-832-6787 F: 380-832-6790 http://www.centurypacificlp.com/partners_cpmgmt.htm Although CP Management was established in 2001 as an affiliate of Century Pacific, the professionals have over 50 years of experience in property management. CD Enterprises switched 9 of our 11 properties over to CP Management in early 2002. CP Management manages over one million square feet office and retail space in Jackson Area including the Bay Vista Office Building, the Denny Building and the Fremont Block 40. Leasing Agent Kyle Peters T: 380-443-1800 F: 380-443-1683 http://www.westinbldg.com Mr. Peters began working a leasing agent in 1994 around the Portland area and then moved up to Jackson in 1997 where he has been working the last six years. CD has used Kyle to lease out our last two office/retail buildings: the Eastview Offices and University Proffessional Offices. Mr. Peters also works with property management firms Clise Properties and CP Management. Loan Request CD Enterprises requests an interim loan to build the mixed-use building at 3103 Eastlake Avenue E. The request is for $3,901,553. CD Enterprises proposes the interest rate will vary with the market and the loan will be unamortized with period interest payments. The term of loan will be for one year. This interim loan is based on a permanent loan CD Enterprises will acquire after finishing construction and leasing out the building. The take out loan will be a 30 year amortized loan at the interest the future interest rates of when the take out loan is procured. The amount of the take out loan will be from $3,901,553.