APPRAISAL OF THE

LIQUIDATION VALUE

Mt. Ashland Ski Area

For

City of Ashland, Oregon

OCTOBER 26 2006 AN ORDERLY LIQUIDATION VALUE APPRAISAL OF THE PROPERTY AT THE

MT ASHLAND SKI AREA ASHLAND, OREGON

OCTOBER 26, 2006 i 511 W 22nd Ave. Post Falls, ID 83854 (208) 457-1148 (208) 699-3817 Cell (866) 233-1947 Fax TED FARWELL MAI www.winterstar.us [email protected]

January 3, 2007

Mr. Lee Tuneberg City of Ashland Ashland OR

Re: Appraisal – Orderly Liquidation Value of Mt. Ashland Ski Area Properties

Dear Mr. Tuneberg;

I have prepared an orderly liquidation value appraisal of the Mt. Ashland Ski Area properties in Jackson County, Oregon as requested and authorized by the City of Ashland by form contract dated October 4, 2006. The purpose of this appraisal is to estimate the orderly liquidation value of the Mt. Ashland Ski Area properties, as they existed on October 26, 2006. The properties are entirely located on a 1,180-acre USFS land use permit.

This valuation is dated October 26, 2006. The attached report of 47 pages describes the properties and the appraisal process.

CERTIFICATION

I certify that, to the best of my knowledge and belief:

 The statements of fact contained in this report are true and correct.  The report analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions.  I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved.  My compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report.  The appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or approval of any proposed financing.  My analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.  I have made a personal inspection of the property that is the subject of this

i ii report.  Mr. Dan Pahl CEA, Mr. John Ellis PE, Mr. Craig Loup and Mr. Ken Olmstead provided significant property appraisal assistance to the person signing this certification.  As of the date of this report I have completed the requirements of the continuing education program of the Appraisal Institute.

I have a unique combination of MT ASHLAND SKI AREA professional expertise and experience Orderly Liquidation Value of Property supporting my competency to conduct 26-Oct-06 such a special appraisal assignment. I Orderly have been a consultant to the North Liquidation American ski industry for forty-five years. Asset Value I have designed, built, and operated ski Five Ski Lifts $152,000 Rolling Stock $190,000 areas. In addition, I am a professional Inventories $105,000 appraiser and have prepared some 120- Generators (4) $24,000 ski area appraisals over the past 27 Waste Water Treatment $40,000 years. My detailed resume is attached. Portable Buildings (5) $11,500 Furniture & Fixtures and $150,200 It is my opinion that the orderly Maintenance Equipment liquidation value of the Mt. Ashland Ski TOTAL Liquidation Value $672,700 Area properties, as described in the Estimated cost to remove attached report and “as is” on October Ski Lifts ($921,500) 26, 2006 is: Buildings ($243,000) NET TOTAL ($491,800)

$ 672,700: SIX HUNDRED & SEVENTY TWO THOUSAND, SEVEN HUNDRED DOLLARS

The estimate of the major costs to remove the four ski lifts is $921,500. The estimate to remove the buildings is $243,000. Total removal costs are projected at $1,164,500.

This leaves a deficit of $491,800.

Sincerely

Ted Farwell MAI

State Certified General Real Estate Appraiser, State of Oregon Temporary Permit Number –TNR1447

Certified General Appraiser #CGA 722 Certified General Appraiser #CGO 1313626 State of State of Colorado

ii iii

APPRAISER CERTIFICATION

I certify that, to the best of my knowledge and belief:

 The statements of fact contained in this report are true and correct

 The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is my personal, impartial and unbiased professional analyses opinions and conclusions.

 I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved.

 My engagement in this assignment was not contingent upon developing or reporting predetermined results.

 My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

 My analyses, opinions and conclusions were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. I have taken the mandatory Uniform Standards of Professional Appraisal Practice class, and thereby have been USPAP certified by the American Society of Appraisers per their re-education program. I am also a member in good standing with AMEA (Association of Machinery & Equipment Appraisers).

 I have made a physical inspection of all the assets listed and from that inspection, I have formulated an opinion of value that is the subject of this report.

 No one provided significant Professional assistance to the person signing this report.

iii 1

SECTION I

MT. ASHLAND ORDERLY LIQUIDATION VALUE APPRAISAL

PREFACE EXECUTIVE SUMMARY

This is an orderly liquidation value appraisal of the Mt. Ashland ski area property.

A. CLIENT & USER OF THE REPORT:

Mr. Lee Tuneberg City of Ashland Ashland, OR

B. DATE OF THE APPRAISAL:

October 26, 2006

C. DATE OF THE REPORT:

January 3, 2007

D. DEFINITION OF ORDERLY LIQUIDATION VALUE:

A professional opinion of the estimated most probable price expressed in terms of currency which the subject equipment could typically realize at a privately negotiated sale, properly advertised and professionally managed, by a seller obligated to sell over an extended period of time, usually within six to twelve months, as of the effective date of the appraisal report. Further, the ability of the asset group to draw sufficient prospective buyers to insure competitive offers is considered. All assets are to be sold on a piecemeal basis 'as is' with purchasers responsible for removal of assets at their own risk and expense. Any deletions or additions to the total assets appraised could change the psychological and/or monetary appeal necessary to gain the value indicated.

E. DEFINITION OF EXTERNAL OBSOLESCENCE:

Used facilities and equipment suffer both physical deterioration and functional obsolesce. They may also suffer a decrease in market value due to external obsolesce. The Appraisal of Real Estate twelfth edition describes External Obsolesce as:

A temporary or permanent impairment of the utility or salability of an improvement or property due to negative influences outside of the property. (i.e. market conditions)

MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 2

F. PURPOSE OF THE APPRAISAL:

The purpose of this appraisal is to estimate the orderly liquidation value of the Mt. Ashland ski area properties herein described, as they exist on October 26, 2006. This estimate is in support of the terms of the Mt. Ashland Ski Area Lease where the lessee is required to maintain a “Minimum Liquidation Value” for the leased property.

G. SCOPE OF THIS APPRAISAL:

The scope of this appraisal is to inspect the property, consider market characteristics and trends, collect and analyze pertinent data, and develop a conclusion about the property’s liquidation value. The nature of this assignment precludes use of either the income or cost approaches to value. Sales comparison is the primary approach used. The specific methodology of data collection and analysis, verification and valuation is detailed within this report.

Winterstar Valuations, Inc. has put together a team of experts to inspect and evaluate the existing assets to determine the most probable liquidation value if sold on the date of inspection, and removed.

Our procedure is to first identify all of the assets with potential value upon ski area closure, next to inspect each piece of equipment for its condition and finally prepare an estimate of its value in place prior to removal. In the case of assets that require significant costs to remove (ie: ski lifts - buildings) we have estimated such removal costs.

We anticipate that the major items will be the ski lifts, the grooming and other vehicles, the rental skis, , the wastewater treatment plant and the 275K generators.

We anticipate that small items such as furniture, fixtures, tools, computers, office equipment, etc. would be offered in bulk or at auction. Where items are routinely offered in used equipment sales outlets, and a used value can be supported, the item was evaluated.

No capitalized costs for planning and/or environmental studies have any liquidation value.

The balance of this report is divided into three sections.

Section II discusses the potential liquidation of the five ski lifts. It includes a removal cost estimate.

Section III discusses the potential liquidation value of the rolling stock.

Section IV discusses the potential liquidation value of the balance of the properties. It includes an estimate of the costs to remove the buildings. MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 3

G. SUMMARY OF FACTS AND CONCLUSIONS:

1. The five ski lifts have an orderly liquidation value of …………….$152,000

2. The rolling stock has an orderly liquidation value of…………….. $189,700

3. The inventories have an orderly liquidation value of…………….. $103,100

4. The balance of the properties have an orderly liquidation value of $227,800

5. The total orderly liquidation value of all city property used by the lessee, Mt. Ashland Associates, as of October 26, 2006 is…………………... $672,600

6. The estimated cost to remove the four fixed ski lifts is……………. ($921,500)

7. The estimated cost to remove the buildings is……………………..($243,000)

8. The estimated costs to remove the ski lifts and buildings exceeds orderly liquidation value by…………………………………………….……… ($491,900)

H. RANGE OF CERTAINTY:

It should be realized that these are estimates of liquidated values to be realized via distressed sale and/or auction and should reasonably be expected to vary +/- 10%. In addition time will also cause variances as these assets continue to depreciate, and market conditions change.

MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 4

SECTION II

MT. ASHLAND LIQUIDATION VALUE APPRAISAL

SKI LIFTS Inventory:

Mt. Ashland has the following equipment. Mr. John Ellis PE inspected all lifts on November 8, 2006.

Valuation: Ski Lifts

The Mt. Ashland Ski Area includes two old and essentially obsolete ski lifts and two more recent smaller lifts. The orderly liquidation value estimate shown below is for the ski lift equipment as if removed and sitting in the parking lot ready to load on a truck. MT ASHLAND SKI LIFT EQUIPMENT INVENTORY

LIFT IDENTIFICATION #1 #2 #3 #4 #5 NAME Ariel Windsor Sonnet Comer Pinocchio DESCRIPTION Ski Lift Type DC DC TC TC WR Manufacturer Riblet Yan Riblet Riblet Bruckschlogl

Year Installed 1964 1978 1987 1987 2001 Top Elevation 7,533 7,080 6,751 6,688 Portable Base Elevation 6,445 6,350 6,650 6,350 Lift Length (feet) 2,960 2,035 872 1,280 152 Vertical Rise (feet) 1,088 730 101 338 17 Slope Length (feet) 3,153 2,161 877 1,285 152 Capacity (PPH) 1,080 1,200 1,200 1,800 600 VTF/hour (000) 1,175 876 121 608 10 H.P. 150 30 75 4 Rope Speed (ft/min) 500 500 305 400 200 Rope Size (inches) 1.250 1.250 1.125 1.125 16mm Number of carriers 110 81 39 64 N/A Number of towers 19 N/A 6 9 0 USEFULL LIFE (Years) 40 40 40 40 40 REMAINING LIFE (Years) (2) 12 21 21 35

Orderly Liquidation Value $10,000 $25,000 $60,000 $50,000 $7,000

Mr. John Ellis PE filed the following report. Copies of the original lift specifications are attached.

Please note that discussions with Mr. Ellis subsequent to his report revealed that filling terminal columns with concrete is/was normal construction procedure to help anchor the terminal. MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 5

Outback Construction, Inc. Ashland, Oregon

November 30, 2006

Re: Chairlift Removal @ Mt. Ashland, Oregon

The following proposal submitted to Ted Farwell for the removal of the at Mt. Ashland, Oregon with removal work being performed by Outback Construction, Inc. This proposal and work scope is subject to approval by the U.S. Forest Service, Mt. Ashland and any other concerning parties involved in this decision to remove the equipment from the ski resort property. Prices are based on current rates and ideal construction conditions to include access to all terminal sites with cranes and equipment to remove terminal structures. Towers shall be removed with helicopters where cranes or other conventional methods of removal cannot be used. Prices are based on the understanding that the equipment shall be removed, disassembled and transported to the ski area parking lot where others will be responsible for final transport and removal from ski area property. Concrete foundations shall be blasted and/or jack hammered to “below grade” appearance using a rock breaker implement mounted on a spyder hoe and the use of two stroke powered jackhammers/drills.

Prices do not include removal of electrical infrastructure and/or transformers, buried and overhead power lines associated with the chairlifts.

Double fixed grip beginner chairlift / Riblet $ 85,100.00

Triple fixed grip chairlift / Riblet $113,500.00

Double fixed grip chairlift / Yan $135,200.00

Double fixed grip chairlift / Riblet $147,100.00

Helicopter cost / tower removal $183,500.00

Foundation removal and blasting fees $257,050.00

Total estimated cost $921,450.00

MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 6

MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 Mt Ashland Ski Lift Appraisal

By: John Ellis P.E. – Aerial Engineering Inc. Inspection date: 11-8-06 For: Winterstar Valuations Inc.

Background:

Mt Ashland currently has 4 chair lifts and a wire rope tow. The lifts are comprised of the following. · “Arial” - 1964 Riblet Double · “Windsor” - 1974 Yan Double · “Comer” - 1987 Riblet Triple · “Sonnet” – 1987 Riblet Triple · “Pinocchio” - 2001 Bruckschlogl GMBH tow

On November 8, 2006 I reviewed the maintenance records and rode Sonnet, Comer and Windsor with Woody of Mt Ashland. We drove to the bottom and top of Arial. The handle tow was still in pieces and was in the process of being set up. All the lifts appear to be in a good state of repair. The lifts have been upgraded and maintained systematically as will be shown in the specifics for each lift. This report contains the following information. · Current pictures for each lift. · A list of upgrades and enhancement to each lift. · Values of each lift sitting in the parking lot ready to load. · The original spec sheets for each lift.

Please note the dates on the pictures are not correct.

F:\Projects\Ski Ashland\Mt Ashland Lift Appraisal.doc 1/7 11/21/2006 Mt Ashland Ski Area Sonnet Chair lift

Top Ilder Terminal Tension -Drive Terminal

Lift Line

Drive Components

F:\Projects\Ski Ashland\Mt Ashland Lift Appraisal.doc 2/7 11/21/2006 Mt Ashland Ski Area Comer Chair lift

Top Idler Terminal Bottom-Tension Drive

Lift Line Drive Components

F:\Projects\Ski Ashland\Mt Ashland Lift Appraisal.doc 3/7 11/21/2006 Mt. Ashland Ski Area Windsor Lift

Top Idler Terminal Bottom-Tension Drive

Drive Components

Lift Line

F:\Projects\Ski Ashland\Mt Ashland Lift Appraisal.doc 4/7 11/21/2006 Mt Ashland Ski Area Arial Lift

Top Tension Terminal Bottom-Drive Terminal

Drive Components

Lift Line

F:\Projects\Ski Ashland\Mt Ashland Lift Appraisal.doc 5/7 11/21/2006 Mt Ashland Ski Area Lift Specifics

Sonnet Lift - 1987 Riblet Triple · New haul rope installed in 1989 · The tension-drive rear column is filled with concrete preventing it from being reused if the lift was relocated. This decreases the lift value as a new column would have to be fabricated if the lift was put up somewhere else. · Lift averages about 1200 hours per year

Comer Lift - 1987 Riblet Triple · New haul rope installed in 1989 · Motor rebuilt in 2006 · APU engine rebuilt in 2001 · The tension-drive rear column is filled with concrete preventing it from being reused if the lift was relocated. This decreases the lift value as a new column would have to be fabricated if the lift was put up somewhere else. · Lift averages 1200 hrs per year

Windsor Lift – 1974 Yan Double · New Comline in 2006 · Bottom Operator’s house upgrade in 2006 · New Electric Drive 2002 · Motor rebuild 2004 · The columns for the terminals are filled with concrete preventing them from being reused if the lift was relocated. This decreases the lift value as new columns would have to be fabricated if the lift was put up somewhere else. · Since 1984 lift averages 1300 hrs per year

Arial Lift – 1964 Riblet Double · New haul rope in 1983 · Towers have original line machinery with cable catcher up grade · New chairs and chair clips were installed in late 1990’s · The tension bullwheel have been upgraded with a stationary shaft. · A new service brake pump unit was installed in 2004 · Lift averages 800-900 hrs per year

Rope Tow – 2001 Bruckschlogl GMBH · Nothing to report

F:\Projects\Ski Ashland\Mt Ashland Lift Appraisal.doc 6/7 11/21/2006 Mt Ashland Ski Area Lift Valuations

Arial Lift - Lift sell Price around $10,000

· Comparisons - 1972 Riblet double chair sold for around $25,000. in 2006 · Comparisons – 1974 Riblet triple chair sold for around $35,000 in 2005 The draw backs for the Arial lift are the age, style of line machinery and style of tower crossarms.

Windsor – Lift sell price around $25,000.00

The asking price for a 1978 Yan Triple in 2004 was $80,000. This lift was twice the horsepower as Windsor and was a triple vs. a double. I have no record that this lift actually sold.

Sonnet – Lift sell price around $60,000

· A small 1969 Hall 1402 double chair in Colorado sold for $25,000 in 2006. It is similar in size to Sonnet.

Comer – Lift sell price around $50,000

· The draw back for Comer is the style of drive enclosure.

Pinocchio Rope Tow – sell price around $7,000.00. This price is based on conversations with the manufacture regarding pricing of used tows.

If you have any questions please let me know. Again these sell prices are based on the lift sitting in the parking lot ready to load on a truck.

Respectfully yours,

John C Ellis P.E. (Project Engineer)

F:\Projects\Ski Ashland\Mt Ashland Lift Appraisal.doc 7/7 11/21/2006 16

SECTION III

MT. ASHLAND LIQUIDATION VALUE APPRAISAL

THE ROLLING STOCK Inventory:

Mt. Ashland has the following mobile equipment. Mr. Ted Farwell MAI inspected all vehicles on October 26, 2006.

MT. ASHLAND SKI AREA LIQUIDATION APPRAISAL ROLLING STOCK INVENTORY

Slope Grooming Equipment Manufacturer Year Model Hours Attachments Condition Rebuilt at Bombardier 2002 TW 275 5,360 12 way Quickblade Excellent 5,360 hrs Terrain Master Tiller Tower Winch Bombardier 1994 400 13,700 12 Way Blade Good 7,800 hrs C- bar Flex Tiller Bombardier 2001 SR 275 6,870 12 way Quickblade 5,500 hrs Terrain Master Tiller Good LMC 1983 3700-C 20,000+ 10 Way Blade Good twice LMC 1986 3700-C 20,000+ Anchor & Winch Fair Heavy Equipment Kawaski 1986 Z-80-II 9,800 Bucket Loader Good John Deere 1967 350 N/A Long-Wide Track Good once Crawler with Backhoe and Six way Blade Utility Vehicles Polaris 2003 Ranger 1,248 6x6 Excellent Polaris 2006 Sportsman 40 4x4 New Susuki 1983 N/A 4x4 Fair Dodge 2001 Ram-350 24,682 15 Pax - Van Good Transmission Dodge 1994 Ram-350 98,198 15 Pax - Van Good Dodge 1979 Ram-350 247,462 Open - Van Fair Dodge 1976 Power Wagon 131,210 Club Cab Good

Pictures of each vehicle except 1 LMC 3700 and 1 van are included on the following pages.

MT. ASHLAND PROPERTY 16 LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 17

Slope Grooming Equipment:

1994 Bombardier 400 2001 Bombardier SR 275

2002 Bombardier TW 275 1986 LMC 3700 C

Heavy Equipment:

1986 Kawasaki Loader Z-80-II 1976 JD Long-Wide Track Crawler

MT. ASHLAND PROPERTY 17 LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 18

Utility Vehicles:

2003 Polaris 6x6 Ranger 2006 Polaris 4x4 Sportsman

1983 4x4 Susuki 1976 Dodge Power Wagon

1979 Ram Van – Open 1994 Ram Van – 15 Pax

MT. ASHLAND PROPERTY 18 LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 19

Valuation: Slope Grooming Vehicles

There is an active market for used slope grooming vehicles The table below lists seven recent sales as reported by resortboneyard.com. Hugh Knapp, an active dealer in used ski area lifts, equipment and parts, sold most. Mr. Knapp confirmed these prices. Hours Price Condition Year Equipment

9,000 $30,000 Very Clean 1996 Piston-Bully 280D 8,800 $20,000 Well Maint 1983 Piston-Bully PB-170D 7,613 $23,500 Excellent Cond 1994 Piston-Bully 260 Snowcat 4,600 $65,000 2002 Bombardier BR-275 2,600 $45,000 1998 Bombardier BR-180 1,941 $57,500 Very Good 2003 Bombardier BR-275 1,320 $107,000 Very Clean 2000 Bombardier BR2000

I have related hours to selling price, as shown on the chart below, and find that the hours explain some 65% of the price variation. Basically, A clean zero hours, used vehicle starts at $87,551 and, all other considerations being equal, each 1000 hours of operation drops the used value by $7,422.

SNOW GROOMING EQUIPMENT y = -7.4221x + 87751 R2 = 0.6541 $120,000

$100,000

$80,000 e c i $60,000 r P

$40,000

$20,000

$0 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Hours

MT. ASHLAND PROPERTY 19 LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 20

Hours since Indicated Rebuilding Value

1994 Bombardier 400 5,900 $43,961 2001 Bombardier SR 275 1,300 $78,102 2002 Bombardier TW 275 0 $87,751

Mt. Ashland Property- Orderly Liquidation Value Appraisal Slope Grooming Vehicles

Year 2002 1994 2001 1983 1986 Mfg. Bombardier Bombardier Bombardier LMC LMC Model TW-275 400 SR-275 3700-C 3700-C Hours 5,360 13,700 6,870 20,000+ 20,000+ Condition Excellent Good Good Source for parts Hours since rebuilt 0 5,900 1,370

Nominal value $100,000 $40,000 $80,000 Less: External Obsolescence $35,000 $25,000 $40,000 Liquidated Value $65,000 $15,000 $40,000 $4,000 $8,000 Estimate Source: Resort boneyard.com & Hugh Knapp

While this result seems logical, I have no information concerning the dates of these sales and discussion with Mr. Hugh Knapp owner and principal of Knapp Associates, dealers in used grooming equipment, reveals the impact of a current over supply of Bombardier grooming machines due to Bombardier’s leasing program during the nineties. The used market has been flooded with some 250-300 such vehicles, thus depressing the prices received. Returned leased Bombardier snowcats are being sold for $25,000 to $35,000. Mr. Knapp stated that realistically he would have to heavily discount the above-indicated values to allow for the depressed market. This is logically external obsolescence.

The 2002 rebuilt Bombardier TR 275 includes a state of the art tower winch and should therefore be afforded an orderly liquidation value of $100,000. According to Mr. Knapp the external obsolescence will bring it’s orderly liquidation value down to $65,000.

In my judgment the 1994 Bombardier 400 should be further discounted due to its age in spite of the fact that it has been rebuilt, which would logically mean $40,000. According to Mr. Knapp the external obsolescence will bring it’s orderly liquidation value down to $15,000.

The 2001 rebuilt Bombardier SR 275 should be afforded an orderly liquidation value of $80,000. The external obsolescence will bring its orderly liquidation value down to $40,000

MT. ASHLAND PROPERTY 20 LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 21

The two LMC 3700C models have primary value for spare parts as no new parts are available. Mr. Knapp quoted $4,000 for the 1983 model and $8,000 for the 1986 model.

Valuation: Utility Vehicles

Utility used vehicle values are assembled and reported by N.A.D.A., the Kelly Bluebook, and other on-line operators. The following values were extracted from their web pages.

Mt. Ashland Property- Orderly Liquidation Value Appraisal Utility Vehicles

Vehicle 15 Pax Van 15 Pax Van Open Van PU Truck ATV 4x4 ATV 6x6 ATV 4x4 Year 2001 1994 1979 1976 2006 2003 N/A Mfg. Dodge Dodge Dodge Dodge Polaris Polaris Susuki Model 3500 3500 3500 Power Wagon Sportsman Ranger Mileage 24,682 98,198 247,462 131,210 Hours 1,248 40 N/A Avg Trade-in Excellent $9,450 $1,850 $500 No Quote Good $8,830 $1,575 $425 Vehicle $5,200 $5,715 Fair $7,765 $1,095 $300 too old or Avg. Retail $13,180 $4,060 $1,430 $5,910 $4,530 $2,000 Source: NADA Guides & Kelly Bluebook Liquidated Value $11,000 $3,000 $500 $300 $5,900 $4,500 $1,500 Estimate

1979 DODGE SPORTSMAN B300 15 Passenger Van VIN# B36JE9K372519 Mileage: 247,462

1979 models are not quoted any more unless they are restored. The latest quote is for 1986-year vehicles.

The other two vans are in excellent condition and therefore I estimate would bring something between average trade-in and retail value

1994 DODGE LE MAXIVAN B350 15 Passenger Van VIN# 2B5WB3520RK162731 Mileage: 98,198 Front/Rear Air Conditioning, Cruise Control

2001 DODGE RAM WAGON 3500 15Passenger MAXIVAN VIN# 2B5WB35Z61K549482 Mileage: 24,682 V8; Automatic; RWD; Front/Rear Air Conditioning; Power Steering, Windows, Locks; Tilt Wheel; Cruise Control; AM/FM Stereo; Cassette; Dual Front Airbags; ABS; Privacy Glass; Alloy Wheels

MT. ASHLAND PROPERTY 21 LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 22

The Polaris ATV’s were found on the N.A.D.A. web site and confirmed by a local dealer. The orderly liquidation value estimated is based on the age and condition. The 2006 Sportsman cost $6,200 new and has only 40 hours of operation.

Valuation: Heavy Equipment:

The two pieces of heavy equipment are very unique. Their value is due to their critical need at unknown times. Most ski areas have several such pieces of equipment, generally purchased used as the demand placed upon them is miniscule when compared to their primary role in daily construction. While as used, and obsolete equipment they have value in their role, but very little value on the used equipment market. I could find no quotes on the Internet and in checking with a local dealer found that both pieces are no longer in production. Mr. Jeremy Thomas of H & E Equipment Services estimated $25,000 for the Loader and $4,000 for the Crawler with a $2,000 add-on for the backhoe attachment.

Heavy Equipment

Vehicle Loader Crawler Year 1986 1976 Mfg. Kawaski John Deere Model z-80zII Long-Wide Track Hours 9,800 N/A Vehicle $4,000 Attachments $2,000 Liquidated Value $25,000 $6,000

MT. ASHLAND PROPERTY 22 LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. OCTOBER 26, 2006 23

SECTION IV

MT. ASHLAND LIQUIDATION VALUE APPRAISAL

OPERATING AND MAINTENANCE EQUIPMENT Inventory:

Mt. Ashland has a wealth of additional required operational and maintenance equipment. Mr. Dan Pahl CEA inventoried and inspected all 350 items listed on October 26, 2006.

Valuation:

Pahl Industrial, Inc. filed the following report.

PURPOSE,SCOPE &OBJECTIVE

Purpose The purpose of the appraisal report is to appraise the assets of Mount Ashland Ski Resort Ashland, Oregon. This is a complete summary appraisal report intended for use by Winterstar Valuation, Inc. and the City of Ashland Oregon. Possession of this report by others other than the named parties does not make them an intended user.

SCOPE The scope of this appraisal was a physical inspection of the assets located at Mount Ashland Oregon, and an opinion of values of selected line items totaling $250,000 in Forced Liquidation Value and $347,000 in Orderly Liquidation Value.

Objective The objective of the report is to submit an opinion of value showing the Forced Liquidation Value and Orderly Liquidation Value of the selected assets. The effective date of the appraisal is October 26, 2006.

DEFINITIONS

Forced Liquidation Value (Auction) A Professional opinion of the estimated most probable price expressed in terms of currency, which would typically be realized at a properly advertised and conducted public auction sale, held under forced sale conditions and under present day economic trends, as of the effective date of the appraisal report. Further, the ability of the asset group to draw sufficient prospective buyers to insure competitive offers is considered. All assets are to be sold on a piecemeal basis ‘as is’ with purchasers responsible for removal of assets at their own risk and expense. Any deletions or additions to the total assets appraised could MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. & PAHL INDUSTRIAL, INC. OCTOBER 26, 2006 24

change the psychological and/or monetary appeal necessary to gain the value indicated

Orderly Liquidation Value A professional opinion of the estimated most probable price expressed in terms of currency which the subject equipment could typically realize at a privately negotiated sale, properly advertised and professionally managed, by a seller obligated to sell over an extended period of time, usually within six to twelve months, as of the effective date of the appraisal report. Further, the ability of the asset group to draw sufficient prospective buyers to insure competitive offers is considered. All assets are to be sold on a piecemeal basis ‘as is’ with purchasers responsible for removal of assets at their own risk and expense. Any deletions or additions to the total assets appraised could change the psychological and/or monetary appeal necessary to gain the value indicated. . Economic Obsolescence The loss in value of a property resulting from factors external to the property.

Functional Obsolescence A form of depreciation in which the loss in value is due to factors inherent to the property itself and changes in designs, materials, or process resulting in inadequacy over capacity, excess construction lack of functional utility, excess operating costs, etc.

Physical Obsolescence The loss of value resulting from wear and tear of an asset in operation and exposure to various elements.

METHODS &PROCEDURES

METHODS The appraisal method used in determining value was the market data approach. The income approach was not used in the performance of this appraisal.

The market data approach to value uses comparable sales, dealer listings and interviews with several dealers specializing in the sale of this type of equipment. Adjustments are made to the comparable sales to reflect the age, condition and other pertinent factors of the subject equipment. The market approach has the advantage of taking all forms of depreciation into account, (economic, functional and technological).

PROCEDURES Dan Pahl from Pahl Industrial Inc. conducted a physical inspection of the Mount Ashland Oregon assets on October 26, 2006.

MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. & PAHL INDUSTRIAL, INC. OCTOBER 26, 2006 25

The appraiser then checked the Pahl Industrial Inc. proprietary comparable sales database, and interviewed certain original manufacturers and used equipment dealers to verify findings. Interviews with certain dealers supplied the appraiser with information on replacement costs for the latest technology and the number of pieces of equipment that have been sold. The dealers indicated the current market conditions and selling prices on the used market.

COMMENTS

EQUIPMENT SPECIFIC COMMENTS

Some of the Machinery & Equipment was operating the day of the physical inspection and company personnel confirmed all Machinery & equipment is in operating condition. Maintenance personnel confirmed regular maintenance procedures are followed. Rental and Retail inventories where consistent with what is normally provided at Ski Resorts. Staff Clothing was adequate and in good condition.

The equipment is of recognized manufacture and common to the Ski Resort Restaurant and Hospitality Industries.

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Mount Ashland Ski Resort Equipment & Inventory Listing

Item Serial No. Qty Description FLV OLV No.

Main Lodge Top Floor

1 27 square tables 125 135

2 20 round tables 100 120

3 137 metal chairs 137 137

4 1 Knotty Pine display case 40 50

5 1 plywood display case 10 15

6 2 sofa's 50 60

7 1 coffee table 4 5

8 1 wood bench 3 5

9 1 wood table 2 3

10 1 wood burning fireplace insert 75 90

11 140 pairs of used Snow Board boots 1,400 1,400

12 assorted boots & binding repair parts in 4 100 120 plastic containers

13 4 fold up tables 80 100

14 1 sled 5 5

15 4 plastic discs 10 12

16 1 office c/w desk chair, computer, file 40 50 cabinet, TV, calculator

17 1 Motorola HT 600 walkie talkie c/w 30 40 charger

18 1 Audio amplifier c/w 2 speakers 20 25

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19 3 jackets 20 20

20 miscellaneous office supplies & books 40 45

21 1 Volunteers & donators wall plaque 40 45

22 1 office c/w desk, credenza, chair 60 70 microwave & shelves

23 1 Panasonic video camera 30 35

24 5 voice activated head sets 75 100

25 asssorted racing bibs 40 45

Third Floor

26 mens washroom - 2 urinals, 1 toilet, 2 20 25 sinks

27 60 lockers 300 420

28 2 drinking fountains 15 20

29 womens washroom 2 sinks, 2 toilets 15 20

30 6 large grey lockers 60 72

31 1 wash bucket 4 5

32 3 microwaves 30 40

33 2 metal cupboards 80 100

34 2 200 amp breaker panels 80 100

35 1 stepladder 35 40

36 1 office c/w desk, chair, computer, printer, 80 100 table & office supplies

Kitchen

37 1 Jet Tec F16 washer 40 50

38 1 Stainless Steel triple sink 60 70

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39 2 4 door wood coolers - 1 c/w beer taps 150 200

40 2 computer cash registers 175 225

41 assorted glasses, pitchers, etc. 250 300

42 1 credit card machine 200 225

43 1 LaCrosse Stainless Steel double sink 100 120

44 1 Cappuccino Machine & coffee maker 40 45

45 105 wood chairs 210 315

46 10 bar stools 50 60

47 1 Panasonic TV & Philllips VCR player 135 160

48 2 snow boards, 3 sets skis & Sleigh 50 60

49 30 square tables 210 300

50 1 bar 100 120

51 pictures & mirrors on wall 75 85

52 9 picnic tables 270 360

53 1 propane heater 200 250

54 1 Mitsubishi projection TV 400 500

55 2 t-bar lifts 50 55

56 2 vacuum cleaners 40 50

57 1 stereo system c/w speakers 30 40

58 1 computer c/w flat screen 70 80

59 3 high chairs 10 12

60 1 Panasonic TV 90 100

61 4 Lawrence vacuum cups 100 120 MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. & PAHL INDUSTRIAL, INC. OCTOBER 26, 2006 29

62 assorted pictures & plaques 70 80

63 10 plastic trash cans 30 40

64 1 40' aluminum extension ladder 150 175

65 1 20' aluminum extension ladder 700 80

66 assorted wood counters 100 120

67 1 soda counter c/w valves & controls 250 300

68 2 microwaves 20 20

69 1 hot dog warmer 15 20

70 1 Ortega nacho machine 25 30

71 1 Fresh & Fast model HFD-3A pizza 70 80 humidity cabinet

72 1 True 6' refrigerated display cooler 200 250

Second Floor

73 1 office c/w 2 safes, 2 chairs, 2 computers, 225 250 calculator & printer

74 1 Magner 35 bill counter 40 45

75 assorted office supplies in cupboard 200 225

76 4 ticket printers 200 225

77 assorted blue back racks 20 25

78 2 computer systems c/w cash drawers 250 300

79 3 chairs 20 25

80 1 office c/w desk, 3 chairs & file cabinet 125 140

81 1 office c/w Gateway laptop computer, 400 500 desk, 2 chairs & supboard

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82 1 time clock & card trays 100 120

83 assorted kitchen utensils pots, pans, 400 500 warming trays, etc.

84 6 sections shelving 240 300

85 1 Leer 6' X 6' X 5' walk in cooler 1,000 1,200

86 1 Howard 2 door cooler 5' X 7' X 3' 500 600

87 1 folding bakery cart 100 120

88 1 Imperial deep fryer 100 120

89 1 oxy acetylene regulator 20 25

90 1 20' skate wheel conveyor 50 60

91 1 stretcher 20 25

92 2 wood walk in coolers 1 free standing 175 200

93 1 office c/w 4 drawer letter file cabinet, 300 350 cupboard, microwave, 2 kenwood amps, fax, printer, coffee table, hole punch

94 1 Agilent Heartstream FR2 defibrillator 250 300

95 1 Maxon base station unit 250 300

96 1 laminator 40 50

Kitchen

97 1 Scotsman LM3 icemaker 600 800

98 1 Frigidaire Fridge 60 70

99 1 Lang convection oven 50 55

100 1 microwave on cart 60 70

101 1 Star warmer 20 25

102 1 Thermatic 4 burner gas stove & oven 600 700

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103 1 2' X 4' grill 60 70

104 1 Montague Grizzly grill 100 125

105 2 Superior & Dean deep fat fryers 400 500

106 1 Lincoln impinger toaster 400 500

107 1 Hatco heated holding display cabinet 40 60

108 1 Stainless Steel table 50 60

109 2 Continental 3' prep table 700 800

110 1 MPW Wyott warming tray in stainless 60 70 steel stand

111 1 Aerohot warming tray 150 200

112 1 shelving unit & wash bucket 40 50

113 1 Stainless Steel sink 40 50

114 1 Stainless Steel table 30" X 7' c/w can 100 120 opener

115 1 set Nemco heat lamps 15 20

116 1 double Stainless Steel sink c/w runoff 75 85

117 1 Auto Chlor dishwasher c/w Stainless 300 350 Steel prep sink with runoff

118 1 24" X 72" wood prep table 65 75

119 assorted pots, pans, sieves, cullenders, 200 250 etc. in kitchen

120 1 Ansul fire protection hood c/w charged 500 1,000 fire extinguisher

121 24 square tables 120 240

122 130 metal chairs 130 195

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123 assorted pictures, display cases, etc. on 250 300 second floor

124 2 shelving units 60 70

125 1 Heinz dispenser & napkin dispenser 8 10

126 1 Warming Hut boot & glove dryer 50 60

127 1 fridge & hand truck 75 85

128 2 wood L shaped counters c/w 3 computer 500 600 cash registers

129 1 Powerflite carpet cleaner 100 120

130 2 wood 2 door lateral file cabinet 150 200

131 1 4' prep table 70 80

132 1 6' & 8' wood display cases 350 400

133 1 credit card machine 200 250

134 1 Wittco warming table 350 400

135 1 Powermate air compressor 150 170

136 1 fiberglass aluminum stepladder 50 60

137 3 soda pop cupboards c/w valves, etc. 300 400

138 2 fire hoses on 2nd & 3rd floors 200 250

139 2 200 amp breaker boxes 75 85

Basement

140 102 triple lift chair seat pads 1,530 2,040

141 210 double lift chair seat pads 2,100 3,150

142 48 tower pads 2,400 2,880

143 4 radio base stations 1,200 1,600

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144 25 walkie talkies Kenwood, Motorola, etc 750 1,000

145 72 wood lockers 72 108

146 assorted rubber matting 300 400

147 1 Ariens 1332 snowblower 300 400

148 1 Honda snowblower 250 300

149 1 fiberglass stepladder 35 40

150 1 118 gallon hot water heater 200 300

151 rope, shelves & sinks 40 50

152 4 urinals, 4 toilets, 4 sinks 50 60

153 148 wood lockers 148 220

154 5 toilets, 4 sinks & baby change station 40 50

155 storage area c/w 10 sets of skis and 300 400 bindings, 2 snowboards, cupboard, shelf & promotional items

156 1 compressor on vertical tank 275 300

Maintenance/Storage/Furnace Room

157 1 2006 Avaya IP400 phone system c/w 8,000 10,000 voice mail & 46 instruments,

158 1 credit card machine 200 250

159 1 Meridian phone system 300 400

160 1 Westinghouse 800 amp main electrical 400 500 panel

161 1 Forced air furnace 100 100

162 7 sections shelving 125 140

163 1 1 horsepower compressor on tank 250 300

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164 assorted power & hand tools in 800 1,000 maintenance area

165 ski school room c/w 4 cordless drills, 300 325 desk, cordless skilsaw & printer

166 ski school & events office c/w computer, 350 400 desk, chair, printer, file cabinet, blueprint file & TV

167 Woody & Adas office c/w desk, chair, 450 500 laptop, label machine, heater, 2 - file cabinets & printer

168 Kids Club room c/w fridge, sink, locker, 200 225 vacuum TV & VCR

169 50 Helly Hansen fleece vests 250 300

170 4 Dermizax coats 320 360

171 3 vacuums & floor polisher 150 170

172 1 Craftsman table saw 175 200

173 64 wood lockers 64 64

174 1 small table saw 50 60

Ski Rental Building

175 2 & ski racks 250 300

176 3 boot drying racks 500 600

177 1 Craftsman chop saw 150 175

178 7 wood work stations 35 40

179 assorted rubber floor mats 300 400

180 5 sections shelving 250 300

181 1 rolling staircase 175 200

182 1 aluminum stepladder 25 30

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183 1 200 amp electrical box 40 50

184 1 vacuum, wash bucket, mops, shovels, 125 150 etc.

185 lunchroom c/w fridge, microwave, tables, 175 200 chairs, etc.

186 1 office c/w desk, chair, file cabinet, laptop, 700 800 desktop, printer & chair

187 1 office c/w desk, chair & copier 60 70

188 1 new furnace 150 200

189 2 rolls fence netting 70 80

190 2 urinals, sink & toilet 15 15

191 2 toilets 2 sinks 15 15

192 1 10' X 40' ski repair trailer 4,000 5,000

193 1 Grindrite ST600 grinder 1,500 2,000

194 1 Laser Straight ski grinder 100 125

195 1 Grindrite edger 250 300

196 1 Grindrite ST490 waxer polisher 800 1,000

197 1 filing bench 125 150

198 assorted power & hand tools 400 450

199 1 Tokomat waxer 75 100

200 2 40' ship containers 3,000 4,000

201 1 Convault 2,000 gallon fuel tank 1,500 2,000

Shop

202 1 42' X 60' metal frame metal clad 1,000 1,500 maintenance shop building

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203 1 used oil tank 100 125

204 1 parts washer 200 250

205 1 eye wash station 50 60

206 1 oil cart & 2 pumps 70 80

207 1 Craftsman tool box & tools 300 350

208 assorted power & hand tools on wall 800 1,000

209 3 work benches & vise 250 300

210 1 jib crane c/w hoist 200 250

211 1 model 6006 battery charger 60 70

212 1 Milwaukee grinder 40 50

213 1 Duracraft pedestal drill press 200 225

214 1 Parker Phastkrimp hose crimp machine 800 1,000

215 1 cut off saw 60 70

216 1 Darex drill bit grinder 350 400

217 1 portapower 200 225

218 1 non destructive magnetic particle tester 200 225

219 1 bench & vise 70 80

220 1 Enerpac PEM2021 hydraulic pump 400 500

221 1 30 ton fully adjustable shop press 300 350

222 1 oxy acetylene set on cart c/w bottles 225 250

223 1 pressure washer 250 300

224 1 gas barbecue 20 25

225 1 creeper, hand truck, masking paper rack 60 70 MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. & PAHL INDUSTRIAL, INC. OCTOBER 26, 2006 37

226 1 floor jack 125 150

227 8 adjustable floor stands 160 180

228 1 Miller Dialarc 250 welder 350 450

229 1 Ingersoll Rand 5 horsepower model 30T 600 700 compressor on tank

230 1 Johnson model J bandsaw 250 300

231 1 Thermal Dynamics Cutmaster 38 plasma 400 500 cutter

232 1 oxy acetylene cart c/w bottles 100 125

233 1 Lincoln SP100 welder 500 600

234 1 Raetone flammable cabinet 150 175

235 1 dual light stand 60 70

236 assorted steel in rack 250 300

237 15 tires 300 350

238 stores inventory including Bombardier 2,000 3,000 parts

239 3 gas weed eaters 300 360

240 shop office c/w desk, chair, laptop, chair, 350 400 sofa, file cabinet & fridge

241 2 Stihl chainsaws 500 600

242 1 Kato 60 kilowatt gen set p/w Detroit 353 3,500 4,000 engine 208/240 volt, 2049 hours

243 assorted pilons, signs, etc. 250 300

244 1 fuel tank & pump 175 200

245 1 8' X 16' trailer c/w file cabinet, desk, 2,000 2,500 chair, laptop & chair

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246 1 Knaack model 4824 tool box 150 200

247 14 lift evacuation kits 1,500 2,000

Lift shop

248 1 office c/w 2 desks, 3 chairs, 2 200 225 microwaves, fridge, tiaster, TV, etc.

249 1 transformer & 200 amp main panel 150 175

250 assorted parts for lift 1,000 1,200

251 1 Craftsman tool box and tools 400 500

252 assorted snow maintenance tools 600 700 including rakes, shovels, fencing, etc.

253 1 Scott welder generator 300 350

254 1 Sears battery charger 25 30

255 1 Honda HP3500 generator 200 250

256 1 Lincoln 225 amp welder 200 250

257 1 Oxy Axetylene set c/w bottles 200 250

258 1 vacuum 20 25

259 1 bench & vice 40 50

260 assorted power & hand tools 700 800

261 1 bench grinder 65 75

262 1 6 ton chain hoist 125 150

263 1 Tirfor comalong 40 50

264 2 comalongs 150 1,785

265 assorted chain slings, wire rope slings, 400 500 pulleys, etc.

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266 1 stereo system 20 25

267 1 hydraulic lift cable detensioner 1,500 3,000

268 assorted tires & sheaves for Riblet chair 3,000 3,500 lifts plus assorted Yan Sheaves

269 1 Kamag 60 KW generator p/w Perkins 4,000 5,000 diesel 240/480 volt - 926 hours

270 2 spare tower lights 100 120

271 assorted light fixtures 100 120

272 elctrical switchgear 200 225

273 assorted fasteners 200 250

274 assorted wire rope, and parts for lifts 2,000 2,500

275 1 Yan grip tester 350 400

276 assorted climbing harnesses 400 500

277 assorted snow fencing in start gate 400 500

278 1 Aluminum frame start gate 500 600

279 1 Aluminum picnic table 100 125

280 4 ladders 250 300

Waste Water Treatment Plant

281 1 YSI 550DO probe 500 600

282 1 Oakton stable temperature oven 350 400

283 1 model 13B microscope 250 300

284 1 Hach DRB 200 c/w Hach DR 890 1,000 1,200 colorimeter

285 1 Parmer Ph meter 70 80

286 1 Ohaus scale 700 800

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287 1 Sequential Batch reactor Waste Water 20,000 40,000 Treatment plant c/w Fluidyne controls and instruments

288 1 GE 75 KW generator p/w 471 Detroit 5,000 7,000 diesel - 97.5 hours

289 99128 1 Hitemetaloy Snow Turbo Snow Park Half 15,000 18,000 Pipe Grinder

290 6 racks - 3 snowboard, 3 ski 1,000 1,200 308 1 Power Systems 275 KW generator c/w 6 6,000 8,000 cylinder Cummins 120/208 volt - 475 hours

309 8 tires 200 250

310 1 Convault 4,000 gallon fuel cell 1,500 2,000

Miscellaneous On Site Items and Retail & Rental Inventory

311 approximately 75,000 FBM of timbers in 10,000 15,000 main lodge

312 Electrical wiring throughout the facility 3,000 5,000

313 12 12" X 8" X 60' light poles and 68 Genlyte 5,000 6,000 lights & 10 new style Rudd lights

314 Rental Snow Board Binding inventory - 6,000 9,000 $18,418 cost

315 Rental Snow Board Inventory - $34,654 10,000 15,000 cost

316 Rental Snow Board Binding Inventory - 7,000 10,000 $24,000 cost

317 Rental Helmet Inventory - $3,500 cost 1,000 1,500

318 Rental Ski & Bindings Inventory - 20,000 28,000 $52,463 cost

MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. & PAHL INDUSTRIAL, INC. OCTOBER 26, 2006 41

319 Rental Ski Boot Inventory - $36,133 cost 7,000 10,000

320 Rental Pole Inventory - $3,063 cost 1,000 1,500

321 Used Coats Spyder & Helly Hansen - 224 8,960 13,440 total

322 Used Pants - 51 pair 750 1,250

323 Used Fleece vests - 227 total 2,270 3,405

324 New Retail inventory of eyewear, gloves, 7,000 10,000 goggles, hats, masks, helmets, outerwear, shirts, sunglasses, etc. - $14,581 cost

On site Total 236,807 330,868

Ashland Office

291 Reception area c/w reception desk, 5 900 1,100 chairs, computer, 2 printers, radio, charge card machine, pictures, easel, etc.

292 2 boxes of trade show displays 500 600

293 Utility office c/w desk, chair, camera, 800 1,000 laptop, desktop, printer

294 1 Fargo DTC 510 Season pass printer 1,300 1,600

295 Human Resource office c/w desk, 3 450 600 chairs, 2 file cabinets, bookcase, printer

296 Storage room, shelving, vacuum, etc. 150 200

297 miscellaneous office supplies 400 500

298 miscellaneous xmas supplies 150 200

299 1 Fridge 40 50

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300 Development Directors office c/w 2 1,400 1,800 laptops, desktop, servedr, printer, stereo, 2 chairs, desk, file cabinet

301 2 paper shredders 80 100

302 open office area c/w fax, cupboard, 1,200 1,500 postage machine, printer, desk, 2 tables, etc.

303 1 Canon NP6030 photocopier 750 1,000

304 Rick Saul office c/w desk, 2 chairs, 1,300 1,600 printer, 2 file cabinets, safe, laptop

305 conference room c/w 2 tables, computer, 1,200 1,500 printer, 4 file cabinets, whiteboard, 11 chairs, TV,

306 Paulines office c/w desk, 3 chairs, 600 750 credenza, file cabinet, printer, computer

307 Mike & Mica's office c/w 2 desks, 4 1,700 2,200 chairs, printer, laptop, desktop, bookcase, file cabinet, projector for Power Point presentations

Grand Total 249,727 347,168

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ESTIMATED BUILDING REMOVAL COSTS:

We asked Western States Environmental Services Inc. to provide a proposal to remove all of the building structures at the Mt. Ashland Ski Area. Their proposal was faxed on January 3, 2007.

MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. & PAHL INDUSTRIAL, INC. OCTOBER 26, 2006 44

MT ASHLANDPROPERTY LIQUIDATION VALUE APPRAISAL WINTERSTAR VALUATIONS, INC. & PAHL INDUSTRIAL, INC. OCTOBER 26, 2006

PAHL INDUSTRIAL, INC. WINTERSTAR VALUATIONS, INC. DAN PAHL CEA TED FARWELL MAI

STATEMENT OF CONTINGENT &LIMITING CONDITIONS

This appraisal is based on a physical inspection of the on site assets listed and information supplied by Mount Ashland Ski Resort personnel, which Winterstar Valuations and Pahl Industrial deemed to be reliable and accurate. No warranty is or will be given as to the accuracy of the information provided by others.

No research regarding ownership and/or the existence of any actual encumbrances or liens was undertaken, nor was Winterstar Valuations, Inc. or Pahl Industrial Inc. requested to perform such work.

The purpose of the appraisal report is to assist the City of Ashland in determining the value of the equipment.

This equipment is valued under the premises that it was maintained to industry standards and operating within manufacturer’s specifications at the effective date of the appraisal. There was no consideration given for the effect any environmental hazards may have on the value of the equipment.

Market conditions do change regarding this type of equipment. Winterstar Valuations, and/or Pahl Industrial Inc. accepts no responsibility for changes in the market conditions, and no obligation is assumed to revise the Appraisal to reflect conditions, which occur subsequent to the effective date of this Appraisal. Any such change could render the appraisal and its conclusions invalid.

It is understood that this appraisal will be a matter of public record for use by the City of Ashland Oregon.

No right to testimony by Winterstar Valuations, Inc. and/or Pahl Industrial Inc. concerning this report is granted unless previous arrangements have been made.

LIMITATION TO LIABILITY In all events and circumstances, Winterstar Valuations, Inc. and Pahl Industrial Inc. maximum liability for any and all damages of any type or nature claimed by any person in connection with this engagement of Winterstar Valuations, Inc. and Pahl Industrial Inc. or the report shall be the fee actually paid to and received by Winterstar Valuations, Inc. and Pahl Industrial Inc. under this engagement letter. 1

511 West 22nd Avenue Post Falls, ID 83854 (208) 457-1148 (208) 699-3817 Cell (866) 233-1947 Fax www.winterstar.us

PROFESSIONAL QUALIFICATIONS OF TED A. FARWELL, MAI - MBA

Ted Farwell MAI has prepared over 125 ski resort appraisals of some 86 separate resorts in both the USA and . These valuation assignments have varied from one of the largest most successful North American resorts to several bankrupt operations that had only salvage value left. We have worked for ski resort owners, commercial banks, governments, and both the FDIC and the Resolution Trust Corp. We have had assignments to review other appraisers work, and to allocate the purchase price between land, hard assets and intangibles. This appraisal expertise was a natural extension of Ted Farwell’s forty-five years as a ski area consultant, when in the middle seventies Farwell studied appraisal and earned the professional designation MAI (Member Appraisal Institute).

Professional Membership:

Member - Appraisal Institute (MAI #6798) 1983-Present

Certified General Appraiser - State of Colorado (#ACO 1313626) - State of Idaho (CGA 722)

Senior Member -American Society of Appraisers (ASA) (Real Property -Urban) 1970-1980 Treasurer, Denver Chapter- 1974/75 Secretary, Denver Chapter- 1975/76 Vice President, Denver Chapter - 1976/77 President, Denver Chapter - 1977/79

Member -National Ski Areas Association 1977 -1996 Economic Study Committee

Ted Farwell MAI Resume – 11/27/2006 2

Awards: Elected to Colorado Ski Hall of Fame 1992 Elected to National Ski Hall of Fame 1992 University of Denver Athletic Hall of Fame 1999

Education: New York State College of Forestry 1948-50 University of Denver, B.S.B.A. 1957-59 Stanford University, M.B.A. 1959-61 Completed American Institute of Real Estate Appraisers' Courses: - Capitalization Theory & Technique - Investment Analysis - Urban Properties - Market Analysis - Advanced Rural Case Studies - Federal Land Exchanges & Acquisitions - Highest & Best Use & Market Analysis - Condemnation Appraising - Advanced Sales Comparison & Cost Approaches Attended seminar of the Real Estate Appraisal Foundation: - Real Estate Analysis Awarded MAI designation #6798 - Dec. 14,1983

Professional Responsibilities:

General Chairman: ASA Denver Chapter Sponsored Recreational Properties Appraisal Symposium

Instructor: Appraisal of Ski Areas-ASA Sponsored Symp. Appraisal of Ski Areas - Appraisal Institute of Canada National Conference Publications:

“The Appraisal of Ski Areas,” Valuation, Vol. 23, #2; American Society of Appraisers; Oct/Nov 1976

“The Appraisal of Ski Areas,” AIM, Vol. 26, Book 3, August 1982 Appraisal Institute of Canada

"Fair Market Value”, Ski Area Management, Vol 32, #2, March 1993

“Measuring Ski Area Value”, Ski Area Management, Vol 33, #2, March 1994

Ted Farwell MAI Resume – 11/27/2006 3

Experience: Employment: Winterstar Valuations, Inc, President (2002 - ) Ted Farwell & Associates, Principal (2001-02) Ted Farwell & Associates, lnc, President (1972-01) Group Delta Consortium, Partner (1975-95) Stratton Corporation; V.P. Mountain Operations (1984-85) Lake Catamount Project; Planning Director (1973-75) Denver Olympic Committee; Technical Director (1970-72) Sno-engineering Inc.; Vice President (1968-70) Director of Research (1961-68) Franconia College; Director of Business Prog. (1963-64) USAF Jet & Helicopter Pilot (1951-57)

Board of Directors: Loon Mountain Recreation Corporation (1965-70) Black Hills Chairlift Co. (Terry Peak) (1986-92)

Scope of Assignments: Physical Site Evaluation Ski Resort Appraisals Ski Area Design & Layout Feasibility Economic Feasibility Studies Supply/Demand Analysis Master Planning Investment Analysis Skier Market Research & Analysis Sales Forecasting

Specific Ski Resort Appraisals: Hidden Valley, Estes Park, CO (with Jerry Moore, MAI, SRPA) 1976 Greek Peak, Cortland, NY (with Dave Schwaner, MAI, SRPA) 1977 Skyline Basin, Dayton, WA – Bluewood Ski Area 1977/03 Bridger Bowl, Bozeman, MT 1978 A-Basin, Dillon, CO 1978 Hogadon Ski Area, Casper, WY 1978 Kirkwood Ski Resort, Kirkwood, CA 1979 Buena Vista Ski Area, Bemidji, MN 1979 Snowbasin Ski Area, Ogden, UT 1980/82/84 Mt. Reba/Bear Valley Ski Resort, Bear Valley, CA 1980 Orchard Site, Collingwood, ONT 1980 China Peak (Sierra Summit), CA (Review) 1980 Pike’s Peak Ski Area, Colorado Springs, CO 1980/83 Sleeping Giant Ski Area, Cody, WY 1981

Ted Farwell MAI Resume – 11/27/2006 4 Dodge Ridge Ski Area, Pinecrest, CA 1981 Bristol Mt. Ski Center, Bristol, NY (With Dave Schwaner, MAI, SRPA) 1981 Geneva Basin Ski Area, Grant, CO 1982/92 Rio Costilla Ski Resort, Costilla, NM 1982/90/91 Bromley Mountain, Manchester, VT (Purchase Price Alloc.) 1985 Sugarloaf Ski Resort, Carrabassett, ME 1985 Big Mt. Ski Resort, Whitefish, MT 1985/92/94 Stratton Mt. Ski Resort, Stratton, VT 1985 Tory Mountain, Harmon, WV (with Bruce Closser, MAI) 1985/86 Arizona Snow Bowl, Flagstaff, AZ 1981/2002/04/06 Fairfield Snowbowl, Flagstaff, AZ 1986/90/92 Mt. Hood Meadows, Portland, OR 1986/2002 Caberfae Ski Resort, Cadillac, Ml (Land Value only) 1987 Terry Peak Ski Area, Lead, SD 1987/2002 Snowshoe Resort, Snowshoe, WV 1987/94 Silver Creek Ski Area, Granby, CO 1987 Ski Resort, , CAN 1988/93/96/2000 Telluride Ski Resort, Telluride, CO 1988/92 Sunshine Village, Banff, ALB, CAN 1988 Tenney Mt. Ski Area, Plymouth, NH 1989 Elk Meadows Ski Area, Beaver, UT 1989/91/93 Grand Targhee Ski Resort, Alta, WY 1990 Ski Sunlight, Glenwood Springs, CO 1982/90/91/93 Burke Mt. Ski Resort, East Burke, VT 1990 Mt. Cranmore Ski Resort, North Conway, NH 1991/93 Snowy Range Ski Area, Centennial, WY 1991/95 Schweitzer Mt. Ski Resort Sandpoint, ID 1991/92/03 Fortress Mt. Ski Area, Kananaskis, ALB, CAN 1991/2000 Vail & Beaver Creek Ski Resorts, Vail, CO. 1991 Sunegga Ski Area, Bethany, ONT, CAN 1992 Northstar-At-Tahoe, Truckee, CA 1993 Galena Ski Resort, Mt. Rose NV (Appraisal Review) 1993 Sierra Ski Ranch, Twin Bridges, CA 1993 , Vancouver, , CAN 1994 Mt. Spokane, Spokane, WA 1994/97 Waterville Valley Ski Area, Waterville Valley, NH 1994 Moffat Tunnel Land, Winter Park, CO 1995/96 Beaver Mountain, Logan, UT 1995/97 Snowbird Ski Resort, UT 1995 USFS exchange for Base Lands, Grand Targhee, WY 1995/2000 Preliminary Valuation of Blue Mt, PA 1996

Ted Farwell MAI Resume – 11/27/2006 5 Deer Mt Ski Area - Leased Lands, Lead S.D. 1996 Powder Mountain, Eden (Understanding of Value) 1996 Preliminary Valuation of the Powderhorn Ski Area, CO 1997 Mike Wiegele Helicopter , Blue River, B.C., CAN 1997 Silver Star Mountain Resort, Vernon, B.C., CAN. 1997 Paoli Peaks Ski Area, Paoli, IN 1997 590-Acre Tract for Base Lands, Brundage Mt., ID 1998 Ski Area, ALB, CAN. 1999 Kimberley Ski & Golf Resort, B.C., CAN 2000 , B.C., CAN. 2000 Wintergreen Ski & Golf Resort, ALB, CAN. 2000 Mt. Bachelor Ski Resort, Bend, OR 2002 , Wenatchee, WA 2002/03 , Solitude UT 2002/06 Kelly , Idaho Falls, ID 2002 Ski Area, Skykomish, WA 2003 49 Degrees North Ski Area, Chewelah, WA 2003/06 Chestnut Mountain Resort, Galena, Ill 2003/05 Morningstar Lodge at Silver Mt., Kellogg ID 2005 Echo Mountain Snowboard Park, Idaho Springs, CO 2005 Taos Ski Valley, Taos Ski Valley, New Mexico 2006

Special Projects

 Allocation of the purchase price of 13 ski area sales to measure the fair market value of the public and private land for the USFS office Mr. Paul Tittman, ARA, Chief Appraiser- 1992/1993 Breckenridge, CO (2 sales) • Steamboat, CO • Monarch, CO Eldora, CO • Grand Targhee, WY • Jackson Hole, WY • Brighton, UT • Heavenly, CA • Goldmine, CA • Bromley, VT • Wildcat, NH Sierra Ski Ranch, CA

 Analysis of the feasibility of ski resort development on Nevado de Toluca, Mexico

 A Master Plan for the development of the Nasan Country Club Ski Resort in Pochoun, Korea

 Analysis of Lost Opportunity for the Cypress Bowl Ski Area, North Vancouver, B.C., Canada

 A Master Plan for the development of the Kosciusko Thredbo Ski Resort - NSW, Australia

Ted Farwell MAI Resume – 11/27/2006 6  A Business Plan in support of the purchase of the Grand Targhee Ski & Summer Resort, Alta, Wyoming

 A Terrain Capacity Analysis & Conceptual Ski Resort Design for the Powder Mountain Resort, Eden, Utah

Representative List of Clients: Government: Forest Service, USDA Economic Development Administration, USDC Area Redevelopment Administration, USDC Farmers Home Administration, USDA New Hampshire State Planning Project New York State Office of Planning Coordination Wyoming Economic Development Department Canadian National Parks Service Ministry of Culture & Recreation, Province of Ontario Province of British Columbia Travel Alberta, Province of Alberta Atlantic Canada Opportunities Agency, Province of New Brunswick Federal Deposit Insurance Corporation Resolution Trust Corporation Washington State Parks & Recreation Commission Moffat Tunnel Commission Governor’s Office of Planning - State of Utah Industry Trade Organizations: National Ski Areas Association Midwest Ski Areas Association Private Organizations: Loon Mountain Recreation Corp.; NH Waterville Company; NH Madonna Mountain Corp.; VT Burke Mountain Corp.; VT Windham Mountain; NY Mount Sutton, Ltd.; Quebec, Canada Camp Fortune; Ottawa Ski Club; Quebec, Canada Boise Cascade Co.; NC Winter Park Recreation Assoc.; CO L.T.V. Recreation Development; CO Pleasant Valley Investment Co.; CO The Woodmoor Corp.; CO Jackson Hole Ski Corp.; WY Mt. Ste. Marie, Ltd.; Quebec, Canada

Ted Farwell MAI Resume – 11/27/2006 7 Blue Mountain Resorts; Ontario, Canada Aspen Highlands Ski Co.; CO Attitash Ski Corp.; NH Whitewater Ski Society; British Columbia, Canada Medicine Bow Ski Co.; WY Ski Roundtop Inc. (Now Snow Time Inc.); PA Thredbo Ski Resort; NSW, Australia Mt. Cook Line; Queenstown, New Zealand Ski Venture, Inc., Snowshoe, W\/ Blackcomb Resort; B.C., Canada Leisureland; Auckland, New Zealand Skiing Louise Ltd., Lake Louise, Alberta, Canada Sunshine Village Corp. Banff, Alberta, Canada Searchmont, Sault Ste. Marie, Ontario, Canada Ski Wentworth, Wentworth Valley, Nova Scotia, Canada Big Valley Co., Alta, WY Fairfield Communities, Little Rock, AR Camelback Ski Corp, PA ARCO Real Estate, Los Angles, CA. Powder Mountain Resort, UTAH MIG Corp, WA Taos Ski Valley, NM Financial Institutions: GEICO Financial Services Inc., Denver, CO Colorado National Bank, Denver, CO Occidental Nebraska Federal Savings & Loan, Omaha, NE Central Bank, Grand Junction, CO Hilco, Bedford, NH First Interstate Bank, Laramie, WY US Bancorp Mortgage Appraisal Services, Seattle, WA Bank of America, Phoenix, AZ First Interstate Bank of , Reno, NV First Interstate Bank of Washington, Seattle, WA Bay Bank, Harvard Trust, Boston, MA Equitable Real Estate Investment Management, Inc., Denver, CO Ontario Development Corp., Toronto, Ontario, Canada Citibank Canada, Vancouver, British Columbia, Canada AT&T Capital, Morristown, NJ Bank of Boston, Boston, MA Bank of Montreal, Banff, Canada Fleet Bank, Boston, MA NCW Community Bank, Wenatchee, WA First Western Bank, Deadwood, SD Ted Farwell MAI Resume – 11/27/2006 8 Wells Fargo Bank, Zions First National Bank, ID/UT National Bank of Arizona, Phoenix AZ Baker-Boyer Bank, Walla Walla, WA Washington Trust Bank, Spokane, WA Dubuque Bank & Trust, Dubuque, IA

Ted Farwell MAI Resume – 11/27/2006 APPRAISER QUALIFICATIONS

Daniel V. Pahl President Pahl Industrial Inc.

EDUCATION, AFFILIATIONS, CERTIFICATIONS &LICENSES  Graduate Vancouver Technical School, Vancouver Canada  Certified Equipment Appraiser (CEA) as sanctioned by AMEA (Association of Machinery and Equipment Appraisers) – Certificate attached.  Certified USPAP (Uniform Standards of Professional Appraisal Practice) practitioner As sanctioned by ASA (American Society of Appraisers) – Certificate attached.  Licensed Auctioneer in Oregon, California, Texas, Washington, and Florida.  Member TMA (Turnaround Management Association)  Member ABI (American Bankruptcy Institute)

INDUSTRY RECOGNITION  Expert witness in Litigation Cases  Facilitated Executive and Management Improvement Courses  Graduate Dale Carnegie Sales Course  Conduct numerous gratuities Auctions for Charitable Organizations annually

Experience & Employment History

Feb 2002 – Present Pahl Industrial Inc Owner/President Pahl Industrial specializes in the Appraisal and Liquidation of Machinery and Equipment in a variety of Industries.  Machinery and Equipment appraiser for lease transactions, property tax, and Asset based lending purposes.  Perform auctions for machinery and equipment in a variety of industries.

Feb 2001 – Jan 2002 Hilco Industrial LLC Executive Vice President Hilco Industrial opened an Industrial Auction and Appraisal business in Chicago servicing a variety of manufacturing industries. My duties for opening this division included:  Formulating, developing and implementing a business plan for the disposition of assets  Personnel hired and an infrastructure built

April 1975 – Jan 2001 Maynards Industries (1991) Inc. Executive Vice President/Partner Fiscally responsible for the operation and management of the Industrial Division of a $75,000,000 per year Auction, Appraisal and Liquidation business.  Instrumental in opening the U.S. operations of this Canadian based company In 1986.  Responsible for directing this division in the performance of Auctions, Appraisals and Liquidations Initially in San Francisco and Portland Oregon with eventually expansion including Lansing Michigan, Cincinnati and Monterrey Mexico.  Performed and or supervised over 100 Appraisals, Auctions and Liquidations per year.  Oversaw complex Appraisals and Liquidations for Pulp and Paper Mills, Mines, Construction Equipment, etc.  Established reputable and reliable name recognition for Maynards to Bankers, Asset Based Lenders, Lawyers, CPA’s, Turnaround Professionals and Industry executives  Instrumental in developing a business to business “e Commerce” plan for the sale of equipment for long-term strategic partners. Namely General Motors, Boeing, Tower Automotive, Compass Aerospace, etc.

 Part of an Executive Business Development team that developed and Implemented strategic trade missions to developing foreign countries in an effort to broaden the customer base for Machinery and Equipment available In  Designed and implemented an historical data base for the collection and storage of sales data for equipment from a variety of industries. This data base is updated daily and is a key element in determining values for the Appraisal and Liquidation business.

Oct 1970 – March 1975 Airmatic Sales Ltd Sales Manager/Owner Company involved in selling a full line of Pneumatic products and also operated a Full service Machine and Fabrication Shop. Actively involved in every aspect of this small business, which enhanced the eventual move into the Appraisal and Liquidation field.

April 1964 – Sept 1970 Galbraith & Sulley/Robert Morse Corporation Sales Trainee/Salesmen Progressed from sales trainee to inside sales to outside sales in 1 ½ years with this large industrial firm selling full lines of Pneumatics, Hydraulics, Power Transmission, Material Handling Equipment, Sawmill Equipment which was expanded to include Machine Tools, Construction Equipment and Logging Equipment when the company was purchased by Robert Morse Corporation in 1968. The 8 years spent with these firms was the base of knowledge in a variety of industries that accelerated the learning curve in the Appraisal and Liquidation business.

JOHN C. ELLIS E. 561 Jackson Ave. Spokane, Washington 99207 Phone (509) 483-6181

January 2006

Born: February 28, 1967 Spokane, Washington

Marital Status: Married - 1991 Three children - Son and Two Daughters

Education: B.S. Civil Engineering, Gonzaga University, Spokane Washington - 1989

Registration as a Professional Engineer in the state of Washington and Utah

Memberships: American Society of Civil Engineers National Society of Professional Engineers Organization International Transportation by Rope, (N.A.C.S.) American Welding Society

Experience: Aerial Engineering, Inc. 1989 to present. Duties include: project engineering working on all facets of aerial rope-way design and inspection from handle tows to jig back tramways. Worked with Doppelmayr USA , providing design and construction engineering on over 10 detachable and fixed grip lifts. Project engineer on over 25 lift relocation projects involving the following lift brands; Riblet, Lift Engineering, Doppelmayr, CTEC, Heron- and Borvig. Shop manager for Superior Tramway Co.; which is a subsidiary of Aerial Engineering. This facility has a full machine and welding shop, supplying parts for the ropeway industry; specializing in rebuilding used lifts.

Hobbies: Fishing, hiking, motorcycling, golf, camping.