Summary Appraisal Report the Properties Located at Alcova/Pathfinder Reservoir Alcova, Wyoming 82620 Book Two - Analysis

SUMMARY APPRAISAL REPORT THE PROPERTIES LOCATED AT ALCOVA/PATHFINDER RESERVOIR ALCOVA, WYOMING 82620 BOOK TWO - ANALYSIS

Prepared For Mr. Mike Haigler, Road, Bridge and Parks Director Board of County Commissioners Natrona County Date of Appraisal - January 30, 2012 Effective Date - December 1, 2011 Appraised By Edward J. Holthouse, CRS, CCIM Certified General Real Estate Appraiser

SUBSECTION “A” APPRAISAL ANALYSIS ON THE ALCOVA CABIN SITES 1-100 ALCOVA RESERVOIR NATRONA COUNTY, WYOMING

The following analysis is only part of the “Total Appraisal Report”, referred herein as Appraisal Report No. 6705, which includes both Book One – Basic Data Section plus addenda and Book Two – Parcel Analysis. Except as hereinafter provided, the Client may distribute copies of the “total appraisal report” in its entirety to such third parties as they may select; however, selected portions of this appraisal report shall not be given to third parties without the prior written consent of the signatories of this appraisal report.

Holthouse Appraisal Group Analysis – 6705 Page A - 1 Holthouse Appraisal Group

The Appraisal Firm of Phone Number - 307-265-7908 Edward J. Holthouse and Associates Fax Number - 307-265-3754 139 West Second Street, Suite 3E E-Mail - [email protected] PO Box 1747 Casper, Wyoming 82602-1747

January 30, 2012

Mr. Mike Haigler, Director Natrona County Road, Bridge and Parks Department 538 SW Wyoming Boulevard Mills, WY 82644

Dear Mr. Haigler:

In fulfillment of our agreement, I have performed an appraisal on the real property, land only, known as Alcova Cabin Sites 1-100, Alcova Reservoir, Natrona County, Wyoming, herein referred to as the "subject property". The Appraiser’s opinions and conclusions are contained within this report and are reported in Summary Report format.

The intended use of this report is to serve as a guide to my client, The Natrona County Board of Commissioners, Mr. Mike Haigler, Director, Natrona County Road, Bridge and Parks Department, 538 SW Wyoming Boulevard, Mills, Wyoming, (herein referred to as the “Client”) as their interests may be served in their efforts to establish the market value and market rents for the subject properties described in the Alcova and Pathfinder Reservoir Private Use Site Appraisal Plan dated April 12, 1991. The intended users of this appraisal assignment are The Natrona County Commissioners, Mr. Mike Haigler, Director, Natrona County Road, Bridge and Parks Department, and the United States Department of the Interior – Bureau of Reclamation. All other parties that choose to rely on the appraisal report should recognize that the assignment results were not developed or reported in a manner consistent with the needs or uses of parties other than those previously identified as the intended user. A copy of the engagement letter, including the Client’s instructions and guidelines, are located in the Addenda of this report.

The appraisal assignment is to establish a supportable and defensible opinion of the subject’s market value (fee simple) and market rents for the subject’s “water front lots” and “non-water front lots”, as defined by the client, “land only excluding all leasehold improvements”, as of the effective date of the appraisal.

I certify that I have experience in appraising properties similar to the subject of this report. I further certify that I am currently certified as "Certified General Appraiser" by the State of Wyoming Appraisal Board, whose laws and regulations comply with Title XI of the Federal Financial Institutions Reforms, Recovery, and Enforcement Act of 1989.

I, Edward J. Holthouse, CRS, CCIM, hold Certified General Real Estate Appraiser Permit No. 438, issued by the State of Wyoming Certified Real Estate Appraiser Board. Holthouse Appraisal Group Analysis – 6705 Page A - 2

"Market value", as used herein, refers to the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under all conditions outlined in the Definition of Market Value contained in the body of this report.

The methods I have used and all pertinent data gathered in my investigation are either included in this report or have been retained in the Appraiser's files. The "Limiting Conditions and Assumptions" applied to this report and the "Appraisers Certification" and "Qualifications" are found in the “Basic Data Section” of this report.

The subject property's marketing time and exposure time are estimated to be one year or less based on the current market conditions.

The appraisal was made in conformance with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. The appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.

Based on my completed appraisal analysis, the contents of which are contained in the ensuing report (two copies with original signatures are enclosed), the fee simple market value and market rents for the subject property “as non-water front lots” and “water front lots”, as of the effective date of this report, are:

MARKET VALUE OF LAND – WATER FRONT LOTS

NINETY FIVE THOUSAND DOLLARS $95,000 MARKET RENTS FOR THE LAND ONLY – WATER FRONT

THREE THOUSAND TWO HUNDRED FIFTY DOLLARS $3,250 MARKET VALUE OF LAND – NON WATER FRONT LOTS

SIXTY THOUSAND DOLLARS $60,000 MARKET RENTS FOR THE LAND ONLY – NON - WATER FRONT

TWO THOUSAND FIFTY DOLLARS $2,050

Holthouse Appraisal Group Analysis – 6705 Page A - 3 EXTRAORDINARY ASSUMPTION: The Appraiser had previously obtained from the Natrona County Road and Bridge Department through an appraisal done by Irle R. Briggs dated July 9, 1991, information indicating that the 100 cabin site lots range in size between 0.37 acres to 2.1 acres with an overall average lot size of 0.64 acres or 27,878 sq. ft. This information, however, cannot be independently verified as the plat map recorded at the Natrona County Deed of Records lacks information adequate for a credible analysis. Therefore, the value opinion and other conclusions expressed in this report are subject to the extraordinary assumption that the average lot size is 27,878 sq. ft., subject to a survey. The client and intended users of this appraisal are cautioned that if this extraordinary assumption is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

HYPOTHETICAL CONDITION NO. 1: The instructions of the Client are to appraise the value of the subject’s “lake front – water front” lots and “lake-view – non-water front” lots as if they were all equal in overall utility including lake access, location, size, topography and availability of services as it relates to the classification of the individual lot, which they are not. Therefore, the value opinion and other conclusions expressed in this report are subject to the hypothetical condition that all “lake-front – water front” lots are equal to each other in location, lake access, lot size, topography and availability of services and that all “lake-view – non-water front” lots are also equal to each other in location, lake access, lot size, topography and availability of services. The Client and intended users of this appraisal are cautioned that if this hypothetical condition is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

HYPOTHETICAL CONDITION NO. 2: At the time of inspection the subject sites were improved with 100 various recreational cabins and various support buildings and improvements. The client has requested an appraised value of the land only excluding all tenant owned improvements but including off-site improvements or any other improvements installed or owned by the United States Government or any other entity. Off-site improvements considered are hydroelectric dams, beaches, lakeways, roadways, electrical service and transmission lines, docks, outdoor restrooms or any other improvement that is not considered a traditional tenant improvement. Therefore, the value opinion and other conclusions expressed in this report are subject to the hypothetical condition that the site is currently vacant with no tenant improvements. The Client and intended users of this appraisal are cautioned that if this hypothetical condition is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

Respectfully submitted,

______Edward J. Holthouse, CRS, CCIM Certified General Appraiser Permit No. 438

Holthouse Appraisal Group Analysis – 6705 Page A - 4 SUMMARY OF SALIENT FACTS AND CONCLUSIONS

Identification of the Subject Property: Alcova Cabin Sites Lots 1-100, Alcova Reservoir, Natrona County, Wyoming.

Legal Description: Lots 1-100, Alcova Cabin Sites, Alcova Reservoir, Natrona County, Wyoming.

Purpose of the Appraisal: To arrive at a supportable and defensible opinion of value (fee simple) and market rents for the subject sites, as of the effective date of the appraisal. These sites are to be valued as “water front lots” and “non-water front lots”, as defined under the clients scope of work stated in the Basic Data Section of this report.

Site Size: 100 cabin site lots ranging between 0.37 acres to 2.1 acres with an overall average lot size of 0.64 acres; subject to a survey.

Improvements: The instructions of the client are to appraise the subject sites as unimproved cabin sites, therefore, the improvements to the sites will not be described as they do not affect the value opinion requested by the Client.

Zoning: The subject is currently zoned “SR-2”, Suburban Residential

Highest and Best Use: Recreational Cabin Sites.

Value Opinion by the Sales Approach Market Value – Water front Lots $ 95,000 Market Rents – Water front Lots $ 3,250 Market Value – Non Water front Lots $ 60,000 Market Rents – Non Water front Lots $ 2,050

Value Opinion by the Cost Approach: Omitted

Value Opinion by the Income Approach: Omitted

Holthouse Appraisal Group Analysis – 6705 Page A - 5 Final Opinion of Market Value: Market Value – Water front Lots $ 95,000 Market Rents – Water front Lots $ 3,250 Market Value – Non Water front Lots $ 60,000 Market Rents – Non Water front Lots $ 2,050

Rate of Return on Investment: 3.40%

Date of the Appraisal: January 30, 2012 Effective Date of Appraisal: December 1, 2011

Appraised By: Edward J. Holthouse, CRS, CCIM Wyoming Certified General Appraiser: Permit Number No. 438

Holthouse Appraisal Group Analysis – 6705 Page A - 6

ALCOVA RESERVOIR LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page A-7 PHOTOGRAPHS OF THE SUBJECT PROPERTY

Holthouse Appraisal Group Analysis – 6705 Page A - 8 A Typical Water Front View Lot

Typical Water Front Lot Typical Water Front Lot

Typical Water Front Lot Typical Water Front View Lot

Typical Water Front Docks Typical Water Front Lot

Typical Water Front Lot Typical Water Front Lot

A Typical Water Front Lots Garbage Collection Area

Typical Non-Water Front View Lot Typical Non-Water Front View Lot

Typical Non-Water Front View Lot IDENTIFICATION AND LOCATION OF THE SUBJECT PROPERTY The subjects of this appraisal report are the 100 cabin sites located on the west shore of Alcova Reservoir approximately 30 miles southwest of Casper in south-central Natrona County. The instructions of the client are to value the subject sites as “water front lots” and “non-water front lots” which will not be the specific value of each of the 100 lots. Therefore, the Appraiser’s description will be general in nature rather than specific for each lot. Furthermore, the Client has instructed the Appraiser to value the sites as unimproved land as described in the definition section of this report; thus, the improvements to the sites will not be described as they are not germane to the value conclusion. The subject lots are generally irregular in shape and range in size from 0.37 acres to 2.1 acres with an overall average size of 0.64 acres based on information provided to the Appraiser by the Natrona County Road and Bridge Department via an appraisal conducted by Irle R. Briggs, dated July 9, 1991, subject to a survey. The topography ranges from sloping to hilly at an elevation of approximately 5,600 feet above sea level. This topography provides a lake view to all sites. The soil conditions are quite rocky with sandy soils; vegetation is sparse and consists of some native grasses and sagebrush. According to Mr. Jeff Hermansky, Civil/Environmental Engineer, the soils are not conducive for year around septic usage under the current density of the site; therefore, the sites are considered as recreational use sites. The lots are considered either “water front lots” or “non-water front lots” and, according to the client, there are 37 “water front lots” and 63 “non-water front lots”. Furthermore, according to the client the “water front lots” do not actually extend to the shore line of Alcova Reservoir and the area between the lots and the shore line is open to the public. Lots 1-14, 75- 79, and 83-100 are considered to be “water front lots” with the rest being “non-water front lots” All lots can have boat docks on the shore line which are obtained under a separate permit at a nominal fee; thus, the value of use appears to be included as part of the cabin site lease payment. The subject property is located east of Lakeshore Drive and west of Alcova Reservoir approximately thirty miles southwest of the center of the Casper Central Business District with the following address: ALCOVA CABIN SITES 1-100 Alcova Reservoir, Wyoming 82620

Holthouse Appraisal Group Analysis – 6705 Page A - 9 LEGAL DESCRIPTION According to information supplied to the Appraiser by the Client, the subject property is legally described as follows: Lots 1 through 100 as shown on the plat known as Alcova Cabin Sites and listed as Plat No. 120 in Plat Book No. 1, Natrona County Clerk’s Office. The sites are in Section 23 and 28, Township 30 North, Range 83 West of the 6th P.M., Natrona County, Wyoming. Although this plat can be found in the Natrona County Plat Books, the Appraiser could find no evidence that it had ever been recorded in the County Records. ZONING According to the Natrona County Planning and Zoning Department the subject site is zoned "SR-2", Suburban Residential. According to this zoning district all allowable uses require a minimum of 2 acres with a minimum district size of 6 acres. The subject sites range in size from .37 acres to 2.1 acres, subject to survey, with most being a non-conforming use under the grandfather provision of the code. Excerpts of this zoning district can be found in the Addenda of the Basic Data Section of this report. SITE DATA Location: The subject property is located adjacent to the Alcova Reservoir approximately 30 miles southwest of the City of Casper.

Address: Alcova Cabin Sites - Lots 1 through 100

Legal Description: Lot 1 through 100 Alcova Cabin Sites, Natrona County, Wyoming

Shape: Various – See Plot Plan

Size: 0.37 acres to 2.1 acres with an average size of 0.64 acres, subject to a survey.

Frontage: Various

Topography: Rolling to steep slope which allows a lake view from all lots. Adequate drainage is provided by road drainage across the front of the subject site. According to F.I.R.M., Map No. 560036-1225A, has not been published yet; however, the subject property

Holthouse Appraisal Group Analysis – 6705 Page A - 10 is located adjacent to Alcova Reservoir that is managed by the Bureau of Reclamation and this area is considered to be in a flood zone.

Soils: The Appraiser has not been provided with a soils analysis; however, based on a visual inspection of the existing buildings, soils appear adequate for a variety of building purposes; however, according to Mr. Jeff Hermansky, Civil/Environmental Engineer, the soils are not conducive for year around septic usage under the current density of the site; therefore, the sites are considered as recreational use sites.

Streets: Lakeshore Drive is a two lane asphalt paved road with improved drainage ditches. Wyoming State Highway 220 is a paved two and four lane, asphalt surfaced roadway with improved drainage ditches along either side. Streets within the Alcova Cabin Site Subdivision are two lane gravel surfaced roads with improved ditches. The streets within the cabin site area have the following names: Rocky Shore Road, Pelican Ridge Road, Jakes Run Road, Peninsula Road, and Bungalow Road. These roadways very from graveled improved roads to graded two track roads.

Utilities: Public utilities in the area are electrical power and telephone with no other services available in the subdivision. Water and sewer are provided by private wells, cistern and septic systems some of which are just holding tanks that are pumped yearly. Upon the instructions of the client, tenant owned onsite improvements are considered as personal property and are excluded from any value conclusions stated in this report.

Holthouse Appraisal Group Analysis – 6705 Page A - 11 Present Improvements: The instructions of the client are to appraise the subject lots as unimproved cabin sites as defined within this report, therefore, the improvements to the sites will not be described as they do not affect the value to be determined.

Easements/Encroachments: Roadway and utility easements, no apparent adverse easements noted on inspection.

Holthouse Appraisal Group Analysis – 6705 Page A - 12

SITE PLAN ALCOVA CABIN SITES LOTS - 1-100

Holthouse Appraisal Group Analysis Section - 6705 Page A-13

ALCOVA CABIN SITES STREET MAP

Holthouse Appraisal Group Analysis Section - 6705 Page A-14

CABIN SITES AERIAL LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page A-15

CABIN SITES TOPOGRAPHICAL MAP

Holthouse Appraisal Group Analysis Section - 6705 Page A-16 HIGHEST AND BEST USE The purpose of studying the highest and best use of a property is to determine the improvements that will generate the greatest residual income to the land. The highest and best use is defined as: The probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

The property owner, the developer, or the appraiser does not find the highest and best use of a specific parcel of land, through subjective analysis. The competitive forces within the market where the property is found shape highest and best use. Therefore, the analysis and interpretation of highest and best use is an economic study of market forces focused on the subject property.

Market forces shape market value. The appraiser to formulate an opinion of the property’s highest and best use as of the appraisal date also uses the general data collected and analyzed to estimate property value. In all value assignments, use is the basis for a value estimate. Highest and best use of a property to be appraised provides the foundation for a thorough investigation of the competitive positions of market participants. Consequently, highest and best use can be described as the foundation on which the market rests.1

The highest and best use may be determined to be different from the existing use and, in such cases, the existing use will continue until land value in its highest and best use exceeds the total value of the property in its existing use. In order to form an opinion of highest and best use of the site, several factors have to be considered. The highest and best use of land must be: 1. legally permissible, 2. physically possible, 3. financially feasible, and 4. maximally profitable In determining the highest and best use of the subject property, the economic, legal, and social factors which motivate investors to develop, manage, own, buy, sell, and lease real estate

1 The Appraisal of Real Estate, 10th Edition, 1992, published by the Appraisal Institute.

Holthouse Appraisal Group Analysis – 6705 Page A - 17 are carefully considered. Typically, five basic land uses are considered. These uses are: special purpose, agricultural, residential, industrial, and commercial land uses. A brief discussion of these uses and how they relate to the subject are as follows: Special Purpose Uses A special purpose property is defined as “a limited market property with a unique physical design, special construction materials, or a layout that restricts its utility to the use for which it was built; also called “special design property”2. Special purpose properties typically have only one use or a very limited number of uses. Examples of such properties include event centers, public libraries, schools, churches, and recreational parks. The subject sites are located approximately 30 miles southwest of the Central Business District of Casper adjacent to the Alcova Reservoir This area has historically been used as recreational cabin sites for the last 50 years ±. The current zoning of the sites is “SR-2”, Suburban Residential which provides for the minimum lot size to be 2 acres; therefore, as the average acreage is 0.64 acres the current use is only allowed under the grandfather provision of the code. Therefore, it is the Appraiser’s opinion that based on location, surrounding uses, and restrictions placed on the site by the Bureau of Reclamation, a special purpose use would not be a financially feasible use of the site. Agricultural Uses Agricultural use of the subject is not physically possible or legally permissible due to restrictions placed on the land by the Bureau of Reclamation prohibiting the site from being used for agricultural purposes. Therefore, due to its location, size, surrounding uses, nature of the soils, area growing season, and legally permitted uses, it is the appraiser’s opinion that a use of this type would not be legally permissible or financially feasible. Residential Uses Residential development of the subject parcel would be both physically and legally possible and the subject’s location is conducive to the risks involved in this type of development. Currently, the subject is subdivided into 100 cabin sites with restrictions for recreational (seasonal) use only by the Bureau and according to Mr. Jeff Hermansky, Civil/Environmental Engineer, the soils are not conducive for year around septic usage under the current density of

2 The Dictionary of Real Estate Appraisal, Third Edition, The Appraisal Institute, 1993, Page 342 Holthouse Appraisal Group Analysis – 6705 Page A - 18 the site even if the Bureau lifted these restrictions; therefore, the sites are considered as recreational use sites. Industrial Uses The subject of this report is located in an area that has historically been seasonal recreational sites and is zoned for these uses. Therefore, this use was not considered as it is not legally permissible nor would it be financially feasible due to its location. Commercial Use Commercial use of the total subject site would be not physically possible due to topography and would not be legally permissible due to the current zoning. Furthermore, there are already two boat clubs and one marina located within a two mile radius and it is doubtful that the addition of a new commercial site would be financially feasible. Financially Feasible Use As previously stated, the subject is located in an area that has historically been seasonal recreational cabin sites with a 0% vacancy rate over the past 30 or more years. An analysis of alternate uses indicates that a use change is highly unlikely due to zoning restrictions, use requirements by the Bureau of Reclamation, Natrona County Health Department and the Wyoming Department of Environmental Quality/Water Quality Division Memorandum of Understanding (MOU) regarding wastewater disposal on the shores at Alcova Reservoir with the Alcova Cabin Owners Association. Therefore, as the current use is desired under the current zoning regulation and is homogeneous with the current land use plan, it is the Appraiser’s opinion that the most financially feasible use of the sites is as recreational cabin sites due to the MOU stated above. Maximally Profitable Use The analysis of the various markets for the land uses that have met the first three criteria (legally permissible, physically possible, and financially feasible) indicates that a seasonal recreational cabin site use would be the maximally profitable use of the site primarily due to location, soils conditions and legal restrictions under the MOU. Therefore, based on the previous analysis, it is the Appraiser’s opinion that the maximally productive use of the site is seasonal recreational cabin sites.

Holthouse Appraisal Group Analysis – 6705 Page A - 19 HIGHEST AND BEST USE AS VACANT Based on the foregoing analysis, the highest and best use of the subject, “as vacant”, would be “seasonal recreational cabin sites”. HIGHEST AND BEST USE AS IMPROVED The highest and best use “as improved” was not part of the Scope of Work; thus, was not considered. TYPICAL PURCHASER The typical purchaser of this site would be an end user looking for seasonal recreation around the Alcova Reservoir. This purchaser would most likely live in Natrona County due to its location 30 miles from Casper. Purchasers would most likely desire a boat dock on the lake as the location is a little more than two mile from the Boat Club and Marina. THE APPRAISAL PROBLEM TO BE ANALYZED The instructions of the Client are to value the subject sites as “water front lots” and “non- water front lots” and not the specific value of each of the 100 lots. Furthermore, the Appraiser has been asked to determine the market rents for the cabin sites located on the subject under two classifications, “water front lots” and “non-water front lots” The subject property consists of 100 recreational cabin sites which range in size between 0.34 acres to 2.1 acres which is allowed under the grandfather clause of its current zoning district, the United States Bureau of Reclamation's Master Plan for the Alcova Reservoir Recreational Area and the Memorandum of Understanding between the Alcova Cabin Owners Association and the Natrona County Health Department, Wyoming Department of Environmental Quality/Water Quality Division. Currently the subject sites (vacant lots) are not bought and sold on the open market and are all currently leased to the owners of the leasehold improvements located on each site. In my interviews with the Mr. Mike Haigler, Natrona County Road and Bridge and Mr. Jerry Stack, President of The Alcova Cabin Owners Association, there is a movement by the cabin owners to privatize the area and allow the leasehold owners to purchase their individual sites. To determine the market value of the sites, the Appraiser must find similar lots with similar location and highest and best use. A search of the Alcova Reservoir area found that there are five subdivisions where sites are privately held located in the lake area. The first three subdivisions are Alcova Lakeview

Holthouse Appraisal Group Analysis – 6705 Page A - 20 Estates No. 1 and No. 2 and Alcova West Ranchettes located 2 miles west of the subject. This area is near the end of its buildout phase which has taken approximately 30 years. These sites have either recreational or year around residential improvements; however, most sites are used for recreational purposes. These sites are comparable to the subject in many aspects but are superior in average size and the subdivision has a central water supply for which home owners pay an annual fee. Approximately 30% of these sites have no lake view, none have lake-frontage and none of these lots have waterfront dock permits. If this service is desired, owners are required to lease mooring space from the Casper Boat Club or the Alcova Lakeside Marina. The fourth subdivision is located due west of the Alcova Trailer Park and south of Alcova Lake View Estates, and is also approximately 2 miles west of the subject. This subdivision is known as the South Estates Subdivision and consists of 16 lots platted in August 2009. These lots are comparable to the subject in many aspects but are superior in average size and the lots within the subdivision have access to a central water system. To date only one of the lots has been purchased which was for view shed protection from a landowner in the adjoining subdivision. None of these lots have waterfront dock permits and are also required to lease mooring space from the Casper Boat Club or the Alcova Lakeside Marina, if such service is desired. The fifth subdivision is located adjacent to Wyoming State Highway 220, due north of the four previously stated subdivisions and is approximately 2.5 miles northwest of the subject. Phase I of this subdivision was platted in June 2007 with 34 lots. It has no direct roadway access to the lake except for Highway 220 (however, there are plans in the works to do so) nor do they have dock permits. Lots are superior in size with acreages ranging from 6.28 acres to 17.33 acres; however, water and sewer are at owner’s expense via private well and septic system. Sales appear to be speculators with only two improvements built on the site. Covenants appear to require upper end homes with the two structures built being in the $300,000 to $500,000 range. An analysis of the market indicates that most sites are purchased based on size and location with emphasis on view and its location with relationship to the lake and lake access. The subject sites are superior in location with a closer proximity to the water and each site is allowed a boat dock via a permit at a nominal charge. Therefore, these variables will be addressed in the following analysis.

Holthouse Appraisal Group Analysis – 6705 Page A - 21 In addition to the fee simple value of the average lot under the two classifications, the Appraiser has been requested to give his opinion of the market rents for these sites under the same two classifications, “water front sites” and “non-water front” sites. Typically, market rents are established by analyzing current rents being paid for comparable properties; however, as there are no similar arm’s length (market) rental sites located in the subject’s market area, the Appraiser has determined the market rents based on a rate of return on fee simple market value of the land using market extracted return rates. In doing so the Appraiser must analyze yields and risk factors to determine a reasonable rate of return. Once this rate is determined, the Appraiser multiplies the yield rate times the market value, to get the amount of rent that a typical market investor would expect as a return on investment. THE APPRAISAL PROCESS Appraisal techniques are the specifics of the three approaches that are traditionally used to derive separate indications of real property value. One or more approaches may be used, depending on their applicability to a particular appraisal assignment. In assignments to determine market value, the ultimate goal of the valuation process is a well-supported conclusion that reflects the appraiser’s consideration of all influences on the market value of the property being appraised. Therefore, the appraiser studies the property from each of the applicable viewpoints reflected in the three approaches. APPROACHES TO VALUE In the appraisal of real estate, there are three basic traditional approaches for determining property value. The three approaches are the Sales Approach, the Cost Approach, and the Income Approach. The final step in determining a property's "market value" (i.e., most probable selling price) is to correlate the appraiser’s value opinion of the three approaches into a single opinion of value. The Sales Approach This approach is based on the proposition that an informed purchaser would pay no more for a property than the cost to him of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data, which can be verified from authoritative sources. The Sales Approach is relatively unreliable in

Holthouse Appraisal Group Analysis – 6705 Page A - 22 an inactive market or in determining the value of properties when no real comparable sales data is available. The Cost Approach This approach is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements, which represent the highest and best use of land, or when unique or specialized improvements are located on the site for which there exists no comparable properties on the market. The Income Approach This approach is based on the proposition that a property is worth no more than the capitalized value of the income stream that the property is capable of generating. The procedure converts anticipated benefits (dollar income) to be derived from the ownership of the property into a value opinion. The Income Approach is widely applied in appraising income-producing properties. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process.

Holthouse Appraisal Group Analysis – 6705 Page A - 23 THE SALES APPROACH The value opinion of the subject property by the Sales Approach was derived after a search for similar properties. The Appraisal Institute further explains the approach below in the paragraphs from Page 417 of The Appraisal of Real Estate, 12th Edition: In the sales comparison approach, the appraiser develops an opinion of value by analyzing similar properties and comparing these properties with the subject property. The comparative techniques of analysis applied in the sales comparison approach are fundamental to the valuation process. Estimates of market rent, expenses, land value, costs, depreciation, and other value parameters may be derived in the other approaches to value using comparative techniques. Similarly, conclusions derived in the other approaches are often analyzed in the sales comparison approach to estimate the adjustments to be made to the sale prices of comparable properties.

In the sales comparison approach, an opinion of market value is developed by comparing properties similar to the subject property that have recently sold, are listed for sale, or are under contract (i.e., for which purchase offers and a deposit have been recently submitted). A major premise of the sales comparison approach is that the market value of a property is related to the prices of comparable, competitive properties.

Comparative analysis of properties and transactions focuses on similarities and differences that affect value, which may include variations in the following:  Property rights appraised  The motivations of buyers and sellers  Financing terms  Market conditions at the time of sale  Size  Location  Physical features  Economic characteristics, if the properties produce income Elements of comparison are tested against market evidence to estimate which elements are sensitive to change and how they affect value. Under this approach the Appraiser has elected to use two separate scenarios, “land value extraction method” and the “direct land sales comparison method”. See Comparable Land Sales and Comparable Leasehold/Fee Simple Cabin Sales/Listings plus related location maps found in the Basic Data Section of this report for specific sales data. These comparable sales were analyzed and the analyses of these properties under the two scenarios are as follows:

Holthouse Appraisal Group Analysis – 6705 Page A - 24 LAND VALUE – LAND EXTRACTION METHOD Typically, under this scenario the Appraiser would determine contributory value (percentage) of the land from improved sales found in similar subdivisions. This percentage would then be applied to the improved sales found within the cabin site area to determine the land value for these lots. This assumes, however, that there are similar land sales within the comparable areas. It also assumes that the improved sales found within the subject’s subdivision also include the fee simple land value as part of the value of the total sales price, which the subject’s leasehold sales do not. To better understand the basic process the Appraiser has provided an example: A fee simple improved sale sold for $225,000. A similar vacant land sale within the same area sold for $58,500 or 26% of the sales price was land value. After using an adequate number of sales the appraiser determines that the value of the land is approximately 24.5% of the total sales price for the neighborhood. This percentage could then be used to determine the land value in a similar subdivision with no vacant land sales, to determine land value. In the case of the subject, there are current known land sales found within competing subdivisions; however, all improved sales within the subject subdivision are leasehold sales which do not include the land value. Furthermore, the subject is the only area around the lake that is allowed direct access to private docks and is only being appraised under two distinct classifications – “water front” and “non-water front” sites, using the average lot size, as known site sizes are difficult to determine. Therefore, the direct percentage comparison is not applicable, so the Appraiser must determine the lot location premiums or the relationships between the location of the sales and the relationship between the subject subdivision and those considered comparable. These relationships will then be used to determine the land values for the subject sites using known lot sales and applying the appropriate lot premium adjustment to leasehold sales where lot sizes can be estimated. This is done through a series of paired sales analysis. The first step of this analysis is to do a series of paired sales analysis between leasehold improvement sales found to have “water-frontage” verses those with only a “lake view” or “non- water-frontage”. This percentage will be used in the final analysis to determine the credibility of the land value conclusion under the land extraction analysis.

Holthouse Appraisal Group Analysis – 6705 Page A - 25 The second step of this analysis is to determine the relationship between the various locations within the fee simple comparable subdivisions, i.e., “lake view” vs “no-lake view” as there are no “water front” properties. This relationship is than analyzed to see if prices increase as you move closer to the lake, i.e., the “leap frog effect”. Special attention must be paid to the location of the fee simple improved sales and their relationship with the fee simple land sales. (Note: The “leap frog effect” is based on the old rule of thumb assumption of 3, 2, 1 used by appraisers in determining “back lot” excess land values when there are no comparable sales available. This rule of thumb assumes that the front 1/3 is worth 3 times the back 1/3, i.e., if the frontage 1/3 is worth $12/sq. ft. then the back 1/3 should be worth $4/sq. ft.)

The final step of this analysis is the comparison between the improved sales (leasehold sales) found within the subject subdivision and the improved sales (fee simple sales) found within the comparable areas. This step is similar to the second step and should correlate well with that found within the fee simple improved sales. Example: If it is found through paired sales analysis that the difference or location premium paid for a fee simple improved “lake view” site is 10% greater than a “no-lake view” site and this correlates well with the locational premium of the leasehold “lake view” improved sale closer to the lake, where the difference is again approximately 10%, the “leap frog effect” is in play and the lot premium can also be used for “water front” properties provided the sizes of the lots are the same. If there is a lot size differential, an analysis of the difference between the “per lot” value vs “per square foot” value must also be analyzed, before making a final value conclusion. In the case of the subject, the Appraiser will use the previously extracted percentage differential or percent premium paid for leasehold “water-front” improvements over “non-water front” improvements, in the final value opinion under this method to determine credibility. The following is a summary of the data used, the paired sales analyses, explanation of adjustments, and value conclusions under this methodology:

Holthouse Appraisal Group Analysis – 6705 Page A - 26 SUMMARY OF THE COMPARABLE LEASEHOLD AND FEE SIMPLE CABIN SALES/LISTING Comparable Leasehold Cabin Sale No. 1 – 22680 Rocky Shore Road, Alcova, Wyoming - This sale is the most current cabin sale in the Alcova Cabin Area. It is a single story ranch style home that was constructed in 1964 with additions and remodels over the past 20 years. These improvements were in average condition with an estimated effective age of 17 years based on a visual inspection of the property and historical knowledge of the improvements. The site is considered to be a lake view “non-water front” site with private dock permit, well and septic system. The land area of the site according to the lease agreement is approximately 1/2 acre; however, according to the plat provided to the Appraiser by the Client, the lot dimensions indicated on the plat are closer to approximately 33,040 sq. ft. According to the owner the site was only used in the summer months as a seasonal cabin site and the purchaser intends to continue this use. The sale closed at $225,000 according to the seller; however, no bill of sale has yet been recorded. Comparable Leasehold Cabin Sale No. 2 and No. 3 – 22691 Rocky Shore Road, Alcova, Wyoming – These sales are the original sale and sale plus additional improvements of the property located directly below Comparable Sale No. 1. It is considered a “water front” property with permitted boat dock. According to the Natrona County Building Department, the owner had applied for a remodel permit for an expansion and second story in the approximate amount of $40,000; however, did a complete replacement. According to the general contractor the owners had to replace the entire structure as there was no foundation under the existing structure to support the new addition; thus, a new 28’ x 28’ two story structure was built on a slab on grade foundation. Furthermore, according to the contractor the purchasers had a 300’ staircase to the lake and a new boat house built as part of the project. When asked what the cost of these improvements would be in today’s market, the contractor indicated that the cost would be in the $100,000 range for similar improvements. According to information obtained from the owner they have a cistern for water and a holding tank for sewage. According to the lease agreement the site is approximately 1 acre in size; however, according to the plat provided to the Appraiser by the Client, the lot dimensions indicate on the plat are closer to approximately 14,195 sq. ft. This

Holthouse Appraisal Group Analysis – 6705 Page A - 27 sale sold for $140,000 according to Natrona County Records with an adjusted value of $240,000 with the new improvements, based on a conversation with the contractor. Comparable Leasehold Cabin Sale No. 4 – 22873 Pelican Ridge Road, Alcova, Wyoming - This sale is located approximately 1/4 mile south of Comparable Sale No. 1, No. 2 and No. 3. It is considered a “non-water front” lot. According to the seller they had purchased the property in 1999 for $30,000 and made approximately $40,000 in improvements. This sale indicates a market increase of approximately 7.70% over the past eleven years. Furthermore, according to the seller, the improvements made included a new deck, new windows and doors, new interior and exterior paint, new roof and new dock. The site also had a well and septic system with the overall improvements having an actual age of 52 years and an effective age of 15 years based on a visual inspection and conversation with the seller. The size of the site appears to be an average lake view “non-water front” lot similar to Comparable Sale No. 1. The sales price was $130,000 according to Natrona County Records. Comparable Leasehold Cabin Sale No. 5 – 22915 Pelican Ridge Road, Alcova, Wyoming - This sale is located just east of Comparable Sale No. 4. It is considered a “lake view – non- water front” lot. According to the purchaser, the property had most likely not been updated since construction and the personal property was considered to have no value. Furthermore, according to the purchaser, after purchase he removed all floor coverings and updated the electrical. In addition, the purchaser indicated that the sales price also included Dock No. 28 and that the water was supplied by a trailer mounted holding tank and sewer was provided by sewage holding tank which he pumps annually. The overall improvements have an actual age of 47 years and an effective age of 30 years based on a visual inspection and conversation with the seller. The size of the site appears to be an average lake view “non-water front” lot size similar to Comparable Sale No. 1. The sales price was $97,500 according to Natrona County Records. Comparable Leasehold Cabin Sale No. 6 – 22783 Pelican Ridge Road, Alcova, Wyoming - This sale is located just southwest of Comparable Sale No. 1, No. 2 and No. 3. It is considered a lake view “non-water front” lot. According to the records found at the Natrona County Courthouse the seller had purchased the property in 2003 for $65,000 and according to the listing agent appears to have made approximately $10,000 in improvements. This sale indicates a market increase of approximately 8.10% over the past six years. Furthermore, according to the

Holthouse Appraisal Group Analysis – 6705 Page A - 28 listing agent and the Alcova Tenant Survey, the site has a holding tank for water and sewer. The overall improvements have an actual age of 44 years and an effective age of 25 years based on a visual inspection and information provided by the listing broker. The size of the site appears to be an average lake view “non-water front” lot similar to Comparable Sale No. 1. The sales price was $110,000 according to the listing agent and MLS No. 20093799. Comparable Fee Simple Cabin Sale 7 – 25805 West Lakeview Drive, Alcova, Wyoming - This sale is located approximately 2 miles west of the subject in the Alcova Lake View Estates No. 2. It is considered a “lake view” lot. According to the listing broker, the property was in “move in” (good-average) condition with 3 bedrooms and 2 baths. The improvements have 1,440 sq. ft. above grade with a drive under two car garage. The site is serviced by the homeowner’s association’s central water system and a private septic system according to the broker. The overall improvements having an actual age of 30 years and an effective age of 10 years based on a visual inspection and information provided by the listing broker. The size of the site appears to be an average “lake-view” lot within the subdivision and contains approximately 1.03 acres or 44,867 sq. ft. Lot value was determined to be $58,500 based on Comparable Land Sale No. 18. The sales price was $255,000 according to the listing agent and MLS No. 20112439. Comparable Fee Simple Cabin Sale 8 – 26021 West Cedar Valley Road, Alcova, Wyoming - This sale is located approximately 2 miles west of the subject in the Alcova West Ranchettes, an extension of the Alcova Lake View Estates No. 2. It is considered a “no-lake view” lot. According to the listing broker, the property was in good-average condition with 3 bedrooms and 2 baths. The improvements have 1,276 sq. ft. above grade with a drive under garage and 408 sq. ft. of finished walk-out basement area. The site is serviced by the homeowner’s association’s central water system and a private septic system according to the broker. The sale is a foreclosure property with overall improvements having an actual age of 14 years and an effective age of 10 years based on a visual inspection and information provided by the listing broker. The size of the site appears to be an average “no-lake view” lot within the subdivision and contains approximately 1.00 acres or 43,560 sq. ft. Lot value was determined to be $47,500 based on Comparable Land Sale No. 16. The sales price was $219,000 according to the listing agent and MLS No. 20101239.

Holthouse Appraisal Group Analysis – 6705 Page A - 29 Comparable Fee Simple Cabin Sale 9 – 26067 Cedar Valley Road, Alcova, Wyoming - This sale is also located approximately 2 miles west of the subject in the Alcova West Ranchettes an extension of Alcova Lake View Estates No. 2. It is considered a “no-lake view” lot. According to the listing broker, the property was in “very good condition (good-average) with 3 bedrooms and 2 baths. The improvements have 1,385 sq. ft. above grade. The site is serviced by the homeowner’s association’s central water system and a private septic system according to the broker. The overall improvements have an actual age of 5 years and an effective age of 3 years based on a visual inspection and information provided by the listing broker. The size of the site appears to be an average “no-lake view” lot within the subdivision and contains approximately 1.05 acres or 45,738 sq. ft. Lot value was determined to be $47,500 based on Comparable Land Sale No. 16. The sales price was $225,000 according to the listing agent and MLS No. 20102381. Comparable Leasehold Cabin Listing No. 10 – 22770 Rocky Shore Drive, Alcova, Wyoming - This sale is located just south of Comparable Sale No. 1 and No. 2. It is considered a “lake view – non-water front” lot. According to the listing broker the property is on the market for $125,000 and according to the owner he feels that the price is high and would most likely sell in the $100,000 range. Furthermore, according to the owner he has no well or septic system and uses holding tanks. The overall improvements have an actual age of 48 years and an effective age of 15 years based on a visual inspection and information provided by the owner. The size of the site appears to be an average lake view “non-water front” lot similar to Comparable Sale No. 1. The list price is $125,000 according to the listing agent and MLS No. 20115332.

Holthouse Appraisal Group Analysis – 6705 Page A - 30 ABSTRACT OF COMPARABLE LEASEHOLD/FEE SIMPLE CABIN SALES AND PAIRED SALES – LAND EXTRACTION METHOD

Holthouse Appraisal Group Analysis – 6705 Page A - 31 PAIRED SALES - LAND EXTRACTION ANALYSIS

Abstract of Comparable Improved Sales/Listing Above Below Interest Grade Grade Comp # Address Sale Date Sales Price Held Sq. Ft. Sq. Ft. Lot/SF Age Eff Age Bedrooms Baths Water Sewer Location 1 22680 Rocky Shore Road 11/23/2011$ 225,000 Leasehold 1,748 0 33,040 47 17 3.00 2.00 Well Septic Non-Water Front 2 22691 Rocky Shore Road 10/25/2010$ 240,000 Leasehold 1,568 0 14,195 0 0 1.00 1.00 Hld Tnk Hld Tnk Water Front 3 22691 Rocky Shore Road 10/25/2010$ 140,000 Leasehold 432 0 14,195 60 30 1.00 1.00 Hld Tnk Hld Tnk Water Front 4 22873 Pelican Ridge Road 10/25/2010$ 130,000 Leasehold 576 0 Avg 52 15 2.00 1.00 Well Septic Non-Water Front 5 22915 Pelican Ridge Road 3/29/2010$ 97,500 Leasehold 576 0 Avg 47 30 2.00 1.00 Hld Tnk Hld Tnk Non-Water Front 6 22783 Pelican Ridge Road 7/16/2009$ 110,000 Leasehold 560 0 Avg 44 25 1.00 1.00 Hld Tnk Septic Non-Water Front 7 25805 W. Lakeview Drive 9/13/2011$ 255,000 Fee Simple 1,440 0 44,867 30 10 3.00 2.00 HOA Septic Lake View 8 26021 W. Cedar Valley Road 5/14/2010$ 219,000 Fee Simple 1,276 408 43,560 14 10 3.00 2.00 HOA Septic Non-Lake View 9 26067 Cedar Valley Road 6/9/2010$ 225,000 Fee Simple 1,385 0 45,738 5 3 3.00 2.00 HOA Septic Non-Lake View 10 22770 Rocky Shore Road Active$ 125,000 Leasehold 400 0 Avg 48 15 2.00 0.00 Hld Tnk Hld Tnk Non-Water Front

Holthouse Appraisal Group Analysis Section - 6705 Page A-31 FEE SIMPLE IMPROVED - PAIRED SALES ANALYSIS LAKE VIEW vs NON-LAKE VIEW - LOCATION PREMIUM Characteristics Comp No. 7 Comp No. 8 Comp No. 9 Address/Location 25805 W. Lakeview Dr. 26021 W. Cedar Valley Rd 26067 Cedar Valley Rd Alcova, WY Alcova, WY Alcova, WY Sale/List Price $255,000 $219,000 $225,000 Price/Unit $177.08 $171.63 $162.45 Property Rights Fee Simple Fee Simple Fee Simple Adjustment $0 $0 Financing Terms Cash to Seller Closing Costs Closing Costs Adjustment -$3,000 $0 Condition of Sale Arms-Length Arms-Length Arms-Length Adjustment $0 $0 Date of Sale 9/13/11 5/20/10 6/9/10 Adjustment 0.00% $0 $0 Price/Unit - Time Adjusted $216,000 $225,000 Location Lake View Non-Lake View Non-Lake View Adjustment To be determined Lot Size 44,867 43,560 45,738 Adjustment $0 $0 Design Ranch Ranch Ranch Adjustment $0 $0 Actual Age (Yrs)/Condition 30 Yrs/Eff 10Yrs 14 Yr/Eff 10 Yrs/Sim 5 Yr/Eff 3 Yrs/Sup Accrued Depreciation 9.00% 9.00% 3.00% Adjustment $0 ($13,500) Baths 2.0 2.0 2.0 Adjustment $3,000 $0 $0 Above Grade Sq. Ft. 1,440 1,276 1,385 Adjustment $129.65 $21,263 $7,131 Below Grade Sq. Ft. 0 408 0 Adjustment $10.00 ($4,080) $0 Below Grade Finish Sq. Ft. 0 367 0 Adjustment $10.00 ($3,670) $0 Garage/Carport 2 1 0 Adjustment $5,000 $5,000 $10,000 Heating/Cooling EBB/None EFA/Central GFA/Central Adjustment ($2,500) ($2,500) Fireplace 1 0 0 Adjustment $1,500 $1,500 $1,500 Site Improvements Average Similar Similar Adjustment $0 $0 $0 Total Adjustments $17,513 $2,631 Indicated Value of the Subject Property $233,513 $227,631 Location Premium $21,487 $27,369 Location Premium Per Sq. Ft. $0.55 $0.49 $0.60 % of Sales Price 10.99% 9.81% 12.16%

Paired Sales - Fee Simple Holthouse Real Estate Group Analysis Section - 6705 Lake View v Non-lake View LEASEHOLD - PAIRED SALES ANALYSIS WELL & SEPTIC vs HOLDING TANKS Characteristics Comp No. 4 Comp No. 5 Comp No. 6 Address/Location 22873 Pelican Ridge Rd 22915 Pelican Ridge Rd 22783 Pelican Ridge Rd Alcova, WY Alcova, WY Alcova, WY Sale/List Price $130,000 $97,500 $110,000 Price/Unit $225.69 $169.27 $196.43 Property Rights Leasehold Leasehold Leasehold Adjustment $0 $0 Financing Terms Cash to Seller Closing Costs Closing Costs Adjustment $0 $0 Condition of Sale Arms-Length Arms-Length Arms-Length Adjustment $0 $0 Date of Sale 10/25/10 3/29/10 7/16/09 Adjustment 0.00% $0 $0 Price/Unit - Time Adjusted $97,500 $110,000 Location Non-Water Front Non-Water Front Non-Water Front Adjustment $0 $0 Lot Size Typical Similar Similar Adjustment $0 $0 Design Seasonal Cabin Similar Similar Adjustment $0 $0 Actual Age (Yrs)/Condition 52 Yrs/Eff 15Yrs 47 Yr/Eff 30 Yrs/Sup 44 Yr/Eff 25 Yrs/Inf Accrued Depreciation 37.00% 62.00% 50.00% Adjustment $24,375 $14,300 Baths 1.0 1.0 1.0 Adjustment $3,000 $0 $0 Above Grade Sq. Ft. 576 576 560 Adjustment $129.65 $0 $2,074 Below Grade Sq. Ft. 0 0 0 Adjustment $10.00 $0 $0 Below Grade Finish Sq. Ft. 0 0 0 Adjustment $10.00 $0 $0 Garage/Carport 0 0 0 Adjustment $5,000 $0 $0 Heating/Cooling Typical Similar Similar Adjustment $0 $0 Fireplace 0 0 0 Adjustment $1,500 $0 $0 Water & Sewer Water & Sewer Water & Sewer Site Improvements Well & Septic Holding Tanks Holding Tanks Adjustment To be Determined Total Adjustments $24,375 $16,374 Indicated Value of the Subject Property $121,875 $126,374 Well & Septic Adjustment $5,875 $8,125 $3,626 % Adjustment 4.52% 6.25% 2.79%

Paired Sales - Leasehold Holthouse Appraisal Group Analysis Section - 6705 Well Septic v None LEASEHOLD IMPROVED SALES - PAIRED SALES ANALYSIS LIST TO SALES RATIO - ACTIVE v SOLDS Characteristics Comp No. 10 Comp No. 4 Comp No. 5 Comp No. 6 Address/Location 22770 Rocky Shore Dr 22873 Pelican Ridge Rd 22915 Pelican Ridge Rd 22783 Pelican Ridge Rd Alcova, WY Alcova, WY Alcova, WY Alcova, WY Sale/List Price $125,000 $130,000 $97,500 $110,000 Price/Unit $312.50 $225.69 $169.27 $196.43 Property Rights Leasehold Leasehold Leasehold Leasehold Adjustment $0 $0 $0 Financing Terms Cash to Seller Closing Costs Closing Costs Closing Costs Adjustment $0 $0 $0 Condition of Sale Active Listing Arms-Length Arms-Length Arms-Length Adjustment To be Determined $0 $0 $0 Date of Sale 12/1/11 11/1/10 3/29/10 7/16/09 Adjustment Active Listing $0 $0 $0 Price/Unit - Time Adjusted $130,000 $97,500 $110,000 Location Non-Water Front Non-Water Front Non-Water Front Non-Water Front Adjustment $0 $0 $0 Lot Size Typical Similar Similar Similar Adjustment $0 $0 $0 Design Seasonal Cabin Similar Similar Similar Adjustment $0 $0 $0 Actual Age (Yrs)/Condition 48 Yrs/Eff 15Yrs 52 Yr/Eff 15 Yrs/Sim 47 Yr/Eff 30 Yrs/Inf 44 Yr/Eff 25Yrs/Inf Accrued Depreciation 37.00% 37.00% 62.00% 50.00% Adjustment $0 $24,375 $14,300 Baths 0.0 1.0 1.0 1.0 Adjustment $3,000 -$3,000 -$3,000 -$3,000 Above Grade Sq. Ft. 400 576 576 560 Adjustment $129.65 ($22,818) ($22,818) ($20,744) Below Grade Sq. Ft. 0000 Adjustment $10.00 $0 $0 $0 Below Grade Finish Sq. Ft. 0000 Adjustment $10.00 $0 $0 $0 Garage/Carport 0000 Adjustment $5,000 $0 $0 $0 Heating/Cooling Typical Similar Similar Similar Adjustment $0 $0 $0 Fireplace 0000 Adjustment $1,500 $0 $0 $0 Water & Sewer Water & Sewer Water & Sewer Water & Sewer Site Improvements Holding Tanks Well & Septic Holding Tanks Holding Tanks Adjustment $0 ($5,875) $0 $0 Total Adjustments ($31,694) ($1,443) ($9,444) Indicated Value of the Subject Property $98,306 $96,057 $100,556 List/Sale Differential $26,694 $26,694 $28,943 $24,444 List/Sale Adjustment 21.35% 21.35% 23.15% 19.56%

Paired Sales - Leasehold Holthouse Appraisal Group Analysis Section - 6705 Lake Front v Lake View LEASEHOLD IMPROVED SALES - PAIRED SALES ANALYSIS WATER FRONT vs NON-WATER FRONT - LOCATION PREMIUM Characteristics Comp No. 3 Comp No. 4 Comp No. 5 Comp No. 6 Comp No. 10 Address/Location 22691 Rocky Shore Rd 22873 Pelican Ridge Rd 22915 Pelican Ridge Rd 22783 Pelican Ridge Rd 22770 Rocky Shore Dr Alcova, WY Alcova, WY Alcova, WY Alcova, WY Alcova, WY Sale/List Price $140,000 $130,000 $97,500 $110,000 $125,000 Price/Unit $324.07 $225.69 $169.27 $196.43 $312.50 Property Rights Leasehold Leasehold Leasehold Leasehold Leasehold Adjustment $0 $0 $0 $0 Financing Terms Cash to Seller Closing Costs Closing Costs Closing Costs Closing Costs Adjustment $0 $0 $0 $0 Condition of Sale Arms-Length Arms-Length Arms-Length Arms-Length Arms-Length Adjustment $0 $0 $0 $0 Date of Sale 10/25/10 10/25/10 3/29/10 7/16/09 Active Listing Adjustment 0.00% $0 $0 $0 ($26,694) Price/Unit - Time Adjusted $130,000 $97,500 $110,000 $98,306 Location Water Front Non-Water Front Non-Water Front Non-Water Front Non-Water Front Adjustment To be determined Lot Size Typical Similar Similar Similar Similar Adjustment $0 $0 $0 $0 Design Seasonal Cabin Similar Similar Similar Similar Adjustment $0 $0 $0 $0 Actual Age (Yrs)/Condition 60 Yrs/Eff 30Yrs 52 Yr/Eff 15 Yrs/Sup 47 Yr/Eff 30 Yrs/Sup 44 Yr/Eff 25Yrs/Sup 48 Yr/Eff 15Yrs/Sup Accrued Depreciation 62.00% 37.00% 62.00% 50.00% 37.00% Adjustment ($32,500) $0 ($13,200) ($31,250) Baths 1.0 1.0 1.0 1.0 1.0 Adjustment $3,000 $0 $0 $0 $0 Above Grade Sq. Ft. 432 576 576 560 400 Adjustment $129.65 ($18,670) ($18,670) ($16,595) $4,149 Below Grade Sq. Ft. 00000 Adjustment $10.00 $0 $0 $0 $0 Below Grade Finish Sq. Ft. 00000 Adjustment $10.00 $0 $0 $0 $0 Garage/Carport 00000 Adjustment $5,000 $0 $0 $0 $0 Heating/Cooling Typical Similar Similar Similar Similar Adjustment $0 $0 $0 $0 Fireplace 10000 Adjustment $1,500 $1,500 $1,500 $1,500 $1,500 Water & Sewer Water & Sewer Water & Sewer Water & Sewer Water & Sewer Site Improvements Holding Tanks Well & Septic Holding Tanks Holding Tanks Holding Tanks Adjustment $0 ($5,875) $0 $0 $0 Total Adjustments ($55,545) ($17,170) ($28,295) ($25,601) Indicated Value of the Subject Property $74,455 $80,330 $81,705 $72,705 Location Premium $65,545 $59,670 $58,295 $67,295 Location Adjustment - Avg 54.87% 50.42% 61.20% 53.00% 53.84%

Paired Sales - Leasehold Holthouse Appraisal Group Analysis Section - 6705 Lake Front v Lake View LEASEHOLD vs FEE SIMPLE - PAIRED SALES ANALYSIS LOT LOCATION - LAND PREMIUM ADJUSTMENT Characteristics Comp No. 7 Comp No. 1 Comp No. 2 Address/Location 25805 W. Lakeway Dr 22680 Rocky Shore Rd 22691 Rocky Shore Rd Alcova, WY Alcova, WY Alcova, WY Sale/List Price $255,000 $225,000 $240,000 Price/Unit $177.08 $128.72 $153.06 Property Rights Fee Simple Leasehold Leasehold Adjustment $0 $0 Financing Terms Cash to Seller Closing Costs Closing Costs Adjustment $0 $0 Condition of Sale Arms-Length Arms-Length Arms-Length Adjustment $0 $0 Date of Sale 9/13/11 11/23/11 10/25/10 Adjustment 0.00% $0 $0 Price/Unit - Time Adjusted $225,000 $240,000 Location Lake View Non-Water Front Water Front Adjustment To be determined Lot Size 44,867 33,040 14,195 Land Value $58,500 $0 $0 Adjustment $58,500 $58,500 Design Ranch Ranch 2-Story Adjustment $0 $0 Actual Age (Yrs)/Condition 30 Yrs/Eff 10Yrs 47 Yr/Eff 17 Yrs/Inf 0 Yr/Eff 0 Yrs/Sup Accrued Depreciation 9.00% 20.00% 0.00% Adjustment $21,116 -$20,322 Baths 2.0 2.0 1.0 Adjustment $3,000 $0 $3,000 Above Grade Sq. Ft. 1,440 1,748 1,568 Adjustment $129.65 -$39,932 -$16,595 Below Grade Sq. Ft. 0 0 0 Adjustment $10.00 $0 $0 Below Grade Finish Sq. Ft. 0 0 0 Adjustment $10.00 $0 $0 Garage/Carport 2 0 0 Adjustment $5,000 $10,000 $10,000 Heating/Cooling EBB/None EBB/Evap EBB Adjustment -$500 $0 Fireplace 1 1 0 Adjustment $1,500 $0 $1,500 Site Improvements HOA Water & Septic Well & Septic Holding Tanks Adjustment $0 $0 $5,875 Total Adjustments $49,183 $41,958 Indicated Value of the Subject Property $274,183 $281,958 Location Lot Premium $19,183 $26,958 Lot Premium Per Sq. Ft. $0.58 $1.90 % of Sales Price 9.88% 8.53% 11.23%

Paired Sales - Location Holthouse Real Estate Group Analysis Section - 6705 Leasehold v Fee Simple NON-WATER FRONT - LAND VALUE Description Sq. Ft. Value $/Sq. Ft. Value Improved Sale No. 1 - Location Premium 33,040$ 19,183 $ 0.58 $ 19,183.40 Land Sale No. 18 - Primary Lot Value 44,867$ 58,500 $ 1.30 $ 43,079.32 Market Extracted Lot Value - Improved Sale No. 1$ 77,683 $ 62,262.72 $/Sq. Ft. - Lake View Lots - 33,040 Sq. Ft. $ 1.88 Average Lot Value - Lake View Lots 27,878$ 52,535.12 Rounded To $ 55,000.00 WATER FRONT - LAND VALUE Description Sq. Ft. Value $/Sq. Ft. Value Improved Sale No. 2 - Location Premium 14,195 $26,958$ 1.90 $ 26,957.65 Land Sale No. 18 - Primary Lot Value 44,867 $58,500$ 1.30 $ 18,508.20 Market Extracted Lot Value - Improved Sale No. 2 $85,458$ 45,465.85 $/Sq. Ft. - Lake Front Lots - 14,195 Sq. Ft. $ 3.20 Average Lot Value - Lake Front Lots 27,878$ 89,291.79 Rounded To $ 90,000.00 Percent Differential -Sq Ft - Lake Front vs Non-Lake Front 63.64%

Land Value Conclusion Holthouse Real Estate Group Analysis Section - 6705 Lake View Lake Front COMMENTS ON ADJUSTMENTS Time Adjustment – All of the comparable sales used within this methodology analysis sold within similar market trends; thus, no adjustment was made.

Above Grade Square Foot Adjustment- This adjustment was extracted from the market based on the average price per square foot for improvements only (less land value) of the fee simple and comparable leasehold sales, i.e, Comparable Sales No. 1, No. 2, No. 7, No. 8, and No. 9 which indicate an adjustment of $129.65/sq. ft. ($128.72 + $153.06 + $136.46 + $101.84 + $128.16 = $648.24 ÷ 5 = $129.65/sq. ft.) as these sales are most comparable.

Below Grade Square Footage and Finished Below Grade Square Foot Adjustment- These adjustments were extracted from the market based on paired sales analysis of past sales which indicate an adjustment of approximately $10.00/sq. ft. for each category; thus, $10.00/sq. ft. was used.

Garage Adjustment- This adjustment was extracted from the market based on paired sales from past sales which indicate an adjustment of $5,000 per bay.

Central Air Conditioning Adjustment – This adjustment was based on paired sales analysis of past sales and the estimated cost to cure which indicates an adjustment of $2,500 for the difference between central air and no central air.

Location Premium Adjustment – Fee Simple – Lake View vs. No-Lake/View – This adjustment was extracted from the market using paired sales analysis between Comparable Sale No. 7 and Comparable Sales No. 8 and No. 9. This analysis indicates there is a 10.99% of location premium adjustment for location between these two classifications. This percentage will be used in the final analysis of the fee simple vs leased fee to determine credibility.

Well & Septic Adjustment vs Holding Tanks (Utility Premium) – This adjustment was extracted from the market using paired sales analysis between Comparable Sale No. 4 and Comparable Sales No. 5 and No. 6. This analysis indicates an adjustment of $5,875 or 4.52% for the differential.

List to Sales Ratio Adjustment – This adjustment was based on paired sales analysis between Comparable Listing No. 10 and Comparable Sales No. 4, No. 5 and No. 6. This analysis indicates an adjustment of 21.35% as an appropriate list to sales ratio.

Location Premium Adjustment – Leasehold Improvements – Water Front vs. Non-Water Front – This adjustment was extracted from the market using paired sales analysis between Comparable Sale No. 3 and Comparable Sales No. 4, No. 5, No. 6, and No. 10. This analysis indicates that there is a 54.87% premium paid for “water front” leasehold improvements verses “non-water front” properties with a lake view. This percentage will be used in the final land value conclusion to determine the credibility of the conclusion.

Holthouse Appraisal Group Analysis – 6705 Page A - 32 Location Premium Adjustment – Fee Simple - Lake View vs Leasehold – Lake Front and Lake View – This adjustment was extracted from the market using paired sales analysis between Comparable Sale No. 7 and Comparable Sales No. 1 and No. 2. This analysis indicates there is a 9.88% value premium adjustment for location based on the total value of the improvements which correlates will with the 10.99% previously determined. It further indicates a location difference per square foot of land of $0.58/sq. ft. for “non-water front” lots and $1.90/sq. ft. for “water front” lots.

ANALYSIS OF THE COMPARABLE LEASEHOLD AND FEE SIMPLE IMPROVED SALES An analysis of the fee simple cabin sales indicates that there is an average location premium of $24,005 within the subdivision when “lake view” improved sites are compared to the lesser desired “no-lake view” improved sites. A further analysis indicates that this premium relates to an average land value premium of $0.54/sq. ft. of land. An analysis of the leasehold improvement sales indicates that there is an average premium of 54.87% between “water front” and “non-water front” improved sales. As the Appraiser has not able to determine the land sizes for all of the leasehold improved sales, this percentage will be used in determining the value spread in the final conclusion under this scenario. (Under this analysis the Appraiser has determined that the differential between “lake- view – non-water front” properties with well and septic systems is on an average of $5,875 or 4.52% greater than just having holding tanks. This extraction will be used in the Direct Land Sales Comparison Analysis found following this scenario as the actual square footage cannot be determined but appear similar so a % adjustment can be used.) An analysis of the fee simple improved “lake-view” sale verses the leasehold “non-water front” and “water front” sales, which are closer to the lake, indicates a location premium of $19,183 for “non-lake front” sales and $26,958 for “water front” properties. This indicates that there is a 40.53% differential ($26,958 - $19,183 = $7,775 ÷ $19,183 = 40.53%) between the subject’s lake view “non-water front” and “water front” properties; however, this assumes that all of the lots within the analysis are the same size, which they are not.

Holthouse Appraisal Group Analysis – 6705 Page A - 33 FINAL OPINION OF VALUE – LAND EXTRACTION METHOD As previously stated the above analysis determines land value based on a series of paired sales analysis to determine if there is a location premium for being close to the lake with a lake view verses having a lake view further back from the shore. This analysis also examines the difference between being on the “water front” verses just having a lake view or “non-water front”. In the analysis the Appraiser has determined that there is a location premium for being on the water front of 54.87% when comparing “non-water front” and “water front” improved sales. It was further determined that there is an average location premium of $24,005 or $0.54/sq. ft. for improved fee simple sales with a lake view verses none. It was also determined that there is a location premium of $19,183 for the difference between a back lot lake-view (non-water front) vs a front lot lake-view lot (non-water front) and a difference of $26,958 for the difference of a lake-front lot (water front). If all lots were the same in size then the value under this scenario would be the lot value of the fee simple improved sale plus the lot premium or:

LAND VALUE - PER LOT BASIS Lake View Lake Front % Diff Fee Simple Lot Value$ 58,500 $ 58,500 Lot Premium$ 19,183 $ 26,958 40.53% Indicated Value$ 77,683 $ 85,458 Rounded To:$ 78,000 $ 85,000 8.97%

This appears to correlate well with the fee simple vs leasehold percentage of 9.88%; however, as previously stated this percentage is for the total property as improved and it assumes that all lots have the same overall utility including size, which as previously stated, they are not. Furthermore, the location premium for the difference between leasehold lake view verses lake front improved sales is 54.87% for the total value of the lot and not the adjustment; therefore, the size of the lot must also be considered. Under the per square foot value approach, the Appraiser will use, as the base land value, the price per square foot of the lake-view lot Comparable Land Sale No. 18, of $1.30/sq. ft. and the lot premium per square foot of the leasehold sites based on their overall estimated square footage, which is calculated as follows (Note: The comparable used to determine the allocated

Holthouse Appraisal Group Analysis – 6705 Page A - 34 value of the land for Comparable Fee Simple Improved Sale No. 7. This sale was used to determine the lot premium in the paired sales analysis.):

LOT VALUE BASED ON PER SQUARE FOOT NON-WATER FRONT - LAND VALUE Description Sq. Ft. Value $/Sq. Ft. Value Improved Sale No. 1 - Location Premium 33,040$ 19,183 $ 0.58 $ 19,183.40 Land Sale No. 18 - Primary Lot Value 44,867$ 58,500 $ 1.30 $ 43,079.32 Market Extracted Lot Value - Improved Sale No. 1$ 77,683 $ 62,262.72 $/Sq. Ft. - Lake View Lots $ 1.88 Average Lot Value - Lake View Lots 27,878$ 52,535.12 Rounded To $ 55,000.00 WATER FRONT - LAND VALUE Description Sq. Ft. Value $/Sq. Ft. Value Improved Sale No. 2 - Location Premium 14,195 $26,958$ 1.90 $ 26,957.65 Land Sale No. 18 - Primary Lot Value 44,867 $58,500$ 1.30 $ 18,508.20 Market Extracted Lot Value - Improved Sale No. 2 $85,458$ 45,465.85 $/Sq. Ft. - Lake Front Lots $ 3.20 Average Lot Value - Lake Front Lots 27,878$ 89,291.79 Rounded To $ 90,000.00 Percent Differential -Sq Ft - Lake Front vs Lake View 63.64%

Conclusion - Under this Land Value – Land Extraction Method scenario the differential is 63.64% between “non-water front” and “water front” lot values which correlates better with the previously described percent differential of 54.87% found using paired sales analysis of improved leasehold properties within the cabin site area; thus, the per square foot approach appears to be the more credible of the two value conclusions. Therefore, under this scenario the average value of the lake view “non-water front” lots would be $55,000 while the average value of the “water front” lots would be $90,000.

Holthouse Appraisal Group Analysis – 6705 Page A - 35 LAND VALUE – DIRECT LAND SALES COMPARISON METHOD The preferred method of determining land values is by direct sales comparison approach, i.e., similar sites, competing in the same market sector as the subject, are compared to the subject. Adjustments, extracted from the market are applied to the comparable site sales for any differences that exist between the sales and the subject. The areas of adjustment include, but are not confined to location, access, size, shape, market conditions at the time of sale, and the terms of the sale. The following pages contain data pertaining to the most recent site sales comparable to the subject. Following the comparable data is a map showing the relative location of the comparables and the subject. The final step in the determination of site value is to adjust and correlate the comparable sales to the subject.

Holthouse Appraisal Group Analysis – 6705 Page A - 36 ABSTRACT OF COMPARABLE LAND SALES Recording Comp # Location Date Deed # Grantor/Grantee Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake CL Dolodell 1 2/27/1998 609823$ 22,000 1.00$ 22,000.00 $ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Ken Milner Lot 33, Alcova Lake Richard D. Wagner 2 5/23/2000 653493$ 23,500 0.94$ 25,000.00 $ 0.57 Average NoHOA/None 1230 "SR-2" View Estates 2 Max Wayne Stalkup Lot 3, Alcova West Charles T. Norton, et ux 3 10/31/2001 680825$ 35,000 1.03$ 34,013.61 $ 0.78 V-GoodYes HOA/None Private "SR-1" Ranchettes Donald Dale Sackett et ux Lot 41, Alcova Lake Stan & Nancy Koehn 4 12/31/2002 707361$ 28,000 1.00$ 28,000.00 $ 0.64 Good-AvgNo HOA/None 77 "SR-2" View Estates 2 Keith W. Johnson Lot 31 Alcova Lake Paul J. Simonton, et ux 5 7/1/2003 720130 $ 33,500 1.00 $ 33,500.00 $ 0.77 AverageNo HOA/None 35 "SR-2" View Estates 1 Newell E. Wilson, et ux Lot 5 Alcova West Donald Dale Sackett et ux 6 9/19/2003 726757$ 20,000 1.86$ 10,752.69 $ 0.25 AverageNo HOA/None 261 "SR-1" Ranchettes Walter E. Weiss, et ux Lot 16 Alcova West Robbie Dane Benson 7 10/21/2003 729128$ 16,000 1.05 $ 15,238.10 $ 0.35 Average No HOA/None 311 "SR-1" Ranchettes David S. Bullard, et ux Lot 5 Alcova West Walter E. Weiss, et ux 8 4/12/2004 739977$ 25,500 1.86$ 13,709.68 $ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Ted Anderson, et ux Lot 13, Alcova West Timothy C. Hoiles, Trustee 9 4/6/2005 763897$ 20,500 1.05$ 19,523.81 $ 0.45 AverageNo HOA/None 410 "SR-1" Ranchettes Wyoming Renovations, Inc Lot 30, Alcova West David Whisler 10 6/23/2005 770669$ 37,500 1.38 $ 27,173.91 $ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Warren R. Foreman Alcova Lake, LLC 11 Lot 3, South Estates 2/2/2010 883441$ 225,000 2.26$ 99,557.52 $ 2.29 ExcellentYes HOA/None Private "UR" John P. Ellbogen, II Lot 11, Lake Ridge Lake Ridge Estates, LLC 12 7/23/2010 892364$ 140,000 12.61$ 11,102.30 $ 0.25 GoodYes Well/None 58 "PUD" Estates Phase I Steddyhomes, II, LLC Lot 12, Lake Ridge Success Properties, LLC 13 9/3/2010 894605$ 110,000 7.24$ 15,193.37 $ 0.35 Average Yes None/None 97 "PUD" Estates Phase I Lakecliffe, Inc. Lot 10, Lake Ridge Lake Ridge Estates, LLC 14 11/15/2010 898890 $ 90,000 10.22 $ 8,806.26 $ 0.20 Fair No None/None Private "PUD" Estates Phase I Steddyhomes, II, LLC Lot 5, Lake Ridge Lake Ridge Estates, LLC 15 11/22/2010 899332$ 61,500 7.33 $ 8,390.18 $ 0.19 Fair No None/None Private "PUD" Estates Phase I Ryan P. Mundell Lot 18, Alcova West Rita J. Condis 16 6/21/2011 910441 $ 47,500 1.14 $ 41,666.67 $ 0.96 AverageNo HOA/None 1 "SR-1" Ranchettes David B. Simonson, et ux Lot 25, Lake Ridge SDRE, LLC 17 7/6/2011 911244 $ 175,000 10.11 $ 17,309.59 $ 0.40 V-GoodYes Well/None Private "PUD" Estates Phase I Craig H. Evert, et ux Lot 55, Alcova Lake Susan F. Hoag, Trustee 18 12/5/2011 919443$ 58,500 1.03 $ 56,796.12 $ 1.30 V-GoodYes HOA/None 206 "SR-1" View Estates 2 Woody C. Hugget

Holthouse Appraisal Group Analysis - 6705 Page A - 37 PAIRED SALES ANALYSIS - TIME - MARKET INCREASE Recording Comp # Location Date Sales Price Acres Sq. Ft. $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake 1 2/27/1998$ 22,000 1.00 43,560$ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Lot 31 Alcova Lake 5 7/1/2003$ 33,500 1.00 43,560$ 0.77 Average No HOA/None 35 "SR-2" View Estates 1 Differential 1,950$ 11,500 %/Year $ 0.26 %/Year Annual Time Adjustment 5.34 52.27% 9.78% 52.27% 9.78% Lot 33, Alcova Lake 2 5/23/2000$ 23,500 0.94 40,946$ 0.57 Average No HOA/None 1230 "SR-2" View Estates 2 Lot 41, Alcova Lake 4 12/31/2002$ 28,000 1.00 43,560$ 0.64 Good-Avg No HOA/None 77 "SR-2" View Estates 2 Differential 952$ 4,500 %/Year $ 0.07 %/Year Annual Time Adjustment 2.61 19.15% 7.34% 12.00% 4.60% Lot 5 Alcova West 6 9/19/2003$ 20,000 1.86 81,022$ 0.25 Average No HOA/None 261 "SR-1" Ranchettes Lot 5 Alcova West 8 4/12/2004$ 25,500 1.86 81,022$ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Differential 206$ 5,500 %/Year $ 0.07 %/Year Annual Time Adjustment 0.56 27.50% 48.73% 27.50% 48.73% Lot 16 Alcova West 7 10/21/2003$ 16,000 1.05 45,738$ 0.35 Average No HOA/None 311 "SR-1" Ranchettes Lot 13, Alcova West 9 4/6/2005$ 20,500 1.05 45,738$ 0.45 Average No HOA/None 410 "SR-1" Ranchettes Differential 533$ 4,500 %/Year $ 0.10 %/Year Annual Time Adjustment 1.46 28.13% 19.26% 28.13% 19.26% Lot 30, Alcova West 10 6/23/2005$ 37,500 1.38 60,113$ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Lot 18, Alcova West 16 6/21/2011$ 47,500 1.14 49,658$ 0.96 Average No HOA/None 1 "SR-1" Ranchettes Differential 2,189$ 10,000 %/Year $ 0.33 %/Year Annual Time Adjustment 6.00 26.67% 4.45% 53.33% 8.89% Lot 3, Alcova West 3 10/31/2001$ 35,000 1.03 44,823$ 0.78 V-Good Yes HOA/None Private "SR-1" Ranchettes Lot 55, Alcova Lake 18 12/5/2011$ 58,500 1.03 44,867$ 1.30 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Differential 3,687$ 23,500 %/Year $ 0.52 %/Year Annual Time Adjustment 10.10 67.14% 6.65% 66.98% 6.63%

Paired Sales Analysis - Land Sales Holthouse Appraisal Group Analysis - 6705 Market Increase/Decrease PAIRED SALES ANALYSIS - SMALL LOT LOCATION ANALYSIS Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 55, Alcova Lake 18 12/5/2011$ 58,500 1.03$ 56,796.12 $ 1.30 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Lot 18, Alcova West 16 6/21/2011$ 47,500 1.14$ 41,666.67 $ 0.96 Average No HOA/None 1 "SR-1" Ranchettes Differential $ 15,129.45 Location Adjustment 36.31% Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 3, South Estates 11 2/2/2010$ 225,000 2.26$ 99,557.52 $ 2.29 Excellent Yes HOA/None Private "UR" Subdivision Lot 18, Alcova West 16 6/21/2011$ 47,500 1.14$ 41,666.67 $ 0.96 Average No HOA/None 1 "SR-1" Ranchettes Differential $ 57,890.86 Location Adjustment 138.94% Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 3, South Estates 11 2/2/2010$ 225,000 2.26$ 99,557.52 $ 2.29 Excellent Yes HOA/None Private "UR" Subdivision Lot 55, Alcova Lake 18 12/5/2011$ 58,500 1.03$ 56,796.12 $ 1.30 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Differential $ 42,761.41 Location Adjustment 75.29% PAIRED SALES ANALYSIS - LARGE LOT LOCATION ADJUSTMENT Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 25, Lake Ridge 17 7/6/2011$ 175,000 10.11$ 17,309.59 $ 0.40 V-Good Yes Well/None Private "PUD" Estates Phase I Lot 11, Lake Ridge 12 7/23/2010$ 140,000 12.61$ 11,102.30 $ 0.25 Good Yes Well/None 58 "PUD" Estates Phase I Differential $ 6,207.29 Location Adjustment 55.91% Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 10, Lake Ridge 14 11/15/2010$ 90,000 10.22$ 8,806.26 $ 0.20 Fair No None/None Private "PUD" Estates Phase I Lot 5, Lake Ridge Estates 15 11/22/2010$ 61,500 7.33$ 8,390.18 $ 0.19 Fair No None/None Private "PUD" Phase I Differential $ 416.08 Location Adjustment 4.96%

Paired Sales Analysis - Land Sales Holthouse Appraisal Group Analysis - 6705 Percent Location Premium ADJUSTMENT GRID - LAKE VIEW - NON-WATER FRONT LOTS Recording Water & Lake Comp # Location Date Deed # Grantor/Grantee Sales Price Sewer Adj Land Value Acres $/Acre $/Sq. Ft. View View Water/Sewer DOM Zoning Lot 55, Alcova Lake Susan F. Hoag, Trustee 18 12/5/2011 919443 $ 58,500 -4.52% $ 55,856 1.03$ 54,229 $ 1.24 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Woody C. Hugget Location % 75.29% Location Adjustment $ 0.94 Adjusted Price Per Square Foot $ 2.18 Average Lot Size 27,878 Indicated Value 60,836 Rounded To: $ 60,000 ADJUSTMENT GRID - LAKE VIEW - WATER FRONT LOT Recording Water & Lake Comp # Location Date Deed # Grantor/Grantee Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft. View View Water/Sewer DOM Zoning Alcova Lake, LLC 11 Lot 3, South Estates 2/2/2010 883441$ 225,000 -4.52% $ 214,830 2.26 $ 95,058 $ 2.18 ExcellentYes HOA/None Private "UR" John P. Ellbogen, II Location % 55.91% Location Adjustment $ 1.22 Adjusted Price Per Square Foot $ 3.40 Average Lot Size 27,878 Indicated Value $ 94,849 Rounded To: $ 95,000 % Differential Between Non-Water Front vs Water Front 58.33%

Adjustment Grid Holthouse Appraisal Group Analysis - 6705 Lot Value SUMMARY OF THE COMPARABLE LAND SALES Comparable Land Sale No. 1 Through No. 10, Alcova, Wyoming – These sales were used by the Appraiser to support conclusions as to time adjustments and market trends in the area. Comparable Land Sale No. 11 – Lot 3 – South Estates Subdivision, Alcova, Wyoming - This sale is located 2 miles west of the subject, in the subject’s immediate neighborhood. This sale is located in the South Estates Subdivision which lies south of Lakeview Estates. The subdivision has 17 platted lots ranging in price from $150,000 to $250,000. The topography of the site is heavy rolling and pad sites are limited. The view of the lake is superior to most of the lots within the subdivision and contains approximately 2.26 acres. This sale, according to the seller, was sold before the subdivision was put on the market. It was purchased by an adjoining landowner who purchased the site to prevent his view of the lake from being blocked. The site is the only site sold within the subdivision and sold at a premium due to the value of the view shed. This site has ease of access to the Boat Club and Marina where mooring can be leased. It is the Appraiser’s opinion that this site best represents the value premium for the subject’s lake view “non-water front” lots per square foot as it has similar views and access to the lake. The sales price was $225,000 or $2.29/sq. ft. before adjustments. Comparable Land Sale No. 12 and No. 13 – Lots 11 and 12, Lake Ridge Estates, Alcova , Wyoming - These sales are located at the entrance of Lake Ridge Estates approximately 3 miles northwest of the subject, in the subject’s immediate neighborhood. These sales are located in the Lake Ridge Estates which lies northwest of Lakeview Estates and have no direct access to the lake area except via Highway 220. Water and sewer will be provided by private well and septic at owner’s expense. Phase No. 1 of the subdivision consists of 34 platted lots ranging in price from $75,000 to $250,000. Lot 11 (Comparable Sale No. 12) is located to the east of Lot 12 (Comparable Sale No. 13) and abuts BLM land so the view of the lake is unobstructed and is likely to remain so. This lot contains approximately 12.61 acres and sold for $140,000 or $025/sq. ft. According to the seller the lot had a well in place with an estimated value of $15,000 to $20,000. Lot 12 is located with a slightly obstructed view of the lake and overlooks Lots 13, 14 and 16. This lot contains approximately 7.24 acres and sold for $110,000 or $0.35/sq. ft. Both sites were purchased by local builders looking to build spec homes in the area. Both sites are

Holthouse Appraisal Group Analysis – 6705 Page A - 38 now improved and are still on the market after more than a year. These two sales indicate that size might be a factor; however, on a per lot basis, the better view sold for a higher price. Sales were used to help set trends in the area. Comparable Land Sale No. 14 and No. 15 – Lots 10 and 5, Lake Ridge Estates – Alcova, Wyoming - This sale is also located approximately 3 miles northwest of the subject, in the subject’s immediate neighborhood. These two sales are located on the highway and have no views of the lake. Water and sewer will need to be provided by the purchaser at their expense. Lot 10 contains approximately 10.22 acres and is located on a hillside overlooking Lots 5 and 6. This sale sold for $90,000 or $0.20/sq. ft. Lot 5 is located adjacent to the highway and at the entrance to this area of the subdivision and contains approximately 7.33 acres. According to the seller the purchaser is planning to put mini-storage units on Lot 5 when the market makes it financially feasible. These two sales indicate there appears to be little difference in value when size is a factor contradicting the preceding analysis; therefore, in the paired sales analysis similar sites should be used to evaluate this dichotomy. Sales were used to help set trends in the area. Comparable Land Sale No. 16 – 23381 West Lower Reeves Road, Wyoming - This sale is located approximately 2 miles west of the subject, in the subject’s immediate neighborhood. It is Lot 18 of Alcova West Ranchettes located west of Lakeview Estates No. 2 and is the most current sale of a no-lake-view lot. This lot is located in a cul-de-sac and has some hill side views of the surrounding area. The site has access to community water as part of the homeowner’s association fees with septic at the expense of the purchaser. This sale is approximately 1.14 acres and sold for $47,500 or $0.96/sq. ft. Comparable Land Sale No. 17 – Lot 25, Lake Ridge Estates, Alcova, Wyoming - This sale is located approximately 3 miles northwest of the subject, in the subject’s immediate neighborhood. It is at the end of Lake Ridge Estates and has an unobstructed view of the lake. It was owned by one of the owners of the subdivision and was considered to be one of the best view lots within the subdivision. According to the seller the site was improved with a water well with an estimated value of $15,000 to $20,000. The lot size is approximately 10.11 acres and had a developed pad site. The sales price was $175,000 or $0.40/sq. ft. This sale was used to support trends in the neighborhood.

Holthouse Appraisal Group Analysis – 6705 Page A - 39 Comparable Land Sale No. 18 – 25887 West Cedar Mesa, Alcova Lake View Estates No. 2, Alcova, Wyoming - This sale is located approximately 2 miles west of the subject, in the subject’s immediate neighborhood. It is the most current sale of a lake-view lot within the Lakeview Estates Area. The site has community water available as part of the homeowner’s fees with septic at the expense of the purchaser. The lot size is approximately 1.03 acres and has very limited area for a pad site. The sales price was $58,500 or $1.30/sq. ft. This sale was used to help support the value of the subject’s “ non-water front” lots. ANALYSIS OF THE COMPARABLE LAND SALES As previously stated Comparable Sales No. 1 through No. 10 were used to help support trends in the area. Also as previously stated Comparable Sale No. 11 was most similar in desirability as the subject’s lake view “non-water front” lots at $2.29/sq. ft. unadjusted. Comparable Sales No. 12, No. 13, No. 14, No. 15 and No. 17 were used to establish trends in the area from which adjustments could be made or supported. Comparable Sale No. 16 was the most current lot sale with no-view of the lake and Comparable Sale No. 18 is the most current “lake- view” sale midway between Comparable Sale No. 16 and No. 11. These sales were used to help establish trends in the area from which reasonable adjustments could be made and to support conclusions to value. These adjustments and conclusions are as follows: Time Adjustment – An analysis of the comparable sales indicates that the market had an increase/decrease as follows (For further details see Paired Sales Analysis – Time – Market Increase/Decrease chart found preceding this analysis:

Holthouse Appraisal Group Analysis – 6705 Page A - 40 Time - Market Increase/Decrease Analysis Comp # Rec. Date Years Acres $/Sq. Ft. %/Year 1 2/27/1998 1.00$ 0.51 5 7/1/2003 5.34 1.00$ 0.77 9.78% 2 5/23/2000 0.94$ 0.57 4 12/31/2002 2.61 1.00$ 0.64 4.60% 6 9/19/2003 1.86$ 0.25 8 4/12/2004 0.56 1.86$ 0.31 48.73% 7 10/21/2003 1.05$ 0.35 9 4/6/2005 1.46 1.05$ 0.45 19.26% 10 6/23/2005 1.38$ 0.62 16 6/21/2011 6.00 1.14$ 0.96 8.89% 3 10/31/2001 1.03$ 0.78 18 12/5/2011 10.10 1.03$ 1.30 6.63%

An analysis of the above chart indicates that land values per square foot at Alcova are moving with the local economy, “steady by jerks”. A further analysis indicates that there have been some periods of leveling off and some periods of extreme increases; however, the overall movement (price per square foot) appears to have averaged 6.63% over the past ten years (Comparable Sales No. 3 and No. 18). Movement between the years of 2005 and 2011 (the approximate time since the Appraiser’s last appraisal of the subject) indicated by Comparable Sales No. 10 and No. 16, has increased by 8.89%/year when the price per square foot is considered. However, when total lot values are considered, the percent increase slightly to 6.65% for the 10 year rate but drops to 4.45% for the 5 year rate. (The 4.45% will be used in the Correlation and Credibility Analysis Section to determine the credibility of the Appraiser’s value conclusion under this method since the last appraisal as the Appraiser will be comparing “total lot value” - 2006 to “total lot value” - 2011.) A further analysis indicates that of the comparable sales considered in determining the market value of the subject’s “non-water front” lots and “water front” lots, Sales No. 11 through No. 18 are the most current sales; thus, the most logical to be used by the Appraiser. These sales sold from February 5, 2010 and December 5, 2011 and the paired sales available do not measure market movement separately between these dates. Therefore, it is difficult for the Appraiser to measure the effects of the slowdown in the local economy caused by the dip and recovery in natural resource prices (if any) predicated by the national lending crisis and the crash of the

Holthouse Appraisal Group Analysis – 6705 Page A - 41 national housing markets. This argument could go several ways and is as follows: First is the 10 year straight line market increase argument where the Appraiser could just use the 10 year average of 6.63%/year (Comparable Sale No. 3 and No. 18). This measurement is the simplistic measurement for the overall period and indicates that there must have been a flattening or decrease sometime during the 10 year period based on historic trends which indicates upward trends anywhere from 4.45% to 48.73% (see chart above). Second, the Appraiser could also argue that the measurement between Comparable Sales No. 10 and No. 16 of 8.89%/year (per square foot) is reasonable; however, this percentage also includes the years of 2005 through 2008 where market increases could have easily been at the same rate as they were between 2003 and 2005 of 19.26%/year (Comparable Sales No. 7 and No. 9). This brings in the other side of the argument, a possible market decline between 2008 and 2011. This argument could easily be that the market did go up 19.26%/year during 2005 and 2008, but declined from 2009 to 2011 indicating that Comparable Sale No. 11 should have a negative adjustment; however, this is just speculation as there are no puritan sales to measure this time period. Therefore, to make a credible determination the Appraiser conducted a market interview with Mr. James Edgeworth, broker/owner of the Edgeworth Real Estate Firm. Mr. Edgeworth was involved in Comparable Sales No. 16 and No. 18. Mr Edgeworth also has properties listed in the same subdivision as Comparable Sale No. 11 and was privy to the details of that sale. In the Appraiser’s interview with Mr. Edgeworth it was found that he felt that he could have gotten a little more next year for Comparable Sales No. 16 and 18, but that No. 11 sold at a premium as the purchaser did not want his view shed of the lake blocked by the downstream developer. He also felt that this lot would most likely not be worth any more in today’s market. This would indicate that Comparable Sale No. 11 most likely sold at the top of the market with no additional market increases necessary. It further indicates that Comparable Sales No. 16 and 18 most likely sold at market with no anticipated decline over the previous or next 12 months. Therefore, it is the Appraiser’s opinion that the market remained stable during the time when Comparable Sale No. 11 sold and the effective date of this report; thus, no time adjustment was made. View/Location Adjustment- This adjustment was extracted from the market based on paired sales analysis which indicate the following (For further details see Paired Sales Analysis – Small/Large Lot Location Analysis chart found preceding this analysis):

Holthouse Appraisal Group Analysis – 6705 Page A - 42 Alcova Reservoir - View Adjustment Analysis Lake Location Comp # Rec. Date View View Acres $/Sq. Ft. Adjustment 14 11/15/2010 Fair No 10.22$ 0.20 15 11/22/2010 Fair No 7.33$ 0.19 4.96% 18 12/5/2011 V-Good Yes 1.03$ 1.30 16 6/21/2011 Average No 1.14$ 0.96 36.31% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% 11 2/2/2010 Excellent Yes 2.26$ 2.29 18 12/5/2011 V-Good Yes 1.03$ 1.30 75.29% 11 2/2/2010 Excellent Yes 2.26$ 2.29 16 6/21/2011 Average No 1.14$ 0.96 138.94% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% Location Extraction - Lake View v Lake Front Leasehold Improvements 54.87% An analysis of the above stated chart indicates that the closer to the lake, the better the view and access the higher the value. This analysis indicates that Comparable Sales No. 18 vs No. 16 (a lake-view lot vs no-lake-view lot) within adjoining subdivisions and a short distance apart, commands only a 36.31% higher price; however, when a premium lake-view lot (Comparable Sales No. 11 vs No. 18) is compared, it demands an adjustment of 75.29% verses one furthest from the lake, and 138.94% for a non-lake view lot, even further from the lake. Furthermore, this analysis indicates that even when lake access is not directly available, the property with the unobstructed view closest to the lake demand a 55.91% premium over those that are furthest from the lake with similar views and amenities (Comparable Sales No. 17 vs No. 12). This adjustment supports the Land Value – Land Extraction Method which indicates a location adjustment 54.87% when pairing Leasehold Improved Sales – Water Front vs Non- Water Front (lake view) sites within the cabin site area. Finally, when similar views are considered, there is only a small differential, if any at all, Comparable Sales No. 14 and No. 15. Utility Adjustment – Seasonal vs Permanent Water & Septic – This adjustment was extracted from the market using paired sales analysis between Comparable Leasehold/Fee Simple Cabin Sales No. 4 and Comparable Sales No. 5 and No. 6 found in the Land Value – Land Extraction Method section preceding this analysis. These three sales indicate a range differential of $3,626 to $8,125 or a percentage range of 2.79% to 6.25% of total sales price or an Holthouse Appraisal Group Analysis – 6705 Page A - 43 average adjustment of $5,875 or 4.52% for the difference between seasonal and non-seasonal water and sewer. (The Appraiser has elected to use the percentage adjustment for this category as the land areas of the comparable sales used could not be determined but were considered similar based on a visual analysis of the plat map.) This conclusion is supported in the Area Lake Property Market Trends - Case Study found in the Basic Data Section which indicates that when considering current listings, location is the primary determinant with no difference between developed water front properties (with community water and ability to have septic) and semi-developed lake front properties (with septic holding tanks required and no current availability, but rights to, community water). When current sales are considered, (See Case Study No. 1 – Shores at Lake DeSmet Sales No. 3 vs No. 6 and No. 7) the conclusion of location verses services is further supported; however, there is a slight premium paid of 3.23% to 4.35% for these improvements. Therefore, the Appraiser has elected to make an adjustment of -4.52% for the difference between seasonal and permanent water and sewer which appears to be credible and well supported in the market. Conclusion - Under the previous analysis of the comparable land sales the Appraiser has determined that Comparable Sale No. 11 was most similar to the subject’s “non-water front” lots as it was purchased by the adjoining landowner to protect his view shed; thus, commanded a premium similar to those enjoyed by the “non-water” front lots of the subject. This sale is closest to the water (without being on the water) than all of the fee simple lots recently sold or currently for sale and has ease of access to the boat club and marina so has similar access to the lake. Furthermore, under the previous analysis it was found that Comparable Sale No. 18 was the most current sale located slightly further from the lake with a lake-view and that Comparable Sale No. 16 was located even further from the lake and had no-lake-view. When these sales are paired with Comparable Sale No. 11 a location premium of 75.29% was derived for the difference between a close up lake-view vs “just” a lake-view and 138.94% for no-lake-view at all. Comparable Sales No. 17 and No. 12 are not located close to the lake but when paired indicate a 55.91% differential between a lake-view property verses an unobstructed lake-view property closer to the lake. This correlates well with the location premium at the cabin site area between “non-water front” lots and “water front” lots from improved sales in the Land Value – Land Extraction Method section preceding this methodology analysis.

Holthouse Appraisal Group Analysis – 6705 Page A - 44 The Appraiser has also elected to use the -4.52% deduction also found in the preceding section for seasonal vs non-seasonal water and sewer. These percentages will be used to determine the value of the subject’s “non-water front” lots and “water front” lots as indicated below:

ADJUSTMENT GRID - LAKE VIEW - NON-WATER FRONT LOTS Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft.

11 Lot 3, South Estates$ 225,000 -4.52% $ 214,830 2.26$ 95,058 $ 2.18

Location % 0.00% Location Adjustment $ - Adjusted Price Per Square Foot $ 2.18 Average Lot Size 27,878 Indicated Value $ 60,836 Rounded To: $ 60,000 Lot 55, Alcova Lake 18 $ 58,500 -4.52% $ 55,856 1.03$ 54,229 $ 1.24 View Estates 2 Location % ( Sale No. 11 vs Sale No. 18) 75.29% Location Adjustment $ 0.94 Adjusted Price Per Square Foot $ 2.18 Average Lot Size 27,878 Indicated Value 60,836 Rounded To: $ 60,000 Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft. Lot 18, Alcova West 16 $ 47,500 -4.52% $ 45,353 1.14$ 39,783 $ 0.91 Ranchettes Location % ( Sale No. 11 vs Sale No. 16) 138.94% Location Adjustment $ 1.27 Adjusted Price Per Square Foot $ 2.18 Average Lot Size 27,878 Indicated Value $ 60,836 Rounded To: $ 60,000

Holthouse Appraisal Group Analysis – 6705 Page A - 45 ADJUSTMENT GRID - LAKE FRONT - WATER FRONT LOTS Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft.

11 Lot 3, South Estates$ 225,000 -4.52% $ 214,830 2.26 $ 95,058 $ 2.18

Location % - Lake View vs Lake Front Extraction 55.91% Location Adjustment $ 1.22 Adjusted Price Per Square Foot $ 3.40 Average Lot Size 27,878 Indicated Value $ 94,849 Rounded To: $ 95,000 Lot 55, Alcova Lake 18 $ 58,500 -4.52% $ 55,856 1.03$ 54,229 $ 1.24 View Estates 2 Location % ( Sale No. 11 vs Sale No. 18) 75.29% Location Adjustment $ 0.94 Adjusted Price Per Square Foot $ 2.18 Location % - Lake View vs Lake Front Extraction 55.91% Location Adjustment $ 1.22 Adjusted Price Per Square Foot $ 3.40 Average Lot Size 27,878 Indicated Value 94,850 Rounded To: $ 95,000 Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft. Lot 18, Alcova West 16 $ 47,500 -4.52% $ 45,353 1.14$ 39,783 $ 0.91 Ranchettes Location % ( Sale No. 11 vs Sale No. 16) 138.94% Location Adjustment $ 1.27 Adjusted Price Per Square Foot $ 2.18 Location % - Lake View vs Lake Front Extraction 55.91% Location Adjustment $ 1.22 Adjusted Price Per Square Foot $ 3.40 Average Lot Size 27,878 Indicated Value 94,850 Rounded To: $ 95,000 % Differential - Lake Front Lots vs Non-Lake Front (Lake View) Lots 58.33%

FINAL OPINION OF VALUE – DIRECT LAND SALES COMPARISON METHOD Under this methodology the differential is 58.33% between “lake-view – non-lake front” lot values and “lake front – water front” lot values which correlates well with the previously

Holthouse Appraisal Group Analysis – 6705 Page A - 46 described percent differential of 54.87% found using paired sales analysis of improved leasehold properties within the cabin site area. This percentage appears to be in the high side; however, this could be due to rounding. Therefore, it is the Appraiser’s opinion that under the Land Value- Direct Sales Comparison Method the average value of the “lake-view – non-water front” lots would be $60,000 while the average value of the “lake front – water front” lots would be $95,000. CORRELATION AND CREDIBILITY ANALYSIS In an effort to determine the value of the subject’s “non-water front” lots and the “water front” lots the Appraiser has conducted two analysis, Land Extraction Method and Direct Sales Comparison Method. Under these two scenarios the Appraiser determined that by using the Land Extraction Method the fee simple land values were $55,000 for the “non-water front” lots and $90,000 for the “water front” lots and $60,000 and $95,000 under Direct Sales Comparison Method. To determine if these values are credible the Appraiser will do the following credibility analysis to determine how well these values correlate using the percentages found within the case study located in the Basic Data Section. This case study is of those properties located near and around Lake DeSmet approximately 150 miles north of the subject. An analysis of the Lake DeSmet area listings and sales indicates that it has similar attributes to Alcova with the lake levels being somewhat consistent and some similar services; however, this area is depressed due to the local and national economies, the lake is smaller, there are less overall services and the site has a smaller population base from which to pull from. Furthermore, as stated in the case study, an analysis of the current sales price per square foot for the Lake DeSmet’s lake-front lots of $0.93 to $1.04. This price range is similar to Alcova’s no- lake-view lots of $0.96/sq. ft, which indicates that there is nothing similar at Lake DeSmet to “water front” lots at Alcova, due to stated dissimilarities between the areas and economic conditions. This is probably why “lake-view” lots are selling at the same price as “lake-front” lots. Therefore, when determining the location premium percentage for “water front” properties under this comparison analysis, the Appraiser will use the average sales price for “lake-front” lots of those properties located at North Shore Development. These lots sold in better economic times which would correlate better with the current market at Alcova. These percentages will be

Holthouse Appraisal Group Analysis – 6705 Page A - 47 used to determine the reasonableness of the values previously determined at Alcova and are as follows.

Alcova Reservoir - View Adjustment Analysis Lake Location Comp # Rec. Date View View Acres $/Sq. Ft. Adjustment 14 11/15/2010 Fair No 10.22$ 0.20 15 11/22/2010 Fair No 7.33$ 0.19 4.96% 18 12/5/2011 V-Good Yes 1.03$ 1.30 16 6/21/2011 Average No 1.14$ 0.96 36.31% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% 11 2/2/2010 Excellent Yes 2.26$ 2.29 18 12/5/2011 V-Good Yes 1.03$ 1.30 75.29% 11 2/2/2010 Excellent Yes 2.26$ 2.29 16 6/21/2011 Average No 1.14$ 0.96 138.94% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% Location Extraction - Lake View v Lake Front Leasehold Improvements 54.87% Lake DeSmet - View Adjustment Analysis Lake Location Comp # Rec. Date View View Acres $/Sq. Ft. Adjustment SALD Mt View Avg List $ Average No 3.79$ 0.48 Lot 30 E Park 7/1/2011 Average No 2.34$ 0.45 6.67% SALD Lk-Mt View Avg List $ V-Good Yes 3.44$ 0.53 SALD Mt View Avg List $ Average No 3.79$ 0.48 10.42% SALD Lake View Avg List $ V-Good Yes 2.13$ 0.74 SALD Mt View Avg List $ Average No 3.79$ 0.48 54.17% SALD Lot 63 7/23/2010 Excellent Yes 2.10$ 1.04 SALD Lk-Mt View Avg List $ V-Good Yes 3.44$ 0.53 96.23% SALD Lot 63 7/23/2010 Excellent Yes 2.10$ 1.04 SALD Lot 64 List $ V-Good Yes 2.13$ 0.74 40.54% SALD Lot 63 7/23/2010 Excellent Yes 2.10$ 1.04 Lot 30 E Park 7/1/2011 Average No 2.34$ 0.45 131.11% NSD Lot NE5 8/13/2007 V-Excellent Frontage 2.02$ 2.10 Lot 65 E Park 5/25/2007 Average Yes 2.12$ 0.60 250.00% SALD Lot 44 5/29/2008 V-Excellent Frontage 2.31$ 1.89 Lot 65 E Park 5/25/2007 Average Yes 2.12$ 0.60 215.00% SALD Lot 44 5/29/2008 V-Excellent Frontage 2.31$ 1.89 SALD Lot 51 5/20/2009 V-Good Yes 2.27$ 0.83 127.71%

SALD = Shores at Lake DeSmet,; NSD = North Shore Development; E Park = Emerald Park Subdivision found in the case study.

Holthouse Appraisal Group Analysis – 6705 Page A - 48 When the Lake DeSmet percentages are correlated to the sales at Alcova Reservoir they indicate a very similar outcome per square foot of land as indicated in the analysis below.

Credibility Analysis - Alcova vs. Lake DeSmet Alcova Alcova Land Land Sale Land Class vs. Land Class Value Lake DeSmet % $/Sq. Ft. No. 16 Non-Lake View vs. Avg-Lake View$ 0.96 10.42%$ 1.06 No. 16 Non-Lake View vs. Avg-Lake View$ 0.96 54.17%$ 1.48 Indicated Value - For Alcova - Using Avg-Lake View % at Lake DeSm$ 1.27 Sales Price of Comparable Sale No. 18 $ 1.30 % Differential 2.36% No. 16 Non-Lake View vs. Sup-Lake View$ 0.96 131.11%$ 2.22 No. 18 Avg-Lake View vs. Sup-Lake View$ 1.30 96.23%$ 2.55 No. 18 Avg-Lake View vs. Sup-Lake View$ 1.30 40.54%$ 1.83 Indicated Value - Alcova - Sup-Lake View $ 2.20 Sales Price of Comparable Sale No. 11 $ 2.29 % Differential 4.14% No. 16 Non-Lake View vs. Lake Frontage$ 0.96 250.00%$ 3.36 No. 16 Non-Lake View vs. Lake Frontage$ 0.96 215.00%$ 3.02 No. 18 Avg-Lake View vs. Lake Frontage$ 1.30 127.71%$ 2.96 Indicated Value - Alcova - Lake Front $ 3.11 Alcova Lake Front Lot Value Using Comparable Sale No. 11 - Adj $ 2.18 No. 11% From Land Extraction Method $ 2.18 54.87%$ 3.38 No. 11 V-Good vs. Good$ 2.18 55.91%$ 3.40 Indicated Value of Lake Front - Alcova Extrapolation $ 3.39 % Differential 8.76% Conclusion - As previously stated, the Appraiser’s assignment is to appraise the lots as water front lots and non-water front lots with no other consideration to the specific value of each of the 100 lots. Under the Land Value – Land Extraction Method scenario the Appraiser had determined that the value of the subject’s sites was more credible using the price per square foot vs the price per lot. This assumption is even more pronounced in the Land Value – Direct Sales Comparison Method as it is doubtful that a 0.64 acre lot located on the lake would command a price of per lot similar to Comparable No. 11 of $225,000 before adjustments or even $215,000 rounded after adjustments.

Holthouse Appraisal Group Analysis – 6705 Page A - 49 Furthermore, even if you were to make the hypothetical assumption that because Comparable Sale No.18 is most similar in size and has a lake view, it would be equal to the subject’s “non-water front” lots on a per lot basis, the adjusted price would be $54,000 adjusted and rounded. This value would only support the Appraiser’s conclusion per square foot of $60,000. Additionally, if you make the location adjustment of 54.87% to the $54,000 the value rounded is $84,000 rounded, which also supports the Appraiser’s value conclusion under the per square foot method, as the per square foot analysis correlates better to both Alcova and Lake DeSmet market studies. Finally, in my interview with Mr. Edgeworth it was found that in his opinion, lots similar to the subject would sell in the $75,000 for “non-lake front” lots and $90,000 for “lake front” lots, with good demand. As further support for this analysis, an examination the previous appraisal assignment was conducted by the Appraiser with an effective date of November 2006. In this assignment the Appraiser determined that the value of the subject’s two classifications of lots was $49,000 for “non-water front” lots and $72,000 for “water front lots. These values indicate a location premium of 46.94% ($72,000 - $49,000 = $23,000 ÷ $4,900 = 46.94%) which less but also correlates well with the 54.87% and 55.91% determined in the two preceding scenarios. When these values are multiplied by the 5 and 10 year market increases based on lot value increases of 4.45% and 6.65% respectfully the following values are determined:

TIME ADJUSTED VALUES Report Total Indicated Description Lot Value Date 10 Year % Eff Date Years Adjustment Value Lake Front Lots$ 72,000 11/1/2006 6.65% 12/1/2011 5.08 33.81%$ 96,347 Rounded To: $ 95,000 Lake View Lots$ 49,000 11/1/2006 6.65% 12/1/2011 5.08 33.81%$ 65,569 Rounded To: $ 65,000 Report Total Indicated Description Lot Value Date 5 Year % Eff Date Years Adjustment Value Lake Front Lots$ 72,000 11/1/2006 4.45% 12/1/2011 5.08 22.63%$ 88,292 Rounded To: $ 90,000 Lake View Lots$ 49,000 11/1/2006 4.45% 12/1/2011 5.08 22.63%$ 60,088 Rounded To: $ 60,000

An analysis of the preceding chart indicates that the two values indicated for each lot classification correlate well with the value determined under the Land Value – Direct Sales

Holthouse Appraisal Group Analysis – 6705 Page A - 50 Comparison Method which also correlates well with the value determined under the Land Value – Land Extraction Method; thus, indicating credibility has been established. FINAL OPINION OF MARKET VALUE – LAND ONLY In determining the values under this assignment the Appraise has presented two different scenarios and a credibility analysis which indicates the following value ranges:

SUMMARY OF INDICATED VALUES Methodology Description Water Front Non-Water Front Land Value - Land Extraction Method$ 90,000 $ 55,000 Land Value - Direct Sales Comparison Method$ 95,000 $ 60,000 % Differential 5.56% 9.09%

Typically, the preferred method of determining land value is direct sales comparison; similar sites, competing in the same market sector as the subject, are compared to the subject. Adjustments, extracted from the market are applied to the comparable site sales for any differences that exist between the sales and the subject. The areas of adjustment include, but are not confined to location, view, access, size, shape, market conditions at the time of sale, and the terms of the sale. It is the Appraiser’s opinion that this approach has adequate data and support to make a credible determination of the subject’s fee simple market value for the two classifications of lots. Therefore, based on the foregoing data, analysis and conclusions, it is the Appraiser’s opinion that the fee-simple market value for the subject’s cabin sites, as of the effective date of this report, are as follows: WATER FRONT LOTS

NINETY FIVE THOUSAND DOLLARS $95,000 NON-WATER FRONT LOTS

SIXTY THOUSAND DOLLARS $60,000

Holthouse Appraisal Group Analysis – 6705 Page A - 51 ANALYSIS OF MARKET RATES OF RETURN (YIELD RATES) It is common practice to derive market rents by analyzing current market rents paid for similar properties. This market data is then compared to the subject to determine the subject’s market rates or rents that an investor would expect as owner of the property and obtain a desired yield. The subject sites are owned by the United States of America, Department of the Interior and are not privately held or sold. An analysis of the Wyoming and surrounding recreational markets indicates that most leases for similar properties are owned by the government and the lease rate is not determined by fee simple market value of the land as is required by the Memorandum of Agreement between the Bureau and the Natrona County Commissioners. Furthermore, the Appraiser could find no current comparable leases of recreational sites that were privately held and were arm’s length. Therefore, the Appraiser’s opinion of market rents will be derived from expected rates of returns (yields) obtained or desired by investors of similar properties. In order to determine a credible rate of return (yield) the Appraiser must analyze the current rates of return offered by similar alternative investments in real property, “land only”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, “the following table summarizes prevailing land lease capitalization and discount rates. The former reflects initial rates of return on appraised values for vacant land proposed for development. They do not address increases in land lease payments or the reversion but may include percentage rent. The latter are internal rates of return being achieved by landowners on improved properties. As such, they include changes in land lease payments, percentage rent where applicable and the reversion of the entire property at the termination of the lease. Lease terms range from 55 to 99 years.”3 This survey will be used to determine the market rate of return the government should expect to achieve for the subject sites.

3 RealtyRates.com – Investor Survey – 3rd Quarter, Robert G. Watts and Associates, 2006, Page 38. Holthouse Appraisal Group Analysis – 6705 Page A - 52 Abstract - Land Lease Capitalization Rates - RealtyRates.com - 3rd Quarter - 2011 Description 2007 2008 2009 2010 2011 5 Year Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Avg Apartments 4.39% 10.94% 8.24% 3.75% 11.68% 7.89% 3.72% 11.54% 7.60% 2.81% 10.82% 7.05% 2.33% 10.18% 6.39% 3.40% Golf 5.27% 16.67% 11.67% 4.49% 17.15% 11.44% 4.22% 17.13% 11.19% 3.30% 16.24% 10.23% 2.90% 15.80% 9.39% 4.04% Health Care/Senior Housing 5.00% 11.87% 8.80% 4.79% 11.87% 8.50% 4.53% 11.72% 8.21% 3.40% 12.19% 7.53% 2.53% 10.59% 6.81% 4.05% Industrial 4.90% 11.98% 8.46% 3.75% 11.68% 8.15% 3.80% 11.44% 7.82% 3.01% 10.82% 7.22% 2.53% 10.15% 6.59% 3.60% Lodging 5.17% 14.67% 8.95% 4.39% 17.15% 8.80% 4.14% 16.85% 8.50% 3.25% 15.96% 7.95% 2.63% 15.56% 7.42% 3.92% Mobile Home/RV Parks 4.92% 11.17% 9.14% 4.14% 11.68% 8.87% 3.89% 11.54% 8.49% 3.00% 10.82% 7.99% 2.53% 10.59% 7.32% 3.70% Office 4.97% 11.47% 8.52% 3.75% 11.69% 8.02% 3.80% 11.55% 7.98/% 3.00% 10.82% 7.21% 2.53% 9.22% 6.18% 3.61% Restaurants 5.90% 14.17% 9.81% 5.53% 17.15% 9.97% 5.29% 17.11% 9.78% 4.40% 16.22% 9.10% 3.53% 15.82% 8.26% 4.93% Retail 4.82% 11.87% 8.55% 3.75% 11.87% 8.21% 3.79% 11.72% 7.94% 2.90% 12.19% 7.38% 2.50% 10.59% 6.68% 3.55% Self-Storage 4.98% 11.47% 10.01% 3.75% 11.69% 9.78% 3.80% 11.55% 9.94% 3.15% 10.82% 9.37% 2.60% 10.26% 8.66% 3.66% Special Purpose 5.88% 18.67% 10.21% 5.10% 17.89% 10.33% 4.84% 17.79% 10.16% 3.95% 16.90% 9.41% 3.54% 16.48% 8.51% 4.66% All Properties 4.39% 18.67% 9.31% 3.75% 17.89% 9.09% 3.72% 17.79% 8.87% 2.81% 16.90% 8.22% 2.33% 16.48% 7.47% 3.92%

Abstract - Land Lease Discount Rates - RealtyRates.com - 3rd Quarter - 2011 Description 20072008 2009 2010 2011 5 Year Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Avg Apartments 6.99% 11.44% 9.24% 6.35% 12.18% 8.89% 6.32% 12.04% 8.60% 5.41% 11.32% 8.05% 4.93% 10.68% 7.39% 6.00% Golf 7.87% 17.17% 12.67% 7.09% 17.65% 12.44% 6.82% 17.63% 12.19% 5.90% 16.74% 11.23% 5.50% 16.30% 10.39% 6.64% Health Care/Senior Housing 7.87% 17.17% 12.67% 7.09% 17.65% 12.44% 6.82% 17.63% 12.19% 6.00% 12.69% 8.53% 5.13% 11.09% 7.81% 6.58% Industrial 7.50% 12.48% 9.46% 6.35% 12.18% 9.15% 6.40% 11.94% 8.82% 5.61% 11.32% 8.22% 5.13% 10.65% 7.59% 6.20% Lodging 7.77% 15.17% 9.95% 6.99% 17.65% 9.80% 6.74% 17.35% 9.50% 5.85% 16.46% 8.95% 5.23% 16.06% 8.42% 6.52% Mobile Home/RV Parks 7.52% 11.67% 10.14% 6.74% 12.18% 9.87% 6.49% 12.04% 9.49% 5.60% 11.32% 8.99% 5.13% 11.09% 8.34% 6.30% Office 7.57% 11.97% 9.52% 6.35% 12.19% 9.02% 6.40% 12.05% 8.98% 5.60% 11.32% 8.21% 5.13% 9.72% 7.18% 6.21% Restaurants 8.50% 14.67% 10.81% 8.13% 17.65% 10.97% 7.89% 17.61% 10.78% 7.00% 16.72% 10.10% 6.13% 16.32% 9.26% 7.53% Retail 7.42% 12.37% 9.55% 6.35% 12.37% 9.21% 6.39% 12.22% 8.94% 5.50% 12.69% 8.38% 5.10% 11.09% 7.68% 6.15% Self-Storage 7.58% 11.97% 11.01% 6.35% 12.19% 10.78% 6.40% 12.05% 10.94% 5.75% 11.32% 10.37% 5.20% 10.76% 9.66% 6.26% Special Purpose 8.05% 19.02% 10.57% 7.28% 19.42% 10.28% 7.26% 19.40% 10.26% 6.58% 18.67% 9.58% 6.25% 18.34% 9.22% 7.08% All Properties 6.99% 17.17% 10.50% 6.35% 17.65% 10.26% 6.32% 17.63% 10.04% 5.41% 16.74% 9.10% 4.93% 16.32% 8.37% 6.50% Historic Capitalizaton Rate Trends Historic Discount Rate Trends 14.00% 14.00%

12.00% 12.00%

10.00% 10.00%

8.00% Min 8.00% Min Max 6.00% Max 6.00% Avg Avg 4.00% 4.00%

2.00% 2.00%

0.00% 0.00% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

Holthouse Appraisal Group Analysis - 6705 Page A - 53 Conclusion The capitalization rates on the preceding chart reflect the initial rates of return on appraised values for vacant land proposed for development, whereas, the discount rates consist of the internal rates of return being achieved by landowners on improved properties and include: changes in land lease payments, percentage rent where applicable, and the reversion of the entire property at the termination of the lease. It is the Appraiser’s opinion that use of the discount rate, which includes the value tenant’s improvements at reversion plus future increases in rent, would not be appropriate for two reasons: 1) the Appraiser’s assignment is to appraise the properties “as vacant” with no improvements; thus, no value for reversion is present, and 2) internal rates of return using future rate increases to determine current rents is “double dipping” if an average rate is used for the five year period. This would escalate rents above market; thus, the Appraiser has chosen the capitalization rates as the basis for this analysis. An analysis of the categories on the preceding chart indicates that the most similar use to the subject is the category - Apartments. This category was selected by the Appraiser for the following reasons: 1) improvements are of a permanent nature with residential similarities and 2) the sites have low to no vacancies which are similar to low risk residential improved investments. Therefore, this classification of return rates will be used. ANALYSIS OF RENT RESTRICTIONS The Appraiser has analyzed the subject property and found that the subject sites are the only approved cabin sites on Alcova Reservoir. Furthermore, this reservoir only fluctuates approximately 5 feet during the irrigation season. Alcova is also used as a leveling reservoir to regulate the irrigation flows of the North Platte River, both up and down stream. This lack of fluctuation allows the cabin site owners to have shore line docks that are usable most of the recreational season. In addition, the Bureau of Reclamation lowers the lake in the winter months to protect its irrigation gates which also protects the shore line docks. These two factors are a vary desired recreational benefit to the tenants and other market participants. However, there are restrictions on the property as to size of improvements (upper end size) and the period of time for which the property can be used (six months). Furthermore, the Appraiser has received information indicating that even if there were no restrictions on the site

Holthouse Appraisal Group Analysis – 6705 Page A - 54 by the Bureau, the soils are not conducive to septic systems; therefore, the sites are considered as seasonal recreational use sites. (See letter dated November 29, 2011 between Mr. Hermansky, Civil/Environmental Engineer and Mr. Jerry Stack, President of the Alcova Cabin Owner’s Association found in the addenda of this report.) An analysis of the comparable sales found in the Land Value – Direct Sales Comparison Method section of this report indicates that all of the sales used did not restrict upper limit improvement size but did restrict the lower limits (which can be detrimental as it relates to seasonal recreational properties) and these sites can be used as a permanent residence. Therefore, these restrictions must be considered in the bundle of rights allowed under the current lease agreement as it reduces the risk to the owner by lowering the overall management requirements of the area, i.e., law enforcement, road maintenance, etc. or risk. An analysis of the Comparable Fee-Simple Cabin Sales vs Comparable Leasehold Cabin Sales found in the Land Value – Land Extraction Method section indicates that when similar sales in these two areas are paired, these restrictions were accounted for. Furthermore, when the land value conclusions under the two scenarios were compared the differential was between 5% to 10% as indicated below:

Therefore, as this minor difference could easily be explained as the deviation between the two approaches, it is the Appraiser’s opinion that these differences have no significance as to value and should have no effect on the overall lease rate if a lower or “safe” rate is used.

Holthouse Appraisal Group Analysis – 6705 Page A - 55 FINAL CONCLUSION OF MARKET RENTS As previously stated the subject’s management requirements are low and the vacancy factor for the past 30+ years has been virtually non-existent. To determine the appropriate return rate for the subject, the Appraiser has again examined the rates reported by the previously stated national survey for “apartments”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, the average rates for “Apartments” over the past five years ranges are as follows:

APARTMENT CAPITALIZATION RATES Year Min Max Avg 2007 4.39% 10.94% 8.24% 2008 3.75% 11.68% 7.89% 2009 3.72% 11.54% 7.60% 2010 2.81% 10.82% 7.05% 2011 2.33% 10.18% 6.39% Average 3.40% 11.03% 7.43%

An analysis of these rates indicates that the “minimum” average rate (low risk rate) for the five years would be a reasonable rate as the cabin site area has had little to no vacancies in the past 30+ years; has restrictions to usage; thus, minimizes the risk to the owner by lowering the overall management requirements of the area, i.e., law enforcement, road maintenance, etc. Therefore, a rate of 3.40% return for the next five years appears reasonable and credible. Conclusion The formula for market rents is as follows - Market Value x Risk Rate = Market Rents or Annual Return on Investment where Market Value is the fee simple value determined in the Sales Approach for the particular site class and the risk rate is the previously determined capitalization rate of 3.40%. Thus, the market rents for the subject sites are calculated as follows:

Market Rents - "Lake Front Lots" Fee Simple Market Return Rate x Market Value =Market Rents 3.40% x$ 95,000 =$ 3,230

Rounded to: $3,250

Holthouse Appraisal Group Analysis – 6705 Page A - 56 Market Rents - "Non - Lake Front Lots" Fee Simple Market Return Rate x Market Value =Market Rents 3.40% x$ 60,000 =$ 2,040

Rounded to: $2,050 APPRAISER’S OPINION OF MARKET RENTS Therefore, based on the preceding analysis, conclusions and considering all things that affect the subject sites, it is the Appraiser’s opinion that the market rents for the subject sites are as follows: MARKET RENTS FOR THE WATER FRONT LOTS

THREE THOUSAND TWO HUNDRED FIFTY DOLLARS $3,250 MARKET RENTS FOR THE NON-WATER FRONT LOTS

TWO THOUSAND FIFTY DOLLARS $2,050

Holthouse Appraisal Group Analysis – 6705 Page A - 57 THE COST APPROACH The Cost Approach represents the objective concept of value. This concept is predicated upon the theory that value is inherent in the object itself and that value and cost tend to be the same. The American Institute of Real Estate Appraisers further explains this approach below in a paragraph from Page 441 of The Appraisal of Real Estate, 8th Edition: The Cost Approach to Value, like the Sales Comparison and Income Approaches, is based on comparison. In the Cost Approach, the cost to construct a building and the value of an existing building are compared. The Cost Approach to Value reflects market thinking in the recognition that market participants relate value to cost. Buyers tend to judge the value of an existing structure by comparing it to the value of a newly constructed building with optimal functional utility. Moreover, buyers adjust the prices they are willing to pay by estimating the costs to bring an existing structure to desired levels of functional utility.

This approach to a value estimate analyzes the subject property in terms of site value and the depreciated cost of improvements. The basic formula for the Cost Approach is: Reproduction Cost New of the Improvements Less: Depreciation Allowance Equals: Depreciated Cost of the Improvements Plus: Site Value Equals: Value Estimate by the Cost Approach

DISCLAIMER OF THE COST APPROACH The value opinion under this approach consists of the present construction cost of any improvements on the property less depreciation from any source, plus the value of the land. Therefore, due to the subject property being considered land only, it is the appraiser’s opinion that this approach would be a duplication of the Sales Approach, thus, is excluded from this report.

Holthouse Appraisal Group Analysis – 6705 Page A - 58 THE INCOME APPROACH The Income Approach is widely applied for income producing properties since it reflects the rationale of typical investors together with current financing conditions (i.e., the assumption being that financing is typically involved in most real property transaction). In this approach, market value is determined through the capitalization of a projected, stabilized estimate of net operating income. The traditional formula for computing value by the Income Approach is V = NOI divided by R, where V = market value, NOI = stabilized net operating income, and R = overall rate. Stabilized Net Operating Income (NOI) In the appraisal of real estate, the stabilized net operating income for the property is based on potential income and expense data as dictated by the market. In other words, income and expense data for similar facilities is projected onto the subject property in order to derive net operating income. The basic components and resulting formula for arriving at net operating income by this method are given below: Potential Gross Income (PGI) Less: Allowance for Vacancy and Rent Loss Equals: Effective Gross Income (EGI) Less: Operating Expenses Property Taxes Insurance Property Management Fees Maintenance Utilities Reserves for Replacement Equals: Net Operating Income (NOI) DISCLAIMER OF THE INCOME APPROACH This approach to value typically details an estimate of the property’s income and expenses. This approach to value is utilized primarily for properties which are improved and those improvements are rented or leased. The subject is being appraised “as vacant land” with no improvements and, as previously stated no comparable leases of similar properties were found with local significance; therefore, this approach was considered but excluded from this report.

Holthouse Appraisal Group Analysis – 6705 Page A - 59 RECONCILIATION AND FINAL OPINION OF MARKET VALUE & MARKET RENTS The final step in the appraisal framework is to evaluate and select from among the three traditional approaches to value, a single or final opinion of market value and market rents. The value opinions established by the three approaches were: Sales Approach Market Value – Water front Sites $ 95,000 Annual Market Rents – Water front Sites $ 3,250 Market Value – Non-Water front Sites $ 60,000 Annual Market Rents – None-Water front Sites $ 2,050 Cost Approach Omitted Income Approach Omitted Sales Approach When sufficient market data is available, investors and many other market participants most frequently rely upon the Sales Approach, as it best reflects interactions within the market between buyers and sellers. Properties that were representative of the subject were found and analyzed under two different scenarios, the Land Value – Direct Sales Comparison Method and the Land Value – Land Extraction Method. The comparables within these two scenarios were dissimilar in some respects; however, it is the opinion of the Appraiser that credible conclusions were drawn based on market evidence. Therefore, the Sales Approach provides the most reliable indication of the subject's market value and market rents as of the effective date of this report. The Cost Approach The Cost Approach has its most usefulness when the property being appraised involves new improvements, which represent the highest and best use of the land, or when there exists no income and sales data of similar properties. As previously stated, the instructions of the client are to appraise the subject as “vacant land”; therefore, it is the Appraiser’s opinion that this approach would be a duplication of the Sales Approach, thus, was omitted from this report. The Income Approach The Income Approach is preferred for income producing properties. The reliability of this approach is a function of rent and expense data and the accurateness of the capitalization rate. The data available on income and expenses for similar properties not was sufficient in both

Holthouse Appraisal Group Analysis – 6705 Page A - 60 quantity and quality, making the estimated net operating income for the subject property mere speculation, thus, this approach was considered, but excluded from this report. FINAL OPINION OF MARKET VALUE AND MARKET RENTS An analysis of the market indicates that properties similar to the subject are typically purchased or leased by end users and that this interaction was analyzed under two different scenarios, the Land Value – Direct Sales Comparison Method and the Land Value – Land Extraction Method supported by a case study of lake front/lake view properties. Thus, it is the Appraiser’s opinion that the Sales Approach is considered to be the best indication of the subject’s fee simple market value and market rents. Therefore, based on the foregoing data, analysis and conclusions, it is the opinion of the appraiser that the fee simple market value and market rents of the subject property, as of the effective date of this report, are as follows: MARKET VALUE OF SUBJECT SITES BY CLASSIFICATION WATER FRONT LOTS NINETY FIVE THOUSAND DOLLARS $95,000

NON-WATER FRONT LOTS SIXTY THOUSAND DOLLARS $60,000

MARKET RENTS FOR THE SUBJECT SITES BY CLASSIFICATION WATER FRONT LOTS THREE THOUSAND TWO HUNDRED FIFTY DOLLARS $3,250

NON-WATER FRONT LOTS TWO THOUSAND FIFTY DOLLARS $2,050 LEASE RATE CREDIBILITY ANALYSIS To determine the credibility of the new lease rate the Appraiser has analyzed the current lease rates determined by the Appraise of comparable sites in the subject’s immediate market area. These rates were derived from the market value of the land and multiplied by an appropriate return rate which was market extracted. An analysis of the new rates for the Casper Boat Club found in Section “C” of the Analysis Section indicates that the new rate for the 11.27 acre tract will be $25,000. An analysis of the Casper Water Ski Club found in Section “D” of the Analysis Section indicates that the new rate for the 10.079 acre tract will be $22,000. An analysis

Holthouse Appraisal Group Analysis – 6705 Page A - 61 of the Alcova Lakeside Marina indicates found in Section “E” of the Analysis Section indicates that the new rate for the 5.3 acres will be $12,850. (This rate was established under a different scenario using 2% of gross sales.) An analysis of the Pathfinder Marina and Boat Club indicates found in Section “F” of the Analysis Section indicates that the new rate for the 3.11 acres will be $7,500. As previously stated the Appraiser had previously obtained from the Natrona County Road and Bridge Department through an appraisal done by Irle R. Briggs dated July 9, 1991, information indicating that the 100 cabin site lots range in size between 0.37 acres to 2.1 acres with an overall average lot size of 0.64 acres or 27,878 sq. ft. This information, however, cannot be independently verified as the plat map recorded at the Natrona County Deed of Records lacks information adequate for a credible analysis. Therefore, the value opinion and other conclusions expressed in this report are subject to the extraordinary assumption that the average lot size is 27,878 sq. ft. or 0.64 acres, subject to a survey. Under this scenario the acreage under lease is approximately 64 acres; however, this does not account for the roads, beaches used by the tenants for their boat docks and waste in the view sheds; thus, further analysis was necessary. To determine the total area under use by the Cabin Owner’s Association Members the Appraiser has done an aerial survey of the site using the NRCS Soils Survey Site provided by the US Department of Agriculture for public use which the Appraiser has included in the Addenda of the Basic Data Section. The results of this survey indicate that the lands under use, subject to survey contain approximately 124.1 acres of land area. This area will be used in the analysis below. An analysis of the subject’s current rate for “water front” sites determined by the Appraiser is $3,250 or $120,250 for all 37 lots ($3,250 x 37 = $120,250). A further analysis indicates that the rents for the “non-water front” determined by the Appraiser is $2,050 or $129,150 ($2,050 x 63 = $129,150). A further analysis indicates that these lots are not supplied with access to a community water and sewer system as most of the competing sites are. Therefore, the Appraiser must adjust to obtain equal consideration for comparison. The Appraiser has elected to use the utility adjustment of 4.52% determined in this section as a utility adjustment.

Holthouse Appraisal Group Analysis – 6705 Page A - 62 When the estimated area of 124.1 acres is used for the subject site and compared to the new rates determined by the Appraiser, the analysis for the competing lands and their associated lease rates per acre owned by the Bureau is determined:

CREDITIBILITY ANALYSIS Description New Annual Rate Acres $/Acre Alcova Lakeside Marina$ 12,850 5.3$ 2,425 Casper Boat Club$ 25,000 11.27$ 2,218 Casper Ski Club$ 22,000 10.079$ 2,183 Pathfinder Boat Club$ 7,500 3.11$ 2,412 Average$ 2,309 Cabin Sites - Income Water Front Lots$ 120,250 Non-Water Front Lots$ 129,150 Total - Lease Income$ 249,400 Water & Sewer Adjustment - 4.52%$ 11,273 Total Cash Equivalency$ 260,673 124.1$ 2,101 Differential 9.04%

An analysis of the above stated chart indicates that the differential between the new rates being charged for the subject and similar sites located at Alcova Reservoir is 9.04%. It is the Appraiser’s opinion that this differential is easily attributed to the value of the roads and waste and shoreline also accessible to the general public, subject to survey; thus, indicating that the new rate for the subject is both reasonable and credible.

Holthouse Appraisal Group Analysis – 6705 Page A - 63

SUBSECTION “B” APPRAISAL ANALYSIS ON THE ALCOVA TRAILER PARK ALCOVA RESERVOIR NATRONA COUNTY, WYOMING

Holthouse Appraisal Group Analysis – 6705 Page B - 1 Holthouse Appraisal Group

January 30, 2012

Mr. Mike Haigler, Director Natrona County Road, Bridge and Parks Department 538 SW Wyoming Boulevard Mills, WY 82644

Dear Mr. Haigler:

In fulfillment of our agreement, I have performed an appraisal on the real property locally known as the Alcova Trailer Park, Alcova Reservoir, Natrona County, Wyoming, herein referred to as the "subject property". The Appraiser’s opinions and conclusions are contained within this report and are reported in Summary Report format.

The intended use of this report is to serve as a guide to my Client, The Natrona County Board of Commissioners, Mr. Mike Haigler, Director, Natrona County Road, Bridge and Parks Department, 538 SW Wyoming Boulevard, Mills, Wyoming, (herein referred to as the “Client”) as their interests may be served in their efforts to establish the market value and market rents for the subject properties described in the Alcova and Pathfinder Reservoir Private Use Site Appraisal Plan dated April 12, 1991. The intended users of this appraisal assignment are The Natrona County Commissioners, Mr. Mike Haigler, Director, Natrona County Road, Bridge and Parks Department, and the United States Department of the Interior – Bureau of Reclamation. All other parties that choose to rely on the appraisal report should recognize that the assignment results were not developed or reported in a manner consistent with the needs or uses of parties other than those previously identified as the intended user. A copy of the engagement letter, including the Client’s instructions and guidelines, are located in the Addenda of this report.

The appraisal assignment is to establish a supportable and defensible opinion of the subject’s market value (fee simple) and market rents for the subject’s “water front lots” and “non-water front lots”, as defined by the Client, “land only excluding all leasehold improvements”, as of the effective date of the appraisal.

I, Edward J. Holthouse, CRS, CCIM, hold Certified General Real Estate Appraiser Permit No. 438, issued by the State of Wyoming Certified Real Estate Appraiser Board.

Holthouse Appraisal Group Analysis – 6705 Page B - 2 "Market value", as used herein, refers to the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under all conditions outlined in the Definition of Market Value contained in the body of this report.

The subject property's marketing time and exposure time are estimated to be one year or less based on the current market conditions.

Based on my completed appraisal analysis, the contents of which are contained in the ensuing report (two copies with original signatures are enclosed), the fee market value and market rents for the subject property, as of the effective date of this report, is:

MARKET VALUE OF SUBJECT THREE MILLION SIX HUNDRED TEN THOUSAND DOLLARS $3,610,000 MARKET RENTS FOR THE SUBJECT’S MOBILE HOME SPACES TWO THOUSAND FOUR HUNDRED FIFTY DOLLARS $2,450 Respectfully submitted,

______Edward J. Holthouse, CRS, CCIM Certified General Appraiser Permit No. 438

ejh

Holthouse Appraisal Group Analysis – 6705 Page B - 3 SUMMARY OF SALIENT FACTS AND CONCLUSIONS

Identification of the Subject Property: Alcova Trailer Park Lots 1-159, Alcova Reservoir, Natrona County, Wyoming.

Legal Description: A tract of land being all that portion of the NW/4NE/4, Section 33, Township 30 North, Range 83 West of the 6th P.M. that is west of Lakeshore Drive (Natrona County Road 406), Natrona County, Wyoming, containing 16.2 acres more or less.

Purpose of the Appraisal: To arrive at a supportable and defensible opinion of the subject's fee simple market value and market rents, excluding all personal property including trailer homes and individual site improvements such as decks and sheds, as of the effective date of the appraisal.

Site Size: 16.2 acres more or less with 159 lots which range in size between 2,000 sq. ft. and 5,000 sq. ft. with only 155 usable spaces.

Density: 9.57 trailers per acre based on 155 usable spaces.

Improvements: The subject is improved with a 159 lot trailer park; however, according to Mr. Mike Haigler with the Natrona County Road and Bridge only 155 sites are usable as the other sites are used for trash pick-up and overnight RV use. Improvements considered in the valuation include paved streets, water, sewer, and electrical hook-ups typical of most mobile home parks.

Zoning: The subject is zoned “M-H”, Mobile Home. It is under consideration to be changed to “PUD”, Planned Unit Development.

Highest and Best Use: Recreational Trailer Park

Value Opinion by the Sales Approach $ 2,840,000

Value Opinion by the Cost Approach: Omitted

Holthouse Appraisal Group Analysis – 6705 Page B - 4 Value Opinion by the Income Approach: Market Value $ 3,610,000 Market Rents $ 2,450

Final Opinion of Market Value: Market Value $ 3,610,000 Market Rents $ 2,450

Capitalization Rate: 8.50%

Date of the Appraisal: January 30, 2012 Effective Date of Appraisal: December 1, 2011

Appraised By: Edward J. Holthouse, CRS, CCIM Wyoming Certified General Appraiser: Permit Number No. 438

Holthouse Appraisal Group Analysis – 6705 Page B - 5

ALCOVA RESERVOIR LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page B - 6 PHOTOGRAPHS OF THE SUBJECT PROPERTY

Holthouse Appraisal Group Analysis – 6705 Page B - 7 Aerial Map - Club Site

Lakeshore Drive - Entrance Typical Street View

Typical Street View Typical Street View

Typical Updated Trailer Typical Street View

Typical Street View Typical Street View

Garbage Collection Area IDENTIFICATION AND LOCATION OF THE SUBJECT PROPERTY The subject of this appraisal report is a 16.2 acre site that is improved with a 159 lot trailer park of which only 155 spaces are usable due to the owner using 4 of the sites for garbage containers, maintenance vehicle storage or overnight RV use. The subject is located adjacent to Lakeshore Drive which runs along the shore line of Alcova Reservoir approximately 30 miles southwest of Casper in south-central Natrona County. The instructions of the Client are to state the Appraiser’s opinion of market value for the real property excluding personal property which includes but is not limited to mobile homes, manufactured homes, decks, patios, fences, storage sheds and landscaping. Furthermore, the Appraiser has been instructed to give his opinion of the market rents for the individual mobile home - trailer sites. The subject’s lots range in size from approximately 2,000 sq. ft. to 5,000 sq. ft. with a majority being in the 3,000 sq. ft. range. Most of the lots are rectangular in shape with 30’ to 35’ of street frontage. Current density at the park is 9.75 spaces per acre based on the usable spaces of 155. This is at the upper end of the range of the typical mobile home park based on the comparable sales. The subject property is located on the western boundary of Lakeshore Drive overlooking the Alcova Reservoir approximately thirty miles southwest of the center of the Casper Central Business District with the following street address: ALCOVA TRAILER PARK 1-159 Alcova Reservoir, Wyoming 82620 LEGAL DESCRIPTION According to information supplied to the Appraiser by the Client, the subject property is legally described as follows: A tract of land being all that portion of the NW/4NE/4, Section 33, Township 30 North, Range 83 West of the 6th P.M. that is west of Lakeshore Drive (Natrona County Road 406), Natrona County, Wyoming, containing 16.2 acres more or less. ZONING According to the Natrona County Planning and Zoning Department the subject site is zoned "MH", Mobile Home and the subject site conforms to this zoning ordinance. Excerpts for these zoning districts can be found in the Addenda of the Basic Data Section of this report.

Holthouse Appraisal Group Analysis – 6705 Page B - 8 SITE DATA

Location: The subject property is located adjacent to the west side of Lakeshore Drive and overlooks Alcova Reservoir, approximately 30 miles southwest of the City of Casper.

Address: Alcova Trailer Park - Lots 1 through 159

Shape: See Plot Plan

Size: 16.2 acres with individual trailer sites that range between 2,000 sq. ft. to 5,000 sq. ft. with most in the 3,000 sq. ft. range.

Density: 9.57 sites per acre

Frontage: Lakeshore Drive

Topography: Near level to slightly rolling. Adequate drainage is provided by road drainage across the front of the individual lots. According to F.I.R.M. Map No. 560036-1225A, has not been published yet; however, the subject property is located adjacent to Alcova Reservoir that is managed by the Bureau of Reclamation and this area is considered to be in a flood zone.

Zoning: “MH”, Mobile Home.

Soils: The Appraiser has not been provided with a soils analysis; however, based on a visual inspection of the existing buildings, soils appear adequate for a variety of building purposes.

Streets: Lakeshore Drive is a two lane asphalt paved road with improved drainage gutters. The roads located within the trailer park are

Holthouse Appraisal Group Analysis – 6705 Page B - 9 asphalt streets with concrete curbs, gutters, and sidewalks.

Utilities: Water, sewer, trash, electrical power and telephone. Water, sewer and trash are available approximately 6 months of the year.

Present Improvements: The subject site is improved with asphalt streets, concrete curbs, gutters and sidewalks and individual utility hook-ups.

Easements/Encroachments: Road way and utility easements, no apparent adverse easements noted on inspection.

Holthouse Appraisal Group Analysis – 6705 Page B - 10

ALCOVA TRAILER PARK - SITE PLAN

Holthouse Appraisal Group Analysis Section - 6705 Page B -11

Casper Boat Club

Alcova Trailer Park

Alcova Marina

ALCOVA TRAILER PARK AERIAL LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page B - 12

ALCOVA TRAILER PARK TOPOGRAPHICAL MAP

Holthouse Appraisal Group Analysis Section - 6705 Page B - 13 HIGHEST AND BEST USE The purpose of studying the highest and best use of a property is to determine the improvements that will generate the greatest residual income to the land. The highest and best use is defined as: The probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

1 The Appraisal of Real Estate, 10th Edition, 1992, published by the Appraisal Institute.

Holthouse Appraisal Group Analysis – 6705 Page B - 14 are carefully considered. There are essentially four stages of analysis, each is discussed as follows: Legally Permissible Use The legal uses of the land are typically controlled by public restrictions such as zoning classifications and/or private restrictions such as protective covenants or deed restrictions. Zoning, in and of itself, does not create a site's highest and best use, rather it limits the potential uses to which a site may be put. Zoning affects supply and demand since it actually limits the supply side utility of a site. The subject sites are zoned “MH”, Mobile Home with the subject conforming to this district. Physically Possible Use Possible use relates to physical characteristics of the site including size, shape, topography, access, proximity to utilities, etc. The sites consist of a 16.2 acre tract of land that is improved with a 155 unit (usable) recreational trailer park which is allowed under its current zoning district and United States Bureau of Reclamation's Master Plan for the Alcova Reservoir Recreational Area. Considering size and location, the site is considered to be adequate for a variety of uses allowed under the “MH”, Mobile Home District, including its current use as a recreational (seasonal) trailer park. Financially Feasible Use Feasible use addresses supply and demand and is a concept that there is a reasonable likelihood that a project will satisfy specific objectives. Feasibility generally pertains to income producing properties and relates to investment objectives such as stabilized occupancy, budget management, and potential value enhancement. The use decision is fundamental to determining how much income a site can produce. Therefore, the income to the land is the driving force of property value. Conformity of use tends to dictate which uses are reasonably probable for a given site. Those uses that are legally permissible and physically possible are again considered to determine their potential for producing income that would be equal to or greater than the amount needed to satisfy operating expenses, financial obligations, and capital amortization. Uses that are expected to produce a positive return are considered financially feasible.

Holthouse Appraisal Group Analysis – 6705 Page B - 15 Of the financially feasible uses, the use that produces the highest residual land value consistent with the rate of return warranted by the market for that use is the highest and best use; however, consideration of existing or potential competition from other sites must be fully recognized. Supply and demand for legal alternative uses is the most important determinant of a site's highest and best use. There are several ways of measuring supply and demand for use types, which also tend to measure the highest and best use of a given site. One important measure is the "principle of conformity" which holds that the maximum of value is realized when a reasonable degree of homogeneity, sociological, as well as economic, is present. Thus, conformity in use is usually a highly desirable adjunct of real property since it creates and/or maintains maximum value. As previously mentioned in the Neighborhood Section of this report, the neighborhood is primarily zoned for agricultural and recreational use. The immediate area of the subject is restricted in its use by the Natrona County zoning and its owner, the U. S. Government, to a recreational use, i.e., recreational trailer park. The existing use and site improvements are designed as a seasonal recreational trailer park that conforms to the United States Bureau of Reclamation's Master Plan for the Alcova Reservoir Recreational Area. This master plan has also considered the subject site as a recreational vehicle park with day use that would include weekly rates with a maximum 14 day stay; however, for analysis purposes, the Appraiser has also considered a year around RV Park and a seasonal RV Park with monthly rates. Other uses considered are a year around manufactured home park similar to the traditional parks found in the Sales Approach and the subject “as is” a seasonal recreational trailer park. Therefore, it is the Appraiser’s opinion that the most financially feasible uses of the site are as a seasonal trailer park, as currently improved, a year around day rate RV Park similar to the Izaak Walton RV Park found at Fort Casper, a monthly rate Seasonal RV Park and a traditional year around manufactured home park similar to those found in the Sales Approach. Maximally Profitable Use The analysis of the various markets for the land uses that have met the first three criteria indicates that the most financially feasible uses of the site are as a seasonal trailer park, as currently improved, a year around day rate RV Park, monthly rate seasonal RV Park and a

Holthouse Appraisal Group Analysis – 6705 Page B - 16 traditional year around manufactured home park. To determine the maximally profitable use of the site, the Appraiser has conducted the following Highest and Best Use Analysis using the income approach. This approach was based on market rates within the subject’s market area and those occupancy rates, expenses ratios, and capitalization rates extracted from the local market and national surveys when local data was not available. The following is this analysis and conclusions:

HIGHEST AND BEST USE ANALYSIS Year Around Seasonal RV Park RV Park Year Around Seasonal Description Day Rate Monthly Rate MH Park MHP Income Days of Operation 365 182.5 365 182.5 Units 155 155 135 155 Daily Rate$ 42.50 $ 21.37 $ 11.67 $ 13.42 Annual Rate$ 15,513 $ 3,900 $ 4,260 $ 2,450 PGI$ 2,404,438 $ 604,500 $ 575,100 $ 379,750 Occupancy % 50.00% 76.00% 87.13% 100.00% EGI$ 1,202,219 $ 459,420 $ 501,085 $ 379,750 Expenses % 68.50% 35.47% 35.47% 19.25% Total Expenses$ 823,520 $ 162,956 $ 177,735 $ 73,092 NOI$ 378,699 $ 296,464 $ 323,350 $ 306,658 Cap Rate 11.14% 8.50% 8.50% 8.50% Indicated Value$ 3,399,452 $ 3,487,809 $ 3,804,117 $ 3,607,745 ESTIMATED EXPENSES - ALCOVA TRAILER PARK Potential Gross Income (PGI) - Alcova Trailer Park $ 379,750 Taxes 1.75%$ 6,645.63 Management 10.00%$ 37,975.00 Maintenance 3.00%$ 11,392.50 Reserves 3.00%$ 11,392.50 Insurance 1.50%$ 5,696.25 Total Expenses 19.25%$ 73,101.88

Scenario No. 1 - Year Around RV Park Day Rate Park – The income derived for this analysis was based on a 365 day season, times the daily rate charged by the Izaak Walton Campground, Comparable RV Park Space Lease No. 6 of $42.50/day. The year around occupancy rate was derived from the owners of Comparable RV Park Space Lease No. 5 which Holthouse Appraisal Group Analysis – 6705 Page B - 17 has a similar rate as Izaak Walton, as no additional information could be derived from Comp No. 6. Capitalization rate was derived from the three most current sales which indicate an average of 11.14% for year around RV parks found in the Appraiser’s work file. Scenario No. 2 – Seasonal RV Park - Monthly Rate – The income for this analysis was based on a six month season and the month to month lease rate for Comparable RV Park Lease No. 5 of $650/month. The occupancy rate is the national rate for seasonal RV Parks of 76% with expenses being market extracted rates from “monthly rate manufactured home parks” as seasonal management should be similar on a ½ year basis. This is due to day to day management and repairs requirements caused by the “in and out” tenancy. Capitalization rate used was the local market extracted rate of 8.50% as a seasonal RV park would have similar risks as the traditional manufactured home park. Scenario No. 3 – Year Around Manufactured Home Park – This is a traditional manufactured home park similar to those found within the Casper area. The number of spaces was reduced by the Appraiser (Appraiser’s Estimate) as a traditional park could not use the smaller spaces found within the park and would most likely use these lots to facilitate double wides. The income was derived from average of similar manufactured home parks found in the Casper market of $345/month. The vacancy rate, expense ratio and capitalization rate were derived from the local market. See comparable MHP Sales found in the Basic Data Section of this report. Scenario No. 4 – Seasonal Recreational Trailer Park – “As Currently Improved” – This scenario is the current use and income and expense analysis of the subject. Overall expenses were reduced to the Appraiser’s estimate of actual, if owned by a fee simple investor. These expenses are less than the other scenarios as this type of park requires no on site management, as do traditional manufactured home or RV parks. Conclusion – An analysis of the four scenarios indicates that on the surface the highest return to the land would be as a traditional year around manufactured home park or $3,805,000 vs the next highest of $3,610,000 for the subject “as is”. However, in order to convert the park to a traditional year around manufactured home park, the lots would need to be reconfigured and the park would need to install “winter” water and sewer lines. This expense would doubtfully cost in excess of the “use premium” $195,000 not to mention the loss in income caused by the

Holthouse Appraisal Group Analysis – 6705 Page B - 18 conversion. Therefore, it is the Appraiser’s opinion that the maximally productive use of the site is “as currently improved” as a seasonal recreational trailer park. HIGHEST AND BEST USE AS VACANT Based on the foregoing analysis, the highest and best use of the site “as vacant” is for a seasonal recreational trailer park located adjacent to the Alcova Reservoir. HIGHEST AND BEST USE AS IMPROVED The improvements to the site are allowed under the "MH", Mobile Home District. The current use is an acceptable use under the Alcova Master Plan and conforms to the surrounding neighborhood. Therefore, considering the market value of the subject's land and my analysis of the market sales and leases of alternative uses, it would not be financially feasible to remove the subject improvements (streets, curbs, sidewalks, and water & sewer system) for an alternative use; therefore, the highest and best use, “as improved”, is its current use as a seasonal recreational trailer park. THE APPRAISAL PROBLEM TO BE ANALYZED The Appraiser has been instructed to appraise the subject excluding all personal property including mobile homes, decks, patios, fences, and storage sheds. Furthermore, the Appraiser has been asked to determine the market rents for the individual trailer sites. The subject property consists of 159 recreational trailer sites of which 155 are usable and range in size between approximately 2,000 sq. ft. to 5,000 sq. ft. This use is allowed under the current zoning district and United States Bureau of Reclamation's Master Plan for the Alcova Reservoir Recreational Area and is serving its highest and best use; therefore, will be appraised as such. THE APPRAISAL PROCESS Appraisal techniques are the specifics of the three approaches that are traditionally used to derive separate indications of real property value. One or more approaches may be used, depending on their applicability to a particular appraisal assignment. In assignments to determine market value, the ultimate goal of the valuation process is a well-supported conclusion that reflects the Appraiser’s consideration of all influences on the market value of the property being appraised. Therefore, the Appraiser studies the property from each of the applicable viewpoints reflected in the three approaches.

Holthouse Appraisal Group Analysis – 6705 Page B - 19 APPROACHES TO VALUE In the appraisal of real estate, there are three basic traditional approaches for estimating property value. The three approaches are: The Sales Approach (also referred to as the Market Approach), the Cost Approach, and the Income Approach. The final step in determining a property's "market value" (i.e., most probable selling price) is to correlate the value opinions of the three approaches into a single value opinion. Sales Approach This approach is based on the proposition that an informed purchaser would pay no more for a property than the cost to him of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data, which can be verified from authoritative sources. The Sales Approach is relatively unreliable in an inactive market or in determining the value of properties when no real comparable sales data is available. The Cost Approach This approach is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements, which represent the highest and best use of land, or when unique or specialized improvements are located on the site for which there exists no comparable properties on the market. The Income Approach This approach is based on the proposition that a property is worth no more than the capitalized value of the income stream that the property is capable of generating. The procedure converts anticipated benefits (dollar income) to be derived from the ownership of the property into a value estimate. The Income Approach is widely applied in appraising income-producing properties. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process.

Holthouse Appraisal Group Analysis – 6705 Page B - 20 THE SALES APPROACH The value opinion of the subject property by the Sales Approach was derived after a search for similar properties. The Appraisal Institute further explains the approach below in the paragraphs from Page 417 of The Appraisal of Real Estate, 12th Edition: In the sales comparison approach, the appraiser develops an opinion of value by analyzing similar properties and comparing these properties with the subject property. The comparative techniques of analysis applied in the sales comparison approach are fundamental to the valuation process. Estimates of market rent, expenses, land value, costs, depreciation, and other value parameters may be derived in the other approaches to value using comparative techniques. Similarly, conclusions derived in the other approaches are often analyzed in the sales comparison approach to estimate the adjustments to be made to the sale prices of comparable properties.

Comparative analysis of properties and transactions focuses on similarities and differences that affect value, which may include variations in the following:  Property rights appraised  The motivations of buyers and sellers  Financing terms  Market conditions at the time of sale  Size  Location  Physical features  Economic characteristics, if the properties produce income Elements of comparison are tested against market evidence to estimate which elements are sensitive to change and how they affect value. The Appraiser has searched the subject’s market area and found five (See Comparable Manufactured Home Park Sales & Location Map found in the Basic Data Section of this report) that are somewhat similar to the subject. These comparable sales were analyzed and correlated into a value opinion which is as follows:

Holthouse Appraisal Group Analysis – 6705 Page B - 21 Abstract of Comparable Manufactured Home Park Sales Other Adjusted Comp # Address Sales Date Sales Price Improv. Price Spaces $/Space Acres Density Cap Rate Exp Ratio EGIM Streets Services Provided Subject Alcova Trailer Park 155 16.2 9.57 Paved Water, Sewer, Trash 1 800 Timberline Drive, Sheridan, WY 9/23/2009$ 800,000 -$ $ 800,000 28 $28,571 3.83 7.31 8.30% 28.01% 8.68 Paved Water, Sewer, Trash 2 953-54 McCue Street, Laramie, WY 1/1/2009$ 6,300,000 30,000$ 6,270,000$ 229 $27,380 36.89 6.21 8.05% 41.81% 7.23 Paved Water, Sewer, Trash 2 2400 Missile Drive, Cheyenne, WY 11/24/2010$ 2,220,000 220,000$ 2,000,000$ 75 $26,667 10.49 7.15 9.54% 29.97% 7.34 Paved Trash 4 806 North Gurley Avenue, Gillette, WY 9/4/2009$ 2,530,000 -$ 2,530,000$ 82 $30,854 9.88 8.30 8.97% 34.91% 7.25 Paved Water, Sewer, Trash 5 600 S Garner Lake Road, Gillette, WY 8/7/2008$ 3,620,000 -$ 3,620,000$ 142 $25,493 13.77 10.31 7.64% 41.52% 7.66 Paved Water, Sewer, Trash Indicated Mean $27,793 14.97 7.86 8.50% 35.24% 7.63

Holthouse Appraisal Group Analysis - 6705 Page B - 22 ADJUSTMENT GRID OF THE COMPARABLE MANUFACTURED HOME PARK SALES

Characteristics Subject Comp No. 1 Comp No. 2 Comp No. 3 Comp No. 4 Comp No. 5 Address/Location Alcova Trailer Park 800 Timberline Drive 953-54 McCue Street 2400 Missile Drive 806 N. Gurley Ave 600 S. Garner Lake Rd Alcova, WY Sheridan, WY Laramie, WY Cheyenne, WY Gillette, WY Gillette, WY Sales Price $800,000 $6,270,000 $2,000,000 $2,530,000 $3,620,000 Price/Unit $28,571 $27,380 $26,667 $30,854 $25,493 Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Adjustment $0 $0 $0 $0 $0 Financing Terms Cash to Seller Cash to Seller Cash to Seller Cash to Seller Cash to Seller Adjustment $0 $0 $0 $0 $0 Condition of Sale Arms-Length Arms-Length Arms-Length Arms-Length Arms-Length Adjustment $0 $0 $0 $0 $0 Recording Date 9/23/2009 1/1/2009 11/24/2010 9/4/2009 8/7/2008 Adjustment $0 $0 $0 $0 $0 Lot Size - Acres 16.20 3.83 36.89 10.49 9.88 13.77 Adjustment $0 $0 $0 $0 $0 Total Sites 155 28 229 75 82 142 Adjustment/Site $27,793 $3,529,711 -$2,056,682 $2,223,440 $2,028,889 $361,309 Subtotal $4,329,711 $4,213,318 $4,223,440 $4,558,889 $3,981,309 Market Monthly Rate $204.17 $274.40 $317.22 $300.15 $354.51 $277.39 Utility % Adjustment -34.40% -55.37% -47.01% -73.63% -35.86% Utility Adjustment -$1,489,326 -$2,332,936 -$1,985,433 -$3,356,925 -$1,427,788 Indicated Value of the Subject Property $2,840,385 $1,880,382 $2,238,007 $1,201,964 $2,553,521 Indicated Mean $ 2,142,852 Weighted Mean $ 2,840,385 100% 0% 0% 0% 0% Indicated Value - Unit $ 18,325 $18,325 $12,131 $14,439 $7,755 $16,474

EFFECTIVE GROSS INCOME MULTIPLIER METHOD OF VALUATION Description Price Per Unit EGIMo EGIM Weight Weighted EGIM Comp No. 1 $28,571 $274.40 104.12 100% 104.12 Comp No. 2 $27,380 $317.22 86.31 0% 0.00 Comp No. 3 $26,667 $300.15 88.84 0% 0.00 Comp No. 4 $30,854 $354.51 87.03 0% 0.00 Comp No. 5 $25,493 $277.39 91.90 0% 0.00 Average $27,793 $304.73 91.64 100% 104.12 Subject - Trailer Park $21,259 $204.17 Projected 104.12 Indicated Value - Trailer Park $3,295,122

Holthouse Appraisal Group Analysis - 6705 Page B - 23 COMMENTS ON ADJUSTMENTS Time Adjustment – An adjustment for time could not be extracted from the market; thus, none was made. Land Size Adjustment – An adjustment for the difference in overall land size could not be extracted from the market; thus, none was made. Manufactured Home Space Adjustment (Total Sites) – This adjustment was extracted from the market using the mean of the five comparable sales (less personal property and mini- storage facility – Adjusted Price) which indicates $27,793 per mobile home site. See Abstract of the Comparable Manufactured Home Park Sales preceding the Adjustment Grid. Personal Property Adjustment – This adjustment was based on the allocated value at the time of sale for the personal property. Utility Adjustment – This adjustment accounts for the value differential for location and seasonal use or income derived from other improvements or personal property. To determine the adjustment the Appraiser has compared the effective gross income of the subject (at market rents - See Income Approach) to the effective gross income of the comparable sales. This adjustment factors in condition, additional services, location and seasonal use. To determine the effective gross income of the subject the Appraiser has elected to use the calculation found in the Income Approach or $372,000 EGI ÷ 155 spaces = $2,450 ÷ 12 months = $204.17/site. SUMMARY OF THE COMPARABLE SALES Comparable MHP Sale No. 1 – 800 Timberline Drive, Sheridan, Wyoming – This sale is located approximately 156 miles north of the subject in the City of Sheridan. It consists of 28 total spaces with a density of 7.3 spaces/acre. The park consists of 28 platted lots combined into one MH Park and included no personal property. According to the listing agent, the effective gross income was $274.40/space with a lease rate of $280/month including water, sewer and trash. The site has paved streets and no amenities except onsite management. Fully adjusted, this sale indicates $2,840,385 or $18,325/space for the subject. Comparable MHP Sale No. 2 – 953-54 McCue Street, Laramie, Wyoming – This sale is located approximately 100 miles south of the subject in the City of Laramie. It consists of 229 total spaces with a density of 6.21 spaces/acre. The site is located near the interstate and included approximately $30,000 in personal property according to the appraiser at the time of sale. According to the appraiser at the time of sale the effective gross income was $317.22/space with a lease rate of $300/month for singlewides and $325-$350 for doublewides including water,

Holthouse Appraisal Group Analysis – 6705 Page B - 24 sewer and trash. The site has paved streets, office/laundry/game room/pool and onsite management. Fully adjusted, this sale indicates $1,880,382 or $12,131/space for the subject. Comparable MHP Sale No. 3 – 2400 Missile Drive, Cheyenne, Wyoming – This sale is located approximately 140 miles southeast of the subject in the City of Cheyenne. It consists of 84 total spaces with a density of 8.01 spaces/acre. The site is located approximately one mile west of the center of the City of Cheyenne near Interstate 25. The sale included an owner’s house, shop and 7 mobile homes with an allocated value of $220,000 at the time of sale. According to the appraiser at the time of sale the effective gross income was $300.15/space with a lease rate of $320/month with no other services provided. The site has paved streets and no amenities except onsite management. Fully adjusted, this sale indicates $2,238,007 or $14,439/space for the subject. Comparable MHP Sale No. 4 – 806 North Gurley Avenue, Gillette, Wyoming – This sale is located approximately 140 miles northeast of the subject near the City of Gillette. It consists of 82 total spaces with a density of 8.3 spaces/acre. According to the owner, spaces are leased for both recreational and permanent residents use. According to the appraiser at the time of sale the lease rates were $360/month for the mobile home spaces and $575/month for the RV spaces with an effective gross income of $354.51/space including water, sewer and trash. The site has paved streets and no amenities except onsite management. Fully adjusted, this sale indicates $1,201,964 or $7,755/space for the subject. Comparable MHP Sale No. 5 – 600 South Garner Lake Road, Gillette, Wyoming – This sale is also located approximately 140 miles northeast of the subject near the City of Gillette. It consists of 142 total spaces with a density of 10.31 spaces/acre. According to the owner, spaces are leased for both recreational and permanent residents use. There was also a doublewide and a single wide included in the price with no allocated value. According to the appraiser at the time of sale the lease rates were $300/month for the mobile home spaces and $500/month for the RV spaces with an effective gross income of $277.39/space including water, sewer and trash. The site has paved streets and no amenities except onsite management. Fully adjusted, this sale indicates $2,553,521 or $16,474/space for the subject. FINAL CORRELATION AND WEIGHTING OF THE COMPARABLE SALES The five comparable sales sold from August 7, 2008 to November 24, 2010. These sales ranged in price from $800,000 to $6,300,000. Fully adjusted, these sales indicate a range of $1,201,964 to $2,840,385 or $7,755/space to $18,325/space for the subject. The indicated overall

Holthouse Appraisal Group Analysis – 6705 Page B - 25 mean of these sales is $2,142,852 or $13,825/space. This mean, however, is a non-weighted mean or an average that assumes equal weighting by the Appraiser which may or may not be accurate. To determine the weighted mean the Appraiser has again analyzed the comparable sales to determine the weighting. The following is the Appraiser’s qualitative analysis of these sales. Comparable MHP Sale No. 1 is located in the City of Sheridan near Interstate 90. Sheridan is an area that caters to second home buyers, seasonal use apartments and mobile home parks. This type of tenant typically leases on a year to year basis in order to keep their desired apartment or manufactured home park space. The park has had little to no vacancies in years, which is similar to the subject; thus, this park was given most weight – Weight 100%. Comparable MHP Sale No. 2 was used for support – Weight – 0%. Comparable MHP Sale No. 3 is the most current sale and used for support – Weight 0%. Comparable MHP Sale No. 4 was used as support – Weight – 0%. Comparable MHP Sale No. 5 is an older sale most similar to the subject in density and unit mix; thus, was also used as support – Weight – 0%. FINAL VALUE CONCLUSION BY THE SALES APPROACH The formula for the weighted mean is as follows: weighted mean = sum (weight x value)/(sum of weights). The following chart is a summation and calculation of these variables:

Comp # Indicated Value Weight Adjusted Value 1$ 2,840,385 100%$ 2,840,385 2$ 1,880,382 0%$ - 3$ 2,238,007 0%$ - 4$ 1,201,964 0%$ - 5$ 2,553,521 0%$ - Weighted-Mean 100%$ 2,840,385

Therefore, the indicated value by the weighted-mean method is $2,840,000 rounded. Effective Gross Income Multiplier Approach To determine the credibility of this analysis the Appraiser has also used the effective gross income multiplier approach or EGIM. This approach is typically used by market participants as a “down and dirty” approach as it assumes that expense percentage will be equal and that income is the driving force in the overall value. Under this approach the Appraiser has used the forecasted EGIM found in the Income Approach for the real property of $204.17/space per month ($2,450/year ÷ 12 months = $204.17/space per month) and weighted the EGIM’s of

Holthouse Appraisal Group Analysis – 6705 Page B - 26 the comparable sales as stated above. Under this approach, the value of the subject is $3,295,000 rounded for the real property. (See Effective Gross Income Multiplier Method of Valuation Chart found in the preceding pages.) It is the Appraiser’s opinion that this approach helps support the higher valued comparable, Comparable Sale No. 1, in the previous analysis; thus, indicates that the value conclusion is determined to be credible. OPINION OF MARKET VALUE BY THE SALES APPROACH Based on the foregoing data, analysis, and conclusions, it is the Appraiser’s opinion that the market value for the subject’s property, as of the effective date of this report, by the Sales Approach is as follows: TWO MILLION EIGHT HUNDRED FORTY THOUSAND DOLLARS $2,840,000

Holthouse Appraisal Group Analysis – 6705 Page B - 27 THE COST APPROACH The Cost Approach represents the objective concept of value. This concept is predicated upon the theory that value is inherent in the object itself and that value and cost tend to be the same. The American Institute of Real Estate Appraisers further explains this approach below in a paragraph from Page 441 of The Appraisal of Real Estate, 8th Edition: The Cost Approach to Value, like the Sales Comparison and Income Approaches, is based on comparison. In the Cost Approach, the cost to construct a building and the value of an existing building are compared. The Cost Approach to Value reflects market thinking in the recognition that market participants relate value to cost. Buyers tend to judge the value of an existing structure by comparing it to the value of a newly constructed building with optimal functional utility. Moreover, buyers adjust the prices they are willing to pay by estimating the costs to bring an existing structure to desired levels of functional utility.

DISCLAIMER FO THE COST APPROACH The value opinion under this approach consists of the present construction cost of any improvements on the property less depreciation from any source, plus the value of the land. It is the Appraiser’s opinion that due to the age of the improvements and the amount of depreciation required, this approach was considered but excluded from this report.

Holthouse Appraisal Group Analysis – 6705 Page B - 28 THE INCOME APPROACH The Income Approach is widely applied for income producing properties since it reflects the rationale of typical investors together with current financing conditions (i.e., the assumption being that financing is typically involved in most real property transaction). In this approach, market value is estimated through the capitalization of a projected, stabilized estimate of net operating income. The traditional formula for computing value by the Income Approach is V = NOI divided by R, where V = market value, NOI = stabilized net operating income, and R = overall rate. Stabilized Net Operating Income (NOI) In the appraisal of real estate, the stabilized net operating income for the property is based on potential income and expense data as dictated by the market. In other words, income and expense data for similar facilities is projected onto the subject property in order to derive net operating income. The basic components and resulting formula for arriving at net operating income by this method are given below: Potential Gross Income (PGI) Less: Allowance for Vacancy and Rent Loss Equals: Effective Gross Income (EGI) Less: Operating Expenses Property Taxes Insurance Property Management Fees Maintenance Utilities Reserves for Replacement Equals: Net Operating Income (NOI) Potential Gross Income (PGI) The Appraiser has analyzed rents on four seasonal recreational trailer parks and three RV Parks located within the subject’s immediate and general market area. The following pages contain the analysis of the pertinent data and an abstract of the four leases of recreational trailer park space that was used to derive the market rent for the subject property. (For comparable data see Comparable Seasonal MHP Space Leases found in the Basic Data Section of this report.)

Holthouse Appraisal Group Analysis – 6705 Page B - 29 ABSTRACT OF COMPARABLE SEASONAL MHP SPACE LEASES

MARKET AREA MHP RENTAL RATES - SEASONAL USE Annual Annual Lease Rate Lease Rate Comp # Location Low High Amenities 1 Glendo Marina, Glendo Reservoir, WY$ 2,400 $ 2,400 WS&T 2 Keyhole Marina, Keyhole Reservoir, WY$ 2,000 $ 2,000 WS&T 3 Alcova Lakeside Marina, Alcova Reservoir$ 2,000 $ 2,800 WS&T 4 Boysen Marina, Boysen Reservoir, WY$ 1,500 $ 1,500 WST&E Indicated Mean $ 1,975 $ 2,175 WS&T SUMMARY OF THE COMPARABLE SEASONAL MHP SPACE LEASES Comparable MHP Lease No. 1 – Glendo Marina, Glendo Reservoir, Glendo, Wyoming – This lease is located at the Glendo Marina, Glendo Reservoir approximately 78 miles southeast of the subject. The trailer spaces lease for $2,400/year with the owner providing water, sewer and trash pickup at a central location. Roads within the park are graveled and the view of the lake is good from most sites. The location is considered to be somewhat similar to the subject as its location is equal distance between Casper and Cheyenne and is also close to Colorado giving it a similar draw market. However, Alcova is only 30 minutes from Casper, which according to the tenant survey (approximately 58%), was a highly desired feature. The lake at Glendo is superior in size but fluctuates drastically during the irrigation season making many areas of the lake difficult to navigate, creates havoc on docking systems and loading and unloading boats. Furthermore, according to the Wyoming State Parks Division, the area had to be closed for approximately 60 days due to heavy flooding in 2011. The lake at Alcova does not fluctuate (making the area more stable) making its overall utility superior. This is also a desired feature (32%) according to the recent tenant survey at Alcova. Boat slips are available at the Glendo Marina for $1,430-$2,230/season. Boat storage and full marina services are also available. A visual inspection of the park and an interview with the owners indicates that there are no sites available and there is a waiting list of approximately 25-30 people for the trailer sites. Comparable MHP Lease No. 2 – Keyhole Marina, Keyhole Reservoir, Moorcroft, Wyoming – This lease is located at the Keyhole Marina at Keyhole Reservoir approximately 200 miles northeast of the subject. The current lease rate is $2,000/year with the owner providing seasonal water, sewer, and trash pick-up at a central location. Roads within the park are graveled and the view of the lake is good. The location is considered inferior to the subject as the lake also fluctuates drastically during the irrigation season; however, due to the mineral activity in the

Holthouse Appraisal Group Analysis – 6705 Page B - 30 City of Gillette and the limited number of sites, the overall market for this area is similar to the subject. The marina has no boat slips and there are limited marina services at the site. Boat docks are reserved for the tenants who purchase a permit from the state for their use. These docks are required to be removed from the lake at the end of the season. A visual inspection of the park and an interview with one of the tenants indicates that there are no sites available and there is a waiting list of approximately 30 for trailer sites. Comparable MHP Lease No. 3 – Alcova Lakeside Marina, 24025 Lakeshore Drive, Alcova, Wyoming – This lease is located across the street from the subject. The site has approximately 200 docks and 29 trailer spaces or RV sites. According to the owner the RV spaces lease from $2,000 to $2,800/year with an average of $2,200/year. Services provided include seasonal water and sewer and trash pickup. Site amenities include a lounge/restaurant, convenience store and dock rentals which are also available to the subject. Boat docks rental rates range from $550/year to $675/year with an average of $650/year and are also available to the tenants of subject. The RV trailer sites are smaller in size and have similar restricted use to a 6 month season; however, some are more desirable as they have water front locations. Comparable Lease No. 4 – Boysen Marina, Boysen Reservoir, Shoshoni, Wyoming – This lease is located at the Boysen Marina at Boysen Reservoir approximately 120 miles northwest of the subject. The trailer spaces lease for $1,500/year with the owner providing seasonal water, sewer, electric and trash pick-up at a central location. Roads within the park are graveled and the view of the lake is good. The lake at Boysen is similar in size but fluctuates drastically during the irrigation season making many areas of the lake difficult to navigate and creates havoc with docking systems and loading and unloading boats. The lake at Alcova does not fluctuate making the area more stable and its overall utility superior. ANALYSIS OF THE COMPARABLE SEASONAL MHP SPACE LEASES To determine the market rents and potential gross income, the Appraiser must first analyze the comparable mobile home space leases and weight them to determine an acceptable rate for the subject. Comparable MHP Lease No. 1 is the lease of mobile home space located at the Glendo Marina, Glendo Reservoir. The spaces are leased for $2,400/year with water, sewer and trash provided. The tenants pay for electrical, bottled gas and telephone. The Glendo Reservoir is considered to be somewhat similar to the subject in location but inferior in utility with the drastic fluctuations in water levels. Glendo was indicated in the “Tenant Survey” conducted by the Appraiser as an alternate site; thus, was given a 50% weight. Comparable MHP

Holthouse Appraisal Group Analysis – 6705 Page B - 31 Lease No. 2 is the lease of mobile home space located at the Keyhole Marina, Keyhole Reservoir. These size spaces are leased at $2,000/year with seasonal water, sewer, trash and dock frontage provided. According to the owner the spaces back up to the reservoir and each of the tenants has constructed their own docks which are required to be removed at the end of the season. Keyhole Reservoir is considered to be inferior in utility with no full marina services available and the lake fluctuates drastically during the irrigation season. It was considered similar in demand and seasonal water & sewer service; however, the draw population and services are overall inferior, thus, was used as support. Comparable MHP Lease No. 3 is the lease of the trailer spaces at the Alcova Lakeside Marina located directly across the street from the subject. This park competes directly with the subject and also provides services to the subject via its restaurant and marina facilities. According to the owner, the RV Park space leases from $2,000/year for the small space and $2,800/year for the larger spaces on the water front. Dock slips can also be leased for $550-$675/season and full marina services are available. The average rate for this facility is $2,200/year for the trailer spaces and $650/year for the boat slips. This sale was given a weight of 50% for being most similar in location. Comparable MHP Lease No. 4 is the lease of mobile home space located at the Boysen Marina Reservoir. The spaces are leased at $1,500/year with seasonal water, sewer and electrical provided. Dock slips can be leased for $780-$980/season and full marina services are available. Boysen Reservoir is considered to be inferior in utility as the lake fluctuates drastically during the irrigation season and in years of drought is nearly non existent. This park has no waiting list; thus, was used as support. Conclusion An analysis of the Alcova Area trailer space lease market reveals that there is a shortage of spaces available with a year to year waiting list of approximately 15 to 30. An analysis of the competing parks indicates that most having waiting lists and are less desirable due to the drastic fluctuations of the reservoirs; therefore, the Appraiser must also consider this difference. To determine the locational differences between Alcova Reservoir and the comparable leases the Appraiser has analyzed the differences between the gross income derived from each of their respective marinas. This information was supplied by Ms. Julie Huntley with the Wyoming Parks, Historical Sites and Trails Division. The gross sales for these marinas is calculated in a similar fashion as those reported to the Natrona County Road and Bridge Department for the Alcova Lakeside Marina (See Section E – Alcova Lakeside Marina Appraisal); thus, the comparison is highly credible.

Holthouse Appraisal Group Analysis – 6705 Page B - 32 This comparison will help the Appraiser determines the demand for the area and the overall services available. This comparison is as follows:

MARINA COMPARISON ANALYSIS Glendo Keyhole Boysen Alcova Lakeside Marina Average Average Average Low High $ 12,680.51 $ 12,680.51 $ 12,680.51 $ 12,680.51 $ 12,680.51 $ 10,774.00 $ 6,298.43 $ 5,946.29 $ 12,680.51 $ 12,680.51 $ 1,906.51 $ 6,382.08 $ 6,734.22 $ - $ - 17.70% 101.33% 113.25% 0.00% 0.00% $ 2,400 $ 2,000 $ 1,500 $ 2,000 $ 2,800 $ 424.69 $ 2,026.56 $ 1,698.76 $ - $ - $ 2,824.69 $ 4,026.56 $ 3,198.76 $ 2,000.00 $ 2,800.00 $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ 2,724.69 $ 3,926.56 $ 3,098.76 $ 1,900.00 $ 2,700.00 Indicated Average Annual Rate $ 2,870.00

Note: The Appraiser has elected to use the low and high for Alcova Lakeside Marina as the subject also has large and small lots. The negative $100 is for the difference in services provided as the Alcova Trailer Park charges an annual fee of $100 for trash removal; however, the competing parks include this service as part of the annual rent. FINAL CONCLUSION OF AVERAGE MARKET RENTS FOR THE SUBJECT The preceding analysis indicates that the average annual adjusted lease rate for all of the marinas that compete with the subject is $2,870/year. This would be a reasonable rate for the subject if the Keyhole and Boysen Marinas provided the same services as does the Glendo and Alcova. Therefore, the Appraiser will exclude these in the final analysis as they do not compete directly with the subject, to determine the market rents for the subject, which is as follows:

MARINA COMPARISON ANALYSIS Glendo Alcova Lakeside Marina Average Low High $ 12,680.51 $ 12,680.51 $ 12,680.51 $ 10,774.00 $ 12,680.51 $ 12,680.51 $ 1,906.51 $ - $ - 17.70% 0.00% 0.00% $ 2,400 $ 2,200 $ 2,800 $ 424.69 $ - $ - $ 2,824.69 $ 2,000.00 $ 2,800.00 $ (100.00) $ (100.00) $ (100.00) $ 2,724.69 $ 1,900.00 $ 2,700.00 Indicated Average Annual Rate $ 2,441.56

Holthouse Appraisal Group Analysis – 6705 Page B - 33 Therefore, based on the preceding analysis it is the Appraiser’s opinion that the market rents for the subject are $2,450/year rounded Credibility Analysis To determine the credibility of this rate the Appraiser has analyzed the difference between the average seasonal rate for the subject and year around rates found in the subject’s market area. This analysis is as follows:

CASPER AREA MHP RENTAL RATES - YEAR AROUND USE Monthly Annual Comp # Location Lease Rate Lease Rate Amenities 1 Lariat Mobile Home Park$ 350.00 $ 4,200 WS&T 2 ARC - Hidden Hills$ 355.00 $ 4,260 WS&T 3 ARC - Terrace$ 355.00 $ 4,260 WS&T 4 ARC - Terrace II$ 355.00 $ 4,260 WS&T 5 ARC - Bar Nunn$ 300.00 $ 3,600 WS&T 6 ARC - Green Valley$ 355.00 $ 4,260 WST&E Indicated Mean $ 345.00 $ 4,140 WST&E 7 Appraiser's Market Rental Rate Determination$ 2,450 WS Indicated Mean $ 2,450 WS % Differential - Year Round vs Seasonal -40.82%

An analysis of the above stated chart indicates that the differential is 40.82% between seasonal use and year around use. To determine if this rate is credible the Appraiser has analyzed the difference between the subject and the comparable sales aka Utility Adjustment, found in the Sales Approach Section of this report. This adjustment indicates a market extracted rate ranges from -34.40% to -73.63% with an average of -49.25%. Therefore, as the subject’s differential percentage is within this range, the preceding analysis is deemed credible; thus, indicating the lease rate of $2,450/year is credible and for the purposes of this analysis will be used. Opinion of Potential Gross Income (PGI) Based on the preceding data, analysis, and conclusions, it is the opinion of the Appraiser that the potential gross income, based on market rents, is calculated as follows:

Type Space Annual Rent Total Spaces PGI Recreational$ 2,450 155$ 379,750 Total$ 379,750

Holthouse Appraisal Group Analysis – 6705 Page B - 34 Allowance for Vacancies and Rent Loss This deduction from potential gross income is necessary in that it illustrates what demand presently exists for the type of property being appraised. The potential gross income stated above, is the actual market rent for the subject based on competing properties in the subject’s market area. The Appraiser has analyzed the market and found that properties most similar to the subject were experiencing 0% vacancy with little to no turnover. Furthermore, most properties have waiting lists of approximately 30 prospects. The subject’s waiting list is currently 35 which is historically typical. Therefore, the allowance for vacancies and rent loss is calculated as follows:

PGI Vacancy Credit Loss/Vacancy $ 379,750 x 0% = $ -

Effective Gross Income (EGI) Effective gross income is the difference between potential gross income and the allowance for vacancies and rent loss. Thus the effective gross income is estimated as follows:

PGI Vacancy Effective Gross Income $ 379,750 -$ - = $ 379,750

Operating Expenses The subject is currently owned by the United States of America, Department of Interior Bureau of Reclamation and is managed by the Natrona County Road and Bridge Department, thus, is not subject to taxes and many of the expenses are rolled into the overall Natrona County budget and paid by the tax payer and not the tenants. Therefore, actual income and expenses statements were not available to the Appraiser. In an effort to determine credible expenses for the subject the Appraiser has analyzed the typical expenses Comparable MHP Sales found in the Sales Approach section of this report. These sales indicate that manufactured parks in the Wyoming markets have the following expense ratios:

Holthouse Appraisal Group Analysis – 6705 Page B - 35 Comparable Manufactured Home Park Expense Ratio Chart Sale # Name Location Spaces EGI Expense Ratio 1 Mountain View Estates 800 Timberline Drive, Sheridan, WY 28$ 92,198 $ 25,824 28.01% 2 Sunny Meadows Village 953 McCue Street, Laramie, WY 229$ 871,724 $ 364,501 41.81% 3 Missile Drive MHP 2400 Missile Drive, Cheyenne, WY 84$ 302,553 $ 90,689 29.97% 4 North Gurley MHP 806 North Gurley Drive, Gillette, WY 82$ 348,837 $ 121,796 34.91% 5 Antelope RV & MHP 600 South Garner Lake Dr, Gillette, WY 142$ 472,674 $ 196,255 41.52% Mean 35.25%

A further analysis of these comparable indicates that none of these parks are seasonal parks similar to the subject; therefore, as a great amount of the expense from these parks comes in the winter months, and as these parks require year around management, the Appraiser has elected to estimate the expenses for the subject, which indicate the following:

ESTIMATED EXPENSES - ALCOVA TRAILER PARK Potential Gross Income (PGI) - Alcova Trailer Park $ 379,750 Taxes 1.75%$ 6,635.42 Management 10.00%$ 37,975.00 Maintenance 3.00%$ 11,392.50 Reserves 3.00%$ 11,392.50 Insurance 1.50%$ 5,696.25 Total Expenses 19.25%$ 73,091.67

Note: Taxes are not currently being assessed to the owner of the subject as they are exempt; therefore, the Appraiser has estimated these taxes based on the percentages found within the Casper and surrounding Wyoming market for similar expenses. Other expenses were also derived from similar use properties in the Casper area.

NET OPERATING INCOME The final step in determining the net operating income is to deduct the expenses from the effective gross income and is calculated as follows:

EGI Expenses Net Operating Income $ 379,750 -$ 73,092 = $ 306,658

Holthouse Appraisal Group Analysis – 6705 Page B - 36 OVERALL RATE DERIVATION (R) There are numerous methods and/or techniques for deriving the overall rate (R) by which net operating income (NOI) is capitalized into a value (V) estimate. These methods range from the very simple market extracted overall rate to the more complex Ellwood Formulation. Regardless of the method used in overall rate derivation, the variables must be extracted from the market. The two options available to the Appraiser are the “Local Market Extracted Rates” and “Nationally Surveyed Rates” - RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists. Given the available market data, the most logical method of overall rate derivation for the subject property appears to be the "Local Market Extracted Rate”. However, to determine the credibility of this rate the Appraiser has also analyzed the “National Surveys” using “Band of Investment Method” – Debt Coverage Technique & Band of Investment Technique and nationally surveyed investor rates. Note: "Band of Investment Method" is a widely used and conceptually defensible approach to estimating a discount rate, herein used synonymously with overall rate (R). It is based on the premise that financing is typically involved in a real estate transaction, and that equity investors seek to obtain the best available financial package in order to maximize the potential benefits of leverage. The overall rate (R) developed is a weighted average of the return on investment required to cover mortgage interest and the return on investment required to provide a competitive equity return. In simple mortgage-equity analysis, the Band of Investment Technique is used to derive the overall rate (R). In this instance, the overall rate (R) is a weighted average of the mortgage constant and the equity rate (simple mortgage-equity analysis assumes no change in the value of the equity position over the holding period, i.e., equity dividend and equity yield rate are equal).The formula for the "Band of Investment Method" is as follows: Loan to Value Ratio x Mortgage Constant Plus: Equity to Value Ratio x Equity Dividend Rate Equals: Overall Rate (R).

Loan Underwriting Technique: This measure of constraint is frequently used by institutional lenders who are generally fiduciaries. They manage and lend the money of others, including depositors and policy holders. Due to their fiduciary responsibility, institutional lenders are particularly sensitive to the safety of loan investments, especially the safety of principal. They are concerned with safety and profit and are anxious to avoid default and possible foreclosure. Consequently, when they underwrite income property loans, institutional lenders try to provide a cushion so that the borrower will be able to meet the debt service obligations on the loan even if the building income declines. To estimate an overall rate, the debt coverage ratio can be multiplied by the mortgage constant and the loan-to-value ratio. The formula is as follows: RO = DCR x RM x M

Holthouse Appraisal Group Analysis – 6705 Page B - 37 Surveyed Rates: This survey is the actual surveyed rates from appraisers (28%), brokers (19%), developers (8%), investors including REIT’s (8%) and lenders (37%) in all 50 states.

National Survey According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, the following are the 3rd Quarter Trends 2009-2011 national rates for RV/Camp Ground – MH Parks and Manufactured Home Parks. This survey will be used as a buttress to the local market extracted rates derived by the Appraiser.

Investor Survey - 3rd Quarter - Mobile Home Parks 2009 2010 2011 Description Min Max Avg Min Max Avg Min Max Avg DCR Teqchnique 4.73% 12.65% 8.18% 5.24% 13.22% 8.51% 5.27% 14.06% 8.28% Band of Investment Technique 6.22% 15.74% 9.89% 6.41% 16.03% 10.14% 6.24% 15.82% 10.00% Surveyed Rates 5.91% 14.95% 9.41% 6.09% 15.23% 9.74% 5.92% 15.03% 9.81% Mean 5.62% 14.45% 9.16% 5.91% 14.83% 9.46% 5.81% 14.97% 9.36%

Market Extracted Rates Capitalization Rate The Appraiser has analyzed the sales of similar mobile/manufactured home parks in the surrounding Wyoming area. These sales indicate overall rates of 7.64% to 9.54% with a mean of 8.72% and are detailed as follows:

Comparable Mobile Home Park Sales Sale # Address Sale Date Cap Rate 1 Mountain View Estates 9/23/2009 8.30% 2 Sunny Meadow Village MHP 1/1/2009 8.05% 3 Missile Drive MHP 11/24/2010 9.54% 4 North Gurley MHP 9/4/2009 8.97% 5 Antelope RV & Mobile Home Park 8/7/2008 7.64% Indicated Mean 8.50%

Calculations may not equal due to computer rounding An analysis of the nationally surveyed rates published by RealtyRates.com indicates a 3rd Quarter – 2011 range of 8.28% to 10.00% with an indicated mean of 9.36%. When these national rates are compared to the mean local market extracted rate of 8.50%, the local rate appears to be reasonable and credible. Therefore, it is the Appraiser’s opinion that this rate best represents the subject and for the purpose of this appraisal will be used.

Holthouse Appraisal Group Analysis – 6705 Page B - 38 SUMMARY OF THE INCOME APPROACH Capitalization Approach Net Income  Capitalization Rate = Value

Net Income ÷ Capitalization Rate = Value $ 306,658 ÷ 8.50% =$ 3,607,741 Rounded To: $ 3,610,000

THREE MILLION SIX HUNDRED TEN THOUSAND DOLLARS $3,610,000

MARKET RENTS Based on the previously stated Appraiser’s opinion of the subject’s market rent per space found in the Potential Gross Income Section of this report, the subject’s market rent per space is as follows: TWO THOUSAND FOUR HUNDRED FIFTY DOLLARS $2,450

Holthouse Appraisal Group Analysis – 6705 Page B - 39 RECONCILIATION AND FINAL OPINION OF VALUE The final step in the appraisal framework is to evaluate and select from among the three traditional approaches to value, a single or final opinion of market value. The value opinions established by the three approaches were: Sales Approach $ 2,840,000 Cost Approach Omitted Income Approach $ 3,610,000 Annual Market Rents Per Space $ 2,450 Sales Approach When sufficient market data is available, investors and many other market participants most frequently rely upon the Sales Approach as it best reflects interactions within the market between buyers and sellers. Five sales of properties that were representative of the subject were found. The comparable sales were dissimilar in many respects; however, analysis based on market evidence was made and the comparables used were considered to provide a credible and reliable conclusion of market value. Therefore, this approach was used to support the Income Approach to value and market rents. The Cost Approach The Cost Approach has its most usefulness when the property being appraised involves new improvements, which represent the highest and best use of the land, or when there exists no income and sales data of similar properties. However, due to the age of the improvements and the amount of depreciation required this approach was omitted. The Income Approach The Income Approach is preferred for income producing properties. The reliability of this approach is a function of rent and expense data and the accurateness of the capitalization rate. The data available on income and expenses for similar properties was sufficient in both quantity and quality, making the estimated net operating income for the subject property reasonable. The overall rate used in the Income Approach was derived from local market data and supported by nationally accepted surveys. The Income Approach is considered to provide the most reliable indication of the subject's fee simple market value and market rents.

Holthouse Appraisal Group Analysis – 6705 Page B - 40 FINAL OPINION OF MARKET VALUE AND MARKET RENTS An analysis of the market indicates that properties similar to the subject are typically purchased by investors and that the Income Approach best depicts this market and is well supported by the Sales Approach within this report. Furthermore, the market rents were derived from similar recreational trailer sites with similar demand and restrictions making them both reliable and credible. Therefore, based on the foregoing data, analysis conclusions, and considering all things that affect the subject, it is the opinion of the appraiser that the fee simple market value and market rents of the subject property, as of the effective date of this report, are as follows: MARKET VALUE OF SUBJECT THREE MILLION SIX HUNDRED TEN THOUSAND DOLLARS $3,610,000 MARKET RENTS FOR THE SUBJECT’S MOBILE HOME SPACES TWO THOUSAND FOUR HUNDRED FIFTY DOLLARS $2,450

Holthouse Appraisal Group Analysis – 6705 Page B - 41

SUBSECTION “C” APPRAISAL ANALYSIS ON THE CASPER BOAT CLUB SITE 23855 LAKESHORE DRIVE ALCOVA RESERVOIR NATRONA COUNTY, WYOMING

Holthouse Appraisal Group Analysis – 6705 Page C - 1 Holthouse Appraisal Group

January 30, 2012

Mr. Mike Haigler, Director Natrona County Road, Bridge and Parks Department 538 SW Wyoming Boulevard Mills, WY 82644

Dear Mr. Haigler:

In fulfillment of our agreement, I have performed an appraisal of the real property, 23855 Lakeshore Drive, (land only), known as the Casper Boat Club, Alcova, Natrona County, Wyoming, herein referred to as the "subject property". The Appraiser’s opinions and conclusions are contained within this report and are reported in Summary Report format.

The appraisal assignment is to establish a supportable and defensible opinion of the subject’s market value (fee simple) and market rents for the subject’s site “as vacant - land only excluding all leasehold improvements”, as of the effective date of the appraisal.

I, Edward J. Holthouse, CRS, CCIM, hold Certified General Real Estate Appraiser Permit No. 438, issued by the State of Wyoming Certified Real Estate Appraiser Board.

"Market value", as used herein, refers to the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and

Holthouse Appraisal Group Analysis – 6705 Page C - 2 seller, each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under all conditions outlined in the Definition of Market Value contained in the body of this report.

The subject property's marketing time and exposure time is estimated to be one year or less based on the current market conditions.

MARKET VALUE OF LAND ONLY

SEVEN HUNDRED FIFTY FIVE THOUSAND DOLLARS $755,000 MARKET RENTS FOR THE LAND ONLY

TWENTY FIVE THOUSAND DOLLARS $25,000 HYPOTHETICAL CONDITION: At the time of inspection the subject was improved with a Boat Club including club house, landscaping, docks, boat ramps, caretaker’s quarters and various support buildings and improvements. The Client has requested an appraised value of the land only excluding all tenant owned improvements but including off-site improvements or any other improvements installed or owned by the United States Government or any other entity. Off-site improvements considered are hydroelectric dams, beaches, lakeways, roadways, electrical service and transmission lines, docks, outdoor restrooms or any other improvement that is not considered a traditional tenant improvement. Therefore, the value opinion and other conclusions expressed in this report are subject to the hypothetical condition that the site is currently vacant with no tenant improvements. The Client and intended users of this appraisal are cautioned that if this hypothetical condition is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

Holthouse Appraisal Group Analysis – 6705 Page C - 3 EXTRAORDINARY ASSUMPTION Currently the subject property is improved with the Casper Boat Club; however, the Appraiser has been asked to appraise the site under the hypothetical condition that these improvements are not on the site and to appraise the subject “as vacant ready for its highest and best use” The Appraiser has conducted a highest and best use analysis and determined that the highest and best use “as vacant”, would be to subdivide the site into recreational lake front lots. Therefore, the value opinion and other conclusions expressed in this report are subject to the extraordinary assumption that the owner of the subject would desire such a use and, that the Natrona County Planning Commission would approve this scenario. The Client and intended users of this appraisal are cautioned that if this extraordinary assumption is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

Respectfully submitted,

______Edward J. Holthouse, CRS, CCIM Certified General Appraiser Permit No. 438 ejh

Holthouse Appraisal Group Analysis – 6705 Page C - 4 SUMMARY OF SALIENT FACTS AND CONCLUSIONS

Identification of the Subject Property: Casper Boat Club, located on the west shore of Alcova Reservoir, Natrona County, Wyoming.

Address: 23855 Lakeshore Drive, Alcova Reservoir, Natrona County, Wyoming

Legal Description: The SW/4SW/4 of Section 27, the SE/4SE/4 of Section 28, NE/4NE/4 of Section 33, and the NW/4NW/4 of Section 34, Township 30 North, Range 83 West, 6th P.M., Natrona County, Wyoming more specifically described within the body of this report.

Purpose of the Appraisal: To arrive at a supportable and defensible opinion of the subject's site value and market rents for the subject site “as is vacant - ready for its highest and best use”, as of the effective date of the appraisal.

Site Size: 11.27 acres.

Improvements: The instructions of the client are to appraise the subject site as unimproved land ready for its highest and best use with domestic “water provided to the area”; therefore, the improvements to the sites will not be described as they do not affect the value to be determined.

Zoning: The subject is zoned “PUD”, Planned Unit Development

Highest and Best Use: Recreational Cabin Sites

Value Opinion by the Sales Approach Market Value $ 755,000 Market Rents $ 25,000

Value Opinion by the Cost Approach: Omitted

Value Opinion by the Income Approach: Inconclusive Final Opinion of Market Value: Market Value $ 755,000 Market Rents $ 25,000

Holthouse Appraisal Group Analysis – 6705 Page C - 5 Return on Investment Rate: 3.40%

Date of the Appraisal: January 30, 2012 Effective Date of Appraisal: December 1, 2011

Appraised By: Edward J. Holthouse Wyoming Certified General Appraiser: Permit Number No.438

Holthouse Appraisal Group Analysis – 6705 Page C - 6

ALCOVA RESERVOIR LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page C - 7 PHOTOGRAPHS OF THE SUBJECT PROPERTY

Holthouse Appraisal Group Analysis – 6705 Page C - 8 Aerial Map - Club Site

Lakeshore Drive - Club Entrance Club Entrance

Camp Sites & Boat Storage Area Club House

Main Gas Dock Main Boat Ramp

Small Water Craft Slips Play Ground & Bathhouse

Water Front Docks Water Front Docks

Water Front Docks IDENTIFICATION AND LOCATION OF THE SUBJECT PROPERTY The subject of this appraisal report is an 11.27 acre tract of land that is currently being occupied by the Casper Boat Club at 23855 Lakeshore Drive on the west shore of Alcova Reservoir approximately 30 miles southwest of Casper in south-central Natrona County. The instructions of the Client are to determine the “fee simple” market value of the “land only” “ready for its highest and best use” with domestic “water and sewer provided to the area”. Thus, the improvements to the sites will not be described, as they have no effect on the value opinion being determined. The subject is generally irregular in shape and the soils conditions are quite rocky to sandy soils along the beach and the vegetation is limited to the landscaping around the boat club house. The site is serviced with community water and sewer. The subject property is located east of Lakeshore Drive and west of Alcova Reservoir, approximately thirty miles southwest of the center of the Casper Central Business District and has the following street address: 23855 Lakeshore Drive Alcova Reservoir, Wyoming 82620 LEGAL DESCRIPTION According to information supplied to the Appraiser by the client, the subject property is legally described as follows: A tract of land lying within the SW/4SW/4, Section 27, SE/4SE/4, Section 28, NE/4NE/4, Section 33, and NW/4NW/4, Section 34, Township 30 North, Range 83 West of the 6th P.M., Natrona County, Wyoming, more particularly described as follows:

Beginning at a point which is S89°07’E, a distance of 567.25 feet from the east 1/16 corner between Sections 28 and 33, Township 30 North, Range 83 West; said point being on the east right-of-way line of the Alcova Shoreline Road; thence, N2°07’W, a distance of 210.26 feet along the east right-of-way line of Shoreline Road to a point ; thence N87°47’E, a distance of 275.90 feet to a point; thence S51°03’E, a distance of 126.12 feet to a point; thence S62°44’E, a distance of 599.90 feet to a point; thence S50°40’E, a distance of 122.36 feet to a point; thence S40°23’W, a distance of 200.30 feet to a point; thence N88°28’W, a distance of 229.80 feet to a point; thence N68°30W’, a distance of 204.0 feet to a point; thence S58°04’W, a distance of 129.70 feet to a point; thence N71°54’W, a distance of 342.23 feet to a point; said point being on the east right-of-way line of Alcova Shoreline Road; thence N2°07’W, a distance of 245.02 feet along the right-of-way to the Point of Beginning, said tract containing 8.59 acres more or less.

Holthouse Appraisal Group Analysis – 6705 Page C - 9 AND a tract of land lying within the NE/4NE/4, Section 33, Township 30 North, Range 83 West of the 6th P.M., Natrona County, Wyoming, more particularly described as follows:

Beginning at a point which is S89°07’E, a distance of 567.25 feet and S2°07’E, a distance of 245.02 feet from the east 1/16 corner between Section 28 and Section 33, Township 30 North, Range 83 West; and said point being on the east right-of-way line of the Alcova Shoreline Road; Thence S71°54’E, a distance of 342.23 feet to a point; thence S7°57’E, a distance of 200.0 feet to a point; thence S40°05’E, a distance of 272.35 feet to a point; thence S2°15’W, a distance of 36.30 feet to a point; thence S89°31W, a distance of 78.48 feet to a point; thence N41°11W, a distance of 210.62 feet to a point; thence N71°54’W, a distance of 318.0 feet to a point; said point being on the east right-of-way line of Alcova Shoreline Road; thence N2°07’W, a distance of 285.0 feet along the right-of-way line to the Point of Beginning, said tract containing 2.68 acres more or less. ZONING According to the Natrona County Planning and Zoning Department the subject site is zoned "PUD", Planned Unit Development. The site is restricted to a private boat club marketed to the general public according to the Natrona County Road & Bridge Department by the Bureau of Reclamation. According to this zoning district all allowable uses require board approval, for which the current use is allowed. Excerpts from this zoning district can be found in the Addenda of this report. SITE DATA

Location: The subject property is located adjacent to the Alcova Reservoir, approximately 30 miles southwest of the City of Casper.

Address: 23855 Lakeshore Drive, Alcova Reservoir, Natrona County, Wyoming.

Holthouse Appraisal Group Analysis – 6705 Page C - 10 Shape: Irregular – See Plot Plan

Size: 11.27 acres

Frontage: Approximately 2,900 feet of shoreline and 740 feet of frontage onto Lakeshore Drive.

Topography: Near level with a steep to slight slope toward the Alcova Reservoir shoreline. Adequate drainage is provided by road drainage across the front of the subject site. According to F.I.R.M., Map No. 560036- 1225A, has not been published; however, the subject property is located adjacent to Alcova Reservoir that is managed by the Bureau of Reclamation and this area is considered to be in a flood zone.

Soils: The Appraiser has not been provided with a soils analysis; however, based on a visual inspection of the existing buildings, soils appear adequate for a variety of building purposes.

Utilities: Public utilities in the area are electrical power and telephone. Water and sewer are provided by a central well and septic system which supplies water and sewer to the Alcova Marina, Casper Boat Club and Alcova Trailer Park. The Casper Water Ski Club is supplied with domestic water but has its own individual septic system for the club house.

Holthouse Appraisal Group Analysis – 6705 Page C - 11 Present Improvements: The instructions of the Client are to appraise the site as unimproved land ready for its highest and best use. The improvements are considered as personal property and are excluded from any value conclusions stated in this report. A brief description of these improvements can be found in the addenda of this report as part of the “Casper Boat Club Lease”.

Easements/Encroachments: Road way and utility easements, no apparent adverse easements noted on inspection.

Holthouse Appraisal Group Analysis – 6705 Page C - 12

CASPER BOAT CLUB - SITE PLAN

Holthouse Appraisal Group Analysis - 6705 Page C-13

BOAT CLUB AERIAL LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page C - 14

BOAT CLUB TOPOGRAPHICAL MAP

Holthouse Appraisal Group Analysis Section - 6705 Page C - 15 ADDITIONAL DEFINITIONS Absorption Period1 - is defined as “The actual expected period required from the time a property is initially offered for purchase or use by its eventual users until all portions have been sold or stabilized occupancy has been achieved. Although marketing may begin before the completion of construction most forecasters consider the absorption period to begin after completion of construction.”

Absorption Rate2 - is defined as “The rate at which properties for sale or lease have been or are expected to be successfully marketed in a given area; usually used in forecasting sales or leasing activity.”

Wholesale or Bulk Sale Value – is defined within this report as the discounted value of the developed finished lots, assuming the sale of all lots under appraisal to a single buyer in a single transaction under the same conditions as Market Value.

Aggregate of Retail Values (ARV) 3 – is defined as “The sum of the appraised values of the individual units in a subdivision, as if all of the units were completed and available for retail sale, as of the date of the appraisal. The sum of the retail sales includes an allowance for lot premiums, if applicable, but excludes all allowances for carrying costs. Also called gross retail value.”

Discounted Rate4 - is defined as “A yield rate used to convert future payments or receipts into present value.”

Discounted Cash Flow (DCF)5 - is defined as “The procedure in which a discount rate is applied to a set of projected income streams and a reversion. The analysis specifies the quantity, variability, timing, and duration of the income streams as well as the quantity and timing of the reversion and discounts each to its present value at a specified yield rate. DCF analysis can be applied with any yield capitalization technique and may be preformed on either a lease-by-lease or aggregate basis.”

Net Present Value (NPV)6 - is defined as “The difference between the present value of all expected investment benefits, or positive cash flows, and the present value of capital outlays, or negative cash flows. For purposes of real property valuation, negative cash flows include the initial cash outlay required to purchase the property. Generally, when NPV is positive, the investment is acceptable; if

1 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 2 2 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 2 3 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 8 4 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 102 5 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 102 6 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 244 Holthouse Appraisal Group Analysis – 6705 Page C - 16 NPV is zero, the investment is neutral; and when NPV is negative, the investment is unacceptable. Also called dollar reward.” HIGHEST AND BEST USE The purpose of studying the highest and best use of a property is to determine the improvements that will generate the greatest residual income to the land. The highest and best use is defined as: The probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

Market forces shape market value. The appraiser, to formulate an opinion of the property’s highest and best use as of the appraisal date, also uses the general data collected and analyzed to estimate property value. In all value assignments, use is the basis for a value estimate. Highest and best use of a property to be appraised provides the foundation for a thorough investigation of the competitive positions of market participants. Consequently, highest and best use can be described as the foundation on which the market rests.7

7 The Appraisal of Real Estate, 10th Edition, 1992, published by the Appraisal Institute.

Holthouse Appraisal Group Analysis – 6705 Page C - 17 In determining the highest and best use of the subject property, the economic, legal, and social factors which motivate investors to develop, manage, own, buy, sell, and lease real estate are carefully considered. Typically, five basic land uses are considered. These uses are: special purpose, agricultural, residential, industrial, and commercial land uses. A brief discussion of these uses and how they relate to the subject are as follows: Special Purpose Uses A special purpose property is defined as “a limited market property with a unique physical design, special construction materials, or a layout that restricts its utility to the use for which it was built; also called “special design property”8. Special purpose properties typically have only one use or a very limited number of uses. Examples of such properties include event centers, public libraries, schools, churches, and recreational parks. The subject is located approximately 30 miles southwest of the Central Business District of Casper adjacent to the Alcova Reservoir. The subject has historically been used as a recreational boat club which provides a club house/restaurant and boat docks to its members which is a special purpose use. Sites similar to the subject are typically not “truly” commercial in nature; thus, are run as not for profit organizations. Therefore, a use of this type although physically possible and legally permissible is not financially feasible. Agricultural Uses Agricultural use of the subject is not physically possible or legally permissible due to restrictions placed on the land by the Bureau of Reclamation prohibiting the site from being used for agricultural purposes. Therefore, due to its location, size, surrounding uses, nature of the soils, area growing season, and legally permitted uses, it is the Appraiser’s opinion that a use of this type would not be legally permissible or financially feasible. Residential Uses Residential development of the subject parcel would be both physically and could be legally possible (if desired by the owner as the restrictions are primarily owner imposed and there is water and sewer to the site) and the subject’s location is conducive to the risks involved in this type of development. A size limitation of 2.0 acres would be conducive to low development costs and would be more acceptable to passage by the Natrona County Planning

8 The Dictionary of Real Estate Appraisal, Third Edition, The Appraisal Institute, 1993, Page 342 Holthouse Appraisal Group Analysis – 6705 Page C - 18 Department. Therefore, it is the Appraiser’s opinion that a use of this type would be physically possible and has a high probability of becoming legally permissible. Industrial Uses The subject of this report is located in an area that has historically been seasonal recreational sites and is zoned for these uses. Therefore, this use was not considered as it is not legally permissible nor would it be financially feasible due to its location. Commercial Use Commercial use of the subject sites would be physically possible and legally permissible as a boat club or marina; however, the Alcova Lakeside Marina has a one mile non-compete radius which encompasses the subject site until 2016. Therefore, a use of this type would not be legally permissible under the non-compete clause. Financially Feasible Use As previously stated, the subject is improved with a boat club that provides a club house with restaurant and boat docks for its members. The site, “as vacant”, is also conducive to being developed into 2 acre sites for recreational home sites. Both of these uses are physically possible and, according to the Natrona County Road & Bridge, are legally permissible if a use of this type is desired by the Bureau. Therefore, should be financially feasible. Maximally Profitable Use The Appraiser has been instructed to appraise the subject “as vacant land ready for its highest and best use” with domestic water and sewer in the area. Furthermore, the Appraiser has been asked to determine the market rent for the subject site without consideration of improvements. Currently, sites similar to the subject are not bought and sold on the open market but are leased to the owners of the leasehold improvements. In my interviews with the Natrona County Road and Bridge and Mr. Kenneth C. Randolph with the U.S. Department of the Interior, Bureau of Reclamation, they have indicated that there are no plans to privatize this site or sell it on the open market. The Appraiser was unable to find comparable sales or arms-length leases that were similar to the subject under its current use as a boat club. An analysis of the site’s financially feasible uses indicates that if vacant, the subject site would have two potential uses: 1) - Boat

Holthouse Appraisal Group Analysis – 6705 Page C - 19 Club as currently improved; or 2) - Cabin sites similar to those located in the Alcova Lakeview Estates, Alcova West Ranchettes, South Estates and Lake Ridge Estates, just to the northwest. According to Mr. Bill Fehringer with Civil Engineering Professionals, Inc., under the cabin site scenario, the desired size for density and health issues would be at least two acres. This would allow for minimal development costs and could facilitate 5 water front sites with approximately 1.27 acres of the site used for open space and waste. Furthermore, in my discussions with the Natrona Road & Bridge it was found that if this use was desired by the Bureau, a use of this type would most likely be acceptable to the county. Therefore, the Appraiser will analyze these two scenarios to determine the maximally profitable use of the site. Scenario No. 1 – Boat Club Analysis In my interview with Mr. Lynn Burgess, Commodore for the Casper Boat Club, it was found that the boat club provides a community service by allowing its members access to the lake via its boat docks. It also provides restaurant and pub services through its club house for which there is no closed membership. Furthermore, according to Mr. Burgess the boat club provides serves to non-members through its community events such as their annual 4th of July fireworks show and the annual fund raiser for Jason’s Kids, a not for profit origination dedicated to help children with spinal cord tumors and childhood cancers. The dock fees for members, according to Mr. Burgess, are primarily $350/season (75%) with some of the larger docks costing up to $775/season. Club membership is $340/year plus a 4 month $75/month “use it or lose it” restaurant/pub charge. There are senior memberships for long time members and junior memberships for those under the age of 26, provided the applicant is “coming out” of a regular family membership. These members only constitute approximately 10% of the overall membership. Total regular members, also according to Mr. Burgess, currently stand at 210. Dock waiting list is approximately 20, but can be only be accessed by members in good standing. There are currently only 203 docks available for the 210 members. As previously stated, the sites around the subject are not typically sold. An analysis of the market indicates that this is typical of most boat/ski clubs located within the State of Wyoming. Furthermore, there have been no sales of boat/ski clubs in the subject’s market area from which to do a land extraction; thus, limiting the available data to draw credible conclusions under this scenario.

Holthouse Appraisal Group Analysis – 6705 Page C - 20 Finally, the subject’s site is located within a one mile radius of the Alcova Lakeside Marina which has a non-compete clause within its lease with the owner of the subject. This clause prohibits the subject from being a competing commercial operation; thus, limiting the options that the site can be put to use. Therefore, it is the Appraiser’s opinion that due to the lack of market data and, the area’s limited success of boat/ski clubs as viable commercial operations, the maximally productive use of the site would not be as boat/ski club unless its members are willing to support its use based on a lease rate derived from the value of the land under the subject’s highest and best use, a requirement of this appraisal. Scenario No. 2 – Hypothetical Subdivision Analysis The Appraiser has researched the market for lot sales that would be similar to the subject under this scenario. These sales will be used in the subdivision analysis to determine the retail value of the lots and the total aggregate value of the site. Once this value is established, the Appraiser must then discount this value by the direct and indirect costs of development including entrepreneurial profit and holding costs. The lots located in the Alcova Lake View Estates I and II, Alcova West Ranchettes, South Estates and Lake Ridge Estates are comparable to the subject in many aspects including the availability of domestic water to four of the five areas. The remaining subdivision, Lake Ridge Estates does have 10± acre tracts with several selling with a water well in place. An analysis of the market indicates that most sites are now purchased on per-square foot-value with the primary emphasis on view and access to the lake. An analysis of the subject’s proposed lots under the hypothetical subdivision indicates that they would be superior in location with a closer proximity to the shoreline. According to my interviews with Mr. Edgeworth with the Edgeworth Real Estate Firm and Mr. Gary Lever with Rocky Mountain Real Estate, these lots would have an extremely high demand and should sell in the $200,000 to $250,000 price range. Therefore, it is the Appraiser’s opinion that a use of this type would be the maximally productive use of the site based on the analysis found within this report. HIGHEST AND BEST USE AS VACANT Based on the foregoing analysis, the highest and best use of the subject, “as vacant”, would be “seasonal recreational lake front lots”.

Holthouse Appraisal Group Analysis – 6705 Page C - 21 HIGHEST AND BEST USE AS IMPROVED The Appraiser’s assignment was to appraise the subject “as vacant ready for its highest and best use”. Therefore, the highest and best use “as improved” was not part of the Scope of Work and was not considered. TYPICAL PURCHASER The typical purchaser of this site would be a developer looking to develop the site into seasonal recreation water front lots. The typical tenant or purchasers of these lots would most likely live in Natrona County due to the sites location 30 miles from Casper. These sites would most likely be sold or leased for recreational or seasonal use market aka second home market or as a club site for a boat or ski club willing to pay market rents based on the market value of the land. THE APPRAISAL PROBLEM TO BE ANALYZED The instructions of the Client are to value the subject site as “as vacant ready for its highest and best use” with community water and sewer in place. Furthermore, the Appraiser has been asked to determine the market rent for this site as a private boat club based on the market value of the land under it highest and best use and typical market return rates. The subject’s current use is allowed under its current “PUD”, Planned Unit Development zoning district and the United States Bureau of Reclamation's Master Plan for the Alcova Reservoir Recreational Area. As previously stated, the subject site has never been bought and sold which is typical of most boat/ski clubs within the State of Wyoming. These sites are typically leased from which ever governmental agency is charged with the management of the site and are done so to promote recreation in the area. Lease rates for these sites are not typically considered as arms- length transactions for the purpose of this appraisal, as the Appraiser is required to use market land values and market rents (non-governmental rents) for the basis of his conclusions. Therefore, to determine the market value of the site and consequently the market rent, the Appraiser must find similar lots with similar location and highest and best use. A search of the Alcova Reservoir area found that there are five subdivisions located in the lake area which are privately held and openly bought and sold. The first three subdivisions are Alcova Lakeview Estates No. 1 and No. 2 and Alcova West Ranchettes located

Holthouse Appraisal Group Analysis – 6705 Page C - 22 approximately 1/4 miles northwest of the subject. This area is near the end of its buildout phase which has taken approximately 30 years. These sites have either recreational or year around residential improvements; however, most sites are used for recreational purposes. These sites are comparable to the subject in many aspects, but are smaller in size and approximately 30% of these sites have no lake view, none have lake-frontage, and consequently none of these lots have waterfront docks or permits for water front docks. If this service is desired, owners are required to lease mooring space from the Casper Boat Club or the Alcova Lakeside Marina if this service is desired. The fourth subdivision is located due west of the Alcova Trailer Park and south of Alcova Lake View Estates, and is also approximately 1/4 mile northwest of the subject. This subdivision is known as the South Estates Subdivision and consists of 17 lots platted in August 2009. These lots are comparable to the subject’s hypothetical lots in many aspects including average lot size and have access to a central water system. This would be similar to the subject’s “highest and best use” “as vacant” under the hypothetical subdivision analysis. To date only one of the lots has been purchased which was for view shed protection from a landowner in the adjoining subdivision. None of these lots have waterfront docks or permits and are also required to lease mooring space from the Casper Boat Club or the Alcova Lakeside Marina, if such service is desired. The fifth subdivision is located adjacent to Wyoming State Highway 220, due north of the four previously stated subdivisions and is approximately 2 miles northwest of the subject. Phase I of this subdivision was platted in June 2007 with 34 lots. It has no direct roadway access to the lake except for Highway 220 (however, there are plans in the works to do so) nor do they have dock permits. Lots are similar in size with acreages ranging from 6.28 acres to 17.33 acres; however, water and sewer are at owner’s expense via private well and septic system. Sales appear to be speculators with only two improvements built on the sites. Covenants appear to require upper end homes with the two structures built being in the $300,000 to $500,000 range. These sites attract buyers similar to the subject if the hypothetical subdivision used in this analysis was put into place. An analysis of the market indicates that most sites are purchased based on size and location with emphasis on the view the location has with relationship to the lake and lake access.

Holthouse Appraisal Group Analysis – 6705 Page C - 23 Furthermore, the subject site is superior in size to most of the sales and in location as it fronts onto the water and has approximately 203 docks. Thus, these variables will be addressed in the following analysis. Therefore, to determine the market value of the subject site the Appraiser has elected to use two separate methodologies, direct sales comparison and a subdivision analysis. These two scenarios will be used to support the Appraiser’s final conclusion of the subject’s land value. In addition to the fee simple land value, the Appraiser has been requested to give his opinion of the market rent for the site. Typically, market rents are established by analyzing current rents being paid for comparable properties; however, as there are no similar arm’s length (market) rental sites located in the subject’s market area, the Appraiser has determined the market rents based on a rate of return on the fee simple market value of the land using market extracted return rates. In doing so the Appraiser must analyze yields and risk factors to determine a reasonable rate of return. Once this rate is determined, the Appraiser multiplies the yield rate times the market value, to get the amount of rent that a typical market investor would expect as a return on investment. THE APPRAISAL PROCESS Appraisal techniques are the specifics of the three approaches that are traditionally used to derive separate indications of real property value. One or more approaches may be used, depending on their applicability to a particular appraisal assignment. In assignments to determine market value, the ultimate goal of the valuation process is a well-supported conclusion that reflects the Appraiser’s consideration of all influences on the market value of the property being appraised. Therefore, the Appraiser studies the property from each of the applicable viewpoints reflected in the three approaches. APPROACHES TO VALUE In the appraisal of real estate, there are three basic traditional approaches for determining property value. The three approaches are the Sales Approach, the Cost Approach, and the Income Approach. The final step in determining a property's "market value" (i.e., most probable selling price) is to correlate the Appraiser’s value opinion of the three approaches into a single opinion of value.

Holthouse Appraisal Group Analysis – 6705 Page C - 24 Sales Approach This approach is based on the proposition that an informed purchaser would pay no more for a property than the cost to him of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data, which can be verified from authoritative sources. The Sales Approach is relatively unreliable in an inactive market or in determining the value of properties when no real comparable sales data is available. The Cost Approach This approach is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements, which represent the highest and best use of land, or when unique or specialized improvements are located on the site for which there exists no comparable properties on the market. The Income Approach This approach is based on the proposition that a property is worth no more than the capitalized value of the income stream that the property is capable of generating. The procedure converts anticipated benefits (dollar income) to be derived from the ownership of the property into a value opinion. The Income Approach is widely applied in appraising income-producing properties. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process.

Holthouse Appraisal Group Analysis – 6705 Page C - 25 THE SALES APPROACH The value opinion of the subject property by the Sales Approach was derived after a search for similar properties. The Appraisal Institute further explains the approach below in the paragraphs from Page 417 of The Appraisal of Real Estate, 12th Edition: In the sales comparison approach, the appraiser develops an opinion of value by analyzing similar properties and comparing these properties with the subject property. The comparative techniques of analysis applied in the sales comparison approach are fundamental to the valuation process. Estimates of market rent, expenses, land value, costs, depreciation, and other value parameters may be derived in the other approaches to value using comparative techniques. Similarly, conclusions derived in the other approaches are often analyzed in the sales comparison approach to estimate the adjustments to be made to the sale prices of comparable properties.

Comparative analysis of properties and transactions focuses on similarities and differences that affect value, which may include variations in the following:  Property rights appraised  The motivations of buyers and sellers  Financing terms  Market conditions at the time of sale  Size  Location  Physical features  Economic characteristics, if the properties produce income Elements of comparison are tested against market evidence to estimate which elements are sensitive to change and how they affect value. The Appraiser has searched the subject’s market area and found eighteen sales that are somewhat similar to the subject. These sales will be used to determine the value of the subject under the extraordinary assumption that the site could be subdivided into five water front lots or as a bulk 11.27 acre residential recreational land sale. Details of these sales can be found in the Basic Data Section with the analysis as follows:

Holthouse Appraisal Group Analysis – 6705 Page C - 26 ABSTRACT OF COMPARABLE LAND SALES Recording Comp # Location Date Deed # Grantor/Grantee Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake CL Dolodell 1 2/27/1998 609823$ 22,000 1.00$ 22,000.00 $ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Ken Milner Lot 33, Alcova Lake Richard D. Wagner 2 5/23/2000 653493$ 23,500 0.94$ 25,000.00 $ 0.57 Average NoHOA/None 1230 "SR-2" View Estates 2 Max Wayne Stalkup Lot 3, Alcova West Charles T. Norton, et ux 3 10/31/2001 680825$ 35,000 1.03$ 34,013.61 $ 0.78 V-GoodYes HOA/None Private "SR-1" Ranchettes Donald Dale Sackett et ux Lot 41, Alcova Lake Stan & Nancy Koehn 4 12/31/2002 707361$ 28,000 1.00$ 28,000.00 $ 0.64 Good-AvgNo HOA/None 77 "SR-2" View Estates 2 Keith W. Johnson Lot 31 Alcova Lake Paul J. Simonton, et ux 5 7/1/2003 720130 $ 33,500 1.00 $ 33,500.00 $ 0.77 AverageNo HOA/None 35 "SR-2" View Estates 1 Newell E. Wilson, et ux Lot 5 Alcova West Donald Dale Sackett et ux 6 9/19/2003 726757$ 20,000 1.86$ 10,752.69 $ 0.25 AverageNo HOA/None 261 "SR-1" Ranchettes Walter E. Weiss, et ux Lot 16 Alcova West Robbie Dane Benson 7 10/21/2003 729128$ 16,000 1.05 $ 15,238.10 $ 0.35 Average No HOA/None 311 "SR-1" Ranchettes David S. Bullard, et ux Lot 5 Alcova West Walter E. Weiss, et ux 8 4/12/2004 739977$ 25,500 1.86$ 13,709.68 $ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Ted Anderson, et ux Lot 13, Alcova West Timothy C. Hoiles, Trustee 9 4/6/2005 763897$ 20,500 1.05$ 19,523.81 $ 0.45 AverageNo HOA/None 410 "SR-1" Ranchettes Wyoming Renovations, Inc Lot 30, Alcova West David Whisler 10 6/23/2005 770669$ 37,500 1.38 $ 27,173.91 $ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Warren R. Foreman Alcova Lake, LLC 11 Lot 3, South Estates 2/2/2010 883441$ 225,000 2.26$ 99,557.52 $ 2.29 ExcellentYes HOA/None Private "UR" John P. Ellbogen, II Lot 11, Lake Ridge Lake Ridge Estates, LLC 12 7/23/2010 892364$ 140,000 12.61$ 11,102.30 $ 0.25 GoodYes Well/None 58 "PUD" Estates Phase I Steddyhomes, II, LLC Lot 12, Lake Ridge Success Properties, LLC 13 9/3/2010 894605$ 110,000 7.24$ 15,193.37 $ 0.35 Average Yes None/None 97 "PUD" Estates Phase I Lakecliffe, Inc. Lot 10, Lake Ridge Lake Ridge Estates, LLC 14 11/15/2010 898890 $ 90,000 10.22 $ 8,806.26 $ 0.20 Fair No None/None Private "PUD" Estates Phase I Steddyhomes, II, LLC Lot 5, Lake Ridge Lake Ridge Estates, LLC 15 11/22/2010 899332$ 61,500 7.33 $ 8,390.18 $ 0.19 Fair No None/None Private "PUD" Estates Phase I Ryan P. Mundell Lot 18, Alcova West Rita J. Condis 16 6/21/2011 910441 $ 47,500 1.14 $ 41,666.67 $ 0.96 AverageNo HOA/None 1 "SR-1" Ranchettes David B. Simonson, et ux Lot 25, Lake Ridge SDRE, LLC 17 7/6/2011 911244 $ 175,000 10.11 $ 17,309.59 $ 0.40 V-GoodYes Well/None Private "PUD" Estates Phase I Craig H. Evert, et ux Lot 55, Alcova Lake Susan F. Hoag, Trustee 18 12/5/2011 919443$ 58,500 1.03 $ 56,796.12 $ 1.30 V-GoodYes HOA/None 206 "SR-1" View Estates 2 Woody C. Hugget

Holthouse Appraisal Group 6705-Analysis Section Page C - 27 PAIRED SALES ANALYSIS - TIME - MARKET INCREASE Recording Comp # Location Date Sales Price Acres Sq. Ft. $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake 1 2/27/1998$ 22,000 1.00 43,560$ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Lot 31 Alcova Lake 5 7/1/2003$ 33,500 1.00 43,560$ 0.77 Average No HOA/None 35 "SR-2" View Estates 1 Differential 1,950$ 11,500 %/Year $ 0.26 %/Year Annual Time Adjustment 5.34 52.27% 9.78% 52.27% 9.78% Lot 33, Alcova Lake 2 5/23/2000$ 23,500 0.94 40,946$ 0.57 Average No HOA/None 1230 "SR-2" View Estates 2 Lot 41, Alcova Lake 4 12/31/2002$ 28,000 1.00 43,560$ 0.64 Good-Avg No HOA/None 77 "SR-2" View Estates 2 Differential 952$ 4,500 %/Year $ 0.07 %/Year Annual Time Adjustment 2.61 19.15% 7.34% 12.00% 4.60% Lot 5 Alcova West 6 9/19/2003$ 20,000 1.86 81,022$ 0.25 Average No HOA/None 261 "SR-1" Ranchettes Lot 5 Alcova West 8 4/12/2004$ 25,500 1.86 81,022$ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Differential 206$ 5,500 %/Year $ 0.07 %/Year Annual Time Adjustment 0.56 27.50% 48.73% 27.50% 48.73% Lot 16 Alcova West 7 10/21/2003$ 16,000 1.05 45,738$ 0.35 Average No HOA/None 311 "SR-1" Ranchettes Lot 13, Alcova West 9 4/6/2005$ 20,500 1.05 45,738$ 0.45 Average No HOA/None 410 "SR-1" Ranchettes Differential 533$ 4,500 %/Year $ 0.10 %/Year Annual Time Adjustment 1.46 28.13% 19.26% 28.13% 19.26% Lot 30, Alcova West 10 6/23/2005$ 37,500 1.38 60,113$ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Lot 18, Alcova West 16 6/21/2011$ 47,500 1.14 49,658$ 0.96 Average No HOA/None 1 "SR-1" Ranchettes Differential 2,189$ 10,000 %/Year $ 0.33 %/Year Annual Time Adjustment 6.00 26.67% 4.45% 53.33% 8.89% Lot 3, Alcova West 3 10/31/2001$ 35,000 1.03 44,823$ 0.78 V-Good Yes HOA/None Private "SR-1" Ranchettes Lot 55, Alcova Lake 18 12/5/2011$ 58,500 1.03 44,867$ 1.30 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Differential 3,687$ 23,500 %/Year $ 0.52 %/Year Annual Time Adjustment 10.10 67.14% 6.65% 66.98% 6.63%

Paired Sales Analysis - Land Sales Holthouse Appraisal Group 6705-Analysis Section Market Increase/Decrease PAIRED SALES ANALYSIS - SMALL LOT LOCATION ANALYSIS Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 55, Alcova Lake 18 12/5/2011$ 58,500 1.03$ 56,796.12 $ 1.30 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Lot 18, Alcova West 16 6/21/2011$ 47,500 1.14$ 41,666.67 $ 0.96 Average No HOA/None 1 "SR-1" Ranchettes Differential $ 15,129.45 Location Adjustment 36.31% Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 3, South Estates 11 2/2/2010$ 225,000 2.26$ 99,557.52 $ 2.29 Excellent Yes HOA/None Private "UR" Subdivision Lot 18, Alcova West 16 6/21/2011$ 47,500 1.14$ 41,666.67 $ 0.96 Average No HOA/None 1 "SR-1" Ranchettes Differential $ 57,890.86 Location Adjustment 138.94% Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 3, South Estates 11 2/2/2010$ 225,000 2.26$ 99,557.52 $ 2.29 Excellent Yes HOA/None Private "UR" Subdivision Lot 55, Alcova Lake 18 12/5/2011$ 58,500 1.03$ 56,796.12 $ 1.30 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Differential $ 42,761.41 Location Adjustment 75.29% PAIRED SALES ANALYSIS - LARGE LOT LOCATION ADJUSTMENT Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 25, Lake Ridge 17 7/6/2011$ 175,000 10.11$ 17,309.59 $ 0.40 V-Good Yes Well/None Private "PUD" Estates Phase I Lot 11, Lake Ridge 12 7/23/2010$ 140,000 12.61$ 11,102.30 $ 0.25 Good Yes Well/None 58 "PUD" Estates Phase I Differential $ 6,207.29 Location Adjustment 55.91% Recording Comp # Location Date Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 10, Lake Ridge 14 11/15/2010$ 90,000 10.22$ 8,806.26 $ 0.20 Fair No None/None Private "PUD" Estates Phase I Lot 5, Lake Ridge Estates 15 11/22/2010$ 61,500 7.33$ 8,390.18 $ 0.19 Fair No None/None Private "PUD" Phase I Differential $ 416.08 Location Adjustment 4.96%

Paired Sales Analysis - Land Sales Holthouse Appraisal Group 6705-Analysis Section Percent Location Premium SUMMARY OF THE COMPARABLE LAND SALES Comparable Land Sale No. 1 Through No. 10, Alcova, Wyoming – These sales were used by the Appraiser to support conclusions as to time adjustments and market trends in the area. Comparable Land Sale No. 11 – Lot 3 – South Estates Subdivision, Alcova, Wyoming - This sale is located 1/4 mile northwest of the subject, in the subject’s immediate neighborhood. This sale is located in the South Estates Subdivision which lies south of Lakeview Estates. The subdivision has 17 platted lots ranging in price from $150,000 to $250,000. The topography of the site is heavy rolling and pad sites are limited. The view of the lake is superior to most of the lots within the subdivision and contains approximately 2.26 acres. This sale, according to the seller, was sold before the subdivision was put on the market. It was purchased by an adjoining landowner who purchased the site to prevent his view of the lake from being blocked. The site is the only site sold within the subdivision and sold at a premium due to the value of the view shed. This site has ease of access to the Boat Club and Marina where mooring can be leased. It is the Appraiser’s opinion that this site best represents the base value premium for the subject’s individual lots under the hypothetical subdivision analysis which will be used to support the Appraiser’s value conclusion of the subject’s land value. The sales price was $225,000 or $2.29/sq. ft. before adjustments. Comparable Land Sale No. 12 and No. 13 – Lots 11 and 12, Lake Ridge Estates Phase I, Alcova , Wyoming - These sales are located at the entrance of Lake Ridge Estates approximately 2 miles northwest of the subject, in the subject’s immediate neighborhood. These sales are located in the Lake Ridge Estates which lies northwest of Lakeview Estates and have no direct access to the lake area except via Highway 220; however, there are currently plans to build one. Water and sewer will be provided by private well and septic at owner’s expense. Phase No. 1 of the subdivision consists of 34 platted lots ranging in price from $75,000 to $250,000. Lot 11 (Comparable Sale No. 12) is located to the east of Lot 12 (Comparable Sale No. 13) and abuts BLM land so the view of the lake is unobstructed and is likely to remain so. This lot contains approximately 12.61 acres and sold for $140,000 or $025/sq. ft. According to the seller the lot had a well in place with an estimated value of $15,000 to $20,000. Lot 12 is located with a slightly obstructed view of the lake and overlooks Lots 13, 14 and 16. This lot contains

Holthouse Appraisal Group Analysis – 6705 Page C - 28 approximately 7.24 acres and sold for $110,000 or $0.35/sq. ft. Both sites were purchased by local builders looking to build spec homes in the area. Both sites are now improved and are still on the market after more than a year. These two sales indicate that size might be a factor; however, on a per lot basis, the better view sold for a higher price. Sales were used to help set trends in the area. Comparable Land Sale No. 14 and No. 15 – Lots 10 and 5, Lake Ridge Estates Phase I – Alcova, Wyoming – These sales are also located approximately 2 miles northwest of the subject, in the subject’s immediate neighborhood. These two sales are located on the highway and have no views of the lake. Water and sewer will need to be provided by the purchaser at their expense. Lot 10 contains approximately 10.22 acres and is located on a hillside overlooking Lots 5 and 6. This sale sold for $90,000 or $0.20/sq. ft. Lot 5 is located adjacent to the highway and at the entrance to this area of the subdivision and contains approximately 7.33 acres. According to the seller the purchaser is planning to put mini-storage units on Lot 5 when the market makes it financially feasible. These two sales indicate there appears to be little difference in value when size is a factor contradicting the preceding analysis; therefore, in the paired sales analysis similar sites should be used to evaluate this dichotomy. Sales were used to help set trends in the area. Comparable Land Sale No. 16 – 23381 West Lower Reeves Road, Wyoming - This sale is located approximately 1/2 mile northwest of the subject, in the subject’s immediate neighborhood. It is Lot 18 of Alcova West Ranchettes located west of Lakeview Estates No. 2 and is the most current sale of a no-lake-view lot. This lot is located in a cul-de-sac and has some hill side views of the surrounding area. The site has access to community water as part of the homeowner’s association fees with septic at the expense of the purchaser. This sale is approximately 1.14 acres and sold for $47,500 or $0.96/sq. ft. This sale was used to help set trends in the area. Comparable Land Sale No. 17 – Lot 25, Lake Ridge Estates, Alcova Phase I, Wyoming - This sale is located approximately 2 miles northwest of the subject, in the subject’s immediate neighborhood. It is at the end of Lake Ridge Estates and has an unobstructed view of the lake. It was owned by one of the owners of the subdivision and was considered to be one of the best view lots within the subdivision. According to the seller the site was improved with a water well with an estimated value of $15,000 to $20,000. The lot size is approximately 10.11 acres and had

Holthouse Appraisal Group Analysis – 6705 Page C - 29 a developed pad site. The sales price was $175,000 or $0.40/sq. ft. This sale was considered to be most similar to the subject in size and will be used as the base value of the subject “as a whole” or “bulk sale” prior to adjustments for location. Comparable Land Sale No. 18 – 25887 West Cedar Mesa, Alcova Lake View Estates No. 2, Alcova, Wyoming - This sale is located approximately 1/2 miles northwest of the subject, in the subject’s immediate neighborhood. It is the most current sale of a lake-view lot within the Lakeview Estates Area. The site has community water available as part of the homeowner’s fees with septic at the expense of the purchaser. The lot size is approximately 1.03 acres and has very limited area for a pad site. The sales price was $58,500 or $1.30/sq. ft. This sale was used to support trends in the area ANALYSIS OF THE COMPARABLE LAND SALES As previously stated Comparable Sales No. 1 through No. 10 were used to help support trends in the area. Also as previously stated Comparable Sale No. 11 was most similar in desirability of location; however, is not a “water front” lot. Comparable Sales No. 12, No. 13, No. 14, and No. 15 were used to establish trends in the area from which adjustments could be made or supported. Comparable Sale No. 16 was the most current lot sale with no-view of the lake and Comparable Sale No. 18 is the most current “lake-view” sale midway between Comparable Sale No. 16 and No. 11. These sales were used to help establish trends in the area from which reasonable adjustments could be made and to support conclusions to value. Comparable Sale No. 17 was most similar in size and had a proven water well in place. This sale was considered to be most similar to the subject in utility and will be used to support a size adjustment. The adjustments and conclusions are as follows: Time Adjustment – An analysis of the comparable sales indicates that the market had an increase/decrease as follows (For further details see Paired Sales Analysis – Time – Market Increase/Decrease chart found preceding this analysis:

Holthouse Appraisal Group Analysis – 6705 Page C - 30 Time - Market Increase/Decrease Analysis Comp # Rec. Date Years Acres $/Sq. Ft. %/Year 1 2/27/1998 1.00$ 0.51 5 7/1/2003 5.34 1.00$ 0.77 9.78% 2 5/23/2000 0.94$ 0.57 4 12/31/2002 2.61 1.00$ 0.64 4.60% 6 9/19/2003 1.86$ 0.25 8 4/12/2004 0.56 1.86$ 0.31 48.73% 7 10/21/2003 1.05$ 0.35 9 4/6/2005 1.46 1.05$ 0.45 19.26% 10 6/23/2005 1.38$ 0.62 16 6/21/2011 6.00 1.14$ 0.96 8.89% 3 10/31/2001 1.03$ 0.78 18 12/5/2011 10.10 1.03$ 1.30 6.63%

An analysis of the above chart indicates that land values per square foot at Alcova are moving with the local economy, “steady by jerks”. A further analysis indicates that there have been some periods of leveling off and some periods of extreme increases; however, the overall movement (price per square foot) appears to have averaged 6.63% over the past ten years (Comparable Sales No. 3 and No. 18). Movement between the years of 2005 and 2011 (the approximate time since the Appraiser’s last appraisal of the subject) indicated by Comparable Sales No. 10 and No. 16, has increased by 8.89%/year when the price per square foot is considered. When total lot values are considered, the percent increase is just slightly more at 6.65% for the 10 year rate but drops to 4.45% for the 5 year rate. A further analysis indicates that of the comparable sales considered in determining the market value of the subject site, Sales No. 11 through No. 18 are the most current sales; thus, the most logical to be used by the Appraiser in the analysis. These sales sold from February 2, 2010 and December 5, 2011 and the paired sales available do not measure market movement separately between these dates. Therefore, it is difficult for the Appraiser to measure the effects of the slowdown in the local economy caused by the dip and recovery in natural resource prices (if any) predicated by the national lending crisis and the crash of the national housing markets. This argument could go several ways and is as follows: First is the 10 year straight line market increase argument where the Appraiser could just use the 10 year average of 6.63%/year (Comparable Sale No. 3 and No. 18). This measurement is the simplistic measurement for the

Holthouse Appraisal Group Analysis – 6705 Page C - 31 overall period and indicates that there must have been a flattening or decrease sometime during the 10 year period based on historic trends which indicates upward trends anywhere from 4.45% to 48.73% (see chart above). Second, the Appraiser could also argue that the measurement between Comparable Sales No. 10 and No. 16 of 8.89%/year (per square foot) is reasonable; however, this percentage also includes the years of 2005 through 2008 where market increases could have easily been at the same rate as they were between 2003 and 2005 of 19.26%/year (Comparable Sales No. 7 and No. 9). This brings in the other side of the argument, a possible market decline between 2008 and 2011. This argument could easily be that the market did go up 19.26%/year during 2005 and 2008, but declined from 2009 to 2011 indicating that Comparable Sale No. 11 should have a negative adjustment; however, this is just speculation as there are no puritan sales to measure this time period. Therefore, to make a credible determination the Appraiser conducted a market interview with Mr. James Edgeworth, broker/owner of the Edgeworth Real Estate Firm. Mr. Edgeworth was involved in Comparable Sales No. 16 and No. 18. Mr. Edgeworth also has properties listed in the same subdivision as Comparable Sale No. 11 and was privy to the details of that sale. In the Appraiser’s interview with Mr. Edgeworth it was found that he felt that he could have gotten a little more next year for Comparable Sales No. 16 and 18, but that No. 11 sold at a premium as the purchaser did not want his view shed of the lake blocked by the downstream developer. He also felt that this lot would most likely not be worth any more in today’s market. This would indicate that Comparable Sale No. 11 most likely sold at the top of the market with no additional market increases necessary. It further indicates that Comparable Sales No. 16 and 18 most likely sold at market with no anticipated decline over the previous or next 12 months. Therefore, it is the Appraiser’s opinion that the market remained stable during the time when Comparable Sale No. 11 sold and the effective date of this report; thus, no time adjustment was made. View/Location Adjustment- This adjustment was extracted from the market based on paired sales analysis which indicate the following (For further details see Paired Sales Analysis – Small/Large Lot Location Analysis chart found preceding this analysis):

Holthouse Appraisal Group Analysis – 6705 Page C - 32 Alcova Reservoir - View Adjustment Analysis Lake Location Comp # Rec. Date View View Acres $/Sq. Ft. Adjustment 14 11/15/2010 Fair No 10.22$ 0.20 15 11/22/2010 Fair No 7.33$ 0.19 4.96% 18 12/5/2011 V-Good Yes 1.03$ 1.30 16 6/21/2011 Average No 1.14$ 0.96 36.31% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% 11 2/2/2010 Excellent Yes 2.26$ 2.29 18 12/5/2011 V-Good Yes 1.03$ 1.30 75.29% 11 2/2/2010 Excellent Yes 2.26$ 2.29 16 6/21/2011 Average No 1.14$ 0.96 138.94% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% Location Extraction - Lake View v Lake Front Leasehold Improvements 54.87% An analysis of the above stated chart indicates that the closer to the lake, the better the view and access, the higher the value. This analysis indicates that Comparable Sales No. 18 vs No. 16 (a lake-view lot vs no-lake-view lot) within adjoining subdivisions and a short distance apart, commands only a 36.31% higher price; however, when a premium lake-view lot (Comparable Sales No. 11 vs No. 18) is compared, it demands an adjustment of 75.29% verses one furthest from the lake, and 138.94% for a non-lake view lot, even further from the lake. Furthermore, this analysis indicates that even when lake access is not directly available, the property with the unobstructed view closest to the lake demand a 55.91% premium over those that are furthest from the lake with similar views and amenities (Comparable Sales No. 17 vs No. 12). This adjustment supports the Land Value – Land Extraction Method found in the Analysis Section A – Cabin Site Appraisal which indicates a location adjustment 54.87% when pairing Leasehold Improved Sales – Water Front vs Non-Water Front lake view sites within the cabin site area found in Analysis Section A – Cabin Site Appraisal. Finally, when similar views are considered, there is only a small differential, if any at all (Comparable Sales No. 14 and No. 15). Utility Adjustment – Seasonal vs Permanent Water & Septic – The subject site is being appraised with community water and sewer in place. An analysis of the comparable land sales indicates that most have community water or a well but are required to provide septic at the purchasers expense; therefore, the Appraiser has elected to use the 4.52% adjustment for the Holthouse Appraisal Group Analysis – 6705 Page C - 33 subject having availability to community sewer. This adjustment was extracted from the market using paired sales analysis between Comparable Leasehold/Fee Simple Cabin Sales No. 4 and Comparable Sales No. 5 and No. 6 found in the Land Value – Land Extraction Method section found in Analysis Section A – Cabin Site Appraisal. These three sales indicate a range differential of $3,626 to $8,125 or a percentage range of 2.79% to 6.25% of total sales price or an average adjustment of $5,875 or 4.52% for the difference between seasonal and non-seasonal water and sewer. (The Appraiser has elected to use the percentage adjustment for this category as the land areas of the comparable sales used could not be determined but were considered similar based on a visual analysis of the plat map.) Conclusion - Under the previous analysis of the comparable land sales the Appraiser has determined that Comparable Sale No. 11 was most similar to the subject in location as it was purchased by the adjoining landowner to protect his view shed; thus, commanded a premium similar to those enjoyed by the “non-water” front lots found in the Cabin Site Area. This sale is closest to the water (without being on the water) than all of the fee simple lots recently sold or currently for sale and has ease of access to the boat club and marina so has similar access to the lake. The primary difference between this lot and the subject is that it is much smaller in size and is not a water front lot; thus will be used to support percentage adjustments for lots further from the lake. Furthermore, under the previous analysis it was found that Comparable Sale No. 18 was the most current sale located slightly further from the lake with a lake-view and that Comparable Sale No. 16 was located even further from the lake and had no-lake-view. When these sales are paired with Comparable Sale No. 11 a location premium of 75.29% was derived for the difference between a close up lake-view vs “just” a lake-view and 138.94% for no-lake-view further from the lake. Comparable Sales No. 17 and No. 12 are not located close to the lake but are similar in size and both had a water well in place. When these sales are paired they indicate a 55.91% differential between a lake-view property verses an unobstructed lake-view property closer to the lake. This correlates well with the location premium at the Cabin Site Area between “non-water front” lots and “water front” lots from improved sales of 54.87% Therefore, to determine the value of the subject site the Appraiser has elected to use Comparable Land Sale No. 17 as the base land value and adjust this sale using the market

Holthouse Appraisal Group Analysis – 6705 Page C - 34 derived 138.94% for the no-lake-view lot further from the lake and the location premium at the Cabin Site Area between “non-water front” lots and “water front” lots from improved sales of 54.87%. These percentages and the resulting value conclusion are detailed in the adjustment grid below:

ADJUSTMENT GRID - CASPER BOAT CLUB - WATER FRONT LOT Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft. Lot 25, Lake Ridge 17 $ 175,000 4.52% $ 182,910 10.11$ 18,092 $ 0.42 Estates Location % - Close Up Lake View Adjustment - Land Sale No. 11 vs No. 16 138.94% Close Up Lake View Location Adjustment - Square Foot $ 0.58 Adjusted Price Per Square Foot $ 0.99 Location % - Water Front Adjustment - Market Extracted From Improved Leased Fee Sales 54.87% Water Front Location Adjustment - Square Foot $ 0.54 Adjusted Price Per Square Foot $ 1.54 Lot Size - 11.27 Acres - 490,921 Square Feet 490,921 Indicated Value $ 754,512 Rounded To: $ 755,000

FINAL OPINION OF VALUE – DIRECT LAND SALES COMPARISON METHOD Therefore, it is the Appraiser’s opinion that under the Land Value- Direct Sales Comparison Method the value of the subject site would be $755,000.

Holthouse Appraisal Group Analysis – 6705 Page C - 35 SUBDIVISION ANALYSIS Under this analysis the Appraiser will analyze the subject site to determine the value of the subject land under the extraordinary assumption that the subject can be subdivided into 5 lake front recreational sites similar to those located in the South Estates located approximately 1/4 mile northwest of the subject, which as previously stated, is the highest and best use of the site. Therefore, the following will be part of the Appraiser’s scope of work under this hypothetical subdivision: “As Is” - Aggregate of Retail Value – This value is defined as the sum of the market values of the individual lots within the subdivision, as if all of the units are available for retail sale, as of the effective date of this report. The sum of the retail sales includes an allowance for lot premiums, if applicable, but excludes all allowances for carrying costs. This value is also called “gross retail value”. The objective of the Appraiser in this assignment is to determine average market value for each class of the subdivided lots, then add these values together to determine the Aggregate Retail Value. The retail value of each subdivided lot is determined by comparison of similar type properties extracted from the market. “As Is” - Market Value – “Bulk Sale Value” or Wholesale Value – The "Bulk Sale Value", as used in the valuation of the finished lots, is the value of the subject assuming the sale of all lots to a single buyer in a single transaction. The objective of the Appraiser in this assignment is to determine the market value of the total subdivision, “as is”, if sold to a single purchaser in a “bulk” sale. This value is the market value of the subdivision and the primary value sought by the Client for their financing or valuation decisions. The bulk sale value or wholesale value is determined by using the average market value of the individual lots derived from the “Aggregate Retail Value”, deducting the cost of sales, and discounting the net proceeds to “present value”, using the market extracted discount and absorption rates, plus excess land. The value will be used to determine the “Scope of Work” value desired by the Client as of the effective date of this report.

Holthouse Appraisal Group Analysis – 6705 Page C - 36 RETAIL VALUE FOR THE INDIVIDUAL LOTS As previously stated, the subject lots under the hypothetical subdivision would be similar to Comparable Land Sale No. 11. This lot has community water and has the ability to install a septic system; however, the subject lots would have access to community sewer and would all be lake front lots; thus, would need to be accounted for. If the Appraiser uses the previously extracted adjustments of 4.52% for the difference in septic system and 54.87% for the lake front lot premium the following retail value of the lots is determined:

ADJUSTMENT GRID - CASPER BOAT CLUB - WATER FRONT LOTS Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft.

11 Lot 3, South Estates$ 225,000 4.52% $ 235,170 2.26$ 104,058 $ 2.39

Location % - Water Front Adjustment - Market Extracted From Improved Leased Fee Sales 54.87% Water Front Location Adjustment - Square Foot $ 1.31 Adjusted Price Per Square Foot $ 3.70 Lot Size - 2 Acres 87,120 Indicated Value $ 322,308 Rounded To: $ 320,000

To determine the reasonableness of this value the Appraiser has interviewed Mr. James Edgeworth, broker for the Edgeworth Real Estate Firm and Mr. Gary Lever with Rocky Mountain Real Estate. In my interview with Mr. Edgeworth it was found that if the subject site was subdivided into (5) 2 acre sites, the most likely sales price of these lots would be in the $200,000 to $250,000 range. It was Mr. Edgeworth’s opinion that even though the lots would be the most desired properties on the lake, the site is still a recreational area, and that purchasers for trophy second home sites would be limited. He further indicated that in order to justify the purchase of a $250,000 lot, the total improved property would have to be in the $750,000 to $1,000,000, so pushing the price to over $250,000 would not be economically viable. In my interview with Mr. Lever, he also indicated that the top end of the market for lots at Alcova, even if on the lake with direct lake access, was $250,000 if a marketing time of one year was considered. He further indicated that if put on the open market the likelihood that they could be sold was extremely high.

Holthouse Appraisal Group Analysis – 6705 Page C - 37 Conclusion - All of the comparable sales are located in the Alcova Lake View Estates I and II, Alcova West Ranchettes, South Estates, and Lake Ridge Estates subdivisions, of which four of are adjoining subdivisions just northwest of the subject. The Appraiser has selected Comparable Sale No. 11 as the most current comparable sale to the subject under the hypothetical subdivision as this sale is closest to the lake, has paved and gravel streets with community water, but, has no direct access (from their site) to the Alcova Lake shoreline nor does it have community sewer. This sales, however, has year round access and can be purchased as a site for primary residency; however, a survey of the area indicates that most homes are second homes and are primarily used for recreational purposes. Therefore, year around access does not appear to be a primary market concern. (Year round access and use are a restriction on the tenants by the owner of the subject. If an adjustment is necessary it will be addressed in the “Market Lease Analysis” section of this report as access and year round use is a restriction that is the Client’s preference. This restriction is well within the clients control; thus, does not affect the fee simple market value of the subject’s sites.) When this sale is adjusted it indicates a value of $320,000 for the hypothetical lots; however, when local real estate brokers were interviewed it was found that the maximum price the market would allow under current economic conditions was $250,000. Furthermore, even if the owner allowed year around access to the site, the primary use in the area was still recreational; thus, would not change the highest and best use of the site. Therefore, it is the Appraiser’s opinion that a maximum price for two acres on the lake would most likely not exceed this amount; thus, for the purposes of this analysis $250,000 will be used. RETAIL VALUE OF THE INDIVIDUAL LOTS Therefore, based on the foregoing data, analysis and conclusions, it is the Appraiser’s opinion that the fee simple retail value for the subject site under this scenario, as of the effective date of this report, is as follows: TWO HUNDRED FIFTY THOUSAND DOLLARS $250,000

Holthouse Appraisal Group Analysis – 6705 Page C - 38 AGGREGATE RETAIL VALUE Once the retail value is determined, the Appraiser can then calculate the Aggregate Value used to determine the market value of the site under the extraordinary assumption that the hypothetical subdivision will be allowed:

Total Retail Value Number of Individual of Lots x Lots = Total Aggreate Value 5 x$ 250,000 = $ 1,250,000

ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS $1,250,000 ANALYSIS OF THE MARKET (WHOLESALE) VALUE OF THE SUBJECT As previously stated, the Appraiser was unable to find sales that were considered to be similar to the total subject property with lake frontage and access; therefore, has elected to use two scenarios to determine a reasonable and credible indication of the subject’s fee simple market value. Under the hypothetical subdivision scenario the Appraiser has made the extraordinary assumption that the lots can be subdivided into water front lots. In my discussions with the Mr. Bill Fehringer with Civil Engineering Professionals, Inc. it was found that current regulations require a two acre site for new subdivisions unless the lots are serviced by a central water and sewer system; thus, the subject could have a higher density. However, according to the Natrona County Planning Department and the Natrona County Road and Bridge Department two acre sites would be the most likely scenario as a higher density site would meet stiff resistance from area residents and would most likely not be approved. Therefore, the subject site of 11.27 acres would most likely be subdivided into five 2.0 acre tracts or lots with 1.27 acres for open areas and waste. Furthermore, according to Mr. Fehringer, the cost to survey and get the subject through the subdivision process would most likely be $22,500. ABSORPTION RATE An analysis of the market indicates that water front lots are at a premium with none being available in the subject’s immediate area with community water or sewer. According to the tenant survey conducted by the Appraiser, 64.91% of the cabin owners (on leased land) felt that Holthouse Appraisal Group Analysis – 6705 Page C - 39 water front lots were more valuable and a desired feature. In addition, a desired feature and concern was the availability of community water and sewer. Furthermore, 96.88% of the cabin owners surveyed would like to purchase their site. This would indicate that there is a pent up demand of at least 97 lots; however, these sites are smaller in size and based on the Appraiser’s analysis are only valued at $95,000, which according to Mr. Edgeworth with the Edgeworth Real Estate Firm, is currently a very strong market. Furthermore as previously stated by both Mr. Edgeworth and Mr. Lever, the demand would be good for these lots; however, due to the price range, buyers would be limited. Therefore, to determine a credible absorption rate the Appraiser has interviewed Mr. Scott Brownell with Lake Ridge Estates, LLC. According to Mr. Brownell the absorption rate for his subdivision in the past year was five lots which ranged from $61,000 to $175,000. These lots ranged from no-lake view lots without water well to an unobstructed lake view lot with a good well in place. This indicates an absorption rate of 5 in the first year for the hypothetical subdivision would be reasonable and for the purposes of this appraisal will be used. Competition Currently, there are two new subdivisions in the subject’s immediate area. These subdivisions have a total of 33 lots ranging in size from 1.48 to 17.24 acres. These lots do not have water frontage and only 15 have community water. They range in price from $60,000 to $250,000 and could compete with the subject; however, none have lake-frontage thus, would not directly compete with the subject under this scenario. Therefore, the hypothetical subdivision would not be adversely affected by competition and, the developed lots under this scenario would most likely sell within the first year. DIRECT COST ANALYSIS As previously stated, the Appraiser has secured a bid from Civil Engineering Professionals, Inc. to plat and subdivide the subject site under this scenario. According to Mr. Fehringer, the cost to plat and subdivide would be $22,500. This cost would be the only direct cost as the site has paved road frontage adequate for subdivision purposes and no other costs would be necessary. Therefore, the total direct costs would be $22,500.

Holthouse Appraisal Group Analysis – 6705 Page C - 40 INDIRECT COSTS Indirect costs are expenditures or allowances that are necessary for construction, but are not typically part of the construction contract. Indirect costs may include:  Architectural and engineering fees for plans, plan checks, surveys to establish building lines and grades, and environmental studies  Appraisal, consulting, accounting, and legal fees  The cost of carrying the investment in land and contract payments during construction (If the property is financed, the points, fees or service charges, and interest on construction loans are indirect costs.)  All-risk insurance and ad valorem taxes during construction  The cost of carrying the investment in property after construction is complete, but before stabilized occupancy is achieved (return on investment, plus operating expenses, offset by operating income)  Supplemental capital investment in tenant improvements or leasing commissions  Marketing, sales commissions, or title transfers  Administrative expenses of the developer  Cost of title change

The Appraiser has analyzed indirect costs associated with other subdivisions located within the State of Wyoming. This analysis indicates that the average indirect costs is approximately 17% (Actual was 17.08% rounded to 17% and was extracted from the Appraiser’s files.) of the retail sales price. Therefore, the Appraiser has calculated this cost based on the “Aggregate Value” previously discussed and is calculated as follows:

Aggregate Value Percentage Indirect Costs $ 1,250,000 x 17% =$ 212,500

ENTREPRENEURIAL PROFIT In addition to the direct and indirect costs, an investor would require a return for their effort when selling the ownership. This cost or profit reflects the amount an entrepreneur would expect to receive for their contribution in bringing vacant land through the development stages to the finished saleable lots. A developer would only purchase these lots if he or she could make a reasonable return in the form of profit for their efforts. To establish an indication of an appropriate profit margin, the Appraiser interviewed a number of developers and broker/investors involved in development as well as a comparative discounted cash flow analysis

Holthouse Appraisal Group Analysis – 6705 Page C - 41 of similar subdivisions pulled from the Appraisers’ files. The result of that survey is as follows:

Local Market Survey - Entrepreneurial Profit Participant Profit Range Appraiser 15.00% 20.00% Appraiser 15.00% 20.00% Appraiser 10.00% 25.00% Developer 28.00% Market Extraction - Appraiser's Files 16.00% Market Extraction - Appraiser's Files 20.00% Market Extraction - Appraiser's Files 20.00% Developer 23.50% Indicated Mean 18.44% 21.67%

An analysis of the previously stated survey indicates that developers profit or entrepreneurial profit, range from 10% to 28% depending on the amount of lots and timing of the project. A further analysis indicates that the low mean was 18.44% with the high mean being 21.67%. Thus, considering the subject’s proposed subdivision should sell within the first month, it is the Appraiser’s opinion that a reasonable rate for the subject would be 20% due to their only being five lots. Therefore, an entrepreneurial profit of 20% will be used and is calculated as follows:

Entrepreneurial Aggregate Value Percentage Profit $ 1,250,000 x 20% =$ 250,000

DISCOUNT RATE The discount rate is defined as an annual percentage rate that reflects the competitive rate of return on an investment or a rate of return that would attract capital to a particular type of investment. It differs from the profit required by the developer as it represents the cost of money over time based on risk where the profit of the developer is based on his experience and labor. As previously stated the subject should sell within the first year; thus, no discounting was applicable. OPINION OF MARKET (WHOLESALE) VALUE BY THE SALES APPROACH Once the value of the proposed subdivided lots is concluded and the costs of development are estimated, the appraiser must then subtract these costs to determine the value of the site as “if vacant and ready for its highest and best use”. This calculation is as follows:

Holthouse Appraisal Group Analysis – 6705 Page C - 42 Aggerage Value of Site$ 1,250,000 Less: Direct Costs$ 22,500 Effective Gross Income (EGI)$ 1,227,500 Less: Indirect Costs$ 212,500 Less: Entrepreneurial Profit$ 250,000 Net Operating Income (NOI)$ 765,000

Rounded to: $765,000 To determine the credibility of the expenses and entrepreneurial profit the Appraiser has again examined the Case Study found in the Basic Data Section of this report. In Case Study No. 1 – The Shores at Lake DeSmet it was determined that the developer was looking for a 41.27% return to cover his costs after development, i.e., indirect costs and entrepreneurial profit. An analysis of the subject’s indirect costs and entrepreneurial profit indicates that these costs are 37% of the aggregate value of the site ($212,500 + $250,000 = $462,500 ÷ $1,250,000 = 37%). Therefore, it is the Appraiser’s opinion that these costs are reasonable and credible and for the purposes of this appraisal will be used. FINAL VALUE OPINION BY THE SALES APPROACH To determine the fee simple market value of the subject site the Appraiser has elected to use two different methodologies to value, direct sales approach and a hypothetical subdivision analysis based on the market value of retail value of the lots. These two scenarios indicated the following value range:

SUMMARY OF INDICATED VALUES Methodology Description Indicated Value Land Value - Direct Sales Comparison Method$ 755,000 Land Value - Subdivision Analysis Method$ 765,000 % Differential 1.32%

Holthouse Appraisal Group Analysis – 6705 Page C - 43 make a credible determination of the subject’s fee simple market value. The Appraiser also used a hypothetical subdivision analysis to determine the reasonableness of this value which had a difference of only 1.32% when the two values were compared. Therefore, based on the foregoing data, analysis and conclusions, it is the Appraiser’s opinion that the fee-simple market value for the subject site, “as vacant and ready for its highest and best use” by the direct sales approach is credible and as of the effective date of this report, is as follows: SEVEN HUNDRED FIFTY FIVE THOUSAND DOLLARS $755,000

Holthouse Appraisal Group Analysis – 6705 Page C - 44 ANALYSIS OF MARKET RATES OF RETURN (YIELD RATES) It is common practice to derive market rents by analyzing current market rents paid for similar properties. This market data is then compared to the subject to determine the subject’s market rates or rents that an investor would expect as owner of the property and obtain a desired yield. The subject sites are owned by the United States of America, Department of the Interior and are not privately held or sold. An analysis of the Wyoming and surrounding recreational markets indicates that most leases for similar properties are owned by the government and the lease rate is not determined by market value of the land as required by the Memorandum of Agreement between the Bureau and the Natrona County Commissioners. Furthermore, the Appraiser could find no current comparable leases of recreational sites that were privately held and were arms-length. Therefore, the Appraiser’s opinion of market rents will be derived from expected rates of returns (yields) obtained or desired by investors of similar properties. In order to determine a credible rate of return (yield) the Appraiser must analyze the current rates of return offered by similar alternative investments in real property, “land only”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, “the following table summarizes prevailing land lease capitalization and discount rates. The former reflects initial rates of return on appraised values for vacant land proposed for development. They do not address increases in land lease payments or the reversion but may include percentage rent. The latter are internal rates of return being achieved by landowners on improved properties. As such, they include changes in land lease payments, percentage rent where applicable and the reversion of the entire property at the termination of the lease. Lease terms range from 55 to 99 years.”9 This survey will be used to determine the market rate of return the government should expect to achieve for the subject sites.

9 RealtyRates.com – Investor Survey – 3rd Quarter, Robert G. Watts and Associates, 2006, Page 38. Holthouse Appraisal Group Analysis – 6705 Page C - 45 Abstract - Land Lease Capitalization Rates - RealtyRates.com - 3rd Quarter - 2011 Description 2007 2008 2009 2010 2011 5 Year Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Avg Apartments 4.39% 10.94% 8.24% 3.75% 11.68% 7.89% 3.72% 11.54% 7.60% 2.81% 10.82% 7.05% 2.33% 10.18% 6.39% 3.40% Golf 5.27% 16.67% 11.67% 4.49% 17.15% 11.44% 4.22% 17.13% 11.19% 3.30% 16.24% 10.23% 2.90% 15.80% 9.39% 4.04% Health Care/Senior Housing 5.00% 11.87% 8.80% 4.79% 11.87% 8.50% 4.53% 11.72% 8.21% 3.40% 12.19% 7.53% 2.53% 10.59% 6.81% 4.05% Industrial 4.90% 11.98% 8.46% 3.75% 11.68% 8.15% 3.80% 11.44% 7.82% 3.01% 10.82% 7.22% 2.53% 10.15% 6.59% 3.60% Lodging 5.17% 14.67% 8.95% 4.39% 17.15% 8.80% 4.14% 16.85% 8.50% 3.25% 15.96% 7.95% 2.63% 15.56% 7.42% 3.92% Mobile Home/RV Parks 4.92% 11.17% 9.14% 4.14% 11.68% 8.87% 3.89% 11.54% 8.49% 3.00% 10.82% 7.99% 2.53% 10.59% 7.32% 3.70% Office 4.97% 11.47% 8.52% 3.75% 11.69% 8.02% 3.80% 11.55% 7.98/% 3.00% 10.82% 7.21% 2.53% 9.22% 6.18% 3.61% Restaurants 5.90% 14.17% 9.81% 5.53% 17.15% 9.97% 5.29% 17.11% 9.78% 4.40% 16.22% 9.10% 3.53% 15.82% 8.26% 4.93% Retail 4.82% 11.87% 8.55% 3.75% 11.87% 8.21% 3.79% 11.72% 7.94% 2.90% 12.19% 7.38% 2.50% 10.59% 6.68% 3.55% Self-Storage 4.98% 11.47% 10.01% 3.75% 11.69% 9.78% 3.80% 11.55% 9.94% 3.15% 10.82% 9.37% 2.60% 10.26% 8.66% 3.66% Special Purpose 5.88% 18.67% 10.21% 5.10% 17.89% 10.33% 4.84% 17.79% 10.16% 3.95% 16.90% 9.41% 3.54% 16.48% 8.51% 4.66% All Properties 4.39% 18.67% 9.31% 3.75% 17.89% 9.09% 3.72% 17.79% 8.87% 2.81% 16.90% 8.22% 2.33% 16.48% 7.47% 3.92%

12.00% 12.00%

10.00% 10.00%

8.00% Min 8.00% Min Max 6.00% Max 6.00% Avg Avg 4.00% 4.00%

2.00% 2.00%

0.00% 0.00% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

Holthouse Appraisal Group Analysis - 6705 Page C - 46 Conclusion The capitalization rates previously stated reflect the initial rates of return on appraised values for vacant land proposed for development, whereas, the discount rates consist of the internal rates of return being achieved by landowners on improved properties and include: changes in land lease payments, percentage rent where applicable, and the reversion of the entire property at the termination of the lease. Thus, it is the Appraiser’s opinion that the use of the discount rate, which includes the value of the tenant’s improvements at reversion plus future increases in rent, would not be appropriate for two reasons: 1) the Appraiser’s assignment is to appraise the properties “as vacant” with no improvements, thus, no value for reversion is present, and 2) internal rates of return using future rate increases to determine current rents is “double dipping”. This would escalate rents above market; thus, the Appraiser has chosen the capitalization rates as the basis for this analysis. An analysis of the categories on the preceding chart indicates that the most similar use to the subject is the category - Apartments. This category was selected by the Appraiser for the following reasons: 1.) the typical tenant would most likely be leasing one of the subdivided sites for seasonal residential use; and 2.) the subject’s sites would be single tracts that could be used as permanent residential use, if owner’s restrictions weren’t in place. ANALYSIS OF RENT RESTRICTIONS The Appraiser has analyzed the subject property and found that the subject site is only one of two private boat/ski clubs on Alcova Reservoir. Furthermore, this reservoir only fluctuates approximately 5 feet during the irrigation season. Alcova is also used as a leveling reservoir to regulate the irrigation flows of the North Platte River, both up and down stream. This lack of fluctuation allows the boat club to have shore line docks that are usable most of the recreational season. In addition, the Bureau of Reclamation lowers the lake in the winter months to protect its irrigation gates which also protects the shore line docks. These two factors are a much desired recreational benefit to the tenants and other market participants. However, there would most likely be a restriction on the period of time for which the property can be used (six months). An analysis of the comparable sales found in the Sales Approach section of this report indicates that all of the sales used did not have a restricted use

Holthouse Appraisal Group Analysis – 6705 Page C - 47 period; however, according to the real estate brokers interviewed and the Alcova Tenant Survey, year around use is not an overly desired feature for the area. Therefore, this restriction must be considered in the bundle of rights allowed under the current lease agreement as it reduces the risk to the owner by lowering the overall management requirements of the area, i.e., law enforcement, road maintenance, etc. To determine what effects on value that this restriction may have on real property, the Appraiser has revisited the Land Value – Land Extraction Method “Paired Sales Analysis” found in the Section A of the Analysis Section of this report. This analysis indicates that properties sold as “permanent” residential home sites, sold for only 5% to 10% more than “recreational” use sites. Therefore, as this minor difference could easily be explained as the deviation between the two approaches used to determine this percentage, it is the Appraiser’s opinion that this difference has no significance as to value and should have no effect on the overall lease rate if a lower or “safe” rate is used. FINAL CONCLUSION OF MARKET RENTS As previously stated the subject’s management requirements are low and the vacancy factor for the past 50+ years has been non-existent. To determine the appropriate return rate for the subject, the Appraiser has again examined the rates reported by the previously stated national survey for “apartments”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, the average rates for “Apartments” over the past five years ranges are as follows:

APARTMENT CAPITALIZATION RATES Year Min Max Avg 2007 4.39% 10.94% 8.24% 2008 3.75% 11.68% 7.89% 2009 3.72% 11.54% 7.60% 2010 2.81% 10.82% 7.05% 2011 2.33% 10.18% 6.39% Average 3.40% 11.03% 7.43%

An analysis of these rates indicates that the “minimum” average rate (low risk rate) for the five years would be a reasonable rate as the boat club has never been vacant in the past 50 years; has restrictions to usage; thus, minimizes the risk to the owner by lowering the overall

Holthouse Appraisal Group Analysis – 6705 Page C - 48 management requirements of the area, i.e., law enforcement, road maintenance, etc. Therefore, a rate of 3.40% return for the next five years appears reasonable and credible. Conclusion The formula for market rents is as follows - Market Value x Risk Rate = Market Rents or Annual Return on Investment where Market Value is the fee simple value determined in the Sales Approach for the particular site class and the risk rate is the previously determined capitalization rate of 3.40%. Thus, the market rents for the subject sites are calculated as follows:

Market Rents - "Highest & Best Use As Vacant" Fee Simple Market Return Rate x Market Value =Market Rents 3.40% x$ 755,000 =$ 25,670

Rounded to: $25,000 To determine the credibility of this rate the Appraiser has again interviewed market participants in the subject’s immediate area. According to Mr. Gary Lever owner of the Alcova Lakeside Marina an appropriate rate for an 11.27 acre site on the lake similar to the subject would be $20,000 to $25,000; however, a commercial or private club venture could not pay more than $25,000 in order to be economically viable. Therefore, it is the Appraiser’s opinion that a rate of $25,000 is not only reasonable but credible.

Holthouse Appraisal Group Analysis – 6705 Page C - 49 THE COST APPROACH The Cost Approach represents the objective concept of value. This concept is predicated upon the theory that value is inherent in the object itself and that value and cost tend to be the same. The American Institute of Real Estate Appraisers further explains this approach below in a paragraph from Page 441 of The Appraisal of Real Estate, 8th Edition: The Cost Approach to Value, like the Sales Comparison and Income Approaches, is based on comparison. In the Cost Approach, the cost to construct a building and the value of an existing building are compared. The Cost Approach to Value reflects market thinking in the recognition that market participants relate value to cost. Buyers tend to judge the value of an existing structure by comparing it to the value of a newly constructed building with optimal functional utility. Moreover, buyers adjust the prices they are willing to pay by estimating the costs to bring an existing structure to desired levels of functional utility.

DISCLAIMER OF THE COST APPROACH The value opinion under this approach consists of the present construction cost of any improvements on the property less depreciation from any source, plus the value of the land. Therefore, due to the subject property being considered unimproved land, it is the Appraiser’s opinion that this approach would be a duplication of the Sales Approach; thus, was excluded.

Holthouse Appraisal Group Analysis – 6705 Page C - 50 THE INCOME APPROACH The Income Approach is widely applied for income producing properties since it reflects the rationale of typical investors together with current financing conditions (i.e., the assumption being that financing is typically involved in most real property transaction). In this approach, market value is determined through the capitalization of a projected, stabilized estimate of net operating income. The traditional formula for computing value by the Income Approach is V = NOI divided by R, where V = market value, NOI = stabilized net operating income, and R = overall rate. Stabilized Net Operating Income (NOI) In the appraisal of real estate, the stabilized net operating income for the property is based on potential income and expense data as dictated by the market. In other words, income and expense data for similar facilities is projected onto the subject property in order to derive net operating income. The basic components and resulting formula for arriving at net operating income by this method are given below: Potential Gross Income (PGI) Less: Allowance for Vacancy and Rent Loss Equals: Effective Gross Income (EGI) Less: Operating Expenses Property Taxes Insurance Property Management Fees Maintenance Utilities Reserves for Replacement Equals: Net Operating Income (NOI) Potential Gross Income (PGI) The Appraiser has analyzed rents charged for similar recreational properties in the subject’s market area. The following pages contain the analysis of the pertinent data on the subject’s lease and an abstract of the five leases of similar recreational properties used to derive

Holthouse Appraisal Group Analysis – 6705 Page C - 51 the restricted rents for the subject property. (For comparable data see Comparable Land Leases found in the Basic Data Section of this report.) ABSTRACT OF COMPARABLE RECREATIONAL LAND LEASES

Comp # Location Annual Lease Rate Amenities 1 Casper Water Ski Club$ 15,000 W 2 Alcova Marina$ 10,300 W&S 3 Subject - Casper Boat Club$ 15,000 W&S 4 Keyhole Marina - 3 Year Average$ 6,298 W&S 5 Glendo Marina - 3 Year Average$ 10,774 W&S 6 Boysen Marina - 3 Year Average$ 5,946 W&S

ANALYSIS OF THE SUBJECT’S LEASE The subject is currently being leased by the Casper Boat Club for its marina on the Alcova Reservoir. This lease originally restricted the tenant to 188 dock slips (currently there are 203 according to the Commodore), 30 dry dock, and 12 camp sites. In my interview with Natrona County Road and Bridge, it was found that the club is maximizing the allowable uses; however, they do not promote their campsites and the goal of the club is to minimize the overall cost to its members. Furthermore, it was found that the subject is restricted to its current use under the Memorandum of Understanding MOU No. 1-AG-60-01340, between the Natrona County Parks and Pleasure Grounds and the Bureau of Reclamation, US Department of Interior which expires May 18, 2016. Thus, the current use is restricted per this agreement to a boat club and will be analyzed accordingly. ANALYSIS OF THE COMPARABLE LAND LEASES Comparable Lease No. 1- This lease is the lease of the Casper Water Ski Club site located at 24725 Lakeshore Drive, Alcova Reservoir. The lease restricts the membership to 100 members. The lease rate is not based on a percentage rate and the goal of the club is to minimize the total cost to its members; thus, is not a true commercial operation. The lease current lease rate is based on the market value of the site if vacant established in 2007 and is approximately 5 years old. This rate is currently $15,000 per year and includes community water to the site; however, water usage is at an additional charge. The 2011 lease rate will be determined by the Appraiser based on the current market value of the site. Comparable Lease No. 2 – This lease is the lease of the Alcova Lakeside Marina, Alcova Reservoir. This lease restricts the tenant to 200 dock slips and 29 RV sites; however, the owner Holthouse Appraisal Group Analysis – 6705 Page C - 52 is allowed to run a full service marina complete with restaurant and lounge. In my interviews with the Natrona County Road and Bridge it was found that this site is not restricted like the private clubs and is designed to service the general public. An analysis of this site and interviews with Mr. Gary Lever, owner of the Alcova Lakeside Marina, indicates that the usable area of the site is being maximized. The current lease rate was established in 2007 and was based on 2% of the average gross sales for 2003-2007 making the data and rate almost five years old. This lease is currently $10,300/year and includes community water and sewer to the site; however, water and sewer usage is at an additional charge. Comparable Lease No. 3- This lease is the lease of the Casper Boat Club, Alcova Reservoir. This lease restricts the tenant to 188 dock slips, 30 dry docks and 12 camp sites; however, the current number of docks according to Mr. Burgess, Commodore is 203. The lease rate is not based on a percentage rate and the goal of the club is to minimize the total cost to its members; thus, is not a true commercial operation. The lease rate was based on the market value of the site “as vacant” established in 2007 which was $15,000 and is approximately 5 years old. This rate was based on the market value of the land. The lease includes community water and sewer to the site; however, usage is at an additional charge. The new rate will be determined by the Appraiser, also based on the market value of the land. Comparable Lease No. 4- This lease is the lease of the Keyhole Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding, gas and sales tax, fishing licenses, camping permits and boat related sales. The minimum lease rate is $200/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusion of boat related sales was being deleted from new leases. In my interview with the owner of the Keyhole Marina, it was found that they do not sell or service boats; therefore, this change will have little to no effect on the overall lease rate. The lease rate for the past few years are as follows: 2008 - $2,840, 2009 – 7,715 and 2010 - $8,341 with an average rate of $6,298/year. Comparable Lease No. 5- This lease is the lease of the Glendo Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding, gas and sales tax, fishing licenses, camping permits, and boat and trailer related sales. The minimum lease rate is $1,000/year. In my discussions with Ms. Julie Huntley with the

Holthouse Appraisal Group Analysis – 6705 Page C - 53 State of Wyoming Parks & Recreation Department it was found that the exclusions of boat and trailer related sales was being deleted from new leases. In my interview with the owner of the Glendo Marina, she indicated that they do limited boat sales but have a good boat service business; therefore, this change will have a substantial effect on the overall lease rate. The lease rates for the past few years are as follows: 2008 – $11,095, 2009 - $11,275 and 2010 – $9,952 with an average of $10,771/year. Comparable Lease No. 6- This lease is the lease of the Boysen Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding gas, and sales tax, fishing licenses, camping permits and boat related sales. The minimum lease rate is $1,000/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusions of boat related sales was being deleted from new leases. In my interview with the owner of the Boysen Marina, it was found that they do not sell boats; therefore, this change will have little effect on the overall lease rate. The lease rates for the past few years are as follows: 2008 – $5,645, 2009 - $5,744 and 2010 - $6,450 with an average of $5,946/year. Competition An analysis of the subject’s market area indicates that there are limited waterways which would facilitate a boat club facility or marina. In addition, the subject site is located at Alcova Reservoir which has two similar facilities. These facilities are all 100% occupied with limitations on the number of docks or trailer spaces. Therefore, the subject is not currently adversely affected by competition. Conclusion The preceding analysis indicates that the leases available are of a commercial nature and not similar to the subject or are similar to the subject but are over 5 years old. Therefore, it is the Appraiser’s opinion that further analysis is neither reliable nor credible; thus, this approach is deemed to be inconclusive.

Holthouse Appraisal Group Analysis – 6705 Page C - 54 RECONCILIATION AND FINAL OPINION OF VALUE The final step in the appraisal framework is to evaluate and select from among the three traditional approaches to value, a single or final opinion of market value. The value opinions established by the three approaches were: Sales Approach Market Value $ 755,000 Annual Market Rents $ 25,000 Cost Approach Omitted Income Approach Market Value Inconclusive Annual Market Rents Inconclusive Sales Approach When sufficient market data is available, investors and many other market participants most frequently rely upon the Sales Approach, as it best reflects interactions within the market between buyers and sellers. Eighteen sales of properties that were somewhat representative of the subject were found under the hypothetical subdivision analysis. The comparables were dissimilar in many respects; however, an analysis based on market evidence was made and the comparables used were considered to provide a credible and reliable conclusion of the subject’s fee simple market value and market rents, as of the effective date of this report. The Cost Approach The Cost Approach has its most usefulness when the property being appraised involves new improvements which represent the highest and best use of the land, or when there exists no income and sales data of similar properties. As previously stated, the instructions of the client are to appraise the subject as “vacant land” with water and sewer available to the area; therefore, it is the Appraiser’s opinion that this approach would be a duplication of the Sales Approach and was omitted. The Income Approach The Income Approach is preferred for income producing properties. The reliability of this approach is a function of rent and expense data and the accurateness of the capitalization rate. The data available on income and expenses for similar properties was iffy at best. The lease rates used were established in 2007 or were determined from gross sales from true commercial sites. Therefore, it is the Appraiser’s opinion that further analysis is neither reliable nor credible; thus, this approach is deemed to be inconclusive. Holthouse Appraisal Group Analysis – 6705 Page C - 55 FINAL OPINION OF MARKET VALUE AND MARKET RENTS The Appraisal assignment was to determine the fee simple market value and market rents of the subject site “as vacant ready for its highest and best use” with water provided to the area. An analysis of the Highest and Best Use section of this report indicates that the highest and best use of the site would be to subdivide the tract into five separate lake front lots. Furthermore, the Appraiser was able to determine the market value of the site based on market extractions by direct sales comparison by adjusting for both size and location. It is the Appraiser’s opinion that the comparable sales found in the Sales Approach best depicts the current market; thus, the Sales Approach is considered to be the best indication of the subject’s fee simple market value and market rents. Therefore, based on the foregoing data, analysis and conclusions, it is the opinion of the Appraiser that the fee simple market value and market rents for the subject property, as of the effective date of this report, are as follows: MARKET VALUE OF SUBJECT SITE SEVEN HUNDRED FIFTY FIVE THOUSAND DOLLARS $755,000

MARKET RENTS FOR THE SUBJECT SITE TWENTY FIVE THOUSAND DOLLARS $25,000

LEASE RATE CREDIBILITY ANALYSIS To determine the credibility of the new lease rate the Appraiser has analyzed the current lease rates determined by the Appraise of comparable sites in the subject’s immediate market area. These rates were derived from the market value of the land and multiplied by an appropriate return rate which was market extracted. An analysis of the Casper Water Ski Club found in Section “D” of the Analysis Section indicates that the new rate for the 10.079 acre tract will be $22,000. An analysis of the Alcova Lakeside Marina indicates found in Section “E” of the Analysis Section indicates that the new rate for the 5.3 acres will be $12,850. (This rate was established under a different scenario using 2% of gross sales.) An analysis of the Pathfinder Marina and Boat Club indicates found in Section “F” of the Analysis Section indicates that the new rate for the 3.11 acres will be $7,500. When these new rates are compared to the new rates determined by the Appraiser for the subject, the following is determined:

Holthouse Appraisal Group Analysis – 6705 Page C - 56 CREDITIBILITY ANALYSIS Description New Annual Rate Acres $/Acre Alcova Lakeside Marina$ 12,850 5.3$ 2,425 Casper Ski Club$ 22,000 10.079$ 2,183 Pathfinder Marina/Boat Club$ 7,500 3.11$ 2,412 Average$ 2,340 Casper Boat Club$ 25,000 11.27$ 2,218 Differential 5.19%

An analysis of the above stated chart indicates that the differential between the new rates being charged for the subject and similar sites located at Alcova Reservoir is 5.19% which most likely indicates that the value of the surplus land associated with a 11.27 acre site has little value; thus, indicating that the new rate for the subject is both reasonable and credible. Furthermore, to determine the credibility of the new lease rate as a boat club the Appraiser has analyzed the current market for dock rentals, the primary draw to the subject. According to Mr. Lynn Burgess, Commodore for the Casper Boat Club the club currently charges $350/year for 75% of its dock space and $340/year for membership, which is a requirement for leasing boat slips. This equates to an annual fee of $690/year plus 4 months of “use it or lose it” food charge of $75/month. An analysis of area dock fees indicate that the Alcova Lakeside Marina charges an average of $650/year for their dock fees, Glendo Marina leases their docks for $1,430-$2,230/year and Boysen Marina leases dock space for $780- $980/year. An analysis of the new lease rate indicates an increase of $9,500 or an annual increase of $46.80/year per slip per member ($9,500 ÷ 203 = $46.80). This would indicate an increase in the overall cost for a member with a dock to $736.80/year or an annual fee for just “membership” (assuming a market price for dock space of $650/year) of $86.80/year which appears to be more than reasonable for services being provided by the club and should not adversely affect the success of the club.

Holthouse Appraisal Group Analysis – 6705 Page C - 57

SUBSECTION “D” APPRAISAL ANALYSIS ON THE CASPER WATER SKI CLUB SITE 24725 LAKESHORE DRIVE ALCOVA RESERVOIR NATRONA COUNTY, WYOMING

Holthouse Appraisal Group Analysis – 6705 Page D - 1 Holthouse Appraisal Group

January 30, 2012

Mr. Mike Haigler, Director Natrona County Road, Bridge and Parks Department 538 SW Wyoming Boulevard Mills, WY 82644

Dear Mr. Haigler:

In fulfillment of our agreement, I have performed an appraisal of the real property, 24725 Lakeshore Drive, (land only), known as the Casper Water Ski Club, Alcova, Natrona County, Wyoming, herein referred to as the "subject property". The Appraiser’s opinions and conclusions are contained within this report and are reported in Summary Report format.

I, Edward J. Holthouse, CRS, CCIM, hold Certified General Real Estate Appraiser Permit No. 438, issued by the State of Wyoming Certified Real Estate Appraiser Board.

"Market value", as used herein, refers to the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and

Holthouse Appraisal Group Analysis – 6705 Page D - 2 seller, each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under all conditions outlined in the Definition of Market Value contained in the body of this report.

The methods I have used and all pertinent data gathered in my investigation are either included in this report or have been retained in the Appraiser's files. The "Limiting Conditions and Assumptions" applied to this report and the "Appraiser’s Certification" and "Qualifications" are found in the “Basic Data Section” of this report.

The subject property's marketing time and exposure time is estimated to be one year or less based on the current market conditions.

MARKET VALUE OF LAND ONLY

SIX HUNDRED FORTY FIVE THOUSAND DOLLARS $645,000 MARKET RENTS FOR THE LAND ONLY

TWENTY TWO THOUSAND DOLLARS $22,000 HYPOTHETICAL CONDITION: At the time of inspection the subject was improved with a Water Ski Club including club house, landscaping, docks, RV sites, boat ramps, bath house and various support buildings and improvements. The Client has requested an appraised value of the land only excluding all tenant owned improvements but including off-site improvements or any other improvements installed or owned by the United States Government or any other entity. Off-site improvements considered are hydroelectric dams, beaches, lakeways, roadways, electrical service and transmission lines, docks, outdoor restrooms or any other improvement that is not considered a traditional tenant improvement. Therefore, the value opinion and other conclusions expressed in this report are subject to the hypothetical condition that the site is currently vacant with no tenant improvements. The Client and intended users of this appraisal are cautioned that if this hypothetical condition is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

Holthouse Appraisal Group Analysis – 6705 Page D - 3 EXTRAORDINARY ASSUMPTION Currently the subject property is improved with the Casper Water Ski Club; however, the Appraiser has been asked to appraise the site under the hypothetical condition that these improvements are not on the site and to appraise the subject “as vacant ready for its highest and best use” The Appraiser has conducted a highest and best use analysis and determined that the highest and best use “as vacant”, would be to subdivide the site into recreational lake front lots. Therefore, the value opinion and other conclusions expressed in this report are subject to the extraordinary assumption that the owner of the subject would desire such a use and, that the Natrona County Planning Commission would approve this scenario. The Client and intended users of this appraisal are cautioned that if this extraordinary assumption is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

Respectfully submitted,

______Edward J. Holthouse, CRS, CCIM Certified General Appraiser Permit No. 438 ejh

Holthouse Appraisal Group Analysis – 6705 Page D - 4 SUMMARY OF SALIENT FACTS AND CONCLUSIONS

Identification of the Subject Property: Casper Water Ski Club, Located on the west shore of Alcova Reservoir, Natrona County, Wyoming.

Address: 24725 Lakeshore Drive, Alcova Reservoir, Natrona County, Wyoming

Legal Description: Parts of the E/2SE/4 of Section 33, the W/2SW/4 of Section 34, Township 30 North, Range 83 West, 6th P.M., Natrona County, Wyoming more specifically described within the body of this report.

Site Size: 10.079 acres.

Zoning: The subject is zoned “PUD”, Planned Unit Development

Highest and Best Use: Recreational Cabin Sites

Value Opinion by the Sales Approach Market Value $ 645,000 Market Rents $ 22,000

Value Opinion by the Cost Approach: Omitted

Value Opinion by the Income Approach: Inconclusive Final Opinion of Market Value: Market Value $ 645,000 Market Rents $ 22,000

Holthouse Appraisal Group Analysis – 6705 Page D - 5 Return on Investment Rate: 3.40%

Date of the Appraisal: January 31, 2012 Effective Date of Appraisal: December 1, 2011

Appraised By: Edward J. Holthouse Wyoming Certified General Appraiser: Permit Number No.438

Holthouse Appraisal Group Analysis – 6705 Page D - 6

ALCOVA RESERVOIR LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page D -7 PHOTOGRAPHS OF THE SUBJECT PROPERTY

Holthouse Appraisal Group Analysis – 6705 Page D - 8 Aerial Map - Club Site

North Entrance Main Entrance

Entrance Road Club House

RV Sites & Docks Club View

Activity Area RV Trailer Sites

RV Trailer Sites Water Front Docks

Water Front Docks Water Front Docks

Water Front Docks RV Trailer Sites

RV Trailer Sites Club House & Activity Area

Main Loading Dock IDENTIFICATION AND LOCATION OF THE SUBJECT PROPERTY The subject of this appraisal report is a 10.079 acre tract of land that is currently being occupied by the Casper Water Ski Club at 24725 Lakeshore Drive on the west shore of Alcova Reservoir approximately 30 miles southwest of Casper in south-central Natrona County. The instructions of the client are to determine the “fee simple” market value of the “land only” “ready for its highest and best use” with domestic “water provided to the area”. Thus, the improvements to the sites will not be described, as they have no effect on the value opinion being determined. The subject is generally irregular in shape and the soils conditions are quite rocky with sandy soils and the vegetation is limited to the landscaping around the club house. The site is serviced with community water but, has its own individual septic system for the club house. The subject property is located east of Lakeshore Drive and west of Alcova Reservoir, approximately thirty miles southwest of the center of the Casper Central Business District and has the following street address: 24725 Lakeshore Drive Alcova Reservoir, Wyoming 82620 LEGAL DESCRIPTION According to information supplied to the Appraiser by the client, the subject property is legally described as follows: A parcel located in and being portions of the E/2SE/4, Section 33, and the N/2SW/4, Section 34, Township 30 North, Range 83 West of the 6th Principal Meridian, Natrona County, Wyoming and being more particularly described by metes and bounds as follows:

Beginning at a point which is located from the southerly corner common to said Sections 33 and 34 at N0°08’W, along the line common thereto, 381.31 feet; thence leaving said common line, N30°38’W, 436.18 feet to a point within the SE/4, Section 33; thence N65°49’E, 33.01 feet to a point on the east right-of-way line of the Lakeshore Drive; said point being the point of beginning of the parcel being described; Thence from said point of beginning and along the westerly line of the parcel being described S29°46’E, 147.74 feet to a point and the southwest corner thereof; thence along the southerly line of said parcel N63°44’E, 127.62 feet to a point on the line common to said Section 33 and 34; thence S77°24’E, 97.44 feet to a point within the SW/4, Section 34; thence N79°47’E, 216.50 feet to a point and southeasterly corner of said parcel being described; thence along the easterly line thereof N58°11’W, 305.13 feet to a point; thence N15°51’W, 155.50 feet to a point; thence N69°08’E, 285.41 feet to a point;

Holthouse Appraisal Group Analysis – 6705 Page D - 9 thence N41°05’E, 216.02 feet to a point; thence N44°58’W, 313.18 feet to a point; thence S76°13’W, 358.30 feet to a point within said SE/4, Section 33; thence N47°27’W, 122.05 feet to a point; thence N16°02’E, 526.15 feet to the most northerly corner of the parcel being described; thence S78°19’W, 108.54 feet to a point and northwest corner of said parcel; thence along the westerly line thereof and the easterly line of said Lakeshore Drive, S13°20’W, 542.41 feet to a point; thence S1°45’W, 241.36 feet to a point; thence S12°00’E, 250.86 feet to a point; thence S25°15’E, 229.02 feet to the point of beginning, containing 10.079 acres more or less. ZONING According to the Natrona County Planning and Zoning Department the subject site is zoned "PUD", Planned Unit Development. The site is restricted to a private ski club marketed to the general public according to the Natrona County Road and Bridge Department by the Bureau of Reclamation. According to this zoning district all allowable uses require board approval, for which the current use is allowed. Excerpts from this zoning district can be found in the Addenda of this report. SITE DATA

Location: The subject property is located adjacent to the Alcova Reservoir, approximately 30 miles southwest of the City of Casper.

Address: 24725 Lakeshore Drive, Alcova Reservoir, Natrona County, Wyoming.

Legal Description: A parcel located in and being portions of the E/2SE/4, Section 33, and the N/2SW/4, Section 34, Township 30 North, Range 83 West of the 6th Principal Meridian, Natrona County, Wyoming more specifically described within the body of this report.

Shape: Irregular – See Plot Plan

Size: 10.079 acres

Frontage: Approximately 2,280 feet of shoreline and 1,411 feet of frontage onto Lakeshore Drive.

Topography: Near level with a steep to slight slope toward the Alcova Reservoir shoreline. Adequate drainage is provided by road Holthouse Appraisal Group Analysis – 6705 Page D - 10 drainage across the front of the subject site. According to F.I.R.M., Map No. 560036- 1225A, has not been published; however, the subject property is located adjacent to Alcova Reservoir that is managed by the Bureau of Reclamation and this area is considered to be in a flood zone.

Soils: The Appraiser has not been provided with a soils analysis; however, based on a visual inspection of the existing buildings, soils appear adequate for a variety of building purposes.

Present Improvements: The instructions of the client are to appraise the site as unimproved land ready for its highest and best use. The improvements are considered as personal property and are excluded from any value conclusions stated in this report. A brief description of these improvements can be found in the addenda of this report as part of the “Casper Water Ski Club Lease”.

Easements/Encroachments: Road way and utility easements, no apparent adverse easements noted on inspection.

Holthouse Appraisal Group Analysis – 6705 Page D - 11

CASPER WATER SKI CLUB - SITE PLAN

Holthouse Appraisal Group Analysis Section - 6705 Page D-12

SKI CLUB AERIAL LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page D -13

SKI CLUB TOPOGRAPHICAL MAP

Holthouse Appraisal Group Analysis Section - 6705 Page D –14 ADDITIONAL DEFINITIONS Absorption Period1 - is defined as “The actual expected period required from the time a property is initially offered for purchase or use by its eventual users until all portions have been sold or stabilized occupancy has been achieved. Although marketing may begin before the completion of construction most forecasters consider the absorption period to begin after completion of construction.”

Discounted Rate4 - is defined as “A yield rate used to convert future payments or receipts into present value.”

1 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 2 2 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 2 3 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 8 4 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 102 5 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 102 6 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 244 Holthouse Appraisal Group Analysis – 6705 Page D - 15 NPV is zero, the investment is neutral; and when NPV is negative, the investment is unacceptable. Also called dollar reward.” HIGHEST AND BEST USE The purpose of studying the highest and best use of a property is to determine the improvements that will generate the greatest residual income to the land. The highest and best use is defined as: The probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

7 The Appraisal of Real Estate, 10th Edition, 1992, published by the Appraisal Institute.

Holthouse Appraisal Group Analysis – 6705 Page D - 16 In determining the highest and best use of the subject property, the economic, legal, and social factors which motivate investors to develop, manage, own, buy, sell, and lease real estate are carefully considered. Typically, five basic land uses are considered. These uses are: special purpose, agricultural, residential, industrial, and commercial land uses. A brief discussion of these uses and how they relate to the subject are as follows: Special Purpose Uses A special purpose property is defined as “a limited market property with a unique physical design, special construction materials, or a layout that restricts its utility to the use for which it was built; also called “special design property”8. Special purpose properties typically have only one use or a very limited number of uses. Examples of such properties include event centers, public libraries, schools, churches, and recreational parks. The subject is located approximately 30 miles southwest of the Central Business District of Casper adjacent to the Alcova Reservoir. The subject has historically been used as a recreational water ski club which provides a club house, RV spaces and boat docks to its members which is a special purpose use. Sites similar to the subject are typically not “truly” commercial in nature; thus, are run as not for profit organizations. Therefore, a use of this type although physically possible and legally permissible is not financially feasible. Agricultural Uses Agricultural use of the subject is not physically possible or legally permissible due to restrictions placed on the land by the Bureau of Reclamation prohibiting the site from being used for agricultural purposes. Therefore, due to its location, size, surrounding uses, nature of the soils, area growing season, and legally permitted uses, it is the Appraiser’s opinion that a use of this type would not be legally permissible or financially feasible. Residential Uses Residential development of the subject parcel would be physically possible and legally permissible; however, any change in use would require approval from the board. The subject’s size of 10.079 acres is, however, conducive to the risks involved obtaining a variance as a size limitation for private septic systems is 2.0 acres. This use would be conducive to low development costs and would be more acceptable to passage by the Natrona County Planning

8 The Dictionary of Real Estate Appraisal, Third Edition, The Appraisal Institute, 1993, Page 342 Holthouse Appraisal Group Analysis – 6705 Page D - 17 Department as it reduces the overall density in the area. Therefore, it is the Appraiser’s opinion that a use of this type would be physically possible and financially feasible. Industrial Uses The subject of this report is located in an area that has historically been seasonal recreational sites and is restricted by the Bureau to these uses. Therefore, this use was not considered as it is not legally permissible nor would it be financially feasible due to its location. Commercial Use Commercial use of the subject sites would be physically possible and legally permissible as a water ski club or marina; however, the Alcova Lakeside Marina has a one mile non-compete radius which encompasses the subject site until 2016. Therefore, a use of this type would not be legally permissible. Financially Feasible Use As previously stated, the subject is improved with a water ski club that provides a club house, RV parking spaces and boat docks for its members. The site, “as vacant”, is also conducive to being developed into 2 acre sites for recreational home sites. Both of these uses are physically possible and, according to the Natrona County Road and Bridge, are legally permissible if a use of this type is desired by the Bureau. Therefore, should be financially feasible. Maximally Profitable Use The Appraiser has been instructed to appraise the subject “as vacant land ready for its highest and best use” with domestic water to the site. Furthermore, the Appraiser has been asked to determine the market rent for the subject site without consideration of improvements. Currently, sites similar to the subject are not bought and sold on the open market but are leased to the owners of the leasehold improvements. In my interviews with the Natrona County Road and Bridge and Mr. Kenneth C. Randolph with the U.S. Department of the Interior, Bureau of Reclamation, they have indicated that there are no plans to privatize this site or sell it on the open market. The Appraiser was unable to find comparable sales or arm’s length leases that were similar to the subject under its current use as a water ski club. An analysis of the site’s financially feasible uses indicates that if vacant, the subject site would have two potential uses:

Holthouse Appraisal Group Analysis – 6705 Page D - 18 1) – Water Ski Club as currently improved; or 2) - Cabin sites similar to those located in the Alcova Lakeview Estates and Alcova West Ranchettes just to the northwest. According to Mr. Bill Fehringer with Civil Engineering Professionals, Inc., under the cabin site scenario, the desired size for density and health issues would be at least two acres. This would allow for minimal development costs and could facilitate 5 water front sites with approximately 0.079 acres of the site used for open space and waste. Furthermore, in my discussions with the Natrona County Road and Bridge it was found that if this use was desired by the Bureau, a use of this type would most likely be acceptable to the county. Therefore, the Appraiser will analyze these two scenarios to determine the maximally profitable use of the site. Scenario No. 1 – Water Ski Club Analysis A visual inspection of the site indicates that the club provides to its members 100 boat docks and 100 trailer spaces for which the members pay a current annual fee of $786/year ($676 + $100 assessment = $786) according to Mr. Dennis Ryan, past president and board member. Ancillary services are a water ski ramp, bathhouse, club house, interior roads and street lights. Also according to Mr. Ryan, members are responsible for the installation of their own dock and must leave the site improvements when they leave. When a new member is selected through the lottery system and inducted into the club, they pay the old member for their dock improvements for which the club sets the value. Waste management to the site is provided by a club house septic system which members use to “honey pot” sewage from their individual holding tanks to the dump station. Water is supplied by the Bureau through the Natrona County Road and Bridge Department to the lot line with the club maintaining all interior lines and systems. As previously stated, the sites around the subject are not typically sold. An analysis of the market indicates that this is typical of most boat/ski clubs located within the State of Wyoming. Furthermore, there have been no sales of boat/ski clubs in the subject’s market area from which to do a land extraction; thus, limiting the available data to draw credible conclusions under this scenario. Finally, the subject’s site is located within a one mile radius of the Alcova Lakeside Marina which has a non-compete clause within its lease with the owner of the subject. This clause prohibits the subject from being a competing commercial operation; thus, limiting the options that the site can be put to use. Therefore, it is the Appraiser’s opinion that due to the lack

Holthouse Appraisal Group Analysis – 6705 Page D - 19 of market data and, the area’s limited success of boat/ski clubs as viable commercial operations, the maximally productive use of the site would not be as boat/ski club unless its members are willing to support its use based on a lease rate derived from the value of the land under the subject’s highest and best use, a requirement of this appraisal. Scenario No. 2 – Hypothetical Subdivision Analysis The Appraiser has researched the market for lot sales that would be similar to the subject under this scenario. These sales will be used in the subdivision analysis to determine the retail value of the lots and the total aggregate value of the site. Once this value is established, the Appraiser must then discount this value by the direct and indirect costs of development including entrepreneurial profit and holding costs. The lots located in the Alcova Lake View Estates I and II, Alcova West Ranchettes, South Estates and Lake Ridge Estates are comparable to the subject in many aspects including the availability of domestic water to four of the five areas. The remaining subdivision, Lake Ridge Estates does have 10± acre tracts with several selling with water well in place. An analysis of the market indicates that most sites are now purchased on per-square foot-value with the primary emphasis on view and access to the lake. An analysis of the subject’s proposed lots under the hypothetical subdivision indicates that they would be superior in location with a closer proximity to the shoreline. According to my interviews with Mr. Edgeworth with the Edgeworth Real Estate Firm and Mr. Gary Lever with Rocky Mountain Real Estate, these lots would have an extremely high demand and should sell in the $200,000 to $250,000 price range. Therefore, it is the Appraiser’s opinion that a use of this type would be the maximally productive use of the site based on the analysis found within this report. HIGHEST AND BEST USE AS VACANT Based on the foregoing analysis, the highest and best use of the subject, “as vacant”, would be “seasonal recreational lake front lots”. HIGHEST AND BEST USE AS IMPROVED The Appraiser’s assignment was to appraise the subject “as vacant ready for its highest and best use”. Therefore, the highest and best use “as improved” was not part of the Scope of Work and was not considered.

Holthouse Appraisal Group Analysis – 6705 Page D - 20 TYPICAL PURCHASER The typical purchaser of this site would be a developer looking to develop the site into seasonal recreation water front lots. The typical tenant or purchasers of these lots would most likely live in Natrona County due to the sites location 30 miles from Casper. These sites would most likely be sold or leased for recreational or seasonal use market aka second home market or as a club site for a boat or ski club willing to pay market rents based on the market value of the land. THE APPRAISAL PROBLEM TO BE ANALYZED The instructions of the Client are to value the subject site as “as vacant ready for its highest and best use” with community water in place. Furthermore, the Appraiser has been asked to determine the market rent for this site as a private water ski club based on the market value of the land under it highest and best use and typical market return rates. The subject’s current use is allowed under its current “PUD”, Planned Unit Development zoning district and the United States Bureau of Reclamation's Master Plan for the Alcova Reservoir Recreational Area. As previously stated, the subject site has never been bought and sold which is typical of most boat/ski clubs within the State of Wyoming. These sites are typically leased from which ever governmental agency is charged with the management of the site and are done so to promote recreation in the area. Lease rates for these sites are not typically considered as arms- length transactions for the purpose of this appraisal, as the Appraiser is required to use market land values and market rents (non-governmental rents) for the basis of his conclusions. Therefore, to determine the market value of the site and consequently the market rent, the Appraiser must find similar lots with similar location and highest and best use. A search of the Alcova Reservoir area found that there are five subdivisions located in the lake area which are privately held and openly bought and sold. The first three subdivisions are Alcova Lakeview Estates No. 1 and No. 2 and Alcova West Ranchettes located approximately 1 mile northwest of the subject. This area is near the end of its buildout phase which has taken approximately 30 years. These sites have either recreational or year around residential improvements; however, most sites are used for recreational purposes. These sites are comparable to the subject in many aspects, but are smaller in size and approximately 30% of these sites have no lake view, none have lake-frontage, and consequently none of these lots have

Holthouse Appraisal Group Analysis – 6705 Page D - 21 waterfront docks or permits for water front docks. If this service is desired, owners are required to lease mooring space from the Casper Boat Club or the Alcova Lakeside Marina if this service is desired. The fourth subdivision is located due west of the Alcova Trailer Park and south of Alcova Lake View Estates, and is also approximately 1/4 mile northwest of the subject. This subdivision is known as the South Estates Subdivision and consists of 17 lots platted in August 2009. These lots are comparable to the subject’s hypothetical lots in many aspects including average lot size and have access to a central water system. This would be similar to the subject’s “highest and best use” “as vacant” under the hypothetical subdivision analysis. To date only one of the lots has been purchased which was for view shed protection from a landowner in the adjoining subdivision. None of these lots have waterfront docks or permits and are also required to lease mooring space from the Casper Boat Club or the Alcova Lakeside Marina, if such service is desired. The fifth subdivision is located adjacent to Wyoming State Highway 220, due north of the four previously stated subdivisions and is approximately 2.5 miles northwest of the subject. Phase I of this subdivision was platted in June 2007 with 34 lots. It has no direct roadway access to the lake except for Highway 220 (however, there are plans in the works to do so) nor do they have dock permits. Lots are similar in size with acreages ranging from 6.28 acres to 17.33 acres; however, water and sewer are at owner’s expense via private well and septic system. Sales appear to be speculators with only two improvements built on the sites. Covenants appear to require upper end homes with the two structures built being in the $300,000 to $500,000 range. These sites would attract buyers similar to the subject if the hypothetical subdivision used in this analysis was put into place. An analysis of the market indicates that most sites are purchased based on size and location with emphasis on the view the location has with relationship to the lake and lake access. Furthermore, the subject site is superior in size and location to most of the sales as it fronts onto the water and has ability to have 100 docks. Thus, these variables will be addressed in the following analysis. Therefore, to determine the market value of the subject site the Appraiser has elected to use two separate methodologies, direct sales comparison and a

Holthouse Appraisal Group Analysis – 6705 Page D - 22 subdivision analysis. These two scenarios will be used to support the Appraiser’s final conclusion of the subject’s land value. In addition to the fee simple land value, the Appraiser has been requested to give his opinion of the market rent for the site. Typically, market rents are established by analyzing current rents being paid for comparable properties; however, as there are no similar arm’s length (market) rental sites located in the subject’s market area, the Appraiser has determined the market rents based on a rate of return on the fee simple market value of the land using market extracted return rates. In doing so the Appraiser must analyze yields and risk factors to determine a reasonable rate of return. Once this rate is determined, the Appraiser multiplies the yield rate times the market value, to get the amount of rent that a typical market investor would expect as a return on investment. THE APPRAISAL PROCESS Appraisal techniques are the specifics of the three approaches that are traditionally used to derive separate indications of real property value. One or more approaches may be used, depending on their applicability to a particular appraisal assignment. In assignments to determine market value, the ultimate goal of the valuation process is a well-supported conclusion that reflects the Appraiser’s consideration of all influences on the market value of the property being appraised. Therefore, the Appraiser studies the property from each of the applicable viewpoints reflected in the three approaches. APPROACHES TO VALUE In the appraisal of real estate, there are three basic traditional approaches for determining property value. The three approaches are the Sales Approach, the Cost Approach, and the Income Approach. The final step in determining a property's "market value" (i.e., most probable selling price) is to correlate the appraiser’s value opinion of the three approaches into a single opinion of value. Sales Approach This approach is based on the proposition that an informed purchaser would pay no more for a property than the cost to him of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data, which can be verified from authoritative sources. The Sales Approach is relatively unreliable in

Holthouse Appraisal Group Analysis – 6705 Page D - 23 an inactive market or in determining the value of properties when no real comparable sales data is available. The Cost Approach This approach is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements, which represent the highest and best use of land, or when unique or specialized improvements are located on the site for which there exists no comparable properties on the market. The Income Approach This approach is based on the proposition that a property is worth no more than the capitalized value of the income stream that the property is capable of generating. The procedure converts anticipated benefits (dollar income) to be derived from the ownership of the property into a value opinion. The Income Approach is widely applied in appraising income-producing properties. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process.

Holthouse Appraisal Group Analysis – 6705 Page D - 24 THE SALES APPROACH The value opinion of the subject property by the Sales Approach was derived after a search for similar properties. The Appraisal Institute further explains the approach below in the paragraphs from Page 417 of The Appraisal of Real Estate, 12th Edition: In the sales comparison approach, the appraiser develops an opinion of value by analyzing similar properties and comparing these properties with the subject property. The comparative techniques of analysis applied in the sales comparison approach are fundamental to the valuation process. Estimates of market rent, expenses, land value, costs, depreciation, and other value parameters may be derived in the other approaches to value using comparative techniques. Similarly, conclusions derived in the other approaches are often analyzed in the sales comparison approach to estimate the adjustments to be made to the sale prices of comparable properties.

Comparative analysis of properties and transactions focuses on similarities and differences that affect value, which may include variations in the following:  Property rights appraised  The motivations of buyers and sellers  Financing terms  Market conditions at the time of sale  Size  Location  Physical features  Economic characteristics, if the properties produce income Elements of comparison are tested against market evidence to estimate which elements are sensitive to change and how they affect value. The Appraiser has searched the subject’s market area and found eighteen sales that are somewhat similar to the subject. These sales will be used to determine the value of the subject under the extraordinary assumption that the site could be subdivided into five water front lots or as a bulk 10.079 acre residential recreational land sale. Details of these sales can be found in the Basic Data Section with the analysis as follows:

Holthouse Appraisal Group Analysis – 6705 Page D - 25 ABSTRACT OF COMPARABLE LAND SALES Recording Comp # Location Date Deed # Grantor/Grantee Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake CL Dolodell 1 2/27/1998 609823$ 22,000 1.00$ 22,000.00 $ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Ken Milner Lot 33, Alcova Lake Richard D. Wagner 2 5/23/2000 653493$ 23,500 0.94$ 25,000.00 $ 0.57 Average NoHOA/None 1230 "SR-2" View Estates 2 Max Wayne Stalkup Lot 3, Alcova West Charles T. Norton, et ux 3 10/31/2001 680825$ 35,000 1.03$ 34,013.61 $ 0.78 V-GoodYes HOA/None Private "SR-1" Ranchettes Donald Dale Sackett et ux Lot 41, Alcova Lake Stan & Nancy Koehn 4 12/31/2002 707361$ 28,000 1.00$ 28,000.00 $ 0.64 Good-AvgNo HOA/None 77 "SR-2" View Estates 2 Keith W. Johnson Lot 31 Alcova Lake Paul J. Simonton, et ux 5 7/1/2003 720130 $ 33,500 1.00 $ 33,500.00 $ 0.77 AverageNo HOA/None 35 "SR-2" View Estates 1 Newell E. Wilson, et ux Lot 5 Alcova West Donald Dale Sackett et ux 6 9/19/2003 726757$ 20,000 1.86$ 10,752.69 $ 0.25 AverageNo HOA/None 261 "SR-1" Ranchettes Walter E. Weiss, et ux Lot 16 Alcova West Robbie Dane Benson 7 10/21/2003 729128$ 16,000 1.05 $ 15,238.10 $ 0.35 Average No HOA/None 311 "SR-1" Ranchettes David S. Bullard, et ux Lot 5 Alcova West Walter E. Weiss, et ux 8 4/12/2004 739977$ 25,500 1.86$ 13,709.68 $ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Ted Anderson, et ux Lot 13, Alcova West Timothy C. Hoiles, Trustee 9 4/6/2005 763897$ 20,500 1.05$ 19,523.81 $ 0.45 AverageNo HOA/None 410 "SR-1" Ranchettes Wyoming Renovations, Inc Lot 30, Alcova West David Whisler 10 6/23/2005 770669$ 37,500 1.38 $ 27,173.91 $ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Warren R. Foreman Alcova Lake, LLC 11 Lot 3, South Estates 2/2/2010 883441$ 225,000 2.26$ 99,557.52 $ 2.29 ExcellentYes HOA/None Private "UR" John P. Ellbogen, II Lot 11, Lake Ridge Lake Ridge Estates, LLC 12 7/23/2010 892364$ 140,000 12.61$ 11,102.30 $ 0.25 GoodYes Well/None 58 "PUD" Estates Phase I Steddyhomes, II, LLC Lot 12, Lake Ridge Success Properties, LLC 13 9/3/2010 894605$ 110,000 7.24$ 15,193.37 $ 0.35 Average Yes None/None 97 "PUD" Estates Phase I Lakecliffe, Inc. Lot 10, Lake Ridge Lake Ridge Estates, LLC 14 11/15/2010 898890 $ 90,000 10.22 $ 8,806.26 $ 0.20 Fair No None/None Private "PUD" Estates Phase I Steddyhomes, II, LLC Lot 5, Lake Ridge Lake Ridge Estates, LLC 15 11/22/2010 899332$ 61,500 7.33 $ 8,390.18 $ 0.19 Fair No None/None Private "PUD" Estates Phase I Ryan P. Mundell Lot 18, Alcova West Rita J. Condis 16 6/21/2011 910441 $ 47,500 1.14 $ 41,666.67 $ 0.96 AverageNo HOA/None 1 "SR-1" Ranchettes David B. Simonson, et ux Lot 25, Lake Ridge SDRE, LLC 17 7/6/2011 911244 $ 175,000 10.11 $ 17,309.59 $ 0.40 V-GoodYes Well/None Private "PUD" Estates Phase I Craig H. Evert, et ux Lot 55, Alcova Lake Susan F. Hoag, Trustee 18 12/5/2011 919443$ 58,500 1.03 $ 56,796.12 $ 1.30 V-GoodYes HOA/None 206 "SR-1" View Estates 2 Woody C. Hugget

Holthouse Appraisal Group Analysis - 6705 Page D - 26 PAIRED SALES ANALYSIS - TIME - MARKET INCREASE Recording Comp # Location Date Sales Price Acres Sq. Ft. $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake 1 2/27/1998$ 22,000 1.00 43,560$ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Lot 31 Alcova Lake 5 7/1/2003$ 33,500 1.00 43,560$ 0.77 Average No HOA/None 35 "SR-2" View Estates 1 Differential 1,950$ 11,500 %/Year $ 0.26 %/Year Annual Time Adjustment 5.34 52.27% 9.78% 52.27% 9.78% Lot 33, Alcova Lake 2 5/23/2000$ 23,500 0.94 40,946$ 0.57 Average No HOA/None 1230 "SR-2" View Estates 2 Lot 41, Alcova Lake 4 12/31/2002$ 28,000 1.00 43,560$ 0.64 Good-Avg No HOA/None 77 "SR-2" View Estates 2 Differential 952$ 4,500 %/Year $ 0.07 %/Year Annual Time Adjustment 2.61 19.15% 7.34% 12.00% 4.60% Lot 5 Alcova West 6 9/19/2003$ 20,000 1.86 81,022$ 0.25 Average No HOA/None 261 "SR-1" Ranchettes Lot 5 Alcova West 8 4/12/2004$ 25,500 1.86 81,022$ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Differential 206$ 5,500 %/Year $ 0.07 %/Year Annual Time Adjustment 0.56 27.50% 48.73% 27.50% 48.73% Lot 16 Alcova West 7 10/21/2003$ 16,000 1.05 45,738$ 0.35 Average No HOA/None 311 "SR-1" Ranchettes Lot 13, Alcova West 9 4/6/2005$ 20,500 1.05 45,738$ 0.45 Average No HOA/None 410 "SR-1" Ranchettes Differential 533$ 4,500 %/Year $ 0.10 %/Year Annual Time Adjustment 1.46 28.13% 19.26% 28.13% 19.26% Lot 30, Alcova West 10 6/23/2005$ 37,500 1.38 60,113$ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Lot 18, Alcova West 16 6/21/2011$ 47,500 1.14 49,658$ 0.96 Average No HOA/None 1 "SR-1" Ranchettes Differential 2,189$ 10,000 %/Year $ 0.33 %/Year Annual Time Adjustment 6.00 26.67% 4.45% 53.33% 8.89% Lot 3, Alcova West 3 10/31/2001$ 35,000 1.03 44,823$ 0.78 V-Good Yes HOA/None Private "SR-1" Ranchettes Lot 55, Alcova Lake 18 12/5/2011$ 58,500 1.03 44,867$ 1.30 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Differential 3,687$ 23,500 %/Year $ 0.52 %/Year Annual Time Adjustment 10.10 67.14% 6.65% 66.98% 6.63%

Paired Sales Analysis - Land Sales Holthouse Appraisal Group Analysis - 6705 Percent Location Premium SUMMARY OF THE COMPARABLE LAND SALES Comparable Land Sale No. 1 Through No. 10, Alcova, Wyoming – These sales were used by the Appraiser to support conclusions as to time adjustments and market trends in the area. Comparable Land Sale No. 11 – Lot 3 – South Estates Subdivision, Alcova, Wyoming - This sale is located 1 mile northwest of the subject, in the subject’s immediate neighborhood. This sale is located in the South Estates Subdivision which lies south of Lakeview Estates. The subdivision has 17 platted lots ranging in price from $150,000 to $250,000. The topography of the site is heavy rolling and pad sites are limited. The view of the lake is superior to most of the lots within the subdivision and contains approximately 2.26 acres. This sale, according to the seller, was sold before the subdivision was put on the market. It was purchased by an adjoining landowner who purchased the site to prevent his view of the lake from being blocked. The site is the only site sold within the subdivision and sold at a premium due to the value of the view shed. This site has ease of access to the Boat Club and Marina where mooring can be leased. It is the Appraiser’s opinion that this site best represents the base value premium for the subject’s individual lots under the hypothetical subdivision analysis which will be used to support the Appraiser’s value conclusion of the subject’s land value. The sales price was $225,000 or $2.29/sq. ft. before adjustments. Comparable Land Sale No. 12 and No. 13 – Lots 11 and 12, Lake Ridge Estates Phase I, Alcova , Wyoming - These sales are located at the entrance of Lake Ridge Estates approximately 2.5 miles northwest of the subject, in the subject’s immediate neighborhood. These sales are located in the Lake Ridge Estates which lies northwest of Lakeview Estates and have no direct access to the lake area except via Highway 220; however, there are currently plans to build one. Water and sewer will be provided by private well and septic at owner’s expense. Phase No. 1 of the subdivision consists of 34 platted lots ranging in price from $75,000 to $250,000. Lot 11 (Comparable Sale No. 12) is located to the east of Lot 12 (Comparable Sale No. 13) and abuts BLM land so the view of the lake is unobstructed and is likely to remain so. This lot contains approximately 12.61 acres and sold for $140,000 or $0.25/sq. ft. According to the seller the lot had a well in place with an estimated value of $15,000 to $20,000. Lot 12 is located with a slightly obstructed view of the lake and overlooks Lots 13, 14 and 16. This lot contains

Holthouse Appraisal Group Analysis – 6705 Page D - 27 approximately 7.24 acres and sold for $110,000 or $0.35/sq. ft. Both sites were purchased by local builders looking to build spec homes in the area. Both sites are now improved and are still on the market after more than a year. These two sales indicate that size might be a factor; however, on a per lot basis, the better view sold for a higher price. Sales were used to help set trends in the area. Comparable Land Sale No. 14 and No. 15 – Lots 10 and 5, Lake Ridge Estates Phase I – Alcova, Wyoming – These sales are also located approximately 2.5 miles northwest of the subject, in the subject’s immediate neighborhood. These two sales are located on the highway and have no views of the lake. Water and sewer will need to be provided by the purchaser at their expense. Lot 10 contains approximately 10.22 acres and is located on a hillside overlooking Lots 5 and 6. This sale sold for $90,000 or $0.20/sq. ft. Lot 5 is located adjacent to the highway and at the entrance to this area of the subdivision and contains approximately 7.33 acres. According to the seller the purchaser is planning to put mini-storage units on Lot 5 when the market makes it financially feasible. These two sales indicate there appears to be little difference in value when size is a factor contradicting the preceding analysis; therefore, in the paired sales analysis similar sites should be used to evaluate this dichotomy. Sales were used to help set trends in the area. Comparable Land Sale No. 16 – 23381 West Lower Reeves Road, Wyoming - This sale is located approximately 1 mile northwest of the subject, in the subject’s immediate neighborhood. It is Lot 18 of Alcova West Ranchettes located west of Lakeview Estates No. 2 and is the most current sale of a no-lake-view lot. This lot is located in a cul-de-sac and has some hill side views of the surrounding area. The site has access to community water as part of the homeowner’s association fees with septic at the expense of the purchaser. This sale is approximately 1.14 acres and sold for $47,500 or $0.96/sq. ft. This sale was used to help set trends in the area. Comparable Land Sale No. 17 – Lot 25, Lake Ridge Estates, Alcova Phase I, Wyoming - This sale is located approximately 2.5 miles northwest of the subject, in the subject’s immediate neighborhood. It is at the end of Lake Ridge Estates and has an unobstructed view of the lake. It was owned by one of the owners of the subdivision and was considered to be one of the best view lots within the subdivision. According to the seller, the site was improved with a water well with an estimated value of $15,000 to $20,000. The lot size is approximately 10.11 acres and had

Holthouse Appraisal Group Analysis – 6705 Page D - 28 a developed pad site. The sales price was $175,000 or $0.40/sq. ft. This sale was considered to be most similar to the subject in size and will be used as the base value of the subject “as a whole” or “bulk sale” prior to adjustments for location. Comparable Land Sale No. 18 – 25887 West Cedar Mesa, Alcova Lake View Estates No. 2, Alcova, Wyoming - This sale is located approximately 1 mile northwest of the subject, in the subject’s immediate neighborhood. It is the most current sale of a lake-view lot within the Lakeview Estates Area. The site has community water available as part of the homeowner’s fees with septic at the expense of the purchaser. The lot size is approximately 1.03 acres and has very limited area for a pad site. The sales price was $58,500 or $1.30/sq. ft. This sale was used to support trends in the area ANALYSIS OF THE COMPARABLE LAND SALES As previously stated Comparable Sales No. 1 through No. 10 were used to help support trends in the area. Also as previously stated Comparable Sale No. 11 was most similar in desirability of location; however, is not a “water front” lot. Comparable Sales No. 12, No. 13, No. 14, and No. 15 were used to establish trends in the area from which adjustments could be made or supported. Comparable Sale No. 16 was the most current lot sale with no-view of the lake and Comparable Sale No. 18 is the most current “lake-view” sale midway between Comparable Sale No. 16 and No. 11. These sales were used to help establish trends in the area from which reasonable adjustments could be made and to support conclusions to value. Comparable Sale No. 17 was most similar in size and had a proven water well in place. This sale was considered to be most similar to the subject in utility and will be used to support a size adjustment. The adjustments and conclusions are as follows: Time Adjustment – An analysis of the comparable sales indicates that the market had an increase/decrease as follows (For further details see Paired Sales Analysis – Time – Market Increase/Decrease chart found preceding this analysis:

Holthouse Appraisal Group Analysis – 6705 Page D - 29 Time - Market Increase/Decrease Analysis Comp # Rec. Date Years Acres $/Sq. Ft. %/Year 1 2/27/1998 1.00$ 0.51 5 7/1/2003 5.34 1.00$ 0.77 9.78% 2 5/23/2000 0.94$ 0.57 4 12/31/2002 2.61 1.00$ 0.64 4.60% 6 9/19/2003 1.86$ 0.25 8 4/12/2004 0.56 1.86$ 0.31 48.73% 7 10/21/2003 1.05$ 0.35 9 4/6/2005 1.46 1.05$ 0.45 19.26% 10 6/23/2005 1.38$ 0.62 16 6/21/2011 6.00 1.14$ 0.96 8.89% 3 10/31/2001 1.03$ 0.78 18 12/5/2011 10.10 1.03$ 1.30 6.63%

An analysis of the above chart indicates that land values per square foot at Alcova are moving with the local economy, “steady by jerks”. A further analysis indicates that there have been some periods of leveling off and some periods of extreme increases; however, the overall movement (price per square foot) appears to have averaged 6.63% over the past ten years (Comparable Sales No. 3 and No. 18). Movement between the years of 2005 and 2011 (the approximate time since the Appraiser’s last appraisal of the subject) indicated by Comparable Sales No. 10 and No. 16, has increased by 8.89%/year when the price per square foot is considered. When total lot values are considered, the percent increase is just slightly more at 6.65% for the 10 year rate but drops to 4.45% for the 5 year rate. A further analysis indicates that of the comparable sales considered in determining the market value of the subject site, Sales No. 11 through No. 18 are the most current sales; thus, the most logical to be used by the Appraiser in the analysis. These sales sold from February 2, 2010 and December 5, 2011 and the paired sales available do not measure market movement separately between these dates. Therefore, it is difficult for the Appraiser to measure the effects of the slowdown in the local economy caused by the dip and recovery in natural resource prices (if any) predicated by the national lending crisis and the crash of the national housing markets. This argument could go several ways and is as follows: First is the 10 year straight line market increase argument where the Appraiser could just use the 10 year average of 6.63%/year (Comparable Sale No. 3 and No. 18). This measurement is the simplistic measurement for the

Holthouse Appraisal Group Analysis – 6705 Page D - 30 overall period and indicates that there must have been a flattening or decrease sometime during the 10 year period based on historic trends which indicates upward trends anywhere from 4.45% to 48.73% (see chart above). Second, the Appraiser could also argue that the measurement between Comparable Sales No. 10 and No. 16 of 8.89%/year (per square foot) is reasonable; however, this percentage also includes the years of 2005 through 2008 where market increases could have easily been at the same rate as they were between 2003 and 2005 of 19.26%/year (Comparable Sales No. 7 and No. 9). This brings in the other side of the argument, a possible market decline between 2008 and 2011. This argument could easily be that the market did go up 19.26%/year during 2005 and 2008, but declined from 2009 to 2011 indicating that Comparable Sale No. 11 should have a negative adjustment; however, this is just speculation as there are no puritan sales to measure this time period. Therefore, to make a credible determination the Appraiser conducted a market interview with Mr. James Edgeworth, broker/owner of the Edgeworth Real Estate Firm. Mr. Edgeworth was involved in Comparable Sales No. 16 and No. 18. Mr. Edgeworth also has properties listed in the same subdivision as Comparable Sale No. 11 and was privy to the details of that sale. In the Appraiser’s interview with Mr. Edgeworth it was found that he felt that he could have gotten a little more next year for Comparable Sales No. 16 and 18, but that No. 11 sold at a premium as the purchaser did not want his view shed of the lake blocked by the downstream developer. He also felt that this lot would most likely not be worth any more in today’s market. This would indicate that Comparable Sale No. 11 most likely sold at the top of the market with no additional market increases necessary. It further indicates that Comparable Sales No. 16 and 18 most likely sold at market with no anticipated decline over the previous or next 12 months. Therefore, it is the Appraiser’s opinion that the market remained stable during the time when Comparable Sale No. 11 sold and the effective date of this report; thus, no time adjustment was made. View/Location Adjustment- This adjustment was extracted from the market based on paired sales analysis which indicate the following (For further details see Paired Sales Analysis – Small/Large Lot Location Analysis chart found preceding this analysis):

Holthouse Appraisal Group Analysis – 6705 Page D - 31 Alcova Reservoir - View Adjustment Analysis Lake Location Comp # Rec. Date View View Acres $/Sq. Ft. Adjustment 14 11/15/2010 Fair No 10.22$ 0.20 15 11/22/2010 Fair No 7.33$ 0.19 4.96% 18 12/5/2011 V-Good Yes 1.03$ 1.30 16 6/21/2011 Average No 1.14$ 0.96 36.31% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% 11 2/2/2010 Excellent Yes 2.26$ 2.29 18 12/5/2011 V-Good Yes 1.03$ 1.30 75.29% 11 2/2/2010 Excellent Yes 2.26$ 2.29 16 6/21/2011 Average No 1.14$ 0.96 138.94% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% Location Extraction - Lake View v Lake Front Leasehold Improvements 54.87% An analysis of the above stated chart indicates that the closer to the lake, the better the view and access, the higher the value. This analysis indicates that Comparable Sales No. 18 vs No. 16 (a lake-view lot vs no-lake-view lot) within adjoining subdivisions and a short distance apart, commands only a 36.31% higher price; however, when a premium lake-view lot (Comparable Sales No. 11 vs No. 18) is compared, it demands an adjustment of 75.29% verses one furthest from the lake, and 138.94% for a non-lake view lot, even further from the lake. Furthermore, this analysis indicates that even when lake access is not directly available, the property with the unobstructed view closest to the lake demand a 55.91% premium over those that are furthest from the lake with similar views and amenities (Comparable Sales No. 17 vs No. 12). This adjustment supports the Land Value – Land Extraction Method found in the Analysis Section A – Cabin Site Appraisal which indicates a location adjustment 54.87% when pairing Leasehold Improved Sales – Water Front vs Non-Water Front lake view sites within the cabin site area found in Analysis Section A – Cabin Site Appraisal. Finally, when similar views are considered, there is only a small differential, if any at all (Comparable Sales No. 14 and No. 15). Utility Adjustment – Seasonal vs Permanent Water & Septic – The subject site is being appraised with community water in place. An analysis of the comparable land sales indicates that most have community water so no adjustment was necessary.

Holthouse Appraisal Group Analysis – 6705 Page D - 32 Conclusion - Under the previous analysis of the comparable land sales the Appraiser has determined that Comparable Sale No. 11 was most similar to the subject in location as it was purchased by the adjoining landowner to protect his view shed; thus, commanded a premium similar to those enjoyed by the “non-water” front lots found in the Cabin Site Area. This sale is closest to the water (without being on the water) than all of the fee simple lots recently sold or currently for sale and has ease of access to the boat club and marina so has similar access to the lake. The primary difference between this lot and the subject is that it is much smaller in size and is not a water front lot; thus will be used to support percentage adjustments for lots further from the lake. Furthermore, under the previous analysis it was found that Comparable Sale No. 18 was the most current sale located slightly further from the lake with a lake-view and that Comparable Sale No. 16 was located even further from the lake and had no-lake-view. When these sales are paired with Comparable Sale No. 11 a location premium of 75.29% was derived for the difference between a close up lake-view vs “just” a lake-view and 138.94% for no-lake-view further from the lake. Comparable Sales No. 17 and No. 12 are not located close to the lake but are similar in size and both had a water well in place. When these sales are paired they indicate a 55.91% differential between a lake-view property verses an unobstructed lake-view property closer to the lake. This correlates well with the location premium at the Cabin Site Area between “non-water front” lots and “water front” lots from improved sales of 54.87% Therefore, to determine the value of the subject site the Appraiser has elected to use Comparable Land Sale No. 17 as the base land value and adjust this sale using the market derived 138.94% for the no-lake-view lot further from the lake and the location premium at the Cabin Site Area between “non-water front” lots and “water front” lots from improved sales of 54.87%. These percentages and the resulting value conclusion are detailed in the adjustment grid below:

Holthouse Appraisal Group Analysis – 6705 Page D - 33 ADJUSTMENT GRID - CASPER WATER SKI CLUB - WATER FRONT LOT Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft. Lot 25, Lake Ridge 17 $ 175,000 0.00% $ 175,000 10.11$ 17,310 $ 0.40 Estates Location % - Close Up Lake View Adjustment - Land Sale No. 11 vs No. 16 138.94% Close Up Lake View Location Adjustment - Square Foot $ 0.55 Adjusted Price Per Square Foot $ 0.95 Location % - Water Front Adjustment - Market Extracted From Improved Leased Fee Sales 54.87% Water Front Location Adjustment - Square Foot $ 0.52 Adjusted Price Per Square Foot $ 1.47 Lot Size - 10.079 Acres - 439,041 Square Feet 439,041 Indicated Value $ 645,595 Rounded To: $ 645,000

Holthouse Appraisal Group Analysis – 6705 Page D - 34 SUBDIVISION ANALYSIS Under this analysis the Appraiser will analyze the subject site to determine the value of the subject land under the extraordinary assumption that the subject can be subdivided into 5 lake front recreational sites similar to those located in the South Estates located approximately 1 mile northwest of the subject, which as previously stated, is the highest and best use of the site. Therefore, the following will be part of the Appraiser’s scope of work under this hypothetical subdivision: “As Is” - Aggregate of Retail Value – This value is defined as the sum of the market values of the individual lots within the subdivision, as if all of the units are available for retail sale, as of the effective date of this report. The sum of the retail sales includes an allowance for lot premiums, if applicable, but excludes all allowances for carrying costs. This value is also called “gross retail value”. The objective of the Appraiser in this assignment is to determine average market value for each class of the subdivided lots, then add these values together to determine the Aggregate Retail Value. The retail value of each subdivided lot is determined by comparison of similar type properties extracted from the market. “As Is” - Market Value – “Bulk Sale Value” or Wholesale Value – The "Bulk Sale Value", as used in the valuation of the finished lots, is the value of the subject assuming the sale of all lots to a single buyer in a single transaction. The objective of the Appraiser in this assignment is to determine the market value of the total subdivision, “as is”, if sold to a single purchaser in a “bulk” sale. This value is the market value of the subdivision and the primary value sought by the Client for their financing or valuation decisions. The bulk sale value or wholesale value is determined by using the average market value of the individual lots derived from the “Aggregate Retail Value”, deducting the cost of sales, and discounting the net proceeds to “present value”, using the market extracted discount and absorption rates, plus excess land. The value will be used to determine the “Scope of Work” value desired by the Client as of the effective date of this report.

Holthouse Appraisal Group Analysis – 6705 Page D - 35 RETAIL VALUE OF THE INDIVIDUAL LOTS As previously stated, the subject lots under the hypothetical subdivision would be similar to Comparable Land Sale No. 11. This lot has community water and has the ability to install a septic system; however, the subject lots would all be lake front lots; thus, would need to be accounted for. If the Appraiser uses the previously extracted adjustment of 54.87% for the lake front lot premium the following retail value of the lots is determined:

ADJUSTMENT GRID - CASPER WATER SKI CLUB - WATER FRONT LOTS Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft.

11 Lot 3, South Estates$ 225,000 0.00% $ 225,000 2.26$ 99,558 $ 2.29

Location % - Water Front Adjustment - Market Extracted From Improved Leased Fee Sales 54.87% Water Front Location Adjustment - Square Foot $ 1.25 Adjusted Price Per Square Foot $ 3.54 Lot Size - 2 Acres 87,120 Indicated Value $ 308,369 Rounded To: $ 310,000

Holthouse Appraisal Group Analysis – 6705 Page D - 36 four of are adjoining subdivisions just northwest of the subject. The Appraiser has selected Comparable Sale No. 11 as the most current comparable sale to the subject under the hypothetical subdivision as this sale is closest to the lake, has paved and gravel streets with community water, but, has no direct access (from their site) to the Alcova Lake shoreline. This sale, however, has year round access and can be purchased as a site for primary residency; however, a survey of the area indicates that most homes are second homes and are primarily used for recreational purposes. Therefore, year around access does not appear to be a primary market concern. (Year round access and use are a restriction on the tenants by the owner of the subject. If an adjustment is necessary it will be addressed in the “Market Lease Analysis” section of this report as access and year round use is a restriction that is the Client’s preference. This restriction is well within the clients control; thus, does not affect the fee simple market value of the subject’s sites.) When this sale is adjusted it indicates a value of $310,000 for the hypothetical lots; however, when local real estate brokers were interviewed it was found that the maximum price the market would allow under current economic conditions was $250,000. Furthermore, even if the owner allowed year around access to the site, the primary use in the area was still recreational; thus, would not change the highest and best use of the site. Therefore, it is the Appraiser’s opinion that a maximum price for two acres on the lake would most likely not exceed this amount; thus, for the purposes of this analysis $250,000 will be used. RETAIL VALUE OF THE INDIVIDUAL LOTS Therefore, based on the foregoing data, analysis and conclusions, it is the Appraiser’s opinion that the fee simple retail value for the subject site under this scenario, as of the effective date of this report, is as follows: TWO HUNDRED FIFTY THOUSAND DOLLARS $250,000

Holthouse Appraisal Group Analysis – 6705 Page D - 37 AGGREGATE RETAIL VALUE Once the retail value is determined, the Appraiser can then calculate the Aggregate Value used to determine the market value of the site under the extraordinary assumption that the hypothetical subdivision will be allowed:

Total Retail Value Number of Individual of Lots x Lots = Total Aggreate Value 5 x$ 250,000 = $ 1,250,000

ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS $1,250,000 ANALYSIS OF THE MARKET (WHOLESALE) VALUE OF THE SUBJECT As previously stated, the Appraiser was unable to find sales that were considered to be similar to the total subject property with lake frontage and access; therefore, has elected to use two scenarios to determine a reasonable and credible indication of the subject’s fee simple market value. Under the hypothetical subdivision scenario the Appraiser has made the extraordinary assumption that the lots can be subdivided into water front lots. In my discussions with the Mr. Bill Fehringer with Civil Engineering Professionals, Inc. it was found that current regulations require a two acre site for new subdivisions unless the lots are serviced by a central water and sewer system; thus, the subject could have a higher density if sewer was extended to the site. However, according to the Natrona County Planning Department and the Natrona County Road and Bridge Department two acre sites would be the most likely scenario as a higher density site would meet stiff resistance from area residents and would most likely not be approved. Therefore, the subject site of 10.079 acres would most likely be subdivided into five 2.0 acre tracts or lots with 0.079 acres for open areas and waste. Furthermore, according to Mr. Fehringer, the cost to survey and get the subject through the subdivision process would most likely be $22,500. ABSORPTION RATE An analysis of the market indicates that water front lots are at a premium with none being available in the subject’s immediate area with community water or sewer. According to the tenant survey conducted by the Appraiser, 64.91% of the cabin owners (on leased land) felt that Holthouse Appraisal Group Analysis – 6705 Page D - 38 water front lots were more valuable and a desired feature. In addition, a desired feature and concern was the availability of community water and sewer. Furthermore, 96.88% of the cabin owners surveyed would like to purchase their site. This would indicate that there is a pent up demand of at least 97 lots; however, these sites are smaller in size and based on the Appraiser’s analysis are only valued at $95,000, which according to Mr. Edgeworth with the Edgeworth Real Estate Firm, is currently a very strong market. Furthermore as previously stated by both Mr. Edgeworth and Mr. Lever, the demand would be good for these lots; however, due to the price range, buyers would be limited. Therefore, to determine a credible absorption rate the Appraiser has interviewed Mr. Scott Brownell with Lake Ridge Estates, LLC. According to Mr. Brownell the absorption rate for his subdivision in the past year was five lots which ranged from $61,000 to $175,000. These lots ranged from no-lake view lots without water well to an unobstructed lake view lot with a good well in place. This indicates an absorption rate of 5 in the first year for the hypothetical subdivision would be reasonable and for the purposes of this appraisal will be used. Competition Currently, there are two new subdivisions in the subject’s immediate area. These subdivisions have a total of 33 lots ranging in size from 1.48 to 17.24 acres. These lots do not have water frontage and only 15 have community water. They range in price from $60,000 to $250,000 and could compete with the subject; however, none have lake-frontage, thus, would not directly compete with the subject under this scenario. Therefore, the hypothetical subdivision would not be adversely affected by competition and, the developed lots under this scenario would most likely sell within the first year. DIRECT COST ANALYSIS As previously stated, the Appraiser has secured a bid from Civil Engineering Professionals, Inc. to plat and subdivide the subject site under this scenario. According to Mr. Fehringer, the cost to plat and subdivide would be $22,500. This cost would be the only direct cost as the site has paved road frontage adequate for subdivision purposes and no other costs would be necessary. Therefore, the total direct costs would be $22,500.

Holthouse Appraisal Group Analysis – 6705 Page D - 39 INDIRECT COSTS Indirect costs are expenditures or allowances that are necessary for construction, but are not typically part of the construction contract. Indirect costs may include:  Architectural and engineering fees for plans, plan checks, surveys to establish building lines and grades, and environmental studies  Appraisal, consulting, accounting, and legal fees  The cost of carrying the investment in land and contract payments during construction (If the property is financed, the points, fees or service charges, and interest on construction loans are indirect costs.)  All-risk insurance and ad valorem taxes during construction  The cost of carrying the investment in property after construction is complete, but before stabilized occupancy is achieved (return on investment, plus operating expenses, offset by operating income)  Supplemental capital investment in tenant improvements or leasing commissions  Marketing, sales commissions, or title transfers  Administrative expenses of the developer  Cost of title change

Aggregate Value Percentage Indirect Costs $ 1,250,000 x 17% =$ 212,500

Holthouse Appraisal Group Analysis – 6705 Page D - 40 of similar subdivisions pulled from the Appraisers’ files. The result of that survey is as follows:

An analysis of the previously stated survey indicates that developers profit or entrepreneurial profit, range from 10% to 28% depending on the amount of lots and timing of the project. A further analysis indicates that the low mean was 18.44% with the high mean being 21.67%. Thus, considering the subject’s proposed subdivision should sell within the first year, it is the Appraiser’s opinion that a reasonable rate for the subject would be 20% due to their only being five lots. Therefore, an entrepreneurial profit of 20% will be used and is calculated as follows:

Entrepreneurial Aggregate Value Percentage Profit $ 1,250,000 x 20% =$ 250,000

Holthouse Appraisal Group Analysis – 6705 Page D - 41 Aggerage Value of Site$ 1,250,000 Less: Direct Costs$ 22,500 Effective Gross Income (EGI)$ 1,227,500 Less: Indirect Costs$ 212,500 Less: Entrepreneurial Profit$ 250,000 Net Operating Income (NOI)$ 765,000

SUMMARY OF INDICATED VALUES Methodology Description Indicated Value Land Value - Direct Sales Comparison Method$ 645,000 Land Value - Subdivision Analysis Method$ 765,000 % Differential 18.60%

Holthouse Appraisal Group Analysis – 6705 Page D - 42 make a credible determination of the subject’s fee simple market value. The Appraiser also used a hypothetical subdivision analysis to determine the reasonableness of this value which had a difference of 18.60% when the two values were compared. An analysis of the Casper Boat Club appraisal indicates that the differential was only 1.32% when this comparison was made compared to 18.60% for the subject. It is the Appraiser’s opinion that this is most likely due to the Boat Club having community sewer with an approximate value of $110,000 ($755,000 - $645,000 = $110,000). This is most likely the cost of installation and approximately 1 acre of land; thus, the retail value of the hypothetical lots for the subject may be overstated at the $250,000/lot. This indicates that the direct sales comparison approach should carry the most weight. Therefore, based on the foregoing data, analysis and conclusions, it is the Appraiser’s opinion that the fee-simple market value for the subject site, “as vacant and ready for its highest and best use” by the direct sales approach is credible and as of the effective date of this report, is as follows: SIX HUNDRED FORTY FIVE THOUSAND DOLLARS $645,000

Holthouse Appraisal Group Analysis – 6705 Page D - 43 ANALYSIS OF MARKET RATES OF RETURN (YIELD RATES) It is common practice to derive market rents by analyzing current market rents paid for similar properties. This market data is then compared to the subject to determine the subject’s market rates or rents that an investor would expect as owner of the property and obtain a desired yield. The subject sites are owned by the United States of America, Department of the Interior and are not privately held or sold. An analysis of the Wyoming and surrounding recreational markets indicates that most leases for similar properties are owned by the government and the lease rate is not determined by market value of the land as required by the Memorandum of Agreement between the Bureau and the Natrona County Commissioners. Furthermore, the Appraiser could find no current comparable leases of recreational sites that were privately held and were arms-length. Therefore, the Appraiser’s opinion of market rents will be derived from expected rates of returns (yields) obtained or desired by investors of similar properties. In order to determine a credible rate of return (yield) the Appraiser must analyze the current rates of return offered by similar alternative investments in real property, “land only”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, “the following table summarizes prevailing land lease capitalization and discount rates. The former reflects initial rates of return on appraised values for vacant land proposed for development. They do not address increases in land lease payments or the reversion but may include percentage rent. The latter are internal rates of return being achieved by landowners on improved properties. As such, they include changes in land lease payments, percentage rent where applicable and the reversion of the entire property at the termination of the lease. Lease terms range from 55 to 99 years.”9 This survey will be used to determine the market rate of return the government should expect to achieve for the subject sites.

9 RealtyRates.com – Investor Survey – 3rd Quarter, Robert G. Watts and Associates, 2006, Page 38. Holthouse Appraisal Group Analysis – 6705 Page D - 44 Abstract - Land Lease Capitalization Rates - RealtyRates.com - 3rd Quarter - 2011 Description 2007 2008 2009 2010 2011 5 Year Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Avg Apartments 4.39% 10.94% 8.24% 3.75% 11.68% 7.89% 3.72% 11.54% 7.60% 2.81% 10.82% 7.05% 2.33% 10.18% 6.39% 3.40% Golf 5.27% 16.67% 11.67% 4.49% 17.15% 11.44% 4.22% 17.13% 11.19% 3.30% 16.24% 10.23% 2.90% 15.80% 9.39% 4.04% Health Care/Senior Housing 5.00% 11.87% 8.80% 4.79% 11.87% 8.50% 4.53% 11.72% 8.21% 3.40% 12.19% 7.53% 2.53% 10.59% 6.81% 4.05% Industrial 4.90% 11.98% 8.46% 3.75% 11.68% 8.15% 3.80% 11.44% 7.82% 3.01% 10.82% 7.22% 2.53% 10.15% 6.59% 3.60% Lodging 5.17% 14.67% 8.95% 4.39% 17.15% 8.80% 4.14% 16.85% 8.50% 3.25% 15.96% 7.95% 2.63% 15.56% 7.42% 3.92% Mobile Home/RV Parks 4.92% 11.17% 9.14% 4.14% 11.68% 8.87% 3.89% 11.54% 8.49% 3.00% 10.82% 7.99% 2.53% 10.59% 7.32% 3.70% Office 4.97% 11.47% 8.52% 3.75% 11.69% 8.02% 3.80% 11.55% 7.98/% 3.00% 10.82% 7.21% 2.53% 9.22% 6.18% 3.61% Restaurants 5.90% 14.17% 9.81% 5.53% 17.15% 9.97% 5.29% 17.11% 9.78% 4.40% 16.22% 9.10% 3.53% 15.82% 8.26% 4.93% Retail 4.82% 11.87% 8.55% 3.75% 11.87% 8.21% 3.79% 11.72% 7.94% 2.90% 12.19% 7.38% 2.50% 10.59% 6.68% 3.55% Self-Storage 4.98% 11.47% 10.01% 3.75% 11.69% 9.78% 3.80% 11.55% 9.94% 3.15% 10.82% 9.37% 2.60% 10.26% 8.66% 3.66% Special Purpose 5.88% 18.67% 10.21% 5.10% 17.89% 10.33% 4.84% 17.79% 10.16% 3.95% 16.90% 9.41% 3.54% 16.48% 8.51% 4.66% All Properties 4.39% 18.67% 9.31% 3.75% 17.89% 9.09% 3.72% 17.79% 8.87% 2.81% 16.90% 8.22% 2.33% 16.48% 7.47% 3.92%

Abstract - Land Lease Discount Rates - RealtyRates.com - 3rd Quarter - 2011 Description 2007 2008 2009 2010 2011 5 Year Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Avg Apartments 6.99% 11.44% 9.24% 6.35% 12.18% 8.89% 6.32% 12.04% 8.60% 5.41% 11.32% 8.05% 4.93% 10.68% 7.39% 6.00% Golf 7.87% 17.17% 12.67% 7.09% 17.65% 12.44% 6.82% 17.63% 12.19% 5.90% 16.74% 11.23% 5.50% 16.30% 10.39% 6.64% Health Care/Senior Housing 7.87% 17.17% 12.67% 7.09% 17.65% 12.44% 6.82% 17.63% 12.19% 6.00% 12.69% 8.53% 5.13% 11.09% 7.81% 6.58% Industrial 7.50% 12.48% 9.46% 6.35% 12.18% 9.15% 6.40% 11.94% 8.82% 5.61% 11.32% 8.22% 5.13% 10.65% 7.59% 6.20% Lodging 7.77% 15.17% 9.95% 6.99% 17.65% 9.80% 6.74% 17.35% 9.50% 5.85% 16.46% 8.95% 5.23% 16.06% 8.42% 6.52% Mobile Home/RV Parks 7.52% 11.67% 10.14% 6.74% 12.18% 9.87% 6.49% 12.04% 9.49% 5.60% 11.32% 8.99% 5.13% 11.09% 8.34% 6.30% Office 7.57% 11.97% 9.52% 6.35% 12.19% 9.02% 6.40% 12.05% 8.98% 5.60% 11.32% 8.21% 5.13% 9.72% 7.18% 6.21% Restaurants 8.50% 14.67% 10.81% 8.13% 17.65% 10.97% 7.89% 17.61% 10.78% 7.00% 16.72% 10.10% 6.13% 16.32% 9.26% 7.53% Retail 7.42% 12.37% 9.55% 6.35% 12.37% 9.21% 6.39% 12.22% 8.94% 5.50% 12.69% 8.38% 5.10% 11.09% 7.68% 6.15% Self-Storage 7.58% 11.97% 11.01% 6.35% 12.19% 10.78% 6.40% 12.05% 10.94% 5.75% 11.32% 10.37% 5.20% 10.76% 9.66% 6.26% Special Purpose 8.05% 19.02% 10.57% 7.28% 19.42% 10.28% 7.26% 19.40% 10.26% 6.58% 18.67% 9.58% 6.25% 18.34% 9.22% 7.08% All Properties 6.99% 17.17% 10.50% 6.35% 17.65% 10.26% 6.32% 17.63% 10.04% 5.41% 16.74% 9.10% 4.93% 16.32% 8.37% 6.50% Historic Capitalizaton Rate Trends Historic Discount Rate Trends 14.00% 14.00%

12.00% 12.00%

10.00% 10.00%

8.00% Min 8.00% Min Max 6.00% Max 6.00% Avg Avg 4.00% 4.00%

2.00% 2.00%

0.00% 0.00% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

Holthouse Appraisal Group Analysis - 6705 Page D - 45 Conclusion The capitalization rates previously stated reflect the initial rates of return on appraised values for vacant land proposed for development, whereas, the discount rates consist of the internal rates of return being achieved by landowners on improved properties and include: changes in land lease payments, percentage rent where applicable, and the reversion of the entire property at the termination of the lease. Thus, it is the Appraiser’s opinion that the use of the discount rate, which includes the value of the tenant’s improvements at reversion plus future increases in rent, would not be appropriate for two reasons: 1) the Appraiser’s assignment is to appraise the properties “as vacant” with no improvements, thus, no value for reversion is present, and 2) internal rates of return using future rate increases to determine current rents is “double dipping”. This would escalate rents above market; thus, the Appraiser has chosen the capitalization rates as the basis for this analysis. An analysis of the categories on the preceding chart indicates that the most similar use to the subject is the category - Apartments. This category was selected by the Appraiser for the following reasons: 1.) the typical tenant would most likely be leasing one of the subdivided sites for seasonal residential use; and 2.) the subject’s sites would be single tracts that could be used as permanent residential use, if owner’s restrictions weren’t in place. ANALYSIS OF RENT RESTRICTIONS The Appraiser has analyzed the subject property and found that the subject is one of only two private boat/ski clubs that are approved for Alcova Reservoir. Furthermore, this reservoir only fluctuates approximately 5 feet during the irrigation season. Alcova is also used as a leveling reservoir to regulate the irrigation flows of the North Platte River, both up and down stream. This lack of fluctuation allows the ski club owners to have shore line docks that are usable most of the recreational season. In addition, the Bureau of Reclamation lowers the lake in the winter months to protect its irrigation gates which also protects the shore line docks. These two factors are a much desired recreational benefit to the tenants and other market participants. However, there would most likely be a restriction on the period of time for which the property can be used (six months). An analysis of the comparable sales found in the Sales Approach section of this report indicates that all of the sales used did not have a restricted use

Holthouse Appraisal Group Analysis – 6705 Page D - 46 period; however, according to the real estate brokers interviewed and the Alcova Tenant Survey, year around use is not an overly desired feature for the area. Therefore, this restriction must be considered in the bundle of rights allowed under the current lease agreement as it reduces the risk to the owner by lowering the overall management requirements of the area, i.e., law enforcement, road maintenance, etc. To determine what effects on value that this restriction may have on real property, the Appraiser has revisited the Land Value – Land Extraction Method “Paired Sales Analysis” found in the Section A of the Analysis Section of this report. This analysis indicates that properties sold as “permanent” residential home sites, sold for only 5% to 10% more than “recreational” use sites. Therefore, as this minor difference could easily be explained as the deviation between the two approaches used to determine this percentage, it is the Appraiser’s opinion that this difference has no significance as to value and should have no effect on the overall lease rate if a lower or “safe” rate is used. FINAL CONCLUSION OF MARKET RENTS As previously stated the subject’s management requirements are low and the vacancy factor for the past 50+ years has been non-existent. To determine the appropriate return rate for the subject, the Appraiser has again examined the rates reported by the previously stated national survey for “apartments”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, the average rates for “Apartments” over the past five years ranges are as follows:

APARTMENT CAPITALIZATION RATES Year Min Max Avg 2007 4.39% 10.94% 8.24% 2008 3.75% 11.68% 7.89% 2009 3.72% 11.54% 7.60% 2010 2.81% 10.82% 7.05% 2011 2.33% 10.18% 6.39% Average 3.40% 11.03% 7.43%

An analysis of these rates indicates that the “minimum” average rate (low risk rate) for the five years would be a reasonable rate as the ski club has never been vacant in the past 50 years; has restrictions to usage; thus, minimizes the risk to the owner by lowering the overall

Holthouse Appraisal Group Analysis – 6705 Page D - 47 management requirements of the area, i.e., law enforcement, road maintenance, etc. Therefore, a rate of 3.40% return for the next five years appears reasonable and credible. Conclusion The formula for market rents is as follows - Market Value x Risk Rate = Market Rents or Annual Return on Investment where Market Value is the fee simple value determined in the Sales Approach for the particular site class and the risk rate is the previously determined capitalization rate of 3.40%. Thus, the market rents for the subject sites are calculated as follows:

Market Rents - "Highest & Best Use As Vacant" Fee Simple Market Return Rate x Market Value =Market Rents 3.40% x$ 645,000 =$ 21,930

Rounded to: $22,000 To determine the credibility of this rate the Appraiser has again interviewed market participants in the subject’s immediate area. According to Mr. Gary Lever owner of the Alcova Lakeside Marina an appropriate rate for a 10.079 acre site on the lake similar to the subject would be $20,000 to $25,000; however, a commercial or private club venture could not pay more than $25,000 in order to be economically viable. Therefore, it is the Appraiser’s opinion that a rate of $22,000 is not only reasonable but credible.

Holthouse Appraisal Group Analysis – 6705 Page D - 48 THE COST APPROACH The Cost Approach represents the objective concept of value. This concept is predicated upon the theory that value is inherent in the object itself and that value and cost tend to be the same. The American Institute of Real Estate Appraisers further explains this approach below in a paragraph from Page 441 of The Appraisal of Real Estate, 8th Edition: The Cost Approach to Value, like the Sales Comparison and Income Approaches, is based on comparison. In the Cost Approach, the cost to construct a building and the value of an existing building are compared. The Cost Approach to Value reflects market thinking in the recognition that market participants relate value to cost. Buyers tend to judge the value of an existing structure by comparing it to the value of a newly constructed building with optimal functional utility. Moreover, buyers adjust the prices they are willing to pay by estimating the costs to bring an existing structure to desired levels of functional utility.

DISCLAIMER OF THE COST APPROACH The value opinion under this approach consists of the present construction cost of any improvements on the property less depreciation from any source, plus the value of the land. Therefore, due to the subject property being considered unimproved land, it is the Appraiser’s opinion that this approach would be a duplication of the Sales Approach; thus, was excluded.

Holthouse Appraisal Group Analysis – 6705 Page D - 49 THE INCOME APPROACH The Income Approach is widely applied for income producing properties since it reflects the rationale of typical investors together with current financing conditions (i.e., the assumption being that financing is typically involved in most real property transaction). In this approach, market value is determined through the capitalization of a projected, stabilized estimate of net operating income. The traditional formula for computing value by the Income Approach is V = NOI divided by R, where V = market value, NOI = stabilized net operating income, and R = overall rate. Stabilized Net Operating Income (NOI) In the appraisal of real estate, the stabilized net operating income for the property is based on potential income and expense data as dictated by the market. In other words, income and expense data for similar facilities is projected onto the subject property in order to derive net operating income. The basic components and resulting formula for arriving at net operating income by this method are given below: Potential Gross Income (PGI) Less: Allowance for Vacancy and Rent Loss Equals: Effective Gross Income (EGI) Less: Operating Expenses Property Taxes Insurance Property Management Fees Maintenance Utilities Reserves for Replacement Equals: Net Operating Income (NOI) Potential Gross Income (PGI) The Appraiser has analyzed rents charged for similar recreational properties in the subject’s market area. The following pages contain the analysis of the pertinent data on the subject’s lease and an abstract of the five leases of similar recreational properties used to derive

Holthouse Appraisal Group Analysis – 6705 Page D - 50 the restricted rents for the subject property. (For comparable data see Comparable Land Leases found in the Basic Data Section of this report.) ABSTRACT OF COMPARABLE RECREATIONAL LAND LEASES

Comp # Location Annual Lease Rate Amenities 1 Subject - Casper Water Ski Club$ 15,000 W 2 Alcova Marina$ 10,300 W&S 3 Casper Boat Club$ 15,000 W&S 4 Keyhole Marina - 3 Year Average$ 6,298 W&S 5 Glendo Marina - 3 Year Average$ 10,774 W&S 6 Boysen Marina - 3 Year Average$ 5,946 W&S

ANALYSIS OF THE SUBJECT’S LEASE The subject is currently being leased by the Casper Water Ski Club for its club house and member facilities on the Alcova Reservoir. This lease restricts the tenant to 100 dock slips and trailer spaces. In my interview with Natrona County Road and Bridge, it was found that the club is maximizing the allowable uses; however, the goal of the club is to minimize the overall cost to its members. Furthermore, it was found that the subject is restricted to its current use under the Memorandum of Understanding MOU No. 1-AG-60-01340, between the Natrona County Parks and Pleasure Grounds and the Bureau of Reclamation, US Department of Interior which expires May 18, 2016. Thus, the current use is restricted per this agreement to a water ski club and will be analyzed accordingly. ANALYSIS OF THE COMPARABLE LAND LEASES Comparable Lease No. 1- This lease is the lease of the Casper Water Ski Club site located at 24725 Lakeshore Drive, Alcova Reservoir. The lease restricts the membership to 100 members. The lease rate is not based on a percentage rate and the goal of the club is to minimize the total cost to its members; thus, is not a true commercial operation. The lease current lease rate is based on the market value of the site if vacant established in 2007 and is approximately 5 years old. This rate is currently $15,000 per year and includes community water to the site; however, water usage is at an additional charge. The 2011 lease rate will be determined by the Appraiser based on the current market value of the site. Comparable Lease No. 2 – This lease is the lease of the Alcova Lakeside Marina, Alcova Reservoir. This lease restricts the tenant to 200 dock slips and 29 RV sites; however, the owner is allowed to run a full service marina complete with restaurant and lounge. In my interviews Holthouse Appraisal Group Analysis – 6705 Page D - 51 with the Natrona County Road and Bridge it was found that this site is not restricted like the private clubs and is designed to service the general public. An analysis of this site and interviews with Mr. Gary Lever, owner of the Alcova Lakeside Marina, indicates that the usable area of the site is being maximized. The current lease rate was established in 2007 and was based on 2% of the average gross sales for 2003-2007 making the data and rate almost five years old. This lease is currently $10,300/year and includes community water and sewer to the site; however, water and sewer usage is at an additional charge. Comparable Lease No. 3- This lease is the lease of the Casper Boat Club, Alcova Reservoir. This lease restricts the tenant to 188 dock slips, 30 dry docks and 12 camp sites; however, the current number of docks according to Mr. Burgess, Commodore is 203. The lease rate is not based on a percentage rate and the goal of the club is to minimize the total cost to its members; thus, is not a true commercial operation. The lease rate was based on the market value of the site “as vacant” established in 2007 which was $15,000 and is approximately 5 years old. This rate was based on the market value of the land. The lease includes community water and sewer to the site; however, usage is at an additional charge. The new rate will be determined by the Appraiser, also based on the market value of the land. Comparable Lease No. 4- This lease is the lease of the Keyhole Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding, gas and sales tax, fishing licenses, camping permits and boat related sales. The minimum lease rate is $200/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusion of boat related sales was being deleted from new leases. In my interview with the owner of the Keyhole Marina, it was found that they do not sell or service boats; therefore, this change will have little to no effect on the overall lease rate. The lease rate for the past few years are as follows: 2008 - $2,840, 2009 – 7,715 and 2010 - $8,341 with an average of $6,298. Comparable Lease No. 5- This lease is the lease of the Glendo Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding, gas and sales tax, fishing licenses, camping permits, and boat and trailer related sales. The minimum lease rate is $1,000/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusions of boat and

Holthouse Appraisal Group Analysis – 6705 Page D - 52 trailer related sales was being deleted from new leases. In my interview with the owner of the Glendo Marina, she indicated that they do limited boat sales but have a good boat service business; therefore, this change will have a substantial effect on the overall lease rate. The lease rates for the past few years are as follows: 2008 – $11,095, 2009 - $11,275 and 2010 – $9,952 with an average of $10,774. Comparable Lease No. 6- This lease is the lease of the Boysen Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding gas, and sales tax, fishing licenses, camping permits and boat related sales. The minimum lease rate is $1,000/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusions of boat related sales was being deleted from new leases. In my interview with the owner of the Boysen Marina, it was found that they do not sell boats; therefore, this change will have little effect on the overall lease rate. The lease rates for the past few years are as follows: 2008 – $5,645, 2009 - $5,744 and 2010 - $6,450 with an average of $5,946. Competition An analysis of the subject’s market area indicates that there are limited waterways which would facilitate a ski club facility or marina. In addition, the subject site is located at Alcova Reservoir which has two similar facilities. These facilities are all 100% occupied with limitations on the number of docks or trailer spaces. Therefore, the subject is not currently adversely affected by competition. Conclusion The preceding analysis indicates that the leases available are of a commercial nature and not similar to the subject or are similar to the subject but are over 5 years old. Therefore, it is the Appraiser’s opinion that further analysis is neither reliable nor credible; thus, this approach is deemed to be inconclusive.

Holthouse Appraisal Group Analysis – 6705 Page D - 53 RECONCILIATION AND FINAL OPINION OF VALUE The final step in the appraisal framework is to evaluate and select from among the three traditional approaches to value, a single or final opinion of market value. The value opinions established by the three approaches were: Sales Approach Market Value $ 645,000 Annual Market Rents $ 22,000 Cost Approach Omitted Income Approach Market Value Inconclusive Annual Market Rents Inconclusive Sales Approach When sufficient market data is available, investors and many other market participants most frequently rely upon the Sales Approach, as it best reflects interactions within the market between buyers and sellers. Eighteen sales of properties that were somewhat representative of the subject were found. The comparables were dissimilar in many respects; however, an analysis based on market evidence was made and the comparables used were considered to provide a credible and reliable conclusion of the subject’s fee simple market value and market rents, as of the effective date of this report. The Cost Approach The Cost Approach has its most usefulness when the property being appraised involves new improvements which represent the highest and best use of the land, or when there exists no income and sales data of similar properties. As previously stated, the instructions of the Client are to appraise the subject as “vacant land” with water available to the area; therefore, it is the Appraiser’s opinion that this approach would be a duplication of the Sales Approach and was omitted. The Income Approach The Income Approach is preferred for income producing properties. The reliability of this approach is a function of rent and expense data and the accurateness of the capitalization rate. The data available on income and expenses for similar properties was iffy at best. The lease rates used were established in 2007 or were determined from gross sales from true commercial sites. Therefore, it is the Appraiser’s opinion that further analysis is neither reliable nor credible; thus, this approach is deemed to be inconclusive. Holthouse Appraisal Group Analysis – 6705 Page D - 54 FINAL OPINION OF MARKET VALUE AND MARKET RENTS The Appraisal assignment was to determine the fee simple market value and market rents of the subject site “as vacant ready for its highest and best use” with water provided to the area. An analysis of the Highest and Best Use section of this report indicates that the highest and best use of the site would be to subdivide the tract into five separate lake front lots. Furthermore, the Appraiser was able to determine the market value of the site based on market extractions by direct sales comparison by adjusting for both size and location. It is the Appraiser’s opinion that the comparable sales found in the Sales Approach best depicts the current market; thus, the Sales Approach is considered to be the best indication of the subject’s fee simple market value and market rents. Therefore, based on the foregoing data, analysis and conclusions, it is the opinion of the Appraiser that the fee simple market value and market rents for the subject property, as of the effective date of this report, are as follows: MARKET VALUE OF SUBJECT SITE SIX HUNDRED FORTY FIVE THOUSAND DOLLARS $645,000

MARKET RENTS FOR THE SUBJECT SITE TWENTY TWO THOUSAND DOLLARS $22,000

LEASE RATE CREDIBILITY ANALYSIS To determine the credibility of the new lease rate the Appraiser has analyzed the current lease rates determined by the Appraise of comparable sites in the subject’s immediate market area. These rates were derived from the market value of the land and multiplied by an appropriate return rate which was market extracted. An analysis of the Casper Boat Club found in Section “C” of the Analysis Section indicates that the new rate for the 11.27 acre tract will be $25,000. An analysis of the Alcova Lakeside Marina indicates found in Section “E” of the Analysis Section indicates that the new rate for the 5.3 acres will be $12,850. (This rate was established under a different scenario using 2% of gross sales.) An analysis of the Pathfinder Marina and Boat Club indicates found in Section “F” of the Analysis Section indicates that the new rate for the 3.11 acres will be $7,500. When these new rates are compared to the new rates determined by the Appraiser for the subject, the following is determined:

Holthouse Appraisal Group Analysis – 6705 Page D - 55 CREDITIBILITY ANALYSIS Description New Annual Rate Acres $/Acre Alcova Lakeside Marina$ 12,850 5.3$ 2,425 Casper Boat Club$ 25,000 11.27$ 2,218 Pathfinder Marina/Boat Club$ 7,500 3.11$ 2,412 Average$ 2,351 Casper Water Ski Club$ 22,000 10.079$ 2,183 Differential 7.17%

An analysis of the above stated chart indicates that the differential between the new rates being charged for the subject and similar sites located at Alcova Reservoir is 7.17% which is due to the lack of community sewer; thus, indicating that the new rate for the subject is both reasonable and credible. Furthermore, the Appraiser has analyzed the current market for dock and seasonal trailer site rentals, the primary draw to the subject. An analysis of competing facilities indicates that the Casper Boat Club currently charges $350/year for 75% of its dock space and $340/year for membership, which is a requirement for leasing boat slips. This equates to an annual fee of $690/year plus 4 months of “use it or lose it” food charge of $75/month. An analysis of area dock and trailer site fees indicate that the Alcova Lakeside Marina charges an average of $650/year for their dock fees and an average of $2,200 for its trailer sites. The Glendo Marina leases their docks for $1,430-$2,230/year with trailer sites being $2,400/year. Boysen Marina leases dock space for $780-$980/year and trailer sites for $1,500/year. An analysis of the new lease rate indicates an increase of $7,000 or an annual increase of $70.00/year member ($7,000 ÷ 100 = $70.00). This would indicate an increase in the overall cost per member for dock and RV trailer space to $856/year, which appears to be more than reasonable for services being provided and should not adversely affect the success of the club.

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SUBSECTION “E” APPRAISAL ANALYSIS ON THE ALCOVA LAKESIDE MARINA SITE 24025 LAKESHORE DRIVE ALCOVA RESERVOIR NATRONA COUNTY, WYOMING

Holthouse Appraisal Group Analysis - 6705 Page E - 1 Holthouse Appraisal Group

January 30, 2012

Mr. Mike Haigler, Director Natrona County Road, Bridge and Parks Department 538 SW Wyoming Boulevard Mills, WY 82644

Dear Mr. Haigler:

In fulfillment of our agreement, I have performed an appraisal of the real property, 24025 Lakeshore Drive, (land only), known as the Alcova Lakeside Marina, Alcova, Natrona County, Wyoming, herein referred to as the "subject property". The Appraiser’s opinions and conclusions are contained within this report and are reported in Summary Report format.

I, Edward J. Holthouse, CRS, CCIM, hold Certified General Real Estate Appraiser Permit No. 438, issued by the State of Wyoming Certified Real Estate Appraiser Board.

"Market value", as used herein, refers to the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and

Holthouse Appraisal Group Analysis - 6705 Page E - 2 seller, each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under all conditions outlined in the Definition of Market Value contained in the body of this report.

The subject property's marketing time and exposure time is estimated to be one year or less based on the current market conditions.

MARKET VALUE OF LAND ONLY

THREE HUNDRED FORTY FIVE THOUSAND DOLLARS $345,000 MARKET RENTS FOR THE LAND ONLY

TWELVE THOUSAND EIGHT HUNDRED FIFTY DOLLARS $12,850 HYPOTHETICAL CONDITION: At the time of inspection the subject was improved with the Alcova Lakeside Marina including bar/restaurant/ships store, landscaping, docks, boat ramps, RV Park and various support buildings and improvements. The Client has requested an appraised value of the land only excluding all tenant owned improvements but including off-site improvements or any other improvements installed or owned by the United States Government or any other entity. Off-site improvements considered are hydroelectric dams, beaches, lakeways, roadways, electrical service and transmission lines, docks, outdoor restrooms or any other improvement that is not considered a traditional tenant improvement. Therefore, the value opinion and other conclusions expressed in this report are subject to the hypothetical condition that the site is currently vacant with no tenant improvements. The Client and intended users of this appraisal are cautioned that if this hypothetical condition is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

Holthouse Appraisal Group Analysis - 6705 Page E - 3 EXTRAORDINARY ASSUMPTION Currently the subject property is improved with the Alcova Lakeside Marina; however, the Appraiser has been asked to appraise the site under the hypothetical condition that these improvements are not on the site and to appraise the subject “as vacant ready for its highest and best use” The Appraiser has conducted a highest and best use analysis and determined that the highest and best use “as vacant”, would be as a marina or to subdivide the site into recreational lake front lots. Therefore, the value opinion and other conclusions expressed in this report are subject to the extraordinary assumption that the owner of the subject would desire such a use and, that the Natrona County Planning Commission would approve this scenario. The Client and intended users of this appraisal are cautioned that if this extraordinary assumption is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

Respectfully submitted,

______Edward J. Holthouse, CRS, CCIM Certified General Appraiser Permit No. 438

ejh

Holthouse Appraisal Group Analysis - 6705 Page E - 4 SUMMARY OF SALIENT FACTS AND CONCLUSIONS

Identification of the Subject Property: Alcova Lakeside Marina, located on the west shore of Alcova Reservoir, Natrona County, Wyoming.

Address: 24025 Lakeshore, Alcova Reservoir, Natrona County, Wyoming

Legal Description: A tract of land in the E/2NE/4, Section 33, Township 30 North, Range 83 West, 6th P.M., Natrona County, Wyoming more specifically described within the body of this report.

Site Size: 5.3 acres.

Improvements: The instructions of the Client are to appraise the subject site as unimproved land ready for its highest and best use with “water and sewer provided to the area”. The site has a 6,408 sq. ft. marina/restaurant/bar/lounge with 1,209 sq. ft. viewing deck, 336 sq. ft. storage deck, 480 sq. ft. boat storage/shop, boat rental shack, guest cabins, gazebo, gasoline storage tank bunker, recreational vehicle park, gas dock, boat slips, personal water craft slips. However, the improvements to the sites will not be further described as they do not affect the value to be determined.

Zoning: “PUD” Planned Unit Developement

Highest and Best Use: Inland Marina

Holthouse Appraisal Group Analysis - 6705 Page E - 5 Value Opinion by the Sales Approach Market Value $ 355,000 Annual Market Rent $ 12,000

Value Opinion by the Cost Approach: Omitted

Value Opinion by the Income Approach: Market Value $ 345,000 Annual Market Rent $ 12,850

Final Opinion of Market Value: Market Value $ 345,000 Market Rents $ 12,850

Return on Investment Rate: 3.72%

Date of the Appraisal: January 30, 2012 Effective Date of Appraisal: December 1, 2011

Appraised By: Edward J. Holthouse Wyoming Certified General Appraiser: Permit Number No.438

Holthouse Appraisal Group Analysis - 6705 Page E - 6

ALCOVA RESERVOIR LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page E - 7 PHOTOGRAPHS OF THE SUBJECT PROPERTY

Holthouse Appraisal Group Analysis - 6705 Page E - 8 Aerial Map - Marina Site

Alcova Marina Entrance Marina - Front

Marina - Rear Gas Dock

Gas Dock Area Fuel Bunker

RV Area RV Sites

Boat Docks RV Sites

RV Sites Water Front Docks

Public Dock Water Craft Docks

Gas Dock & Public Loading Docks Personal Water Craft Docks

Water Front Docks Water Front Docks

Water Front Docks IDENTIFICATION AND LOCATION OF THE SUBJECT PROPERTY The subject of this appraisal report is a 5.3 acre tract of land that is currently being occupied by the Alcova Lakeside Marina at 24025 Lakeshore Drive on the west shore of Alcova Reservoir approximately 30 miles southwest of Casper in south-central Natrona County. The instructions of the Client are to determine the “fee simple” market value of the “land only” “ready for its highest and best use” with “water and sewer provided to the area”. Thus, the improvements to the site will not be described, as they have no effect on the value opinion being determined. The subject is generally irregular in shape and the soils conditions are quite rocky with sandy soils and the vegetation is limited to the landscaping around the marina. The site is serviced with community water and sewer adequate for its improvements according to the County. The subject property is located east of Lakeshore Drive and west of Alcova Reservoir, approximately thirty miles southwest of the center of the Casper Central Business District and has the following street address: 24025 Lakeshore Drive Alcova Reservoir, Wyoming 82620 LEGAL DESCRIPTION According to information supplied to the Appraiser by the Client, the subject property is legally described as follows: A tract of land in the E/2NE/4, Section 33, Township 30 North, Range 83 West of the 6th Principal Meridian, Natrona County, Wyoming, being more particularly described as follows:

Beginning at a point at the intersection of the south line of the NE/4NE/4, Section 33, and the easterly right-of-way line of County Road No. 406, Lake Shore Drive, said point being located at S8902'E, a distance of 599.91 feet from the southwest corner of the NE/4NE/4, Section 33; thence along the easterly right-of-way line of Lake Shore Drive, N0145'W, 234.35 feet to a point; thence leaving said road, N6720'E, 285.0 feet to a point; thence S2240'E, 49.0 feet to a point; thence S6720'W, 225.0 feet to a point; thence S2949'W, 121.95 feet to a point; thence S7758'E, 397.32 feet to a point; thence S6422'W, 279.70 feet to a point; thence S0742'E, 144.15 feet to a point; thence S2809'15"E, 73.05 feet to a point; thence N7156'19"E, 144.50 feet to a point; thence S8905'14"E, 138.11 feet to a point; thence S6205'50"W, 371.45 feet to a point on the easterly right-of-way line of Lake Shore Drive; thence along said easterly right-of-way line, N3240'W, Holthouse Appraisal Group Analysis - 6705 Page E - 9 191.26 feet to a point; thence along said easterly right-of-way line, N3340'W, 133.25 feet to a point; thence along said easterly right- of-way line, N1639'W, 186.91 feet to a point; thence along said easterly right-of-way line, N0145'W, 223.75 feet to the point of beginning and encompassing an area of 5.30 acres, more or less.

ZONING According to the Natrona County Planning and Zoning Department the subject site is zoned "PUD", Planned Unit Development. The site is restricted to a private boat club marketed to the general public according to the Natrona County Road & Bridge Department by the Bureau of Reclamation. According to this zoning district all allowable uses require board approval, for which the current use is allowed. Excerpts from this zoning district can be found in the Addenda of this report. SITE DATA

Location: The subject property is located adjacent to the Alcova Reservoir, approximately 30 miles southwest of the City of Casper.

Address: 24025 Lakeshore Drive, Alcova Reservoir, Natrona County, Wyoming.

Legal Description: A tract of land in the E/2NE/4, Section 33, Township 30 North, Range 83 West, 6th P.M., Natrona County, Wyoming more specifically described above.

Shape: Irregular – See Plot Plan

Size: 5.3 acres

Frontage: Alcova Reservoir and Lakeshore Drive with both being adequate for its highest and best use.

Holthouse Appraisal Group Analysis - 6705 Page E - 10 Bureau of Reclamation and this area is considered to be in a flood zone.

Soils: The Appraiser has not been provided with a soils analysis; however, based on a visual inspection of the existing buildings, soils appear adequate for a variety of building purposes.

Present Improvements: The instructions of the Client are to appraise the site as unimproved land ready for its highest and best use. The improvements are considered as personal property and are excluded from any value conclusions stated in this report. A brief description of these improvements are as follows: 6,408 sq. ft. marina/restaurant/bar/lounge with 1,209 sq. ft. viewing deck, 336 sq. ft. storage deck, 480 sq. ft. boat storage/shop, boat rental shack, guest cabins, gazebo, gasoline storage tank bunker, recreational vehicle park, gas dock, boat slips, personal water craft slips.

Easements/Encroachments: Road way and utility easements, no apparent adverse easements noted on inspection.

Holthouse Appraisal Group Analysis - 6705 Page E - 11

ALCOVA LAKESIDE MARINA - SITE PLAN

Holthouse Appraisal Group Analysis Section - 6705 Page E-12

ALCOVA MARINA AERIAL LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page E - 13

ALCOVA MARINA TOPOGRAPHICAL MAP

Holthouse Appraisal Group Analysis Section - 6705 Page E - 15 ADDITIONAL DEFINITIONS Absorption Period1 - is defined as “The actual expected period required from the time a property is initially offered for purchase or use by its eventual users until all portions have been sold or stabilized occupancy has been achieved. Although marketing may begin before the completion of construction most forecasters consider the absorption period to begin after completion of construction.”

Discounted Rate4 - is defined as “A yield rate used to convert future payments or receipts into present value.”

1 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 2 2 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 2 3 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 8 4 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 102 5 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 102 6 The Dictionary of Real Estate Appraisal, Third Edition, Chicago: Appraisal Institute, 1998, Page 244 Holthouse Appraisal Group Analysis - 6705 Page E - 15 NPV is zero, the investment is neutral; and when NPV is negative, the investment is unacceptable. Also called dollar reward.” HIGHEST AND BEST USE The purpose of studying the highest and best use of a property is to determine the improvements that will generate the greatest residual income to the land. The highest and best use is defined as: The probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

7 The Appraisal of Real Estate, 10th Edition, 1992, published by the Appraisal Institute.

Holthouse Appraisal Group Analysis - 6705 Page E - 16 In determining the highest and best use of the subject property, the economic, legal, and social factors which motivate investors to develop, manage, own, buy, sell, and lease real estate are carefully considered. Typically, five basic land uses are considered. These uses are: special purpose, agricultural, residential, industrial, and commercial land uses. A brief discussion of these uses and how they relate to the subject are as follows: Special Purpose Uses A special purpose property is defined as “a limited market property with a unique physical design, special construction materials, or a layout that restricts its utility to the use for which it was built; also called “special design property”8. Special purpose properties typically have only one use or a very limited number of uses. Examples of such properties include event centers, public libraries, schools, churches, and recreational parks. The subject is located approximately 30 miles southwest of the Central Business District of Casper adjacent to the Alcova Reservoir. The subject has historically been used as a recreational marina that provides the general public with bar/restaurant/ships store, boat docks and RV spaces. The analysis found within this report indicates that special purpose uses such as private boat/ski clubs are typically run as not for profit organizations; thus, are historically not financially feasible. Agricultural Uses Agricultural use of the subject is not physically possible or legally permissible due to restrictions placed on the land by the Bureau of Reclamation prohibiting the site from being used for agricultural purposes. Therefore, due to its location, size, surrounding uses, nature of the soils, area growing season, and legally permitted uses, it is the Appraiser’s opinion that a use of this type would not be legally permissible or financially feasible. Residential Uses Residential development of the subject parcel would be both physically and could be legally possible (if desired by the owner as the restrictions are primarily owner imposed and there is water and sewer to the site) and the subject’s location is conducive to the risks involved in this type of development. A size limitation of 2.0 acres would be conducive to low development costs and would be more acceptable to passage by the Natrona County Planning

8 The Dictionary of Real Estate Appraisal, Third Edition, The Appraisal Institute, 1993, Page 342 Holthouse Appraisal Group Analysis - 6705 Page E - 17 Department. Therefore, it is the Appraiser’s opinion that a use of this type would be physically possible and has a high probability of becoming legally permissible. Industrial Uses The subject of this report is located in an area that has historically been seasonal recreational sites and is restricted by the Bureau to these uses. Therefore, this use was not considered as it is not legally permissible nor would it be financially feasible due to its location. Commercial Use Commercial use of the subject sites would be physically possible and legally permissible under the subject’s current zoning restrictions. Furthermore, due to the rural nature of the area, a commercial use such as a marina would be a desired use by the current owner as it provides support services for other owned real property being leased in the area. Therefore, a use of this type would be physically possible, legally permissible and financially feasible. Financially Feasible Use As previously stated, the subject is improved with a commercial marina that provides goods and services to the general public. The site, “as vacant”, is also conducive to being developed into 2 acre sites for recreational home sites. Both of these uses are physically possible and, according to the Natrona County Road & Bridge, are legally permissible if a use of this type is desired by the Bureau; therefore, should be financially feasible. Maximally Profitable Use The Appraiser has been instructed to appraise the subject “as vacant land ready for its highest and best use” with domestic water and sewer in the area. Furthermore, the Appraiser has been asked to determine the market rent for the subject site without consideration of improvements. Currently, sites similar to the subject are not bought and sold on the open market but are leased to the owners of the leasehold improvements. In my interviews with the Natrona County Road and Bridge and Mr. Kenneth C. Randolph with the U.S. Department of the Interior, Bureau of Reclamation, they have indicated that there are no plans to privatize this site or sell it on the open market. The Appraiser was unable to find comparable land sales but was able to find arms-length leases that were similar to the subject under its current use as a commercial marina. An analysis

Holthouse Appraisal Group Analysis - 6705 Page E - 18 of the site’s financially feasible uses indicates that if vacant, the subject site would have two potential uses: 1) – Commercial Marina as currently improved; or 2) - Cabin sites similar to those located in the Alcova Lakeview Estates, Alcova West Ranchettes, South Estates and Lake Ridge Estates, just to the northwest. According to Mr. Bill Fehringer with Civil Engineering Professionals, Inc., under the cabin site scenario, the desired size for density and health issues would be at least two acres. This would allow for minimal development costs and could facilitate 2 water front sites with approximately 1.3 acres of the site used for open space and waste. Furthermore, in my discussions with the Natrona County Road & Bridge it was found that if this use was desired by the Bureau, a use of this type would most likely be acceptable to the county. Therefore, the Appraiser will analyze these two scenarios to determine the maximally profitable use of the site. Scenario No. 1 – Boat Club Analysis In my interview with Mr. Gary Lever one of the owners of the marina it was found that the marina provides traditional marina services such as, but not limited to, convenience items, alcoholic beverages, RV spaces, boat rentals and boat slip rentals. These services are provided to the general public including the Alcova Trailer Court and other lands owned by the Bureau. The marina is currently being leased from the Bureau for $10,300 established in 2007 and was based on 2% of the average gross sales for 2003-2007. This lease restricts the tenant to 200 dock slips and 29 RV sites; however, the owner is allowed to run a full service marina complete with restaurant and lounge. In my interviews with the Natrona County Road and Bridge it was found that this site is not restricted like the private clubs and is designed to service the general public. An analysis of this site and interviews with Mr. Gary Lever, owner of the Alcova Lakeside Marina, indicates that the usable area of the site is being maximized and includes community water and sewer to the site; however, water and sewer usage is at an additional charge. The value of this site under the Marina Scenario Analysis will be determined by the Income Approach as adequate data is available to make a credible conclusion under this scenario.

Holthouse Appraisal Group Analysis - 6705 Page E - 19 Scenario No. 2 – Hypothetical Subdivision Analysis The Appraiser has researched the market for lot sales that would be similar to the subject under this scenario. These sales will be used in the subdivision analysis to determine the retail value of the lots and the total aggregate value of the site. Once this value is established, the Appraiser must then discount this value by the direct and indirect costs of development including entrepreneurial profit and holding costs. The lots located in the Alcova Lake View Estates I and II, Alcova West Ranchettes, South Estates and Lake Ridge Estates are comparable to the subject in many aspects including the availability of domestic water to four of the five areas. The remaining subdivision, Lake Ridge Estates, does have acerages similar to the subject with several selling with a water well in place. An analysis of the market indicates that most sites are now purchased on per-square foot- value with the primary emphasis on view and access to the lake. An analysis of the subject’s proposed lots under the hypothetical subdivision indicates that they would be superior in location with a closer proximity to the shoreline. According to my interviews with Mr. Edgeworth with the Edgeworth Real Estate Firm and Mr. Gary Lever with Rocky Mountain Real Estate, these lots would have an extremely high demand and should sell in the $200,000 to $250,000 price range. The value of this site under the Hypothetical Subdivision Analysis will be determined by the Sales Approach as adequate data is available to make credible conclusions under this scenario. Conclusion An analysis of the Income Approach indicates that the value of the subject is $345,000 with an annual lease rate of $12,850. An analysis of the Sales Approach indicates that the value under this scenario would be $355,000 with a lease rate of $12,000. This would indicate that the subject as a seasonal recreational second site subdivision should be the maximally profitable use of the site; however, due to the narrow range and services that a marina would supply to the owner’s surrounding properties making them more desirable, it is the Appraiser’s opinion that the maximally productive use of the site “as vacant” would be as a marina site. HIGHEST AND BEST USE AS VACANT Based on the foregoing analysis, the highest and best use of the subject, “as vacant”, would be a full service marina with public access.

Holthouse Appraisal Group Analysis - 6705 Page E - 20 HIGHEST AND BEST USE AS IMPROVED The Appraiser’s assignment was to appraise the subject “as vacant ready for its highest and best use”. Therefore, the highest and best use “as improved” was not part of the Scope of Work and was not considered. TYPICAL PURCHASER The typical purchaser of this site would be a user/investor looking to develop the site into a full service marina with public access. The typical tenant or purchasers of the site would most likely live in or move to the area and operate the site as a sole proprietor. THE APPRAISAL PROCESS Appraisal techniques are the specifics of the three approaches that are traditionally used to derive separate indications of real property value. One or more approaches may be used, depending on their applicability to a particular appraisal assignment. In assignments to determine market value, the ultimate goal of the valuation process is a well-supported conclusion that reflects the appraiser’s consideration of all influences on the market value of the property being appraised. Therefore, the appraiser studies the property from each of the applicable viewpoints reflected in the three approaches. APPROACHES TO VALUE In the appraisal of real estate, there are three basic traditional approaches for determining property value. The three approaches are the Sales Approach, the Cost Approach, and the Income Approach. The final step in determining a property's "market value" (i.e., most probable selling price) is to correlate the appraiser’s value opinion of the three approaches into a single opinion of value. Sales Approach This approach is based on the proposition that an informed purchaser would pay no more for a property than the cost to him of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data, which can be verified from authoritative sources. The Sales Approach is relatively unreliable in an inactive market or in determining the value of properties when no real comparable sales data is available.

Holthouse Appraisal Group Analysis - 6705 Page E - 21 The Cost Approach This approach is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements, which represent the highest and best use of land, or when unique or specialized improvements are located on the site for which there exists no comparable properties on the market. The Income Approach This approach is based on the proposition that a property is worth no more than the capitalized value of the income stream that the property is capable of generating. The procedure converts anticipated benefits (dollar income) to be derived from the ownership of the property into a value opinion. The Income Approach is widely applied in appraising income-producing properties. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process.

Holthouse Appraisal Group Analysis - 6705 Page E - 22 THE SALES APPROACH The value opinion of the subject property by the Sales Approach was derived after a search for similar properties. The Appraisal Institute further explains the approach below in the paragraphs from Page 417 of The Appraisal of Real Estate, 12th Edition: In the sales comparison approach, the appraiser develops an opinion of value by analyzing similar properties and comparing these properties with the subject property. The comparative techniques of analysis applied in the sales comparison approach are fundamental to the valuation process. Estimates of market rent, expenses, land value, costs, depreciation, and other value parameters may be derived in the other approaches to value using comparative techniques. Similarly, conclusions derived in the other approaches are often analyzed in the sales comparison approach to estimate the adjustments to be made to the sale prices of comparable properties.

Comparative analysis of properties and transactions focuses on similarities and differences that affect value, which may include variations in the following:  Property rights appraised  The motivations of buyers and sellers  Financing terms  Market conditions at the time of sale  Size  Location  Physical features  Economic characteristics, if the properties produce income Elements of comparison are tested against market evidence to estimate which elements are sensitive to change and how they affect value. The Appraiser has searched the subject’s market area and found eighteen sales that are somewhat similar to the subject. These sales will be used to determine the value of the subject under the extraordinary assumption that the site could be subdivided into two water front lots or as a bulk 5.3 acre residential recreational land sale. Details of these sales can be found in the Basic Data Section with the analysis as follows:

Holthouse Appraisal Group Analysis - 6705 Page E - 23 ABSTRACT OF COMPARABLE LAND SALES Recording Comp # Location Date Deed # Grantor/Grantee Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake CL Dolodell 1 2/27/1998 609823$ 22,000 1.00$ 22,000.00 $ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Ken Milner Lot 33, Alcova Lake Richard D. Wagner 2 5/23/2000 653493$ 23,500 0.94$ 25,000.00 $ 0.57 Average NoHOA/None 1230 "SR-2" View Estates 2 Max Wayne Stalkup Lot 3, Alcova West Charles T. Norton, et ux 3 10/31/2001 680825$ 35,000 1.03$ 34,013.61 $ 0.78 V-GoodYes HOA/None Private "SR-1" Ranchettes Donald Dale Sackett et ux Lot 41, Alcova Lake Stan & Nancy Koehn 4 12/31/2002 707361$ 28,000 1.00$ 28,000.00 $ 0.64 Good-AvgNo HOA/None 77 "SR-2" View Estates 2 Keith W. Johnson Lot 31 Alcova Lake Paul J. Simonton, et ux 5 7/1/2003 720130 $ 33,500 1.00 $ 33,500.00 $ 0.77 AverageNo HOA/None 35 "SR-2" View Estates 1 Newell E. Wilson, et ux Lot 5 Alcova West Donald Dale Sackett et ux 6 9/19/2003 726757$ 20,000 1.86$ 10,752.69 $ 0.25 AverageNo HOA/None 261 "SR-1" Ranchettes Walter E. Weiss, et ux Lot 16 Alcova West Robbie Dane Benson 7 10/21/2003 729128$ 16,000 1.05 $ 15,238.10 $ 0.35 Average No HOA/None 311 "SR-1" Ranchettes David S. Bullard, et ux Lot 5 Alcova West Walter E. Weiss, et ux 8 4/12/2004 739977$ 25,500 1.86$ 13,709.68 $ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Ted Anderson, et ux Lot 13, Alcova West Timothy C. Hoiles, Trustee 9 4/6/2005 763897$ 20,500 1.05$ 19,523.81 $ 0.45 AverageNo HOA/None 410 "SR-1" Ranchettes Wyoming Renovations, Inc Lot 30, Alcova West David Whisler 10 6/23/2005 770669$ 37,500 1.38 $ 27,173.91 $ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Warren R. Foreman Alcova Lake, LLC 11 Lot 3, South Estates 2/2/2010 883441$ 225,000 2.26$ 99,557.52 $ 2.29 ExcellentYes HOA/None Private "UR" John P. Ellbogen, II Lot 11, Lake Ridge Lake Ridge Estates, LLC 12 7/23/2010 892364$ 140,000 12.61$ 11,102.30 $ 0.25 GoodYes Well/None 58 "PUD" Estates Phase I Steddyhomes, II, LLC Lot 12, Lake Ridge Success Properties, LLC 13 9/3/2010 894605$ 110,000 7.24$ 15,193.37 $ 0.35 Average Yes None/None 97 "PUD" Estates Phase I Lakecliffe, Inc. Lot 10, Lake Ridge Lake Ridge Estates, LLC 14 11/15/2010 898890 $ 90,000 10.22 $ 8,806.26 $ 0.20 Fair No None/None Private "PUD" Estates Phase I Steddyhomes, II, LLC Lot 5, Lake Ridge Lake Ridge Estates, LLC 15 11/22/2010 899332$ 61,500 7.33 $ 8,390.18 $ 0.19 Fair No None/None Private "PUD" Estates Phase I Ryan P. Mundell Lot 18, Alcova West Rita J. Condis 16 6/21/2011 910441 $ 47,500 1.14 $ 41,666.67 $ 0.96 AverageNo HOA/None 1 "SR-1" Ranchettes David B. Simonson, et ux Lot 25, Lake Ridge SDRE, LLC 17 7/6/2011 911244 $ 175,000 10.11 $ 17,309.59 $ 0.40 V-GoodYes Well/None Private "PUD" Estates Phase I Craig H. Evert, et ux Lot 55, Alcova Lake Susan F. Hoag, Trustee 18 12/5/2011 919443$ 58,500 1.03 $ 56,796.12 $ 1.30 V-GoodYes HOA/None 206 "SR-1" View Estates 2 Woody C. Hugget

Holthouse Appraisal Group Analysis - 6705 Page E - 24 PAIRED SALES ANALYSIS - TIME - MARKET INCREASE Recording Comp # Location Date Sales Price Acres Sq. Ft. $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake 1 2/27/1998$ 22,000 1.00 43,560$ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Lot 31 Alcova Lake 5 7/1/2003$ 33,500 1.00 43,560$ 0.77 Average No HOA/None 35 "SR-2" View Estates 1 Differential 1,950$ 11,500 %/Year $ 0.26 %/Year Annual Time Adjustment 5.34 52.27% 9.78% 52.27% 9.78% Lot 33, Alcova Lake 2 5/23/2000$ 23,500 0.94 40,946$ 0.57 Average No HOA/None 1230 "SR-2" View Estates 2 Lot 41, Alcova Lake 4 12/31/2002$ 28,000 1.00 43,560$ 0.64 Good-Avg No HOA/None 77 "SR-2" View Estates 2 Differential 952$ 4,500 %/Year $ 0.07 %/Year Annual Time Adjustment 2.61 19.15% 7.34% 12.00% 4.60% Lot 5 Alcova West 6 9/19/2003$ 20,000 1.86 81,022$ 0.25 Average No HOA/None 261 "SR-1" Ranchettes Lot 5 Alcova West 8 4/12/2004$ 25,500 1.86 81,022$ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Differential 206$ 5,500 %/Year $ 0.07 %/Year Annual Time Adjustment 0.56 27.50% 48.73% 27.50% 48.73% Lot 16 Alcova West 7 10/21/2003$ 16,000 1.05 45,738$ 0.35 Average No HOA/None 311 "SR-1" Ranchettes Lot 13, Alcova West 9 4/6/2005$ 20,500 1.05 45,738$ 0.45 Average No HOA/None 410 "SR-1" Ranchettes Differential 533$ 4,500 %/Year $ 0.10 %/Year Annual Time Adjustment 1.46 28.13% 19.26% 28.13% 19.26% Lot 30, Alcova West 10 6/23/2005$ 37,500 1.38 60,113$ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Lot 18, Alcova West 16 6/21/2011$ 47,500 1.14 49,658$ 0.96 Average No HOA/None 1 "SR-1" Ranchettes Differential 2,189$ 10,000 %/Year $ 0.33 %/Year Annual Time Adjustment 6.00 26.67% 4.45% 53.33% 8.89% Lot 3, Alcova West 3 10/31/2001$ 35,000 1.03 44,823$ 0.78 V-Good Yes HOA/None Private "SR-1" Ranchettes Lot 55, Alcova Lake 18 12/5/2011$ 58,500 1.03 44,867$ 1.30 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Differential 3,687$ 23,500 %/Year $ 0.52 %/Year Annual Time Adjustment 10.10 67.14% 6.65% 66.98% 6.63%

Paired Sales Analysis - Land Sales Holthouse Appraisal Group Analysis - 6705 Percent Location Premium SUMMARY OF THE COMPARABLE LAND SALES Comparable Land Sale No. 1 Through No. 10, Alcova, Wyoming – These sales were used by the Appraiser to support conclusions as to time adjustments and market trends in the area. Comparable Land Sale No. 11 – Lot 3 – South Estates Subdivision, Alcova, Wyoming - This sale is located 1/4 mile northwest of the subject, in the subject’s immediate neighborhood. This sale is located in the South Estates Subdivision which lies south of Lakeview Estates. The subdivision has 17 platted lots ranging in price from $150,000 to $250,000. The topography of the site is heavy rolling and pad sites are limited. The view of the lake is superior to most of the lots within the subdivision and contains approximately 2.26 acres. This sale, according to the seller, was sold before the subdivision was put on the market. It was purchased by an adjoining landowner who purchased the site to prevent his view of the lake from being blocked. The site is the only site sold within the subdivision and sold at a premium due to the value of the view shed. This site has ease of access to the Boat Club and Marina where mooring can be leased. It is the Appraiser’s opinion that this site best represents the base value premium for the subject’s individual lots under the hypothetical subdivision analysis which will be used to support the Appraiser’s value conclusion of the subject’s land value. The sales price was $225,000 or $2.29/sq. ft. before adjustments. Comparable Land Sale No. 12 and No. 13 – Lots 11 and 12, Lake Ridge Estates Phase I, Alcova , Wyoming - These sales are located at the entrance of Lake Ridge Estates approximately 2 miles northwest of the subject, in the subject’s immediate neighborhood. These sales are located in the Lake Ridge Estates which lies northwest of Lakeview Estates and have no direct access to the lake area except via Highway 220; however, there are currently plans to build one. Water and sewer will be provided by private well and septic at owner’s expense. Phase No. 1 of the subdivision consists of 34 platted lots ranging in price from $75,000 to $250,000. Lot 11 (Comparable Sale No. 12) is located to the east of Lot 12 (Comparable Sale No. 13) and abuts BLM land so the view of the lake is unobstructed and is likely to remain so. This lot contains approximately 12.61 acres and sold for $140,000 or $025/sq. ft. According to the seller the lot had a well in place with an estimated value of $15,000 to $20,000. Lot 12 is located with a slightly obstructed view of the lake and overlooks Lots 13, 14 and 16. This lot contains

Holthouse Appraisal Group Analysis - 6705 Page E - 25 approximately 7.24 acres and sold for $110,000 or $0.35/sq. ft. Both sites were purchased by local builders looking to build spec homes in the area. Both sites are now improved and are still on the market after more than a year. These two sales indicate that size might be a factor; however, on a per lot basis, the better view sold for a higher price. Sales were used to help set trends in the area. Comparable Land Sale No. 14 and No. 15 – Lots 10 and 5, Lake Ridge Estates Phase I – Alcova, Wyoming – These sales are also located approximately 2 miles northwest of the subject, in the subject’s immediate neighborhood. These two sales are located on the highway and have no views of the lake. Water and sewer will need to be provided by the purchaser at their expense. Lot 10 contains approximately 10.22 acres and is located on a hillside overlooking Lots 5 and 6. This sale sold for $90,000 or $0.20/sq. ft. Lot 5 is located adjacent to the highway and at the entrance to this area of the subdivision and contains approximately 7.33 acres. According to the seller the purchaser is planning to put mini-storage units on Lot 5 when the market makes it financially feasible. These two sales indicate there appears to be little difference in value when size is a factor contradicting the preceding analysis; therefore, in the paired sales analysis similar sites should be used to evaluate this dichotomy. Sales were used to help set trends in the area. Comparable Land Sale No. 16 – 23381 West Lower Reeves Road, Wyoming - This sale is located approximately 1/2 mile northwest of the subject, in the subject’s immediate neighborhood. It is Lot 18 of Alcova West Ranchettes located west of Lakeview Estates No. 2 and is the most current sale of a no-lake-view lot. This lot is located in a cul-de-sac and has some hill side views of the surrounding area. The site has access to community water as part of the homeowner’s association fees with septic at the expense of the purchaser. This sale is approximately 1.14 acres and sold for $47,500 or $0.96/sq. ft. This sale was used to help set trends in the area. Comparable Land Sale No. 17 – Lot 25, Lake Ridge Estates, Alcova Phase I, Wyoming - This sale is located approximately 2 miles northwest of the subject, in the subject’s immediate neighborhood. It is at the end of Lake Ridge Estates and has an unobstructed view of the lake. It was owned by one of the owners of the subdivision and was considered to be one of the best view lots within the subdivision. According to the seller the site was improved with a water well with an estimated value of $15,000 to $20,000. The lot size is approximately 10.11 acres and had

Holthouse Appraisal Group Analysis - 6705 Page E - 26 a developed pad site. The sales price was $175,000 or $0.40/sq. ft. This sale was considered to be somewhat similar to the subject in size with water in place and will be used as the base value of the subject “as a whole” or “bulk sale” prior to adjustments for location. Comparable Land Sale No. 18 – 25887 West Cedar Mesa, Alcova Lake View Estates No. 2, Alcova, Wyoming - This sale is located approximately 1/2 mile northwest of the subject, in the subject’s immediate neighborhood. It is the most current sale of a lake-view lot within the Lakeview Estates Area. The site has community water available as part of the homeowner’s fees with septic at the expense of the purchaser. The lot size is approximately 1.03 acres and has very limited area for a pad site. The sales price was $58,500 or $1.30/sq. ft. This sale was used to support trends in the area. ANALYSIS OF THE COMPARABLE LAND SALES As previously stated Comparable Sales No. 1 through No. 10 were used to help support trends in the area. Also as previously stated Comparable Sale No. 11 was most similar in desirability of location; however, is not a “water front” lot. Comparable Sales No. 12, No. 13, No. 14, and No. 15 were used to establish trends in the area from which adjustments could be made or supported. Comparable Sale No. 16 was the most current lot sale with no-view of the lake and Comparable Sale No. 18 is the most current “lake-view” sale midway between Comparable Sale No. 16 and No. 11. These sales were used to help establish trends in the area from which reasonable adjustments could be made and to support conclusions to value. Comparable Sale No. 17 was somewhat similar in size and had a proven water well in place. This sale was considered to be most similar to the subject in utility and will be used to support a size adjustment. The adjustments and conclusions are as follows: Time Adjustment – An analysis of the comparable sales indicates that the market had an increase/decrease as follows (For further details see Paired Sales Analysis – Time – Market Increase/Decrease chart found preceding this analysis:

Holthouse Appraisal Group Analysis - 6705 Page E - 27 Time - Market Increase/Decrease Analysis Comp # Rec. Date Years Acres $/Sq. Ft. %/Year 1 2/27/1998 1.00$ 0.51 5 7/1/2003 5.34 1.00$ 0.77 9.78% 2 5/23/2000 0.94$ 0.57 4 12/31/2002 2.61 1.00$ 0.64 4.60% 6 9/19/2003 1.86$ 0.25 8 4/12/2004 0.56 1.86$ 0.31 48.73% 7 10/21/2003 1.05$ 0.35 9 4/6/2005 1.46 1.05$ 0.45 19.26% 10 6/23/2005 1.38$ 0.62 16 6/21/2011 6.00 1.14$ 0.96 8.89% 3 10/31/2001 1.03$ 0.78 18 12/5/2011 10.10 1.03$ 1.30 6.63%

An analysis of the above chart indicates that land values per square foot at Alcova are moving with the local economy, “steady by jerks”. A further analysis indicates that there have been some periods of leveling off and some periods of extreme increases; however, the overall movement (price per square foot) appears to have averaged 6.63% over the past ten years (Comparable Sales No. 3 and No. 18). Movement between the years of 2005 and 2011 (the approximate time since the Appraiser’s last appraisal of the subject) indicated by Comparable Sales No. 10 and No. 16, has increased by 8.89%/year when the price per square foot is considered. When total lot values are considered, the percent increase is just slightly more at 6.65% for the 10 year rate but drops to 4.45% for the 5 year rate. A further analysis indicates that of the comparable sales considered in determining the market value of the subject site, Sales No. 11 through No. 18 are the most current sales; thus, the most logical to be used by the Appraiser in the analysis. These sales sold from February 2, 2010 and December 5, 2011 and the paired sales available do not measure market movement separately between these dates. Therefore, it is difficult for the Appraiser to measure the effects of the slowdown in the local economy caused by the dip and recovery in natural resource prices (if any) predicated by the national lending crisis and the crash of the national housing markets. This argument could go several ways and is as follows: First is the 10 year straight line market increase argument where the Appraiser could just use the 10 year average of 6.63%/year (Comparable Sale No. 3 and No. 18). This measurement is the simplistic measurement for the

Holthouse Appraisal Group Analysis - 6705 Page E - 28 overall period and indicates that there must have been a flattening or decrease sometime during the 10 year period based on historic trends which indicates upward trends anywhere from 4.45% to 48.73% (see chart above). Second, the Appraiser could also argue that the measurement between Comparable Sales No. 10 and No. 16 of 8.89%/year (per square foot) is reasonable; however, this percentage also includes the years of 2005 through 2008 where market increases could have easily been at the same rate as they were between 2003 and 2005 of 19.26%/year (Comparable Sales No. 7 and No. 9). This brings in the other side of the argument, a possible market decline between 2008 and 2011. This argument could easily be that the market did go up 19.26%/year during 2005 and 2008, but declined from 2009 to 2011 indicating that Comparable Sale No. 11 should have a negative adjustment; however, this is just speculation as there are no puritan sales to measure this time period. Therefore, to make a credible determination the Appraiser conducted a market interview with Mr. James Edgeworth, broker/owner of the Edgeworth Real Estate Firm. Mr. Edgeworth was involved in Comparable Sales No. 16 and No. 18. Mr. Edgeworth also has properties listed in the same subdivision as Comparable Sale No. 11 and was privy to the details of that sale. In the Appraiser’s interview with Mr. Edgeworth it was found that he felt that he could have gotten a little more next year for Comparable Sales No. 16 and 18, but that No. 11 sold at a premium as the purchaser did not want his view shed of the lake blocked by the downstream developer. He also felt that this lot would most likely not be worth any more in today’s market. This would indicate that Comparable Sale No. 11 most likely sold at the top of the market with no additional market increases necessary. It further indicates that Comparable Sales No. 16 and 18 most likely sold at market with no anticipated decline over the previous or next 12 months. Therefore, it is the Appraiser’s opinion that the market remained stable during the time when Comparable Sale No. 11 sold and the effective date of this report; thus, no time adjustment was made. View/Location Adjustment- This adjustment was extracted from the market based on paired sales analysis which indicate the following (For further details see Paired Sales Analysis – Small/Large Lot Location Analysis chart found preceding this analysis):

Holthouse Appraisal Group Analysis - 6705 Page E - 29 Alcova Reservoir - View Adjustment Analysis Lake Location Comp # Rec. Date View View Acres $/Sq. Ft. Adjustment 14 11/15/2010 Fair No 10.22$ 0.20 15 11/22/2010 Fair No 7.33$ 0.19 4.96% 18 12/5/2011 V-Good Yes 1.03$ 1.30 16 6/21/2011 Average No 1.14$ 0.96 36.31% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% 11 2/2/2010 Excellent Yes 2.26$ 2.29 18 12/5/2011 V-Good Yes 1.03$ 1.30 75.29% 11 2/2/2010 Excellent Yes 2.26$ 2.29 16 6/21/2011 Average No 1.14$ 0.96 138.94% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% Location Extraction - Lake View v Lake Front Leasehold Improvements 54.87% An analysis of the above stated chart indicates that the closer to the lake, the better the view and access, the higher the value. This analysis indicates that Comparable Sales No. 18 vs No. 16 (a lake-view lot vs no-lake-view lot) within adjoining subdivisions and a short distance apart, commands only a 36.31% higher price; however, when a premium lake-view lot (Comparable Sales No. 11 vs No. 18) is compared, it demands an adjustment of 75.29% verses one furthest from the lake, and 138.94% for a non-lake view lot, even further from the lake. Furthermore, this analysis indicates that even when lake access is not directly available, the property with the unobstructed view closest to the lake demand a 55.91% premium over those that are furthest from the lake with similar views and amenities (Comparable Sales No. 17 vs No. 12). This adjustment supports the Land Value – Land Extraction Method found in the Analysis Section A – Cabin Site Appraisal which indicates a location adjustment 54.87% when pairing Leasehold Improved Sales – Water Front vs Non-Water Front lake view sites within the cabin site area found in Analysis Section A – Cabin Site Appraisal. Finally, when similar views are considered, there is only a small differential, if any at all (Comparable Sales No. 14 and No. 15). Utility Adjustment – Seasonal vs Permanent Water & Septic – The subject site is being appraised with community water and sewer in place. An analysis of the comparable land sales indicates that most have community water or a well but are required to provide septic at the purchasers expense; therefore, the Appraiser has elected to use the 4.52% adjustment for the Holthouse Appraisal Group Analysis - 6705 Page E - 30 subject having availability to community sewer. This adjustment was extracted from the market using paired sales analysis between Comparable Leasehold/Fee Simple Cabin Sales No. 4 and Comparable Sales No. 5 and No. 6 found in the Land Value – Land Extraction Method section found in Analysis Section A – Cabin Site Appraisal. These three sales indicate a range differential of $3,626 to $8,125 or a percentage range of 2.79% to 6.25% of total sales price or an average adjustment of $5,875 or 4.52% for the difference between seasonal and non-seasonal water and sewer. (The Appraiser has elected to use the percentage adjustment for this category as the land areas of the comparable sales used could not be determined but were considered similar based on a visual analysis of the plat map.) Conclusion - Under the previous analysis of the comparable land sales the Appraiser has determined that Comparable Sale No. 11 was most similar to the subject in location as it was purchased by the adjoining landowner to protect his view shed; thus, commanded a premium similar to those enjoyed by the “non-water” front lots found in the Cabin Site Area. This sale is closest to the water (without being on the water) than all of the fee simple lots recently sold or currently for sale and has ease of access to the boat club and marina so has similar access to the lake. The primary difference between this lot and the subject is that it is much smaller in size and is not a water front lot; thus, will be used to support percentage adjustments for lots further from the lake. Furthermore, under the previous analysis it was found that Comparable Sale No. 18 was the most current sale located slightly further from the lake with a lake-view and that Comparable Sale No. 16 was located even further from the lake and had no-lake-view. When these sales are paired with Comparable Sale No. 11 a location premium of 75.29% was derived for the difference between a close up lake-view vs “just” a lake-view and 138.94% for no-lake-view further from the lake. Comparable Sales No. 17 and No. 12 are not located close to the lake but are similar in size and both had a water well in place. When these sales are paired they indicate a 55.91% differential between a lake-view property verses an unobstructed lake-view property closer to the lake. This correlates well with the location premium at the Cabin Site Area between “non-water front” lots and “water front” lots from improved sales of 54.87% Therefore, to determine the value of the subject site the Appraiser has elected to use Comparable Land Sale No. 17 as the base land value and adjust this sale using the market

Holthouse Appraisal Group Analysis - 6705 Page E - 31 derived 138.94% for the no-lake-view lot further from the lake and the location premium at the Cabin Site Area between “non-water front” lots and “water front” lots from improved sales of 54.87%. These percentages and the resulting value conclusion are detailed in the adjustment grid below:

ADJUSTMENT GRID - ALCOVA LAKESIDE MARINA - WATER FRONT LOT Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft. Lot 25, Lake Ridge 17 $ 175,000 4.52% $ 182,910 10.11$ 18,092 $ 0.42 Estates Location % - Close Up Lake View Adjustment - Land Sale No. 11 vs No. 16 138.94% Close Up Lake View Location Adjustment - Square Foot $ 0.58 Adjusted Price Per Square Foot $ 0.99 Location % - Water Front Adjustment - Market Extracted From Improved Leased Fee Sales 54.87% Water Front Location Adjustment - Square Foot $ 0.54 Adjusted Price Per Square Foot $ 1.54 Lot Size - 5.3 Acres - 230,868 Square Feet 230,868 Indicated Value $ 354,828 Rounded To: $ 355,000

Holthouse Appraisal Group Analysis - 6705 Page E - 32 SUBDIVISION ANALYSIS Under this analysis the Appraiser will analyze the subject site to determine the value of the subject land under the extraordinary assumption that the subject can be subdivided into 2 lake front recreational second home sites similar to those located in the South Estates located approximately 1/4 mile northwest of the subject, which as previously stated, is one of the subject’s highest and best uses of the site. Therefore, the following will be part of the Appraiser’s scope of work under this hypothetical subdivision: “As Is” - Aggregate of Retail Value – This value is defined as the sum of the market values of the individual lots within the subdivision, as if all of the units are available for retail sale, as of the effective date of this report. The sum of the retail sales includes an allowance for lot premiums, if applicable, but excludes all allowances for carrying costs. This value is also called “gross retail value”. The objective of the Appraiser in this assignment is to determine average market value for each class of the subdivided lots, then add these values together to determine the Aggregate Retail Value. The retail value of each subdivided lot is determined by comparison of similar type properties extracted from the market. “As Is” - Market Value – “Bulk Sale Value” or Wholesale Value – The "Bulk Sale Value", as used in the valuation of the finished lots, is the value of the subject assuming the sale of all lots to a single buyer in a single transaction. The objective of the Appraiser in this assignment is to determine the market value of the total subdivision, “as is”, if sold to a single purchaser in a “bulk” sale. This value is the market value of the subdivision and the primary value sought by the Client for their financing or valuation decisions. The bulk sale value or wholesale value is determined by using the average market value of the individual lots derived from the “Aggregate Retail Value”, deducting the cost of sales, and discounting the net proceeds to “present value”, using the market extracted discount and absorption rates, plus excess land. The value will be used to determine the “Scope of Work” value desired by the Client as of the effective date of this report.

Holthouse Appraisal Group Analysis - 6705 Page E - 33 RETAIL VALUE OF THE INDIVIDUAL LOTS As previously stated, the subject lots under the hypothetical subdivision would be similar to Comparable Land Sale No. 11. This lot has community water and has the ability to install a septic system; however, the subject lots would have access to community sewer and would all be lake front lots; thus, would need to be accounted for. If the Appraiser uses the previously extracted adjustments of 4.52% for the difference in septic system and 54.87% for the lake front lot premium the following retail value of the lots is determined:

ADJUSTMENT GRID - ALCOVA LAKESIDE MARINA - WATER FRONT LOTS Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft.

11 Lot 3, South Estates$ 225,000 4.52% $ 235,170 2.26$ 104,058 $ 2.39

To determine the reasonableness of this value the Appraiser has interviewed Mr. James Edgeworth, broker for the Edgeworth Real Estate Firm and Mr. Gary Lever with Rocky Mountain Real Estate. In my interview with Mr. Edgeworth it was found that if the subject site was subdivided into (2) 2 acre sites, the most likely sales price of these lots would be in the $200,000 to $250,000 range. It was Mr. Edgeworth’s opinion that even though the lots would be the most desired properties on the lake, the site is still a recreational area, and that purchasers for trophy second home sites would be limited. He further indicated that in order to justify the purchase of a $250,000 lot, the total improved property would have to be in the $750,000 to $1,000,000, so pushing the price to over $250,000 would not be economically viable. In my interview with Mr. Lever, he also indicated that the top end of the market for lots at Alcova, even if on the lake with direct lake access, was $250,000 if a marketing time of one year was considered. He further indicated that if put on the open market the likelihood that they could be sold was extremely high.

Holthouse Appraisal Group Analysis - 6705 Page E - 34 Conclusion - All of the comparable sales are located in the Alcova Lake View Estates I and II, Alcova West Ranchettes, South Estates, and Lake Ridge Estates subdivisions, of which four are of adjoining subdivisions just northwest of the subject. The Appraiser has selected Comparable Sale No. 11 as the most current comparable sale to the subject under the hypothetical subdivision as this sale is closest to the lake, has paved and gravel streets with community water, but, has no direct access (from their site) to the Alcova Lake shoreline nor does it have community sewer. This sale, however, has year round access and can be purchased as a site for primary residency; however, a survey of the area indicates that most homes are second homes and are primarily used for recreational purposes. Therefore, year around access does not appear to be a primary market concern. (Year round access and use are a restriction on the tenants by the owner of the subject. If an adjustment is necessary it will be addressed in the “Market Lease Analysis” section of this report as access and year round use is a restriction that is the Client’s preference. This restriction is well within the Clients control; thus, does not affect the fee simple market value of the subject’s sites.) When this sale is adjusted it indicates a value of $320,000 for the hypothetical lots; however, when local real estate brokers were interviewed it was found that the maximum price the market would allow under current economic conditions was $250,000. Furthermore, even if the owner allowed year around access to the site, the primary use in the area was still recreational; thus, would not change the highest and best use of the site. Therefore, it is the Appraiser’s opinion that a maximum price for two acres on the lake would most likely not exceed this amount; thus, for the purposes of this analysis $250,000 will be used. RETAIL VALUE OF THE INDIVIDUAL LOTS Therefore, based on the foregoing data, analysis and conclusions, it is the Appraiser’s opinion that the fee simple retail value for the subject site under this scenario, as of the effective date of this report, is as follows: TWO HUNDRED FIFTY THOUSAND DOLLARS $250,000

Holthouse Appraisal Group Analysis - 6705 Page E - 35 AGGREGATE RETAIL VALUE Once the retail value is determined, the Appraiser can then calculate the Aggregate Value used to determine the market value of the site under the extraordinary assumption that the hypothetical subdivision will be allowed:

Total Retail Value Number of Individual of Lots x Lots = Total Aggreate Value 2 x$ 250,000 = $ 500,000

FIVE HUNDRED THOUSAND DOLLARS $500,000 ANALYSIS OF THE MARKET (WHOLESALE) VALUE OF THE SUBJECT As previously stated, the Appraiser was unable to find sales that were considered to be similar to the total subject property with lake-frontage and access; therefore, has elected to use two scenarios to determine a reasonable and credible indication of the subject’s fee simple market value. Under the hypothetical subdivision scenario the Appraiser has made the extraordinary assumption that the lots can be subdivided into water front lots. In my discussions with the Mr. Bill Fehringer with Civil Engineering Professionals, Inc. it was found that current regulations require a two acre site for new subdivisions unless the lots are serviced by a central water and sewer system; thus, the subject could have a higher density. However, according to the Natrona County Planning Department and the Natrona County Road and Bridge Department two acre sites would be the most likely scenario as a higher density site would meet stiff resistance from area residents and would most likely not be approved. Therefore, the subject site of 5.3 acres would most likely be subdivided into (2) two acre tracts or lots with 1.3 acres for open areas and waste. (According to the owner of the Marina there is a portion of the subject site that is under water and would not be buildable; thus, the most likely scenario would be as (2) two acre sites.) Furthermore, according to Mr. Fehringer, the cost to survey and get the subject through the subdivision process would most likely be $11,250. ABSORPTION RATE An analysis of the market indicates that water front lots are at a premium with none being available in the subject’s immediate area with community water or sewer. According to the Holthouse Appraisal Group Analysis - 6705 Page E - 36 tenant survey conducted by the Appraiser, 64.91% of the cabin owners (on leased land) felt that water front lots were more valuable and a desired feature. In addition, a desired feature and concern was the availability of community water and sewer. Furthermore, 96.88% of the cabin owners surveyed would like to purchase their site. This would indicate that there is a pent up demand of at least 97 lots; however, these sites are smaller in size and based on the Appraiser’s analysis are only valued at $95,000, which according to Mr. Edgeworth with the Edgeworth Real Estate Firm, is currently a very strong market. Furthermore as previously stated by both Mr. Edgeworth and Mr. Lever, the demand would be good for these lots; however, due to the price range, buyers would be limited. Therefore, to determine a credible absorption rate the Appraiser has interviewed Mr. Scott Brownell with Lake Ridge Estates, LLC. According to Mr. Brownell the absorption rate for his subdivision in the past year was five lots which ranged from $61,000 to $175,000. These lots ranged from no-lake view lots without water well to an unobstructed lake view lot with a good well in place. This indicates an absorption rate of 2 in the first year for the hypothetical subdivision would be reasonable and for the purposes of this appraisal will be used. Competition Currently, there are two new subdivisions in the subject’s immediate area. These subdivisions have a total of 33 lots ranging in size from 1.48 to 17.24 acres. These lots do not have water frontage and only 15 have community water. They range in price from $60,000 to $250,000 and could compete with the subject; however, none have lake-frontage thus, would not directly compete with the subject under this scenario. Therefore, the hypothetical subdivision would not be adversely affected by competition and, the developed lots under this scenario would most likely sell within the first year. DIRECT COST ANALYSIS As previously stated, the Appraiser has secured a bid from Civil Engineering Professionals, Inc. to plat and subdivide the subject site under this scenario. According to Mr. Fehringer, the cost to plat and subdivide would be $11,250. This cost would be the only direct cost as the site has paved road frontage adequate for subdivision purposes and no other costs would be necessary. Therefore, the total direct costs would be $11,250.

Holthouse Appraisal Group Analysis - 6705 Page E - 37 INDIRECT COSTS Indirect costs are expenditures or allowances that are necessary for construction, but are not typically part of the construction contract. Indirect costs may include:  Architectural and engineering fees for plans, plan checks, surveys to establish building lines and grades, and environmental studies  Appraisal, consulting, accounting, and legal fees  The cost of carrying the investment in land and contract payments during construction (If the property is financed, the points, fees or service charges, and interest on construction loans are indirect costs.)  All-risk insurance and ad valorem taxes during construction  The cost of carrying the investment in property after construction is complete, but before stabilized occupancy is achieved (return on investment, plus operating expenses, offset by operating income)  Supplemental capital investment in tenant improvements or leasing commissions  Marketing, sales commissions, or title transfers  Administrative expenses of the developer  Cost of title change

Aggregate Value Percentage Indirect Costs $ 500,000 x 17% =$ 85,000

Holthouse Appraisal Group Analysis - 6705 Page E - 38 of similar subdivisions pulled from the Appraisers’ files. The result of that survey is as follows:

An analysis of the previously stated survey indicates that developers profit or entrepreneurial profit, range from 10% to 28% depending on the amount of lots and timing of the project. A further analysis indicates that the low mean was 18.44% with the high mean being 21.67%. Thus, considering the subject’s proposed subdivision should sell within the first year, it is the Appraiser’s opinion that a reasonable rate for the subject would be 20% due to their only being two lots. Therefore, an entrepreneurial profit of 20% will be used and is calculated as follows:

Entrepreneurial Aggregate Value Percentage Profit $ 500,000 x 20% =$ 100,000

Holthouse Appraisal Group Analysis - 6705 Page E - 39 Aggerage Value of Site$ 500,000 Less: Direct Costs$ 11,250 Effective Gross Income (EGI)$ 488,750 Less: Indirect Costs$ 85,000 Less: Entrepreneurial Profit$ 100,000 Net Operating Income (NOI)$ 303,750

Rounded to: $305,000 To determine the credibility of the expenses and entrepreneurial profit the Appraiser has again examined the Case Study found in the Basic Data Section of this report. In Case Study No. 1 – The Shores at Lake DeSmet it was determined that the developer was looking for a 41.27% return to cover his costs after development, i.e., indirect costs and entrepreneurial profit. An analysis of the subject’s indirect costs and entrepreneurial profit indicates that these costs are 37% of the aggregate value of the site ($85,000 + $100,000 = $185,000 ÷ $500,000 = 37%). Therefore, it is the Appraiser’s opinion that these costs are reasonable and credible and for the purposes of this appraisal will be used. FINAL VALUE OPINION BY THE SALES APPROACH To determine the fee simple market value of the subject site the Appraiser has elected to use two different methodologies to value, direct sales approach and a hypothetical subdivision analysis based on the market value of retail value of the lots. These two scenarios indicated the following value range:

SUMMARY OF INDICATED VALUES Methodology Description Indicated Value Land Value - Direct Sales Comparison Method$ 355,000 Land Value - Subdivision Analysis Method$ 305,000 % Differential -14.08%

Holthouse Appraisal Group Analysis - 6705 Page E - 40 make a credible determination of the subject’s fee simple market value. The Appraiser also used a hypothetical subdivision analysis to determine the reasonableness of this value which had a difference of only 14.08% when the two values were compared. An analysis of the previous Casper Boat Club appraisal indicates that the differential was only 1.32% when this comparison was made compared to 14.08% for the subject. It is the Appraiser’s opinion that this is most likely due to the size of the Boat Club site and the difference in the surplus land per lot, i.e., 11,064 sq. ft. for each of the lots for the Boat Club and 28,314 sq. ft. per lot for the Alcova Lakeside Marina. Furthermore, it is the Appraiser’s opinion that the difference in value could easily be that the surplus land has more value to the marina than it would have under the hypothetical subdivision scenario. Therefore, based on the foregoing data, analysis and conclusions, it is the Appraiser’s opinion that the fee-simple market value for the subject site, “as vacant and ready for its highest and best use” by the direct sales approach is credible and as of the effective date of this report, is as follows: THREE HUNDRED FIFTY FIVE THOUSAND DOLLARS $355,000 SALES APPROACH - MARKET RENTS USING YIELD RATES Under this scenario the Appraiser has assumed that the highest and best use is as a hypothetical subdivision with a “whole sale” land value of $355,000. It is common practice to derive market rents by analyzing current market rents paid for similar properties. This market data is then compared to the subject to determine the subject’s market rates or rents that an investor would expect as owner of the property and obtain a desired yield. However, the subject sites are owned by the United States of America, Department of the Interior and are not privately held or sold. An analysis of the Wyoming and surrounding recreational markets indicates that most leases for similar properties are owned by the government and the lease rate is determined by a percentage of the gross sales which will be analyzed in the Income Approach. Under the Sales Approach, however, the Appraiser will determine the lease rate based on the market value of the land as if the highest and best use was as the above stated hypothetical subdivision as no current comparable leases of recreational second home sites that were privately held and were arms-length were found. Thus, the market rents will be derived from expected rates of returns

Holthouse Appraisal Group Analysis - 6705 Page E - 41 (yields) obtained or desired by investors of similar properties. This rate of return will then be used to determine the market rents of the subject under the hypothetical subdivision scenario and compared the rents derived in the Income Approach. This analysis will determine the highest and best use of the subject, i.e., if in the final analysis the Appraiser determines the lease rate for the Marina is more than or equal to the lease rate of the subject as recreational second home sites, the highest and best use of the site is as a marina. However, if in the final analysis the lease rate for the subject is higher as a recreational second home site, then the highest and best use of the site is as a recreational home site and the resulting rental rate will be used even though the site is still being used as a marina. This is required by the Memorandum of Agreement between the Bureau and the Natrona County Commissioners. ANALYSIS OF MARKET RATES OF RETURN (YIELD RATES) In order to determine a credible rate of return (yield) the Appraiser must analyze the current rates of return offered by similar alternative investments in real property, “land only”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, “the following table summarizes prevailing land lease capitalization and discount rates. The former reflects initial rates of return on appraised values for vacant land proposed for development. They do not address increases in land lease payments or the reversion but may include percentage rent. The latter are internal rates of return being achieved by landowners on improved properties. As such, they include changes in land lease payments, percentage rent where applicable and the reversion of the entire property at the termination of the lease. Lease terms range from 55 to 99 years.”9 This survey will be used to determine the market rate of return the government should expect to achieve for the subject sites.

9 RealtyRates.com – Investor Survey – 3rd Quarter, Robert G. Watts and Associates, 2006, Page 38. Holthouse Appraisal Group Analysis - 6705 Page E - 42 Abstract - Land Lease Capitalization Rates - RealtyRates.com - 3rd Quarter - 2011 Description 2007 2008 2009 2010 2011 5 Year Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Avg Apartments 4.39% 10.94% 8.24% 3.75% 11.68% 7.89% 3.72% 11.54% 7.60% 2.81% 10.82% 7.05% 2.33% 10.18% 6.39% 3.40% Golf 5.27% 16.67% 11.67% 4.49% 17.15% 11.44% 4.22% 17.13% 11.19% 3.30% 16.24% 10.23% 2.90% 15.80% 9.39% 4.04% Health Care/Senior Housing 5.00% 11.87% 8.80% 4.79% 11.87% 8.50% 4.53% 11.72% 8.21% 3.40% 12.19% 7.53% 2.53% 10.59% 6.81% 4.05% Industrial 4.90% 11.98% 8.46% 3.75% 11.68% 8.15% 3.80% 11.44% 7.82% 3.01% 10.82% 7.22% 2.53% 10.15% 6.59% 3.60% Lodging 5.17% 14.67% 8.95% 4.39% 17.15% 8.80% 4.14% 16.85% 8.50% 3.25% 15.96% 7.95% 2.63% 15.56% 7.42% 3.92% Mobile Home/RV Parks 4.92% 11.17% 9.14% 4.14% 11.68% 8.87% 3.89% 11.54% 8.49% 3.00% 10.82% 7.99% 2.53% 10.59% 7.32% 3.70% Office 4.97% 11.47% 8.52% 3.75% 11.69% 8.02% 3.80% 11.55% 7.98/% 3.00% 10.82% 7.21% 2.53% 9.22% 6.18% 3.61% Restaurants 5.90% 14.17% 9.81% 5.53% 17.15% 9.97% 5.29% 17.11% 9.78% 4.40% 16.22% 9.10% 3.53% 15.82% 8.26% 4.93% Retail 4.82% 11.87% 8.55% 3.75% 11.87% 8.21% 3.79% 11.72% 7.94% 2.90% 12.19% 7.38% 2.50% 10.59% 6.68% 3.55% Self-Storage 4.98% 11.47% 10.01% 3.75% 11.69% 9.78% 3.80% 11.55% 9.94% 3.15% 10.82% 9.37% 2.60% 10.26% 8.66% 3.66% Special Purpose 5.88% 18.67% 10.21% 5.10% 17.89% 10.33% 4.84% 17.79% 10.16% 3.95% 16.90% 9.41% 3.54% 16.48% 8.51% 4.66% All Properties 4.39% 18.67% 9.31% 3.75% 17.89% 9.09% 3.72% 17.79% 8.87% 2.81% 16.90% 8.22% 2.33% 16.48% 7.47% 3.92%

12.00% 12.00%

10.00% 10.00%

8.00% Min 8.00% Min Max 6.00% Max 6.00% Avg Avg 4.00% 4.00%

2.00% 2.00%

0.00% 0.00% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

Holthouse Appraisal Group Analysis - 6705 Page E - 43 Conclusion The capitalization rates previously stated reflect the initial rates of return on appraised values for vacant land proposed for development, whereas, the discount rates consist of the internal rates of return being achieved by landowners on improved properties and include: changes in land lease payments, percentage rent where applicable, and the reversion of the entire property at the termination of the lease. Thus, it is the Appraiser’s opinion that the use of the discount rate, which includes the value of the tenant’s improvements at reversion plus future increases in rent, would not be appropriate for two reasons: 1) the Appraiser’s assignment is to appraise the properties “as vacant” with no improvements, thus, no value for reversion is present, and 2) internal rates of return using future rate increases to determine current rents is “double dipping”. This would escalate rents above market; thus, the Appraiser has chosen the capitalization rates as the basis for this analysis. An analysis of the categories on the preceding chart indicates that the most similar use to the subject as a hypothetical subdivision is the category - Apartments. This category was selected by the Appraiser for the following reasons: 1.) the typical tenant under the hypothetical subdivision would most likely be leasing one of the subdivided sites for seasonal residential use; and 2.) the subject’s sites under the hypothetical subdivision would be single tracts that could be used as permanent residential use, if owner’s restrictions weren’t in place. ANALYSIS OF RENT RESTRICTIONS The Appraiser has analyzed the subject property and found that the subject site is the only commercial marina on Alcova Reservoir. Furthermore, this reservoir only fluctuates approximately 5 feet during the irrigation season. Alcova is also used as a leveling reservoir to regulate the irrigation flows of the North Platte River, both up and down stream. This lack of fluctuation allows the marina to have shore line docks that are usable most of the recreational season. In addition, the Bureau of Reclamation lowers the lake in the winter months to protect its irrigation gates which also protects the shore line docks. These two factors are a much desired recreational benefit to the tenants and other market participants and would also be a benefit under the hypothetical subdivision analysis.

Holthouse Appraisal Group Analysis - 6705 Page E - 44 However, there would most likely be a restriction, under this scenario, on the period of time for which the property can be used (six months). An analysis of the comparable sales found in the Sales Approach section of this report indicates that all of the sales used did not have a restricted use period; however, according to the real estate brokers interviewed and the Alcova Tenant Survey, year around use is not an overly desired feature for the area. Therefore, this restriction must be considered in the bundle of rights allowed under the current lease agreement as it reduces the risk to the owner by lowering the overall management requirements of the area, i.e., law enforcement, road maintenance, etc. To determine what effects on value that this restriction may have on real property, the Appraiser has revisited the Land Value – Land Extraction Method “Paired Sales Analysis” found in the Section A of the Analysis Section of this report. This analysis indicates that properties sold as “permanent” residential home sites, sold for only 5% to 10% more than “recreational” use sites. Therefore, as this minor difference could easily be explained as the deviation between the two approaches used to determine this percentage, it is the Appraiser’s opinion that this difference has no significance as to value and should have no effect on the overall lease rate if a lower or “safe” rate is used, under this scenario. FINAL CONCLUSION OF MARKET RENTS – USING YIELD RATES As previously stated the subject’s management requirements are low and the vacancy factor for the past 30+ years has been virtually non-existent in the area. To determine the appropriate return rate for the subject under this scenario, the Appraiser has again examined the rates reported by the previously stated national survey for “apartments”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, the average rates for “Apartments” over the past five years ranges are as follows:

APARTMENT CAPITALIZATION RATES Year Min Max Avg 2007 4.39% 10.94% 8.24% 2008 3.75% 11.68% 7.89% 2009 3.72% 11.54% 7.60% 2010 2.81% 10.82% 7.05% 2011 2.33% 10.18% 6.39% Average 3.40% 11.03% 7.43%

Holthouse Appraisal Group Analysis - 6705 Page E - 45 An analysis of these rates indicates that the “minimum” average rate (low risk rate) for the five years would be a reasonable rate as hypothetical lots in a hypothetical subdivision as the area has not seen a vacancy in the past 30 years. Furthermore, the hypothetical lots would most likely have restrictions to usage; thus, minimizes the risk to the owner by lowering the overall management requirements of the area, i.e., law enforcement, road maintenance, etc. Therefore, a rate of 3.40% return for the next five years appears reasonable and credible. Conclusion The formula for market rents is as follows - Market Value x Risk Rate = Market Rents or Annual Return on Investment where Market Value is the fee simple value determined in the Sales Approach for the particular site class and the risk rate is the previously determined capitalization rate of 3.40%. Thus, the market rents for the subject sites are calculated as follows:

Market Rents - "Highest & Best Use As Vacant" Fee Simple Market Return Rate x Market Value =Market Rents 3.40% x$ 355,000 =$ 12,070

Rounded to: $12,000

Holthouse Appraisal Group Analysis - 6705 Page E - 46 THE COST APPROACH The Cost Approach represents the objective concept of value. This concept is predicated upon the theory that value is inherent in the object itself and that value and cost tend to be the same. The American Institute of Real Estate Appraisers further explains this approach below in a paragraph from Page 441 of The Appraisal of Real Estate, 8th Edition: The Cost Approach to Value, like the Sales Comparison and Income Approaches, is based on comparison. In the Cost Approach, the cost to construct a building and the value of an existing building are compared. The Cost Approach to Value reflects market thinking in the recognition that market participants relate value to cost. Buyers tend to judge the value of an existing structure by comparing it to the value of a newly constructed building with optimal functional utility. Moreover, buyers adjust the prices they are willing to pay by estimating the costs to bring an existing structure to desired levels of functional utility.

DISCLAIMER OF THE COST APPROACH The value opinion under this approach consists of the present construction cost of any improvements on the property less depreciation from any source, plus the value of the land. Therefore, due to the subject property being considered unimproved land, it is the Appraiser’s opinion that this approach would be a duplication of the Sales Approach; thus, was excluded.

Holthouse Appraisal Group Analysis - 6705 Page E - 47 THE INCOME APPROACH The Income Approach is widely applied for income producing properties since it reflects the rationale of typical investors together with current financing conditions (i.e., the assumption being that financing is typically involved in most real property transaction). In this approach, market value is determined through the capitalization of a projected, stabilized estimate of net operating income. The traditional formula for computing value by the Income Approach is V = NOI divided by R, where V = market value, NOI = stabilized net operating income, and R = overall rate. Stabilized Net Operating Income (NOI) In the appraisal of real estate, the stabilized net operating income for the property is based on potential income and expense data as dictated by the market. In other words, income and expense data for similar facilities is projected onto the subject property in order to derive net operating income. The basic components and resulting formula for arriving at net operating income by this method are given below: Potential Gross Income (PGI) Less: Allowance for Vacancy and Rent Loss Equals: Effective Gross Income (EGI) Less: Operating Expenses Property Taxes Insurance Property Management Fees Maintenance Utilities Reserves for Replacement Equals: Net Operating Income (NOI) Potential Gross Income (PGI) Under the marina scenario the Appraiser has analyzed rents charged for similar recreational properties in the subject’s market area. The following pages contain the analysis of the pertinent data on the subject’s lease and an abstract of the five leases of similar recreational

Holthouse Appraisal Group Analysis - 6705 Page E - 48 properties used to derive the restricted rents for the subject property. (For comparable data see Comparable Land Leases found in the Basic Data Section of this report.) ABSTRACT OF COMPARABLE RECREATIONAL LAND LEASES

Comp # Location Annual Lease Rate Amenities 1 Casper Water Ski Club$ 15,000 W 2 Subject - Alcova Lakeside Marina$ 10,300 W&S 3 Subject - Casper Boat Club$ 15,000 W&S 4 Keyhole Marina - 3 Year Average$ 6,298 W&S 5 Glendo Marina - 3 Year Average$ 10,774 W&S 6 Boysen Marina - 3 Year Average$ 5,946 W&S

ANALYSIS OF THE SUBJECT’S LEASE The subject is currently being leased by the owners of the Alcova Lakeside Marina for their marina on the Alcova Reservoir. This lease restricts the tenant to 200 dock slips and 29 RV sites; however, the owner is allowed to run a full service marina complete with restaurant and lounge. In my interview with the Natrona County Road & Bridge and the owner, it was found that the marina is maximizing the allowable uses and is protected by a one mile non-compete radius which protects the tenant from a new competing facility being built until 2016. Furthermore, it was found that the subject is restricted to its current use under the Memorandum of Understanding MOU No. 1-AG-60-01340, between the Natrona County Parks and Pleasure Grounds and the Bureau of Reclamation, US Department of Interior which expires May 18, 2016. Thus, the current use is restricted per this agreement to a marina and will be analyzed in this portion of the report accordingly. ANALYSIS OF THE COMPARABLE LAND LEASES Comparable Lease No. 1- This lease is the lease of the Casper Water Ski Club site located at 24725 Lakeshore Drive, Alcova Reservoir. The lease restricts the membership to 100 members. The lease rate is not based on a percentage rate and the goal of the club is to minimize the total cost to its members; thus, is not a true commercial operation. The current lease rate is based on the market value of the site if vacant established in 2007 and is approximately 5 years old. This rate is currently $15,000 per year and includes community water to the site; however, water usage is at an additional charge. The 2011 lease rate will be determined by the Appraiser based on the current market value of the site.

Holthouse Appraisal Group Analysis - 6705 Page E - 49 Comparable Lease No. 2 – This lease is the current lease of the Alcova Lakeside Marina, Alcova Reservoir. This lease restricts the tenant to 200 dock slips and 29 RV sites; however, the owner is allowed to run a full service marina complete with restaurant and lounge. In my interviews with the Natrona County Road and Bridge it was found that this site is not restricted like the private clubs and is designed to service the general public. An analysis of this site and interviews with Mr. Gary Lever, owner of the Alcova Lakeside Marina, indicates that the usable area of the site is being maximized. The current lease rate was established in 2007 and was based on 2% of the average gross sales for 2003-2007 making the data and rate almost five years old. This lease is currently $10,300/year and includes community water and sewer to the site; however, water and sewer usage is at an additional charge. Comparable Lease No. 3- This lease is the lease of the Casper Boat Club, Alcova Reservoir. This lease restricts the tenant to 188 dock slips, 30 dry docks and 12 camp sites; however, the current number of docks according to Mr. Burgess, Commodore is 203. The lease rate is not based on a percentage rate and the goal of the club is to minimize the total cost to its members; thus, is not a true commercial operation. The lease rate was based on the market value of the site “as vacant” established in 2007 which was $15,000 and is approximately 5 years old. This rate was based on the market value of the land. The lease includes community water and sewer to the site; however, usage is at an additional charge. The new rate will be determined by the Appraiser, also based on the market value of the land. Comparable Lease No. 4- This lease is the lease of the Keyhole Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding, gas and sales tax, fishing licenses, camping permits and boat related sales. The minimum lease rate is $200/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusion of boat related sales was being deleted from new leases. In my interview with the owner of the Keyhole Marina, it was found that they do not sell or service boats; therefore, this change will have little to no effect on the overall lease rate. The lease rate for the past few years are as follows: 2008 - $2,840, 2009 – 7,715 and 2010 - $8,341 with a 3 year average of $6,298/year. Comparable Lease No. 5- This lease is the lease of the Glendo Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross

Holthouse Appraisal Group Analysis - 6705 Page E - 50 sales excluding, gas and sales tax, fishing licenses, camping permits, and boat and trailer related sales. The minimum lease rate is $1,000/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusions of boat and trailer related sales was being deleted from new leases. In my interview with the owner of the Glendo Marina, she indicated that they do limited boat sales but have a good boat service business; therefore, this change will have a substantial effect on the overall lease rate. The lease rates for the past few years are as follows: 2008 – $11,095, 2009 - $11,275 and 2010 – $9,952 with a 3 year average of $10,774/year. Comparable Lease No. 6- This lease is the lease of the Boysen Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding gas, and sales tax, fishing licenses, camping permits and boat related sales. The minimum lease rate is $1,000/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusions of boat related sales was being deleted from new leases. In my interview with the owner of the Boysen Marina, it was found that they do not sell boats; therefore, this change will have little effect on the overall lease rate. The lease rates for the past few years are as follows: 2008 – $5,645, 2009 - $5,744 and 2010 - $6,450 with a 3 year average of $5,946/year. An analysis of the subject’s market area indicates that there are limited waterways which would facilitate a boat club facility or marina. In addition, the subject site is located at Alcova Reservoir which has two similar facilities. These facilities are all 100% occupied with limitations on the number of docks or trailer spaces. Furthermore, the subject site is protected by a one mile non-compete until 2016. Therefore, the subject is not currently adversely affected by competition. Conclusion The preceding analysis indicates that the subject is not adversely affected by competition due to limited waterways which would facilitate an inland boat club or marina plus is protected by a one mile non-compete till 2016. Furthermore, the lake at Alcova is a leveling reservoir that does not fluctuate more than five feet in the summer (irrigation) season and thrives when other areas suffer due to droughts or drops in reservoir levels due to irrigation in the summer months. An analysis of the comparable leases indicates that true commercial marinas in Wyoming

Holthouse Appraisal Group Analysis - 6705 Page E - 51 are typically leased on a percentage lease basis. This rate is typically 2% of gross sales which allows for seasonal adjustments due to weather and usage. Therefore, it is the Appraiser’s opinion that a percentage lease rate of 2% of gross sales would be a reasonable and credible rate for the subject and for the purposes of this appraisal will be used. PERCENTAGE LEASE ANALYSIS According to the Natrona County Road & Bridge the subject’s 2007-2011 gross sales were $551,285, $599,000, $635,700, $688,593 and $733,495 respectively and indicate the following five year average lease rate:

Year Annual Gross Sales % Increase Rate Indicated Rate 2007$ 551,285 2%$ 11,026 2008$ 599,000 8.66% 2%$ 11,980 2009$ 635,700 6.13% 2%$ 12,714 2010$ 688,593 8.32% 2%$ 13,772 2011$ 733,495 6.52% 2%$ 14,670 Indicated Mean $ 12,832

Rounded to: $12,850

Final Opinion of Potential Gross Income (PGI) As previously stated the typical marina in Wyoming is charged a percentage lease rate of 2% of gross sales. This rate when extrapolated to the five year historic gross sales for the subject indicates a average lease rate of $12,850/year. As previously stated in the Sales Approach “if in the final analysis the Appraiser determines the lease rate for the Marina is more than or equal to the lease rate of the subject as recreational second home sites, the highest and best use of the site is as a marina. However, if in the final analysis the lease rate for the subject is higher as a recreational second home site, than the highest and best use of the site is as a recreational home site and the resulting rental rate will be used even though the site is still being used as a marina.” Therefore, it is the Appraiser’s opinion that, as the return to the land is higher as a marina $12,850 vs $12,000, the highest and best use of the site is as a “commercial marina” and the lease rate of $12,850 will be used.

Holthouse Appraisal Group Analysis - 6705 Page E - 52 Allowance for Vacancies and Rent Loss This deduction from potential gross income is necessary in that it illustrates what demand presently exists for the type of property being appraised. The potential gross income stated above, is the actual market rent for the subject based on competing properties in the subject’s market area. The Appraiser has analyzed the market and found that properties most similar to the subject were experiencing 0% vacancy with little to no turnover. Therefore, the allowance for vacancies and rent loss is calculated as follows:

PGI Vacancy Credit Loss/Vacancy $ 12,850 x 0% = $ -

Effective Gross Income (EGI) Effective gross income is the difference between potential gross income and the allowance for vacancies and rent loss. Thus, the effective gross income is as follows:

PGI Vacancy Effective Gross Income $ 12,850 -$ - = $ 12,850

Operating Expenses The subject is owned by the United States Government - Department of Interior, with all of the expenses being paid by the tenant who manages the site for the common good. Therefore, there are no expenses incurred by the owner, thus, none are considered. NET OPERATING INCOME By combining the estimated income and expense items for the subject property, the following annual, projected operating statement culminates in an estimate of net operating income: Potential Gross Income (PGI)$ 12,850.00 Less: Vacancy & Rent Loss$ - Effective Gross Income (EGI)$ 12,850.00 Less: Operating Expenses$ - Net Operating Income (NOI)$ 12,850.00

Holthouse Appraisal Group Analysis - 6705 Page E - 53 OVERALL RATE DERIVATION (R) There are numerous methods and/or techniques for deriving the overall rate (R) by which net operating income (NOI) is capitalized into a value (V) estimate. These methods range from the very simple market extracted overall rate to the more complex Ellwood Formulation. Regardless of the method used in overall rate derivation, the variables must be extracted from the market. In order to determine a credible rate of return (yield) the appraiser must analyze the current rates of return offered by similar alternative investments in real property, “land only”. An analysis of the market indicates that local rates for land leases are not available as most Wyomingites prefer ownership for which to place their improvements; thus, national surveys were viewed. For this purpose the Appraiser has selected the “Investor Survey” distributed by Realty Rates.com and published by Robert G. Watts & Associates, Consulting Land Economists, which is widely used by local market participants. An analysis of the subject property indicates that the site is used for a variety of commercial purposes including a bar/restaurant, ship’s store and RV park. Thus, the Appraiser will use a blended rate based on these uses. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, the following are the 3rd Quarter Trends 2009-2011 for the above stated property types.

Investor Survey - 3rd Quarter - Land Lease Cap Rates 2009 2010 2011 Description Min Max Avg Min Max Avg Min Max Avg Mobile Home/RV Parks 3.59% 11.24% 8.19% 3.72% 12.00% 8.57% 3.40% 11.46% 8.17% Restaurants 4.99% 16.81% 9.48% 5.12% 16.94% 9.64% 4.40% 16.69% 9.06% Retail 3.49% 11.42% 7.59% 3.50% 12.00% 7.92% 3.37% 11.46% 7.54% Mean 4.02% 13.16% 8.42% 4.11% 13.65% 8.71% 3.72% 13.20% 8.26%

An analysis of the nationally surveyed rates published by RealtyRates.com indicates a 3rd Quarter – 2011 minimum risk (subject has not been vacant for over 30+ years) range is 3.37% to 4.40% for those property types associated with the subject. This chart further indicates that the 3rd Quarter – 2011 indicated mean for the blending of these types is 3.72%. Therefore, it is the Appraiser’s opinion that this rate best represents the subject overall rate and for the purpose of this appraisal will be used.

Holthouse Appraisal Group Analysis - 6705 Page E - 54 SUMMARY OF THE INCOME APPROACH Capitalization Approach Net Income  Capitalization Rate = Value

Net Income ÷ Capitalization Rate = Value $ 12,850 ÷ 3.72% =$ 345,430 Rounded To: $ 345,000

THREE HUNDRED FORTY FIVE THOUSAND DOLLARS $345,000 MARKET RENTS Based on the previously stated Appraiser’s opinion of the subject’s market rent found in the Potential Gross Income Section of this report, the subject’s market rent is as follows: TWELVE THOUSAND EIGHT HUNDRED FIFTY DOLLARS $12,850

Holthouse Appraisal Group Analysis - 6705 Page E - 55 RECONCILIATION AND FINAL ESTIMATE OF VALUE The final step in the appraisal framework is to evaluate and select from among the three traditional approaches to value, a single or final opinion of market value. The value opinions established by the three approaches were: Sales Approach Market Value $ 355,000 Annual Market Rents $ 12,000

Cost Approach Omitted Income Approach Market Value – as restricted $ 345,000 Annual Market Rents – as restricted $ 12,850 Sales Approach When sufficient market data is available, investors and many other market participants most frequently rely upon the Sales Approach as it best reflects interactions within the market between buyers and sellers. Eighteen sales of properties that were somewhat representative of the subject under the hypothetical subdivision analysis. Furthermore, as previously stated, the prospects of subdividing would be good if desired by the owner as most of the restrictions on the land are owner imposed; thus, credible conclusions were drawn. However, subdividing the site is not the maximally productive use of the site – See Highest and Best Use Section. Therefore, it is the Appraiser’s opinion that this approach is best used to support the market value of the site found in the Income Approach. The Cost Approach The Cost Approach has its most usefulness when the property being appraised involves new improvements which represent the highest and best use of the land, or when there exists no income and sales data of similar properties. As previously stated, the instructions of the Client are to appraise the subject as “vacant land” with water and sewer available in the area; therefore, it is the Appraiser’s opinion that this approach would be a duplication of the Sales Approach and was omitted. The Income Approach The Income Approach is preferred for income producing properties. The reliability of this approach is a function of rent and expense data and the accurateness of the capitalization rate. The data available on income and expenses for similar properties was sufficient in both quantity

Holthouse Appraisal Group Analysis - 6705 Page E - 56 and quality making the estimated net operating income for the subject property both reasonable and credible. The overall rate used in the Income Approach was derived from nationally accepted surveys of the blended services provided by the subject. Therefore, based on the quality of the data, it is the Appraiser’s opinion that the Income Approach provides the most reliable indication of the subject’s fee simple market value and market rents supported by the Sales Approach. FINAL OPINION OF MARKET VALUE AND MARKET RENTS The appraisal assignment was to determine the fee simple market value and market rents of the subject site “as vacant” “ready for its highest and best use” with water and sewer provided to the area. An analysis of the Highest and Best Use section of this report indicates that the maximally productive use of the site “as vacant” is for a public marina providing services to the area and that the Income Approach provides the most credible data. Therefore, based on the foregoing data, analysis and conclusions, it is the opinion of the Appraiser that the fee simple market value and market rents for the subject property, as of the effective date of this report, are as follows: MARKET VALUE OF SUBJECT SITE THREE HUNDRED FORTY FIVE THOUSAND DOLLARS $345,000 MARKET RENTS FOR THE SUBJECT SITE TWELVE THOUSAND EIGHT HUNDRED FIFTY DOLLARS $12,850 LEASE RATE CREDIBILITY ANALYSIS To determine the credibility of the new lease rate the Appraiser has analyzed the current lease rates determined by the Appraiser of comparable sites in the subject’s immediate market area. These rates were derived from the market value of the land and multiplied by an appropriate return rate which was market extracted. An analysis of the new rates for the Casper Boat Club found in Section “C” of the Analysis Section indicates that the new rate for the 11.27 acre tract will be $25,000. An analysis of the Casper Water Ski Club found in Section “D” of the Analysis Section indicates that the new rate for the 10.079 acre tract will be $22,000. An analysis of the Pathfinder Marina and Boat Club found in Section “F” of the Analysis Section indicates

Holthouse Appraisal Group Analysis - 6705 Page E - 57 that the new rate for the 3.11 acres will be $7,500. When these new rates are compared to the new rates determined by the Appraiser for the subject, the following is determined:

CREDITIBILITY ANALYSIS Description New Annual Rate Acres $/Acre Casper Boat Club$ 25,000 11.27$ 2,218 Casper Ski Club$ 22,000 10.079$ 2,183 Pathfinder Boat Club$ 7,500 3.11$ 2,412 Average$ 2,271 Alcova Lakeside Marina$ 12,850 5.3$ 2,425 Differential -6.77%

An analysis of the above stated chart indicates that the differential between the new rates being charged for the subject and similar sites located at Alcova Reservoir is 6.77%; thus, indicating that the new rate for the subject is both reasonable and credible.

Holthouse Appraisal Group Analysis - 6705 Page E - 58

SUBSECTION “F” APPRAISAL ANALYSIS ON THE PATHFINDER MARINA/BOAT CLUB SITE 26800 SOUTH PATHFINDER ROAD PATHFINDER RESERVOIR NATRONA COUNTY, WYOMING The following analysis is only part of the “Total Appraisal Report”, referred herein as Appraisal Report No. 6705, which includes both Book One – Basic Data Section plus addenda and Book Two – Parcel Analysis. Except as hereinafter provided, the Client may distribute copies of the “total appraisal report” in its entirety to such third parties as they may select; however, selected portions of this appraisal report shall not be given to third parties without the prior written consent of the signatories of this appraisal report.

Holthouse Appraisal Group Analysis – 6705 Page F - 1 Holthouse Appraisal Group

January 30, 2012

Mr. Mike Haigler, Director Natrona County Road, Bridge and Parks Department 538 SW Wyoming Boulevard Mills, WY 82644

Dear Mr. Haigler:

In fulfillment of our agreement, I have performed an appraisal of the real property, 26800 South Pathfinder Road, (land only), known as the Pathfinder Marina & Boat Club, Pathfinder Reservoir, Natrona County, Wyoming, herein referred to as the "subject property". The Appraiser’s opinions and conclusions are contained within this report and are reported in Summary Report format.

The subject property's marketing time and exposure time is estimated to be one year or less based on the current market conditions.

MARKET VALUE OF LAND ONLY

TWO HUNDRED TWENTY THOUSAND DOLLARS $220,000 MARKET RENTS FOR THE LAND ONLY

SEVEN THOUSAND FIVE HUNDRED DOLLARS $7,500 HYPOTHETICAL CONDITION: At the time of inspection the subject was improved with the Pathfinder Marina & Boat Club including ship’s store, landscaping, buoy system, boat ramp, RV Park and various support buildings and improvements. The Client has requested an appraised value of the land only excluding all tenant owned improvements but including off-site improvements or any other improvements installed or owned by the United States Government or any other entity. Off-site improvements considered are hydroelectric dams, beaches, lakeways, roadways, electrical service and transmission lines, docks, outdoor restrooms or any other improvement that is not considered a traditional tenant improvement. Therefore, the value opinion and other conclusions expressed in this report are subject to the hypothetical condition

Holthouse Appraisal Group Analysis – 6705 Page F - 3 that the site is currently vacant with no tenant improvements. The Client and intended users of this appraisal are cautioned that if this hypothetical condition is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

EXTRAORDINARY ASSUMPTION Currently the subject property is improved with the Pathfinder Marina & Boat Club; however, the Appraiser has been asked to appraise the site under the hypothetical condition that these improvements are not on the site and to appraise the subject “as vacant ready for its highest and best use”. The Appraiser has conducted a highest and best use analysis and determined that the highest and best use “as vacant”, would be a seasonal second home site “recreational” lake front lot. Therefore, the value opinion and other conclusions expressed in this report are subject to the extraordinary assumption that the owner of the subject would desire such a use and, that the Natrona County Planning Commission would approve this scenario. The Client and intended users of this appraisal are cautioned that if this extraordinary assumption is incorrect, the value opinion and other conclusions expressed in this report could be significantly different.

Respectfully submitted,

______Edward J. Holthouse, CRS, CCIM Certified General Appraiser Permit No. 438 ejh

Holthouse Appraisal Group Analysis – 6705 Page F - 4 SUMMARY OF SALIENT FACTS AND CONCLUSIONS

Identification of the Subject Property: 26800 South Pathfinder Road, Pathfinder Reservoir, Alcova, Natrona County, Wyoming

Legal Description: A tract of land in the SW/4SE/4NW/4, Section 23, Township 29 North, Range 84 West of the 6th P.M., Natrona County, Wyoming

Site Size: 3.11 acres.

Improvements: The instructions of the Client are to appraise the subject site as unimproved land ready for its highest and best use. However, improvements in place consist of a 816 sq. ft. marina with 516 sq. ft. viewing deck, 330 sq. ft. pump house, buoy system, 466 sq. ft. gasoline bunker, 60 sq. ft. gas shed and a 25 unit RV park. However, the improvements to the sites will not be further described as they do not affect the value to be determined.

Zoning: "RAM", Ranching, Agricultural and Mining

Highest and Best Use: Recreational Home/Cabin Site

Value Opinion by the Sales Approach Market Value $ 220,000 Market Rents $ 7,500

Value Opinion by the Cost Approach: Omitted

Value Opinion by the Income Approach: Inconclusive Final Opinion of Market Value: Market Value $ 220,000 Market Rents $ 7,500 Holthouse Appraisal Group Analysis – 6705 Page F - 5

Return on Investment Rate: 3.40%

Date of the Appraisal: January 30, 2012 Effective Date of Appraisal: December 1, 2011

Appraised By: Edward J. Holthouse Wyoming Certified General Appraiser: Permit Number No.438

Holthouse Appraisal Group Analysis – 6705 Page F - 6

PATHFINDER RESERVOIR LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page F - 7 PHOTOGRAPHS OF THE SUBJECT PROPERTY

Holthouse Appraisal Group Analysis – 6705 Page F - 8 Aerial Map - Pathfinder Marina/Boat Club

Pathfinder Entrance Club Overview

Camp Sites Near Club Public Shelter

Public Restrooms Pathfinder RV Park - Club Site

Pathfinder RV Park - Club Site Boat Trailer Parking Area

Marina/Boat Club Facility Fuel Bunker

Public Boat Ramp Gas Dock

Pathfinder Dam Reconstruction Project IDENTIFICATION AND LOCATION OF THE SUBJECT PROPERTY The subject of this appraisal report is a 3.11 acre tract of land that is currently being occupied by the Pathfinder Marina/Boat Club at 26800 Pathfinder Road on the northeastern shore of Pathfinder Reservoir approximately 39 miles southwest of Casper in south-central Natrona County. The instructions of the Client are to determine the “fee simple” market value of the “land only” “ready for its highest and best use”. Thus, the improvements to the sites will not be described, as they have no effect on the value opinion being determined. The subject is generally irregular in shape and the soils conditions are quite rocky with sandy soils and the vegetation is limited to the landscaping around the RV Park. The site is not serviced by any community water and sewer system. The subject, locally known as the "Pathfinder Marina and Boat Club" is located at Pathfinder Reservoir one mile west of the Pathfinder Dam, Alcova, Wyoming, approximately 39 miles southwest of Casper, Wyoming. The property has the following address: 26800 South Pathfinder Road Pathfinder Reservoir, Wyoming, 82620 LEGAL DESCRIPTION According to information supplied to the Appraiser by the Client, the subject property is legally described as follows: A tract of land in the SW/4SE/4NW/4, Section 23, Township 29 North, Range 84 West of the 6th Principal Meridian, Natrona County, Wyoming, being more particularly described as follows:

A tract of land located in Section 23, Township 29 North, Range 84 West of the 6th Principal Meridian, Natrona County, Wyoming and being more particularly described by metes and bounds as follows:

Beginning at a point from which the USBR control point #102 bears S8529'46"E; thence S 6500'45" W, a distance of 250.60 feet to a point; thence S 8029'44" W, a distance of 239.25 feet to a point; thence N 220' 25" E, a distance of 94.22 feet to a point; thence N 3614'22" E, a distance of 479.92 feet to a point; thence S 8738'51" E, a distance of 250.57 feet to a point; thence S 3931'38" W, a distance of 222.54 feet to a point; thence S 2328'18" E, a distance of 167.81 feet to a point to the POINT OF BEGINNING; said described tract encompassing an area of 3.11 acres, more or Holthouse Appraisal Group Analysis – 6705 Page F - 9 less. Note: This description is tied to USBR control survey only and is not recordable.

ZONING According to the Natrona County Planning and Zoning Department the subject site is zoned "RAM.", Ranching, Agricultural, and Mining. The site is restricted to use as a public marina according to the Natrona County Road & Bridge Department by the Bureau of Reclamation. According to this zoning district all allowable uses require a minimum of 35 acres. The subject site is only 3.11 acres which is allowed under the grandfather provision of this ordinance. Excerpts from this zoning district can be found in the Addenda of this report. SITE DATA

Location: Adjacent to the north side of Pathfinder Reservoir, approximately one mile west of Pathfinder Dam and approximately 39 miles southwest of Casper, Wyoming

Address: 26880 South Pathfinder Road, Pathfinder Reservoir, Alcova, Natrona Wyoming

Occupancy: The Pathfinder Boat Club/Marina and Recreational Vehicle Park

Legal Description: See the Legal Description Section of this report

Shape: Irregular

Dimensions: See Site Plan

Size: 3.11 acres

Frontage: Pathfinder Reservoir and Pathfinder Road.

Topography: Sloping to near level

Zoning: "RAM", Ranching, Agricultural & Mining

Holthouse Appraisal Group Analysis – 6705 Page F - 10 Flood Hazard: The F.I.R.M. (Flood Insurance Rate Map), Panel #560036-1225A has not been printed; however, the subject property is located adjacent to the Pathfinder Reservoir that is managed by the Bureau of Reclamation and this area is considered to be in a flood zone.

Soils: A soils analysis was not provided the Appraiser and the Appraiser did not obtain a soils analysis; however, inspection of the subject and existing buildings in the immediate area indicate soils are adequate for most building purposes.

Access: By Wyoming Highway 220 and Pathfinder Road and is considered good.

Utilities: Utilities that are in place and in use on the site are provided by the following:

Water – Private Well Sewer - None Natural Gas - None (propane is available) Electricity – Rocky Mountain Power Telephone – Cellular Communications

Police Protection: Natrona County Sheriff's Office

Present Improvements: 816 sq. ft., low-average quality, manufactured mobile home used as a marina plus boat docks, gas shed & dock, 25 space RV Park and other support buildings.

Present Use: Boat Club/Marina/Convenience/Tackle Store and RV Park.

Easements/Encroachments: Road way and utility easements, no apparent adverse easements noted on inspection.

Holthouse Appraisal Group Analysis – 6705 Page F - 11

PATHFINDER MARINA - SITE PLAN

Holthouse Appraisal Group Analysis Section - 6705 Page F-12

PATHFINDER MARINA AERIAL LOCATION MAP

Holthouse Appraisal Group Analysis Section - 6705 Page F - 13

PATHFINDER MARINA TOPOGRAPHICAL MAP

Holthouse Appraisal Group Analysis Section - 6705 Page F - 14 HIGHEST AND BEST USE The purpose of studying the highest and best use of a property is to determine the improvements that will generate the greatest residual income to the land. The highest and best use is defined as: The probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

1 The Appraisal of Real Estate, 10th Edition, 1992, published by the Appraisal Institute.

Holthouse Appraisal Group Analysis – 6705 Page F - 15 are carefully considered. Typically, five basic land uses are considered. These uses are: special purpose, agricultural, residential, industrial, and commercial land uses. A brief discussion of these uses and how they relate to the subject are as follows: Special Purpose Uses A special purpose property is defined as “a limited market property with a unique physical design, special construction materials, or a layout that restricts its utility to the use for which it was built; also called “special design property”2. Special purpose properties typically have only one use or a very limited number of uses. Examples of such properties include event centers, public libraries, schools, churches, and recreational parks. The subject is located approximately 39 miles southwest of the Central Business District of Casper adjacent to the Pathfinder Reservoir. The subject has historically been used as a recreational marina that provides the general public with ships store, boat docks and RV spaces; thus, its current use is more commercial in nature than special purpose such as a private club. However, the operation is being operated by the Pathfinder Marina and Boat Club due to the failed economic viability of the site. A review of the revenues indicates that it is being run more as a “not for profit” organization than a commercial venture. Therefore, its current use is not financially feasible. Agricultural Uses Agricultural use of the subject is not physically possible or legally permissible due to restrictions placed on the land by the Bureau of Reclamation prohibiting the site from being used for agricultural purposes. Therefore, due to its location, size, surrounding uses, nature of the soils, area growing season, and legally permitted uses, it is the Appraiser’s opinion that a use of this type would not be legally permissible or financially feasible. Residential Uses Residential development of the subject parcel would be physically possible; however, would require a zoning variance to make it legally permissible due to the subject’s overall size being under the minimum acreage size. The subject’s size of 3.11 acres is, however, conducive to the risks involved obtaining a variance as a size limitation for private septic systems is 2.0 acres. This would allow low development costs and would be more acceptable to a variance

8 The Dictionary of Real Estate Appraisal, Third Edition, The Appraisal Institute, 1993, Page 342 Holthouse Appraisal Group Analysis – 6705 Page F - 16 passage by the Natrona County Planning Department as it reduces the overall density in the area. Therefore, it is the Appraiser’s opinion that a use of this type would be financially feasible. Industrial Uses The subject of this report is located in an area that has historically been seasonal recreational sites and is restricted by the Bureau to these uses. Therefore, this use was not considered as it is not legally permissible nor would it be financially feasible due to its location. Commercial Use Commercial use of the subject sites would be physically possible and legally permissible under the grandfather portion of the zoning restrictions. Furthermore, due to the rural nature of the area, a commercial use such as a marina would be a desired use by the current owner as it provides support services for other owned real property being leased in the area. However, the subject site has a history of commercial failures indicating that a use of this type is not financially feasible. Furthermore, the marina is not currently being run as a commercial venture, but instead, is being run as a boat club with emphasis on keep costs low to its members. Therefore, a use of this type would not be financially feasible. Financially Feasible Use As previously stated, the subject is improved with the Pathfinder Marina/Boat Club that provides the general public with a ships store, boat docks and RV Park. This use is a desired use by the Bureau as it provides support services (such as basic groceries items and supplies) for the surrounding campgrounds; thus, enhancing their overall appeal. An analysis of the current use indicates that the site is being run as a hybrid marina/boat club due to its history of commercial failures; thus, is geared more toward keeping down the overall costs to the members than creating a profit. As previously stated, the site “as vacant” could be used as a recreational second home site; however, a variance would be required. In my discussion with the Natrona County Road & Bridge and Planning and Zoning Department it was found that a low density use of this type would be a desired use (with typical caveats) if also desired by the Bureau. Therefore, the financially feasible use of the site “as vacant” would be as a recreational home site.

Holthouse Appraisal Group Analysis – 6705 Page F - 17 Maximally Profitable Use The Appraiser has been instructed to appraise the subject “as vacant land ready for its highest and best use”. Furthermore, the Appraiser has been asked to determine the market rent for the subject site without consideration of improvements. Currently, sites similar to the subject are not bought and sold on the open market but are leased to the owners of the leasehold improvements. In my interviews with the Natrona County Road and Bridge and Mr. Kenneth C. Randolph with the U.S. Department of the Interior, Bureau of Reclamation, they have indicated that there are no plans to privatize this site or sell it on the open market. The Appraiser was unable to find comparable sales or arms-length leases that were similar to the subject under its current use as a hybrid marina/boat club. An analysis of the site’s financially feasible uses indicates that if vacant, the subject site would have two potential uses: 1) - Boat Club/Marina as currently improved; or 2) - Cabin sites similar to those located in the Alcova Lakeview Estates, Alcova West Ranchettes, South Estates and Lake Ridge Estates, just to the northeast. According to Mr. Bill Fehringer with Civil Engineering Professionals, Inc., under the cabin site scenario, the desired size for density and health issues would be at least two acres making the subject conducive to one site. Furthermore, in my discussions with the Natrona Road and Bridge it was found that if this use was desired by the Bureau, a use of this type would most likely be acceptable to the county. Therefore, the Appraiser will analyze these two scenarios to determine the maximally profitable use of the site. Scenario No. 1 – Boat Club/Marina Analysis A visual inspection of the site indicates that the boat club/marina provides minimal grocery services, has a 816 sq. ft. marina with 516 sq. ft. viewing deck, 330 sq. ft. pump house, 466 sq. ft. gasoline bunker, 60 sq. ft. gas shed and a 25 unit RV park, boat docks, boat buoy system. This club uses the site as a minimal cost center and relies on donated labor to make the site viable. Therefore, it is the Appraiser’s opinion that due to the lack of market data and the area’s limited success of boat/ski clubs as viable commercial operations, the maximally productive use of the site would not be as boat/ski club unless its members are willing to support its use based

Holthouse Appraisal Group Analysis – 6705 Page F - 18 on a lease rate derived from the value of the land under the subject’s highest and best use, a requirement of this appraisal. Scenario No. 2 – Recreational Second Home Site Analysis The Appraiser has researched the market for lot sales that would be similar to the subject under this scenario. These sales will be used to determine the market value of the site as a recreational second home site. These sales are located in the Alcova Lake View Estates I and II, Alcova West Ranchettes, South Estates and Lake Ridge Estates and are comparable to the subject except for their availability of domestic water to four of the five areas. The remaining subdivision, Lake Ridge Estates has larger sites with several selling with a water well in place. An analysis of the market indicates that most sites are now purchased on per-square foot-value with the primary emphasis on view and access to the lake. An analysis of the subject under the extraordinary assumption that it could be used as a recreational second home site indicates that it would be superior in location with a closer proximity to the shoreline; however, would most likely be less desirable than a similar lot on Alcova Reservoir as the lake at Pathfinder fluctuates drastically during the summer season. According to my interviews with Mr. RC Benardis, associate broker with RE/MAX The Group and Mr. Gary Lever with Rocky Mountain Real Estate, under this scenario this lot would be in demand and should sell in the $225,000 to $250,000 price range; however, it is doubtful that the land value would be as much as a similar lot on Alcova Reservoir. Therefore, it is the Appraiser’s opinion that a use of this type would be the maximally productive use of the site based on the analysis found within this report. HIGHEST AND BEST USE AS VACANT Based on the foregoing analysis, the highest and best use of the subject, “as vacant”, would be “seasonal recreational lake front lot”. HIGHEST AND BEST USE AS IMPROVED The Appraiser’s assignment was to appraise the subject “as vacant ready for its highest and best use”. Therefore, the highest and best use “as improved” was not part of the Scope of Work and was not considered.

Holthouse Appraisal Group Analysis – 6705 Page F - 19 TYPICAL PURCHASER The typical purchaser of this site would be a user wanting a seasonal second home “recreation” water front lot. The typical tenant or purchaser for this lot would most likely live in Natrona County due to the sites location 39 miles from Casper. This site would most likely be sold or leased for recreational or seasonal use market aka second home market or as a club site for a boat or ski club willing to pay market rents based on the market value of the land. THE APPRAISAL PROBLEM TO BE ANALYZED The instructions of the Client are to value the subject site as “as vacant ready for its highest and best use”. Furthermore, the Appraiser has been asked to determine the market rent for this site as a marina/boat club based on the market value of the land under it highest and best use and typical market return rates. The subject’s current use is allowed under the grandfather provision of its current “RAM”, Ranching, Agricultural and Mining zoning district and the United States Bureau of Reclamation's Master Plan for the Alcova Reservoir Recreational Area. As previously stated, the subject site has never been bought and sold which is typical of most boat/ski clubs within the State of Wyoming. These sites are typically leased from which ever governmental agency is charged with the management of the site and are done so to promote recreation in the area. Lease rates for these sites are not typically considered as arms- length transactions for the purpose of this appraisal, as the Appraiser is required to use market land values and market rents (non-governmental rents) for the basis of his conclusions. Therefore, to determine the market value of the site and consequently the market rent, the Appraiser must find similar lots with similar location and highest and best use. A search of the Pathfinder and Alcova Reservoirs indicates that there are five subdivisions located at Alcova which are privately held and openly bought and sold. The first three subdivisions are Alcova Lakeview Estates No. 1 and No. 2 and Alcova West Ranchettes located approximately 6 miles northeast of the subject. This area is near the end of its buildout phase which has taken approximately 30 years. These sites have either recreational or year around residential improvements; however, most sites are used for recreational purposes. These sites are comparable to the subject in many aspects, but are smaller in size and approximately 30% of these sites have no lake view, none have lake-frontage, and consequently none of these lots have waterfront docks or permits for water front docks. If this service is desired, owners are

Holthouse Appraisal Group Analysis – 6705 Page F - 20 required to lease mooring space from the Casper Boat Club or the Alcova Lakeside Marina, if this service is desired. The fourth subdivision is located due west of the Alcova Trailer Park and south of Alcova Lake View Estates, and is also approximately 6 mile northeast of the subject. This subdivision is known as the South Estates Subdivision and consists of 17 lots platted in August 2009. These lots are comparable to the subject as a second home site in many aspects including similar lot sizes; however, they are superior in utility with access to a central water system which will be adjusted for based on market extracted adjustments. This would be similar to the subject’s “highest and best use” “as vacant” under the second home site analysis. To date only one of the lots has been purchased which was for view shed protection from a landowner in the adjoining subdivision. None of these lots have waterfront docks or permits and are also required to lease mooring space from the Casper Boat Club or the Alcova Lakeside Marina, if such service is desired. The fifth subdivision is located adjacent to Wyoming State Highway 220, due north of the four previously stated subdivisions and is approximately 6 miles northeast of the subject. Phase I of this subdivision was platted in June 2007 with 34 lots. It has no direct roadway access to the lake except for Highway 220 (however, there are plans in the works to do so) nor do they have dock permits. Lots are similar utility with acreages ranging from 6.28 acres to 17.33 acres and water and sewer at owner’s expense via private well and septic system. Sales appear to be speculators with only two improvements built on the sites. Covenants appear to require upper end homes with the two structures built being in the $300,000 to $500,000 range. These sites attract buyers similar to the subject if the seller elected to allow the site to be used for a second home site. An analysis of the market indicates that most sites are purchased based on size and location with emphasis on the view the location has with relationship to the lake and lake access. Furthermore, the subject site is superior in size to most of the sales closest to the lake and it has actual lake frontage. Thus, these variables will be addressed in the following analysis. Therefore, to determine the market value of the subject site the Appraiser has elected to use the direct sales comparison as its highest and best use is as a single lot second home recreational site.

Holthouse Appraisal Group Analysis – 6705 Page F - 21 In addition to the fee simple land value, the Appraiser has been requested to give his opinion of the market rent for the site. Typically, market rents are established by analyzing current rents being paid for comparable properties; however, as there are no similar arms-length (market) rental sites located in the subject’s market area, the Appraiser has determined the market rents based on a rate of return on the fee simple market value of the land using market extracted return rates. In doing so the Appraiser must analyze yields and risk factors to determine a reasonable rate of return. Once this rate is determined, the Appraiser multiplies the yield rate times the market value, to get the amount of rent that a typical market investor would expect as a return on investment. THE APPRAISAL PROCESS Appraisal techniques are the specifics of the three approaches that are traditionally used to derive separate indications of real property value. One or more approaches may be used, depending on their applicability to a particular appraisal assignment. In assignments to determine market value, the ultimate goal of the valuation process is a well-supported conclusion that reflects the appraiser’s consideration of all influences on the market value of the property being appraised. Therefore, the appraiser studies the property from each of the applicable viewpoints reflected in the three approaches. APPROACHES TO VALUE In the appraisal of real estate, there are three basic traditional approaches for determining property value. The three approaches are the Sales Approach, the Cost Approach, and the Income Approach. The final step in determining a property's "market value" (i.e., most probable selling price) is to correlate the Appraiser’s value opinion of the three approaches into a single opinion of value.

Holthouse Appraisal Group Analysis – 6705 Page F - 22 Sales Approach This approach is based on the proposition that an informed purchaser would pay no more for a property than the cost to him of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data, which can be verified from authoritative sources. The Sales Approach is relatively unreliable in an inactive market or in determining the value of properties when no real comparable sales data is available. The Cost Approach This approach is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements, which represent the highest and best use of land, or when unique or specialized improvements are located on the site for which there exists no comparable properties on the market. The Income Approach This approach is based on the proposition that a property is worth no more than the capitalized value of the income stream that the property is capable of generating. The procedure converts anticipated benefits (dollar income) to be derived from the ownership of the property into a value opinion. The Income Approach is widely applied in appraising income-producing properties. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process.

Holthouse Appraisal Group Analysis – 6705 Page F - 23 THE SALES APPROACH The value opinion of the subject property by the Sales Approach was derived after a search for similar properties. The Appraisal Institute further explains the approach below in the paragraphs from Page 417 of The Appraisal of Real Estate, 12th Edition: In the sales comparison approach, the appraiser develops an opinion of value by analyzing similar properties and comparing these properties with the subject property. The comparative techniques of analysis applied in the sales comparison approach are fundamental to the valuation process. Estimates of market rent, expenses, land value, costs, depreciation, and other value parameters may be derived in the other approaches to value using comparative techniques. Similarly, conclusions derived in the other approaches are often analyzed in the sales comparison approach to estimate the adjustments to be made to the sale prices of comparable properties.

Comparative analysis of properties and transactions focuses on similarities and differences that affect value, which may include variations in the following:  Property rights appraised  The motivations of buyers and sellers  Financing terms  Market conditions at the time of sale  Size  Location  Physical features  Economic characteristics, if the properties produce income Elements of comparison are tested against market evidence to estimate which elements are sensitive to change and how they affect value. The Appraiser has searched the subject’s market area and found eighteen sales that are somewhat similar to the subject. These sales will be used to determine the value of the subject under the extraordinary assumption that the site could be used as a seasonal second home site with water frontage containing 3.11 acres. Details of these sales can be found in the Basic Data Section with the analysis as follows:

Holthouse Appraisal Group Analysis – 6705 Page F - 24 ABSTRACT OF COMPARABLE LAND SALES Recording Comp # Location Date Deed # Grantor/Grantee Sales Price Acres $/Acre $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake CL Dolodell 1 2/27/1998 609823$ 22,000 1.00$ 22,000.00 $ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Ken Milner Lot 33, Alcova Lake Richard D. Wagner 2 5/23/2000 653493$ 23,500 0.94$ 25,000.00 $ 0.57 Average NoHOA/None 1230 "SR-2" View Estates 2 Max Wayne Stalkup Lot 3, Alcova West Charles T. Norton, et ux 3 10/31/2001 680825$ 35,000 1.03$ 34,013.61 $ 0.78 V-GoodYes HOA/None Private "SR-1" Ranchettes Donald Dale Sackett et ux Lot 41, Alcova Lake Stan & Nancy Koehn 4 12/31/2002 707361$ 28,000 1.00$ 28,000.00 $ 0.64 Good-AvgNo HOA/None 77 "SR-2" View Estates 2 Keith W. Johnson Lot 31 Alcova Lake Paul J. Simonton, et ux 5 7/1/2003 720130 $ 33,500 1.00 $ 33,500.00 $ 0.77 AverageNo HOA/None 35 "SR-2" View Estates 1 Newell E. Wilson, et ux Lot 5 Alcova West Donald Dale Sackett et ux 6 9/19/2003 726757$ 20,000 1.86$ 10,752.69 $ 0.25 AverageNo HOA/None 261 "SR-1" Ranchettes Walter E. Weiss, et ux Lot 16 Alcova West Robbie Dane Benson 7 10/21/2003 729128$ 16,000 1.05 $ 15,238.10 $ 0.35 Average No HOA/None 311 "SR-1" Ranchettes David S. Bullard, et ux Lot 5 Alcova West Walter E. Weiss, et ux 8 4/12/2004 739977$ 25,500 1.86$ 13,709.68 $ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Ted Anderson, et ux Lot 13, Alcova West Timothy C. Hoiles, Trustee 9 4/6/2005 763897$ 20,500 1.05$ 19,523.81 $ 0.45 AverageNo HOA/None 410 "SR-1" Ranchettes Wyoming Renovations, Inc Lot 30, Alcova West David Whisler 10 6/23/2005 770669$ 37,500 1.38 $ 27,173.91 $ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Warren R. Foreman Alcova Lake, LLC 11 Lot 3, South Estates 2/2/2010 883441$ 225,000 2.26$ 99,557.52 $ 2.29 ExcellentYes HOA/None Private "UR" John P. Ellbogen, II Lot 11, Lake Ridge Lake Ridge Estates, LLC 12 7/23/2010 892364$ 140,000 12.61$ 11,102.30 $ 0.25 GoodYes Well/None 58 "PUD" Estates Phase I Steddyhomes, II, LLC Lot 12, Lake Ridge Success Properties, LLC 13 9/3/2010 894605$ 110,000 7.24$ 15,193.37 $ 0.35 Average Yes None/None 97 "PUD" Estates Phase I Lakecliffe, Inc. Lot 10, Lake Ridge Lake Ridge Estates, LLC 14 11/15/2010 898890 $ 90,000 10.22 $ 8,806.26 $ 0.20 Fair No None/None Private "PUD" Estates Phase I Steddyhomes, II, LLC Lot 5, Lake Ridge Lake Ridge Estates, LLC 15 11/22/2010 899332$ 61,500 7.33 $ 8,390.18 $ 0.19 Fair No None/None Private "PUD" Estates Phase I Ryan P. Mundell Lot 18, Alcova West Rita J. Condis 16 6/21/2011 910441 $ 47,500 1.14 $ 41,666.67 $ 0.96 AverageNo HOA/None 1 "SR-1" Ranchettes David B. Simonson, et ux Lot 25, Lake Ridge SDRE, LLC 17 7/6/2011 911244 $ 175,000 10.11 $ 17,309.59 $ 0.40 V-GoodYes Well/None Private "PUD" Estates Phase I Craig H. Evert, et ux Lot 55, Alcova Lake Susan F. Hoag, Trustee 18 12/5/2011 919443$ 58,500 1.03 $ 56,796.12 $ 1.30 V-GoodYes HOA/None 206 "SR-1" View Estates 2 Woody C. Hugget

Holthouse Appraisal Group 6705-Analysis Section Page F - 25 PAIRED SALES ANALYSIS - TIME - MARKET INCREASE Recording Comp # Location Date Sales Price Acres Sq. Ft. $/Sq. Ft. View Lake View Water/Sewer DOM Zoning Lot 13, Alcova Lake 1 2/27/1998$ 22,000 1.00 43,560$ 0.51 Fair Yes HOA/None 227 "SR-2" View Estates 1 Lot 31 Alcova Lake 5 7/1/2003$ 33,500 1.00 43,560$ 0.77 Average No HOA/None 35 "SR-2" View Estates 1 Differential 1,950$ 11,500 %/Year $ 0.26 %/Year Annual Time Adjustment 5.34 52.27% 9.78% 52.27% 9.78% Lot 33, Alcova Lake 2 5/23/2000$ 23,500 0.94 40,946$ 0.57 Average No HOA/None 1230 "SR-2" View Estates 2 Lot 41, Alcova Lake 4 12/31/2002$ 28,000 1.00 43,560$ 0.64 Good-Avg No HOA/None 77 "SR-2" View Estates 2 Differential 952$ 4,500 %/Year $ 0.07 %/Year Annual Time Adjustment 2.61 19.15% 7.34% 12.00% 4.60% Lot 5 Alcova West 6 9/19/2003$ 20,000 1.86 81,022$ 0.25 Average No HOA/None 261 "SR-1" Ranchettes Lot 5 Alcova West 8 4/12/2004$ 25,500 1.86 81,022$ 0.31 Average No HOA/None 48 "SR-1" Ranchettes Differential 206$ 5,500 %/Year $ 0.07 %/Year Annual Time Adjustment 0.56 27.50% 48.73% 27.50% 48.73% Lot 16 Alcova West 7 10/21/2003$ 16,000 1.05 45,738$ 0.35 Average No HOA/None 311 "SR-1" Ranchettes Lot 13, Alcova West 9 4/6/2005$ 20,500 1.05 45,738$ 0.45 Average No HOA/None 410 "SR-1" Ranchettes Differential 533$ 4,500 %/Year $ 0.10 %/Year Annual Time Adjustment 1.46 28.13% 19.26% 28.13% 19.26% Lot 30, Alcova West 10 6/23/2005$ 37,500 1.38 60,113$ 0.62 Average No HOA/None 292 "SR-1" Ranchettes Lot 18, Alcova West 16 6/21/2011$ 47,500 1.14 49,658$ 0.96 Average No HOA/None 1 "SR-1" Ranchettes Differential 2,189$ 10,000 %/Year $ 0.33 %/Year Annual Time Adjustment 6.00 26.67% 4.45% 53.33% 8.89% Lot 3, Alcova West 3 10/31/2001$ 35,000 1.03 44,823$ 0.78 V-Good Yes HOA/None Private "SR-1" Ranchettes Lot 55, Alcova Lake 18 12/5/2011$ 58,500 1.03 44,867$ 1.30 V-Good Yes HOA/None 206 "SR-1" View Estates 2 Differential 3,687$ 23,500 %/Year $ 0.52 %/Year Annual Time Adjustment 10.10 67.14% 6.65% 66.98% 6.63%

Paired Sales Analysis - Land Sales Holthouse Appraisal Group 6705-Analysis Section Percent Location Premium SUMMARY OF THE COMPARABLE LAND SALES Comparable Land Sale No. 1 Through No. 10, Alcova, Wyoming – These sales were used by the Appraiser to support conclusions as to time adjustments and market trends in the area. Comparable Land Sale No. 11 – Lot 3 – South Estates Subdivision, Alcova, Wyoming - This sale is located 6 miles northeast of the subject, in the subject’s general neighborhood. This sale is located in the South Estates Subdivision which lies south of Lakeview Estates. The subdivision has 17 platted lots ranging in price from $150,000 to $250,000. The topography of the site is heavy rolling and pad sites are limited. The view of the lake is superior to most of the lots within the subdivision and contains approximately 2.26 acres. This sale, according to the seller, was sold before the subdivision was put on the market. It was purchased by an adjoining landowner who purchased the site to prevent his view of the lake from being blocked. The site is the only site sold within the subdivision and sold at a premium due to the value of the view shed. This site has ease of access to the Boat Club and Marina where mooring can be leased. It is the Appraiser’s opinion that this site best represents the base value premium for the subject site. The sales price was $225,000 or $2.29/sq. ft. before adjustments. Comparable Land Sale No. 12 and No. 13 – Lots 11 and 12, Lake Ridge Estates Phase I, Alcova , Wyoming - These sales are located at the entrance of Lake Ridge Estates approximately 6 miles northeast of the subject, in the subject’s general neighborhood. These sales are located in the Lake Ridge Estates which lies northwest of Lakeview Estates and have no direct access to the lake area except via Highway 220; however, there are currently plans to build one. Water and sewer will be provided by private well and septic at owner’s expense. Phase No. 1 of the subdivision consists of 34 platted lots ranging in price from $75,000 to $250,000. Lot 11 (Comparable Sale No. 12) is located to the east of Lot 12 (Comparable Sale No. 13) and abuts BLM land so the view of the lake is unobstructed and is likely to remain so. This lot contains approximately 12.61 acres and sold for $140,000 or $0.25/sq. ft. According to the seller the lot had a well in place with an estimated value of $15,000 to $20,000. Lot 12 is located with a slightly obstructed view of the lake and overlooks Lots 13, 14 and 16. This lot contains approximately 7.24 acres and sold for $110,000 or $0.35/sq. ft. Both sites were purchased by local builders looking to build spec homes in the area. Both sites are now improved and are still

Holthouse Appraisal Group Analysis – 6705 Page F - 26 on the market after more than a year. These two sales indicate that size might be a factor; however, on a per lot basis, the better view sold for a higher price. Sales were used to help set trends in the area. Comparable Land Sale No. 14 and No. 15 – Lots 10 and 5, Lake Ridge Estates Phase I – Alcova, Wyoming – These sales are also located approximately 6 miles northeast of the subject, in the subject’s general neighborhood. These two sales are located on the highway and have no views of the lake. Water and sewer will need to be provided by the purchaser at their expense. Lot 10 contains approximately 10.22 acres and is located on a hillside overlooking Lots 5 and 6. This sale sold for $90,000 or $0.20/sq. ft. Lot 5 is located adjacent to the highway and at the entrance to this area of the subdivision and contains approximately 7.33 acres. According to the seller the purchaser is planning to put mini-storage units on Lot 5 when the market makes it financially feasible. These two sales indicate there appears to be little difference in value when size is a factor contradicting the preceding analysis; therefore, in the paired sales analysis similar sites should be used to evaluate this dichotomy. Sales were used to help set trends in the area. Comparable Land Sale No. 16 – 23381 West Lower Reeves Road, Wyoming - This sale is located approximately 6 mile northeast of the subject, in the subject’s general neighborhood. It is Lot 18 of Alcova West Ranchettes located west of Lakeview Estates No. 2 and is the most current sale of a no-lake-view lot. This lot is located in a cul-de-sac and has some hill side views of the surrounding area. The site has access to community water as part of the homeowner’s association fees with septic at the expense of the purchaser. This sale is approximately 1.14 acres and sold for $47,500 or $0.96/sq. ft. This sale was used to help set trends in the area. Comparable Land Sale No. 17 – Lot 25, Lake Ridge Estates, Alcova Phase I, Wyoming - This sale is located approximately 6 miles northeast of the subject, in the subject’s general neighborhood. It is at the end of Lake Ridge Estates and has an unobstructed view of the lake. It was owned by one of the owners of the subdivision and was considered to be one of the best view lots within the subdivision. According to the seller the site was improved with a water well with an estimated value of $15,000 to $20,000. The lot size is approximately 10.11 acres and had a developed pad site. The sales price was $175,000 or $0.40/sq. ft. This sale was used to help set trends in the area.

Holthouse Appraisal Group Analysis – 6705 Page F - 27 Comparable Land Sale No. 18 – 25887 West Cedar Mesa, Lot 55, Alcova Lake View Estates No. 2, Alcova, Wyoming - This sale is located approximately 6 miles northeast of the subject, in the subject’s general neighborhood. It is the most current sale of a lake-view lot within the Lakeview Estates Area. The site has community water available as part of the homeowner’s fees with septic at the expense of the purchaser. The lot size is approximately 1.03 acres and has very limited area for a pad site. The sales price was $58,500 or $1.30/sq. ft. This sale was used to support trends in the area ANALYSIS OF THE COMPARABLE LAND SALES As previously stated Comparable Sales No. 1 through No. 10 were used to help support trends in the area. Also as previously stated Comparable Sale No. 11 was most similar in desirability of location; however, is not a “water front” lot and is located at Alcova which has superior utility to Pathfinder due to the consistent level of the lake. Comparable Sales No. 12, No. 13, No. 14, No. 15 and No. 17 were used to establish trends in the area from which adjustments could be made or supported. Comparable Sale No. 16 was the most current lot sale with no-view of the lake and Comparable Sale No. 18 is the most current “lake-view” sale midway between Comparable Sale No. 16 and No. 11. These sales were used to help establish trends in the area from which reasonable adjustments could be made and to support conclusions to value. The adjustments and conclusions are as follows: Time Adjustment – An analysis of the comparable sales indicates that the market had an increase/decrease as follows (For further details see Paired Sales Analysis – Time – Market Increase/Decrease chart found preceding this analysis:

Holthouse Appraisal Group Analysis – 6705 Page F - 28 Time - Market Increase/Decrease Analysis Comp # Rec. Date Years Acres $/Sq. Ft. %/Year 1 2/27/1998 1.00$ 0.51 5 7/1/2003 5.34 1.00$ 0.77 9.78% 2 5/23/2000 0.94$ 0.57 4 12/31/2002 2.61 1.00$ 0.64 4.60% 6 9/19/2003 1.86$ 0.25 8 4/12/2004 0.56 1.86$ 0.31 48.73% 7 10/21/2003 1.05$ 0.35 9 4/6/2005 1.46 1.05$ 0.45 19.26% 10 6/23/2005 1.38$ 0.62 16 6/21/2011 6.00 1.14$ 0.96 8.89% 3 10/31/2001 1.03$ 0.78 18 12/5/2011 10.10 1.03$ 1.30 6.63%

An analysis of the above chart indicates that land values per square foot at Alcova are moving with the local economy, “steady by jerks”. A further analysis indicates that there have been some periods of leveling off and some periods of extreme increases; however, the overall movement (price per square foot) appears to have averaged 6.63% over the past ten years (Comparable Sales No. 3 and No. 18). Movement between the years of 2005 and 2011 (the approximate time since the Appraiser’s last appraisal of the subject) indicated by Comparable Sales No. 10 and No. 16, has increased by 8.89%/year when the price per square foot is considered. When total lot values are considered, the percent increase is just slightly more at 6.65% for the 10 year rate but drops to 4.45% for the 5 year rate. A further analysis indicates that of the comparable sales considered in determining the market value of the subject site, Sales No. 11 through No. 18 are the most current sales; thus, the most logical to be used by the Appraiser in the analysis. These sales sold from February 2, 2010 and December 5, 2011 and the paired sales available do not measure market movement separately between these dates. Therefore, it is difficult for the Appraiser to measure the effects of the slowdown in the local economy caused by the dip and recovery in natural resource prices (if any) predicated by the national lending crisis and the crash of the national housing markets. This argument could go several ways and is as follows: First is the 10 year straight line market increase argument where the Appraiser could just use the 10 year average of 6.63%/year (Comparable Sale No. 3 and No. 18). This measurement is the simplistic measurement for the

Holthouse Appraisal Group Analysis – 6705 Page F - 29 overall period and indicates that there must have been a flattening or decrease sometime during the 10 year period based on historic trends which indicates upward trends anywhere from 4.45% to 48.73% (see chart above). Second, the Appraiser could also argue that the measurement between Comparable Sales No. 10 and No. 16 of 8.89%/year (per square foot) is reasonable; however, this percentage also includes the years of 2005 through 2008 where market increases could have easily been at the same rate as they were between 2003 and 2005 of 19.26%/year (Comparable Sales No. 7 and No. 9). This brings in the other side of the argument, a possible market decline between 2008 and 2011. This argument could easily be that the market did go up 19.26%/year during 2005 and 2008, but declined from 2009 to 2011 indicating that Comparable Sale No. 11 should have a negative adjustment; however, this is just speculation as there are no puritan sales to measure this time period. Therefore, to make a credible determination the Appraiser conducted a market interview with Mr. James Edgeworth, broker/owner of the Edgeworth Real Estate Firm. Mr. Edgeworth was involved in Comparable Sales No. 16 and No. 18. Mr. Edgeworth also has properties listed in the same subdivision as Comparable Sale No. 11 and was privy to the details of that sale. In the Appraiser’s interview with Mr. Edgeworth it was found that he felt that he could have gotten a little more next year for Comparable Sales No. 16 and 18, but that No. 11 sold at a premium as the purchaser did not want his view shed of the lake blocked by the downstream developer. He also felt that this lot would most likely not be worth any more in today’s market. This would indicate that Comparable Sale No. 11 most likely sold at the top of the market with no additional market increases necessary. It further indicates that Comparable Sales No. 16 and 18 most likely sold at market with no anticipated decline over the previous or next 12 months. Therefore, it is the Appraiser’s opinion that the market remained stable during the time when Comparable Sale No. 11 sold and the effective date of this report; thus, no time adjustment was made. View/Location Adjustment- This adjustment was extracted from the market based on paired sales analysis which indicate the following (For further details see Paired Sales Analysis – Small/Large Lot Location Analysis chart found preceding this analysis):

Holthouse Appraisal Group Analysis – 6705 Page F - 30 Alcova Reservoir - View Adjustment Analysis Lake Location Comp # Rec. Date View View Acres $/Sq. Ft. Adjustment 14 11/15/2010 Fair No 10.22$ 0.20 15 11/22/2010 Fair No 7.33$ 0.19 4.96% 18 12/5/2011 V-Good Yes 1.03$ 1.30 16 6/21/2011 Average No 1.14$ 0.96 36.31% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% 11 2/2/2010 Excellent Yes 2.26$ 2.29 18 12/5/2011 V-Good Yes 1.03$ 1.30 75.29% 11 2/2/2010 Excellent Yes 2.26$ 2.29 16 6/21/2011 Average No 1.14$ 0.96 138.94% 17 7/6/2011 V-Good Yes 10.11$ 0.40 12 7/23/2010 Good Yes 12.61$ 0.25 55.91% Location Extraction - Lake View v Lake Front Leasehold Improvements 54.87% An analysis of the above stated chart indicates that the closer to the lake, the better the view and access, the higher the value. This analysis indicates that Comparable Sales No. 18 vs No. 16 (a lake-view lot vs no-lake-view lot) within adjoining subdivisions and a short distance apart, commands only a 36.31% higher price; however, when a premium lake-view lot (Comparable Sales No. 11 vs No. 18) is compared, it demands an adjustment of 75.29% verses one furthest from the lake, and 138.94% for a non-lake view lot, even further from the lake. Furthermore, this analysis indicates that even when lake access is not directly available, the property with the unobstructed view closest to the lake demand a 55.91% premium over those that are furthest from the lake with similar views and amenities (Comparable Sales No. 17 vs No. 12). This adjustment supports the Land Value – Land Extraction Method found in the Analysis Section A – Cabin Site Appraisal which indicates a location adjustment 54.87% when pairing Leasehold Improved Sales – Water Front vs Non-Water Front lake view sites within the cabin site area found in Analysis Section A – Cabin Site Appraisal. Finally, when similar views are considered, there is only a small differential, if any at all (Comparable Sales No. 14 and No. 15). Utility Adjustment – Seasonal vs Permanent Water & Septic – The subject site is being appraised without community water and sewer in place. An analysis of the comparable land sales indicates that most have community water or a well but are required to provide septic at the purchasers expense; therefore, the Appraiser has elected to use the -4.52% adjustment for the Holthouse Appraisal Group Analysis – 6705 Page F - 31 subject not having availability to community water or a well. This adjustment was extracted from the market using paired sales analysis between Comparable Leasehold/Fee Simple Cabin Sales No. 4 and Comparable Sales No. 5 and No. 6 found in the Land Value – Land Extraction Method section found in Analysis Section A – Cabin Site Appraisal. These three sales indicate a range differential of $3,626 to $8,125 or a percentage range of 2.79% to 6.25% of total sales price or an average adjustment of $5,875 or 4.52% for the difference between seasonal and non-seasonal water and sewer. (The Appraiser has elected to use the percentage adjustment for this category as the land areas of the comparable sales used could not be determined but were considered similar based on a visual analysis of the plat map.) Reservoir Fluctuation Adjustment An analysis of the comparable sales indicates that all of the sales are located at Alcova Reservoir which has good desirability due to the consistent level of the lake. An analysis of the subject and competing parks indicates that some having waiting lists and all are less desirable then Alcova due to the drastic fluctuations of the reservoirs during the summer months; therefore, the Appraiser must also consider this difference. To determine the utility differential the Appraiser has analyzed the differences between the gross income (Note: A three year average for 2008, 2009 and 2010 was used as 2011 numbers were only available for Alcova.) derived from each respective marina which was supplied by Ms. Julie Huntley with the Wyoming Parks, Historical Sites and Trails Division. The gross sales (three year average) for these marinas is calculated in a similar fashion as those reported to the Natrona County Road and Bridge Department for the Alcova Lakeside Marina. This comparison will help the Appraiser determine the demand for the area and the overall services available and is as follows:

MARINA COMPARISON ANALYSIS Description Glendo Keyhole Boysen Average Gross Sales$ 10,774.00 $ 6,298.43 $ 5,946.29 Alcova Gross Sales$ 12,680.51 $ 12,680.51 $ 12,680.51 Sales Differential$ (1,906.51) $ (6,382.08) $ (6,734.22) Location Differential -15.03% -50.33% -53.11%

As previously stated the subject site is located at Pathfinder Reservoir and is less desirable than Alcova as the lake cannot support similar goods and services. In my interviews

Holthouse Appraisal Group Analysis – 6705 Page F - 32 with area residents and based on the Alcova Market Survey (30%± for both Trailer Park and Cabin Sites) it was found that the primary reason for the less desirability was that the lake drops drastically during the irrigation (summer) season which is the primary recreation season. To determine the difference between this site and those sites at Alcova where the lake level is consistent, the Appraiser has analyzed lakes with similar irrigation drawdowns such as, Glendo, Keyhole and Boysen Reservoirs. (For a complete analysis of the data used, see Section B – Alcova Trailer Park Appraisal.) In this analysis it was found that Glendo, due to its location near Colorado and the interstate, is more similar to Alcova than Pathfinder and has a better draw and overall reputation. It was further found that Keyhole and Boysen were more similar as they have similar reputations and relatively similar services; therefore, this adjustment will be based on the locational differentials for these two lakes of -51.72%. (-50.33% + -53.11% = -51.72%) Conclusion - Under the previous analysis of the comparable land sales, the Appraiser has determined that Comparable Sale No. 11 was most similar to the subject in location as it was purchased by the adjoining landowner to protect his view shed; thus, commanded a premium. This sale is closest to the water (without being on the water) than all of the fee simple lots recently sold or currently for sale and has ease of access to the boat club and marina so has similar access to a lake. The primary difference between this sale and the subject is that it is smaller in size, is not a water front lot but is located at Alcova where the level of the lake remains somewhat consistent during the recreational season. Furthermore, under the previous analysis it was found that Comparable Sales No. 17 and No. 12 are not located close to the lake but are closer to Pathfinder in access. When these sales are paired they indicate a 55.91% differential between a lake-view property verses an unobstructed lake-view property closer to the lake. This correlates well with the location premium at the Cabin Site Area between “non-water front” lots and “water front” lots from improved sales of 54.87% Therefore, to determine the value of the subject site, the Appraiser has elected to use Comparable Land Sale No. 11 as the base land value. This sale will then be adjusted using the market derived location premium at the Cabin Site Area between “non-water front” lots and “water front” lots from improved sales of 54.87% to determine the base value of the subject as if it were at Alcova less the community water or well adjustment of -4.52%. Once this is done the

Holthouse Appraisal Group Analysis – 6705 Page F - 33 Appraiser can adjust the sale for the utility adjustments for lake fluctuation of -51.72%. These percentages and the resulting value conclusion are detailed in the adjustment grid below:

ADJUSTMENT GRID - PATHFINDER MARINA/BOAT CLUB - WATER FRONT LOT Water & Comp # Location Sales Price Sewer Diff Land Value Acres $/Acre $/Sq. Ft.

11 Lot 3, South Estates$ 225,000 -4.52% $ 214,830 2.26$ 95,058 $ 2.18

Location % - Water Front Adjustment - Market Extracted From Improved Leasehold Sales 54.87% Close Up Lake View Location Adjustment - Square Foot $ 1.20 Adjusted Price Per Square Foot $ 3.38 Utility % - Water Fluctuation - Alcova Marina vs Keyhole & Boysen -51.72% Water Front Location Adjustment - Square Foot $ (1.75) Adjusted Price Per Square Foot $ 1.63 Lot Size - 3.11 Acres - 135,472 Square Feet 135,472 Indicated Value $ 221,046 Rounded To: $ 220,000

Market Interviews To determine the reasonableness of this value the Appraiser has interviewed Mr. RC Benardis, associate broker with RE/MAX The Group and Mr. Gary Lever with Rocky Mountain Real Estate. In my interview with Mr. Benardis it was found that if the subject site were available for recreational use as a second home site the probable sales price would be in the $225,000 to $250,000 range. It was Mr. Benardis’s opinion if you could purchase the site for this purpose he would subdivide the site into 6 lots and market them for $60,000 each. This would gross him approximately $360,000 less costs and profit; thus, he could not pay any more than $225,000 to $250,000 for the site. The Appraiser has analyzed this scenario and found that if this scenario was legally permissible, and if the market value of the sites was $60,000, as indicated by Mr. Benardis, the whole sale market value of the total land area would most likely be no more than $226,800 using the previously determined 37% direct and indirect costs found in Section “C” Casper Boat Club Appraisal. Calculation - $360,000 – ($360,000 x 37% = $133,200) = $226,800. In my interview with Mr. Lever he also indicated that this site would most likely have a market price of $225,000 to $250,000 as a single tract of land.

Holthouse Appraisal Group Analysis – 6705 Page F - 34 Conclusion - All of the comparable sales are located in the Alcova Lake View Estates I and II, Alcova West Ranchettes, South Estates, and Lake Ridge Estates subdivisions which are six miles northeast of the subject. The Appraiser has selected Comparable Sale No. 11 as the most current comparable sale to the subject under the extraordinary assumption that the subject could be used as a second home seasonal recreational home site. This sale is most similar in size and is just slightly less desirable than a lot on the lake front of Alcova. The site is superior in that it has community water, but, has no direct access (from the site) to the shoreline. It does have better access to goods and services not available at Pathfinder and has year round access; however, year around access does not appear to be a primary market concern based on surveys. (Year round access and use are a restriction on the tenants by the owner of the subject. If an adjustment is necessary it will be addressed in the “Market Lease Analysis” section of this report as access and year round use is a restriction that is the Client’s preference. This restriction is well within the Clients control; thus, does not affect the fee simple market value of the subject’s sites.) When this sale is adjusted, it indicates a value of $220,000 for the hypothetical use which is supported in market interviews. Therefore, it is the Appraiser’s opinion that a maximum price for the 3.11 acre site on Pathfinder with lake-frontage would most likely not exceed $220,000 as the lake fluctuates during the recreation season; thus, for the purposes of this analysis $220,000 will be used. FINAL OPINION OF VALUE – DIRECT LAND SALES COMPARISON METHOD Therefore, it is the Appraiser’s opinion that under the Land Value- Direct Sales Comparison Method the value of the subject site would be $220,000.

Holthouse Appraisal Group Analysis – 6705 Page F - 35 ANALYSIS OF MARKET RATES OF RETURN (YIELD RATES) It is common practice to derive market rents by analyzing current market rents paid for similar properties. This market data is then compared to the subject to determine the subject’s market rates or rents that an investor would expect as owner of the property and obtain a desired yield. The subject sites are owned by the United States of America, Department of the Interior and are not privately held or sold. An analysis of the Wyoming and surrounding recreational markets indicates that most leases for similar properties are owned by the government and the lease rate is not determined by market value of the land as required by the Memorandum of Agreement between the Bureau and the Natrona County Commissioners. Furthermore, the Appraiser could find no current comparable leases of recreational sites that were privately held and were arms-length. Therefore, the Appraiser’s opinion of market rents will be derived from expected rates of returns (yields) obtained or desired by investors of similar properties. In order to determine a credible rate of return (yield) the Appraiser must analyze the current rates of return offered by similar alternative investments in real property, “land only”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, “the following table summarizes prevailing land lease capitalization and discount rates. The former reflects initial rates of return on appraised values for vacant land proposed for development. They do not address increases in land lease payments or the reversion but may include percentage rent. The latter are internal rates of return being achieved by landowners on improved properties. As such, they include changes in land lease payments, percentage rent where applicable and the reversion of the entire property at the termination of the lease. Lease terms range from 55 to 99 years.”3 This survey will be used to determine the market rate of return the government should expect to achieve for the subject sites.

3 RealtyRates.com – Investor Survey – 3rd Quarter, Robert G. Watts and Associates, 2006, Page 38. Holthouse Appraisal Group Analysis – 6705 Page F - 36 Abstract - Land Lease Capitalization Rates - RealtyRates.com - 3rd Quarter - 2011 Description 2007 2008 2009 2010 2011 5 Year Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Max Avg Min Avg Apartments 4.39% 10.94% 8.24% 3.75% 11.68% 7.89% 3.72% 11.54% 7.60% 2.81% 10.82% 7.05% 2.33% 10.18% 6.39% 3.40% Golf 5.27% 16.67% 11.67% 4.49% 17.15% 11.44% 4.22% 17.13% 11.19% 3.30% 16.24% 10.23% 2.90% 15.80% 9.39% 4.04% Health Care/Senior Housing 5.00% 11.87% 8.80% 4.79% 11.87% 8.50% 4.53% 11.72% 8.21% 3.40% 12.19% 7.53% 2.53% 10.59% 6.81% 4.05% Industrial 4.90% 11.98% 8.46% 3.75% 11.68% 8.15% 3.80% 11.44% 7.82% 3.01% 10.82% 7.22% 2.53% 10.15% 6.59% 3.60% Lodging 5.17% 14.67% 8.95% 4.39% 17.15% 8.80% 4.14% 16.85% 8.50% 3.25% 15.96% 7.95% 2.63% 15.56% 7.42% 3.92% Mobile Home/RV Parks 4.92% 11.17% 9.14% 4.14% 11.68% 8.87% 3.89% 11.54% 8.49% 3.00% 10.82% 7.99% 2.53% 10.59% 7.32% 3.70% Office 4.97% 11.47% 8.52% 3.75% 11.69% 8.02% 3.80% 11.55% 7.98/% 3.00% 10.82% 7.21% 2.53% 9.22% 6.18% 3.61% Restaurants 5.90% 14.17% 9.81% 5.53% 17.15% 9.97% 5.29% 17.11% 9.78% 4.40% 16.22% 9.10% 3.53% 15.82% 8.26% 4.93% Retail 4.82% 11.87% 8.55% 3.75% 11.87% 8.21% 3.79% 11.72% 7.94% 2.90% 12.19% 7.38% 2.50% 10.59% 6.68% 3.55% Self-Storage 4.98% 11.47% 10.01% 3.75% 11.69% 9.78% 3.80% 11.55% 9.94% 3.15% 10.82% 9.37% 2.60% 10.26% 8.66% 3.66% Special Purpose 5.88% 18.67% 10.21% 5.10% 17.89% 10.33% 4.84% 17.79% 10.16% 3.95% 16.90% 9.41% 3.54% 16.48% 8.51% 4.66% All Properties 4.39% 18.67% 9.31% 3.75% 17.89% 9.09% 3.72% 17.79% 8.87% 2.81% 16.90% 8.22% 2.33% 16.48% 7.47% 3.92%

12.00% 12.00%

10.00% 10.00%

8.00% Min 8.00% Min Max 6.00% Max 6.00% Avg Avg 4.00% 4.00%

2.00% 2.00%

0.00% 0.00% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

Holthouse Appraisal Group Analysis - 6705 Page F - 37 Conclusion The capitalization rates previously stated reflect the initial rates of return on appraised values for vacant land proposed for development, whereas, the discount rates consist of the internal rates of return being achieved by landowners on improved properties and include: changes in land lease payments, percentage rent where applicable, and the reversion of the entire property at the termination of the lease. Thus, it is the Appraiser’s opinion that the use of the discount rate, which includes the value of the tenant’s improvements at reversion plus future increases in rent, would not be appropriate for two reasons: 1) the Appraiser’s assignment is to appraise the properties “as vacant” with no improvements, thus, no value for reversion is present, and 2) internal rates of return using future rate increases to determine current rents is “double dipping”. This would escalate rents above market; thus, the Appraiser has chosen the capitalization rates as the basis for this analysis. An analysis of the categories on the preceding chart indicates that the most similar use to the subject is the category - Apartments. This category was selected by the Appraiser for the following reasons: 1.) the typical tenant would most likely be leasing the site for seasonal residential use; and 2.) the subject’s sites would be single tracts that could be used as permanent residential use, if owner’s restrictions weren’t in place. ANALYSIS OF RENT RESTRICTIONS The Appraiser has analyzed the subject property and found that the subject site would be the only home/cabin site on Pathfinder Reservoir. However, if sold for this purpose there would most likely be a restriction on the period of time for which the property can be used (six months). An analysis of the comparable sales found in the Sales Approach section of this report indicates that all of the sales used did not have a restricted use period; however, according to the real estate brokers interviewed and the Alcova Tenant Survey, year around use is not an overly desired feature for the area. Therefore, this restriction must be considered in the bundle of rights allowed under the current lease agreement as it reduces the risk to the owner by lowering the overall management requirements of the area, i.e., law enforcement, road maintenance, etc. To determine what effects on value that this restriction may have on real property, the Appraiser has revisited the Land Value – Land Extraction Method “Paired Sales Analysis” found

Holthouse Appraisal Group Analysis – 6705 Page F - 38 in the Section A of the Analysis Section of this report. This analysis indicates that properties sold as “permanent” residential home sites, sold for only 5% to 10% more than “recreational” use sites. Therefore, as this minor difference could easily be explained as the deviation between the two approaches used to determine this percentage, it is the Appraiser’s opinion that this difference has no significance as to value and should have no effect on the overall lease rate if a lower or “safe” rate is used. FINAL CONCLUSION OF MARKET RENTS As previously stated the subject’s management requirements are low and the vacancy factor for the past 50+ years has been non-existent when considering leased cabin sites. To determine the appropriate return rate for the subject, the Appraiser has again examined the rates reported by the previously stated national survey for “apartments”. According to the RealtyRates.com Investor Survey published by Robert G. Watts & Associates, Consulting Land Economists, Investor Survey – 3rd Quarter 2007-2011, the average rates for “Apartments” over the past five years ranges are as follows:

APARTMENT CAPITALIZATION RATES Year Min Max Avg 2007 4.39% 10.94% 8.24% 2008 3.75% 11.68% 7.89% 2009 3.72% 11.54% 7.60% 2010 2.81% 10.82% 7.05% 2011 2.33% 10.18% 6.39% Average 3.40% 11.03% 7.43%

An analysis of these rates indicates that the “minimum” average rate (low risk rate) for the five years would be a reasonable rate as the site has not been vacant since June 11, 1998; has restrictions to usage; thus, minimizes the risk to the owner by lowering the overall management requirements of the area, i.e., law enforcement, road maintenance, etc. Therefore, a rate of 3.40% return for the next five years appears reasonable and credible.

Holthouse Appraisal Group Analysis – 6705 Page F - 39 Conclusion The formula for market rents is as follows - Market Value x Risk Rate = Market Rents or Annual Return on Investment where Market Value is the fee simple value determined in the Sales Approach for the particular site class and the risk rate is the previously determined capitalization rate of 3.40%. Thus, the market rents for the subject sites are calculated as follows:

Market Rents - "Highest & Best Use As Vacant" Fee Simple Market Return Rate x Market Value =Market Rents 3.40% x$ 220,000 =$ 7,480

Rounded to: $7,500

Holthouse Appraisal Group Analysis – 6705 Page F - 40 THE COST APPROACH The Cost Approach represents the objective concept of value. This concept is predicated upon the theory that value is inherent in the object itself and that value and cost tend to be the same. The American Institute of Real Estate Appraisers further explains this approach below in a paragraph from Page 441 of The Appraisal of Real Estate, 8th Edition: The Cost Approach to Value, like the Sales Comparison and Income Approaches, is based on comparison. In the Cost Approach, the cost to construct a building and the value of an existing building are compared. The Cost Approach to Value reflects market thinking in the recognition that market participants relate value to cost. Buyers tend to judge the value of an existing structure by comparing it to the value of a newly constructed building with optimal functional utility. Moreover, buyers adjust the prices they are willing to pay by estimating the costs to bring an existing structure to desired levels of functional utility.

DISCLAIMER OF THE COST APPROACH The value opinion under this approach consists of the present construction cost of any improvements on the property less depreciation from any source, plus the value of the land. Therefore, due to the subject property being considered unimproved land, it is the Appraiser’s opinion that this approach would be a duplication of the Sales Approach; thus, was excluded.

Holthouse Appraisal Group Analysis – 6705 Page F - 41 THE INCOME APPROACH The Income Approach is widely applied for income producing properties since it reflects the rationale of typical investors together with current financing conditions (i.e., the assumption being that financing is typically involved in most real property transaction). In this approach, market value is determined through the capitalization of a projected, stabilized estimate of net operating income. The traditional formula for computing value by the Income Approach is V = NOI divided by R, where V = market value, NOI = stabilized net operating income, and R = overall rate. Stabilized Net Operating Income (NOI) In the appraisal of real estate, the stabilized net operating income for the property is based on potential income and expense data as dictated by the market. In other words, income and expense data for similar facilities is projected onto the subject property in order to derive net operating income. The basic components and resulting formula for arriving at net operating income by this method are given below: Potential Gross Income (PGI) Less: Allowance for Vacancy and Rent Loss Equals: Effective Gross Income (EGI) Less: Operating Expenses Property Taxes Insurance Property Management Fees Maintenance Utilities Reserves for Replacement Equals: Net Operating Income (NOI) Potential Gross Income (PGI) The Appraiser has analyzed rents charged for similar recreational properties in the subject’s market area. The following pages contain the analysis of the pertinent data on the subject’s lease and an abstract of the six leases of similar recreational properties used to derive

Holthouse Appraisal Group Analysis – 6705 Page F - 42 the restricted rents for the subject property. (For comparable data see Comparable Land Leases found in the Basic Data Section of this report.) ABSTRACT OF COMPARABLE RECREATIONAL LAND LEASES

Comp # Location Annual Lease Rate Amenities 1 Casper Water Ski Club$ 15,000 W 2 Alcova Marina$ 10,300 W&S 3 Casper Boat Club$ 15,000 W&S 4 Keyhole Marina$ 6,298 W&S 5 Glendo Marina$ 10,774 W&S 6 Boysen Marina$ 5,946 W&S

ANALYSIS OF THE SUBJECT’S LEASE The subject is currently being leased by the Pathfinder Boat Club for its marina on the Pathfinder Reservoir. This lease restricts the tenant to 150 dock slips and 25 RV sites; however, the owner is allowed to run a full service marina complete with restaurant and lounge, if desired. In my interviews with the Natrona County Road and Bridge, it was found that the subject is not as restricted as the private clubs in the area and is designed to service the general public; however, they are not utilizing the site to its fullest allowable use due to the drastic fluctuations of the lake; thus, making this site less desirable than those at Alcova. ANALYSIS OF THE COMPARABLE LAND LEASES Comparable Lease No. 1- This lease is the lease of the Casper Water Ski Club site located at 24725 Lakeshore Drive, Alcova Reservoir. The lease restricts the membership to 100 members. The lease rate is not based on a percentage rate and the goal of the club is to minimize the total cost to its members; thus, is not a true commercial operation. The current lease rate is based on the market value of the site if vacant established in 2007 and is approximately 5 years old. This rate is currently $15,000 per year and includes community water to the site; however, water usage is at an additional charge. The 2011 lease rate will be determined by the Appraiser based on the current market value of the site. Comparable Lease No. 2 – This lease is the lease of the Alcova Lakeside Marina, Alcova Reservoir. This lease restricts the tenant to 200 dock slips and 29 RV sites; however, the owner is allowed to run a full service marina complete with restaurant and lounge. In my interviews with the Natrona County Road and Bridge it was found that this site is not restricted like the private clubs and is designed to service the general public. An analysis of this site and interviews Holthouse Appraisal Group Analysis – 6705 Page F - 43 with Mr. Gary Lever, owner of the Alcova Lakeside Marina, indicates that the usable area of the site is being maximized. The current lease rate was established in 2007 and was based on 2% of the average gross sales for 2003-2007 making the data and rate almost five years old. This lease is currently $10,300/year and includes community water and sewer to the site; however, water and sewer usage is at an additional charge. Comparable Lease No. 3- This lease is the lease of the Casper Boat Club, Alcova Reservoir. This lease restricts the tenant to 188 dock slips, 30 dry docks and 12 camp sites; however, the current number of docks according to Mr. Burgess, Commodore is 203. The lease rate is not based on a percentage rate and the goal of the club is to minimize the total cost to its members; thus, is not a true commercial operation. The lease rate was based on the market value of the site “as vacant” established in 2007 which was $15,000 and is approximately 5 years old. This rate was based on the market value of the land. The lease includes community water and sewer to the site; however, usage is at an additional charge. The new rate will be determined by the Appraiser, also based on the market value of the land. Comparable Lease No. 4- This lease is the lease of the Keyhole Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding, gas and sales tax, fishing licenses, camping permits and boat related sales. The minimum lease rate is $200/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusion of boat related sales was being deleted from new leases. In my interview with the owner of the Keyhole Marina, it was found that they do not sell or service boats; therefore, this change will have little to no effect on the overall lease rate. The lease rate for the past few years are as follows: 2008 - $2,840, 2009 – 7,715 and 2010 - $8,341 with an average of $6,298/year. Comparable Lease No. 5- This lease is the lease of the Glendo Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding, gas and sales tax, fishing licenses, camping permits, and boat and trailer related sales. The minimum lease rate is $1,000/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusions of boat and trailer related sales was being deleted from new leases. In my interview with the owner of the Glendo Marina, she indicated that they do limited boat sales but have a good boat service

Holthouse Appraisal Group Analysis – 6705 Page F - 44 business; therefore, this change will have a substantial effect on the overall lease rate. The lease rates for the past few years are as follows: 2008 – $11,095, 2009 - $11,275 and 2010 – $9,952 with an average of $10,774. Comparable Lease No. 6- This lease is the lease of the Boysen Marina site which is managed by the State of Wyoming for the Bureau of Reclamation. The lease rate is 2% of gross sales excluding gas, and sales tax, fishing licenses, camping permits and boat related sales. The minimum lease rate is $1,000/year. In my discussions with Ms. Julie Huntley with the State of Wyoming Parks & Recreation Department it was found that the exclusions of boat related sales was being deleted from new leases. In my interview with the owner of the Boysen Marina, it was found that they do not sell boats; therefore, this change will have little effect on the overall lease rate. The lease rates for the past few years are as follows: 2008 – $5,645, 2009 - $5,744 and 2010 - $6,450 with an average of $5,946/year. Competition An analysis of the subject’s market area indicates that there are limited waterways which would facilitate a boat club facility or marina. In addition, the subject site is located at Pathfinder is the only facility on the lake. This facility has to compete with Alcova thus making the site more conducive to a recreational home site than a marina as this use has not had a history of being financially feasible at Pathfinder. Therefore, as the subject site would be the only recreational home site at Pathfinder under this analysis and would not be adversely affected by competition. Conclusion The preceding analysis indicates that the leases available are of a commercial nature (Glendo, Keyhole and Boysen) or located at Alcova Reservoir; thus, are not similar to the subject. Furthermore, three of the leases were leases set 5 years ago and are not current; therefore, it is the Appraiser’s opinion that further analysis is neither reliable nor credible; thus, this approach is deemed to be inconclusive.

Holthouse Appraisal Group Analysis – 6705 Page F - 45 RECONCILIATION AND FINAL OPINION OF VALUE The final step in the appraisal framework is to evaluate and select from among the three traditional approaches to value, a single or final opinion of market value. The value opinions established by the three approaches were: Sales Approach Market Value $ 220,000 Annual Market Rents $ 7,500 Cost Approach Omitted Income Approach Market Value Inconclusive Annual Market Rents Inconclusive Sales Approach When sufficient market data is available, investors and many other market participants most frequently rely upon the Sales Approach, as it best reflects interactions within the market between buyers and sellers. Eighteen sales of properties that were somewhat representative of the subject were found. The comparables were dissimilar in many respects; however, an analysis based on market evidence was made and the comparables used were considered to provide a credible and reliable conclusion of the subject’s fee simple market value and market rents, as of the effective date of this report. The Cost Approach The Cost Approach has its most usefulness when the property being appraised involves new improvements which represent the highest and best use of the land, or when there exists no income and sales data of similar properties. As previously stated, the instructions of the Client are to appraise the subject as “vacant land” with water and sewer available to the area; therefore, it is the Appraiser’s opinion that this approach would be a duplication of the Sales Approach and was omitted. The Income Approach The Income Approach is preferred for income producing properties. The reliability of this approach is a function of rent and expense data and the accurateness of the capitalization rate. The data available on income and expenses for the subject was not available and the lease rates were determined from gross sales from true commercial sites. Therefore, it is the Appraiser’s opinion that further analysis is neither reliable nor credible; thus, this approach is deemed to be inconclusive. Holthouse Appraisal Group Analysis – 6705 Page F - 46 FINAL OPINION OF MARKET VALUE AND MARKET RENTS The Appraisal assignment was to determine the fee simple market value and market rents of the subject site “as vacant ready for its highest and best use”. An analysis of the Highest and Best Use section of this report indicates that the highest and best use of the site would as a recreational home site. Furthermore, the Appraiser was able to determine the market value of the site based on market extractions by direct sales comparison by adjusting for both location and utility. It is the Appraiser’s opinion that the comparable sales found in the Sales Approach best depicts the current market; thus, the Sales Approach is considered to be the best indication of the subject’s fee simple market value and market rents. Therefore, based on the foregoing data, analysis and conclusions, it is the opinion of the Appraiser that the fee simple market value and market rents for the subject property, as of the effective date of this report, are as follows: MARKET VALUE OF SUBJECT SITE TWO HUNDRED TWENTY THOUSAND DOLLARS $220,000

MARKET RENTS FOR THE SUBJECT SITE SEVEN THOUSAND FIVE HUNDRED DOLLARS $7,500

LEASE RATE CREDIBILITY ANALYSIS To determine the credibility of the new lease rate the Appraiser has analyzed the current lease rates determined by the Appraise of comparable sites in the subject’s immediate market area. These rates were derived from the market value of the land and multiplied by an appropriate return rate which was market extracted or based on a percentage lease rate for commercial sites. An analysis of the new rates for the Casper Boat Club found in Section “C” of the Analysis Section indicates that the new rate for the 11.27 acre tract will be $25,000. An analysis of the Casper Water Ski Club found in Section “D” indicates that the new rate for the 10.079 acre tract will be $22,000. An analysis of the Alcova Lakeside Marina indicates found in Section “E” of the Analysis Section indicates that the new rate for the 5.3 acres will be $12,850. (This rate was established under a different scenario using 2% of gross sales.) When these new Holthouse Appraisal Group Analysis – 6705 Page F - 47 rates are compared to the new rates determined by the Appraiser for the subject, the following is determined:

An analysis of the above stated chart indicates that the differential between the new rates being charged for the subject and similar sites located at Alcova Reservoir is 5.99%; thus, indicating that the new rate for the subject is both reasonable and credible.

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