appraisal of the liquidation value mt. ashland ski area

APPRAISAL OF THE

LIQUIDATION VALUE

Mt. Ashland Ski Area

For

City of Ashland, Oregon

OCTOBER 26 2006

AN ORDERLY LIQUIDATION VALUE APPRAISALOF

THE PROPERTY AT THE

MT ASHLAND SKI AREAASHLAND, OREGON

OCTOBER 26, 2006

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

January 3, 2007

Mr. Lee TunebergCity of AshlandAshland OR

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

Dear Mr. Tuneberg;

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

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

CERTIFICATION

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

The statements of fact contained in this report are true and correct. The report analyses, opinions, and conclusions are limited only by the reported

assumptions and limiting conditions, and are my personal, unbiased professionalanalyses, opinions, and conclusions.

I have no present or prospective interest in the property that is the subject of thisreport, and I have no personal interest or bias with respect to the partiesinvolved.

My compensation is not contingent on an action or event resulting from theanalyses, opinions, or conclusions in, or the use of, this report.

The appraisal assignment was not based upon a requested minimum valuation, aspecific valuation, or approval of any proposed financing.

My analyses, opinions and conclusions were developed, and this report has beenprepared, in conformity with the Uniform Standards of Professional AppraisalPractice.

I have made a personal inspection of the property that is the subject of this

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report. Mr. Dan Pahl CEA, Mr. John Ellis PE, Mr. Craig Loup and Mr. Ken Olmstead

provided significant property appraisal assistance to the person signing thiscertification.

As of the date of this report I have completed the requirements of the continuingeducation program of the Appraisal Institute.

I have a unique combination ofprofessional expertise and experiencesupporting my competency to conductsuch a special appraisal assignment. Ihave been a consultant to the NorthAmerican ski industry for forty-five years.I have designed, built, and operated skiareas. In addition, I am a professionalappraiser and have prepared some 120-ski area appraisals over the past 27years. My detailed resume is attached.

It is my opinion that the orderlyliquidation value of the Mt. Ashland SkiArea properties, as described in theattached report and “as is” on October26, 2006 is:

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

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

This leaves a deficit of $491,800.

Sincerely

Ted Farwell MAI

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

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

MT ASHLAND SKI AREAOrderly Liquidation Value of Property

26-Oct-06Orderly

LiquidationAsset ValueFive Ski Lifts $152,000Rolling Stock $190,000Inventories $105,000Generators (4) $24,000Waste Water Treatment $40,000Portable Buildings (5) $11,500Furniture & Fixtures and $150,200Maintenance EquipmentTOTAL Liquidation Value $672,700

Estimated cost to removeSki Lifts ($921,500)Buildings ($243,000)NET TOTAL ($491,800)

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APPRAISERCERTIFICATION

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

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

The reported analyses, opinions, and conclusions are limited only by the reportedassumptions and limiting conditions, and is my personal, impartial and unbiasedprofessional analyses opinions and conclusions.

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

My engagement in this assignment was not contingent upon developing or reportingpredetermined results.

My compensation for completing this assignment is not contingent upon thedevelopment or reporting of a predetermined value or direction in value that favorsthe cause of the client, the amount of the value opinion, the attainment of astipulated result, or the occurrence of a subsequent event directly related to theintended use of this appraisal.

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

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

No one provided significant Professional assistance to the person signing thisreport.

MT ASHLANDPROPERTYLIQUIDATION VALUE APPRAISALWINTERSTAR VALUATIONS, INC.OCTOBER 26, 2006

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SECTION I

MT. ASHLAND ORDERLY LIQUIDATION VALUE APPRAISAL

PREFACEEXECUTIVE SUMMARY

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

A. CLIENT & USER OF THE REPORT:

Mr. Lee TunebergCity of AshlandAshland, OR

B. DATE OF THE APPRAISAL:

October 26, 2006

C. DATE OF THE REPORT:

January 3, 2007

D. DEFINITION OF ORDERLY LIQUIDATION VALUE:

A professional opinion of the estimated most probable price expressed in terms ofcurrency which the subject equipment could typically realize at a privately negotiatedsale, properly advertised and professionally managed, by a seller obligated to sell overan extended period of time, usually within six to twelve months, as of the effective dateof the appraisal report. Further, the ability of the asset group to draw sufficientprospective buyers to insure competitive offers is considered. All assets are to be soldon a piecemeal basis 'as is' with purchasers responsible for removal of assets at theirown risk and expense. Any deletions or additions to the total assets appraised couldchange the psychological and/or monetary appeal necessary to gain the valueindicated.

E. DEFINITION OF EXTERNAL OBSOLESCENCE:

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

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


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F. PURPOSE OF THE APPRAISAL:

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

G. SCOPE OF THIS APPRAISAL:

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

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

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

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

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

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

The balance of this report is divided into three sections.

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

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

Section IV discusses the potential liquidation value of the balance of the properties. Itincludes an estimate of the costs to remove the buildings.


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G. SUMMARY OF FACTS AND CONCLUSIONS:

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

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

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

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

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

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

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

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

H. RANGE OF CERTAINTY:

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


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SECTION II

MT. ASHLAND LIQUIDATION VALUE APPRAISAL

SKI LIFTSInventory:

Mt. Ashland has the following ski lift equipment. Mr. John Ellis PE inspected all lifts onNovember 8, 2006.

Valuation: Ski Lifts

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

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

Please note that discussions with Mr. Ellis subsequent to his report revealed that fillingterminal columns with concrete is/was normal construction procedure to help anchor theterminal.

MT ASHLANDSKI LIFT EQUIPMENT INVENTORY

LIFT IDENTIFICATION #1 #2 #3 #4 #5NAME Ariel Windsor Sonnet Comer Pinocchio

DESCRIPTIONSki Lift Type DC DC TC TC WRManufacturer Riblet Yan Riblet Riblet Bruckschlogl

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

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


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Outback Construction, Inc.Ashland, Oregon

November 30, 2006

Re: Chairlift Removal @ Mt. Ashland, Oregon

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

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

Double fixed grip beginner chairlift / Riblet $ 85,100.00

Triple fixed grip chairlift / Riblet $113,500.00

Double fixed grip chairlift / Yan $135,200.00

Double fixed grip chairlift / Riblet $147,100.00

Helicopter cost / tower removal $183,500.00

Foundation removal and blasting fees $257,050.00

Total estimated cost $921,450.00


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F:\Projects\Ski Ashland\Mt Ashland Lift Appraisal.doc 1/711/21/2006

Mt AshlandSki Lift Appraisal

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

Background:

Mt Ashland currently has 4 chair lifts and a wire rope tow. The lifts arecomprised of the following.

• “Arial” - 1964 Riblet Double• “Windsor” - 1974 Yan Double• “Comer” - 1987 Riblet Triple• “Sonnet” – 1987 Riblet Triple• “Pinocchio” - 2001 Bruckschlogl GMBH tow

On November 8, 2006 I reviewed the maintenance records and rode Sonnet,Comer and Windsor with Woody of Mt Ashland. We drove to the bottom and topof Arial. The handle tow was still in pieces and was in the process of being setup. All the lifts appear to be in a good state of repair. The lifts have beenupgraded and maintained systematically as will be shown in the specifics foreach lift. This report contains the following information.

• Current pictures for each lift.• A list of upgrades and enhancement to each lift.• Values of each lift sitting in the parking lot ready to load.• The original spec sheets for each lift.

Please note the dates on the pictures are not correct.


Mt Ashland Ski AreaSonnet Chair lift

Tension -Drive Terminal

Top Ilder Terminal

Lift Line

Drive Components


Mt Ashland Ski AreaComer Chair lift

Bottom-Tension DriveTop Idler Terminal

Lift Line Drive Components


Mt. Ashland Ski AreaWindsor Lift

Bottom-Tension DriveTop Idler Terminal

Lift Line

Drive Components


Mt Ashland Ski AreaArial Lift

Bottom-Drive TerminalTop Tension Terminal

Lift Line

Drive Components


Mt Ashland Ski AreaLift Specifics

Sonnet Lift - 1987 Riblet Triple• New haul rope installed in 1989• The tension-drive rear column is filled with concrete preventing it from

being reused if the lift was relocated. This decreases the lift value as anew column would have to be fabricated if the lift was put up somewhereelse.

• Lift averages about 1200 hours per year

Comer Lift - 1987 Riblet Triple• New haul rope installed in 1989• Motor rebuilt in 2006• APU engine rebuilt in 2001• The tension-drive rear column is filled with concrete preventing it from

being reused if the lift was relocated. This decreases the lift value as anew column would have to be fabricated if the lift was put up somewhereelse.

• Lift averages 1200 hrs per year

Windsor Lift – 1974 Yan Double• New Comline in 2006• Bottom Operator’s house upgrade in 2006• New Electric Drive 2002• Motor rebuild 2004• The columns for the terminals are filled with concrete preventing them

from being reused if the lift was relocated. This decreases the lift value asnew columns would have to be fabricated if the lift was put up somewhereelse.

• Since 1984 lift averages 1300 hrs per year

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

Rope Tow – 2001 Bruckschlogl GMBH• Nothing to report


Mt Ashland Ski AreaLift Valuations

Arial Lift - Lift sell Price around $10,000

• Comparisons - 1972 Riblet double chair sold for around $25,000. in 2006• Comparisons – 1974 Riblet triple chair sold for around $35,000 in 2005

The draw backs for the Arial lift are the age, style of line machinery and style oftower crossarms.

Windsor – Lift sell price around $25,000.00

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

Sonnet – Lift sell price around $60,000

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

Comer – Lift sell price around $50,000

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

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

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

Respectfully yours,

John C Ellis P.E. (Project Engineer)

MT. ASHLAND PROPERTYLIQUIDATION VALUE APPRAISALWINTERSTAR VALUATIONS, INC.OCTOBER 26, 2006

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SECTION III


THE ROLLING STOCKInventory:

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

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

MT. ASHLAND SKI AREALIQUIDATION APPRAISAL

ROLLING STOCK INVENTORY

Slope Grooming EquipmentManufacturer Year Model Hours Attachments Condition Rebuilt atBombardier 2002 TW 275 5,360 12 way Quickblade Excellent 5,360 hrs

Terrain Master TillerTower Winch

Bombardier 1994 400 13,700 12 Way Blade Good 7,800 hrsC- bar Flex Tiller

Bombardier 2001 SR 275 6,870 12 way Quickblade 5,500 hrsTerrain Master Tiller Good

LMC 1983 3700-C 20,000+ 10 Way Blade Good twiceLMC 1986 3700-C 20,000+ Anchor & Winch Fair

Heavy EquipmentKawaski 1986 Z-80-II 9,800 Bucket Loader GoodJohn Deere 1967 350 N/A Long-Wide Track Good once

Crawler withBackhoe andSix way Blade

Utility VehiclesPolaris 2003 Ranger 1,248 6x6 ExcellentPolaris 2006 Sportsman 40 4x4 NewSusuki 1983 N/A 4x4 FairDodge 2001 Ram-350 24,682 15 Pax - Van Good TransmissionDodge 1994 Ram-350 98,198 15 Pax - Van GoodDodge 1979 Ram-350 247,462 Open - Van FairDodge 1976 Power Wagon 131,210 Club Cab Good


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Slope Grooming Equipment:

1994 Bombardier 400 2001 Bombardier SR 275

2002 Bombardier TW 275 1986 LMC 3700 C

Heavy Equipment:

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


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Utility Vehicles:

2003 Polaris 6x6 Ranger 2006 Polaris 4x4 Sportsman

1983 4x4 Susuki 1976 Dodge Power Wagon

1979 Ram Van – Open 1994 Ram Van – 15 Pax


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Valuation: Slope Grooming Vehicles

There is an active market for used slope grooming vehicles The table below listsseven recent sales as reported by resortboneyard.com. Hugh Knapp, an active dealerin used ski area lifts, equipment and parts, sold most. Mr. Knapp confirmed theseprices.

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

Hours Price Condition Year Equipment

9,000 $30,000 Very Clean 1996 Piston-Bully 280D8,800 $20,000 Well Maint 1983 Piston-Bully PB-170D7,613 $23,500 Excellent Cond 1994 Piston-Bully 260 Snowcat4,600 $65,000 2002 Bombardier BR-2752,600 $45,000 1998 Bombardier BR-1801,941 $57,500 Very Good 2003 Bombardier BR-2751,320 $107,000 Very Clean 2000 Bombardier BR2000

SNOW GROOMING EQUIPMENT y = -7.4221x + 87751R2 = 0.6541

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

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

Hours

Pri

ce


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

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

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

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

Hours since IndicatedRebuilding Value

1994 Bombardier 400 5,900 $43,9612001 Bombardier SR 275 1,300 $78,1022002 Bombardier TW 275 0 $87,751

Mt. Ashland Property- Orderly Liquidation Value AppraisalSlope Grooming Vehicles

Year 2002 1994 2001 1983 1986Mfg. Bombardier Bombardier Bombardier LMC LMC

Model TW-275 400 SR-275 3700-C 3700-CHours 5,360 13,700 6,870 20,000+ 20,000+Condition Excellent Good Good Source for partsHours since rebuilt 0 5,900 1,370

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


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

Valuation: Utility Vehicles

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

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

1979 models are not quoted any more unless they are restored. The latest quote is for1986-year vehicles.

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

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

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

Mt. Ashland Property- Orderly Liquidation Value AppraisalUtility Vehicles

Vehicle 15 Pax Van 15 Pax Van Open Van PU Truck ATV 4x4 ATV 6x6 ATV 4x4Year 2001 1994 1979 1976 2006 2003 N/AMfg. Dodge Dodge Dodge Dodge Polaris Polaris SusukiModel 3500 3500 3500 Power Wagon Sportsman RangerMileage 24,682 98,198 247,462 131,210Hours 1,248 40 N/AAvg Trade-in

Excellent $9,450 $1,850 $500 No QuoteGood $8,830 $1,575 $425 Vehicle $5,200 $5,715Fair $7,765 $1,095 $300 too old

orAvg. Retail $13,180 $4,060 $1,430 $5,910 $4,530 $2,000Source: NADA Guides & Kelly Bluebook

Liquidated Value $11,000 $3,000 $500 $300 $5,900 $4,500 $1,500Estimate


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The Polaris ATV’s were found on the N.A.D.A. web site and confirmed by a localdealer. The orderly liquidation value estimated is based on the age and condition. The2006 Sportsman cost $6,200 new and has only 40 hours of operation.

Valuation: Heavy Equipment:

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

Heavy Equipment

Vehicle Loader CrawlerYear 1986 1976Mfg. Kawaski John DeereModel z-80zII Long-Wide TrackHours 9,800 N/AVehicle $4,000Attachments $2,000Liquidated Value $25,000 $6,000

MT ASHLANDPROPERTYLIQUIDATION VALUE APPRAISALWINTERSTAR VALUATIONS, INC. & PAHL INDUSTRIAL, INC.OCTOBER 26, 2006

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SECTION IV


OPERATING AND MAINTENANCE EQUIPMENTInventory:

Mt. Ashland has a wealth of additional required operational and maintenanceequipment. Mr. Dan Pahl CEA inventoried and inspected all 350 items listed on October26, 2006.

Valuation:

Pahl Industrial, Inc. filed the following report.

PURPOSE, SCOPE& OBJECTIVE

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

SCOPE

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

ObjectiveThe objective of the report is to submit an opinion of value showing the ForcedLiquidation Value and Orderly Liquidation Value of the selected assets. Theeffective date of the appraisal is October 26, 2006.

DEFINITIONS

Forced Liquidation Value (Auction)A Professional opinion of the estimated most probable price expressed in termsof currency, which would typically be realized at a properly advertised andconducted public auction sale, held under forced sale conditions and underpresent day economic trends, as of the effective date of the appraisal report.Further, the ability of the asset group to draw sufficient prospective buyers toinsure competitive offers is considered. All assets are to be sold on a piecemealbasis ‘as is’ with purchasers responsible for removal of assets at their own riskand expense. Any deletions or additions to the total assets appraised could


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change the psychological and/or monetary appeal necessary to gain the valueindicated

Orderly Liquidation ValueA professional opinion of the estimated most probable price expressed in termsof currency which the subject equipment could typically realize at a privatelynegotiated sale, properly advertised and professionally managed, by a sellerobligated to sell over an extended period of time, usually within six to twelvemonths, as of the effective date of the appraisal report. Further, the ability of theasset group to draw sufficient prospective buyers to insure competitive offers isconsidered. All assets are to be sold on a piecemeal basis ‘as is’ with purchasersresponsible for removal of assets at their own risk and expense. Any deletions oradditions to the total assets appraised could change the psychological and/ormonetary appeal necessary to gain the value indicated..Economic Obsolescence

The loss in value of a property resulting from factors external to the property.

Functional ObsolescenceA form of depreciation in which the loss in value is due to factors inherent to theproperty itself and changes in designs, materials, or process resulting ininadequacy over capacity, excess construction lack of functional utility, excessoperating costs, etc.

Physical ObsolescenceThe loss of value resulting from wear and tear of an asset in operation andexposure to various elements.

METHODS & PROCEDURES

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

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

PROCEDURESDan Pahl from Pahl Industrial Inc. conducted a physical inspection of the MountAshland Oregon assets on October 26, 2006.


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

COMMENTS

EQUIPMENT SPECIFIC COMMENTS

Some of the Machinery & Equipment was operating the day of the physicalinspection and company personnel confirmed all Machinery & equipment is inoperating condition. Maintenance personnel confirmed regular maintenanceprocedures are followed. Rental and Retail inventories where consistent with whatis normally provided at Ski Resorts. Staff Clothing was adequate and in goodcondition.

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


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Mount Ashland Ski Resort Equipment & Inventory Listing

ItemNo.

Serial No. Qty Description FLV OLV

Main Lodge Top Floor

1 27 square tables 125 135

2 20 round tables 100 120

3 137 metal chairs 137 137

4 1 Knotty Pine display case 40 50

5 1 plywood display case 10 15

6 2 sofa's 50 60

7 1 coffee table 4 5

8 1 wood bench 3 5

9 1 wood table 2 3

10 1 wood burning fireplace insert 75 90

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

12 assorted boots & binding repair parts in 4plastic containers

100 120

13 4 fold up tables 80 100

14 1 sled 5 5

15 4 plastic discs 10 12

16 1 office c/w desk chair, computer, filecabinet, TV, calculator

40 50

17 1 Motorola HT 600 walkie talkie c/wcharger

30 40

18 1 Audio amplifier c/w 2 speakers 20 25


27

19 3 jackets 20 20

20 miscellaneous office supplies & books 40 45

21 1 Volunteers & donators wall plaque 40 45

22 1 office c/w desk, credenza, chairmicrowave & shelves

60 70

23 1 Panasonic video camera 30 35

24 5 voice activated head sets 75 100

25 asssorted racing bibs 40 45

Third Floor

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

20 25

27 60 lockers 300 420

28 2 drinking fountains 15 20

29 womens washroom 2 sinks, 2 toilets 15 20

30 6 large grey lockers 60 72

31 1 wash bucket 4 5

32 3 microwaves 30 40

33 2 metal cupboards 80 100

34 2 200 amp breaker panels 80 100

35 1 stepladder 35 40

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

80 100

Kitchen

37 1 Jet Tec F16 washer 40 50

38 1 Stainless Steel triple sink 60 70


28

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

40 2 computer cash registers 175 225

41 assorted glasses, pitchers, etc. 250 300

42 1 credit card machine 200 225

43 1 LaCrosse Stainless Steel double sink 100 120

44 1 Cappuccino Machine & coffee maker 40 45

45 105 wood chairs 210 315

46 10 bar stools 50 60

47 1 Panasonic TV & Philllips VCR player 135 160

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


50 1 bar 100 120

51 pictures & mirrors on wall 75 85

52 9 picnic tables 270 360

53 1 propane heater 200 250

54 1 Mitsubishi projection TV 400 500

55 2 t-bar lifts 50 55

56 2 vacuum cleaners 40 50

57 1 stereo system c/w speakers 30 40

58 1 computer c/w flat screen 70 80

59 3 high chairs 10 12

60 1 Panasonic TV 90 100

61 4 Lawrence vacuum cups 100 120


29

62 assorted pictures & plaques 70 80

63 10 plastic trash cans 30 40

64 1 40' aluminum extension ladder 150 175

65 1 20' aluminum extension ladder 700 80

66 assorted wood counters 100 120

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

68 2 microwaves 20 20

69 1 hot dog warmer 15 20

70 1 Ortega nacho machine 25 30

71 1 Fresh & Fast model HFD-3A pizzahumidity cabinet

70 80

72 1 True 6' refrigerated display cooler 200 250

Second Floor

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

225 250

74 1 Magner 35 bill counter 40 45

75 assorted office supplies in cupboard 200 225

76 4 ticket printers 200 225

77 assorted blue back racks 20 25

78 2 computer systems c/w cash drawers 250 300

79 3 chairs 20 25

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

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

400 500


30

82 1 time clock & card trays 100 120

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

400 500

84 6 sections shelving 240 300

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

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

87 1 folding bakery cart 100 120

88 1 Imperial deep fryer 100 120

89 1 oxy acetylene regulator 20 25

90 1 20' skate wheel conveyor 50 60

91 1 stretcher 20 25

92 2 wood walk in coolers 1 free standing 175 200

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

300 350

94 1 Agilent Heartstream FR2 defibrillator 250 300

95 1 Maxon base station unit 250 300

96 1 laminator 40 50

Kitchen

97 1 Scotsman LM3 icemaker 600 800

98 1 Frigidaire Fridge 60 70

99 1 Lang convection oven 50 55

100 1 microwave on cart 60 70

101 1 Star warmer 20 25

102 1 Thermatic 4 burner gas stove & oven 600 700


31

103 1 2' X 4' grill 60 70

104 1 Montague Grizzly grill 100 125

105 2 Superior & Dean deep fat fryers 400 500

106 1 Lincoln impinger toaster 400 500

107 1 Hatco heated holding display cabinet 40 60

108 1 Stainless Steel table 50 60

109 2 Continental 3' prep table 700 800

110 1 MPW Wyott warming tray in stainlesssteel stand

60 70

111 1 Aerohot warming tray 150 200

112 1 shelving unit & wash bucket 40 50

113 1 Stainless Steel sink 40 50

114 1 Stainless Steel table 30" X 7' c/w canopener

100 120

115 1 set Nemco heat lamps 15 20

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

117 1 Auto Chlor dishwasher c/w StainlessSteel prep sink with runoff

300 350

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

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

200 250

120 1 Ansul fire protection hood c/w chargedfire extinguisher

500 1,000


122 130 metal chairs 130 195


32

123 assorted pictures, display cases, etc. onsecond floor

250 300

124 2 shelving units 60 70

125 1 Heinz dispenser & napkin dispenser 8 10

126 1 Warming Hut boot & glove dryer 50 60

127 1 fridge & hand truck 75 85

128 2 wood L shaped counters c/w 3 computercash registers

500 600

129 1 Powerflite carpet cleaner 100 120

130 2 wood 2 door lateral file cabinet 150 200

131 1 4' prep table 70 80

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


134 1 Wittco warming table 350 400

135 1 Powermate air compressor 150 170

136 1 fiberglass aluminum stepladder 50 60

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

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

139 2 200 amp breaker boxes 75 85

Basement

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

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

142 48 tower pads 2,400 2,880

143 4 radio base stations 1,200 1,600


33

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

145 72 wood lockers 72 108

146 assorted rubber matting 300 400

147 1 Ariens 1332 snowblower 300 400

148 1 Honda snowblower 250 300

149 1 fiberglass stepladder 35 40

150 1 118 gallon hot water heater 200 300

151 rope, shelves & sinks 40 50

152 4 urinals, 4 toilets, 4 sinks 50 60

153 148 wood lockers 148 220

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

155 storage area c/w 10 sets of skis andbindings, 2 snowboards, cupboard, shelf& promotional items

300 400

156 1 compressor on vertical tank 275 300

Maintenance/Storage/Furnace Room

157 1 2006 Avaya IP400 phone system c/wvoice mail & 46 instruments,

8,000 10,000


159 1 Meridian phone system 300 400

160 1 Westinghouse 800 amp main electricalpanel

400 500

161 1 Forced air furnace 100 100


163 1 1 horsepower compressor on tank 250 300


34

164 assorted power & hand tools inmaintenance area

800 1,000

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

300 325

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

350 400

167 Woody & Adas office c/w desk, chair,laptop, label machine, heater, 2 - filecabinets & printer

450 500

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

200 225

169 50 Helly Hansen fleece vests 250 300

170 4 Dermizax coats 320 360

171 3 vacuums & floor polisher 150 170

172 1 Craftsman table saw 175 200

173 64 wood lockers 64 64

174 1 small table saw 50 60

Ski Rental Building

175 2 Snowboard & ski racks 250 300

176 3 boot drying racks 500 600

177 1 Craftsman chop saw 150 175

178 7 wood work stations 35 40

179 assorted rubber floor mats 300 400


181 1 rolling staircase 175 200

182 1 aluminum stepladder 25 30


35

183 1 200 amp electrical box 40 50

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

125 150

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

175 200

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

700 800

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

188 1 new furnace 150 200

189 2 rolls fence netting 70 80

190 2 urinals, sink & toilet 15 15

191 2 toilets 2 sinks 15 15

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

193 1 Grindrite ST600 grinder 1,500 2,000

194 1 Laser Straight ski grinder 100 125

195 1 Grindrite edger 250 300

196 1 Grindrite ST490 waxer polisher 800 1,000

197 1 filing bench 125 150

198 assorted power & hand tools 400 450

199 1 Tokomat waxer 75 100

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

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

Shop

202 1 42' X 60' metal frame metal cladmaintenance shop building

1,000 1,500


36

203 1 used oil tank 100 125

204 1 parts washer 200 250

205 1 eye wash station 50 60

206 1 oil cart & 2 pumps 70 80

207 1 Craftsman tool box & tools 300 350

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

209 3 work benches & vise 250 300

210 1 jib crane c/w hoist 200 250

211 1 model 6006 battery charger 60 70

212 1 Milwaukee grinder 40 50

213 1 Duracraft pedestal drill press 200 225

214 1 Parker Phastkrimp hose crimp machine 800 1,000

215 1 cut off saw 60 70

216 1 Darex drill bit grinder 350 400

217 1 portapower 200 225

218 1 non destructive magnetic particle tester 200 225

219 1 bench & vise 70 80

220 1 Enerpac PEM2021 hydraulic pump 400 500

221 1 30 ton fully adjustable shop press 300 350

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

223 1 pressure washer 250 300

224 1 gas barbecue 20 25

225 1 creeper, hand truck, masking paper rack 60 70


37

226 1 floor jack 125 150

227 8 adjustable floor stands 160 180

228 1 Miller Dialarc 250 welder 350 450

229 1 Ingersoll Rand 5 horsepower model 30Tcompressor on tank

600 700

230 1 Johnson model J bandsaw 250 300

231 1 Thermal Dynamics Cutmaster 38 plasmacutter

400 500

232 1 oxy acetylene cart c/w bottles 100 125

233 1 Lincoln SP100 welder 500 600

234 1 Raetone flammable cabinet 150 175

235 1 dual light stand 60 70

236 assorted steel in rack 250 300

237 15 tires 300 350

238 stores inventory including Bombardierparts

2,000 3,000

239 3 gas weed eaters 300 360

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

350 400

241 2 Stihl chainsaws 500 600

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

3,500 4,000

243 assorted pilons, signs, etc. 250 300

244 1 fuel tank & pump 175 200

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

2,000 2,500


38

246 1 Knaack model 4824 tool box 150 200

247 14 lift evacuation kits 1,500 2,000

Lift shop

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

200 225

249 1 transformer & 200 amp main panel 150 175

250 assorted parts for lift 1,000 1,200

251 1 Craftsman tool box and tools 400 500

252 assorted snow maintenance toolsincluding rakes, shovels, fencing, etc.

600 700

253 1 Scott welder generator 300 350

254 1 Sears battery charger 25 30

255 1 Honda HP3500 generator 200 250

256 1 Lincoln 225 amp welder 200 250

257 1 Oxy Axetylene set c/w bottles 200 250

258 1 vacuum 20 25

259 1 bench & vice 40 50

260 assorted power & hand tools 700 800

261 1 bench grinder 65 75

262 1 6 ton chain hoist 125 150

263 1 Tirfor comalong 40 50

264 2 comalongs 150 1,785

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

400 500


39

266 1 stereo system 20 25

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

268 assorted tires & sheaves for Riblet chairlifts plus assorted Yan Sheaves

3,000 3,500

269 1 Kamag 60 KW generator p/w Perkinsdiesel 240/480 volt - 926 hours

4,000 5,000

270 2 spare tower lights 100 120

271 assorted light fixtures 100 120

272 elctrical switchgear 200 225

273 assorted fasteners 200 250

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

275 1 Yan grip tester 350 400

276 assorted climbing harnesses 400 500

277 assorted snow fencing in start gate 400 500

278 1 Aluminum frame start gate 500 600

279 1 Aluminum picnic table 100 125

280 4 ladders 250 300

Waste Water Treatment Plant

281 1 YSI 550DO probe 500 600

282 1 Oakton stable temperature oven 350 400

283 1 model 13B microscope 250 300

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

1,000 1,200

285 1 Parmer Ph meter 70 80

286 1 Ohaus scale 700 800


40

287 1 Sequential Batch reactor Waste WaterTreatment plant c/w Fluidyne controlsand instruments

20,000 40,000

288 1 GE 75 KW generator p/w 471 Detroitdiesel - 97.5 hours

5,000 7,000

289 99128 1 Hitemetaloy Snow Turbo Snow Park HalfPipe Grinder

15,000 18,000

290 6 racks - 3 snowboard, 3 ski 1,000 1,200308 1 Power Systems 275 KW generator c/w 6

cylinder Cummins 120/208 volt - 475hours

6,000 8,000

309 8 tires 200 250

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

Miscellaneous On Site Items andRetail & Rental Inventory

311 approximately 75,000 FBM of timbers inmain lodge

10,000 15,000

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

313 12 12" X 8" X 60' light poles and 68 Genlytelights & 10 new style Rudd lights

5,000 6,000

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

6,000 9,000

315 Rental Snow Board Inventory - $34,654cost

10,000 15,000

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

7,000 10,000

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

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

20,000 28,000


41

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

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

321 Used Coats Spyder & Helly Hansen - 224total

8,960 13,440

322 Used Pants - 51 pair 750 1,250

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

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

7,000 10,000

On site Total 236,807 330,868

Ashland Office

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

900 1,100

292 2 boxes of trade show displays 500 600

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

800 1,000

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

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

450 600

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

297 miscellaneous office supplies 400 500

298 miscellaneous xmas supplies 150 200

299 1 Fridge 40 50


42

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

1,400 1,800

301 2 paper shredders 80 100

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

1,200 1,500

303 1 Canon NP6030 photocopier 750 1,000

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

1,300 1,600

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

1,200 1,500

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

600 750

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

1,700 2,200

Grand Total 249,727 347,168


43

ESTIMATED BUILDING REMOVAL COSTS:

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


44

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

STATEMENT OF CONTINGENT& LIMITING CONDITIONS

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

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

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

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

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

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

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

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

Ted Farwell MAIResume – 11/27/2006

1

511 West 22nd AvenuePost Falls, ID 83854(208) 457-1148(208) 699-3817 Cell(866) 233-1947 Faxwww.winterstar.us

PROFESSIONAL QUALIFICATIONSOF

TED A. FARWELL, MAI - MBA

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

Professional Membership:

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

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

Senior Member -American Society of Appraisers (ASA)(Real Property -Urban) 1970-1980

Treasurer, Denver Chapter- 1974/75Secretary, Denver Chapter - 1975/76Vice President, Denver Chapter - 1976/77President, Denver Chapter - 1977/79

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


2

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

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

Professional Responsibilities:

General Chairman: ASA Denver Chapter Sponsored RecreationalProperties Appraisal Symposium

Instructor: Appraisal of Ski Areas-ASA Sponsored Symp.Appraisal of Ski Areas - Appraisal Institute of CanadaNational Conference

Publications:

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

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

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

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


3

Experience:Employment:Winterstar Valuations, Inc, President (2002 - )Ted Farwell & Associates, Principal (2001-02)Ted Farwell & Associates, lnc, President (1972-01)Group Delta Consortium, Partner (1975-95)Stratton Corporation; V.P. Mountain Operations (1984-85)Lake Catamount Project; Planning Director (1973-75)Denver Olympic Committee; Technical Director (1970-72)Sno-engineering Inc.; Vice President (1968-70)

Director of Research (1961-68)Franconia College; Director of Business Prog. (1963-64)USAF Jet & Helicopter Pilot (1951-57)

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

Scope of Assignments:Physical Site Evaluation Ski Resort AppraisalsSki Area Design & Layout Snowmaking FeasibilityEconomic Feasibility Studies Supply/Demand AnalysisMaster Planning Investment AnalysisSkier Market Research & Analysis Sales Forecasting

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


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


5Deer Mt Ski Area - Leased Lands, Lead S.D. 1996Powder Mountain, Eden UTAH (Understanding of Value) 1996Preliminary Valuation of the Powderhorn Ski Area, CO 1997Mike Wiegele Helicopter Skiing, Blue River, B.C., CAN 1997Silver Star Mountain Resort, Vernon, B.C., CAN. 1997Paoli Peaks Ski Area, Paoli, IN 1997590-Acre Tract for Base Lands, Brundage Mt., ID 1998Nakiska Ski Area, ALB, CAN. 1999Kimberley Ski & Golf Resort, B.C., CAN 2000Fernie Alpine Resort, B.C., CAN. 2000Wintergreen Ski & Golf Resort, ALB, CAN. 2000Mt. Bachelor Ski Resort, Bend, OR 2002Mission Ridge Ski Area, Wenatchee, WA 2002/03Solitude Mountain Resort, Solitude UT 2002/06Kelly Canyon Ski Area, Idaho Falls, ID 2002Stevens Pass Ski Area, Skykomish, WA 200349 Degrees North Ski Area, Chewelah, WA 2003/06Chestnut Mountain Resort, Galena, Ill 2003/05Morningstar Lodge at Silver Mt., Kellogg ID 2005Echo Mountain Snowboard Park, Idaho Springs, CO 2005Taos Ski Valley, Taos Ski Valley, New Mexico 2006

Special Projects

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

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

A Master Plan for the development of the Nasan Country Club Ski Resortin Pochoun, Korea

Analysis of Lost Opportunity for the Cypress Bowl Ski Area, NorthVancouver, B.C., Canada

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


6 A Business Plan in support of the purchase of the Grand Targhee Ski &

Summer Resort, Alta, Wyoming

A Terrain Capacity Analysis & Conceptual Ski Resort Design for thePowder Mountain Resort, Eden, Utah

Representative List of Clients:Government:

United States Forest Service, USDAEconomic Development Administration, USDCArea Redevelopment Administration, USDCFarmers Home Administration, USDANew Hampshire State Planning ProjectNew York State Office of Planning CoordinationWyoming Economic Development DepartmentCanadian National Parks ServiceMinistry of Culture & Recreation, Province of OntarioProvince of British ColumbiaTravel Alberta, Province of AlbertaAtlantic Canada Opportunities Agency, Province of New BrunswickFederal Deposit Insurance CorporationResolution Trust CorporationWashington State Parks & Recreation CommissionMoffat Tunnel CommissionGovernor’s Office of Planning - State of Utah

Industry Trade Organizations:National Ski Areas AssociationMidwest Ski Areas Association

Private Organizations:Loon Mountain Recreation Corp.; NHWaterville Company; NHMadonna Mountain Corp.; VTBurke Mountain Corp.; VTWindham Mountain; NYMount Sutton, Ltd.; Quebec, CanadaCamp Fortune; Ottawa Ski Club; Quebec, CanadaBoise Cascade Co.; NCWinter Park Recreation Assoc.; COL.T.V. Recreation Development; COPleasant Valley Investment Co.; COThe Woodmoor Corp.; COJackson Hole Ski Corp.; WYMt. Ste. Marie, Ltd.; Quebec, Canada


7Blue Mountain Resorts; Ontario, CanadaAspen Highlands Ski Co.; COAttitash Ski Corp.; NHWhitewater Ski Society; British Columbia, CanadaMedicine Bow Ski Co.; WYSki Roundtop Inc. (Now Snow Time Inc.); PAThredbo Ski Resort; NSW, AustraliaMt. Cook Line; Queenstown, New ZealandSki Venture, Inc., Snowshoe, W\/Blackcomb Resort; B.C., CanadaLeisureland; Auckland, New ZealandSkiing Louise Ltd., Lake Louise, Alberta, CanadaSunshine Village Corp. Banff, Alberta, CanadaSearchmont, Sault Ste. Marie, Ontario, CanadaSki Wentworth, Wentworth Valley, Nova Scotia, CanadaBig Valley Co., Alta, WYFairfield Communities, Little Rock, ARCamelback Ski Corp, PAARCO Real Estate, Los Angles, CA.Powder Mountain Resort, UTAHMIG Corp, Seattle WATaos Ski Valley, NM

Financial Institutions:GEICO Financial Services Inc., Denver, COColorado National Bank, Denver, COOccidental Nebraska Federal Savings & Loan, Omaha, NECentral Bank, Grand Junction, COHilco, Bedford, NHFirst Interstate Bank, Laramie, WYUS Bancorp Mortgage Appraisal Services, Seattle, WABank of America, Phoenix, AZFirst Interstate Bank of Nevada, Reno, NVFirst Interstate Bank of Washington, Seattle, WABay Bank, Harvard Trust, Boston, MAEquitable Real Estate Investment Management, Inc., Denver, COOntario Development Corp., Toronto, Ontario, CanadaCitibank Canada, Vancouver, British Columbia, CanadaAT&T Capital, Morristown, NJBank of Boston, Boston, MABank of Montreal, Banff, CanadaFleet Bank, Boston, MANCW Community Bank, Wenatchee, WAFirst Western Bank, Deadwood, SD


8Wells Fargo Bank, CaliforniaZions First National Bank, ID/UTNational Bank of Arizona, Phoenix AZBaker-Boyer Bank, Walla Walla, WAWashington Trust Bank, Spokane, WADubuque Bank & Trust, Dubuque, IA

APPRAISERQUALIFICATIONS

Daniel V. Pahl PresidentPahl Industrial Inc.

EDUCATION, AFFILIATIONS,CERTIFICATIONS & LICENSES

Graduate Vancouver Technical School, Vancouver Canada Certified Equipment Appraiser (CEA) as sanctioned by AMEA (Association of

Machinery and Equipment Appraisers) – Certificate attached. Certified USPAP (Uniform Standards of Professional Appraisal Practice)

practitioner As sanctioned by ASA (American Society of Appraisers) –Certificate attached.

Licensed Auctioneer in Oregon, California, Texas, Washington, and Florida. Member TMA (Turnaround Management Association) Member ABI (American Bankruptcy Institute)

INDUSTRY RECOGNITION

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

Experience & Employment History

Feb 2002 – Present Pahl Industrial IncOwner/President

Pahl Industrial specializes in the Appraisal and Liquidation of Machinery and Equipmentin a variety of Industries. Machinery and Equipment appraiser for lease transactions, property tax, and

Asset based lending purposes. Perform auctions for machinery and equipment in a variety of industries.

Feb 2001 – Jan 2002 Hilco Industrial LLCExecutive Vice President

Hilco Industrial opened an Industrial Auction and Appraisal business in Chicagoservicing a variety of manufacturing industries. My duties for opening this divisionincluded: Formulating, developing and implementing a business plan for the disposition

of assets Personnel hired and an infrastructure built

April 1975 – Jan 2001 Maynards Industries (1991) Inc.Executive Vice President/Partner

Fiscally responsible for the operation and management of the Industrial Division of a$75,000,000 per year Auction, Appraisal and Liquidation business. Instrumental in opening the U.S. operations of this Canadian based company

In 1986.

Responsible for directing this division in the performance of Auctions,Appraisals and Liquidations Initially in San Francisco and Portland Oregonwith eventually expansion including Lansing Michigan, Cincinnati andMonterrey Mexico.

Performed and or supervised over 100 Appraisals, Auctions and Liquidationsper year.

Oversaw complex Appraisals and Liquidations for Pulp and Paper Mills,Mines, Construction Equipment, etc.

Established reputable and reliable name recognition for Maynards to Bankers,Asset Based Lenders, Lawyers, CPA’s, Turnaround Professionals andIndustry executives

Instrumental in developing a business to business “e Commerce” plan for thesale of equipment for long-term strategic partners. Namely General Motors,Boeing, Tower Automotive, Compass Aerospace, etc.

Part of an Executive Business Development team that developed andImplemented strategic trade missions to developing foreign countries in aneffort to broaden the customer base for Machinery and Equipment availableIn North America

Designed and implemented an historical data base for the collection andstorage of sales data for equipment from a variety of industries. This database is updated daily and is a key element in determining values for theAppraisal and Liquidation business.

Oct 1970 – March 1975 Airmatic Sales LtdSales Manager/Owner

Company involved in selling a full line of Pneumatic products and also operated aFull service Machine and Fabrication Shop. Actively involved in every aspect of thissmall business, which enhanced the eventual move into the Appraisal andLiquidation field.

April 1964 – Sept 1970 Galbraith & Sulley/Robert Morse CorporationSales Trainee/Salesmen

Progressed from sales trainee to inside sales to outside sales in 1 ½ years with thislarge industrial firm selling full lines of Pneumatics, Hydraulics, Power Transmission,Material Handling Equipment, Sawmill Equipment which was expanded to includeMachine Tools, Construction Equipment and Logging Equipment when the companywas purchased by Robert Morse Corporation in 1968. The 8 years spent with these firmswas the base of knowledge in a variety of industries that accelerated the learning curvein the Appraisal and Liquidation business.

JOHN C. ELLISE. 561 Jackson Ave.

Spokane, Washington 99207Phone (509) 483-6181

January 2006

Born: February 28, 1967Spokane, Washington

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

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

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

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

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

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

appraisal of the liquidation value mt. ashland ski area

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