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V A L U A T I O N S E R V I C E S

COMPLETE APPRAISAL OF REAL PROPERTY

Mount Carmel Office 50 West 3rd Street Mount Carmel Borough, Northumberland County, Pennsylvania

IN A SELF-CONTAINED APPRAISAL REPORT As of June 17, 2004

Prepared For:

Lehman Brothers Holdings, Inc. 399 Park Avenue, 8th Floor New York, N.Y. 10022

Prepared By:

Cushman & Wakefield of Philadelphia, Inc. Valuation Services Bell Atlantic Tower 1717 Arch Street, 30th Floor Philadelphia, PA 19103

C&W File ID: 04-9157-11

Cushman & Wakefield of Pennsylvania, Inc. Bell Atlantic Tower 1717 Arch Street, 30th Floor Philadelphia, PA 19103 215-963-4125 Tel 215-569-8657 fax [email protected]

June 18, 2004 Mr. Yaniv Blumenfeld Vice President Lehman Brothers Holdings, Inc. 399 Park Avenue, 8th Floor New York, N.Y. 10022 Re: Complete Appraisal of Real Property In a Self-Contained Report

Mount Carmel Office 50 West 3rd Street Mount Carmel Borough, Northumberland County, Pennsylvania 17851

C&W File ID: 04-9157-11

Dear Mr. Blumenfeld:

In fulfillment of our agreement as outlined in the Letter of Engagement, we are pleased to transmit our complete appraisal report on the property referenced above.

The value opinion reported below is qualified by certain assumptions, limiting conditions, certifications, and definitions, which are set forth in the report. We particularly call your attention to the following extraordinary assumptions and hypothetical conditions:

Extraordinary Assumptions The appraisal employs the following extraordinary assumptions: 1) The annual Base Rent for the Wachovia Bank space over the first 5 years of the lease is assumed to be $5.92 per square foot increasing 1.5 percent every 5 years over the 20 year initial lease term.

2) We have assumed the 20 year Wachovia Bank lease commences as of our effective date of valuation and that none of the six 5 year renewal options are exercised as it is uncertain as to the Bank’s needs in 20 years.

3) The building square footage used to estimate market value is based upon information supplied to us by the buyer. We have assumed that this figure is an accurate reflection of the subject building's size.

Hypothetical Conditions: This appraisal employs the following hypothetical condition:

1) As the subject property is leased, the “As Dark” Value assumes the entire property is vacant and available for lease at current market terms.

Cushman & Wakefield, Inc. Mr. Yaniv Blumenfeld Lehman Brothers Holdings, Inc. June 18, 2004 Page 2

This Report has been prepared to assist in the determination of whether to make a loan evidenced by a note (the “Mortgage Note”) secured by the property referred to in the Report. This Report may be relied upon by: (i) Lehman Brothers Holdings, Inc. (“Lehman”); (ii) the trustee of a trust created in connection with a securitization which includes the Mortgage Note or an interest therein; and (iii) any other purchaser or assignee of the Mortgage Note or an interest therein, upon such purchaser’s or assignee’s written acceptance of and consent to the terms of this reliance letter. This Report may be, for information purposes only: (i) provided to any potential purchaser or assignee of the Mortgage Note or an interest therein; (ii) provided to any rating agency, rating securities which represent a beneficial ownership interest in a trust fund that consists of mortgage loans including the Mortgage Note or an interest therein; and (iii) referred to, quoted in or included with materials offering for sale the Mortgage Note or an interest therein. There are no third party beneficiaries (intended or unintended) to this Report, except as expressly stated herein. This Report speaks only as of its date.

This report may not be distributed or relied upon by any other persons or entities without the written permission of Cushman & Wakefield, Inc.

This appraisal report has been prepared in accordance with our interpretation of Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), and the Uniform Standards of Professional Appraisal Practice (USPAP), including the Competency Provision.

The property was inspected by and the report was prepared by Daniel C. Rudderow under the supervision of Gerald B. McNamara, MAI.

This appraisal employs all three typical approaches to value: the Cost Approach, the Sales Comparison Approach and the Income Capitalization Approach. Based on our analysis and knowledge of the subject property type and relevant investor profiles, it is our opinion that all approaches would be considered meaningful and applicable in developing a credible value conclusion.

Based on our Complete Appraisal as defined by the Uniform Standards of Professional Appraisal Practice, we have developed an opinion that the market value of the Leased Fee estate of the referenced property, subject to the assumptions and limiting conditions, certifications, extraordinary and hypothetical conditions, if any, and definitions, “as is” on June 17, 2004 is:

FIVE HUNDRED FIFTY THOUSAND DOLLARS

$550,000

Cushman & Wakefield, Inc. Mr. Yaniv Blumenfeld Lehman Brothers Holdings, Inc. June 18, 2004 Page 3

In addition, we have estimated the “As Dark” Value of the Fee Simple Interest as of June 17, 2004 at:

ONE HUNDRED FIFTY THOUSAND DOLLARS $150,000

Based upon transactions that have occurred in the marketplace as well as discussions with knowledgeable market participants, exposure time would have required approximately nine (9) months. Furthermore, a marketing period of approximately nine (9) months will be reasonable for properties such as the subject.

This letter is invalid as an opinion of value if detached from the report, which contains the text, exhibits, and Addenda.

Respectfully submitted,

CUSHMAN & WAKEFIELD OF PENNSYLVANIA, INC.

Daniel C. Rudderow Appraiser PA Certified General Appraiser License No. GA003341 [email protected] 215-963-4125 Office Direct 215-569-8657 Fax

Gerald B. McNamara, MAI Managing Director PA Certified General Appraiser License No. GA000267L


SUMMARY OF SALIENT FACTS

Common Property Name: Mount Carmel Office

Location: 50 West 3rd Street Mount Carmel Borough, Pennsylvania 17851

The subject property is situated at the southeast corner of West 3rd Street and South Maple Street in Mount Carmel Borough, Northumberland County, Pennsylvania. In addition, the subject property contains a parking lot situated at the northeast corner of the same intersection.

Property Description: The property consists of a 1-building, 3-story bank branch/office building containing 14,000 square feet of net rentable area on a 0.379-acre parcel of land.

Assessor's Parcel Number: 7-2-4-104 and 4-2-1-246

Interest Appraised: Leased Fee and Fee Simple

Date of Value: June 17, 2004

Date of Inspection: June 18, 2004

Ownership: First Liberty Bank

Occupancy: The subject property is 64.29 percent occupied by Wachovia.

Current Property Taxes

Total Assessment: $166,225

2004/2005 Property Taxes: $22,000

Highest and Best Use

If Vacant: Commercial development

As Improved: As it is currently developed

Site & Improvements

Zoning: C-2, Commercial

Land Area: 0.3788 acres

16,502 square feet

Number of Stories: 3

Year Built: 1965

Gross Building Area: 14,000 square feet

Net Rentable Area: 14,000 square feet

Parking Type: Surface

Number of Parking Spaces: 13



VALUE INDICATORS

Land Value:

Indicated Value: $50,000

Per Square Foot: $3.03

Per Acre: $131,984

Cost Approach:


Per Square Foot (NRA): $42.86

Sales Comparison Approach:



Income Capitalization Approach

Discounted Cash Flow

Projection Period: 22 years

Holding Period: 21 years

Terminal Capitalization Rate: 9.5%

Internal Rate of Return: 9.00%


Direct Capitalization

Net Operating Income: $68,755

Capitalization Rate: 8.50%


Reconciled Value: $550,000


FINAL VALUE CONCLUSION

Leased Fee: $550,000


Exposure Time: 9 months

Marketing Time: 9 months



FINAL VALUE CONCLUSION

“As Dark” Fee Simple Interest: $150,000


INSURABLE VALUE CONCLUSION $2,000,000

Extraordinary Assumptions and Hypothetical Conditions

Extraordinary Assumptions

An extraordinary assumption is defined by the Uniform Standards of Professional Appraisal Practice as “an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.”

The appraisal employs the following extraordinary assumptions: 1) The annual Base Rent for the Wachovia Bank space over the first 5 years of the lease is assumed to be $5.92 per square foot increasing 1.5 percent every 5 years over the 20 year initial lease term.

2) We have assumed the 20 year Wachovia Bank lease commences as of our effective date of valuation and that none of the six 5 year renewal options are exercised as it is uncertain as to the Bank’s needs in 20 years.

3) The building square footage used to estimate market value is based upon information supplied to us by the buyer. We have assumed that this figure is an accurate reflection of the subject building's size.

Hypothetical Conditions

A hypothetical condition is defined by the Uniform Standards of Professional Appraisal Practice as “that which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.”

This appraisal employs the following hypothetical condition: 1) As the subject property is leased, the "As Dark" Value assumes the entire property is vacant and available for lease at current market terms.


SUBJECT PHOTOGRAPHS

Front elevation of subject property

Additional view of subject property

SUBJECT PHOTOGRAPHS


View depicting subject’s parking lot

View depicting first floor Wachovia space

SUBJECT PHOTOGRAPHS


View depicting second floor office space

View depicting third floor shell space

SUBJECT PHOTOGRAPHS


Easterly view along West 3rd Street

Westerly view along West 3rd Street


TABLE OF CONTENTS

INTRODUCTION .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 REGIONAL MAP .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Regional Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 LOCAL AREA MAP .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 LOCAL AREA ANALYSIS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 SITE DESCRIPTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 IMPROVEMENTS DESCRIPTION .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 REAL PROPERTY TAXES AND ASSESSMENTS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 ZONING.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 HIGHEST AND BEST USE .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 VALUATION PROCESS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 LAND VALUATION .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 COST APPROACH ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 SALES COMPARISON APPROACH ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 INCOME CAPITALIZATION APPROACH ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 RECONCILIATION AND FINAL VALUE OPINION .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 “AS DARK” VALUE .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 INSURABLE VALUE .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 ASSUMPTIONS AND LIMITING CONDITIONS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 CERTIFICATION OF APPRAISAL .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 ADDENDA ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

V A L U A T I O N S E R V I C E S 1

INTRODUCTION

Identification of Property Common Property Name: Mount Carmel Office

Location: 50 West 3rd Street Mount Carmel Borough, Northumberland County, Pennsylvania 17851


Property Description: The property consists of a 1-building, 3-story bank branch/office building containing 14,000 square feet of net rentable area on a 0.379-acre parcel of land.

Assessor's Parcel Number: 7-2-4-104 and 4-2-1-246

Property Ownership and Recent History Current Ownership: First Liberty Bank

Sale History: The subject property is part of a portfolio of 150 properties that are being purchased by First States Investors 3300, LLC from Wachovia Bank, National Association. To the best of our knowledge, there have been no other arms-length transaction involving the subject property over the past three years.

Wachovia will lease back all, a portion or none of the space in each building for a term of 20 years. The contract of sale is dated May 10, 2004. The aggregate sales price is reportedly $546,386,107 and an allocation of the total price to each asset was not provided.

Intended Use and Users of the Appraisal This appraisal was prepared for Lehman Brothers Holdings, Inc. and is to be used in connection with potential acquisition financing. All other uses and users are unintended, unless specifically stated in the letter of transmittal.

Dates of Inspection and Valuation The value conclusion reported herein is as of June 17, 2004. The property was inspected on June 18, 2004 by Daniel C. Rudderow. Gerald B. McNamara, MAI has reviewed the report but did not inspect the property.

Property Rights Appraised Leased Fee and Fee Simple Interests

INTRODUCTION


Scope of the Appraisal This is a complete appraisal presented in a self-contained report, intended to comply with the reporting requirements set forth under the Uniform Standards of Professional Appraisal Practice (USPAP).

In addition, the report was also prepared to conform to the requirements of the Code of Professional Ethics of the Appraisal Institute and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), Title XI Regulations.

In preparation of this appraisal, we investigated numerous vacant land and improved sales in the subject’s market, analyzed rental data, and considered the input of buyers, sellers, brokers, property developers and public officials. Additionally, we investigated the general regional economy as well as the specifics of the local area of the subject.

The scope of this appraisal required collecting primary and secondary data relative to the subject property. The depth of the analysis is intended to be appropriate in relation to the significance of the appraisal issues as presented herein. The data have been analyzed and confirmed with sources believed to be reliable, whenever possible, leading to the value conclusions set forth in this report. In the context of completing this report, we have made a physical inspection of the subject property. The valuation process involved utilizing generally accepted market-derived methods and procedures considered appropriate to the assignment.

This appraisal employs all three typical approaches to value: the Cost Approach, the Sales Comparison Approach and the Income Capitalization Approach. Based on our analysis and knowledge of the subject property type and relevant investor profiles, it is our opinion that all approaches would be considered meaningful and applicable in developing a credible value conclusion.

Definitions of Value, Interest Appraised and Other Terms The following definitions of pertinent terms are taken from the Dictionary of Real Estate Appraisal, published by the Appraisal Institute, as well as other sources.

Market Value

Market value is one of the central concepts of the appraisal practice. Market value is differentiated from other types of value in that it is created by the collective patterns of the market. A current economic definition agreed upon by agencies that regulate federal financial institutions in the United States of America follows, taken from the glossary of the Uniform Standards of Professional Appraisal Practice of The Appraisal Foundation:

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 and 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 conditions whereby:

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised, and acting in what they consider their own best interests;

3. A reasonable time is allowed for exposure in the open market;

INTRODUCTION


4. Payment is made in terms of cash in US dollars or in terms of financial arrangements comparable thereto; and

5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

“As Dark” Value

The market value assuming the property is entirely vacant and available for lease at market terms. This value factors in the cost of lease-up which includes rent loss, tenant improvements, leasing commissions and holding costs over the absorption period.

Fee Simple Estate

Absolute ownership unencumbered by any other interest or estate, subject to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.

Leased Fee Estate

An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the leased fee are specified by contract terms contained within the lease.

Market Rent

The rental income that a property would most probably command on the open market, indicated by the current rents paid and asked for comparable space as of the date of appraisal.

Cash Equivalent

A price expressed in terms of cash, as distinguished from a price expressed totally or partly in terms of the face amounts of notes or other securities that cannot be sold at their face amounts.

Exposure Time and Marketing Time

Exposure Time

Under Paragraph 3 of the Definition of Market Value, the value opinion presumes that "A reasonable time is allowed for exposure in the open market". Exposure time is defined as the length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at the market value on the effective date of the appraisal. Exposure time is presumed to precede the effective date of the appraisal.

The reasonable exposure period is a function of price, time and use. It is not an isolated opinion of time alone. Exposure time is different for various types of real estate and under various market conditions. As noted above, exposure time is always presumed to precede the effective date of appraisal. It is the length of time the property would have been offered prior to a hypothetical market value sale on the effective date of appraisal. It is a retrospective opinion based on an analysis of recent past events, assuming a competitive and open market. It

INTRODUCTION


assumes not only adequate, sufficient and reasonable time but adequate, sufficient and a reasonable marketing effort. Exposure time and conclusion of value are therefore interrelated.

Based on our review of national investor surveys, discussions with market participants and information gathered during the sales verification process, a reasonable exposure time for the subject property at the value concluded within this report would have been approximately nine (9) months. This assumes an active and professional marketing plan would have been employed by the current owner.

Marketing Time

Marketing time is an opinion of the time that might be required to sell a real property interest at the appraised value. Marketing time is presumed to start on the effective date of the appraisal and take place subsequent to the effective date of the appraisal. The opinion of marketing time uses some of the same data analyzed in the process of estimating reasonable exposure time and it is not intended to be a prediction of a date of sale.

We believe, based on the assumptions employed in our analysis, as well as our selection of investment parameters for the subject, that our value conclusion represents a price achievable within nine (9) months.

Legal Description The subject site is identified by Northumberland County as Tax Parcel Numbers 7-2-4-104 and 4-2-1-246. A legal description can be found in the Addenda to this report.


REGIONAL MAP

VALUATION SERVICES 6

REGIONAL ANALYSIS

Northumberland County Northumberland County was created in 1772, from parts of Lancaster, Cumberland, Berks, Bedford and Northampton Counties. Sunbury, the county seat, was laid out in 1772, incorporated as a borough in 1797, and became a city in 1921. Containing an area of 460 square miles, Northumberland County is located 50± miles north of Harrisburg along the Susquehanna River in the heart of the Susquehanna Valley. It is bordered by Montour and Columbia Counties to the north, Schuylkill County to the east, Union and Snyder counties to the west and Dauphin County to the south.

Population According to the most recent federal census, Northumberland County had a 2000 population of 94,556 persons, a decrease of 2.3 percent decrease from the 1990 figure of 96,771. In addition, this represents a population density of approximately 210 persons per square mile.

Employment Historically, Northumberland County was best known as a coal mining area, with the various communities here developed along the coal veins. Although the county continues to rank highly in anthracite coal production in Pennsylvania, its importance has diminished in recent years. Now, the major economic activities are manufacturing (textiles and transportation equipment), agriculture (field crops and poultry), in addition to anthracite coal mining.

According to the Pennsylvania Department of Labor and Industry, the January 2004 unemployment rate in Northumberland County was 8.1 percent. This figure is higher than the 6.1 percent for Commonwealth of Pennsylvania as a whole. At the same time, the unemployment rate for the United States was placed at 6.3 percent.

The median effective household buying income or disposable income after federal taxes in Northumberland County is currently estimated to be $28,845. This is below the statewide median level of $36,933. It is estimated that 28.8 percent of the 39,100 households have an effective buying income under $35,000 annually, while 19.7 percent of households have yearly EBI in excess of $50,000.

Linkages Northumberland County benefits from an adequate transportation system linking the region to the rest of the nation. Northumberland County is within 250 miles of six of the nation's top 25 markets including New York City, Philadelphia, Washington, D.C., Baltimore, Pittsburgh and Newark. Sunbury, the county seat, is a major hub for motor traffic in this region. PA Routes 61 and 209 traverse east and west throughout the county, while PA State Route 225, 15 and 11 are the primary north/south thoroughfares. Additional major highways found within the county include PA State Routes 147, 45, 522 and 35.

REGIONAL ANALYSIS

VALUATION SERVICES 7

Cultural, Educational, Recreational Resources Educational resources abound in Northumberland County, with seven colleges and universities located within a one hour’s drive. Northumberland's most visible attributes are its waterways and forests. The West Branch of the Susquehanna is recognized as a superb bass fishery while smaller streams, like White Deer and Penn's Creek are excellent trout streams. Boating on the Susquehanna has become popular and the Fish Commission has developed access ramps at many locations along the river. The impoundment of the north and west branches of the Susquehanna at Sunbury is a busy boating area complete with marina and boat rentals.

Conclusion Northumberland County is going through a restructuring period as a result of the decline of coal as an energy source. While the population is expected to remain basically stable over the near term, unemployment is high relative to state and national averages. However, the economic development agencies throughout the county are committed to attract new investments. Highway transportation is good and utilities are adequate for many development opportunities. Additionally, there are adequate recreational and educational opportunities in the area. It is our conclusion that the long-term trends of the region are stable.


LOCAL AREA MAP


LOCAL AREA ANALYSIS

Location The property is located in Mount Carmel Borough, Northumberland County, Pennsylvania. Mount Carmel Borough is an older municipality situated approximately 14.0 miles south of Bloomsburg, 25.0 miles southwest of Hazleton, 40.0 miles southwest of Wilkes-Barre and 45.0 miles southeast of Williamsport. In addition, the Borough is virtually surrounded by Mount Carmel Township. All told, the Borough contains a land area of 0.7 square miles.

Access Access to the local market area is facilitated by Route 61. This roadway links with the Sunbury area to the west and Interstate 81 to the east. Interstate 81 travels in a generally northeast/southwest direction, linking with the Wilkes-Barre area and Interstate 80 to the north and Interstate 78 to the south. Interstate 80 provides access to Stroudsburg and the New York metropolitan area to the east and various towns in Pennsylvania to the west. In addition, Interstate 476 which connects with Interstate 80 to the east, provides access to the Philadelphia metropolitan area to the south. Interstate 78, which also links with Interstate 476, connects with the Harrisburg area to the southwest, as well as the Allentown area to the east. The balance of roadways serving the immediate area are primarily local roadways, serving the needs of the local populace.

Nearby and Adjacent Uses The subject property is situated along North Broadway Street, an older commercial/residential corridor in Wind Gap Borough. This stretch of roadway contains a number of small local retailers. Businesses immediately surrounding the subject property include a Texaco gas station as well as a number of local sales and service-oriented retailers. Although no formal market studies exist for the local marketplace, it appears that the occupancy rate of competitive buildings was in the vicinity of 90.0 percent. As West 3rd Street is virtually 100 percent built-up, there was no new commercial construction along this roadway. The balance of the local market area consists of residential development primarily situated along the secondary roadways as well as vacant rural land.

Local Area Characteristics According to the 2000 Census, the population for Mount Carmel Borough was 6,390 persons. This represents an 11.9 percent decline from the 1990 Census figure of 7,254 persons.

Special Hazards or Adverse Influences We are not aware of any atypical or unusual detrimental influences, such as land fills, flooding, noise pollution, air pollution or chemical factories or storage in the immediate neighborhood of the subject.

Conclusion The subject property is situated at the southeast corner of West 3rd Street and South Maple Street in Mount Carmel Borough, Northumberland County, Pennsylvania. In addition, the subject property contains a parking lot situated at the northeast corner of the same intersection. The trend over the recent past has been one of stabilization after a period of steady decline. Overall, the trend for the local marketplace appears to be stable.

V A L U A T I O N S E R V I C E S 1 0

OFFICE MARKET ANALYSIS

Local Overview Mount Carmel is an older Borough situated in the northeast section of Pennsylvania. Office users are typically local tenants, such as real estate agents, insurance brokers, attorneys and small business people. Because of its size and local character of its tenants, there are no published statistics on vacancy, rental rates and lease terms. But our survey of nearby buildings indicated that vacancy rate appeared to be approximately 10.0 percent for similar type space.

Rental Rates and Terms Local brokers indicate that rental rates generally range between $8 and $15 per square foot for office space. In addition, terms typically last from one and five years. Expense structures vary. Some leases are completely gross, with the landlord paying all operating expenses. The more common lease structure is that the tenant pays for increases in some or all operating expenses over the first (base) year of the lease. Occasionally, the tenant is required to pay all operating expenses (triple net). However, the net lease structure is more common in newly constructed single story office buildings in campus settings.

Tenant Improvement Costs Tenant improvement costs vary. New tenants in older buildings such as the subject have a minimal tenant allowance intended to cover painting the walls and cleaning or replacing carpets. That cost could range between $2 and $5 per square foot. Buildings that can command a higher rent due to age, location, condition and parking will also often have a higher tenant improvement costs, ranging up to $10 to $20 per square foot.

Leasing Commissions The standard leasing commission in this marketplace is based upon a percentage of the rent paid. The norm is 6% of the first year’s rent, 5% of the second year’s rent, 4% of the third year’s rent and 3% for each subsequent year. For renewals, half that amount is anticipated. The leasing commission is typically paid half at signing and the remaining at occupancy.

The Subject Property While the subject property is currently utilized as a bank branch, its multi story design is considered less functional by current standards than a one-story design. If the subject were to become vacant, it would most likely be used for office space.


SITE DESCRIPTION

Location: 50 West 3rd Street Mount Carmel Borough, Northumberland County, Pennsylvania 17851


Shape: Irregular

Topography: Generally level

Land Area: 0.3788 acres

16,502 square feet

Frontage, Access, Visibility: The subject site contains good frontage along 3rd Street and Maple Street. Vehicular access to the subject's parking lot is available via curb cuts along both of these roadways. Visibility is rated as average.

Soil Conditions: We did not receive nor review a soil report. However, we assume that the soil's load-bearing capacity is sufficient to support the existing structure. We did not observe any evidence to the contrary during our physical inspection of the property. Drainage appears to be adequate.

Utilities: All utilities are available to the site.

Site Improvements: The site improvements include asphalt paved parking areas, curbing, signage, landscaping, yard lighting and drainage.

Land Use Restrictions: We were not given a title report to review. We do not know of any easements, encroachments, or restrictions that would adversely affect the site's use. However, we recommend a title search to determine whether any adverse conditions exist.

Flood Map: National Flood Insurance Rate Map Community Panel Number 4207380001C dated June 19,1985.

Flood Zone: FEMA Zone C: Areas outside of a 100-year flood hazard.

Wetlands: We were not given a Wetlands survey. If subsequent engineering data reveal the presence of regulated wetlands, it could materially affect property value. We recommend a wetlands survey by a competent engineering firm.

Hazardous Substances: We observed no evidence of toxic or hazardous substances during our inspection of the site. However, we are not trained to perform technical environmental inspections and recommend the services of a professional engineer for this purpose.

Overall Functionality: The subject site is functional for its current use.


IMPROVEMENTS DESCRIPTION

The following description of improvements is based upon our physical inspection of the improvements along with our discussions with the building manager.

General Description

Year Built: 1965

Number of Buildings: 1

Number of Stories: 3

Land To Building Ratio: 1.18 to 1

Gross Building Area: 14,000 square feet

Net Rentable Area: 14,000 square feet

Construction Detail

Basic Construction: Masonry

Foundation: Masonry

Framing: Masonry and wood

Floors: Concrete poured over metal deck.

Exterior Walls: Brick

Roof Cover: Flat roofing system consisting of built-up assemblies with rubber membrane cover.

Windows: The windows are thermal windows in aluminum frames.

Pedestrian Doors: Glass in aluminum frames.

Mechanical Detail

Heating: Heat is supplied by roof-mounted package HVAC units.

Cooling: The building is cooled by roof-mounted package HVAC units.

Plumbing: The plumbing system is assumed to be adequate for existing use and in compliance with local law and building codes. The plumbing system is typical of other bank branch/office properties in the area with a combination of PVC, steel, copper and cast iron piping throughout the building.

Electrical Service: Assumed to be adequate.

Elevator Service: The building is not elevator served.

Fire Protection: The building is not sprinklered.

Security: Monitors are situated in the bank branch area.



Interior Detail

Layout: The subject property represents a three-story office building, with the first floor primarily used as a bank branch and the second floor consisting of vacant office space. In addition, the building contains a partial basement level. We would note that the third floor office space was in shell-like condition as of the date of inspection. However, it appears that this space could be renovated and rented. We have estimated a tenant improvement allowance for this portion of the building of $15.00 per square foot.

Floor Covering: Ceramic tile, carpet or resilient tile.

Walls: Painted or wallpapered sheetrock.

Ceilings: The ceilings are suspended acoustical tile.

Lighting: A mixture of fluorescent and incandescent light fixtures.

Restrooms: The building features adequate restrooms for men and women.

Site Improvements Parking: 13 spaces (0.93:1,000 Sq Ft). Open surface parking.

Onsite Landscaping: Minimal.

Other: Concrete curbs and walkways.

Personal Property: Personalty was excluded from our valuation.

Capital Improvements: Other than normal routine property maintenance, there are no major capital improvement expenditures planned in the immediate future.

Summary Condition: Average

With the exception of the third story shell space, the building has been well maintained and provides an average appearance relative to competing buildings within its market.

We did not inspect the roof of the building or make a detailed inspection of the mechanical systems. The appraisers, however, are not qualified to render an opinion as to the adequacy or condition of these components. The client is urged to retain an expert in this field if detailed information is needed about the adequacy and condition of mechanical systems.

Quality: Good



Design and Functionality: The subject was originally constructed as a bank building. Its multi-story design is considered less functional for modern bank operations than a one-story structure. While it can still be utilized for bank operations, it is anticipated that at some future date, it will be more functional for general office space. In addition, the building contains a partial basement level. We would note that the third floor office space was in shell-like condition as of the date of inspection. However, it appears that this space could be renovated and rented. We have estimated a tenant improvement allowance for this portion of the building of $15.00 per square foot.

Actual Age: 39 years

Effective Age: 25 years

Expected Economic Life: 50 years

Remaining Economic Life: 25 years

Americans With Disabilities Act The Americans With Disabilities Act (ADA) became effective January 26, 1992. We have not made, nor are we qualified to make a compliance survey of this property to determine whether or not it is in conformity with the requirements of the ADA. It is possible that a compliance survey could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since we have not been provided with the results of a survey, we did not analyze the results of possible non-compliance.

Hazardous Substances We are not aware of any potentially hazardous materials (such as formaldehyde foam insulation, asbestos insulation, radon gas emitting materials, or other potentially hazardous materials) which may have been used in the construction of the improvements. However, we are not qualified to detect such materials and urge the client to employ an expert in the field to determine if such hazardous materials exist.


REAL PROPERTY TAXES AND ASSESSMENTS

The property is subject to the taxing jurisdiction of Northumberland County. The assessors' parcel identification numbers are 7-2-4-104 and 4-2-1-246. The assessment and taxes for the property are presented below:

PROPERTY TAX DATA (2004/2005)

2004Assessed Value

Total: $166,225Tax Rate 0.13235Total Property Taxes $22,000

Building Area ( SF ) 14,000Property Taxes per Square Foot $1.57

Total taxes for the property are $22,000, or $1.57 per square foot. Based upon tax burdens on properties in the market that are similar to the subject, the subject’s real estate taxes appear to be reasonable. Based upon historical trends, we have assumed taxes will increase 3.00 percent per annum over the projection period.

The current assessment-to-value ratio in Northumberland County is 50.0 percent. Thus, the subject’s assessment indicates a market value estimate by the taxing authority of $332,450 or $23.75 per square foot. Based on our subsequent analysis, it would appear that the subject property is favorably assessed.

Assessments in Pennsylvania are done irregularly and on a countywide basis. Therefore, a sale of the subject would not trigger a re-assessment. However, a substantial renovation could cause a re-assessment. When a building owner applies to a local township for a building permit for renovation, this information is forwarded to the county assessor. A re-assessment would typically be based primarily on the costs of the renovation.


ZONING

The property is zoned C-2, Commercial by the City of Mount Carmel Borough. Permitted uses within this district include a wide variety of office, retail and commercial development. Zoning regulations imposed within this district are as follows:

ZONING REGULATIONS Minimum Lot Area: None Minimum Yard Requirements: Front: Side: Rear:

None None None

Maximum Building Height: 6 stories or 65 feet Maximum Building Coverage: 75%

We are not experts in the interpretation of complex zoning ordinances but the property appears to be a legal, conforming use based on our review of public information. The determination of compliance is beyond the scope of a real estate appraisal.

We know of no deed restrictions, private or public, that further limit the subject property's use. The research required to determine whether or not such restrictions exist, however, is beyond the scope of this appraisal assignment. Deed restrictions are a legal matter and only a title examination by an attorney or title company can usually uncover such restrictive covenants. Thus, we recommend a title search to determine if any such restrictions do exist.


HIGHEST AND BEST USE

Definition Of Highest And Best Use According to The Dictionary of Real Estate Appraisal, Third Edition (1993), a publication of the Appraisal Institute, the highest and best use is defined as:

The reasonably 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 four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability.

Highest And Best Use Criteria We have evaluated the site's highest and best use both as currently improved and as if vacant. In both cases, the property’s highest and best use must meet four criteria. That use must be (1), legally permissible (2) physically possible, (3) financially feasible, and (4) maximally productive.

Legally Permissible

The first test concerns permitted uses. According to our understanding of the zoning ordinance, noted earlier in this report, the site may legally be improved with structures that accommodate a variety of commercial development. Aside from the site's zoning regulations, we are not aware of any legal restrictions that limit the potential uses of the subject.

Physically Possible

The second test is what is physically possible. As discussed in the "Site Description," section of the report, the site's size, soil, topography, etc. do not physically limit its use. The subject site is of adequate shape and size to accommodate most permitted uses.

Financial Feasibility and Maximal Productivity

The third and fourth tests are what is financially feasible and what will produce the highest net return. After analyzing the physically possible and legally permissible uses of the property, the highest and best use must be considered in light of financial feasibility and maximum productivity. For a potential use to be seriously considered, it must have the potential to provide a sufficient return to attract investment capital over alternative forms of investment. A positive net income or acceptable rate of return would indicate that a use is financially feasible.

Highest and Best Use of Site As Though Vacant Considering the subject site’s physical characteristics and location, as well as the state of the local market, it is our opinion that the Highest and Best Use of the subject site as though vacant is commercial development.

HIGHEST AND BEST USE


Highest and Best Use of Property As Improved According to the Dictionary of Real Estate Appraisal, highest and best use of the property as improved is defined as:

The use that should be made of a property as it exists. An existing property should be renovated or retained “as is” so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more than offset the cost of demolishing the existing building and constructing a new one.

It is our opinion, the existing building adds value to the site as if vacant, therefore dictating a continuation of its current use. In conclusion, it is our opinion that the Highest and Best Use of the subject property as improved is as it is currently developed.


VALUATION PROCESS

Methodology There are three generally accepted approaches available in developing an opinion of value: the Cost, Sales Comparison and Income Capitalization approaches. We have considered each in this appraisal to develop an opinion of the market value of the subject property. In appraisal practice, an approach to value is included or eliminated based on its applicability to the property type being valued and the quality of information available. The reliability of each approach is dependent upon the availability and comparability of the market data uncovered as well as the motivation and thinking of purchasers in the market for a property such as the subject. Each approach is discussed below, and applicability to the subject property is briefly addressed in the following summary.

Land Value

Developing an opinion of land value is typically accomplished via the Sales Comparison Approach by analyzing recent sales transactions of sites of comparable zoning and utility adjusted for differences which exist between the comparables and the subject. Valuation is typically accomplished using a unit of comparison such as price per square foot of land area. Adjustments are applied to the unit of comparison from an analysis of comparable sales, and the adjusted unit of comparison is then used to derive a value for the subject site.

Cost Approach

The Cost Approach is based upon the proposition that an informed purchaser would pay no more for the subject than the cost to produce a substitute property with equivalent utility. This approach is particularly applicable when the property being appraised involves relatively new improvements which represent the highest and best use of the land; or when relatively unique or specialized improvements are located on the site, for which there exist few improved sales or leases of comparable properties.

In the Cost Approach, the appraiser forms an opinion of the cost of all improvements, depreciating them to reflect any value loss from physical, functional and external causes. Land value, entrepreneurial profit and depreciated improvement costs are then added resulting in a value estimate for the subject property.

Sales Comparison Approach

The Sales Comparison Approach utilizes sales of comparable properties, adjusted for differences, to indicate a value for the subject property. Valuation is typically accomplished using a unit of comparison such as price per square foot of building area, effective gross income multiplier or net income multiplier. Adjustments are applied to the unit of comparison from an analysis of comparable sales, and the adjusted unit of comparison is then used to derive a value for the subject property.

VALUATION PROCESS


ncome Capitalization Approach

This approach first determines the income-producing capacity of a property by utilizing contract rents on leases in place and by estimating market rent from rental activity at competing properties for the vacant space. Deductions then are made for vacancy and collection loss and operating expenses. The resulting net operating income is divided by an overall capitalization rate to derive an opinion of value for the subject property. The capitalization rate represents the relationship between net operating income and value. This method is referred to as Direct Capitalization.

Related to the Direct Capitalization Method is the Discounted Cash Flow Method. In this method, periodic cash flows (which consist of net operating income less capital costs) and a reversionary value are developed and discounted to a present value using an internal rate of return that is determined by analyzing current investor yield requirements for similar investments.

Summary This appraisal employs all three typical approaches to value: the Cost Approach, the Sales Comparison Approach and the Income Capitalization Approach. Based on our analysis and knowledge of the subject property type and relevant investor profiles, it is our opinion that all approaches would be considered meaningful and applicable in developing a credible value conclusion.

The valuation process is concluded by analyzing each approach to value used in the appraisal. When more than one approach is used, each approach is judged based on its applicability, reliability, and the quantity and quality of its data. A final value opinion is chosen that either corresponds to one of the approaches to value, or is a correlation of all the approaches used in the appraisal.


LAND VALUATION

LAND VALUATION


We used the Sales Comparison Approach to develop an opinion of land value. In this method, we analyzed prices buyers have recently paid for similar sites in the market, as well as examined current offerings. In making comparisons, we adjusted the sale prices for differences between this site and the comparable sites. If the comparable was superior to the subject, a downward adjustment was made to the comparable sale. If inferior, an upward adjustment was made. We present on the following pages a summary of pertinent details of sites recently sold that we compared to the subject site.

In the valuation of the subject site’s fee simple interest, the Sales Comparison Approach has been used to establish prices being paid for comparably zoned land. The most widely used and market oriented unit of comparison for properties with characteristics similar to those of the subject is the sale price per square foot of land area. All transactions utilized in this analysis are analyzed on this basis.

The major elements of comparison utilized to value the subject site include the property rights conveyed, the financial terms incorporated into the transaction, the conditions or motivations surrounding the sale, changes in market conditions since the sale, the location of the real estate, its utility and the physical characteristics of the property.

Discussion of Comparable Sales

Comparable Sale No. 1

This is the sale of a 509,652 square foot parcel located along Columbia Boulevard (Route 11) in Bloomsburg, PA. This property is in the Commercial zoning district. Dillon Floral Corp, First Eastern Bank sold the site in August 2002 for a price of $2,024,125 or $3.97 per square foot of land area. The site has average utility and public utilities are all available. After all adjustments, this sale indicated an adjusted unit value of $3.36 per square foot. Overall, this sale was adjusted downward for location and utility and upward due to its larger size.


This is the sale of a 3,900 square foot parcel located at Lehigh & Oak Street in Frackville, PA. This property is in the Commercial zoning district. Zack M. Fran sold the property in October 2001 for a price of $19,900 or $5.10 per square foot of land area. The site has good utility and public utilities are all available. After all adjustments, this sale indicated an adjusted unit value of $3.87 per square foot. This sale was adjusted upward for its larger size and downward for its superior commercial utility.


This is the sale of a 138,956 square foot parcel located along the 2200 Block of West Front Street (Route 11) in Bloomsburg, PA. This property is in the Commercial zoning district. Daisey Burke sold the property to Dr. Definnis in August 2000 for a price of $515,000 or $3.71 per square foot of land area. The site has good utility and public utilities are all available. After all adjustments, this sale indicated an adjusted unit value of $2.91 per square foot. This sale was adjusted downward for its superior commercial utility and better location and upward for its larger size.

LAND VALUATION


Conclusion of Site Value After adjustments, the comparable land sales reflect unit prices ranging from $2.91 to $3.87 per square foot ($126,799 to $168,503 per acre), with an average of $3.38 per square foot ($147,198 per acre).

Placing equal emphasis on each sale, we conclude that the indicated value by the Sales Comparison Approach is as follows:

Square Feet Acres

Land Area: 16,502 .38 Concluded Unit Value: X $3.00 X $130,680 Indicated Land Value: $49,506 $49,506 Rounded Land Value: $50,000 $50,000

LAND VALUATION

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tilitiesPrice/Acre

CO

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1C

olumbia B

oulevard (Route 11)

Dillon Floral C

orp, First E

astern Bank

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omm

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Bloom

sburg, PA

Bloom

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$173,002

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0.0895 Ac

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$222,268

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Bloom

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Dr. D

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3.1900 Ac

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$161,442

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COST APPROACH

Methodology The Cost Approach is based on the principle of substitution, which states that no prudent person will pay more for a property than the cost of acquiring a site and constructing, without undue delay, an equally desirable and useful property. The steps have been outlined in the Valuation Process section of this report. We have previously developed an opinion of land value of $50,000.

Replacement Cost New (RCN) Our opinion of replacement cost new is based on the Calculator Section in Marshall Valuation Service, a nationally recognized publication containing construction costs for all types of improvements. Base costs are revised monthly and adjustment factors are provided to reflect regional and local cost variations.

Base Building Costs

The published costs include all direct costs for the base structure, tenant improvements, and the following indirect costs:

1. Plans, specifications, and building permits, including engineer's and architect's fees;

2. Interest on construction loan during the construction period;

3. Sales tax on materials; and

4. Contractor's overhead and profit, including worker's compensation, fire and liability insurance, unemployment insurance, etc.

These base building costs, adjusted for any unique building characteristics and cost multipliers, are presented in the cost summary chart at the end of this section.

Site Improvement Costs

Site improvement costs are not included in our Base Building Cost opinion. These include landscaping, asphalt paving, walkways, etc. Site improvement costs are estimated at $2.00 per square foot of land area or $33,004.

Other Indirect Costs

Other indirect costs not included in Base Building Costs are developer overhead, property taxes, permanent loan fees, legal costs, developer fees, contingencies, and lease-up and marketing costs.

Research into these costs leads to the conclusion that an average property requires an allowance for other indirect costs of between 5.00 percent and 10.00 percent of Base Building Costs plus Site Improvements Costs. We have chosen to use 5.00 percent in our analysis.

Entrepreneurial Profit

Entrepreneurial profit represents the return to the developer for taking the construction and lease-up risk. Based upon our discussions with developers in the local market, this figure tends to range between 10.00 percent to 20.00 percent of Base Building, Site Improvement and Other Indirect Costs. We have chosen to use 15.00 percent in our analysis.

COST APPROACH


Accrued Depreciation There are three sources of accrued depreciation:

Physical Deterioration: We have used the economic age-life method to develop an opinion of physical deterioration. In the Improvements Description section of this report, we developed an opinion that the effective age of the subject to be 25 years and the economic life to be 50 years. This results in a physical deterioration of 50.00 percent (effective age divided by economic life).

Functional Obsolescence: The subject was originally constructed as a bank building. Its multi-story design is considered less functional for modern bank operations than a one-story structure. While it can still be utilized for bank operations, it is anticipated that at some future date, it will be more functional for general office space. Therefore, functional obsolescence is 25.00 percent.

External Obsolescence: Based upon a review of the specific location of the subject as well as the local bank branch/office market, the subject property is not affected by external obsolescence.

Total Depreciation: The sum of these elements of accrued depreciation is 75.00 percent.

Stabilization Expense: The subject property is not operating at a stabilized occupancy level. As such, we have made the appropriate deduction associated with leasing up the subject to a more market-oriented occupancy level. This deduction accounts for rent loss, shortfall in operating expense reimbursement, tenant improvements and leasing commissions. In the case of the subject property, this stabilization expense is placed at $119,131.

Conclusion Please refer to the following page for our Cost Approach summary which concludes to a market value opinion as follows:

Value $/SF (NRA)

Cost Approach Conclusion $618,168 Rounded $600,000 $42.86

COST APPROACH


COST APPROACH SUMMARY

Replacement Cost New (RCN) GBA (SF) $/GBA Sub-TotalTotalCost

Building ImprovementsBase Cost 14,000 $149.70 $2,095,800Sprinklers 14,000 0.00 0Subtotal 14,000 $149.70 $2,095,800

MultipliersCurrent Cost 1.060 Local Area 1.010 Perimeter 1.000 Building Height 1.000 Product of Multipliers x 1.071

Adjusted Base Building Cost $160.27 $2,243,763Total Site Improvements $33,004

Total Direct Costs $2,276,767Plus Other Indirect Costs (%of Direct Costs) 5.0% 113,838

Subtotal Replacement Cost New ( RCN ) $2,390,606Plus: Entrepreneurial Profit (% of RCN) 15.0% 358,591

Total Replacement Cost New ( RCN ) $2,749,197Per Square Foot (based on gross area) $196.37

Less Accrued DepreciationPhysical Deterioration

Effective Age (Years): 25 YearsEconomic Life: 50 YearsTotal Physical Depreciation: 50.0% $1,374,598

Functional Obsolescence 25.0% 687,299External Obsolescence 0.0% 0

Total 75.0% $2,061,898Depreciated Value of the Improvements $687,299

Per Square Foot (based on gross area) $49.09

Plus Land Value $50,000

Indicated Value $737,299Less: Stabilization Expense: $119,131Indicated Value by Cost Approach $618,168Rounded to nearest $50,000 5 $600,000

Per Square Foot (based on net rentable area) $42.86

Source: Marshall Valuation Service Section: 15 Quality: GoodPage: 21 Class: CDate: 11/03 Type: Bank/Branches


SALES COMPARISON APPROACH

Methodology In the Sales Comparison Approach, we developed an opinion of value by comparing the subject property with similar, recently sold properties in the surrounding or competing area. Inherent in this approach is the principle of substitution, which states that when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming that no costly delay is encountered in making the substitution.

By analyzing sales that qualify as arm’s-length transactions between willing and knowledgeable buyers and sellers, we can identify value and price trends. The basic steps of this approach are:

1. Research recent, relevant property sales and current offerings throughout the competitive area;

2. Select and analyze properties that are similar to the property appraised, analyzing changes in economic conditions that may have occurred between the sale date and the date of value, and other physical, functional, or locational factors;

3. Identify sales that include favorable financing and calculate the cash equivalent price;

4. Reduce the sale prices to a common unit of comparison such as price per square foot of net rentable area, effective gross income multiplier, or net income per square foot;

5. Make appropriate comparative adjustments to the prices of the comparable properties to relate them to the property being appraised; and

6. Interpret the adjusted sales data and draw a logical value conclusion.

The most widely used and market-oriented unit of comparison for properties such as the subject is the sales price per square foot of net rentable area. All comparable sales were analyzed on this basis. On the following pages we present a summary of the improved properties that we compared to the subject property, a map showing their locations, and the adjustment process.

Due to the nature of the subject property and the level of detail available for the comparable data, we have elected to analyze the comparables through application of a traditional adjustment grid utilizing percentage adjustments.

The sales that we have utilized represent the best available information that could be compared to the subject property. The major elements of comparison for an analysis of this type include the property rights conveyed, the financial terms incorporated into a particular transaction, the conditions or motivations surrounding the sale, changes in market conditions since the sale, the location of the real estate, its physical traits and the economic characteristics of the property. We have made a downward adjustment to those comparables considered superior to the subject. Conversely, an upward adjustment was made to those comparables considered to be inferior.



SUMMARY OF IMPROVED SALES

Address GrantorSalesPrice Site SF Yr. Built Condition

PricePSF

No. City, State Grantee Date Bldg NRA Quality Parking Occup. Comments

1 85 East Elizabeth AvenueElizabeth Avenue Associates, LLC. $3,475,000 76,230 1967 Average $40.41

City of Bethlehem, PA Diversified Capital - Bethlehem

6/02 86,000 Average None 100%

2 8 West Market Street Mellon Bank, NA $4,000,000 46,174 1913 Average $23.53City of Wilkes-Barre, PA Citizens Bank of

Pennsylvania11/01 170,000 Average Structured 100%

3 17 West Broad Street Flatrock Partners, LP. $7,200,000 37,462 1974 Average $54.73City of Bethlehem, PA Diversified Capital -

Bethlehem1/01 131,550 Average None 100%

4 101-111 North Fifth Street Berkshire Building Group $3,200,000 20,909 1914 Average $28.88City of Reading, PA Berkshire Realty

Associates, LLC.1/01 110,800 Average None 80%

Subject Property 16,502 1965 Average14,000 Average Surface 64%

Survey Minimum $3,200,000 20,909 1913 $23.53Survey Maximum $7,200,000 76,230 1974 $54.73Survey Average $4,468,750 45,194 1942 $36.89Survey Minimum 1/01 86,000 80%Survey Maximum 6/02 170,000 100%Survey Average 7/01 124,588 95%

This is a ten-story office building situated in the City of Bethlehem.

This property also included a parking garage that included 465 spaces.

This property was 100 percent master leased to Summit Bank at the time of sale. The rent at the time of sale was $6.61/SF, triple net.

This property was 80 percent leased at the time of sale.

SALES COM

PARISON APPRO

ACH V

AL

UA

TIO

N S

ER

VIC

ES

3

2

IMPR

OVED

SALE ADJU

STMEN

T GR

ID

EC

ON

OM

IC A

DJU

STM

ENTS

(CU

MU

LATIV

E)

PR

OPE

RTY

CH

AR

AC

TER

ISTIC

AD

JUS

TME

NTS

(AD

DITIV

E)

No.

Price PSF &D

ate

PropertyR

ightsC

onveyedC

onditionsof Sale

FinancingM

arket*C

onditionsSubtotal

LocationSize

Age,Q

ualityC

onditionN

o. of Stories

ParkingU

tility**Econom

icsO

ther

Adj.PricePSF

Overall

1$40.41

Leased Fee/Mkt.

Arm

s-LengthN

oneInferior

$42.91S

imilar

LargerS

uperiorS

imilar

Sim

ilarS

imilar

Sim

ilarS

imilar

$47.20Inferior

6/020.0%

0.0%0.0%

6.2%6.2%

0.0%15.0%

-5.0%0.0%

0.0%0.0%

0.0%0.0%

10.0%2

$23.53Leased Fee/M

kt.A

rms-Length

None

Inferior$25.44

Sim

ilarLarger

Sim

ilarS

imilar

Sim

ilarS

imilar

Sim

ilarS

imilar

$30.52Inferior

11/010.0%

0.0%0.0%

8.1%8.1%

0.0%20.0%

0.0%0.0%

0.0%0.0%

0.0%0.0%

20.0%3

$54.73Leased Fee/M

kt.A

rms-Length

None

Inferior$60.64

Sim

ilarLarger

Superior

Sim

ilarS

imilar

Sim

ilarS

uperiorS

imilar

$60.64S

uperior1/01

0.0%0.0%

0.0%10.8%

10.8%0.0%

20.0%-5.0%

0.0%0.0%

0.0%-15.0%

0.0%0.0%

4$28.88

Leased Fee/Mkt.

Arm

s-LengthN

oneInferior

$32.00S

imilar

LargerS

imilar

Sim

ilarS

imilar

Sim

ilarS

imilar

Sim

ilar$36.80

Inferior1/01

0.0%0.0%

0.0%10.8%

10.8%0.0%

15.0%0.0%

0.0%0.0%

0.0%0.0%

0.0%15.0%

SALES SUM

MAR

YPrice R

angeU

nadj. Price P

SF

Adj. P

rice PS

F*M

arket Conditions Adjustm

entLow

$23.53$30.52

Com

pound annual change in market conditions:

3.00%H

igh$54.73

$60.64D

ate of Value (for adjustm

ent calculations):6/17/04

Average

$36.89$43.79

** Utility includes loss factor, floor plates, etc.

VALUE C

ON

CLU

SION

Indicated Value per S

quare Foot NR

A$45.00

Net R

entable Area in S

quare Feetx 14,000

Indicated Value

$630,000Less: S

tabilization Expense

$119,131Indicated V

alue$510,869$500,000

4P

er square foot$35.71

Rounded to nearest $25,000



Discussion of Comparable Sales


This is the June 2002 sale of an office property located at 85 East Elizabeth Avenue in the City of Bethlehem, PA. The site contains 76,230 square feet and is improved with an 86,000 square foot building. The improvements were constructed in 1967 and are of average quality. The property sold from Elizabeth Avenue Associates, LLC. to Diversified Capital - Bethlehem for $3,475,000 or $40.41 per square foot. After all adjustments, this comparable indicated an adjusted unit value of $47.20 per square foot. This sale was adjusted upward due to its larger size and improved market conditions and downward for its superior condition.


This is the November 2001 sale of an office property located at 8 West Market Street in the City of Wilkes-Barre, PA. The site contains 46,174 square feet and is improved with a 170,000 square foot building. The improvements were constructed in 1913 and are of average quality. The property sold from Mellon Bank, NA to Citizens Bank of Pennsylvania for $4,000,000 or $23.53 per square foot. After all adjustments, this comparable indicated an adjusted unit value of $30.52 per square foot. This sale was adjusted upward for its larger size and improved market conditions.


This is the January 2001 sale of an office property located at 17 West Broad Street in the City of Bethlehem, PA. The site contains 37,462 square feet and is improved with a 131,550 square foot building. The improvements were constructed in 1974, and are of average quality. The property sold from Flatrock Partners, LP. to Diversified Capital - Bethlehem for $7,200,000 or $54.73 per square foot. After all adjustments, this comparable indicated an adjusted unit value of $60.64 per square foot. This sale was adjusted upward for its larger size and downward for its superior condition. In addition, this sale was adjusted downward as the building was 100 percent master leased to a credit tenant at the time of sale.


This is the January 2001 sale of an office property located at 101-111 North Fifth Street in the City of Reading, PA. The site contains 20,909 square feet and is improved with a 110,800 square foot building. The improvements were constructed in 1914 and are of average quality. The property sold from Berkshire Building Group to Berkshire Realty Associates, LLC. for $3,200,000 or $28.88 per square foot. After all adjustments, this comparable indicated an adjusted unit value of $36.80 per square foot. This sale was adjusted upward for it larger size and improved market conditions.



Summary of Percentage Adjustment Method After adjustments the comparable improved sales reflect unit prices ranging from $30.52 to $60.64 per square foot with an average adjusted price of $43.79 per square foot. Equal emphasis was placed on each sale.

However, the subject property is not operating at a stabilized occupancy level. As such, we have made the appropriate deduction associated with leasing up the subject to a more market-oriented occupancy level. This deduction accounts for rent loss, shortfall in operating expense reimbursement, tenant improvements and leasing commissions. In the case of the subject property, this stabilization expense is placed at $119,131.

Therefore, we conclude that the value via the Sales Comparison Approach, after making the necessary deduction, is as follows:

Net Rentable Area: 14,000 Concluded Price Per Square Foot: x $45.00 Indicated Value: $630,000 Less Stabilization Expense: $119,131

Rounded: $500,000 Per Square Foot: $35.71


INCOME CAPITALIZATION APPROACH

Methodology The Income Capitalization Approach is a method of converting the anticipated economic benefits of owning property into a value through the capitalization process. The principle of “anticipation” underlies this approach in that investors recognize the relationship between an asset’s income and its value. In order to value the anticipated economic benefits of a particular property, potential income and expenses must be projected, and the most appropriate capitalization method must be selected.

The two most common methods of converting net income into value are Direct Capitalization and Discounted Cash Flow. In direct capitalization, net operating income is divided by an overall capitalization rate to indicate an opinion of market value. In the discounted cash flow method, anticipated future cash flows and a reversionary value are discounted to an opinion of net present value at a chosen yield rate (internal rate of return).

Based upon the above, both methods are appropriate in this assignment.

Occupancy Status Wachovia Bank will occupy 9,000 square feet or 64.29 percent of the total NRA for a 20 year term at $5.92 per square foot per annum (Base Rent) increasing 1.5 percent every 5 years of the term. The lease is absolute net whereby the tenant is responsible for all operating expenses (including management) and real estate taxes.

The following chart summarizes the annualized attained base rent and occupancy level of the leases in place as of the appraisal date.

Space Category No. of Tenants Occ. SF Total Rent Avg. $/SF Vct. SF Total SF PercentMarket Rent 1 9,000 $53,280 $5.92 - 9,000 64.3%Other Tenants 0 - $0 N/A 5,000 5,000 35.7%Total/Weighted Average 1 9,000 $53,280 $5.92 5,000 14,000 100.0%Percent 64.3% 35.7%

OCCUPANCY STATUS

On the following page is an attained rent schedule for all tenants in place as of the appraisal date.



ATTAINED RENT SCHEDULE AS OF: July-04

Start End Area Base RentTenant Name Suite # Date Date ( SF ) Per Year Rent/SF

Market RentWachovia 1 Jul-04 Jun-24 9,000 $53,280 $5.921 tenant sub-total 9,000 $53,280 $5.92

GRAND-TOTALS 9,000 $53,280 $5.92

Office Rent Comparables The following table summarizes rental activity for office space in competing buildings in the market.

OFFICE RENT COMPARABLESProperty Location Lease SF Term Rent/ Rent Steps Bldg. Age

No. Tenant Name Date Leased (years) SF Expense Recoveries Bldg. SF Stories TI/SF Comments1

108 North Wasington AvenueScranton, PA 3 $9.00 Flat

1912 renovated

1979 N/AMichael Pisanchyn Law Offices Full service

2 106 North Wasington AvenueScranton, PA

Oct-043 $8.50 $0.50/psf per annum 1979 N/A

Lackawanna County Redevelopment Authority

Full service

3

Reading, PAJul-04

10 $7.79 2% annual increases 1965 N/ACitizens Bank Triple Net

Survey Low: Nov-03 2,666 3 $7.79Survey High: Oct-04 24,185 10 $9.00Survey Mean: May-04 9,992 5 $8.43 N/A

3,124 24,000 Office rent in SNB Building.

24,185 N/A Bank branch/office lease.

Nov-03 2,666 36,623 Office rent in SNB Building.

Conclusion of Market Rent

We have analyzed recent leases negotiated in competitive buildings in the marketplace, which range from $7.79 to $9.00 per square foot, with an average of $8.43. Recovery clauses for the comparable leases are typically written on a full service basis, whereby the tenant pays for increases over base year expenses and electric. Landlords are responsible for base year expenses and capital expenditures. Comparables #1 and #2 were adjusted upward for better quality space (assuming the shell space at the subject is fit-out with the assumed TI). In addition comparable #3 was adjusted upward as it is a triple net lease.

Based upon our analysis of the comparables, we have concluded to a market rent for the Wachovia space of $10.00 per square foot on a full service basis. This assumes a full service lease with a 5 year term.



Market Rent Synopsis The following chart summarizes our market rent conclusion for each tenant category within the subject property.

MARKET RENT ESTIMATEMarket Rent

Market Rent Per Square Foot $10.00

Contract Rent Increase Flat

Lease Type Base Year Stop, Plus

Electric

Lease Term (years) 5

Miscellaneous Revenue None.

Expense Reimbursements Wachovia is responsible for their pro-rata share of real estate taxes and operating expenses (including management). All other existing tenants are assumed to pay increases over base year expenses. Future tenants are assumed to be responsible for their pro rata share of increases over base year real estate taxes and operating expenses while the landlord is responsible for base year expenses and capital expenditures.

Vacancy and Collection Loss Based upon the current vacancy in the market, and our perception of future market vacancy, we have projected a global stabilized vacancy rate of 8.00 percent for all non Bank space. We have also projected a collection loss of 2.00 percent for all non Bank space. The total vacancy and credit loss is therefore 10.00 percent on all non Wachovia space. No vacancy or collection loss was taken on the Wachovia space over their 20 year lease term as the Bank is an investment grade tenant. Upon expiration of this lease, we have assumed a market vacant and collection loss figure.

Absorption of Vacant Space The subject property is presently 64.29 percent occupied. We have estimated the vacant space to be absorbed within nine months.

Operating Expenses We have developed an opinion of the property’s annual operating expenses after reviewing the operating performance of similar buildings. We analyzed each item of expense and developed an opinion as to what a typical informed investor would consider normal. We were provided with the 2003 actual historical expenses on the subject property, but have relied on the expenses of comparable properties as well as published statistics provided by IREM.

Our forecast, and our opinion of Year 2 (stabilized) income and operating expenses are presented on the following page.

INCOM

E CAPITALIZATION APPRO

ACH

VA

LU

AT

ION

SE

RV

ICE

S

38

REVEN

UE AN

D EXPEN

SE ANALYSIS - STAB

ILIZED (YR

. 2)

TotalPer SF

TotalPer SF

POTEN

TIAL GR

OSS R

EVENU

EB

ase Rental R

evenueN

/AN

/A$103,280

$7.38E

xpense Reim

bursement R

evenueN

/AN

/A56,235

4.02

TOTAL PO

TENTIAL G

RO

SS REVEN

UE

N/A

N/A

$159,515$11.39

Vacancy and C

ollection LossN

/AN

/A(5,118)

(0.37)EFFEC

TIVE GR

OSS R

EVENU

EN

/AN

/A$154,397

$11.03

OPER

ATING

EXPENSES

Repairs &

Maintenance

$37,543$2.68

$14,420$1.03

Utilities (excl. tenant electric)

$19,827$1.42

21,6301.55

JanitorialN

/AN

/A10,815

0.77G

eneral & A

dministrative

N/A

N/A

3,6050.26

Security

N/A

N/A

1,4420.10

InsuranceN

/AN

/A2,884

0.21R

oads / Grounds

N/A

N/A

3,6050.26

Managem

entN

/AN

/A3,860

0.28O

ther$20,491

$1.46721

0.05S

ubtotal Operating

$77,861$5.56

$62,982$4.50

Real E

state Taxes18,576

1.33$22,660

$1.62

TOTAL EXPEN

SES$96,437

$6.89$85,642

$6.12

NET O

PERATIN

G IN

CO

ME

N/A

N/A

$68,755$4.91

2003C

&W

Forecast (1)



Total operating expenses excluding real estate taxes are estimated at $62,982 equating to $4.50 per square foot or $6.12 per square foot inclusive of taxes. The following expense comparisons support our opinion of operating expenses for the subject.

Property Size (SF) ExpenseYearOperating

Expenses/SFScranton, PA 36,686 2003 $4.16

Wilkes-Barre, PA 68,197 2003 $6.25

Moosic, PA 27,526 2003 $6.83

Survey Low $4.16Survey High $6.83Survey Average $5.75

OPERATING EXPENSE COMPARABLES



Income and Expense Pro Forma The following chart is our opinion of income and expenses for the stabilized year.

REVENUE AND EXPENSE ANALYSIS - STABILIZED (YR. 2)

2004/2005 $/SFPOTENTIAL GROSS REVENUE

Base Rental Revenue $103,280 $7.38Expense Reimbursement Revenue 56,235 4.02

TOTAL POTENTIAL GROSS REVENUE $159,515 $11.39Vacancy and Collection Loss (5,118) (0.37)

EFFECTIVE GROSS REVENUE $154,397 $11.03

OPERATING EXPENSESRepairs & Maintenance $14,420 $1.03Utilities (excl. tenant electric) 21,630 1.55Janitorial 10,815 0.77General & Administrative 3,605 0.26Security 1,442 0.10Insurance 2,884 0.21Roads / Grounds 3,605 0.26Management 3,860 0.28Other 721 0.05Subtotal Operating $62,982 $4.50

Real Estate Taxes $22,660 $1.62

TOTAL EXPENSES $85,642 $6.12

NET OPERATING INCOME $68,755 $4.91

Capitalization Rate Selection In addition, we have considered the Korpacz Real Estate Investor Survey.

Property Type Date Going-In Cap Rate

Range

Going-In Cap Rate Average

National Suburban Office Q1-2004 7.0%-12.0% 9.34% National CBD Office Q1-2004 6.0%-10.50% 8.77% National Net Lease Q1-2004 6.8%-10.25% 8.28%

Our observations and analysis suggest that a going-in capitalization rate of 8.50 percent represents reasonable investor criteria under current market conditions. In choosing our



capitalization rate, we have considered the amount of space that Wachovia occupies over the 20 year lease term.

Direct Capitalization Method Conclusion In the Direct Capitalization Method, we developed an opinion of market value by dividing Year 2 net operating income by a 8.50 percent overall capitalization rate. Our conclusion via the Direct Capitalization Method is as follows:

NET OPERATING INCOME $68,755 $4.91

Sensitivity Analysis (0.50% OAR Spread) Value $/SF NRABased on Low-Range of 8.00% $859,438 $61.39Based on Most Probable Range of 8.50% $808,882 $57.78Based on High-Range of 9.00% $763,944 $54.57

Reconciled Value $808,882 $57.78Less Stabilization Expense: $119,131 $8.51Indicated Value: $689,751 $49.27Rounded to nearest $25,000 $700,000 $50.00

Direct Capitalization Method

Once again, the subject property is not operating at a stabilized occupancy level. Because we have utilized Year 2 income and expenses (the first stabilized year), we have made the appropriate deduction associated with leasing up the subject over the first year. This deduction accounts for rent loss, shortfall in operating expense reimbursement, tenant improvements and leasing commissions. In the case of the subject property, this stabilization expense is placed at $119,131.



Discounted Cash Flow Method In the Discounted Cash Flow Method, we employed Argus software to model the income characteristics of the property and to make a variety of cash flow assumptions. We attempted to reflect the most likely investment assumptions of typical buyers and sellers in this particular market segment. The following table illustrates the assumptions used in the discounted cash flow analysis.

Discounted Cash Flow Assumptions

DISCOUNTED CASH FLOWMODELING ASSUMPTIONS

Holding Period: 21 YearsProjection Period: 22 YearsStart Date: 7/1/2004

RESERVES FOR REPLACEMENT (PSF) $0.15

VACANCY & COLLECTION LOSSGlobal Vacancy: 8.00%Collection Loss: 2.00%Total: 10.00%

GROWTH RATESMarket Rent: 3.00%Consumer Price Index (CPI): 3.00%Expenses: 3.00%Real Estate Taxes: 3.00%

RATES OF RETURNInternal Rate of Return: 9.00%Terminal Capitalization Rate: 9.50%Reversionary Sales Cost: 3.00%



LEASING ASSUMPTIONS Market RentMarket Rent Per Square Foot $10.00Contract Rent Increase Flat

Lease Type Base Year Stop, Plus

ElectricLease Term (years) 5

Free Rent on New Leases (months) 0Free Rent on Renewals (months) 0

Downtime Between New Leases 9Renewal Probability 70.00%

TENANT IMPROVEMENTS (PSF) Market RentNew Leases $10.00Renewals $2.00First Generation (shell) $15.00

Leasing Commissions: 4.2 percent of total rent for new leases; 2.1 percent of total rent for

renewal leases. Tenant Improvements: The second and third floor office space was in shell-like condition as of

the date of inspection. However, it appears that this space could be renovated and rented. We have estimated an initial tenant improvement allowance for this portion of the building of $15.00 per square foot.

Contract Rent Increases: Leases are assumed to flat. Expense Reimbursements: Future tenants are assumed to be responsible for their pro rata share of

increases over base year real estate taxes and operating expenses while the landlord is responsible for base year expenses and capital expenditures.

Capital Expenditures: The building was in average condition at the time of our inspection. We do not foresee any major capital expenditures in the near future.

Terminal Capitalization Rate Selection

A terminal capitalization rate was used to develop an opinion of the market value of the property at the end of the assumed investment holding period. The rate is applied to the net operating income in year 22 before making deductions for leasing commissions, tenant improvement allowances and reserves for replacement. We have developed an opinion of an appropriate terminal capitalization rate based on indicated rates in current investor surveys.



Property Type Date Terminal Cap Rate Range

Terminal Cap Rate Average


As a result, we have applied a 9.50 percent terminal capitalization rate in our analysis.

Discount Rate Selection

As previously discussed, Wachovia Bank leased a large part or the entire building for a 20 year term. According to Standard and Poors, they are currently considered to be an investment grade tenant with rating of A.

In order to determine an appropriate yield rate to discount our cash flow projections, we have researched Wachovia Bank’s long term bond yields and compared them to U.S. Treasuries. According to Bloomberg, Wachovia Bank currently has bonds maturing August 15, 2015 (in approximately 11.2 years) that are yielding 5.813 percent. Current U.S. Treasuries for a 11.2 year term are yielding 4.797 percent. Therefore, the premium over the U.S. Treasury yield associated with the Wachovia Bank bond yield is 1.016 percent (5.813% less 4.797%). Since the Wachovia Bank lease is for 20 years, we have looked at the U.S. Treasury yield on a 20 year term. As of June 3, 2004, 20 year treasuries are yielding 5.15 percent. When we add to this the Wachovia premium of 1.016 percent, a rate of 6.166 percent is derived. We have then added an additional premium of 100 to 200 basis points to this rate for illiquidity and management, which results in a yield rate range of 7.166 percent to 8.166 percent.

We have also looked at the Korpacz Real Estate Investor Survey which indicates the following internal rates of return.

Property Type Date IRR Range

IRR Average


The above table summarizes the investment parameters of some of the most prominent investors currently acquiring similar investment properties in the United States. We realize that this type of survey reflects target rather than transactional rates. Transactional rates are usually difficult to obtain in the verification process and are actually only target rates of the buyer at the time of sale. The property’s performance will ultimately determine the actual yield at the time of sale after a specific holding period.

Based upon the amount of income derived from the Wachovia Bank lease as it relates to total cash flow, we have discounted our cash flow and reversionary value projections at an internal rate of return of 9.00 percent.

Discounted Cash Flow Method Conclusion

Based on the discount rates selected, market value is estimated at $550,000, rounded. Our cash flow projections and value derivation are presented on the following pages.

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ent R

even

ue

5

2,93

1

56,

235

5

8,75

0

61,

342

6

4,00

5

65,

325

6

3,70

5

66,

620

6

9,62

0

72,

712

7

5,91

8

73,

539

7

7,20

7

TOTA

L P

OTE

NTI

AL

GR

OS

S R

EV

EN

UE

1

18,7

11

1

59,5

15

1

62,0

30

1

64,6

22

1

67,2

85

1

56,9

04

1

77,4

87

1

80,4

02

1

83,4

02

1

86,4

94

1

90,5

11

1

80,3

38

2

01,3

09

Gen

eral

Vac

ancy

(

1,00

0)

(4,

094)

(

4,16

6)

(4,

240)

(

4,31

6)

(4,

776)

(

4,86

0)

(4,

945)

(

5,03

4)

(5,

125)

(

5,64

2) C

olle

ctio

n Lo

ss

(2

50)

(

1,02

4)

(1,

042)

(

1,06

0)

(1,

079)

(823

)

(1,

194)

(

1,21

5)

(1,

236)

(

1,25

8)

(1,

281)

(

1,03

8)

(1,

410)

EFF

EC

TIV

E G

RO

SS

RE

VE

NU

E

117

,461

154

,397

156

,822

159

,322

161

,890

156

,081

171

,517

174

,327

177

,221

180

,202

184

,105

179

,300

194

,257

OP

ER

ATI

NG

EX

PE

NS

ES

R

epai

rs a

nd M

aint

.

14,

000

1

4,42

0

14,

853

1

5,29

8

15,

757

1

6,23

0

16,

717

1

7,21

8

17,

735

1

8,26

7

18,

815

1

9,37

9

19,

961

Util

ities

2

1,00

0

21,

630

2

2,27

9

22,

947

2

3,63

6

24,

345

2

5,07

5

25,

827

2

6,60

2

27,

400

2

8,22

2

29,

069

2

9,94

1 J

anito

rial

10,

500

1

0,81

5

11,

139

1

1,47

4

11,

818

1

2,17

2

12,

538

1

2,91

4

13,

301

1

3,70

0

14,

111

1

4,53

4

14,

970

G&

A

3,

500

3,60

5

3,

713

3,82

5

3,

939

4,05

7

4,

179

4,30

5

4,

434

4,56

7

4,

704

4,84

5

4,

990

Sec

urity

1,40

0

1,

442

1,48

5

1,

530

1,57

6

1,

623

1,67

2

1,

722

1,77

3

1,

827

1,88

1

1,

938

1,99

6 In

sura

nce

2,

800

2,88

4

2,

971

3,06

0

3,

151

3,24

6

3,

343

3,44

4

3,

547

3,65

3

3,

763

3,87

6

3,

992

Roa

ds/G

roun

ds

3,

500

3,60

5

3,

713

3,82

5

3,

939

4,05

7

4,

179

4,30

5

4,

434

4,56

7

4,

704

4,84

5

4,

990

Man

agem

ent

2,

937

3,86

0

3,

921

3,98

3

4,

047

3,90

2

4,

288

4,35

8

4,

431

4,50

5

4,

603

4,48

3

4,

856

Oth

er

700

7

21

743

7

65

788

8

11

836

8

61

887

9

13

941

9

69

998

R

eal E

stat

e Ta

xes

22,

000

2

2,66

0

23,

340

2

4,04

0

24,

761

2

5,50

4

26,

269

2

7,05

7

27,

869

2

8,70

5

29,

566

3

0,45

3

31,

367

TOTA

L O

PE

RA

TIN

G E

XP

EN

SE

S

8

2,33

7

85,

642

8

8,15

7

90,

747

9

3,41

2

95,

947

9

9,09

6

102

,011

105

,013

108

,104

111

,310

114

,391

118

,061

NE

T O

PE

RA

TIN

G IN

CO

ME

35,

124

6

8,75

5

68,

665

6

8,57

5

68,

478

6

0,13

4

72,

421

7

2,31

6

72,

208

7

2,09

8

72,

795

6

4,90

9

76,

196

LEA

SIN

G &

CA

PIT

AL

CO

STS

Ten

ant I

mpr

ovem

ents

7

5,00

0

26,

269

3

0,45

3 L

easi

ng C

omm

issi

ons

1

0,50

0

8,

149

9,44

7 R

eser

ves

2,10

0

2,

163

2,22

8

2,

295

2,36

4

2,

434

2,50

8

2,

583

2,66

0

2,

740

2,82

2

2,

907

2,99

4

TOTA

L LE

AS

ING

& C

AP

ITA

L C

OS

TS

87,

600

2,16

3

2,

228

2,29

5

2,

364

2,43

4

36,

926

2,58

3

2,

660

2,74

0

2,

822

4

2,80

7

2,

994

CA

SH

FLO

W B

EFO

RE

DE

BT

SE

RV

ICE

($

52,4

76)

$

66,5

92

$

66,4

37

$

66,2

80

$

66,1

14

$

57,7

00

$

35,4

95

$

69,7

33

$

69,5

48

$

69,3

58

$

69,9

73

$

22,1

02

$

73,2

02

& T

AX

ES

===

====

===

===

====

===

===

====

===

===

====

===

===

====

===

===

====

===

===

====

===

===

====

===

===

====

===

===

====

===

===

====

===

===

====

===

===

====

===

Softw

are : A

RG

US

Ver. 11.0.03

Mount C

armel

Date

: 9/2/04 File

: PA

_MtC

armel_036131

50 West 3rd S

treet Tim

e : 20:53

Property Type

: Office/Industrial

Mount C

armel, P

A

Ref#

: AD

J P

ortfolio :

Page

: 2 S

CH

ED

ULE

OF P

RO

SP

EC

TIVE

CA

SH

FLOW

In Inflated Dollars for the Fiscal Y

ear Beginning 7/1/2004

Year 14

Year 15

Year 16

Year 17

Year 18

Year 19

Year 20

Year 21

Year 22

For the Years E

nding Jun-2018

Jun-2019 Jun-2020

Jun-2021 Jun-2022

Jun-2023 Jun-2024

Jun-2025 Jun-2026

PO

TEN

TIAL G

RO

SS

RE

VE

NU

E

Base R

ental Revenue

$124,102 $124,102

$124,926 $133,194

$135,949 $135,949

$135,949 $242,786

$249,175 A

bsorption & Turnover V

acancy (20,059)

(40,638) (23,254)

Scheduled B

ase Rental R

evenue 124,102

124,102 124,926

113,135 135,949

135,949 135,949

202,148 225,921

Expense R

eimbursem

ent Revenue

80,688 84,271

87,984 86,708

89,388 93,419

97,576 5,696

6,751

TOTA

L PO

TEN

TIAL G

RO

SS

RE

VE

NU

E

204,790 208,373

212,910 199,843

225,337 229,368

233,525 207,844

232,672 G

eneral Vacancy

(5,741) (5,844)

(5,950) (6,541)

(6,656) (6,775)

(6,874) (13,248)

Collection Loss

(1,435) (1,461)

(1,487) (1,181)

(1,635) (1,664)

(1,694) (4,157)

(4,653)

EFFE

CTIV

E G

RO

SS

RE

VE

NU

E

197,614 201,068

205,473 198,662

217,161 221,048

225,056 196,813

214,771

OP

ER

ATIN

G E

XP

EN

SE

S

Repairs and M

aint. 20,559

21,176 21,812

22,466 23,140

23,834 24,549

25,286 26,044

Utilities

30,839 31,764

32,717 33,699

34,710 35,751

36,824 37,928

39,066 Janitorial

15,420 15,882

16,359 16,849

17,355 17,876

18,412 18,964

19,533 G

&A

5,140

5,294 5,453

5,616 5,785

5,959 6,137

6,321 6,511

Security

2,056 2,118

2,181 2,247

2,314 2,383

2,455 2,529

2,604 Insurance

4,112 4,235

4,362 4,493

4,628 4,767

4,910 5,057

5,209 R

oads/Grounds

5,140 5,294

5,453 5,616

5,785 5,959

6,137 6,321

6,511 M

anagement

4,940 5,027

5,137 4,967

5,429 5,526

5,626 4,920

5,369 O

ther 1,028

1,059 1,091

1,123 1,157

1,192 1,227

1,264 1,302

Real E

state Taxes 32,308

33,277 34,275

35,304 36,363

37,454 38,577

39,734 40,926

TOTA

L OP

ER

ATIN

G E

XP

EN

SE

S

121,542 125,126

128,840 132,380

136,666 140,701

144,854 148,324

153,075

NE

T OP

ER

ATIN

G IN

CO

ME

76,072

75,942 76,633

66,282 80,495

80,347 80,202

48,489 61,696

LEA

SIN

G &

CA

PITA

L CO

STS

Tenant Improvem

ents 35,304

71,522 40,926

Leasing Com

missions

10,952 22,188

12,697 R

eserves 3,084

3,176 3,272

3,370 3,471

3,575 3,682

3,793 3,907

TOTA

L LEA

SIN

G &

CA

PITA

L CO

STS

3,084

3,176 3,272

49,626 3,471

3,575 3,682

97,503 57,530

CA

SH

FLOW

BE

FOR

E D

EB

T SE

RV

ICE

$72,988

$72,766 $73,361

$16,656 $77,024

$76,772 $76,520

($49,014) $4,166

& TA

XE

S

========== ========== ========== ========== ========== ========== ========== ========== ==========

Sof

twar

e

: A

RG

US

Ver

. 11.

0.03

Mou

nt C

arm

el

D

ate

: 9/2

/04

Fi

le

: P

A_M

tCar

mel

_036

131

5

0 W

est 3

rd S

treet

T

ime

: 20:

53

Pro

perty

Typ

e : O

ffice

/Indu

stria

l

Mou

nt C

arm

el, P

A

R

ef#

: AD

J

P

ortfo

lio

:

P

age

: 3

PR

OS

PE

CTI

VE

PR

ES

EN

T V

ALU

EC

ash

Flow

Bef

ore

Deb

t Ser

vice

plu

s P

rope

rty R

esal

eD

isco

unte

d A

nnua

lly (E

ndpo

int o

n C

ash

Flow

& R

esal

e) o

ver a

21-

Yea

r Per

iod

For t

he

P

.V. o

f

P.V

. of

P

.V. o

f A

naly

sis

Y

ear

Ann

ual

Cas

h Fl

ow

Cas

h Fl

ow

Cas

h Fl

owP

erio

d

E

ndin

g

Cas

h Fl

ow

@

8.7

5%

@

9.0

0%

@

9.2

5%

Yea

r 1

Jun-

2005

($52

,476

)

($48

,254

)

($48

,143

)

($48

,033

)Y

ear

2

Ju

n-20

06

6

6,59

2

56,

307

5

6,04

9

55,

793

Yea

r 3

Jun-

2007

66,

437

5

1,65

7

51,

302

5

0,95

0 Y

ear

4

Ju

n-20

08

6

6,28

0

47,

387

4

6,95

4

46,

526

Yea

r 5

Jun-

2009

66,

114

4

3,46

6

42,

970

4

2,48

0 Y

ear

6

Ju

n-20

10

5

7,70

0

34,

882

3

4,40

4

33,

935

Yea

r 7

Jun-

2011

35,

495

1

9,73

1

19,

417

1

9,10

8 Y

ear

8

Ju

n-20

12

6

9,73

3

35,

646

3

4,99

7

34,

362

Yea

r 9

Jun-

2013

69,

548

3

2,69

0

32,

022

3

1,36

8 Y

ear 1

0

Ju

n-20

14

6

9,35

8

29,

978

2

9,29

7

28,

634

Yea

r 11

Jun-

2015

69,

973

2

7,81

1

27,

117

2

6,44

2 Y

ear 1

2

Ju

n-20

16

2

2,10

2

8,

078

7,85

8

7,

645

Yea

r 13

Jun-

2017

73,

202

2

4,60

0

23,

877

2

3,17

6 Y

ear 1

4

Ju

n-20

18

7

2,98

8

22,

555

2

1,84

1

21,

152

Yea

r 15

Jun-

2019

72,

766

2

0,67

7

19,

977

1

9,30

2 Y

ear 1

6

Ju

n-20

20

7

3,36

1

19,

169

1

8,47

8

17,

813

Yea

r 17

Jun-

2021

16,

656

4,00

2

3,

849

3,70

1 Y

ear 1

8

Ju

n-20

22

7

7,02

4

17,

017

1

6,32

8

15,

669

Yea

r 19

Jun-

2023

76,

772

1

5,59

8

14,

932

1

4,29

6 Y

ear 2

0

Ju

n-20

24

7

6,52

0

14,

295

1

3,65

3

13,

042

Yea

r 21

Jun-

2025

(49,

014)

(

8,42

0)

(8,

023)

(

7,64

7)

Tot

al C

ash

Flow

1,0

97,1

31

4

68,8

72

4

59,1

56

4

49,7

14

Pro

perty

Res

ale

@ 9

.50%

Cap

6

29,9

49

1

08,2

16

1

03,1

21

9

8,27

8

Tot

al P

rope

rty P

rese

nt V

alue

$577

,088

$562

,277

$547

,992

=

====

====

= =

====

====

= =

====

====

= R

ound

ed to

Tho

usan

ds

$577

,000

$562

,000

$548

,000

=

====

====

= =

====

====

= =

====

====

= P

er S

qFt

41

.22

40.1

6

39

.14

PE

RC

EN

TAG

E V

ALU

E D

ISTR

IBU

TIO

N

Ass

ured

Inco

me

8

6.66

%

8

7.35

%

8

8.03

%

Pro

spec

tive

Inco

me

(

5.41

%)

(

5.69

%)

(

5.96

%)

Pro

spec

tive

Pro

perty

Res

ale

18.

75%

18.

34%

17.

93%

=

====

====

= =

====

====

= =

====

====

=

100

.00%

100

.00%

100

.00%



Reconciliation Within the Income Capitalization Approach

SUMMARY OF INCOME CAPITALIZATION METHODS Value Per Sq. Ft.Value Indicated by the Discounted Cash Flow Method: $550,000 $39.29Value Indicated by the Direct Capitalization Method: $700,000 $50.00

We have placed greater reliance on the discounted cash flow analysis. Therefore, our opinion of market value via the Income Capitalization Approach is as follows:

Value Conclusion: $550,000 $39.29


RECONCILIATION AND FINAL VALUE OPINION

Valuation Methodology Review and Reconciliation This appraisal employs all three typical approaches to value: the Cost Approach, the Sales Comparison Approach and the Income Capitalization Approach. Based on our analysis and knowledge of the subject property type and relevant investor profiles, it is our opinion that all approaches would be considered meaningful and applicable in developing a credible value conclusion.

The approaches indicated the following:

Cost Approach: $600,000 Sales Comparison Approach: $500,000 Income Capitalization Approach: $550,000

Because the subject property is leased on a long-term basis to a credit tenant, we have given most weight to the Income Capitalization Approach This mirrors the methodology that a purchaser of a property like the subject would place most emphasis on.

Based on our Complete Appraisal as defined by the Uniform Standards of Professional Appraisal Practice, we have developed an opinion that the “as is” market value of the Leased Fee estate of the referenced property, subject to the assumptions, limiting conditions, certifications, and definitions, on June 17, 2004 was:

FIVE HUNDRED FIFTY THOUSAND DOLLARS

$550,000


“AS DARK” VALUE

In order to estimate the “As Dark” Value, we have utilized the Direct Capitalization Method of the Income Capitalization Approach. We first derived the Fee Simple Stabilized Market Value by estimating market lease terms for the entire building which is assumed to be vacant. We then deducted rent loss based upon an assumed average lease-up period, tenant improvements, leasing commissions, and operating expenses and real estate taxes over the absorption period to derive “As Dark” Value.

Our market rent and expense estimates were based upon the rent and expense comparables cited in the previous section of the report.

Our vacancy estimate was based upon current market vacancy and our perception of average vacancy over the long term.

The capitalization rate was based upon the improved sales illustrated in the Sales Comparison Approach and the Korpacz Real Estate Investor Survey previously cited.

We have assumed a lease-up to stabilized occupancy of 9 months. As this lease-up is assumed to occur evenly over the 9 month absorption period, we have used an average of 9 months to calculate rent loss.

Tenant improvements, leasing commissions and holding costs were based up on our conclusions within the previous section of the report.

Please refer to the following two charts for our derivation of “As Dark” Value.

“AS DARK” VALUE


MARKET VALUE - FEE SIMPLE - STABILIZED

Building Area (sf) 14,000

SF Mkt Rate/SF Income Total Income Avg.Rent/sfWachovia Space 9,000 $10.00 $90,000 $140,000 $10.00Non Bank Space 5,000 $10.00 $50,000 $6.10

$3.90

POTENTIAL GROSS INCOME Size Avg.Rent/sf14,000 $3.90 $54,600

RECOVERIESR.E. Taxes $22,660Operating Expenses $62,982Total Recoveries $85,642

TOTAL GROSS INCOME $140,242

LESS: Vacancy 10.00% $14,024

EFFECTIVE GROSS INCOME $126,218

EXPENSESRecoverableR.E. Taxes $1.62 psf $22,660Operating Expenses $4.50 psf $62,982UnrecoverableReserves $0.15 psf $2,100

Total Expenses $87,742

NET OPERATING INCOME $38,476

VALUE CONCLUSION-STABILIZED FEE SIMPLEOverall Capitalization Rate 9.50%Value Conclusion via Income Capitalization Approach $405,008

ROUNDED: $400,000Per SF $28.57

NNN Average RentLess: Operating Expenses

“AS DARK” VALUE


"AS DARK" MARKET VALUE ESTIMATE

ASSUMPTIONS

BUILDING SQUARE FOOTAGE 14,000

ESTIMATED AVERAGE LEASE-UP PERIOD ( in months ) 9

ESTIMATED TENANT IMPROVEMENTS / SF $10.00

ESTIMATED LEASING COMMISSIONS / SF $0.82

ESTIMATED YEAR 1 MARKET RENT $54,600

ESTIMATED YEAR ONE R.E.TAXES $22,660ESTIMATED YEAR ONE OPERATING EXPENSES $62,982ESTIMATED YEAR ONE R.E.TAXES AND OPERATING $85,642

FEE SIMPLE STABILIZED MARKET VALUE $400,000

Less: Rent Loss $40,950 Tenant Improvements $140,000 Leasing Commissions $11,466 Real Estate Taxes and Operating $64,232 Total Lease-Up Cost Deduction $256,648

"AS DARK" MARKET VALUE $143,353

ROUNDED $150,000Per SF $10.71


INSURABLE VALUE

Insurable Value is directly related to the portion of the real estate which is covered under the asset’s insurance policy. We have based this opinion on the building’s replacement cost new (RCN) which has no direct correlation with its actual market value.

The replacement cost new is the total construction cost of a new building built using modern technology, materials, standards and design, but built to the same specifications of and with the same utility as the building being appraised. For insurance purposes, replacement cost new includes all direct costs necessary to construct the building improvements. Items which are not considered include land value, site improvements, indirect costs, accrued depreciation and entrepreneurial profit. To develop an opinion of insurable value, exclusions for below-grade foundations and architectural fees must be deducted from replacement cost new.

We developed an opinion of replacement cost new by using the Calculator Cost Method developed by Marshall Valuation Service, a nationally recognized cost estimating company which estimates construction costs for all types of improvements. Marshall Valuation Service revises its cost factors monthly and adjusts them to reflect regional and local cost variations.

INSURABLE VALUE

Replacement Cost New (RCN) GBA (SF) $/GBA Sub-TotalBuilding Improvements

Base Cost 14,000 $149.70 $2,095,800Sprinklers 14,000 0.00 0Subtotal 14,000 $149.70 $2,095,800

MultipliersCurrent Cost 1.060 Local Area 1.010 Perimeter 1.000 Building Height 1.000 Product of Multipliers x 1.071

Adjusted Base Building Cost $2,243,763Less: Insurance Exclusions

Foundations Below Grade -5.00%Piping Below Grade (Negligible) 0.00%Architect Fees -6.00%Total Insurance Exclusion Adjustment -11.00% ($246,814)

Insurable Value $1,996,949Rounded to nearest $100,000 6 $2,000,000

Source: Marshall Valuation Service Section: 15 Quality: GoodPage: 21 Class: CDate: 11/03 Type: Bank/Branches


ASSUMPTIONS AND LIMITING CONDITIONS

"Appraisal" means the appraisal report and opinion of value stated therein, to which these Assumptions and Limiting Conditions are annexed.

"Property" means the subject of the Appraisal.

"C&W" means Cushman & Wakefield, Inc. or its subsidiary which issued the Appraisal.

"Appraiser" or “Appraisers” means the employee(s) of C&W who prepared and signed the Appraisal.

General Assumptions This appraisal is made subject to the following assumptions and limiting conditions:

1. No opinion is intended to be expressed and no responsibility is assumed for the legal description or for any matters which are legal in nature or require legal expertise or specialized knowledge beyond that of a real estate appraiser. Title to the Property is assumed to be good and marketable and the Property is assumed to be free and clear of all liens unless otherwise stated. No survey of the Property was undertaken.

2. The information contained in the Appraisal or upon which the Appraisal is based has been gathered from sources the Appraiser assumes to be reliable and accurate. Some of such information may have been provided by the owner of the Property. Neither the Appraiser nor C&W shall be responsible for the accuracy or completeness of such information, including the correctness of opinions, dimensions, sketches, exhibits and factual matters.

3. The opinion of value is only as of the date stated in the Appraisal. Changes since that date in external and market factors or in the Property itself can significantly affect property value.

4. The Appraisal is to be used in whole and not in part. No part of the Appraisal shall be used in conjunction with any other appraisal. Publication of the Appraisal or any portion thereof without the prior written consent of C&W is prohibited. Except as may be otherwise stated in the letter of engagement, the Appraisal may not be used by any person other than the party to whom it is addressed or for purposes other than that for which it was prepared. No part of the Appraisal shall be conveyed to the public through advertising, or used in any sales or promotional material without C&W's prior written consent. Reference to the Appraisal Institute or to the MAI designation is prohibited, except as it relates to the collaboration between C&W and the Appraisal Institute relative to the Real Estate Outlook publication.

5. Except as may be otherwise stated in the letter of engagement, the Appraiser shall not be required to give testimony in any court or administrative proceeding relating to the Property or the Appraisal.

6. The Appraisal assumes (a) responsible ownership and competent management of the Property; (b) there are no hidden or unapparent conditions of the Property, subsoil or structures that render the Property more or less valuable (no responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them); (c) full compliance with all applicable federal, state and local zoning and environmental regulations and laws, unless noncompliance is stated, defined and analyzed in the Appraisal; and (d) all required licenses, certificates of occupancy and other governmental consents have been or can be obtained and renewed for any use on which the value opinion contained in the Appraisal is based.

7. The physical condition of the improvements analyzed within the Appraisal is based on visual inspection by the Appraiser or other person identified in the Appraisal. C&W assumes no



responsibility for the soundness of structural members nor for the condition of mechanical equipment, plumbing or electrical components.

8. The projected potential gross income referred to in the Appraisal may be based on lease summaries provided by the owner or third parties. The Appraiser has not reviewed lease documents and assumes no responsibility for the authenticity or completeness of lease information provided by others. C&W recommends that legal advice be obtained regarding the interpretation of lease provisions and the contractual rights of parties.

9. The projections of income and expenses are not predictions of the future. Rather, they are the Appraiser's opinion of current market thinking on future income and expenses. The Appraiser and C&W make no warranty or representation that these projections will materialize. The real estate market is constantly fluctuating and changing. It is not the Appraiser's task to predict or in any way warrant the conditions of a future real estate market; the Appraiser can only reflect what the investment community, as of the date of the Appraisal, envisages for the future in terms of rental rates, expenses, supply and demand.

10. Unless otherwise stated in the Appraisal, the existence of potentially hazardous or toxic materials which may have been used in the construction or maintenance of the improvements or may be located at or about the Property was not analyzed in arriving at the opinion of value. These materials (such as formaldehyde foam insulation, asbestos insulation and other potentially hazardous materials) may adversely affect the value of the Property. The Appraisers are not qualified to detect such substances. C&W recommends that an environmental expert be employed to determine the impact of these matters on the opinion of value.

11. Unless otherwise stated in the Appraisal, compliance with the requirements of the Americans With Disabilities Act of 1990 (ADA) has not been analyzed in arriving at the opinion of value. Failure to comply with the requirements of the ADA may adversely affect the value of the property. C&W recommends that an expert in this field be employed.

12. Additional work requested by the client beyond the scope of this assignment will be billed at our prevailing hourly rate. Preparation for court testimony, update valuations, additional research, depositions, travel or other proceedings will be billed at our prevailing hourly rate, plus reimbursement of expenses.

13. The reader acknowledges that Cushman & Wakefield of Pennsylvania has been retained hereunder as an independent contractor to perform the services described herein and nothing in this agreement shall be deemed to create any other relationship between us. This assignment shall be deemed concluded and the services hereunder completed upon delivery to you of the appraisal report discussed herein.

14. This study has not been prepared for use in connection with litigation and this document is not suitable for use in a litigation action. Accordingly, no rights to expert testimony, pretrial or other conferences, deposition, or related services are included with this appraisal. If, as a result of this undertaking, C&W or any of its principals, its appraisers or consultants are requested or required to provide any litigation services, such shall be subject to the provisions of the C&W engagement letter or, if not specified therein, subject to the reasonable availability of C&W and/or said principals or appraisers at the time and shall further be subject to the party or parties requesting or requiring such services paying the then-applicable professional fees and expenses of C&W either in accordance with the provisions of the engagement letter or arrangements at the time, as the case may be.



Extraordinary Assumptions An extraordinary assumption is defined as “an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal or economic characteristics of the subject property or about conditions external to the property, such as market conditions or trends, or the integrity of data used in an analysis” (USPAP).

The appraisal employs the following extraordinary assumptions: 1) All existing leases to third party tenants on non Wachovia Bank space are assumed to be gross whereby the landlord is responsible for all expenses. All renewal options on this space are not assumed to be exercised. 2) All space on a month to month basis is assumed to be vacant. 3) The annual Base Rent for the Wachovia Bank space over the first 5 years of the lease is assumed to be $5.92 per square foot increasing 1.5 percent every 5 years over the 20 year initial lease term. 4) We have assumed the 20 year Wachovia Bank lease commences as of our effective date of valuation and that none of the six 5 year renewal options are exercised as it is uncertain as to the Bank’s needs in 20 years. 5) The building square footage used to estimate market value is based upon information supplied to us by the buyer. We have assumed that this figure is an accurate reflection of the subject building's size.

Hypothetical Conditions A hypothetical condition is defined as “that which is contrary to what exists, but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property or about conditions external to the property, such as market conditions or trends, or the integrity of data used in an analysis” (USPAP).

This appraisal employs the following hypothetical condition: 1) As the subject property is leased, the "As Dark" Value assumes the entire property is vacant and available for lease at current market terms.


CERTIFICATION OF APPRAISAL

We certify that, to the best of our knowledge and belief:

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

2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions.

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

4. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

5. Our engagement in this assignment was not contingent upon developing or reporting predetermined results.

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

7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation and the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute.

8. Daniel C. Rudderow made a personal inspection of the property that is the subject of this report. Gerald B. McNamara, MAI, Managing Director, Valuation Advisory Services, reviewed and approved the report but did not inspect the property.

9. No one provided significant real property appraisal assistance to the persons signing this report.

10. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

11. As of the date of this report, Appraisal Institute continuing education Gerald B. McNamara, MAI is current.

Daniel C. Rudderow Appraiser PA Certified General Appraiser License No. GA003341

Gerald B. McNamara, MAI Managing Director PA Certified General Appraiser License No. GA000267L


ADDENDA

Addenda Contents ADDENDUM A: Argus Rent Roll

ADDENDUM B: Argus Lease Expiration – First Term

ADDENDUM C: Qualifications of the Appraisers

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PROFESSIONAL QUALIFICATIONS Daniel C. Rudderow Staff Appraiser, Valuation Services, Advisory Group Mr. Rudderow joined Cushman and Wakefield as a junior appraiser in November 1999 and was trained under the direction of Michael A. Lagreca, MAI, Associate Director of the Philadelphia Office. After a three-year training period, Mr. Rudderow was designated a Staff Appraiser in January 2003. Experience Appraisal and consulting assignments have included office buildings, shopping centers, industrial complexes, commercial properties, apartment complexes, investment properties and vacant land, principally in Pennsylvania, New Jersey and Delaware. Education Muhlenberg College, Allentown, Pennsylvania Bachelor of Arts - 1999 Appraisal Education Appraisal Institute, Chicago, Illinois Course 110:Appraisal Principles –2000 Course 120:Appraisal Procedures-2000 Course 310: Basic Income Capitalization – 2000 Course 410:Standards of Professional Practice, Part A 1999 Course 510: Advanced Income Capitalization - 2001 Course 540 Report Writing and Valuation Analysis - 2002 Professional Affiliations Affiliate member, Appraisal Institute Associate Private Member, Urban Land Institute

PROFESSIONAL QUALIFICATIONS Gerald B. McNamara, MAI Managing Director, Valuation Services, Advisory Group Following college, Mr. McNamara worked for 11 years (1973 to 1984) in branch operations for Beneficial Savings Bank of Philadelphia attaining the rank of Assistant Vice President. Mr. McNamara joined Cushman and Wakefield as a staff appraiser in 1984. Received the MAI designation of the Appraisal Institute in 1992. In March 1995, Mr. McNamara was designated as an Associate Director of the firm. In July 1997, Mr. McNamara became the Manager of the Philadelphia office of the Valuation Advisory Services Group, now Valuation Services. In 1998, he was designated as a Director and in 2002 as a Managing Director. Current responsibilities include managing seven appraisers, two of which hold the MAI designation. Experience Appraisal and consulting assignments have included vacant land, office buildings, shopping centers, regional malls, industrial complexes, commercial properties, apartment complexes and investment properties, principally in Pennsylvania, New Jersey and Delaware. Mr. McNamara is also a member of the firm’s Retail Property Group, which specializes in the valuation and investment counseling on retail properties. Qualified as an expert witness in US Bankruptcy Court for the Northeastern District of Pennsylvania and before assessment appeal proceedings in Philadelphia, Montgomery and Bucks counties in Pennsylvania. Education Saint Vincent College, Latrobe, Pennsylvania Bachelor of Arts - 1972 Temple University, Philadelphia, Pennsylvania Graduate Program in Finance - 1975-1978 Required Courses of Study for State Licensure Appraisal Education Successfully completed all courses and experience requirements to qualify for the MAI designation. Also, he has completed the requirements of the continuing education program of the Appraisal Institute. Memberships, Licenses and Professional Affiliations Member, Appraisal Institute (MAI Designation #9380) Delaware Certified General Appraiser (Certificate #X1-0000050) Maryland Certified General Appraiser (Certificate #10034) New Jersey Certified General Appraiser (Certificate #42RG 00081100) Ohio Certified General Appraiser (Certificate #391901) Pennsylvania Certified General Appraiser (Certificate #GA-000267-L) Pennsylvania Real Estate Broker (License #AB-047948-L) West Virginia Certified General Appraiser (License #328)

PROFESSIONAL QUALIFICATIONS Gerald B. McNamara, MAI Mr. McNamara is the director of the Government Affairs/Legislative Committee of the Philadelphia chapter of the Appraisal Institute. Also serves on the ARGUS Advisory Board of the Realm Company of Dallas, Texas, which provides the primary software utilized for investment analysis. Special Awards Mr. McNamara was awarded Cushman & Wakefield’s Philadelphia office 2000 Service Excellence Award which is awarded to that professional receiving the highest score on client responses for service quality.

Phase 1 Environmental Site Assessment Report

PHASE I ENVIRONMENTAL SITE ASSESSMENT

MOUNT CARMEL50 & 51 WEST 3RD STREET

MOUNT CARMEL, PENNSYLVANIA 17851

Prepared for:

American Financial Realty TrustJenkintown, Pennsylvania

Prepared by:

ENTRIX, Inc.New Castle, Delaware

Project Number: 7070930

June 2004



MOUNT CARMEL50 & 51 WEST 3RD STREET

MOUNT CARMEL, PENNSYLVANIA 17851

Prepared for:

American Financial Realty Trust1725 The Fairway

Jenkintown, Pennsylvania 19046

Prepared by:

ENTRIX, Inc.10 Corporate Circle, Suite 300New Castle, Delaware 19720

(302) 395-1919

Written by: Reviewed by:

Stephen G. Kilper, P. E. Lawrence D. MalizziSenior Consultant General Manager

Project Number: 7070930

June 2004


Copyright ENTRIX, Inc. 2004 Privileged Documenti


Mount Carmel50 & 51 West 3rd Street

Mount Carmel, Pennsylvania 17851

TABLE OF CONTENTS

EXECUTIVE SUMMARY ........................................................................................................III

1.0 INTRODUCTION AND LIMITATIONS ....................................................................... 1-1

1.1 INTRODUCTION ................................................................................................................. 1-11.2 LIMITATIONS..................................................................................................................... 1-2

2.0 SITE DESCRIPTION AND INSPECTION .................................................................... 2-1

2.1 SUBJECT PROPERTY SETTING............................................................................................ 2-12.1.1 Location ................................................................................................................... 2-12.1.2 Topography.............................................................................................................. 2-12.1.3 Wetlands/Hydrology................................................................................................ 2-1

2.2 SUBJECT PROPERTY VICINITY........................................................................................... 2-22.3 SUBJECT PROPERTY OPERATIONS ..................................................................................... 2-2

2.3.1 Description of Subject Property Operations ............................................................ 2-22.3.2 Building/Grounds..................................................................................................... 2-22.3.3 Utilities..................................................................................................................... 2-32.3.4 Housekeeping........................................................................................................... 2-32.3.5 Chemical Materials and Petroleum Products Storage and Use................................ 2-42.3.6 Waste Generation, Storage, and Disposal................................................................ 2-42.3.7 Aboveground Storage Tanks ................................................................................... 2-52.3.8 Underground Storage Tanks .................................................................................... 2-52.3.9 Wells ........................................................................................................................ 2-52.3.10 Wastewater Management......................................................................................... 2-52.3.11 Stormwater Management ......................................................................................... 2-62.3.12 Potential Asbestos-Containing Materials ................................................................ 2-62.3.13 Potential Polychlorinated Biphenyl-Containing Equipment.................................... 2-62.3.14 Radon ....................................................................................................................... 2-72.3.15 Mold......................................................................................................................... 2-82.3.16 Other Features/Conditions ....................................................................................... 2-8

3.0 REGULATORY AGENCY RECORDS REVIEW ........................................................ 3-1

3.1 REGULATORY AGENCY DATABASE INFORMATION............................................................ 3-13.2 REGULATORY AGENCY CONTACT INFORMATION ............................................................. 3-4

4.0 HISTORICAL LAND USE............................................................................................... 4-1

5.0 SUMMARY OF RECOGNIZED ENVIRONMENTAL CONDITIONS ..................... 5-1

5.1 SUBJECT PROPERTY .......................................................................................................... 5-15.2 NEIGHBORING PROPERTIES ............................................................................................... 5-1


Copyright ENTRIX, Inc. 2004 Privileged Documentii

6.0 SUMMARY OF REFERENCES...................................................................................... 6-1

LIST OF TABLES

Table E-1. Summary of Environmental Findings .......................................................................... vTable 3-1. Summary of Researched Databases........................................................................... 3-2Table 3-2. Regulatory Agency Database Sites Within ¼ Mile of the Subject Property............. 3-3Table 4-1. Historical Land Use Summary .................................................................................. 4-1

LIST OF FIGURES

Figure 1 - Site Location MapFigure 2 - Site Vicinity and Layout Map

LIST OF APPENDICES

Appendix A – Site PhotographsAppendix B – Environmental Data Resources ReportAppendix C – Historical InformationAppendix D – Previously Produced ReportsAppendix E – Staff Qualifications


Copyright ENTRIX, Inc. 2004 Privileged Documentiii

EXECUTIVE SUMMARY



ENTRIX, Inc. (ENTRIX) has completed a Phase I Environmental Site Assessment (ESA) of thecommercial properties located at 50 and 51 West 3rd Street in the Borough of Mount Carmel,Northumberland County, Pennsylvania (Subject Property), for the benefit of the American FinancialRealty Trust. The project scope-of-work was designed and executed to assess the potential for recognizedenvironmental conditions associated with the real property.

The project goals were achieved by application of industry-standard research and site inspection protocolsfor such assessments. Specifically, the project scope-of-work was based on the American Society forTesting and Materials (ASTM) Standard Practice for Environmental Site Assessments: Phase IEnvironmental Site Assessment Process (E 1527-00).

The Subject Property consists of a 3-story, 14,000 square foot building constructed in the 1920’s, and amotor bank located across West 3rd Street including a building of approximately 420 square feet. Thebuilding is occupied by Wachovia Bank. Operations conducted at the Subject Property include:

The main bank building is utilized as a commercial bank branch and was built between 1913 and 1920 asa bank building. The first floor includes the bank lobby and offices, while the second floor is used as atraining center. The third floor is vacant with an unfinished renovation. The motor bank is located acrossWest 3rd Street from the main building and includes the motor bank and an asphalt parking lot. The motorbank was constructed between 1978 and 1980. The area in the immediate vicinity of the propertiesincludes a gas station and mini-mart, residential properties, and commercial shops.

No aboveground (AST) or underground storage tanks (UST) have been utilized on the Subject Property.Additionally, no significant volumes of hazardous substances are stored on-site.

Two leaking underground storage tank (LUST) sites are located within ½ mile of the Subject Property,both of which are closed. Four UST sites are located ¼ mile of the Subject Property. Impacts to theSubject Property, if any, are unknown.

Recognized Environmental Condition:

The buildings located on the Subject Property were constructed prior to 1980 and, therefore, ACM’s mayhave been used during the building construction.

Recommendation:

An asbestos survey should be considered to determine if ACM’s are present. If identified throughsampling and analysis, the ACM’s should be abated and/or managed.


The Subject Property is located in an area of high radon.

Recommendation:

Radon testing should be conducted (at a minimum) to verify whether high levels of radon exist. If highlevels of radon are discovered, the installation of a radon mitigation system should be considered.


Copyright ENTRIX, Inc. 2004 Privileged Documentiv


No recognized environmental conditions were identified in conjunction with neighboring properties.

Recommendation:

No recommendation.


Copyright ENTRIX, Inc. 2004 Privileged Documentv

Table E-1. Summary of Environmental Findings

Conclusions

IssueReportPage

Reference

NoFurtherAction

Maintenanceor

OperationsIssues

File ReviewWarranted

(Client or

regulatory)

Potential Issue– Phase IIWarranted

EnvironmentalLiability,Remedial

ActionWarranted

Housekeeping 2-3

Chemical Materials &Petroleum ProductsStorage & Use

2-3

Waste Generation,Storage, & Disposal 2-4

Aboveground StorageTanks 2-4

Underground StorageTanks 2-5

Wells 2-5

WastewaterManagement 2-5

StormwaterManagement 2-6

Potential Asbestos-Containing Materials 2-6

PolychlorinatedBiphenyls 2-6

Radon 2-6

Mold 2-7

Other: 2-7

Subject PropertyEnvironmental Records 3-1

Neighboring PropertiesEnvironmental Records 3-1

Phase 1 Environmental Site Assessment ReportMount Carmel/Mount Carmel, Pennsylvania

Copyright ENTRIX, Inc. 2004 Privileged Document1-1

1.0 INTRODUCTION AND LIMITATIONS

1.1 INTRODUCTION

ENTRIX, Inc. (ENTRIX) was retained by American Financial Realty Trust to conduct a Phase IEnvironmental Site Assessment (ESA) of the following Subject Property:



The purpose of the assessment was to identify potential environmental issues due to current and historicalactivities conducted on or near the Subject Property. During the site inspection, environmental conditionsof the Subject Property and neighboring properties were noted. Additional information used to evaluatethe Subject Property was obtained from historical and regulatory agency sources. The environmentalassessment was conducted based on the methods and procedures described in the American Society forTesting and Materials (ASTM) Standard Practice for Environmental Site Assessments: Phase IEnvironmental Site Assessment Process (E 1527-00). Information regarding the site inspection ispresented below:

Date(s) of site inspection: May 27, 2004.

Name(s) of ENTRIX staff that performed the site inspection: Mr. Stephen G. Kilper.

Name(s) of Subject Property representatives providing information during site inspection:

Affiliation with Subject PropertyName

Responsibilities/Title Dates of AffiliationMr. Mike Boyko Property Manager 1998 to Present

At the time of the site inspection, the Subject Property status was: active/occupied vacant/closed other: undergoing occupancy undergoing closure

At the time of the site inspection, the Subject Property was utilized/recently utilized as: commercial office facility bank branch with adjacent motor bank bank branch other:

The Northumberland County Tax Assessors Office searched diligently for the property records card forthe Subject Property, but was unable to find cards for either the main bank building property or the motorbank property. According to their map, they have the property listed as being owned by Liberty StateBank.



1.2 LIMITATIONS

An ENTRIX Phase I ESA is limited to visual observations of site conditions on the day inspected, reviewof readily available and relevant data and statements made and information provided by the client, hisagents, outside parties and regulatory agencies. ENTRIX has exercised due diligence and customary carein the conduct of its assessment. The Phase I ESA is a limited and non-exhaustive survey that is intendedto evaluate whether readily available information indicates that the historic or current use of the SubjectProperty has resulted in contamination by hazardous substances or waste. As a result, without acomprehensive sampling and analysis program or implementation of services beyond the original scope-of-work, certain conditions, including, but not limited to those summarized below, may not be revealed:

Naturally occurring toxic substances or elements found in the subsurface soils, rocks or water;

Toxic substances commonly found in current habitable environments, such as, stored householdproducts, building materials, and consumables;

Biological or infectious agents and pathogens;

Contaminant plumes (liquid or gaseous) below the surface from a remote or unknown source;

Contaminants or conditions that do not violate current regulatory standards, but may violate suchstandards in the future; and

Unknown, reported and not readily visible site contamination.

In preparing this report, ENTRIX has reviewed historical records, conducted interviews with certainprivate and public officials, and performed an on-site visual inspection of the property. ENTRIX hasexamined and relied upon documents referenced in the report and has relied on oral statements made bycertain individuals. ENTRIX has not conducted an independent examination of the facts contained inreferenced materials and statements. ENTRIX has assumed the genuineness of the documents and thatthe information provided in documents or statements is true and accurate. Based on time constraints ofthe project, some regulatory files (not readily available) could not be reviewed. ENTRIX has preparedthis report in a professional manner, using that degree of skill and care exercised for similar projectsunder similar conditions by reputable and competent environmental consultants. ENTRIX shall not beresponsible for conditions or consequences arising from relevant facts that were concealed, withheld, ornot fully disclosed at the time the report was prepared. ENTRIX also notes that the facts and conditionsreferenced in this report may change over time and the conclusions and recommendations set forth hereinare applicable only to the facts and conditions as described at the time of this report and the siteinspection. ENTRIX believes the conclusions stated herein to be factual, but no guarantee is made orimplied.

This report has been prepared for the benefit of American Financial Realty Trust. The informationcontained in this report, including all exhibits and attachments, may not be used by any other partywithout the express written consent of ENTRIX. The use of this report by third parties shall be at theirown risk.



2.0 SITE DESCRIPTION AND INSPECTION

2.1 SUBJECT PROPERTY SETTING

2.1.1 Location

The name of the facility is: Mount Carmel.

The physical address of the Subject Property is: 50 and 51 West 3rd Street.

City, County (Parish), State: Mount Carmel, Northumberland County, Pennsylvania.

Comments or issues regarding the location of the Subject Property: The main bank building is on thesoutheast corner of West 3rd Street and South Maple Streets. The motor bank is located on the northeastcorner of the same intersection.

The location of the Subject Property is shown in Figure 1.

2.1.2 Topography

The topography of the Subject Property is characterized below: flat (0% slope) gentle relief (0%-1% slope) moderate relief (1%-3% slope) significant relief (>3% slope)

Average elevation of the Subject Property (above mean sea level): 1,087 feet.

2.1.3 Wetlands/Hydrology

The Subject Property was inspected for potential wetlands and water bodies. For purposes of this report,potential wetlands include areas that are saturated with water or covered by shallow water and supporthydrophytic vegetation (cattails, fern, bald cypress, etc.). Wetlands do not include constructed drainageditches and retention ponds that are maintained for the purpose of stormwater or wastewater control. Awetlands delineation study was not included in the scope-of-work for the Phase I ESA.

Yes No Potential wetlands were observed on the Subject Property.

Yes No Potential wetlands were observed immediately adjacent to the Subject Property.

Yes No A permanent body of water and/or other standing water was observed on the SubjectProperty.

Name of the nearest permanent water body in relation to the Subject Property: Shamokin Creek.

Distance and direction of the water body in relation to the Subject Property: 960 feet north.



2.2 SUBJECT PROPERTY VICINITY

During the site inspection, land use on properties adjacent to the Subject Property was observed to be: undeveloped commercial/retail heavy industrial residential light industrial parking lot vacant building(s) developed but vacant lot(s) agricultural restaurant(s) auto service/gas station(s) other:

In general, land use in the areas surrounding the Subject Property consists of: undeveloped commercial/retail heavy industrial residential light industrial agricultural other:

Property use in the vicinity of the Subject Property is portrayed in Figure 2. Details concerning propertieslocated proximal to the Subject Property, which were identified within regulatory agency databases, areprovided in Section 3.0.

Applicable photographs: Appendix A, Photograph(s) #1 through #5.

2.3 SUBJECT PROPERTY OPERATIONS

2.3.1 Description of Subject Property Operations

The three-story main building located on the southeast corner of West 3rd and Maple Streets is configuredfor use as commercial office space and a retail bank branch. The customer service bank branchoperations are conducted on the first floor. The second floor includes a training center, kitchen, twoconference rooms, and a computer network room. The third floor is vacant office space with evidence ofan unfinished renovation. A basement is used for storage and facility services.

A one story remote motor bank is located directly across West 3rd Street from the main building. It hasthree drive-through lanes and an adjacent asphalt parking lot for the main building customers. A walk-upAutomated Teller Machine (ATM) is located within the south wall of the motor bank building.

The main building property encompasses approximately 0.3 acres and is built of masonry. A residenceabuts the eastern exterior of the building, and residences and commercial properties abut the southernexterior.

The motor bank is also of masonry construction and does not include a basement.

2.3.2 Building/Grounds

The Subject Property is improved with buildings (see below), concrete walkways, asphalt-paved parkingand vehicular access drives.



The following building are located on the Subject Property (Figure 2), as referenced in this report.

Building Building Utilization/Operations/Departments~Area

(ft2)Construction Date(s)

#1 Commercial bank branch with training center andoffices 14,000 Between 1920 to 1927

#2 Motor bank 420 Between 1978 to 1980


2.3.3 Utilities

Utilities and heating supplied to the Subject Property include the following:Utilities Provider

Electrical PP&LPotable water use Aqua-PennsylvaniaDomestic wastewater Mount Carmel Sewer SystemWaste removal On-Call

HeatingNatural gas PG Energy

Potable water supplied to the Subject Property is obtained from the following source(s): AquaPennsylvania is contracted to supply water to Mount Carmel. The water is obtained from groundwatersupply wells.

Water quality of the region: According to The US Geologic Survey Circular 1168, nitrates are of aconcern in both surface water and groundwater in the Lower Susquehanna River Basin.

2.3.4 Housekeeping

Yes No Evidence of surface spills, surface staining, mold, debris piles, abandonedproducts/wastes etc., was observed on the Subject Property.

Yes No Areas of distressed vegetation were identified on or bordering the Subject Property.

Yes No Abnormal odors associated with the Subject Property were identified.

Yes No Evidence of recent site disturbances (e.g., excavation, filling, tilling, grading, etc.)was observed on or bordering the Subject Property.

Comments regarding housekeeping: A wood-slatted barrel was found in a room in the western portion ofthe basement, containing greenish-white crystalline particles of approximately 1-inch irregular shapes(possibly salt for water conditioning). The barrel was open and the northern side of the barrel was rottedthrough. A whitish residue was on the floor around the barrel, suggesting the particles dissolve in water.

Near the center of the basement, a 20 to 30 gallon steel container was found labeled “metal polish”. Thecontainer had no further information observed and appeared to be full. The container was somewhatrusty, however no leaks were observed.

A steel device, approximately 8-inches by 10-inches by 6-inches was on the floor near the containerlabeled metal polish. The device appeared to be an electrical component of an unknown piece of



machinery or equipment, possibly a transformer or a capacitor. No markings were found on the deviceand it did not appear to be leaking.


2.3.5 Chemical Materials and Petroleum Products Storage and Use

Yes No Various retail-sized products and virgin materials are stored on the Subject Propertyfor maintenance purposes. Cleaning supplies are located in the basement of the mainbank building.

Yes No Chemicals, hazardous materials or petroleum products are stored in bulk (>5 gallons)on the Subject Property.

Yes No Excluding heating systems, petroleum products are used for the operation ofequipment (e.g., air compressors, emergency generators, elevators etc.) on the SubjectProperty. Petroleum products are confined to the equipment.

Comments regarding chemical materials and petroleum products storage and use: A wood-slatted barrelwas found in a room in the western portion of the basement, containing greenish-white crystallineparticles of approximately 1-inch irregular shapes. The barrel was open and the northern side of thebarrel was rotted through. A whitish residue was on the floor around the barrel, suggesting the particlesdissolve.

Near the center of the basement, a 20 to 30 gallon steel container was found labeled “metal polish”. Thecontainer had no further information observed and appeared to be full. The container was somewhatrusty, however no leaks were observed.

An elevator that utilizes hydraulic oil and pump system is located in the basement. No evidence ofhydraulic oil leakage from the pump or above grade piping was observed.

Additional information regarding bulk storage of chemicals, hazardous materials or petroleum products islocated in Section 2.3.7 – Aboveground Storage Tanks and Section 2.3.8 – Underground Storage Tanks.


2.3.6 Waste Generation, Storage, and Disposal

Yes No Non-hazardous wastes such as paper and cardboard are generated at the SubjectProperty.

Yes No Hazardous wastes are generated at the Subject Property.

Yes No Empty drums or other suspect containers were observed.

Yes No Evidence of existing or former, waste lagoons, injection wells, or similar wastedisposal practices were observed during the site inspection.

Comments regarding waste generation, storage, and disposal: Generated non-hazardous wastes are placedin a locked dumpster located in the parking lot of the motor bank and regularly picked up by On-Call.



2.3.7 Aboveground Storage Tanks

Yes No Aboveground Storage Tanks (ASTs) are located on the Subject Property (ASTs areconsidered >55 gallons in capacity).

2.3.8 Underground Storage Tanks

Yes No Underground Storage Tanks (USTs) are/were formerly located on the SubjectProperty, as reported by regulatory agencies or facility personnel.

Yes No Physical evidence indicative of current or former USTs was observed on the SubjectProperty by ENTRIX.

2.3.9 Wells

The following well types are located/formerly located on the Subject Property: accessible monitor well(s) plugged monitor well(s) accessible water supply well(s) plugged water supply well(s) accessible UST leak detection well(s) plugged UST leak detection well(s) dry well(s) irrigation well(s) injection well(s) abandoned well(s) none reported/observed other:

In relation to the Subject Property, The nearest public water supply well is located between ½ and onemile south-southwest of the subject property. (Data regarding wells was provided by Environmental DataResources, Inc. [EDR]).

2.3.10 Wastewater Management

Yes No Wastewater (sinks, lavatories) is generated at the Subject Property.

The following number of devices were identified or reported to be located on the Subject Property for thecollection of domestic wastewater:

floor drain(s): location(s): sump(s): location(s): other: location(s): none

Wastewater is discharged to: unknown/undetermined municipal sanitary sewer ground surface oxidation pond septic tank/leach field other:

Information regarding the wastewater system was identified according to: report by facility personnel site plans/drawings municipal records/permit results from tracer testing other:



2.3.11 Stormwater Management

Stormwater flow at the Subject Property is controlled by the following: parking lot drain drainage ditch on-site retention pond curb inlets ground surface discharge other:

Comments or issues regarding stormwater management: Roof drains and storm water runoff is carried viathe Borough’s storm water sewer system.

2.3.12 Potential Asbestos-Containing Materials

In accordance with regulations adopted by the Federal Occupational Safety and Health Administration(OSHA), surfacing material (including sprayed material and troweled on acoustical plaster, fireproofing,etc.), thermal system insulation, and flooring materials (vinyl and asphalt) used in buildings constructedno later than 1980 are presumed to contain potential asbestos-containing materials (ACMs), unless testingproves otherwise. After 1980, the aforementioned materials are not presumed to be ACMs. However,certain types of products including, but not limited to, acoustical ceiling tile, vinyl floor tile, and drywallcould potentially still contain ACMs.

A visual inspection of accessible building materials was conducted by ENTRIX in an effort to identifymaterials suspected of containing asbestos. The visual inspection did not include roofing materials orinaccessible spaces within the site building. Determination of whether Subject Property buildings containasbestos can only be ascertained by performing an asbestos survey.

Yes No Site buildings were constructed prior to 1980, and therefore, ACMs may have beenused.

Yes No Potential ACMs were visually identified at the Subject Property for buildingsconstructed prior to 1980.

Applicable details regarding potential ACMs are provided below:

Location of potential ACMs: Each floor and the basement of the main bank building and the motorbank building.Potential ACMs include the following:

vinyl tile floor/mastic acoustical ceiling tile pipe/duct insulation spray-on insulation plaster materials/drywall other:

Comments or issues regarding potential ACMs: According to the property manager, the first and secondfloors of the building underwent a significant renovation approximately 15-years ago. No reports ofACM surveys or removals were provided.

2.3.13 Potential Polychlorinated Biphenyl-Containing Equipment

Potential polychlorinated biphenyl-containing equipment (PCBs) were used as a coolant or in lubricatingoils that were widely used as dielectric and heat transfer fluids in transformers prior to 1976. Electricalequipment often contains oil that acts as the dielectric fluid.

The federal government has classified PCB content in electrical transformers as follows:

Non-PCB transformers are those containing less than 50 parts per million (ppm) PCBs;



PCB-contaminated transformers are those containing greater than 50, but less than 500 ppmPCBs; and

PCB transformers are those containing 500 ppm or greater PCBs.

Applicable details regarding potential PCBs are provided below:

Potential PCB-containing equipment includes the following: none electrical transformer(s) fluorescent light ballast(s) hydraulic elevators(s) electrical capacitor(s) other:

Comments or issues regarding PCB-content of equipment (if no PCB-content labeling): Products used areconfined to the equipment. PCB content of equipment cannot be determined without testing the fluidswithin each piece of equipment. All equipment should be assumed to be PCB-containing unlessotherwise labeled. Fluorescent lights are in use throughout the Subject Property. The light ballast(s)appeared to be in good condition during the site inspection; however, not all light ballast(s) wereindividually inspected.

A steel device, approximately 8-inches by 10-inches by 6-inches was on the floor near the containerlabeled metal polish. The device appeared to be an electrical component of an unknown piece ofmachinery or equipment, possibly a transformer or a capacitor. No markings were found on the deviceand it did not appear to be leaking.

An elevator that utilizes hydraulic oil and pump system is located in the basement. No evidence ofhydraulic oil leakage from the pump or above grade piping was observed.

Applicable photographs: Appendix A, Photograph(s) #13 and #15.

2.3.14 Radon

Radon is a colorless, odorless, tasteless, radioactive gas that results from the decay of Radium-226.Radium occurs naturally in small quantities in most rocks and soil, radon is continuously released intosoil, underground water, and outdoor air. Radon is chemically inert and moves freely without combiningwith other materials. In indoor air, radon emitted from soil is quickly diluted to very low concentrations.Relatively high concentrations of radon can accumulate inside buildings where radon-containing soil gasinfiltrates buildings through openings such as cracks, joints and utility penetrations. As a comparison,average outdoor radon concentrations tend to range from approximately 0.1 to 0.2 pico-Curies per liter(pCi/L).

According to the EDR report, the Subject Property is located in Federal EPA Zone:

Zone 1 indoor average level > 4 pCi/L. Zone 2 indoor average level >=2 pCi/L and <=4 pCi/L. Zone 3 indoor average level <2 pCi/L.

Comments regarding radon: Radon levels specific to the Subject Property can only be determined throughradon sampling and testing.



2.3.15 Mold

Mold is commonly found in homes or buildings, which have sustained flooding or water damage frombroken pipes, roof leaks sewage backups, HVAC condensation, etc. Mold is most common on the papercovering of drywall and wallpaper, ceiling tiles, paper, products, carpets with natural fibers, papercoverings on insulated pipes, insulation material on wood, food and on general organic debris. Potentialhealth effects and symptoms associated with mold exposures include allergic reactions, asthma and otherrespiratory complaints.

A visual inspection of accessible building materials was conducted by ENTRIX in an effort to identifyareas of potential mold. The visual inspection did not include inaccessible spaces within the site building.Determination of whether Subject Property buildings contain mold can only be ascertained by performinga mold spore sampling survey.

Yes No Area of potential mold was identified during the site inspection.

Yes No Water damage or potential mold was reported by facility personnel.

2.3.16 Other Features/Conditions

The other features/conditions are located on the Subject Property that were either observed or reported: air compressor(s) alternate power source (generator, batteries, etc.) elevator(s) other trash compactor(s) other

Comments regarding other features/conditions at the Subject Property: An elevator that utilizes hydraulicoil and pump system is located in the basement. No evidence of hydraulic oil leakage from the pump orabove grade piping was observed. The elevator shaft was inaccessible. According to facility personnel,the elevator functions properly. Some elevator components are situated below ground. Impacts to thesubsurface, if any, are unknown.

Additional information regarding bulk storage of chemicals, hazardous materials or petroleum products islocated in Section 2.3.7 – Aboveground Storage Tanks and Section 2.3.8 – Underground Storage Tanks.

Applicable photographs: Appendix A, Photograph(s) #15.



3.0 REGULATORY AGENCY RECORDS REVIEW

3.1 REGULATORY AGENCY DATABASE INFORMATION

As part of this assessment, ENTRIX obtained and reviewed State and Federal regulatory agency databaselistings concerning the current and historical activities conducted at the Subject Property and immediatesurrounding area. The regulatory database information, provided by EDR, complies with the ASTMStandard E 1527-00 for government records review. Database information and corresponding searchdistances from the Subject Property are included in Table 3-1. The database report is included asAppendix B.

Yes No The Subject Property is listed in one or more of the regulatory agency databasesresearched. (Details regarding any regulatory agency database listings are providedbelow).

Yes No Database listings conflict with site observations and/or other reported informationregarding the Subject Property.

Yes No Excluding the Subject Property, sites in the vicinity of the Subject Property arelisted in one or more of the regulatory agency databases researched. Detailsregarding any database listings are provided below. A summary of these regulatoryagency database sites is presented as Table 3-2.

Regulatory agency database listings for sites located within the specified search radii (see Table 3-1)include the following:

NPL CERCLIS FINDS ERNSSPL RCRIS SWF/LF SHWSUST LUST CORRACTS other:

Comments regarding off-site properties listed in regulatory agency databases: Two ResourceConservation and Recovery Information System (RCRIS) sites are located between zero and ¼ mile fromthe Subject Property. The EDR reports that K’s Cleaners, located at 10 North Oak Street, less than of amile north of the Subject Property, received two violations in September 1999. Compliance was achievedfor both violations in December of that year. The other RCRIS site, Keystone Printing and Graphics, hasno violations listed.

Three properties are listed in the UST database within ¼ mile of the Subject Property. One of theproperties listed in the UST database is also listed in the LUST database. Refer below for LUSTinformation.

Two properties are listed in the LUST database within ½ mile of the Subject Property. According to theEDR, the Mount Carmel Borough Garage, located less than mile south-southeast of the property, had apetroleum UST that experienced a release in 1989. The EDR gives the site status as “cleanup completed”as of April 22, 1992. The Miriello Service Station, located between ¼ and ½ mile east-northeast of theproperty, experienced a release from a petroleum UST in 1989. The EDR lists the status as “cleanupcompleted” as of October 30, 1997. Based on the information in the EDR and distance from the SubjectProperty, these LUST sites are not expected to pose a recognized environmental condition for the SubjectProperty. Impacts to the Subject Property, if any, are unknown.



Nineteen orphan sites, which could not be mapped due to poor or inadequate address information, areincluded in the database report provided by EDR. None of the orphan sites were observed to be in thevicinity of the Subject Property during the site inspection.

Table 3-1. Summary of Researched Databases

DatabaseIssuingAgency

AgencyVersion

Date

SearchRadius

Description

National Priority List(NPL) U.S. EPA 4/27/04 1 mile

List of uncontrolled or abandonedhazardous waste sites identified forpriority remedial actions under thefederal Superfund program.

ComprehensiveEnvironmentalRecovery,Compensation andLiability InformationSystem (CERCLIS)

U.S. EPA 2/26/04 ½ mile

List of suspected uncontrolled wastesites (i.e., actual or potential Superfundsites, inactive, bankrupt, or abandonedhazardous waste sites, roadside dumps,or sites that have been the Subject ofcitizen complaints) that may containhazardous waste or other toxic orregulated materials. The inclusion of asite on the CERCLIS list does notconfirm that illegal activity has takenplace, or that a health or environmentalrisk exists at the site.

CERCLIS-No FurtherRemedial ActionPlanned (NFRAP)

U.S. EPA 2/26/04 1 mile oradjacent

List of sites that have been removedfrom CERCLIS. These sites may besites where initial investigation foundno contamination, contamination wasquickly removed without the need forthe site to be placed on the NPL, or thecontamination was not serious enoughto require Federal Superfund action orNPL consideration.

Resource Conservationand RecoveryInformation System(RCRIS)

U.S. EPA 4/13/04 ¼ mile

List of facilities that generate, treat,store, or dispose of hazardous wastes.The inclusion of a site on the RCRAlist indicates that the facility hasnotified the EPA that it manages RCRAhazardous waste.

Emergency ResponseNotification System(ERNS)

U.S. EPA 12/31/03 SubjectProperty

List of releases of oil and hazardoussubstances since October 1986 reportedto the EPA, U.S. Coast Guard, NationalResponse Center, or Department ofTransportation.

Resource Conservationand Recovery Act(RCRA) CorrectiveActions (CORRACTS)

U.S. EPA 3/15/04 1 mileList of RCRA facilities undergoing acorrective action order where a releaseof hazardous waste has occurred.



Table 3-1. Summary of Researched Databases (continued)

DatabaseIssuingAgency

AgencyVersion

Date

SearchRadius

Description

Solid Waste FacilityInformation/Landfill(SWF/LF)

PADEP 7/21/03 ½ mile Inventory of solid waste facilitiespermitted by the State.

Underground StorageTank (UST) PADEP 4/1/04 ¼ mile Inventory of registered UST and AST

sites.LeakingUnderground StorageTank (LUST)

PADEP 4/6/04 ½ mileInventory of leaking registeredunderground storage tank sites reportedto the State.

State HazardousWaste Site (SHWS) PADEP 7/8/03 1 mile Inventory of sites on the State

Superfund list.

Table 3-2. Regulatory Agency Database Sites Within ¼ Mile of the Subject Property

AgencyDatabase(s)

Facility Name and AddressDistance(miles)*

Direction*Regulatory

Status

RCRISK’s Cleaners

10 North Oak Street< East-Northeast R2, R5

RCRISKeystone Printing and Graphics

483 North Oak Street to ¼ North R2

LUST, UST Mount Carmel Borough Garage121 South Oak Street < South-Southeast L2, U1

LUSTMiriello Service Station

550 East 3rd Street¼ to ½ East-Northeast L2

USTRay’s Gulf

150 North Oak Street< North-Northeast U1

USTTower Mini-Mart (Texaco)

Third and Maple Streets< West U1

USTTurkey Hill 133

130 East 5th to ¼ Southeast U1

*Distance/Direction from Subject Property.

Notations Regarding Status of Regulatory Agency Database Sites

C1 - CERCLA Violation/Citation N2 - Delisted NPL SiteC2 - Active CERCLA Site O1 - OtherC3 - Closed CERCLA Site R1 - RCRA Conditionally Exempt GeneratorCO1 - Active CORRACTS Site R2 - RCRA Small-Quantity GeneratorCO2 - Closed CORRACTS Site R3 - RCRA Large-Quantity GeneratorE1 - Confirmed ERNS Site R4 - RCRA TSD FacilityE2 - Unconfirmed ERNS Site R5 - RCRA Violation/CitationH1 - Listed Hazardous Waste Site (HWS) S1 - Solid Waste Landfill



H2 - Delisted Hazardous Waste Site (HWS) T1 - TRIS FacilityL1 - Active LUST Site U1 - Active UST(s)L2 - Closed LUST Site U2 - Out-of-Service/Removed UST(s)L3 - Status of LUST Site Unknown/Not Reported U3 - Abandoned-in-Place UST(s)N1 - Listed NPL Site U4 - Status of UST Unknown/Not Reported

3.2 REGULATORY AGENCY CONTACT INFORMATION

Regulatory agency personnel were contacted regarding potential reports, investigations, citations, permits,or corrective actions associated with the Subject Property and/or sites in the vicinity of the SubjectProperty. Information reported by agency personnel is presented below:

Agency contacted: Pennsylvania Department of Environmental ProtectionName of agency representative(s): Mr. Randy FarmerDate of agency contact: June 21, 2004 Agency phone number: (570) 327-3716Response from agency:

no file(s) identified file(s) identifiedfile(s) regarding issue not maintained by Agency other:

Comments regarding regulatory agency inquiry: Mr. Farmer had no knowledge of environmentalproblems at the site, and suggested speaking with the file coordinator in Harrisburg (PADEPHeadquarters).

Agency contacted: Pennsylvania Department of Environmental ProtectionName of agency representative(s): Ms. Jacqueline TravayDate of agency contact: June 21, 2004 Agency phone number: (717) 705-4706Response from agency:


Comments regarding regulatory agency inquiry: Ms. Travay searched the state file database, findingno files concerning the site.

Agency contacted: Borough of Mount CarmelName of agency representative(s): Mr. Joe BassDate of agency contact: June 21, 2004 Agency phone number: (570) 339-4486Response from agency:


Comments regarding regulatory agency inquiry: Mr. Bass is the Borough Manager. He is veryfamiliar with the site and area, and said that there has never been a report of an environmental issuethere.



4.0 HISTORICAL LAND USE

In association with the site inspection, an investigation was conducted to identify past land uses of theSubject Property and neighboring properties.

The following sources of historical information were reviewed by ENTRIX:aerial photographs site plans/permits previous reportsfire insurance maps city directories property record cardpersonnel interviews topographic maps other:

Historical information indicates that the site of the main bank building was developed prior to 1920 asshops that included a grocers, a meat shop, and at one point, a cobblers. The building currently locatedon the Subject Property was constructed in between 1913 and 1920 according to the fire insurance maps.The 1920 fire insurance map depicts a 100-foot building, while the 1913 map shows the land as vacant.

The property on which the motor bank is located appears to be a grocers until 1927, when the VictoriaTheater appears on the map. The theatre remained until at least 1962.

The Northumberland Tax Assessor was contacted to obtain the property records card for the subjectproperties. Despite repeated searches, the county was unable to locate either property record card.

Yes No Historical information regarding the Subject Property prior to property developmentwas obtained.

Yes No Historical land use information indicates that potential environmental issues exist forSubject Property and/or immediate vicinity.

Comments regarding potential environmental issues identified from historical information: No propertyuses depicted on the Sanborn fire insurance maps for, or in the immediate vicinity of, the Subject Propertywould be expected to cause environmental issues.

A chronological summary of historical land use is presented in Table 4-1. Historical information isincluded in Appendix C.

Table 4-1. Historical Land Use Summary

Date(Year)

Source of HistoricalInformation

Description of Historical Land Use

1885 Sanborn Fire InsuranceMaps

The maps depict a grocers at the site of the current motorbank. Several small buildings of unknown use are depictedat the site of the main bank building. The surrounding areaappears to be mainly commercial and residential.






The map depicts a meat market and a grocers at the site ofthe main bank building, and a grocers and a domicile at thesite of the motor bank.



Table 4-1. Historical Land Use Summary

Date(Year)

Source of HistoricalInformation

Description of Historical Land Use


The map depicts a grocers, a meat shop, a cobbler, and onedomicile at the current site of the main bank building. Agrocers and a domicile are shown at the current motor banklocation.


The current site of the main bank building is shown vacanton this map, and the motor bank location is depicted with agrocers and a domicile.


The current main bank building location is depicted with a100-foot building of the same configuration as the existingbuilding. The motor bank location is depicted as a grocersand a domicile.

1927-1962 Sanborn Fire InsuranceMaps

The site of the main bank building is labeled “Liberty StateBank and Trust”. It appears that the land use has notchanged since the building was constructed. The site of themotor bank has had a theatre constructed on it, labeled“Victoria Theatre”.



5.0 SUMMARY OF RECOGNIZED ENVIRONMENTAL CONDITIONS

ENTRIX was retained by American Financial Realty Trust to conduct a Phase I ESA of the commercialproperty located at 50 and 51 West 3rd Street in the Borough of Mount Carmel, Pennsylvania. TheSubject Property was inspected by ENTRIX staff on May 27, 2004, in an effort to identify potentialenvironmental issues that may exist due to current and past activities conducted on or near the SubjectProperty. In association with the site inspection, the assessment included regulatory agency recordsreview and inquiry, and related historical research.

Based on the investigation, the following environmental issues were identified:

5.1 SUBJECT PROPERTY


The buildings located on the Subject Property were constructed prior to 1980 and, therefore, ACMs mayhave been used during the building construction.

Recommendation:

An asbestos survey should be considered to determine if ACMs are present. If identified throughsampling and analysis, the ACMs should be abated and/or managed.


The Subject Property is located in an area of high radon.

Recommendation:

Radon testing should be conducted (at a minimum) to verify whether high levels of radon exist. If highlevels of radon are discovered, the installation of a radon mitigation system should be considered.

5.2 NEIGHBORING PROPERTIES


No recognized environmental conditions were identified in conjunction with neighboring properties.

Recommendation:

No recommendation.

6.0 SUMMARY OF REFERENCES

ENTRIX requested and/or obtained readily available environmental/real estate reports and other relevantsources of information during the preparation of this report. This section provides a summary of thereferences reviewed. Note that this summary does not identify environmental/real estate reports and otherrelevant sources of information that were not provided, were not readily available, or did not exist.

Subject Property Representatives

Mr. Mike Boyko - Slater & Sons, Inc.

Regulatory Agency Representatives

Ms. Jacqueline Travay - Pennsylvania Department of Environmental Protection

Mr. Joe Bass - Borough of Mount Carmel

Mr. Randy Farmer - Pennsylvania Department of Environmental Protection

Topographic Maps

1894, 1947, 1955, and 1976-via Environmental Data Resources, Inc.

Fire Insurance Maps

1885, 1891, 1896, 1901, 1907, 1913, 1920, 1927, 1947 and 1962 - Source: The Sanborn Library LLC(via Environmental Data Resources, Inc.).

Other Reports

Environmental Data Resources, Inc., May 25, 2004. EDR Radius Map with Geocheck.

Keating Environmental Management, Inc., March 1998. Phase I Environmental Site Assessment for 50West Third Street, Borough of Mount Carmel.

Published Information

US Geological Survey Circular 1168: Water Quality in the Lower Susquehanna River Basin inPennsylvania and Maryland; 1998, US Geological Survey.

FIGURES

Scale: 1:24,000Contour Interval = 5 Feet

USGS 7.5 Minute Quadrangles:Mount Carmel, Pennsylvania (1974)

Project No. 7070930 Jun-04

Mount Carmel, Pennsylvania

Figure 1Site Location Map

Mount Carmel 50 West 3rd Street

Subject Property

DATE: 6/04D/B: SRSPROJ. NO: 7070930

Site Vicinity and Layout MapMount Carmel

Figure 2

50 West 3rd StreetMount Carmel, Pennsylvania

Appendix A

Site Photographs

Mount C

armel

Mount C

armel, P

ennsylvania

Photograph #1.

Texaco Station on southw

est corner of Maple and

West 3rd Streets.

Photograph #2.

Bank building on right, adjacent residence on left,

looking south.

Photograph #4.

Looking east from

motor bank to

residential/comm

ercial properties.P

hotograph #3.L

ooking across West 3rd Street from

Main bank

building north toward m

otor bank.

Mou

nt C

arm

elM

ount

Car

mel

, Pen

nsyl

vani

a

Pho

togr

aph

#5.

Loo

king

wes

t fr

om m

otor

ban

k to

war

d re

side

ntia

lpr

oper

ties

on

nort

hwes

t co

rner

of

Map

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APPENDIX B

Environmental Data Resources Report

The Standard inEnvironmental RiskManagement Information

440 Wheelers Farms RoadMilford, Connecticut 06460

Nationwide Customer Service

Telephone: 1-800-352-0050Fax: 1-800-231-6802Internet: www.edrnet.com

FORM-WIS

The EDR Radius Mapwith GeoCheck®

Mount Carmel Wachovia Bank50 West 3rd Street

Mount Carmel, PA 17851

Inquiry Number: 01199464.29r

May 25, 2004

SECTION PAGE

Executive Summary ES1

Overview Map 2

Detail Map 3

Map Findings Summary 4

Map Findings 6

Orphan Summary 14

Government Records Searched/Data Currency Tracking GR-1

GEOCHECK ADDENDUM

Physical Setting Source Addendum A-1

Physical Setting Source Summary A-2

Physical Setting Source Map A-7

Physical Setting Source Map Findings A-8

Physical Setting Source Records Searched A-13

TC01199464.29r Page 1

Thank you for your business.Please contact EDR at 1-800-352-0050

with any questions or comments.

Disclaimer - Copyright and Trademark Notice

This report contains information obtained from a variety of public and other sources. NO WARRANTY EXPRESSED OR IMPLIED, IS MADEWHATSOEVER IN CONNECTION WITH THIS REPORT. ENVIRONMENTAL DATA RESOURCES, INC. SPECIFICALLY DISCLAIMS THE MAKING OF ANYSUCH WARRANTIES, INCLUDING WITHOUT LIMITATION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE. ALL RISK ISASSUMED BY THE USER. IN NO EVENT SHALL EDR BE LIABLE TO ANYONE, WHETHER ARISING OUT OF ERRORS OR OMISSIONS, NEGLIGENCE,ACCIDENT OR ANY OTHER CAUSE, FOR ANY LOSS OR DAMAGE, INCLUDING, WITHOUT LIMITATION, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OREXEMPLARY DAMAGES. It can not be concluded from this report that coverage information for the target and surrounding properties does notexist from other sources. Any analyses, estimates, ratings or risk codes provided in this report are provided for illustrative purposes only, and arenot intended to provide, nor should they be interpreted as providing any facts regarding, or prediction or forecast of, any environmental risk forany property. Any liability on the part of EDR is strictly limited to a refund of the amount paid for this report.

Copyright 2004 by Environmental Data Resources, Inc. All rights reserved. Reproduction in any media or format, in wholeor in part, of any report or map of Environmental Data Resources, Inc., or its affiliates, is prohibited without prior written permission.

EDR and its logos (including Sanborn and Sanborn Map) are trademarks of Environmental Data Resources, Inc. or its affiliates. All othertrademarks used herein are the property of their respective owners.

TABLE OF CONTENTS

EXECUTIVE SUMMARY

TC01199464.29r EXECUTIVE SUMMARY 1

A search of available environmental records was conducted by Environmental Data Resources, Inc.(EDR). The report meets the government records search requirements of ASTM Standard Practice forEnvironmental Site Assessments, E 1527-00. Search distances are per ASTM standard or customdistances requested by the user.

TARGET PROPERTY INFORMATION

ADDRESS

50 WEST 3RD STREETMOUNT CARMEL, PA 17851

COORDINATES

40.796700 - 40˚ 47’ 48.1’’Latitude (North): 76.414100 - 76˚ 24’ 50.8’’Longitude (West): Zone 18Universal Tranverse Mercator: 380702.4UTM X (Meters): 4516939.5UTM Y (Meters): 1087 ft. above sea levelElevation:

USGS TOPOGRAPHIC MAP ASSOCIATED WITH TARGET PROPERTY

40076-G4 MOUNT CARMEL, PATarget Property:USGS 7.5 min quad indexSource:

TARGET PROPERTY SEARCH RESULTS

The target property was not listed in any of the databases searched by EDR.

DATABASES WITH NO MAPPED SITES

No mapped sites were found in EDR’s search of available ( "reasonably ascertainable ") governmentrecords either on the target property or within the ASTM E 1527-00 search radius around the targetproperty for the following databases:

FEDERAL ASTM STANDARD

NPL National Priority ListProposed NPL Proposed National Priority List SitesCERCLIS Comprehensive Environmental Response, Compensation, and Liability Information

SystemCERC-NFRAP CERCLIS No Further Remedial Action PlannedCORRACTS Corrective Action ReportRCRIS-TSD Resource Conservation and Recovery Information SystemRCRIS-LQG Resource Conservation and Recovery Information SystemERNS Emergency Response Notification System

STATE ASTM STANDARD

SHWS Hazardous Sites Cleanup Act Site List

EXECUTIVE SUMMARY


SWF/LF Solid Waste Facility Inventory/Transfer StationsVCP Voluntary Cleanup Program SitesARCHIVE UST Archived Underground Storage Tank Sites

FEDERAL ASTM SUPPLEMENTAL

CONSENT Superfund (CERCLA) Consent DecreesROD Records Of DecisionDelisted NPL National Priority List DeletionsFINDS Facility Index System/Facility Identification Initiative Program Summary ReportHMIRS Hazardous Materials Information Reporting SystemMLTS Material Licensing Tracking SystemMINES Mines Master Index FileNPL Liens Federal Superfund LiensPADS PCB Activity Database SystemINDIAN RESERV Indian ReservationsFUDS Formerly Used Defense SitesUS BROWNFIELDS A Listing of Brownfields SitesDOD Department of Defense SitesRAATS RCRA Administrative Action Tracking SystemTRIS Toxic Chemical Release Inventory SystemTSCA Toxic Substances Control ActSSTS Section 7 Tracking SystemsFTTS INSP FIFRA/ TSCA Tracking System - FIFRA (Federal Insecticide, Fungicide, &

Rodenticide Act)/TSCA (Toxic Substances Control Act)

STATE OR LOCAL ASTM SUPPLEMENTAL

AST Listing of Pennsylvania Regulated Aboveground Storage TanksLAST Storage Tank Release SitesACT 2-DEED Act 2-Deed Acknowledgment SitesHIST LF Abandoned Landfill InventoryARCHIVE AST Archived Aboveground Storage Tank SitesUNREG LTANKS Unregulated Tank Cases

EDR PROPRIETARY HISTORICAL DATABASES

Coal Gas Former Manufactured Gas (Coal Gas) Sites

BROWNFIELDS DATABASES

US BROWNFIELDS A Listing of Brownfields SitesAUL Engineering and Institutional Controls at Act 2 SitesVCP Voluntary Cleanup Program SitesBROWNFIELDS Brownfields Sites

SURROUNDING SITES: SEARCH RESULTS

Surrounding sites were identified.

Elevations have been determined from the USGS Digital Elevation Model and should be evaluated ona relative (not an absolute) basis. Relative elevation information between sites of close proximityshould be field verified. Sites with an elevation equal to or higher than the target property have beendifferentiated below from sites with an elevation lower than the target property.Page numbers and map identification numbers refer to the EDR Radius Map report where detaileddata on individual sites can be reviewed.

Sites listed in bold italics are in multiple databases.

Unmappable (orphan) sites are not considered in the foregoing analysis.

EXECUTIVE SUMMARY



RCRIS: Resource Conservation and Recovery Information System. RCRIS includes selective information on sites which generate, transport, store, treat and/or dispose of hazardous waste as defined by the Resource Conservation and Recovery Act (RCRA). Conditionally exempt small quantity generators (CESQGs): generate less than 100 kg of hazardous waste, or less than 1 kg of acutely hazardous waste per month. Small quantity generators (SQGs): generate between 100 kg and 1,000 kg of hazardous waste per month. Large quantity generators (LQGs): generate over 1,000 kilograms (kg) of hazardous waste, or over 1 kg of acutely hazardous waste from the generator off-site to a facility that can recycle, treat, store, or dispose of the waste. TSDFs treat, store, or dispose of the waste.

A review of the RCRIS-SQG list, as provided by EDR, and dated 04/13/2004 has revealed that there are 2 RCRIS-SQG sites within approximately 0.25 miles of the target property.

PageMap IDDist / Dir Address Equal/Higher Elevation ____________________ ________ ____________________

82ENE0 - 1/8 10 N OAK ST K’S CLNRS

PageMap IDDist / Dir Address Lower Elevation ____________________ ________ ____________________

126N1/8 - 1/4 483 N OAK ST KEYSTONE PRINTING AND GRAPHIC

STATE ASTM STANDARD

LUST: The Leaking Underground Storage Tank Incident Reports contain an inventory of reportedleaking underground storage tank incidents. The data come from the Department of EnvironmentalResources’ List of Confirmed Releases.

A review of the LUST list, as provided by EDR, and dated 04/06/2004 has revealed that there are 2 LUST sites within approximately 0.5 miles of the target property.


104SSE0 - 1/8 121 S OAK ST MT CARMEL BORO NORTHUMBERLAND 137ENE1/4 - 1/2 550 E 3RD ST MIRIELLO SVC STA

UST: The Underground Storage Tank database contains registered USTs. USTs are regulated underSubtitle I of the Resource Conservation and Recovery Act (RCRA). The data come from theDepartment of Environmental Resources’ Regulated Underground Storage Tank Listing.

A review of the UST list, as provided by EDR, and dated 04/01/2004 has revealed that there are 4 UST sites within approximately 0.25 miles of the target property.

PageMap IDDist / Dir Address Equal/Higher Elevation ____________________ ________ ____________________

83NNE0 - 1/8 150 N OAK ST RAYS GULF115SE1/8 - 1/4 130 E 5TH ST TURKEY HILL 133


61W0 - 1/8 THIRD & MAPLE ST TOWER MINI MKT

EXECUTIVE SUMMARY



104SSE0 - 1/8 121 S OAK ST MT CARMEL BORO NORTHUMBERLAND

EXECUTIVE SUMMARY


Due to poor or inadequate address information, the following sites were not mapped:

Database(s)Site Name ________________________

FTTS INSPMOUNT CARMEL SCHOOL DISTRICTCERC-NFRAPMOUNT CARMEL TOWNSHIP LANDFILL- NATALIECERC-NFRAPMT. CARMEL GAS PLANTCERC-NFRAPMOUNT CARMEL BOROUGH LANFILL - ATLASVCPPPL POLE SITE NO 158SWF/LFBLOOMSBURG MUN AUTH (J.L. MCDOWEL)RCRIS-SQG, FINDS, LUSTKUZO BROTHERSLUSTCAPITAL PETROLUSTSUNOCO 0003 2037USTUNI MART 44130RCRIS-SQG, FINDSTADDEO BODY WORKSRCRIS-SQG, FINDSBULLSEYE FORD INCRCRIS-SQG, FINDSNORTHEAST INDUSTRIAL SERV CORPFINDSMOUNT CARMEL PLANTFINDSMOUNT CARMEL BORO AUTHFINDSALUMO PROD CO/MT CARMEL PLTFINDSMOUNT CARMEL GREENHOUSEFINDSMT CARMEL FLYASH FACCoal GasMOUNT CARMEL GAS LIGHT CO.

MAP FINDINGS SUMMARY

SearchTarget Distance Total

Database Property (Miles) < 1/8 1/8 - 1/4 1/4 - 1/2 1/2 - 1 > 1 Plotted


0 NR 0 0 0 0 1.000NPL 0 NR 0 0 0 0 1.000Proposed NPL 0 NR NR 0 0 0 0.500CERCLIS 0 NR NR NR 0 0 0.250CERC-NFRAP 0 NR 0 0 0 0 1.000CORRACTS 0 NR NR 0 0 0 0.500RCRIS-TSD 0 NR NR NR 0 0 0.250RCRIS Lg. Quan. Gen. 2 NR NR NR 1 1 0.250RCRIS Sm. Quan. Gen. 0 NR NR NR NR NR TPERNS

STATE ASTM STANDARD

0 NR 0 0 0 0 1.000State Haz. Waste 0 NR NR 0 0 0 0.500State Landfill 2 NR NR 1 0 1 0.500LUST 4 NR NR NR 1 3 0.250UST 0 NR NR 0 0 0 0.500VCP 0 NR NR NR 0 0 0.250ARCHIVE UST

FEDERAL ASTM SUPPLEMENTAL

0 NR 0 0 0 0 1.000CONSENT 0 NR 0 0 0 0 1.000ROD 0 NR 0 0 0 0 1.000Delisted NPL 0 NR NR NR NR NR TPFINDS 0 NR NR NR NR NR TPHMIRS 0 NR NR NR NR NR TPMLTS 0 NR NR NR 0 0 0.250MINES 0 NR NR NR NR NR TPNPL Liens 0 NR NR NR NR NR TPPADS 0 NR 0 0 0 0 1.000INDIAN RESERV 0 NR 0 0 0 0 1.000FUDS 0 NR NR 0 0 0 0.500US BROWNFIELDS 0 NR 0 0 0 0 1.000DOD 0 NR NR NR NR NR TPRAATS 0 NR NR NR NR NR TPTRIS 0 NR NR NR NR NR TPTSCA 0 NR NR NR NR NR TPSSTS 0 NR NR NR NR NR TPFTTS

STATE OR LOCAL ASTM SUPPLEMENTAL

0 NR NR NR NR NR TPAST 0 NR NR NR NR NR TPLAST 0 NR NR 0 0 0 0.500ACT 2-DEED 0 NR NR 0 0 0 0.500HIST LF

TC01199464.29r Page 4

MAP FINDINGS SUMMARY

SearchTarget Distance Total

Database Property (Miles) < 1/8 1/8 - 1/4 1/4 - 1/2 1/2 - 1 > 1 Plotted

0 NR NR NR NR NR TPARCHIVE AST 0 NR NR 0 0 0 0.500UNREG LTANKS


0 NR 0 0 0 0 1.000Coal Gas


0 NR NR 0 0 0 0.500US BROWNFIELDS 0 NR NR NR 0 0 0.250AUL 0 NR NR 0 0 0 0.500VCP 0 NR NR 0 0 0 0.500BROWNFIELDS

NOTES:

AQUIFLOW - see EDR Physical Setting Source Addendum

TP = Target Property

NR = Not Requested at this Search Distance

Sites may be listed in more than one database

TC01199464.29r Page 5

MAP FINDINGSMap IDDirectionDistance

EDR ID NumberDistance (ft.)EPA ID NumberDatabase(s)SiteElevation

Coal Gas Site Search: No site was found in a search of Real Property Scan’s ENVIROHAZ database.

003Tank Seq No: 10/01/1989Date Installed: 4000Capacity: 585842Facility ID:

4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 17-Oct-03Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-05326Other Id : TOWER CITY, PA 17980 PO BOX A 947 E GRAND AVEMailing Address: TOWER SALES INCMailing Name : 172490Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: GASChemical: 002Tank Seq No: 10/01/1989Date Installed: 4000Capacity: 585842Facility ID:


UST:

154 ft.

Relative:Lower

Actual:1084 ft.

< 1/8 MOUNT CARMEL, PA 17851West THIRD & MAPLE ST N/A1 USTTOWER MINI MKT U001099728

TC01199464.29r Page 6



4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-05326Other Id : TOWER CITY, PA 17980 PO BOX A 947 E GRAND AVEMailing Address: TOWER SALES INCMailing Name : 172490Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: KEROChemical: 005Tank Seq No: 10/01/1989Date Installed: 2000Capacity: 585842Facility ID:


4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 17-Oct-03Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-05326Other Id : TOWER CITY, PA 17980 PO BOX A 947 E GRAND AVEMailing Address: TOWER SALES INCMailing Name : 172490Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: GASChemical:

TOWER MINI MKT (Continued) U001099728

TC01199464.29r Page 7



4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 17-Oct-03Tank Last Dt Inspected : FOIInspection Code : USTTank Code :

TOWER MINI MKT (Continued) U001099728

Resource Conservation and Recovery Act Information system (RCRAINFO)Pennsylvania Environment, Facility, Application, Compliance Tracking System (PA-EFACTS)AIRS/AIRS Facility Subystem (AIRS/AFS)

Other Pertinent Environmental Activity Identified at Site:FINDS:

__________________________________________________________________________ ComplianceArea of ViolationEvaluationDate of

There are 2 violation record(s) reported at this site:

12/08/1999 Actual Date Achieved Compliance: 09/01/1999 Date Violation Determined: GENERATOR-OTHER REQUIREMENTS Area of Violation: 6018.401(a) Regulation Violated:

12/07/1999 Actual Date Achieved Compliance: 09/01/1999 Date Violation Determined: GENERATOR-OTHER REQUIREMENTS Area of Violation: 261a.5(b) Regulation Violated:

Violations existViolation Status:

Not reportedTSDF Activities:Small Quantity GeneratorClassification:

Not reportedContact:

PAR000040188EPA ID:(570) 339-1484KONDISKO TOMOwner:

RCRIS:

166 ft.

Relative:Higher

Actual:1093 ft.

< 1/8 MT CARMEL, PA 17851ENE FINDS10 N OAK ST PAR0000401882 RCRIS-SQGK’S CLNRS 1001818640

MOUNT CARMEL, PA 17851 150 N OAK STMailing Address: RAYMOND G KORNACKIMailing Name : 164632Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: GASChemical: 001Tank Seq No: 08/01/1986Date Installed: 4000Capacity: 586072Facility ID:

UST:

326 ft.

Relative:Higher

Actual:1092 ft.

< 1/8 MOUNT CARMEL, PA 17851NNE 150 N OAK ST N/A3 USTRAYS GULF U001461595

TC01199464.29r Page 8



006Tank Seq No: 08/17/1994Date Installed: 4000Capacity: 586072Facility ID:

4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 23-May-02Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-70630Other Id : MOUNT CARMEL, PA 17851 150 N OAK STMailing Address: RAYMOND G KORNACKIMailing Name : 164632Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: GASChemical: 005Tank Seq No: 08/17/1994Date Installed: 6000Capacity: 586072Facility ID:

4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 23-May-02Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-70630Other Id : MOUNT CARMEL, PA 17851 150 N OAK STMailing Address: RAYMOND G KORNACKIMailing Name : 164632Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: DIESLChemical: 004Tank Seq No: 08/01/1986Date Installed: 4000Capacity: 586072Facility ID:

4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 23-May-02Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-70630Other Id :

RAYS GULF (Continued) U001461595

TC01199464.29r Page 9



4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 23-May-02Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-70630Other Id : MOUNT CARMEL, PA 17851 150 N OAK STMailing Address: RAYMOND G KORNACKIMailing Name : 164632Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: GASChemical:

RAYS GULF (Continued) U001461595

01/01/1992Date Installed: 2000Capacity: 264784Facility ID:

4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 16-Oct-98Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-08502Other Id : MOUNT CARMEL, PA 17851 121 S OAK STMailing Address: MOUNT CARMEL BORO NORTHUMBERLAND CNTYMailing Name : 181467Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: DIESLChemical: 003Tank Seq No: 01/01/1992Date Installed: 1000Capacity: 264784Facility ID:

UST:

NC-4Region:08/05/1989Release Date:

MOUNT CARMEL BOROUGH GARAGEDescription :04/22/1992Status Date:Cleanup CompletedFacility Status:Underground Storage Tank Containing PetroleumFacility Type:Not reportedFacility Address 2:49-08502Facility Id:

LUST:

519 ft.

Relative:Lower

Actual:1074 ft.

< 1/8 MOUNT CARMEL, PA 17851SSE LUST121 S OAK ST N/A4 USTMT CARMEL BORO NORTHUMBERLAND CNTY U001961507

TC01199464.29r Page 10



4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 16-Oct-98Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-08502Other Id : MOUNT CARMEL, PA 17851 121 S OAK STMailing Address: MOUNT CARMEL BORO NORTHUMBERLAND CNTYMailing Name : 181467Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: GASChemical: 004Tank Seq No:

MT CARMEL BORO NORTHUMBERLAND CNTY (Continued) U001961507

49-08901Other Id : LANCASTER, PA 17603 257 CENTERVILLE RDMailing Address: TURKEY HILL MINIT MKTMailing Name : 92105Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: GASChemical: 002Tank Seq No: 07/01/1984Date Installed: 8000Capacity: 585859Facility ID:

4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 8-May-01Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-08901Other Id : LANCASTER, PA 17603 257 CENTERVILLE RDMailing Address: TURKEY HILL MINIT MKTMailing Name : 92105Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: GASChemical: 001Tank Seq No: 07/01/1984Date Installed: 8000Capacity: 585859Facility ID:

UST:

1072 ft.

Relative:Higher

Actual:1106 ft.

1/8-1/4 MOUNT CARMEL, PA 17851SE 130 E 5TH ST N/A5 USTTURKEY HILL 133 U001464903

TC01199464.29r Page 11



4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 8-May-01Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address : 49-08901Other Id : LANCASTER, PA 17603 257 CENTERVILLE RDMailing Address: TURKEY HILL MINIT MKTMailing Name : 92105Client Id Number : Mount CarmelMunicipality Name : Currently in UseTank Status: GASChemical: 003Tank Seq No: 07/01/1984Date Installed: 6000Capacity: 585859Facility ID:

4400Region Code : Not reportedTank Substance Date End : Not reportedStatus Code End Date : 8-May-01Tank Last Dt Inspected : FOIInspection Code : USTTank Code : 4-Aug-04Regulated Expiration Dt: NC REGIONAL OFFICE, WILLIAMSPORTRegion Code Name : Not reportedSecondary Facility Address :

TURKEY HILL 133 (Continued) U001464903

Resource Conservation and Recovery Act Information system (RCRAINFO)Pennsylvania Environment, Facility, Application, Compliance Tracking System (PA-EFACTS)

Other Pertinent Environmental Activity Identified at Site:FINDS:

No violations foundViolation Status:

Not reportedTSDF Activities:Conditionally Exempt Small Quantity GeneratorClassification:

(717) 648-5785DAN BURANICHContact:

PA0000488080EPA ID:(717) 648-5785JOSEPH SHEPARDOwner:

RCRIS:

1276 ft.

Relative:Lower

Actual:1051 ft.

1/8-1/4 SHAMOKIN, PA 17872North FINDS483 N OAK ST PA00004880806 RCRIS-SQGKEYSTONE PRINTING AND GRAPHIC 1004772572

TC01199464.29r Page 12



NC-4Region:08/05/1989Release Date:

MIRIELLO SERVICE STATIONDescription :10/30/1997Status Date:Cleanup CompletedFacility Status:Underground Storage Tank Containing PetroleumFacility Type:Not reportedFacility Address 2:49-24516Facility Id:

LUST:

2394 ft.

Relative:Lower

Actual:1064 ft.

1/4-1/2 MOUNT CARMEL, PA ENE 550 E 3RD ST N/A7 LUSTMIRIELLO SVC STA S105802274

TC01199464.29r Page 13

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atabase(s)

To maintain currency of the following federal and state databases, EDR contacts the appropriate governmental agencyon a monthly or quarterly basis, as required.

Elapsed ASTM days: Provides confirmation that this EDR report meets or exceeds the 90-day updating requirementof the ASTM standard.

FEDERAL ASTM STANDARD RECORDS

NPL: National Priority ListSource: EPATelephone: N/ANational Priorities List (Superfund). The NPL is a subset of CERCLIS and identifies over 1,200 sites for priority

cleanup under the Superfund Program. NPL sites may encompass relatively large areas. As such, EDR provides polygoncoverage for over 1,000 NPL site boundaries produced by EPA’s Environmental Photographic Interpretation Center(EPIC) and regional EPA offices.

Date of Government Version: 04/27/04 Date of Data Arrival at EDR: 05/04/04Date Made Active at EDR: 05/21/04 Elapsed ASTM days: 17Database Release Frequency: Semi-Annually Date of Last EDR Contact: 05/04/04

NPL Site Boundaries

Sources:

EPA’s Environmental Photographic Interpretation Center (EPIC)Telephone: 202-564-7333

EPA Region 1 EPA Region 6Telephone 617-918-1143 Telephone: 214-655-6659

EPA Region 3 EPA Region 8Telephone 215-814-5418 Telephone: 303-312-6774

EPA Region 4Telephone 404-562-8033

Proposed NPL: Proposed National Priority List SitesSource: EPATelephone: N/A


CERCLIS: Comprehensive Environmental Response, Compensation, and Liability Information SystemSource: EPATelephone: 703-413-0223CERCLIS contains data on potentially hazardous waste sites that have been reported to the USEPA by states, municipalities,

private companies and private persons, pursuant to Section 103 of the Comprehensive Environmental Response, Compensation,and Liability Act (CERCLA). CERCLIS contains sites which are either proposed to or on the National PrioritiesList (NPL) and sites which are in the screening and assessment phase for possible inclusion on the NPL.

Date of Government Version: 02/26/04 Date of Data Arrival at EDR: 03/22/04Date Made Active at EDR: 04/02/04 Elapsed ASTM days: 11Database Release Frequency: Quarterly Date of Last EDR Contact: 03/22/04

CERCLIS-NFRAP: CERCLIS No Further Remedial Action PlannedSource: EPATelephone: 703-413-0223As of February 1995, CERCLIS sites designated "No Further Remedial Action Planned" (NFRAP) have been removed

from CERCLIS. NFRAP sites may be sites where, following an initial investigation, no contamination was found,contamination was removed quickly without the need for the site to be placed on the NPL, or the contaminationwas not serious enough to require Federal Superfund action or NPL consideration. EPA has removed approximately25,000 NFRAP sites to lift the unintended barriers to the redevelopment of these properties and has archived themas historical records so EPA does not needlessly repeat the investigations in the future. This policy change ispart of the EPA’s Brownfields Redevelopment Program to help cities, states, private investors and affected citizensto promote economic redevelopment of unproductive urban sites.

TC01199464.29r Page GR-1

GOVERNMENT RECORDS SEARCHED / DATA CURRENCY TRACKING

Date of Government Version: 02/26/04 Date of Data Arrival at EDR: 03/22/04Date Made Active at EDR: 04/02/04 Elapsed ASTM days: 11Database Release Frequency: Quarterly Date of Last EDR Contact: 03/22/04

CORRACTS: Corrective Action ReportSource: EPATelephone: 800-424-9346CORRACTS identifies hazardous waste handlers with RCRA corrective action activity.


RCRIS: Resource Conservation and Recovery Information SystemSource: EPATelephone: 800-424-9346Resource Conservation and Recovery Information System. RCRIS includes selective information on sites which generate,

transport, store, treat and/or dispose of hazardous waste as defined by the Resource Conservation and RecoveryAct (RCRA). Conditionally exempt small quantity generators (CESQGs): generate less than 100 kg of hazardouswaste, or less than 1 kg of acutely hazardous waste per month. Small quantity generators (SQGs): generate between100 kg and 1,000 kg of hazardous waste per month. Large quantity generators (LQGs): generate over 1,000 kilograms(kg) of hazardous waste, or over 1 kg of acutely hazardous waste per month. Transporters are individuals orentities that move hazardous waste from the generator off-site to a facility that can recycle, treat, store, ordispose of the waste. TSDFs treat, store, or dispose of the waste.

Date of Government Version: 04/13/04 Date of Data Arrival at EDR: 04/20/04Date Made Active at EDR: 05/13/04 Elapsed ASTM days: 23Database Release Frequency: Varies Date of Last EDR Contact: 04/20/04

ERNS: Emergency Response Notification SystemSource: National Response Center, United States Coast GuardTelephone: 202-260-2342Emergency Response Notification System. ERNS records and stores information on reported releases of oil and hazardous

substances.

Date of Government Version: 12/31/03 Date of Data Arrival at EDR: 01/26/04Date Made Active at EDR: 03/12/04 Elapsed ASTM days: 46Database Release Frequency: Annually Date of Last EDR Contact: 04/26/04

FEDERAL ASTM SUPPLEMENTAL RECORDS

BRS: Biennial Reporting SystemSource: EPA/NTISTelephone: 800-424-9346The Biennial Reporting System is a national system administered by the EPA that collects data on the generation

and management of hazardous waste. BRS captures detailed data from two groups: Large Quantity Generators (LQG)and Treatment, Storage, and Disposal Facilities.

Date of Government Version: 12/01/01 Date of Last EDR Contact: 03/16/04Database Release Frequency: Biennially Date of Next Scheduled EDR Contact: 06/14/04

CONSENT: Superfund (CERCLA) Consent DecreesSource: EPA Regional OfficesTelephone: VariesMajor legal settlements that establish responsibility and standards for cleanup at NPL (Superfund) sites. Released

periodically by United States District Courts after settlement by parties to litigation matters.

Date of Government Version: N/A Date of Last EDR Contact: N/ADatabase Release Frequency: Varies Date of Next Scheduled EDR Contact: N/A

TC01199464.29r Page GR-2


ROD: Records Of DecisionSource: EPATelephone: 703-416-0223Record of Decision. ROD documents mandate a permanent remedy at an NPL (Superfund) site containing technical

and health information to aid in the cleanup.

Date of Government Version: 01/09/04 Date of Last EDR Contact: 04/05/04Database Release Frequency: Annually Date of Next Scheduled EDR Contact: 07/05/04

DELISTED NPL: National Priority List DeletionsSource: EPATelephone: N/AThe National Oil and Hazardous Substances Pollution Contingency Plan (NCP) establishes the criteria that the

EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425.(e), sites may be deleted from theNPL where no further response is appropriate.

Date of Government Version: 04/27/04 Date of Last EDR Contact: 05/04/04Database Release Frequency: Quarterly Date of Next Scheduled EDR Contact: 08/02/04

FINDS: Facility Index System/Facility Identification Initiative Program Summary ReportSource: EPATelephone: N/AFacility Index System. FINDS contains both facility information and ’pointers’ to other sources that contain more

detail. EDR includes the following FINDS databases in this report: PCS (Permit Compliance System), AIRS (AerometricInformation Retrieval System), DOCKET (Enforcement Docket used to manage and track information on civil judicialenforcement cases for all environmental statutes), FURS (Federal Underground Injection Control), C-DOCKET (CriminalDocket System used to track criminal enforcement actions for all environmental statutes), FFIS (Federal FacilitiesInformation System), STATE (State Environmental Laws and Statutes), and PADS (PCB Activity Data System).


HMIRS: Hazardous Materials Information Reporting SystemSource: U.S. Department of TransportationTelephone: 202-366-4555Hazardous Materials Incident Report System. HMIRS contains hazardous material spill incidents reported to DOT.


MLTS: Material Licensing Tracking SystemSource: Nuclear Regulatory CommissionTelephone: 301-415-7169MLTS is maintained by the Nuclear Regulatory Commission and contains a list of approximately 8,100 sites which

possess or use radioactive materials and which are subject to NRC licensing requirements. To maintain currency,EDR contacts the Agency on a quarterly basis.


MINES: Mines Master Index FileSource: Department of Labor, Mine Safety and Health AdministrationTelephone: 303-231-5959

Date of Government Version: 03/05/04 Date of Last EDR Contact: 03/30/04Database Release Frequency: Semi-Annually Date of Next Scheduled EDR Contact: 06/28/04

NPL LIENS: Federal Superfund LiensSource: EPATelephone: 202-564-4267Federal Superfund Liens. Under the authority granted the USEPA by the Comprehensive Environmental Response, Compensation

and Liability Act (CERCLA) of 1980, the USEPA has the authority to file liens against real property in orderto recover remedial action expenditures or when the property owner receives notification of potential liability.USEPA compiles a listing of filed notices of Superfund Liens.

TC01199464.29r Page GR-3


Date of Government Version: 10/15/91 Date of Last EDR Contact: 03/12/04Database Release Frequency: No Update Planned Date of Next Scheduled EDR Contact: 05/24/04

PADS: PCB Activity Database SystemSource: EPATelephone: 202-564-3887PCB Activity Database. PADS Identifies generators, transporters, commercial storers and/or brokers and disposers

of PCB’s who are required to notify the EPA of such activities.


DOD: Department of Defense SitesSource: USGSTelephone: 703-692-8801This data set consists of federally owned or administered lands, administered by the Department of Defense, that

have any area equal to or greater than 640 acres of the United States, Puerto Rico, and the U.S. Virgin Islands.


STORMWATER: Storm Water General PermitsSource: Environmental Protection AgencyTelephone: 202 564-0746A listing of all facilities with Storm Water General Permits.

Date of Government Version: N/A Date of Last EDR Contact: N/ADatabase Release Frequency: Quarterly Date of Next Scheduled EDR Contact: N/A

INDIAN RESERV: Indian ReservationsSource: USGSTelephone: 202-208-3710This map layer portrays Indian administered lands of the United States that have any area equal to or greater

than 640 acres.


US BROWNFIELDS: A Listing of Brownfields SitesSource: Environmental Protection AgencyTelephone: 202-566-2777Included in the listing are brownfields properties addresses by Cooperative Agreement Recipients and brownfields

properties addressed by Targeted Brownfields Assessments. Targeted Brownfields Assessments-EPA’s Targeted BrownfieldsAssessments (TBA) program is designed to help states, tribes, and municipalities--especially those without EPABrownfields Assessment Demonstration Pilots--minimize the uncertainties of contamination often associated withbrownfields. Under the TBA program, EPA provides funding and/or technical assistance for environmental assessmentsat brownfields sites throughout the country. Targeted Brownfields Assessments supplement and work with other effortsunder EPA’s Brownfields Initiative to promote cleanup and redevelopment of brownfields. Cooperative AgreementRecipients-States, political subdivisions, territories, and Indian tribes become BCRLF cooperative agreement recipientswhen they enter into BCRLF cooperative agreements with the U.S. EPA. EPA selects BCRLF cooperative agreement recipientsbased on a proposal and application process. BCRLF cooperative agreement recipients must use EPA funds providedthrough BCRLF cooperative agreement for specified brownfields-related cleanup activities.


RMP: Risk Management PlansSource: Environmental Protection AgencyTelephone: 202-564-8600When Congress passed the Clean Air Act Amendments of 1990, it required EPA to publish regulations and guidance

for chemical accident prevention at facilities using extremely hazardous substances. The Risk Management ProgramRule (RMP Rule) was written to implement Section 112(r) of these amendments. The rule, which built upon existingindustry codes and standards, requires companies of all sizes that use certain flammable and toxic substancesto develop a Risk Management Program, which includes a(n): Hazard assessment that details the potential effectsof an accidental release, an accident history of the last five years, and an evaluation of worst-case and alternativeaccidental releases; Prevention program that includes safety precautions and maintenance, monitoring, and employeetraining measures; and Emergency response program that spells out emergency health care, employee training measuresand procedures for informing the public and response agencies (e.g the fire department) should an accident occur.

TC01199464.29r Page GR-4


Date of Government Version: N/A Date of Last EDR Contact: N/ADatabase Release Frequency: N/A Date of Next Scheduled EDR Contact: N/A

FUDS: Formerly Used Defense SitesSource: U.S. Army Corps of EngineersTelephone: 202-528-4285The listing includes locations of Formerly Used Defense Sites properties where the US Army Corps of Engineers

is actively working or will take necessary cleanup actions.

Date of Government Version: 10/01/03 Date of Last EDR Contact: 04/26/04Database Release Frequency: Varies Date of Next Scheduled EDR Contact: 07/05/04

RAATS: RCRA Administrative Action Tracking SystemSource: EPATelephone: 202-564-4104RCRA Administration Action Tracking System. RAATS contains records based on enforcement actions issued under RCRA

pertaining to major violators and includes administrative and civil actions brought by the EPA. For administrationactions after September 30, 1995, data entry in the RAATS database was discontinued. EPA will retain a copy ofthe database for historical records. It was necessary to terminate RAATS because a decrease in agency resourcesmade it impossible to continue to update the information contained in the database.

Date of Government Version: 04/17/95 Date of Last EDR Contact: 03/08/04Database Release Frequency: No Update Planned Date of Next Scheduled EDR Contact: 06/07/04

TRIS: Toxic Chemical Release Inventory SystemSource: EPATelephone: 202-566-0250Toxic Release Inventory System. TRIS identifies facilities which release toxic chemicals to the air, water and

land in reportable quantities under SARA Title III Section 313.


TSCA: Toxic Substances Control ActSource: EPATelephone: 202-260-5521Toxic Substances Control Act. TSCA identifies manufacturers and importers of chemical substances included on the

TSCA Chemical Substance Inventory list. It includes data on the production volume of these substances by plantsite.

Date of Government Version: 12/31/02 Date of Last EDR Contact: 03/05/04Database Release Frequency: Every 4 Years Date of Next Scheduled EDR Contact: 06/07/04

FTTS INSP: FIFRA/ TSCA Tracking System - FIFRA (Federal Insecticide, Fungicide, & Rodenticide Act)/TSCA (Toxic Substances Control Act)Source: EPATelephone: 202-564-2501


SSTS: Section 7 Tracking SystemsSource: EPATelephone: 202-564-5008Section 7 of the Federal Insecticide, Fungicide and Rodenticide Act, as amended (92 Stat. 829) requires all

registered pesticide-producing establishments to submit a report to the Environmental Protection Agency by March1st each year. Each establishment must report the types and amounts of pesticides, active ingredients and devicesbeing produced, and those having been produced and sold or distributed in the past year.


TC01199464.29r Page GR-5


FTTS: FIFRA/ TSCA Tracking System - FIFRA (Federal Insecticide, Fungicide, & Rodenticide Act)/TSCA (Toxic Substances Control Act)Source: EPA/Office of Prevention, Pesticides and Toxic SubstancesTelephone: 202-564-2501FTTS tracks administrative cases and pesticide enforcement actions and compliance activities related to FIFRA,

TSCA and EPCRA (Emergency Planning and Community Right-to-Know Act). To maintain currency, EDR contacts theAgency on a quarterly basis.


STATE OF PENNSYLVANIA ASTM STANDARD RECORDS

SHWS: Hazardous Sites Cleanup Act Site ListSource: Department Environmental ProtectionTelephone: 717-783-7816The Hazardous Sites Cleanup Act Site List includes sites listed on PA Priority List, sites delisted from PA Priority

List, Interim Response Completed sites, and Sites Being Studied or Response Being Planned.


PA SWF/LF:

SWF/LF: Solid Waste Facility Inventory/Transfer StationsSource: Department of Environmental ProtectionTelephone: 717-783-9258Solid Waste Facilities/Landfill Sites. SWF/LF type records typically contain an inventory of solid waste disposal

facilities or landfills in a particular state. Depending on the state, these may be active or inactive facilitiesor open dumps that failed to meet RCRA Subtitle D Section 4004 criteria for solid waste landfills or disposalsites. Database addresses may represent a sites locational and/or mailing address.

Date of Government Version: 07/21/03 Date of Data Arrival at EDR: 09/24/03Date Made Active at EDR: 10/07/03 Elapsed ASTM days: 13Database Release Frequency: No Update Planned Date of Last EDR Contact: 03/22/04

SWF/LF: Operating FacilitiesSource: Department of Environmental ProtectionTelephone: 717-787-7564


SWF/LF: Transfer StationsSource: Department of Environmental ProtectionTelephone: 717-787-7564A listing of transfer stations.


SWF/LF: Inactive Solid Waste LandfillSource: Department of Environmental ProtectionTelephone: 717-783-9258Inactive Solid Waste Facilities. This listing is no longer updated by the state.

Date of Government Version: 12/20/94 Date of Data Arrival at EDR: 06/08/99Date Made Active at EDR: 06/30/99 Elapsed ASTM days: 22Database Release Frequency: No Update Planned Date of Last EDR Contact: 03/22/04

TC01199464.29r Page GR-6


LUST: Storage Tank Release SitesSource: Department of Environmental ProtectionTelephone: 717-783-7509Leaking Underground Storage Tank Incident Reports. LUST records contain an inventory of reported leaking underground

storage tank incidents. Not all states maintain these records, and the information stored varies by state.


UST: Listing of Pennsylvania Regulated Underground Storage TanksSource: Department of Environmental ProtectionTelephone: 717-772-5599Registered Underground Storage Tanks. UST’s are regulated under Subtitle I of the Resource Conservation and Recovery

Act (RCRA) and must be registered with the state department responsible for administering the UST program. Availableinformation varies by state program.


VCP: Voluntary Cleanup Program SitesSource: Department of Environmental ProtectionTelephone: 717-783-2388Sites involved in the Voluntary Cleanup Program


ARCHIVE UST: Archived Underground Storage Tank SitesSource: Department of Environmental ProtectionTelephone: 717-772-5599The list includes tanks storing highly hazardous substances that were removed from the DEP’s Storage Tank Information

database because of the Department’s policy on sensitive information. The list also may include tanks that areremoved or permanently closed.


STATE OF PENNSYLVANIA ASTM SUPPLEMENTAL RECORDS

AST: Listing of Pennsylvania Regulated Aboveground Storage TanksSource: Department of Environmental ProtectionTelephone: 717-772-5599Registered Aboveground Storage Tanks.


LAST: Storage Tank Release SitesSource: Department of Environmental ProtectionTelephone: 717-783-7509Leaking Aboveground Storage Tank Incident Reports.


TC01199464.29r Page GR-7


ACT 2-DEED: Act 2-Deed Acknowledgment SitesSource: Department of Environmental ProtectionTelephone: 717-783-9470This listing pertains to sites where the Department has approved a cleanup requiring a deed acknowledgment under

Act 2. This list includes sites remediated to a non-residential Statewide health standard (Section 303(g));all sites demonstrating attainment of a Site-specific standard (Section 304(m)); and sites being remediatedas a special industrial area (Section 305(g)). Persons who remediated a site to a standard that requires adeed acknowledgment shall comply with the requirements of the Solid Waste Management Act or the Hazardous SitesCleanup Act, as referenced in Act 2. These statutes require a property description section in the deed concerningthe hazardous substance disposal on the site. The location of disposed hazardous substances and a descriptionof the type of hazardous substances disposed on the site shall be included in the deed acknowledgment. A deedacknowledgment is required at the time of conveyance of the property.


UNREG LTANKS: Unregulated Tank CasesSource: Department of Environmental ProtectionTelephone: 717-783-7509Leaking storage tank cases from unregulated storage tanks.

Date of Government Version: 04/12/02 Date of Last EDR Contact: 08/14/03Database Release Frequency: No Update Planned Date of Next Scheduled EDR Contact: N/A

HIST LF: Abandoned Landfill InventorySource: Department of Environmental ProtectionTelephone: 717-787-7564The report provides facility information recorded in the Pennsylvania Department of Environmental Protection ALI

database. Some of this information has been abstracted from old records and may not accurately reflect the currentconditions and status at these facilities


ARCHIVE AST: Archived Aboveground Storage Tank SitesSource: Department of Environmental ProtectionTelephone: 717-772-5599The list includes aboveground tanks with a capacity greater than 21,000 gallons that were removed from the DEP’s

Storage Tank Information database because of the Department’s policy on sensitive information. The list also mayinclude tanks that are removed or permanently closed.



Former Manufactured Gas (Coal Gas) Sites: The existence and location of Coal Gas sites is provided exclusively toEDR by Real Property Scan, Inc. ©Copyright 1993 Real Property Scan, Inc. For a technical description of the typesof hazards which may be found at such sites, contact your EDR customer service representative.

Disclaimer Provided by Real Property Scan, Inc.

The information contained in this report has predominantly been obtained from publicly available sources produced by entitiesother than Real Property Scan. While reasonable steps have been taken to insure the accuracy of this report, Real PropertyScan does not guarantee the accuracy of this report. Any liability on the part of Real Property Scan is strictly limited to a refundof the amount paid. No claim is made for the actual existence of toxins at any site. This report does not constitute a legalopinion.

TC01199464.29r Page GR-8



AUL: Engineering and Institutional Controls at Act 2 SitesSource: Department of Environmental ProtectionTelephone: 717-783-9470Activity and use limitations include both engineering controls and institutional controls. Under Act 2 and the

accompanying regulations, Administration of Land Recycling Program, persons who perform a site cleanup using asite-specific standard or affect a special industrial area cleanup may use engineering or institutional controlsto attain the cleanup. The sites listed had either an engineering control and/or an instituitional control usedin the remediation of the site.


VCP: Voluntary Cleanup Program SitesSource: Department of Environmental ProtectionTelephone: 717-783-2388Sites involved in the Voluntary Cleanup Program


BROWNFIELDS: Brownfields SitesSource: Department of Environmental ProtectionTelephone: 717-783-7509


US BROWNFIELDS: A Listing of Brownfields SitesSource: Environmental Protection AgencyTelephone: 202-566-2777Included in the listing are brownfields properties addresses by Cooperative Agreement Recipients and brownfields

properties addressed by Targeted Brownfields Assessments. Targeted Brownfields Assessments-EPA’s Targeted BrownfieldsAssessments (TBA) program is designed to help states, tribes, and municipalities--especially those without EPABrownfields Assessment Demonstration Pilots--minimize the uncertainties of contamination often associated withbrownfields. Under the TBA program, EPA provides funding and/or technical assistance for environmental assessmentsat brownfields sites throughout the country. Targeted Brownfields Assessments supplement and work with other effortsunder EPA’s Brownfields Initiative to promote cleanup and redevelopment of brownfields. Cooperative AgreementRecipients-States, political subdivisions, territories, and Indian tribes become BCRLF cooperative agreement recipientswhen they enter into BCRLF cooperative agreements with the U.S. EPA. EPA selects BCRLF cooperative agreement recipientsbased on a proposal and application process. BCRLF cooperative agreement recipients must use EPA funds providedthrough BCRLF cooperative agreement for specified brownfields-related cleanup activities.

Date of Government Version: N/A Date of Last EDR Contact: N/ADatabase Release Frequency: Semi-Annually Date of Next Scheduled EDR Contact: N/A

OTHER DATABASE(S)

Depending on the geographic area covered by this report, the data provided in these specialty databases may or may not becomplete. For example, the existence of wetlands information data in a specific report does not mean that all wetlands in thearea covered by the report are included. Moreover, the absence of any reported wetlands information does not necessarilymean that wetlands do not exist in the area covered by the report.

Oil/Gas Pipelines: This data was obtained by EDR from the USGS in 1994. It is referred to by USGS as GeoData Digital Line Graphsfrom 1:100,000-Scale Maps. It was extracted from the transportation category including some oil, but primarilygas pipelines.

Electric Power Transmission Line DataSource: PennWell CorporationTelephone: (800) 823-6277This map includes information copyrighted by PennWell Corporation. This information is providedon a best effort basis and PennWell Corporation does not guarantee its accuracy nor warrant itsfitness for any particular purpose. Such information has been reprinted with the permission of PennWell.

TC01199464.29r Page GR-9


Sensitive Receptors: There are individuals deemed sensitive receptors due to their fragile immune systems and special sensitivityto environmental discharges. These sensitive receptors typically include the elderly, the sick, and children. While the location of allsensitive receptors cannot be determined, EDR indicates those buildings and facilities - schools, daycares, hospitals, medical centers,and nursing homes - where individuals who are sensitive receptors are likely to be located.

AHA Hospitals:Source: American Hospital Association, Inc.Telephone: 312-280-5991The database includes a listing of hospitals based on the American Hospital Association’s annual survey of hospitals.

Medical Centers: Provider of Services ListingSource: Centers for Medicare & Medicaid ServicesTelephone: 410-786-3000A listing of hospitals with Medicare provider number, produced by Centers of Medicare & Medicaid Services,a federal agency within the U.S. Department of Health and Human Services.

Nursing HomesSource: National Institutes of HealthTelephone: 301-594-6248Information on Medicare and Medicaid certified nursing homes in the United States.

Public SchoolsSource: National Center for Education StatisticsTelephone: 202-502-7300The National Center for Education Statistics’ primary database on elementaryand secondary public education in the United States. It is a comprehensive, annual, national statisticaldatabase of all public elementary and secondary schools and school districts, which contains data that arecomparable across all states.

Private SchoolsSource: National Center for Education StatisticsTelephone: 202-502-7300The National Center for Education Statistics’ primary database on private school locations in the United States.

Daycare Centers: Child Care Facility ListSource: Department of Public WelfareTelephone: 717-783-3856

Flood Zone Data: This data, available in select counties across the country, was obtained by EDR in 1999 from the FederalEmergency Management Agency (FEMA). Data depicts 100-year and 500-year flood zones as defined by FEMA.

NWI: National Wetlands Inventory. This data, available in select counties across the country, was obtained by EDRin 2002 from the U.S. Fish and Wildlife Service.

STREET AND ADDRESS INFORMATION

© 2003 Geographic Data Technology, Inc., Rel. 07/2003. This product contains proprietary and confidential property of GeographicData Technology, Inc. Unauthorized use, including copying for other than testing and standard backup procedures, of this product isexpressly prohibited.

TC01199464.29r Page GR-10


TC01199464.29r Page A-1

forming an opinion about the impact of potential contaminant migration.EDR’s GeoCheck Physical Setting Source Addendum is provided to assist the environmental professional inof the soil, and nearby wells. Groundwater flow velocity is generally impacted by the nature of the geologic strata.Groundwater flow direction may be impacted by surface topography, hydrology, hydrogeology, characteristics

2. Groundwater flow velocity.1. Groundwater flow direction, and

Assessment of the impact of contaminant migration generally has two principle investigative components:

and geologic characteristics of a site, and wells in the area.additional physical setting sources generally include information about the topographic, hydrologic, hydrogeologic,to assess the impact of migration of recognized environmental conditions in connection with the property. SuchTopographic Map (or equivalent) is generally obtained, pursuant to local good commercial or customary practice,to migrate to or from the property, and (2) more information than is provided in the current USGS 7.5 Minutewhen (1) conditions have been identified in which hazardous substances or petroleum products are likelyElevation Model) be reviewed. It also requires that one or more additional physical setting sources be soughtSection 7.2.3 requires that a current USGS 7.5 Minute Topographic Map (or equivalent, such as the USGS Digitalwith the collection of physical setting source information in accordance with ASTM 1527-00, Section 7.2.3.EDR’s GeoCheck Physical Setting Source Addendum has been developed to assist the environmental professional

1087 ft. above sea levelElevation:4516939.5UTM Y (Meters): 380702.4UTM X (Meters): Zone 18Universal Tranverse Mercator: 76.414101 - 76˚ 24’ 50.8’’Longitude (West): 40.796700 - 40˚ 47’ 48.1’’Latitude (North):

TARGET PROPERTY COORDINATES

MOUNT CARMEL, PA 1785150 WEST 3RD STREETMOUNT CARMEL WACHOVIA BANK

TARGET PROPERTY ADDRESS

GEOCHECK - PHYSICAL SETTING SOURCE ADDENDUM®

TC01199464.29r Page A-2

should be field verified.on a relative (not an absolute) basis. Relative elevation information between sites of close proximitySource: Topography has been determined from the USGS 7.5’ Digital Elevation Model and should be evaluated

SURROUNDING TOPOGRAPHY: ELEVATION PROFILES

Ele

vatio

n (f

t)E

leva

tion

(ft)

TP

TP0 1/2 1 Miles

✩Target Property Elevation: 1087 ft.

North South

West East

1561

15301467

13611265

1149

1117

1080

1069

1087

1088

1045

1082

1233

1260

1325

1359127512201131

1144

1156

1134 1054

1059

1071

1072

1078

1087

1099

1117

1113

1091

1095

1118

1154

1154

1154

USGS 7.5 min quad indexSource:General NWGeneral Topographic Gradient:40076-G4 MOUNT CARMEL, PAUSGS Topographic Map:

TARGET PROPERTY TOPOGRAPHY

should contamination exist on the target property, what downgradient sites might be impacted.assist the environmental professional in forming an opinion about the impact of nearby contaminated properties or,Surface topography may be indicative of the direction of surficial groundwater flow. This information can be used toTOPOGRAPHIC INFORMATION

collected on nearby properties, and regional groundwater flow information (from deep aquifers).sources of information, such as surface topographic information, hydrologic information, hydrogeologic datausing site-specific well data. If such data is not reasonably ascertainable, it may be necessary to rely on otherGroundwater flow direction for a particular site is best determined by a qualified environmental professionalGROUNDWATER FLOW DIRECTION INFORMATION

GEOCHECK - PHYSICAL SETTING SOURCE SUMMARY®

TC01199464.29r Page A-3

Not Reported

GENERAL DIRECTIONLOCATIONGROUNDWATER FLOWFROM TPMAP ID

hydrogeologically, and the depth to water table.authorities at select sites and has extracted the date of the report, groundwater flow direction as determinedflow at specific points. EDR has reviewed reports submitted by environmental professionals to regulatoryEDR has developed the AQUIFLOW Information System to provide data on the general direction of groundwater

AQUIFLOW®

Search Radius: 1.000 Mile.

contamination exist on the target property, what downgradient sites might be impacted.environmental professional in forming an opinion about the impact of nearby contaminated properties or, shouldof groundwater flow direction in the immediate area. Such hydrogeologic information can be used to assist theHydrogeologic information obtained by installation of wells on a specific site can often be an indicatorHYDROGEOLOGIC INFORMATION

YES - refer to the Overview Map and Detail MapMOUNT CARMEL

NATIONAL WETLAND INVENTORYNWI ElectronicData CoverageNWI Quad at Target Property

4219420004B4219420005B4219420004B4219420005BAdditional Panels in search area:

4207380001CFlood Plain Panel at Target Property:

YES - refer to the Overview Map and Detail MapNORTHUMBERLAND, PA

FEMA FLOOD ZONEFEMA FloodElectronic DataTarget Property County

and bodies of water).Refer to the Physical Setting Source Map following this summary for hydrologic information (major waterways

contamination exist on the target property, what downgradient sites might be impacted.the environmental professional in forming an opinion about the impact of nearby contaminated properties or, shouldSurface water can act as a hydrologic barrier to groundwater flow. Such hydrologic information can be used to assistHYDROLOGIC INFORMATION


TC01199464.29r Page A-4

Min: 4.50Max: 8.40

Min: 0.20Max: 6.00

Gravelfines, ClayeyGravels withSOILS, Gravels,COARSE-GRAINED

Sand.Gravel andFragments,200), Stonepassing No.pct. or lessmaterials (35Granular

sandy loamvery channery - 6 inches 0 inches 1

Soil Layer Information

Boundary Classification

Layer Upper Lower Soil Texture Class AASHTO Group Unified Soil Permeability Soil ReactionRate (in/hr) (pH)

> 60 inchesDepth to Bedrock Max:

> 20 inchesDepth to Bedrock Min:

HIGHCorrosion Potential - Uncoated Steel:

Hydric Status: Soil does not meet the requirements for a hydric soil.

Not reportedSoil Drainage Class:

drained and are classified.Class B/D - Drained/undrained hydrology class of soils that can beHydrologic Group:

very channery - sandy loamSoil Surface Texture:

UDORTHENTSSoil Component Name:

The following information is based on Soil Conservation Service STATSGO data.in a landscape. Soil maps for STATSGO are compiled by generalizing more detailed (SSURGO) soil survey maps.for privately owned lands in the United States. A soil map in a soil survey is a representation of soil patternsSurvey (NCSS) and is responsible for collecting, storing, maintaining and distributing soil survey informationThe U.S. Department of Agriculture’s (USDA) Soil Conservation Service (SCS) leads the National Cooperative Soil

DOMINANT SOIL COMPOSITION IN GENERAL AREA OF TARGET PROPERTY

Map, USGS Digital Data Series DDS - 11 (1994).of the Conterminous U.S. at 1:2,500,000 Scale - a digital representation of the 1974 P.B. King and H.M. BeikmanGeologic Age and Rock Stratigraphic Unit Source: P.G. Schruben, R.E. Arndt and W.J. Bawiec, Geology

ROCK STRATIGRAPHIC UNIT GEOLOGIC AGE IDENTIFICATION

Stratifed SequenceCategory:PaleozoicEra:PennsylvanianSystem:PennsylvanianSeries:PPCode: (decoded above as Era, System & Series)

at which contaminant migration may be occurring.Geologic information can be used by the environmental professional in forming an opinion about the relative speedGEOLOGIC INFORMATION IN GENERAL AREA OF TARGET PROPERTY

move more quickly through sandy-gravelly types of soils than silty-clayey types of soils.characteristics data collected on nearby properties and regional soil information. In general, contaminant plumesto rely on other sources of information, including geologic age identification, rock stratigraphic unit and soilusing site specific geologic and soil strata data. If such data are not reasonably ascertainable, it may be necessaryGroundwater flow velocity information for a particular site is best determined by a qualified environmental professionalGROUNDWATER FLOW VELOCITY INFORMATION


TC01199464.29r Page A-5

contaminant migration on nearby drinking water wells.assessing sources that may impact groundwater flow direction, and in forming an opinion about the impact of7.2.2 is water well information. Water well information can be used to assist the environmental professional inare obtained, pursuant to local, good commercial or customary practice." One of the record sources listed in Sectionuseful, accurate, and complete in light of the objective of the records review (see 7.1.1), and (3) whether theyany, should be checked include (1) whether they are reasonably ascertainable, (2) whether they are sufficientlyand state sources... Factors to consider in determining which local or additional state records, ifrecords may be checked, in the discretion of the environmental professional, to enhance and supplement federalAccording to ASTM E 1527-00, Section 7.2.2, "one or more additional state or local sources of environmental

ADDITIONAL ENVIRONMENTAL RECORD SOURCES

gravelly - sandy clay loamweathered bedrockgravelly - loamunweathered bedrockDeeper Soil Types:

channery - silt loamloamsandy loamvery channery - sandy loamShallow Soil Types:

very stony - loamchannery - loamchannery - silt loamextremely stony - loamextremely stony - sandy loamSurficial Soil Types:

very stony - loamchannery - loamchannery - silt loamextremely stony - loamextremely stony - sandy loamSoil Surface Textures:

appear within the general area of target property.Based on Soil Conservation Service STATSGO data, the following additional subordinant soil types may

OTHER SOIL TYPES IN AREA

Min: 4.50Max: 8.40

Min: 0.06Max: 20.00

Gravel.fines, SiltyGravels withSOILS, Gravels,COARSE-GRAINEDgravel.Well-gradedGravels,Gravels, CleanSOILIS,COARSE-GRAINED

Sand.Gravel andFragments,200), Stonepassing No.pct. or lessmaterials (35Granular

silt loamvery shaly -60 inches 6 inches 2

Soil Layer Information

Boundary Classification

Layer Upper Lower Soil Texture Class AASHTO Group Unified Soil Permeability Soil ReactionRate (in/hr) (pH)


TC01199464.29r Page A-6

1/2 - 1 Mile SSWDPA00025517 A11/2 - 1 Mile SSWDPA00025517 A1

STATE DATABASE WELL INFORMATION

LOCATIONFROM TPWELL IDMAP ID

Note: PWS System location is not always the same as well location.

No PWS System Found

FEDERAL FRDS PUBLIC WATER SUPPLY SYSTEM INFORMATION


1/2 - 1 Mile SSWUSGS0933608 A21/2 - 1 Mile SSWUSGS0933608 A2

FEDERAL USGS WELL INFORMATION


1.000State DatabaseNearest PWS within 1 mileFederal FRDS PWS1.000Federal USGS

WELL SEARCH DISTANCE INFORMATION

SEARCH DISTANCE (miles)DATABASE


1120

1120

1360

1360

1120

1080

1120

10801080

1680

1640

1240

1600

1640

1600

1560

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13

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1280

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12

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1200

1200

1200

1200

1200

1160

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1120

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1080

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166016

60

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15401460

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1

1380

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13

1340 1340

1300

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1300

1300 1300

1260

12601260

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12

1220

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1180

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114011

40

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1140

1100

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1100

1060

1060

TC01199464.29r Page A-8

WITHDRAWALSite Use:Not ReportedNote:Not ReportedDate of Use:

Site Use Information:

Status during measurement: Not ReportedNot ReportedTest Length:Not ReportedSpec. Cap.:Not ReportedDrawdown:Not ReportedProduction WL:

WL Measurement Method: Not ReportedNot ReportedWL Data Source:

Not ReportedSWL:120Discharge:REPORTED, METHOD NOT KNOWNMeasurement Method:WELL OWNERData Source:

FLOWINGDischarge Type:03/31/1910Discharge Date:

Aquifer Test Information:

8.00Diameter:1180Bottom of the Hole:0Top of the Hole:

Hole Information:

327MCCKFormation Code:SANDSTONELithology:PRIMARYContributing Unit:Not ReportedBottom of Interval:Not ReportedTop of Interval:

Geohydrologic Information:

BLANCHARDDriller:CABLE TOOLConstruction Method:USGS OR PAGSConst. Data Source:Not ReportedFinish:1908Construction Date:

Construction Information:

UNKNOWNCasing Material:Not ReportedCasing Wall Thickness:8Diameter:490Casing Bottom:0Casing Top:

Casing Information:

Not ReportedZip Code:10/13/1930Date of Ownership:MT. CARMEL WATER COOwner:

Owner Information:

Inventory Data Site OnlyAgency use of site:UNKNOWNDepth Data Source:04/18/1991Date Record Updated:field checked by reporting agencyData Reliability:06/04/1981Date Record Created:MOUNT CARMELQuadrangle:1400Elevation:interpolated from topographic mapElevation Method:10Elevation Accuracy:HILLSIDETopography:327MCCKFormation:MOUNT CARMELMunicipality:NORTHUMBERLANDCounty:02050301Hydrologic Unit:Lat/Long Accuracy: ACCURATE TO +5 SECONDS0762508Longitude:404702Latitude:01/01/1908Date Drilled:1180Well Depth:wellType of Site:103Local well #:

404702076250801Site ID:

A1SSW1/2 - 1 MileHigher

DPA00025517PA WELLS

Map IDDirectionDistanceElevation EDR ID NumberDatabase

GEOCHECK - PHYSICAL SETTING SOURCE MAP FINDINGS®

TC01199464.29r Page A-9

UNKNOWNCasing Material:Not ReportedCasing Wall Thickness:8Diameter:490Casing Bottom:0Casing Top:

Casing Information:

Not ReportedZip Code:10/13/1930Date of Ownership:MT. CARMEL WATER COOwner:

Owner Information:

Inventory Data Site OnlyAgency use of site:UNKNOWNDepth Data Source:04/18/1991Date Record Updated:field checked by reporting agencyData Reliability:06/04/1981Date Record Created:MOUNT CARMELQuadrangle:1400Elevation:interpolated from topographic mapElevation Method:10Elevation Accuracy:HILLSIDETopography:327MCCKFormation:MOUNT CARMELMunicipality:NORTHUMBERLANDCounty:02050301Hydrologic Unit:Lat/Long Accuracy: ACCURATE TO +5 SECONDS0762508Longitude:404702Latitude:01/01/1908Date Drilled:1180Well Depth:wellType of Site:103Local well #:

404702076250801Site ID:


DPA00025517PA WELLS

Ground-water levels, Number of Measurements: 0

Not ReportedProject no:Not ReportedSource:Not ReportedHole depth:

1176Well depth:Not ReportedAquifer type:327MCCKPrimary Aquifer:Single well, other than collector or Ranney typeWell Type:

Not ReportedInven Date:19080101Const Date:Ground-water other than SpringSite Type:Hillside (slope)Topographic:02050301Hydrologic code:1400.00Altitude:Northumberland CountyCounty:PAState:NAD83Coord Sys:-76.41856Dec. Longitude:40.78398Dec. Latitude:NU 103Site Name:

404702076250801Site ID:USGSAgency:


USGS0933608FED USGS

LOHMANName of Visitor:10/13/1930Date of Visit:

Hydrogeologist Visits Information:

PUBLIC SUPPLYUse:Not ReportedUse Date:

Water Use Information:


TC01199464.29r Page A-10

Single well, other than collector or Ranney typeWell Type:Not ReportedInven Date:19080101Const Date:

Ground-water other than SpringSite Type:Hillside (slope)Topographic:02050301Hydrologic code:1400.00Altitude:Northumberland CountyCounty:PAState:NAD83Coord Sys:-76.41856Dec. Longitude:40.78398Dec. Latitude:NU 103Site Name:

404702076250801Site ID:USGSAgency:


USGS0933608FED USGS

LOHMANName of Visitor:10/13/1930Date of Visit:

Hydrogeologist Visits Information:

PUBLIC SUPPLYUse:Not ReportedUse Date:

Water Use Information:

WITHDRAWALSite Use:Not ReportedNote:Not ReportedDate of Use:

Site Use Information:

Status during measurement: Not ReportedNot ReportedTest Length:Not ReportedSpec. Cap.:Not ReportedDrawdown:Not ReportedProduction WL:

WL Measurement Method: Not ReportedNot ReportedWL Data Source:

Not ReportedSWL:120Discharge:REPORTED, METHOD NOT KNOWNMeasurement Method:WELL OWNERData Source:

FLOWINGDischarge Type:03/31/1910Discharge Date:

Aquifer Test Information:

8.00Diameter:1180Bottom of the Hole:0Top of the Hole:

Hole Information:

327MCCKFormation Code:SANDSTONELithology:PRIMARYContributing Unit:Not ReportedBottom of Interval:Not ReportedTop of Interval:

Geohydrologic Information:

BLANCHARDDriller:CABLE TOOLConstruction Method:USGS OR PAGSConst. Data Source:Not ReportedFinish:1908Construction Date:

Construction Information:


TC01199464.29r Page A-11

Ground-water levels, Number of Measurements: 0

Not ReportedProject no:Not ReportedSource:Not ReportedHole depth:

1176Well depth:Not ReportedAquifer type:327MCCKPrimary Aquifer:


TC01199464.29r Page A-12

: Zone 3 indoor average level < 2 pCi/L. : Zone 2 indoor average level >= 2 pCi/L and <= 4 pCi/L. Note: Zone 1 indoor average level > 4 pCi/L.

Federal EPA Radon Zone for NORTHUMBERLAND County: 1

0 (0.00%)0 (0.00%)0 (0.00%)1 (2.63%)12 (31.58%)25 (65.79%)

>100 50-100 20-50 10-20 4-10 <4pCi/LpCi/LpCi/LpCi/LpCi/LpCi/L

Minimum Radon Level: 0.1 pCi/L.Maximum Radon Level: 12.0 pCi/L.

Number of sites tested: 38.

EPA Region 3 Statistical Summary Readings for Zip Code: 17851

3.2131.1917851

____________________________________Avg pCi/LMax pCi/LMin pCi/LTotal SitesZip

Test Result Statistics

State Database: PA Radon

AREA RADON INFORMATION

GEOCHECK - PHYSICAL SETTING SOURCE MAP FINDINGSRADON

®

TOPOGRAPHIC INFORMATION

USGS 7.5’ Digital Elevation Model (DEM)Source: United States Geologic SurveyEDR acquired the USGS 7.5’ Digital Elevation Model in 2002. 7.5-Minute DEMs correspond to the USGS1:24,000- and 1:25,000-scale topographic quadrangle maps.

HYDROLOGIC INFORMATION

Flood Zone Data: This data, available in select counties across the country, was obtained by EDR in 1999 from the FederalEmergency Management Agency (FEMA). Data depicts 100-year and 500-year flood zones as defined by FEMA.

NWI: National Wetlands Inventory. This data, available in select counties across the country, was obtained by EDRin 2002 from the U.S. Fish and Wildlife Service.

HYDROGEOLOGIC INFORMATION

AQUIFLOW Information SystemR

Source: EDR proprietary database of groundwater flow informationEDR has developed the AQUIFLOW Information System (AIS) to provide data on the general direction of groundwater

flow at specific points. EDR has reviewed reports submitted to regulatory authorities at select sites and hasextracted the date of the report, hydrogeologically determined groundwater flow direction and depth to water tableinformation.

GEOLOGIC INFORMATION

Geologic Age and Rock Stratigraphic UnitSource: P.G. Schruben, R.E. Arndt and W.J. Bawiec, Geology of the Conterminous U.S. at 1:2,500,000 Scale - A digitalrepresentation of the 1974 P.B. King and H.M. Beikman Map, USGS Digital Data Series DDS - 11 (1994).

STATSGO: State Soil Geographic DatabaseSource: Department of Agriculture, Natural Resources Conservation ServicesThe U.S. Department of Agriculture’s (USDA) Natural Resources Conservation Service (NRCS) leads the nationalConservation Soil Survey (NCSS) and is responsible for collecting, storing, maintaining and distributing soilsurvey information for privately owned lands in the United States. A soil map in a soil survey is a representationof soil patterns in a landscape. Soil maps for STATSGO are compiled by generalizing more detailed (SSURGO)soil survey maps.

ADDITIONAL ENVIRONMENTAL RECORD SOURCES

FEDERAL WATER WELLS

PWS: Public Water SystemsSource: EPA/Office of Drinking WaterTelephone: 202-564-3750Public Water System data from the Federal Reporting Data System. A PWS is any water system which provides water to at

least 25 people for at least 60 days annually. PWSs provide water from wells, rivers and other sources.

PWS ENF: Public Water Systems Violation and Enforcement DataSource: EPA/Office of Drinking WaterTelephone: 202-564-3750Violation and Enforcement data for Public Water Systems from the Safe Drinking Water Information System (SDWIS) after

August 1995. Prior to August 1995, the data came from the Federal Reporting Data System (FRDS).

USGS Water Wells: USGS National Water Inventory System (NWIS)This database contains descriptive information on sites where the USGS collects or has collected data on surfacewater and/or groundwater. The groundwater data includes information on wells, springs, and other sources of groundwater.

TC01199464.29r Page A-13

PHYSICAL SETTING SOURCE RECORDS SEARCHED

STATE RECORDS

Pennsylvania Public Water Supply WellsSource: Pennsylvania Department of Environmental Resources Bureau of Water SupplyTelephone: 717-787-5017

Pennsylvania Groundwater Information SystemSource: Department of Conservation and Natural ResourcesTelephone: 717-783-7258

RADON

State Database: PA RadonSource: Department of Environmental ProtectionTelephone: 717-783-3594Radon Test Results Statistics by Zip Code

Area Radon InformationSource: USGSTelephone: 703-356-4020The National Radon Database has been developed by the U.S. Environmental Protection Agency(USEPA) and is a compilation of the EPA/State Residential Radon Survey and the National Residential Radon Survey.The study covers the years 1986 - 1992. Where necessary data has been supplemented by information collected atprivate sources such as universities and research institutions.

EPA Radon ZonesSource: EPATelephone: 703-356-4020Sections 307 & 309 of IRAA directed EPA to list and identify areas of U.S. with the potential for elevated indoorradon levels.

EPA Region 3 Statistical Summary ReadingsSource: Region 3 EPATelephone: 215-814-2082Radon readings for Delaware, D.C., Maryland, Pennsylvania, Virginia and West Virginia.

OTHER

Airport Landing Facilities: Private and public use landing facilitiesSource: Federal Aviation Administration, 800-457-6656

Epicenters: World earthquake epicenters, Richter 5 or greaterSource: Department of Commerce, National Oceanic and Atmospheric Administration

TC01199464.29r Page A-14

PHYSICAL SETTING SOURCE RECORDS SEARCHED

APPENDIX C

Historical Information

Scale: 1:24,000

Project No. 7070930 05/04

50 West 3rd StreetMount Carmel PA 17851

1947 Subject PropertyHistorical Topographic Map

Mount Carmel Wachovia Bank

Subject Property

Scale: 1:24,000

Project No. 7070930 05/04


1955 Subject PropertyHistorical Topographic Map


Subject Property

Scale: 1:24,000

Project No. 7070930 05/04


1955-1969 Subject PropertyHistorical Topographic Map


Subject Property

Scale: 1:24,000

Project No. 7070930 05/04


1955-1974 Subject PropertyHistorical Topographic Map


Subject Property

Scale: 1:24,000

Project No. 7070930 05/04


1976Historical Topographic Map


Subject Property

Scale: 1:24,000

Project No. 7070930 05/04


1894 Adjacent PropertyHistorical Topographic Map


Subject Property

Scale: 1:24,000

Project No. 7070930 05/04


1955 Adjacent PropertyHistorical Topographic Map


Subject Property

APPENDIX D

Previously Produced Reports

APPENDIX E

Staff Qualifications

STEPHEN G. KILPER, PE Litigation SupportValue Engineering

CERCLA & RCRAEconomic Analysis

Solid Waste ProjectsMaterials Management

Acquisition Due DiligenceEnvironmental Engineering

Environmental ManagementMine Permitting and Operations

Environmental Construction and RemediationConstruction Management and Quality Assurance

EDUCATION

University of Wisconsin-Madison, B.S., Engineering, 1983

PROFESSIONAL HISTORY

ENTRIX, Inc., Senior ConsultantEarth Sciences Consultants, Inc.AWS Remediation, Inc.American Landfill Management, Inc.Antech Ltd.American Waste Services, Inc.U.S. Army

REPRESENTATIVE EXPERIENCE

Mr. Kilper has successfully managed all facets of multiple environmental businesses and has been theCEO of eight subsidiaries of publicly owned corporations, as well as being a Director of two corporations.These companies have included: environmental consulting, environmental construction, solid wastemanagement, and both environmental and radiochemistry laboratories. Mr. Kilper was charged with theregulatory compliance in these heavily regulated businesses as well as P&L, public affairs, contractnegotiation, marketing, strategic planning, project management, acquisitions, personnel management, andcapital projects. As part of these functions, Mr. Kilper has successfully expedited numerousenvironmental and business projects and has added shareholder value to all of these companies.

Mr. Kilper’s major projects have included planning and execution of tens of millions of dollars ofenvironmental construction and permitting projects that have added hundreds of millions of dollars ofvalue for the permittee, acquisition due diligence for acquisitions in excess of $150 million, expert witnessprojects, economic analysis, value engineering that has saved clients millions of dollars, public meetings,wetland permitting and mitigation, and several hundred other successful projects. These projects typicallyinvolve all aspects of environmental work including air emissions, land resources, surface and groundwater resources, and logistical evaluations and planning. Mr. Kilper specializes in saving his clients manymultiples of his cost.

Mr. Kilper’s clients include multibillion dollar chemical manufacturers, large government contractors, lawfirms, major power companies, the Army Corps of Engineers, state agencies and municipalities, solidwaste management companies, steel companies, developers, rail and road transportation companies, and amyriad of large and small industrial concerns. His regulatory agency relationships have resulted in someof the shortest approvals ever seen in Ohio, allowing his clients to enjoy expenditure savings and/orrevenue enhancement sometimes years ahead of similar projects managed by others.

STEPHEN G. KILPER, PE

PROJECT EXPERIENCE

Solid Waste Disposal Facility Design/Permitting, Stark County, OH – Project Director and Designer forthe redesign and permitting of a 1970’s era solid waste disposal facility including hydrogeologicassessment, design of facility, environmental control design, permitting, and public relations for a 25million cubic yard expansion/upgrade.

Expert Witness Report, Allegheny County, PA – Provided expert witness report for litigation between adesign/permitting firm and a construction company. Plaintiff was suing for $792 million. Followingissuance of report, client’s insurance company settled for $1.3 million.

Coal Mine Permitting and Compliance, Stark County, OH – Project Director and Manager for a severalhundred acre new coal and industrial mineral mine in Northeast Ohio. Project work included wetlandpermitting and mitigation, mine planning, surface water controls, reclamation, air emissions, and minesafety compliance and training.

Economic Valuation of Three Properties for Power Company, Northeast, OH – Project Director andManager for economic valuation of three properties owned by a power generation company ranging from200 to over 1000 acres. Power company utilized the report for acquisition planning and management.

Superfund Remedial Action, Ashtabula, OH – Project Director for a portion of the source control for amultibillion dollar chemical company. Work included regulatory negotiations, project planning, publicmeetings and buy-in, logistics, environmental monitoring and oversight, and the execution of the remedialaction of 70,000 cubic yards of PCB, PAH, volatile, and radiological contaminated soil.

Surface Water Impoundment and Wetland Mitigation, Sandy Township, OH – Project Director, Manager,and Engineer for a surface water impoundment that included dam design and permitting, hazard analysis,wetland permitting and mitigation, archeological investigations, MSHA permitting, endangered speciesanalysis, stability analysis, and water quality certification. No fewer than eight different agencies ordivisions of agencies were required to issue approvals. All were received in less than 12-months.

Major Solid Waste Acquisition, Northeast OH – Managed the seller’s end of the due diligence of a $150million sale of solid waste assets. This included environmental due diligence, permit transfers,Department of Justice due diligence, personnel actions and transfers, and confidential informationmanagement.

Value Engineering, Ashtabula, OH – Participated in two Value Engineering Committees with industrialconcerns, Ohio EPA, USEPA, and the US Army Corps of Engineers for the first 312(b) environmentaldredging project in the US. Found and developed ways of saving several million dollars on the $50million dollar environmental dredging project and won the 2000 Environmental Service Award for efforts.

Wetland Wastewater Treatment Plant Design, Permitting, and Construction, New Springfield, OH –Project Manager, Director, and Engineer for the first constructed wetland wastewater treatment system inOhio. Won USEPA’s National Wastewater Excellence Award.

Methane Extraction and Recovery System Design, Permitting, and Construction, Sandy Township, OH –Project Director for one of the largest landfill methane extraction projects in the US. Gas was recoveredand used as an alternative to natural gas and coal.

Wastewater Recirculation, Ashtabula, OH – Project Manager for design, permitting, and construction of awastewater recirculation system for a national chemical company. Reduced wastewater treatmentrequirement from operation by 15 percent.

Disposal Facility 100 percent Retrofit and Expansion Permitting, Northeast, OH – Project Director,Manager, and Engineer for the redesign and re-permitting of two disposal facilities originally opened in1960. Included stream relocations, hydrogeologic assessments, underground mine mitigation, hazardanalysis, waste relocation, and stability analysis.

STEPHEN G. KILPER, PE

Scrap Tire Disposal/Storage Facility, Sandy Township, OH – Project Director and Manager for the firstscrap tire monofill in Ohio. Project work included design, permitting, materials processing, wetlanddelineation and avoidance, surface water and air emissions permitting, bid package and constructionspecifications development, contracting, and quality control and assurance.

Scrap Tire Beneficial Use, Statewide, OH – Worked with Ohio EPA to develop the State’s first scrap tiredisposal and recycling regulations. Obtained three approvals for beneficial use/recycling of scrap tirescurrently being used by dozens of facilities around the State.

Divestiture Management, Export, PA – Performed valuation, located qualified purchasers, and negotiatedsale of two analytical laboratories near Pittsburgh.

CERCLA and NRC Remedial Action, Cleveland, OH – Took over project management of a radiologicallycontaminated site that was stalled due to poorly written specifications and site investigations. Rewrote andobtained agency approval of specifications and work plan, suspending project loses and successfullycompleted the remediation.

Construction Management, Northeast, OH – Project Director for approximately 100 acres of disposalfacility cell and cap construction including construction plans, agency approvals, specifications, contractdocument preparation, quality assurance, and certification approvals. Project work valued in excess of$25 million.

CERTIFICATIONS

Hazardous Site Operations CertificationsMSHA Impoundment Inspector CertificationRadiological Site Certification

LAWRENCE D. MALIZZI, P.G. geologyhydrogeology

project managementenvironmental assessments

business/client developmentrestoration/reclamation planning

EDUCATION

Rutgers University: M.S., Geology, 1989Montclair State College: B.S., Geoscience, 1987

PROFESSIONAL HISTORY

ENTRIX, Inc., Assistant Vice President and General Manager, 1995 to PresentN.J. Army National Guard, Woodbury, NJ, Battalion Fire Support Officer (Captain), 1982 - presentFrederick C. Spott & Associates, Blakely, PA, Hydrogeologist/Project Manager, 1992 - 1995Vectre Corporation, Lafayette, NJ, Project Geologist, 1991 - 1992N.J. Army National Guard, Trenton, NJ, Active Duty Officer, 1990 - 1991Toedter-Schofield, Inc., Whitehall, PA, Geologist, 1990 - 1990

REPRESENTATIVE EXPERIENCE

Mr. Malizzi has seven years of experience in geology and hydrogeology, including management of projectsinvolving groundwater contamination, hazardous and solid waste, RI/FS completion, and remediation. Specificproject experience includes:

NRD applications to groundwater issues. Project management of sites where alternate restorationapproaches were used instead of invasive remediation to achieve site closure. Performed NEBA todetermine "best" remedial/restoration options.

Surface mining permit preparation; mining reclamation planning/permitting; air quality permits; siteassessments; wetland delineation and permitting; underground storage tank management; erosion andsedimentation control plans; soil and water sampling. Proposal development; time allocation; eventscheduling; and invoicing.

Underground storage tank management; site assessments and remediation; groundwater investigation andmonitoring; RCRA closures; hazardous waste management; soil gas surveys; and Federal and Statepermitting. 40-hour OSHA training and N.J. BUST certification.

Preliminary site assessments and groundwater monitoring. Wrote an environmental regulation for the N.J.Department of Military and Veterans Affairs facilities, to include underground storage tank management,waste water permitting, and spill prevention/response.

Percolation tests; soil sampling and analysis; septic system design; wetland delineation and permitting;well installation and pump testing; B.O.C.A. inspection; and technical report writing. PA SewageEnforcement Officer (Lic. #02316).

Mr. Malizzi has assisted industrial, municipal, and government clients. In addition, he has written numerouspublications and technical reports and has participated in numerous public meetings. Representative experienceincludes:

Project manager for the removal of eight inground hydraulic lifts at an automotive service center in BergenCounty, New Jersey. Tasks included: excavation oversight, soil testing, soil disposal, hydraulic oildisposal, construction management, regulatory interface, and report preparation.

LAWRENCE D. MALIZZI, P.G.

Remedial alternatives analysis advisor to a PRP group in Burlington County, New Jersey. The site is anold landfill with groundwater contamination which is being remediated under CERCLA. Provided reportand data review and structured the analysis into a net environmental benefits framework.

Project manager for a used motor oil UST in Baltimore County, Maryland, at an automotive body shop.Tasks included: excavation oversight, soil testing, soil disposal, used motor oil disposal, and regulatoryinterface/reporting.

Project task manager for the development of restoration options at a petroleum spill site in AlleghenyCounty, Pennsylvania. Designed various restoration options to compensate the public for lost use causedby a pipeline failure. Provided restoration plan for possible presentation to PADEP.

Project manager for various Phase I environmental site assessments throughout the East Coast atautomotive dealership facilities. Identified potential impacts to land, air, and ground/surface water, andrecommended remediation options to mitigate areas of environmental concern.

Project manager for the completion of surface coal mining permits in Luzerne and Lackawanna counties,Pennsylvania. Identified coal reserves utilized as fuel in co-generation facilities. Provided regulatoryinterface and conducted field activities in support of the permitting process.

Project manager for studies assessing acid mine drainage in Luzerne, Carbon, and Lackawanna counties inPennsylvania. Established baseline pollution load on surface waters by detailed sampling of undergroundmine and culm pile discharge points. Developed acid mine drainage treatment plans.

Project task manager for groundwater studies at international airports in Greensboro, North Carolina andNewark, New Jersey. Identified extent of impacted groundwater caused by leaking USTs. Providedtechnical reports and regulation interface to close sites.

Project manager for permitting sites in Luzerne County, Pennsylvania to receive coal ash. Tasks included:site mapping, groundwater monitoring, permit preparation, regulatory interface, coal ash testing, andreclamation design (regrading and revegetation).

Project sponsor for major automotive company. Provided environmental consulting services to clientduring litigation over site remediation, managed field scientists during the collection of samples and reportpreparation, and provided technical information interpretation to attorneys during preparation of legaldocuments.

AFFILIATIONS

National Water Well AssociationDelaware State Chamber of Commerce

PUBLICATIONS

Gates, A.E., Gundersen, L.C.S., and Malizzi, L.D. 1989. Case Studies of Anomalous Radon in Soils OverShear Zones (VA and NJ). EOS-Transactions of the American Geophysical Union 70: 499.

Gates, A.E., Malizzi, L.D., and Driscoll, J. 1993. Soil Radon Distribution in Glaciated Areas: An Examplefrom the NJ Highlands. Geological Society of America Special Paper 271.

Malizzi, L.D. and Gates, A.E. 1989. A Positive Flower Structure in the New Jersey Highlands. AmericanAssociation of Petroleum Geologists Bull. (in review).

1989. An Alleghanian Positive Flower Structure in the New Jersey Highlands. EOS - Transactions of theAmerican Geophysical Union 70: 462.

LAWRENCE D. MALIZZI, P.G.

Rosmarin, S.G. and Malizzi, L. 1998. "How to Prepare for a Natural Resource Damage Claim."Environmental Compliance & Litigation Strategy. Vol 13, No. 8, pp. 1-3.

Weberg, E., Batatian, D., Derr, D., Evans, J., Genovese, P., Harlan, S., Malizzi, L., McDonnell, R., Nelson, G.,Parke, M., and Schimdt, C. 1990. Footwall Deformation Below the Scarface Thrust, Madison Range,

Southwestern Montana. Geological Society of America Abstracts with Programs.

CERTIFICATIONS/ REGISTRATIONS

New Jersey UST Certifications: Closure and Subsurface EvaluatorRegistered Professional Geologist: PennsylvaniaRegistered Professional Geologist: DelawareOSHA 8-hour supervisory trainingOSHA 40-hour hazardous waste operations training

ENTRIX, Inc.10 Corporate Circle, Suite 100New Castle, DE 19720(302) 395-1919(302) 395-1920 FAX

September 9, 2004

American Financial Realty Trust1725 The FairwayJenkintown, Pennsylvania 19046

And

Lehman Brothers Holdings, Inc.399 Park AvenueNew York, New York 10022

RE: Phase II Letter ReportMt. Carmel Office50 & 51 West 3rd StreetMount Carmel, Pennsylvania 17851ENTRIX Project No. 7070930

Dear Clients:

ENTRIX, Inc. (ENTRIX) is pleased to provide American Financial Realty Trust and LehmanBrothers Holdings, Inc. (Clients) with this letter report regarding the removal and disposal ofa 25-gallon container of metal polish and approximately 50-gallons of rock salt from 50 and51 West 3rd Street in the Borough of Mount Carmel, Northumberland County, Pennsylvania(Subject Property). The findings of the Phase II Letter Report are presented below.Attachments to this report include: Lehman Brothers Holdings Inc. Reliance Language andAcknowledgment (Attachment A); and a letter of documentation from CurrenEnvironmental, Inc. (Curren), of Westmont, New Jersey, dated August 4, 2004 (AttachmentB).

OBJECTIVE

The objective of this Phase II Letter Report is to inform the Clients of the removal anddisposal of a 25-gallon container of metal polish and approximately 50-gallons of rock saltfrom the Subject Property, located at the Mt. Carmel Office branch building, 50 & 51 West3rd Street, on August 5, 2004 by Curren Environmental.

Phase II Letter ReportMt. Carmel Office

Mt. Carmel, PennsylvaniaPage 2 of 3

TERMS AND CONDITIONS

The findings and conclusions of this report are not scientific certainties, but rather,probabilities based on professional judgment concerning the significance of the data gatheredduring the course of the assessment. ENTRIX is not able to verify that the sites or adjoiningland contains no hazardous substances, petroleum products, or other latent conditions beyondthat detected or observed during the assessment. The possibility always exists forcontaminants to migrate through surface water, air, soil, or groundwater. The ability toaccurately address the environmental risks associated with transport in these media is beyondthe scope of this assessment. The opinions expressed by ENTRIX with reference to theSubject Property only pertain to the conditions that existed at the sites during the time inwhich the site inspection was conducted and the information supplied for review. Noguarantees or warranties are either expressed or implied.

The scope of the Phase II ESA was limited by project budget constraints, and the review of aletter of removal by Curren.

Lehman Brothers Holdings Inc. Reliance Language and Acknowledgment (Attachment A).

SITE DESCRIPTION

Location

The Subject Property consists of a three-story, 14,000 square foot building constructed in the1920’s, and a motor bank located across West 3rd Street including a building ofapproximately 420 square feet. The building is occupied by Wachovia Bank. The area in theimmediate vicinity of the properties includes a gas station and mini-mart, residentialproperties, and commercial shops.

Subject Property Use

The main bank building is utilized as a commercial bank branch and was built between 1913and 1920 as a bank building. The first floor includes the bank lobby and offices, while thesecond floor is used as a training center. The third floor is vacant with an unfinishedrenovation. The motor bank is located across West 3rd Street from the main building andincludes the motor bank and an asphalt parking lot. The motor bank was constructedbetween 1978 and 1980.

Phase II Letter ReportMt. Carmel Office

Mt. Carmel, PennsylvaniaPage 3 of 3

Recognized Environmental Problem

According to the previously completed Phase I ESA,1 a wood-slatted barrel was found in aroom in the western portion of the basement, containing greenish-white crystalline particlesof approximately one-inch irregular shapes. The barrel was open and the northern side of thebarrel was rotted through. A whitish residue was on the floor around the barrel suggestingthe particles dissolved. Additionally, near the center of the basement, a 20 to 30 gallon steelcontainer was found labeled “metal polish”. The container had no further informationregarding its contents and appeared to be full. The container was somewhat rusty; howeverno leaks were observed.

CONCLUSIONS

Based on the a letter to MACTEC Engineering & Consulting, Inc., from Curren, a 25-galloncontainer of metal polish and approximately 50-gallons of rock salt were removed from theSubject Property on August 4, 2004, and are currently being stored at Curren’s storage yard.The containers formerly located on the Subject Property are not likely to haveenvironmentally impacted the Subject Property. Therefore, no further investigation isrecommeded at this time. The letter of documentation from Curren is included in AttachmentB.

If you have any questions regarding this report, then please do not hesitate to contact us.

Sincerely,

Mark T. HartStaff Scientist

Neil ChandlerProject Scientist

Attachment A – Lehman Brothers Holdings Inc. Reliance Language and AcknowledgmentAttachment B – Documentation letter from Curren

1 ENTRIX, Inc., June 2004. Phase I Environmental Site Assessment, Mount Carmel Office, 50&51 West 3rd

Street, Mount Carmel, Pennsylvania.

ATTACHMENT A

Lehman Brothers Holdings Inc. Reliance Language and Acknowledgment

LEHMAN BROTHERS HOLDINGS INC.

Reliance Language and Acknowledgment

This Report has been prepared to assist in the determination of whether to make a loan evidenced by a note (the “Mortgage Note”) secured by the property referred to in the Report. This Report may be relied upon by: (i) Lehman Brothers Holdings Inc. (“Lehman”); (ii) the trustee of a trust created in connection with a securitization which includes the Mortgage Note or an interest therein; and (iii) any other purchaser or assignee of the Mortgage Note or an interest therein, upon such purchaser’s or assignee’s written acceptance of and consent to the terms of this reliance letter. This Report may be, for informational purposes only: (i) provided to any potential purchaser or assignee of the Mortgage Note or an interest therein; (ii) provided to any rating agency, rating securities which represent a beneficial ownership interest in a trust fund that consists of mortgageloans including the Mortgage Note or an interest therein; and (iii) referred to, quoted in or included with materials offering for sale the Mortgage Note or an interest therein.There are no third party beneficiaries (intended or unintended) to this Report, except as expressly stated herein. This Report speaks only as of its date.

We have performed our services and prepared this Report in accordance with applicable, generally accepted engineering, environmental or appraisal consulting practices. Wemake no other warranties, either expressed or implied, as to the character and nature of such services and product.

ENTRIX, Inc.

Neil Chandler Project Scientist

ATTACHMENT B

Documentation Letter from Curren

DU E D I L I G EN C E F O R T H E L I F E C Y C LE O F R E A L E S T A T E AN ISO 9001 C E RT I FI E D C O M P A N Y • www.emgcorp.com

PROPERTY CONDITION A S S E S S M E N T

LLEEHHMMAANN BBRROOTTHHEERRSS BBAANNKK,, FFSSBB399 Park Avenue, 8th Floor New York, New York 10022

Mr. Yaniv Blumenfeld

PPRROOPPEERRTTYY CCOONNDDIITTIIOONN AASSSSEESSSSMMEENNTT

ooffWWAACCHHOOVVIIAA--MMOOUUNNTT CCAARRMMEELL

50 West 3rd Street Mount Carmel, Northumberland County, Pennsylvania 17851

Site ID No.: 107

PPRREEPPAARREEDD BBYY::

EMG11011 McCormick Road Hunt Valley, Maryland 21031

800.733.0660410.785.6220 (fax) www.emgcorp.com

RREEVVIIEEWWEEDD BBYY::

Cary Hendrix Technical Relationship Manager 800.733.0660, x7547 [email protected]

EMG Project #: 122236

Date of Report: December 2, 2004

On site Date: October 5, 2004

112222223366

DU E D I L I G EN C E F O R T H E L I F E C Y C LE O F R E A L E S T A T E. 800.733.0660 • www.emgcorp.com

A S S E S S M E N T P R O P E R T Y C O N D I T I O N

TT AA BB LL EE OO FF CC OO NN TT EE NN TT SS

1. Executive Summary....................................................................................................... 11.1. Summary of Findings ................................................................................................ 11.2. Follow Up Recommendations .................................................................................... 11.3. Opinions of Probable Cost ......................................................................................... 21.3.1. Methodology ......................................................................................................... 21.3.2. Immediate Repairs ................................................................................................. 21.3.3. Modified Capital Reserves ...................................................................................... 2

2. Purpose and Scope ........................................................................................................ 62.1. Purpose.................................................................................................................... 62.2. Deviations from Guide (ASTM E2018-01) ................................................................. 62.3. Additional Scope Considerations................................................................................ 72.4. Property’s Remaining Useful Life Estimate ................................................................ 72.5. Personnel Interviewed ............................................................................................... 82.6. Documentation Reviewed.......................................................................................... 82.7. Pre-Survey Questionnaire .......................................................................................... 82.8. Weather Conditions .................................................................................................. 8

3. Code Information and Accessibility ............................................................................... 93.1. Code Information, Flood Zone and Seismic Zone ........................................................ 93.2. ADA Accessibility .................................................................................................... 93.3. Mold...................................................................................................................... 10

4. Existing Building Evaluation ....................................................................................... 114.1. Tenant Unit Types .................................................................................................. 114.2. Areas Observed ...................................................................................................... 11

5. Site Improvements....................................................................................................... 125.1. Utilities .................................................................................................................. 125.2. Parking, Paving, and Sidewalks ............................................................................... 125.3. Drainage Systems and Erosion Control ..................................................................... 125.4. Topography and Landscaping .................................................................................. 135.5. General Site Improvements...................................................................................... 13

6. Building Architectural and Structural Systems............................................................ 146.1. Foundations............................................................................................................ 146.2. Superstructure ........................................................................................................ 146.3. Roofing.................................................................................................................. 156.4. Exterior Walls ........................................................................................................ 156.5. Exterior and Interior Stairs....................................................................................... 166.6. Windows and Doors................................................................................................ 166.7. Patio, Terrace, and Balcony ..................................................................................... 166.8. Common Areas, Entrances, and Corridors................................................................. 16

7. Building Mechanical and Electrical Systems................................................................ 177.1. Building Heating, Ventilating, and Air-conditioning (HVAC) .................................... 177.2. Building Plumbing.................................................................................................. 177.3. Building Gas Distribution ........................................................................................ 177.4. Building Electrical .................................................................................................. 177.5. Building Elevators and Conveying Systems .............................................................. 187.6. Fire Protection Systems ........................................................................................... 18

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8. Interiors ...................................................................................................................... 198.1. Interior Finishes...................................................................................................... 198.2. Commercial Kitchen Equipment .............................................................................. 198.3. HVAC ................................................................................................................... 208.4. Plumbing ............................................................................................................... 208.5. Electrical................................................................................................................ 20

9. Other Structures ......................................................................................................... 2210. Certification ................................................................................................................ 2311. Appendices .................................................................................................................. 25

Project at a Glance

Office BuildingSquare Footage: 12,182Building Age: 39

Immediate ReplacementPhysical Condition Summary Good Fair Poor Action Repairs ReservesExecutive Summary

1.2 Follow-Up Recommendations Additional evaluation $7,500 $0Code Information and Accessibility

3.1 Building, Zoning, and Fire Code Information $0 $03.2 Accessibility See Section 3.2 $220 $03.3 Mold See Section 3.3 $0 $0

Site Improvements5.1 Utilities $0 $05.2 Parking, Paving and Sidewalks Seal, repair $0 $1,0005.3 Storm Sewer, Drainage Systems & Erosion Control $0 $05.4 Landscaping and Topography $0 $05.5 General Site Improvements $0 $0

Building Architectural & Structural Systems6.1 Foundations $1,500 $06.2 Superstructure and Floors See Section 1.2 $0 $3,0006.3 Roofing Replace over term $0 $7,0006.4 Exterior Walls Repair over term $0 $1,9506.5 Exterior and Interior Stairs $0 $06.6 Exterior Windows and Doors $0 $06.7 Patio, Terrace and Balcony Not Applicable $0 $06.8 Common Areas, Entrances and Corridors Not Applicable $0 $0

Building Mechanical and Electrical Systems7.1 Building Heating, Ventilating, and Air-Conditioning Not applicable $0 $07.2 Building Plumbing and Domestic Hot Water $0 $07.3 Building Gas Distribution $0 $07.4 Building Electrical $0 $07.5 Building Elevators and Conveying Systems Replace over term $0 $10,0007.6 Fire Protection Replace over term $0 $2,000

Tenant Units8.1 Interior Finishes Tenant responsibility $0 $08.2 Commercial Kitchen Appliances Not Applicable $0 $08.3 HVAC By tenant $0 $08.4 Plumbing $0 $08.5 Electrical $0 $0

Other Structures9.0 Drive thru $0 $0

Totals $9,220 $24,950

Summary$/SF

Immediate Repairs $0.76

$/SF $/SF/YearReplacement Reserves, today's dollars $0.00 $0.00

Replacement Reserves, w/ 9-year, 2.5% escalation $2.23 $0.25

Wachovia-Mount Carmel

EMG Project No. 122236

$9,220Today's Dollars

October 5, 2004

Total Dollars

$27,125

Mount Carmel, Pennsylvania

$0

EMG 122236 tables2.xls 12/10/2004

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1


11 .. EE XX EE CC UU TT II VV EE SS UU MM MM AA RR YY

11 .. 11 .. SS UU MM MM AA RR YY OO FF FF II NN DD II NN GG SS

The Client contracted with EMG to conduct a Property Condition Assessment (PCA) in order to prepare a Property Condition Report (PCR) of the subject property, Wachovia-Mount Carmel, located at 50 West 3rd Street in Mount Carmel, Northumberland County, Pennsylvania. The PCA was performed on October 5, 2004.

Property Summary

Item Description

Property Type Bank

Drive-through Yes

Number of Buildings One

Number of Floors Three

Number of Tenant Units One

Floor Area 12,182 SF

Site Area 0.38 acres

Construction Date 1965

Construction Quality Good

Maintenance Practices Fair

Overall Condition Good to poor

Recent Capital Improvements Replaced rooftop unit.

There are a number of immediate repairs and modified capital reserve costs recommended over the evaluation period. These needs are identified in the various sections of this report and are summarized in the attached cost tables. A Project at a Glance summary table is provided as part of the Executive Summary.

According to property management personnel, all interior components relating to the tenant space, including the roof, exterior walls, the parking lot, and related facilities are the responsibility of the tenant to maintain, repair, or replace at the tenant’s own expense. This responsibility also extends to any exterior mechanical, electrical, or plumbing equipment that services the tenant space, such as rooftop HVAC units and wall-mounted electrical equipment.

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The following issue requires additional study:

There is a sagging roof beam on the north side of the building. It is recommended that an engineering professional be retained to analyze the existing condition, provide recommendations and, if necessary, estimate the scope and cost of any recommended repairs. The cost to retain an engineering professional is included in the Immediate Repairs Cost Estimate (Table 1). The cost for any possible subsequent repairs cannot be determined until the additional evaluation is performed; therefore, no costs are included in the cost tables.

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2


11 .. 33 .. OO PP II NN II OO NN SS OO FF PP RR OO BB AA BB LL EE CC OO SS TT

This section provides estimates for the repair and capital reserves items noted within this PCR.

These estimates are based on invoice or bid documents provided either by the Owner/facility and construction costs developed by construction resources such as R.S. Means and Marshall & Swift, EMG’s experience with past costs for similar properties, city cost indexes, and assumptions regarding future economic conditions.

11..33..11.. MMeetthhooddoollooggyy

Based upon site observations, research, and judgment, along with referencing Expected Useful Life (EUL) tables from various industry sources, EMG opines as to when a system or component will most probably necessitate replacement. Accurate historical replacement records, if provided, are typically the best source of information. Exposure to the elements, initial quality and installation, extent of use, the quality and amount of preventive maintenance exercised, etc., are all factors that impact the effective age of a system or component. As a result, a system or component may have an effective age that is greater or less than its actual chronological age. The Remaining Useful Life (RUL) of a component or system equals the EUL less its effective age.

Where quantities could not be derived from an actual take-off, lump sum costs or allowances are used. Estimated costs are based on professional judgment and the probable or actual extent of the observed defect, inclusive of the cost to design, procure, construct and manage the corrections.

11..33..22.. IImmmmeeddiiaattee RReeppaaiirrss

Immediate repairs are opinions of probable costs that require immediate action as a result of: (1) material existing or potential unsafe conditions, (2) material building or fire code violations, or (3) conditions that, if left unremedied, have the potential to result in or contribute to critical element or system failure within one year or will most probably result in a significant escalation of its remedial cost.

11..33..33.. MMooddiiffiieedd CCaappiittaall RReesseerrvveess

Modified Capital Reserves are for recurring probable expenditures that are not classified as operation or maintenance expenses. The modified capital reserves should be budgeted for in advance on an annual basis. Capital reserves are reasonably predictable both in terms of frequency and cost. However, capital reserves may also include components or systems that have an indeterminable life but nonetheless have a potential liability for failure within an estimated time period.

Modified Capital Reserves exclude systems or components that are estimated to expire after the reserve term and that are not considered material to the structural and mechanical integrity of the subject property. Furthermore, systems and components that are not deemed to have a material effect on the use are also excluded. Costs that are caused by acts of God, accidents, or other occurrences that are typically covered by insurance, rather than reserved for, are also excluded.

Replacement costs are solicited from ownership/property management, EMG’s discussions with service companies, manufacturers' representatives, and previous experience in preparing such schedules for other similar facilities. Costs for work performed by the ownership’s or property management’s maintenance staff are also considered.

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3


EMG’s reserve methodology involves identification and quantification of those systems or components requiring capital reserve funds within the evaluation period. The evaluation period is defined as the effective age plus the reserve term. Additional information concerning system’s or component’s respective replacement costs (in today's dollars), typical expected useful lives, and remaining useful lives were estimated so that a funding schedule could be prepared. The Modified Capital Reserves Schedule presupposes that all recommended remedial work has been performed or that monies for remediation have been budgeted for items defined in the Immediate Repairs Cost Estimate.

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S

EUL =

Exp

ected

Use

ful Li

fe (A

vera

ge)

IN

FLAT

ION

RATE

FAC

TOR

1.000

01.0

250

1.050

61.0

769

1.103

81.1

314

1.159

71.1

887

1.218

4EF

F =

Effec

tive A

ge of

Buil

ding C

ompo

nents

AN

NUAL

RES

ERVE

(IN

FLAT

ED)

2.50%

$4,00

0$0

$0$0

$23,1

25$0

$0$0

$0$2

7,125

RUL =

Rem

aining

Use

ful Li

fe (E

stima

ted)

RE

SERV

E / S

QUAR

E FO

OT / Y

EAR

$0.00

IN

FLAT

ED R

ESER

VE /

SQUA

RE F

OOT

/ YEA

R$0

.25

EM

G F

ilena

me:

122

236

tabl

es2.

xls

Tab

le 2

12/1

0/20

04

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22 .. PP UU RR PP OO SS EE AA NN DD SS CC OO PP EE

22 .. 11 .. PP UU RR PP OO SS EE

The purpose of this report is to assist the Client in evaluating the physical aspects of this property and how its condition may affect the Client’s financial decisions over time. For this PCA, representative samples of the major independent building components were observed and their physical conditions were evaluated in accordance with ASTM E2018-01. These components include the site and building exteriors, representative interior areas, and the interior of the building. The estimated cost for repairs and/or capital reserve items are included in the cost estimates presented in the previous section. All findings relating to these opinions of probable costs are included in the relevant narrative sections of this Report.

The property management staff and code enforcement agencies were interviewed for specific information relating to the physical property, code compliance, available maintenance procedures, available drawings, and other documentation.

The physical condition of building systems and related components is typically defined as being in one of three conditions: Good, Fair, or Poor. For the purposes of this Report, the following definitions are used:

Good = Satisfactory as-is. Requires only routine maintenance during the evaluation period. Repair or replacement may be required due to a system’s estimated useful life.

Fair = Satisfactory as-is. Repair or replacement is required due to current physical condition and/or estimated remaining useful life.

Poor = Immediate repair, replacement, or significant maintenance is required.

Each building system or component is further identified with the following references if costs or other actions are applicable:

RM = Routine maintenance

IR = Immediate Repair recommended

RR = Replacement Reserve cost recommended during the evaluation term

N/A = Not applicable.

22 .. 22 .. DD EE VV II AA TT II OO NN SS FF RR OO MM GG UU II DD EE (( AASSTTMM EE22001188--0011))

ASTM E2018-01 requires that any deviations from the Guide be so stated within the report. EMG’s probable cost threshold limitation is reduced from the Guide’s $3,000 to $1,000, thus allowing for a more comprehensive assessment on smaller scale properties. Therefore, EMG’s opinions of probable costs that are individually less than a threshold amount of $1,000 are typically omitted from this PCR. Comments and estimated costs regarding identified deficiencies relating to life, safety or accessibility items are included regardless of this cost threshold.

In lieu of providing written record of communication forms, personnel interviewed from the facility and government agencies are identified in Section 2.5. Relevant information based on these interviews is included in Sections 2.5. , 3.1. , and other applicable report sections.

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22 .. 33 .. AA DD DD II TT II OO NN AA LL SS CC OO PP EE CC OO NN SS II DD EE RR AA TT II OO NN SS

Items required by ASTM E2018-01 are included within the Property Condition Assessment (PCA) and the associated Property Condition Report (PCR). Additional “non-scope” considerations were addressed as part of EMG’s PCA/PCR. These additional items are identified as follows:

PCA may be performed by a Professional Engineer, Registered Architect

PCR may be reviewed by a Professional Engineer or a Registered Architect other than the Field Observer

Property disclosure information is obtained from EMG’s Pre-Survey Questionnaire (copy included in the Appendices of this Report)

A limited visual assessment for ADA accessibility utilizing EMG’s Accessibility Checklist (copy included in the Appendices of this Report)

A limited visual assessment and review of the property for mold growth, conditions conducive to mold growth, and evidence of moisture in accessible areas of the property

Preparation of the Modified Capital Reserves Schedule based upon a reserve term provided by the Client

Provide a statement on the property’s Remaining Useful Life

Provide cross-reference indexing between cost tables and report text

Provide Project At a Glance summary table

Determination of Federal Emergency Management Agency (FEMA) Flood Plain Zone for single address properties

Determination of geographic Uniform Building Code Seismic Zone

22 .. 44 .. PP RR OO PP EE RR TT YY ’’ SS RR EE MM AA II NN II NN GG UU SS EE FF UU LL LL II FF EE EE SS TT II MM AA TT EE

Subject to the qualifications stated in this paragraph and elsewhere in this report, the Remaining Useful Life (RUL) of the property is estimated to be not less than 35 years. The Remaining Useful Life estimate is an expression of a professional opinion and is not a guarantee or warranty, expressed or implied. This estimate is based upon the observed physical condition of the property at the time of EMG’s visit and is subject to the possible effect of concealed conditions or the occurrence of extraordinary events such as natural disasters or other “acts of God” that may occur subsequent to the date of EMG’s site visit.

The Remaining Useful Life for the property is further based on the assumption that: (a) the immediate and future repairs for which replacement reserve funds are recommended are completed in a timely and workman-like manner, and (b) a comprehensive program of preventive and remedial property maintenance is continuously implemented using an acceptable standard of care. The Remaining Useful Life estimate is made only with regard to the expected physical or structural integrity of the improvements on the property, and no opinion regarding economic or market conditions, the present or future appraised value of the property, or its present or future economic utility, is expressed by EMG.

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22 .. 55 .. PP EE RR SS OO NN NN EE LL II NN TT EE RR VV II EE WW EE DD

The following personnel from the facility and government agencies were interviewed in the process of conducting the PCA:

Name and Title Organization Phone Number

Mr. Ron Nein Property Manager

Wachovia (610) 655-1607

Mr. Joseph Bass Borough Manager

Mount Carmel (570) 339-4486

The PCA was performed with the assistance of Mr. Ron Nein, Property Manager, Wachovia, the on site Point of Contact (POC), who was cooperative and provided information, which appeared to be accurate based upon subsequent site observations. The on site contact is not knowledgeable about the subject property but answered most questions posed during the interview process. The POC’s management involvement at the property has been for the past one week. This was the POC’s first visit to the site.

22 .. 66 .. DD OO CC UU MM EE NN TT AA TT II OO NN RR EE VV II EE WW EE DD

Prior to the PCA, relevant documentation was requested that could aid in the knowledge of the subject property’s physical improvements, extent and type of use, and/or assist in identifying material discrepancies between reported information and observed conditions. The review of submitted documents does not include comment on the accuracy of such documents or their preparation, methodology, or protocol.

No documents were available for review. The Documentation Request Form is included in the Appendix.

22 .. 77 .. PP RR EE -- SS UU RR VV EE YY QQ UU EE SS TT II OO NN NN AA II RR EE

A Pre-Survey Questionnaire was sent to the POC prior to the site visit. The questionnaire is included in the appendices of this report, after EMG’s Accessibility Checklist. Information obtained from the questionnaire has been used in the preparation of this PCR.

22 .. 88 .. WW EE AA TT HH EE RR CC OO NN DD II TT II OO NN SS

Weather conditions at the time of the site visit were clear, with temperatures in the 60’s (°F), and light winds.

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33 .. CC OO DD EE II NN FF OO RR MM AA TT II OO NN AA NN DD AA CC CC EE SS SS II BB II LL II TT YY

33 .. 11 .. CC OO DD EE II NN FF OO RR MM AA TT II OO NN ,, FF LL OO OO DD ZZ OO NN EE AA NN DD SS EE II SS MM II CC ZZ OO NN EE

According to Mr. Joseph Bass of the Mount Carmel Building Department, there are no outstanding building code violations on file. The Building Department does not have an annual inspection program. They only inspect new construction, work that requires a building permit, and citizen complaints. A copy of the original Certificate of Occupancy was requested, but was not available.

A review of the zoning classification information at the Mount Carmel Planning Department indicates that the property is located within a C-2, Central Commercial zoning district and is a non-conforming, legal use.

Mount Carmel Fire Department personnel were not available to provide code compliance information. This information has been requested through submission of a written request under the Freedom of Information Act (FOIA). A copy of the request is included in Appendix C. Significant information will be forwarded upon receipt.

According to the Flood Insurance Rate Map, published by the Federal Emergency Management Agency (FEMA) and dated June 19, 1985 the property is located in Zone C, defined as an area outside the 500-year flood plain with less than 0.2% annual probability of flooding. Annual Probability of Flooding of Less than one percent.

According to the 1997 Uniform Building Code Seismic Zone Map of the United States, the property is located in Seismic Zone 2A, defined as an area of low to moderate probability of damaging ground motion.

33 .. 22 .. AADDAA AA CC CC EE SS SS II BB II LL II TT YY

Generally, Title III of the Americans with Disabilities Act (ADA) prohibits discrimination by entities to access and use of “areas of public accommodations” and “commercial facilities” on the basis of disability. Regardless of its age, these areas and facilities must be maintained and operated to comply with the Americans with Disabilities Act Accessibility Guidelines (ADAAG).

Buildings completed and occupied after January 26, 1992 are required to comply fully with the ADAAG. Facilities constructed prior to this date are held to the lesser standard of compliance to the extent allowed by structural feasibility and the financial resources available. As an alternative, a reasonable accommodation pertaining to the deficiency must be made.

During the PCA, a limited visual observation for ADA accessibility compliance was conducted. The scope of the visual observation was limited to those areas set forth in EMG’s Accessibility Checklist provided in Appendix D of this report. It is understood by the Client that the limited observations described herein does not comprise a full ADA Compliance Survey, and that such a survey is beyond the scope of EMG’s undertaking. Only a representative sample of areas was observed and, other than as shown on the Accessibility Checklist, actual measurements were not taken to verify compliance.

At a bank property, the areas considered as public accommodation are the site itself, parking, the exterior accessible route up to the building entrance, any interior route up to the tenant entrance, the interior, and the common area restrooms.

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The facility does not appear to be accessible with Title III of the Americans with Disabilities Act. Elements as defined by the ADAAG that are not accessible as stated within the priorities of Title III are as follows:

Parking

Adequate number of designated handicapped-accessible parking stalls and signage for vans is not provided. (ADAAG Section 4.1.2.5b)

Estimated Cost: 1 @ $220 each = ...................................................................................................................... $220

A full ADA Compliance Survey may reveal additional aspects of the property that are not in compliance.

Corrections of these conditions should be addressed from a liability standpoint, but are not necessarily code violations. The Americans with Disabilities Act Accessibility Guidelines concern civil rights issues as they pertain to the disabled and are not a construction code, although many local jurisdictions have adopted the Guidelines as such. The cost to address the achievable items noted above is $220 and is included as a lump sum in the Immediate Repairs Cost Estimate (Table 1).

33 .. 33 .. MM OO LL DD

As part of the PCA, EMG completed a limited, visual assessment for the presence of visible mold growth, conditions conducive to mold growth, or evidence of moisture in readily accessible areas of the property. EMG interviewed property personnel concerning any known or suspected mold contamination, water infiltration, or mildew-like odor problems.

This assessment does not constitute a comprehensive mold survey of the property. The reported observations and conclusions are based solely on interviews with property personnel and conditions observed in readily accessible areas of the property at the time of the assessment. Sampling was not conducted as part of the assessment.

EMG observed the presence of visible, suspect mold growth, and water damage in the areas cited below:

The elevator equipment room in the basement.

Remediation can be conducted by properly trained building maintenance staff. In addition, the source of this moisture should be addressed in order to prevent future mold problems. The estimated costs of corrective action are of a minimal quantity, and consequently, are considered to be part of routine maintenance operations. No other costs are included in the tables.

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44 .. EE XX II SS TT II NN GG BB UU II LL DD II NN GG EE VV AA LL UU AA TT II OO NN

44 .. 11 .. TT EE NN AA NN TT UU NN II TT TT YY PP EE SS

The following table identifies the reported tenant unit types and tenant mix at the subject property.

Tenant Unit Types and Mix

Quantity Type Floor Area

1 Bank 3,622 SF

1 Vacant Office 8,560 SF

There is currently one vacant unit.

There are currently zero down units.

2 TOTAL 12,182 SF

44 .. 22 .. AA RR EE AA SS OO BB SS EE RR VV EE DD

The entire interior of the building was observed in order to gain a clear understanding of the property’s overall condition. Other areas accessed included the exterior of the property and the roof.

Tenant Units Observed

Unit # Name Comments

Wachovia Bank Occupied. Good condition.

Vacant Vacant. Fair to poor condition.

All areas of the property were available for observation during the site visit.

A “down unit” is a term used to describe an unusable area due to poor conditions such as fire damage, water damage, missing equipment, damaged floor, wall or ceiling surfaces, or other significant deficiencies. According to the POC, there are no down areas.

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55 .. SS II TT EE II MM PP RR OO VV EE MM EE NN TT SS

55 .. 11 .. UU TT II LL II TT II EE SS

Site Utilities

Utility Supplier Action ConditionSanitary sewer City of Mount Carmel RM Good Storm sewer City of Mount Carmel RM Good Domestic water APA RM Good Electric service PP&L RM Good Natural gas service Mount Carmel Gas. RM Good

Observations/Comments:

No repair costs are recommended. Routine maintenance is recommended during the evaluation period.

55 .. 22 .. PP AA RR KK II NN GG ,, PP AA VV II NN GG ,, AA NN DD SS II DD EE WW AA LL KK SS

Item Description Action Condition

Parking and Paving

Surface Lots

13 total parking stalls

Asphalt

RR Good/Fair

Sidewalks, Curbs and Gutters Concrete RM Good

Site Access Two driveways into site from adjacent streets. RM Good

Observations and Comments:

The asphalt pavement is in good to fair condition. There are isolated areas of failure and deterioration, such as alligator cracking and localized depressions. The damaged areas of paving must be cut and patched in order to maintain the integrity of the overall pavement system. The estimated cost of this work is included in the Modified Capital Reserves Schedule (Table 2).

In addition to the pavement repairs noted above, pothole patching, crack sealing, seal coating, and restriping of the asphalt pavement will be required during the evaluation period to maximize the pavement life. The estimated cost of this work is relatively insignificant and the work can be performed as part of the property management’s routine maintenance program. The estimated cost of this work is not included in the cost tables.

55 .. 33 .. DD RR AA II NN AA GG EE SS YY SS TT EE MM SS AA NN DD EE RR OO SS II OO NN CC OO NN TT RR OO LL

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Drainage Systems and Erosion Control

Surface flow, swales, inlets, underground piping RM Good



55 .. 44 .. TT OO PP OO GG RR AA PP HH YY AA NN DD LL AA NN DD SS CC AA PP II NN GG


Topography Relatively flat RM Good

Landscaping Trees and bushes RM Good

Irrigation By hand watering only RM Good

Adjacent Properties Commercial, retail RM Good

Retaining Walls Not applicable RM Good



55 .. 55 .. GG EE NN EE RR AA LL SS II TT EE II MM PP RR OO VV EE MM EE NN TT SS


Signage Pylon sign, Building –mounted signs RM Good

Site Lighting Pole-mounted fixtures along adjacent public streets RM Good

Building Lighting Wall-mounted fixtures. Recessed soffit fixtures RM Good

Fencing Not applicable RM Good

Dumpsters Not applicable N/A N/A



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66 .. BB UU II LL DD II NN GG AA RR CC HH II TT EE CC TT UU RR AA LL AA NN DD SS TT RR UU CC TT UU RR AA LL

SS YY SS TT EE MM SS

66 .. 11 .. FF OO UU NN DD AA TT II OO NN SS


Floor Concrete slab-on-grade RM Good

Footings Concrete perimeter footings, Pad footings RM Good

Basements and Crawl Spaces Basement with perimeter CMU and brick masonry retaining and bearing walls.

RR Good/Fair



The subterranean basement walls appeared to be in good to fair condition. There are isolated areas of water seepage in the elevator equipment room. The flashing and sealants between this building and the adjacent buildings should be replaced. The cost of this work is included in the Immediate Repairs Cost Estimate (Table 1).

66 .. 22 .. SS UU PP EE RR SS TT RR UU CC TT UU RR EE


WallsBrick masonry and CMU interior and exterior bearing walls. Interior concrete and steel columns.

RM Good

FloorsWood joists with wood plank sheathing, Steel joists with concrete-topped steel decks

RM/RR Good/Poor

Roofs Wood beams and joists with wood plank and plywood sheathing. Steel decks supported by steel joists

RR Good/Fair/Poor


The superstructure is exposed in some locations, allowing for limited observation. There is isolated evidence of deflection and movement of a roof support beam on the north side of the building. An engineering professional with specific expertise in structural design and construction in this geographical area must be retained to evaluate the structure and to provide remedial recommendations consistent with local regulatory and code requirements. The estimated cost to retain an engineering professional is included in the Immediate Repairs Cost Estimate (Table 1) under Section 1.2. The cost of repair cannot be accurately determined without the recommended study.

The third floor flooring and sheathing is in fair to poor condition. There are significant areas of damaged and missing flooring and sheathing. The damaged areas must be repair or replaced. A cost allowance for this work is included in the Modified Capital Reserves Schedule (Table 2).

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66 .. 33 .. RR OO OO FF II NN GG


Type Flat

Finish Single-ply membrane RR Good

Maintenance Maintained by outside contractor

Age The roof finishes are approximately 18 years old.

Warranties Information regarding roof warranties or bonds was not available.

Drainage Internal drains RM Good

Flashing Sheet metal RM Good

Insulation Rigid insulation RM Good

Parapet and Copings Parapets with sheet metal copings RM Good

Soffits, Eaves, and Fascias Concealed soffits RM Good

Skylights Not applicable. N/A N/A

Attics There are no attics N/A N/A

Ventilation Parapet wall vents RM Good

Other Not applicable N/A N/A


Based on the estimated Remaining Useful Life (RUL) and condition, roof membrane replacement is anticipated during the evaluation period. The estimated cost of this work is included in the Modified Capital Reserves Schedule (Table 2).

66 .. 44 .. EE XX TT EE RR II OO RR WW AA LL LL SS


Typical Finishes and Cladding

Stucco and stone veneer on the front elevations along West 3rd Street and North Maple Street. Stucco on other two sides.

RR Good

Other finishes Not applicable N/A N/A

SealantsCaulking and sealants at joints, finish transitions, and at wall openings.

RM Good


Based on the estimated Remaining Useful Life (RUL) and condition, exterior painting and sealant replacement are anticipated during the evaluation period. The estimated cost of this work is included in the Modified Capital Reserves Schedule (Table 2).

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66 .. 55 .. EE XX TT EE RR II OO RR AA NN DD II NN TT EE RR II OO RR SS TT AA II RR SS


Exterior Stairs Not applicable N/A N/A

Interior Stairs Steel framed stairs with precast treads and metal balusters

RM Good



66 .. 66 .. WW II NN DD OO WW SS AA NN DD DD OO OO RR SS


Windows Aluminum-framed units with fixed panes of glazing. RM Good

Doors The doors are fully-glazed, aluminum-framed doors set in the metal framing system.

RM Good

Door Hardware Push-pull hardware, Deadbolts RM Good

Overhead Doors Not applicable N/A N/A



66 .. 77 .. PP AA TT II OO ,, TT EE RR RR AA CC EE ,, AA NN DD BB AA LL CC OO NN YY


Patios Not applicable N/A N/A

Balconies Not applicable N/A N/A

66 .. 88 .. CC OO MM MM OO NN AA RR EE AA SS ,, EE NN TT RR AA NN CC EE SS ,, AA NN DD CC OO RR RR II DD OO RR SS

Not applicable. There are no common areas.

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77 .. BB UU II LL DD II NN GG MM EE CC HH AA NN II CC AA LL AA NN DD EE LL EE CC TT RR II CC AA LL

SS YY SS TT EE MM SS

77 .. 11 .. BB UU II LL DD II NN GG HH EE AA TT II NN GG ,, VV EE NN TT II LL AA TT II NN GG ,, AA NN DD AA II RR -- CC OO NN DD II TT II OO NN II NN GG ((HH VVAACC))

There are no interior common areas. See Section 8.3. for descriptions and comments regarding the HVAC systems.

77 .. 22 .. BB UU II LL DD II NN GG PP LL UU MM BB II NN GG

There are no interior common areas. See Section 8.3. for descriptions and comments regarding the plumbing systems.

77 .. 33 .. BB UU II LL DD II NN GG GG AA SS DD II SS TT RR II BB UU TT II OO NN


Gas Meter and Regulator Located along rear elevation of building RM Good

Gas Distribution Piping Malleable steel (black iron). RM Good


The pressure and quantity of gas appear to be adequate.

The gas meters and regulators appear to be in good condition and will require routine maintenance during the evaluation period.

Only limited observation of the gas distribution piping can be made due to hidden conditions. The gas piping is in good condition and, according to the POC, there have been no gas leaks.


77 .. 44 .. BB UU II LL DD II NN GG EE LL EE CC TT RR II CC AA LL

There are no interior common areas. See Section 8.3. for descriptions and comments regarding the electrical systems.

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77 .. 55 .. BB UU II LL DD II NN GG EE LL EE VV AA TT OO RR SS AA NN DD CC OO NN VV EE YY II NN GG SS YY SS TT EE MM SS


Type and Quantity One hydraulic passenger elevator, 2,000 pound capacity. Manufactured by Ottos Elevator Company. Installed in 1986

RR Good

Maintenance Service contract with Ottis Elevator Company

Inspection Certificate Posted in cab; Expired on 4/30/03.

Equipment Located in room adjacent to shaft RM Good

Other Devices Electric safety stops. Emergency communication equipment

RM Good

Elevator Cab Finishes Carpeted floor, plastic laminated wood wall panels, soffited ceiling with recessed light fixtures

RM Good


The elevator appears to be in good condition. Based on its Remaining Useful Life (RUL), some machinery will require replacement during the evaluation period. The cost of this work is included in the Modified Capital Reserves Schedule (Table 2).

The elevator is inspected on an annual basis by the municipality, and a certificate of inspection is displayed in the elevator cab. The inspection certificate has expired. It is common for inspections to occur behind schedule. A new inspection should be scheduled as soon as possible.

77 .. 66 .. FF II RR EE PP RR OO TT EE CC TT II OO NN SS YY SS TT EE MM SS


Sprinkler Systems Wet pipe, automatic sprinkler system with flow switches, pull stations, and alarm horns. Sprinklers are located of the teller counter only

N/A N/A

Other Equipment and Devices

Central alarm panel, strobe light alarms, illuminated exit signs, battery back-up light fixtures, hard-wired smoke detectors

RR Good

Special Systems Not applicable N/A N/A

Fire Extinguishers Located throughout interior spaces RM Good

Fire Hydrants Located along adjacent public streets N/A Good

Stair Wells Drywall-finish stairwell walls. Fire rated doors and door hardware

RM Good


The central alarm panel appears to be more than ten years old. Based on the estimated Remaining Useful Life (RUL), and because replacement parts and components for this type of equipment may be obsolete, the alarm panel will require replacement during the evaluation period. The estimated cost of this work is included in the Modified Capital Reserves Schedule (Table 2).

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88 .. II NN TT EE RR II OO RR SS

88 .. 11 .. II NN TT EE RR II OO RR FF II NN II SS HH EE SS

The following table generally describes the interior finishes:

Area Description Action Condition

Floor Walls Ceilings

Counter area/teller stations Carpet, Ceramic tile

Painted drywall Suspended T-bar with tiles

RM Good

Offices Carpet Painted drywall Suspended T-bar with tiles

RM Good/Poor

Storage Unfinished Unfinished Unfinished RM Good/Fair

Restrooms Vinyl tile, Ceramic tile

Painted drywall Painted drywall RM Good

Safe deposit box area Carpet Painted drywall Suspended T-bar with tiles

RM Good

There are six teller stations, a vault, and a safe deposit box area. Security cameras are provided on the interior and exterior of the building.


No repair costs are recommended.

Life (RUL), the carpet will require replacement during the evaluation period. Repair, replacement, maintenance, or upgrading of the interior finishes in the tenant space is the responsibility of the tenant.

Interior painting and wall finish replacement will also be required. Based on the estimated Remaining Useful Life (RUL), painting and wall finish replacement will require replacement during the evaluation period. Repair, replacement, maintenance, or upgrading of the interior finishes in the tenant space is the responsibility of the tenant.

The ceiling tiles are in good to fair condition. Based on the estimated Remaining Useful Life (RUL), the ceiling tiles will require replacement during the evaluation period. Repair, replacement, maintenance, or upgrading of the interior finishes in the tenant space is the responsibility of the tenant.

Significant areas of the third floor are in poor condition with significant areas of damaged floors, walls and ceilings. Repair of these items will be required. Repair, replacement, maintenance, or upgrading of the interior finishes in the tenant space is the responsibility of the tenant.

88 .. 22 .. CC OO MM MM EE RR CC II AA LL KK II TT CC HH EE NN EE QQ UU II PP MM EE NN TT

Not applicable. There are no commercial kitchens.

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88 .. 33 .. HH VVAACC


Maintenance Maintained by an outside contractor

Age and Type The HVAC equipment appears to vary in age. HVAC equipment is reportedly replaced on an "as needed" basis.

Heating and Air-conditioning

Gas-fired rooftop packaged unit. Central system with boiler

RM Good

Refrigerant R-22

Quantity/Capacity One rooftop packaged unit with a capacity of 35 tons.

One boiler with a capacity of 112,000 BTUH

Distribution Ducts from roof to spaces. Baseboard radiators RM Good

Controls Local thermostats RM Good

Ducts Concealed ducts above ceilings RM Good

Supplemental systems Not applicable N/A N/A

Ventilation Bathroom exhaust fans RM Good


The boiler appeared to be in good condition. Based on the estimated Remaining Useful Life (RUL), the boiler will require replacement during the evaluation period Repair, replacement, maintenance, or upgrading of the HVAC equipment in the tenant space is the responsibility of the tenant.

88 .. 44 .. PP LL UU MM BB II NN GG


Water Meter Meters in vaults along public street RM Good

Domestic Water Supply Copper Pipe RM Good

Domestic Waste and Ventilation

Cast iron pipe and PVC pipe RM Good

Domestic Hot Water Two, electric 40-gallon water heaters RM Good

Restroom Fixtures/ breakroom fixtures

Commercial RM Good



88 .. 55 .. EE LL EE CC TT RR II CC AA LL

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Service Type Underground lines to pad-mounted transformers in underground vault

Service Size 120/208-Volt, three-phase, four-wire, alternating current. Amperage could not be determined

Electric Meters and Equipment

Meters along rear elevations in electrical room. Circuit breaker panels located inside

RM Good

Wiring Copper wire in metallic conduit and Copper wire in non-metallic sheathed cable.

RM Good

Emergency generator Not applicable. N/A N/A


No repair costs are recommended. Routine maintenance is recommended over the evaluation period.

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99 .. OO TT HH EE RR SS TT RR UU CC TT UU RR EE SS


Drive through Slab on grade, CMU bearing walls with stone veneer, flat roof with single ply membrane

RM Good

ATM Kiosk Mounted on Drive thru building RM Good


No repair costs are recommended. Routine maintenance is recommended over the evaluation period.

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11 00 .. CC EE RR TT II FF II CC AA TT II OO NN

EMG has completed a Property Condition Assessment (PCA) of the subject property, Wachovia-Mount Carmel, located at 50 West 3rd Street in Mount Carmel, Northumberland County, Pennsylvania, in order to prepare a Property Condition Report (PCR).

The PCA was performed at the Client's request using methods and procedures consistent with good commercial and customary practice conforming to ASTM E2018-01, Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process. In addition, EMG’s reference to the “Client” follows the ASTM guide’s definition of “User” in all instances pertaining to the published guide. A “User” may include, without limitation, a purchaser, potential tenant, owner, existing or potential mortgagee, lender, or property manager of the subject property.

This report has been prepared to assist in the determination of whether to make a loan evidenced by a note (the “Mortgage Note”) secured by the property referred to in the Report. This Report may be relied upon by: (i) Lehman Brothers Bank, FSB (“Lehman”), or an affiliate (“Lehman”); (ii) the trustee of a trust created in connection with a securitization which includes the Mortgage Note or an interest therein; and (iii) any other purchaser or assignee of the Mortgage Note or an interest therein. This Report may be, for informational purposes only: (i) provided to any potential purchaser or assignee of the Mortgage Note or an interest therein; (ii) provided to any rating agency, rating securities which represent a beneficial ownership interest in a trust fund that consists of mortgage loans including the Mortgage Note or an interest therein; and (iii) referred to, quoted in or included with materials offering for sale the Mortgage Note or an interest therein. There are no third party beneficiaries (intended or unintended) to this Report, except as expressly stated herein. This Report speaks only as of its date.

We have performed our services and prepared this Report in accordance with applicable, general accepted engineering, environmental or appraisal consulting practices. We make no other warranties, either expressed or implied, as to the character and nature of such services and product.

The purpose for which this report shall be used shall be limited to the use as stated in the contract between the client and EMG.

The opinions EMG expresses in this report were formed utilizing the degree of skill and care ordinarily exercised by any prudent architect or engineer in the same community under similar circumstances. EMG assumes no responsibility or liability for the accuracy of information contained within this report that has been obtained from the Client or the Client’s representatives, from other interested parties, or from the public domain. The conclusions presented represent EMG’s professional judgment based on information obtained during the course of this assignment. EMG’s evaluations, analyses, and opinions are not representations regarding the design integrity, structural soundness, or actual value of the property. Factual information regarding operations, conditions, and test data provided by the Client or the Client’s representative has been assumed to be correct and complete. The conclusions presented within this report are based on the data provided, observations made, and conditions that existed specifically on the date of the assessment.

EMG certifies that EMG has no undisclosed interest in the subject property, that EMG’s relationship with the Client is at arms-length, and that EMG’s employment and compensation are not contingent upon the findings or estimated costs to remedy any noted deficiencies due to deferred maintenance and/or any noted component or system replacements.

112222223366


24


EMG’s PCA cannot wholly eliminate the uncertainty regarding the presence of physical deficiencies and/or the performance of a subject property’s building systems. Preparation of a PCR in accordance with ASTM E2018-01 is intended to reduce, but not eliminate, the uncertainty regarding the potential for component or system failure and to reduce the potential that such component or system failure may not be initially observed. This PCR was prepared recognizing the inherent subjective nature of EMG’s opinions as to such issues as workmanship, quality of original installation, and estimating the remaining useful life of any given component or system. It should be understood that EMG’s suggested remedy may be determined under time constraints or may be formed without the aid of engineering calculations, testing, exploratory probing, the removal of materials, or design. Furthermore, there may be other alternate or more appropriate schemes or methods to remedy the noted physical deficiencies. EMG’sopinions are generally formed without detailed knowledge from individuals familiar with the performance of noted components or systems.

Any questions regarding this report should be directed to M. Shane Totten at (800) 733-0660, Extension 6653 or [email protected].

Prepared by: David P. Guse, Field Observer

Reviewed by:

M. Shane Totten PCR Reviewer Technical Relationship Manager [email protected]

112222223366


25


11 11 .. AA PP PP EE NN DD II CC EE SS

APPENDIX A: Photographic Record

APPENDIX B: Site Plan

APPENDIX C: Supporting Documentation

APPENDIX D: EMG Accessibility Checklist

APPENDIX E: Acronyms and Out of Scope Items

Photo#1:

Front elevation of building Photo#2:

Right side elevation of building

Photo#3:

Left side elevation of building Photo#4:

Rear elevation of building

Photo#5:

Roof overview Photo#6:

Night deposit box

An ISO 9001 Certified Company EMG PHOTOGRAPHIC RECORD

Project No.: 122236 Project Name: Wachovia–Mount Carmel

CORPORATE HEADQUARTERS 11011 McCORMICK ROAD HUNT VALLEY, MARYLAND 21031 800 733 0660 FAX 410 785 6220 www.emgcorp.com

Photo#7:

Drive-up teller building with ATM Photo#8:

Rear of drive-up building with teller windows

Photo#9:

Parking area Photo#10:

Boiler

Photo#11:

Rooftop unit Photo#12:

Radiator




Photo#13:

Water heater Photo#14:

Circuit breaker panel

Photo#15:

Electric meter Photo#16:

Elevator interior

Photo#17:

Elevator equipment Photo#18:

Fire alarm panel




Photo#19:

Fire system piping Photo#20:

Main lobby

Photo#21:

Teller counter Photo#22:

First floor — sitting area

Photo#23:

First floor — office area Photo#24:

First floor — office area




Photo#25:

Tenant restroom Photo#26:

Second floor — vacant space

Photo#27:

Second floor — vacant space Photo#28:

Third floor — vacant space

Photo#29:

Third floor — vacant space Photo#30:

Third floor — damaged wall




Photo#31:

Third floor — ceiling Photo#32:

Third floor — sagging beam

Photo#33:

Mold in basement elevator equipment room Photo#34:

Water seepage — basement elevatorequipment room

Photo#35:

Deteriorated asphalt paving




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As of

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Total Unit A

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Total Unit A

CM

Vacant

8,560

0Total D

oc SF

12,182Total B

uilding AC

M

%29.73

Percentage Occupied

70.27%

Percentage Vacant

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