Court Receiver Presentation

DAVID M. FRANKNATIONWIDE COURT APPOINTED RECEIVER/TRUSTEE

MONTANA NORTHDAKOTA

SOUTHDAKOTA

WYOMING

TEXAS

NEWMEXICO

NEBRASKA IOWA

LAALA GA

UTAH COLORADO

ARIZONA

NEVADA

WASHINGTON

OREGONIDAHO

MINN

DISTRESSED PROPERTIES UNITCourt Appointed Receiver

Chapter 11/ RestructuringAsset Management

Construction ManagementLeasing/Marketing

800-808-8559www.dmfcourtreceiver.com

A Division of the Merrill Group of Companieswww.themerrillgroupco.com


As one of the largest Federal and State Court Appointed Receivers for a combination of receivership and asset and property management firms in the United States, we have been appointed to over 400 cases, representing over 73 lending institutions.

With over 19 years of courtroom experience, David M. Frank has implemented programs, services and procedures to assist lenders in protecting the security of their loans, namely increasing market value and generating higher revenue. Problem management issues, such as debt and creditor workouts, are one of the proprietary tasks of the Distressed Properties Unit.

Since 1985, The Merrill Group of Companies, an affiliate of the receiver is a full service property management company with 160 offices affiliated nationwide has specifically managed, industrial, multi-family, hospitality, special purpose properties and millions of square feet of both retail and office space.

The Companies Distressed Properties Unit consists of a Property Manager, Asset Manager, Assistant Property Manager, Construction Manager, and Maintenance Director. With our combined Team, we survey the property, perform interior and exterior inspections (determining the life, safety, and health conditions), leasing and area demographics, and any issues regarding the property.

As a group, we develop a strategic plan for the operation of the property internally, and management commences immediately based upon our action plan that includes tenant interviews and evaluations, legal, vendors, insurance, accountings and proceed with acquiring the property’s books and records. Our Asset Management Department prepares a budget, expense and cash flow reports, and oversees the operation of the property.

Our on-line paperless document system includes 24-hour access to monthly financial reports, leasing information, maintenance reports and is available 24 hours a day simply by going on line through our web site secured data room.

DISTRESSED PROPERTIES UNIT


DEPARTMENT OVERVIEW

Legal DepartmentPrepares Motions for Receivership and Final Accounting and serves all parties with ◊

the appropriate reports and pleadings.

Takes possession of the asset and conducts audit pursuant to the order of the Court.◊

Assists in debt work-outs and/or sells or manages assets in order to optimize proceeds.◊

Asset ManagementDevelops a customized management plan specifically for the asset.◊

Performs tenant interviews and evaluations.◊

Maintains detailed records, including monthly income and expense reports and complete ◊ receivables and payables tracking along with detailed check register information and monthly bank account reconciliation.

Court Appointment

DISTRESSED PROPERTY

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Property MaintenancePerforms repairs and regular maintenance services to protect the value of the property.◊

Prepares a Field Inspection Report of the property condition and health & safety issues.◊

Performs property inspections at regularly scheduled intervals to assure the continued ◊ quality of the property, buildings and grounds.

LeasingMeets with prospective tenants to evaluate their space needs and designs a plan that ◊

will assist tenants in making their decision.

Prepares a full property report and traffic radius reports.◊

Prepares all documentation for lease agreements and provides store-front signage ◊ assistance and property management information.

Construction ManagementDetailed review of the property condition. Preparation of recommendations for any ◊

deferred maintenance or other related physical issues.

As required, confers with architect and/or civil engineer regarding any issues beyond ◊ normal repair and maintenance.

As reguired, prepares all documents, cost estimates, and time-lines necessary to effect ◊ completion of the subject repairs, maintenance and/or construction.

DEPARTMENT OVERVIEW


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CORE SERVICESReceivership Services◊

Real Estate Asset Management Services◊

Real Estate Facilities Management Services◊

Construction Management◊

TRANSITION PLAN

Our team understands the unique challenges associated with the transition process and work with the lender to minimize disruption to ongoing operations, reduce time and effort, maintain tenant morale, produce effective results and allow for informed decisions through effective communication and organization. Upon appointment we provide a 24-36 Hour Preliminary Report to the Client with Property Inspection, Evaluation & Photos and continue with the transition listed below:

WITHIN 2 WEEKS

Complete ◊ Takeover Report is provided to Client which includes abstracting lease analysis, building and property condition, Inspections & Tenant information.

Action Plan is completed◊

Legal department ◊ notifies all the vendors and property depository banking institution

WITHIN 30 DAYS

A Year end budget is ◊ created and provided to Client with a cash needs analysis, repairs, leasing, and tenant retention issues

Vendor Bidding ◊ and initial repairs and maintenance have commenced

Financial accounting ◊ has been updated and processed into our computer system

Chapter 11 Bankruptcy Trustee Services◊

Real Estate Property Management Services◊

Construction Services◊

General Contracting ◊

ON-GOING

Monthly and Quarterly ◊ Financials are provided

Establish budget ◊ procedures and policies

Implementation of the ◊ on-going Action Plan

Rents & Profits◊



For over 25 years in business and 18 years as a court appointed receiver, our client relationships have been built on integrity, responsiveness, performance.

At all times, The Merrill Group of Companies seeks creative solutions that maximize and protect the property value. The Companies Asset and Business Management delivers a comprehensive range of services as set forth in more detail below.

The Portfolio Manager and Field Supervisor will visit the property and handle tenant issues, ◊ health and safety issues, maintenance and related subjects and prepare appropriate solutions.

24-hour Emergency Service Line, which will allow tenants and others access to the ◊ managers of your property even on holidays and weekends. Should any emergency occur, we will notify you immediately.

Monitoring of vendors and contractors, preparation of specifications for new contracts, ◊ negotiation and/or renegotiations for new contracts, and performance evaluation of existing contracts.

Monthly financial statement: On a cash basis to include an executive summary of ◊ operational activity and variances to the budget with a general ledger, balance sheet, budget comparison report, summary income sheet, aged delinquency report, income register, rent roll, check register and a bank reconciliation reports.

Prepare tenant billings, collect rent and administer leases.◊

A monthly narrative report summarizing the activities for the prior month.◊

A remaining Year End Budget and the annual budget are prepared for the property. ◊

Preventative maintenance programs are established for the building’s mechanical ◊ components. These programs are completed with vendors with inspections made by the Company staff.

Supervise the services of an on-site property manager (“Site Manager”). Tenant ◊ Satisfaction Surveys are sent out periodically to measure the performance of the management and maintenance personnel, as well as to assist with the future planning process.



The management staff monitors all tenant improvement work and works closely with tenant ◊ improvement manager to maintain integrity with the tenant.

Implementation of strong tenant relations programs and administration of all tenant leases, ◊ coordinating closely with the leasing team, and establishes procedures for the prompt receipt, recordation, investigation and handling of tenant complaints and requests.

Hire, discharge and supervise all employees required for the on-site management, ◊ operation, maintenance and repair of the Property.

Maintain constant review of physical structure, provide recommendations and implement ◊ programs to maintain the image of the property.

Take all reasonable steps, including legal action to enforce all maintenance, service and ◊ supply contracts, guarantees, warranties, bonds and other contractual undertakings, if any.

Engage attorneys experienced in the field of landlord-tenant relations to prosecute defaults ◊ under leases and other agreements relating to the occupancy of the Property.

Emergency Response Planning (ERP)◊


ACCOUNTING SERVICES

COMMITMENT TO INVESTINGThe Merrill Group of Companies’ seasoned and dedicated accounting staff are a key value added contributor to a comprehensive management program. As such, the company invests in training of our accounting team and is constantly in the workplace recruiting applicants with industry specific accounting knowledge.

REAL-TIME ACCOUNTING SERVICESThe Merrill Group of Companies has the ability to provide full accounting services deliver customizable, real-time reporting through web-enabled technology, allowing our managers and accountants to work more efficiently.

SCOPE OF SERVICESThe basic scope of accounting services includes the following:

Narrative Report ◊

Variance Report◊

Check Register ◊

Tenants Cash Receipts Journal◊

CAM Accounts Receivable Status◊

Bank Statements & Reconciliation ◊

Optional Reports available:

Trial Balance◊

Balance Sheet◊

General Ledger◊

Supporting Schedules◊


CLIENT LIST

American International Bank

American Savings Bank

AMRESCO Financial, Inc.

Bank of America

Bank of the West

Bankers Mutual

Bay View Federal Bank

Beneficial California, Inc.

Berkadia Commercial Mortgage LLC

Berkeley Federal Bank & Trust FSB

Brentwood Thrift & Loan

Bristol Group

Business Bank of California

C-III Asset Management, LLC

California Center Bank

California Federal Bank

California Thrift & Loan

California United Bank

Cathay Bank

Cenfed Bank

Centerline

Citibank, N.A.

City National Bank

Citizens Business Bank

Coast Federal Bank

Continental Savings of America

Equimax Mortgage & Loan

Essex Property Trust

Federal Deposit Insurance Corporation

Federal National Mortgage Association

Fidelity Federal Bank

First Bank

First Federal Bank of California

First Fidelity Thrift & Loan Association

First Los Angeles Bank

First Nationwide Bank

First Regional Bank

First Union National Bank

GE Capital Realty Group

General Bank

Glendale Federal Bank

GMAC Commercial Mortgage Corp.

Guardian Bank

Hanover Financial

Helios AMC, LLC

Household Commercial Financial

Imperial Capital Bank

Imperial Commercial Services

Imperial Thrift and Loan

Inland Empire National Bank

ITT Federal Bank

JE Robert Companies

Key Bank National Association

Marathon National Bank

Midvale Capital Group

National Bank of Southern California

Nevada State Bank

North County Bank

Northeast Savings Bank

Northern Trust of California Bank

Ocwen Federal Bank

Omni Bank

P F F Bank & Trust

Pacific Crest Investment & Loan Bank

Pacific Thrift & Loan Co.

Pomona First Federal Savings

Quaker City Federal Savings

Regency Savings Bank, FSB

Resolution Trust Corporation

San Pedro Bank

Sanwa Bank of California

Southern California Bank

Tokai Bank of California

Trust Bank F.S.B.

U. S. Bank

United California Savings Bank

United Pacific Bank

Wells Fargo Bank & Trust

Western Bank

World Trade Bank


RECEIVER / TRUSTEE / PROVISIONAL DIRECTOR

David M. Frank

David M. Frank is Chief Executive Officer of The Merrill Group of Companies, LLC a real estate development and property management company founded in 1985. Mr. Frank’s career began in the legal field in 1984 after earning a Juris Doctorate in Law at Pepperdine University Law School and a Bachelor’s degree from University of California, Los Angeles in 1982. Mr. Frank has become one of the nation’s foremost experts in receiverships. He is currently acting on behalf of the Division of Resolution and Receiverships of the Federal Deposit Insurance Corporation and has had over 74 public or institutional clients.

As the principal as well as the founder of the Company, Mr. Frank has a 25 year history of working in business, forensic accounting, and commercial real estate. Beginning in 1992 began to handle bankruptcy matters, foreclosures, court appointed receiverships and appointments for Resolution Trust Corporation (RTC) nationwide for over 400 cases. As a provisional director Mr. Frank was involved in business partnership disputes.

Mr. Frank is a well-seasoned professional having acted as an expert witness, complex business litigation matters, including fraud issues, tracing of funds, financial data reconstruction, and valuations. Mr. Frank has spoken on receiverships, business restructuring. As a receiver, Mr. Frank has operated hotels, business, real estate, and factories involving hundreds of millions of dollars of properties and assets.

EDUCATION

UCLA Graduate 1982

Pepperdine School of Law Graduate 1984

California Broker’s License 1982

Nevada Broker’s License 2003

California General Contractor’s License 1992


FEE SCHEDULE

RECEIVERSHIP

Upon confirmation as a Court Appointed Receiver:

$250.00 per hour for State Court Receiver

$100.00 per hour for Receiver Staff Services

Minimum Monthly Fee: $1,250.00

Plus Management Fees based on the Gross Receivables collected

MANAGEMENT SERVICES:

Size of Asset Percentage of OR Monthly One Time Gross Income Minimum Initial Set-up Report Abstraction Fee

Retail: 0 to 40,000 sq. ft. 6.0% $1,750.00 $3,000.00

40,000 to 100,000 sq. ft. 5.0% $5,000.00 $3,500.00

100,000 to 200,000 sq. ft. 4.5% $8,000.00 $4,000.00

200,000 sq. ft. and over 3.5% $10,000.00 $6,000.00

Multi-Family: 1 to 15 Units 6.0% $850.00 $2,500.00

16 to 30 Units 6.0% $1,500.00 $3,000.00

31 to 60 Units 6.0% $2,500.00 $3,500.00

61 to 100 Units 5.0% $3,500.00 $5,000.00

101 to 150 Units 4.5% $5,000.00 $6,000.00

151 Units and up 4.0% $6,000.00 $7,000.00


FEE SCHEDULE

Office: 0 to 40,000 sq. ft. 6.0% $1,750.00 $3,000.00

40,000 to 100,000 sq. ft. 5.0% $5,000.00 $3,500.00

100,000 to 200,000 sq. ft. 4.5% $8,000.00 $4,000.00

200,000 sq. ft. and over 3.5% $10,000.00 $6,000.00

Industrial: 0 to 40,000 sq. ft. 5.0% $1,750.00 $3,000.00

40,000 to 100,000 sq. ft. 4.0% $5,000.00 $3,500.00

100,000 and over 3.5% $8,000.00 $4,000.00

Single-Family Residential: Any Size, for first month $550.00 per Unit

Any size, for subsequent months $375.00 per Unit

Special Unique Assets: Subject to negotiation

All properties are subject to a termination fee of $2,500 to close out the books and cover costs of delivering the property documents to the receiving party

OTHER SERVICES OFFERED:

Asset Management Services: Subject to negotiation

Commercial Leasing: 6% of the gross scheduled rental income for the first 5 years of the primary term, and 3% of the gross scheduled rental income for the second 5 years of the primary term

Construction Management: 20% of the aggregate amount of the contract price of the work


CORPORATE CONTACTS


David M. Frank 22817 Ventura Blvd., Suite 310 Woodland Hills, CA 91364 818-888-9476 Office 818-887-6666 Fax [email protected]

Carol Dvorak 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

Susan Punos 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

Danielle Watson 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

Craig Katchen 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

Joe Sulima 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

Janet Bryant 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

Lisa Murray - Consultant 22817 Ventura Blvd., Suite 310 Woodland Hills, CA 91364 818-888-9476 Office 818-887-6666 Fax [email protected]

Marty Bolkin 22817 Ventura Blvd., Suite 310 Woodland Hills, CA 91364 818-888-9476 Office 818-887-6666 Fax [email protected]

Larry Luck 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

Audrey Kanthack 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

Jonathan Klempa 22817 Ventura Blvd., Suite 310 Woodland Hills, CA 91364 818-888-9476 Office 818-887-6666 Fax [email protected]

Katie Kleber 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

Harry Ramnath 3855 South Jones Blvd., Suite 102 Las Vegas, NV 89103 702-851-0588 Office 702-889-0008 Fax [email protected]

REFERENCES

H. Stewart Carrico II

Senior Vice PresidentC-III Asset Management LLC

5221 N. O’Connor Blvd., Suite 600

Irving, TX 75039

Phone: 972-868-5380

Fax: 972-868-5495

Adelaide Maudsley

Chapman and Cutler LLP One Utah Center

201 South Main Street, Suite 2000

Salt Lake City, Utah 84111

Main: 801-533-0066

Direct: 801-320-6731

Fax: 801-533-9595

Gabriel Liao

Perkins Coie LLP Attorney at Law

1888 Century Park East, Suite 1700

Los Angeles, California 90067-1721

Phone: 310-788-3208

Fax: 310-843-1256

Stephen Santacroce

Senior Asset Manager GE Capital

Commercial Finance Real Estate

1901 Main St., 7th Floor

Irvine, CA 92614

Phone: 949-477-1544

Main: 714-319-0660

Fax: 949-477-0903

Richard Ormond

Shareholder

BuchalterNemer, A Professional Corporation

1000 Wilshire Boulevard, Suite 1500

Los Angeles, California 90017-2457

Phone: 213-891-5217

Fax: 213-630-5748

Curt Spaugh

Senior Vice President Helios AMC, LLC

2 Embarcadero Center, Suite 1360

San Francisco, CA 94111

Phone: 415-374-2834

Main: 415-374-2820

Fax: 415-374-2704


MONTANA NORTHDAKOTA

SOUTHDAKOTA

WYOMING

TEXAS

NEWMEXICO

NEBRASKA IOWA

LAALA GA

UTAH COLORADO

ARIZONA

NEVADA

WASHINGTON

OREGONIDAHO

MINN

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