Memorandum AIDEA Board Members April 30, 2015 Page 2

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2 Memorandum AIDEA Board Members April 30, 2015 Page 2 Management Huna Totem Corporation ( HTC ) is the village corporation created under the Alaska Native Claims Settlement Act (ANCSA) for the village Hoonah. It is the parent company of the borrower and is a guarantor. A nine-member board of directors oversees the HTC management team. Lawrence Gaffaney is the President and CEO of HTC. He has a background in investment banking and capital management. Collateral and Value The loan will be secured by a first deed of trust with an assignment of rents on the Icy Strait Point site and improvements. The 34-acre site is located at 108 Cannery Road, Hoonah, Alaska. The collateral will include a lien on all furniture, fixtures and equipment. Kim M. World of Alaska Appraisal Associates, Inc. appraised the Icy Strait Point facility as of the January 13, The report concluded the value upon completion of the proposed improvements as of May 1, 2016 at $35,280,000. The appraised value provides a 71% loan to value, which is within AIDEA guidelines. Using the appraisal s projected net operating income for the project; the debt service coverage ratio is projected to be Related Debt Huna Totem Corporation is the borrower for an existing AIDEA participation loan with a balance of $6,484,910. This loan was originated in 2004 and has paid as agreed. The loan is secured by the Icy Strait Point property and will be paid off from the subject loan. Financial Information Specific confidential financial information will be provided to Board members under separate cover. Environmental No issues noted. Strengths The project is a successful and proven tourism destination facility. The project has a history of proven management and profitable operations. Use of funds is for the expansion of an existing, profitable business. The parent company has the financial capacity to provide additional financial support. The project has strong community support and job creation/retention. City of Hoonah receives the positive economic impact of a 5% sales tax and the SOA cruise ship passenger tax. BIA is guarantying 90% of the loan balance.

3 Memorandum AIDEA Board Members April 30, 2015 Page 3 The $24.6 million cost of the new dock is being offset, in part, by a $14.1 million SOA grant. Weaknesses Positive cash flow is dependent upon one new ship being added to the ISP location as a port of call during the Alaska cruise ship season. A feasibility study by McDowell Group provides sound reasoning and justification for more cruise ships being attracted to ISP as port of call. Any additional ships will have a very positive effect on revenues and cash flows. Portfolio Diversification As of December 31, 2014, AIDEA had 19.7% of its total statewide portfolio secured by tourism properties. This will increase to 24.0%. For participated loans within the Southeast region, 35.2% of AIDEA s total portfolio is attributed to tourism type projects. This loan will increase penetration of the tourism properties to 50.7% in the Southeast region. Recommendation Staff recommends approval as presented.

4 AIDEA Credit Presentation BORROWER: X una Kaawu Annee Corporation Bank: Northrim Bank CO-BORROWER: Originating Officer: Ray Dinger ADDRESS: 9301 Glacier Highway, Suite, 200 Juneau, AK Loan Officer: Bill Phelan Date: March 26, 2015 C-Corp S-Corp LLC General Partnership Ltd Partnership Sole Proprietorship Individual BOND SALE BUSINESS: Real estate holding company for co-borrowers and Huna Totem Corporation NAICS: GUARANTORS: BIA Guaranty at 90%, Icy Strait Point, LLC, Huna Totem Corporation and Duck Point Development, LLC LOAN PURPOSES: Refinance New Construction Acquisition Assumption Equity Extraction Energy Development Project LOAN PROGRAM: Loan Participation Business Assistance Program OREO Sale AIDEA 100% Owned COMMITMENT TERM: 18 months ANTICIPATED FUNDING DATE: September 15, 2016 JOBS CREATED/RETAINED: 52 construction jobs were created and 35 new permanent jobs created or retained PARTICIPATION Loan Amount Percentage Rate Payment Quarterly Annual Term Northrim Bank $5,000,000 20% Variable/5% 1 $99, ,930.48$ 20years: AIDEA $20,000,000 80% Fixed/5.36% 2 $364, $1,456, years TOTAL $25,000,000 $463, $1,853, Effective Amo: 25 years Related Debt $6,484,910 GUARANTEE Loan Amount Guarantee Percentage Guarantee Amount Rate Payment Monthly Annual Term None COLLATERAL DESCRIPTION AND VALUE Description Appraisal Date Source Appraised Value Loan to Value First liens on Icy Strait Point, a tourism destination facility in Hoonah, AK. As of January 13, 2015 Kim M. Wold Alaska Appraisal Associates, Inc. As Complete $35,280,000 71% Comments: Loan committee approved this participation request on April 6, Economic development is being enhanced by providing long-term financing and a fixed interest rate for the expansion of a successful, cruise ship destination project located in Hoonah, Alaska. The borrower will benefit from the growth in economic activity that the new docking facility and site improvement will bring to the project. The project is expected to create 52 construction jobs and 35 new permanent jobs as result of this transaction. CONDITIONS OF APPROVAL 1 Underwritten at 5%, the initial rate. 2 Underwritten at 5.36%, AIDEA s 25-year fixed rate. -1- L15-05_PublicCreditPresentation-X'unaKaawu.docx

5 ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY LOAN RESOLUTION NO. L15-05 A RESOLUTION OF THE ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY REGARDING PURCHASE BY THE AUTHORITY OF A PARTICIPATION IN X UNNA KAAWU ANNEE CORPORATION. WHEREAS, Northrim Bank has filed an application with the Alaska Industrial Development and Export Authority (the Authority ) requesting that the Authority purchase a participation in a loan to X una Kaawu Annee Corporation, (the Loan ) under the Authority s loan participation program (AS et seq.); WHEREAS, the nature, purpose and terms of the Loan and the Authority s participation are described in the memorandum from Authority staff attached (the Memorandum ); WHEREAS, staff of the Authority has recommended that the Authority purchase the participation in the Loan, subject to certain conditions, as described in the Memorandum; WHEREAS, the Authority s participation in the Loan is consistent with all requirements for such participation provided in AS et seq. and the applicable regulations of the Authority related to such participations provided in 3 AAC ; WHEREAS, it is the Authority s policy that the purchase of a loan participation be approved by the Authority s board if the Authority s participation in the loan will equal or exceed $3,000,000, or if the aggregate amount of the Authority s participation in loans to any borrower or guarantor will exceed $5,000,000; WHEREAS, the dollar amount of the participation is over $3,000,000;

6 WHEREAS, Northrim Bank requests the Authority to purchase $20,000,000 (80.0%) of the $25,000, Loan; and WHEREAS, it is in the best interest of the Authority that the Authority purchase the participation in the Loan, subject to conditions recommended by staff as described in the Memorandum. NOW, THEREFORE, BE IT RESOLVED BY THE ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY AS FOLLOWS: Section 1. The Authority s purchase of the participation in the Loan as described in the Memorandum is approved, subject to the conditions recommended by staff as set forth in the Memorandum. The Executive Director is authorized to approve such non-material changes in the terms and conditions of the Loan and the Authority s participation as the Executive Director, in his discretion, determines appropriate. Section 2. The Executive Director of the Authority and the Commercial Finance Director of the Authority are authorized to take such actions as may be necessary or convenient to consummate the purchase of the participation in the Loan including, without limitation, issuing a commitment with respect to the Authority s participation in the Loan. DATED at Anchorage, Alaska on this 30 th day of April (S E A L) A T T E S T Chair Secretary AIDEA Loan Resolution No. L15-05 Page 2