RE: Address of property

We hereby request your services in providing us with a Summary report of a LIMITED OR COMPLETE (choose one) appraisal on the captioned project listed above. The appraisal is to be an estimated opinion of current "Market Value" (per the enclosed definition as provided by the Office of the Comptroller of Currency) of the fee simple interest in the said real estate as of a current date or the date of your inspection.

Your use of an assigned qualified appraiser is acceptable if this assignment is not subcontracted outside of your firm and you sign and take full responsibility for the appraisal reports. The purpose of the appraisal is to estimate a reliable opinion of market value of the property on an "AS IS" or "AS Improved" (select one) basis. The function of the appraisal is to enable ENTER NAME OF FINANCIAL INSTITUTION to appropriately analyze the property as collateral for a proposed loan.

If a Complete Appraisal, the report must be in conformance with the Uniform Standards of Professional Appraisal Practice (USPAP), however, the Departure Provision thereof shall not apply. If a Limited Appraisal, the scope and content of your appraisal should follow generally accepted practices set forth in the Uniform Standards of Professional Appraisal Practice as amended by the Appraisal Standards Board Statement for the use of departure. We understand that the departure provision will be invoked and is aware of the limitations inherent in a limited appraisal. It is incumbent on the appraiser to determine that the use of departure will not result in a misleading appraisal. If circumstances indicate to you that departure will result in a misleading appraisal, immediate notification of the bank is required.

Please note that we ask you to expand the fourth certification item under Uniform Standards of Professional Appraisal Practice Rule 2-3 as follows: "Neither my engagement to make this appraisal (or any future appraisals for this client), nor any compensation therefore, are contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event."

Please also note that a full legal description of the property to be appraised must be included in the report. If not available, an explanation must be provided.

All appraisals of income property will require that the appraiser comment on "feasibility", i.e., the probability of a stabilized property to "hold its own" in the market area or, for proposed or non-stabilized projects, the prospects for achieving normal occupancy at market rates within a reasonable time. Such commentary must be supported by data regarding existing competitive projects, absorption history in similar projects, etc., adjusted for current and estimated future market trends. If feasibility studies by third parties are used, the appraiser should attempt to verify same to the extent assumptions are utilized and he should comment on his acceptance or rejection of the third party study and its impact on value.
Note that the appraiser must "...consider and analyze any current agreement of sale, option or listing of the [subject] property..." as well as any prior sales that occurred within the past three years for commercial or industrial or agricultural uses and one year for residential uses. This, we believe, would apply to the land as well as to the improved property.
Of course, we will expect that the report will contain a sufficient quantity of comparable market data related to land sales, rental values and completed project sales if available. Likewise, we will expect to see adequate support for operating expense estimates, utilization rates and input data for discounted cash flow analyses, if used. A narrative explanation and/or adjustment grid of comparables must be provided.

If this is a summary report, the review process may necessitate presentation of your appraisal file/work papers, currently or at some future date. Your cooperation during the review process is required as part of this agreement.

It is understood that your fee for this assignment will be paid by INSERT FINANCIAL INSTITUTION NAME, upon its approval of the appraisal report. The agreed upon amount of your fee is $ .

It is further understood that you will have the reports in our hands, in duplicate, on or before INSERT DATE. Unless delayed by circumstances beyond the control of the appraiser, the appraisal report must be received by INSERT FINANCIAL INSTITUTION NAME, by the due date.

For information regarding the property or to arrange for inspection, please contact INSERT FINANCIAL INSTITUTION REPRESENTATIVE NAME, PHONE, FAX, and ADDRESS.

Any questions regarding appraisal methodology, etc., should be directed to me,

Please confirm your understanding of the assignment, the timing, and the fee by returning to me a signed copy of this letter within ___ days of the date hereof.

Sincerely,

ACKNOWLEDGED, AGREED AND ACCEPTED

BY: _______________________________________ DATE: ___________________