Pacific Lumber & ShippingOffering Memorandum

Industrial Zoning • 25+ acres • Port of Longview, WA

Pacific Lumber & Shipping Property

CONFIDENTIAL OFFERING MEMORANDUM

The Pacific Lumber & Shipping (“Company” or “PLS”) has engaged CenturyPacific, LLLP as real estate advisor and agent on an exclusive basis in connection with a proposed sale of the 25-acre Longview Property (the “Property”)

located in Longview, Washington.

This Confidential Offering Memorandum (“Memorandum”) is being delivered to a limited number of parties who may be interested in the Property. By acceptance hereof, each recipient agrees not to reproduce or use in whole or in part

the information contained herein, or any other information that is not already public, and to use this Memorandum only for the purpose of evaluating the offering made hereby.

This Memorandum has been prepared based partly upon information furnished by the Company which has reviewed it and authorized its use for the purpose and in the manner described above. Neither the Company, its shareholders, partners nor affiliates, makes any representations or warranties with regard to the accuracy or completeness of the

information contained herein. CenturyPacific, LLLP has conducted a limited review of the information contained in this Memorandum, but has not independently verified the accuracy or completeness thereof. CenturyPacific, LLLP does not represent or warrant the accuracy or completeness of the information contained in this Memorandum. Nothing

contained in this Memorandum should be construed as a representation by any person as to the future possibilities or performance of the Property.

EACH POTENTIAL PURCHASER IS EXPECTED TO CONDUCT ITS OWN DUE DILIGENCE.

CenturyPacific, LLLPpls

Pacific Lumber & Shipping LLC

CenturyPacific, LLLP1201 Third Avenue, Suite 1680Seattle, Washington 98101

Steven L. Wood Managing Director T +1 206 757 8891 stevenwood@centurypacificlp.com

Campbell MathewsonExecutive Vice PresidentT +1 206 757 8893M +1 206 910 2448cmathewson@centurypacificlp.com

Katherine K. Laird Executive Vice President Michael E. FinchVice President

CenturyPacific, LLLP

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Table of Contents

I. Investment Summary 1

II. Maps & Photos 4

III. Recent Articles 9

IV. Transaction Details 11

I. Investment SummaryTHE INVESTMENT

Pacific Lumber & Shipping LLC (“PLS”) is offering for sale approximately 25.02 acres of industrial-zoned property (“the Property”) located in the northwest section of the Port of Longview’s West Industrial Park. We know of no other like properties available for sale within such close proximity to the Port’s eight marine terminals. PLS is seeking proposals to purchase the entire Property.

TERMS & PRICE

$3,300,000, all cash at closing

TIMING FOR PROPOSALS

Letters of intent may be submitted to CenturyPacific, LLLP at any time.

DUE DILIGENCE & CLOSING

The Pacific Lumber & Shipping envisions a due diligence and closing period totaling no more than sixty (60) days.

PROPERTY

The Property is bounded on the north by Paper Way as well as railroad tracks owned by the Port of Longview and Burlington Northern. Paper Way runs southwest from Columbia Drive until reaching the BNSF railroad right-of-way at which time it turns northwest approximately 794 feet until heading southwest and becoming North Tie Road. North Tie Road serves as the western boundary of the property. The southern boundary is an unimproved, but dedicated 40-foot-right-of-way. The eastern boundary is 35 acres formerly owned by Simpson Timber that was recently re-purchased by the Port of Longview.

The site is relatively flat. A stormwater ditch runs the length of the property on the western side. In addition a rail spur from the Port of Longview’s railroad tracks crosses the property in the east-west direction in the northwest portion of the site. The property is served by the full array of public utilities provided under agreement with the City of Longview since the property itself is located in Cowlitz County’s jurisdiction. The site is accessed by a city street grid on its northern boundary (i.e., Paper Way). The Property enjoys agreements with both the Port of Longview and BNSF to allow construction of a continuation of Paper Way across the railroad tracks directly onto the site.

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Owner: Pacific Lumber & Shipping LLCParcel Size: 25.02 acresParcel Dimensions: North Boundary: 794’ east-westSouth Boundary: 911’ east-westEast Boundary: 1,265’ north-southWest Boundary: 1,251’ north-southBuilding Size: Vacant lotParcel No.: 616140106Owner: Pacific Lumber and Shipping LLCSite Address: Southeast corner of the intersection of Paper Way and North Tie Road in Cowlitz County, Washington just south of the City of LongviewAssessed Value: $2,942,700 (i.e., $2.70 per square foot)2008 Taxes: $14,856.76Jurisdiction: Cowlitz CountyZoning: MH: Heavy ManufacturingUtilities: New industrial size municipal water and sewer lines, high pressure natural gas lines and low-cost hydroelectric power are provided to the parkPartial Legal: SUB: HUTCHINSON A DLC SECT, TWN, RNG: 9-7N-2W DESC: HUTCHINSON DLC T-1A-4B / NATHANIEL STONE DLC T-1 PARCEL: 616140106

ZONING

The property is zoned MH – Heavy Manufacturing in Cowlitz County allowing a broad range of industrial uses. According to the Cowlitz County Code (18.10.235), the purpose of the MH zone “is to allow heavy industrial uses or structures where the primary use involved fabrication, manufacturing, assembly, processing and distribution of raw materials, primarily serving non-local wholesale and retail markets.” These uses are “dependent upon rail, water or arterial access to the interstate highway system.” The subject property is located within several hundred feet of the deep-draft Columbia River (and the Port’s eight marine shipping facilities) and Highway 432 which provides direct access three miles to the east to Interstate 5. In addition, both the Port of Longview and Burlington Northern own railroad tracks immediately to the north of the subject property which includes a rail spur from the Port’s track.

The development regulations include typical front, side, rear and corner setback requirements ranging from 5 to 55 feet depending on the fronting road, building height and lot configuration. The limitation on height in the MH zone is only restricted such that any building over 35 feet “shall be no greater than the capability of the fire abatement equipment of the Fire District in which the building is located” (Cowlitz County Code 18.10.570). The MH zone allows for a broad use of industrial uses including all of those allowed in the light manufacturing zone (ML), including commercial uses, warehouse, storage and distribution; as well as uses more typically associated with heavier industrial use such as hazardous waste storage and treatment. Residential use is specifically precluded.

ACCESS

The Property is 40 minutes from Portland International Airport and two hours from Seattle-Tacoma International Airport. The West Industrial Park offers easy access to north-south Interstate 5 which is only 3 miles to the east of the Property, to east-west Interstate 8, and includes direct rail service via the BSNF Railway, Union Pacific and the Port’s Industrial Rail Corridor. The Property is located within several hundred feet of the deep-draft Columbia River shipping channel.

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The Property is directly accessed off of Paper Way crossing the Port’s and BNSF’s railroad tracks per a recent easement. There is also an agreement with the Port to allow access off of North Tie Road just south of the rail spur across a stormwater ditch for which the Port holds an easement.

STORMWATER

The Property is included in the Port of Longview’s detailed stormwater planning area. The result is a net positive in that there is certainty regarding stormwater requirements. A buyer or developer shall comply with Port’s stormwater plan as well as with the stormwater ditch for which the Port has an easement along the western boundary of the site.

TITLE

Review of a title report provided by First American Title Company indicates 12 exceptions to the policy. Exceptions 1, 2 and 12 are standard general tax, excise tax and unrecorded leasehold exceptions found in most policies. The remaining exceptions relate to easements and matters set forth in various surveys. We do not view any of these exceptions as impediments to the development of the Property. In fact, the 11th exception regarding the recently recorded easement agreement between the Port and PLS provides much greater certainty than previously existed providing the Port with a non-exclusive 15-foot wide rail spur easement and non-exclusive stormwater easement and PLS with a 40-foot wide easement for access to Paper Way and 24-foot wide easement for access to North Tie Road.

AREA INFORMATION

The Property is located in the Port of Longview’s West Industrial Park which is just south of Highway 432 approximately four miles west of Interstate 5’s Milepost 36 and 66 miles from the Pacific Ocean. The Port of Longview, in operation since 1921, includes eight marine terminals. To the north of the subject property is Columbia West Industrial Park in the City of Longview which is comprised of dozens of industrial parcels in the one to five acre range. To the east of the property is the Port of Longview’s West Industrial Park including active industrial operations for Pacific Lumber and Shipping, Longview Fibre and others. A joint venture between Japan-based Itochu, Korean shipper STX Pan Ocean and St. Louis-based Bunge North America is under construction on a new $200 million grain terminal. To the south of the Property is an approximate 30-acre parcel before Terminal Way which then leads to Berth 4 of the Port of Longview’s eight marine terminals. The deep-draft Columbia River then proceeds 66 miles to the Pacific Ocean. On the west side of the property are a series of industrial buildings, mostly leased by the Port. Highway 433 then runs south to Oregon. Weyerhaueser has a large facility located just west of Highway 433. On the south / Oregon side of the river is the town of Rainier.

MARKET

The property is located in the Port of Longview’s West Industrial Park which is influenced by activity levels at the Port’s eight marine terminals. The Port of Longview is an active port with over one hundred vessel calls and 1.5 million metric tons of cargo per year. In 2009 the Port posted a $2.7 million profit on record revenues helped by increases in logs, bulks and wind-energy cargo. Companies in the area include Longview Fibre, US Cellular, Simpson Timber, Emmert International, North American Pipe and Steel, Brown-Strauss Steel, Kinder Morgan and others.

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II. Maps & Photos

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III. Recent News ArticlesPort has winning gameplan amid Great Recession Friday, July 16, 2010

LONGVIEW DAILY NEWS

LONGVIEW, Wash. —

The long line of people outside the Kelso’s Worksource building early last week, waiting to apply for 50 on-call longshore jobs, caused us to remember a prediction Commissioner George Raiter made several months ago. Raiter predicted that Cowlitz County would bounce back from the recession sooner than the state and the nation.

The county isn’t back where we want it to be yet, obviously. The jobless rate seems stuck well within the double digits. But recent growth spurts at area ports lead us to think Raiter was onto something.

The Port of Longview, in particular, has shown itself to be somewhat recession proof. Most recently, port commissioners signed a lease with New Jersey-based Skyline Steel to build a $9 million pipe fabrication facility. Daily News business writer Erik Olson reported a couple of weeks ago that the fabrication plant will support 65 family wage jobs once it begins operations early next year.

That’s just the latest piece of encouraging news generated by the port during this historic economic downturn. Port of Longview revenue totaled $7.3 million in the first quarter of 2010, an increase of 29 percent from the first quarter of 2009. Even as what’s become known as the Great Recession seemed to be at its worst, in 2009, the port was an economic engine that wouldn’t quit. Ship traffic on the Columbia River fell by a third last year. Still, the Port of Longview took in $17.2 million in revenue through September of 2009, up 1.7 percent from its record total during the same period in 2008.

The really big fish landed by port officials last year was an agreement with Portland-based EGT Development and its partners to construct a $200 million grain terminal at the Port of Longview. It’s the kind of deal that will bring significant, long-term business to the port and, in turn, considerable benefits to the community. Those benefits began to accrue with the start of construction last summer. Upon completion, a little more than a year from now, the grain terminal will create around 50 family wage jobs at the port and an estimated 30 additional related jobs in the community.

The grain terminal and the more recently acquired steel fabrication facility, together, should add about 115 good-paying jobs at the port, according to Olson. These new port facilities also will give local governments a much-need boost in property tax revenue.

This steady, impressive growth in revenue and jobs isn’t a matter of luck. It’s taken vision, hard work and patience on the part of port officials and commissioners. That work was recognized by the Washington Public

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Ports Association last December, when the organization selected the Port of Longview as its 2009 Port of the Year. The honor was well-deserved. We think port officials are deserving of another plaque this year for continuing to grow revenue and jobs in a still-struggling economy.

Joint venture to build Longview grain terminalMonday, June 1, 2009

THE SEATTLE TIMES COMPANY

A joint venture of U.S., Japanese and Korean companies said today that it will build a $200 million grain terminal at the Port of Longview on the Columbia River.

It will be the first grain export facility built in the U.S. since the early 1980s, and will employ about 50, said a statement from Bunge North America, the majority partner in the joint venture with Tokyo-based Itochu and STX Pan Ocean, South Korea’s largest bulk carrier.

The terminal will be able to handle more than 8 million metric tons of grain

It features a rail loop track unloading system capable of holding four 110-car unit trains at any given time. The facility will include a highly efficient shuttle train unloading system as well as the capability to unload barges from the Columbia River. Construction of the terminal is slated for this month.

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IV. Transaction Details

The offering of the Longview property is being distributed exclusively by CenturyPacific, LLLP (the “Investment Team”) to a select group of pre-qualified investors. The prospective investor will be selected by the Seller in its sole and absolute discretion based on a variety of factors including, but not limited to, offer price, financial strength and ability to close in a timely fashion.

The Investment Team will be available to assist prospective investors to arrange site inspections and to answer any questions related to information contained in this Offering Memorandum.

All inquiries should be directed to: CenturyPacific, LLLP 1201 Third Avenue, Suite 1680 Seattle, Washington 98101

Steven L. Wood Campbell MathewsonManaging Director Executive Vice PresidentT +1 206 757 8891 T +1 206 757 8893stevenwood@centurypacificlp.com M +1 206 910 2448 cmathewson@centurypacificlp.com

Katherine K. Laird Michael E. FinchExecutive Vice President Vice President

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DISCLAIMER

Materials contained in this Investment Offering are confidential, furnished solely for the purpose of considering the purchase of the Longview Property (the “Property”) located in Longview, Washington; described herein and are not to be used for any other purpose or to be made available to any other person without the express written consent of CenturyPacific, LLLP (the “Investment Team”) and Pacific Lumber & Shipping, LLC (the “Seller”). The material is based, in part, upon information supplied by Seller and, in part, upon information obtained by the Investment Team from sources they deem to be reliable. Summaries contained herein of any legal documents are not intended to be comprehensive statements of the terms of such documents, but rather are outlines of some of the principal provisions contained therein. No warranty or representation, expressed or implied, is made by Seller, the Investment Team or any of their related entities as to the accuracy or completeness of the information contained herein. Prospective investors should make their own investigations, projections and conclusions. Interested buyers should be aware that the Seller is selling the Property in “AS IS” CONDITION WITH ALL FAULTS, WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE. It is expected that prospective investors will conduct their own independent due diligence concerning the Property, including such engineering and environmental inspections as they deem necessary to determine the condition of the Property and the existence or absence of any potentially hazardous materials used in the construction or maintenance of the Property. No representations, expressed or implied, are made as to the foregoing matters by Seller, the Investment Team or any of their officers, employees, affiliates and/or agent. Information contained in this Offering Memorandum is further governed by the Confidentiality Agreement.

CenturyPacific, LLLP