MEMORANDUM

To: Dave Wartel,

Assistant Director/COO

Jayne Williams
Chief Project Manager

From: LeeAnne Woods

Project Analyst

Date: March 12, 2007

Re: NURFC Discussion

The purpose of this memo is to address some preliminarily questions regarding

NURFC’s financial assessment:

Is NURFC Fully Funded?

The National Underground Railroad Freedom Center’s (NURFC) funding status depends
on the use of the value of their investments associated with the Reimbursement
Agreement, between NURFC and Bank One, N.A. (JP Morgan Chase Bank, N.A.). The
value of these investment vehicles total over $27.5 million, as of December 2006:

ƒ 7-Day Certificate of Deposit with US Bank, valued at $2 million,

ƒ 5/3 Account, valued at $4.2 million, and
ƒ JP Morgan Fixed Income Account valued at $21.3 million.

According to the May 2005 PASR financial summary, project costs total approximately
$115.8 million. All other funding sources, not including the value of these investments,
total $109.8 million. The CD is the only investment with an original maturity date of 30
days or less and is, therefore, considered a cash equivalent. The value of the CD should
be used when considering funding status and this would bring NURFC’s funding total to
$111.8 million; this leaves $4 million unaccounted for. If the remaining investments are
used to determine funding, total funding increases to $137.3 million and NURFC could
be considered fully funded.

General Issues and Questions Regarding NURFC’s Financial Status and Financing
Model:

Whether NURFC has developed a sustainable business model or not is a separate

question from full funding. Their performance and model for financing thus far indicates a
heavy reliance on debt and investment financing rather than a plan to sustain operations
through fundraising/other revenue generation and expense control.

As a part of the overall capital funding plan, NURFC anticipated the establishment of an
operating endowment with interest payments from received pledges. The plan relied on
NURFC’s ability to pay back debt service on schedule (provided in the original loan
agreement with the Port Authority). This was to be accomplished with interest earnings
from the investment of received pledges. NURFC expected these interest earnings to be
sufficient to meet their debt repayment schedule and produce a surplus that could be
used to establish an endowment. In reality, NURFC ended 2004 and 2005 in a deficit
and has thus far been unable to establish the endowment. Unaudited financials dated
September 2006 indicate NURFC was on track to end 2006 with an income surplus.

Information Needed:

ƒ 2006 audited statements when available (unaudited helpful now),

ƒ Correct list/total of project costs,
ƒ Fundraising Plan and History, and
ƒ Updated Pro Forma projections, income and cash flow.