Assignment: To: Settlement Agent Re: Preparation of settlement statement for Big Red Apartments Date: Date of closing is March 26, 2015 You will find below all the information necessary for completing the settlement statement for closing todays sale of Big Red Apartments. Day of closing is being treated as a buyers day for purposes of allocating expenses and credits. Please review the following assumptions and accompanying documents and generate a settlement statement using the attached HUD1statement of sale for the transaction as set forth below: THE PLAYERS

Seller: Ken and Linda Danter Buyer: Sibley Partners LLC; Travis Frost, Managing Member (and personal guarantor)

Lender: BB&T Bank; Jason Moore, Commercial Loans Mgr.

Listing real estate agent: David Hodes, Realty America

Selling real estate agent: Doug Weill, Century Real Estate

Sellers Attorney: Gary Stevens - $750 fee

Buyers Attorney: Adam Klausner - $1,500 fee

Lenders Attorney: Marcus and Blarney, LLP THE PROPERTY

Big Red Apartments. Big Red Apartments is a 88-unit townhome development built in 1982 that comprises 22 buildings. Each unit is a 2 bedroom/1 bath layout with 900 sf gla. Current occupancy is 95.5% with each occupied unit leased at $900/month and with an equivalent security deposit amount equal to one months rent paid. No interest is due on these security deposits held by the seller.

Property Taxes: Taxes are the responsibility of the owner (not tenants) and are paid in arrears1 (eg. 2nd half 2014 payable in 2015).

o Assessed Value of Property: $3,000,000 o City Tax Rate: $15.00 per $1,000 of Assessed Value (2nd half begins 7/1)

? Tax bill was received on 3-1-2015 for 2nd half 2014 and is due on 4-15-2015

o County Tax Rate: $10.00 per $1,000 of Assessed Value (FY begins 1/1)

? Tax bill was received 1-15-2015 for full TY 2014 and has been paid by seller

o School Tax Rate: $20.00 per $1,000 of Assessed Value (FY begins 7/1)

? Tax bill was received 1-1-2015 for 2nd half 2014 and has been paid by seller.

THE PURCHASE DEAL

Purchase Price: $4,000,000.

Earnest money deposit: $40,000 by buyer, held by the selling real estate agent, to be applied as a credit against the purchase price at closing

Listing Agreement: 3.25% commission based on purchase price, split evenly between listing and selling agent; all commissions to be paid by seller

Existing Mortgage: to be paid off by seller from proceeds at closing. Principal balance as of 3/1/2015 was $1,000,000 with an interest rate of 5% (simple interest calculated on a 365-day year payable in arrears - e.g. the March 1st payment pays Februarys interest). The seller made their March 1st payment

Rents: rent for current tenants to be adjusted at closing. All but three tenants paid their monthly rent for March on 3-1-2015. The remaining three tenants were paid up through February but are past due for their March 1st rent payment. Buyer and seller agree that buyer assumes all responsibility on day of closing for past and future rent, including collection activity and associated proceeds.

Security Deposits: to be transferred to buyer at closing

Expenses: each party pays its own attorney fees.

o Seller Expenses:

? Survey: ALTA survey to be provided by seller ($5,000)

? Deed stamps/transfer tax ($6 per $1,000)

? Record discharge of existing mortgage ($50)

? Record Franchise Tax Search/Cert of Good Standing ($30)

? Title Search/Abstracting/Tax Searches ($300)

o Buyer Expenses:

? Record deed ($60)

? File Survey Map ($10) THE FINANCING DEAL

Financing:

BB&T: BB&T Bank is providing $3,000,000 in first mortgage financing at an interest rate of 4.25% with the first payment due on May 1, 2015. The payment on 5-1-2015 will pay the interest for the coming month (simple interest calculated on a 365-day year payable in advance - e.g. the May 1st payment pays Mays interest), and the loan will begin amortizing from that first payment date. Interest will be due from day of closing through the first payment date. The lender is also requiring that the buyer/borrower establish a $75,000 reserve account due to concerns found with the existing waste water treatment facility on the property. Buyer will provide funds to establish the reserve account as a part of closing and have it reflected on the settlement statement.

Seller financing: The seller is providing an I/O (interest only) loan of $700,000 at 5% interest with a balloon payment due at the end of the first year. The first payment is due May 1st (simple interest calculated on a 365-day year payable in advance) with interest from day of closing to first payment date to be included in the settlement statement.

Borrower Expenses:

o Record Mortgage ($50)

o Mortgage Tax ($5 per $1000) (there is no tax due on the seller-financed portion).

o Title Insurance at State-mandated regulated rates of $3 per $1000: Owners policy to include market value rider ($200) and Lenders Policy to include the following 2 endorsements. (Buyer has elected to decline owners coverage). Title insurance will include the following endorsement requirements:

? Adjustable Rate Mortgage Endorsement ($100)

? Environmental Protection Lien Endorsement ($50)

o Appraisal Fee to Upstate Appraisers: ($6,000)

o Flood certification: ($35)

o Property Insurance to Burns Fire & Casualty: $2,500 annual premium

? (already paid by buyer prior to closing).

o Phase 1 Environmental Audit to GeoSludge: ($1,500)

? (already paid by buyer prior to closing).

o Origination fee to BB&T Bank: ($15,000)

o Lenders Settlement fee to Marcus & Blarney, LLP: ($1,500)

o No escrow account for taxes/insurance to be established at this time