Hadc bond inducement application 2 12 14

Table of Contents

Application

Attachment A - Site Plans

Attachment 8 -Floor Plans

Attachment C - Artist Rendering

Attachment D - Zoning and Zoning Variance Certificate

Attachment E - Lender /Credit Enhancer Information

Attachment F -Applicant/Parent/Guarantor Information

Attachment G - Tax Credit Investor Information

Attachment H - Management Company Information

Attachment I- Copy of the Public Notice- Exhibit "8"

Attachment J - Fact Sheet- Exhibit

Attachment K- DeKalb County's Proposed Multifamily Bond Summary

Attachment L - Management Agreement

Attachment M - Purchase and Sale Contract

Attachment N - Developer Proforma Numbers

CERTIFICATION

The undersigned hereby certifies as to the foregoing Application for Inducement Letter, that:

1. All items as completed are true.

2. The undersigned has read and agrees to comply with the terms of the Authority' s Statement of Policy as to multifamily housing facilities. The undersigned agrees to the Indemnification provisions set forth in the Bond Loan Program Guidelines as if such provisions were specifically set forth herein.

3. The undersigned agrees to pay all out-of-pocket expenses of the Authority and the Authority's financial advisor and Authority Counsel incurred in connection with the requested financing.

4. The undersigned authorizes the Authority and/or the Authority's financial advisor to make whatever credit checks and to contact whatever parties and request whatever credit reports as may be appropriate to verify the information contained in this Application.

5. An incomplete application will not be considered by the Authority.

MV AFFORDABLE HOUSING LLC an Ohio limited liability cO(Il~

By: ~ Print Name: B~AJJ /AC(ze;fti) ' {

Authorized Signer '

13

MULTIFAMILY BOND LOAN PROGRAM APPLICATION

1. Applicant

a. ~ Partnership or D Corporation

b. Name: The Villas at Pine Lake, LLC

c. Headquarters Address:

9349 WaterStone Blvd. Cincinnati, OH 45249

d. Person to Contact:

Marvin Wilmoth Senior Developer 917-331-0136

Name Title Telephone No.

e. Chief Executive Officer:

William H. Krul II President 937-297-3263


f. Chief Financial Officer:

Edward J. Blake Vice President/CFO 937-297-937 4


g. Directors or Partners:

Name Occupation

(1) N/A for The Villas of Pine Lake, L4i (2)

(3)

(4)

(5)

(6)

h. Leading Banking Relationship:

(1) Bank Name: _s_u_n_T_ru_s_t_B_a_n_k ---------------

(2) Loan Officer:

Constance Callahan Vice President 404-588-7039


4

2. Applicant's Parent Corporation or Partnership (if any)

a. D Partnership or ~ Corporation

b. Name: Miller-Valentine Operations, Inc.

c. Headquarters Address:

9349 Waterstone Blvd. Cincinnati, OH 45249

d. Person to Contact:

Marvin Wilmoth Senior Developer 917-331-0136


e. Chief Executive Officer:

William H. Krulll President 937-297-3263


f. ChiefFinancial Officer:

Edward J. Blake Vice President/CFO 937-297-937 4


g. Directors or Partners:

Name Occupation

(1) William H. Krulll Board of Director

(2) Edward J. Blake Board of Director

(3) Michael B. Green Board of Director

(4) David R. Liette Board of Director

(5) Jack H. Goodwin Board of Director

(6)

h. Leading Banking Relationships:

(1) Bank Name: _s_u_n_tr_u_st_B_a_n_k _______________ _

(2) Loan Officer:

Constance Callahan Vice President 404-588-7039


5

3. Proposed Project

Projects proposed to be fmanced from proceeds of the bond issue, please provide the following information (a) through ( o) for each project (if available at time of application).

a. Name: Villas at Pine Lake

b. Address: 4656 RockbridQe Road, Pine Lake, GA 30072

c. Nearest major intersection: RockbridQe Rd and Aberdeen Dr.

d. Within corporate limits of what municipality? ...:.P....:.i:...:.ne=--=L::::a:.:..!k.:::.e _______ _

e. Number of Buildings: -=2=----------

f. Size ofunits (show range if applicable):

(i) Number of 1 Bedroom Units: 15 of 768 sq. ft. (ii) Number of 2 Bedroom Units: """""5;..,;;;3=----- of 1152 sq. ft.

(iii) Number of3 Bedroom Units: 28 of 1280 sq. ft. (iv) Number of 4 Bedroom Units: of ____ sq. ft.

g. Proposed Rental Rates (show range if applicable):

(i) 1 Bedroom Units: $510-625 (ii) 2 Bedroom Units: $ 610-725

(iii) 3 Bedroom Units: $ 690-825 (iv) 4 Bedroom Units: $ (v) Utilities included inr _e_n_t:-.-Wrr-at.-e-r, Sewer, and Trash

h. Number of Acres in Project: 3.055

i. Proposed Amenities: Community Room, Computer Center, Fitness Center

j . Type of Construction: New Construction, 5 Story Elevator

k. Is proposed project site presently zoned for multi-family housing?

~Yes DNa*

Governmental Body approving zoning: City of Pine Lake

* Note: If zoning for the project has not been approved, the Authority will not adopt an Inducement Resolution.

6

1. Number of units to be reserved for Qualified Renters (as defined in the Authority's Policy):

(i) 1 Bedroom Units: $ 15 (ii) 2 Bedroom Units: $"""""'5""'3 __ _

(iii) 3 Bedroom Units: $-=2:.:::8 __ _ (iv) 4 Bedroom Units: $ ___ _

m. How many jobs will be created with this project?_1_4_6 __ _

n. How much will the real estate tax base increase because of this project? 72,000

o. What bond set aside will be selected? D 20% at 50% or ~ 40% at 60%

4. Other Similar Projects Developed by Applicant or Parent

Give name, location and brief description of project, including name of permanent financing lender. If projects were fmanced with tax-exempt bonds, provide issuer name, Bond Counsel and Bond Underwriters (if any). Please provide this information on a separate sheet and attach to this Application.

7

5. Applicant's Management Company or Fee Manager

Please provide the following information:

a. D Partnership or Ill Corporation

b. Name: MV Residential Property Manage c. Headquarters Address:

9349 WaterStone Blvd. d. Chief Executive Officer:

Michael B. Green CEO 513 588-1010 Name Title Telephone No.

e. Directors or Partners:

Name Occupation

(1) William H. Krul II Board of Director

(2) Edward J. Blake Board of Director

(3) David R. Liette Board of Director

f. Leading Banking Relationship:

(1) Bank Name: Suntrust Bank (2) Loan Officer:

Constance Callahan VP 404-588-7039 Name Title Telephone No.

g. Name, location and brief description of other projects managed by proposed management company. Please provide this information on a separate sheet and attach to this Application.

h. Name and location (including nearest major street intersection) of one or more multifamily rental facilities presently constructed that are similar in type of construction, quality, size of units, number of units, amenities and rental rates to the facilities proposed to be fmanced. Please provide this information on a separate sheet and attach to this Application.

8

6. Bond Issue Size Requested for Inducement Letter

Provide the size of the bond issue requested: $_8_,5_0_0_,_00_0 ____ _

7. Preliminary Development Cost Budget

Provide a preliminary development cost budget showing projected sources and uses of funds:

Sources of Funds:

A. Proceeds of Bonds .$. 4,250,000

B. Other (State Source):

1. State and Federal Tax Credits .$. 5,660,013

2.DCAHOME 4,250,000

3. Deferred Developer Fee 672,379

Total .$.14,832,392

Uses of Funds:

A. Financing Costs .$. 1,079,811

B. Land Acquisition 600,000

C. Site Development 1,500,000

D. Direct Structure 7,711,354

E. Amenity Construction 325,000

F. Permits/Fees, etc. 303,000

G. Marketing 116,000

H. Project Overhead 672,960

I. Developer & Related Company Fees 1,856,399

J. Other (State Use)

1. Tax Credit Fees .$. 116,868

2. AlE, other 3rd Party items 491,000

3. Mise Development Cost 60,000

Total .$. 14,832,392

Note: Total Sources of Funds should equal Total Uses of Funds and equal total cost of project.

9

8. Proposed Bond Issue Participants

a. Bond Counsel (must choose from list of counsels on Exhibit "C"

(1) Finn Name: Hunton and Williams

(2) Address: 600 Peachtree Street, N.E. Atlanta, GA 30308, St. 4100

(3) Person to Contact:

Caryl Smith Partner 4048884025


b. Lender (if loans-to-lenders financing program)

(1) Finn Name: _s_u_n_T_ru_s_t_B_a_nk _______________ _

(2) Address of Principal Office: 115 Peachtree Street, Suite 300, Atlanta, GA :

(3) Address of Responsible Office: _s_a_m_e_a_s_a_b_o_v_e _________ _

( 4) Person to Contact:

Constance Callahan Vice President 4045887039


(5) Experience in multifamily rental housing fmancing: Over $195MM in loan activity

Mortgages Mortgages Originated Serviced

Number of Mortgages See above

Principal Amount

Approximate Number of Units

c. Lender Attorney

(1) Finn Name: Holland and Knight (2) Address: 1201 West Peachtree St. N.E. St 2000, A1 (3) Person to Contact:

Woody Vaughan Partner 4048178574


10

d. Architect

(1) Name: Dwell Design Studio, LLC (2) Address: 2550 Northwinds Pkwy, Alpharetta, GA 3f


Jason Shepard CEO/Creative Director 7708641035


e. Engineer (if any)

(1) Name: Eberly & Associates, Inc.

(2) Address: 1852 Century Place, Suite 202, Atlanta, GA, 30345


Kevin S. Edwards PE 7704527849


f. Feasibility Consultant (if any)

(1) Name: N/A

(2) Address:



g. Bond Underwriter

(1) Name: TBD

(2) Address:



h. Tax Credit Equity Investor

(1) Name: Raymond James Tax Credit Funds, Inc

(2) Address: 880 Carillon Parkway, St. Petersburg, FL 33716


Sean Jones Director of Acquisitions 7275675703


II

9. Security to Be Provided to Bondholders

Briefly describe security to be provided to bondholders (i.e. , mortgage on project; credit enhancement, Housing Assistance Payments under Section 8 of National Housing Act or HUD/FHA mortgage under 221(d)(4) ofNational Housing Act).

10. Marketing to General Public

Are any of the bonds to be marketed to the general public? NO

11. Attachments

a. Site Plans

b. Floor Plans

c. Artist Rendering

d. Zoning and Zoning Variance Certificate

e. Lender/Credit Enhancer Infonnation (financial statement/rating, commitment letter, etc.)

f. Applicant/Parent/Guarantor Infonnation (include financial statements, resumes, etc.)

g. Tax Credit Investor Infonnation (financial statement, commitment letter, etc.)

h. Management Company Infonnation (financial statement and projects managed)

1. Copy of the Public Notice -Exhibit "B"

J. Fact Sheet- Exhibit "D"

k. DeKalb County's Proposed Multifamily Bond Summary- see attached to Exhibit "E"

I. Management Agreement (which must be approved by the Authority)

m. Purchase and Sale Contract

n. Developer Profroma Numbers, which must include bond sizing, tax credit calculations (if applicable), and 15-year projected cashflows.

12

Attachment A - Site Plans

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PINE LAKE NORTH

RESIDENTIAL GROSS SQUARE FEET

BUILDING1 4 STORY I BASEMENT ONE BEDROOM TWO BEDROOM THREE BEDROOM

BUILOING2 4 STORY I BASEMENT ONE BEDROOM TWO BEDROOM THREE BEDROOM

TOTAL UNITS ONE BEDROOM TWO BEDROOM THREE BEDROOM

TOTAL UNITS

AMENITY SF

PARKING SPACES PER UNIT

2.00 REQUIRED

TOTAL PARKING SPACES AVERAGE SPACE PER UNIT

AREA HEATED SF

708 1092 1220

708 1092 1220

1,920

192

196 2.04

BALCONY SF

60 60 60

80 60 60

112912014

UNITS TOT A AREA HEATED SF

8 5,664 27 29,484 14 17,080

7 4,956 26 28,392 14 17.080

102,656

15 53 28

96

PINE LAKE NORTH 112912014

PARCELID 18 040 01 015 BALCONY SF COUNTY DEKALB

ZONING CURRENT UP-T 480 UPTOVVN PINE LAKE TRANSITIONAL

1,620 MINIMUM LOT AREA 2000 SF 840 MINIMUM LOT VVIDTH 20 FEET

MINIMUM STREET FACADE 100.00%

420 BUILDING HEIGHT 75 FEET 1,560 5 STORIES

840 BONUS 5,760 LEED 100 FEET

8 STORIES AFFORDABLE HOUSING MAXIMUM 2x SF

FLOOR AREA- ADDITIONAL EQUAL TO MARKET RATE

LOT CALCULATIONS EXISTING NET LOT AREA 133,076 SF

3.055 ACRES

OPEN SPACE 20.00% OPEN SPACE REQUIRED 26,615 SF OPEN SPACE PROVIDED 37,268 SF

Attachment B - Floor Plans

MASTERBEDROOM

BEDROOM

WALK-INCLOSET

LAUNDRY

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MECH.

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9' - 3 1/2" 3' - 6 1/2" 5' - 3" 3' - 3 1/2" 4' - 8 1/2" 9' - 11"

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DRAWN BY CHECKED BY

JOB NUMBER:

SHEET NAME:

THIS DRAWING AND ASSOCIATED DOCUMENTS ARE THE EXCLUSIVE PROPERTYOF DWELL DESIGN STUDIO, AND ARE NOT TO BE REPRODUCED OR COPIED INWHOLE OR IN PART, EXCEPT AS REQUIRED FOR THE STATED PROJECT. THEY

ARE ONLY TO BE USED FOR THIS PROJECT AND SITE SPECIFICALLY IDENTIFIEDHEREIN AND ARE NOT TO BE USED ON ANY OTHER PROJECT WITHOUT WRITTEN

CONSENT OF DWELL DESIGN STUDIO.SCALES AS NOTED ON THIS DRAWING ARE VALID ON THE ORIGINAL DRAWING

ONLY, THE DIMENSIONS OF WHICH ARE 11 x 17 INCHES.

DISCLAIMER:

UA-B1

Author Checker

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NET AREA:GROSS AREA :# OF UNITS:APPROVED:

UNIT APPROVALB1

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1/4" = 1'-0"1

UNIT APPROVAL - B1 UNIT

MASTERBEDROOM

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LAUNDRY

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CLOSET

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12' -

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DISCLAIMER:

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1/4" = 1'-0"1

UNIT APPROVAL - C1 UNIT


UNIT APPROVALC1

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KITCHEN

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6' -

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11' -

9"

27' -

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4' -

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15' -

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31' -

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11' - 6" 12' - 6"

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UNIT APPROVALA1

701 SQ. FT.701 SQ. FT.-

1/4" = 1'-0"1

UNIT APPROVAL - A1 UNIT

Attachment C - Artist Rendering

"This document to be provided at a later date."

Attachment D - Zoning and Zoning Variance Certificate

/

DeKalb's Hidden Treasure

City of Pine Lake

February 10, 2014

CITY OF PINE LAKE PO Box 1325

462 Clubhouse Drive Pine Lake, GA 30072

Phone: 404-292-4250 Fax: 404-292-4859

www .pinelakega.com

Office of Affordable Housing Department of Community Affairs 60 Executive Park South, N.E. Atlanta, GA 30329-2231

Re: Request for Zoning Verification

To whom it may concern:

Located at the geographic center of DeKalb County, Pine Lake is just 12 miles ea:,1 of Atlanta. DeKalb's smallest city is a quiet arts community of around 1000 residents. This historic neighborbood is centered by a 12-acre lake and surrounding wildlife habitat which serves as its gathering place for community and recreational events.

The purpose of this letter is to confirm that the current zoning on that tract of land identified as tax parcel# 18 040 01 016, and more specifically described as 4656 Rockbridge Road, Pine Lake, GA 30072, is Uptown Transitional, UP-T.

The City's ordinance should be consulted for all applicable zoning standards, including landscaping and parking requirements. This can be found on the Pine Lake website at www.pinelakega.com.

This zoning verification is made as of the date of this letter and does not constitute any representation or assurance that the property will remain in the same zoning classification for any specified period of time, nor that this confirmation may be relied upon for the issuance of any permits or other official documents.

CITY OF PINE LAKE

(Y~~ " Valerie CaldwetJ· - City Administrator

Attachment E- Lender/Credit Enhancer Information

"This document to be provided at a later date."

Attachment F -Applicant/Parent/Guarantor

Information

•-----------------1) General Statement of Experience

Founded in 1963, MVG is one of the top Affordable Housing Developers in the United States. MVG has established itself as a premier partner for municipalities, community redevelopment agencies, housing authorities, non-profit community groups, faithbased institutions and private sector partners looking for creative solutions to their unique housing needs. MVG has significant experience in financing, developing, constructing and managing affordable housing on Housing Authority owned land.

MVRD consists of 23 professionals with extensive experience acquiring, planning, financing, developing, leasing and managing multifamily assets. Our experience in affordable housing development has prompted us to establish and implement a work model that maximizes both efficiency and creativity. Each development is directly managed by a team of Development staff and consistently monitored by executives in MVG's Development, Construction, Accounting, Asset Management, and Property Management departments. This multi-disciplinary approach ensures reliable execution of complex developments.

The unique challenges we face with each engagement and the subsequent solutions we devise have helped us build an unparalleled repository of institutional knowledge that is well-suited to enable our partners to achieve their goals. MVG's experience directly contributes to our team's technical capability to provide a variety of services to the Housing Authority of DeKalb County, include the following:

• team has experience with a diverse combination of approaches to housing and community revitalization, and has successfully planned, developed, rehabilitated and managed mixed-use, mixed income and transit oriented developments, historic rehabilitations, market rate housing, and work-force housing. MVRD developments serve many demographics including families, seniors, the military and populations requiring supportive services. In addition, MVRD has significant experience with master site planning for ground-up development and has acquired and developed more than 150 land sites, from rural to urban in-fill sites. Many of MVRD's projects incorporate commercial operations and community programs like America Homebuyer Education and Certification {NeighborWorks), enrichment seminars on health issues, prescription drugs, Medicare, exercise programs such as the Arthritis

•------------Foundation Exercise Program as well as access to fitness equipment, and access to American Red Cross, I'M OK Program.

• Management Expertise: MVRPM has extensive property and asset management

expertise, including knowledge of regulatory compliance laws with a portfolio of 139

multi-family rental properties with over 12,800 units under management. MVRPM's

staff interfaces daily with staff to ensure that our portfolio assets are well-maintained,

and financially stable. Additionally, the MVRPM maintains sole control over all

compliance requirements related to its various funding sources in order to ensure that

all practices and documents are in compliance with Federal, State, and Local regulations.

• Capital Needs Assessment: MVRPM has experience with reviewing property

assessments and capital fund plans to ensure short and long term viability and has

worked with our partners to strategize to preserve and create more than 12,800 units.

Not only does MVG have experience working with community partners, we also have an

in-house asset management team that makes capital decisions on a daily basis. These

decisions often include assessing capital needs and prioritizing the necessary

expenditures to improve the efficiency and long term sustainability of existing housing

stock. MVG has direct experience with all types of development sources, and has

executed $250 million 9% tax credit and financed and multiple historic tax credit

transactions.

• Diverse Skill Set: With the experience and capacity to handle any project, we are

prepared to immediately start work. Our multifaceted organization is capable of

handling every aspect of housing revitalization, including project financing, community

outreach and planning, rehabilitation, construction management, property maintenance

and asset management.

2) Development Experience - Market & Affordable Housing

Please see MVG's Market and Affordable Housing Experience List attached as an Exhibit a.

•------------3) Geographic Presence

MVRD is currently active in 16 states including Texas, Oklahoma, Florida, Georgia, Missouri,

Tennessee, Kentucky, West Virginia, North Carolina, Illinois, Indiana, Ohio, Iowa, Pennsylvania,

Michigan, and Wisconsin.

4) Public Housing Authority Experience MVG has a variety of experience with Housing Authorities and HUD financed developments and

other non-profit partners. All of the affordable housing developments are being developed by

MVG and require significant familiarity with HUD financing and program regulations. The

Houston Housing Authority has selected the Miller Valentine Group to be one of the developers

from their QBS/PBS No 12-22. to co-develop multiple properties over the next 3 years. This will

be a multiphase development and is waiting the award of CDBG funds before commencement.

•------------------Below is a list of MVG's Housing Authority and other partners we have worked with:

ORGNAIZATION: CONTACT: DESCRIPTION:

Sean Thomas Have secured over $280 million of tax Director credits for 80 developments in Ohio.

Ohio Housing Finance Agency 57 East Main Street

Columbus, Ohio 43215 (614) 644-5772

Email: [email protected]

Richard McBride MVRD and SMDC have partnered to

President and CEO develop and build 25 developments

St. Mary Development 2160 E. 5th Street with approximately 1,800 units.

Corporation Dayton, OH 45403 (937) 277-8149 ext. 210

Email: [email protected]

Andre' D. Blakley Partnered in 2011 to build 84 Units Director of Transactions Hampshire Landing Apartments, a

Mercy Housing Mountain Plains 120 S. LaSalle Street, Suite 1850 rebuilding initiative after an EF 5

Chicago, IL 60603 tornado destroyed Joplin, Missouri. {312) 447-4531

Email: ablakle't_@merc't_housing_.org_

Ivory Mathews MVRPM was chosen by LMHA through Deputy Executive Director a competitive RFP process to manage

Lucas Metropolitan Housing 435 Nebraska Avenue Collingwood Green, a new 272-unit Authority POBOX477 multi-phase, mixed-income, mixed

Toledo, OH 43697 finance development in Toledo, Ohio {419} 259-9540 for seniors and families.

Email: [email protected]_

Skip Sipos Partnered to build 54 units of senior Executive Director housing in Brunswick, Ohio

Medina Metropolitan Housing 850 Walter Road Authority Medina, Ohio 44256

Phone: (330} 725-7531 Email: [email protected]_

Robert Graham Comprehensive redevelopment Executive Director (including acquisitions, financing,

Virgin Islands Housing Phone: (340) 715-7326 construction and lease-up) of 450+

Authority* Email: rg_raham@vihousing_.org_ public housing into 242 tax-credit

financed developments for families and seniors utilizing RHF,

Development Grant and Capital Funds.

*Completed by the members of the Miller-Valentine Southeast Team in a previous company

•------------5) Description of MVG's Experience with Financing Subsidies MVG values long term relationships with our development partners and understands that each

housing authority faces unique challenges and has varying risk tolerance. MVRD is committed to

work hand-in-hand with the Housing Authority of DeKalb County to structure the most

appropriate partnership and economic sharing program that is equitable for all parties and

appropriately scaled based on roles, responsibilities, and exposure to risk. MVG has developed

over 800 units using $8.4 million of CDBG and AHP funds. Most notably these funds were

sources for Lawrence Village Senior Residence in Marion, Indiana and Meadow Vista Parkside in

Altoona, Iowa.

It is our experience that our flexibility in structuring partnerships that cater to the specific needs

and wants of our partners is one of our greatest assets. MVRD has a strong background in

financial analysis and extensive experience with housing developments that incorporate

Federal Funds, NSP, Federal Home Loan Bank, NeighborWorks, PHA Grant, Section 1602,

TCAP, RD 538, and other forms of affordable housing financing. MVG has financed more than 90

affordable housing development utilizing low-income housing tax credits. When evaluating

existing development opportunities, MVRD has on multiple occasions been successful in

obtaining additional subsidies for its clients, facilitating the addition of more units when it

otherwise would not have been possible.

HOME Investment Partnership Program: MVG has been awarded HOME loans through local

competitive applications. To date, Miller-Valentine has developed over 1,000 affordable housing

units that have been partially financed with more than $22.2 million in HOME funds. Our

successes with the HOME program has allowed us to build a breadth of knowledge and

experience with affirmative marketing, environmental review, income targeting, Section 8

program, Davis-Bacon and other federal grant requirements.

HUD Section 221(d) (3): MVG has utilized the HUD Section 221(d)(3) program which is

mortgage insurance on multifamily housing for low- and moderate-income families. The

purpose of the Section 221(d)(3) program is to assist private industry in providing comfortable

and attractive rental accommodations for low- and moderate-income families in Section

221(d)(3) program, with preference or priority of occupancy to such families who have been

displaced from urban renewal areas or because of governmental action or as a result of a

disaster determined by the President to be a major disaster.

Project Based Section 8 Voucher: MVRD recently developed the Palm House in Wooster, Ohio.

This development had an existing contact with HAP that was to expire within the year. Since

MVRD's substantial rehabilitation, the HAP contract was extended for 20 years.

• ------------Neighborhood Stabilization Program (NSP): The Neighborhood Stabilization Program (NSP) was

established for the purpose of stabilizing communities that have suffered from foreclosures and

abandonment. The scope of NSP funds has since been expanded under the American Recovery

and Reinvestment Act (the Recovery Act) of 2009, to provide grants to states, local governments,

nonprofits and a consortium of nonprofit entities on a competitive basis. To date, MVG has been

awarded approximately $6.5 million in NSP funding.

6) Experience with the LIHTC Program MVRD brings a winning combination of national capabilities and years of experience working

with municipalities, housing authorities, not-for

profit agencies and community groups. We are

capable of handling every aspect of affordable

housing development, including due diligence,

market research, feasibility analyses, project

design, financing, relocation, community outreach

and planning, rehabilitation,

construction management, property lease-up,

management, and maintenance, asset

management and marketing. As such, the Housing

Authority of DeKalb County's required scope of

work reads like a "standard operating procedure"

for our team.

Our Development Team strengths include the following:

• Creative expertise in providing financially sound development plans by leveraging a

variety of local, state and national financing sources, including assembling financing for

LIHTC and mixed-income housing as demonstrated by having raised approximately $500

million in Tax Credit Equity.

• Demonstrated development, rehabilitation and construction management expertise,

culminating with the development of more than 9,629 units of affordable housing across

the country.

• Innovative urban planning, master planning, economic development and other

community revitalization initiatives around the country with significant experience

working with municipalities and housing authorities to revitalize neighborhoods.

• The financial capacity to guarantee the successful completion of the proposed

developments as evidenced by the audited financials included in the response.

• Intimate knowledge of and experience with HUD's programs and requirements.

•------------• Property and asset management expertise with a cumulative total of more than 12,800

affordable and market rate units under management.

• Proven neighborhood assessment & market research capabilities which will yield a

comprehensive understanding ofthe local community and real estate market.

• Track Record partnering with residents and neighborhood groups and employing low

income residents and Section 3, MBE/WBE as referenced in the sections below.

• Industry leading experience in developing environmentally sustainable communities.

7) Resumes of Developers Key Staff

Lead Developer

General Contractor

Property Management, Compliance

MV Residential Development LLC Brian McGeady, Partner, President of Multi-Family

Development 9349 WaterStone Blvd. Cincinnati, OH 45249

www.mvg.com

MV Residential Construction, Inc. Randy Humbert, Partner, President

9349 WaterStone Blvd. Cincinnati, OH 45249

www.mvg.com MV Residential Property Management, Inc.

Jim Fenwick, President 9349 WaterStone Blvd. Cincinnati, OH 45249

www.mvg.com

National affordable housing leader; Focused on partnering with municipalities, housing

authorities, non-profits & faithbased institutions and on Green

development General Contractor with

knowledge of local building codes I Will provide general

construction services

LIHTC-specialized Property Management and

Compliance

•------------Lead Development Partner, MV Residential Development LLC (MVRD)

MV Residential Development LLC has established itself as a premier partner for municipalities,

housing authorities, non-profit community groups, faith-based institutions and private sector

partners looking for creative solutions to their unique housing needs.

MVG Principals

Dave Liette, Partner, President: Mr. Liette oversees and manages all day-to-day development

operations for MVRD, which encompasses multi-family and single-family homes, military family

housing, lifestyle communities for empty-nesters, independent living for older adults, urban

condos and student housing, representing both new construction and historic rehabilitation

opportunities. Mr. Liette joined MVG in 1993 and has been President of MV Residential

Development since 2004. During his tenure, he has directed the development of over 10,000

housing units in the Midwest and Southeast.

Prior to joining MVG, Mr. Liette was National Association of Director of Acquisitions and CFO at

National Affordable Housing Trust in Columbus, Ohio. In addition, he held the title of Vice

President of Finance at County Corp. in Dayton, Ohio and was a Certified Public Accountant with

Coopers & Lybrand in Dayton, Ohio.

Mr. Liette is a Board Member on the National Association of Home Builders Housing Credit

Steering Committee, St. Mary Development Corporation Asset Management Committee and the

Helping Hands Neighborhood Development Company as well as a past Board Member of the

Ohio Housing Finance Agency Housing Credit Advisory Group and the Christian Life Center. He

holds a B.S. in Accounting from Wright State University.

Brian McGeady, Partner, President of Multi-Family Development: Mr. McGeady guides the

short and long-term acquisition and development activities of MVRD, overseeing the affordable

housing operations in over 18 states. He is responsible for strategic planning, financing,

feasibility analysis, and the creation of strategic housing partnerships with non-profit and for

profit organizations. Mr. McGeady will be the single responsible point of contact for this

development.

Brian joined MVG in 1999 where he has been involved in the development and financing of

more than 6,500 apartment units in Ohio, Indiana, Pennsylvania, Michigan, Tennessee,

Kentucky, Iowa, and North Carolina. Adding to his experience, he spent nearly 2 years with

Paramount Financial Group underwriting more than $150 million of equity investment for tax

credit properties.

•------------An active community leader, Brian is Chair of the Cincinnati Division of March of Dimes, President of the Jim Walsh Angel Fund, and Past President of the Ohio Housing Council. He holds a B.S. in Finance from the University of Dayton and an M.B.A. from the University of Cincinnati.

Key Staff of MVRD

Anthony Ceroy, Senior Developer - Southeast: Mr. Ceroy is the co-lead developer in the

Southeast. He has over ten years of experience in real estate finance, acquisitions, and asset

and property management. As Finance Director at Carlisle Development Group, he structured

and negotiated 19 partnerships representing over $250 million of third-party investment.

Several of the aforementioned developments involved public and private partnerships between

Carlisle and various housing authorities including the Virgin Islands Housing Authority, the

Housing Authority of the City of Fort Lauderdale, and Miami-Dade Housing Authority. Anthony

was responsible for maintaining relationships with all debt and equity investors, evaluating

complex mixed-finance multifamily developments, negotiating financial terms during closing and

managing project managers for all financial matters. Prior to joining Carlisle, Mr. Ceroy worked

for City Real Estate Advisors in Indianapolis, Indiana, where he closed more than $100 million of

LIHTC equity. He holds a B.S. in Business Administration from the University of Florida.

Marvin Wilmoth, Senior Developer- Southeast: Mr. Wilmoth is the co-lead developer in the

Southeast responsible for deal origination, site selection, public relationships, and project

management. He has over nine years of experience in real estate finance and development.

Prior to joining MVG, Marvin was the Regional Director at Carlisle Development Group, where he

originated and managed developments in the Caribbean, Mid-Atlantic and South Florida regions

of the US, representing over 750 units and $230 million of total development cost. Additionally,

Mr. Wilmoth was responsible for evaluating complex mixed-finance multifamily developments

while maintaining relationships with key public partners, including housing authorities and local

government agencies. Mr. Wilmoth has worked with the Virgin Islands Housing Authority, the

Housing Authority of the City of Fort Lauderdale, and Miami-Dade Housing Authority.

Mr. Wilmoth began his career at J.P. Morgan's Investment Banking Division in New York where

he transacted over $9.6 billion of debt, equity and acquisition value. He holds a B.A. in Business

Administration and an M.B.A. with a concentration in Finance from Florida A&M University, and

a Master of Science in Real Estate Development from Columbia University.

General Contractor, MV Residential Construction, Inc. {MVRC)

MV Residential Construction, Inc. is the Residential General Contractor of MVG. MVRC has

nearly 30 years' experience in the residential market and has produced more than 10,000

housing units, from urban neighborhood revitalization to luxury homes. It averages more than

$70 million in sales on active projects on an annual basis.

•----------------------Randy Humbert, Partner, President: Mr. Humbert oversees operations for MV Residential

Construction, Inc. conducting business in Ohio, Michigan, Pennsylvania, Iowa, Tennessee,

Kentucky, Missouri, Illinois, North Carolina, Indiana and shortly, as well, in Texas, Oklahoma, and

West Virginia. In addition, he manages budgetary projections, scheduling, quality control, as well

as building code, safety, and OSHA compliance for single and multi-family developments. Randy

joined MVG in 1987, and has directed the development of over 9,000 apartment and single

family homes, including 1,500 units of military housing.

Mr. Humbert is OSHA Certified and has a North Carolina Unlimited Contractor's License. He

belongs to the National Association of Home Builders as well as the Home Builders Association

of Charlotte, North Carolina and Cincinnati, Ohio. He holds a degree from University of

Cincinnati.

Bill Hubbert, Construction Project Manager: Mr. Hubbert, based in Greensboro, North Carolina,

has been with MVRC since 1998. Mr. Hubbert is the Construction Project Manager for MVRC's

Southeast, TX, and OK developments. He is responsible for project budgeting, scheduling,

quality control, supervision of field personnel, compliance with building codes and OSHA

regulations, working with architects, engineers, lenders, owners/partners and reporting. He has

completed multi-family developments in North Carolina utilizing LIHTC, NSP and HOME financing

programs.

Mr. Hubbert is OSHA Certified and belongs to the National Association of Home Builders. He

holds a degree from the University of North Carolina at Greensboro.

Property Manager, MV Residential Property Management, Inc. (MVRPM)

MV Residential Property Management, Inc. has been managing LIHTC properties since 1988.

MVRPM, in connection with MVG Asset Management Department, is responsible for compliance

with regulations governing property management related to all housing funding programs

utilized in MVG developments, including LIHTC, NSP, HOME, and HUD programs. MVRPM

believes that proper training of its property managers is critical to a property's success and is

heavily invested in training its property managers on an ongoing basis.

MVRPM also operates the award-winning apartment leasing site

(www.YourNextPiaceTolive.com). This website contains property information on each of the

properties that MVRPM manages, with photos and images of the communities, residential units,

and common spaces in each development. MVRPM brings a wide range of experience and

expertise to residential property management. All MVRPM services are aimed at one goal:

helping tenants meet unique financial objectives. MVRPM provides everything tenants need to

meet the day-in, day-out demands and seasonal requirements of maintaining facilities. MVRPM

also brings experienced sales and marketing professionals to meet one more critical concern:

•------------keeping units full and at the maximum possible rent levels. MVRPM currently manages over

12,800 units across the United States.

Jim Fenwick, President: Mr. Fenwick has been President of MV Residential Property

Management, Inc. since 2008. His responsibilities include P&L, budgeting, planning, operations,

marketing, property management, customer relations management, procurement, safety and

quality for the operations of MV Residential Property Management, Inc. (including MV Senior

Housing - CCRC and Independent living). Prior to his time at MV Residential Property

Management, Inc., Mr. Fenwick was the President of Property Management at Mills Properties,

Inc. Mr. Fenwick directed a management team supervising 154 properties, over 39,000 units, in

13 states generating in excess of 325 million dollars in annual NOI. He had total control of a

7,000 unit multi-state regionally based private firm, where he directed the VP of Property

Management and supervised all acquisitions, dispositions and refinancing. Mr. Fenwick is

committed to meeting or exceeding performance expectations while maintaining asset quality

and client satisfaction.

Maria Stanton, Director of Operations: Ms. Stanton has been with MV Residential Property

Management, Inc. since 2006. She directs property management and maintenance operations

company-wide. Ms. Stanton is responsible for both day to day operations and strategic planning.

She serves as President for the Greater Cincinnati Northern Kentucky Apartment Association, an

Education Committee Member, Greater Cincinnati Northern Kentucky Apartment Association,

and a Member of National Association of Female Executives.

8) Financial Statements and Financial Partner References Please see Miller-Valentine Operations, Inc. financial statements attached

Below is a list of our Financial Partners and Housing Authority References:

RBC Capital Markets Brian Flanagan,

Director- Acquisitions 4720 Piedmont Row Dr., Suite

240 Charlotte, NC 28210

(980) 233-6462 [email protected]

p g

FINANANCIAL PARTNER ----------------REFERENCES

Citigroup Global Markets Mark Risch, Director

1801 California Street, Suite 3700 Denver, CO 80202


HOUSING AUTHORITY AND AGENCY REFERENCES

p g

KeyBank Greg Kiger, Vice President

88 East Broad Street, 2nd Floor

Columbus, OH 43215 (614) 460-3458

[email protected]

g g y

Authority Skip Sipos, Executive Director

850 Walter Road Medina, Ohio 44256


Authority Ivory Mathews, Deputy Executive

Director 435 Nebraska Avenue, PO BOX 477

Toledo, OH 43697 (419) 259-9540

[email protected]

Sean Thomas, Director, Office of Planning, Preservation &

Development 57 East Main Street

Columbus, Ohio 43215 (614) 644-5772

[email protected]

DEVELOPEREXPEmENCE

Development Name: City, State: Developer Contact Name: Telephone Number:

Bent Tree Piqua, Ohio Brian M. McGeady 513 588-2694

Development Type: Type of Subsidy: Placed-in-Service Number of Total Units: 84 ./ New Construction D None (Market) ./ Section 42 Date: D Rehabilitation D Section 8 D Tax-Exempt Bond D Acquisition/Rehabilitation Financing 07/07/97 Number of Low-Income Units: 84

D Rural Housing D Other:

Is permanent financing in place? No. of Months in Lease-Up Physical and Economic Occupancy %'s for Each of the Last ./Yes D No Period1 Two Years2

Have you had to make capital contributions? 5 Ph~sical 89.3% Economic 86.1% ./ Yes D No Development Lender: City, State: Contact Person: Telephone

Number: Red Capital Group Columbus, Ohio Charles C. Meyer 614-857-1492

Development Equity Provider: City, State: Contact Person: Telephone Number:

KeyBank Piqua, Ohio Joseph Knackstedt 913-317-4200

Has the development ever had a financial audit If an audit has been Contact Person at Audit Provider: Telephone performed? performed, has the audit Number:

./ Yes been qualified based on the David Dirksen 937-299-3400 D No development's ability to Flagel Huber Flagel

If yes, provide the financial statement year: 2012 remain a going concern? 3400 South Dixie Drive DYes Dayton, OH 45439 ./No

i

DEVELOPEREXPE~ENCE

Development Name: City, State:

Breckenridge Findley, Ohio

Development Type: Type of Subsidy: o/ New Construction 0 None (Market) ./ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing

0 Rural Housing 0 Other:

Is permanent financing in place? No. of Months in Lease-Up ./ Yes 0 No Period1

Have you had to make capital contributions? 16 0 Yes ./ No Development Lender: City, State:

Red Capital Group Columbus, Ohio

Development Equity Provider: City, State:

Key Bank Findley, Ohio

Has the development ever had a financial audit If an audit has been performed? performed, has the audit

./ Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes ./No

i 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economic Occupancy = Actual Rents Received Divided by Gross Potential Rents

Developer Contact Name: Telephone Number:

Brian M. McGeady 513 588-2694

Placed-in-Service Number of Total Units: 72 Date:

Number of Low-Income Units: 72 11/13/98

Physical and Economic Occupancy %'s for Each of the Last Two Years2

Ph~sical 98.6% Economic 92.7%

Contact Person: Telephone Number:

Charles C. Meyer 614-857-1492


Joseph Knackstedt 913-317-4200

Contact Person at Audit Provider: Telephone Number:

David Dirksen 937-299-3400 Flagel Huber Flagel 3400 South Dixie Drive Dayton, OH 45439

DEVELOPEREXPE~ENCE


Cedar Trail Bellbrook, Ohio

Development Type: Type of Subsidy: ./ New Construction 0 None (Market) ./ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing






KeyBank Bellbrook, Ohio



If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes ./ No

i 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents




07/18/96 Number of Low-Income Units: 132


Physical 99.2% Economic 95.7%







DEVELOPEREXPE~ENCE


Cobblegate Square Apartments Moraine, Ohio

Development Type: Type of Subsidy: ./ New Construction D None (Market) ./ Section 42 D Rehabilitation D Section 8 D Tax-Exempt Bond D Acquisition/Rehabilitation Financing


Is permanent financing in place? No. of Months in Lease-Up ./ Yes D No Period1

Have you had to make capital contributions? 18 DYes ./ No Development Lender: City, State:

PNC , National Association Cincinnati, Ohio


KeyBank Moraine, Ohio


./ Yes been qualified based on the D No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? DYes ./ No

• I 1Lease-Up Period= Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents








Pamela Weber 513-651-7797





DEVELOPER EXPERIENCE


Deer Creek Delphos, Ohio

Development Type: Type of Subsidy: ../ New Construction Q None (Market) ../ Section 42 Q Rehabilitation Q Section 8 Q Tax-Exempt Bond Q Acquisition/Rehabilitation Financing

Q Rural Housing Q Other:

Is permanent financing in place? No. of Months in Lease-Up ../ Yes Q No Period1

Have you had to make capital contributions? 14 Q Yes ../ No Development Lender: City, State:

Walker & Dunlop Bethesda, Maryland


KeyBank Delphos, Ohio


../ Yes been qualified based on the Q No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes ../ No









Carter Bryant 301-634-5368





DEVELOPEREXPE~ENCE


Eagles Point Kenton, Ohio







Apollo/ RBC Capital Markets Kenton, Ohio




• I 'Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents







Contact Person: Telephone Number.



Brian Flanagan 980-233-6462



c DEVELOPER EXPERIENCE


Enclave at Winston-Salem Winston-Salem, North Carolina

Development Type: Type of Subsidy: ,/ New Construction 0 None (Market) ..1' Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond ,/ Acquisition/Rehabilitation Financing

0 Rural Housing ..1' Other: HOME, NSP

Is permanent financing in place? No. of Months in Lease-Up 0 Yes ..1' No Period1

Have you had to make capital contributions? 9 0 Yes ..1' No Development Lender: City, State:

No Lender N/A


RBC Capital Markets Winston-Salem, North Carolina


..1' Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes ..1' No

i 1Lease-Up Period =Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents








N/A N/A







Fox Run Trotwood, Ohio



Is permanent financing in place? No. of Months in Lease-Up ../ Yes 0 No Period1

Have you had to make capital contributions? 18 0 Yes ../ No Development Lender: City, State:

Prudential Financial Chicago, Illinois


Key Bank Trotwood, Ohio




• I 1Lease-Up Period= Time from Occupancy Certificate Receipt to 90"/o Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents








David Graham 312-540-5424





DEVELOPEREXPE~ENCE


Gallatin Park Apartments Gallatin, Tennessee


D Rural Housing ./ Other: Section 1602



Bank of America Nashville, Tennessee


RBC Capital Markets Gallatin, Tennessee


./ Yes been qualified based on the D No development's ability to


i 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy = Actual Rents Received Divided by Gross Potential Rents








John H. Reynolds 615-7 49-3965





DEVELOPEREXPE~ENCE


Glen Arbors Napoleon, Ohio




Have you had to make capital contributions? 15 ./ Yes 0 No Development Lender: City, State:

US Bank Cincinnati, Ohio


KeyBank Napoleon, Ohio


./Yes been qualified based on the 0 No development's ability to







Physical and Economic Occupancy o/o's for Each of the Last Two Years2

Ph)lsical 88.9% Economic 88.9%


RogerFoy 513-562-3660





DEVELOPEREXPE~ENCE


Hunters Oak Greenville, Ohio






Development Equity Provider. City, State:

Apollo/ RBC Capital Markets Greenville, Ohio

















DEVELOPEREXPE~ENCE


Indian Trace I Oxford, Ohio

Development Type: Type of Subsidy: ., New Construction 0 None (Market) " Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing




Arbor National Commercial Mortgage Boston, Massachusetts


Key Bank Oxford, Ohio


"Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes

" No

l 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy = Actual Rents Received Divided by Gross Potential Rents








Ellen B. Segal 617-619-7301



Contact Person at Audit Provider: Telephone Number.


c



Landings at Steele Creek II Charlotte, North Carolina

Development Type: Type of Subsidy: ~ New Construction 0 None (Market) ~ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing


Is permanent financing in place? No. of Months in Lease-Up ~Yes 0 No Period1

Have you had to make capital contributions? 12 0 Yes ~ No Development Lender: City, State:

Green Park Financial Bethesda, Maryland


Community Affordable Housing Equity Corp Charlotte, North Carolina


~Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes ~ No









Christopher S. Lynch 301-215-5519


MaryAnn Hughes-Fahey 919-788-1816



DEVELOPEREXPE~ENCE


Landings II in Gastonia Gastonia, North Carolina

Development Type: Type of Subsidy: ./ New Construction Cl None (Market) ./ Section 42 Cl Rehabilitation Cl Section 8 Cl Tax-Exempt Bond Cl Acquisition/Rehabilitation Financing

Cl Rural Housing Cl Other:

Is permanent financing in place? No. of Months in Lease-Up ./ Yes Cl No Period1

Have you had to make capital contributions? 2 Cl Yes ./ No Development Lender: City, State:

Green Park Financial Bethesda, Maryland


Apollo/ RBC Capital Markets Gastonia, North Carolina


./Yes been qualified based on the Cl No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? Cl Yes ./ No









Christopher 5. Lynch 301-215-5519







Meadows at Grand Lake Celina, Ohio

Development Type: Type of Subsidy:

"' New Construction 0 None (Market) <~' Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing


Is permanent financing in place? No. of Months in Lease-Up <~' Yes 0 No Period1

Have you had to make capital contributions? 9 <~' Yes 0 No Development Lender: City, State:



KeyBank Celina, Ohio


<~' Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes <~' No

i 1Lease-Up Period= Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economic Occupancy = Actual Rents Received Divided by Gross Potential Rents








RogerFoy 513-562-3660





DEVELOPEREXPE~ENCE


Normandy Ridge Wapakoneta, Ohio


" New Construction 0 None (Market) ./ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing






Key Bank Wapakoneta, Ohio

Has the development ever had a financial audit If an audit has been perfonned? perfonned, has the audit
















DEVELOPEREXPE~ENCE


Pinecrest Apartments Walkertown, North Carolina







Boston Capital Walkertown, North Carolina

Has the development ever had a financial audit If an audit has been performed, performed? has the audit been qualified

./Yes based on the development's 0 No ability to remain a going

If yes, provide the financial statement year: 2012 concern? 0 Yes ./ No

i 1Lease-Up Period= Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economic Occupancy = Actual Rents Received Divided by Gross Potential Rents








RogerFoy 513-562-3660


Amanda Henderson 617-624-8620



DEVELOPEREXPE~ENCE


Scioto Woods I Chillicothe, Ohio


0 Rural Housing ./ Other: HOME



PNC, National Association Cincinnati, Ohio


KeyBank Chillicothe, Ohio




• I 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90"/o Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents















Twin Cedars II Hickory, North Carolina







Community Affordable Housing Equity Corp Hickory, North Carolina




1 1Lease-Up Period= Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economic Occupancy= Actual Rents Received Divided by Gross Potential Rents










MaryAnn Hughes-Fahey 919-788-1816





Walkers Ridge Apartments Greensburg, Pennsylvania

Development Type: Type of Subsidy: ~ New Construction 0 None (Market) ~ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing

0 Rural Housing ~ Other: HOME

Is permanent financing in place? No. of Months in Lease-Up ~Yes 0 No Period1

Have you had to make capital contributions? 6 lJ Yes lJ No Development Lender: City, State:

U.S. Bancorp Community Development Corporation St. Louis, Missouri


CREA Greensburg, Pennsylvania


~Yes been qualified based on the lJ No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? lJ Yes ~ No









AnneMarie R. Watts 314-335-2605


Susan Callhoun 317-808-7158



DEVELOPEREXPE~ENCE


Wind Ridge Tipp City, Ohio







KeyBank Tipp City, Ohio




l 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents













DEVELOPEREXPE~ENCE


Brookstone Bellefontaine, Ohio

Development Type: Type of Subsidy: ./ New Construction ./ None (Market) ./ Section 42 [J Rehabilitation 0 Section 8 0 Tax-Exempt Bond [J Acquisition/Rehabilitation Financing

[J Rural Housing 0 Other:





Apollo/ RBC Capital Markets Bellefontaine, Ohio


./ Yes been qualified based on the [J No development's ability to






12120/00 Number of Low-Income Units: 57




RogerFoy 301-634-5368





DEVELOPEREXPE~ENCE


CedarWood Mansfield, Ohio

Development Type: Type of Subsidy: ., New Construction ./ None (Market) " Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing


Is permanent financing in place? No. of Months in Lease-Up " Yes 0 No Period1




Apollo/ RBC Capital Markets Mansfield, Ohio




i 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economic Occupancy= Actual Rents Received Divided by Gross Potential Rents








RogerFoy 513-562-3660







Mallard Glen Amelia, Ohio

Development Type: Type of Subsidy: ./ New Construction ./ None (Market) ./ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing




Fifth Third Bank Cincinnati, Ohio


Apollo/ RBC Capital Markets Amelia, Ohio




i 'Lease-Up Period= Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economic Occupancy= Actual Rents Received Divided by Gross Potential Rents








Douglas J. Burgess 513-579-5470





c



Meadow Creek Bryan, Ohio







Apollo/ RBC Capital Markets Bryan, Ohio




i 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90"/o Occupancy Achievement 2Economlc Occupancy = Actual Rents Received Divided by Gross Potential Rents













DEVELOPEREXPE~ENCE


OakWood Lexington, Ohio




Have you had to make capital contributions? 6 0 Yes ../ No Development Lender: City, State:

BlueMark Capital, LLC Cincinnati, Ohio


Apollo/ RBC Capital Markets Lexington, Ohio












Seth Pirie 513-618-0549





DEVELOPEREXPEmENCE


Scioto Woods II Chillicothe, Ohio





Fifth Third Bank Cincinnati, Ohio


Fifth Third CDC Chillicothe, Ohio




l 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy = Actual Rents Received Divided by Gross Potential Rent






Ph:isical 90.5% Economic 87.5%


Douglas J. Burgess 513-579-5470


Erin Pinger 513-358-3019





Sycamore Creek Sidney, Ohio

Development Type: Type of Subsidy: ./ New Construction ./ None (Market} ./ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing






Apollo/ RBC Capital Markets Sidney, Ohio












Rogerfoy 513-562-3660





DEVELOPEREXPEmENCE


Timberlake Vandalia, Ohio


"' New Construction -" None (Market) -" Section 42 a Rehabilitation a Section 8 a Tax-Exempt Bond a Acquisition/Rehabilitation Financing


Is permanent financing in place? No. of Months in Lease-Up -" Yes 0 No Period1

Have you had to make capital contributions? 5 0 Yes -" No Development Lender: City, State:



Apollo/ RBC Capital Markets Vandalia, Ohio


<~' Yes been qualified based on the a No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? a Yes -" No









RogerFoy 513-562-3660







Meadow Vista Parkside Altoona, Iowa

Development Type: Type of Subsidy: .,/ New Construction D None (Market) ../ Section 42 D Rehabilitation D Section 8 D Tax-Exempt Bond D Acquisition/Rehabilitation Financing

D Rural Housing .,/ Other: CDBG

Is permanent financing in place? No. of Months in Lease-Up ../ Yes D No Period1

Have you had to make capital contributions? 6 DYes ../ No Development Lender: City, State:

Citigroup Global Markets, Inc. Denver, Colorado


RBC Capital Markets Altoona, Iowa


../ Yes been qualified based on the D No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes ../ No

• I 1Lease·Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents






Ph~sical 100% Economic 98.1%


Mark G. Risch 303-308-7 401





DEVELOPEREXPE~ENCE


Autumn Wood Village I Toledo, Ohio





Charter One Bank Columbus, Ohio


Ohio Capital Corporation for Housing Toledo, Ohio




• I 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents






Physical 100% Economic 93.4%


Julie Dockter 614-342-7181


Doug Klingensmith 614-224-8446


David Dirksen 937-299-3400 Ftagel Huber Flagel 3400 South Dixie Drive Dayton, OH 45439

DEVELOPEREXPE~ENCE


Autumn Wood Village II Toledo, Ohio

Development Type: Type of Subsidy: ,/ New Construction 0 None (Market) ./ Section 42 Cl Rehabilitation Cl Section 8 Cl Tax-Exempt Bond Cl Acquisition/Rehabilitation Financing

Cl Rural Housing ./ Other: HOME





Ohio Capital Corporation for Housing Toledo, Ohio




• .. 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents








Maureen A. Hands 513-762-1895





DEVELOPEREXPE~ENCE


New Lima Homes Lima, Ohio

Development Type: Type of Subsidy: .., New Construction D None (Market) ../' Section 42 D Rehabilitation D Section 8 D Tax-Exempt Bond D Acquisition/Rehabilitation Financing

D Rural Housing ../' Other: HOME



Huntington National Bank Cincinnati, Ohio


Centerline Capital Group Lima, Ohio


../'Yes been qualified based on the D No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? DYes ../' No









Maureen A. Hands 513-762-1895


Corey Eilhardt 212-317-5759





Nia Heights Toledo, Ohio

Development Type: Type of Subsidy: ./ New Construction 0 None (Market) 0 Section42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing

0 Rural Housing ./ Other: NSP, HOME



OHFA Columbus, Ohio


Ohio Housing Finance Authority Toledo, Ohio


0 Yes been qualified based on the ./ No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes 0 No









William Spencer 614-728-9758


Kevin Clark 614-752-4550



DEVELOPEREXPEmENCE


Ridgewood Heights Dayton, Ohio







Ohio Capital Corporation for Housing Dayton, Ohio












RogerFoy 513-562-3660





DEVELOPEREXPEmENCE


Rising at Phoenix Dayton, Ohio

Development Type: Type of Subsidy: ./ New Construction Cl None (Market) ./ Section 42 Cl Rehabilitation Cl Section 8 Cl Tax-Exempt Bond Cl Acquisition/Rehabilitation Financing

Cl Rural Housing ./ Other: HOME

















RogerFoy 513-562-3660





DEVELOPEREXPEmENCE


Roosevelt Homes Dayton, Ohio

Development Type: Type of Subsidy: o/ New Construction 0 None (Market) o/ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing

0 Rural Housing o/ Other: NSP

Is permanent financing in place? No. of Months in Lease-Up 0 Yes 0 No Period1

Have you had to make capital contributions? 7 0 Yes o/ No Development Lender: City, State:

City of Dayton Dayton, Ohio


Ohio Capital Corporation for Housing Saginaw, Michigan


o/ Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: remain a going concern? First audit to be complete for year end 2013 in first 0 Yes quarter of 2014. o/ No

l 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economic Occupancy = Actual Rents Received Divided by Gross Potential Rents






Physical 100% Economic 100%


Aaron Sorrell 937-333-4209







South Saginaw Homes Saginaw, Michigan

Development Type: Type of Subsidy: ../' New Construction 0 None (Market) ../' Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing


Is permanent financing in place? No. of Months in Lease-Up ../'Yes 0 No Period1

Have you had to make capital contributions? 7 0 Yes ../' No Development Lender: City, State:



Great Lakes Capital Saginaw, Michigan


../'Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes ../' No







Ph~sical 93.9% Economic 91 .7%


RogerFoy 513-562-3660


James White 517-364-8939





South Saginaw Homes II Saginaw, Michigan



Is permanent financing in place? No. of Months in Lease-Up ./Yes 0 No Period1


KeyBank Cleveland, Ohio


RBC Capital Markets Saginaw, Michigan












Paul Ettorre 216-689-8769







Sunlight Homes Dayton, Ohio











• .. 1Lease·Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents








RogerFoy 513-562-3660







Washington Square Homes II Dayton, Ohio











1 1Lease-Up Period =Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents








RogerFoy 513-562-3660





DEVELOPEREXPE~ENCE


Allegheny Pointe Allegheny Towns, Pennsylvania


"' New Construction 0 None (Market) <~' Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing

0 Rural Housing <~' Other: HOME

Is permanent financing in place? No. of Months in Lease-Up 0 Yes 0 No Period1

Have you had to make capital contributions? 11 0 Yes <~' No Development Lender: City, State:

Lancaster Pollard Columbus, Ohio


National Development Council Apollo, Pennsylvania


<~' Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes <~' No


Developer Contact Name: Telephone Number.







Jeff Banker 614-224-8800


Akeley David Irwin 407-371-0653





Carriage Trails Senior Village Huber Heights, Ohio


D Rural Housing ./ Other: HOME



Key Bank Cleveland, Ohio


Ohio Capital Corporation for Housing Huber Heights, Ohio


./Yes been qualified based on the D No development's ability to










PauiEttorre 216-689-8769





DEVELOPEREXPEmENCE


Eaton Senior Village Eaton, Ohio







Ohio Capital Corporation for Housing Eaton, Ohio












RogerFoy 513-562-3660







Faith Community Crestline, Ohio





Midland Mortgage Investment Corp West Bloomfield, Michigan


Ohio Capital Corporation for Housing Crestline, Ohio












John A. Williamson 800-442-5503





DEVELOPEREXPEmENCE


Hamburg Senior Residence Lexington, Kentucky

Development Type: Type of Subsidy: -/ New Construction 0 None (Market) -/ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing

0 Rural Housing -/ Other:



Bank of America Nashville, Tennessee


RBC Capital Markets Lexington, Kentucky


-/Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes -/ No

l 'Lease-Up Period= Time from Occupancy Certificate Receipt to 90"/o Occupancy Achievement 2Economic Occupancy= Actual Rents Received Divided by Gross Potential Rents








John H. Reynolds 615-749-3965







Harmony Senior Village Williamsburg, Ohio


./ Rural Housing ./ Other: HOME





Ohio Capital Corporation for Housing Williamsburg, Ohio




• I 1Lease-Up Period= Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy = Actual Rents Received Divided by Gross Potential Rents













DEVELOPEREXPE~ENCE


Lake Towne Senior Lake Township, Ohio


./ Rural Housing 0 Other:



Bellwether Real Estate Capital, LLC Cincinnati, Ohio


Ohio Capital Corporation for Housing Walbridge, Ohio




i 1Lease-Up Period= Time from Occupancy Certificate Receipt to 90"k Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents








Sara Behrman 513-985-4402





DEVELOPEREXPE~ENCE


One Pen rose Place Lawrence, Indiana

Development Type: Type of Subsidy: ,/ New Construction 0 None (Market) ./ Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing

0 Rural Housing ./ Other: FHLB AHP, Section 1602

Is permanent financing in place? No. of Months in Lease-Up 0 Yes ./ No Period1


No Lender N/A


Ohio Capital Corporation for Housing Lawrence, Indiana




i 'Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy = Actual Rents Received Divided by Gross Potential Rents








N/A N/A





DEVELOPEREXPEmENCE


Madison Place Seniors Gastonia, North Carolina





Capital Advisors, Inc. Charlotte, North Carolina


RBC Capital Markets Gastonia, North Carolina




• I 'Lease-Up Period= Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economlc Occupancy = Actual Rents Received Divided by Gross Potential Rents






Phllsical 98.7% Economic 96.7%


Chuck Wooddy 704-945-3400







Meadow Vista Senior Villas Altoona, Iowa

Development Type: Type of Subsidy: .., New Construction D None (Market) "' Section 42 D Rehabilitation D Section 8 D Tax-Exempt Bond D Acquisition/Rehabilitation Financing

D Rural Housing "' Other: CDBG

Is permanent financing in place? No. of Months in Lease-Up "' Yes D No Period1

Have you had to make capital contributions? 3 DYes -' No Development Lender: City, State:

Citigroup Global Markets, Inc. Denver, Colorado


RBC Capital Markets Altoona, Iowa


"'Yes been qualified based on the D No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? DYes "' No









Mark G. Risch 303-308-7 401





DEVELOPEREXPEmENCE


Mercy Siena Village Dayton, Ohio





PNC , National Association Cincinnati, Ohio


KeyBank Dayton, Ohio

















DEVELOPEREXPEmENCE


Pheasant Run Seniors Dayton, Ohio







Apollo/ RBC Capital Markets Dayton, Ohio




• I 1Lease-Up Period =Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economic Occupancy= Actual Rents Received Divided by Gross Potential Rents








RogerFoy 513-562-3660







Riverview Bluffs New Richmond, Ohio







Ohio Capital Corporation for Housing New Richmond, Ohio




i 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90".4 Occupancy Achievement 2Economlc Occupancy= Actual Rents Received Divided by Gross Potential Rents




Number of Low-Income Units: 36 06/27/06









DEVELOPEREXPE~ENCE


The Residenz at Sylvania Sylvania, Ohio


"" New Construction 0 None (Market) ->~' Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing

0 Rural Housing ->~' Other: HOME


Have you had to make capital contributions? 11 0 Yes ->~' No Development Lender: City, State:

KeyBank Cleveland, Ohio


Ohio Capital Corporation for Housing Sylvania, Ohio


->~' Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes ->~' No







Ph:J£sical 94.1% Economic 92.2%


Paul Ettorre 216-689-8769





DEVELOPEREXPE~ENCE


Villas at Twin Cedars Hickory, North Carolina


"' New Construction D None (Market) ./' Section 42 D Rehabilitation D Section 8 D Tax-Exempt Bond D Acquisition/Rehabilitation Financing


Is permanent financing in place? No. of Months in Lease-Up <~' Yes D No Period1

Have you had to make capital contributions? 8 DYes -~' No Development Lender: City, State:



Apollo/ RBC Capital Markets Hickory, North Carolina


./' Yes been qualified based on the D No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? DYes ./' No

1 1Lease-Up Period = Time from Occupancy Certificate Receipt to 90% Occupancy Achievement 2Economic Occupancy= Actual Rents Received Divided by Gross Potential Rents








Rogerfoy 513-562-3660







Wauseon Senior Villas Wauseon, Ohio

Development Type: Type of Subsidy: .., New Construction 0 None (Market) "' Section 42 0 Rehabilitation 0 Section 8 0 Tax-Exempt Bond 0 Acquisition/Rehabilitation Financing

0 Rural Housing "' Other: HUD Section 202

Is permanent financing in place? No. of Months in Lease-Up "'Yes 0 No Period1

Have you had to make capital contributions? 17 0 Yes ..-' No Development Lender: City, State:

Bellwether Real Estate Capital, LLC Cincinnati, Ohio


CREA Wauseon, Ohio


"' Yes been qualified based on the 0 No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? 0 Yes "' No









Sara Behrman 513-985-4402


Susan Callhoun 317-808-7158





Whitehouse Square Senior Village Whitehouse, Ohio


./ Rural Housing ./ Other: HOME



USDA Rural Development Columbus, Ohio


National Development Council Whitehouse, Ohio












Melodie Taylor-Ward 614-255-2418


Akeley David Irwin 407-371-0653





Summit Pointe Lawrenceburg, Indiana

Development Type: Type of Subsidy: Q New Construction CJ None (Market) 11' Section 42 CJ Rehabilitation CJ Section 8 CJ Tax-Exempt Bond

"' Acquisition/Rehabilitation Financing CJ Rural Housing CJ Other: HOME

Is permanent financing in place? No. of Months in Lease-Up 11' Yes CJ No Period1

Have you had to make capital contributions? 6 CJ Yes 11' No Development Lender: City, State:

Lancaster Pollard Columbus, Ohio


RBC Capital Markets Lawrenceburg, lndiania


11' Yes been qualified based on the CJ No development's ability to

If yes, provide the financial statement year: 2012 remain a going concern? DYes 11' No









Jeff Banker 614-224-8800



Contact Person at Audit Provider: Telephone Number.


-Miller Valentine ~ -

Miller-Valentine Group 9349 WaterStone Blvd. Suite 200 Cincinnati, Ohio 45249

513-77 4-8400 513-683-6165 Fax

February 4, 2014

Georgia Department of Community Affairs

Office of Affordable Housing

60 Executive Park South N.E.

Atlanta, GA 30329-2231

RE: The Villas at Pine Lake Miller-Valentine Entities

Dear Georgia Department of Community Affairs:

GFDCEUENCE 19&3•2013

The Applicant, The Villas at Pine Lake, LLC has an Identity of Interest with the MV

Affordable Housing LLC, MV Residential Development LLC, MV Residential Construction,

Inc. and MV Residential Property Management, Inc .. All have a direct financial interest and

are part of the same parent organization, Miller-Valentine Operations, Inc.

If you have any questions, please feel free to give me a call at 513 774-8400.

Sincerely,

CJ~~~ Analyst

/bdj

www.mvg.com

Miller-Valentine Operations, Inc.

Consolidated Financial Statements- Federal Income Tax Basis

with Accompanying Information

December 31, 2010 and 2009

{with Independent Accountants' Review Report)

~ CLARK SCHAEFER HACKETT STRENGTH IN NUMBERS

TABLE OF CONTENTS

Independent Accountants' Review Report ................................................................................................. 1

Consolidated Financial Statements

Consolidated Statements of Assets, Liabilities and Stockholders' Equity- Federal Income

Tax Basis ............................................................................................................................................ 2-3

Consolidated Statements of Revenues and Expenses- Federal Income Tax Basis .............................•.. 4

Consolidated Statements of Stockholders' Equity- Federal Income Tax Basis ....................................... S

Consolidated Statements of Cash Flows- Federal Income Tax Basis ................................................. S-7

Notes to Consolidated Financial Statements ...................................................................................... B-17

Accompanying Information

Consolidating Statements of Assets, Liabilities and Stockholders' Equity (Deficit) -

Federal Income Tax Basis- December 31, 2010 .......................................................................... 18-19

Consolidating Statements of Revenues and Expenses-

Federal Income Tax Basis- Year Ended December 31, 2010 ............................................................. 20

Consolidating Statements of Assets, Liabilities and Stockholders' Equity (Deficit) -

Federal Income Tax Basis- December 31, 2009 ································-·····-·········-·--····-···············-··21-22

Consolidating Statements of Revenues and Expenses -Federal Income Tax Basis- Year Ended December 31, 2009 ............................................................. 23


INDEPENDENT ACCOUNTANTS' REVIEW REPORT

Board of Directors Miller-Valentine Operations, Inc. Dayton, Ohio

We have reviewed the accompanying statements of assets, liabilities, and shareholders' equity-federal income tax basis of Miller-Valentine Operations, Inc. (an S-Corp) as of December 31, 2010 and 2009, and the related statements of revenue and expenses -federal income tax basis, cash flows -federal income tax basis, and stockholders' equity-federal income tax basis for the years then ended. A review includes primarily applying analytical procedures to management's financial data and making inquiries of company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the income tax basis of accounting and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the income tax basis of accounting, as described in Note 1.

Our reviews were made for the purpose of expressing a conclusion that there are no material modifications that should be made to the financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. The information included in the accompanying Consolidating Statements of Assets, Liabilities, and Stockholders' Equity - Federal Income Tax Basis and Consolidating Statements of Revenues and Expenses - Federal Income Tax Basis as of December 31, 2010 and 2009 are presented only for purposes of additional analysis and has been subjected to the inquiry and analytical procedures applied in the review of the basic financial statements, and we are not aware of any material modifications that should be made thereto.

c~~t:R~71~~~ Cincinnati, Ohio May 27,2011

cincinnati I columbus I dayton I middletown I springfield

105 east fourth street, ste. 1500 cincinnati, oh 45202

www.cshco.com p. 513.241 .3111 f. 513.241 .1212

Miller-Valentine Operations, Inc. Consolidated Statements of Assets, Liabilities and Stockholders' Equity - Federal Income Tax Basis


Assets

Current assets Cash and cash equivalents Notes receivable:

Affiliates Other

Accounts receivable: Affiliates Other Tax credit property advances- construction costs Due on contracts: Trade Affiliates Retainage

Costs and estimated earnings in excess of billings on uncompleted contracts

Inventory-for sale product-residential Inventory-for sale product-commercial Prepaid expense Pre-contract costs Pre-development costs Other current assets

Total current assets

Property and equipment Land Furniture and fixtures Leasehold improvements Trucks, autos and equipment

Total property and equipment

Less: Accumulated depreciation

Net property and equipment

other assets Investment in operating joint ventures Investment in real estate joint ventures Development fees Tax credit property advances- operating Goodwill in operating entity, net of amortization of

$519,378 and $443,372 in 2010 and 2009, respectively Other assets

Total other assets

Total assets

2010

$ 6,942,261

15,536,597 88,522

554,609 504,987 328,870

6,235,501 559,245

1,042,651

2,175,678 4,628,198 4,951,369

53,894 231,474 844,283 106,561

44,784,700

41,024 1,333,302

584,699 770 796

2,729,821

(2.236,372)

493,449

244,466 (989,376) 307,035

3,993,236

620,722 258.484

4,434,567

~ 49,712,716

2009

$ 11,743,276

7,181,344 135,632

2,058,958 340,539

1,132,262

1,713,728 311,387

1,263,330

2,934,740 9,058,438 1,951,370

72,988 1,001,682

436,079 145,925

41.481,678

41,024 1,355,203

378,154 804,169

2,578,550

{2.2831 11 0)

295,440

243,753 (844,622) 350,488

3,801,814

696,729 158.783

4,406,945

~ 46,184,063

See independent accountants' review report and acompanying notes to financial statements. 2

Miller-Valentine Operations, Inc. Consolidated Statements of Assets, Liabilities and Stockholders' Equity (Continued)- Federal Income Tax

Basis December 31,2010 and 2009

Liabilities and Stockholders' Equity

Current liabiities

Real estate mortgage notes payable

Line of credit - operations

Line of credit- land purchase

Notes payable:

Other

Stockholder

Accounts payable:

Trade

Affiliates

Retention

Other

Affiliate advances

Accrued employee compensation and other expenses

Billings in excess of costs and estimated earnings on

uncompleted contracts

Total current liabilities

Long-term liabilities

Notes payable - affiliates

Notes payable - stockholders

Other notes payable

Other long-term liabilities

Total long-term liabilities

Total liabilities

Stockholders' equity

Common stock, no par value, 73,164 and 76,000

shares issued and outstanding

at December 31, 2010 and 2009, respectively.

Additional paid-in capital

Retained earnings (deficit)

Total stockholders' equity

Total liabilities and stockholders' equity

$

2010

7,964,127

11,620,254

795,149

315,984

601,417

8,652,723

364,897

2,665,485

71,585

1 '161 ,950 526,228

3,443,226

38,183,025

9,451

1,822,861

1,712,990

402,334

3,947,636

42,130,661

9,473,327

(1 ,891 ,272)

7,582,055

$ 49,712,716

$

2009

8,653,080

5,389,000

1,750,000

316,188

601,417

5,321,763

2,056,040

4,213,110

585,501

443,467

2, 194,138

31,523,704

8,833

2,424,278

2,028,828

402,333

4,864,272

36,387,976

9,796,362

(275)

9,796,087

$ 46,184,063

See independent accountants' review report and accompanying notes to financial statements. 3

Miller-Valentine Operations, Inc. Consolidated Statements of Revenues and Expenses - Federal Income Tax Basis

Years Ended December 31, 2010 and 2009

Revenues Construction revenues earned:

Affiliates Other

For sale product-residential For sale product--commercial Lease and sales commissions Property management fees :

Affiliates Other

Development fees: Affiliates Other

Consulting Income Acquisition fees Other fees:

Affiliates Other

Total revenues

Costs and expenses Cost of construction:

Labor Material Subcontract Equipment rental Other Depreciation For sale product-residential For sale product--commercial

Total costs and expenses Gross profit

Administrative and general expenses

Operating profit

Rental real estate Rental income Reimbursement income Rental expense Depreciation and amortization

Total rental real estate income (expense)

Other income (expense) Loss from joint ventures Gain on sale of joint venture Gain (loss) on sale of assets Interest income Interest expense Interest expense- affiliate Depreciation and amortization Gain on cancellation of debt Loss on disposal of property in bulk sale net of

$

2010

44,007,544 34,304,799

265,000

934,475

4,068,345 739,289

782,803 390,24°1 413,644 100,000

1,246,675 890,979

88,143,794

7,031,063 9,005,628

45,567,834 428,946

6,612,364 37,844

239,778

68,923,457 19,220,337

18,140,259

1,080,078

6,151

(628,624)

(622,473)

(151,558) 48,196

5,000 400,953

(296,526) (441,630) (162,437)

1,608,790

cost of $4,613,846 (3,271,846)

$

2009

65,479,113 63,866,139

346,560 1,793,250 1,091,980

3,609,027 589,438

2,970,102 924,647

1,006,329 320,119

141,996,704

8,212,543 15,761,693 90,937,396

580,662 5,051,604

48,848 342,879

1,273,962

122,209,587 19,787,117

18,191,912

10,230 (735,020)

(1,753) (726,543)

(415,226) 356,949

950 511,733

(264,391) (1,183,804)

(143,454)

Other income (expense) 454,104 820,324 Total other income (expense) (1,806,954) (316,919) Net income (loss) ~ ~1 ~4~ 34~) ~ 5~1,74~

See independent accountants' review report and accoriJaryli yule io lrh:lricial sher11ifhts. 4

Miller-Valentine Operations, Inc. Consolidated Statements of of Stockholders' Equity- Federal Income Tax Basis


Additional

Common Paid-In Retained

Stock Capital Earnings Total

Balance at January 1, 2009 $ 7,638,873 4,103,451 $ 11,742,324

Issuance (redemption)

of common stock 2,157,489 (1 ,654,869) 502,620

Dividends (3,000,600) (3,000,600)

Net income for 2009 551,743 551,743

Balance at December 31, 2009 9,796,362 (275) 9,796,087

Issuance (redemption)

of common stock (323,035) (541 ,548) (864,583)

Dividends (100} (100)

Net loss for 2010 (1,349,349} (1 ,349,349}

Balance at December 31 , 201 0 $ 9,473,327 {1 ,891 ,272) $ 7,582,055


Miller-Valentine Operations, Inc. Consolidated Statements of Cash Flows - Federal Income Tax Basis (Continued)


Cash flows provided by (used in) operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash

provided by (used in) operating activities:

Depreciation and amortization

Gain on cancellation of debt

(Gain) loss on sale of property and equipment

Gain on sale of joint venture interest

Loss from investments in joint ventures, net

Changes in assets and liabilities:

Change in inventory

Decrease in accounts receivable and advances

Decrease (increase) in costs and estimated earnings

in excess of billings on uncompleted contracts

Increase in pre-contract costs

Decrease (increase) in pre-development costs

Decrease in other assets

(Decrease) increase in accounts payable

(Decrease) increase in billings in excess of costs

and estimated earnings on uncompleted contracts

Decrease in accrued expenses and deposits

Net cash used in operating activities

Cash flows provided by (used in) investing activities:

Purchases of property and equipment

Proceeds from sale of property and equipment

Proceeds from sale in joint venture

Net change in inventory - for sale product

Net change in construction in progress -turnkey project

Issuance of notes receivable

Payments received on notes receivable

Contributions to investments in joint ventures

Cash from acquisition of noncontrolling interest

Distributions received from investments in joint ventures

Net cash provided by (used in) investing activities

2010 2009

$ (1,349,349) $ 551,743

184,496 194,055

(1,608,790)

40,745 (950)

(48,196) (356,949)

42,559 415,226

1,430,240

(2,597,081) 3,985,371

759,062 2,145,870

770,208 (46,693)

(408,204) 1,115,649

93,659 773,195

(421,724) (6,328,855)

1,249,088 (2,077,085)

82,761 (1,470,964)

(1,780,526) (1, 1 00,387)

(331,084) (3,500)

5,000 950

29,517 106,208

1,804,943

19,094 (10,300)

(13,187,554) (9,767,751)

4,879,411 22,351,745

(48,505) (480,446)

15,698

36,966 109,836

(8,597,155) 14,127,383


Miller-Valentine Operations, Inc Consolidated Statements of Cash Flows - Federal Income Tax Basis (Continued)


Cash flows provided by (used in) financing activities:

Net change in line of credit and advances

Proceeds from borrowings

Payments on borrowings

Proceeds from sale of stock

Redemption of stock

Distributions to stockholders

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplemental disclosure of cash flow information:

SUPPLEMENTAL DISCLOSURE OF CASH TRANSACTIONS:

Interest paid

Supplemental disclosure of non-cash transactions:

2010

6,438,363

3,017,815

(3,014,819)

(864,583)

(100)

5,576,666

(4,801,015)

11,743,276

$ 6,942,261

$ 751,811

In 2010 the company recorded a gain on cancellation of debt of $1,608,790.

2009

(1,075,000)

286,250

(13,834,861)

2,157,489

(1,654,869)

(3,000,600)

(17,121,591)

(4,094,595)

15,837,871

$ 11,743,276

$ 1,506,374

During 2009, a minority owner in 7760 University Court, LLC exchanged its interest for the assumption of liabilities in excess of assets of $240,376.

During 2009, MVO Investment, LLC sold multiple office condominium buildings, parcels of land and other assets totaling $5,324,802 subject to the related mortgages totaling $4,745,667 to an affiliate. These transactions were effected at cost, and accordingly no gain or loss was recognized.


Miller-Valentine Operations, Inc Notes to the Consolidated Financial Statements


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of operations Miller-Valentine Operations, Inc. (the Company), an S-Corporation, is the parent company of MillerValentine Construction, Inc., MV Realty, Inc., MV Commercial Development LLC, MV Residential Property Management, Inc., MV Residential Construction, Inc., MV Residential Development LLC, MVO Investments, LLC, and MV Services LLC.. The financial statements include the Company and its wholly owned subsidiaries which are disregarded entities for income tax reporting. All intercompany transactions have been eliminated. The Company is a holding company for all operational activities related to brokerage, development and construction services for the commercial businesses; property management, construction and development services for the residential businesses and internal support services.

Basis of accounting The Company's financial statements have been prepared on the federal income tax basis of accounting. Miller-Valentine Realty, Inc., Miller-Valentine Construction, Inc. and MV Residential Construction, Inc. are accounted for under the accrual basis method of accounting used for federal income tax purposes. MV Residential Property Management, Inc., MV Residential Development LLC, MVO Investments, LLC, MV Commercial Development LLC, and MV Services LLC are accounted for under the cash basis method for federal income tax purposes. Consequently for the subsidiaries accounted for under the federal income tax cash basis, certain revenues are recognized when received rather than when earned and certain obligations are recognized when paid rather than when incurred, except for costs capitalized and amortized in accordance with tax regulations. Additionally, under the federal income tax cash basis of accounting valuation reserves and allowances, if any, are not recorded.

Use of estimates in financial statements The preparation of the financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The actual results could differ from these estimates.

Revenue recognition Income from long-term construction contracts is recorded using the percentage-of-completion method of accounting measured by the ratio of costs incurred to total estimated costs for each contract. Contracts extend over periods ranging from several months to two or more years.

Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation costs. Selling, general, and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Profit incentives are included in revenues when their realization is reasonably assured. An amount equal to contract costs attributable to claims is included in revenues when realization is probable and the amount can be reliably estimated.

See independent accountants' review report. 8



The asset, "Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts," represents revenues recognized in excess of amounts billed. The liability, "Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts," represents billings in excess of revenues recognized.

Real estate sales and the related cost of real estate sold are recorded on the closing date of the sale.

During construction of commercial and residential for-sale product, identified as inventory and construction in process, all direct material and labor costs and those indirect costs related to acquisition and construction are capitalized, including interest, and all customer deposits are treated as liabilities. Capitalized costs are charged to earnings upon closing. Costs incurred in connection with completed units and selling, general, and administrative costs are charged to expense as incurred.

Concentrations of credit risk The majority of accounts receivable and all contract work in process are from construction customers in various industries throughout the Midwestern and Southeastern United States. The contracts require payments as projects progress and, in some cases, advance payments. Customers typically withhold retainers of up to 10 percent of contract value, which is not paid until the customer is satisfied with the completion of the contract. Retainage was $1,042,651 and $1,263,330 at December 31, 2010 and 2009, respectively. The Company generally does not require collateral, but, in most cases, can place liens against the property, plant, and equipment constructed if a default takes place.

Property leased to others Properties are stated at the Company's tax basis and depreciation is computed using straight-line or accelerated methods over recovery periods specified by federal tax regulations.

For sale product The Company capitalizes all direct costs, interest and development costs, in each project until the project is sold. Included in the costs is interest capitalized in the amount of $307,450 in 2010, and $387,519 in 2009. In connection with debt restructuring in 2010, the Company sold the property, Lifestyle Communities by Miller Valentine at StoneLake LLC, in a bulk sale.

Property and equipment Property and equipment are stated at cost. Depreciation expense is calculated on property and equipment using accelerated and straight-line methods over recovery periods specified by federal tax regulations

Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost is removed from the asset accounts and the related allowance is adjusted and any resulting gain or loss is recognized in income for the period, except for like-kind exchanges which utilize the tax method whereby the basis of the new asset is adjusted by the amount of the gain or loss arising from the disposition of the exchanged asset.


Warranty obligations


December 31,2010 and 2009

Construction contracts provide for a warranty period extending to one year from the date of completion. The Company has recorded a liability of $20,000 for a specific project at December 31, 2010 and 2009. At December 31, 2010 and 2009, the Company has not recorded any other liability for warranty cost as management believes the likelihood of any future claims is remote.

Employee benefit plan The Company maintains a qualified 401 (k) plan which covers substantially all employees meeting certain eligibility requirements. Participants may contribute a portion of their compensation to the plan, up to the maximum amount permitted under Section 401 (k) of the Internal Revenue Code. At the Company's discretion, it can match a portion of the participants' contributions. The Company's matching contributions were $46,504 at December 31, 2009. The Company made no contribution in 2010.

Goodwill Goodwill is carried at the initial value less amortization which is calculated on a straight-line basis over 15 years.

Income taxes The Company has elected S-corporation status under the Internal Revenue Code. The shareholders of the parent company, Miller-Valentine Operations, Inc., include the Company's tax attributes in their individual tax returns. Therefore, no income tax provision is included in the accompanying financial statements. Certain accruals and expenses not currently deductible in accordance with income tax regulations are charged against taxable income when paid or become a permanent timing difference

Accounting for uncertainty in income taxes The Company adopted the provisions of Accounting for Uncertainty in Income Taxes. Those provisions clarify the accounting and recognition for income tax positions taken or expected to be taken in the Company's income tax returns. The Company's income tax filings are subject to audit by various taxing authorities. The Company's open audit periods are 2007-2009. The Company's policy with regard to interest and penalty is to recognize interest through interest expense and penalties through other expense. In evaluating the Company's tax provisions and accruals, future taxable income, and the reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes its estimates are appropriate based on current facts and circumstances.

Cash and cash equivalents The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2010 and 2009, cash equivalents consisted primarily of demand deposit and money market deposit accounts at commercial banks. These accounts, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant credit risk.

Advertising Advertising costs are expensed as incurred. The amount charged to expense in 2010 and 2009 was $492,573 and $541,666, respectively.


Accounts receivable



Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 10 to 30 days from the invoice date. The Company may collect finance charges for unpaid accounts receivable under normal trade terms, which bear interest at 1% per month. At management's discretion, interest may be accrued monthly on delinquent accounts until the invoice is paid in full or written off. Accounts receivable are stated at the amount billed to the customer plus any accrued and unpaid interest. Currently, there are no delinquent customer accounts to which interest has been charged.

Payments of accounts receivable are allocated to the specific invoices identified on the customer's remittance advice. The direct write-off method is used to deduct bad debt expenses related to accounts receivable when collection efforts have been exhausted and the receivable is deemed worthless. Accordingly, there is no allowance for doubtful accounts in the financial statements. If amounts become uncollectible, these amounts will be charged to operations when that determination is made. Bad debt expense for the year ended December 31, 2010 and 2009 was $757,211 and $3,390, respectively. The bad debt expense in 2010 resulted from the dissolution of a construction joint venture relationship.

Investment in real estate and operating joint ventures The Company accounts for investments in joint ventures on the equity method of accounting, including its proportional share of earnings or losses.

Pre-contract costs and pre-development costs The Company capitalizes costs incurred in pursuing contracts until such time as the contract is awarded. When a contract is obtained, costs are transferred to construction costs. When it becomes probable that the contract will not be obtained, the Company charges these costs to expense. Accordingly, there is no reserve recorded for capitalized pre-contract costs. Capitalized pre-contract costs were $231,4 7 4 and $1,001,682 at December 31, 2010 and 2009, respectively.

The company capitalizes costs incurred on projects prior to commencement of real estate development activities which are related to pre-acquisition and acquisition of real estate. These costs are accumulated until development is completed. When costs are reimbursed by real estate projects, payments are applied to the outstanding balance incurred. Capitalized pre-development costs were $844,283 and $436,079 at December 31, 2010 and 2009, respectively.

Reclassifications Certain reclassifications have been made to the prior year financial statements to conform to the presentation used in the current year. These changes had no effect on net income (loss).

Subsequent events Management evaluates events and transactions occurring subsequent to the date of the financial statements for matters requiring recognition or disclosure in the financial statements. The accompanying financial statements consider events through May 27, 2011, the date which the financial statements were available to be issued.


2. DEBT RESTRUCTURING:



In 2010 the Company, certain of its subsidiaries and several affiliated companies (the "Restructuring Entities") entered into discussions with their principal lenders to restructure certain debts and guarantees. As of December 31, 2010 certain of those debt restructurings had been completed and others remained to be implemented. The Company completed the restructuring of one real estate mortgage note payable for Lifestyle Communities by Miller Valentine at Stonelake LLC in 2010. In this case, certain real estate inventory held for sale was sold in bulk for an amount less than the amount of the outstanding debt secured by the property. The resulting shortfall was canceled by the lender. This transaction resulted in the Company recording a loss of $3,271,846 from the sale of the property, and a gain of $1,608,790 from the cancellation of the debt.

While terms of the debt restructuring have been agreed in principle with the lenders by the Company and its affiliates, final legal documents including loan modifications, extinguishment of debts, releases of guarantees, and conveyances of property titles and ownership interests have not been fully effectuated at December 31,2010. Consequently the obligations and guarantees of the Company, its subsidiaries and affiliates remained in-place as of December 31, 2010. The debt restructuring contemplates that 23 properties with debt totaling $128.7 million, and unsecured debt facilities totaling $10.8 million will be either disposed of or have their debts modified. The restructuring further provides that the Restructuring Entities will be released from guarantees of $126.1 million over the course of the disposition period through 2012. In accordance with the terms of the restructuring agreement, the Company, its subsidiary MVO Investments, LLC, and an affiliate as co-obligors will be obligated to make payments totaling up to approximately $22 million plus interest at rates ranging from 2% to 5% from 2011 through 2017, in exchange for certain releases of guarantees, extinguishments of debt, and other loan modifications of the Restructuring Entities. The agreements were signed and became effective on May 27, 2011 .

3. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS:

The costs, estimated earnings, and the progress billings on uncompleted contracts were composed of the following: December 31, 2010: Affiliates Others Total

Costs incurred on uncompleted contracts

Estimated earnings

$ 22,248,012

2,320,524

24,568,536

107,158,526

10,155,972

117,314,498

129,406,538

12,476,496

141,883,034

Progress billings 25,171,242 117,979,340 143,150,582

$ (602,706) (664,842) (1,267,548)


Costs and estimated earnings in excess of billings on uncompleted contracts

Billings in excess of costs and estimated

earnings on uncompleted contracts



2,175,678

(3,443,226)

$ (1,267,548)

At December 31, 2010, the remaining contract value on uncompleted contracts was approximately $38,552,808 with an estimated gross margin of approximately $2,564,227.

December 31, 2009: Affiliates

Costs incurred on uncompleted contracts $135,057,778

Estimated earnings 9,978,164

145,035,942

Progress billings 144,999,960

Costs and estimated earnings in excess

of billings on uncompleted contracts


$ 35,982

Others

72,686,330

6,074,080

78,760,410

78,055,790

704,620

Total

207,744,108

16,052,244

223,796,352

223,055,750

740,602

2,934,740

earnings on uncompleted contracts (2,194,138)

$ 740,602


4. LEASES:

The Company leases office space from an affiliate. The lease term expires September 30, 2019. Rent expense under the lease was $457,900 and $601,568 for the years ending December 31, 2010 and 2009, respectively.




The Company is obligated under operating leases to several affiliates, for different terms, with the last lease expiring September 30, 2019. Rent is allocated to the Company annually based on actual head count. Rental expense under these leases was $2,089,529 and $1,205,144 for the years ending December 31,2010 and 2009, respectively.

Future estimated minimum lease payments on non-cancellable operating leases are as follows:

2011 $ 1,071,990

2012 1,061,271

2013 1,113,563

2014 1,102,600

2015 1,011,628

Thereafter 3,106,158

$ 8,467,210

The Company has the opportunity to renew some of these leases for ten years under similar terms at its option.

5. NOTES RECEIVABLE AND NOTES PAYABLE WITH AFFILIATES:

At December 31, 2010 and 2009, the Company had notes receivable from affiliates which are due on demand and bear interest at the prime rate (3.25%). Interest income from these notes was $298,122 and $310,678 for the years ending December 31, 2010 and 2009, respectively.

The Company had notes payable to affiliates which are due on demand and bear interest at the prime rate (3.25%). Interest expense on these notes was $441,630 and $281,897 for the years ending December 31,2010 and 2009, respectively.

The Company had notes payable to stockholders aggregating $2,424,278 and $3,025,695 at December 31, 2010 and 2009, respectively. Notes payable to stockholders are payable in installments of principal plus interest rates ranging from 6.5% to 7.8%. Interest expense on these notes was $174,419 and $901,907 for the years ending December 31, 2010 and 2009, respectively.




Principal amounts for obligations to stockholders at December 31, 2010 mature as follows:

2011

2012

2013

2014

2015 Thereafter

Less current maturities

Total long term stockholder notes

$

$

601,417 511,418

511,418 164,816

164,816 470,393

2,424,278

601,417

1,822,861

6. REAL ESTATE MORTGAGE NOTES PAYABLE AND LINES OF CREDIT:

The Company had access to secured construction and intermediate loans in the amount of $7,964,127 and $11,641,193 at December 31, 2010 and 2009, respectively. These loans were primarily with commercial banks with terms of three to five years with variable rates based primarily on LIBOR or the lender's prime rate. At December 31, 2010, the interest rates ranged from 2.23% to 5.50%. Draws on the loans are approved as the construction work is performed. Based on the work performed, the banks had approved and funded construction and intermediate loans for the Company in the amount of $7,964,127 and $8,653,080 at December 31, 2010 and 2009, respectively.

At December 31, 2010 and 2009, the Company had $12,140,000 and $12,750,000 in unsecured operating lines of credit, of which $11,620,254 and $5,839,000 was drawn at December 31, 2010 and 2009, respectively. At December 31,2010 and 2009, $153,980 was committed in the form of letters of credit from a commercial bank. At December 31, 2010, the interest rates ranged from 3.75% to 4.00%. The lines are subject to the debt restructuring described in Note 2.

The Company had $795,149 and $1,750,000 in unsecured lines for land purchases, of which $795,149 and $1,750,000 was drawn at December 31, 2010 and 2009, with two commercial banks at variable rates based primarily on LIBOR or the lender's prime rate. At December 31, 2010, the interest rate was 6.50%. The lines are subject to the debt restructuring described in Note 2.

The Company had other notes payable totaling $2,028,974 and $2,345,016 at December 31, 2010 and 2009, respectively. Interest on the notes ranged from 6.75% to 7.50% and is payable annually. The notes mature in March 2019.




Principal amounts for other notes payable at December 31, 2010 mature as follows:

2011

2012

2013 2014

2015

Thereafter


Total other

long-term obligations

$ 315,984

232,848

211,449

211,449 211,449

845,795

2,028,974

315,984

$ 1,712,990

In 2010, total interest incurred was $58,554, of which all was charged to operations. In 2009, total interest incurred was $395,591, of which $387,519 was capitalized.

7. CONTINGENCIES:

Certain subsidiaries of the Company and several affiliates, together guarantee the debt secured by the real estate owned by the subsidiaries, affiliates, and certain joint ventures in which the subsidiaries and affiliates have ownership interests. The real estate security is a mix of properties fully leased, in the lease up phase, and for sale.

These subsidiaries, affiliates, and joint ventures (collectively "Borrowers") have access to $143,851,968 and $141,997,474 in secured construction and intermediate loans at December 31, 2010 and 2009, respectively. These loans are primarily with commercial banks with terms of three to five years and is carrying interest based primarily on the LIBOR rate. Draws on the loans are approved as the construction work is performed. Based on the work performed, the banks have approved and funded $138,267,923 and $118,198,772 at December 31, 2010 and 2009, respectively, of construction and intermediate loans for these projects. The loans and guarantees are subject to the debt restructuring described in Note 2.

The Company has jointly and severally guaranteed lines of credit with and for related companies. These guarantees amount to $3,156,000 and $3,000,000 at December 31, 2010 and 2009, respectively, with outstanding amounts of $2,956,000 and $3,000,000 as of December 31, 2010 and 2009, respectively. The lines of credit and guarantees are subject to the debt restructuring described in Note 2.

Certain subsidiaries of the Company have guaranteed the delivery of certain low-income housing tax credits. In conjunction with the tax credits, the Company guarantees secured construction loans in the amount of $14,834,611 and $20,387,840 at December 31, 2010 and 2009, respectively. Total amounts outstanding in connection with the construction loans were $5,498,453 and $9,508,859 as of December 31, 2010 and 2009, respectively. Also guaranteed is the funding of credit reductions, if incurred. Credit




reductions of up to $25,118,081 and $25,002,615, were guaranteed at December 31, 2010 and 2009, and no credit reductions had been incurred nor funded. The Company's subsidiaries have guaranteed commitments to make advances to certain tax credit properties to fund property level operating deficits. The total of these guarantees was up to $2,076,205 and $1,537,835 as of December 31, 2010 and 2009, respectively. Advances to these properties totaled $3,993,236 and $3,801,814 as of December 31, 2010 and 2009, respectively. The operating deficit advances are to be repaid from future cash flows of the project.

In conjunction with a military housing project, the Company has jointly and severally guaranteed one year of principal and interest on the permanent loans in the amount of $5,485,431 as of December 31, 201 0 and 2009. There have been no payments or advances associated with these guarantees.

The Company is indemnitor on several Performance Bonds on construction projects totaling $17,413,385 and $10,747,533 as of December 31, 2010 and 2009, respectively.

8. RELATED PARTY TRANSACTIONS:

In 2009 the Company used a related party to provide various administrative functions. Costs reimbursed to the related party amounted to $3,929,826. In 2010 these administrative functions were undertaken directly by the Company through its newly formed subsidiary MV Services LLC.


Assets ""' ""' Op1r11U0nt1, """'- MVRoalty, MV RHkttNIII

Inc. 1 ... Inc. ......... Mgmt.

Cun'llntAssets Cash and cosh equivalents 319,976 3,0119,227 271,481 693,980 Afr~lo1e adv11nces 1,78S,OS2 17,2S6 800,739

Notes receivable: Afrdlatea 111,507,585 3,000,000 Other 12,402 25,179 50,941

Acoounts re~IYable: Atrdiates 252,616 74,600 11 ,229 Olher 137,317 46,845 52,718

Tax cnuf4 _.nv adv11nces - consltuction costs

Due on cootncts: Trade 4,684,568 Amlletes 559,281

Retoinoge 701 ,948 Casts and estimated earnings ln excess or bUIIngs on

unc:ompleled conlracla 1,601 ,074 lnventory.for .. ,, product-reslden\ial Inventory-for nle pn>ducl-commerciol

Prepaid expense 53,894 Pre-contract casts 231,474

P~entcc.sts

Other current assets

Total current enets 20,080,157 15,943,1147 372,000 1,404,378

Pmpeny and equipment

Land

Fumllure and h1urea 917,575 96,828 38,774 Leesehold improvements 5114,699 Trucks, autos, and equipment 638,526 21,589

Totol preperty and equipment 2,140,800 96,828 61,363

Less: aa:umulated depredallon !1,810,228! !96,828! ~.597)

Net property and equipmenl 330,572 788

Other ISSeiS

Investment In operating joint ventures 244,466 Investment In real estate joint ventures 33,867 lnvlltment in sublldlarles 2,587,414

Development fees T•• cradll property advances • oporallng

Goodwtlt In openrtlng entily, net or omD<Iizalion or

S519,37811nd S443,3721n 2010 ond 2009, respectively

Other 1uets 156,843 2,186

Total other aneta 2,587,414 401,309 30,053

Totolasse1s s 23,067,571 16,675,728 408,053 1405142

MHier-Valentine Operations, Inc. Consolidating Statement of Assets, UabffHies and Stockholders' EquHy {Deficit)- Federal Income Tax Basis

December 31,2010

MY Rft.ktenttal MVO

Construdiofl. Inc. lnwttmants. LlC

2,030,567 432,290 1,344,615

~.391

17,609

1,540,933

340,703

574,804

4,951 ,369

106,400

6,504,213 5,401,268

34,330

110,681

145,011

(144,471!

540

(18,809)

1,000 11,241

1,000 (7,568!

6,505,753 5 393 700

MV Resldenllll MVComerdel

OeveklpmentUC Development UC

45,951 58,498

120,281

89,1151 1,148 250,500

328,870

4,628,158

844,283

181

6,308,034 59,805

41.024

120,255

161,279

!105,567)

55,712

(1 ,004,434)

307,035

3,993,236

620,722

86,214

3,916,559 86,214

10,280,305 146019

MV

MI/StArctd Operations, Inc.

._u.c EllmiMtlont Condald.ted

291 6,942,261

222,446 (3,979, 130)

(7,091 ,2411) 15,536,597

S8,522

(441,324) 554,609

50ol,587

328,870

8,235,501 (38) 559,245

1,042,651

2,175,878

4,828,198

4,951,369

53,894

231,474

844,283

108,561

222,739 (11 ,511,739) 44,784,700

41,024

124,540 1,333,302

5114,699

770,796

124,540 2,729,821

!18,681) (2,236,372)

105,859 493,449

244,466

(589,378)

{2,987,414)

307,035

3,993,236

820,722 1,000 256,484

1,000 (2,887,414! 4,434,567

329 558 (14,499,153) 49,712,716


----· .. -·----------

Llllblllllea and Slocklloldell' eqUity (deflcl) MV MV

Op•mlcm, Construction, MV"Hity, MV RasklenUal

Inc. Inc. Inc. ...,""' ........ Cumtnl!abllliiH

Real estate llll>llgoge notes P"Y"ble

Line or credH ~ operations 8,499,973 3,000,000

Line of credll· land pun:hase 795,149

Notes payebfe:

Allilla1es

Other 211,449

stocldlolder 512,997 82.595 5,825

Accoonupoyablo:

Trode 100 8,60B,687 11,507

Allilla1es 3A8,114 36

Retention \,668,90\

Oilier 1164

Amftata advancea 2,282,140 450

Accrued employee compensallon and other expentes \31,349 32\,345 3\,376

BIIHngs In excess of costs and estimated earnings on

uncompleted conttadl 2.867,385

Total eurrenllllbiUtres 12,413,\57 15,197,007 48,744 1,314

Long-term DabNitlu

Noles payable • atnllales 9,451

Noles payable. stoc:ld>oklers 1,380,769 412.968 29,124

Oilier net•• poyllbll \,891,591

other long-term Nabttltles

Tolallong-lenn lllbliKies 3,072,360 422,419 29,124

Tol:lllabllllles \5,485,517 15,619,426 n ,B68 1,314

Slocllholdm' equity (defld)

Common stock, no par value, 73,164 1nd 76,000 shares

!>sued end oustandlng a1 Oocemller3\, 2010 and

2009, respectively. 219,311 4,607 500

Addtlonal paid-In copHal 9,473,327 2,791,750 849,858

Retained eamlnga (deflcR) (1 ,891,273) (1,95A,759) (524,280) 1,403,328

Tolalatod<holdera'-ly(dellcl) T,582,05A 1,058,302 330,185 1,403,828

Tolol Ueblllllea ono sloc:t<holders' equRy 23,087,571 18,675,728 408,053 1,405,142

Miller-Valentine Operations, Inc. Consolidating Statement or Assets, UabiiiUes and Stockholders' Equity (Deficit) - Federal Income Tax Basis

December 31, 2010

MV A.esldenUal MVO NVResld'lfttt.l MVComaclal

ConMrucUon, lno. tnvntmenbl, LLC o......,.,., .... u.c Dowlopment u.c

5,227,689 2,736,458

120,281

795,149

10..1535

\ ,724,523 7,926

79,261 1n,1a9

996,584

70,72\

1,951 ,355 927,585

35,\97 114

575,84\

3,482,1\7 5,227,689 5,893,493 927,599

6,496,707

2\ ,399

402,334

6,920,440

3,482,\17 5,227,869 12,813,933 927,699

SOD

8,434,148

3,023,136 166,031 (8,967,n6) (781 ,680)

3,023,838 1116,03\ (2.533,828) (781.680)

6,505,753 5,393,700 10,280,305 148019

MV

MV Shared Op....tktns, Inc.

SerW:.tUC Ellmlnollomo Con .........

7,964,127

11,820,25A

795,149

(795,149)

315,984

601,4\7

8,652,723

(240,303) 364,897

2,665,485

7\,585

(3,979,580) 1,16\,950

5,857 526,229

3,443,228

6 ,857 (5,015,032) 38,183,025

(6,496,707) 9,451

1,822,861

1,712,990

402,334

(6.496,707) 3,5A7,636

8,857 (11,511 ,739) 42,130,661

(224,918)

(1 0,075,758) 9,473,327

322,741 7,313,260 (1 ,891,272)

322,741 (<,9117,414) 7,582,055

329,598 (14,499,153) 49,712.716

See Independent accountants' review report. 19

MV MV .,..,......, c.-. UVR-. MV R•l&danbt ... .... ""' .... ., ....... RIYIInues

Conatrudion revenues earned:

Am.tn 211,481,809 OU!ef 31,1192,3ofe

For .. ,,""""""· r.-nlltol For ule product- commerdlll Lease and sales commfsslona 833,975 100,500 Property managern.nt rees:

Alihtd 350,153 3,718,192

Olhef 7311,2811

Onelopmorot foos: ~,..

Other Consulllng Income

Acq-..IHI 0111«-:

A!Aotn 1,188,875 Olhor 214,877

Total revenuaa 52,384,155 1,184,128 5 ,959,633

Casts and erpenus Ceotof..........,..,:

lAbor 5,574,064 Motlftfot 4,838,543 s.-tnoct 31,140,029

Equ1pmtnt rental 428,846

01her 4,036,284 460,237

Ooproddon 37,844

FD< - product Olfi'O,... • JOSidonllal For ntos pn>duclolfi'O""" • cammordol

Total co""' and"""""'" 45,858,710 480,237

Grouprofil 8,527,445 n3,881 5,159,633

-·~~~~-~-301,178 5,733,062 aoe,601 4,427,119

OJ>II1IIIntlpn>lll~) (301 ,178) 604,383 (12,D10) 1,532,514

Renb:l real estill Rentollna>mo Rolmburaomorotlncome Rental upenu (128,824) Oepro-ondomorllzolon

Totll rental real estate Income (DIPOflH) (628,624)

Other Income (opense) Lon from }alnt ventures 233 1,482

lncomo tram- (11113,5411)

OolnDflaoleofjalnt- 48,11111

Gotn or Lou on nlo of ISSOis Interest Income 474,on 93,951 429

lnterest erpense (132,450) (90,476) Interest npenu ~ arrillalo (39B,24ol) (42,437) (2,11o19)

O"t'feclolonond-. (2,242) GolnonC8ni:OII-.oldebl LOlli on dlspoaal of property In bulk .... nat or

cost of 14,813,848 other Income (expense) 628,624 149,104 112,1211 ~·~

Tolalolher Income (expense) (419,5411) 110.375 158,258 (4,814!

Net-(loa) 1 11~49 34!1 1114758 711348 1 527 700

MVR- MVO

c-r... 1.-AMnt.,UC

23,515,735 2,412,453

25,928 ,188

1,458,1199 4,388,085

14,427,605

2,115,843

22,368,732

3,581,458

1,087,062

2,474,3tlol

6,151

6,151

(44,253)

5,000 3,8511 30

(58,554)

(1,439) (21,157)

~.739l

7,419 ~26,673!

b481,813 ~a

Miller-Valentine OperaUons, Inc. Consolidating Statement of Revenues and Expenses • Federnllncome Tax Basis

MVResWmiW uvc.m....., -u.c -menlllC

265,000

754,739 28,08ol 380,241

413,844 100,000

60,000 84,232

1,834,212 441,708

239,778

239,778

1,394,434 441.708

4 ,301,300 1,223.388

(2.808,1168) (781,680)

(109,000)

6,402 (15,046)

(177,789) (118,916)

1.808.790

(3,271,8411)

(230,433!

~,307,84!12

1§,!!4~ (?!1!~

Year Ended December 31, 2010

MV

liN- .,..._,., .... SeMcnUC - .,.,._.

44,007,544 34,304,71111

285,000

934,475

4,088.345 739,281

782,1103 390,241 413,844 100,000

1,248,875 811 ,770 880,879

611,770 88,143,794

7,031,063 8 ,005,628

45,587,134 428,946

8,612,364 37,844

236,778

68,923 ,457

811,770 19,220,337

270,348 18,140,259

341,422 1,080,078

6 ,151

(828,624)

(122,473)

(151.558) 993,548

48,106 5,000

(177,789) 400,953

(288,526) 177,7811 (441,630)

(18,6111) (162,437)

1,608,790

(3,271 ,8411) 454,104

!18,681! 993,548 !1 ,808,954)

322 741 11113546 $ !1,348134!1

See Independent accountanrs review repolt. 20

Miller-Valentine Operations, Inc. Consolidating Statement of Assets, Liabilities and Stockholders' Equity (Deficit) - Federal income Tax Basis

December 31, 2909

Assets M\1 MV M\1

Operations. Conslrudlon, M\1 Realty. M\1 Resk!enllol M\1 Residential MVO MV Resk!enUol Operations. Inc.

Inc. Inc. Inc. Property Mgml. Construction, Inc. Investments, llC Development LLC Eliminations Condolidaled

Current Assets Cash and cash equivalents $ 1,249.174 4,353.475 122.290 308.358 2,925.313 445,045 2.339,621 $ 11.743.276 Notes receivable:

AlliHates 7,181,344 1,1&4,000 (1,1&4,000) 7,181,344 Other 18,015 56,815 60,802 135,632

Accounts receivable: Alliflates 113,098 36,166 1,909.694 2.058,956 Other 168,219 81,210 67,508 18,109 (14,507) 340,539

Tax credit property advances- construction costs 1,132,262 1,132,262 Due on conlnlcts: Trade 1,703,728 10,000 1,713,728 Atliliates 219,048 1,833,713 (1,741,374) 311 ,367

Retain age 841 ,181 422,149 1,263,330

Costs and estimated earnings in excess of billings on uncompleted contracts 1,064,683 1,670,057 2,934,740

lnvenloty-lor sale product-residential 9,058,436 9,056,436 Inventory-for sale product-commen:lal 1,951,370 1,951,370 Prepaid expense 72,988 72,988 Pre-contract costs 1.001,682 1,001,682 Pre-development costs <436,079 436,079 Olher current assets 145,925 145,925

Total current assets 8,430,518 10,740,117 260,315 436,668 7,243,323 2,414,524 14,861,567 (2,905,37 4) 41 ,481,678

Property and equipment Land 41 ,024 41,024 Fumlllln! and fiXIUfeS 917,574 96,828 39,774 34,330 266,697 1,355,203 Leasehold Improvements 378,154 378,154 Trucks, autos, and equipment 636,526 10,803 21,569 133,251 804,169

Total property and equipment 1,934,254 107,631 61,363 167,581 307,721 2,578,550

less: a~mulated depraclation 11,772,364) (107,631) (56,354) (165,602) (179,139) (2,263,110)

Net property and equipment 161 ,870 3,009 1.979 128,562 295,440

Other assets lnvesbnent In operating joint ventures 243,753 243,753 Investment In real estate joint ventures 15,977 12,135 (872,734) (8«,622) lnvasbnenlln subsidiaries 6,033,044 (6,033,044) Development fees 350,488 350,488 Tax credit property advances - operaUng 3,801,814 3,801,814 Notes receivable - affiHates Goodwill in operati1g entity, net of amortization of $519,378 and $443,372111 2010 and 2009, respectively 696,729 696,729

Other assets 137,605 1,000 750 19,428 156,783

Total other assets 6,033,044 381.358 16,977 750 31,563 3,976,297 (6.033,044) 4,406,945

Total assets $ 14.463.562 11.283.345 277,292 439 677 7.246.052 2,446.087 18,966,466 (8,936,418) $ 46,184,063


------------.. ------·-·---

Liabilities and stockhOlders's equity (deftcll) MV

Opmlions,

Inc.

Current liabilities

Real estate mortgage nates payable s Line of C111dit- operations

Line of credit - land purchase

Notes payable:

Other 211.449

StockhOlder 512,997

Accounts payable:

Trade 600

Alliliates

Retention

Other

Allitiale advances

Accrued employee compensation end other expenses 145,623

Billings In excess of costs and eStimated earnings on

uncompleted contracts

Total current Habllitles 870,669

Long-term Uabifilles

Notes payable - aftlHates

Notes payable - stockhOlders 1,893,766

Other nates payable 1,903,040

Other long-term RabiiiUes

Total long-term labilities 3,796,806

Total nabftiUes 4,667,475

Stockholders' equity (defoct)

Common stock, no par value, 73,164 and 76,000 shams

issued and outstanding at both December 31 , 2010

and 2009, respectively

Adcfrtlonal paid-in capital 9,796.362

Retained earrnngs (defiCit) (275)

Total stockhOlders' equity (defiCit) 9,796,087

TotalllabiiiOes and stockholders' equity $ 14,463,562

-·-···-----·-·--·--------

Miller-Valentine Operations, Inc. Consolidating Statement of Assets, Liabilities and Stockholders' Equity (Deficit) - Federal Income Tax Basis (Continued)

December 31, 2009

MV

ConsltUcUon, MVRtally, MV Rosldtnllal MVResldential

1m:. Inc. Pn>polly Mgmt. Conatruetion, Inc.

1,164,000

82,595 5,825

2,725,360 10,962 2,584,841

1,917,293 138,747 1,741,374

1,850,016 2,363,094

24.802 161,497

257,426 40,418

1,340,715 853,423

9,337,405 57,205 163,549 7,704,229

8,833

495,563 34,949

504,396 34,949

9,841,801 92,154 163,549 7,704.229

219,311 4,607 500 500

2,791,750 849,858

(1,569,517) (669,327) 275,628 (458,677)

1,441,544 185,138 276,128 (458,177)

11,283,345 277,292 439,677 7,246,052

MVO

lnveatments, UC

2,209,853

2,209.853

2,209.853

236,234

236.234

2,446,087

MV

MV RosldonUal Operations, Inc.

Development UC Eliminations Condolld;oted

6,443,227 s 8,653,080

5,389,000 (1 ,164,000) 5,389,000

1,750,000 1,750,000

104,739 316,188

601,417

5,321,763

(1.741,374) 2,056,040

4,213,110

399,202 585,501

443,467

2,194,138

14.088,188 (2.905,374) 31.523,704

8,833

2,424,278

125,788 2,028.828

402,333 402,333

528,121 <4,864.272

14,614,289 (2.905,374) 36.387,976

(224,918)

4.605,248 (8,246.856) 9,796,362

(253,071) 2,438,730 (275)

4.352,177 (6,033,044) 9,796.087

18,966,466 (8,938,418) $ 46,184,063


... MV

~-.,........., NVAady, .... ""-

__ ,_ .... __ ROYanuta

Construdlon revenues e•med: Allillotes 31,6115,509 Olher 48,875,738

For 10\e pn>duct- miclenltol For 11le product .. commercii I Leae •nd Ales eommlsskJns ll75,380 Property ITIIIMgement fees :

Atflllotes 375,491

Diller 0-pment!Hs:

Armates Oltlor

c-umngf ... Acquhllon fen

Olherfees:

Altlllotes Dill or

Totalnovonun 80,371~47 1,350,871

Cocts and upenses Cos\ of consVVctlon:

Labor 8,331 ,023 Ma\erlal 5,875,244 Subcontr.ct 57,422,541

E<M>ment renlll 560,822 Olher 2,807,307 5112.795 Oepreclotlon 48,648 For nln product expenses~ resldentflll For ••In prod~Jd expenses - commen:llll ----

Total costs •nd upenses 73,185,585 ~ G<-ossprof~ 7.205,862 648,078

AdmfniAnlthla and pnetal exp~m~n 208,651 5,810,858 ~ O~pn>lll(loss) (208,851) 1,394,808 (74,8431

Rental reel estate: Reimbursement Income 10,230

Rental upense (735,020)

Oeprodatlon and·-Totll rental r .. l eslale axponM (724,780)

Olher """""" (01Cpf1nso) loss from Joint veniUtes 3,004 2.670 Income from subsklbrin 1,702,908

Gain on s•la Df Joint venture 118,711 238,238

Gain on s•le of assets 850 Jnterettlncome 340,180 87,010 41,543

Jnternt e!~PfJnH (237,186)

lntefHt 8JP8nH. ltrl!'hlte (1,047,529) (93,264) (42,991)

Oept'ed.llon and amortization (416)

01ln on Cllncoflllon of debt l.DSS en dtlpoal of ptoperty kl butk ule net of -of $4,813,148

Diller Income (OIIPIRSO) n4,7ao 192,508 ~

Total aUI• Income (apense) 1,483,164 318,900 ~ Net Income~) s 551.743 117131706 ~

WR- MVR•Mfanbl -- Ccnmdon, ft.

33,783,604 15,190,401

118,600

3,233,538

5lJD,438

1,008,328 178,805

5,1~soe 48,874,005

1,881,520 9,886,449

33,514,855

40 1,641,502

46,924,3811

5,122,508 2,049,839

4,233,715 1,598,274

M8,7D3 453,385

11!473

(5,786) (4,430)

(340)

(5,786) 3,703

883,004 457.068

Mfller-Valentlne Operations, Inc. Consolidating Statement of Revenues end Expenses- Federal Income Tex Basis

""" MVR-ltMCCrnmtt.. LLC o...-uc

348,560 1,7D3,2Sll

2.870,102

924,647

143,514

1,793,250 4,384,823

342,878 1.273,882

1.273.992 342.879

518,218 4,041,844

5,421 ,497

519,288 (1 ,379,553)

(1,753)

(1.753)

(246,944) (173,958)

24,527

(8.072) (18,153)

(132,816)

(71,074) (119,521)

(326,080) (420,922)

181445 ,11100147!)

-

(1,702,908)

(1,702,908)

'11702.!2!J;

Year Ended December31, 2009

MV

"""""'"'-'""-·-65.~70,113

83,1188,138

348,560

1,703,250

1,081,!NIO

3,609,027

5lJD,438

2,970,102

924,847

1.008.328 320,119

141,1188,704

8.212,543 15,781,693 80,837,399

560,1182 5.051,604

48,648 342,879

1,273,992

122,208,587

19,7e7,117

18,191 ,912

1,595,205

10,230

(135,020)

(1,753)

(726,543)

(415.226)

356,949

950

511,733

{284,391)

(1,183,804) (143,454)

820,324

(316,816)

551 743


·'

f' . - :-}_. . ' I&'·. ~-··~· \ : , !:'ll'ICJ!I • ' ..• ·.

At Clarl< Schaefer Hackett, we are the sum of our

individuals. Each team member's training and

experience are well-suited for each client's purpose

and goals. We are committed to providing insightful

and customized service - from efficient compliance

to sophisticated consulting - to help each client

prosper today and plan for future success.


www. cshco. com



with Accompanying Information


(with Independent Accountants' Review Report)

....!) CLARK SCHAEFER HACKETT STRENGTH IN NUMBERS

TABLE OF CONTENTS


Consolidated Financial Statements '

Consolidated Statements of Assets, Liabilities and Stockholders' Equity- Federal Income

Tax Basis ............................................................................................................................................ 2-3

Consolidated Statements of Revenues and Expenses- Federal Income Tax Basis .............................. .4

Consolidated Statements of Stockholders' Equity- Federal Income Tax Basis ....................................... 5

Consolidated Statements of Cash Flows- Federal Income Tax Basis .................................................... 6

Notes to the Consolidated Financial Statements .............................................................................. J-16

Accompanying Information

Consolidating Statements of Assets, Liabilities and Stockholders' Equity-

Federal Income Tax Basis- December 31, 2012 ........................................................................... 17-18

Consolidating Statements of Revenues and Expenses -

Federal Income Tax Basis- Year Ended December 31, 2012 ............................................................. 19

Consolidating Statements of Assets, Liabilities and Stockholders' Equity-

Federal Income Tax Basis- December 31, 2011 ........................................................................... 20-21

Consolidating Statements of Revenues and Expenses -

Federal Income Tax Basis - Year Ended December 31, 2011 .............................................•............... 22

...!) CLARK SCHAEFER HACKETT


Board of Directors Miller-Valentine Operations, Inc. Dayton, Ohio

STRENGTH IN NUMB ERS

We have reviewed the accompanying consolidated statements of assets, liabilities, and shareholders' equity-fed~ral income tax basis of Miller-Valentine Operations, Inc. (an S-Corp) as of December 31, 2012 and 2011, and the related consolidated statements of revenue and expenses- federal income tax basis, cash flows- federal income tax basis, and stockholders' equity-federal income tax basis for the years then ended. A review includes primarily applying analytical procedures to management's financial data and making inquiries of company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the income tax basis of accounting and for designing, implementing, and maintaining Internal control relevant to the preparation and fair presentation of the financial statements.

Our responsibility is to conduct the reviews in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the federal income tax basis of accounting, as described in Note 1.

Our reviews were made for the purpose of expressing a conclusion that there are no material modifications that should be made to the financial statements in order for them to be in conformity the federal income tax basis, as described in Note 1. The information included in the accompanying Consolidating Statements of Assets, Liabilities, and Stockholders' Equity- Federal Income Tax Basis and Consolidating Statements of Revenues and Expenses- Federal Income Tax Basis are presented only for purposes of additional analysis. Such information has been subjected to the inquiry and analytical procedures applied in the reviews of the basic financial statements. This information is presented on the federal income tax basis of accounting, and we are not aware of any material modifications that should be made thereto.

Cincinnati, Ohio April14, 2013

cincinnati I cleveland I columbus I miami valley I springfield I toledo

one east fourth street, ste. 1200 cincinnati, oh 45202

www.cshco.com p. 513.241 .3111 f. 513.241.1212

Miller-Valentine Operations, Inc. Consolidated Statements of Assets, Liabilities, and Stockholders' Equity- Federal Income Tax Basis


Assets 2012 2011

Current assets Cash and cash equivalents s 19,646,157 s 15,623,699 Notes receivable

Affiliates 9,893,450 14,158,426 Other 22,910 19,318

Accounts receivable Affiliates 39,627 42,200 Other 847,098 661,560 Tax credit property advances- development costs 1,925,217 1,115,490

Due on contracts Trade 9,599,098 7,173,411 Affiliates 87,580 19,304 Retainage 2,166,062 2,210,371

Costs and estimated earnings in excess of billings on uncompleted contracts 8,885,376 8,730,520

Inventory-for sale product- residential 3,432,528 4,605,036 Inventory-for sale product- commercial 1,205,451 Inventory-for sale- turnkey project 835,687 3,000,000 Prepaid expense 179,704 71,777 Pre-contract costs 212,164 455,195 Pre-development costs 818,017 691,066 Other current assets 577,075 67,396

Total current assets 59,167,750 59,850,220

Property and equipment land 41,024 41,024 Furniture and fixtures 1,722,748 1,579,307 Leasehold improvements 1,097,028 584,699 Trucks, autos and equipment 849,045 673,854

Total property and equipment 3,709,845 2,878,884

less: Accumulated depreciation (2,421,584) (2,234,205)

Net property and equipment 1,288,261 644,679

Other assets Notes receivable-affiliates 10,675 Investment In operating joint ventures 209,295 205,557 Investment in real estate joint ventures (518,352) (542,715) Development fees 193,671 207,820 Tax credit property advances- operating 1,540,246 3,830,128 Goodwill in operating entity, net of amortization of $671,393

and $595,386 in 2012 and 2011, respectively 468,708 544,715 Other assets 364,488 265,456

Total other assets 2,258,056 4,521,636

Total assets $ 62,714,067 s 65,016,535

See Independent accountants' review report and accompanying notes to the consolidated financial statements. 2

Miller-Valentine Operations, Inc. Consolidated Statements of Assets, Uabilities, and Stockholders' Equity- Federal Income Tax Basis


Liabilities and Stockholders' Equity 2012 2011

Current Liabilities Real estate mortgage notes payable $ 1,970,704 $ 3,571,953 Une of credit 124,940 line of credit- turnkey project 853,502 3,017,815 Notes Payable

Affiliates 498,516 277,722 Other 412,539 211,449 Restructured debt facilities 1,110,858 515,852 Stockholder 511,418 511,418

Accounts Payable Trade 17,557,296 18,042,043 Affiliates 18,147 16,937 Retention S,139,763 4,688,894 Other 68,057 18,110

Accrued employee compensation and other expenses 1,772,292 659,853 Deposits 7,924 Billings in excess of costs and estimated earnings on

uncompleted contracts 2,384,536 3,685,709

Total current liabilities 32,305,552 35,342,695

Long-term liabilities Notes Payable

Affiliates 8,833 8,833 Other 1,758,682 1,865,542 Restructured debt facilities 11,173,243 12,440,262 Stockholder 800,024 1,311,443

Other long-term liabilities 402,333 402,333

Total long-term liabilities 14,143,115 16,028,413

Total liabilities 46,448,667 51,371,108

Stockholders' equity Common stock, no par value, 76,213 and 73,164 shares

Issued and outstanding at December 31, 2012 and 2011, respectively.

Additional paid-in-capital 9,473,327 9,473,327 Retained earnings 6,792,073 4,172,100

Total stockholders' equity 16,265,400 13,645,427

Total liabilities and stockholders' equity $ 62,714,067 $ 65,016,535

See independent accountants' review report and accompanying notes to the consolidated financial statements. 3

Revenues Construction revenues earned

Affiliates other

For sale product- residential

For sale product- commercial Lease and sales commissions Property management fees

Affiliates

other Development fees

Affiliates Other

Consulting income Other fees

Affiliates Other

Total revenues

Cost and expenses Cost of construction

Labor Material

Subcontract Equipment rental

Other Depreciation For sale product expenses- residential

For sale product expenses· commercial

Total costs and expenses

Gross profit


Operating profit

Other Income (expense) Gain/( loss} from joint ventures Gain on sale of joint venture

Gain on sale of assets Interest Income Interest expense Interest expense-affiliate Depreciation and amortization Gain on cancellation of debt Other Income

Total other Income (expense)

Net income

Miller-Valentine Operations, Inc. Consolidated Statements of Revenues and Expenses - Federal income Tax Basis


2012 2011

s 71,319,541 $ 30,635,303 79,640,293 72,363,493

759,000 80,000 652,450 523,639

2,004,145 1,440,116

3,660,411 4,096,258 1,416,770 752,354

3,674,935 2,901,259 262,172 530,690 198,721 325,031

1,841,363 1,183,974 1,907,687 1,112,275

167,337,488 115,944,392

8,652,553 7,685,423 14,058,794 9,095,723

100,347,992 68,982,518 1,485,009 996,571

12,220,940 6,792,096 70,892 50,937

1,330,491 202,042 1,253,833 793,320

139,420,504 94,598,630

27,916,984 21,345,762

21,249,261 15,657,681

6,667,723 5,688,081

48,137 (201,698) 677,894

257,443 42,765 471,577 397,809 (254,765} (327,478} (250,541) (284,335} (231,009} (170,602) 452,020 408,162 240,936

901,024 375,291

s 7,568,747 $ 6,063,372

See independent accountants' revlew report and accompanying notes to the consolidated financial statements. 4

Balance at January 1, 2011

Net Income for 2011

Balance at December 31, 2011

Distributions

Net Income for 2012


Common

Stock

$

$


Consolidated Statements of Stockholders' Equity- Federal Income Tax Basis


Additional

Paid-In Retained

Capital Earnin~s Total

9,473,327 (1,891,272) 7,582,055

6,063,372 6,063,372

9,473,327 4,172,100 13,645,427

(4,948,774) (4,948,774)

7,568,747 7,568,747

9,473,327 6,792,073 16,265,400


Cash flows provided by (used in) operating activities Net income Adjustments to reconcile net Income ~oss) to net cash provided by (used In) operating activities

Depreciation and amortization Gain on cancellation of debt Gain loss on sale of property and equipment· Gain on sale of joint venture Interest (Gain) loss from Investments In joint ventures, net Changes in assets and llabiiHies

Change in inventory Change in accounts receivable and advances Change in cests and esUmated earnings

In excess of billings on uncompleted contracts Change in pre-contract costs Change in pre-development costs Change in other assets Change in accounts payable Change in billings in excess of costs

and estimated earnings on uncompleted contracts Change in accrued expenses and deposits

Net cash provided by operating activities

Cash flows provided by (used In) Investing activities Purchases of property and equipment Proceeds from sale of property and equipment Net change In construction In progress - turnkey project Issuance of notes receivable Payments received on notes receivable Contributions to investments In joint ventures Dlstnbutions received from Investments In joint ventures

Net cash provided by Investing activities

Cash flows provided by (used In) financing activities Net change In line of credit and advances Proceeds from borrowings Payments on borrowings Distributions to shareholders

Net cash used In financing activities

Net Increase In cash and cash equivalents



SUPPLEMENTAL DISCLOSURE OF CASH TRANSACTIONS: Interest paid

SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS: Reclassification of Une of credit and short term real estate notes to term notes

Miller-Valentine Operations, Inc. Consolidated Statement of Cash Flows- Federal Income Tax Basis


2012 2011

$ 7,568,747 $ 6,063,372

301,900 221,539 (452,020)

(14,589) (42,765) (677,894)

(48,137) 201,698

2,377,959 769,080 {1,152,464) (1 ,833,365)

(154,856) (6,554,842) 243,031 (223,721)

{126,951) 153,217 (705,083) 110,931

17,279 11,010,844

(1 ,301,173) 242,483 1,120,363 133,625

7,674,006 9,574,202

(862,573) (278,383) 20,868 42,765

2,164,313 (21,970) (55,215)

4,294,029 1,491,915 (7,711) (1 ,311) 17,160 53,970

5,604,116 1,253,741

(124,940) {883,934) 526,473

(4,708,423) (1 ,262,571) (4,948,774)

(9,255,664) (2,146,505)

4,022,458 8,681,438

15,623,699 6,942,261

$19,646.157 $ 15,623,699

~ 519,579 ~ 790,533

$ $ 9,953,155


Miller-Valentine Operations, Inc. Notes to the Consolidated Financial Statements



Nature of operations Miller-Valentine Operations, Inc. (the Company), an S-Corporation, is the parent company of MillerValentine Construction, Inc., MV Realty, Inc., MV Commercial Development LLC, MV Residential Property Management, Inc., MV Residential Construction, Inc., MV Residential Development LLC, MVO Investments, LLC, MV Services LLC, MV SE Property Management, LLC, MV United Senior Residence LLC, MV Affordable Housing LLC, Miller Valentine Gem Real Estate Group LLC and The Gem Real Estate Group, Inc. The Company is a holding company for all operational activities related to development and construction, appraisal and 3rd party real estate services for the commercial businesses; property management, construction and development services for the residential businesses and internal support services. The Company is also an investor in affordable housing under the section 42 Low Income Housing Tax Credit (LIHTC} program.

Basis of accounting The Company's financial statements have been prepared on the federal income tax basis of accounting. MV Realty, Inc., Miller-Valentine Construction, Inc. and MV Residential Construction, Inc. are accounted for under the accrual basis method of accounting used for federal income tax purposes. MV Residential Property Management, Inc., MV Residential Development LLC, MVO Investments, LLC, MV Commercial Development LLC, MV Services LLC, MV SE Property Management, LLC, MV United Senior Residence LLC, MV Affordable Housing LLC, Miller Valentine Gem Real Estate Group LLC and The Gem Real Estate Group are accounted for under the cash basis method for federal income tax purposes. Consequently for the subsidiaries accounted for under the federal income tax cash basis, certain revenues are recognized when received rather than when earned and certain obligations are recognized when paid rather than when incurred, except for costs capitalized and amortized in accordance with tax regulations. Additionally, under the federal income tax cash basis of accounting valuation reserves and allowances, if any, are not recorded.

Principles of Consolidation The financial statements include the Company and its wholly owned subsidiaries which are disregarded entities for income tax reporting. All intercompany transactions have been eliminated.

During 2012, the company consummated a tax free merger with Gem Real Estate Group. The operations of that entity are included in operations of the company from the point of merger to year end.

Use of estimates in financial statements The preparation of the financial statements requires management to make estimates ani:! assumptions that affect the amounts reported in the financial statements and accompanying notes. The actual results could differ from these estimates.


Revenue recognition



Income from long-term construction contracts is recorded using the percentage-of-completion method of accounting measured by the ratio of costs incurred to total estimated costs for each contract. Contracts extend over periods ranging from several months to two or more years.

Contract costs include all direct m9terial and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation costs. Selling,.general, and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including final contract settlements may result in revisions to costs and income and are recognized in the period in Which the revisions are determined. Profit incentives are included in revenues when their realization is reasonably assured. An amount equal to contract costs attributable to claims is included in revenues when realization is probable and the amount can be reliably estimated.

The asset, "Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts," represents revenues recognized in excess of amounts billed. The liability, "Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts," represents billings in excess of revenues recognized.

During construction of commercial and residential for-sale product, identified as inventory, all direct material and labor costs and those indirect costs related to acquisition and construction are capitalized, including interest, and all customer deposits are treated as liabilities. Capitalized costs are charged to earnings upon closing. Costs incurred in connection with completed units and selling, general, and administrative costs are charged to expense as incurred. Real estate sales and the related cost of real estate sold are recorded on the closing date of the sale.

Revenue is earned on sale of appraisal and other services at the time the service are delivered to the customer.

Concentrations of credit risk The majority of accounts receivable and all contract work in process are from construction customers in various industries throughout the Midwestern and Southeastern United States. The contracts require payments as projects progress and, in some cases, advance payments. Customers typically withhold retainers of up to 10 percent of contract value, which is not paid until the customer is satisfied with the completion of the contract. Retainage was $2,166,062 and $2,210,371 at December 31, 2012 and 2011, respectively. The Company generally does not require collateral, but, in most cases, can place liens against the property, plant, and equipment constructed if a default takes place.

For sale product The Company capitalizes all direct costs, interest and development costs, in each project until the project is sold. Included in the costs is interest capitalized in the amount of $114,221 in 2012, and $178,720 in 2011.


Property and equipment



Property and equipment are stated at cost Depreciation expense is calculated on property and equipment using accelerated and straight-line methods over recovery periods specified by federal tax regulations.

Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost is removed fr.om the asset accounts and the related allowance is adjusted and any resulting gain or loss is recognized in income for the period, except for like-kind exchanges which utilize the tax method whereby the basis of the new asset is adjusted by the amount of the gain or loss arising from the dis~osition of the exchanged asset.

Employee benefit plan The Company maintains a qualified 401(k) plan which covers substantially all employees meeting certain eligibility requirements. Participants may contribute a portion of their compensation to the plan, up to the maximum amount permitted under Section 401 (k) of the Internal Revenue Code. At the Company's discretion, it can match a portion of the participants' contributions. The Company's matching contribution was $80,759 and $0 for the years ending December 31, 2012 and 2011, respectively.

Goodwill Goodwill is carried at the initial value less amortization which is calculated on a straight-line basis over 15 years.

Income taxes The Company has elected S-corporation status under the Internal Revenue Code. The stockholders of the parent company, Miller-Valentine Operations, Inc., include the Company's tax attributes in their individual tax returns. Therefore, no income tax provision is included in the accompanying financial statements. Certain accruals and expenses not currently deductible in accordance with income tax regulations are charged against taxable income when paid or become a permanent timing difference.

Accounting for uncertainty in income taxes The Company adopted the provisions of Accounting for Uncertainty in Income Taxes. Those provisions clarify the accounting and recognition for income tax positions taken or expected to be taken in the Company's income tax returns. The Company's income tax filings are subject to audit by various taxing authorities. The Company's open audit periods are 2009-2011. The Company's policy with regard to interest and penalty is to recognize interest through interest expense and penalties through other expense. In evaluating the Company's tax provisions and accruals, future taxable income, and the reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes its estimates are appropriate based on current facts and circumstances.


See independent accountants' review report 9

Advertising



Advertising costs are expensed as incurred. The amount charged to expense in 2012 and 2011 was $405,946 and $383,926, respectively.

Accounts receivable Accounts receivable are uncollatecalized customer obligations due under normal trade terms requiring payment within 10 to 30 days from the invoice date. The Company may collect finance charges for unpaid accounts receivable under normal trade terms, which bear interest at 1% per month. At management's discretion, interest may be accrued monthly on delinquent accounts until the invoice is paid in full o~ written off. Accounts receivable are stated at the amount billed to the customer plus any accrued and unpaid interest. Currently, there are no delinquent customer accounts to which interest has been charged.

Payments of accounts receivable are allocated to the specific invoices identified on the customer's remittance advice. The direct write-off method is used to deduct bad debt expenses related to accounts receivable when collection efforts have been exhausted and the receivable is deemed worthless. Accordingly, there is no allowance for doubtful accounts in the financial statements. If amounts become uncollectible, these amounts will be charged to operations when that determination is made. Bad debt expense for the year ended December 31, 2012 and 2011 was $6,403 and $0, respectively.

Investment in real estate and operating joint ventures The Company accounts for investments in joint ventures on the equity method of accounting, including its proportional share of earnings or losses.

Pre-contract costs and pre-development costs The Company capitalizes costs incurred in pursuing contracts until such time as the contract is awarded. When a contract is obtained, costs are transferred to construction costs. When it becomes probable that the contract will not be obtained, the Company charges these costs to expense. Accordingly, there is no reserve recorded for capitalized pre-contract costs. Capitalized pre-contract costs were $212,164 and $455,195 at December 31, 2012 and 2011, respectively.

The Company capitalizes costs incurred on projects prior to commencement of real estate development activities which are related to pre-acquisition and acquisition of real estate. These costs are accumulated until development is completed. When costs are reimbursed by real estate projects, payments are applied to the outstanding balance incurred. Capitalized pre-development costs were $818,017 and $691,066 at December 31,2012 and 2011, respectively.

Reclassifications Certain reclassifications have been made to the prior year financial statements to conform to the presentation used in the current year. These changes had no effect on net income (loss).

Subsequent events Management evaluates events and transactions occurring subsequent to the date of the financial statements for matters requiring recognition or disclosure in the financial statements. The accompanying financial statements consider events through April14, 2013, the date on which the financial statements were available to be issued.

See independent accountants' review report 10



2. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS:

The costs, estimated earnings, and the progress billings on uncompleted contracts were composed of the following: December 31, 2012: Affiliates Others Total

. '


Estimated earnings

Progress billings




earnings on uncompleted contracts

$ 52,134,681

4,430,485

56,565,166

52,348,927

$ 4,216,239

70,189,960

4,971,244

75,161,204

72,876,603

2,284,601

122,324,641

9,401,729

131,726,370

125,225,530

6,500,840

$ 8,885,376

(2,384,536)

$ 6,500,840


December 31, 2011:


Estimated earnings

Progress billings

Affiliates Others Total

$ 38,025,320 71,651,604 109,676,924

$

3,962,238 4,296,148 8,258,386

41,987,558 75,947,752 117,935,310

35,842,163 77,048,336 112,890,499

6,145,395 (1,100,584) 5,044,811





earnings on uncompleted contracts ;

Miller-Valentine Operations, Inc. Notes to the Consolidated Financial State.ments


$ 8,730,520

(3,685,709)

$ 5,044,811

At December 31 , 2011, the remaining contract value on uncompleted contracts was approximately $85,383,636 with an estimated gross margin of approximately $4,099,336.

3. LEASES:

The Company leases office space from an affiliate. The lease term expires December 31, 2027. Rent expense under the lease was $350,347 and $382,025 for the years ending December 31, 2012 and 2011, respectively.

The Company is obligated under operating leases to several affiliates, for different terms, with the last lease expiring September 30, 2019. Rent is allocated to the Company annually based on actual head count. Rental expense under these leases was $2,285,247 and $1,553,038 for the years ending December 31, 2012 and 2011, respectively.

Future estimated minimum lease payments on non-cancellable operating leases are as follows:

2013 $ 1,139,950

2014 1,101,392

2015 1,109,870

2016 1,129,257

2017 1,090,816

Thereafter 2,142,368

$ 7,713,653

The Company has the opportunity to renew some of these leases for ten years under similar terms at its option.




4. NOTES RECEIVABLE AND NOTES PAYABLE WITH AFFILIATES:

At December 31, 2012 and 2011, the Company has notes receivable from affiliates which are due on demand and bear interest at the prime rate (3.25%). Interest income from these notes was $262,880 and $331,490 for the years ending December 31, 2012 and 2011, respectively .

• ol

The Company has notes payable jo affiliates which are due on demand and bear interest at the prime rate (3.25%). Interest expense on these notes was $12,513 and $40,759 for the years ending December 31,2012 and 2011, respectively.

The Company has notes payable to stockholders aggregating $1,311 ,442 and $1,822,861 at December 31, 2012 and 2011, respectively. Notes payable to stockholders are payable in installments of principal plus interest rates ranging from 6.5% to 7.8%. Interest expense on these notes was $123,225 and $166,642 for the years ending December 31, 2012 and 2011, respectively.

Principal amounts for obligations to stockholders at December 31, 2012 mature as follows:

2013

2014

2015

2016

2017

Thereafter


Total long term stockholder notes

$ 511,418

164,816

164,816

164,808

76,396

229,188

1,311,442

511,418

$ 800,024

5. REAL ESTATE MORTGAGE NOTES PAYABLE AND LINES OF CREDIT:

In conjunction with the restructured debt facilities in Note 7 the Company is assisting in the orderly sale of the Lifestyles at Sugar Ridge property. At December 31, 2012 the sale of the entire development is not yet complete. Upon disposition of the remainder lots, the debt obligation of Lifestyles at Sugar Ridge will be deemed by the lender to be fully satisfied. The Company owes $1 I 970,704 and $2,655,577 on this note at December 31 , 2012 and 2011, respectively.

At December 31, 2012 and 2011, the Company had $0 and $640,000 in unsecured operating lines of credit, of which $0 and $124,940 was drawn at December 31, 2012 and 2011, respectively.

6. OTHER NOTES PAYABLE:

The Company has other notes payable totaling $2,171,221 and $2,076,991 at December 31, 2012 and 2011, respectively. Interest on the notes ranged from 6.75% to 7.50% and is payable annually. The notes mature in March 2019.




Principal amounts for other notes payable at December 31, 2012 mature as follows:

2013

2014

2015

2016 2017

Thereafter


Total other long-term obligations

$ 412,539

262,073

238,210

231,973 218,129

808,297

2,171,221

412,539

$ 1,758,682

The total interest incurred was $109,401 and $117,076 as of December 31, 2012 and 2011, respectively, of which all was charged to operations.

7. RESTRUCTURED DEBT FACILITES:

In 2011 the Company, certain of .its subsidiaries and several affiliated companies (the "Restructuring Entities") restructured certain debt agreements with their principal lenders. The restructuring agreements provide for the Restructuring Entities to make principal payments plus interest at rates ranging from 2% to 5% through 2017. The total balance of the debt outstanding attributable to the Restructuring Entities is $19.7 million and $20.9 million at December 31, 2012 and 2011 . The company is co-obligor under the restructuring agreement The Restructuring Entities are in compliance with the terms of the restructuring agreements at December 31, 2012.

The Company is directly responsible for restructured debt facilities in the amount of $12,284,101 and $12,956,114 at December 31, 2012 and 2011, respectively.

Principal amounts for restructured debt facilities at December 31, 2012 mature as follows:

2013

2014

2015 2016 2017

Thereafter


Total other long-term obligations

$ 1,110,858

2,483,948

3,563,062 3,376,260

1,749,973

12,284,101

1,110,858

$11,173,243

The total interest incurred was $260,056 and $285,247 as of December 31 , 2012 and 2011, respectively, of which all was charged to operations.


8. CONTINGENCIES:



The Company, certain subsidiaries and several affiliates, guarantee the debt secured by the real estate owned by the subsidiaries, affiliates, and certain joint ventures in which the subsidiaries and affiliates have ownership interests. The real estate security is a mix of properties fully leased, in the lease up phase, and for sale.

These subsidiaries, affiliates, and joint ventures (collectively "Borrowers") have $12,446,773 and $33,540,380 in secured intermediate loans at December 31, 2012 and 2011, respectively. These loans are primarily with commercial banks with terms of three to five years and carry interest based primarily on the LIBOR.

Certain subsidiaries of the Company have guaranteed the delivery of certain low-income housing tax credit (LIHTC) projects. In connection with these projects, the Company has provided multiple guarantees.

The Company guarantees the funding of certain credit-timing reductions, if incurred. The LIHTC projects generate tax credits to investor partners based upon certain criteria including timely completion of the project and achievement of lease up projections during the first two years. The company guarantees that an agreed upon amount of tax credits will be timely delivered to the investor partner during the first two years. To the extent that the credits are not delivered to the investor partner in the year promised the company would make a payment equivalent to the present value of such tax credits. Tax credit guarantees range from $96,250 to $1,572,218 per project in 2012 and from $210,757 to $1,657,971 per project in 2011. The total amount guaranteed by the Company is $13,703,675 and $10,712,102 as of December 31, 2012 and 2011, respectively. The Company has not been required to make a payment related to the late delivery of tax credits in connection with these projects.

In conjunction with the tax credit projects, the Company guarantees secured construction loans in the amount of $95,217,648 and $71,643,252 at December 31, 2012 and 2011, respectively. Total amounts outstanding in connection with these loans were $46,972,508 and $14,909,876 at December 31, 2012 and 2011, respectively.

The Company has guaranteed the funding of certain tax credit recaptures for certain partnerships, if incurred. There have been no incidents of recapture incurred or funded.

The Company in conjunction with their development agreements for Low Income Housing Tax Credit partnerships, has committed to advance operating funds when the partnership cannot cash flow operations. The advances are expected to be repaid out of excess funds throughout the life of the property partnership. To the extent that such amounts are still outstanding at the end of the partnership period, the advances could be repaid out of sale or re-syndication of the property. During the recent economic downturn, certain partnerships were and will be unable to repay the funds advanced and to the extent that those notes are uncollectible a charge to earnings of $2,534,240 has been taken. The company expects to recover all other amounts advanced.

The Company provides a completion guarantee on projects in process. Total amount of projects in process are $61,938,527, of which $23,137,965 of work has been put in place at December 31,2012, leaving $38,800,562 remaining.




In conjunction with a military housing project, the Comp?JnY has jointly and severally guaranteed one year of principal and interest on the permanent loans in the amount of $5,485,431 as of December 31, 2012 and 2011. There have been no payments or advances associated with these guarantees.

The Company is indemnitor on .seyeral Performance Bonds on construction projects totaling $14,789,510 and $36,176,710 as of December,31, 2012 and 2011, respectively.


I!WIIrollll1 MY'-IIDii:ll !W!all! .. lB. lB. Alldl CWTcniUSdS

ea.h.., ash cquinlcols 26,405 15,857,461 131,741 Aftiliatc!WIVIDCCS 1,022,5n 2,351,229 -..... -Allllialcs 10,649,115 3,042,076

Otbcr 2,757 12,844 Acanaall n:a:ivablc

Alllliata 965 Otbcr 176 63,056 Tu:crc4stJ1f011Cf1YodviiOCCI·~eosts

Due OD <D1Irods Trdo 3,760,166 AllilioW 87,510 Rdaioqe 426,950

Colts_,-.,. ........ IDcwssof'""""'oa ~ooalnldl 4.243,421 "'-·fot .... produ<t . raida>llol

111.-o.y.for aole • Turuby Projcd Prcpoldcxpcme 179,704 Pre<ooiJJd C:OIIJ 212,164 Prc-dcvdopmcat eostJ

Otbcr...-axu 2005 422657

TGial""""'useu 11,700,167 30~94~13 214,641

Propc:ny .., equipmclot 1..aod Fumilun:aodfuduta 917,575 96,821

Lcasdoold ·-

514,699 Tmcks,- aod cqulpcacot 675,157

ToColpn>penyaod .......... 2,171,131 96,121 Less: A<cunoulolod ............ (1,102,737! ~.121l

Nclpovpenyaod~ 375~94

Otbcr ...... -iDopcnilioajolot- 2119,295 -ior<O!at.olcjoiot- 41,792 IDYc:sbslalt in subsidiaries 19,103,127 ~r... Tac:rodilprapcrtyodnoca-_.m.c OoochriU ,. openotiDg tOtity,"" of -of$671,393 Otbcr- 146,416 Q!!ll

ToColoth..-axu 19,103,127 355,711 41,529

ToCoiiiSICis 301103.!!! 31~2S14U 256,177

MilkrValaltloc Opt"ndolu, lac.& SubsidlaritS Ce010114111Dc Sla......,b of Aum, UobUitla aood Stockllold<n' Bqoolty-Ftd..-.1 lat0.,. Tu Buis

Asofl>ttaoba-31,2011

M!Bal!lmlillfm• ~ l!ml ~ M!c:' anurdal I!IY Ml!lllli ... IBS. C~fM. la~LI& D llouw.tJ..I,&; D k: •u•Jd&: &ai<!J.lol&

541,699 2,973,341 132 38,061 3,213 611 3,015,311

493 17,500

14,11'1 24,473 122,136 ISS 660,875

1,925,217

s.an,9l2

1,739,112

4,641,955 3,432,528

135,617

651;!79 7;!38 1$ 413

3,794209 150359,942 136,674 6,739,433 10~21 681

41,024 41.095 34,330 l2,nl SIO,I9S

512,329 21,519 82,061

62,614 116,391 93,749 1,092,524 (62,11'1! (116~91} jl2,!ID !221,176!

495 41,024 871,348

(33,480) (526,664)

193,671 1,540.246

461,7011 ~75 6,052 3,050 161 1,000

~l7l ~7421l 1,679,011 161 1,000

31794j704 u~ss11 109~46 114591~61 10,682 173,029

M! I! h!m!l ~ ~ Ml Wid£ IIDIIoLIJ& lislll..lll..ld

I,SII .30.969 1411.-415

(10,191)

IS2,500

30,969 ll4,0a& 138294

69~38

69,531

!69,531J

30,969 154,011 131~

MY

Il!l..!is.!l..l O,en .... t.c.

~ - ~

37,751 19,646,157 348,290 (6,993,926)

(3,791,304) 9,893,450 22,910

39,627 147,098

1,915.217

9,599,1191 87,510

2,166,062

I,BI5,376 3,432,528

135,687 179,704 212,164 811,017 577 075

316,041 (I0,7~Dl 59,167,750

41.024 l ,n2,741 1,1197,028

849,045

3,709,845

~,421~14l

12BIJ6!

2119.295 (lli,3S2)

(19,103,127) 193,671

1,540,246

468,701 205427 364,411

205,427 !19,103,82!) 2~1,056

S91,468 la9119610!!} 61('111.1067

Soo----17

MUkr V1lmllae Opend-la<.l< S•bsklllrlcs ConselidaW. Statanc:ats .r Assds, UabHttia •011 St.ckhWrn' Kquity~F~rall.c.JH Tn Balls

As ofDta.berll, 1011

~ Ml!t~ .I!IY.&I!I1 MY BuiUI!IIIltu ~ I!IYl! ~ ,M!C'••-rftll J!ll! las. II<. lor. M-• ar1111 ~!!l!lll:dial!zs. J If taU& o,.,•-••11&: Dln1aaiNIIJI,Jd; -..w;

U.lollldcs .... _ ... .,...aty

Cbnadlilbiliucs Rcol.-.... _ ..... poyl!lle 1,970,7~

1.a1e or c:ralit-Tumlcey ProJect 153,502 Nooal'l)'lli>le

Alfitillcs 4,296,820 Olbcr 211,449 17,026 R.....-..!clebtfKililico 930,158 9,511 171,112 Stockloold" 422,991 ll.S95 5,125

AccounU Poyoble Traclc 12,464,561 2,500 5,084,517 5,647 Aftililtcs 11,147 ~ 2,188,093 2,251,670 Olbcr 611033 24 -- 861,511 2,223,799 1,556,503 1,546,113

A=uod""''loY<cCOIIIJ>'IIIIIioiUidochcr"'JJ"'SCS 267,329 1,217,111 22,175 230,638 1,304 2,523 2,267 [lq>osiiJ 7,924 BitliDp io a cas of cosbl_. atimatcd earDiap oa

IIIICOI11plclod"""""'s 119702 264134

Tolllcunaoliabilitics 1,131,934 11,117,531 30,500 75,957 1,693,310 1,032,942 1,496,970 1,559,026 1,.S41,ll0

Lon& ...... liabilities N-Pay.Wc

Aftltiolcs 1,133 Olbcr 1,654,093 64,601 llcstnlcOirulclebt ficli<ia 10,517,791 94,635 560,110 Stoc:llbolckr SJ4,m 247,771 17,474

Olbcrlo ... -lilbilitlc:s 402 33

ToWJont-to:nnlioiJilitics 1;706,663 415,154 17,474 560,810 4~33

Tallllilllililic:s 14,531,597 19,233,315 47,974 75,957 1,693,310 I,S9307Sl 1,199,303 10559,026 1,!141,310

Stoclcboldcd equity (ddicit) c-JIOck,ooparwlue, 76,213 olwainuoc!IUid"""'""""'a 219,lll 4,607 sao sao

Aclclitiooolpaid.;.copilal 9,473,327 5,791,750 '"·as• 1,000,000 6,434,141 R<lliDalcanUocs (ddicit) 6,792,070 6,011,~2 (646J62l 3,711J47 5,66107VI QB4,llJ!l (6,173,2!3) (1,541~) !675~51)

TotaliODCI<boldcn'oquity 16~5~97 12,092,103 201~ 3,711,747 6,M9J07 QB4,S06) !439,835) !l~l~l !675.;!51)

ToWHaloi!iOosoad I10Ckholdcn'oquity 30,103,994 31,32.1,411 256,177 3179417~ 15~17 1091246 •,459,461 101fil2 873.029

Ml:DPnMI'h ~ ~ Ma111:11m!U&: ~ lis!!.llli!l!l

153,000

341,290 10,492

153,000 351,712

ISJ,OOO 351,711

1,sao 30,969 !412) {B!1,4111) 30,969 1,011 !220,481)

30,969 tS4.08B 131~94

MY llll!isa.IWI ~ ..... .III!!Uil!a ~ .!dmoliUid

1,970,7~

153,502

(3,798,304) 491,516 31,0154 412,539

1,110,151 511,411

17,557,296 11,147

5,139,763 61,057

457,640 (6,993,926) 10,746 1,772,192

7,924

14536

499,450 (10,792,230) 32,305,552

1,123 39,911 1,751,612

11,173,243 100,024 402 33

39,911 14,143,ll5

539,431 (10,792,230) 4M41,667

(224,911) 35,433 (14,ll2,619) 9,473,.)27 16,604 !4,766J20) 6,7'!b,073 5~037 0 9,103,127) 16,265,400

5911461 sa9•896•0"! 6l?t4.067

s..~---18

MiUer·VAkattne Opcnticmt..lac. aad SDbsldinia Consolkbtrd Statcmrats of Rcnaues aDd Expenses · Federal bacomr Tu Basis

Year Ended D<wnbu 31,l012

MV

MJl.2omJiw Ml:tudtl'tilll MltJiultt M,YIInidlntfi!Jfr!t~ l![!~at!!l MY!! ~ MVC!!!MfTdtl ~ ~HtBilU!J MYAffB!Ialtk rz8k!::VIll:aii!S n.Jim.JigJ O.U•••a.Iac.. w. w. w. Mwmnr;pt:IK, C!!drutia!IK l~atmtpts LLC Dml!!!!t!!!l LLCDrydrut!nt LLC Smka..LLC M•n!!P!rnt U& - CmBE(jrna iii!J1.!d:ul ililliulillll ~

Revenues Construction revenues earned

AffililllcS 11.457.1~ 59,862,407 71,319,541 Otbu 76,128,254 3,512,039 79,640,293

For sale pn>duc:t. residcotial 159.000 759,000 For sale p<oclud o commemai 652.450 652.450 Lease and sales commissions 1,599,175 20,400 383.870 2,004,145 Pmpel1y IIWI"'I"ment fees

AflilialeS 3,576,01 I 84,400 3,660.411 Otbet 213,292 945,781 11.521 246.176 1,416,770

Ot:Y<Iopment fees Affiliates 3,674,935 3,674,935 Other 162.172 100,000 262.172

Coosullillc..-nc 198,721 191,721 Other fees

Affiliates 1,413,053 421,310 1,841.363 Otbu 336,445 171,117 144~75 555,050 1,907,617

Total re'I'CDUcs 17,515,318 1,813,167 6,291,690 63,374.446 652.450 5.024,417 298,721 171,117 95,921 774,421 555,050 167,337,488

Cast ond expeases Cost of c-.uctioa

Labor 7,310,463 1,272,090 8,652,553 Malerial 5,867,953 8,190,841 14,058,794 Subc:onlrlcl 59,]27,206 4l,Ol0,716 I 00,347.992 l!quipmeot rental 1,485,009 1,485,009 Other 3,376,909 694,153 5,414,113 2,534,240 195,000 6,455 12,220,940 Deprecialiott 70,892 70,892 For sale prodact expenses o rosidea<lal 1,330,491 1,330.491 For sale p<oduct o:xpc:~~S<S oCOIIIIII<ICial 1,253,833 1,253,833

Total casu 111<1 .,._ nJ!!8.432 694.153 551197,900 1~53,833 3,164,731 195,000 6,455 139,420,504

Gn>SS p<Ofit 10,076,956 1,119,014 6,291,690 7,476,546 (601,383) 1,159,616 298,721 171.117 95,921 579,421 548,595 27.916.984

AdmininstrlliY< 111<1 general expenses 356J!!3 4,420~68 116,497 4,121,856 1.473,516 55.571 4.nl,l79 1,012,739 ~050,476 61J!!!! 412 697,423 565,245 21~49.261

Openlliac p<afit (loss) (356,503) 5,656,681 232,517 1,469,134 6,002,960 (656,954) (3,611,493) (784,018) (1.178,659) 28.415 (412) (118,002) (16.650) 6,667,723

Other inc:omc (apeaoe)

Goinl{loss) fAJnljaint......,.. 8,008 6,842 (22,212) 55.499 41.137 IDcame fium subsidiaries" 1,004.841 (8,004,841) Gain on sale of asets 14,000 242.971 472 257,443 lntaest income ~7.492 26,703 60 129,625 (32,303) 411.Sn lntemtr:xpase (202.041) (5.720) (26,367) (17,100) (388) (2.442) (254,765) lnten:st- 0 afliliate (224.835) (29,570) (2,042) (26,397) 32,303 (250,541) Dep=iatioa 111<1 IUliOitization (496) (2,594) (91.282) (136,637) {231.009) Gain 011 CIIDI:dlllian af debt 452,020 452,020 Other income (apense) 374,712 110,661 !529) (!6,951! 199 401,162

Total ather intome and (expeas 7,225~50 374.203 115221 !I.~ 14,000 400,847 215.665 199 (136.165) (31!) Q,442) (8,004,641! 901,024

Net iDalme (loss) s 7,568,147 6t030t891 ~!.031 114681809 6,016~ ~S6,10:!J Q.395,121j !;283,119! ,.~t4,124l 21t41S !412! p1at1901 !19,092! ~·10041641l 7.568.747

Miller Valeatiae Operatioas,lac. & Sublidiaries Coosolidatiag St.tcmeots of A.JHts, Uabilities aad Stockholders' Eq•ity-Fnlerallncomt Tax Buls

As o£Deccmbrr 31,2011 MV

M~OI!so!i!!BJ MVCot~lt!:!!£!1!! MY.I!Wll M V Bn&lmUal Pree; MVB!z!.mtbl .MYQ M:VRgiBJiial MV S:•!D!!!!sl!ll MY MV~&fllJJ:In o....-,, ~oc.

!!!!. Ius. Ius. M•l!!lmua!•~& fdmtms:titl (!1£ ll!a!Z!Isat! t I&; !!s!dll!l!!f!ll JJ.I; iln'elonm"'IJ,L!: ~ Mag!amc!rL~ ~ ~ Assets Cum:ntll$!c:ts

Cash rmd cash equivaleuts 1,908 13,184,821 76,344 511,043 1,830,449 2,041 13,091 3,299 698 15,623,699 Affiliate advmrzs 2,550,200 2,091,801 373,674 2,554 (5,018,229) NoteS ra:civoble

Affiliates 14,798,124 131,977 25,696 124,940 (922,311) 14,158,426 Otbcr 7,354 11,964 19,31&

Aa:oUDts r=ivablc Af!ilialcs 38.500 44,638 430 15,201 10,739 9,248 (76,606) 42,200 Otbcr 10,000 151,241 137,349 855 362,115 661,560 Tax ctedit property advances - development cnsts l,J15,490 1,115,490

Due 011 cootncts Tr11de 5,160,321 2,013,090 7,173,411 Alf"dillts 19,304 19,304 Retainage 1,293,929 916,442 2,210,371

Costs aad cstimllled tunings in excess of billings on uncompleled CODiniCts 2,546,056 6,184,464 8,730,520

ID\'CIIto<y-for sale product - rcsukulial 4,605,036 4,605,036 ID\'CII!.O<y-for nJe product- COIIUIIacial 1,205,451 1,205,451 bniCntory-fur sale - Tumkq Projm 3,000,000 3,000,000 Prq>oid CXJlCIISC 71,777 71,777 Pn:-amtratt to5ts 455,195 455,195 Pn:-developmcnt costs 691,066 691,066 Otbcr cum:nt assets 67.235 161 67 96

Toll! cum:nt wets 14,838,532 25,475,622 239,979 2,765,894 11,026,881 4,208,347 6,911,738 14,199 383,620 2,554 !6.017,146) 59,850,220

Property and equipmcut Lmd 41,024 41,024 FUI'IIJI!m and fixlures 917,575 96,828 41,095 34,330 120,255 369,224 1,579,307 l.castbold unpruvements 584,699 584,699 Trudcs, autos 1111d equipmcut 541~84 21,589 110,681 673,854

Toll! property aod cquipmc:nt 2,043,858 96,828 62,684 145,011 161,279 369,224 2,878,884 Less: AcciDIIullltd depn:cialion !1,731,84~ !96,828) !61,693) !145,011) !111,81:1) !87,010) Q,234,20S)

Net property aad equipment 31~012 991 49,462 282,214 644,679

Otbcrmcts Nola receivable- afflliala 2,977,042 10,675 (2,977 ,042) 10,675 Investment in optrlllingjoint ventures 205,557 205,557 IDvestment in real estate joint ventures 34,950 (17,749) (559,916) (542,715) lnvtstmeo1 in subsidiaries 16,041,610 (16,041,610) Devdopmcnt fees 207,820 207,820 Tax ar:dit property advana:s-op<:rlllig 3,830,128 3,830,128 Goodwill in openrting eulity, Dt:t of aroortization

of$595,386 544,715 544,715 Othcrii$!CIS 151,704 127 5.290 8,645 3,050 95,640 I 000 265,456

Toll! other assets 16.041.610 3,334,303 35,077 10,675 5.290 !9,104) 4,025,797 95,640 1,000 (19,018,652) 4,521,636

Toll! assets s 30,880,142 29,121,937 275,056 2.777,560 11,032,171 4,199,243 10,986,997 109,839 666,134 21554 (25.035,791) 65,016,535

See ~ent"""""""'nls review report 20

Miller Valentine Opcratiom, Inc. & Subsidiaries Coasolidallng Statements of Assets, UabiUtles and Stockholders' Equity-Federal Income Tax Basis

As of December 31, 2011

M!QHati:IIJ MVtm!IBs:tiH l!1Y.I!al!I ~ Bralllod!l ti:!P.J MYBS!Islmlll! .MYQ M!Ba:ldmtf!l .IH. w. .!J!s. M!!~C!M!t IH: C!!!JI!]!11leftl5: ["•a!!!!mlt ld.& P:!!d!l!!!lm! J,.LC

Uablllliu and stockholders' equity

Curr<Dlliabililies RaJ estate mortgage no1<s payable .$ 916,376 2,655,577 Line of credit 124,940 Line of c:rt:dit- tuJnkey proJect 3,017,815 Notes Payable

Affiliates 4,177,075 Other 211,449 Rcstructurcd debt facilities 456,956 4,796 54,100 Stockholder 422,998 82,595 5,825

Acanmts Payable Trade 12,603,201 55,632 5,374,180 9,030 Armia~os 28,198 65,345 Rdl:ntion 3,496,297 1,192,597 Other 18,087 23

Affiliate adllliDCCS 1,754,974 292,206 2,096,704 Acaued employee compensation 111d other expenses 117,076 370,868 97,128 47,400 Billings in excess of c:os1s and estimated caruings nn

unromplclcd conlracts 3,639 708 46,001

Total cuneut liabilities 2,963,453 20,225,663 158,585 18,087 6,952,3&4 3,988,314 9,128,671

Long-tam liabilities Notes Payable Affi)j~ 8,833 Olbcr 1,865,542 Rtstnlcturcd debt facilities 11,447,951 104,223 188,088 Stockholder 957,171 330,373 23,299 Other long-term liabilities 402 33

Totallong·tamliabilitics 14,271~64 443,429 23,299 888,088 402,333

Total liabilities 17,234,717 20,669,092 181,884 18,087 6,952,384 4,876,402 9,531,004

Stockholders' equity (defK:il) CDIDIIIOII slack, no par value, 73,164 shares issued

and outstanding 219,311 4,607 500 500 Additional paid-in capital 9,473,327 5,791,750 849,858 6,434,141 RCUiiDed earnings (deficit) 4,172,098 2,441,7&4 Q61~93) 2.758,973 4,079,287 (677,159) {4,978,15~

Total stockholdcn' equity (defK:it) 13,645,425 8,452,&45 93,172 2,759,473 4,079,787 !677,159) 1,455,993

Total liabilities 111d slockholdcrs' equity s 30,810,142 29,121,937 2751056 2,777,560 11,032,171 4,199.243 101986.997

MY~•"'!!tt!Si!' .MY MV~_5Praes:r:!X

l!adll!l!lll!l LL~ ~ MIAII:li!ID!! ld.&

874,345 20 27,361

874,365 27,361

&74,365 27,361

!764~26) 639,473 2,554 !764,526) 639,473 ~554

109,&39 666,834 ~554

MY Opuallom, lac.

E1l.mll!!liuJ ~

3,571,953 124,940

3,017,&15

(3,899,353) 217,722 211,449 515,852 511,418

18,042,043 (76,606) 16,937

4,688,894 11,110

(5,018,229) 659,853

J 685 709

(8,994,188) 35,342,695

8,833 1,865,542

12,440,262 1,311,443

4 333

16,028,413

(8,994,188) 51,371,108

(224,918) (13,075,756) 9,473,327 !2,740,93~ 4,17~100

!16,041,610) 13,645,427

F5.035,79Bl 65,016,535

See Independent aa::ounlanb review report 21

MUier .. VaJeatiae Oprratloas,IIK'.. and Subsidiaries Coasolidaled Sblenx•ts of Rn't:llua •ad E.spe~- Federall•come Tax Basis

y..,, Eadcd Dn:tDiber 31,2011

MV MY 2!!1:!1!!!! ~~Jt!:!§jJ:!a ~ MY Ru!dr.ll!l !!!I! (!!VRgbk!t!l!l ml! MY Balikalitl M!Cmmr:sill mlliW MY 8 fr:mttt: Openl'--.lac.

!!<. l!!s. 1115. M!lllmmllas. CeMtnKtii!ID:s. leSI!I!lt!ISILIJ:: l!edn!!I!!!LI& l!m:!!li!!!!!llld& :lm!sll.ld.!: Mll!lll!!l!!lLI& EHn~l.,.lleM ~ Revenues

Construction rcvc:nues earned Affiliotcs s 4,489,865 26,145,438 30,635,303 Other 70,855,613 1,507,180 72,363,493

FO< sale product - rcsidentilll 80,000 80,000 For sole product- commercial 523,639 523,639 1..cox aod Ales eommislion1 - 1,366,916 73,200 1,440,116 Propeny management fees

Affiliat= 330,278 3,692,600 73,380 4,096,258 Other 744,467 7,887 752,354

O...lopment fees Alliliates 2,901,259 2,901,259 Other 40,690 490,000 530,690

Consultin& income: 325,031 325,031 Other fees

Alliliates 1,123,974 60,000 1,183,974 Other 218,007 84,491 809,777 1,112~75

Total~oues 75,345,478 1,697,194 5,852,241 27,653,318 523,639 3,166,440 815,031 809,777 11,267 IIS,944,392

Cost aod expenses Cost of c:onstnx:tion

LaiJor 6,434,367 1,251,056 7,685,423 Material 4,658,900 4,436,823 9,095,723 Subcontract 52,221,217 16,754,231 61,912,511 Equipment rcnllll 996,571 996,571 Other 3,330,692 725,860 75 2,735,469 6,792,096 Depreciation 50,937 50,937 For sale product ""penses - residential 202,042 202,042 For sak: product cxpenses- commcn:ial 793 20 793 20

Total costs aod ""pcnses 67,699,754 725,860 75 25,177,!!9 793,320 21)1042 94,591,630

Gross profit 7,645,724 971,334 5,852,173 2,475,739 (269,681) 2,964,398 115,031 809,777 81,267 21,345,762

Admioinslnlive aod teneral ~ 457,198 3,371,937 826J78 4,495,017 1,420,770 103,735 3,681~70 797,177 424,716 71,713 15,657,681

~ profrt(loss) (457,191) 4,273,717 144,956 1,357,086 1,054,969 (373,416) (716,872) 17,154 385,061 2,554 5,688,081

Other income (expense) Goinllloss) from joint vemurcs 472 3,401 (205,578) (201,698) lococnc: fiom subsidiaries 6,516,146 (6,586,146) Gain on sale ofjoialventurc 677,894 677,194 Gain on sole of wets 11,172 31,593 42,765 lnltrcstiacomo 333,468 40,992 75 1,722 96,816 (75,334) 397,109 lntvcstexpc:nse (153,207) (36,134) (134,130) (3,307) (327,478) lmorestoxporsse- alliliate (245,838) (36,002) (2,495) (75,334) 75,334 (214,335) ll:prcc:wion aod 11110rtizalion (1,097) (540) (2,594) (98,042) (61,329) (170,602) Other UlCOIDC (expense) 142,956 112,043 !344) !13,719) 240,936

Total other income aod (expense) 6220.569 122,756 113,031 {1,441) 1,112 {136,724) 410J93 {68J29l !6286,14~ 375,291

Net income (lou) 6,063~71 4,396~3 257t987 lt35S1645 1,056tl51 !510,140! Q06,472j 17,154 316t732 ~554 !6~16,14~ 6t063~72

Attachment G- Tax Credit Investor Information

RAYMONDJAMFS(I)

February 10,2014

Mr. Anthony Ceroy MV Residential Development, LLC 9349 WaterStone Boulevard Cincinnati, OH 45249

Re: Partnership: Property Name: City/State:

To be determined Pine Lake Pine Lake, Georgia

Dear Mr. Ceroy:

This letter will confirm our agreement ("Agreement") whereby Raymond James Tax Credit Funds, Inc. ("RJTCF") shall attempt to effect a closing ("Closing") of an investment by a Fund sponsored by RJTCF (the "RJTCF Fund") in the above named partnership ("Partnership") on the assumptions, terms, and conditions contained in this letter, or such other assumptions, terms and conditions as are acceptable to you, RJTCF and the RJTCF Fund.

CURRENT ASSUMPTIONS:

I. DESCRIPTION OF THE PROJECT AND THE INVESTMENT.

A. Project:

I. New Construction 2. Units: 96. 3. Estimated Construction Start Date: June 2014. 4. Estimated Construction Completion Date: June 2015. 5. Estimated 100% Occupancy Date: August 2015. 6. Set-aside Requirements: Nineteen (19) units rented to persons at 50% or less of

area median income and the remaining seventy-seven (77) units shall be rented to persons at 60% or less of area median income.

7. Rental Assistance: N/A. 8. Management:

a. Company: MV Residential Property Management, Inc. b. Management Fee: 6.0% of Effective Gross Income.

9. General Contractor: MV Residential Construction, Inc. 10. Additional Commitments:

a. Facilities: To be determined. b. Services: To be determined. c. Tenant Population: Family.

B. Tax Credit Information:

l. Reserved or Allocated Credits: $432,105. 2. RJTCF Fund's Share of Partnership Annual Credits: 99.99%

Raymond James Tax Credit Funds, Inc. A Subsidiary of Raymond James Financial, Inc.

880 Carillon Parkway • St. Petersburg, FL 33716 800-438-8088 Toll Free • 727-567-8455 Fax

Visit our Web Site at www.RJTCF.com

3. Estimated RJTCF Fund Annual Federal Credits: $432,062. 4. Estimated RJTCF Total Credits: $4,320,620. 5. Applicable Fraction: 100%. 6. Applicable Percentage: 3.26%. 7. First Credit Year: 2015. 8. Estimated RJTCF Fund Annual State Credits: $432,062 9. Estimated RJTCF Fund Total State Credits: $4,320,620.

C. Equity Investment:

1. Estimated $0.93 per dollar of the RJTCF Fund Total Credits ("Credit Price") and estimated $0.38 per dollar of the RJTCF Fund's State Credits, subject to market conditions and availability of funds.

2. Estimated RJTCF Fund Total Capital: $5,660,013. Note that actual contributions are based on actual credits delivered. If actual RJTCF Fund Total Credits are less than the estimated amount, RJTCF Fund Total Capital will be reduced by the shortfall times the Credit Price. The foregoing adjuster will apply if actual credits are less than the estimate for any reason, including without limitation the failure of the Project to qualify for an applicable percentage of 9% because it is placed in service after December 30, 2013. If actual RJTCF Fund Total Credits are greater than the estimated amount ("Excess Credits"), then the RJTCF Fund Total Capital will be increased by an amount equal to the Excess Credits times the Credit Price, but RJTCF Fund Total Capital shall not exceed 105% of the Estimated RJTCF Fund Total Capital except as provided below. The RJTCF Fund will specify the terms, if any, under which it will purchase any Excess Credits attributable to an additional reservation of Credits, and/or those that would otherwise cause capital contributions to exceed 105% of the Estimated Total Capital. If those terms provide for a credit price less than the Credit Price, the General Partners can accept or reject those terms. Any Excess Credits that the RJTCF Fund is unwilling to buy or that the General Partners are unwilling to sell at the price specified by the RJTCF Fund shall be allocated to the General Partners.

3. Installment Payment of Estimated RJTCF Fund Total Capital: a. $1,132,003 (20%) at Closing, of which $50,000 shall be paid directly to

RJTCF in payment of its due diligence fee b. $3,396,008 (60%) at Construction Completion c. $1,132,002 (20%) at Stabilized Operations ("Stabilization Capital

Contribution"), of which $100,000 may be held back and paid when all required tax filing information and Forms 8609 are received and audited financials for the year of Breakeven Operations are available.

All payments will be subject to various deliveries required by the RJTCF Fund as described in the definitive documents, including without limitation, updates of representations and warranties previously given to the RJTCF Fund.

"Stabilized Operations" means the date upon which all of the following events have occurred: (i) final completion of the Project and final closing of all permanent financing, and (ii) Rent must be not less than $64,490 in each month of Stabilized Operation based on rental rates that, assuming one hundred percent

2

(1 00%) occupancy, would achieve a monthly rental income of $69,345, and (iii) for each of three (3) consecutive months (the last of which must end after or concurrently with Final Closing), the lesser of: (a) actual Net Operating Income, or (b) Net Operating Income detem1ined as if"Rent" equaled 93% of the rent that would be due and payable if the Project attained 100% occupancy based on rental rates then being charged for the Project (each as determined by the Accountants and approved by RJTCF) is at least equal to 120% ofthe Partnership's Must-pay Debt Service. Achievement of Stabilized Operations shall be certified by the Accountants and shall be subject to the review and approval ofRJTCF.

4. Timing Adjusters: The capital contribution ofthe RJTCF Fund shall be reduced by 70% of

the shortfall between the Credits actually delivered and the Credits estimated to be delivered in 2015 and 2016. Currently, it is estimated that the Partnership will deliver (i) $324,078 of Federal and State Credits in 2015 and (ii) $432, I 05 of Federal and State Credits in 2016. The capital contribution of the RJTCF Fund shall be adjusted if and to the extent that the RJTCF Fund is admitted after Credits have begun to run.

In the event that the actual Credits with respect to the first Credit Year are more than the Credits projected for such years, then the capital contribution of the RJTCF Fund to the Partnership shall be increased by an amount (the "Upward Timing Adjustment") equal to 30% of such excess; provided, that any such increase is subject to the overall limitation that RJTCF Fund Total Capital cannot exceed I 05% of estimated RJTCF Total Capital without RJTCF Fund consent. The Upward Timing Adjustment shall be made and applied to increase the Stabilization Capital Contribution. It is understood and agreed that the Upward Timing Adjustment is intended to address any acceleration in the delivery of the first [or second] year of the Credit Period from the projected Credit amounts during such year where the total projected Credits for the entire Credit Period is not affected and that the Upward Timing Adjustment may be decreased if the RJTCF Fund determines in the exercise of its sole and absolute discretion that a smaller Upward Timing Adjustment must be paid in order to maintain the expected return on investment of its investors.

D. Allocation of Distributions:

I. Asset Management Fee: The RJTCF Fund shall receive an annual asset management fee of $3,300, increasing at 3% per year prior to any cash distributions. The Asset Management Fee shall begin once the Project has been placed in service and shall be prorated for the year that the Project is placed in service. The fee shall be cumulative to the extent unpaid in any year and shall be payable from sale proceeds of the property to the extent not previously paid. The fee must be paid in order for the Partnership to remain Current; thus, if cash flow is not sufficient to pay the fee, it shall be paid from available reserves or from loans made by the General Partner or Guarantors under the Operating Deficit Guaranty.

2. Cash From Operations: Cash available to be distributed after paying Partnership expenses (including the Asset Management Fee), funding the Replacement

3

Reserve, and maintaining working capital reserves. Cash From Operations shall be allocated in the following order:

a. To the RJTCF Fund to the extent of any amounts owed, including amounts to be paid under Tax Credit Guaranty;

b. To pay any accrued but unpaid Asset Management Fee; c. To replenish the Operating Reserve if the balance therein is less than the

Operating Reserve Minimum; d. To the Developer to pay any unpaid Deferred Development Fee; e. To the General Partners or Guarantors to repay any loans due under the

Operating Deficit Guaranty; f. 90% to the General Partners as an incentive management fee; g. The balance 0.01% to the General Partners, and 99.99% to the RJTCF

Fund.

In all events, the RJTCF Fund must receive at least I 0% of the amount available for distributions to partners and payment of incentive management fees to the General Partners.

3. Cash From Sale or Refinancing: Proceeds available after paying all debts and liabilities and establishing any required reserves shall be allocated in accordance with capital accounts, in the following order:

a. To the RJTCF Fund to the extent of any amounts owed, including unpaid amounts under Tax Credit Guaranty;

b. To pay any accrued but unpaid Asset Management Fee; c. To the Developer to pay any unpaid Deferred Development Fee; d. To the General Partners or Guarantors to repay any loans due under the

Operating Deficit Guaranty; e. The balance, 90% to the General Partners and I 0% to the RJTCF Fund

The distribution of Cash From Sale or Refinancing shall be subject to the requirement of the Internal Revenue Code that liquidating distributions be made in accordance with capital accounts.

E. Allocations of Profits and Losses:

1. Operating Profits and Losses: 99.99% RJTCF Fund; 0.01 % General Partner. 2. Credits and Depreciation: 99.99% RJTCF Fund; 0.01 % General Partner. 3. State Tax Credits: 99.99% RJTCF Fund; 0.0 I% General Partner. 4. Gain or Loss on Sale: So as to bring the capital accounts into the ratios that will

allow Proceeds of Sale to be distributed 90% to the General Partners and I 0% to the RJTCF Fund, to the extent possible given the requirements of the Internal Revenue Code and the Treasury Regulations.

5. Operating Income and Losses Prior to Credit Delivery: At the discretion of the RJTCF Fund, Operating Income and Losses attributable to the period prior to the start of Credit delivery may be specially allocated to the General Partners.

F. Developer and Development Fee:

1. Developer: MV Residential Development, LLC

4

2. Estimated Development Fee: $1,856,399. 3. Development Fee payment schedule shall be determined prior to Closing.

If necessary, part of the development fee, not to exceed $800,000, will be deferred beyond the date of the RJTCF Fund's final capital contribution installment, with interest at 5.00% per annum, and shall be paid in accordance with the terms of allocations of Cash From Operations and Cash from Sale or Refinancing or, if not paid within 12 years after placed-in-service date, from General Partners' capital as described below. Any development fee that cannot be paid by the time of the final capital contribution of the RJTCF Fund or deferred in accordance with the foregoing limitation shall be paid as an excess cost under the Completion Guaranty. It is currently estimated that there will be a deferred development fee in the amount of$672,379.

4. Development Fee shall be pledged to secure the obligations of the General Partner and the Guarantors.

5. If the Development Fee is fully paid (no deferred development fee), but there are excess sources of funds, such funds shall be contributed to the Operating Reserve and increase the amount of the Operating Reserve above the amount otherwise required hereunder. To the extent the balance in the Operating Reserve exceeds the amount otherwise required hereunder at the end of the Operating Deficit Period, such excess shall be released from the reserve and distributed as Cash From Operations.

G. Reserves:

I. Replacement Reserve: $26,400 per year ($275 per unit) beginning at the earlier of six months after completion of construction or the first month of Stabilized Operations, increased by 3% per year thereafter. In the aggregate, no more than $10,000 will be withdrawn from the Replacement Reserve in any calendar year without the approval of the RJTCF Fund.

2. Lease-up Reserve: $116,000, to be funded prior to Completion. The Lease-up Reserve shall be used to fund operating deficits prior to the Stabilization Capital Contribution. To the extent that funds remain in the Lease-Up Reserve after such contribution, these funds will be transferred to the Operating Reserve to meet the Operating Reserve Requirement and shall be held therein. If such transfer would cause the amount of the Operating Reserve to be greater than the amount otherwise required hereunder to be held in the Operating Reserve, then such excess amount may be used instead to pay deferred Development Fee (except to the extent that the Agency requires a minimum deferred Development Fee or there is no deferred Development Fee, in which case such amount shall remain in the Operating Reserve). To the extent the balance in the Operating Reserve exceeds the amount otherwise required hereunder at the end of the Operating Deficit Period, such excess shall be released from the reserve and distributed as Cash From Operations.

3. Operating Reserve: $357,725, to be funded into the operating reserve account (the "Operating Reserve Account") at the time of the funding of the Stabilization Capital Contribution. Such Operating Reserve Account shall be maintained for the duration of the Compliance Period (after which, funds on deposit may be released and distributed as Net Cash Flow) and shall be used exclusively to pay for Operating Deficits incurred by the Partnership after the date of the Stabilization Capital Contribution; provided however, that all withdrawals from

5

the Operating Reserve Account that would cause aggregate draws in any one fiscal year to exceed $I 0,000 shall be made only with the Consent of the RJTCF Fund, which shall not be unreasonably withheld, delayed or conditioned. Operating Deficits shall be funded from the Operating Reserve and under the Operating Deficit Guaranty; provided, that, notwithstanding anything to the contrary contained herein, the Operating Reserve Account may not be drawn down below $I 75,000 ("the Operating Reserve Minimum") unless the General Partners have fully funded their obligations under the Operating Deficit Guaranty. Operating Deficits shall be funded 100% from the Operating Reserve once the General Partners have fully funded their obligations under the Operating Deficit Guaranty. Should the balance in the Operating Reserve Account fall below the Operating Reserve Minimum, Net Cash Flow on each Payment Date will be deposited in the Operating Reserve Account to maintain such minimum balance.

4. All reserves shall be established with a lending institution acceptable to the RJTCF Fund and shall be subject to withdrawal limitations determined by the RJTCF Fund to be appropriate to ensure the proper use of such funds.

H. Obligations of General Partners:

I. General Partners: A to-be-determined for-profit entity. 2. General Partners' Capital: $0 (estimate). 3. The General Partners agree that to the extent any deferred development fee has

not been repaid from cash flow at the end of twelve years from the date the property is placed in service (or at the time of removal of the General Partners), they will contribute sufficient capital so that the Partnership can pay any amount of the deferred fee outstanding at that time.

4. The General Partners will provide the following guaranties: a. Completion Guaranty- The General Partners will guarantee lien-free

completion of the Property and will pay any of the below costs that are in excess of the allowed sources of funds (including any allowed deferred development fee). Such costs include costs to:

(I) acquire the Property and complete construction substantially in accordance with plans and specifications and free from any defects;

(2) pay all acquisition and construction costs, including any construction period interest, costs, fees, and reserves; and

(3) pay all operating expenses, debt service and capital maintenance items that exceed rental and other income through the date the RJTCF Fund makes its final capital contribution.

Any excess costs will not be considered loans or capital contributions. However, the General Partners will also advance funds as needed during construction if proceeds of financing and/or capital contributions are not yet available to pay such costs. Such advances will be repaid, without interest, once such sources of funds become available.

The General Partners will also guarantee that the permanent financing will close and that the debt service on the permanent financing will not exceed an amount that would allow the Partnership to achieve Stabilized

6

Operations within a reasonable time. Any reduction in principal amount of, or interest rate on, the permanent financing necessary to achieve Stabilized Operations will be considered an excess cost to be funded under the Completion Guaranty.

In the event that certain events occur, the RJTCF Fund shall have the right to require the General Partners to repurchase the RJTCF Fund's interest for a price that returns II 0% of its investment to date plus interest and any tax liability attributable to such payment. Examples of such events include failure to complete construction, achieve breakeven operations or achieve Stabilized Operations by agreed-upon dates, failure to replace withdrawn commitments for, or close, permanent financing, loss of rental assistance, failure to qualify for at least seventy (70%) of the expected Credits, etc.

b. Tax Credit Guaranty- Guaranty that expected Credits will be available to the RJTCF Fund and Credits taken will not be recaptured. If the actual annual Credits available to the RJTCF Fund in any year are lower than the Credits expected, the General Partners shall reimburse the RJTCF Fund for the shortfall on a dollar for dollar basis. If it is determined that the shortfall in Credits will apply to future years as well, General Partners will refund an amount equal to the present value of those future credits. If the RJTCF Fund is subject to recapture (including disallowance of credits) of previously claimed credits, the General Partners shall reimburse the RJTCF Fund for its recapture amount. To the extent that payments in respect of the Tax Credit Guaranty are taxable, the payments shall be grossed-up to reimburse the RJTCF Fund for the tax liability.

This guaranty shall apply to a period that ends at the end of the LIHTC compliance period.

The General Partners will not be obligated ifthe reduction in the amount of Credits or recapture is a result of a change in the tax law or the disposition by the RJTCF Fund of its interest.

To the extent that the General Partners have no obligation to compensate the RJTCF Fund for reduced or recaptured Credits or fail to make payments due to the RJTCF Fund under the Tax Credit Guaranty, the amounts necessary to compensate the RJTCF Fund, plus interest, will be paid as a priority from all available cash, including Cash From Operations or Sale Proceeds. In the case in which the General Partners are obligated to make payments under the Tax Credit Guaranty but fail to do so, such cash distributions shall not reduce the General Partners' obligations except to the extent that cash distributions paid to the RTJCF Fund would have otherwise been paid to the General Partners.

If the RJTCF Fund is acquiring State Tax Credits, the Tax Credit Guaranty will apply to such State Tax Credits as well.

7

c. Operating Deficit Guaranty - Guaranty that the Partnership will have sufficient funds to remain current in its obligations during a specified period and that General Partners will make subordinated, interest-free loans to the Partnership to the extent necessary to meet obligations, including Asset Management Fee, debt service and the funding of reserves, for the period beginning with the Stabilization Capital Contribution and ending on the December 31st which (i) is at least five years following the Stabilization Capital Contribution and on which each of the following is true:

( 1) In each of the three preceding calendar years, the Partnership has achieved a 1.20:1 debt service coverage ratio, determined on an annual basis as shown in the audited financial statements for such years;

(2) The General Partners have not been required to make any payments or loans to the Partnership under the Operating Deficit Guaranty in the preceding three calendar years;

(3) The Partnership is current with regards to all liabilities; (4) The Partnership's Replacement Reserve account balance is an

amount equal to 80% of the Annual Replacement Reserve times the length of time since completion of construction or rehabilitation; and

(5) The General Partners have not been obligated to make any payments under the Tax Credit Guaranty within the preceding three calendar years.

(6) The balance in the Operating Reserve Account must not be less than the Operating Reserve Minimum.

Notwithstanding any termination of the Operating Deficit Guaranty Period or any limitation on the maximum liability of the General Partners under the Operating Deficit Guaranty, the General Partners shall also be responsible throughout the entire Compliance Period for deficits attributable to the failure to obtain or the loss of any property tax abatement expected to be received by the Project.

Notwithstanding any termination of the Operating Deficit Guaranty Period or any limitation on the maximum liability of the General Partners under the Operating Deficit Guaranty, the General Partners shall also be responsible throughout the entire Compliance Period for deficits attributable to the failure to obtain or the loss of any rental assistance contract or agreement expected to be received by the Project.

Operating deficit loans shall not bear interest and shall be payable on a subordinated basis from available cash, including Cash from Operations and Sale Proceeds.

The maximum obligations of the General Partners under this Operating Deficit Guaranty will not exceed $357,725 (approximately six months' operating expenses, debt service and replacement reserves).

8

S. The General Partners shall pledge their interests in the Partnership to secure their obligations under the Partnership Agreement.

I. Obligations of the Guarantors:

I. Guarantors: The General Partners, MV Residential Construction, Inc. & MY Residential Property Management, Inc., subject to RJTCF approval..

2. Guarantors shall collectively have a minimum net worth of $S,OOO,OOO ($1 ,000,000 liquid). Distributions from entity guarantors shall be restricted to the extent that any distribution would reduce the net worth of the Guarantors below the prescribed minimums.

3. Guarantors unconditionally guarantee that the General Partners will perform all of their obligations under the partnership agreement, including, without limitation, guaranties, repurchase obligations and the obligation to make a capital contribution as and when required to pay deferred development fee and that the developer will perform all of its obligations under the Development Agreement.

4. Guarantors shall provide such due diligence information as is necessary for RJTCF to ascertain their ability to perform under the guaranty of the General Partner's and Developer's obligations. Such information may include, without limitation, organizational and authority documentation for entity Guarantors, financial and tax return information, industry experience, references, credit inquiries and similar information. By execution of this letter, Guarantors agree to provide this information and authorize RJTCF to make third-party inquiries with respect to such matters.

J. Total Depreciable Basis: $13,2S4,7SO.

In the event that the General Partner is a tax exempt entity, allocations shall be structured as qualified allocations, so that the underlying building owned by the Partnership shall be depreciated over 27.S years using the straight line method and the personal property and site improvements owned by the Partnership shall be depreciated overS and IS years.

In the event that the General Partner is controlled by a tax exempt entity, it will make the election described in Section 168(h)(6)(F)(ii) of the Code, so that the underlying building owned by the Partnership shall be depreciated over 27.5 years using the straight line method and the personal property and site improvements owned by the Partnership shall be depreciated over S and IS years.

K. Financing:

I. Construction Financing a. Lender: ______ _ b. Amount: -------c. Rate: ______ _ d. Terms: -------e. Maturity: ______ _

9

2. Permanent Financing- First Mortgage a. Not to Exceed Amount: $4,250,000. b. Lender: Georgia DCA. c. Funds at stabilization. d. Non recourse. e. Tax-exempt bond financed. f. Term (years): 30. g. Amortization period (years): 30. h. Interest rate: 6.00%.

1. Fixed. ii. Annual payment: Not to exceed an amount that would result in a

debt coverage ratio of less than 1.20x during the 15 year compliance period. Currently, the annual payment is estimated to equal $305,771.

3. Permanent Financing- Second Mortgage a. Not to Exceed Amount: $4,250,000. b. Lender: Georgia DCA HOME. c. Funds throughout Construction. d. Recourse or Non recourse: Non recourse. e. Not tax-exempt bond financed. f. Term (years): 30. g. Amortization period (years): 30. h. Interest rate: 0.00%.

1. Fixed. ii. Annual payment: Cash flow contingent loan. Hard debt payments

not required.

L. Definitive Documents

All of the terms and conditions of the investment shall be set forth in definitive documents to be negotiated by the parties including but not limited to an Amended and Restated Operating Agreement, together with certain closing exhibits (including various Guaranty Agreements). Such documents shall be consistent with the terms and conditions set forth in this letter with such changes as the parties may agree are appropriate. Once executed, the definitive documents shall supersede this letter, which shall be of no further force or effect. RJTCF will begin preparation of the definitive documents upon the completion of our due diligence to our satisfaction, as determined in our sole discretion.

II. INFORMATION REQUIRED BY THE RJTCF FUND

DUE DILIGENCE AND REPORTING REQUIREMENTS

The specific information required by the RJTCF Fund prior to Closing, as a condition of making its capital contribution, and on an ongoing basis throughout the term of the Partnership, are as follows:

A. Before closing, the RJTCF Fund will require receipt of those items set forth in Appendix A.

B. Before making its various capital contribution installments, the RJTCF Fund will require receipt of those items set forth in Appendix B.

C. The RJTCF Fund will require reports from time to time, as described in Appendix C.

10

III. THE RJTCF FUND EXIT RIGHTS

The RJTCF Fund shall have the right to require the General Partners to acquire its interest after the end of the compliance period for a price equal to the amount the RJTCF Fund would receive if the Partnership sold the Project at fair market value, paid its debts and distributed the remaining assets in accordance with the provisions relating to distribution of sales proceeds. If the General Partners fail to acquire the RJTCF Fund's interest, then the RJTCF Fund shall have the right, without the concurrence of the General Partners, to order a sale of the Project.

IV. OTHER ASSUMPTIONS TO CLOSING

I. Prior to Closing, there shall have been no changes in tax laws or Treasury pronouncements, or changes in interpretations of existing tax issues that would materially and adversely affect this investment.

2. In the event an investment in the Partnership requires HUD Previous Participation Certification (HUD Form 2530), the RJTCF Fund and its investor members are willing and able to request and obtain HUD 2530 approval in accordance with the filing requirements promulgated by HUD.

3. RJTCF and the RJTCF Fund's review and approval in its sole discretion of all due diligence materials, including the construction and permanent loan commitments, proposed extended use agreement, real estate, plans and specifications, market study (including any additional market studies determined by the RJTCF Fund and the fund to be necessary - at the Partnership's expense), basis for the Credits, operating budgets, construction and lease-up budgets, current financial statements of the General Partners, other guarantors and their affiliates, verification of background information to be provided by the General Partners and their affiliates, and references to be provided by the General Partners.

4. Satisfactory inspection of the property by RJTCF and the RJTCF Fund investors. 5. Approval by the Investment Committee of RJTCF and the RJTCF Fund investors of the

terms and conditions of the investment in their sole discretion based on then current market conditions.

6. Availability of investment funds. 7. The negotiation of definitive documents as described herein (and this Agreement shall

terminate if all such documents are not executed and delivered by the Closing date). 8. During underwriting and due diligence, RJTCF will review the rental assistance

agreement and market conditions, and may in its sole discretion determine that a Rental Assistance Transition Reserve or Rental Assistance Loss Guarantee be required as a requirement of Closing.

V. TERM

The initial term ofthis Agreement shall be for a period of five (5) months from the date of this letter, with a closing (Closing Date) no later than July 31, 20 14, providing that RJTCF may terminate this Agreement by giving at least 10 days written notice if it determines, in the exercise of its sole discretion that the conditions to closing are unlikely to be met. RJTCF may extend the term of this Agreement up to 90 days beyond the initial term and both parties can agree in writing to an extension beyond that date. If due diligence activities and negotiation of definitive documents continue beyond termination of this Agreement, the parties shall not be bound hereunder, but only to the extent provided in definitive documents or other written agreements that are actually executed and delivered.

II

VI. EXCLUSIVITY

You acknowledge that the RJTCF Fund will expend significant effort and expense, and may forego other investment opportunities, in connection with its best efforts to effect a Closing. You agree that you will not solicit or entertain any offers by other parties to acquire an equity interest in the Partnership during the Term of this Agreement. Furthermore, you agree to pay the RJTCF Fund its $50,000 due diligence/legal reimbursement fee and to reimburse it for the due diligence expenses described below, up to a maximum of $50,000, regardless of whether or not the Investment closes, unless such failure to close was due to RJTCF inability to obtain Investment Committee or Investor approval.

The Partnership must provide at its expense a legal opinion acceptable to RJTCF. If required by an Investor in connection with its admission to the RJTCF Fund subsequent to the Closing of the Investment, such opinion must be updated and reissued at Partnership expense.

VII. DUE DILIGENCE FEES

At the Closing, the Partnership shall pay $50,000 to the RJTCF Fund as a due diligence/legal reimbursement fee in respect of the costs associated with the due diligence process and preparation of Partnership documents and legal opinions. A higher amount may be appropriate, for example, if the RJTCF Fund undertakes significant work to obtain the title policy, close complicated financings, etc. Such additional charges are subject to negotiation and no amount greater than $50,000 will be incurred or due to the RJTCF Fund from the Partnership without your agreement. You will be responsible for payment of the $50,000 agreed upon due diligence/legal reimbursement fee whether or not the Investment closes, unless such failure to close was due to RJTCF inability to effect the Closing.

VIII. DUE DILIGENCE EXPENSES

Due diligence expenses for third party reports (described in Appendix A hereto) ordered by RJTCF shall be paid by the Partnership regardless of whether the Partnership has separately obtained such reports, including without limitation: market study, appraisal, environmental reports, subsurface investigation report, preconstruction review and construction inspections, credit reports and background investigations. Generally, such expenses shall be paid by the Partnership in connection with the Closing. If and to the extent that these expenses are paid by RJTCF, they shall be reimbursed by the Partnership regardless of whether or not the Investment closes, unless such failure to close was due to RJTCF inability to effect the Closing.

The Partnership must provide at its expense a legal opinion acceptable to RJTCF. If required by an Investor in connection with its admission to the RJTCF Fund subsequent to the Closing of the Investment, such opinion must be updated and reissued at Partnership expense.

IX. CONFIDENTIALITY

This letter is delivered to you with the understanding that neither it nor its substance shall be disclosed to any third party except those who are in a confidential relationship with you, or where the same is required by law.

12

X. ACCEPTANCE

If these terms and conditions are acceptable to you, please sign and return one copy of this memorandum. If not accepted by February 28, 2014, this offer shall terminate.

By acceptance of this letter, you authorize Raymond James Tax Credit Funds, Inc. to make any credit inquiries that we may deem necessary as part of our underwriting process. These credit inquiries may be performed on the General Partners, Guarantors, or any significant business operation of General Partners or Guarantors. This authorization also applies to follow-up credit inquiries that we may deem necessary after our admission to the Partnership.

For more than 25 years Raymond James Tax Credit Funds and our affiliates have been involved with the development of affordable housing. We have provided equity for more than 1,200 properties nationwide. We look forward to working with you.

Sincerely,

A Sean Jones Director of Acquisitions Raymond James Tax Credit Funds, Inc.

Accepted:

By: General Partner Date

13

Raymond James Tax Credit Funds- dedicated to help1ng developers succeed.

Proven Track Record

Sirce the tnA. audit pmgmm

OO<.Jan on 1986. we M>/0 raload

nearty $3 bllion In cquoty tor

rnore than 1 ,200 properti&s

tt'toughoulthe Unitod States

Your Proven Partner

Raymond James has ~en sponsonng affordable housmg since 1969, Our

cxpc:ricnccd profcssion<lls enable: us to conststc:ntly 1dcntafy and dcvdo1J

lon~~rcrm rc:l:lttonsh•ps wuh many of the atlOrdable housin,.: m:uket's

lcadmg developers. As a result, more than 50 of our 150-plus <levc:loper clients

have: synditoltcd at least five properties with U!l.

The resources, strength ami personahzetl ~rvlce that charactertzc Raymontl

Jamt.-s Tax Credit Funds :tllow us to hdp our dcvdopmcnl partners create and

implement strategies that meet their spcctflc fin:mcm~ needs an«lmvenment

obJectives while enablmg m; to anract h1gh-qualiry instnuuonalmvestors.

Unparalleled Resources for Developers

Raymond James Tax Crc:dlt Funds pro\·1des a full range of sophu:ucatc:d

5ervices fc1r de\·dopers, including i(lentifying suitable ln\·c:non.

In :uldition. we hring to 1he table a number ()f other valuable resources;

We have extensive experience. includinR more than 1.200 t:omplctcd

proJects throughout the nation, ami famihanty wuh the mtricac1es

of state housmg agentiC$,

Our rumpem;vc ct1111ry pr1cing, inclntJing tkxihle tcrm!t, makes 11 ~~•sy

for you to t"omplcte your proJect.

We have strong n:lanonships wuh a wtdc array of mvr..stor partnt"rs,

mcluding the nation's leading institutions,

Our tax credu experts can help you structure )•our appltcat1ons correctly.

along with providmg ongmng tax credit advu:e and guidance.

Our p;utnc:rship documents arc concise and undc:ntanc.bblc,

accompamcd by to-the-point c:xpc:rt advice from our legal team,

all destgned to save you umc and lc:~;:~l f~es.

\Ve provulc you wnh a stnglc poant of cont;~.ct- an cxpcnc:ncc:d

profeuional who is committed to ensuring your needs for your

current and future prn1ccts arc met.

As one oft he nation'~ l:att{C:St dJvcrsiflc:'l financial scrvJcc:s companies,

Raymoncl }:1mcs, our parent compomy. can dchvcr busmess roluuon:s

dcst).!OC:d to help you achieve all of your financial and business goals.

Laying a Successful Foundation

Raymund James is an mdustry leader and nattonal prex:ncc m tht:

syncltcate<l affonlablc housm~ markcl5- from urban mfill clevclopment

to new t:onstructton in rural areas and Nauvc Amencan lands. We help

you succcecl by:

Saving you time Jnd money. \Vc make it eJ.~;y to J!et the financing

that's best suited for you.

Givmg you acce:n to "best practices." \Vc share 1<leas and strategies

tfom other succeuful tax cre<lit developments across the country.

Getting you the money you need qutekly. We arc highly responsive

tn your needs, whh qmck nnnaround tame on draw requests.

Asststtng you m ovcrcommg challcn~es. We fiml tnnovauvc ways

to structure: your developments.

Let us show you how our proven mc1hods and resources can help

your clcvclopment succeed.

Superior Service

AI Raymond James Tax Crodit

Funds, lrr. .. we are committed to

cxcotlont oxocution. As our many

dtNeAoper partners can altest , we

stoivo to p1011ioo the h:ghest quoMy

of SOMCO and make tho syndicatiOn

pi'OCSS!i ns s:mple OS po~ible-

so you c&n focus on yoor develop

ment6tforts.

Our regiOnal reproscntatiVCS throuqh

out the United Stote:i are e>:perts on

national 1~. ils wd as rcgK>f'\31

mark~ts. 1 hay aro at your SOfVtCO

to ltu"-' rrukt:t t.ure you lnl<.J tile rlgill

propert~. tlnancing. m~torc and

c;hUC\UfCS cfficten11y and QUICkly,

RAYMOND JAMES.

Raymond James Tax Credit Funds, Inc- Key Personnel

Senior Management

Ronald Diner is the executive chairman of Raymond James Tax Credit Funds, a

leading sponsor of Section 42 investments, with more than $4 billion of LIHTC equity

raised since the inception of the tax credit program. Since 1983, on behalf of

Raymond James, Ron has been responsible for the acquisition and asset

management of over 1,300 affordable housing properties located throughout the

United States. He has served on numerous industry-wide committees and boards,

and is a frequent speaker and panel member at national and state seminars relating

to the low-income housing tax credit program. He received an MBA from Columbia

University; his bachelor's degree is from Trinity College.

Steven Kropf is the president of Raymond James Tax Credit Funds. He is

responsible for acquisitions, as well as institutional investor relations. Steven is a

member of the RJTCF investment committee, which is responsible for reviewing and

approving each partnership. Prior to joining Raymond James in 2000, he was a senior

manager within the financial advisory services practice of PricewaterhouseCoopers.

He was also a project manager within the construction practice of Peterson

Consulting LP, where he was responsible for performing financial damage analysis on

construction and environmental projects. Steven received a bachelor's degree in

engineering, a master's in engineering and an MBA from the University of Florida.

James Horvick is vice president and director of originations for Raymond James Tax

Credit Funds and is responsible for providing overall originations team infrastructure

and administrative support. He oversees three of our production teams: Mid-Atlantic,

Southeast and Midwest and assists in the development of regional equity placement

strategies. James serves on the City of Tampa's Affordable Housing Advisory

Committee. Prior to joining RJTCF in 2002, he developed and delivered specialized

training programs for Raymond James & Associates. James received an MBA with

honors from the University of Florida and a BA from Concordia College.

Bob Landis is senior vice president and director of asset management for Raymond

James Tax Credit Funds. A long-term veteran of the multi-family housing industry,

Bob has experience in asset management, property operations, acquisitions and

development, involving market rate and affordable assets throughout the United

States. Prior to joining Raymond James, he served as president of Lane

Management, LLC in Atlanta and he was senior vice president with both Alliance

Residential Management and United Dominion Realty Trust in Texas. Bob received a

BA with honors from the University of Delaware and a Master of Urban and

Environmental Planning from the University of Virginia School of Architecture.

Sam Shupe, senior vice president of feasibility, is responsible for determining the

feasibility of property acquisitions made by Raymond James Tax Credit Funds. Sam

is a member of the RJTCF investment committee. Prior to joining Raymond James in

1995, he worked with NationsBank for more than eight years. He was involved with

the underwriting and analysis of commercial real estate loans, as well as

recommendations regarding restructuring of troubled loans and asset disposal

decisions. He also directed the production of market research reports and performed

numerous property valuations and feasibility studies. Previously, he was a real estate

lender, and also was directly involved in the management of loans on troubled

properties. Sam graduated from the University of Florida with a bachelor degree with

honors.

Rick Cargo is senior vice president and chief underwriter, responsible for the

underwriting process and closing property acquisitions for Raymond James Tax

Credit Funds. He has more than 27 years of experience in numerous aspects of

commercial real estate. He is a member of the RJTCF investment committee. Prior to

joining Raymond James in 1999, Rick worked for First Industrial Realty Trust in

several capacities including acquisitions, developmenUconstruction and management.

Previously a project development manager with the Radnor Corporation, he received

his bachelor's degree with honors from University of Florida and attended the MBA

program at the University of South Florida.

Toni Matthews is vice president and chief financial officer of Raymond James Tax

Credit Funds, Inc. She is responsible for directing the financial activities, the

information technology development and the reporting of Raymond James Tax Credit

Funds. Prior to joining Raymond James, Toni was in public accounting, specializing in

IRS controversy. She also held the position of assistant vice president of corporate

tax for Raymond James Financial. She received her bachelor's degree from the

University of South Florida.

Attachment H - Management Company Information

Development Name: City: State: Directors Name: Telephone Number: Development Type: Type of Subsidy: Placed in

Service Date:# Years Managed

by Agent:# of

Units:# of Low-

Income Units:Physical Occupancy

Rate:Economic

Occupancy Rate: Contact Person at Agency: City: State: Telephone Number :

Bent Tree Piqua OH Maria Stanton 513-379-1604 New Construction Section 42 7/7/1997 17 84 84 89.3% 86.1% Sean Thomas Columbus OH 614-466-7970Breckenridge Findley OH Maria Stanton 513-379-1604 New Construction Section 42 11/13/1998 15 72 72 98.6% 92.7% Sean Thomas Columbus OH 614-466-7970Cedar Trail Bellbrook OH Maria Stanton 513-379-1604 New Construction Section 42 7/18/1996 18 132 132 99.2% 95.7% Sean Thomas Columbus OH 614-466-7970Cobblegate Square Apartments Moraine OH Maria Stanton 513-379-1604 New Construction Section 42 3/21/1997 17 132 132 90.9% 88.6% Sean Thomas Columbus OH 614-466-7970Deer Creek Delphos OH Maria Stanton 513-379-1604 New Construction Section 42 9/30/1999 14 84 84 94.1% 90.4% Sean Thomas Columbus OH 614-466-7970Eagles Point Kenton OH Maria Stanton 513-379-1604 New Construction Section 42 11/5/1999 14 72 72 87.5% 83.3% Sean Thomas Columbus OH 614-466-7970

Enclave at Winston-Salem Winston-Salem NC Maria Stanton 513-379-1604 New Construction/ Acquisition/Rehabilitation Section 42 7/10/2012 2 68 68 98.5% 96.2% Scott Farmer Raleigh NC 866-546-7742

Fox Run Trotwood OH Maria Stanton 513-379-1604 New Construction Section 42 10/23/1998 15 144 144 96.5% 96.2% Sean Thomas Columbus OH 614-466-7970Gallatin Park Apartments Gallatin TN Maria Stanton 513-379-1604 New Construction Section 42 6/28/2012 2 48 48 97.9% 88.4% Judith Smith Nashville TN 615-815-2200Glen Arbors Napoleon OH Maria Stanton 513-379-1604 New Construction Section 42 6/17/1999 15 72 72 88.9% 88.9% Sean Thomas Columbus OH 614-466-7970Hunters Oak Greenville OH Maria Stanton 513-379-1604 New Construction Section 42 9/3/1998 15 72 72 94.4% 93.5% Sean Thomas Columbus OH 614-466-7970Indian Trace I Oxford OH Maria Stanton 513-379-1604 New Construction Section 42 5/4/1998 16 84 84 96.4% 93.4% Sean Thomas Columbus OH 614-466-7970Landings at Steele Creek II Charlotte OH Maria Stanton 513-379-1604 New Construction Section 42 11/15/2001 12 48 48 95.8% 95.6% Sean Thomas Columbus OH 614-466-7970Landings II in Gastonia Gastonia NC Maria Stanton 513-379-1604 New Construction Section 42 7/24/2000 14 48 48 93.8% 91.2% Scott Farmer Raleigh NC 866-546-7742Meadows at Grand Lake Celina OH Maria Stanton 513-379-1604 New Construction Section 42 10/12/1999 14 60 60 88.3% 77.5% Sean Thomas Columbus OH 614-466-7970Normandy Ridge Wapakoneta OH Maria Stanton 513-379-1604 New Construction Section 42 12/15/1998 15 84 84 94.1% 93.8% Sean Thomas Columbus OH 614-466-7970Pinecrest Apartments Walkertown NC Maria Stanton 513-379-1604 New Construction Section 42 11/21/2007 6 80 80 97.5% 93.4% Scott Farmer Raleigh NC 866-546-7742Scioto Woods I Chillicothe OH Maria Stanton 513-379-1604 New Construction Section 42 11/10/1998 15 72 72 97.2% 89.0% Sean Thomas Columbus OH 614-466-7970Twin Cedars II Hickory NC Maria Stanton 513-379-1604 New Construction Section 42 11/29/2001 12 72 84 95.8% 93.8% Scott Farmer Raleigh NC 866-546-7742Walkers Ridge Apartments Greensburg PA Maria Stanton 513-379-1604 New Construction Section 42 12/4/2008 5 84 84 98.8% 96.4% Holly Glauser Harrisburg PA 717-780-3800Wind Ridge Tipp City OH Maria Stanton 513-379-1604 New Construction Section 42 7/8/1997 17 84 84 90.5% 82.7% Sean Thomas Columbus OH 614-466-7970Brookstone Bellefontaine OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 12/20/2000 13 96 57 91.7% 91.7% Sean Thomas Columbus OH 614-466-7970Cedar Wood Mansfield OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 12/27/2000 13 96 57 90.6% 90.6% Sean Thomas Columbus OH 614-466-7970Mallard Glen Amelia OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 11/2/2001 12 96 67 93.8% 84.7% Sean Thomas Columbus OH 614-466-7970Meadow Creek Bryan OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 10/11/2000 13 96 57 81.3% 81.3% Sean Thomas Columbus OH 614-466-7970Oak Wood Lexington OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 12/11/2000 13 84 50 94.1% 92.3% Sean Thomas Columbus OH 614-466-7970Scioto Woods II Chillicothe OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 9/29/2004 9 84 71 90.5% 87.5% Sean Thomas Columbus OH 614-466-7970Sycamore Creek Sidney OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 3/28/2000 14 96 57 88.5% 88.5% Sean Thomas Columbus OH 614-466-7970Timberlake Vandalia OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 12/20/2000 13 144 100 93.8% 93.8% Sean Thomas Columbus OH 614-466-7970Meadow Vista Parkside Altoona IA Maria Stanton 513-379-1604 New Construction Section 42 12/10/2012 1 59 59 100.0% 98.1% Dave Vaske Des Moines IA 515-725-4900Autumn Wood Village I Toledo OH Maria Stanton 513-379-1604 New Construction Section 42 12/30/2003 10 48 48 100.0% 93.4% Sean Thomas Columbus OH 614-466-7970Autumn Wood Village II Toledo OH Maria Stanton 513-379-1604 New Construction Section 42 7/29/2004 10 42 42 100.0% 98.1% Sean Thomas Columbus OH 614-466-7970New Lima Homes Lima OH Maria Stanton 513-379-1604 New Construction Section 42 10/31/2005 8 60 60 98.3% 96.4% Sean Thomas Columbus OH 614-466-7970Nia Heights Toledo OH Maria Stanton 513-379-1604 New Construction Section 42 12/30/2011 2 16 16 100.0% 94.7% Sean Thomas Columbus OH 614-466-7970Ridgewood Heights Dayton OH Maria Stanton 513-379-1604 New Construction Section 42 8/29/2003 10 40 40 100.0% 93.8% Sean Thomas Columbus OH 614-466-7970Rising at Phoenix Dayton OH Maria Stanton 513-379-1604 New Construction Section 42 7/26/2010 4 33 33 90.9% 89.9% Sean Thomas Columbus OH 614-466-7970Roosevelt Homes Dayton OH Maria Stanton 513-379-1604 New Construction Section 42 6/28/2013 1 43 43 100.0% 100.0% Sean Thomas Columbus OH 614-466-7970South Saginaw Homes Saginaw MI Maria Stanton 513-379-1604 New Construction Section 42 6/14/2007 7 49 49 93.9% 91.7% Andy Martin Lansing MI 517-373-8370South Saginaw Homes II Saginaw MI Maria Stanton 513-379-1604 New Construction Section 42 11/13/2012 1 42 42 100.0% 84.9% Andy Martin Lansing MI 517-373-8370Sunlight Homes Dayton OH Maria Stanton 513-379-1604 New Construction Section 42 6/16/2006 8 33 33 97.0% 97.0% Sean Thomas Columbus OH 614-466-7970

Washington Square Homes II Dayton OH Maria Stanton 513-379-1604 New Construction Section 42 12/21/2011 2 30 30 93.1% 90.9% Sean Thomas Columbus OH 614-466-7970Allegheny Pointe Allegheny Towns PA Maria Stanton 513-379-1604 New Construction Section 42 12/16/2010 3 52 52 98.1% 98.1% Holly Glauser Harrisburg PA 717-780-3800Carriage Trails Senior Village Huber Heights OH Maria Stanton 513-379-1604 New Construction Section 42 8/29/2012 1 34 34 100.0% 99.3% Sean Thomas Columbus OH 614-466-7970Eaton Senior Village Eaton OH Maria Stanton 513-379-1604 New Construction Section 42 11/22/2010 3 44 44 95.5% 95.5% Sean Thomas Columbus OH 614-466-7970Faith Community Crestline OH Maria Stanton 513-379-1604 New Construction Section 42 8/19/2008 5 41 41 97.6% 96.2% Sean Thomas Columbus OH 614-466-7970Hamburg Senior Residence Lexington KY Maria Stanton 513-379-1604 New Construction Section 42 7/12/2012 2 62 62 100.0% 99.1% Michelle Huybers Frankfort KY 502-564-7630Harmony Senior Village Williamsburg OH Maria Stanton 513-379-1604 New Construction Section 42 3/16/2007 7 30 30 100.0% 99.1% Sean Thomas Columbus OH 614-466-7970Lake Towne Senior Lake Township OH Maria Stanton 513-379-1604 New Construction Section 42 10/16/2008 5 43 43 100.0% 93.2% Sean Thomas Columbus OH 614-466-7970One Penrose Place Lawrence IN Maria Stanton 513-379-1604 New Construction Section 42 1/30/2012 2 45 45 95.6% 95.6% Jacob Sipe Decatur IN 866-546-7742Madison Place Seniors Gastonia NC Maria Stanton 513-379-1604 New Construction Section 42 12/18/2003 10 76 76 98.7% 96.7% Scott Farmer Raleigh NC 866-546-7742Meadow Vista Senior Villas Altoona IA Maria Stanton 513-379-1604 New Construction Section 42 7/3/2012 2 50 50 100.0% 99.4% Dave Vaske Des Moines IA 515-725-4900Mercy Siena Village Dayton OH Maria Stanton 513-379-1604 New Construction Section 42 5/9/1997 17 108 108 100.0% 90.3% Sean Thomas Columbus OH 614-466-7970Pheasant Run Seniors Dayton OH Maria Stanton 513-379-1604 New Construction Section 42 12/29/2004 9 75 75 100.0% 98.3% Sean Thomas Columbus OH 614-466-7970Riverview Bluffs New Richmond OH Maria Stanton 513-379-1604 New Construction Section 42 6/27/2006 8 36 36 97.2% 97.2% Sean Thomas Columbus OH 614-466-7970The Residenz at Sylvania Sylvania OH Maria Stanton 513-379-1604 New Construction Section 42 7/30/2012 2 51 51 94.1% 92.2% Sean Thomas Columbus OH 614-466-7970Villas at Twin Cedars Hickory NC Maria Stanton 513-379-1604 New Construction Section 42 6/29/2005 9 40 40 100.0% 97.5% Scott Farmer Raleigh NC 866-546-7742Wauseon Senior Villas Wauseon OH Maria Stanton 513-379-1604 New Construction Section 42 6/15/2010 4 48 48 95.8% 95.8% Sean Thomas Columbus OH 614-466-7970Whitehouse Square Senior Village Whitehouse OH Maria Stanton 513-379-1604 New Construction Section 42 3/15/2011 3 32 32 100.0% 98.7% Sean Thomas Columbus OH 614-466-7970Summit Pointe Lawrenceburg IN Maria Stanton 513-379-1604 Acquisition/Rehabilitation Section 42 10/23/2012 1 83 83 95.2% 92.2% Jacob Sipe Decatur IN 866-546-7742Cross Creek Meadows Chillicothe OH Maria Stanton 513-379-1604 New Construction Section 42 12/28/2011 2 32 32 93.8% 93.8% Sean Thomas Columbus OH 614-466-7970Pine Ridge Apartments Logan OH Maria Stanton 513-379-1604 New Construction Section 42 7/31/2006 8 72 72 100.0% 95.8% Sean Thomas Columbus OH 614-466-7970Bridge Street Landing Chillicothe OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 8/16/2000 13 84 61 100.0% 96.4% Sean Thomas Columbus OH 614-466-7970Holly Hills Jackson OH Maria Stanton 513-379-1604 New Construction Section 42/Market Rate 11/29/2001 12 72 60 90.3% 89.7% Sean Thomas Columbus OH 614-466-7970Walnut Run Senior Cortland OH Maria Stanton 513-379-1604 New Construction Section 42 9/25/2008 5 40 40 100.0% 99.8% Sean Thomas Columbus OH 614-466-7970Church Square Commons Cleveland OH Maria Stanton 513-379-1604 New Construction Section 42 1/27/2012 2 48 48 93.8% 93.8% Sean Thomas Columbus OH 614-466-7970Delphos Senior Villas Delphos OH Maria Stanton 513-379-1604 New Construction Section 42 9/6/2011 2 32 32 100.0% 93.4% Sean Thomas Columbus OH 614-466-7970Englewood Senior Housing Toledo OH Maria Stanton 513-379-1604 New Construction Section 42 12/1/2010 3 38 38 97.4% 91.1% Sean Thomas Columbus OH 614-466-7970Hurth Apartments Portsmouth OH Maria Stanton 513-379-1604 Acquisition/Rehabilitation Section 42 10/14/2004 9 39 39 92.3% 92.3% Sean Thomas Columbus OH 614-466-7970Kingston Mound Manor Apartments Circleville OH Maria Stanton 513-379-1604 New Construction Section 42 6/30/2006 8 47 47 97.9% 97.9% Sean Thomas Columbus OH 614-466-7970Kingston Mound Manor Apartments 2 Circleville OH Maria Stanton 513-379-1604 New Construction Section 42 4/24/2009 5 50 50 98.0% 98.0% Sean Thomas Columbus OH 614-466-7970Park Apartments Portsmouth OH Maria Stanton 513-379-1604 New Construction Section 42 12/31/2002 11 40 40 95.0% 95.0% Sean Thomas Columbus OH 614-466-7970

MV RESIDENTIAL PROPERTY MANAGEMENT RELEVANT EXPERIENCE

MV Residential Property Management, Inc.



(with Accountants' Review Report)


TABLE OF CONTENTS


Consolidated Financial Statements - Federal Income Tax Basis

Consolidated Statements of Assets, Liabilities and Stockholder's Equity- Federal Income Tax Basis.2-3

Consolidated Statements of Revenues and Expenses- Federal Income Tax Basis ................................ 4

Consolidated Statements of Stockholder's Equity- Federal Income Tax Basis ....................................... 5

Consolidated Statements of Cash Flows- Federal Income Tax Basis .................................................... 6

Notes to Financial Statements ......................................................................................................... J-10



Stockholder of MV Residential Property Management, Inc. Dayton, Ohio

We have reviewed the accompanying consolidated statements of assets, liabilities, and stockholder's equity-federal income tax basis of MV Residential Property Management Inc. (an S-Carp) as of December 31, 2010, and the related consolidated statements of revenue and expenses- federal income tax basis, stockholder's equity -federal income tax basis and cash flows -federal income tax basis for the year then ended. A review includes primarily applying analytical procedures to management's financial data and making inquiries of company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.



Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the income tax basis of accounting, as described in Note 1.

Cincinnati, Ohio May 10, 201 1

1 05 east fourth street, ste. 1500 cincinnati, oh 45202


www.cshco.com p. 513.241 .3111 f. 513.241 .1212

MV Residential Property Management, Inc. Consolidated Statements of Assets, Liabilities, and Stockholder's Equity- Federal Income Tax Basis


2010 2009

Assets

Current assets

Cash $ 693,980 $ 308,358

Affiliate advance 606,739

Notes receivable - affiliate 50,941 60,802 Accounts receivable - other 52,716 67,508

Total current assets 1,404,376 436,668


Furniture and fixtures 39,774 39,774

Trucks and autos 21,589 21,589 Less: Accumulated depreciation {60,597} {58,354)

Total property and equipment 766 3,009

Total assets $ 1,405,142 $ 439,677

See independent accountants' report and accompanying notes to financial statements. 2

MV Residential Property Management, Inc. Consolidated Statements of Assets, Liabilities, and Stockholder's Equity- Federal Income Tax Basis (Continued)


2010 2009

Current liabilities

Affiliate advance $ 450 $ 138,747

Accounts payable Trade 864 24,802

Total current liabilities 1,314 163,549

Stockholder's Equity

Common stock - 100 shares no par value - issued

and outstanding at aggregate stated value 500 500 Retained earnings 1,403,328 275,628

Total stockholder's equity 11403,828 276,128

Total liabilities and stockholder's equity $ 1,405,142 $ 439,677


Revenues

Lease and sale commissions

Property management fees:

Affiliates

Other

Other fees:

Affiliates Other

Total revenues


Operating profit

Other income (expense)

Depreciation Other

Total other income (expense)

Net income

MV Residential Property Management, Inc. Consolidated Revenues and Expenses- Federal Income Tax Basis


2010 2009

$ 100,500 $ 116,600

3,718,192 $ 3,233,536 739,289 589,438

1,186,675 1,006,329 214,977 176,605

5,959,633 5,122,508

4,427,119 4,233,715 4,427,119 4,233,715

1,532,514 888,793

(2,243) (5,789) (2,571) (4,814) (5,789)

$ 1,527,700 $ 883,004

See independent accountants' report and accompanying notes to financial statements. 4


Distributions

Net income for the year


Distributions



MV Residential Property Management, Inc. Consolidated Statements of Stockholder's Equity- Federal Income Tax Basis


$ 793,124

(1,400,000)

$ 883,004

276,128

(400,000)

1,527,700

$ 1,403,828


MV Residential Property Management, Inc. Consolidated Statements of Cash Flows - Federal Income Tax Basis


Cash flows provided by operating activities:

Net income

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation

Decrease (increase) in accounts receivable (Decrease) increase in accounts payable


Cash flows provided by (used in) investing activities:


Payments received on notes receivable Net change in affiliate advance

Net cash (used in) provided by investing activities

Cash flows provided by (used in) financing activities: Distributions to stockholder


Net increase in cash



2010

$ 1,527,700

$

2,243

14,792 (23,938)

1,520,797

(5,575)

15,436 (745,036)

(735,175)

(400,000)

(400,000)

385,622

308,358

693,~~0

2009

$ 883,004

$

5,789

(4,777) 17,846

901,862

(65,726)

4,924 846,444

785,642

(1,400,000)

(1,400,000)

287,504

20,854

308,358


MV Residential Property Management, Inc. Notes to the Consolidated Financial Statements



Nature of operations MV Residential Property Management, Inc. (the Company), a wholly owned qualified S Corporation subsidiary of Miller-Valentine Operations Inc., is a residential property management company specializing in management of apartment buildings and other multi-family properties primarily in the Midwestern, Eastern and Southeastern United States.

The financial statements include the accounts of MV Senior Management LLC and its subsidiaries. All transactions between the companies have been eliminated.

Basis of accounting The Company's financial statements have been prepared on the accounting basis used for federal income tax purposes. Consequently, certain revenues are recognized when received rather than when earned and certain obligations are recognized when paid rather than when incurred, except for costs capitalized and amortized in accordance with tax regulations. Assets and liabilities contributed by the stockholder or distributed to the stockholder are recorded at their tax basis to the contributing stockholder or, in the case of a distribution, at the Company's tax basis rather than at fair market value.



Concentrations of credit risk The majority customer revenue comes from properties controlled by affiliated interests located throughout the Midwestern and Southeastern United States.

Accounts receivable The company provides property management and related services and recognizes revenue as the fees for the services are collected. The company carries its accounts receivable at cost On a periodic basis the company evaluates its accounts receivable. When amounts are deemed to be uncollectible they are changed to operations. The company has determined that it has no need for an allowance at this time.

The Company in the normal course of business will advance money to affiliated entities for operating capital. These amounts are considered fully collectible.

7



Property and equipment Property and equipment are stated at cost. Depreciation expense is calculated on property and equipment using accelerated and straight-line methods over recovery periods specified by federal tax regulations.

Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost is removed from the asset accounts and the related allowance is adjusted and any resulting gain or loss is recognized in income for the period.

Notes receivable The Company holds notes in connection with sales of vehicles to affiliated companies. The notes carry interest rates of 3.9%- 5.5%.

Employee benefit plan The Company maintains a qualified 401{k) plan which covers substantially all employees meeting certain eligibility requirements. Participants may contribute a portion of their compensation to the plan, up to the maximum amount permitted under Section 401{k) of the Internal Revenue Code. At the Company's discretion, it can match a portion of the participants' contributions. The Company made no contribution in 2010 and its matching contributions were $6,147 in 2009.

Income taxes The Company is not subject to federal or state income tax. The Company's parent will include the tax attributes in its tax return. Therefore, no income tax provision is included in the accompanying financial statements.

Accounting for uncertainty in income taxes The Company adopted the provisions Accounting for Uncertainty in Income Taxes. Those provisions clarify the accounting and recognition for income tax positions taken or expected to be taken in the Company's income tax returns. The Company's income tax filings are subject to audit by various taxing authorities. The Company's open audit periods are 2007-2009. The Company's policy with regard to interest and penalty is to recognize interest through interest expense and penalties through other expense. In evaluating the Company's tax provisions and accruals, future taxable income, and the reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes its estimates are appropriate based on current facts and circumstances.

Subsequent events Management evaluates events and transactions occurring subsequent to the date of the financial statements for matters requiring recognition or disclosure in the financial statements. The accompanying financial statements consider events through March 31, 2010, the date which the financial statements were available to be issued.

8



2. LEASES:

The Company is party to a sub-lease with several affiliates. The lease expires on September 30, 2019. Rent is allocated to the Company annually based on actual head count. Rental expense and common expense charges under these leases was $117,300 and $230,400 for the years ending December 31, 2010 and 2009, respectively.

Future estimated minimum lease payments on non-cancelable operating leases are as follows:

2011 $ 74,244

2012 75,732

2013 77,232

2014 78,780

2015 80,364

Thereafter 315,755

$ 702,107

The Company has the opportunity to renew the leases for ten years under similar terms at its option.

3. CONTINGENCIES:

The Company has guaranteed the delivery of certain low-income housing tax credits. In conjunction with the tax credits, the Company guarantees secured construction loans in the amount of $4,531,000 at December 31, 2010. There were no amounts in 2009. There were no amounts outstanding in connection with these loans. Also guaranteed is the funding of credit reductions, if incurred. Credit reductions of up to $2,460,092 were guaranteed at December 31, 2010. No credit reductions have been incurred or funded. In 2010, the Company has guaranteed commitments to make advances to certain tax credit properties to fund property level operating deficits. The total of these guarantees was up to $360,870 at December 31, 2010, of which none has been called.

The Company is part of an affiliated group several members of which, including the Parent company, Miller-Valentine Operations, Inc., have entered into debt restructuring negotiations with their principal lenders. While terms of the debt restructuring have been agreed in principle by the Parent company and its affiliates, final legal documents including loan modifications, extinguishments of debt, waivers and forbearance agreements, and releases of guarantees have not been fully effectuated. Consequently the obligations and guarantees of the Parent and affiliates remained in-place as of December 31,2010. While the Company has no direct obligations under these restructuring agreements, the restructuring contemplates the Parent and affiliates making payments totaling up to $22 million plus interest at rates ranging from 2% to 5% from 2011 through 2017, in exchange for certain releases of guarantees, extinguishments of debt, and other loan modifications.

9

---------- -

4. RELATED PARTY TRANSACTIONS:



The majority of the properties from which the company receives property management fees are owned or controlled by entities affiliated through common ownership. Such properties include rent-restricted affordable housing properties operated under the section 42 low income housing tax credit program, where the affiliate holds the general partnership or controlling member interest The Company recognized approximately $3,718,192 and $3,233,536 in revenue related to these properties for the years ending December 31, 2010 and 2009, respectively.

The Company has various related party transactions in the normal course of business, including a global cash management process whereby it can advance or be advanced funds to or from affiliates for operating capital.

The Company has notes and advances due from related parties in the amount of $657,680 at December 31, 2010 and $60,802 at December 31,2009. Related entities have advanced to the Company $450 at December 31, 2010 and $138,747 at December 31, 2009.

The Company shares administrative resources with affiliated entities. Amounts paid for these services were $1,363,742 in 2010 and $1,012,946 in 2009.

10

MV Residential Property Management, Inc.



(with Accountants' Review Report)


TABLE OF CONTENTS

Independent Accountants' Review Report_·-------------------------------- ---------------------------------------------------------------1


Consolidated Statements of Assets, Liabilities and Stockholder's Equity- Federal Income Tax Basis.2-3

Consolidated Statements of Revenues and Expenses -Federal Income Tax Basis _________________________________ 4

Consolidated Statements of Stockholder's Equity -Federal Income Tax Basis ________________________________________ 5

Consolidated Statements of Cash Flows- Federal Income Tax Basis ____________________________________________________ 6

Notes to Financial Statements ____ --------- ___________________________ -----------------_---------------- ______________ ------------- ______ 7 -1 0

.-!) CLARK SCHAEFER HACKETT STRENGTH IN NUMBERS


Stockholder of MV Residential Property Management, Inc. Dayton, Ohio

We have reviewed the accompanying consolidated statements of assets, liabilities, and stockholder's equity-federal income tax basis of MV Residential Property Management Inc. (an S-Carp) as of December 31, 2012, and the related consolidated statements of revenue and expenses -federal income tax basis, stockholder's equity -federal income tax basis and cash flows -federal income tax basis for the year then ended. A review includes primarily applying analytical procedures to management's financial data and making inquiries of company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.



Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the income tax basis of accounting , as described in Note 1.

t!~ML .feAr /fJ41 ~ Cincinnati, Ohio I March 25, 2013

one east fourth street, ste. 1200 cincinnati, oh 45202

cincinnati I cleveland I columbus I miami valley I springfield I toledo

www.cshco.com p. 513.241 .3111 f. 513.241.1212

MV Residential Property Management, Inc. Consolidated Statements of Assets, Liabilities, and Stockholder's Equity- Federal Income Tax Basis


2012 2011

Assets

Current assets

Cash $ 568,699 $ 511 ,048

Affiliate advance 3,085,381 2,091,801

Note receivable - affiliate 493 25,696

Note receivable - other 17,500

Accounts receivable - other 122,136 137,349

Total current assets 3,794,209 2,765,894


Furniture and fixtures 41,095 41,095

Trucks and autos 21,589 21,589

Less: Accumulated depreciation {62,189) {61,693}

Total property and equipment 495 991

Long-term portion of notes receivable 10,675

Total assets $ 3,794,704 $ 2,777,560

See independent accountants' review report and accompanying notes to the financial statements. 2

MV Residential Property Management, Inc. Consolidated Statements of Assets, Liabilities, and Stockholder's

Equity- Federal Income Tax Basis (Continued) December 31, 2012 and 2011

2012 2011

Current liabilities

Accounts payable - other 68,033 18,087

Security deposits 7,924

Total current liabilities 75,957 18,087

Stockholder's Equity

Common stock - 100 shares no par value - issued

and outstanding at agregate stated value 500 500

Retained Earnings 3,718,247 2,758,973

Total stockholder's equity 3,718,747 2,759,473

Total liabilities and stockholder's equity $ 3,794,704 $ 2,777,560


MV Residential Property Management, Inc. Consolidated Statements of Revenues and Expenses- Federal Income Tax Basis

Years Ended December 31,2012 and 2011

2012 2011

Revenues

Lease and sale commissions $ 20,400 $ 73,200

Property Management Fees

Affiliates 3,576,011 3,692,600

Other 945,781 744,467

Other fees

Affiliates 1,413,053 1,123,974

Other 336,445 218,007

Total revenues 6,291,690 5,852,248

Administrative and general expenses 4,821,856 4,495,162

Operating profit 1,469,834 1,357,086

Other income (expense)

Depreciation (496) (1 ,097)

Other (529) (344)

Total other income (expense) (1,025) (1,441)

Net income $ 1,468,809 $ 1,355,645





Distributions



MV Residential Property Management, Inc. Consolidated Statements of Stockholder's Equity- Federal Income Tax Basis


Common Retained Stock Earnings Total

500 1,403,328 1,403,828

1,355,645 1,355,645

500 2,758,973 2,759,473

(509,535) (509,535)

1,468,809 1,468,809

$ 500 $ 3,718,247 $ 3,718,747


MV Residential Property Management, Inc. Consolidated Statements of Cash Flows- Federal Income Tax Basis Years Ended


Cash flows provided by operating activities

Net income

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation

Decrease (increase) in accounts receivable

(Decrease) increase in accounts payable

(Decrease) increase in security deposits


Cash flows provided by investing activities

Purchases of property and equipment


Payments received on notes receivable

Net change in affiliate advance

Net cash used in investing activities

Cash flows provided by financing activities

Distributions to stockholder


Net (decrease) increase in cash



2012

$ 1,468,809

$

496

15,213

49,946

7,924

1,542,388

18,378

(993,580)

(975,202)

(509,535)

(509,535)

57,651

511,048

568,699

2011

1,355,645

1,096

(84,633)

17,223

1,289,331

(1 ,321)

(750)

15,320

(1,485,512)

(1 ,472,263)

(182,932)

693,980

511,048





Nature of operations MV Residential Property Management, Inc. (the Company), a wholly owned qualified S Corporation subsidiary of Miller-Valentine Operations Inc. {the Parent Company), is a residential property management company specializing in management of apartment buildings and other multi-family properties primarily in the Midwestern, Eastern and Southeastern United States.

Affiliated entities The financial statements include the accounts of MV Senior Management LLC and its subsidiaries. All transactions between the companies have been eliminated.

Basis of accounting The Company's financial statements have been prepared on the federal income tax basis of accounting. Consequently, certain revenues are recognized when received rather than when earned and certain obligations are recognized when paid rather than when incurred, except for costs capitalized and amortized in accordance with tax regulations. Assets and liabilities contributed by the stockholder or distributed to the stockholder are recorded at their tax basis to the contributing stockholder or, in the case of a distribution, at the Company's tax basis rather than at fair market value.


Cashandcashequ~a~n~

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2012 and 2011, cash equivalents consisted primarily of demand deposit and money market deposit accounts at commercial banks. These accounts, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant credit risk.

Concentrations of credit risk The majority customer revenue comes from properties controlled by affiliated interests located throughout the Midwestern, Eastern and Southeastern United States.

Accounts receivable The Company provides property management and related services and recognizes revenue as the fees for the services are collected. The Company carries its accounts receivable at cost On a periodic basis the Company evaluates its accounts receivable. When amounts are deemed to be uncollectible they are charged to operations. The Company has determined that it has no need for an allowance at this time.

The Company in the normal course of business will advance money to affiliated entities for operating capital. These amounts are considered fully collectible.

See independent accountanfs review report. 7




Property and equipment are stated at cost. Depreciation expense is calculated on property and equipment using accelerated and straight-line methods over recovery periods specified by federal tax regulations.

Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost is removed from the asset accounts and the related allowance is adjusted and any resulting gain or loss is recognized in income for the period.

Notes receivable The Company holds notes in connection with sales of vehicles to affiliated companies. The notes carry interest rates of 3.9% - 5.5%.

Employee benefit plan The Company maintains a qualified 401 (k) plan which covers substantially all employees meeting certain eligibility requirements. Participants may contribute a portion of their compensation to the plan, up to the maximum amount permitted under Section 401 (k) of the Internal Revenue Code. At the Company's discretion, it can match a portion of the participants' contributions. The Company's matching contributions were $11,034 and $0 at December 31, 2012 and 2011, respectively.

Income taxes The Company has elected S-corporation status under the Internal Revenue Code. The shareholders of the parent company, Miller-Valentine Operations, Inc., include the Company's tax attributes in their individual tax returns. Therefore, no income tax provision is included in the accompanying financial statements. Certain accruals and expenses not currently deductible in accordance with income tax regulations are charged against taxable income when paid or become a permanent timing difference.

Accounting for uncertainty in income taxes The Company adopted the provisions Accounting for Uncertainty in Income Taxes. Those provisions clarify the accounting and recognition for income tax positions taken or expected to be taken in the Company's income tax returns. The Company's income tax filings are subject to audit by various taxing authorities. The Company's open audit periods are 2009 - 2011. The Company's policy with regard to interest and penalty is to recognize interest through interest expense and penalties through other expense. In evaluating the Company's tax provisions and accruals, future taxable income, and the reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes its estimates are appropriate based on current facts and circumstances.

Subsequent events Management evaluates events and transactions occurring subsequent to the date of the financial statements for matters requiring recognition or disclosure in the financial statements. The accompanying financial statements consider events through March 25, 2013, the date which the financial statements were available to be issued.

See independent accountant's review report. 8

2. LEASES:



The Company is party to a sub-lease with several affiliates. The lease expires on September 30, 2019. Rent is allocated to the Company annually based on actual head count Rental expense and common expense charges under these leases was $93,336 and $102,288 for the years ending December 31, 2012 and 2011, respectively.

Future estimated minimum lease payments on non-cancelable operating leases are as follows:

2013 $ 101,245

2014 103,274

2015 105,350

2016 107,443

2017 109,598

Thereafter 196,889

$ 723,799

The Company has the opportunity to renew the leases for ten years under similar terms at its option.

3. CONTINGENCIES:

The following summarizes the outstanding guarantees for which the Company is contingently liable.

The Company has guaranteed the delivery of certain low-income housing tax credit (LIHTC) projects. In connection with these projects, the Company has provided multiple guarantees.

The Company guarantees the funding of certain credit-timing reductions, if incurred. The LIHTC projects generate tax credits to investor partners based upon certain criteria including timely completion of the project and achievement of lease up projections during the first two years. The company guarantees that an agreed upon amount of tax credits will be timely delivered to the investor partner during the first two years. To the extent that the credits are not delivered to the investor partner in the year promised the company would make a payment equivalent to the present value of such tax credits. Tax credit guarantees range from $96,250 to $1,572,218 per project in 2012 and from $210,757 to $1,657,971 per project in 2011. The total amount guaranteed by the Company is $13,703,675 and $10,712,102 as of December 31, 2012 and 2011, respectively. The Company has not been required to make a payment related to the late delivery of tax credits in connection with these projects.

In conjunction with the tax credit projects, the Company guarantees secured construction loans in the amount of$93,491,862 and $65,017,586 at December 31,2012 and 2011, respectively. Total amounts outstanding in connection with these loans were $45,784,097 and $9,262,650 at December 31, 2012 and 2011, respectively.




The Company has guaranteed the funding of certain tax credit recaptures for those partnerships, if incurred. There have been no incidents of recapture incurred or funded.

The Company has guaranteed commitments to make advances to certain tax credit properties to fund property level operating deficits. The Company made no payments or advances associated with this guarantee.

The Company provides a completion guarantee on projects in process. Total amount of projects in process are $61,938,527 of which $23,137,965 of work has been put in place at December 31, 2012, leaving $38,800,562 remaining.

The Company is part of an affiliated group of companies, which includes the Parent Company and several affiliates. In 2011, The Parent Company and several of its affiliates restructured certain debt agreements with their principal lenders. While the Company has no direct obligations under these agreements, the restructuring agreements provide for the Parent Company and several affiliates, to make principal payments plus interest at rates ranging from 2% to 5% through 2017. The balances outstanding were $19.7 million and $20.9 million at December 31,2012 and 2011. The Parent Company and its affiliates are in material compliance with the terms of the restructuring agreements at December 31 , 2012.

4. RELATED PARlYTRANSACTIONS:

The majority of the properties from which the Company receives property management fees are owned or controlled by entities affiliated through common ownership. Such properties include rent-restricted affordable housing properties operated under the section 42 low income housing tax credit program, where the affiliate holds the general partnership or controlling member interest. The Company recognized $4,989,064 and $4,816,574 in revenue related to these properties for the years ending December 31, 2012 and 2011, respectively.

The Company has various related party transactions in the normal course of business, including a global cash management process whereby it can advance or be advanced funds to or from affiliates for operating capital.

The Company has notes and advances due from related parties in the amount of $3,085,874 at December 31 , 2012 and $2,128,172 at December 31,2011.

The Company shares administrative resources with affiliated entities. Amounts paid for these services were $1,259,813 in 2012 and $1,272,326 in 2011 .


Attachment I - Copy of the Public Notice - Exhibit ''B''

-----Miller Valentine Group -----

Miller-Valentine Group 9349 WaterStone Blvd. Suite 200 Cincinnati, Ohio 45249

513-77 4-8400 513·683·6165 Fax

EXHIBIT B

Public Notice

OF EXCELLENCE 1963-2013

The Villas at Pine Lake, LLC (Owner) proposes to develop ninety-six (96) apartments units in a complex to

be located at 4656 Rockbridge Road, Pine Lake, GA 30072, and tentatively called The Villas at Pine Lake.

The development is located at Rockbridge and Aberdeen Road on a site consisting of 3.055 acres and is

currently zoned Uptown Pine Lake Transitional. The complex will have 100% of the units (96 units)

income restricted as a result of requested bond financing. In addition, the developer is proposing that

an additionallOO% of the units (96 units) will be income restricted as a result of other financing sources.

Therefore a total of 96 units in the complex will be income restricted.

For more information contact Marvin Wilmoth (Owner's Representative) at:

9349 WaterStone Blvd. Suite 200 Cincinnati, Ohio 45249 [email protected] 305 921-0152 Fax 917 331-0136 Phone

Comments will be received at the address above until February 26, 2014 for consideration.

Sincerely,

Brian M. McGeady Partner President, MV Affordable Housing Development

www.mvg.com

Attachment J - Fact Sheet - Exhibit

Exhibit "D"

HOUSING AUTHORITY OF THE COUNTY OF DEKALB INDUCEMENT RESOLUTION

Fact Sheet Villas at Pine Lake Apartments

LOCATION: 4678 Rockbridge Road, Pine Lake, GA 30072

TYPE: _F_am_n_v-_N_e_w_c_on_st_ru_ct_ion ____________________ _

DEVELOPER: MV Affordable Housing LLC ----------~----------------------

OWNERSillP ENTITY: Villas at Pine Lake, LLC ----------------------------------PROPERTY MANAGER: MV Residential Property Management, Inc.

RENT RANGE: Number __ Square Feet

$

$

$ $

(set aside)

(market)

(set aside) (market)

510-625 15 1br 768 2 50%AMI, 13 60%AMI

610-725 53 2br 1152 12 50%AMI, 41 60%AMI

690-825 28 3br 1280 6 50%AMI, 22 60%AMI

Total Units 96 20 50%AMI, 76 60%AMI

SET ASIDE UNITS: ~% to families within 50/60 % of median income o % market rate

AMENITIES:

~Central AJC • C61it Oolel• ~.,._ • En"'Y Stllr Appl

SOURCES OF FUNDS USES OF FUNDS

14,832,392 14,832392

$ $

CONSTRUCTION PERIOD: 12 Months

FINANCING STRUCTURE: 4% Tax Credits, Tax Exempt Bonds, DCA HOME Funds, Developer Contribution

ANTICIPATED CLOSING: 7115114 ------------------------------------------

33

Attachment K- DeKalb County's Proposed Multifamily Bond

Summary

DeKalb County Proposed Multifamily Bond Project Summary

PROPOSED PROJECT NAME: Villas at Pine Lake

{Current name if rehab of existinl!):

ADDRESS: 4678 Rockbridge Road, Pine Lake, GA 30072

COUNTY TAX ID #: [District, Land Lot, Block, Parcell 1804001016 PROJECTED HA APPLICATION DATE: 2/14/14

APPLICANT: Villas at Pine Lake, LLC

CONTACT PERSON: PHONE: EMAIL:

Marvin Wilmoth 917-331-0136 marvin. [email protected] TYPE OF PROJECT: (fiehab/New Construction/Acg_uisition? l

New Construction

ISSUE AMOUNT REQUESTED: 8,500,000

TOTAL UNITS: 96

BOND INCOME-RESTRICTED UNITS: 96

OTHER INCOME-RESTRICTED UNITS AND SOURCE: 96 LIHTC and HOME

TOTAL# OF INCOME-RESTRICTED UNITS: 96

PROPOSED UNIT MIX AND RENT RANGES:

#of~ 1 BRs ($51 0 to $625 ) #of~3BRs ($ 725 to $825 )

# of 53 2 BRs ($ 61 0 to$ 725 ) #of __ 4BRs ($ to$ )

Please be sure to attach information as to the construction or rehab work being proposed and the on-site supportive services to be offered the residents.

34

Attachment L - Management Agreement

MANAGEMENT PLAN

1. The Role and Responsibility of the Owner and Its Relation and Delegation of Authority to the Management Agent.

a. The Principle Parties recognize the importance of effectively managing the Housing Choice Voucher program as administered by the Housing Authority of DeKalb County.

b. Vice President of MV Residential Property Management, Inc. has executive responsibility for all decisions of the Managing Agent. The District Managers have delegated to them the authority for daily decisions and the responsibility to make emergency decisions. Unusual problems will be referred to the Vice President for his decision. The District Manager will supervise the Community Managers.

c. The Managing Agent must consult on any matter other than normal operating items and emergency maintenance items. The Owner will be advised immediately of such emergency items.

d. The Managing Agent will make decisions on all routine matters without consulting the Owner.

e. The Managing Agent will meet with designated Representatives of the Owner to discuss issues on a regular pre-designated monthly schedule or more frequently if the need arises.

f. The Managing Agent is responsible for coordinating social service programs and contacting appropriate social agencies.

g. The responsibilities of the Owner and Managing Agent are clearly defined in the Management Agreement and do not overlap.

h. The management fee pays those expenses incurred by the Managing Agent for providing supervisory personnel to assure that the on-site personnel are adequately trained to perform their respective duties which includes but is not limited to proper selection of residents, proper computation and collection of rent. The management fee pays expenses incurred by the Managing Agent in providing adequate supervision to see that the requirements of the Management Plan are implemented and effected.

2. The following expenses will be borne directly by the Property:

a. Salary, and bonus for site Manager, leasing and administrative staff (as needed).

1

b. Salary for maintenance, custodial and lawn staff (as needed).

c. Maintenance and repairs.

d. The following management services are performed by the Central Office accounting system and will be billed to the Property as an operating expense:

a. Technical support fees for the computers and software licenses will be billed to the Property based on the number of computers and licenses on site at a cost of $175 per computer per month and $1200 annually per property license.

b. Other supportive services may include but not limited to Marketing, www.YourNextPiaceTolive.com Website, and Call Center, will be billed on an actual cost per unit basis.

c. Routine Section 42 compliance services will be performed at no extra charge to the Property. Extraordinary services, such as defense of non-compliance claims, advanced training, and others will be provided at a charge to be agreed to by the Owner and the Agent.

3. Personnel Policy and Staffing.

a. Managing Agent will hire, supervise and discharge all employees and contractors in accordance with all applicable federal, state and local laws, regulations and ordinances, including but not limited to all Equal Opportunity Laws.

b. If positions become available, any qualified Property residents will be considered.

c. The staffing needs of the Property are:

One Community Manager One Maintenance Person

(1) The Community Manager's duties are as follows:

Marketing apartments. Resident selection. Processing of all applicable forms. Timely submission of all required reports. Rent collection. Coordinating maintenance activities. Community inspections. Processing service requests. Budget monitoring I Cost Control. Providing daily direction and supervision of leasing and maintenance staff. Any additional duties as prescribed by the District Manager or Vice President

2

(2) The maintenance person's duties are as follows:

Maintain curb appeal which includes maintaining the condition and appearance of the property. Refurbish vacant units as quickly as possible. Handle resident service requests within 24 hours. Notify Manager of Life/Safety issues. Notify Manager of illegal activity. Any additional duties as prescribed by the District Manager or Vice President

d. Personnel Policy:

(1) All employees are to have ample training and promotion opportunities. These may include an orientation program for the office staff, attendance at seminars sponsored by HUD, the local Apartment Association and other appropriate trade organizations. Promotion opportunities will be made available to our employees.

(2) Fringe benefits include the availability of a 401 K plan, group medical insurance plan, life insurance, paid vacation each year based on longevity and seven (7) paid holidays per year.

(3) Any personnel decision at the Property level can be appealed to the Human Resources Director at Managing Agent's Central Office.

(4) All employees are expected to give at least three (3) weeks' notice of their intent to terminate their employment. The written notice should state the specific reason the employee is terminating and the last day the employee will work. The notice should be delivered personally by the employee to the employee's supervisor.

The employee's final paycheck will be issued at the next regular payday.

(5) No employee shall be dismissed (or fired) without written reason for dismissal approved by the District Manager. This written reason for dismissal shall be given to the employee along with their final paycheck on the day of dismissal.

(6) The employee termination form, along with the employee's written notice of termination or written reason for dismissal shall be forwarded to the Vice President of MV Residential Property Management, Inc., following the employee's last work day.

e. The lines of authority flow directly from the Vice President of MV Residential Property Management, Inc., to the District Manager who directly supervises the onsite Community Manager.

f. MV Residential Property Management, Inc., will provide and maintain Worker's

3

Compensation coverage for all employees. Employees with authority over the Rental Agency Account are to be covered by the fidelity bond.

4. Leasing Plans and Procedures.

a. The units will be advertised in newspapers. All advertisements shall contain the Fair Housing logo and shall comply with the provisions of any federal, state or local law prohibiting discrimination in housing on the grounds of race, color, sex, creed, handicap, familial status or national origin including Title VI of the Civil Rights Act of 1964 (Public Law ii-3 52, 78 Stat. 241 ), all requirements imposed by or pursuant to the Regulations of the Secretary (24CFR, Subtitle A, Part 1) issued pursuant to that Title regulations issued pursuant to Executive Order 11063, and Title VIII of the 1968 Civil Rights Act and the Fair Housing Amendments Act of 1988.

b. Affirmative marketing practices will be utilized.

c. The office will be open daily and may change with notification to Owner based on leasing needs as established by the District Manager and Vice President. Additional hours will be by appointment with the Community Manager. Initial office hours are:

Weekdays

d. Residents will be required to inspect units prior to occupancy. The resident will make a list of all work needed in the apartment and will be guaranteed these items will be corrected prior to move-in. This list will be signed by both the Community Manager and the resident and placed in the resident's file.

e. An orientation package will be provided to each resident containing information on utilization of the utilities.

f. The Community Manager, with the approval of his/her District Manager, is responsible for selecting residents. These selections are subject to a review by the Owner. The residents shall be selected in accordance with the guidelines of Section 42 of the IRS Code.

5. Procedures for Determining Resident Eligibility. The On-Site Manager uses the following resident screening procedures:

a. Checks previous landlords to verify paying and living habits.

b. Checks credit through reputable credit reporting agency.

c. Verifies employment.

d. Verifies income in accordance with the guidelines of Section of 42 of the IRS Code.

4

6. Plans for Carrying out an Affirmative Maintenance and Repair Program.

a. All utilities will be thoroughly inspected and tested prior to occupancy.

b. An itemized checklist has been developed for the purpose of inspection to move-out and all repair items will be completed prior to re-renting. These inspections will be reviewed by the District Manager.

c. Painting and interior decorating will take place after each move-out.

d. Garbage and trash will be removed on a weekly basis.

e. Major repairs will be authorized by the Managing Agent, approved by the Owner and performed by contract.

f. Grounds upkeep and maintenance will be carried out as follows:

(1) Grounds upkeep and maintenance of grounds will be done by an outside contractor at regular intervals and inspected by the On-Site Manager and District Manager.

{2) Chemical treatment of lawns will be provided by an outside contractor.

(3) Snow removal will be done by an outside contractor.

(4) In unit preventative maintenance shall be performed on a quarterly basis during the second week of the second month of the quarter. During the preventative maintenance visit, furnace filters will be replaced on all HVAC units. Additionally, maintenance personnel will carry out a visual inspection of all Owner provided appliances, heating and air conditioning systems, and plumbing systems. In unit inspections will also include inspections and assessments pertaining to mildew and I or mold I water intrusion, pest infestation, and general upkeep and cleanliness of the apartments. Unsatisfactory inspection findings shall be immediately reported to the On-Site Manager for the facilitation and execution of an appropriate corrective action plan.

(5) Pest exterminating and general pest preventative maintenance shall be carried out by a licensed vendor on a monthly or as needed basis.

g. Entryways, halls and/or Community Building will be cleaned weekly unless inclement weather requires additional cleaning.

h. Residents are instructed in their orientation package to call in all maintenance requests to the rental office. A 24-hour-a-day telephone number is available for emergency maintenance repairs.

7. Rent Collection Policies and Procedures.

5

a. Rent collections will be made at the Office during regular office hours noted in 3c above.

b. Partial payments will be accepted if a resident has run into a particular problem and developed a payment plan with the District Manager. A prepayment is also acceptable.

c. A Fifty Dollar ($50) late fee is charged after the fifth day of the month.

d. When a resident misses a rent payment, a notice will be sent on the fifth of the month. A follow-up visit will be made by the Site Manager to meet with the resident to discuss the reasons for non-payment and work out a payment plan if the cause for nonpayment is of an emergency nature. Eviction proceedings will begin on the 15th day of the month unless satisfactory arrangements are made for payment of rent.

e. Residents will be referred to the local credit counseling agency to establish a budget for problem cases.

f. The eviction procedures are stated in the lease and are consistent with Georgia law. A three-day notice will be served on the 11th of the month.

g. Rent payments are recorded and kept in a separate account according to prescribed procedures.

h. Managing Agent will lease in accordance with the Leasing Guidelines specified in Exhibit B (Leasing Guidelines) attached hereto.

8. Program for Maintaining Account Records and Handling Necessary Forms and Vouchers.

a. All accounting procedures will be consistent with the Standard Operating Procedures of MV Residential Property Management, Inc.

b. The Property's cash flow can be monitored continuously.

c. The monthly accounting reports will be sent to the Owner by the twenty-fifth {25th) day of the month.

9. Plans for Resident-Management Relations.

a. Any resident with a problem that cannot be solved satisfactorily by the Site Manager or the District Manager will be advised to contact the Vice President of MV Residential Property Management, Inc., at the Corporate Office in Cincinnati, Ohio, at (513) 588.1000.

b. The lease is fair and non-punitive.

6

c. A copy of the lease is attached.

10. Management Contract. The standard Management Agreement format will be used.

7

EXHIBIT 8 lEASING GUIDELINES

This property is subject to Section 42 of the Internal Revenue Code of 1986 as amended. Compliance with the Code is of the greatest importance. Owner shall provide Managing Agent with rent schedule and income qualification guidelines per Section 42 of the Code and the terms of any financing documents or other agreements that relate to the leasing and management duties of the Managing Agent.

Managing Agent acknowledges that Owner is required to lease all of the housing units in the Property to Residents whose income and rent levels qualify such apartments for inclusion in determining federal low-income housing tax credits (the "Credits") for the Property pursuant to Section 42 of the Internal Revenue Code of 1986 as amended. This means that all housing units must be occupied by individuals with income less than or equal to 50/60% of area median gross income, adjusted for family size.

Managing Agent further acknowledges that obtaining the Credits will have substantial economic value to Owner and its partners. Managing Agent will familiarize itself with the low income housing tax credit requirements (the "Requirements") as they relate to Managing Agent's leasing and management duties hereunder and shall use its best efforts to comply with such requirements and to the extent Managing Agent is unable to do so, Managing Agent shall promptly notify Owner of such fact and the reasons therefore. Incident thereto, the following provisions shall apply:

a. Managing Agent shall require each prospective Resident to certify, on the Lease application or Lease, the amount of such Resident's annual family income, family size, and any other information required to enable Owner to obtain and maintain LIHTC compliance of the Credits or otherwise reasonably requested by Owner. Managing Agent shall require Residents to certify in writing as to such matters on an annual basis, prior to such time as the information is required for reporting purposes.

b. Managing Agent shall from time to time furnish Owner with a written schedule of maximum rents for the apartments which complies with the Requirements, for Owner's (and any lender's, if required) approval. Without Owner's express prior written consent, Managing Agent shall not enter into any lease on behalf of Owner at a rental amount exceeding the applicable maximum.

c. Managing Agent shall maintain and preserve all written records of Resident family income and size, and any other information necessary to comply with the Requirements or otherwise reasonably requested by Owner throughout the term of this Agreement and shall turn all such records over to Owner upon the termination or expiration of this Agreement.

d. Managing Agent shall prepare reports of low-income leasing and occupancy and other matters related to Managing Agent's obligations hereunder and to the operation of the Property in form suitable for submission to state, federal and/or local housing authorities in connection

8

with the Credits and in compliance with the Requirements.

A. Screening Process

1. Aoolication. Each prospective Resident must complete and sign a written application for lease, containing detailed personal information, previous residences and landlords for several years, information on employment, income, assets, and credit, proposed occupants (including ages) and pets, and references, and containing such other information and statements as will enable Manager to screen the prospective Resident or as is otherwise proper and advisable for the management of the Property in accordance with professional standards.

2. Interview. Manager shall interview every proposed adult occupant of the rental unit.

3. Emolovment. Manager shall obtain written verification of the employment and income information given by the prospective Resident.

4. Credit. Manager shall have conducted a responsible credit agency check of the prospective Resident, and shall personally check with one or more of the Resident's previous landlords, if possible, with respect to past rent payment history.

5. Housekeeping. If possible, Manager shall check with one or more previous landlords of the proposed Resident and other occupants with respect to their ability to maintain an apartment in good condition, pay rent on a timely basis, and to abide by building rules.

6. Other. If advisable, Manager shall check other references and perform other screening of the proposed Resident.

7. Approval. Manager shall approve the proposed Resident's lease application only if, in Manager's best professional judgment, the proposed Resident is qualified to pay rent when due and all proposed occupants are likely to maintain properly the dwelling unit, abide by reasonable rules and otherwise be suitable occupants of the Property. Also, without Owner's prior written consent, Manager shall not approve any lease application unless the Resident and other proposed occupants meet the rental guidelines contained in the Requirements.

8. Nondiscrimination. In the performance of its obligations under the Management Agreement, the Managing Agent will comply with the provisions of any federal, state or local law prohibiting discrimination in housing on the grounds of race, color, sex, creed, handicap, familial status or national origin including Title VI of the Civil Rights Act of 1964 (Public Law ii-352, 78 Stat. 241 ), all requirements impose by or pursuant to the Regulations of the Secretary (24CFR, Subtitle A, Part 1) issued pursuant to that Title regulations issued pursuant to Executive Order 11063, and Title VIII of the 1968 Civil Rights Act and the Fair Housing

9

Amendments Act of 1988.

B. Lease

1. Application. Prior to leasing any dwelling unit, Manager shall have screened the prospective Resident and all other proposed occupants in accordance with Section A hereof, and shall have approved the lease application as described above.

2. Lease Form. In leasing dwelling units, Manager shall use only the form of lease approved in writing by Owner from time to time, without material changes unless approved in writing by Owner.

3. Approved Rent. Manager shall not lease any dwelling unit for a rental amount other than as specified in the rent schedule.

4. Security Deposit. Manager shall require a deposit and shall require such greater amount as circumstances warrant, but not more than the maximum allowed by law.

5. Named Resident. Occupants & Pets. Each adult occupant of the dwelling unit shall be named as Resident in the Lease, and shall be jointly and severally liable for rental payments. The Lease shall specify all other permitted occupants and it shall be a default if any non-permitted occupant resides in the dwelling. In the event the pet policy will be established or changed based on occupancy needs, the Owner shall approve the pet policy in advance. There will be breed restrictions imposed on pets allowed at the Property.

6. Term. Each Lease shall be for a term of no longer than one (1) year.

7. Substitution of Unit. In the event rehabilitation or other plans for the Property will require that the housing unit to be leased to the Resident be vacated or made available to another Resident during any portion of the Lease term, the Lease shall contain a provision for substitution of another dwelling unit and relocation of the Resident.

8. Certain Lease Provisions. The form of lease to be approved by Owner shall contain detailed provisions concerning the following matters of practical importance, including, but not limited to:

a. Condition of Unit. Acknowledgment of the condition of the dwelling unit as described in a unit inspection report.

b. Default Charges. Resident's liability for the following default charges: late rent payment charges; returned check charges; lost keys; damage to the dwelling unit or the Property not caused by ordinary wear and tear; missing property, fixtures or equipment; and costs of rent collection and eviction.

10

c. Security Deposit. Procedures concerning deductions from and return of security deposit, with interest to the extent required by law, and any key deposits.

d. Utilities and Other Charges. Resident's responsibilities concerning utility services to the dwelling unit, other services to the dwelling unit, other services provided by Owner or Manager, and any parking or other charges.

e. Maintenance. Maintenance duties of Resident and of Owner, respectively, separately listed.

f. Alterations. Requirement of Owner's or Manager's consent to alterations of the dwelling unit, listing examples, and to charges of keys and locks.

g. Use Restrictions. Restrictions on Resident's use of the dwelling units, including hazards, noise, nuisance, etc.

h. Changes. Resident's obligation to report changes in Resident's household employment status or income.

i. Rules. Resident's and all other occupants' obligation to comply with any rules and regulations issued by Owner or Manager. A copy of any such rules shall be attached to the Lease.

j. Other. Other provisions customarily included in apartment lease or advisable for the Property, and all provisions necessary to comply with the requirements.

k. Attachments. Acknowledgment of Resident of any attachments to the Lease.

9. Execution. If requested to do so by Owner, Manager shall execute Lease as agent for Owner.

11

Attachment M - Purchase and Sale Contract

BRIDGER 4045652382 p.1

Purchase and Sale Agreement

This Purchase and Sale Agreement (this "Agreement'') is effective as oiJlO, 2 ~ 1

2..0\L\, 2014, by MV RESIDENTIAL LAND LLC, an Ohio limited liability cumpany, or its successors and assigns (the "Purchaser") and BBT INVESTMENTS, L.L.C., a Georgia limited liability company (the "Seller").

In consideration of the mutual promises and conditions contained in this Agreement, the parties agree as follows:

1. Definitions. Unless otherwise stated in this Agreement, all of the capitalized words in this Agreement have the meanings set forth in the Exhibit A hereof, or in other provision of this Agreement.

2. Property Description. On the Closing Date and subject to the performance of all conditions precedent contained in this Agreement, Purchaser agrees to purchase from Seller, and Seller agrees to sell and deliver possession to Purchaser, on the Closing Date, all of Seller's right, title, and interest in and to the Property, free and clear of all Encumbrances, except for the Permitted Encumbrances. If necessary, the exact legal description of the Property, in accordance with Section 5.1, shall be substituted for the legal description and/or depiction of the Property attached hereto as Exhibit Band attached to the Deed.

, 3. · Purchase Price; Deposit: Prorations.

3.1. Purchase Price. The purchase price for all of Seller's right, title, and interest in and to the Property (the "Purchase Price'') is Six Hundred Thousand Dollars ($600,000).

3.2. Deposit. Within ten (10) days after the date of this Agreement, Purchaser shall deliver to Chicago Title Insurance Company, or its affiliate chosen by Purchaser, which shall act as the escrow agent for the Closing (the "Title Companv"), an earnest money deposit, in the amount of Ten Thousand Dollars ($10,000), to be held in an account and in accordance with the terms of this Agreement (the "Deposit"). Interest earned on the Deposit shaJJ be considered part of the Deposit, if any. rf Purchaser tetminates this Agreement in accordance with this Agreement, the Deposit shall be immediately returned to Purchaser. If Purchaser purchases the Property, such Deposit shall be applied by Seller as a credit tO\vards the Purchase Price ·or retumed to Purchaser, as determined by Purchaser. If Purchaser fails to perfonn its obligations, Qr otherwise terminates this Agreement in violation of this Agreement, Seller shall be entitled to retain the Deposit as its sole and exclusive damages under this Agreement.

3.3. Prorations. The balance of the Purchase Price, after application of any credits or prorations set fonh in this Agreement and the application of the Deposit, shall be delivered by Purchaser in accordance with Section 4.3 of this Agreement, by certified or official bank check or wire transfer to the order of the Title Company, subject to the prior delivery in escrow of all instruments of transfer and conveyance in accordance with this Agreement.

4. Closing Date; Closing Deliveries; Costs and Expenses.

4.1. Closing Date. Subject to the satisfaction of all terms and conditions of this Agreement, the closing under this Agreement shall take place as an escrow closing through the offices of the Title Company on a date that is within sixty (60) days after the expiration of the Inspection Period, as extended pursuant to this Agreement, as determined by Purchaser in its sole and absolute discretion, by providing notice to Seller.

Purchase nnd S~lc Agreement- DcKalb County, GA (Pine Luke) Page I of tr, \'2 purchase and sale agreement . MV Residential • OeKalb County GA (Pine lake)·l 1

BRIDGER 4045652382 p.2

4.2. Seller' s Deliveries to Title Company. Subject to the conditions and obligations of this Agreement, Seller shall make the following deliveries to the Title Company or Purchaser, and perform the following acts, at least two (2) days prior to the Closing Date:

4.2.1 . A duly executed general warranty deed, transferring to Purchaser any and all of Seller"s right, title, and interest in and to the Property (the "Deed"), conveying fee simple, good and marketable title to the Property, free and clear of any and all Encumbrances, other than the Permitted Encumbrances applicable thereto, and containing any and all release of dower, courtesy and/or other marital rights, if applicable, as required by state law.

4.2.2. Closing statement (the "Closing Statement"), prepared by the Title Company, executed by Seller, conforming to the proration and other relevant provisions of this Agreement.

4.2.3. Seller shall deliver to Purchaser a final set of construction drawings, plans and specifications (including all appropriate governmental approvals) for any off-site improvements which are Seller's obligation to complete on or before the Closing Date.

4.2.4. A cet1ificate of the members of Seller certifying copies of: (i) formation documents of Seller; (ii) all requisite resolutions or actions of Seller approving the execution and delivery of,this Agreement and the consummation of the transactions contemplated herein; and (iii) the signature ofeach authorized representative of Seller.

4.2.5 . A bill of sale, assignment of leases and such other documents as are necessary to convey to Purchaser all of Seller's right, title and interest in and to the Property other than the real property, including, without limitation, the Tangible Personal Property, Reports, Leases and Licenses, free and clear of any and all Encumbrances, other than the Permitted Encumbrances applicable thereto.

4.2.6 . An affidavit with respect to mechanics ' liens, certifYing that there are no unpaid bills for services rendered or material furnished to the Property, and an agreement indemnifying the Title Company and Purchaser against claims for such services or materials.

4.2. 7. Any and all other documents and instruments incidental to the transactions contemplated by this Agreement and reasonably requested by Purchaser , any Governmental Authority, or Title Company, including-but not limited to: (a) the standard affidavit required by the Title Company for the removal of the standard preprinted exceptions from the title insurance policies; and (b) a Certificate of Non-Foreign Status or other evidence satisfactory to Purchaser and the Title Company confirming that Purchaser is not required to withhold or pay to the Internal Revenue Service any part of the ramount realized" as such term is defined in the Internal Revenue Code of 1986, as amended, and the regulations promulgated pursuant thereto.

4.3. Purchaser's Deliveries to Title Company. Subject to the conditions and obligations of this Agreement, Purchaser shall make the following deliveries to the Title Company or Seller, and perfo1m the following acts, at least two (2) days prior to the Closing Date, unless otherwise noted:

4.3.1. Closing Statement, executed by Purchaser.

4.3.2. Purchaser shall deliver the Purchase Price, as adjusted by this Agreement, to the Title Company, on or before the Closing Date.

4.3.3. A certificate of the members of Purchaser certifying copies of: (i) the formation documents of Purchaser; (ii) all requisite resolutions or actions of Purchaser approving the

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BRIDGER 4045652382 p.3

execution and delivery of this Agreement and the consummation ofthe transactions contemplated herein; and (iii) the signature of each authorized representative of Purchaser.

4.3.4. All other documents and instruments incidental to-the transactions contemplated by this Agreement and reasonably requested by Seller or Title Company.

4.4. Costs and Expenses. Seller shall pay for the following expenses relative to this transaction: (i) its own attorneys' fees; (ii) one half of the Title Company's closing and escrow fees; and (iii) all costs and expenses of transferring and recording the deed of conveyance, including, but not limited to transfer fees, documentary stamp and/or conveyance taxes of transferring the Property. Purchaser shall pay for the following expenses relative to this transaction: (i) one half of the Title Company's closing and escrow fee; (ii) its own financing expenses, if any; (iii) its own attorneys' fees; (iv) all of the premium cost of an O\\ner's policy of title insurance and endorsements; and (v) costs and expense of the Survey.

5. Inspection Period; Seller's DeliYerablcs; Seller's Post-Closing Obligations.

5.1. Inspection Period. Purchaser, at Purchaser sole cost and expense, shall have until 5 p.m. EST on that day which. is five (5) business days following Purchaser's satisfaction of the contingency set forth in Section 5 .1.9 below or such other date as mutually agreed upon by Seller and Purchaser (the "l1ispection Period''), in which to conduct its due diligence review of the Property, testing, investigations and inspections of the physical aspects of the Property, and otherwise to determine the desirability and utility of the Property for Purchaser's intendoo use, as determined by Purchaser, in Purchaser's sole and absolute discretion, including but not limited to the following:

5.1.1. Zoning and Permits. Purchaser shall have confirmed that the Property is zoned to permit the construction of an affordable rental community consisting of approximately seventy-tv.·o (72) units (the "Purchaser's Intended Use''). lf the Property must be rezoned for Purchaser's Intended Use, Seller agrees to cooperate with Purchaser in the rezoning process. Purchaser, at its cost and expense, shall have obtained, upon tenns and conditions satisfactory to Purchaser, all necessary permits, licenses, variances and approvals (collectively, the "Permits'') pertaining to the building, occupancy, signs, utilities, curb cuts, driveways (including ingress and egress to and from public thoroughfares), zoning, use, environmental controls, and any other permits which, in the sole judgment of Purchaser, are necessary for Purchaser's Intended Use:. Seller agrees to execute any applications or other documents and make such other appearances as reasonably requested by Purchaser in order to obtain the Permits.

5.1.2. Utilities. Purchaser shall have confirmed that all utilities, including telephone, stonn sewer, sanitary sewer, water, gas and electric (collectively, the "Utilities") have been adequately extended within satisfactory easements or rights-of-way to a location on the perimeter of the Pro petty at which Purchaser can tap into and receive service without the imposition of tap-in charges to Purchaser other than tap-in charges which are customarily and normally charge.d in the locality in which the Property is located. Such Utilities shall be available in a size and pressure appropriate for Purchase1Js Intended Use. If such Utilities are not so extended and available, or are not an appropriate size or pressure for Purchaser's Intended Use as aforesaid, then Seller hereby covenants and agrees to extend same and/or increase the size and pressure to Purchaser's specifications, at Seller's sole cost, within fifteen (15) days after Purchaser notifies Seller that all other conditions of this Agreement have been satisfied, failing which Seller shall cre.dit against the Purchase Price the costs and expenses of so extending the utilities and/or increasing the size and pressure to Purchaser's specifications as reasonably estimated by Purchaser. Seller shall grant, or cause to be granted to Purchaser all necessary utility easements.

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5.1.3. Easements. Purchaser shall have obtained at or prior to Closing all other easements or licenses deemed necessary by Purchaser upon tenns and conditions acceptable to Purchaser. Seller agrees to reasonably cooperate with Purchaser in obtaining any such easements or licenses.

5.1.4. Lot Split. Purchaser may, at Purchaser's sole cost and expense, complete any subdivision or lot split of Seller's property which is necessary in order to convey the Property to Purchaser as a separate, transferable and taxable parcel. Purchaser may obtain, at Purchaser's sole cost, a certified survey, bearing a legal description, made by a licensed surveyor, showing the area, dimensions and location of the Property to the nearest monuments, streets, alleys or property, the location of all improvements, utilities and encroachments, the location of all proposed and recorded easements against or appUI1enant to the Property, and not disclosing any condition rendering the Property unusable, in Purchaser's sole judgment, for the intended purpose of Purchaser. The Property shall not be located in a flood plain and the survey shall confirm that the Property totals approximately 3.055 acres net of any wetlands or waterways and free of any easements or restrictions related to wetlands or waterways under the jurisdiction of the Army Corp. of Engineers, the State where the Property is located or any other governmental entity or agency.

5. I .5. Soil Tests. Purchaser shall obtain, at Purchaser's cost and expense, borings, percolation tests, toxic or hazardous substance tests and other tests (collectively, the ''Soil Tests") sh9wing that the Property is satisfactory, in Purchaser's sole judgment, for building foundations and the construction, operation-and financing of the improvements which Purchaser may wish to make. Seller hereby grants to Purchaser, its agents or contractors, the right to enter upon the Property to make the Soil Tests and surveys; provided, however, that the tests and survey shall be conducted so as not to damage Seller's property.

5.1.6. Title Insurance. Purchaser shall have obtained a satisfactory Title Commitment in accordance with Section 6.1 ofthis Agreement.

5.1.7. Environmental Phase I and Related Testing. Purchaser, at Purchaser's cost and expense, shall have obtained a current satisfactory Phase I Environmental Audit of the Property and any other environmental testing which Purchaser deems reasonably necessary to evaluate potential environmental risks related to the Property.

5.1.8. Financial Feasibility. Purchaser must have determined, in its sole and absolute discretion, that the purchase and development of the Property for Purchaser's Intended Use is financially feasible.

5.1.9. Receipt of LIHTC Allocation. The Property shall have received an allocation of Section 42 Low Income Housing Tax Credits from the appropriate agency in an amount deemed sufficient by Purchaser, in its sole discretion.

5.1.1 0. Financing. Purchaser shall have obtained a binding commitment for debt and equity financing in amounts and on terms satisfactory to Purchaser in its sole and absolute discretion to use the Property in accordance with Purchaser's Intended Use.

5.1.11. Leases. Purchaser shall have received and reviewed all Leases as well as a rent roll for the Property, including a list of all security deposits and any delinquencies which Leases and rent roll shall be acceptable to Purchaser in its sole discretion.

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If Purchaser determines in its sole and absolute discretion that the Property is not acceptable, Purchaser shall have the right for any reason or no reason either to: (a) terminate dtis Agreement by written notice to Seller on or before expiration of the Inspection Period, or any extensions thereof as mutually agreed upon by Seller and Purchaser, Title Company shall immediately return the Deposit to Purchaser and neither party shall have any further rights or obligations to the other under this Agreement; or (b) waive the requirements and/or contingencies regarding such due diligence review and proceed with this Agreement.

5.2. Extension of Inspection Period. Purchaser shall have the option to extend the Inspection Period for three (3) periods of ninety {90) days each provided Purchaser delivers to Seller a written notice of its exercise of the extension of the Inspection Period prior to the expiration of the Inspection Period, as extended, and deposits with the Title Insurance Company an e>..1ension fee in the amount of Fifteen Dollars ($15,000) for each extension (each, an "Extension Fee"), which Extension Fee(s) shall become non-refundable but credited against the Purchase Price at Closing except in the event of a Seller default in which event the Extension fee(s) shall be refunded to Purchaser. Upon Purchaser's exercise of the first Extension Period, the Deposit shall become non-refundable but remain applicable to the Purchase Price except in the event of a Seller default ]n wltich event the Deposit shall be refunded to Purchaser.

5.3. Liquidated Damages. As a material inducement to Purchaser's execution hereof, Pwchaser and Seller agree that it would be impracticable and extremely difficult to fix actual damages in case of Purchaser's defimlt, Seller agrees that the amount of the Deposit is a reasonable estimate of such damages, and that Seller shall retain the Deposit as liquidated damages, and its sole remedy agains~ Purchaser. Furthermore, Seller agrees that the amount of the Deposit is a sufficient remedy for such Purchaser default, Seller shall no longer have any cause of action or claim against Purchaser in law or in equity, including specific performance, and Purchaser shall be fully released from any action of Seller arising out of Purchaser's alleged breach of this Contract. The parties further agree that the Deposit is a reasonable sum considering all of the circumstances ofdte transactions contemplated by this Agreement.

5.4. Seller's Deliverables/Purchaser Reports. Within seven (7) days after the date of this Agreement, Seller agrees to provide Purchaser with copies of any and all environmental reports, wetlands permits, geotechnical reports, concurrency documents, plans and specifications, plans, bids, covenants, construction contracts, aerial photographs, development agreements, warranties, leases and rent roll, topos, correspondence, utility locations and capacity documents, traffic studies, surveys, title work commitments or policies,-.surveys, soil tests or other inspection reports regarding the Property which are in Seller's possession and any and all reports or information in Seller's possession affecting the Property. ln addition and upon request by Purchaser, Seller shall within three (3) business days, shall deliver to Purchaser copies of any and all other due diligence items requested by Purchaset·. Further, Purchaser shalt provide Seller copies of any third party reports regarding d1e Property generated on behalf of Purchaser to the extent Purchaser has the right to do so.

6. Title Commitment; Sun•ey.

6.1. Title Commitment. Prior to thirty (3 0) days before the expiration of the Inspection Period as san1e may be extended, Purchaser may cause to be furnished to Purchaser, at Purchaser's costs and expense, a title insurance report and conunitment for an ALTA Owner's Title Insurance Policy in a coverage amount equal to the amount of the Purchase Price, from the Title Company (the "Title Commitment"), in which the Title Company commits that upon delivery and recordation of the Deed and other documents provided for in this Agreement, dte Title Company will issue, at its usual rate, an ALTA Owner's Title Insurance Policy, insuring access to the Property and such other endorsements as Purchaser may request (the ''Title Policv"). Title to the Property shall be good and marketable in fee simple in the name of Seller, as detennined in accordance with the standards of the state bar association where the

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Property is located and free and clear of all Encumbrances other than Pennitted Encumbrances. If the Title Commitment or the exceptions show that title is unmarketable, then Purchaser shall notifY Seller of Purchaser's objections prior to the expiration of the Inspection Period. Seller shall undertake, with due diligence, to have the defects identified by Purchaser eliminated. Jf Seller is unable or unwilling to eliminate defects identified by Purchaser within fifteen (15) days, Seller shall notify Purchaser in writing, and Purchaser shall have the option, within fifteen ( 15) days of the written notice by Seller, to be exercised in Purchaser's sole discretion, to: (i) proceed with Closing of this transaction subject to such title defects; or (ii) terminate this Agreement, in which event the Title Company shall retum to Purchaser the Deposit. Notwithstanding the foregoing, Purchaser shall have the right to object to any new title exceptions which are identified between the date of the Title Commitment and the Closing Date.

6.2. Survey. Prior to thirty (30) days before the expiration of the Inspection Period as same may be extended, Purchaser may cause to be delivered to Purchaser, a survey of the Property, at Purchaser's cost and expense (the "Survey'').

7. Representations bv Seller. As of the date of this Agreement and as of the Closing Date:

7.1. Title to Propertv. Seller represents that Seller has good, marketable and indefeasible fee simple title to the Property, free and clear of all Encumbrances of any nature except Permitted El)Cumbrances. The Property constitutes all of the Property necessary and sufficient to conduct the operations of the Property in accordance with Seller's past practices. On the Closing Date the Property shall be unoccupied and free of any lease or other right of possession or claim of right of possession by any person or entity other than Purchaser. No easements or other encumbrances affect the Property which would interfere, prevent or frustrate the use of the Property for Purchaser's Intended Use.

7.2. Authority and Organization. Seller represents that it is a Georgia limited liability company, duly organized, validly existing, and in good standing under the laws of the State of Georgia. and has all requisite power and authority to carry on its business as it is presently being conducted. Seller represents that Seller has obtained or will obtain all necessary approvals to authorize the transaction and consummate the transfer of the Property as herein contemplated.

7.3. Enforceability. Seller represents that this Agreement has been duly authorized and approved by Seller, has been duly and validly executed and delivered by Seller and is a valid and legally binding agreement of Seller, enforceable against Seller in accordance with its terms, except to the extent that such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relative to or affecting the rights and remedies of creditors generally and by general principles of equity (regardless of whether in equity or at law). The execution and delivery of this Agreement bave been duly authorized and validly executed and delivered by Seller, and will not: (i) constitute or result in the breach of or default under any oral or written agreement to which Seller is a party or which affects the Property; (ii) constitute or result in a violation of any order, decree or injunction with respect to which Seller and/or the Property is bound; (iii) cause or entitle any party to have a right to accelerate or declare a default under any oral or written agreement to whic.h Seller is a party or which affects the Property; and or (iv) violate any provision of any municipal, state or federal law, statutory or othen:vise, to which Seller or the Property may be subject.

7.4. Transfer of Property; Compliance with Laws. Seller represents that on the Closing Date, Seller will transfer the Property and possession of the Property to Purchaser. Seller represents that the Property is in good standing and in compliance with all applicable covenants, conditions, restrictions, easements, laws, regulations, rules affecting the Property and for which the Property is subject. Seller represents that neither Seller nor the Property has received any notice of and there exist no known proceedings or investigations by any Governmental Authority against or affecting the Property.

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7.5. Continued Compliance with Laws. The continued compliance with all legal requirements relating to the Property is not dependent on facilities located at any other property; and compliance by any other property with any legal requirements applicable to the other property is not dependent on the Property.

7.6. Property Rights. Seller represents that other than this Agreement, there are no outstanding options, contracts, commitments, warranties, pledges, agreements or other rights of any character entitling any Person to acquire any or all of the Property. Further, all service and maintenance contracts with respect to the Property will, unless Purchaser notifies Seller in writing during the Inspection Period that Purchaser intends to assume the same. be tem1inated by Seller, at Seller's cost, at Closing.

7.7. Litigation. There is no pending or threatened litigation, arbitration, administrative action or examination, claim, or demand whatsoever relating to the Property. No attachments, execution proceedings, liens, assignments or insolvency proceedings are pending or threatened against Seller or the Property or contemplated by Seller. Seller is not contemplating the institution of insolvency proceedings.

7.8. Eminent Domain. Seller has no knowledge of any pending or contemplated eminent do;nain, condemnation, or other governmental or quasi-governmental taking of any part or all of the Property, including, but not limited to, any action that would compromise access to the Property due to changes in public roads or impact the availability of utilities to the Property. Seiter has no knowledge of any pending moratorium or other action which would impact construction on the Property.

7.9. Assessments/Tax Appeals. Seller has not been notified of any possible future improvements by any public authority, any part ofthe cost of which might be assessed against any part of the Property. Seller has not appealed the current tax valuation of the Property and has no knowledge of any existing or potential changes in the tax value of the Property. During the tenn of this Agreement. Seller shall not formally or informally appeal the tax valuation of the Property without Purchaser's prior written consent not to be unreasonably withheld.

7. I 0. Environmental. To the best of Seller's knowledge, Seller: (i) has not used the Property for the storage, treatment, generation, production or disposal of any toxic or hazardous waste, material or substance nor does Seller, have knowledge of such use by others; (ii) has not caused or permitted and has no knowledge of the release of any toxic or hazardous waste, material or substance on or off site of the Property; (iii) has not received any notice from any governmental authority or other agency concerning the removal of any toxic or hazardous waste, material or substance from the Property; and (iv) has disclosed to Purchaser the location of all underground storage tanks on the Property, if any. No event has occurred with respect to the Property which would constitute a violation of any applicable environmental law, ordinance or regulation.

7.11. Z2.!J.in.g. The Propet1y is zoned for residential use, including multi-family use in accordance with the Purchaser's lntended Use.

8. Representations by Purchaser. As of the date of this Agreement and as of the Closing Date:

8.1. Authority and Organization. Purchaser represents that it is an Ohio limited liability company, duly organized, validly existing, and in good standing under the laws of the State of Ohio, and has all requisite power and authority to carry out the transactions contemplated by this Agreement and has obtained all necessary approvals to authorize the transaction and consummate the transfer of the Property as herein contemplated.

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BRIDGER 4045652382 p.8

released from any and all obligations arising hereunder or as a result of their course of dealings and the Deposit and any Extension Fee(s) shall be immediately delivered to Purchaser; (ii) Seller agrees to reimburse Purchaser for all actual expenses and costs of Purchaser in connection with its due diligence regarding this Agreement and the purchase of the Property; and (iii) PurChaser may pursue any and all remedies available to Purchaser under law or equity, including the right of specific performance of the obligations of Seller hereunder.

11.2. lf Purchaser should fail to perform in accordance with this Agreement, or othen.vise breach any ofthe terms, covenants or agreements contained in this Agree.ment, then Seller may terminate this Agreement and upon such termination, the parties hereto shall be released from any and all obligations arising hereunder or as a result of their course of dealings and the Deposit shall be immediately delivered to Seller, such sum being agreed upon as the sole damages for the failure of Purchaser to pe1form the duties, liabilities and obligations imposed on it by the terms and provisions of this Agreement. Seller agrees to accept and take the Deposit as its total damages and relief as Seller's sole remedy hereunder.

12. Condemnation; Destruction. If, prior to the Closing Date, all or any significant portion of the Property is taken by eminent domain {or is the subject of a pending or contemplated taking which has not been consummated) or if a material part of tl1e Property, including any means of ingress thereto or egress thyrefrom is damaged or destroyed by fire or other casualty prior to the Closing Date, Seller shall notify Purchaser of that fact, ·and Purchaser shall have the option to terminate this Agreement upon notice to Seller and not later than ten (1 0) days after receipt of Seller's notice; in which case, all obligations of Seller and Purchaser hereunder will be extinguished.

13. Assignment. Purchaser may assign its interest or rights or obligations in this Agreement to an affiliated entity of Purchaser, without the consent of Seller. Purchaser must obtain the consent of Seller to assign Purchaser's interest or rights or obligations in this Agreement to any individual or entity which is not an affiliated entity of Purchaser.

14. Notices. Either party may change its address by notice to the other party. Any notice provided or permitted to be given under this Agreement must be in writing and may be served: (i) by depositing the same in the United States mail or with a reputable nationwide delivery service, addressed to the party to be notified, postage prepaid; and overnight, registered or certified with return receipt requested; or (ii) by delivering by a national courier service. Notice given in accordance with (i) above shall be effective three (3) days after mailed. ~otice given in accordance with (ii) above shall be effective upon delivery by the national courier at the address of the addressee. For purposes of notice, the addresses of the parties shall be as follo\•;s:

Seller: BBT INVESTMENTS, L.L.C. 3 Horseleg Creek Road P.O. Box 5083 Rome, Georgia 30162 Attention: Robert Troy Telephone: -, Olo - 3 C:;,rQ ·• 3 007 Email: 1-ra¥ 'CciJ @e \ \ Se:H,>H. '\e._-\-

with a copy to:

Attention:

Purchase and Sale Agreement - DcKalb County. GA (Pine Lake) Pagc9 ~r 16 ''2 purchase nnd sale agrem~cnl· MV Residential- DeK.nlb County GA (Pine Lakc)-1 .1

BRIDGER

Purchaser:

\Vith a copy to:

4045652382

MV RESIDENTIAL LAND LLC 9349 WaterStone Blvd. Cincinnati, Ohio 45249 Attention: Brian McGeady Telephone: (5 13) 588-2694 Email: Brian.McGeadylalmvg.com

Strauss Troy Co., LPA 50 E. Rivercenter Blvd., Suite 1400 Covington, Kentucky 410 11 Attention: Pete A. Smith, Esq. Telephone: (513) 768-9734 Email: pasm [email protected]

p.9

15. Entire Agreement and Amendments. This Agreement, together with the schedules and exhibits hereto, each of which is deemed to be a part hereof, contains the entire understanding between the parties hereto concerning the subject matter hereof and it is understood and agreed that all negotiations and agreements heretofore had between the patties are merged herein.

16. Amendment; Waiver. This Agreement may be amended, modified or supplemented only by an agreement in writing signed by all parties hereto. The parties agree that there are no oral agreements, understandings, representations or warranties that are not expressly set forth herein. Neither the failure nor any delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, or of any other right, power or remedy; nor shall any single or partial exercise of any right, power or remedy preclude any further or other exercise thereof, or the exercise of any right, power or remedy. Except as expressly provided herein, no waiver of any of the provisions of this Agreement shall be valid unless it is in writing and signed by the party against whom it is sought to be enforced.

17. Successors and Assiens. The agreements and representations herein shall inure to the benefit of and shall be binding upon the heirs, executors, administrators, successors, and assigns of the respective parties.

18. Time of Essence. Time is of the essence of all provisions of this Agreement.

19. Governing Law. This Agreement shall be governed by and construed in accordance with the Jaws of the State where the Property is located, without regard to conflicts of laws principles of that state. In the event of the bringing of any action or suit by either party against the other arising out of this Agreement, the party in whose favor final judgment shall be entered shall be entitled to recover from the other party all costs and expenses of suit, including reasonable attorney's fees.

20. Counterparts; Facsimile. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered, shall constitute an original, but all of which together shall constitute but one instrument. Signatures transmitted by facsimile shall have the same effect as original signatures.

21. Scvcrabilitv. This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations. If any provision of this Agreement or the application thereof to any person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, but the extent of such invalidity or unenforceability does not destroy

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the basis of the bargain among the parties as expressed herein, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law.

22. Captions and Headings. The captions and headings of this Agreement are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

23. Multiple Sellers. If two or more persons constitute this Agreement each as a seller, the word "Seller" shall be construed as if it reads "Sellers" throughout this Agreement.

24. Acceptance. In the event tbis Agreement is not signed simultaneously by Purchaser and Seller, it shall be considered to be an offer made by the party first executing it. In such event this offer shall expire at midnight Eastern Time on 2014 unless one copy of this Agreement, executed by the party to whom this offer had been made, shall have been mailed, in accordance with this Agreement.

25. Interpretation, No Presumption; Survival. This Agreement has undergone drafts with the negotiated suggestions of all parties and therefore no presumption shall arise favoring any party by virtue of the authorship of this Agreement or any of its provisions. The parties hereto have been advised by th~ir respective legal counsel regarding the fonn and substance of the provisions contained herein. The use of the word "including" in this Agreement means including, without limitation, the items following. All ofthe representations, warranties and covenants made in this Agreement shall survive the Closing.

26. Date of Performance. If the date for performance of any act under this Agreement falls on a Saturday, Sunday or federal holiday, the date for such perfonnance shall automatically be exte.nded to the first succeeding business day that is not a Saturday, Sunday or federal holiday.

27. Pre-Closing Marketing. Seller acknowledges that Purchaser will be applying for an award of Section 42 Low Income Housing Tax Credits (the "Credits") to assist Purchaser in its purchase and/or operation of the Property. At such time as Purchaser may be awarded such Credits, Seller agrees that Purchaser may begin to promote and market the Property by reasonable means that do not unduly interfere with the Seller's operation or ownership of the Propet1y, including the placement of signage upon the Property and tlte open marketing of the Property for Purchaser's intended Use.

'· 28. Apportionments. Adjustments to the Purchase Price paid hereunder shall be made between Seller and Purchaser and shall be prorated as applicable upon the Closing Date. For purposes of all prorations provided for herein, Seller shall be responsible for all days prior to tlte Closing Date and Purchaser shall be responsible for the Closing Date and all days on or after the Closing Date. All prorations shall be made on a 365 day calendar year basis and the actual number of days in the month of the Closing Date.

28.1. All income and expense, inc-luding but not limited to applicable prepaid expenses, rents. cash adjustments, and accrued liabilities, attributable to the ownership of the Property, measured and prorated between Seller and Purchaser on an accrual basis until the Closing Date will be for the account of the Seller and on or after the Closing Date are for the account of the Purchaser.

28.2. Seller shall pay or credit against tlte Purchase Price all Llnpaid real estate taxes, including penalties and interest, for all tax. years preceding the Closing Date, and shall credit a portion of such taxes for the ta.x. year in which the Closing is held, prorated through the Closing Date. The proration of such taxes shall be based on a 365-day year and on the most recently available rate and valuation and the amount so computed and adjusted shall be final. Seller shall pay any special assessments which: (a) arc a

Purchase and Sale Agreement- DeKolb County, GA (Pine Lake) Page 11 orl6 \'2 purchase and sale agreement- MV Rcstdential- DcKalb CoWlt}•GA (Pine Lake)-1.1

BRIDGER 4045652382 p.11

lien on the Property on the Closing Date, whether such assessments are past due, then due or thereafter to become due; or (b) are not a lien but are then known and will be payable in whole or in paL1 after the Closing Date.

28.3 . Seller is responsible for the payment of any and all agricultural tax recoupment charges and/or defen·ed real estate taxes for the Property.

28.4. Seller shall transfer to Purchaser any and all security deposits relating to any and all leases or other funds held in trust for tenants of the Property, if any.

29. Brokers. The patties acknowledge that no real estate agent, broker or company has been used in this transaction by either party and no party has taken any actions which would give rise to a claim for any commission. Purchaser and Seller each covenant and agree to defend, indemnify and save the other harmless from any actions, damages, fees, real estate commissions, costs and/or expenses (including reasonable attorneys' fees) resulting from or claimed to be due on account of the purchase and sale of the Property due to the acts of the other party. These reciprocal indemnities shall include the costs of discharging any lien and the cost of defending any litigation, including reasonable attorney's fees (the party to be indemnified shall have the right to choose its own counsel).

301 Ooerations Pending Closing. Seller, at its expense, shall use reasonable efforts to maintain the Property until the Closing or sooner termination of this Agreement, substantially in its present condition and pursuant to Seller's normal course of business (such as maintenance obligations but not including extraordinary capital expenditures or expenditures not incurred in such nonnal course of business), subject to ordinary wear and tear, damage by fire or other casualty and condemnation. In addition, Seller shall deliver to Purchaser a copy of any written notice of default delivered by Seller to any Tenant.

[Sig~wtw·es on the Next Page.]

Purchase and Snl<! A(!rccmcnl - DcKalb Coun:y, GA (Pine Lake) v2 purchase and sale ugrccmcnl- MV Residential- DeKalb County GA (Pine Lakc)·l.l

Pagc12of16

BRIDGER 4045652382 p.12

Purcbase and Sale Agreement

Signature Page

11'\ WiTNESS WHEREOF, Seller and Purchaser have executed this Purchase and Sale Agreement as of the date listed above.

BBT INVE.STME>JTS, L.L.C., a Georgia limited liability company

By:~~~ PrintNaM~~ni'Y!o s ""'=obi"" Title: m_j M e..Y'\'\ lrJ ~ 1

Purchaser:

MV RESJDENTIAL LAND LLC an Ohio limited liability company

B)'·: MY Residential Development LLC an Ohio limited liability compan~·

Its: Sole Memb '

By: ----~------'---~>oF-Print ~arne: Brian McGeady

Its: Authorized Signer

Content approved by: NuJ/n.J._· _ Signature block appro~:~

[End ofSigrratures.]

f'urcbasL' and Sale AllTccmcnt- Dc:Knlb Cnunly, GA (Pin~ lake) v2 purcltasc and snlc nr.rccmcnr- MV ~~~dcntial - DcKalb Co:mty GA (Pine Lllkc)-1.1

P111!.:13orl6

BRIDGER 4045652382 p.13


Exhibit A

Definitions

For the purposes of this Agreement, the following terms shall have the following meanings:

"Appurtenances" mean all rights, privileges, easements, hereditaments, tenements and rights-of-way appurtenants to, or used in connection with, the beneficial use and enjoyment of the Property, including, without limitation, all right, title and interest, if any, of Seller in and to all water rights, open or proposed highways, streets, roads, roadways, avenues, alleys, sidewalks, easements, strips, gores or rights-of-way, ingress and egress, in, on, across, under, in front of, contiguous to, adjacent to, abutting, adjoining or otherwise benefi1ing the Property, both public and private.

"Encumbrance" means any lien, pledge, mortgage, charge, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, encroachment or other survey defect, transfer restriction, easements and restrictions related to wetlands and waterways, or other encumbrance of any nature whatsoever.

"Governmental Authoritv'' or "Govenunental Authorities" mean any government or political subdivision thereof, whether federal, state, local or foreign, or any agency or instrumentality of any such government or political subdivision, or any court or arbitration body, having authority over the Property.

"Improvements" mean all improvements, buildings, structures and fixtures currently located on the Property or to be located on the Prope1ty as of the Closing Date, excluding any f'lxtures owned by tenants, including, without limitation, all heating and air conditioning systems, parking facilities and services, refrigeration, ventilation or other utilities, facilities or services located on the Property or owned by Seller and used in connection with the Property.

"Leases" mean each and every lease of space at the Property and any amendments thereto (a) in full force and effect as of the Effectiv.e Date and/or (b) executed by Seller after the Effective Date in compliance with the terms and provisi,ons of this Agreement.

"Licenses" mean all of the following owned by Seller, any and all licenses, permits, certificates, consents, registrations, certifications, approvals, operating rights, service contracts, intellectual property, waivers and other authorizations, whether issued or granted by any Governmental Authority or by any other Person, with respect to the Property.

"Permitted Encumbrance" means: (a) any mortgage or related security documents on the Property to be released on or before the Closing Date; (b) easements and restrictions of record which do not interfere in any material respect with the ownership of the Property for Purchaser's Intended Use; (c) liens for real property ta.xes not yet due and payable; and (d) other exceptions approved in writing by Purchaser.

"Person" means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, unincorporated organization, or other organization, whether or not a legal entity, and any Governmental Authority.

Purchase and S:lle Agrcern~'fll - DcKalb County, G.<\ (Pine Lake) !'age 14 of 16 v2 purch.1se and sale aGfCCm~"lll- MY Residential- Dc:Kalb County G!\ (Pine la!.c)-1 1

BRIDGER 4045652382 p.14

"Property" means that certain approximate 3.055 acres of real prope11y, net of any wetlands or watenvays, located at 4656 Rockbridge Road, Rome, DeKalb County, Georgia, being part of parcel no. 18 040 0 I 016, and more particularly described and/or depicted in ExJtibit B. together with all Improvements, Appurtenances, together with all of Seller's right, title and interest in and tothe following: (i) the Tangible Personal Prope1ty; (ii) any and all signage, identifYing names and all marketing materials of or associated witil the real property; (iii) any and all Licenses; (iv) any and all Records; {v) goodwill, trademarks, trade names, service marks, telephone and facsimile numbers regarding the foregoing real property; (vi) all such other tangible or intangible property used or useful in the ownership of the Property; and (vii) any and all contracts, agreements, and other arrangements relating to the o·wnership of the foregoing real property, including any existing lease and any and all service contracts relating to third party service providers of the foregoing real property, as detennined by Purchaser during the Inspection Period.

"Records" mean any and all books, lists, leases, documents, manuals, marketing infonnation, databases, and speciftcations, architectural renderings, warranties, blue prints, floor plans, mylars, forms and records used in connection with the Property and/or any Improvements on the Property.

"Tangible Personal Propertv" means a11 furnishings, fixtures, furniture, artwork, apparatus, appliances, tools, machinery, accessories, equipment, and other tangible personal property of any type or description owned by Seller and used or held for use in connection with the ownership of the Property, if any.

i

Purchase and Sale Agreement - DcKalb Count). GA (Pine Lake) Page IS ofl6 v2 purchase and sale agreement- MV Residcntinl- DcKalb County GA (Pmc L~ke)- 1.1

BRIDGER 4045652382 p.15


Exhibit B

Legal DescriptioniDepiction of the Propertv

All that tract or parcel of land lying and being in land lot 40 of the 18th District of Dekalb County, Georgia and being more particularly described as follows;

Beginning at the intersection of the northerly right of way of Rock Bridge Road (having a variable right of way) and the wes1erly right of way of Aberdeen Road (having a variable right of way and run thence along said northerly right of way North 84 degrees 36 minutes 06 seconds West a distance of 80.72 feet to the intersection of said right of way with centerline of branch; Thence run along said centerline of branch the following 22 courses, North 09 degrees 31 minutes 31 seconds West a distance of 20.79 feet to a point; North 36 degrees 38 minutes 16 seconds West a distance of20.23 feet to a point; North 59 degrees 48 minutes 09 seconds West a distance of 46.04 feet to a point; North 37 degrees 15 minutes 42 seconds West a distance of 43.00 feet to a point; North 63 degrees 04 minutes 51 seconds West a distance of 13.51 feet to a pliint; North 08 degrees 18 minutes 05 seconds West a distance of 31.68 feet to a point; North 60 degrees 20 minutes 59 seconds West a distance of 26.43 feet to a point; North 28 degrees 24 minutes 00 seconds West a distance of 62.43 feet to a point; North 02 degrees 47 minutes 54 seconds East a distance of 46.96 feet to a point; North 06 degrees 33 minutes 0 L seconds East a distance of 35.84 feet to a point; North 07 degrees 09 minutes 56 seconds West a distance of 29.40 feet to a point; North 02 degrees 13 minutes 46 seconds east a distance of 28.42 feet to a point; North 02 degrees 20 minutes 43 seconds East a distance of 28.73 feet to a point; North 10 degrees 44 minutes 59 seconds West a distance of 20.39 feet to a point: North 36 degrees 35 minutes 36 seconds East a distance of 13.19 feet to a point; North l8 degrees 26 minutes 12 seconds East a distance of 18.12 feet to a point; North 08 degrees 21 minutes 26 seconds West a distance of 17.20 feet to a point; ~orth 14 degrees 04 minutes 57 seconds East a distance of 50.88 feet to a point; North 31 degrees 12 minutes 02 seconds East a distance of21.88 feet to a point; North 19 degrees, 50 minutes 06 seconds Wes1 a distance of29.39 feet to a point; North 04 degrees 39 minutes 33 seconds East a distance of 17.13 feet to a point; North 08 degrees 45 minutes 07 seconds West a distance of 25.57 feet to a point; Thence leaving said centerline of branch and run South 81 degrees 52 minutes 57 seconds East a distance of293.37 feet to a W' rebar found on said westerly right of way; thence nm along said westerly right of way South 08 degrees 46 minutes 37 seconds West a distance of 110.00 feet to a W' rebar found: Thence continue along said right of way South 08 degrees 46 minutes 37 seconds West a distance of 433.77 feet to a pk nail set and the Point of Beginning.

Said tract or parcel of land to contain 3.055 acres.

Purchase and Sill~ Agreement- Dc:<Dtb County, GA (Pine Lake) Pag~ 16 of 16 v2 purchase a:1d sale agreement- MV Residential - DcKalb County GA (Pine Lake)-1 .I

FROM FAX NO. Feb. 25 2012 04:10PM P1

HOME ADDENDUM

T~is Pre-Contract Agreement (A~ement) is executed for the property located. at 4656 Rockbridge Road, Pme Lake, DeKalb County, Gcorg•a between the following parties:

Buyer: MY .Residential Land LLC, an Ohio

limited liabiJity company

Se!ler: BBT Investments, J....L.C

a Georgia 1imited Jiabjlitv company

Address: 9349 WaterSton~ Blvd. Cincinnati. OH 45249

Address: 3 Horseleg Creek Road Rome. GA 30162

AGREEMENT CONDITIONS: The Buyer may use Federal funds obtained from the U.S. Department of Housing and Development to acquite·property owned by the Seller. Therefore, please be informed of the following: · ·

Voluntary Sale-

1) The Buyer d~s not have the right of eminent domain. 2) Because this is a voluntary transaction, the Buyer will not be able to acquire the property offered for sale if negotiations fail to

result in an amicable agreement. 3) The Buyer estimates the fair market value of the property to be $600,000 .

. 4) Even though Federal funds will be use.d in the acquisition of the property, the Seller WILL NQ'( be entitled to any relocation benefits,

5) Any tenant legally occupying the property is eligibl~ to receive relocation assistance and benefits as identified in the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) of 1970, as amended.

Timely Notices-.

1) The Seller ~uthorizes the Buyer, the fWlding buyer, or a designated representative, to provide to each resident the notices required by I:IUD's instructions found 1n HUD Handbook 1378 .

. 2) · The Seller authorizes the Buyer, the funding buyer, or a designated representative, to provide, or permit to be provided, a move•in notice to ·any person who wishes to mak;e application to become a tenant.

3) Before signing a lease and commencing occupancy, the person must be informed of the following: a. lfthe application is funded, the new tenant may be displaced; and, b. The person would rug qualify as a "displaced person" as a result of the project and. therefore, would not be eligible to

receive mwassistaijce or benefits.

Recordkeeping-

1) The Seller agree:s to proVide the Buyer, the funding buyer, or a ·designated representative, when requested, the names and addresses ofthe residents residing in the property.

2) The Seller authorizes the Buyer, the funding buyer, or a designated representative,' to survey the residents to determine the relocation costs and housing needs.

AGREEMENT ACCEPTANCE: ·The Buyer and Seller understand if the conditions of this Agreement 'are not complied with, either party may tenninate the real property sales contract (Contrae!) by notifyin& the other p.arty by certified mail, return-receipt requested, that the Contract is

. terminated. The Buyer and Seller voluntarily accept these Agreement conditions and agree to enter into a Contract for the property

~ d-f7fd.Ollf g;goature of Seller . . j&~/ ,/ ~l~ .?A 97~~- 't:::.. Signature~itness . Date

'KJII·9'13-33'0 Witness Phone Number:

AddressofWitness: ,:3¥§>0 l)t}fii.S BtvD ftt4GM:· 3o341' . --7

S !'nature .of Buyer

~l~#.

2-7 -1</ Date

d- 1-JV Date

MV RESIDENTIAL LAND LLC an Ohio limited liability comr-afl}

1~ By MV Residential Development LLC ~'W" an Ohio limitc111iabi~any

Its SoleMe er ' { O By ----Prinl Name £E' frJ. 'f

Autho ·zed ogner

tt3 vq vtlft O:W..,17Wir J>Lv& , cuvetrJA)m . oM 4 SJ.V£ DCA Housing flmmce Developmc:nt Division . 1 of I

Attachment N - Developer Proforma Numbers

PINE LAKE FAMILY SOURCE AND USE OF FUNDS

%of Total Monthly Debt Annual Debt O~scriution Tgtal Sourc~ Rate T~rm (MQnth~} AmQrtlza!!Qn Servl!;!! §~rvl~~

Limited Partner- Low Income Housing Tax Credit Equity 4,014,559 27.07% Perm 4,250,000 2865% 600% 360 360 25,481 305,771 Deferred Developer Fee 677.476 457% 000% 180 180 3,764 State Tax Credit 1,640,357 1106% 000% 0 0 0 DCA HOME 4,250,000 28.65% 000% 0 0 0

Total Sources 14 832 392 100.00%

Low Income Eligible

Acquisition Canst/Rehab Site Non-Eligible Per Unit Basis Basis Basis Other

AcqulsHion Costs Land 600,000 6,250 600,000

Construction Costs Residential Structures 6,912,000 72,000 6,912,000 On-Site Improvements 1,500,000 15,625 1,500,000 1,500,000 Off-Site Improvements Construction Contingency 494,634 5,152 494,634 General Requirements 504,720 5,258 504,720 Builder Profit I Overhead 672,960 7,010 672,960 Water I Sewer /Impact Fees 192,000 2,000 192,000 BuHde(s Risk Insurance/ Bond(s) 15,000 156 15,000 Permits 96,000 1,000 96,000

Transaction Costs Architectural Fees 278,000 2,896 278,000 Engineering Fees 35,000 396 35,000 Third Party Studies (Envlro I HlstoricJGreen Cons 50,000 521 50,000 Taxes During Construction 10,000 104 10,000 Soft Cost Contingency 25,000 260 25,000 Cost Certification I Audit 15,000 156 15,000 Legal- General Legal 60,000 625 60,000 Legal - Partnership and Related 40,000 417 40,000 Tax Credit Fees- Reservation 34,568 360 34,568 Tax Credit Fees- Compliance 76,800 600 76,800 Tax Credit Fees- Application 5,500 57 5,500 Miscellaneous Development Costs 25,000 260 25,000 Mari<etSiudy 5,000 52 5,000 Appraisal 5,000 52 5,000

Financing Costs Perm loan orig fee - lender 42,500 443 42,500 Construction loan orig fee - lender 85,163 887 85,163 Title & Recording- Construction & Perm 39,097 407 39,097 OperatinR Reserve 357,725 3,726 357,725 MV lnterast Can-y Cost 10,000 104 10,000 Construction Interest 363,576 3,787 279,875 83.701

Other Costs New Construction/Rehab - Developer Fee 1,856,399 19,337 1,856,399 Rent Up & Mari<eting 116,000 1,208 116,000 Clubhouse Furniture 125,000 1,302 125,000 125,000 Issuer fee 21,250 221 21,250 Issuer Counsel 10,000 104 10,000 Bond Consel 50,000 521 50,000 Bond Underwriter ~2.500 443 42,500 Underwriters Counsel 27,000 281 27,000 Raing Agency Fee 15,000 156 15,000 Bond Trustee/Counsel 9,000 94 9,000 Printing of offering document 2,000 21 2,000 Miscellaneous 5,000 52 5,000

Total Uses. 14 832 392 154 504 13 254 750 1 500000 125 000 322166 1 255475

PINE LAKE FAMILY PROJECTED CASH FLOW • NOI

Gross Property Real Estate Total Replacement

Total Total Affordable Net Other Effective Gross Operating Management Net Opernting Construction Permanent Cash Flow DSC

Year Rental Income Income Vacancy Rental Income Expenses Fee Taxes Expenses Income

Reserves Debt Service Debt Service

2014 2015 179,760 2,344 (12,583) 169,520 (134,293) (9,324) (54,000) (197,617) (28,096) (5,775) (16,933) (50,805) (2.00) 2016 813,200 10,602 (56,924) 766,878 (268,586) (42,178) (74,160) (384,924) 381,954 (26,909) (33,867) (178,366) 142,812 1.67 2017 821,760 10,714 (57,523) n4,9SO (268,586) (42,622) (74,160) (385,368) 389,582 (28,008) (305,771) 55,804 1.18 2018 838,200 10,928 (58,674) 790,454 (276,644) (43,475) (76,385) (396,503) 393,951 (28,848) (305,771) 59,332 1.19 2019 854,964 11 ,146 (59,847) 806,263 (284,943) (44,344) (78,676) (407,964) 398,299 (29,713) (305,771) 62,815 1.21 2020 872,063 11,369 (61,044) 822,388 (293,491) (45,231) (81,037) (419,759) 402,629 (30,605) (305,771) 66,253 1.22 2021 889,505 11,597 (62,265) 838,836 (302,296) (46,136) (83,468) (431 ,900) 406,936 (31 ,523) (305,771) 69,643 1.23 2022 907,295 11,829 (63,511) 855,613 (311,365) (47,059) (85,972) (444,395) 411 ,217 (32,469) (305,771) 72,978 1.24 2023 925,441 12,065 (64,781) 872,725 (320,706) (48,000) (88,551) (457,257) 415,468 (33,443) (305,771) 76,255 1.25 2024 943,949 12,307 (66,076) 890,179 (330,327) (48,960) (91 ,207) (470,494) 419,685 (34,446) (305,771) 79,468 1.26 2025 962,828 12,553 (67,398) 907,983 (340,237) (49,939) (93,944) (484,119) 423,864 (35,479) (305,771) 82,613 1.27 2026 982,085 12,804 (68,746) 926,143 (350,444) (50,938) (96,762) (498,144) 427,999 (36,544) (305,771) 85,685 1.28 2027 1,001,727 13,060 (70,121) 944,666 (360,957) (51,957) (99,665) (512,579) 432,087 (37,640) (305,771) 88,676 1.29 2028 1,021,761 13,321 (71,523) 963,559 (371,786) (52,996) (102,655) (527,436) 436,122 (38,769) (305,771) 91,582 1.30 2029 1,042,196 13,587 (72,954) 982,830 (382,939) (54,056) (105,734) (542,729) 440,101 (39,932) (305,771) 94,397 1.31 2030 1,063,040 13,859 (74,413) 1,002,487 (394,428) (55,137) (108,906) (558,471) 444,016 (41 ,130) (305,771) 97,115 1.32

Total 14.119,774 184.084 {988.384! 13.315.474 ,4.992.026! {732.351! ,1.395.282) !7.119.659! 6,195,814 ,511.233} ,50.800) ,4.459,157! 11174.624

2

PINE LAKE FAMILY OPERATING ASSUMPTIONS • INCOME

LIHTC Rental Income Annual

Sq. Total Sq. Max Gross Utility Actual Actual Gross Rent Per Annual Rent/Unit A!!artment T~!!e Baths #of Units Ft./Unit Ft. %of AMI Rent Allow Net Rent Rent Sg/Ft Rent/Unit T~!!e One Bedroom Garden 1.0 2 768 1,536 50% 604 94 510 604 0.664 6,120 12,240

One Bedroom Garden 1.0 13 768 9,984 60% 725 94 625 719 0.814 7,500 97,500

Tm Bedroom Garden 2.0 12 1,152 13,824 50% 725 115 610 725 0.530 7,320 87,840

Tm Bedroom Garden 2.0 41 1,152 47,232 60% 870 115 725 840 0.629 8,700 356,700

Three Bedroom Garden 2.0 6 1,280 7,680 50% 837 147 690 837 0.539 8,280 49,680

Three Bedroom Garden 2.0 22 1,280 28,160 60% 1,005 147 825 972 0.645 9,900 217,800

96 1,129 108.416 713 0.640 47,820 821,760

other Income Monthly

Monthly Monthly Annual Net Units Amount Income RentiS!!ace Vacanc~ Income

Mise Income 96 $10.00 960 11 ,520 7.00% 893

960 11 ,520 7.00% 893

3

PINE LAKE FAMILY OPERATING ASSUMPTIONS- EXPENSES

Operating Expenses

Subject Property Annual

Description Annual Expense Expense/Unit

Property Management Fee 42,622 444 Advertising 11 ,040 115 Auto!Travel 1,500 16 Audit 4,000 42 Bank 850 9 Commissions 4,800 50 Electric 15,360 160 Elevator 5,400 56 Grounds 10,560 110 Leasing Agent 9,120 95 Maintenance 64,800 675 Office 7,200 75 Pest Control 1,500 16 Postage 500 5 Property Manager 52,500 547 Telephone 2,496 26 Turnover 19,200 200 Waste Collection 4,000 42 Water/Sewer 34,560 360 Insurance 19,200 200 Project Operating Expenses 311 ,208 3,242

Real Estate Taxes 72,000 750 Non Operating Expenses 72,000 750

Total Trended Expenses 383,208 3,992

Replacement Reserves 26,400 275

Asset Management Fee 3,300 34

PINE LAKE FAMILY SCHEDULED ABSORPTION

What Total Percent Cumulative Market Cumulative Credit Cumulative Percent Building Units Units Units Units Units Units Market Units Units Credit Units Qualified

Delivered PIS PIS PIS Rented Rented Rented Rented Rented Rented Occupied

Jan-15 0.0% 0.0% Feb-15 0.0% 0.0% Mar-15 0.0% 0.0% Apr-15 0.0% 0.0% May-15 0.0% 0.0% Jun-15 0.0% 0.0% Jul-15 1 48 48 50.0% 12 12 12 12 12.5%

Aug-15 2 48 96 100.0% 12 24 12 24 25.0% Sep-15 96 100.0% 12 36 12 36 37.5% Oct-15 96 100.0% 12 48 12 48 50.0% Nov-15 96 100.0% 12 60 12 60 62.5% Dec-15 96 100.0% 12 72 12 72 75.0%

Aug-15 96 72 72

Occupied 75.00% 12.00

What Total Percent Cumulative Market Cumulative Credit Cumulative Percent Building Units Units Units Units Units Units Market Units Units Credit Units Qualified

Delivered PIS PIS PIS Rented Rented Rented Rented Rented Rented Occupied

Jan-16 96 100.0% 12 84 12 84 87.5% Feb-16 96 100.0% 12 96 12 96 100.0% Mar-16 96 100.0% 96 96 100.0% Apr-16 96 100.0% 96 96 100.0% May-16 96 100.0% 96 96 100.0% Jun-16 96 100.0% 96 96 100.0% Jul-16 96 100.0% 96 96 100.0%

Aug-16 96 100.0% 96 96 100.0% Sep-16 96 100.0% 96 96 100.0% Oct-16 96 100.0% 96 96 100.0% Nov-16 96 100.0% 96 96 100.0% Dec-16 96 100.0% 96 96 100.0%

24 24

Occupied 100.00% 12.00

5

PINE LAKE FAMILY CALCULATION OF TAX CREDITS

New and Rehab Credit Acquisition Credit Total LIHTC Credits

Eligible Costs 13,254,750 0 13,254,750 Historic Tax Credit 0

0 Subtotal 13,254,750

HUD 221 D 3 Limit 0

Adjusted Eligible Basis 13,254,750

Applicable Fraction 100.00% 100.00%

Qualified Basis 13,254,750 0 13,254,750

DDAIQCT Basis Boost 100.00% 100.00%

Eligible Basis 13,254,750 0 13,254,750

Credit Rate 3.26% 0.00%

Total Calculated Credit 432,105 0 432,105

Maximum Credit 10,000,000 0

Tax Credit Allocated 432,105 432 105

Annual Credit to Investors 431,673 0 431 ,673

Credit Price 0.930 0.930

Federal Tax Credit Equity 4,014,559 0 4 014 559

Credit Price 0.380 State Tax Credit Equity 1,640,357

6