Securities and Exchange Commission v. Nadel et al

Filing 1311

DECLARATION of Burton W. Wiand re 1310 Verified MOTION for miscellaneous relief, specifically to Enforce Constructive Trust through Turnover of Real Property, or in the Alternative, through Foreclosure of the Receiver's Equitable Lien by Burton W. Wiand. (Attachments: # 1 Exhibit A - Doc 29 Order granting partial motion for summary judgment, # 2 Exhibit B - Final Judgment, # 3 Exhibit C - BK Case Doc 39 Order Granting Motion to Confirm Termination or Absence of Stay or Alternatively Relief From the Automatic Stay, # 4 Exhibit D - AQ Doc 115 Motion to transfer, # 5 Exhibit E - AQ Doc 182 ORDER granting 115 Motion to transfer; granting 117 Motion to transfer, # 6 Exhibit F - AQ Doc 184 Turnover Order, # 7 Exhibit G - 1 (pages 1-25) - AQ Doc 258 MOTION for confirmation of sale of Realty - with exhibits, # 8 Exhibit G - 2 (pages 25-50) - AQ Doc 258 MOTION for confirmation of sale of Realty - with exhibits-2, # 9 Exhibit G - 3 (pages 51-101) - AQ Doc 258 MOTION for confirmation of sale of Realty - with exhibits-2, # 10 Exhibit H - AQ Doc 263 FINAL JUDGMENT CONFIRMING RECEIVER'S SALE OF REALTY, # 11 Exhibit I - Hudgins Doc 264 Order Approving Sale of Real Propert)(Lamont, Michael)

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EXHIBIT G Case 6:07-cv-00608-ACC-DAB Document 258 Filed 08/11/10 Page 1 of 8 PageID 2658 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION CASE NO.: 6:07-cv-0608-ORL-22-DAB SECURITIES AND EXCHANGE COMMISSION, ) ) Plaintiff, ) ) -v. ) ) AQUACELL BATTERIES, INC. and ) MICHAEL J. NASTE, ) ) Defendants, ) ) AQUACELL BATTERIES FLORIDA, INC., ) ETERNERGY, INC., ) GAMING SOFTWARE, INC. ) (f/k/a BET-NET ENTERPRISES, INC.), ) GAMING SOFTWARE INTERNATIONAL, ) GODFATHER’S INC., ) MIGHTY MUSCLE CARS, INC., and ) HOLLYWOOD MOVIE HAIR PRODUCTS, INC. ) ) Relief Defendants. ) ________________________________________________/ RECEIVER, MICHAEL L. GORE’S MOTION FOR CONFIRMATION OF PRIVATE SALE OF REALTY (165 KNOLL TOP ROAD, ROBBINSVILLE, NORTH CAROLINA) Receiver Michael L. Gore (“the Receiver”) moves this Court for the entry of an Order, pursuant to 28 U.S.C. § 2001(b), confirming the Receiver’s sale to Dennis J. Schneider and Virginia Schneider (“Buyers”) of real property located at 165 Knoll Top Road, Robbinsville, North Carolina (the “Property”), and states as follows: BACKGROUND 1. On April 12, 2007, the Securities and Exchange Commission (“SEC”) commenced this enforcement action against the corporate defendant, Aquacell Batteries, Inc., individual defendant, Michael J. Naste (“Mr. Naste”), and relief defendants, Aquacell Batteries Florida, Case 6:07-cv-00608-ACC-DAB Document 258 Filed 08/11/10 Page 2 of 8 PageID 2659 Inc., Eternergy, Inc., Gaming Software, Inc. (f/k/a Bet-Net Enterprises, Inc.), Gaming Software International, Godfather’s Inc., Mighty Muscle Cars, Inc., and Hollywood Movie Hair Products, Inc. 2. On April 13, 2007, this Court entered its Temporary Restraining Order (“TRO”) and Order Appointing Receiver in this action. On May 24, 2007, this Court entered its Preliminary Injunction Order (“PIO”). 3. Based upon the sworn allegations made by the SEC in its Complaint and based upon the Receiver’s independent investigation, the Receiver determined that funds from Aquacell were used to purchase a home located at 165 Knoll Top Road, Robbinsville, North Carolina, Legal Description recorded in Book: 00281, Page 0179, Graham County Official Records, more fully described as follows: Lot B-3, Stecoah View Subdivision, Stecoah Township, Graham County, North Carolina, as described and conveyed in the deed dated December 12, 2005, from Stecoah Vista, LLC to Trophy Group, Inc., said deed being recorded at Deed Book 263, Page 389, Graham County Registry of Deeds. Being the same real property purported to be conveyed in the deed dated April 19, 2007, from Trophy Group, Inc. to MWH Investments, LLC, said deed being recorded at Deed Book 281, Page 179, Graham County Registry of Deeds (hereinafter, the “Property”). 4. Thereafter, on May 9, 2008, the Receiver filed his Motion for the Entry of an Order Directing the Turnover and Transfer of Certain Real Property Located in Graham County, North Carolina [DOC 115]. 5. On September 23, 2008, the Court entered an Order Transferring Title of the Property Located in Graham County, North Carolina [DOC 184]. 6. The Receiver immediately undertook efforts to market and sell the Property through the use of a licensed, experience residential estate broker located in the Graham County 2 Case 6:07-cv-00608-ACC-DAB Document 258 Filed 08/11/10 Page 3 of 8 PageID 2660 area, Southland Realty. The agent listed the Property on the local MLS system, took photographs and published its listing online, conducted several open houses and contacted local brokers. Over the course of more than eighteen (18) months, Southland Realty aggressively marketed the Property, initial listing the Property for $249,000.00. Due to the conditions throughout the U.S. economy in general, and the depressed market for vacation homes specifically, Southland Realty adjusted its listing price with the approval of the Receiver in order to stimulate interest in the Property Most recently, the asking price was lowered to $159,900. Pursuant to the listing agreement with Southland Realty, the Receiver is responsible for paying a standard real estate commission of 7% percent on the sale of the Property. 7. As a result of these efforts, the Receiver entered into an agreement (“Purchase Agreement”) for the purchase of the Property for $140,000, which the Buyers have made an earnest money deposit in the amount of $2,000. A true and correct copy of the Purchase Agreement is attached hereto as Exhibit “A”. 8. Based on the terms of the Purchase Agreement and in conformance with 28 U.S.C. § 2001(b), the Receiver has done the following: a) The Receiver obtained three appraisals on the Property from licensed, disinterested real estate appraisers estimating the market value of the Property to be $158,000 (7/23/10), $151,500 (7/30/10) and $224,000 (7/30/10), for an average appraised value of $177,833.33. True and correct copies of the appraisals are attached hereto as Composite Exhibit “B”. The purchase offer exceeds two-thirds of the average appraised value (as required by 28 U.S.C. § 2001(b)). b) The Receiver has published the Notice of Sale of the Property to the Buyer “Notice of Sale”) commencing on August 5, 2010 in a newspaper of general circulation, The Graham Star. Attached hereto as Composite Exhibit “C” is a 3 Case 6:07-cv-00608-ACC-DAB Document 258 Filed 08/11/10 Page 4 of 8 PageID 2661 copy of the Notice of Sale and the Affidavit of Publication. The Notice of Sale details the terms of the proposed sale to the Buyer, including the property description and the price, and allows for the submission and consideration of overbids as set forth in 28 U.S.C. § 2001(b), provided that such are received by August 16, 2010, by 5:00 p.m. EDT. Pursuant to 28 U.S.C. § 2001(b), the overbid must be at least $154,000. 9. Based on the publication of the Notice of Sale, the Receiver will notify the Court if any bids greater than $154,000.00 are received by 5:00 p.m. EDT on August 16, 2010. Should the Receiver receive no higher bids, then the Receiver requests that the Court confirm the sale in accordance with the terms of the Purchase Agreement and upon such notification by the Receiver, enter the proposed Order Confirming the Sale and Final Judgment, attached hereto as Exhibits D and E. 10. Based upon the appraised market values of the Property, the Receiver believes that the sale price of $140,000.00 is an appropriate amount and the sale of the Property could realize a significant recovery for investors. The Receiver proposes to satisfy the costs and expenses of the sale (e.g., brokerage fees and prorations for property taxes, insurance, etc…). DISCUSSION 11. 28 U.S.C. § 2001(b) governs the Receiver’s sale of the Property. Specifically, the statutes provides: Before confirmation of any private sale, the court shall appoint three disinterested persons to appraise such property or different groups of three appraisers each to appraise properties of different localities. No private sale shall be confirmed at a price less than two-thirds of the appraised value. Before confirmation of any private sale, the terms thereof shall be published in such newspaper or newspapers of general circulation as the court directs at least ten days before confirmation. The private sale shall not be confirmed if a bona fide offer is made, under conditions prescribed by the 4 Case 6:07-cv-00608-ACC-DAB Document 258 Filed 08/11/10 Page 5 of 8 PageID 2662 court, which guarantees at least a 10 per centum increase over the price offered in the private sale. 28 U.S.C. § 2001(b). 12. Section 2001(b) requires that the Receiver publish a notice of the sale of real property in a newspaper of general circulation, and the Receiver has published such a notice in The Graham Star newspaper. The notice provided the details of the sale (including the property description and the price), and allowed for the submission (on or before August 16, 2010, by 5:00 p.m. EDT) and consideration of overbids in the amount of $154,000. 13. Section 2001(b) also requires the Court to “appoint three disinterested persons to appraise” the property in question, and to approve the sale only if the price is at least two-thirds of the “appraised-value.” As set forth above and as shown in Composite Exhibit “B” hereto, the Receiver has already obtained appraisals from three disinterested appraisers. Accordingly, the Receiver also requests that this Court approve the appraisers selected by the Receiver. Each of these appraisers is licensed and qualified (and disinterested), and the purchase offer exceeds two-thirds of the average appraised value. 14. The Receiver believes that the sale of the Property to the Buyers pursuant to the price, terms, and conditions provided in Exhibit “A” is in the best interest of the Receivership Estate. First, the sale of the Property at this time will ensure that the Receiver will not have to bear the carrying costs and risks associated with continuing to own the Property. The Receiver’s carrying costs include real property taxes, insurance, utilities, and other upkeep expenses. Finally, if the sale to the Buyers is confirmed, the Property should produce net proceeds of approximately $125,000. 15. The Receiver considered the following factors to conclude the Buyers’ $140,000 purchase price to be reasonable: a) the financial crisis in the United States which commenced in 5 Case 6:07-cv-00608-ACC-DAB Document 258 Filed 08/11/10 Page 6 of 8 PageID 2663 September 2008 and continues through today, particularly in the housing and credit markets and, b) the length of time the property has been on the market (approximately 21 months) together with the lack of interest in the Property. Indeed, given today’s economic conditions, the Receiver believes that this proposed sale is an appropriate outcome for the estate. 16. Accordingly, the Receiver requests that this Court confirm the sale to the Buyers, permit the Receiver to close the transaction, and issue such other and further relief as is just. For this Court’s convenience, a proposed Order granting this Motion and confirming the sale is attached as Exhibit “D”. In addition, and in order to ensure finality for the protection of the Buyers, the Receiver also requests that this Court issue a Final Judgment, under Rule 54(b), Fed.R.Civ.P., confirming the foregoing sale. See Bank of Lincolnwood v. Fed. Leasing, Inc., 622 F.2d 944, 947 (7th Cir. 1980) (certification under Federal Rule 54(b) is appropriate if action involves multiple claims for relief or multiple parties, there is a final decision as to at least one claim or the rights and liabilities of at least one of the parties, and there is an express determination that there is no just reason for delay and that a final judgment should be issued). Here, the Buyers of Property are not parties to this action and will have no further role in this action. Accordingly, the Buyers should not have to wait until the conclusion of the entire case before having finality with respect to the issuance of a Final Judgment confirming the sale of the Property. For this Court’s convenience, a proposed Final Judgment is attached hereto as Exhibit “E”. 6 Case 6:07-cv-00608-ACC-DAB Document 258 Filed 08/11/10 Page 7 of 8 PageID 2664 RULE 3.01(G) STATEMENT Counsel for the SEC is in agreement with the relief sought in this Motion. Dated this 11th day of August, 2010. /s/ Eric C. Reed Jonathan Cohen Florida Bar No. 384305 E-mail: Shutts & Bowen LLP 1500 Miami Center 201 South Biscayne Boulevard Miami, FL 33131 Telephone: (305) 358-6300 Facsimile: (305) 347-7873 And Andrew M. Brumby, Esq. Florida Bar No.: 650080 E-mail: Eric C. Reed, Esq. Florida Bar No.: 0557161 E-mail: Shutts & Bowen LLP 300 S. Orange Ave., Suite 1000 Orlando, FL 32801-5403 Telephone: (407) 423-3200 Facsimile: (407) 425-8316 Counsel for Receiver CERTIFICATE OF SERVICE I HEREBY CERTIFY that on August 11, 2010, I electronically filed the foregoing document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being served this day on all counsel of record or pro se parties identified on the attached Service Lists by either transmission of Notices of Electronic Filing generated by CM/ECF or in some other authorized and specified manner for those counsel or parties who are not authorized to receive electronically Notices of Electronic Filing. /s/ Eric C. Reed OF COUNSEL 7 Case 6:07-cv-00608-ACC-DAB Document 258 Filed 08/11/10 Page 8 of 8 PageID 2665 SERVICE LIST VIA ELECTRONIC MAIL James V. Etscorn, Esq. Florida Bar No. 705111 E-mail: BAKER & HOSTETLER LLP SunTrust Center, Suite 2300 200 South Orange Avenue Post Office Box 112 Orlando, FL 32802-0112 Telephone: (407) 649-4000 Facsimile: (407) 841-0168 Attorneys for Defendants Scott A. Masel, Esq. Senior Trial Counsel Florida Bar No. 0007110 Direct Dial: (305) 982-6398 E-mail: Trial and Lead Counsel Elizabeth D. Fatovich, Esq. Senior Counsel New York Bar No. 3984283 Direct Dial: (305) 416-6250 E-mail: SECURITIES AND EXCHANGE COMMISSION 801 Brickell Avenue, Suite 1800 Miami, FL 33131 Telephone: (305) 982-6300 Facsimile: (305) 536-4154 Attorneys for Plaintiff John J. Carney, Esq. Telephone: (212) 589-4255 Email: Jimmy Fokas, Esq. Telephone: (212) 589-4200 Email: BAKER & HOSTETLER LLP 45 Rockefeller Plaza New York, NY 10111 Co-counsel for Defendants Jonathan R. Williams, Esq. Florida Bar No. 178810 E-mail: JONATHAN R. WILLIAMS, P.A. Post Office Pox 9247 Daytona Beach, FL 32120 Telephone: (386) 882-1686 Facsimile: (386) 492-3896 Counsel for Tina Mitchell Tucker H. Byrd, Esq. E-mail: MORGAN & MORGAN, P.A. 20 North Orange, Suite 1600 Orlando, Florida 32801 Telephone: (407) 420-1414 Attorneys for Mike Andrews John P. Knight, Esq. Email: Meghan L. Riordan, Esq. Email: mriordan@morrison MORRISON MAHONEY LLP 250 Summer Street Boston, MA 02210 Telephone: (617) 737-8891 Facsimile: (617) 342-4889 Counsel for Candace and Tiffany Naste L. Reed Bloodworth, Esq. Florida Bar No. 0718491 Email: Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth, P.C. Post Office Box 2346 Orlando, FL 32802-1200 Telephone: (407) 841-1200 Facsimile: (407) 423-1831 Local Counsel for Pro Hac Vice Admission SERVICE LIST VIA U.S. MAIL Timothy Fieldler, Esq. E-mail: FOGLE & FIELDLER, PLLC P.O. Box 24 Deland, Florida 32721-0024 Telephone: (386) 734-4215 Michael Hennigan, M.D. 1847 Florida Avenue Panama City, FL 32405 E-mail: Telephone: (850) 914-8657 Facsimile: (850) 914-8669 Diamond Capital LLC c/o Scott C. Sinclair, Esq. Sinclair Law Firm 416 Travis Street, Suite 715 Shreveport, LA 71101 Attorneys for Michael Naste, Jr. ORLDOCS 11898588 3 8 Case 6:07-cv-00608-ACC-DAB Document 258-1 Filed 08/11/10 Page 1 of 9 PageID 2666 Jul 05 10 02:51 p SOUTHLAND REALTY From La p,2 828-479-1223 OFFER TO PURCHASE A~D CONTRACT [Consult "GuideHnesn (form 2G) for guidance in completing this form] Dennis J. Schneider and wife Virginia B. Schneider ,as Buyer, hereby offers to purchase and Owner of record/Michael L. Gore, Receiver , as Seller, upon acceptance of said offer, agrees to sell and convey, all of that plOl, piece or parcel ofland described below, together with all improvements located thereon and such fixtures and personal property as are listed below (collectively referred to as the "Property"), upon the tenns and conditions set forth herein. This offer shall become a binding contract on the date that: (i) the last one of the Buyer and Seller has signed or initialed this offer or the final counteroffer, ifany, and (ii) such signing or initialing is communicated to the party making the offer or counteroffer, as the case may be. Such date shall be referred to herein as the "Effective Date." ), REAL PROPERTY. Located in _ _ _--::R..;:.o=b=b.:.:in.:..:s~v::...:;.:.:II.;::e.L.!. .,:;N.=. C.: : :;.•:,. ....,;G:::;.ra::.=h.;,;:a::::m.:.:.....;C=o=::u:.;:n.:..tvL.-_ _ _ County, State of North Carolina,., o and is known more particularly and described as: Address: Street 165 Knoll Top Road City: Robbinsville. NC Zip 28771 NOTE: Governmental authority over taxes, zoning, school districts, utilities and mail delivery may differ from address shown. Legal Description: 3bdrml3ba 2 StOry Home located on Lot B-3 Subdivision Name: Stecoah View Subdivision Plat Reference: Lot Lot B-3 , Block or Section n/a as shown on Plat Book or Slide nla at Page(s) nla (Property acquired by Seller in Deed Book 00281 at Page 0179 ). NOTE: Prior to signing this Offer to Purchase and Contract - Vacant Lot/Land, Buyer is advised to review Restrictive Covenants. if any, which may limit the use of the Property, and to read the Dec1aration of Restrictive Covenants, By-Laws, Articles of Incorporation, Rules and Regu]ations. and other governing documents of the owners' association and/or the subdivision, ifapplicable. If the Property is subject to regulation by an owners' association, it is recommended that Buyer obtain a copy ofa completed Owners' Association Disclosure And Addendum (standard fonn 2A 12-T) prior to signing this Offer to Purchase and Contract, and include it as an addendum hereto, 2. FIXTURES: The following items, if any, and if owned by the Seller, are included in the purchase price free ofliens: any built-in appliances, light fixtures, ceiling fans, attached floor coverings, blinds, shades, drapery rods and curtain rods, brackets and all related hardware, window and door screens, storm windows, combination doors, awnings, antennas, satellite dishes and receivers, burglar/fire/smoke alarms, pool and spa equipment, solar energy systems, attached fireplace screens, gas logs~ fireplace inserts. electric garage door openers with controls. outdoor pLants and trees (other than in movable containers). basketball goals, storage sheds, mailboxes, wall and/or door mirrors, attached propane gas tank, invisible fencing including all related equipment, lawn irrigation systems and all related equipment, water softener/conditioner and filter equipment, and any other items attached or affixed to the Property, EXCEPT any such items leased by the Seller and the following items: .:.:n.=o;.;.:n:".;:e'--_________________ 3. PERSONAL PROPERTY: The following personal property is included in the purchase price: See Attachment A 4. PURCHASE PRICE: The purchase price is $ 140,000.00 and shalJ be paid in U,S, Dollars. Should any check or other funds paid by Buyer be dishonored, for any reason, by the institution upon which the payment is drawn, Buyer shall have one (I) banking day after written notice to deliver good funds to the payee. In the event Buyer does not timely deliver good funds, the Seller shall have the right to tenninate this contract upon written notice to the Buyer, The purchase price shall be paid as follows: (a) $ 2,000.00 , EARNEST MONEY DEPOSIT with this offer by [J cash ~ personal check ::J bank check :=J certified check =:J other: to be deposited and held in escrow by McKinney and Taflant Trust Account ("Escrow Agent") until the sale is closed, at which time it will be credited to Buyer, or until this contract is otherwise terminated. In the event: (1) this otTer is not accepted; or (2) any of the cond itions hereto are not satisfied, then all earnest mon ies shall be refunded to Buyer, In the event of breach of this contract by Seller, all ~arnesl monies shall be refunded to Buyer upon Buyer's request, but such r~tum shaIl not affect any other remedies avatlable to Buyer for such breach. In the event of breach of this contract by Buyer, then all earnest monies shall be forfeited to ScHer upon Selle(s request, but such forfeiture shall not atfect any other remedies availabJe to Seller for such breach. III AtALTO~ Page t of8 This rorm jointly approved by: North Carolina Bar Associatjon North Carolina Association of REAL TORS®, Inc. Buyer initials ~ This fOlm pro6.Jcad t7f. »&r FornxIIator. ST ANDARD FORM 2-T Revised 7/2008 @ 712009 Seller initials _~;;;....;:..~_ _ _ __ EXHIBIT 80()·499·9612 PAGE 219' RCVD AT 715/2010 2:49:55 PM [Eastern Daylight Time)' SVR:SB-NAP-RFAXJ6' DNIS:7259' CSID:828 4791223' DURATI~ I .. "A" Case 6:07-cv-00608-ACC-DAB Document 258-1 Filed 08/11/10 Page 2 of 9 PageID 2667 SOUTHLAND REALTY , Jul 05 10 02:51p p.3 828-479-1223 From La NOTE: In the event of a dispute between Seller and Buyer over the return or forfeiture of earnest money held in escrow. a licensed real estate broker ("Broker") is required by slate law (and Escrow Agent. if not a Broker. hereby agrees) to retain said earnest money in the Escrow Agent's trust or escrow account until Escrow Agent has obtained a written release from the parties consenting to its disposition or until disbursement is ordered by a court of competent jurisdiction. Alternatively. jf a Broker is holding the Earnest Money, the Broker may deposit the disputed monies with the appropriate clerk of court in accordance with the provisions ofN.C.G.S. §93A-12. THE PARTIES AGREE THAT A REAL ESTATE BROKERAGE FIRM ACTING AS ESCROW AGEl"'T MAY PLACE ANY EARNEST MONIES DEPOSITED BY BUYER IN AN INTEREST BEARl~G TRUST ACCOUNT AND THAT A~Y INTEREST EARNED THEREON SHALL BE DISBURSED TO THE ESCROW AGENT MONTHLY IN CONSIDERATION OF THE EXPENSES INCURRED BY l.\-lAINTAINING SUCH ACCOUNT AND RECORDS ASSOCIATED THEREWITH. (b) $ _ _ _ _ _ _ _ _ _ _"""nA:..=a, (ADDITIONAL) EARNEST MONEY DEPOSIT to be paid to Escrow Agent no later than _ _ _ _ _ _ _ _ _ _ • TIME BEING OF THE ESSENCE WITH REGARD TO SAID DA TE. "la, OPTION FEE in accordance with paragraph 16, Alternative 2, to be paid to Seller on the (e) $ Effective Date. (NOTE: If Alternative 2 applies~ then do not insert $0, N/A, or leave blank). (d) $ nla, BY ASSUMPT10N of the unpaid principal balance and ail obligations of SeJler on the existing loan(s) secured by a deed of trust on the Property in accordance with the attached Loan Asswnption Addendum. nla, BY SELLER FINANCING in accordance with the attached Seller Financing Addendum. (e) $ (1) $ 138.000.00. BALANCE of the purchase price in cash at Closing. 5. LOAN CONDITION: (a) Loan: Buyer's perfonnance is contingent upon Buyer's ability to obtain a 0 FHA [] V A (attach FHAIV A Financing Addendum) C Conventional o Other: cash sale loan at a C Fixed Rate 0 Adjustable Rate in the principal amount of nla (plus any financed VA Funding Fee or FHA MIP) for a tenn of n/a year(s), at an initial interest rate not to exceed n/a % per annum, with mortgage loan discount points not to exceed n/a % and with loan origination fee not to exceed nla % of the loan runount ("Loan"). (b) Loan Obligations: The Buyer agrees to: (i) Make written application for the Loan, authorize any required appraisal and pay any necessary fees within n/a days after the Effective Date; (ii) Promptly furnish Sener written confinnation from the lender ofbaving applied for the Loan. I f Buyer fails to furnish Seller written confirmation from the lender of having applied for the Loan, SelJer may make written demand for compliance. If Buyer does not furnish Seller written confinnation from the lender of application within five (5) days after such demand, then Seller may terminate this contract by written notice to Buyer at any time thereafter, provided Seller has not received either written evidence of the application or a walver of the Loan Condition, and all Earnest Money shall be forfeited to Seller as liquidated damages and as Seller'S sale and exclusive remedy for Buyer's failure to close, but without limiting Seller's rights under paragraph 17 for damage to the Property. Buyer further agrees to: (iii) Pursue qualification for and approval of the Loan diligently and in good faith; (iv) Continually and promptly provide requested documentation to lender. (c) Buyerts Right to Terminate: rr Buyer has complied with Buyer's Loan Obligations in subsection (b) above, then within n/a days after the Effective Date (or any agreed-upon written extension oftbis deadline) TIME BEING OF THE ESSENCE, Buyer shall have the right to terminate this contract by delivering to Seller written notice of termination if Buyer, in Buyer's sale discretion, is not satisfied that the Loan wiJl be approved and funded. If Buyer has timely delivered such notice, this contract shall be tenninated and all Earnest Money shalt be refunded to Buyer. If Buyer fails to deliver such notice, then Buyer will be deemed to have waived this condition. Thereafter, jf Buyer fails to close based upon inabi lity to obtain the Loan, then all Earnest Money shall be forfeited to Seller. If Buyer provides Seller reasonable third-party documentation confirming Buyer's inability to obtain the Loan, then the Earnest Money shall serve as liquidated damages and as Seller's sole and exclusive remedy for Buyer's fai Jure to close, but without lim iting Seiler'S rights under paragraph 17 for damage to the Property. (WARN1:'lG: Buyer is advised to consult with Buyer's lender to assure that the number of days allowed for Buyer to obtain the Loan is sufficient to allow Buyer's lender time to take all reasonable steps necessary to provide reliable Joan approval.) 6. FLOOD HAZARD DISCLOSURE/CONDITION (Choose O:\iE of the following alternatives): Page 2 of8 Buyer initial~ --{(£c Tl"n 10m prodwlc:: b¥ FornJuIator. Seller initials _71: _________ STANDARD FORM 2-T Revised 7/2008 () 712009 8CO-4~12 PAGE 319' RCVD AT 715120102:49:55 PM [Eastern Daylight Time)' SVR:SB-NAP-RFAXJ6' DNIS:7259' CSID:828 4791223' DURATION (mm-ss):06·24 Case 6:07-cv-00608-ACC-DAB Document 258-1 Filed 08/11/10 Page 3 of 9 PageID 2668 SOUTHLAND REALTY Jul 05 10 02:52p ~ From La p.4 828-479-1223 To the best of Seller's knowledge, the Property IS located partly or entirely within a designated Special Flood Hazard Area. Buyer understands that it may be necessary to purchase flood insurance in order to obtain any loan secured by the Property from any federally regulated institution or a loan insured or guaranteed by an agency of the U.S. Government. To the best of Seller's knowledge. the Property IS NOT located partly or entirely within a designated Special Flood Hazard Area. If, following the Effective Date of this contract, it is determined that any permanent improvements on the Property are located within a designated Special Flood Hazard Area according to the current FEMA flood map, or if this contract is subject to a Loan Condition and Buyer's lender requires Buyer to obtain flood insurance as a condition of making the Loan. then in either event Buyer shall have the right to terminate this contract upon written notice to Seller, and all earnest monies shall be refunded to Buyer. 7. OTHER CONDITIONS: (State N/A in each blank that is not a condition to this contract.) (a) There must be no restriction, easement, zoning or other governmental regulatjon that would prevent the reasonable use of the Property for residential purposes. (b) The Property must be in substantially the same or better condition at Closing as on the date of this offer, reasonable wear and tear excepted. (c) The Property must appraise at a value equal to or exceeding the purchase price or, at the option of Buyer. this contract may be terminated and al( earnest monies shall be refunded to Buyer. even if the Loan Condition has been waived as provided in paragraph 5. If this contract is NOT subject to a financing contingency requiring an appraisal, Buyer shall arrange to have the appraisal completed on or before nla Cd) All deeds of trust, liens and other charges against the Property, not assumed by Buyer, must be paid and satisfied by Seller prior [0 or at Closing such that cancellation may be promptly obtained following Closing. Seller shall remain obHgated to obtain any such cancellations following Closing. (e) Title must be delivered at Closing by GENERAL WARRANTY DEED unless otherwise stated herein, and must be fee simple marketable and insurable title, free of all encumbrances except: ad valorem taxes for the current year (prorated through the date of Closing); utility easements and unviolated restrictive covenants that do not materially affect the value of the Property; and such other encumbrances as may be asswned or specifically approved by Buyer. The Property must have legal access to a public right of way. 8. SPECIAL ASSESSMENTS: 2\fOTE: For purposes of this agreement, a "confirmed" special assessment is defined as an assessment that has been approved by a governmental agency or an owners' association for the purpose(s) stated, whether or not it is fully payable at time of closing. A "pending" special assessment is defined as an assessment that is under fonnal consideration by a governing body. Seller warrants that there are no pending or con finned governmental special assessments for sidewalk. paving, water, sewer, or other improvements on or adjoining the Property, and no pending or confirmed owners' association special assessments. except as follows (Insert ·'None" or the identification of such assessments, ifany): Home Owners In Stecoah View Subdivision pay $100. per year toward road maintenance UnJess otherwise agreed, Seller shall pay all owners' association assessments and alJ governmental assessments confirmed through the time of Closing. jfany. and Buyer shall take title subject to all pending assessments disclosed by Seller herein, ifany. 9. PRORATIONS .I\ND ADJUSTME~TS: Unless otherwise provided, the following items shall be prorated and either adjusted between the parties or paid at Closing: (a) Ad valorem taxes on real property shall be prorated on a calendar year basis through the date of Closing; Cb) Ad valorem taxes on persona] property for the entire year shall be paid by the SeBer unless the personal property is conveyed to the Buyer, in which case, the personal property taxes shall be prorated on a caJendar year basis through the date of Closing; (c) All late listing penalties, irany. shall be paid by Seller; (d) Rents, ifany, for the Property shall be prorated through the date of Closing; (e) Owners' association dues and other like charges shall be prorated through the date of Closing. Seller represents that the regular owners' association dues, if any, are $ nla per nfa . Unless otherwise agreed, Buyer shaH pay any fees required for obtaining account payment information on owners' association dues or assessments for payment or proration and any charge made by the owners' association in connection with the disposition of the Property to Buyer, including any transfer andlor document fee imposed by the owners' association. J o. F:XPENSES: Unless otherwise agreed, BUyer shall be responsible for all costs with respect to any loan obtained by Buyer. appraisal, title search. title insurance, recording the deed and for preparation and recording of all instruments required to secure the balance of the purchase price unpaid at Closing. Seller shall pay for preparation ofa deed and all other documents necessary to perfonn Seller'S obligations under this agreement, and for excise tax. (revenue stamps) required by law. Seller shall pay at Closing l3uycr initials L ThIS form produced by: Page 3 ofS (r6Y FonnuIator. Seller initials STANDARD FORM 2-T Revised 7120()8 © 7/2009 800·499-0012 PAGE 419 * RCVD AT 71512010 2:49:55 PM [Eastern Daylight Time)· SVR:SB·NAP-RFAX/6· DNIS:7259' CSID:828 4791223 * DURATION (mm·ss):06·24 Case 6:07-cv-00608-ACC-DAB Document 258-1 Filed 08/11/10 Page 4 of 9 PageID 2669 Jul 05 10 02:53p SOUTHLAND REALTY From La p.5 828-479-1223 $ nla toward any of Buyer's expenses associated with the purchase of the Property, including any FHA/VA lender and inspection costs that Buyer is not permitted to pay, but excJuding any portion disapproved by Buyer's lender. 11. HOME WARRANTY: If a home warranty is to be provided, select one of the following: 0 Buyer may obtain a one-year home warranty at a cost not to exceed S nla and Seller agrees to pay for it at Closing. 0 Seller has obtained and will provide a one-year home warranty from nla at a cost of$ nla and will pay for it at Closing. 12. FUEL: Buyer agrees to purchase from Seller the fuel. if any. situated in any tank on the Property at the prevaiting rate with the cost of measurement thereof, ifany, being paid by Se11er. 13. EVIDENCE OF TITLE: Seller agrees to use his best efforts to deliver to Buyer as soon as reasonably possible after the Effective Date of this contract. copies of all title infonnation in possession of or available to Seller. including but not limited to: title insurance policies, attorney's opinions on title, surveys, covenants, deeds, notes and deeds oftrust and easements relating to the Property. Seller authorizes (1) any attorney presently or previously representing Seller to release and disclose any title insurance policy in such attorney's file to Buyer and both Buyer's and Seller's agents and attorneys; and (2) the Property's title insurer or its agent to release and disclose all materials in the Property's title insurer's (or title insurer's agent's) fi(e to Buyer and both Buyer's and SeHer's agents and attorneys. 14. LABOR AND MATERIAL: Seller shall furnish at Closing an affidavit and indemnification agreement in form satisfactory to Buyer showing that all labor and materia1s, if any, furnished to the Property within 120 days prior to the date of Closing have been paid for and agreeing to indemnify Buyer against all loss from any cause or claim arising therefrom. 15. PROPERTY DISCLOSURE: ~ Buyer has received a signed copy ofthe N.C. Residential Property Disclosure Statement prior to the signing of this Offer to Purchase and Contract. Buyer has NOT received a signed copy of the N.C. Residential Property Disclosure Statement prior to the signing of this Offer to Purchase and Contract and shall have the right to terminate or withdraw this contract without penalty prior to WHICHEVER OF THE FOLLOWING EVEl\TS OCCURS FIRST: (1) the end of the third calendar day fo[[owing receipt of the Disclosure Statement; (2) the end of the third calendar day following the date the contract was made; or (3) CI()sing or occupancy by the Buyer jn the case of a sale or exchange. D Exempt from N.C. Residential Property Disclosure Statement because (SEE GUIDELINES) .:...:n.;..:/a:=..--_ _ _ _ _ _ _ _ __ o o The Property is residential and was buiJt prior to 1978 (Attach Lead-Based Paint or Lead-Based Paint Hazards Disclosure Addendum.) 16. PROPERTY INSPECTIONIINVESTIGATION (Choose ONLY ONE of the following Alternatives): o ALTERNATIVE 1: (a) Property Condition: As to alJ permanent improvements except: .:...:n;:,.;/a::w...-_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _--', it is a condition of this contract that (1) the bunt-in appliances, electrical system, plumbing system, heating and cooling systems. roof coverings (including flashing and gutters)7 doors and windows, exterior buiJding surfaces, structural components (including foundations, retaining walls, columns, chimneys, floors, walls, ceilings and roofs), porches and decks, fireplaces and flues, crawl space and attic ventilation systems (if any), water and sewer systems (public and private). shall be performing the function for which intended and shaH not be in need of immediate repair; (ii) there shall be no unusual drainage conditions or evidence of excessi ve moisture adversel), affecting the structure(s); and (iii) there shan be no friable asbestos or existing environmental contamination. (b) Inspections/Repair Negotiations: Buyer, at Buyer's expense, may inspect or obtain such inspections of the Property as Buyer deems appropriate. Only items covered by subsections (a)(i), (a)(ii). and (a)(iii) above ("::'Jecessary Repairs") are included in repair negotiations under this contract. All inspections, including but not limited to any additional inspections recommended by Buyer's inspector(g), shaJ) be completed and written notice of Necessary Repairs shall be given to Seller on or before n/a (the 44Repair Notice Date"). SeJIer shall have the option of completing Necessary Repairs or refusing to complete them. Seller shan provide written notice to Buyer of Seller's response within nla days of Buyer's notice, T/ME BE'JlVG OF THE ESSENCE. Seller's failure to provide said notice as required shall constitute an election by the Seller not to complete Necessary Repairs. If Seller elects not to complete all Necessary Repairs, then Buyer shall have the option of (a) acceptjng the Property in its present condition, (b) accepting Seller'S offer to make repairs to the extent and as described in the SeHer's response, Page 4 of8 STANDARD FORM 2-T Buyer ini'ia"L l!Y6Y This !oem prodJ~ by FonnuIator. Revised 7/2008 Seller initials P'()()...499·9612 PAGE 519' RCVD AT 715/20102:49:55 PM [Eastern Oaylight Time)' SVR:SB-NAP-RFAX/6· DNIS:7259' CSID:828 4791223' OURATION (mm-ss):06·24 (9712009 Case 6:07-cv-00608-ACC-DAB Document 258-1 Filed 08/11/10 Page 5 of 9 PageID 2670 Jul 05 10 02:54p SOUTHLAND REALTY 828-479-1223 From La p.6 or (c) terminating this contract~ in which case all earnest monies shall be refunded. The Buyer shall deliver the Buyer's written decision to Seller within five (5) days after receiving the Seller's written response, or Seller's failure to respond, T1ME BEING OF THE ESSENCE. Failure of Buyer to provide this written decision by the time stated herein shall constitute acceptance ofSeJler's agreement to make repairs to the extent and as described in the SeHer's response. Buyer shal1 have the right to verity that any Necessary Repairs have been completed in a good and workmanlike manner. (c) Wood-Destroying Insects: Buyer shall have the option of obtaining, at Buyer's expense, a report from a licensed pest control operator on a standard fonn in accordance with the regulations of the North Carolina Structural Pest Control Committee. stating that as n/a , there was no visible evidence of wood-destroying to all structures, except insects and containing no indication of visible damage therefrom. The report must be obtained on or before the Repair Notice Date. If the report indicates that there is visible evidence of wood-destroying insects or visible damage therefrom, Seller shall have the option of performing any required treatment or completing Necessary Repairs, or refusing to perfonn any required treatment or complete Necessary Repairs. If Seller elects not to perform required treatment or complete Necessary Repairs, Buyer shall have the option of accepting the Property without the required treatment or Necessary Repairs, or terminating the contract, in which case all earnest monies shall be refunded. Buyer and Seller shall exercise their respective rights under this subsection (c) in the same manner and within the same time limitations as set forth in subsectjon (b) above. The Buyer is advised that the inspection report described in this paragraph may not always reveal either structural damage or damage caused by aeents or organisms other than wood-destroying insects. Ifnew construction~ Sener shall provide a standard warranty of termite soil treatment. (d) Radon Inspection: Buyer shall have the option, at Buyer's expense, to have the Property tested for radon on or before the Repair Notice Date. The test result shall be deemed satisfactory to Buyer if it indicates a radon level of less than 4.0 pico curies per liter of air <as of January t, 1997, EPA guidelines renect an "acceptable" level as anything less than 4.0 pico curies per liter orair). If the test result exceeds the above-mentioned level, Seller shall have the option of: a) remediating to bring the radon level within the satisfactory range; or b) refusing to remediate. Upon the completion of remediation, Buyer may have a radon test performed at Seller's expense~ and jf the test result indicates a radon level Jess than 4.0 pico curies per liter of air, it shall be deemed satisfactory to the Buyer. IfSeJIer elects not to remediate, or ifremediation is attempted but fails to bring the radon level within the satisfactory range, Buyer shall have the option of: a) accepting the Property with its then current radon [eve]; or b) cenninating the contract. in which case a11 earnest monies shall be refunded. Buyer and SelJer shall exercise their respective rights under this subsection (d) in the same manner and within the same time limitations as set forth in subsection (b) above. (e) Cost Of Repair Contingency: In addition to the above, Buyer shall have the right to terminate this contract if a reasonable estimate obtained by Buyer of the tota1 cost of Necessary Repairs equals or exceeds S nla . Tbis right may be exercised by Buyer without regard to any decision by Seller to complete. or refuse to complete. Necessary Repairs. Buyer shall notify the Seller in writing of its decision to tenninate this contract under this Cost of Repair Contingency no later than seven (7) days following the Repair Notice Date, TIME BEI1VG OF THE ESSENCE, in which case all earnest monies shall be refunded to Buyer. Neither the cost of wood-destroying insect treatment under subsection (c) above nor the cost of radon remediation under subsection (d) above shall be included in the cost of repairs under this subsection (e). (0 CLOSING SHALL CONSTITUTE ACCEPTA~CE OF THE PROPERTY IN ITS THEN EXISTING CONDITION UNLESS PROVISION IS OTHERWISE MADE IN WRITING. :=J ALTERNA TtV E 2: (This Alternative applies ONLY ifAlternative 2 Is checked AND Buyer lias paid the Opl/on Fee.) (a) Property Investigation with Option to Terminate: In consideration the sum set forth in paragraph 4(c) paid by Buyer to Seller (not Escrow Agent) and other valuable consideration, the sufficiency of which is hereby acknowledged (the HOption Fee"), Buyer shall have the right to tenninate this contract for any reason or no reason, whether related to the physical condition of the Property or otherwise, by delivering to SeHer written notice of termination (the "Term ination Notice'9) by 5:00 p.m. on nla , 20 n/a TIME BEING OF THE ESSENCE (the ~'Optjon Termination Date'"). At any time prior to Closing. Buyer shall have the right to inspect the Property at Buyer's expense (Buyer is advised to have all inspectionsl investigations of the Property, including but not 1imited to those matters set forth in A1ternative I, perfonned prior to the Option Tennjnation Date). (b) Exercise of Option: If Buyer delivers the Termination Notice prior to the Option Termination Date, TIME BEING OF THE ESSENCE, this contract shall become nu)) and void and all earnest monies received in connection herewith shall be refunded to Buyer; however, the Option Fee will not be refunded and shall be retained by Seller. If Buyer fails to deliver the Termination )lotice to Seller prior to the Option Termination Date. then Buyer wil1 be deemed to have accepted the Property in its physical condition existing as of the Option Termination Date; provided such acceptance shall not constitute a waiver of any rights Buyer has under paragraphs 5, 6 or 7 above. The Option Fee is not refundable! is not a part of any earnest monies, and wiJI be credited to the purchase price at Closing. t Page 5 ofS Buyeriniti'l~ ~ Thi, lorm produr:ed by: Formulator. Seller initials 1f-: STANDARD FORM 2-T Revised 712008 <D 7/2009 800·499-9612 PAGE! 6/9' RCVD AT 715/20102:49:55 PM [l!astern Daylight Time)' SVR:SB-NAP-RFAX/6· DNIS:7259' CSID:828 4791223' DURATION (mm-ss):06-24 Case 6:07-cv-00608-ACC-DAB Document 258-1 Filed 08/11/10 Page 6 of 9 PageID 2671 Jul 05 10 02:54p SOUTHLAND REALTY p.l 828-479-1223 From La (c) CLOSING SHALL CONSTITUTE ACCEPTANCE OF THE PROPERTY IN ITS THEN EXISTING CONDITION UNLESS PROVISION (S OTHER\VISE MADE IN WRITI:"'JG. 17. REASONABLE ACCESS/RESTORATION AND INDEMl'"ITY: Seller will provide reasonable access to the Property (including working, existing utilities) through the earlier of Closing or possession by Buyer. Buyer and Buyer's agents and contractors shall have the right to enter upon the Property for the purpose of appraising and evaluating the Property, and perfonning the tests and inspections pennitted in this contract. Buyer shall, at Buyer's expense. promptly repair any damage to the Property resulting from any actlvities of Buyer and Buyer's agents and contractors, but Buyer shall not be responsible for any damage caused by accepted practices either approved by the NC Home Inspector Licensure Board or applicable to any other NC licensed professiona1 perfonning the inspection that reveal Necessary Repairs as defined under Alternative 1 of paragraph 16. Buyer will indemnify and hold Se1ler harmless from aU loss, damage, claims, suits or costs, which shall arise out of any contract, agreement, or injury to any person or property as a result of any acti viti es of Buyer and Buyer's agents and con tractors re ]atl ng to the Property except for any loss, damage, claim. suit or cost arising out of pre-existing conditions of the Property andior out of Seller's negJigence or willful acts or omissions. This repair obligation and indemnity shall survive this contract and any tennination hereof. Buyer may conduct a walkthrough inspection of the Property prior to Closing._ 18. CLOSING: Closing shall be defined as the date and time of recording of the deed and shall be on or before August 13,2010 (the "Closing Date"). AlJ parties agree to execute any and all documents and papers necessary in connection with Closing and transfer of title on or before the Closing Date at a place and time designated by Buyer. The deed is to be made to Dennis J.Schne/der and Virginia B. Schneider Absent agreement to the contrary in this contract or any subsequent modification thereto, the foHowing terms shall apply: If either party is unable to close by the Closing Date, then provlded that the party is acting in good faith and with reasonable ditigence to proceed to closing, such party shall be entitled to reasonable delay of the Closing Date and shall give as much notice as possible to the non-delaying party and closing agent. In such event. however, either party for whom the Closing Date is delayed shall have a maximum often (10) days from the Closing Date, or any extension of the Closing Date agreed-upon in writing, in which to close without payment of interest. Following expiration of the ten-day period, the party not ready to cJose shall be responsible for paying (0 the other party (if ready, willing and able to close) interest on the purchase price at the rate of eight percent (8%) per annwn accruing from the end of the ten-day period until closing occurs or the contract is tenninated. Should the delay in closing continue for more than thirty (30) days from the Closing Date or the last agreed-upon extensic)fi of the Closing Date, then the non-delaying party shall have the unilateral right to tenninate the contract and receive the earnest money, but the right to such receipt shall not affect any other remedies available to the non-delaying party for such breach. 19. POSSESSION: Unless otherwise provided herein. possession shall be delivered at Closing. In the event possession is NOT to be delivered at Closing: 0 a Buyer Possession Before Closing Agreement is attached. OR, :J a Seller Possession After Closing Agreement is attached. Se11er shall remove, by the date possession is made availabJe to the Buyer, all persona) property which is not a part of the purchase and all garbage and debris from the Property. 20. OTHER PROVISIO~S AND CONDITIONS: (CHECK ALL STANDARD ADDENDA THAT rvlA Y BE A PART OF THIS CO't'TRACT. IF ANY, AND ATTACH HERETO. ITEM1ZE ALL OTHER ADDENDA TO THIS CONTRACT, IF ANY. AND ATTACH HERETO. (NOTE: UNDER 1\ORTH CAROLI;-.JA LA W, REAL ESTA TE AGENTS ARE NOT PERMITTED TO DRAFT CONDITIONS OR CONTl:-.lGENCIES TO THlS CONTRACT.) C Additional Provisions Addendum (form 2A 11-1) o Loan Assumption Addendum (Form 2A6-T) [J Back-Up Contract Addendum (Form 2A I - T ) O New Construction Addendum (Form 2A3-T) Contingent Sale Addendum (Fonn 2A2-1) 0 Owners' Association Disclosure And Addendum (Fonn 2A 12-T) FHA/VA Financing Addendum (Form 2A4-T) 0 Seller Financing Addendum (Form 2A5-T) Insurance Availability/Affordability Addendum r:JVacation Rental Addendum (Fonn 2A13-T) __ (Form 370-T) (NC Association of REAL TORS form only) LJ Lead- Based Paint Or Lead-Based Paint Hazard Addendum (Fonn 2A 9-T) nOTI-lER: 1. Earnest money to be held by closing attorney 2. $ " Attachment A for reference to personal grORflrty 3. Buyers are purchasing the subject property "as ;s .. Page 6 of8 RUYCT initi.JS~ m STANDARD FORM 2-T Seller initials £fL: PAGE 719' RCVD AT 7/5/2010 2:49:55 PM [Eastern Daylight Time)' SVR:SB·NAP-RFAX16· DNIS:7259' CSID:828 4791223' DURATION (mm-ss):06·24 Revised 7/2008 © 7/2009 Case 6:07-cv-00608-ACC-DAB Document 258-1 Filed 08/11/10 Page 7 of 9 PageID 2672 Jul 05 10 02:55p SOUTHLAND REALTY p.8 828-479-1223 From La 21. RISK OF LOSS: The risk ofloss or damage by fire or other casualty prior to Closing shall be upon Seller. If the improvements on the Property are destroyed or materially damaged prior to Closing, Buyer may terminate this contract by written notice delivered to Seller or Seller's agent and all deposits shall be refunded to Buyer. In the event Buyer does NOT elect to terminate this contrac~ Buyer shall be entitled to receive, in addition to the Property, any of the Seller's insurance proceeds payabJe on account of the damage or destruction applicable to the Property being purchased. Seller is advised not to cancel existing insurance on the Property until after confinning recordation of the deed. 22. ASSIGNMENTS: This contract may not be assigned without the writlen consent of all parties, but if assigned by agreement, then this contract shall be binding on the assignee and his heirs and successors. 23. TAX-DEFERRED EXCHANGE: In the event Buyer or Se1ler desires to effect a tax-deferred exchange in connection with the conveyance of the Property, Buyer and Seller agree to cooperate in effecting such exchange; provided, however, that the exchanging additional costs associated with such exchange; and provided further, that a non-exchanging party party shall be responsible for shall not assume any additional liability with respect to such tax-deferred exchange. Seller and Buyer shall execute such additional documents. at no cost to the non-exchanging party, as shall be required to give effect to this provision. (NOTE: If Alternative 2 under paragraph 16 of this contract wiIJ apply, SeHer should seek advice concerning the taxation of the Option Fee.) an 24. PARTIES: This contract shall be binding upon and shall inure to the benefit of the parties, Le., Buyer and SeJler and their heirs, successors and assigns. As used herein. words in the singular include the plural and the masculine includes the feminine and neuter genders, as appropriate. 25. SURVIVAL: If any provision herein contained which by its nature and effect is required to be observed, kept or perfonned after the Closing, it shall survive the Closing and remain binding upon and for the benefit of the parties hereto Wltil fully observed, kept or perfonned. 26. ENTIRE AGREEMENT: This contract contains the entire agreement of the parties and there are no representations, inducements or other provisjons other than those expressed herein. All changes, additions or deletions hereto must be in writing and signed by aJl parties. Nothing contained herein shall alter any agreement between a REALTOR'» or broker and Seller or Buyer as contained in any listing agreement. buyer agency agreement, or any other agency agreement between them. 27. NOTICE AND EXECUTION: Any notice or communication to be given to a party herein may be given to the party or to such party's agent. Any written notice or communication in connection with the transaction contemplated by this contract may be given to a party or a party's agent by sending or transmitting it to any mai1ing address, e-mail address or fax number set forth in the "Notice Address~' section below. Seller and Buyer agree that the "Notice Information" and "Escrow Acknowledgment" sections below shall not constitute a material part of this Offer to Purchase and Contract, and that the addition or modification of any infonnation therein shall not constitute a rejection of an offer or the creation of a counteroffer. This contract may be signed in multipJe originals, all of which together constitute one and the same instrument, and the parties adopt the word "SEAL" beside their signatures below. 28. COMPUTA nON OF DAYS: Unless otherwise provided, for purposes of this contract, the term '"days" shall mean consecutive calendar days, including Saturdays! Sundays, and holidays, whether federal, state, local or religious. For the purposes of calculating days, the count of "days'" shall begin on the day following the day upon which any act or notice as provided in this contract was required to be performed or made. Buyer ~ has ::J has not made an on-site personal examination of the Property prior to the making of this offer. THE NORTH CAROLI~A ASSOCIATION OF REALTORS®, INC. AND THE NORTH CAROLINA BAR ASSOCIATION MAKE NO REPRESENTATION AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY PROVISrON OF THIS FORM 1='J ANY SPECIFIC TRANSACTlON. IF YOU DO NOT UNDERSTAND THIS FORM OR FEEL THAT IT DOES NOT PROVIDE FOR YOUR LEGAL NEEDS, YOU SHOCLD CONSULT A NORTH CAROLINA REAL ESTATE AITORNEY BEFORE YOU SIGN IT. :~:~-~"..'L:"': ~ D~-:_n~n-_~=-.s_U~J!.A~_.~3~S:C=2: ':h_O~n. .; :1:" :e=O:" i" d~e~r~ ~-=-_-_-~ _-_(SEAL) . -f:~_"' . Seller _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _(SEAL) Page 70f8 STANDARD FORM 2-T Revised 7/2008 © 112009 PAGE 8/g' RCVD AT 7/5/2010 2:411:55 PM [Eastern Daylight Time]" SVR:SB-NAP-RFAX/6' DNIS:725g' CSID:828 47g 1223' DURATION (mm-ss):06·24 Case 6:07-cv-00608-ACC-DAB Document 258-1 Filed 08/11/10 Page 8 of 9 PageID 2673 Jul 05 10 02:56p SOUTHLAND REALTY p.9 828-479-1223 From La NOTICE INFORl\lATION NOTE: INSERT THE ADDRESS ANDIOR ELECTRONIC DELIVERY ADDRESS EACH PARTY AND AGENT APPROVES FOR THE RECEIPT OF ANY NOTICE CONTEMPLATED BY THIS CONTRACT. INSERT "N/A" FOR ANY WHICH ARE NOT APPROVED. BUYER I\'OTICE ADDRESS: SELLER C'OTICE ADDRESS: Mailing Address: _____6=.,:7=-1=-.=E=a=s.;:..t,,;:::L=a=k:..:::;:e-=D:::;,,;r.:...:,i.,;;..v.-.,e_ _ __ Mailing Address: _-=3;:.00=-.,;::5;.:,..-=O:..:,ra..=n... .....v;...;8::.:;.L...:::,S.=,U.:.,:it=8-=1..,:::OOO=__ a=e"""A • Tarpon Springs. Fl. 34688 Orlando, Fl. 32801 Buyer Fax#: _______________________ Seller Fax#: _ _ _ _ _ _4..:..;O:...:7~·=84..:..9.::;,.·"""7=2=5=9_ _ _ _ __ Buyer E-mail Address: _ _. . .;d:. e:.: n;. :. :b:;, :a: .: rb.. :;. .;:,7-=6:. >o@:; oo:J.m=s;.;,.;n;,; , ;.c;: ;. ;o=m=-_ _ Sell er E-mail Address: _;.;:s=h:..::;u:..:tt=s=.c.!;..o;:::;..m:..:.:-.____ SELLING AGENT NOTICE ADDRESS: LISTING AGENT NOTICE ADDRESS: Individual Selling Agent: _ _ _ __ Indi vidual Listing Agent : _ _ _~M::.:::ax=in~e=--..:W.:..:..:...-=B:..:::a~h::.:.r_ __ License #: _ _ _ _ _ _ _ _1:..,:5::.,:2::.,:9:.,.:0::..,:7 _ _ _ _ _ __ _ License #: _ _ _ _ _ _ _-.:.1..,:5:.::2=.9,:,0.:.,.7_ _ _ _ _ _ _ __ Finn Name: Southland Realty Acting as Buyer's Agent~Sener's (sub)Agent DDual Agent Firm Name: Southland Realtv Acting as!&1 Seller's (sub)Agent 0 Dual Agent Mailing Address: _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Mailing Address: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Selling Agent Fax#: _ _ _ _ _ _ _ _ _ _ _ _ _ __ Listing Agent fax#:. _ _ _ _ _ _ _ _ _ _ _ _ _ __ Selling Agent E-mail Address:_ _ _ _ _ _ _ _ _ _ __ Listing Agent E-mail Address: _ _ _ _ _ _ _ _ _ __ Selling Agent Phone#: _ _ _ _ _ _ _ _ _ _ _ _ _ __ Listing Agent Phone#: _ _ _ _ _ _ _ _ _ _ _ _ __ = ESCROW ACKNOWLEDGMENT Escrow Agent acknowledges receipt of the earnest money and agrees to hold and disburse the same in accordance with the terms hereof. Date _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Firm; _ _.....:M=c.:...;K=in=n~e::::..yL_.,,;:a;:..::n_=d:....r.::..;:a=/..:..:/a::.;,n.:.;:t:...;~:..:,.,..:u:.::s:.::.t..::...A.:..:c::.,:c:.,.:o:;,.::u::.;,n..:..:t'--_ _ 8y: _________________________________________ (Signature) Page 8 of8 STANDARD FORM 2-'1' Re)lised 7/2008 0712009 PAGE 9/9· RCVD AT 715/2010 2:49:55 PM [Eastern Daylight Time)' SVR:SB-NAP-RFAX/6' DNIS:7259· CSID:828 4791223' DURATION (mm-ss):06-24 Case 6:07-cv-00608-ACC-DAB Document 258-1 Filed 08/11/10 Page 9 of 9 PageID 2674 Jul 06 10 03:24p SOUTHLAND REALTY From La p.2 828-479-1223 Attachment A Offer to Purchase and Contract: July 1,2010 Buyers: Dennis and Virginia Schneider Seller: Michael Gorel Receiver Seller agrees to the household furnishings and the accessories to remain with the property. They are to be included in the sales price agreed upon between the parties to the contract. SellerlMichael GorelReceiver <::::: ==4 $- !4fh&y --£ ~~CCJ~ L, PAGE 212' RCVD AT 716120103:22:11 PM [Eastern Daylight Time)' SVR:SB·NAP-RFAX/4· DNI8:7259' CSID:828 4791223' DURATION (mm-ss):00·37 #/ltkutZ ~~r' IFile 18 PageID Case 6:07-cv-00608-ACC-DAB Document 258-2 Filed 08/11/10 Page 1 of No 101301 Page #11 2675 APPRAISAL OF REAL PROPERTY LOCATED AT: 165 KNOLL TOP RD BOOK 281 PAGE 179 ROBBINSVILLE, NC 28771 FOR: SHUTTS & BOWEN LLP 3000 SOUTH ORANGE AVENUE, STE 1000, ORLANDS FL 32801 AS OF: 07/23/2010 BY: TERRY W PHILLIPS EXHIBIT Form GA 1 - 'TOTAL lor Windows' appraisal software by a la mode, Inc 1,BOO·ALAMOOE I COMPOSITE "B" IFile 18 PageID Case 6:07-cv-00608-ACC-DAB Document 258-2 Filed 08/11/10 Page 2 of No. 101301 Page #21 2676 FROM; INVOICE David Anderson INVOtCE NUMBER Anderson Appraisal Services, Inc P.O , Box 35 ., ,';' .' 15 Haunted Hollow Trail Brasstown, NC 28902 DATE' :-: . 07/27/2010 Telephone Number: 828-837-5492 FIX Number: 826-837-6235 REFERENCE TO: In''mll On:Ier II: SHUlTS & BOWEN LLP LendtrC... II: 300 SOUTH ORANGE AVENUE Client FIle II: SUITE 1000 "'lin Flilil on fonn: ORLANDO FL 32801 10130 Other AlII on fonn: Fal Number: Altlm.tI Number: Federll To 10: E-MIII: Ttlephone Number: EmployerlD: Lendet': SHUnS & BOWEN LLP 57-1183495 Client Purchaser/Bonower: NA Property Addresa: 165 KNOLL TOP RD City: ROBBINSVILLE State: County: GRAHAM Legal Detcrlp!lon: BOOK 281 PAGE 179 ZIp: 28771 NC APPRAISAl OF A SINGLE FAMILY RESIDENCE 350.00 SUBTOTAL - PAYMENTS Cheek II: 2710 Check II : Check II: Om: 07 /21 /2010 Dlft: 0.11: 350.00 AMOUNT Description: PAID BY AQUACELL BATTERIES Description: 35000 Oescrtprton: SUBTOTAL TOTAL DUE /S Form NIV5 - 'TOTAL tor Windows' appraisal soflware by a la mode, inc. Anderson Appraisal Services, Inc. 1-800-ALAMODE 350.00 000 IFile 18 PageID Case 6:07-cv-00608-ACC-DAB Document 258-2 Filed 08/11/10 Page 3 of No 101301 Page #31 2677 07/27/2010 SHuns & BOWEN LLP 3000 SOUTH ORANGE AVENUE, STE 1000, ORLANDS FL 3 Re: Property: Borrower: File No.: 165 KNOLL TOP RD ROBBINSVILLE, NC 28771 NA In accordance with your request, we have appraised the above referenced property. The report of that appraisal is attached. The purpose of this appraisal is to estimate the market value of the property described in this appraisal report, as improved, in unencumbered fee simple title of ownership. This report is based on a physical analysis of the site and improvements, a locational analysis of the neighborhood and city, and an economic analysis of the market for properties such as the subject. The appraisal was developed and the report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice. The value conclusions reported are as of the effective date stated in the body of the report and contingent upon the certification and limiting conditions attached. It has been a pleasure to assist you. Please do not hesitate to contact me or any of my staff if we can be of additional service to you. IFile No 101301 Page #41 Case 6:07-cv-00608-ACC-DAB Document 258-2 Filed 08/11/10 Page 4 of 18 PageID 2678 SUMMARY OF SALIENT FEATURES Subject Address 165 KNOLL TOP RD Legal Description BOOK 281 PAGE 179 City ROBBINSVILLE County GRAHAM State NC Zip Code 28771 Census Tract 0075-37-9802 Map Rel8f8ooe 6602 S 140,000 Sale Price Date of Sale 07/06/2010 Borrower NA LenderIC ent II SHUnS & BOWEN LLP Size (Square Feet) 1,408 Price per Square Foot S 99.43 Location Age 5A 5E Condition AVG/GD Total Rooms 6 Bedrooms 3 Baths 2 AppraislI( : AVERAGE TERRY W. PHtLLlPS Date 01 Appraised Value 07/23/2010 Opinioo 01 Value S 158.000 Form SSD2 - 'TOTAL for Windows' appraisal software by a la mode, inc. 1·800·ALAMODE IFile No.1 PageID Anderson Appraisal Case 6:07-cv-00608-ACC-DAB Document 258-2 Services, Inc. 08/11/10 Page 5 of 1801301 Page #51 2679 Filed Um arm ReSI·d entia ·f ·IA IR epart ~ pp ralsa File# 10130 The purpose of this summary appraisal report is 10 provide the lender/client with an accurate. and adequately supported, opinion 01 the market value 01 the subject property. Zip Code 28771 State NC ProPeM>i Address 165 KNOLL TOP RD City ROBBINSVILLE Owner of Public Record MICHAEL L. GOREIRECEIVER County GRAHAM Borrower NA leval Description BOOK 281 PAGE 179 Tax Year 2008 & 2009 R.E. Taxes S 2 602.40 Assessor's Parcel /I 6602 0000 5040B3 Map Relerence 6602 Census Tract 0075-37-9802 Neighborhood Name STECOAH TOWNSHIP cg:J per year [] per month ( ] PUD HOAS 100 Special Assessments S 0 Occupant (J Owner ] Tenanl [8J Vac ant " Properly Riohts Appraised IZI Fee Simple [ ] leasehold [ ] Other (describe) Assigrunent Type [ Purchase Transaction ( ] Refinance Transaction I8l Other describe COURT PROCEEDINGS Address 3000 SOUTH ORANGE AVENUE STE 1000 ORLANDS FL 32801 lender/C Iienl SHUTTS & BOWEN LLP Is the subject property currenlly oHerad for sale or has it been oHered for sale in the twelve months prior to lhe etfeclive date of this appraisal? I:8J Yes (] No Report data source(5) used ollerlng price{s). and dale(s). MLS 02125/2009 ~249 000 CHANGED SEVERAL TIMES WITH THE LAST CHANGE BEING ON 06/23/2010 TO $159 000. I I:8J did 0 did not analyze the contract lor sale lor the subject purchase transaction. Explain the resuns of lhe analysis 01 the contract lor sale or why the analysiS was not .performed. APPEARS TO BE AN ARMS LENGTH TRANSACTION. BUYER IS BUYING PROPERTY AS IS. Date of Contract 07/06/2010 Is the property seller !he ownar 01 public record? I:8J Yes [] No Data Source(s) : Contract Price S 140 000 Is there any llnancial assistance (loan charges, sale concessions, gitl or downpayment assistance. etc.) to be paid by any party on behan 01 the borrower? • nYes, report the total doJar amount and describe the itelm to be paid. D Yes [81 No Note: Rac. Ind thl racial comJlOaition of the n~lghborhood I" not ~pplilul factor •• One-tlnJt HoUling T,.,dI Nefghborttood Chlllcltrlllles One-Unlt Houllna PreIent Land UtI " [ Stable location [ ] Urban Propllfty Values [ ] Increasing ] Suburban ~ Rural IZI Declining PRICE AGE One-Unit 30 % ( In Balance IZI Over Supply S(0001 (yrs) 2-4 Unit 1% • Buln-Up [ 1 Ovar 75% 1::><1 25·75% [ Under 25% DlITlandlSuoply [ ] Shortage [ Slow Marketing Time [J Under 3 rn1hs ~ S1able low NEW MuIti·Family 1% : Growth ( J Rapid 3-6 mitis IZI Over 6 mths 60 , Neighborhood Boundaries IN THIS RURAL MOUNTAIN AREA NEIGHBORHOOD BOUNDARIES ARE 2% 600'S H igh 80 COlTYTl8rclal 2OO'S Pred. 15 Other 66 % ~ CONSIDERED COUNTY BOUNDARIES. Neighborhood DeSCription SUBJECT PROXIMITY TO SCHOOLS CENTERS OF EMPLOYMENT AND OTHER AMENITIES ARE CONSIDERED AVERAGE FOR THIS RURAL AREA EMPLOYMENT STABtLlTY IS CONSIDERED AVERAGE. APPEAL TO MARKET IS CONSIDERED AVERAGE. THERE IS A VAST AMOUNT OF USFS LAND IN THIS MARKET. Markel Condltlons Oncludlng support lor thB above conclusions) THE CURRENT MORTGAGE MARKET OFFERS A WIDE VARIETY OF CONVENTIONAL LOANS AT A COMPETITIVE AP.R. AS A RESULT THE TERMS OF FINANCING HAVE HAD LITTLE IF ANY INFLUENCE ON SALE PRICES tN THIS MARKET. MARKETING TIME EXCEEDS 6 MONTHS AND IS DUE IN PART TO SEASONAL MARKET INFLUENCES. DllTJBI1sions REFER TO DEED ArBa 1.52AC+/Shape IRREGULAR View GOOD/MTN Specillc Zoning Classification NA Zoning Descripllon NA Zoning Co~lIance [ legal (] legal Nonconforming GrandlalherBd Use) I8l No Zoning [ Illegal (describe) Is the highest and best use of subject properly as Improved (Dr as proposed per plans and specifications) the present use? ~ Yes [ ] No "No, describe r Utlitlel Pubic Other (deICrllt) Pubic Other (ducrlle Off-tl. Improv.ments - TyPi Privati Public ] [8J Electricity Water [J [J [81 WELL Stree! ASPHALT PAVED IZI [] Sanitary Sewer [ ] Gas (J Alley NONE IZI SEPTIC l J ~ PROPANE FEMA Special Flood Hazard Area ( ] Yes [8J No FEMA Flood Zone C FEMA Map /I 3701050050 8 FEMA Mao Date 07/17/1986 Are the utJlHles and off-sHe improvements typical for \he market area? [8J Yas [ ] No HNo, describe Are there any adverse sita condltlons or BXtlImallactors (easements. encroacllnenls, environmental condHions land uses, etc.)? [ ] Yes cg:J No HYes, describe Generli Dacript/on Foundltlon E1tIrIor Delcriptlon II1I1trfIII/condttlon Interior II1I1trfIli/cond/tfon Units !8l One J J One with AccessolY Unit lIZ! Concrete Slab [ ] Crawl Space Foundation Walls CONC/AVG Ibors WDICPTIGD II 01 Stories 1181 FuH Basement [ ] Partial Basement Exterior Wals Walls 1 LOG SIDINGIAVG DWIPT/GD Type I:8J Del. [ ] All. ] S-DetJEnd Unit Basement Area 1408 Roof Surface COMP SHGUAVG TrinYFlnlsh WD/NAT/GD 181 EJdsting [ ] Proposed [J Under Const. Basement Anish Bath Floor 100 % GullllfS & Oownspouts ALUM/AVG CERTILElGD Desilln (Style) Window Type TRAD 11:8:1 O utside Entry/EXll ( J Sump Pump Bath Wainscot CER TILE/GD WDDHlAVG Year Bultt Evidence 01 [J Infestation 2005 Stonm Sastvlnsulaled INSULATED Car Storage 11 None Effectiva Age (yrs) 5 ] Da~ness [ J Settlement Screens NONE ~ Driveway II 01 Cars 2 Anlc None HeaUno I.XI FWA II I HWBB II I Radiant Amerities Driveway Sur1ace Woodstove(sJ II ASPHALT ] Drop Stair Stairs ] Other Fence C8j Garage II of Cars lFual ELECTRIC !8l Fireplace(s) II 1 1 l Floor Coolina IXJ Central Air Conditioning X Scuttle Porch ] Carport I:8J PatiG'Deck II of Cars ] finished Heated ] Individual I[ ] Other ] Pool ] An. Other ] Det. IZI Buin·in Appliances I8l Retrigef1ltor I:8J Range/Oven !8l Dishwasher t8J Disposal I8l Microwave [ J Washer/Olyer [] Other (describel Finished area grade contains: , 408 Square feet 01 Gross l lvino Area Above Grade 6 Rooms 3 Bedrooms 2 Bath(s) • Additional tea lUres [special eI1BfUY efficient ~ems , etc.). TYPICAL INSULATION. CEILING FANS . .bov. Descnbe the condition ol lha prop~ pncklding needed repairs. deterioration, f'8OOvabons rerllldeing, 8Ic.). CONDITION OF IMPROVEMENTS RATED AVERAGE TO GOOD . QUALI fY OF CONSTRucnON RATED AVERAGE TO GOOD. PHYSICAL DEPRECIATION WAS CHARGED BASED ON EF FECTIVE AGE OF 5 YEARS NO FUNCTIONAL OR EXTERNAL DEPRECIATION WAS CHARGED. Are lhere any physical defiC iencies or adverse condHions that alfectlhe ~yabi61y . sollldness. ()( slrucflral integsily ol lhe property? ~ Yes [ ] No "Ye describe s. THERE IS AN ISSUE WITH THE SITE THAT COULD AFFECT THE STRUCTURAL INTEGR·ITY OF THE PROPERTY. SEE COMMENT ADDENDA Does I~ property gererally conlorm 1 lhe neighborhood (funclional utility. style. conditiOn, use construction, e 0 . tc.)1 Freddie Mac Form 70 March 2005 [gJ Yes [ ] No "No. descnbe Page 1 of 6 Form 1004 - ·TOTAL for Windows' appraisal software by a la mode. inc Fannie Mae Form 1004 March 2005 1·800·ALAMODE IFile 18 PageID Case 6:07-cv-00608-ACC-DAB Document 258-2 Filed 08/11/10 Page 6 of No 101301 Page #61 2680 Um arm ReSI'd ent'laI App ralsaIR epart 'f ~ File# 10130 to S NA NA caf11larabla prapef1ies currenlty offered tar sale in thB subjll(;t neig/lbalhood ranging in price Iram S NA toS NA There are NA calTllarabla sales in ttwJ sublect nelghbortJood wllhinlhe 'pasl1w8lve months ranging in sale price from S NA COMPARABLE SALE II 3 COMPARABLE SALE If. 1 COMPARABLE SALE 112 SUBJECT fEATURE 195 HOLLY BERRY BRANCH 450 BEACON Hill Address 165 KNOLL TOP RD 80 CRABAPPLE LN MURPHY HAYESVilLE MURPHY ROBBINSVilLE NC 28771 26.88 miles Proximity to Subject 24 .01 mites 24 .36 miles $ S $ 259000 235000 S 249500 Sale Price 140000 $ 99.43 sQ.!!. $ S 190.75 sQ.", S 163.51 Sale Price/Gross Liv. Area 177.71 S .". Q MLS Data SOUfce{s) MLS MLS BOOK 1379 PAGE 562 Verification Source(s) BOOK 1387 PAGE 319 BOOK 350 PAGE 226 +(-) SAdjustment +{-j $ Adjustment +(-) SAdjustment DESCRIPTION DESCRIPTION DESCRIPTION DESCRIPTION VAlUE ADJUSTMENTS NONE Sales or financing NONE NONE NOTED NOTED NOTED Concessions -12950 0212212010 06/19/2010 07/08/2010 Date 01 Sate/Time -5 000 -5000 GOOD Location -5000 GOOD AVERAGE GOOD FEE SIMPLE LeasBholdlFee Simple FEE SIMPLE FEE SIMPLE FEE SIMPLE 0.74AC+/1.08AC+/1.12AC+ISite 1. 52AC+/GOOD/MTN GOOD/MTN View GOOD/MTN GOOD/MTN TRAQ Design (Slylej CHALET TRAD CHALET Ouality 01 ConstructiOll AVG/GD AVG/GD AVG/GD AVG/GD Actual Age 3A2E 6A3E 5A3E SASE -3000 -2000 GOOD -2000 GOOD Condition GOOD AVG/GD T 1 Dial Bdrms, 1Baths Total Bdrms,18a1hs Above Grade TDIaI IBdrms.1Sallis Tmal IBdrms.1 8a1hs 4 1 1 1 1_ 5 +2000 5 2 12 Room Count 51212 6 I 3 12 1 584 SQ.It. -7920 +7920 +180 1 232 sQ," . Gross Uving Area 1 408 1404 sq.". +5, 160 +2,640 1.064 S.F. +7,080 1,232 S.F. Basement & Anlshed 1,408 Sq.Ft. 936 S.F. +4000 2-1 +6000 Rooms Below Grade +6000 3-1 5-1 2-1 GOOD Functional Utility GOOD AVERAGE AVERAGE Heating/CooDng CENTRAL CENTRAL CENTRAL CENTRAL Energy Efficient Hems TYPINSUL TYP INSUL TYP INSUL TYP INSUL Garage/Carport -8000 ATI2 CAR GA -8000 NONE +4000 DET 2 CAR GA BSMT 1 CAR PORCH/DE'CK PorctVPatiO/Deck PORCH/DECK DECK/PATIO PORCH/DECK 1 FP 1 FP 1 FP 1 FP • AREPlACE -85000 NO -85000 NO -85000 YES NO '_ UNSTABLE SITE There are s [ ] + 181- $ • Net Adjustment (Tolan 86740 [J+ /ZlNat Adj. NalAdj. Adjusted Sale Price 34.8% 35.S% Gross Adj. 45.4" $ 162760 Gross Adj. 49.6 % $ 01 Comparables I ~ . did LJ did not research the sale or transfer history of the subject property and comparable sales. II not. explain 83440 ( + Net Adl. 151 560 GIOSS Adj. /Zl- S 98710 38.1 % 49.8" $ 160290 r] .P.1y research did 181 did not reveal any prior sales or transfers 01 the subject property lor the three years prior to the effecllve date of this appraisal. Data Source(sl PUBLIC RECORD P.1y research [J did ~ did not reveal any prior sales or transfers at the cOlT1larable sales lor the year prior to the date 01 sale ollhe comparable sale. Oata Source{s) PUBLIC RECORD Reportlhe fesuns of the research and analysis olthB prior sale or transfer history 01 the subject proparty and cOlT1larable sales (repor1 additional prior sales on page 3). COMPARABLE SALE #1 COMPARABLE SALE 12 COMPARABLE SALE 113 SUBJECT ITEM Date of Prior SaliVTransfer NO PRIOR SALES WITHIN NO PRIOR SALES WITHIN NO PRIOR SALES WITHIN 05/07 Price 01 Prior Sale/Transler 12 MONTHS OF LAST 12 MONTHS OF LAST '2 MONTHS OF LAST $250000 Data SOlKce(s) TRANSFER TRANSFER BOOK 281 PAGE 179 TRANSFER EffecHve Date 01 Oala Source(s} 07/23/2010 07/23/2010 07/23/2010 07/23/2010 AnalYsis 01 prior sale or transfer tistory 01 the subject property and cOlT1larable sales THE SUBJECT PROPERTY HAS NOT SOLD WITHIN THE PAST 36 MONTHS AND NONE OF THE COMPARABLES SOLD WTIHIN 12 MONTHS PRIOR TO LAST TRANSFER. Surrrnary 01 Sales Comparison Approach LIVING AREA ADJUSTMENT BASED ON l45 sa. FT.+/-$4000 EACH BATHROOM FACILITY. BASEMENT ADJUSTMENT BASED ON $15 sa.FT.+/-$2000 EACH FINISHED ROOM BELOW GRADE. THE 3 CLOSED SALES DISPLAYED WERE CONSIDERED THE MOST COMPARABLE. DATE OF SALEITIME ADJUSTMENT FOR SALE # 3 REFLECTS MARKET CHANGE SINCE DATE OF SALE_THE ADJUSTMENT FOR THE UNSTABLE SITE IS BASED ON ESTIMATE OF COST TO CURE SITE PROBLEMS. looicaled Value by Sales Companson Apjlroach S 158 000 Indlclttd VI. by: Sales Compl_rllOn Approach S 158000 . Call Approach (if developed) S 222 415 Income Approach (if developed) S o subject to completion per plans and specifications on the basis of a hypothetical condition lnal the improvements have been Tt'fs appraisal is made ~ 'as is'. LJ subject 10 the folloWing repairs or atterations on lhe basis 01 a hypothetical coooilion that the repaJrs or anerations have been completed. or subject to lhe • toUowillQ required inspec1Jon basad on the exlraordlllary assumpUon thai the corxlition or defiCiency does nol require atteration or repair: co~leted. Based on a c.omplete visual Inspection of the Interior and el1erior areal of the subject properlt, defined scope of work, slltement of assumptions and timitlng condillon., and appraiset"1 certiflCillon, my (our) opinion of Ihe mar1!et vaillt, is defined, of he real property Ihlt is the subject of this report is alOl 07/23/20 t 0 which II the dlle of inspection and the effectIve date 01 this appraisll. S 158.000 Freddie Mac Form 70 March 2005 Page 2 of 6 Form 1004 - 'TOTAL for Windows' appraisal software by a la mode, Fannie Mae Form 1004 March 2005 inC. 1-800-ALAMODE IFile 18 PageID Case 6:07-cv-00608-ACC-DAB Document 258-2 Filed 08/11/10 Page 7 of No 101301 Page #71 2681 f U ifarm ReSI·d enlaIAIppralsaIR epart n File # 10130 COMPARABLE SALES OVER ONE MILE AWAY -COMPARABlE SALES OVER ONE MILE DISTANT FROM mE SUBJECT ARE OFTEN USED BECAUSE THEY ARE THE BEST AVAILABLE IN THIS RURAL MOUNTAIN AREA. EXPANDING THE SEARCH TO A RADIUS GREATER THAN ONE MILE STILL DEVELOPS SALES WHICH ARE IN THE SAME MARKET AREA AS THE SUBJECT PROPERTY. USING COMPARABLE SALES WITHIN THE SAME COUNTY AND MANY TIMES SEARCHING OUTSIDE TH ADJOINING COUNTIES DEVELOPS GOOD COMPARABLE SALES. PRIVATE WELLS SPRINGS SEPTIC SYSTEMS IN THIS RURAL MOUNTAIN AREA PRIVATE WATER SYSTEMS AND PRIVATE SEPTIC SYSTEMS ARE TYPICAL AND MEET STATE CODES. THE USE OF THESE SYSTEMS IN THIS AREA DO NOT ADVERSELY AFFECT MARKET VALUE. PRIVATE ACCESS ROADS AND SUBDIVISON ROADS IN THIS RURAL MOUNTAIN AREA, MOST SUBDIVISION ROADS ARE PRIVATE AND IN MANY CASES ARE GRAVEL BASED ROADS. THIS TYPE ROAD IS COMMON AND DOES NOT ADVERSELY AFFECT THE VALUE OF THESES PROPERTIES WHEN WELL MAINTAINED. THE GENERAL TREND IS TOWARD MORE PAVED ACCESS ROADS. THE SUBJECT REAL ESTATE MARKET HAS SEEN A SIGNIFICANT DECREASE IN SALES ACTIVITY OVER THE PAST 44 MONTHS. THE NAR REPORT FOR THIS MARKET INDICATES AS 36 MONTH SUPPLY OF SINGLE FAMILY HOMES LISTED WITH AN AVERAGE MARKETING TIMIE OF 232 DAYS. THE SUBJECT MARKET IS PRIMARILY A SECOND HOME/RETIREMENT HOME MARKET WITH THE • MAJORITY OF THE BUYERS COMING FROM THE FLORIDA AND GEORGIA METROPOLITAN AREAS. PROPERTY VALUES TYPICALLY I!! INCREASED FROM YEAR TO YEAR IN THIS MARKET. AS INVENTORIES BUILT VALUES BECAMES STABLE AND ARE CURRENTLY § DECLINING. ~ : ZONING: THERE IS NO ZONING IN THIS RURAL MOUNTAIN AREA WITH THE EXCEPTION OF PROPERTIES LOCATED INSIDE TOWN LIMITS. IF THE SUBJECT STRUCTUE IS DESTROYED IT CAN BE REBUILT AS IT CURRENTLY EXISTS. GRAHAM COUNTY IS THE MOST RURAL COUNTY IN THIS MARKET AND HAS THE FEWEST NUMBER OF SALES. THE SALES USED IN THIS REPORT ARE SIMILAR TYPE PROPERTIES IN NEIGHBORING CHEROKEE AND CLAY COUNTIES. THE SALES USED ARE IN SUBDIVISIONS THAT ARE WELL DEVELOPED. THAT IS THE REASON FOR THE LOCATION ADJUSTMENT. IN THE APPRAISER'S OPINION THESE ARE THE MOST RECENT SALES THAT ARE COMPARABLE TO THE SUBJECT PROPERTY. , COST APPROACH TO VALUE(nOt lICIulnd by Fannie MIl) '. ' Provide adequate information for tl'8 lender/cllenllo repUcatethe below cost ligures and calculations. Support for the opinion of sne value (sunmary 01 comparable land sales or other methods for estimatirY;! sU value) e ANAL YSIS OF LAND SAlES IN THE SUBJECT MARKET AREA. ESTIMATED [] REPRODUCTION OR IZI REPlACEMENT COST NEW Source of cost data MARSHAlL AND SWIFT RESIDENTIAL COST HB QuaHty ratirY;!lrom cosl seNiee AV/GD Effective date 01 cost data 12-09 Comments on Cost Approach (gross livina area calculaUons. depreciation, 8IC.) · OPINION OF SITE VALUE .. __ .. .... ._ DWElliNG 1408 50.Ft.@$ 1408 5o.Ft.@$ AS IS VALUE OF IMPROVEMENTS INCLUDE WATER SEPTIC LANDSCAPING AND DRIVEWAYS. Garaaw'C arport 5a.Ft.@$ Total Estimate at Cost-New less PhYsical IFunctional 1External :::$( Dejlreciation 161221 I Depreciated Cost of IlT1Irovemenls ....•.... _. ......... _.......•-.........•-. =$ ·As·is· Value 01 Sile Ill1Irovemenls ..... --._ _..... _...... _ .-... ......... =$ Estimated Remaining Econonic lHe (HUD and VA only) _ _ • • • • • __ .n~ DECK/PATIO ._-. .--.................- =$ 97.56 _ . __ =$ 36 .35 ............. =$ _ -.... =$ ...... _ ---- =$ .............. =$ 55 Years INDICATED YAWE BY COST APPROACH ...................................... ____. =S _ 25000 137364 51 181 4992 193537 16122) 177 415 20000 222415 INCOME APPROACH TO VALUE (nGi required by Fannie"', X Gross AenI Muftlplier • Estimated Monthly Maltel Aent $ SUlTITlaty of Income Approach (inckJding sUPJXlrtlor malUt rent and GRM) =$ Indicated Value by Income Approach INCOME APPROACH NOT APPLICABLE PfIOJECT INFORMA11)N FOR Pm. (It 1PPI1cIbIe) Is \he developer/bIJilder in co~rul altha Homeowners' Association (HOA)? [J Yes [] No UrVt type(s} [] DBlached [ ] Anached Provide '/Wlollowi. g information lor PUOs Ort. Y~ tile developeflbtlkler is In control althe HOA and !he subject Pfoperty is an attached <!weling um. n leQai Name of PmJ8Ct THE SUBJECT IS NOT A PUD T number oIlt11ts oral T rlJIWef 01 urnls sold olal • Total f'IUfm&f of pha ses Total number of urits rented Totaf llUtmer of units lor sale Data soUlte(s} Was 1/18 project created by !he COrNerslon of existing buildina!s) Into a POO? [ ] Yes L] No II Yas, dala 01 C011Y8fSion. ~ Does lhe~ contain any roo/1i·dwe~units? [ 1 Ves .[ 1No Data Source E; Are the units. common elements. and recreation lacll~ies complale? r ] Ves [ J No nNo. describe the stabJs 01 cOfl1jletion. · Ar8tha CO!TlTlOfl elements leased to or by the HOf'*Iwners' Association? [ ] Ves [] No nYes, describe !he rerialtenns and options. Oescnbe corrmon elements and recreanonaJ lacll ties. Freddie Mac Form 70 March 2005 Page 3 at 6 Form 1004 'TOTAL for Windows· appraisal software by a la mode, inc. - 1·8oo·AlAMODE Fannie Mae Form 1004 March 2005

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