Based on the term Sheet example reviewed in Segment 7.2, AND using the PDF file Term Sheet Example (which you may find attached to Lesson 7) as your reference document, please answer the following questions:

1. The loan amount of $5.3MM as stated in the term sheet is limited to 60% of total project costs. What is the minimum total project cost that will allow the loan to remain at least that amount ($5.3MM) and not dip below it?

2. Considering the interest rate and amortization, what is the annual debt service for the loan based on the $5,300,000 loan amount?

3. A) Is this a bridge loan or a permanent loan? B) Is this a floating rate or a fixed rate loan?

4. What is the term of the loan? (Another way to ask the same question is how long after the closing the loan maturity occurs?)

5. Considering the minimum interest payment period, if the borrower prepaid the loan after 12 months, how much would the borrower have to pay as prepayment penalty at that point?

6. Is the borrower permitted to have any additional debt placed on the property during the loan term?

7. Which Third Party Reports are required by the lender?

8. How much is the lenders Underwriting Fee?

9. What level of recourse (also called personal guarantee) is required by the lender if any?

10. How much equity is the borrower expected to invest?

June 11, 2013 Reference Dear Mr Please be advised that Capital Partners LLC agent, has obtained preliminary terms from a capital source (the "Lender) for your loan request as captionesd herein. This Term Sheet is contingent upon final approval and does not constitute a commitment to lend in its capacity as originating and processing or any of its correspondents, affiliates, successors or assigns, or any oher lending entity funding the transaction Investments, Ltd Any other member with 20% or greater ownership. Borrower: To-be-approved special-purpose entity Recourse: This loan shall be full recourse to Borrower and Guarantons Subject Property: A508-unit aparment community known as address of Apartments having an Collateral: The Loan will be secured by (a) a first priority morigage lien on the Property: (b)an assignment of leases and rents; (c) a pledge of membership interests in Borrower, and (d) a first security interest in all furnishing, fixtures and equipment located within the Property that is owned by the Borrower. Loan Amount: S5300000, limited to 6000% of total project costs Estimated Sources 60.00% 65.70% 220% 1.90% and Use of Proceeds:Loan Borrower $3.531,925 40,00%Inarest Reserve $250,000 Lender Foe Capital $171925 $2.500,000 28.30% Est. Closing Costs Total Uses $100,000 $8821925 1.10% Total Sources $8,821,925 100.00% 100.00% Interest Rate: 9.00% fixed for the term ofthe Loan The Loan Amount shall be distributed construction draw schodule which will be made part of the Loan Documents and interest shall only be charged on funded capital (including funded reserves). pursuant to l Amortization: Interest-only Loan Term: 36-months Extension: Two six (6) month extension options are available. Provided there shall be no existing (a) Borrower's written request no less than thirty (30) days prior to the maturity (b) The payment to Lender ofanextension foe cqual to 200% ofthe outstanding default, the extension will be granted upon: of the Loan, and balance of the Loan Laan Fee: Exit Fee: Brokers: 3.25% payable at closing WAIVED 1.00% payable Borrower hereby agrees to indemnify and hold harmless Lender from and against any claim by Broker or by any other broker, finder, consultant or like agent or any person or entity for commissions or other compensation for bringing about this transaction where such claim is based in whole or in part on dealings with Borrower or any affliate thereof, and from all expenses of Lender in without limitation, reasonable attorneys' fees and disbursements. resisting such claim, inclading Prepayment: Prepayment of the Loan shall be perminted at any time upon thirty (30) days notice, provided that on or prior to such prepayment the Lender shall have roceived, a minimum of twenty four (24) months of Interest Leader Transfers: Lender shall have the right to freely transfer or participate the Loan, to enter into one or more secondary market transactions with respect to the Loan and to structure and restructure all of any part of the Loan as multiple tranches. Other Debt or Neither the Borrower nor Key Principals shall be permitted to pledge, borow against Encumbrances Major Decisions: or oterwise encumber the Property without the prior writen consent of Lender. All major decisions involving the Property, including budgets, improvements and re- zoning shall be subject to review and approval by Lender. Prior to closing, Lender shall review all zoning applications and timelines and approve all capital budgets for the Property as prepared by Borrower, if applicable Borrower Transfers: No transfer of any interest in the Borrower is penmitted except in the case of a sale of the Property in which the Loan is paid in full. Third Party Reports: Appraisal, engineering, enviroamental and property condition reports are required as determined by Lender. These reports mast be ordered by Lender and will be the property of Lender as appropriate Such Third Party reports shall be conducted by independent persons who are pot related to Lender, its affiliates and its officers. Copies may be forwarded to Applicant only after the loan has closed or if the loan is Enviroamental Borrower, its members, and Principals shall execute an Environmental Indemnity Indemnity: Agreement in form and substance acceptable to Lender Legal: As a condition to the closing, Borrower's counsel shall render all cussomary legal opinions regarding Borrower and Principals, including but not lmited to due enforceability of the loan transaction under Coenecticut law,as applicable, and usury Title Insurance: Lender must receive a copy of BorrowersOwner's title insurance policy for the Property issued currently by a title insurance company satisfactory to Lender in all respects. The liens created by the pledge and the priority thereof shall be insured in favor of Lender and its successors and/or assigns, which insurance shall be issued and underwritten by an insurance carrier designated by Lender Lockbex Agreement: Springing lockbox to be established with further details to be outlined in loan documents. Insurance: Borrower is required to provide a property and casualty insurance policy acceptable to Lender and naming Lender as first loss payee and underwrinen by an insurance company approved by Lender including coverage as determined by Lender Expess Applicant shall reimburse Lender for all underwriting fees and out-of pocket expenses, including, but not limited to, environmental and due diligence expenses incurred in connection with this transaction whether or not it actually closes (collectively the "Due Diligence Expenses") which may exceed the Due Diligence Deposit third-party appraisal report costs, and engineering report costs, site visit costs, legal fees and any other costs and expenses Applicant shall be directly responsible for the payment of any other expenses in connection with the Loan, such as fees charged by Bonower's Broker fees. counsel and any required to Deposit" equal to $50,000 to cover the costs associated with this loan request. A non- refundable Underwriting Fee of S15,000 shall be carned by Lender upon execution of this Term Sheet and deducted from the Application Deposit The Application Deposit, less Due Diligence Expenses, shall be credited against the Loan Fee payable at closing. If the Duc Diligence Expenses and required to be reimbursed to Lender at closing exceed the Application Deposit, such additional amounts shall be paid from Loan Proceeds. any other expenses In the event this loan application is denied for any reason other than for those reasons listed under Break-up Fee below, any funds unused as determined above refunded to Applicant. shall be Break-up Fee: Any outstanding unused balance on deposit shall be deemed camod as a Break-up Fee and shall not be refundable to applicant if the Loan fails to close because of any of the following: 1. Applicant withdraws this loan request or notifies Lender it no longer wishes to proceed with the Loan 2. Applicant's fraud or misrepresentation 3. Applicant does not provide requested documentation in a reasonable time or 4. Applicant is not ready, willing and able to close in accordance with the terms and conditions set forth in the Term Sheet within 30 (thirty) days of the execution thereof Reseves: At the closing of the Loan, Lender shall establish an interest reserve in an amount of This reserve, at Lender's reasonable discretion, may be released to meet interest payment shoetfalls net of free cash flow from operating activities, condact capital improvements and pay the real estate taxes and insurance premiums that will be due during the Loan Term. Special Conditions: The closing of the Loan is subjoct to: 1) Satisfactory completion of due diligence on the Property, the Bornower, the Principals and affiliates Property, Bonower and Principals prior to closing financial, banking or capital market conditions that, in the sole judgment of 2) No material adverse change in the fair market value or condition of the The absence of any material disruption of material adverse change in current 3) Lender, could materially impair the Loan; Appeoval by Lender Investment Committee, 5) Confirmation of zoning and entitlements of the Property satisfactory to ) Environmental Review of the Property acceptable to Lender, 7) Receipt and review of Appraisal Report acceptable to Lender 8) Receipt of such other business credit or legal approvals as Lender shall reasonably deem necessary and appropriate, including an agreement on all required documentation for the Loan in form and substance satisfactory to Lender and its legal counsel. The terms and conditions detailed herein are valid oaly if this letter, along with the Application Deposit, is returned signed by Applicant no later than June 13,Bysgg below signing party repeesents that tdhey have full authority to authorize this document on behalf of borrowing entity. This letter supersedes all prio Yours Sincerely, Managing Principal June 11, 2013 Reference Dear Mr Please be advised that Capital Partners LLC agent, has obtained preliminary terms from a capital source (the "Lender) for your loan request as captionesd herein. This Term Sheet is contingent upon final approval and does not constitute a commitment to lend in its capacity as originating and processing or any of its correspondents, affiliates, successors or assigns, or any oher lending entity funding the transaction Investments, Ltd Any other member with 20% or greater ownership. Borrower: To-be-approved special-purpose entity Recourse: This loan shall be full recourse to Borrower and Guarantons Subject Property: A508-unit aparment community known as address of Apartments having an Collateral: The Loan will be secured by (a) a first priority morigage lien on the Property: (b)an assignment of leases and rents; (c) a pledge of membership interests in Borrower, and (d) a first security interest in all furnishing, fixtures and equipment located within the Property that is owned by the Borrower. Loan Amount: S5300000, limited to 6000% of total project costs Estimated Sources 60.00% 65.70% 220% 1.90% and Use of Proceeds:Loan Borrower $3.531,925 40,00%Inarest Reserve $250,000 Lender Foe Capital $171925 $2.500,000 28.30% Est. Closing Costs Total Uses $100,000 $8821925 1.10% Total Sources $8,821,925 100.00% 100.00% Interest Rate: 9.00% fixed for the term ofthe Loan The Loan Amount shall be distributed construction draw schodule which will be made part of the Loan Documents and interest shall only be charged on funded capital (including funded reserves). pursuant to l Amortization: Interest-only Loan Term: 36-months Extension: Two six (6) month extension options are available. Provided there shall be no existing (a) Borrower's written request no less than thirty (30) days prior to the maturity (b) The payment to Lender ofanextension foe cqual to 200% ofthe outstanding default, the extension will be granted upon: of the Loan, and balance of the Loan Laan Fee: Exit Fee: Brokers: 3.25% payable at closing WAIVED 1.00% payable Borrower hereby agrees to indemnify and hold harmless Lender from and against any claim by Broker or by any other broker, finder, consultant or like agent or any person or entity for commissions or other compensation for bringing about this transaction where such claim is based in whole or in part on dealings with Borrower or any affliate thereof, and from all expenses of Lender in without limitation, reasonable attorneys' fees and disbursements. resisting such claim, inclading Prepayment: Prepayment of the Loan shall be perminted at any time upon thirty (30) days notice, provided that on or prior to such prepayment the Lender shall have roceived, a minimum of twenty four (24) months of Interest Leader Transfers: Lender shall have the right to freely transfer or participate the Loan, to enter into one or more secondary market transactions with respect to the Loan and to structure and restructure all of any part of the Loan as multiple tranches. Other Debt or Neither the Borrower nor Key Principals shall be permitted to pledge, borow against Encumbrances Major Decisions: or oterwise encumber the Property without the prior writen consent of Lender. All major decisions involving the Property, including budgets, improvements and re- zoning shall be subject to review and approval by Lender. Prior to closing, Lender shall review all zoning applications and timelines and approve all capital budgets for the Property as prepared by Borrower, if applicable Borrower Transfers: No transfer of any interest in the Borrower is penmitted except in the case of a sale of the Property in which the Loan is paid in full. Third Party Reports: Appraisal, engineering, enviroamental and property condition reports are required as determined by Lender. These reports mast be ordered by Lender and will be the property of Lender as appropriate Such Third Party reports shall be conducted by independent persons who are pot related to Lender, its affiliates and its officers. Copies may be forwarded to Applicant only after the loan has closed or if the loan is Enviroamental Borrower, its members, and Principals shall execute an Environmental Indemnity Indemnity: Agreement in form and substance acceptable to Lender Legal: As a condition to the closing, Borrower's counsel shall render all cussomary legal opinions regarding Borrower and Principals, including but not lmited to due enforceability of the loan transaction under Coenecticut law,as applicable, and usury Title Insurance: Lender must receive a copy of BorrowersOwner's title insurance policy for the Property issued currently by a title insurance company satisfactory to Lender in all respects. The liens created by the pledge and the priority thereof shall be insured in favor of Lender and its successors and/or assigns, which insurance shall be issued and underwritten by an insurance carrier designated by Lender Lockbex Agreement: Springing lockbox to be established with further details to be outlined in loan documents. Insurance: Borrower is required to provide a property and casualty insurance policy acceptable to Lender and naming Lender as first loss payee and underwrinen by an insurance company approved by Lender including coverage as determined by Lender Expess Applicant shall reimburse Lender for all underwriting fees and out-of pocket expenses, including, but not limited to, environmental and due diligence expenses incurred in connection with this transaction whether or not it actually closes (collectively the "Due Diligence Expenses") which may exceed the Due Diligence Deposit third-party appraisal report costs, and engineering report costs, site visit costs, legal fees and any other costs and expenses Applicant shall be directly responsible for the payment of any other expenses in connection with the Loan, such as fees charged by Bonower's Broker fees. counsel and any required to Deposit" equal to $50,000 to cover the costs associated with this loan request. A non- refundable Underwriting Fee of S15,000 shall be carned by Lender upon execution of this Term Sheet and deducted from the Application Deposit The Application Deposit, less Due Diligence Expenses, shall be credited against the Loan Fee payable at closing. If the Duc Diligence Expenses and required to be reimbursed to Lender at closing exceed the Application Deposit, such additional amounts shall be paid from Loan Proceeds. any other expenses In the event this loan application is denied for any reason other than for those reasons listed under Break-up Fee below, any funds unused as determined above refunded to Applicant. shall be Break-up Fee: Any outstanding unused balance on deposit shall be deemed camod as a Break-up Fee and shall not be refundable to applicant if the Loan fails to close because of any of the following: 1. Applicant withdraws this loan request or notifies Lender it no longer wishes to proceed with the Loan 2. Applicant's fraud or misrepresentation 3. Applicant does not provide requested documentation in a reasonable time or 4. Applicant is not ready, willing and able to close in accordance with the terms and conditions set forth in the Term Sheet within 30 (thirty) days of the execution thereof Reseves: At the closing of the Loan, Lender shall establish an interest reserve in an amount of This reserve, at Lender's reasonable discretion, may be released to meet interest payment shoetfalls net of free cash flow from operating activities, condact capital improvements and pay the real estate taxes and insurance premiums that will be due during the Loan Term. Special Conditions: The closing of the Loan is subjoct to: 1) Satisfactory completion of due diligence on the Property, the Bornower, the Principals and affiliates Property, Bonower and Principals prior to closing financial, banking or capital market conditions that, in the sole judgment of 2) No material adverse change in the fair market value or condition of the The absence of any material disruption of material adverse change in current 3) Lender, could materially impair the Loan; Appeoval by Lender Investment Committee, 5) Confirmation of zoning and entitlements of the Property satisfactory to ) Environmental Review of the Property acceptable to Lender, 7) Receipt and review of Appraisal Report acceptable to Lender 8) Receipt of such other business credit or legal approvals as Lender shall reasonably deem necessary and appropriate, including an agreement on all required documentation for the Loan in form and substance satisfactory to Lender and its legal counsel. The terms and conditions detailed herein are valid oaly if this letter, along with the Application Deposit, is returned signed by Applicant no later than June 13,Bysgg below signing party repeesents that tdhey have full authority to authorize this document on behalf of borrowing entity. This letter supersedes all prio Yours Sincerely, Managing Principal