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Home My WebLink About03-17-11 1505610145 REV-1500 ~``°'-'°' pennsylvamia OFFICIAL USE ONLY PA Department of Revenue oEr,vm~KroFaEVEnuE County Code Year File Number Bureau of Individual Taxes INHERITANCE TAX RETURN Po sox 2606°1 \ Hartisburg. PA 17128-0601 RESIDENT DECEDENT ~ IJ D ENTER DECEDENT INFORMATION BELOW Social Security Number Date of Death MMDDYYYY Date of Birth MMDDYYYY 162-36-9922 12142009 05101946 Decedent's Last Name Suffix Decedent's First Name MI COSTABILE PHILIP F (ff Applicable) Enter Surviving Spouse's Information Below Spouse's Last Name Suffix Spouse's First Name MI COSTABILE KATHERINE K Spouse's Social Security Number 181-42-9043 FILL IN APPROPRIATE BOXES BELOW ® 1. Original Retum 0 4. limited Estate ® 6. Decedent Died Testate (Attach Copy of wll) 0 9. Litigation Proceeds Received THIS RETURN MUST BE FILED IN DUPLICATE WITH THE REGISTER OF WILLS Q 2. Supplemental Retum 0 4a. Future Interest Compromise (date of death after 12-12-82) 7. Decedent Maintained a Living Trust (Attach Copy of Trust) 0 10. Spousal Poverty Credit (date of death between 12-31-91 and 1-1-95) 3. Remainder Retum (date of death priorfA 12-13-82) 5. Federal Estate Tax Retum Required 8. Total Number of Safe Deposit Boxes Q 11. Election to tax under Sec. 9113(A) (Attach Sch. O) CORRESPONDENT -THIS SECTION MUST BE COMPLETED. ALL CORRESPONDENCE AND CONFIDENTIAL TAX INFORMATION SHOULD BE DIRECTED T0: Name Daytime Telephone Number KATHERINE K. COSTABILE n -.."= -~, ~~_ ~- ~~ REGISTE LLS USE'Y~NLY .' '_r_ ~ - _ ~ ___, First line of address ~' -' ~ ~~ " ~;_ ~ , ~._, -_ ~ r"~ ---~ ,. ,. .. 18 CRAIN CIRCLE C?~-" Second line of address ~ ~" c-~ O a t-' -~ City or Post Office LEMOYNE Correspondents e-mail address: State ZIP Code PA 17043-841 102 7 MUMMA ~ZOAT~,( WORMLEYSBURG, PA 17 0 4 3 PLEASE USE ORIGINAL FORM ONLY Side 1 L 1505610145 1505610145 J `~1~ 18 CRAIN CIRCLE, LEMOYNE, PA 17043-8412 SIGNATU OF PREPARER OVT~ER THAA REPRES NTATIVE DATE .C /mil/.~nt~/ ~/~ 3 •//• ~/ J REV-1500 EX Decedent's Name: PHILIP F COSTABILE Decedent's Social Security Number 162-36-9922 RECAPITULATION 1. Real Estate (Schedule A) ........................................... 1. NONE 2. Stocks and Bonds (Schedule B) ...................................... 2. NONE 3. Closely Held Corporation, Partnership or Sole-Proprietorship (Schedule C) ..... 3. 4. Mortgages and Notes Receivable (Schedule D) .......................... 4. 5. Cash, Bank Deposits and Miscellaneous Personal Property (Schedule E) ...... 5. 6. Jointly Owned Property (Schedule F) OSeparate Billing Requested ........ 6. 7. Inter-Vivos Transfers 8~ Miscellaneous Non-Probate Property (Schedule G) Separate Billing Requested ........ 7 NONE 8. Total Gross Assets (total Lines 1 through 7) ........................... 8. 1273000.00 1574000.00 136907.00 917354.00 3901261.00 9. Funeral Expenses and Administrative Costs (Schedule H) .................. 9. 2 2 6 5 7 . 0 0 10. Debts of Decedent, Mortgage Liabilities, and Liens (Schedule I) ............. 10. 9 9 5 2 7 3 . 0 0 11. Total Deductions (total Lines 9 and 10) ............................... 11. 1 O 17 9 3 O. 0 0 12. Net Value of Estate (Line 8 minus Line 11) ............................. 12. 2 8 8 3 3 31.0 0 13. Charitable and Governmental Bequests/Sec 9113 Trusts for which an election to tax has not been made (Schedule J) ....................... 13. 2 8 8 3 3 31.0 0 14. Net Value Subject to Tax (Line 12 minus Line 13) ....................... 14. 0 • 0 0 TAX CALCULATION -SEE INSTRUCTIONS FOR APPLICABLE RATES 15 Amount of Line 14 taxable at the spousal tax rate, or transfers under Sec. 9116 (a)(1.2) X .0 0 0. 0 0 15. 0. 0 0 16. Amount of Line 14 taxable at lineal rate X .0 4 5 16. 0. 0 0 17. Amount of Line 14 taxable at sibling rate X • 12 17. 0 • 0 0 18. Amount of Line 14 taxable at collateral rate X , 15 18. 0 . 0 0 19. TAX DUE ....................................................... 19. 0 . 0 0 20, FILL IN THE BOX IF YOU ARE REQUESTING A REFUND OF AN OVERPAYMENT ~ 1505610245 Side 2 L 1505610245 1505610245 J REV-1500 EX Page 3 File Number 162-36-9922 Decedent's Complete Address: DECEDENTS NAME PHILIP F. COSTABILE STREET ADDRESS 18 CRAIN CIRCLE CITY LEMOYNE STATE PA ZIP 17043-8412 Tax Payments and Credits: 1. Tax Due (Page 2, Line 19) 2. Credits/Payments A. Prior Payments B. Discount 76428.00 (,) o.oo Total Credits (A + B) (2) 76428.00 3. Interest (3) 4. If Line 2 is greater than Line 1 + Line 3, enter the difference. This is the OVERPAYMENT. Fill in box on Page 2, Line 20 to request a refund. (4) 76428.00 5. If Line 1 + Line 3 is greater than Line 2, enter the difference. This is the TAX DUE. (5) 0.00 Make check payable to: REGISTER OF WILLS, AGENT PLEASE ANSWER THE FOLLOWING QUESTIONS BY PLACING AN "X" IN THE APPROPRIATE BLOCKS 1. Did decedent make a transfer and: Yes No a. retain the use or income of the property transferred : ............................................................................ . ^ ^ b. retain the right to designate who shall use the property transferred or its income : ................................ ^ ^X c. retain a reversionary interest; or ........................................................................................................... . ^ d. receive the promise for life of either payments, benefds or care? ......................................................... . ^ ^ 2. If death occurred after Dec. 12, 1982, did decedent transfer property within one year of death without receiving adequate consideration? ................................................................................................. ^ ^ 3. Did decedent own an "in trust for" or payable-uponileath bank account or security at his or her death? ... . ^ ^X 4. Did decedent own an individual retirement account, annuity or other non-probate property, which contains a beneficiary designation? ........................................................................................................... . ^ ^X IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS YES, YOU MUST COMPLETE SCHEDULE G AND FILE IT AS PART OF THE RETURN. For dates of death on or after July 1, 1994, and before Jan. 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is 3 percent [72 P.S. §9116 (a) (1.1) (i)]. For dates of death on or after Jan. 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is 0 percent [72 P.S. §9116 (a) (1.1) (ii)]. The statute does not exempt a transfer to a surviving spouse from tax, and the statutory requirements for disclosure of assets and filing a tax return are still applicable even if the surviving spouse is the only beneficiary. For dates of death on or after July 1, 2000: • The tax rate imposed on the net value of transfers from a deceased child 21 years of age or younger at death to or for the use of a natural parent, an adoptive parent or a stepparent of the child is 0 percent p2 P.S. §9116(a)(1.2)]. • The tax rate imposed on the net value of transfers to or for the use of the decedent's lineal beneficiaries is 4.5 percent, except as noted in 72 P.S. §9116(1.2) p2 P.S. §9116(a)(1)]. • The tax rate imposed on the net value of transfers to or for the use of the decedent's siblings is 12 percent [72 P.S. §9116(a)(1.3)]. Asibling is defined, under Section 9102, as an individual who has at least one parent in common with the decedent, whether by blood or adoption. REV-1504 E)(+ (6-98) AT COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN SCHEDULE C CLOSELY-HELD CORPORATION, PARTNERSHIP OR SOLE-PROPRIETORSHIP ESTATE OF FILE NUMBER PHILIP F. COSTABILE 2110-0126 Schedule C-1 or C-2 (including all supporting information) must be attached for each closely-held corporation/partnership interest of the (If more space is needed, insert additional sheets of the same size) REV-1505 EX + (6.98) SCHEDULE C-1 COMMONWEALTH OF PENNSYLVANIA CLOSELY-HELD CORPORATE INHERITANCE TAX RETURN STOCK INFORMATION REPORT RESIDENT DECEDENT ESTATE OF FILE NUMBER PHILIP F. COSTABILE 2110-0126 1. Name of Corporation SOFPAC CORPORATION State of Incorporation PA Address 5341 JAYCEE AVENUE Date of Incorporation 3/26/1998 City HARRISBURG State PA Zip Code 17112-2938 Total Number of Shareholders 3 2. Federal Employer I.D. Number 23-2956612 Business Reporting Year 12/31 3. Type of Business WATER PURIFICATION Product/Service WATER CONDITIONER 4. 5. 6. Was the decedent employed by the Corporation? .^Yes ^X No If yes, Position Annual Salary $ Time Devoted to Business Was the Corporation indebted to the decedent? .^Yes ^X No If yes, provide amount of indebtedness $ 7. Was there life insurance payable to the corporation upon the death of the decedent? .^Yes ^X No If yes, Cash Surrender Value $ Net proceeds payable $ Owner of the policy 8. Did the decedent sell or transfer stock in this company within one year prior to death or within two years if the date of death was prior to 12-31-82? ^Yes ^X No If yes,^Transfer ^Sale Number of Shares Transferee or Purchaser Consideration $ Date Attach a separate sheet for additional transfers and/or sales. 9. Was there a written shareholder's agreement in effect at the time of the decedent's death? .^Yes ^X No If yes, provide a copy of the agreement. 10. Was the decedent's stock sold? .^Yes ^X No If yes, provide a copy of the agreement of sale, etc. 11. Was the corporation dissolved or liquidated after the decedent's death? .^Yes ^X No If yes, provide a breakdown of distributions received by the estate, including dates and amounts received. 12. Did the corporation have an interest in other corporations or partnerships? .^Yes ^X No If ves, report the necessary information on a separate sheet, incuding a Schedule C-1 or C-2 for each interest. A. Detailed calculations used in the valuation of the decedent's stock. B. Complete copies of financial statements or Federal Corporate Income Tax returns (Form 1120) for the year of death and 4 preceding years. C. If the corporation owned real estate, submit a list showing the complete address/es and estimated fair market value/s. If real estate appraisals have been secured, attach copies. D. List of principal stockholders at the date of death, number of shares held and their relationship to the decedent. E. List of officers, their salaries, bonuses and any other benefits received from the corporation. F. Statement of dividends paid each year. List those declared and unpaid. G Any other information relating to the valuation of the decedent's stock. (If more space is needed, insert additional sheets of the same size) Provide all rights and restrictions pertaining to each class of stock. REV-1506 EX+ (9-00) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE C-2 PARTNERSHIP INFORMATION REPORT ESTATE OF FILE NUMBER PHILIP F. COSTABILE 2110-0126 1. Name of Partnership PAC INDUSTRIES PARTNERSHIP Date Business Commenced 6/12/1972 Address 5341 JAYCEE AVENUE Business Reporting Year 12/31 City HARRISBURG State PA Zip Code 17112 2. Federal Employer I.D. Number 23-1895159 3. Type of Business COMMERCIAL & RESIDENTIAL LEASING Product/Service COMMERCIAL & RESIDENTIAL LEASING 4. Decedent was a ^General ^Limited partner. If decedent was a limited partner, provide initial investment $ 5. 7. Was the Partnership indebted to the decedent? ^Yes ^No If yes, provide amount of indebtedness 8. Was there I'Ife insurance payable to the partnership upon the death of the decedent? ^Yes aNo If yes, Cash Surrender Value $ Owner of the policy Net proceeds payable $ 9. Did the decedent sell or transfer an interest in this partnership within one year prior to death or within two years if the date of death was prior to 12-31-82? ^Yes ^No If yes,^Transfer ^Sale Percentage transferred/sold Transferee or Purchaser Attach a separate sheet for additional transfers and/or sales. Consideration $ 10. Was there a written partnership agreement in effect at the time of the decedent's death? . ^Yes ^No If yes, provide a copy of the agreement. 11. Was the decedent's partnership interest sold? ^Yes ~No If yes, provide a copy of the agreement of sale, etc. Date 12. Was the partnership dissolved or liquidated after the decedent's death? ^Yes ^X No If yes, provide a breakdown of distributions received by the estate, including dates and amounts received. 13. Was the decedent related to any of the partners? . ^Yes ^No If yes, explain ROCCO A. COSTABILE AND FRANK M. COSTABILE WERE BROTHERS OF THE DECEDENT 14. Did the partnership have an interest in other corporations or partnerships? ^X Yes ^No If yes, report the necessary information on a separate sheet, including a Schedule C-1 or C-2 for each interest. • • •' ~ • ~ ~ A. Detailed calculations used in the valuation of the decedent's partnership interest. B. Complete copies of financial statements or Federal Partnership Income Tax returns (Form 1065) for the year of death and 4 preceding years. C. If the partnership owned real estate, submit a list showing the complete address/es and estimated fair market values. If real estate appraisals have been secured, attach copies. D. Any other information relating to the valuation of the decedent's partnership interest. 6. Value of the decedent's interest $ 1,253,000 REV-1507 EX+ (8-98) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE D MORTGAGES 8~ NOTES RECEIVABLE ESTATE OF FILE NUMBER PHILIP F. COSTABILE 2110-0126 All property jointly-owned with right of survivorship must lie disclosed on Schedule F. (If more space is needed, insert additional sheets of the same size) REV-1508 EX+(6-98) SCHEDULE E CASH, BANK DEPOSITS, 8r, MISC. COMMONWEALTH OF PENNSYLVANIA PERSONAL PROPERTY INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF FILE NUMBER PHILIP F. COSTABILE 2110-0126 Include the proceeds of litigation and the date the proceeds wen: received by the estate. All ro 'ointl -owned with ri ht of survivorshi must be disclosed on Schedule F. ITEM VALUE AT DATE NUMBER DESCRIPTION OF DEATH 1 2009 FORD F-150 TRUCK 45,000 2 MB SL 600 32,000 3 DELEWARE DEPARTEMENT OF REVENUE - 2009 INCOME TAX REFUND RECEIVABLE 84 4 MARYLAND DEPARTEMENT OF REVENUE - 2009 INCOME TAX REFUND RECEIVABLE 2,000 5 WEST VIRGINIA DEPARTEMENT OF REVENUE - 2009 INCOME TAX REFUND RECEIVABLE 1 6 PENNSYLVANIA DEPARTEMENT OF REVENUE - 2009 INCOME TAX REFUND RECEIVABLE 1,822 7 STOCK WARRANT -PAC INC. 56,000 TOTAL (Also enter on line 5, Recapitulation) ~ ~ 136,907 (If more space is needed, insert additional sheets of the same size) REV-1509 EX+ (01-10) Pennsylvania DEPARTMENT OF REVENUE INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE F JOINTLY-OWNED PROPERTY ESTATE OF: FILE NUMBER: PHILIP F. COSTABILE 2110-0126 If an asset became jointly owned within one year of the decedent's date of death, it must be reported on Schedule G. SURVIVING JOINT TENANT(S) NAME(S) ADDRESS RELATIONSHIP TO DECEDENT A. KATHERINE COSTABILE B. C. 18 CRAIN CIRCLE, LEMOYNE, PA 14043-1381 JOINTLY OWNED PROPERTY: ITEM NUMBER LETTER FOR JOINT TENANT DATE MADE JOINT DESCRIPTION OF PROPERTY INCLUDE NAME OF FINANCIAL INSTITUTION AND BANK ACCOUNT NUMBER OR SIMILAR IDENTIFYING NUMBER. ATTACH DEED FOR JOINTLY HELD REAL ESTATE. DATE OF DEATH VALUE OF ASSET % OF DECEDENT INTEREST DATE OF DEATH vALUE OF DECEDENTS INTEREST FULTON BANK -ACCOUNT 3624-25092 585 309 50 00% 154 793 ~. A. ORIGINAL , . , FULTON BANK -ACCOUNT 3524-25093 192 356 50 00% 178 96 2. B ORIGINAL , . , MERRILL LYNCH - CMA MONEY FUND -ACCOUNT 872- 30 605 50 00% 15 303 3. A oRIGINAL 10515 , . , PNCBANK-ACCOUNT51-1201-1858 11 866 00% 50 5 933 4. A ORIGINAL , . , METRO BANK -ACCOUNT 0513206334 899 50 00% 450 5. A ORIGINAL . BANK OF AMERICA -MORTGAGE ESCROW -ACCOUNT 1 480 50 00% 740 g. q ORIGINAL 094458657 , . REAL ESTATE -PERSONAL RESIDENCE - 18 CRAIN 462 800 00% 50 231 400 7. A 7/30/08 CIRCLE, LEMOYNE, PA 17043-1381 , . , REAL ESTATE -CONDOMINIUM -5404 CENTRAL AVENUE, 785 000 00% 50 392 500 8. A 1/1/93 OCEAN CITY, NJ 08226 , . , 9. A 5/21/07 2008 LEXUS RX350 SW 29,300 50.00% 14,650 10. A 6/29/05 2005 HONDA CR-V 10,813 50.00% 5,407 18 CRAIN CIRCLE, WIFE COSTABILE A -KATHERINE K , , . 0 LEMOYNE, PA 17043-8412 0 B - PHILIP A. COSTABILE, SON, 18 CRAIN CIRCLE, 0 LEMOYNE, PA 17043-8412 0 0 0 TOTAL (Also enter on Line 6, Recapitulation) I ~ 917.354 .00 If more space is needed, use additional sheets of paper of the same size. REV-1511 EX+(10-09) SCHEDULE H Pennsylvania DEPARTMENT OF REVENUE FUNERAL EXPENSES AND INHERITANCE TAX RETURN ADMINISTRATIVE COSTS RESIDENT DECEDENT ESTATE OF FILE NUMBER PHILIP F. COSTABILE 2110-0126 Decedent's debts must be reported on Schedule I. ITEM NUMBER DESCRIPTION AMOUNT A. FUNERAL EXPENSES: 1. FUNERAL 6,005 CEMETARY/BURIAL 750 RECEPTION 3,984 GRAVE MARKER 2,100 OLD TOWNE FLORIST 153 B. 1 2 3. ADMINISTRATIVE COSTS: Personal Representative Commissions: Name(s) of Personal Representative(s) Street Address City Year(s) Commission Paid: Attorney Fees: Family Exemption: (H decedent's address is not the same as claimant's, attach explanation.) ClaimanT __ State ZIP Street Address City State ZIP Relationship of Claimant to Decedent 4, Probate Fees: 5. Accountant Fees: 6,665 6. Tax Return Preparer Fees: 7. OTHER ADMINISTRATIVE FEES I 3,000 TOTAL (Also enter on Line 9, Recapitulation) ~ $ 22 If more space is needed, use additional sheets of paper of the same size. REV-1512 EX+ (12-08) pennsylvania DEPARTMENT OF REVENUE INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULEI DEBTS OF DECEDENT, MORTGAGE LIABILITIES ~ LIENS ESTATE OF FILE NUMBER PHILIP F. COSTABILE 2110-0126 Report debts incurred by the decedent prior to death that remained unpaid, at the date of death, including unreimbursed medical expenses. ITEM VALUE AT DATE NUMBER DESCRIPTION OF DEATH 1. UNITED STATES TREASURY - 2009 FEDERAL INCOME TAX 143,853 BANK OF AMERICA MORTGAGE -ACCOUNT 094458657 541,985 WEST SHORE TAX BUREAU - 2009 LOCAL INCOME TAX 99 WELLS FARGO BANK -ACCOUNT 0177890217 305,298 PNC BANK -LINE OF CREDIT ACCOUNT 40 03 048113570912 4,038 TOTAL (Also enter on Line 10, Recapitulation) I ; 995,273 ff more space is needed, insert additional sheets of the same size. REV-1513 EX+ (01-10) Pennsylvania SCHEDULE J DEPARTMENT OF REVENUE BENEFICIARIES INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF: FILE NUMBER: Pi-111 IP F rC)GTARII F 2110-0126 RELATIONSHIP TO DECEDENT AMOUNT OR SHARE NUMBER NAME AND ADDRESS OF PERSON(S) RECENING PROPERTY Do Not List Trustee(s) OF ESTATE I TAXABLE DISTRIBUTIONS [InGude outright spousal distributions and transfers under Sec. 9118 (a) (1.2).] 1. ENTER DOLLAR AMOUNTS FOR DISTRIBUTIONS SHOWN ABOVE ON LINES 15 THROUG H 18 OF REV-1500 COVER SH EET, AS APPROPRIATE. II NON-TAXABLE DISTRIBUTIONS A. SPOUSAL DISTRIBUTIONS UNDER SECTION 9113 FOR WHICH AN ELECTION TO TAX IS NOT TAKEN: 1. KATHERINE K. COSTABILE, 18 CRAIN CIRCLE, LEMOYNE, PA 17043 2,883,331 B. CHARITABLE AND GOVERNMENTAL DISTRIBUTIONS: 1. TOTAL OF PART II -ENTER TOTAL NON-TAXABLE DISTRIBUTIONS ON LINE 13 OF REV-1500 COVER SHEET. S 2 883 331 ff more space is needed, use additional sheets of paper of the same size. Philip F. Costabile Estate REV-1500 Schedule C-1 Support SOFPAC, INC. VALUATION WORKSHEET DECEMBER 14, 2009 CALCULATION OF BOOK VALUE AND ADJUSTED NET EQUITY VALUE 2009 11205 CrharlnlP T. CURRENT ASSETS Cash Inventories Account Receivable -Other TOTAL CURRENT ASSETS ASSETS CURREN LIABILITIES Accounts Payable Sales Tax Payable TOTAL CURRENT LIABILITIES BOOK AND ADJUSTED NET EQUITY VALUES Net Equity Value -Company Philip F. Costabile Ownership Percentage Allocated Value Before Discounts Less: Lack of Control Discount Allocated Value Before Marketability Discount Less: Discount fro Lack of Marketability Estimated Fair Market Value (Non-Controlling, Non-Marketable) 245 4 249 $20,393 $0 3,496 0 64,388 0 88,277 0 LIABILITIES Adjustments Estimated Fair Market ~Talna $20,393 3,496 64,388 88,277 0 245 0 4 n ~a9 $88,028 $0 $88,028 $88,000 ~z ~°i Ly,000 20% (6,000) 23,000 15% (3,000) $20,000 Form 1120S Department of the Treasury Internal Revenue Service (77) U.S. Income Tax Return for an S Corporation - Do not file this form unless the corporation has filed or is attaching Form 2553 to elect to be an S corporation. OMB No. 1545-0130 2009 For calendar year 2009 or tax year be inning ,and ending A Selection effective date Name D Employer identification number 05/22/1998 use B Business activity label. SOFPAC CORPORATION 2 3- 2 9 5 6 612 code number S~ Other- Number, street, and room or suite no. If a P.O. box, see instructions. E Date incor orated (see541990 N1Se' 5341 JAYCEE AVE. 03/26/1998 print C Check if Sch. M-3 ar type. City or town, state, and ZIP code F Total assets (see instructions) attached 0 HARRISBURG PA 17112 - 2 9 3 8 $ 8 8, 2 7 7. G Is the corporation electing to be an S corporation beginning with this tax year? Yes X No If "Yes;' attach Form 2553 if not already filed H Check if: (1) 0 Final return (2) 0 Name change (3) 0 Address change (4)0 Amended return (5) 0 S election termination or revocation Enter the number of shareholders who were shareholders during any part of the tax year .............................................................................. - 3 Caution: Include only trade or business income and expenses on lines la through 21. See the instructions formore information. 1 a Gross receipts or sales 16 , 4 6 9. b Less returns and allowances C Bal - 1 C 1 6, 4 6 9. 2 Cost of goods sold (Schedule A, line 8) ...................................................................................................... 2 2 3 ,12 3 . ~ 3 Gross profit. Subtractline2fromlinelc .................................................................................................. 3 -6, 654. ~ c 4 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) ............................................................... 4 5 Other income (loss) (attach statement) ................................................................................................... 5 6 Total income (loss .Add lines 3 through 5 ............................................................................................. - 6 - 6 , 6 5 4 . ~-. N 7 Compensation of officers .............................................................................STATEMENT.-_ 1.......... 7 c 8 Salaries and wages (less employment credits) ............................................................................................. 8 9 Repairs and maintenance ........................................................................................................................ 9 ,E 10 Bad debts ............................................................................................................................................. 10 2 2 , 2 4 0 . $ 11 Rents ................................ ................................................................................................................ 11 12 Taxes and licenses .STATEMENT..- 2.... 12 2 . 13 Interest ................................................................. - ...........................- ~ -.................. 13 14 Depreciation not claimed on Schedule A or elsewhere on return (attach Form 4562) .......................................... 14 15 Depletion (Do not deduct oil and gas depletion.) ....................................................................................... 15 ~~ i6 Advertising ............................................. .......................................................................................... i6 N --~ 17 Pension, rofit-sharin ,etc., Ions ..... P 9 P ...................................................................................................... 17 ~ o 18 Employee benefit programs ..................... ................................................................................................ 18 19 Other deductions (attach statement) .............................................................. E.TATEMENT....3.......... 19 7 , 3 6 7 . ~ 20 Total deductions. Addlines7throughl9 ................................................................................................ - 20 29, 609. ~ 21 Ordinary business income (loss). Subtract line 20 from line 6 ........... ... 21 - 3 6 , 2 6 3 . 22 a Excess net passive income or LIFO recapture tax (see instructions) .................. 22a b Tax fromScheduleD (Form1120S) ........„ ............................................... 22b c Add lines 22a and 22b ..................................... ............ 22c 23 a 2009 estimated tax payments and 2008 overpayment credited to 2009 ............ 23a a b Tax deposited with Form 7004 .................................................................. 23b c Credit for federal tax paid on fuels (attach Form 4136) ................................. 23c a . d Add lines 23athrou h 23c ............... 9 ..................................................................................................... 23d 6 ~ 24 Estimated tax penalty (see instructions). Check if Form 2220 is attached ....................................... - 0 24 ~ 25 Amount owed. If line 23d is smaller than the total of lines 22c and 24, enter amount owed .................................... 25 ~ 26 Overpayment. If line 23d is larger than the total of lines 22c and 24, enter amount overpaid ...... ...................... 26 27 Enter amount from line 26 Credited to 2010 estimated tax - Refunded - 27 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and Sign belief, it is true, correct, and complete. Declaration of preparar (other than taxpayer) is based on all information of which preparar has any knowledge. May the IRS discuss this return with the Here preparar shown ' 'PRESIDENT below (see instr.)? Signature of officer Date Title ®YesO N Preparers' Date self ck if Preparer's SSN or PTIN Paid signature employed 0 P 0 0 2 2 917 4 Pre arer's p ' Use Only Firm sname(or SELIGMAN FRIEDMAN & CO. P.C yours if self- ~ ~ EIN employed), ' 10 2 7 MUNIlKA ROAD address and 2 3- 2 7 0 8 6 0 7 , ZIP code WORMLEYSBURG , PA 17 0 4 3 Phone no. 717 - 7 61- 0 211 JWA For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. s1no1 t2-t?-os 1 18240308 759605 604600 2009.03001 SOFPAC CORPORATION Form 1120S (2009) 604600_2 Form 1120S (2009) SOFPAC CORPORATION 2 3- 2 9 5 6 612 Page 2 Schedule A Cost of Goods Sold (see instructions) ............... 1 Inventory at beginning of year ............................................................................................................... 2 Purchases ................................................................................................................................................ . 2 2 3, 12 3. 3 Cost of labor .............................................................................................................................................. . 3 ...................................................................................................... 4 Additional section 263A casts (attach statement) 4 5 Other costs (attach statement) 5 6 Total. Add lines 1 through 5 ............................................................................................................................. . 6 2 3, 12 3. ......................................................................................................... 7 Inventory at end of year ............... 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 ............................... . 8 2 3 12 3 . 9 a Check all methods used for valuing closing inventory: (i) 0 Cast as described in Regulations section 1.471-3 (ii) 0 Lower of cost or market as described in Regulations section 1.471-4 (iii) ~ Other (Specify method used and attach explanation) - b Check if there was a writedown of subnormal goods as described in Regulations section 1.471-2(c) .................................... ............. .................... - c Check if the LIFO inventory method was adapted this tax year for any goods (if checked, attach Form 970) ..,... . - d If the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory .................................................................................... computed under LIFO ......................... ....................... .. ~ 9d e If property is produced or acquired for resale, do the rules of Section 263A apply to the corporation? ................................ .............. ........ Yes X Nc f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? .,, ~ Yes ©Nc ,.,. ~.. Schedule B Other Information (see instructions) Yes No 1 Check accounting method: (a) Cash (b) X Accrual (c) Other (specify) - 2 See the instructions and enter the: (a) Business activity -WATER PURIFICATION (b) Product or service - WATER CONDITIONER 3 At the end of the tax year, did the corporation own, directly or indirectly, 50% or more of the voting stock of a domestic corporation? (For rules of attribution, see section 267(c).) If "Yes," attach a statement showing: (a) name and employer (b) percentage owned, and (c) if 100% owned, was a QSub election made? ................................... identification number (EIN) ......................... X , 4 Has this corporation filed, or is it required to file, a return under section 6111 to provide information on any reportable transaction? .... .. ....... X 5 Check this box if the corporation issued publicly offered debt instruments with original issue discount ...................................... ............. - 0 If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. 6 If the corporation: (a) was a C corporation before it elected to be an S corporation orthe corporation acquired an asset with a basis determined by reference to its basis (or the basis of any other property) in the hands of a C corporation and (b) has net unrealized built-in gain (defined in section 1374(4)(1)) in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years .......................................................................................................................................... - $ 7 Enter the accumulated earnings and profits of the corporation at the end of the tax year .............................. $ 8 Are the corporation's total receipts (see instructions) for the tax year and its total assets at the end of the tax year less than $250,000? If "Yes; the corporation is not required to complete Schedules L and M-1 .............................................. .......................... X Schedule K Shareholders' Pro Rata Share Items Total amount 1 Ordinary business income (loss) (page 1, line 21) ....................................................................................... 1 - 3 . 2 Net rental real estate income (loss) (attach Form 8825) .............................................................................. 2 3a Other gross rental income (loss) 3a ......................................................... b Expenses from other rental activities (attach statement) ........................... 3b c Other net rental income (loss). Subtract line 3b from line 3a ........................................................................ 3c w 0 ........................................................................... .................................................... 4 Interest income 4 J m . 5 Dividends: a Ordinary dividends ............................................................................................................ 5a c b Qualified dividends ......................................................... 5b c .......................................................................................... 6 Royalties 8 ................................................ 7 Net short-term capital gain (loss) (attach Schedule D (Form 1120S)) ............................................................ 7 8a Net long-term capital gain (loss) (attach Schedule D (Form 1120S)) ........................................:...................... 8a b Collectibles (28%) gain (loss) ............................................................ 8b c Unrecaptured section 1250 gain (attach statement) ................................. 8c ...................................................................................... 9 Net section 1231 gain (loss) (attach Form 4797) 9 . 10 Other income (loss) (see instructions) ......... Type - 10 JWA siren 12-17-09 18240308 759605 604600 2 2009.03001 SOFPAC CORPORATION Form 11 ZOS (2009) 604600_2 Fnrm 119nS l7nnQl CC1FP A C' C(~R PORATI ON 2 3 - 2 9 5 6 612 Page 3 Shareholders' Pro Rata Share Items (continued) Total amount ................... . ......................................... 11 Section 179 deduction (attach Form 4562) 11 w 0 .. ................................. ......................................... .............................. 12a Contributions 12a ~ .......................................................... b Investment interest expense 12b d c Section 59(e)(2)expenditures (1)Type - 0 ............................................................. . (2)Amount - 12c(2) . ..................................................................... d Other deductions see instructions Type - 12d .......................................................... . 13 a Low-income housing credit (section 42(1)(5)) 13a .. ............................. ................................................................ b Low-income housing credit (other) 13b ......................................... P ( ) ( ) ...................................................... c Qualified rehabilitation ex enditures rental real estate attach Form 3468 13c d d Other rental real estate credits (see instructions) Type - 13d U Type - e Other rental credits (see instructions) 13e ,,,,,,,,,,,,,,, ................................................................... f Alcohol and cellulosic biofuel fuels credit (attach Form 6478) 13f ..... g Other credits (see instructions) Type - 13g 14 a Name of country or U.S. possession - ................................................................ b Gross income from all sources 14b .............................................. ........................................................... c Gross income sourced at shareholder level 14c .................................. Foreign gross income sourced at corporate level ............................................................ d Passive category 14d c ..................................................................... ............................................................. .. e General cote ory 9 14e . ............................................................ .................................................................. f Other (attach statement) 14f c ................................................... Deductions allocated and apportioned at shareholder level t6 ~ ............................................................. . 9 Interest expense 14g a . .................................................................. ........................................................ h Other 14h ~ ........................................................................................ °' Deductions allocated and apportioned at corporate level to foreign source income ° a i Passive category 14i j General category ,,,,,,,,,,,,,,,, ....... ................................. .. 14f ...................................................................... ........................................................... k Other (attach statement) 14k ............................................................. Other information ....................................................... Total foreign taxes (check one): - ~ Paid ~ Accrued 141 ........ mReduction in taxes available for credit (attach statement) .............................................................................. 14m n Other foreign tax information attach statement) ....................................................................................... ............................................................... 15a Post-1986 depreciation adjustment 15a x a >~ ,,,,,-„ .................................. ................................................................ . b Adjusted gain or loss 15b E . ........................................................ ~' c Depletion (other than oil and gas) 15c ~ E ........................ ............................................................. and geothermal properties -gross income d Oil gas 15d y ~ ¢~¢ ,,,,,,,,,,,,,,,,,,,_ , , ...................................................... and geothermal properties -deductions a Oil as 15e ................................. , g , f Other AMT items attach statement ......................................................................................................... 15f _ ................................................................. 18 a Tax-exempt interest income 18a ~ ~'a ................................................. ....- ....................................................... b Othertax-exempt income 6 ,,,,,,,,,,,,,,,,,,, ...................................... ~L N ...................................................... c Nondeductible expenses i6c ¢ m ~o .................................................................. R y°0 ......................................................... d Property distributions i6d v ........... .................... ................................... m ~ eRepaymentofloansfromshareholders ................................................................................................... i6e c .............................................................. 17a Investment income 17a t ................................................................ ............................. .............................. b Investment ex enses P 17b £ ........................................................ p ......................... c Dividend distributions paid from accumulated earnings and profits ,,,,, 17c c ~ d Other items and amounts (attach statement) ............................................................................................. .c 0 v m 18 Income/loss reconciliation. Combine the amounts on lines 1 through 10 in the far right column. ~"° From the result, subtract the sum of the amounts on lines 11 through 12d and 141 .......................................... 18 - 3 ~ ~ nnc• innnn. JWA sinzi 12-17-09 18240308 759605 604600 2009.03001 SOFPAC CORPORATION 604600_2 Form 112oS (2009) SOFPAC CORP ORATION 2 3- 2 9 5 6 612 Page 4 Schedule L Balance Sheets per Books Assets Beginning o (a) f tax year (b) 436. End of ta (c) x year (d) 20,393. 1 Cash ................................................... counts receivable d t 2 2, 2 4 0. ....,.... ac es an 2 a Trade no bt dtl 22,240. s ................. e b Less allowance for ba 4, 8 8 8. 3, 4 9 6. 3 Inventories .............. 4 U.S.Governmentobligations .................. 5 Tax-exempt securities ........................... STATEMENT 4 9 6 , 7 8 0 . 6 4, 3 8 8. 6 Other current assets (att. stmt.) ............... 7 Loans to shareholders ........................... 8 Mortgage and real estate loans ............... 9 Other investments (att. stmt.) .................. ciable assets d h ...... epre er 10 a Buildings and ot cumulated depreciation b L ............... ess ac ita Depletableassets ................................. letion d de l t p a e b Less accumu 12 Land (net of any amortization) .. l ) bl i y ........_ e on za 13 a Intangible assets (amort d amortization t l . .............. a e b Less accumu 14 Other assets (att. stmt.) ...................... 12 4 , 3 4 8 8 , 2 7 7 . ....................................... 15 Total assets Liabilities and Shareholders' Equity 5 3 . 2 4 5 . 16 Accounts payable ................................. 17 Mortgages, notes, bonds payable in less than 1 year STATEMENT 5 4 18 Other current liabilities (att. stmt) ......_..... 19 Loans from shareholders ........................ 2p Mortgages, notes, bonds payable in 1 year or more 21 Other liabilities (att stmt) ........................ 22 Capital stock ....................................... 23 Additional paid-in capital ........................ STATEMENT 6 12 4 , 2 91 . 8 8 , 0 2 8 . 24 Retained earnings ................................. 25 Adjustments to shareholders' equity (att. stmt.) ...... ( ) ( ) 28 Less cost of treasury stock ..................... 27 Total liabilities and shareholders' equity ...... Schedule M-1 Reconciliation o Note: Schedule M-3 req f Income (Loss) per uired instead of Schedule M-1 12 4 , 3 4 4 . Books With Income if total assets are $10 million (Loss) per Return or more -see instructions 8 8 , 2 7 7 1 Net income (loss) per books ................ - 3 6 , 2 6 3 . 5 Income recorded on books this year not 2 Income included on Schedule K, lines 1, 2, 3c, 4, fie, 6, 7, Sa, 9, and 10, not recorded on books this year (itemize): included on Schedule K, lines 1 through 10 (itemize): aTax-exempt interest $ 3 Expenses recorded on books this year not 6 Deductions included on Schedule K, lines 1 included on Schedule K, lines 1 through 12 through 12 and 141, not charged against and 141(itemize): book income this year (itemize): a Depreciation $ a Depreciation $ b Travel andentertalnmentS 7 Add lines 5 and 6 .......................................... 4 Add lines 1 through 3 .. - 3 6 2 6 3. - 3 6 2 6 3 . 8 Income (loss) (Schedule K, line 18). Line 4 less line 7 ......... ~ Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Schedule M-2 Shareholders' Undistri buted Taxable Income Previously Taxed (see instructions) (a) Accumulated (b) Other adjustments (c) Shareholders' undistributed adjustments account aCCOUnt taxable income previously taxed 12 4 , 2 9 0 . ............................ 1 Balance at beginning of tax year .......................... 2 Ordinary income from page 1, line 21 ...................... .......................... 3 Other additions ........... ................................... .......................... 3 6, 2 6 3 a ( 4 Loss from page 1, line 21 ..................................... .......................... ) 5 Other reductions ................................................ ........................... 8 8, 0 2 7. 6 Combine lines 1 through 5 .... 7 Distributions other than dividend distributions ......... .......................... 0 2 7 . 8 8 8 Balance at end of tax year. Subtract line 7 from line 6 . , .......................... 4 Form 11205 (2009) s11~s1 JWA 1z-n-os 18240308 759605 604600 2009.03001 SOFPAC CORPORATION 604600_ SOFPAC CORPORATION 23-2956612 FORM 11205 COMPENSATION OF OFFICERS STATEMENT 1 NAME OF OFFICER SOCIAL SECURITY NUMBER TIME DEVOTED TO PCT OF BUSINESS STOCK 0 33.30 50 33.30 AMOUNT OF COMPENSATION ROCCO COSTABILE 175-40-9493 FRANK COSTABILE 191-42-8935 TOTAL COMPENSATION OF OFFICERS LESS: COMPENSATION CLAIMED ELSEWHERE EMPLOYMENT CREDIT REDUCTION TOTAL TO FORM 11205, PAGE 1, LINE 7 0. 0. 0. FORM 11205 TAXES AND LICENSES STATEMENT 2 DESCRIPTION TAXES - OTHER TOTAL TO FORM 1120S, PAGE 1, LINE 12 AMOUNT 2. 2. FORM 11205 OTHER DEDUCTIONS STATEMENT 3 DESCRIPTION BANK CHARGES MANAGEMENT FEE OFFICE SUPPLIES PROFESSIONAL FEE5 TELEPHONE TOTAL TO FORM 11205, PAGE 1, LINE 19 AMOUNT 105. 5,000. 1,071. 685. 506. 7,367. 5 STATEMENT(S) 1, 2, 3 18240308 759605 604600 2009.03001 SOFPAC CORPORATION 604600 2 50FPAC CORPORATION 23-2956612 SCHEDULE L OTHER CURRENT ASSETS STATEMENT 4 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR ACCOUNTS RECEIVABLE - AFFILIATE 96,780. 64,388. TOTAL TO SCHEDULE L, LINE 6 96,780. 64,388. SCHEDULE L OTHER CURRENT LIABILITIES STATEMENT 5 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR SALES TAX PAYABLE 4. TOTAL TO SCHEDULE L, LINE 18 4. SCHEDULE L ANALYSIS OF TOTAL RETAINED EARNINGS PER BOOKS STATEMENT 6 DESCRIPTION AMOUNT BALANCE AT BEGINNING OF YEAR 124,291. NET INCOME PER BOOKS -36,263. DISTRIBUTIONS 0. OTHER INCREASES (DECREASES) BALANCE AT END OF YEAR - SCHEDULE L, LINE 24, COLUMN (D) 88,028. 6 STATEMENT(S) 4, 5, 6 18240308 759605 604600 2009.03001 SOFPAC CORPORATION 604600 2 671109 Schedule K-1 Af1AA 0 Final K-1 ~ Amended K-1 OMB No. 1545-0130 trorm i ~zuaf ~ V V`J' Department of the Treasury Part 111 Shareholder's Share of CurrentYear Income, Deductions, Credits, and Other Items Internal Revenue Service For calendar year 2009, or tax year beginning 1 Ordinary business income (loss) -12 , 0 8 8 . 13 Credits ending 2 Net rental real estate inc (loss) Shareholder's Share of Income, Deductions, Credits, etc. - See separate instructions. 3 other net rental income (loss) Part I Information About the Corporation 4 Interest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. s Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return E-FILE 8a Net long-term capital gain (loss) Part II Information About the Shareholder 8b Collectibles (28%) gain (loss) D Shareholder's identifying number 162-36-9922 8c Unrecaptured sec 1250 gain E Shareholder's name, address, city, state and ZIP code 9 Net section 1231 gain (loss) PHILIP F . COSTABILE 348 BLACK LATCH LANE 10 Other income (loss) 15 Alternative min tax (AMT) items CAMP HILL, PA 17011 F Shareholder's percentage of stock ownership for tax year .................. 33.333333% 11 Section 179 deduction 16 Items affecting shareholder basis 12 Other deductions c O m N ~ _ 0 LL 17 Other information *See attached statement for ad ditional information. ~2_'~~_09 JWA For Paperwork Reduction Act Notice, see Instructions for Form 1120S. Schedule K-1 (Form 1120S) 2009 7 SHAREHOLDER NUMBER 1 18240308 759605 604600 2009.03001 SOFPAC CORPORATION 604600 2 671109 Schedule K-1 AAAA 0 Final K-1 ~ Amended K-1 OMB No. 1545-0130 trorm i izu~f L V V.y Department of the Treasury Part III Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service For calendar year 2009, or tax year beginning 1 Ordinary business income (loss) -12 , 0 8 7 . 13 Credits ending 2 Net rental real estate inc (loss) Shareholder's Share of Income, Deductions, Credits, etc. - See separate instructions. 3 Other net rental income (loss) Part I Information About the Corporation 4 Interest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. a Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return E-FILE 8a Net long-term capital gain (loss) Part II Information About the Shareholder 8b Collectibles (28%) gain (loss) D Shareholder's identifying number 175-40-9493 8c Unrecaptured sec 1250 gain E Shareholder's name, address, city, state and ZIP code 9 Net section 1231 gain (loss) ROCCO A . COSTABILE BOX 5205 10 Other income (loss) 15 Alternative min tax (AMT) items GRANTVILLE, PA 17028 F Shareholder's percentage of stock ownership for tax year .................. 33.333333% 11 Section 179 deduction 18 Items affecting shareholder basis 12 Other deductions C d N 0 LL 17 Other information *See attached statement for ad ditional information. 12'»09 JWA For Paperwork Reduction Act Notice, see Instructions for Form 1120S. Schedule K-1 (Form 1120S) 2009 8 SHAREHOLDER NUMBER 2 18240308 759605 604600 2009.03001 SOFPAC CORPORATION 604600 2 671109 Schedule K-1 f'1AAA 0 Final K-1 0 Amended K-1 OMB No. 1545-0130 orm Department of the Treasury -- Part III Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service For calendar year 2009, or tax year beginning 1 Ordinary business income (loss) -12 , 0 8 8 . 13 Credits ending 2 Net rental real estate inc (loss) Shareholder's Share of Income, Deductions, Credits, etc. - See separate instructions. 3 Other net rental income (loss) Part I Information About the Corporation 4 Interest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. s Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return E-FILE 8a Net long-term capital gain (loss) Part II Information About the Shareholder sb Collectibles (2a°~°) gain (foss) D Shareholder's identifying number 191-42-8935 8c Unrecaptured sec 1250 gain E Shareholder's name, address, city, state and ZIP code 9 Net section 1231 gain (loss) FRANK M. COSTABILE 576 LESTER COURT 10 Other income (loss) 15 Alternative min tax (AMT) items HARRISBURG, PA 17112 F Shareholder's percentage of stock ownership for tax year .................. 33.333334% 11 Section 179 deduction 16 Items affecting shareholder basis 12 Other deductions c O m N `0 LL 17 Other information *See attached statement for ad ditional information. i,z 1 JWA For Pa erwork Reduction Act Notice, see Instructions for Form 1120S. Schedule K-1 Form 1120S 2009 iz-i~-os P ( ) 9 SHAREHOLDER NUMBER 3 18240308 759605 604600 2009.03001 SOFPAC CORPORATION 604600_2 Form 1120S Department of the Treasury Internal Revenue Service (77) U.S. Income Tax Return for an S Corporation - Do not file this form unless the corporation has filed ar is attaching Form 2553 to elect to be an S corporation. OMB No. 1545-0130 2008 For calendar year 2008 er tax year beginning ,and ending A Selection effective date Name D Employer identification number 05/22/1998 use thelRS SOFPAC CORPORATION 23-2956612 B Business activity label. code number Other- Number, street, and room or suite no. If a P.O. box, see instructions. E Date incorporated (see instructions wise, 54199 print 5341 JAYCEE AVE. 03/26/1998 C Check if Sch. M-3 or type. City or town, state, and ZIP code F Total assets (see instructions) attached ~ HARRISBURG PA 17112-2938 $ 124,344. G Is the corporation electing to be an S corporation beginning with this tax year? Yes X No If "Yes," attach Form 2553 if not already filed H Check if: (i) 0 Final return (2) ~ Name change (3) 0 Address change (4)0 Amended return (5) 0 S election termination or revocation Enter the number of shareholders who were shareholders during any part of the tax year .............................................................................. - 3 Cautions Inrlude only trade or business income and exoenses on lines 1 a throuoh 21. See the instructions for more information. 1 a Gross receipts or sales 6 $ , 5 0 6 . b Less returns and allowances 3 , 3 9 6 • C Bal - i C 6 5 , 110 . 2 Cost of goods sold (Schedule A, line 8) ......... .. ............................................... ....... 2 3 5 , 0 4 9 . E 3 Gross profit. Subtract line 2 from line 1c ........................................................ ..... .......................... 3 3 0 , 0 61. 4 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) ............................................................... 4 5 Other income (lass) (attach statement) .................... .........STATEMENT. 1. _ 5 4 2 . 6 Total income (loss). Add lines 3 through 5 ....... ................ - 6 3 0 , 10 3 . H 7 Compensation of officers ............................................................................. STATEMENT... 2.......... 7 0 8 Salaries and wages (less employment credits) ............................................................................................. 8 9 Repairs and maintenance ........................................................................................................................ 9 E 10 Bad debts ............................................................................................................................................. 10 ° 11 Rents ................................................................................................................................................... 11 ~ H 12 Taxes and licenses ......................................... 12 ;° 13 Interest ................................................................................... . . ................................................. 13 U ~ b 14 Depreciation not claimed on Schedule A or elsewhere on return (attach Form 4562) .......................................... 14 ~ 15 Depletion (Do not deduct oil and gas depletion.) ....................................................................................... 15 ro i6 Advertisin 9 ........................................................................................................................................ 16 N 17 Pension rofit-sharing, etc. lens r P > P ............................................................................................................ 17 w c 18 Employee benefit programs ..................................................................................................................... 18 3 19 Other deductions (attach statement) ...............................................................S.TATEMENT....3.......... 19 6 , 4 8 6 . a 20 Total deductions. Add lines 7 through 19 ............. ......................... ..........................................................- 20 ,4 6. ~ ........................................................................ 21 Ordinary business income (loss). Subtract line 20 from line 6 21 23, 617. 22 a Excess net passive income or LIFO recapture tax (see instructions) .................. 22a b Tax from Schedule D (Form 1120S) ...............„-.,..--..............................,.. 22b c Add lines 22a and 22b .............................................................................. ............................................. 22c ~ 23 a 2008 estimated tax payments and 2007 overpayment credited to 2008 ..._...._.., 23a a~i b Tax de osited with Farm 7004 - 23b P ............................................................... c Credit for federal tax paid on fuels (attach Form 4136) ................................. 23c ~ d Add lines 23a through 23c .......................................................................... ........................................... 23d ~ 24 Estimated tax penalty (see instructions). Check if Form 2220 is attached ....................................... - 0 24 ~ 25 Amount owed. If line 23d is smaller than the total of lines 22c and 24, enter amount owed .................................... 25 ~ 28 Overpayment. If line 23d is larger than the total of lines 22c and 24, enter amount overpaid ...... ...................... 28 27 Enter amount from line 26 Credited to 2009 estimated tax - Refunded - 27 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and Sign belief, it is Vue, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. May the IRS discuss this return with the Here I reparar shown ' 'PRESIDENT below (see instr.>? Signature of officer Date Title ®Yes~ No Preparer's Date selfck if Preparer's SSN or PTIN Paid ' signature employed ~ P 0 0 2 2 917 4 Preparer s Firm'sname(or SELIGMAN, FRIEDMAN & CO. , P.C EIN Use Only v°°rs if Self- employed), ' 10 2 7 MUMMA ROAD d dd 2 3- 2 7 0 8 6 0 7 ress, an a ZIP code WORMLEYSBURG , PA 17 0 4 3 Phone n°. 717 - 7 61- 0 211 JWA For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. 811701 12-31-OB 1 15310306 759605 604600 2008.03000 SOFPAC CORPORATION Form 11205 (2008) 604600_1 Form 1120S (2008 SOFPAC CORPORATION 23-2956612 2 scnedute A Lost of Goods Sold (see instructions 1 Inventory atbeginning ofyear -_._ _ _ - - ..................................................................................................... 1 .. 2 Purchases ............................................................................................................................................ .. 2 3 5, 0 4 9. 3 Cost of labor .................................................................... .. 3 4 Additional section 263A costs (attach statement) ......................................................................... 4 5 Other costs (attach statement) ........................................................................................................................... ... 5 6 Total. Add lines 1 through 5 ...................................................................................... ............................. 6 3 5 0 4 9. .. , 7 Inventory at end of year ........................................................................................................................ 7 ............. 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 ............... .. .. 8 3 5 , 0 4 9 . 9 a Check all methods used for valuing closing inventory: (i) ~ Cost as described in Regulations section 1.471-3 (ii) ~X Lower of cost or market as described in Regulations section 1.471-4 (iii) 0 Other (Specify method used and attach explanation) - b Check if there was a writedown of subnormal goods as described in Regulations section 1.471-2(c) . c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Farm 970) d If the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory computed under LIFO ........................................................................................................................................ gd .. e If property is produced or acquired for resale, do the rules of Section 263A apply to the corporation? .....-, __ Yes No f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? .. .- 0 Yes OX No If "Yes," attach explanation. Schedule B Other Information (see instructions) Yes No 1 Check accounting method: (a) Cash (b) Accrual (c) Other (specify) - 2 See the instructions and enter the: (a) Business activity -WATER PURIFICATION (b) Product or service - WATER CONDITIONER 3 At the end of the tax year, did the corporation own, directly or indirectly, 50% or more of the voting stock of a domestic corporation? (For rules of attribution, see section 267(c).) If "Yes;' attach a statement showing: (a) name and employer identification number (EIN), (b) percentage owned, and (c) if 100% owned, was a QSub election made? ........................... ............................... X 4 Has this corporation filed, or is it required to file, a return under section 6111 to provide information on any reportable transacti on? _-..._ --- . X 5 Check this box if the corporation issued publicly offered debt instruments with original issue discount ............................... ................... - 0 If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. 6 If the corporation: (a) was a C corporation before it elected to be an S corporation orthe corporation acquired an asset with a basis determined by reference to its basis (or the basis of any other property) in the hands of a C corporation and (b) has net unrealized built-in gain (defined in section 1374(d)(1)) in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years ...........................................~ - $ .............................................................................................. 7 Enter the accumulated earnings and profits of the corporation at the end of the tax year ...................... .... $ 8 Are the corporation's total receipts (see instructions) for the tax year and its total assets at the end of the tax year less than $250,000? If "Yes;'the corporation is not required to complete Schedules L and M-1 ......................................... ............................... X Schedule K Shareholders' Pro Rata Share Items total amount 1 Ordinary business income (loss) (page 1, line 21) . ...................................................................................... t 23 , 617 . 2 Net rental real estate income (loss) (attach Form 8825) .............................................................................. 2 3a Other gross rental income (loss) .................................. . 3a b Expenses from other rental activities (attach statement) ....... . ... .. . .. 3b H c Other net rental income (loss). Subtract line 3b from line 3a .......... .. ......... 3c J 4 Interest income ......................................................... ......... ......... ......... ......... ............. 4 5 Dividends: a Ordinary dividends ............................................................................................................ 5a ~ b Qualified dividends 5b ......................................................... ~ 6 Royalties -....-. ............................................................... ... ................................................................. 6 7 Net short-term capital gain (loss) (attach Schedule D (Form 1120S)) ......................................................... 7 8a Net long-term capital gain (loss) (attach Schedule D (Form 1120S)) ............................................................... Sa b Collectibles (28%) gain (loss) ............................... . .... ...... ...... 8b c Unrecaptured section 1250 gain (attach statement) .............................. 8c 9 Net section 1231 gain (loss) (attach Form 4797) ............................................................... g 10 Other income (loss see instructions) ......... Type- ip JWA Form 1120S (2008) 811711 12-31-OS 2 15310306 759605 604600 2008.03000 SOFPAC CORPORATION 604600 1 Form 1 1205 (2008) SOFPAC CORPORATION 2 3- 2 9 5 6 612 Page 3 Shareholders' Pro Rata Share Items (continued Total amount ,~ 11 Section 179 deduction (attach Form 4562) .............................. .. . 11 0 Y 12a Contributions ............................. .. ................................................................................... 12a 3 b Investment interest expense .................................................................................................................. 12b o c Section 59(e)(2) expenditures (1)Type ~ (2) Amount ~ ................................................. .................................................... ............ .... 12c(2) d Other deductions (see instructions Type - 12d 13 a Low-income housing credit (section 42(1)(5)) .......................................................................................... 13a b Low-income housing credit (other) ............................................... ....................................................... 13b ,.y_. c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) ................................ .. 13c d Other rental real estate credits (see instructions) Type - 13d V e Other rental credits (see instructions) T e ............... YP - 13e f Alcohol and cellulosic biofuel fuels credit (attach Form 6478) .............................. ... 13f g Other credits (see instructions) Type ~ 13g 14 a Name of country or U.S. possession ~ b Gross income from all sources .............................................................................................................. 14b c Gross income sourced at shareholder level ........................................................................................... 14c Foreign gross income sourced at corporate level H d Passive category ...................... 14d o M e General categorY ................................................................................................................................. 14e ~ f Other (attach statement) ..................................................................................................................... 14f Deductions allocated and apportioned at shareholder level ~ g Interest expense ......................................................... .................................................................... 149 rn h Other ................................................................................................................................................ 14h c Deductions allocated and apportioned at corporate level to foreign source income LL i Passive category ........................................................................................................................... 14i j General cate9ory ................................................................................................................................. i4j k Other (attach statement) ........................................................................................................................ 14k Other information Total foreign taxes (check one): - ~ Paid 0 Accrued ............................... .. .. 141 mReduction in taxes available for credit (attach statement) ................... ......... ....... ......... ............... 14m n Other foreign tax information attach statement ............................. ..................................... 15a Post-1986 depreciation adjustment 15a x ......................................................................................................... >~ E b Adjusted gain or loss .................................................................................. ......................................... 5b cam- c De letion other than oil and as .................................................. . ................ P ( 9 ) ...................................... 15c E~ d Oil, gas, and geothermal properties -gross income 15d ago a Oil, gas, and geothermal properties -deductions 15e f Other AMT items attach statement ......................................................................................................... 15f c ~ 16a Tax-exempt interest income .................................................................................................................. 16a ~~° ~ m o,_ b Other tax-exempt income ..................................................................................................................... 16b a m o m c Nondeductible expenses ......................................................... ............................................................... 16c ~L d Property distributions ........................................................................................................................... 16d °Y'y _ a Repayment of loans from shareholders ................................................................................................... i6e 0 17a Investment income ........................................ ...................................................................................... 17a dR t~ binvestmentexpenses ............................. 17b o g c Dividend distributions paid from accumulated earnings and profits ._... .......................................................... 17c ~ d Other items and amounts attach statement ............... ............................................................................. .c co n m 18 Income/Icss reconciliation. Combine the amounts on lines 1 through 10 in the far right column. ~ n From the result, subtract the sum of the amounts on lines 11 through 12d and 141 .......................................... 18 2 3 , 617 . JWA a1 n21 12-31-OB Form 11205 (2008) 15310306 759605 604600 2008.03000 SOFPAC CORPORATION 604600 1 Form 112oS (2008) SOFPAC CORPORATION 23-295FF1 2 Paae 4 SChedule L Balance Sheets per Books Beginning of tax year End of tax year Assets (a) (b) (c) (d) 1 Cash ................................................... 496. 436. 2 a Trade notes and accounts receivable ......... 2 3, 7 31 . 2 2, 2 4 0. b Less allowance for bad debts ....,. ....... 2 3 , 7 31. 2 2 , 2 4 0 . 3 Inventories .......................................... 13, 240. 4, 888. 4 U.S.Governmentobligations .................. 5 Tax-exempt securities ........................... 6 Other current assets (att stmt.) ............... STATEMENT 4 71 , 5 31 . 9 6 , 7 8 0 . 7 Loans to shareholders ........................... 8 Mortgage and real estate loans ............... 9 Other investments (att. stmt.) .................. 10 a Buildings and other depreciable assets .... _. b Less accumulated depreciation ............... 11 a Depletable assets ................................. b Less accumulated depletion .. 12 Land (net of any amortization) ......_..___ 13 a Intangible assets (amortizable only) ..._._... b Less accumulated amortization ............... 14 Other assets (att. stmt.) . .......................... 15 Total assets .................................. 108,998. 124,344. Liabilities and Shareholders' Equity 18 Accounts payable ................................. 8, 322. 53. 17 Mortgages, notes, bonds payable in less than 1 year 18 Other current liabilities (att. stmt.) ......._.... STATEMENT 5 2 . 0 , 19 Loans from shareholders ........................ 2U Mortgages, notes, bonds payable in 1 year or more 21 Other liabilities (att. stmt.) ........................ 22 Capital stock ....................................... 23 Additional paid-in capital ........................ 24 Retained earnings ................................. STATEMENT 6 100, 674. 124, 291. 25 Adjustments to shareholders' equity (att. stmt.) ,. _... 28 Less cost of treasury stock ...... , _... ( ( ) 27 Total liabilities and shareholders' equity ...... 10 8 , 9 9 8 . 12 4 , 3 4 4 . Schedule M-1 Reconciliation of Note: Schedule M-3 requ Income (Loss) per ired instead of Schedule M-1 i Books With Income (Loss) per Return f total assets are $10 million or more -see instructions 1 Net income (loss) per books .................. 2 3 , 617. 5 Income recorded on books this year not 2 Income included on Schedule K, lines 1, 2, 3c, 4, Sa, 6, 7, 8a, 9, and 10, not recorded on books this yeaz (itemize): included on Schedule K, lines 1 through 10 (itemize): aTax-exempt interest $ 3 Expenses recorded on books this year not included on Schedule K, lines 1 through 12 and 141(itemize): a Depreciation $ b Travel andenterheinment$ 6 Deductions included on Schedule K, lines 1 through 12 and 141, not charged against book income this year (temize): a Depreciation $ 7 Add lines 5 and 6 4 Add lines 1 through 3 .............................. 2 3 , 617. 8 Income (loss) (Schedule K, line 18). Line 4 less line 7 ......... 2 3 617 . Analysis of Accumulated Adiustment s Account. Other Adiustments Ar_r_nun t_ anrt i J"~"""r` ~~~-` i Shareholders' Undistributed Taxable Income Previously Taxed (see instructions) (a) Accumulated (b) Other adjustments (c) Shareholders' undistributed adjustments account aCCOUnt taxable income previously taxed 1 Balance at beginning of tax year .................................... . ............. 100, 673. 2 Ordinary income from page 1, line 21 .. ......... ......... ............... 2 3 , 617 . 3 Other additions ........................................................................... 4 Loss from page 1, line 21 ............................................................... ( ) 5 Other reductions ........................................................................... 6 Combinelinesithrough5 .......................................................... 124,290. 7 Distributions other than dividend distributions 8 Balance at end of tax year. Subtract line 7 from line 6 .. 12 4 , 2 9 0 . 811731 1z-31-oa JWA 4 15310306 759605 604600 2008.03000 SOFPAC CORPORATION Farm 1120S (2008) 604600_1 SOFPAC CORPORATION 23-2956612 FORM 1120S OTHER INCOME STATEMENT 1 DESCRIPTION FINANCE CHARGES TOTAL TO FORM 11205, PAGE 1, LINE 5 AMOUNT 42. 42. FORM 11205 COMPENSATION OF OFFICERS STATEMENT 2 SOCIAL TIME SECURITY DEVOTED TO PCT OF AMOUNT OF NAME OF OFFICER NUMBER BUSINESS STOCK COMPENSATION ROCCO COSTABILE 175-40-9493 0 33.30 0. FRANK COSTABILE 191-42-8935 50 33.30 0. TOTAL COMPENSATION OF OFFICERS 0. LESS: COMPENSATION CLAIMED ELSEWHERE EMPLOYMENT CREDIT REDUCTION TOTAL TO FORM 11205, PAGE 1, LINE 7 FORM 11205 OTHER DEDUCTIONS STATEMENT 3 DESCRIPTION AMOUNT BANK CHARGES PROFESSIONAL FEES TELEPHONE ADMINISTRATIVE EXPENSE TOTAL TO FORM 11205, PAGE 1, LINE 19 40. 500. 946. 5,000. 6,486. SCHEDULE L OTHER CURRENT ASSETS STATEMENT 4 DESCRIPTION ACCOUNTS RECEIVABLE - AFFILIATE TOTAL TO SCHEDULE L, LINE 6 BEGINNING OF END OF TAX TAX YEAR YEAR 71,531. 71,531. 96,780. 96,780. 5 STATEMENT(S) 1, 2, 3, 4 15310306 759605 604600 2008.03000 SOFPAC CORPORATION 604600_1 SOFPAC CORPORATION 23-2956612 SCHEDULE L OTHER CURRENT LIABILITIES STATEMENT 5 DESCRIPTION SALES TAX PAYABLE BEGINNING OF TAX YEAR 2. END OF TAX YEAR n_ TOTAL TO SCHEDULE L, LINE 18 2. 0. SCHEDULE L ANALYSIS OF TOTAL RETAINED EARNINGS PER BOOKS STATEMENT 6 DESCRIPTION BALANCE AT BEGINNING OF YEAR NET INCOME PER BOOKS DISTRIBUTIONS OTHER INCREASES (DECREASES) BALANCE AT END OF YEAR - SCHEDULE L, LINE 24, COLUMN (D) 124,291. AMOUNT 100,674. 23,617. 0. 6 STATEMENT(S) 5, 6 15310306 759605 604600 2008.03000 SOFPAC CORPORATION 604600 1 671108 Schedule K-1 nlnlne ~ Final K-1 0 Amended K-1 OMB No. 1545-0130 trorm iizua~ LIVUQ Department of the Treasury Partlll Shareholder's Share of Current Yearlncome, Deductions, Credits, and Other Items Internal Revenue Service For calendar year 2008, or tax year beginning 1 Ordinary business income (loss) 7 , 8 7 2 . 13 Credits ending 2 Net rental real estate inc (loss) Shareholder's Share of Income, Deductions, Credits, etc. - See separate instructions. 3 Other net rental income (lass) Part I Information About the Corporation 4 Interest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. 6 Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return E-FILE 8a Net long-term capital gain (loss) Part II Information About the Shareholder 8b .Collectibles (28%) gain (loss) D Shareholder's identifying number 162-36-9922 8c Unrecaptured sec 1250 gain E Shareholder's name, address, city, state and ZIP code 9 Net section 1231 gain (loss) PHILIP F . COSTABILE 348 BLACK LATCH LANE 10 Other income (loss) 15 Alternative min tax (AMT) items CAMP HILL, PA 17011 F Shareholder's percentage of stock ownership for tax year .................. 33.333333% 11 Section 179 deduction 18 Items affecting shareholder basis 12 Other deductions T C d N N Q: `0 LL 17 Other information *See attached statement for ad ditional information. 811Z'1 JWA For Pa erwork Reduction Act Notice, see Instructions for Form 1120S. Schedule K-1 Form 1120S 2008 1231-OS p ( ) 7 SHAREHOLDER NUMBER 1 15310306 759605 604600 2008.03000 SOFPAC CORPORATION 604600 1 671108 Schedule K-1 nnne 0 Final K-1 ~ Amended K-1 OMB No. 1545-0130 trormnzu~f ~VUQ Department of the Treasury Partlll Shareholder's Share of Current Yearlncome, Deductions, Credits, and Other Items Internal Revenue Service For calendar year 2008, or tax year beginning 1 Ordinary business income (loss) 7 , 8 7 3 . 13 Credits ending 2 Net rental real estate inc (loss) Shareholder's Share of Income, Deductions, Credits, etc. - See separate instructions. 3 other net rental income (loss) Part I Information About the Corporation 4 Interest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. s Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return E-FILE Sa Net long-term capital gain (loss) Part II Information About the Shareholder ab Collectibles (28%) gain (loss) D Shareholder's identifying number 175-40-9493 8c Unrecaptured sec 1250 gain E Shareholder's name, address, city, state and ZIP code 9 Net section 1231 gain (loss) ROCCO A . COSTABILE BOX 5205 10 Other income (loss) 15 Alternative min tax (AMT) items GRANTVILLE, PA 17028 F Shareholder's percentage of stock ownership for tax year .................. 3 3. 3 3 3 3 3 3% 11 Section 179 deduction 16 Items affecting shareholder basis 12 Other deductions a O m N C: `0 LL 17 Other information "See attached statement for ad ditional information. 12~g~ pg JWA For Paperwork Reduction Act Notice, see Instructions for Form 1120S. Schedule K-1 (Form 1120S) 2008 8 SHAREHOLDER NUMBER 2 15310306 759605 604600 2008.03000 SOFPAC CORPORATION 604600 1 671108 Schedule K-1 nnne 0 Final K-1 0 Amended K-1 OMB No. 1545-0130 frarm i izu~f LV VQ Department of the Treasury Part III Shareholder's Share of CurrentYear Income, Deductions, Credits, and Other Items Internal Revenue Service For calendar year 2008, or tax year beginning 1 Ordinary business income (loss) 7 , 8 7 2 . 13 Credits ending 2 Net rental real estate inc (loss) Shareholder's Share of Income, Deductions, Credits, etc. - See separate instructions. 3 Other net rental income (loss) Part I Information About the Corporation 4 Interest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. 6 Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return E-FILE 8a Net long-term capital gain (loss) Part II Information About the Shareholder Sb Collectibles (28%) gain (loss) D Shareholder's identifying number 191-42-8935 8c Unrecaptured sec 1250 gain E Shareholder's name, address, city, state and ZIP code 9 Net section 1231 gain (loss) FRANK M . COSTABILE 5798 HIDDEN LAKE DRIVE 10 Other income (loss) 15 Alternative min tax (AMT) items HARRISBURG, PA 17112 F Shareholder's percentage of stock ownership for tax year .................. 3 3. 3 3 3 3 3 4% 11 Section 179 deduction 16 Items affecting shareholder basis 12 Other deductions c O m UJ `0 a 17 Other information "See attached statement for ad ditional information. 8i~ai oa .1WA for Paperwork Reduction Act Notice, see Instructions for Form 11205. Schedule K-1 (Form 1120S) 2008 9 SHAREHOLDER NUMBER 3 15310306 759605 604600 2008.03000 SOFPAC CORPORATION 604600 1 Form 1120S Department of the Treasury Internal Revenue Service U.S. Income Tax Return for an S Corporation - Do not file this form unless the corporation has filed ar is attaching Form 2553 to elect to be an S corporation. ' OMB No. 7545-0130 2007 For calendar year 2007, or tax year beginning ,and ending A Selection effective date Name D Employer identification number 05/22/1998 use the IRS B Business activity label. SOFPAC CORPORATION 23-2956612 code number Other- Number, street, and room or suite no. If a P.O. box, see instructions. E Date incor orated (see instructions 0 3/ 2 6/ 19 9 8 5 419 9 ~ wise, 5 3 41 JAYCEE AVE . print C Check if Sch. M-3 or type. City or town, state, and ZIP code F Total assets (see instructions) attached ~ HARRISBURG PA 17112 - 2 9 3 8 $ 108,998. G Is the corporation electing to be an S corporation beginning with this tax year? Yes No If "Yes," attach Form 2553 if not already filed H Check if: (1) ~ Final return (2) 0 Name change (3) 0 Address change (4)0 Amended return (5) 0 S election termination or revocation Enter the number of shareholders in the corporation at end of the tax year ..... ..................................................................................... - 3 Caution:/nc/ude onlytrade or business income and expenses on lines 1a through 27. See the instructions for more information. i s Gross receipts or sales 10 8, 7 0 0. b Less returns and allowances 11, 6 0 3. C Bal - i c 9 7, 0 9 7, 2 Cast of goods sold (Schedule A, line 8) 2 4 4 , 313 . £ 3 Gross profit. Subtract line 2 from line is ....... .... ............... ... . 3 5 2 , 7 8 4 . 4 Net gain (loss) from Farm 4797, Part II, line 17 (attach Form 4797) ....................... .... .. 4 5 Other income (loss) (attach statement) ... ................. .... STATEMENT.. 1. 5 '7'7 9 , 6 Total income loss .Add lines 3 through 5 ....... ......... ........ ......... ...................... ............... - 6 5 3 , 5 6 3 . H 7 Compensation of officers ...................................................... STATEMENT... 2.......... 7 0 8 Salaries and wages (less employment credits) ................................. 8 ~ 9 Repairs and maintenance 9 ,~ 10 Bad debts ............................................................................................................................................. 10 6 , 8 4 8 . `0 w 11 Rents ................................................................................................................................................... 11 H c 12 Taxes and licenses ................................................................................................................................ 12 v 13 Interest ................................................................................................................................................ 13 ~ ~L., 14 Depreciation not claimed on Schedule A or elsewhere on return (attach Form 4562) .......................................... 14 = 15 Depletion (Do not deduct oil and gas depletion.) ....................................................................................... 15 r .............................................................................................. 16 Advertising ............................................ i6 376. n -- N 17 Pension, profit-sharing, etc., Plans ............................................................................................................ 17 `0 18 Employee benefit programs .......................................................................... 18 3 19 Other deductions (attach statement) ...............................................................S.TATEMENT 3 19 5 5 0 4 .... .......... , . c 20 Total deductions. Add lines 7 through 19 ............................................................................................... - 20 12 , 7 2 8 . 21 Ordinary business income (loss). Subtract line 20 from line 6 ........................................................................ 21 4 0 , 8 3 5 . 22 a Excess net passive income or LIFO recapture tax (see instructions) ....... ........... 22a b Tax from Schedule D (Form 1120S) .................................................... . 22b c Add lines 22a and 22b ...................... ....................... ............................................. 22c r 23 a 2007 estimated tax payments and 2006 overpayment credited to 2007 ...___...__. 23a aci b Tax deposited with Form 7004 23b ~ ............. ................................................... c Creditforfederaltaxpaidonfuels (attach Form 4136) ................................. 23c a a d Add lines 23a throw h 23c 9 ..................................................................................................................... 23d ~ 24 Estimated tax penalty (see instructions). Check if Form 2220 is attached ._..._.... _ - Q ........................... 24 25 Amount owed. If line 23d is smaller than the total of lines 22c and 24, enter amount owed .................................. . 25 26 Overpayment. If line 23d is larger than the total of lines 22c and 24, enter amount overpaid ...... ...................... 26 27 Enter amount from line 26 Credited to 2008 estimated tax - Refunded - 27 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is Vue, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. .SI n g May the IRS discuss this return with the Here reparer shown ' 'PRESIDENT Below (see inatr.>a Signature of officer Date Title ®Yes~No Paid Preparers' Date Check if self- Preparer's SSN or PTIN Pre arer's signature employed ~ P 0 0 2 2 917 4 p Firm'sname(or SE G Use Only LI MAN, FRIEDMAN & CO. , P . C f e EIN mpioyed) address, and 10 2 7 MUMMA ROAD 2 3- 2 7 0 8 6 0 7 ZIP code WORMLEYSBURG , PA 17 0 4 3 Phone no. 717 - 7 61- 0 211 JWA For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. 7n7ot 12-26-07 1 07460308 759605 604600 2007.05000 SOFPAC CORPORATION Form 1120S (2007) 604600_1 Form 112os (2007) SOFPAC CORPORATION 2 3- 2 9 5 6 612 Page 2 Schedule A Cost of Goods Sold see instructions) 1 Inventory at beginning of year .............................................................................................................................. 1 2 Purchases ................................................. ......................................................... .......... 2 44 313. 3 Cost of labor ................................................................................................... .............................. 3 4 Atlditionalsection263Acosts(attachstatement) ........................................ . .................... ................... 4 5 Other costs (attach statement) ..... ................................. ......................... . ........................ . 5 6 Total. Add lines 1 throw h 5 9 ............................................................................. 6 4 4, 313 . 7 Inventory at end of year ....................................................................................................................................... 7 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 ............................... . . . 8 4 4 , 313 . 9 a Check all methods used for valuing closing inventory: (i) ~ Cost as described in Regulations section 1.471-3 (ii) ©Lower of cost or market as described in Regulations section 1.471-4 (iii) ~ Other (Specify method used and attach explanation) - b Check if there was a writedown of subnormal goods as described in Regulations section 1.471-2(c) . ................................... .................... - ............. c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) .......................... .................... - 0 .............. d If the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory computed under LIFO .......................................................................................................................................... 9d e If property is produced or acquired for resale, do the rules of Section 263A apply to the corporation? ........... ... . Yes No f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? _.... .. _ ~ Yes 0 No If "Yes;' attach explanation. Schedule B Other Information (see instructions) Yes No 1 Check accounting method: (a) Cash (b) Accrual (c) Other (specify) - 2 See the instructions and enter the: (a) Business activity -WATER PURIFICATION (b) Product or service - WATER CONDITIONER 3 At the end of the tax year, did the corporation own, directly or indirectly, 50% or mare of the voting stock of a domestic corporation? (For rules of attribution, see section 267(c).) If "Yes," attach a statement showing: (a) name and employer identification number (EIN), (b) percentage owned, and (c) if 100% owned, was a OSub election made? _ X ........................................................... 4 Has this corporation filed, or is it required to file, a return under section 6111 to provide information on any reportable transaction? X ........................ 5 Check this box if the corporation issued publicly offered debt instruments with original issue discount - ................................................... If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. 6 If the corporation: (a) was a C corporation before it elected to be an S corporation orthe corporation acquired an asset with a basis determined by reference to its basis (or the basis of any other property) in the hands of a C corporation and (b) has net unrealized built-in gain (defined in section 1374(4)(1)) in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years - $ .......................................................................................................................................... 7 Enter the accumulated earnings and profits of the corporation at the end of the tax year .............................. $ 8 Are the corporation's total receipts (see instructions) for the tax year and its total assets at the end of the tax year less than $250,000? If "Yes," the corporation is not re wired to complete Schedules L and M-1 ........................................................................ X Schedule K Shareholders' Pro Rata Share Items Total amount 1 Ordinary business income (loss) (Page 1, line 21) ............................................................ ....................... 1 40 , 8 3 5 . 2 Net rental real estate income (loss) (attach Farm 8825) .............................................................................. 2 H 3a Other gross rental income (loss) ......................................................... 3a b Expenses from other rental activities (attach statement) ........................... 3b c Other net rental income (loss). Subtract line 3b from line 3a ........................................... .. ..... ............. 3c 4 Interest income ........................................................ ......... ........ .. ...... ......... ............... 4 m 5 Dividends: a Ordinary dividends ............................................................................................................ 5a E 0 b Qualified dividends ............. ............................................ 5 ~ 6 Royalties ........................ ......... ......................................................................................... ........... 8 7 Net short-term capital gain (loss) (attach Schedule D (Form 1120S)) ........................................................ 7 Sa Net long-term capital gain (loss) (attach Schedule D (Farm 1120S)) .... ... ... ......... ............... Sa b Collectibles (28%) gain (loss) ............................:............................... 8b c Unrecaptured section 1250 gain (attach statement) ............................... . Sc 9 Net section 1231 gain (loss) (attach Form 4797) .......................................................... .......... ... ............. 9 10 Other income (loss see instructions ......... Type - 10 JWA Form 1120S (2007) ~im~ i z-zs-a~ 2 07460308 759605 604600 2007.05000 SOFPAC CORPORATION 604600_1 Form 1 12oS (2007) SOFPAC CORPORATION 2 3- 2 9 5 6 612 Page 3 Shareholders' Pro Rata Share Items continued) Total amount H 11 Section 179 deduction (attach Form 4562) ............................ 11 0 ~, 12a Contributions ........................................................................................................... 12a 3 b Investment interest expense .................. ~ ................................................................................... 12b o c Section 59(e)(2) expenditures (1)Type - (2) Amount - .................................................................................................................................... 12c(2) d Other deductions (see instructions) Type - 12d 13a Low-income housing credit (section 42(j)(5)) .......................................................................................... 13a b Low-income housing credit (other) ......................................................................................................... 13b ,._~. c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) . .............. . . ............................. 13c m d Other rental real estate credits (see instructions) Type - 13d v e Other rental credits (see instructions) ............... Type - 13e f Credit for alcohol used as fuel attach Form 6478 ( ) ............................ ...................................... 13f g Other credits (see instructions) Type - 13g 14 a Name of country or U.S. possession - b Gross income from all sources ............................................................................................................... 14b c Gross income sourced at shareholder level -. .................................................................................. 14c Foreign gross income sourced at corporate level w d Passive cate9ory ................................................................................................................................. 14d ,o .. a General categorY ................................................................................................................................. 14e ~ f Other (attach statement) ................................................. ........................................................... 14f Deductions allocated and apportioned at shareholder level H g Interest expense ................................................................................................................................. 149 a~ h Other ................................................................................................................................................ 14h c Deductions allocated and apportioned at corporate level to foreign source income ~ i Passive cote o 9 ry ................................................................................... ........................................... 14i j General cate9ory ................................................................................................................................. i4j k Other (attach statement) ........................................................................................................................ 14k Other information Total foreign taxes (check one): - ~ Paid ~ Accrued .............................. .. ...... .... 141 mReduction in taxes available for credit (attach statement) ................... ......... ........ ......... ............... 14m n Other foreign tax information attach statement ....................................................................................... x 15a Post-1986 depreciation adjustment ......................................................................................................... 15a >H E b Adjusted gain or loss ........................................................................................................................... 15b ~~' c De letion other than oil and as P ( 9 ) ............................................................................................................ 15c ~~ d Oil, gas, and geothermal properties -grass income 15d ago a Oil, gas, and geothermal properties -deductions ................................ ............. .. . ........... ............. ..... 15e f Other AMT items attach statement ......................................................................................................... 15f c ~ 18 aTax-exempt interest income .................................................................................................................. 16a c H b 0thertox-exempt income .............. ........................................................................ 16b a m o Lm c Nondeductible expenses .................... ........ .. ....................................................................................... i6c Er d Property distributions ........................................................................................................................... 18d ~~ a Repa ment of loans from shareholders ................................................................................................... 18e co ,_ 17a Investment income .............................................................................................................................. 17a s E b Investmentexpenses ........................................................................................................................... 17b o~ c Dividend distributions paid from accumulated earnings and profits ............................................. .......... 17c c d Other items and amounts (attach statement ................... .c co 18 Income/loss reconciliation. Combine the amounts on lines 1 through 10 in the far right column- ~~& From the result, subtract the sum of the amounts on lines 11 through 12d and 141 .......................................... 18 40, 835. JWA ~„~z, iz-zs-o~ Form 1120S (2007) 07460308 759605 604600 2007.05000 SOFPAC CORPORATION 604600 1 Form 1120S (2007) SOFPAC CORPORATION 23-2956612 Page4 Schedule L Balance Sheets per Books Beginning of tax year End of tax year Assets (a) (b) (c) (d) 1 Cash ................................................... 1, 464. 496 . 2 a Trade notes and accounts receivable .._...... 19 , 8 7 3 . 2 3 , 7 31 . b Less allowance for bad debts ......... .. ....... 19 , 8 7 3 . 2 3 , 7 31. 3 Inventories .......................................... 5, 084. 13, 240. 4 U.S.Governmentobligations .................. 5 Tax-exempt securities ........................... 6 Other current assets (att. stmt.) ............... STATEMENT 4 3 3 , 4 9 8 . 71 , 5 31 . 7 Loans to shareholders ........................... 8 Mortgage and real estate loans ............... 9 Other investments (att. stmt.) .................. 10 a Buildings and other depreciable assets ...... b Less accumulated depreciation ............... 11a Depletableassets ._._,. ........................... b Less accumulated depletion 12 Land (net of any amortization) ... 13 a Intangible assets (amortizable only) ......... b Less accumulated amortization ............... 14 Other assets (att. stmt.) .......................... 15 Total assets ............................ 59, 919. 108 , 998. Liabilities and Shareholders' Equity 16 Accounts payable ................................. 80. 8 , 322. 17 Mortgages, notes, bonds payable in less than 1 year 18 Other current liabilities (att. stmt.) ...._....._. STATEMENT 5 2 , 19 Loans from shareholders ........................ 20 Mortgages, notes, bonds payable in 1 year or more 21 Other liabilities (att stmt) ........................ 22 Capital stock ............................... ........ 23 Additional paid-in capital ........................ 24 Retained earnings .......... .......... ...... .... ... STATEMENT 6 5 9 , 8 3 9 . 10 0 , 6 7 4 . 25 Adjustments to shareholders' equity (att. stmt.) , ..... 26 Less cost of treasury stock ... .................. ( ( ) 27 Total liabilities and shareholders' equity ...... 5 9 , 919. 10 8 , 9 9 8 . Schedule M-1 Reconciliation of Note: Schedule M-3 requ Income (Loss) per ired instead of Schedule M-1 Books With Income (Loss) per Return if total assets are $10 million or more -see instructions 1 Net income (loss) per books ................ 4 0 , 8 3 5 . 5 Income recorded on books this year not Z Income included on Schedule K, lines 1, z, s~, a, sa, 6, 7, Sa, 9, and 10, not recorded on books this year (itemize): included on Schedule K, lines 1 through 10 (itemize): aTax-exempt interest $ 3 Expenses recorded on books this year not included on Schedule K, lines 1 through 12 and 141(itemize): a Depreciation $ b Travel and entertainment $ 6 Deductions included on Schedule K, lines 1 through 12 and 141, not charged against book income this year (itemize): a Depreciation $ 7 Add lines 5 and 6 .......................................... 4 Add lines 1 through 3 .............................. 4 0 , 8 3 5 . S Income (loss) (Schedule K, line 18). Line 4 less line 7 ......... 4 O , 8 3 5 . Schedule M-2 Analysis of Accumulated Adjustments Account, c7tner Adliustments Account, and Shareholders' Undistributed Taxable Income Previous) Taxed (see instructions) (a) Accumulated (b) Other adjustments (c)Shareholders' undistributed adjustments account account taxable income previously taxed 1 Balance at beginning of tax year . _ _.... _.... 5 y , ti ,i tf . _ 2 Ordinary income from page 1, line 21 4 0 8 3 5 . ................................................ . 3 Other additions 4 Loss from page 1, line 21 ( ) ............................................................... 5 Other reductions 6 Combine lines 1 through 5 .......................................................... 100 , 673 . 7 Distributions other than dividend distributions 8 Balance at end of tax year. Subtract line 7 from line 6 .. 10 0 , 6 7 3 . ......................... "„3, JWA 4 iz-zs-o~ 07460308 759605 604600 2007.05000 SOFPAC CORPORATION Form 11205 (2007) 604600_1 SOFPAC CORPORATION 23-2956612 FORM 11205 OTHER INCOME STATEMENT 1 DESCRIPTION FINANCE CHARGES TOTAL TO FORM 11205, PAGE 1, LINE 5 AMOUNT 779. 779. FORM 11205 COMPENSATION OF OFFICERS STATEMENT 2 NAME OF OFFICER SOCIAL SECURITY NUMBER TIME DEVOTED TO PCT OF BUSINESS STOCK 0 33.30 50 33.30 AMOUNT OF COMPENSATION ROCCO COSTABILE 175-40-9493 FRANK COSTABILE 191-42-8935 TOTAL COMPENSATION OF OFFICERS LESS: COMPENSATION CLAIMED ELSEWHERE EMPLOYMENT CREDIT REDUCTION TOTAL TO FORM 11205, PAGE 1, LINE 7 0. 0. 0. FORM 11205 OTHER DEDUCTIONS STATEMENT 3 DESCRIPTION AMOUNT BANK CHARGES 108. TELEPHONE 396. ADMINISTRATIVE EXPENSE 5,000. TOTAL TO FORM 11205, PAGE 1, LINE 19 5,504. SCHEDULE L OTHER CURRENT ASSETS STATEMENT 4 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR ACCOUNTS RECEIVABLE - AFFILIATE 33,498. 71,531. TOTAL TO SCHEDULE L, LINE 6 33,498. 71,531. 5 STATEMENT(S) 1, 2, 3, 4 07460308 759605 604600 2007.05000 SOFPAC CORPORATION 604600_1 SOFPAC CORPORATION 23-2956612 SCHEDULE L OTHER CURRENT LIABILITIES STATEMENT 5 DESCRIPTION SALES TAX PAYABLE TOTAL TO SCHEDULE L, LINE 18 BEGINNING OF END OF TAX TAX YEAR YEAR 2. 2. SCHEDULE L ANALYSIS OF TOTAL RETAINED EARNINGS PER BOOKS STATEMENT 6 DESCRIPTION BALANCE AT BEGINNING OF YEAR NET INCOME PER BOOKS DISTRIBUTIONS OTHER INCREASES (DECREASES) AMOUNT 59,839. 40,835. 0. BALANCE AT END OF YEAR - SCHEDULE L, LINE 24, COLUMN (D) 100,674. 6 STATEMENT(S) 5, 6 07460308 759605 604600 2007.05000 SOFPAC CORPORATION 604600 1 671107 Schedule K-1 AAA ~ Final K-1 0 Amended K-1 OMB No. 1545-0130 (Farm 11205) LV V ~ Department of the Treasury Part III Shareholder's Share of CurrentYear Income, Deductions, Credits, and Other Items Internal Revenue Service For calendar year 2007, or tax year beginning 10rdinary business income (loss) 13 , 612 . 13 Credits ending 2 Net rental real estate income (loss) Shareholder's Share of Income, Deductions, Credits, etc. - See separate instructions. 3 other net rental income (toss) Part 1 Information About the Corporation 4lnterest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. SRoyalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return CINCINNATI, OH Ba Net long-term capital gain (loss) Part II Information About the Shareholder 8b Collectibles (28%) gain (loss) D Shareholder's identifying number 162-36-9922 Bc Unrecaptured sec 1250 gain E Shareholder's name, address, city, state and ZIP code 9 Net section 1231 gain (loss) PHILIP F . COSTABILE 348 BLACK LATCH LANE 100t her income (loss) 15 Alternative min tax (AMT) items CAMP HILL, PA 17011 F Shareholder's percentage of stock ownership for tax year .................. 33.333333% 11 Section 179 deduction i6 Items affecting shareholder basis 12 Ot her deductions c O m N 0 LL 17 Other information "See attached statement for ad ditional information. "1z" JWA For Pa erwork Reduction Act Notice, see Instructions for Form 1120S. Schedule K-1 Form 1120S 2007 iz-z~-o~ P ( ) 7 SHAREHOLDER NUMBER 1 07460308 759605 604600 2007.05000 SOFPAC CORPORATION 604600_1 671107 Schedule K-1 ~ Final K-1 0 Amended K-1 OMB No. 1545-0130 (form 1120S) 2007 Department of the Treasury Part III Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service For calendar year 2007, or tax year beginning 10rdinary business income (loss) 13 , 611 . 13 Credits ending 2 Net rental real estate income (lass) Shareholder's Share of Income, Deductions, Credits, etc. - See separate instructions. 3 Other net rental income (loss) Part I Information About the Corporation 4lnterest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 F oreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. sRoyalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return CINCINNATI, OH 8a Net long-term capital gain (loss) Part II Information About the Shareholder 8b Collectibles (28%) gain (loss) D Shareholder's identifying number 175-40-9493 Sc Unrecaptured sec 1250 gain E Shareholder's name, address, city, state and ZIP code 9 Net section 1231 gain (loss) ROCCO A. COSTABILE BOX 5205 100t her income (loss) 15 Alternative min tax (AMT) items GRANTVILLE, PA 17028 F Shareholder's percentage of stock ownership for tax year ................ .. 3 3. 3 3 3 3 3 3% 11 Section 179 deduction i6 Items affecting shareholder basis 120t her deductions c O a~ N 0 LL 17 Other information "See attached statement for a dditional information. X12 ~ JWA For Pa erwork Reduction Act Notice, see Instructions for Form 1120S. Schedule K-1 (Form 1120S) 2007 iz-z~-o~ P 8 SHAREHOLDER NUMBER 2 07460308 759605 604600 2007.05000 SOFPAC CORPORATION 604600_1 671107 Schedule K-1 AAA ~ Final K-1 ~ Amended K-1 OMB No. 1545-0130 (Form 1120S) LV V ~ Department of the Treasury Part III Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service For calendar year 2007, or tax year beginning 10rdinary business income (loss) 13 , 612 . 13 Credits ending 2 Net rental real estate income (loss) Shareholder's Share of Income, Deductions, Credits, etc. - See separate instructions. 3 Other net rental income (loss) Part 1 Information About the Corporation 4 interest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. 6Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return CINCINNATI, OH 8a Net long-term capital gain (loss) Part II Information About the Shareholder 8b Collectibles (28%) gain (lass) D Shareholder's identifying number 191-42-8935 8c Unrecaptured sec 1250 gain E Shareholder's name, address, city, state and ZIP code 9 Net section 1231 gain (loss) FRANK M. COSTABILE 5798 HIDDEN LAKE DRIVE 100t her income (loss) 15 Alternative min tax (AMT) items HARRISBURG, PA 17112 F Shareholder's percentage of stack ownership for tax year .................. 33.333334% 11 Section 179 deduction i6 Items affecting shareholder basis 120t her deductions a c O m N 0 LL 17 Other information `See attached statement for a dditional information. ~ 1271 JWA For Paperwork Reduction Act Notice, see Instructions for form 11205. Schedule K-1 (Form 1120S) 2007 iz-27-o~ 9 SHAREHOLDER NUMBER 3 07460308 759605 604600 2007.05000 SOFPAC CORPORATION 604600_1 Form 1120S Department of the Treasury Internal Revenue Service U.S. Income Tax Return for an S Corporation - Do not file this form unless the corporation has filed Form 2553 to elect to be an S corporation. OMB No. 1545-0130 2006 A Effective date of S Name C Employer identrfication number election Use the IRS 05 22 1998 label. SOFPAC CORPORATION 23-2956612 B Business activity Other- Number, street, and room or suite no. If a P.O. box, see instructions. D Date incorporated code number (see wise, 5 3 41 JAYCEE AVE . 0 3 2 6 19 9 8 instructions) print ar type. City or town, state, and ZIP code E Total assets (see instructions) 541990 - 59 919 F Check if: (1) 0 Initial return (2) ~ Final return (3) 0 Name change (4) ~ Address change (5) ~ Amended return G Enter the number of shareholders in the corporation at end of the tax year ................................................................................................... - H Check if Schedule M-3 is required (attach Schedule M-3) ................ ..................................................................................................... - C n_...:__. r....i...v,.....i., s...,v„ ,.. ti..~:r~~~ :.,~.,..,o ~.,.,I cvncncac nn linac 1a thrnnnh 91 Rao tha insinrctinnc fnr mnra infnrmatinn_ 1 a Gross receipts or sales 6 4, 2 0 9. b Less returns and allowances 7, 3 6 2. C Bal - i C 5 6 8 4 7. line 8) ..................................... 2 Cost of goods sold (Schedule A 2 31 , 0 41. ~ , ............................................................ .. ...................................................... .. 3 Gross profit. Subtract line 2 from line 1c 3 25 806. v . .......................................... line 17 attach Form 4797 Part II ............................. 4 Net ain loss from Form 4797 9 ( ) ( ) 4 ~ , , .................................. ..........STATEMENT.-.1..._.....- .. 5 Other income (loss) (attach statement) 5 - 2 3 6 . . ........................................... 6 Total income loss .Add lines 3 throu h 5 ........ ......... ......... .................................. ................. - 6 2 5 5 7 0 . ....... STATEMENT... 2....._.... 7 Compensation of officers 7 y 0 .................................................................. ................................................ 8 Salaries and wages (less employment credits) 6 ............................................. ....................... .. 9 Repairs and maintenance 9 ~ . ........................................................................................... ........................................... 10 Bad debts 10 6 47 7 . . ° .................................................................................................. .......................................... 11 Rents 11 . ~ ......................................................................................................... ................ .......... 12 Taxes and licenses 12 ........................................................................... ................ ............................................................................................................. 13 Interest 13 U 3 ................................... 14 Depreciation not claimed on Schedule A or elsewhere on return (attach Form 4562) .......................................... 14 ~ .................................................................... 15 Depletion (Do not deduct oit and gas depletion.) 15 ~ ................... .................................................... . 16 Advertisin9 16 ~ .. .................................................................................. plans etc. profit-sharing 17 Pension 17 c , , , .................................................................. 18 Employee benefit programs 16 ................................................... 19 Other deductions (attach statement) ...............................................................S.TATEMENT....3.......... 19 5 5 3 0 . d ...-............................... - Add lines 7 through 19 . ............ 20 Total deductions 20 12 0 0 7 . ~ ............................. .................. . . ............................................................. 21 Ordina business income loss .Subtract line 20 from line 6 ........... 21 3 5 22 a Excess net passive income or LIFO recapture tax (see instructions) .................. 22a b Tax from Schedule D (Form 1120S) 22b ............................................................................................................. c Add lines 22a and 22b 22c .............. 23 a 2006 estimated tax payments and 2005 overpayment credited to 2006 ------..-,.. 23a m ................... b Tax deposited with Form 7004 23b ............................................... .. ............... c Credit for federal tax paid on fuels (attach Form 4136) 23c a . ............... . ....... d Credit for federal telephone excise tax paid (attach Form 8913) 23d ~ ............ . e Add lines 23a through 23d ...... .................................... 23e ~ ........................................................................... .............. - 0 24 Estimated tax penalty (see instructions). Check if Form 2220 is attached 24 ~ ......................... -------------------------- -- If line 23e is smaller than the total of lines 22c and 24, enter amount owed 25 Amount owed 25 ------- - . If line 23e is larger than the total of lines 22c and 24, enter amount overpaid ...... ...................... 26 Overpayment 26 . 27 Enter amount from line 26 Credited to 2007 estimated tax - Refunded - 27 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparar has any knowledge. May the IRS discuss Slgn Here this return with the preparer shown 'PRESIDENT below (see instr.)? ®Y ON Titl ' es o e Signature of officer Date Preparer's Date selfck if Preparer's SSN or PTIN Paid signature em to ed ~ P 0 0 2 2 917 4 Preparer's Firm's name (or SELIGMAN, FRIEDMAN & CO. P . C ours if self- ~ EIN Use Only Y employed), ' 10 2 7 MUMMA ROAD 2 3- 2 7 0 8 6 0 7 address, and ZIP code WORMLEYS BURG , PA 1.7 0 4 3 Phone no. 717 - 7 61- 0 211 JWA For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. e1no1 12-2a-os 1 18120314 759605 604600 2006.09000 SOFPAC CORPORATION Form 1120S (2006) 604600_1 =orm 11205 2006 SOFPAC CORPORATION 2 3 - 2 9 5 6 612 Pa e 2 Schedule A Cost of Goods Sold see instructions 1 Inventory at beginning of year ......................................... - .... - ............................................. ............. . 1 2 Purchases .................................................................................................................................................. . 2 31 0 41 . 3 Cost of labor .................................. ............... ........................................................................................ . 3 4 Additional section 263A costs (attach statement) ..................................................................................................... . 4 5 Other costs (attach statement) ............................................................................................................................. . 5 6 Total. Add lines 1 through 5 ................ ............................................................................................................. . 6 31 041 . 7 Inventory at end of year ....................................................................................................... ......... ... 7 8 Costof goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 .......................................................... .. 8 31 041. 9 a Check all methods used for valuing closing inventory: (i) 0 Cost as described in Regulations section 1.471-3 (ii) ®Lower of cost or market as described in Regulations section 1.471-4 (iii) 0 Other (Specify method used and attach explanation) - b Check if there was a writedown of subnormal goods as described in Regulations section 1.471-2(c) . c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) d If the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory computed under LIFO ..................... ................................ - ..................-..................................... . ~ 9d e If property is produced or acquired for resale, do the rules of Section 263A apply to the corporation? ................................ .............. 0 Yes ........ No f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? ....................... .............. ........ ~ Yes ®No Schedule B Other Information see instructions Yes No 1 Check method of accounting: (a) ~ Cash (b) ®Accrual (c) ~ Other (specify) - 2 See the instructions and enter the: (a) Business activity -WATER PURIFICATION (b) Product or service - WATER CONDITIONER 3 At the end of the tax year, did the corporation own, directly or indirectly, 50% or mare of the voting stock of a domestic corporation? (For rules of attribution, see section 267(c).) If "Yes;' attach a statement showing: (a) name and employer identification number (EIN), (b) percentage owned, and (c) if 100% owned, was a QSub election made? ............................................................ X 4 Was the corporation a member of a controlled group subjectto the provisions of section 1561? .. ......... ......... ......... ..._. .........,.. X 5 Has this corporation filed, or is it required to file, a return under section 6111 to provide information on any reportable transaction? ................. X ....... 6 Check this box if the corporation issued publicly offered debt instruments with original issue discount ................................................... -0 If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. 7 If the corporation: (a) was a C corporation before it elected to be an S corporation or the corporation acquired an asset with a basis determined by reference to its basis (or the basis of any other property) in the hands of a C corporation and (b) has net unrealized built-in gain (defined in section 1374(d)(1)) in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years .......................................................................................................................................... - $ 8 Enter the accumulated earnings and profits of the corporation at the end of the tax year .............................. - $ 9 Are the corporation's total receipts (see instructions) for the tax year and its total assets at the end of the tax year less than $250,000? If"Yes;'the corporation is not required to complete Schedules L and M-1 ........................................................................ X Note: If the corporation, at any time during the tax year, had assets or operated a business in a foreign country or U.S. possession, it ma be re wired to attach Schedule N Form 1120 Forei n 0 erations of U.S. Cor orations to this return. See Schedule N for details. Cr~hnrlulo K CharahnW~ars' Prn Rata Share Items Tnt~l ~mnunf 1 Ordinary business income (loss) (page 1, line 21) --------------------------------„-_,,,.,.,,,-„..,.,....-.......-...-................. 1 13 , 5 6 3 . 2 Net rental real estate income (loss) (attach Form 8825) .............................................................................. 2 3a Other gross rental income (loss) ......................................................... 3a b Expenses from other rental activities (attach statement) ........................... 3b ~ c Other net rental income (loss). Subtract line 3b from line 3a ........................................................................ 3c , 0 4 Interest income ....................................................... ......... ............... .... ........ ................. 4 J ~, 5 Dividends: a Ordinary dividends ............................................................................................................ 5a ~ o b Qualified dividends ......................................................... 5b 8 Royalties ............................................................................................................... . 8 ......................... . 7 Net short-term capital gain (loss) (attach Schedule D (Form 1120S)) ..........................................................„ 7 8a Net long-term capital gain (loss) (attach Schedule D (Form 1120S)) ............................................................... 8a b Collectibles (28%) gain (loss) ............................................................ 8b c Unrecaptured section 1250 gain (attach statement) -------------------------------„ 8c 9 Net section 1231 gain (loss) (attach Form 4797) ....................................................................................... 9 10 Other income (loss) (see instructions ......... T e 10 JWA s~i~~7 iz-za-oe 2 18120314 759605 604600 2006.09000 SOFPAC CORPORATION Form 1120S (2006) 604600_1 r~~w n n....,,n Form 11 205 (2006) SOFPAC CORPORATION L.S - L y ~ b d 1 G rayc ~ Shareholders' Pro Rata Share Items continued Total amount ................. . : 11 Section 179 deduction (attach Form 4562) 11 w . ................................................. ........................... 0 12a Contributions 12a ....................... ....-.... ........................... ............... b Investment interest expense 12b o ...................... c Section 59(e)(2) expenditures (1) Type - ................................... (2) Amount - 12c 2 ................................................................................................. d Other deductions see instructions T e 12d ..................... 13a Low-income housing credit (section 42(1)(5)) 13a ..................................................................... b Low-income housing credit (other) ............ ................. 13b . .................................................................... ................................. .. c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) 13c --...---,-„ ...... . d Other rental real estate credits (see instructions) Type - 13d V Type - e Other rental credits (see instructions) 13e ,,,-.-,-,-„-,- ................... .. f Credit for alcohol used as fuel (attach Form 6478) 13f . .............................................................. Other credits see instructions T e 13 14 a Name of country or U.S. possession - ............. ............... b Gross income from all sources 14b ............................... ..................................... .............. c Gross income sourced atshareholder level 14c .............................................................................. Foreign gross income sourced at corporate level ................................. . d Passive 14d N . ..................................... .................. .......... ............................ o ................ ....... e Listed categories (attach statement) 14e .............................. ........................ ............... ............................ .. f General limitation 14f . ................................................................ ......................... Deductions allocated and apportioned at shareholder level ~ .................... Interest expense 14 ............................................................. ........... ............................ g rn h Other ............................. 14h ;v Deductions allocated and apportioned at corporate level to foreign source income 0 ~` i Passive 14i j Listed categories (attach statement) „-------------------------------- ..................................... k General limitation 14k ............................................................................................ Other information ....-.--........... Total foreign taxes (check one): - 0 Paid 0 Accrued 141 ------------------„-,--„-----.--------.-.. m Reduction in taxes available for credit (attach statement) .............................................................................. 14m n Other forei n tax information attach statement ....................................................................................... ........................... 15 a Post-1986 depreciation adjustment 15a x >~ E .............................................................................. . .................... b Adjusted gain or loss 15b o I=« . ..................................................................................................... ............. c Depletion (other than oil and gas) . ................ 15c c ~ . ............................................................................. + ~~ ........................ . and geothermal properties -gross income gas d Oil 15d ; ... ,-,--„ ................................................. , , ago ,- .................................. andgeothermalproperties-deductions a Oil gas 15e „--„----,--„-------------- ...................... , , fOther AMT items attach statement ......................................................................................................... 15f c .................................. 16a Tax-exempt interest income i6a ~ ................................................................................ ................................. b Other tax-exempt income 16b c H .................................................................................... .................................... c Nondeductible expenses w ~m .................................................................................... ................................ d Property distributions 16d EL ........................................................................................... rN a Re a ment of loans from shareholders ................................................................................................... i6e 0 ................................ 17a Investment income 17a .............................................. .............................................. t~ ................................ b Investment expenses 17b ........................................................................................... 0 c .................................... . c Dividend distributions paid from accumulated earnings and profits 17c .. ......................... . ~ d Other items and amounts attach statement ............................................................................................. .c co ~ A 18 Income/loss reconciliation. Combine the amounts on lines 1 through 10 in the far right column. °C~~ From the result subtract the sum of the amounts on lines 11 throw h 12d and 141 .......................................... 18 13 5 6 3 . JWA sinzi iz-za-oa 3 18120314 759605 604600 2006.09000 SOFPAC CORPORATION Form ll"1U5 (2006) 604600_1 Form 1120S (2006) SOFPAC COR PORATION G J- L 7~ O O l L ' °y" Schedule L Balance Sheets er Books Be innin of tax ear End of t ax ear Assets a b) (c) d 1 Cash 336. 1 464. ................................................... 2 a Trade notes and accounts receivable 2 4 4 2 0. 19 8 7 3. ,,..,.__. b Less allowance for bad debts 2 4 4 2 0. 19 8 7 3. ,,,,,,,,,,,,, ,,,,, 3 Inventories 11 7 0 7. 5 0 8 4. Governmentobligations S 4 U ,,,,,,,,,,,,,,,,,, . . 5 Tax-exempt securities ......................... stmt ) 6 Other current assets (att STATEMENT 4 9 9 3 8. 3 3 4 9 8. ,,,,,,,,,,,,,„ . . 7 Loans to shareholders ........................... e and real estate loans 8 Mort a ,,,,___._ g g stmt ) 9 Other investments (att ,,,,,,,,,,,,,,,,,, . . s and other depreciable assets 10 a Buildin ..,,,, g b Less accumulated depreciation ,,,,,,, letable assets 11 a De _„ .............................. p b Less accumulated depletion ,,,__.__,,.. amortization) nd (net of an 12 L ,__.,,.,... y a ible assets (amortizable only) 13 a Intan ,,,,_ g b Less accumulated amortization ,,,__,,,,, stmt ) 14 Other assets (att ........................... . . 15 Total assets 4 6 4 01. 5 9 919 . ....................................... Liabilities and Shareholders' Equity able nts a 16 A co 1 2 5. 8 0. p y c u ear in less than 1 bl d b 1 ~ y s paya e on Mortgages, notes, stmt ) 18 Other current liabilities (att . ,,,,.,,,,_„ . 19 Loans from shareholders ,,,,,,,,,,,,,,,,,,,,,,,, ear or more able in 1 b d t 20 y on s pay Mortgages, no es, stmt ) 21 Other liabilities (att ............ ............ . . ital stock 22 Ca p ....................................... ital aid-in ca 23 Additional ,,,,,,,,,,,,,,,,,,,,,,,, p p s 24 Retained earnin STATEMENT 5 4 6 2 7 6. 5 9 8 3 9. ................................. g stmt ) it (att ' h h ld 25 . , _,,,, y . ers equ are o Adjustments to s stock 26 Less cost of treasur ,,,,,,,,,,,,,,,,,,,,, y 27 Total liabilities and shareholders' a ui 4 6 4 01. 5 9 919 . Sr_harll~rlP M-1 Reconciliation o f Income (Loss) per Books With Income (Loss) per Return Note: Schedule M-3 required instead of Schedule M-1 if total assets are $10 million or more.-see instructions 1 Net income (loss) per books ,,,,,,,,,,,,,,,,, 13 5 6 3 . 5 Income recorded on books this year not 2 Income included on Schedule K, lines ,, z, ao, a, sa, included on Schedule K, lines 1 through 8, 7, Sa, 9, and 10, not recorded on books this year 10 (itemize): (itemize): aTax-exempt interest $ 3 Expenses recorded on books this year not included on Schedule K, lines 1 through 12 and 141(itemize): a Depreciation $ b Travel and entertainment $ 4 Add lines 1 through 3 I 13 , 5 6 3.1 8 Income (loss) (Schedule K, line 18). Line 4 less line 7 ......... I 1 3 , 5 6 3 . Schedule M-2 Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Shareholders' Undistributed Taxable Income Previous) Taxed see instructions (a) Accumulated (b) Other adjustments (c) Shareholders' undistributed adjustments account aCCOUnt taxable income previously taxed 1 Balance at beginning of tax year 4 6 2 7 5. 2 Ordinary income from page 1, line 21 „._,„,,,,,,,-„ ............................... 13 5 6 3 . 3 Other additions ........................................................................... 4 Loss from page 1, line 21 ............................................................... 5 Other reductions ............................................... ........................ 6 Combine lines 1 through 5 5 9 8 3 8. 7 Distributions other than dividend distributions ,,,,_„ ............................. 6 Deductions included on Schedule K, lines 1 through 12 and 141, not charged against book income this year (itemize): a Depreciation $ 7 Add lines 5 and 6 ,.,._„ .................................. 8 Balance at end of tax ear. Subtract line 7 from line 6 .................... 5 9 8 3 8 . 81173, 4 Form 1120S (2006) 1z-ze-oe JWA 18120314 759605 604600 2006.09000 SOFPAC CORPORATION 604600_1 SOFPAC CORPORATION 23-2956612 FORM 11205 OTHER INCOME STATEMENT 1 DESCRIPTION AMOUNT FINANCE CHARGES TOTAL TO FORM 1120S, PAGE 1, LINE 5 -236. -236. FORM 1120S COMPENSATION OF OFFICERS STATEMENT 2 SOCIAL TIME SECURITY DEVOTED TO PCT OF AMOUNT OF NAME OF OFFICER NUMBER BUSINESS STOCK COMPENSATION ROCCO COSTABILE 175-40-9493 0 33.30 0. FRANK COSTABILE 191-42-8935 50 33.30 0. TOTAL COMPENSATION OF OFFI CERS 0• LESS: COMPENSATION CLAIMED ELSEWHERE EMPLOYMENT CREDIT RE DUCTION TOTAL TO FORM 1120S, PAGE 1, LINE 7 FORM 11205 OTHER DEDUCTIONS STATEMENT 3 DESCRIPTION AMOUNT BANK CHARGES 46. TELEPHONE 492. ADMINISTRATIVE EXPENSE 4,992. TOTAL TO FORM 11205, PAGE 1, LINE 19 5,530. SCHEDULE L OTHER CURRENT ASSETS STATEMENT 4 DESCRIPTION ACCOUNTS RECEIVABLE - AFFILIATE TOTAL TO SCHEDULE L, LINE 6 BEGINNING OF END OF TAX TAX YEAR YEAR 9,938. 9,938. 33,498. 33,498. 5 STATEMENT(S) 1, 2, 3, 4 18120314 759605 604600 2006.09000 SOFPAC CORPORATION 604600_1 SOFPAC CORPORATION 23-2956612 SCHEDULE L ANALYSIS OF TOTAL RETAINED EARNINGS PER BOOKS STATEMENT 5 DESCRIPTION BALANCE AT BEGINNING OF YEAR NET INCOME PER BOOKS DISTRIBUTIONS OTHER INCREASES (DECREASES) BALANCE AT END OF YEAR - SCHEDULE L, LINE 24, COLUMN (D) 6 18120314 759605 604600 2006.09000 SOFPAC CORPORATION AMOUNT 46,276. 13,563. 0. 59,839. STATEMENT(S) 5 604600_1 671106 Schedule K-1 0 Final K-1 ~ Amended K-1 OMB No.1545-0130 (Form 1120S) 2006 Department of the Treasury Part III Shareholder's Share o Deductions Credits a f Current Year Income, nd Other Items Internal Revenue Service For calendar year 2006, or tax year beginning 10rdinary business income (loss) 4 5 21. 13 Credits ending 2 Net rental real estate income (loss) Shareholder's Share of Income, Deductions, Credits etc. -See se crate instructions. 30ther net rental income (loss) Part I Information About the Corporation 4lnterest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b0ualified dividends 14 F oreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. BRoyalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return CINCINNATI OH 8a Net long-term capital gain (loss) D ~ Tax shelter registration number, if any E ~ Check if Form 8271 is attached 8b Collectibles (28%) gain (loss) 8cUnrecaptured sec 1250 gain Part 11 Information About the Shareholder 9 Net section 1231 gain (loss) F Shareholder's identifying number 16 2 - 3 6 - 9 9 2 2 10 Ot her income (loss) 15 Alternative min tax (AMT) items G Shareholder's name, address, city, state and ZIP code PHILIP F. COSTABILE 348 BLACK LATCH LANE CAMP HILL, PA 17011 H Shareholder's percentage of stock ownership for tax year .................................... 33.333333% 11 Se ction 179 deduction 16 Items affecting shareholder basis 120t her deductions c O m y ~_ i O LL 17 Other information "See attached statement fo r additional information. 8112'1 JWA For Privac Act and Paperwork Reduction Act Notice, see Instructions for Form 1120S. Schedule K-1 Form 1120S 2006 12-28-OB Y ( ) 7 SHAREHOLDER NUMBER 1 18120314 759605 604600 2006.09000 SOFPAC CORPORATION 604600_1 671106 Schedule K-1 AAAf+ 0 Final K-1 ~ Amended K-1 OMB No.1545-0130 (Form 1120S) LUDO Department of the Treasury Part III Shareholder's Share of CurrentYear Income, -- Deductions Credits and Other Items Internal Revenue Service For calendar year 2006, or tax year beginning 1Ordinary business income (loss) 4 5 21. 13 Credits ending 2 Net rental real estate income (loss) Shareholder's Share of Income, Deductions, Credits etc. -See se arate instructions. 3Other net rental income (loss) Part I Information About the Corporation 4lnterest income A Corporation's employer ident'rfication number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 F oreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. 6Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return CINCINNATI OH 8a Net long-term capital gain (loss) D ~ Tax shelter registration number, if any E ~ Check if Form 8271 is attached 8b Collectibles (28%) gain (loss) 8c Unrecaptured sec 1250 gain Part II Information About the Shareholder 9 Net section 1231 gain (loss) F Shareholder's identifying number 17 5 - 4 0 - 9 4 9 3 10Ot her income (loss) 15 Alternative min tax (AMT) items ~ Shareholder's name, address, city, state and ZIP code ROCCO A. COSTABILE BOX 5205 GRANTVILLE, PA 17028 H Shareholder's percentage of stock ownership for tax year .................................... 33.333333% 11 Section 179 deduction 16 Items affecting shareholder basis 12Ot her deductions c O m N ~_ O LL 17 Other information 'See attached statement fo r additional information. s"z~' JWA For Privac Act and Pa erwork Reduction Act Notice, see Instructions for form 11205. Schedule K-1 form 1120S 2006 iz-zs-os Y P ( ) 8 SHAREHOLDER NUMBER 2 18120314 759605 604600 2006.09000 SOFPAC CORPORATION 604600_1 671106 e,.tio,~~~ie ~r_i wwww n Final K-1 ~ Amended K-1 OMB No. 1545-0130 (Form 1120S) LVV~ Department of the Treasury Part III Shareholder's Share of Deductions Credits a CurrentYear Income, nd Other Items Internal Revenue Service For calendar year 2006, or tax year beginning 1Ordinary business income (loss) 4 521. 13 Credits ending 2 Net rental real estate income (loss) Shareholder's Share of Income, Deductions, Credits etc. - See se arate instructions. 3Other net rental income (loss) Part I Information About the Corporation 4lnterest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 F oreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. 6Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return CINCINNATI OH 8a Net long-term capital gain (loss) D 0 Tax shelter registration number, if any E ~ Check if Form 8271 is attached 8b Collectibles (28%) gain (loss) 8cUnrecaptured sec 1250 gain Part II Information About the Shareholder 9Netsection 1231 gain (loss) F Shareholder's identifying number 191- 4 2 - 8 9 3 5 10 Ot her income (loss) 15 Alternative min tax (AMT) items state and ZIP code city address G Shareholder's name , , , COSTABILE FRANK M . 5798 HIDDEN LAKE DRIVE PA 17112 HARRISBURG , H Shareholder's percentage of stock ownership for tax year .................................... 3 3. 3 3 3 3 3 4% 11 Se ction 179 deduction 16 Items affecting shareholder basis 12Ot her deductions T C 0 N _~ L LL 17 Other information `See attached statement f or additional information. e"2" JWA For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 112OS. Schedule K-1 (Form 112OS) 2006 12-29-os 9 SHAREHOLDER NUMBER 3 18120314 759605 604600 2006.09000 SOFPAC CORPORATION 604600_1 Form 1120S Department of the Treasury Internal Revenue Service U.S. Income Tax Return for an S Corporation - Do not file this form unless the corporation has filed Form 2553 to elect to be an S corporation. OMB No. 1545-0130 2005 For calendar ear 2005 or tax ear b e innin and endin A Effective date of S Name C Employer identification number election Use 05 22 1998 thelRs label SOFPAC CORPORATION 23-2956612 B Business code number . Other- Number, street, and room or suite no. If a P.O. box, see instructions. D Date incorporated (see instructions) wise, 5 3 41 JAYCEE AVE . 0 3 2 6 19 9 8 print or type. City or town, state, and ZIP code E Total assets (see instructions) 541990 I HARRISBURG, PA 1 71 1 2-2.938 1$ 36 , 463. F Check applicable boxes: (1) 0 Initial return (2) ~ Final return (3) 0 Name change (4) 0 Address change (5) 0 Amended return G Enter number of shareholders in the corporation at end of the tax year ......................................................................................................... - 3 e~~~ro„~• fnrf„r!o ^nh, rrnrVc nr hircinacc incnma and exnansas nn linos 1a throuoh 9L See the instructions for more information- 1 a Gross receipts or sales 6 5, 2 4 3 .6 Less returns and allowances 18 , 3 4 O. C Bal - iC 4 6 9 0 3. 2 Cost of goods sold (Schedule A, line 8) 2 _19 , 4 0 8 . 0 .......................................................................... 3 Gross profit. Subtract line 2 from line ic 3 2 7 4 9 5. c ........................ 4 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) ............................................................... 4 .................... .-................. . STATEMENT...1 ,........ 5 Other income (loss) (attach statement) 5 - 9 . .. 6 Total income loss .Add lines 3 throu h 5 ......... ..... ......... ......... ................... ................ - 6 2 7 4 8 6 . ................... STATEMENT... 2.......... 7 Compensation of officers 7 ........................................................ ....................... 8 Salaries and wages (less employment credits) ................................. 8 .................................. 9 Repairs and maintenance ............................................................ ... 9 . ........................................................ ................................................................ 10 Bad debts ... 10 . .....................................~......................... 11 Rents ...................................................................... . 11 . ......... ............................................................. = 12 Taxes and licenses ............................................................... . . 12 L ~° .. . ......................................................... 13 Interest ................................................................................................................................................ 13 N c 14 a Depreciation (attach Form 4562) ............................................................... 14a b Depreciation claimed on Schedule A and elsewhere on return ........................ 146 y c Subtract line 146 from line 14a .................................................................... . 14c ........................................ .. ................................................................................ . 15 Depletion (Do not deduct oil and gas depletion.) 15 .... .. 16 Advertising ................................................................................................. i 6 2 0 5 5. ......................................... 17 Pension, profit-sharing, etc., plans ........................................................................................ . 17 ................ ... 18 Employee benefit programs ........................................................................ ~ ~~ 18 ...................................... 19 Other deductions (attach statement) ...............................................................S.TATEMENT....3.......... 19 4 8 2 5 . °' 20 Total deductions. Add the amounts shown in the far right column for lines 7 through 19 .............................. - 20 6 8 8 0 . 0 21 Ordina business income loss .Subtract line 20 from line 6 ........................................................................ 21 2 0 6 0 6 . 22 Tax: a Excess net passive income tax (attach statement) ........................... 22a b Tax from Schedule D (Form 1120S) 226 c Add lines 22a and 22b .............................................................................. ............... . ........................... 22c C 23 Payments: a 2005 estimated tax payments and amount applied from 2004 return .,,.,,.. 23a ~ b Tax deposited with Form 7004 .................................................................. 236 R c Credit for Federal tax paid on fuels (attach Form 4136) .............................. 23c v d Add lines 23a through 23c ................................... . 23d ~ ............................................. . ........................................ - 0 ... 24 Estimated tax penalty. Check if Form 2220 is attached 24 ................... . If line 23d is smaller than the total of lines 22c and 24, enter amount owed . . ... ................................. 25 Tax due 25 . . 26 Overpayment. If line 23d is larger than the total of lines 22c and 24, enter amount overpaid ...... ................... 26 27 Enter amount of line 26 ou want: Credited to 2006 estimated tax - Refunded - 27 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (othar than taxpayer) is based on all information of which preparer has any knowledge. May the IRS discuss Sign Here this return with the ~ preparer shown 'PRESIDENT below (see instr.)7 ' Signature of officer Date Title ®Yes~No Preparers' Date selfCk If SSNeorPTIN Paid ' signature em to ed ~ P 0 0 2 2 917 4 Preparer s Firm'sname(or SELIGMAN, FRIEDMAN & CO. P . C ours if self- ~ EIN Use Only y employed), ' 10 2 7 MUMMA ROAD 2 3- 2 7 0 8 6 0 7 address, and ZIP code WORMLEYS BURG ,_ __ PA 17 0 4 3 Phone no. 71 7 - 7 61- 0 211 JWA For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. 511701 12-12-05 1.1 10220310 759605 604600 2005.09001 SOFPAC CORPORATION Form 1120S (2005) 604600_1 =orm 1120S 2005 SOFPAC CORPORATION G J- G 7 7 0 0 1 G ra e c Schedule A Cost of Goods Sold see instructions 1 Inventory at beginning of year ........................................................................................................ ................. . 1 2 Purchases .................................................................................................................................................. . 2 19 4 0 8. 3 Cost of labor 3 ..................................................................................................... 4 Additional section 263A costs (attach statement) 4 . 5 Other costs (attach statement) ......- -~~~~~~ ~ --~-~~ ~ 5 ............................................................................................................................. 6 Total. Add lines 1 through 5 6 . 19 4 0 8. 7 Inventory at end of year ............ .............. . ................................................................... ................................ . 7 8 19 4 0 8 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 ....................................................... .. . 9 a Check all methods used for valuing closing inventory: (i) ~ Cost as described in Regulations section 1.471-3 (ii) ®Lower of cost or market as described in Regulations section 1.471-4 (iii) ~ Other (specify method used and attach explanation)- b Check if there was a writedown of subnormal goods as described in Regulations section 1.471-2(c) ................................... ................... ............... - 0 c Check if the LIFO inventory method was adopted this tax year for any goods ('rf checked, attach Form 970) ......................... ................... ................ - 0 d If the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory computed under LIFO .............................................................................................. ....................................... e If property produced or acquired for resale, do the rules of Section 263A apply to the corporation? .......... ......................... .. ~ 9d .................. .... 0 Yes ®No f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? ...................... ................... .... ~ Yes ®No If "Yes "attach ex lanation. ^-~--~--._., .,.~__.s,........,+:,.., ~,.,,,,;....~.,,,.f,nn~~ Yes No 1 Check method of accounting: (a) ~ Cash (b) ®Accrual (c) U Other (specify) - 2 See the instructions and enter the: (a) Business activity -WATER PURIFICATION (b) Product or service - WATER CONDITIONER 3 At the end of the tax year, did the corporation own, directly or indirectly, 50% or more of the voting stock of a domestic corporation? (For rules of attribution, see section 267(c).) If "Yes;' attach a statement showing: (a) name, address, and employer identification number and (b) percentage owned ............................... X 4 Was the corporation a member of a controlled group subjectto the provisions of section 1561? ..................................................................... X 5 Has this corporation filed, or is it required to file, a return under Section 6111 to provide information on any reportable transaction? ........................ X 6 Check this box if the corporation issued publicly offered debt instruments with original issue discount ................................................... - If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. 7 If the corporation: (a) was a C corporation before it elected to be an S corporation or the corporation acquired an asset with a basis determined by reference to its basis (or the basis of any other property) in the hands of a C corporation and (b) has net unrealized built-in gain (defined in section 1374(d)(1)) in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from pri~ $ years .......................................................................................................................................... 8 Check this box if the corporation had accumulated earnings and profits at the close of the tax year ...................................................... - 9 Are the corporation's total receipts (see instructions) for the tax year and its total assets at the end of the tax year less than $250,000? If"Yes;'the corporation is not required to complete Schedules L and M-1 ........................................................................ X Note: If the corporation had assets or operated a business in a foreign country or U.S. possession, it may be required to attach .._~ _ ~-~_ . ___ unn~ c......,,n Mnr°tinne of I I S Cnrnnratinns to this return- See Schedule N for details. __. Schedule K Shareholders' Shares of Income Deductions Credits etc. Shareholders' Pro Rata Share Items 1 Ordinary business income (loss) (Page 1, line 21) .................................... ................................................... 2 Net rental real estate income (loss) (attach Form 8825) .......................... .................................................... 3a Other gross rental income (loss) ......................................................... 3a b Expenses from other rental activities (attach statement) .......................... . 3b ~ c Other net rental income (loss). Subtract line 3b from line 3a ......... ........... .................................................... , 0 4 Interest income .............................................................................. ................................................... d ~, 5 Dividends: a Ordinary dividends ........................................................ .................................... ti ... ... .... ~ o b Qualified dividends ......................... ............................ i i 5 . c 6 Royalties .-..-,-.._ -~- ~-•~- ~~-~ 7 Net short-term capital gain (loss) (attach Schedule D (Form 1120S)) ........ .................................................... 8a Net long-term capital gain (loss) (attach Schedule D (Form 11205)) ........... .................................................... b Collectibles (28%) gain (lass) .................. . 8b c Unrecaptured section 1250 gain (attach statement) ................................ . 8c 9 Net section 1231 gain (loss) (attach Form 4797) ................................... .................................................... JWA 511711 12-OS-05 1.2 10220310 759605 604600 2005.09001 SOFPAC CORPORATION 06. 3c form l 1205 (2005) 604600_1 Form 11 20S (2005) SOFPAC CORPORATION 2 3- 2 9 5 6 612 Nage 3 Shareholders' Pro Rata Share Items continued Totaf amount w 11 Section 179 deduction (attach Form 4562) ................................................................................................ 11 0 12a Contributions .................................................................................................................................... 12a ... ~ b Investment interest expense .................................................................................................................. 12b o c Section 59(e)(2) expenditures (1) Type - (2) Amount - ................... ...................................................................... .. 12c 2 .. ............................. d Other deductions see instructions T e 12d 13a Low-income housing credit (section 42(j)(5)) ...................................................................................... 13a .r bLow-income housing credit (other) ................................................. 13b ~ U `~ c Qualified rehabilitation expenditures (rental real estate) (attach form 3468) ...................................................... 13c ~ , w ~ d Other rental real estate credits (see instructions) Type - 13d '~ ~ e Other rental credits (see instructions) ............... Type - 13e U` f Creditfor alcohol used as fuel (attach Form 6478) ................................................................................... 13f Other credits and credit reca ture see instructions T e 13 14 a Name of country or U.S. possession - b Gross income from all sources ......................................... .............................................................. 14b . ................................................................................. . c Gross income sourced at shareholder level 14c .......... . Foreign gross income sourced at corporate level: d Passive ................................................. ...................................... . . 14d H o . . ...................................... e Listed categories (attach statement) ................................................ ............................. . 14e ......... . ~ f General limitation ................................................................................ .............. . 14f m ................. . Deductions allocated and apportioned at shareholder level: ~= g Interest ex ense ............... ................. ..................... - ............... P 14 ............................... h Other ................................................................................................ . 14h . ...... ..................................... Deductions allocated and apportioned at corporate level to foreign source income: 0 LL i Passive .................................................................................................. 14i ...................................... . j Listed categories (attach statement) ....--..-._. ............................................................................................. 4 k General limitation ................ . ..................................................................................... 14k ....................... Other information: Total foreign taxes (check one): - ~ Paid 0 Accrued ................. 141 m Reduction in taxes available for credit (attach statement) .............................................................................. 14m n Other forei n tax information attach statement ....................................................................................... 15a Post-1986 depreciation adjustment ....................................................................................... ... 15a x > r10- E .. ............. b Adjusted gain or loss .................................................................................. 15b 3 *' ......................................... c Depletion (other than oil and gas) ,,,,,,,.,... ....................................................................................... 15c ......... d Oil, gas, and geothermal properties -gross income .................................................................................... 15d ~ a ~ ¢ .. ......... ......... ......... ......... ......... ................ e Oil, gas, and geothermal properties -deductions 15e . f Other AMT items attach statement ......................................................................................................... 15f c ~ 16a Tax-exempt interest income ................................................................................................... . 16a c H ............. . b Other tax-exempt income ............................................................................................... . 16b .................... . m H c Nondeductible expenses ......................................................................................... 16c ~ ............................... d Property distributions ............................................................................... . .. 16d N ...... .................................. . e Re a ment of loans from shareholders ................................................................................................... 16e 17a Investment income ....................................................................................... 17a ~ ....................................... b Investment expenses ....................................................................................................... 17b ~ .................... c Dividend distributions paid from accumulated earnings and profits ............................................................... 17c .° d Other items and amounts (attach statement) c L ........................ e Incomefloss reconciliation. (Required only if Schedule M-1 must be completed.) Combine m the amounts on lines 1 through 10 in the far right column. From the result, subtract the sum ~ .......................................................... of the amounts on lines 11 throw h 12d and 141 ............................. i7e 20 606. JWA form 1120S (2005) 611721 12-OB-05 1.3 10220310 759605 604600 2005.09001 SOFPAC CORPORATION 604600_1 Form 1120S (2005) SOFPAC CORPORATION 2 3- 2 9 5 6 612 Page 4 IJnrn• Tha rnrnnratinn is not ranuirari to rmm~lata Schartulec I and M-1 if nnectinn Q of Ccherinla R is ancwararl "Vac " Schedule L Balance Sheets er Books Be innin of tax ear End of tax ear Assets a b c d) 1 Cash ....... ...................................... 1 345. 336. 2 a Trade notes and accounts receivable 2 0 7 8 2. 2 4 4 2 0. b Less allowance for bad debts ........... ....... 2 0 7 8 2. 2 4 4 2 0. 3 Inventories .......................................... 7 5 3 2. 11 7 0 7. 4 U.S.Governmentobligations .................. 5 Tax-exempt securities ........................... 6 Other current assets (att. stmt.) ............... 7 Loans to shareholders ........................... 8 Mortgage and real estate loans ............... 9 Other investments (att. stmt.) .................. 10 a Buildings and other depreciable assets ...... b Less accumulated depreciation ......... 11 a Depletable assets ................................ . b Less accumulated depletion ............. 12 Land (net of any amortization) 13 a Intangible assets (amortizable only) ..._..... b Less accumulated amortization ............... ......................... 14 Other assets (att. stmt.) .. 15 Total assets 2 9 6 5 9. 3 6 4 6 3. Liabilities and Shareholders' Equity 16 Accounts payable 2 7 . 12 5 . ................................. 17 Mortgages, notes, bonds payable in less than 1 year 18 Other current liabilities (att. stmt.) ........._., STATEMENT 4 3 9 6 3 . - 9 9 3 8 . 19 Loans from shareholders _......... .............. 20 Mortgages, notes, bonds payable in 1 year or more 21 Other liabilities (att. stmt.) ........................ 22 Capital stock .............................. .. ...... . 23 Additional paid-in capital ................... ..... ........................ . 24 Retained earnings 2 5 6 6 9. 4 6 2 7 6. ...... .. 25 Adjustments to shareholders' equity (att. stmt.) . _.. _. 26 Less cost of treasury stock ..................... 27 Total liabilities and shareholders' a ui 2 9 6 5 9. 3 6 4 6 3. Schedule M-1 Reconciliation of Income Loss er Books With Income Loss er Return 1 Net income (loss) per books .................. 2 0 6 0 6 . 5 Income recorded on books this year not Z Income included on Schedule K, lines 1, 2, 3c, 4, 5a, 8, 7, Sa, 9, and 10, not recorded on books this year ptemize): included on Schedule K, lines 1 through 10 (itemize): aTax-exempt interest $ 3 Expenses recorded on books this year not included on Schedule K, lines 1 through 12 and 141(ftemize): a Depreciation $ b Travel and entertainment $ 6 Deductions included on Schedule K, lines 1 through 12 and 141, not charged against book income this year (itemize): a Depreciation $ 7 Adtl lines 5 and 6 .......................................... 4 Add lines 1 throw h 3 .............................. 2 0 6 0 6. 8 Income loss Schedule K line 17e. Line 41ess line 7 ......... 2 O 6 0 6. Schedule M-2 Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Shareholders' Undistributed Taxable Income Previous) Taxed see instructions (a) Accumulated (b) Other adjustments (c) Shareholders' undistributed adjustments account aCCOUnt taxable income previously taxed 1 Balance at beginning of tax year ...................................................... 2 5 6 6 9 . 2 Ordinary income from page 1, line 21 ._....... 3 Other additions ._._ .............................................. 4 Loss from page 1, line 21 ...................................... 5 Other reductions ................................................. 6 Combine lines 1 through 5 .................................. 7 Distributions other than dividend distributions _____._... A Ralanre at end of tax vear. Subtract line 7 from line 6 .. 511731 1z-oa-o5 JWA 10220310 759605 604600 75. 1 . 4 Form 1120S (2005) 2005.09001 SOFPAC CORPORATION 604600_1 SOFPAC CORPORATION TIME DEVOTED TO PCT OF BUSINESS STOCK 0 33.30 50 33.30 FORM 1120S COMPENSATION OF OFFICERS DESCRIPTION FINANCE CHARGES TOTAL TO FORM 11205, PAGE 1, LINE 5 23-2956612 STATEMENT 1 AMOUNT -9. -9. FORM 1120S NAME OF OFFICER OTHER INCOME SOCIAL SECURITY NUMBER ROCCO COSTABILE 175-40-9493 FRANK COSTABILE 191-42-8935 TOTAL COMPENSATION OF OFFICERS LESS: COMPENSATION CLAIMED ELSEWHERE TOTAL TO FORM 1120S, PAGE 1, LINE 7 STATEMENT 2 AMOUNT OF COMPENSATION 0. 0. 0. FORM 1120S OTHER DEDUCTIONS STATEMENT 3 DESCRIPTION BANK CHARGES PROFESSIONAL FEES TELEPHONE ADMINISTRATIVE EXPENSE TOTAL TO FORM 11205, PAGE 1, LINE 19 AMOUNT 156. 505. 836. 3,328. 4,825. SCHEDULE L OTHER CURRENT LIABILITIES STATEMENT 4 DESCRIPTION SALES TAX PAYABLE ACCOUNTS PAYABLE - AFFILIATE TOTAL TO SCHEDULE L, LINE 18 10220310 759605 604600 BEGINNING OF TAX YEAR END OF TAX YEAR 1. 0. 3,962. -9,938. 3,963. -9,938. 2 STATEMENT(S) 1, 2, 3, 4 2005.09001 SOFPAC CORPORATION 604600_1 671105 Schedule K-1 AAAC ~ Final K-1 0 Amended K-1 OMB No. 1545-0130 (Form 1120S) ~ V V~ Department of the Treasury Part III Shareholder's Share of Current Year Income, Deductions Credits and Other Items Internal Revenue Service For calendar year 2005, or tax year beginning 10rdinary business income (loss) 6 8 6 9 . 13 Credits & credit recapture ending 2 Net rental real estate income (loss) Shareholder's Share of Income, Deductions, Credits etc. -See se arate instructions. 30ther net rental income (loss) Part I Information About the Corporation 4lnterest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends 8 Corporation's name, address, city, state, antl ZIP code 5b0ualified dividends 14 F oreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. 6Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return CINCINNATI OH 8a Net long-term capital gain (loss) D 0 Tax shelter registration number, if any E ~ Check if Form 8271 is attached 8b Collectibles (28%) gain (loss) 8c Unrecapturetl sec 1250 gain h ld P I i Ab h Sh are er I Informat on out t e o art 9 Net section 1231 gain (loss) F Shareholder's identifying number 16 2 - 3 6 - 9 9 2 2 10 Ot her income (loss) 15 Alternative min tax (AMT) items G Shareholder's name, address, city, state and ZIP code PHILIP F. COSTABILE 348 BLACK LATCH LANE CAMP HILL, PA 17011 H Shareholder's percentage of stock ownership for tax year .................................... 3 3. 3 3 3 3 3 3°~° 11 Se ction 179 deduction 16 Items affecting shareholder basis 120t her deductions c O m y u7 ~_ L LL 17 Other information `See attached statement fo r additional information. 5112'1 JWA For Privac Act and Paperwork Reduction Act Notice, see Instructions for Form 11205. Schedule K-1 Form 1120S 2005 12-08-05 y ( ) 2.2 SHAREHOLDER NUMBER 1 10220310 759605 604600 2005.09001 SOFPAC CORPORATION 604600 1 671105 Schedule K-1 0 Final K-1 0 Amended K-1 OMB No.1545-0130 (Form 1120S) 2005 Department of the Treasury Part III Shareholder's Share o Deductions Credits a f CurrentYear Income, nd Other Items Internal Revenue Service For calendar year 2005, or tax year beginning 10rdinary business income (loss) 6 8 6 8 . 13 Credits & credit recapture ending 2 Net rental real estate income (loss) Shareholder's Share of Income, Deductions, Credits etc. - See se crate instructions. 30ther net rental income (loss) Part I Information About the Corporation 4lnterest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 F oreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. 6Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return CINCINNATI OH 8a Net long-term capital gain (loss) D 0 Tax shelter registration number, if any E ~ Check if Form 8271 is attached 8b Collectibles (28%) gain (loss) 8c Unrecaptured sec 1250 gain Part II Information About the Shareholder 9 Net section 1231 gain (loss) F Shareholder's identifying number 17 5 - 4 0 - 9 4 9 3 10 Ot her income (loss) 15 Alternative min tax (AMT) items G Shareholder's name, address, city, state and ZIP code ROCCO A. COSTABILE BOX 5205 GRANTVILLE, PA 17028 H Shareholder's percentage of stock ownership for tax year .................................... 33.333333% 11 Se ction 179 deduction 16 Items affecting shareholder basis 120t her deductions a c O m N ~_ O LL 17 Other information "See attached statement fo r additional information. 5112'1 JWA For Privacy Act and Pa erwork Reduction Act Notice, see Instructions for Form 1120S. Schedule K-1 (Form 1120S) 2005 12-08-05 p 2.6 SHAREHOLDER NUMBER 2 10220310 759605 604600 2005.09001 SOFPAC CORPORATION 604600_1 671105 Schedule K-1 nAAG 0 Final K-1 0 Amended K-1 OMB No. 1545-0130 irormiizus~ ~VVJ Department of the Treasury Part 111 Shareholder's Share Deductions Credits of Current Yearlncome, and Other Items Internal Revenue Service For calendar year 2005, or tax year beginning t Ordinary business income (loss) 6 8 6 9 . 13 Credits & credit recapture ending 2 Net rental real estate income (loss) Shareholder's Share of Income, Deductions, Credits etc. - See se arate instructions. 30ther net rental income (loss) Part I Information About the Corporation 4lnterest income A Corporation's employer identification number 23-2956612 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 F oreign transactions SOFPAC CORPORATION 5341 JAYCEE AVE. 6Royalties HARRISBURG , PA 17112 - 2 9 3 8 7 Net short-term capital gain (loss) C IRS Center where corporation filed return CINCINNATI OH 8a Net long-term capital gain (loss) D ~ Tax shelter registration number, if any E ~ Check if Form 8271 is attached 8b Collectibles (28%) gain (loss) 8c Unrecaptured sec 1250 gain Part II Information About the Shareholder 9 Net section 1231 gain (loss) F Shareholder's identifying number 191- 4 2 - 8 9 3 5 10 Other income (loss) 15 Alternative min tax (AMT) items G Shareholder's name, address, city, state and ZIP code FRANK M. COSTABILE 5798 HIDDEN LAKE DRIVE HARRISBURG, PA 17112 H Shareholder's percentage of stock ownership for tax year .................................... 33.333334% 11 Se ction 179 deduction i6 It ems affecting shareholder basis 120t her deductions c O m N ~_ O LL 17 Other information `See attached statement for additional information. i2~os os JWA For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 11205. Schedule K-1 (Form 1120S) 2005 2.10 SHAREHOLDER NUMBER 3 10220310 759605 604600 2005.09001 SOFPAC CORPORATION 604600 1 Philip F. Costabile Estate REV-1500 Schedule C-2 Support PAC PARTNERSHIP SUMMARY VALUATION REPORT DECEMBER 14, 2009 PAC PARTNERSHIP TABLE OF CONTENTS PAGE NUMBER LETTER 1 STANDARD OF VALUE, SUMMARY DESCRIPTION OF THE BUSINESS, AND SOURCES OF INFORMATION 2 VALUATION APPROACH AND METHOD 3 NET ASSET VALUE METHOD 3 - 4 VALUATION DISCOUNTS 5 - 6 CONCLUSION 6 APPENDIX A -REPRESENTATIONS OF THE VALUATION ANALYST 7 APPENDIX B -ASSUMPTIONS AND LIMITING CONDITIONS 8 - 9 ATTACHMENTS • PARTNERSHIP TAX RETURNS - 2005 - 2009 • REAL ESTATE APPRAISALS • REAL ESTATE TAX ASSESSMENT - 950 RIVER ROAD • 2009 COMMON LEVEL RATIO FOR BUCKS COUNTY Katherine A. Costabile 18 Crain Circle Lemoyne, Pennsylvania 17112-3544 Re: Business Valuation We have performed a calculation engagement, as that term is defined in the Statement on Standards for Valuation Services (SSVS) of the American Institute of Certified Public Accountants. We performed certain calculation procedures for the valuation of Philip F. Costabile's one-third, general partnership interest in PAC Partnership as of December 14, 2009. The specific calculation procedures are detailed below. The calculation procedures were performed solely to assist in the matter of providing a value of the ownership interest pursuant to the preparation of a Pennsylvania Inheritance Tax return for Philip F. Costabile and should not be used for any other purpose or by any other party for any purpose. This calculation engagement was conducted in accordance with the SSVS. The estimate of value that results from a calculation engagement is expressed as a calculated value. In a calculation engagement, the valuation analyst and the client agree on the specific valuation approaches and valuation methods the valuation analyst will use and the extent of the valuation procedures the valuation analyst will perform to estimate the value of the subject interest. A calculation engagement does not include all of the procedures required in a valuation engagement, as that term is defined in the SSVS. Had a valuation engagement been performed, the results might have been different. Based on our calculations as described in this report, which are based solely on procedures agreed upon as referred to above, the resulting calculated value for Mr. Costabile's one-third, general partnership interest in PAC Partnership as of December 14, 2009 was $1,253,000. This conclusion is subject to the Representations of the Valuation Analyst found in Appendix A and the Assumptions and Limiting Conditions found in Appendix B. We have no obligation to update this report or our conclusion of value for information that comes to our attention after the date of this report. {~ .C ~~ 0 Harrisburg, Pennsylvania March 7, 2011 1 PAC PARTNERSHIP SUMMARY VALUATION REPORT DECEMBER 14, 2009 STANDARD OF VALUE Fair market value is defined as the cash or cash equivalent price at which property would change hands between a willing buyer and a willing seller, neither being under a compulsion to buy or sell and both having reasonable knowledge of relevant facts. SUMMARY DESCRIPTION OF THE BUSINESS PAC Partnership is organized as a Pennsylvania general partnership and was started on June 12, 1972. As of December 14, 2009, ownership of the Partnership was shared equally by Philip F. Costabile, Rocco A. Costabile, and Frank M. Costabile. The Company holds commercial real estate at the following locations: 5321 Jaycee Avenue, Harrisburg, Pennsylvania (multi-tenant flex building on 1.278 acres); 5341 Jaycee Avenue, Harrisburg, Pennsylvania (multi-tenant flex building on 1.373 acres); 7301 Allentown Boulevard, Harrisburg, Pennsylvania (commercial building on 10.5 acres); 313 Baltimore Street, Dillsburg Pennsylvania (coin-operated Laundromat on 0.68 of an acre); and 950 River Road, Croydon, Pennsylvania (commercial building). SOURCES OF INFORMATION We were provided with the following fmancial information for this engagement: • Partnership income tax returns from 2005 through 2009. • Real estate appraisal report for the real property located at 5321 Jaycee Avenue, Lower Paxton Township, Dauphin County, Pennsylvania as of June 30, 2009 by Jeffrey L. Walters, MAI. • Real estate appraisal report for the real property located at 5341 Jaycee Avenue, Lower Paxton Township, Dauphin County, Pennsylvania as of June 30, 2009 by Jeffrey L. Walters, MAI. • Real estate appraisal report for the real property located at 7301 Allentown Boulevard, West Hanover Township, Dauphin County, Pennsylvania as of July 1, 2009 by Robert R. Jones, SRA. • Real estate appraisal report for the real property located at 313 Baltimore Street, Dillsburg Borough, York County, Pennsylvania as of August 26, 2007 by Robert R. Jones, SRA. • Real estate tax bill for the period January 1 to December 31, 2010 for the real property located at 950 River Road, Bristol Township, Bucks County, Pennsylvania. • Pennsylvania common level ratios for real property assessments published by the Pennsylvania State Tax Equalization Board. 2 PAC PARTNERSHIP SUMMARY VALUATION REPORT DECEMBER 14, 2009 VALAUTION APPROACH AND METHOD Revenue Ruling 59-60, Section 5, Weight to be Accorded Various Factors, discusses the consideration of relevant factors in valuing closely held entities given the particular circumstances of the case. This section presents the following illustration: "The value of the stock of a closely held investment or real estate holding company, whether or not family owned, is closely related to the value of the assets underlying the stock. For companies of this type, the appraiser should determine the fair market values of the assets of the company ....The market values of the underlying assets give due weight to potential earnings and dividends of the particular items of property underlying the stock, capitalized at rates deemed proper by the investing public at the date of appraisal. A current appraisal by the investing public should be superior to the retrospective opinion of an individual. For these reasons, adjusted net worth should be accorded greater weight in valuing the stock of a closely held investment or real estate holding company, whether or not family owned, than any of the other customary yardsticks or appraisal, such as earnings and dividend paying capacity." We are in agreement with the theory behind this example and have employed a valuation method (Net Asset Value) that considers both the book value and the adjusted net equity value of the Partnership. NET A5SET VALUE METHOD Underlying asset valuation methods derive an estimate of value based upon the hypothetical sale of the subject company's assets. The Net Asset Value Method assumes that the value of a particular company is realized by the hypothetical sale of its assets as part of a going concern. Application of the Net Asset Value Method involves adjusting the subject company's assets and liabilities to their appraised values with the net results being an indication of the equity value of the company. The Partnership's real estate holdings have been adjusted to their estimated fair values. The recoded values for all other partnership assets and liabilities are believed to be indicative of their market values. The market value for the property located at 5321 Jaycee Avenue, Lower Paxton Township, Dauphin County, Pennsylvania has been estimated based upon an appraisal report dated July 13, 2009 by Jeffrey L. Walters, MAI. This appraisal report presents an indicated value for the property of $750,000 as of June 30, 2009. 3 PAC PARTNERSHIP SUMMARY VALUATION REPORT DECEMBER 14, 2009 NET ASSET VALUE METHOD The market value for the property located at 5341 Jaycee Avenue, Lower Paxton Township, Dauphin County, Pennsylvania has been estimated based upon an appraisal report dated July 13, 2009 by Jeffrey L. Walters, MAI. This appraisal report presents an indicated value for the property of $1,075,000 as of June 30, 2009. The market value for the property located at 7301 Allentown Boulevard, West Hanover Township, Dauphin CounTy, Pennsylvania has been estimated based upon an appraisal report dated July 28, 2009 by Robert R. Jones, SRA. This appraisal report presents an indicated value for the property of $5,600,000 as of July 1, 2009. The market value for the property located at 313 Baltimore Street, Dillsburg Borough, York County, Pennsylvania has been estimated based upon an appraisal report dated October 21, 2007 by Robert R. Jones, SRA. This appraisal report presents an indicated value for the property of $300,000 as of August 26, 2007. The market value for the property located at 950 River Road, Bristol Township, Bucks County, Pennsylvania has been estimated based upon the county/township real estate tax assessment for the period January 1 through December 31, 2010. The assessed value for the land and building was $64,000. The 2009 common level ratio for Bucks County was 10.9. The application of this ratio to the assessed value resulted in an estimated market value for the property of $698,000. We have presented a summary of the Partnership's net equity value below. Book Value of Partnership Equity (Deficit) -December 2009 Fair Market Value Adjustments: 5321 Jaycee Avenue, Dauphin County, PA 5341 Jaycee Avenue, Dauphin County, PA 7301 Allentown Boulevard, Dauphin County, PA 313 Baltimore Street, York County, PA 950 River Road, Bucks County, PA Subtotal Less: Net Book Value Fair Market Value Adjustment -Real Estate Adjusted Net Equity Value $(1,645,000) $ 750,000 1,075,000 5,600,000 300,000 698,000 8,423,000 1,303,000 7,120,000 $~ 5,000 4 PAC PARTNERSHIP SUMMARY VALUATION REPORT DECEMBER 14, 2009 VALUATION DISCOUNTS Our application of the Net Asset Value Method contemplated certain adjustments to the Partnership's financial position that reflect a partner's ability to effect change with regard to certain partnership matters. Thus, the resulting estimate of fair market value produced by the application of the Net Asset Value Method is on acontrolling-interest basis. When ownership is distributed between three individuals, no single owner possesses outright voting control. However, this distribution of ownership results in each owner requiring the consent of only one other individual to affect control over business matters. We do not consider the three individual owners in this case to be in minority interest positions. Minority interest stockholders typically lack little, if any, ability to directly exercise control rights. To develop a discount for the observed lack of control inherent with each owner's interest, we referenced a 1996 U. S. District Court Decision. In Estate of Elmore K. Melton v. U. S., the Court acknowledged a ten percent discount for the lack of control associated with a fifty percent ownership interest in a corporation with only two other stockholders. The Court recognized that the shares of a corporation that represent a minority ownership interest are usually subject to a minority interest discount. The minority interest discount was appropriate because the minority stockholder lacks the general ability to control policy. The Court determined that a fifty percent stockholder does not have a sufficient interest to control corporate affairs. The base value in this case assumed a controlling ownership interest. So the Court decided a valuation discount of ten percent must be applied in order to provide indications of value for a less than controlling interest. We believe that the observed characteristics for the ownership interests in this case are generally analogous to those observed for the PAC Partnership. With reference to this case, we have applied a twenty percent discount for lack of control. Ownership interests in closely-held companies are typically not readily marketable compared to similar interests in public companies. As a result, an ownership interest in a privately held company is usually worth less than an otherwise comparable share in a publicly held company. Factors usually considered in determining a discount for lack of marketability include: the relative risk of the Corporation's assets; the historical consistency of the Corporation's earnings and distributions; the condition of the Corporation's assets; the Corporation's and industry's growth potential; and the strength of the Corporation's management. There have. been numerous studies regarding the quantification of marketability discounts observed in actual transactions involving equity ownership interests. Many such studies have focused upon the trading prices of securities (minority interests) prior to and after an initial public offering or upon a comparison of a restricted stock's trading price versus its publicly traded equivalent. These studies have identified average marketability discounts that range from 35 to 50 percent.l 5 ~ Fishman, Jay E., et. al., Practitioners Publishing Company, Guide to Business Valuations, Twelfth Edition, January 2005, Fort Worth, Texas, p. 8-37. PAC PARTNERSHIP SUMMARY VALUATION REPORT DECEMBER 14, 2009 VALUATION DISCOUNTS There have not been as many studies regarding marketability discounts for controlling interests in privately-held companies. One such study that does exist was performed by Jerry O. Peters, AM, CBA, CPA and published in the June 1995 issue of the Business Valuation Review.2 In his study, he compared the median public and private price-to-earnings ratios (P/E's) for the sales of companies from 1989 through 1994 as compiled by Mergerstat Review. He categorized his comparative analysis into four categories based upon market value. For companies with a total market value of $25 million or less, the average observed discount for the median private P/E from the median public P/E from 1989 through 1994 was 9.6 percent.3 We have applied a discount for lack of marketability of fifteen (15) percent for the subject interest being valued. We have presented below the application of both valuation discounts to Mr. Costabile's one-third general partnership interest: Book Value of Mr. Costabile's Ownership Interest at December 2009 $ (531,000) Fair Market Value Adjustment ($7,120,000 x 33.34%) 2,374,000 Allocated Value Before Valuation Discounts 1,843,000 Less: Lack of Control Discount (20%) 3( 69,000) Allocated Value Before Lack of Marketability Discount 1,474,000 Less: Discount for Lack of Marketability (15%) 221 000) Estimated Fair Market Value (Non-Controlling, Non-Marketable) $1 25. 3.000 CONCLUSION Based on our calculations as described in this report, which are based solely on procedures agreed upon as referred to in this report, the resulting calculated value for Mr. Costabile's one- third, general partnership interest in PAC Partnership as of December 14, 2009 was $1,253,000. ONE MILLION, TWO HUNDRED FIFTY-THREE THOUSAND DOLLARS $1,253,000 6 a Peters, Jerry O., Lack of Marketability Discounts for Controlling Interests: An Analysis of Public v. Private Transactions, Vol. 14, No. 2, June 1995, pp. 59 - 61. ' Ibid., p. 60. PAC PARTNERSHIP SUMMARY VALUATION REPORT DECEMBER 14, 2009 APPENDIX A REPRESENTATIONS OF THE VALUATION ANALYST • The analyses and calculation of value included in the valuation report are subject to the specified assumptions and limiting conditions. • The valuation engagement was performed in accordance with the Statement on Standards for Valuation Services of the American Institute on Certified Public Accountants. • The parties for which the information and use of the valuation report is restricted are identified; the valuation report is not intended to be and should not be used by anyone other than these such parties. • The valuation analyst has no obligation to update the report or calculation of value for information that comes to his or her attention after the date of the report. 7 PAC PARTNERSHIP SUMMARY VALUATION REPORT DECEMBER 14, 2009 APPENDIX B ASSUMPTIONS AND LIMITING CONDITIONS • The calculation of value arrived at herein is valid only for the stated purpose as of the date of valuation. Financial statements and other related information provided by PAC Partnership or its representatives, in the course of this engagement, have been accepted without any verification as fully and correctly reflecting the enterprise's business conditions and operating results for the respective periods, except as specifically noted herein. SF&Company, with respect to this engagement for business valuation services, has not audited, reviewed, or compiled the financial information provided to us and, accordingly, we express no audit opinion or any other form of assurance on this information. This report and the calculation of value arrived at herein are for the exclusive use of our client for the sole and specific purposes as noted herein. They may not be used for any other purpose or by any other party for any other purpose. Furthermore, the report and calculation of value are not intended by the author and should not be construed by the reader to be investment advice in any manner whatsoever. The calculation of value is based upon information furnished by PAC Partnership. • Neither all nor any part of the contents of this report should be disseminated to the public through advertising media, public relations, news media, sales media, mail, direct transmittal, or any other means of communication without the prior written consent and approval of SF&Company. • SF&Company is not an environmental consultant or auditor, and it takes no responsibility for any actual or potential environmental liabilities. Any person entitled to rely on this report, wishing to know whether such liabilities exist, or the scope and their effect on the value of the property, is encouraged to obtain a professional environmental assessment. SF&Company does not conduct or provide environmental assessments and has not performed one for the subject company. 8 PAC PARTNERSHIP SUMMARY VALUATION REPORT DECEMBER 14, 2009 APPENDIX B ASSUMPTIONS AND LIMITING CONDITIONS • SF&Company has not determined independently whether PAC Partnership is subject to any present or future liability relating to environmental matters nor the scope of any such liabilities. SF&Company's valuation takes no such liabilities into account, except as they have been reported to SF&Company by PAC Partnership or by an environmental consultant working for PAC Partnership, and then only to the extent that the liability as reported to us in an actual or estimated dollar amount. Such matters, if any, are noted in the report. To the extent such information has been reported to us, SF&Company has relied on it without verification and offers no warranty or representation as to its accuracy or completeness. • SF&Company has not made a specific compliance survey or analysis of the subject property to determine whether it is subject to, or in compliance with, the American Disabilities Act of 1990, and this valuation does not consider the effect, if any, of noncompliance. • Unless otherwise stated, no effort has been made to determine the possible effect, if any, on the subject business due to future federal, state, or local legislation, including any environmental or ecological matters or interpretations thereof. • Except as noted, we have relied on the representations of the owners, management, and other third parties concerning the value and useful condition of all equipment, real estate, investments used in the business, and any other assets or liabilities, except as specifically stated to the contrary in this report. We have not attempted to confirm whether or not all assets of the business are free and clear of liens and encumbrances or that the entity has good title to all assets. 9 WALTERS APPRAISAL SERVICES, INC. Commercial and Iiulustrial Rea[ Estate July 13, 2009 Mr. Ron Smalstig Vice President -Corporate Banking Group Fulton Bank PO Box 1189 3`~ & Locust Streets Harrisburg, Pemtsylvauia 17108 Re: Smnmary Appraisal Report 5321 Jaycee Avenue Lower Paxton Township Dauphin County, Pennsylvania Walters Appraisal Services, Iuc. File #09-1724 Dear Mr. Smalstig: We have inspected and appraised the above referenced property at your request by letter of engagement dated June 18, 2009. The report format is a "Summary Appraisal Report." We have estimated the market value of the leased fee interest of the subject property. Our most recent inspection of the subject property was on June 30, 2009. We have considered location, condition, size, zoning, marketing time, functional utility, sales of comparable properties, the uses for which the property is and could be employed, operating costs, and other pertinent data. Market data is used to develop the sales comparison approach and income approach to valuue. It is our opinion, and we certify, the market vahie of the leased fee interest in the subject property in "as is" condition, as of June 30, 2009, is: SEV>;N HUNDRED ):I)i'TY THOUSAND ($750,000) DOLLARS This letter does not make up a complete appraisal report. The accompanying report, which comprises 63 pages plots addenda, follows this letter. Please note the assumptions and limiting conditions on pages 10 to 11. We have personally prepared the analysis and formed the opinions presented in this report without significant professional assistance from any other person. This appraisal is written inconformity with the Codes of Ethics and Standards of Professional Practice of the Appraisal Institute and the Uniform Standards of Professional Practice of the Appraisal Practice (USPAP). We have taken steps to comply with the competency provision of USPAP by identifying the appraisal problem and deciding that we have the knowledge and experience to complete the assignment competently. Jeffrey L. Walters is currently state-certified as a "Ge;feral Appraiser" by the Commonwealth of Pennsylvania and professional qualifications follow this report. 601 NORTH FRONT STREET HARRISBURG, PENNSYLVANIA 17101 • Tel (717)234-0540 • Fax (717}901-0541 WALTERS APPRAISAL SERVICES, INC. Commercial and Industrial Real Estate July 13, 2009 Mr. Ron Smalstig Vice President -Corporate Batilcing Group Fulton Bank PO Box 1189 3~ & Locust Streets Harrisburg, Petmsylvania 17108 Re: Sutrunaty Appraisal Report 5341 Jaycee Avenue Lowet• Paxton Township Dauphin County, Pennsylvania Walters Appraisal Services, Inc. File #09-1'728 Dear Mr. Smalstig: We have inspected and appraised the above referenced property at your request by letter of engagement dated June 18, 2009. The report format is a "Suuunary Appraisal Report." We have estunated the market value of the leased fee interest of the subject property. Our most recent inspection of the subject property was on June 30, 2009. We have considered location, condition, size, zoning, marketing time, functional utility, sales of comparable properties, the uses for which the property is and could be employed, operating costs, and other pertinent data. Market data is used to develop the sales comparison approach and income approach to value. It is our opinion, and we certify, the market value of the leased fee interest in the subject property in "as is" condition, as of June 30, 2009, is: ONE MILLION SEVENTY FIVE THOUSAND ($1,075,040) DOLLARS This letter does not make up a complete appraisal report. The accompanying report, which comprises G4 pages plus addenda, follows this letter. Please note the assumptions and limiting conditions on pages 10 to 11. We have personally prepared the analysis and formed the opinions presented in this report without significant professional assistance from any other person. This appraisal is written in eonfot7nity with the Codes of Ethics and Standards of Professional Practice of the Appraisal Institute and the Uniform Standards of Professional Practice of the Appraisal Practice (USPAP). We have taken steps to comply with the competency provision of USPAP by identifying the appraisal problem and deciding that we have the knowledge and experience to complete the assigmnent competently. Jeffrey L. Walters is currently state-certified as a "General Appraiser" by the Commonwealth of Pennsylvania and professional qualifications follow this report. 601 NORTH FRONT STREET HARRISBURG, PENNSYLVANIA 17101 • Tel (717}234-0540 • Fax {717)901-0541 RA~ER7 R. JONES ~ ASSOCIATES REAL ESTATE APPRAfSERS & CONSULTANTS 7800 ALLENTOWN BLVt7. HARRISBURG, PENNSYLVANIA 17112-3708 OFFICE (717) 652-6600 FAX (717) 652-3983 www.Jonesappraisers,com ROBERT R. JONE5, SRA, RM CHRISTOPHER M. JONES, SRA JOHN R. JONES, SRA (1958-1993} July 28, 2008 Mr. Ran Smalstig, Vice President Corporate Banking Group Fulton Bank 200 N. 3r`' Street Harrisburg, PA 17108 Mr. Smalstig, LEBANON, PA 17042 (717) 838-0170 Ref: 7301 Allentown Blvd, West Hanover Township, Dauphin County At your request I have completed an appraisal on the above property and have arrived at my opinion of the value of the unencumbered fee simple interest in the referenced property. This is a summary ' appraisal report, see attached scope for more details. The appraisal was completed according to the results of the Highest and Best Use analysis. The property is currently improved with a building containing less than 18,000 square feet, which is considered to be an underutilization of the site. The site contains 10.5 acres of land and the improvement utilized less than 5% of the site. The income approach was completed to support the highest and best use change. The income approach was not considered in the value conclusion of the site. The appraisal was completed utilizing the direct sales comparison approach with 6 comparable sales 4 of which are considered as very good comparable sales. Comparable sales 4 and 5 were included due to the location in West Hanover Township, but they required very large adjustment. I also included 4 competing listing which were not adjusted, they are included for information purposes only. I have included information on a parcel of land which is being assembled at the intersection of Route 22 and 39. I also acknowledged the land available on the north side of route 22. The three major projects that are under construction or about to begin construction were mentioned in the report. r I addressed the current economic conditions and how West Hanover Township does not appear to be having any negative effects of the slower economy. It is my opinion that the highest and best use of the property has changed, mainly due to the small building is considered to be an under utilization of the site. However, with the slotaer economy it taould be advisable to consider leasing the property until such time as a purchaser or a developer interested in assembling the properties expresses interest in the property. In the course of preparing this report, I have inspected the subject property, the neighborhood and comparable sales. In addition I analyzed other pertinent market data relevant to estimating the market value of the subject property. With consideration of the preceding and the attached report, and subject to the assumptions and limiting conditions therein, I have reached an opinion of the market value of the subject property according to the Highest and Best use analysis tahich is as a vacant site as of July 1, 2009. The complete summary report is attached. Respectfully Submitted ~'~"" Robert R. J es, SRA -iii- SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS LOCATION OWNER OF RECORD South east corner of Route 22 aka Allentown Blvd and Oak Grove Road, West Hanover Twp., Dauphin County PA PAC Industries, Lower Paxton Tocanship SITE DATA Total approx. 10.5 Acres ZONING: CH Commercial Highway IMPROVEMENTS One Stary commercial building, contributing no value to the site DATE OF APPRAISAL RIGHTS APPRAISED HIGHEST AND BEST LRND VALUE as is DIRECT SALES COMPARISON APPROACH Land Value as if vacant FINAL VALUE ESTIMATE July 1, 2009 Unencumbered fee simple estate To be developed for single family attached homes. -vii- $5,775,000 $5,600,000 $5,00,000 !File No_0710136.~ Page #2, Robert R. Jones 8 Associates 7800 Allentown Blvd. Harrisburg, PA 17112 October 21, 2007 Client Rocco Costabile 3015 Walnut St Hartisburg, PA 17103 Re: Property: 313 Baltimore Street Dillsburg, PA 17019 Borrower: Rocco Costabile Pile No.: 0710136 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 tkle of ownership. This repoR 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 wkh the Un'rform 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. k 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 Sincerely, Robert R Jones, SRA, GAA (File No_0710136LPage #3~ SUMMARY OF SALIENT FEATURES Subject Address 313 Baltimore Street Legal Descdption None provided, copy of tax map attached City Dillsburg COUrity York State PA Lp Code 17079 Census Tract 270025-0204.20 Map Reference 49620 Sale Price $ NIA Date of Sale N!A Bortower Rocco Costabile Lender/Cfierrt Client Rocco Costabile Size (Square Fee[) Price per Square Foot $ Location Suburban Age 1984 Condition Good Total Rooms Bedrooms Baths Appraiser Robert R Jones, SRA, GAA Date of Appraised Value 08.26.07 Opinion of Value $ 300,000 Form SSD2 - "WinTOTAL' appraisal software by a la mode, inc. -1-800-ALAMODE +-+ o 0 N d N ~~~ ~r M N N et O O 01 O M N M M ~ ~~ U W b4 bq ~~ •~.~ ~ w O O ~ ~~ q S` O O O 4 ,,.; 2 d' O O O ~ x U ~~ {y O ~ \ \ \ N w U ~ ~ N O O O ro -~ rw~w~ '." rl O v; O W ~'~"^ i.n h z Z ~' w m z .~. .~~ a ~ ~ < oQ x~ ~° aH z< o ~ O M w Z q4 w a' a p ~ E V` a ~ W Q N U q ~ r~ . ~ C ~ w ~ t-{ . . 4 ap r.{ ~z MN ~n x H z ~ w ~ ~ ao0o c00a `n r \ Q' `~ trt tp © ~ ~~ M ~ Q N W ~ J V N E -~ o r z a V W F- a 4 O y ~ er N tiQtD ' J ., 0 `y.L"F+ r{ O~ Mtn z~ \ ri r-i r p~ • a a 0 0 ~ o =C M H D OE' ~~nN ~. W m ~ w rn a ~r in a M ~ 00 '~`~ ~ ~ u D m v N 'a o a w a ~ ~Q to a~ en J W I- ~^ e-i M N a H ~ N N t0 ~"~ H r-! a ^t z a ~ -. O F- ~~?""' w ~ p'y C ~ ~ ~ s i- O 3 0 ~,~ 4~ ~r z ~ t - ¢c, ~~Up~ ~ ~ ~ z ~ 0 W ¢ ~~; °- ~ ~ u ~ x + ~ N H w W ~O V - v m N A F+m F ~~-~ :q w O s + t7 OOH z ~~ ~ ° a R V F- ~ z , N Q~ U a :r:::_ z: ~J -- r C~ z F ~ ~~ State Tax Equalization Board ,~ . ~ ~.. County Year All ~ y All ~ Go~ >~~ .: , COUNTY NAME 2009 BUCKS 10 9 I Count~• In;arna ,c,n I h1~ yet Values I Go^imon Lev ~ F2,tios I About UB Ccnta~*. Us Other LIRiCS Horse _....- I _______...._ I _ __......___ I ___.,._.._ (c) Copyngh[ 1999 STEB. _ ~ P~nnsy[varra 'CC~'~S CORE3ETT. C;OI'ERNOR Page 1 of 1 http://www. steb. state.pa.us/Commonmain.asp?OptionCounty=BUCKS&OptionYear=2009&submit 1=... 3/8/2011 - r ~ l - (L PAS AGRE@!PNP C~ PAC Il1705'~~2IE'S ~a p~cy].~nia ~ na~r^ShiP~ TABZE CF C~Tffi~TIS . P~ ARTICLE I Name and Principal Place of Business. .1 Section 1.1 Name .1 Section 1.2 Principal Place of Business. .1 ARTICLE II Purpose of Business .1 ARTICLE III Term of Partnership .1 ARTICLE IV Accounting Method .2 ARTICLE V Capital Contributions .2 ARTICLE VI Capital Accounts; Thawing Acoounts. .2 Section 6.1 Capital Accounts .2 Sectiom 6.2 Thawing Accounts .3 Section 6:3 Balances in Drawing Accrnnt. .3 ARTICLE VII Profits or mosses .3 ARTICLE VIII Cash Flow .4 Section 8.1 Definition of Cash Flow. .4 Section 8.2 Distributions of Cash Flow .4 ARTICLE IX AcT[ninistrativ+e Provisions .5 Section 9.1 Voting • 5 Section 9.2 Time Devoted to Partnership. .5 Section 9.3 Bank Accounts. .5 Section 9.4 Restrictions on Partners .5 ARTICLE X Withdrawal or Death of a Partner. - •6 Section 10.1 Withdrawal of Partner. .6 Section 10.2 Death. .7 Section 10.3 Option Upon Involuntary Transfer .7 Section 10.4 Exercise of Options and Effect of Non-exercise of Options. .8 Section 10.5 Effect of Withdrawal or Death. .8 Section 10.6 Sale or Encimibrance of Partnership interest .8 -i- ARTICLE XI Terms of Payment to a Withdrawing or Deceased Partner . 9 Section 11.1 Valuation - In General 9 Section 11.2 T~~; sal of C~_rta.in Partnership Properties 9 Section 11.3 Expeditious Deterntinaticn of Valuation . .10 Section 11.4 Balance in Drawing Accounts. .10 Section 11.5 Value by Agrearent .10 ARTICLE XII Terms of Payment to a Withdrawing or Deceased Partner .11 Section 12.1 Payments to a Withdrawing or Deceased Partner .11 section 12.2 Collateral .12 Section 12.3 Closing . .12 Section 12.4 Interest on Payments .12 section 12.5 Indstmification. .13 ARTICLE XIII Insurarioe on Lives of Partners. .13 Section 13.1 Amount of Tn~~rance, .13 Section 13.2 Interests in Face Amount of Tn~iranCe . .13 ARTICLE XIV Voluntary Dissoluticai .14 5ecticrn 14.1 Winding Up the Partnership .14 Sectioai 14.2 Gains or IASSes in W11'~~ng Up. .14 Section 14.3 Balance O~aed by a Partner. .15 ARTICLE XV Waiver of Right to Court Decree of Dissolution .15 ARTICLE XVI Arbitration .15 ARTICLE XVII Execution in Counterparts .16 - ii - (S~ PAC II17U3IIt~S THIS PARTNERSHIP AGREEMEN'T' is effective this ~q 7~ day of U C(Ol~~/~ 1988, by and among Philip F. Gostabile, Rocco A. Costabile, and Frank M. Costabile. ARTICLE I Namme and Pacincitaal. Place of Business Section 1.1 Name - Zhe partnership shall operate under the name of PAC Il~C1S`iRIES . Section 1.2 Principal Place of Business - The principal place of business shall be at 5341 Jaycee Avenue, Harrisburg, Pennsylvania 17112, with such other places of business as may be agreed upon by the partners from time to time. ARTICi~ II Puiyose of Busies The partnership shall engage in the business of o~nership, rn„n-hale, leasing, management and sale of real estate. ARTIQE III Zpn~n of }~i,n This partnership agreatient is effective as of the day and year first above written arxi the partnership shall continue tmtil t-A,~m; Hated as hereinafter provided. BRFiCIR N the partnership shall keep its accounting records and shall report its income for incarie tax purposes based on the accounting method selected by the partners by vote in accordance with Section 9.1 hereof. ~car~ v . Capital Zhe present capital of the partnership shall be as set forth in the R-1 for each partner for year end Decac+ber 31, 1987, as attached hereto and by reference herein incorporated. Zhe percentages of the respective partners in the capital of the partnership are as follows: Philip F. Costabile 79.9 Rocco A. Costabile 12.77$ Frank M. Costabile 7.33 ARiZCI~ VI (;apital Aoooimts : Ea~rincl Aooamts Section 6.1 Capital Accowzts - An individual capital account shall be maintained for each partner. 'Ihe capital interest of each partner sha11 consist of his origmn~l contribution of capital, increased by (1) additional capital contributions and (2} any credit balances transferred from that partner's drawing accrnmt to his capital account and decreased by (a) distributions in reduction of na~PrShip capital and (b) the partner's share of partnership losses, if charged to the capital accounts of the 2 Section 6.2 Drawirw Acoonints - An individual drawing account shall be maintained for each partner. All withdrawals' by a partner shall be charged to that partner's drawing account. Withdrawals during the year shall be limited to such amoLUits as the partners shall detPaznine from time to time. Each partner's share of any partnership net loss shall be charged to that partner's drawing account, .unless the partners agree to charge the loss to the capital accrnmts of the partners. Each partner's share of partnership profits shall be credited to that partner's drawing account. The partners may determine by such wte to transfer to partnership capital all or any portion of the credit balances in the drawing accounts of the partners. Any amounts transferred shall be in the proportions of the partners' interests in profits or losses of the partnership. Section 6.3 Balances in Drawinct Accounts - A credit balance in a partner's drawing account shall constitute a liability of the partnership. A debit balance in a partner's drawing account, whether occasioned by drawings in excess of his share of partnership profits or by charging that partner for a share of partnership loss, shall constitute an obligation of that partner to the partnership repayable within ten (10) days following demand. It shall not reduce the partner's interest in the capital of the Partnership ARL'ICLE VII Pxvfits or Losses Net profits or net losses of the n~~-+-nP~hip shall be credited or charged to the partners as follows: . Philip F. Costabile 33.34$ Rocco A. Costabile 33.33 Frank M. Costabi.le 33.33 3 .~ ~ , AR7.ZCL$ V>~ Cash Flaw Section 8.1 Definition of Cash Flow - Cash Flow shall be the net profit or net loss of the partnership determined in accordance with generally accepted acca~uzting principals, adjusted as follows: 1. Depreciation of buildings, improvements and personal property of any type shall not be considered a deduction. 2. Principal payments on all loans, mortgages, oonciitional sales contracts and other indebtedness shall be considered a deduction. 3. There shall be deducted such amonmt as the partners determine is needed as a reasonable resexve ~;~d to conduct the partnership business or to pay anticipated future expenses. 4. Any other cash expenditures which have not been deducted in determining net profits or net losses shall be considered a deduction. 5. There shall be added other cash receipts of the partnership which have not been taken into account in dete~rnvning net profits or net losses including, but not limited to, proceeds from any refinancing of partnership loans. Section $.2 Distribution of Cash Flow - At least once a year the cash flow of the partnership, if any, shall be distributed to the partziers on the basis of their relative interests in profits and losses. 4 ARFICI~ I% h~ni_n; ~r_rative Provision Section 9.1 Voting - Each partner shall have a voice in the management of partnership business equal to his relative interest in the partnership's profits and losses. Partnership action shall be taken on the affirmative vote of partners holding a total of at least a Sixty (60$) percent interest in the partnership's profits and losses. Section 9.2 Time Devoted to Partnership -Each partner shall devote such time to the partnership business as necessary to provide supezvision aver the partnership operations. The parties anticipate that they will devote substantially equal amounts of time to the partnership. Section 9.3 Bank Accounts -One or more partnership accounts shall. be established and checks on the accounts must be signed by at least one (1) of the partners . Section 9.4 Restrictions on Partners - No partner, without the consenting vote of the partnership as described in Section 9.1, shall: 1. Borrow or lend money on behalf of the partnership. 2. Execute arty deed, rmrt~gage, bond, lease or similar doc~m~ent . 3. Assign, transfer, or pledge any debts due the partnership or release any debts due the partnership, except upon payment in full. 4. Comprcanise any claim due to the partnership or submit to arbitration any dispute or controversy involving the partnership. 5. Sell, assign, Pledge, or mortgage the partner's interest in the partnership. 5 6. Convey or purport to convey any partnership rr~mrrpr-t-y or interest therein. ART'ICT,E % Witl~rdwal az Daath of a pa,~-ter Section 10.1 Withdrawal of Partner - A partner may withdraw from the n3rrl,P,xhip after giving ninety (90) days' advance written notice to the rr~na i nag partners of his intention to withdraw, whereupon (subject to the terns hereof) each *~ini„~ partner may, within thirty (30) days of the receipt of the notice of withdrawal by the last of the rem? nag partners to receive such notice, exercise an option to purchase that portion of the withdrawing partner's partnership interest which the partnership interest owned by such remain~*~ partner at the time of his receipt of the notice is of the total partnership interests then owned by all ~"'ng parbners. The purchase option granted in this paragraph is hereinafter sanetimes referred to as the "primary option". If a ,~na;n;ng partner fails to exercise his primary option to purchase a portion of the withdrawing partner's partnership interest, each other rF~; n; n~ partner Who is granted and who exercises the primary option may, within fifteen (15) days after the expiration of the thirty (30) day primary option period provided for above, exercise an option to purchase the partnership interest with respect to which such partner has failed to exercise his primary option (hereinafter "the option interest"). In the case of a single ram-~in;n~ partner, his option shall be to purchase all of the option interest . In the case of two or mare „ana; n; n~ partners, each rr-ana i n i nq partner' s option shall be to purchase the portion of the option interest which bears the same proportion to the total option interest as 6 the partnership interests owned by each such ~maining partner at the time of the receipt of the notice provided hereinabove bears to the total partnership interests then owned by all such rgnaining partners; Provided that all such rnlre; nag partners may by agrearnnt ammg themselves determine the proportions to which sane or all of their number may exercise the option granted in this paragraph. Zhe purchase option granted by this paragraph is sometimes hereinafter referred to as "the secx~aLy option" . Z'he option (primary ar secorxiary) price and ter-LS shall be as provided in Articles XI and XiI hereof. 'IIie partners who are granted primary and secondary options to purchase the partnership interest under the' foregoing Paragraphs must in the aggregate, exercise their options to purchase all of the partnership - interest of the withdrawing partner or forfeit their pmrchase options entirely. If a withdrawing partner dies prior to closing of the sale and purchase pars-cant to any opt ion e~cercised by any ~; n; ng partner Lnxier this Section 10.1, his partnership interest shall be the subject to sale and purchase under Section 10.2 hereof. Section 10.2 Death -Upon the death of a partner, his estate shall sell and the partnership shall purchase the deceased partner's partnership interest, for the price and under the terns provided in Articles XI and XII hereof . Section 10.3 g7tion Upon Involuntary Transfer - If other than by reason of a partner's death, his partnership interest is transferred by operation of law to any person other than the partnership {such as but not limited to a partner's trustee in banl~vptcy, a pn~rchaser at a creditor's or 7 court's sale or the guardian or conservator of an incasg~etent partnQ_r), the -~r~3; nag partners, as aYmng themselves, within thirty (30) days of 'the receipt by the last of them to receive actual notice of the transfer in the case of a primary option, and within fifteen (15) days as said in the case of a secondary option, may exercise an optical to purchase all but not less than all of the partnership interest so transferred in the same manner and upon the same teens as provided in Section 10.1 hereof. Section 10.4 Exercise of Option and Effect of Non-F~ercise of Orstions The partners who exercise the primary or secondary pn~rcllase options hereinabove provided shall do so by delivery of a written notice of their exercise of the option within the teens provided in said paragraphs to the withdrawing partner in the case of an option provided in-Section 10.1 or to the transferee in the case of an option provided in Section 10.3 and to the rc3nainin~ partners in any case. If the purchase options are forfeited or are not exercised in ccanpliance with Sections 10.1 or 10.3, then the withdrawing partner's partnership interest shall thereafter be transferrable free of the provisions of this AgreaY~nt. Section 10.5 Effect of Withdrawal or Death -The partnership shall not be dissolved by the withdrawal or death of a partner. Section 10.6 Sale or Encumbrance of Partnership Interest - No Partner shall sell, transfer, encumber, pledge or otherwise dispose of all or any portion of his partnership interest, except as prrnrided in this Agreement, absent the written consent of all rara?n;n~ parties hereto. 8 ARTICLE %I valuation of the lntet~est of a Ti~ithrira~iioa or Deceased ~,-+-•~p*- Section 11.1 Valuation - In General - Subject to the provisions of this Article, the value of a withdrawing or deceased partner's interest (collectively referred to as "partner"), in the partnership property, adjusted to reflect appraised values as provided in Section 11.2, shall be the stun of the partner's capital account and proportionate share of accrued net income or loss of the partnership to the date of the partner's withdrawal or death, unless previously included in the partner's drawing account . Section 11.2 Appraisal of Certain Partriership Properta.es - All partnership assets shall be valued at book value except that the appraised value of any tangible personal Property and real prcperty shall be substituted for book value. The difference between the total appraised value and the book value of any tangible personal property shall increase or decrease the partners' capital accounts in the pro~.ortions of their interests in profits or losses of the partnership specified in Article VII. The appraised value shall be dete~nined as of the date of withdrawal or death of the partner and shall be made by an appraiser selected by agrearnnt between the purchasing partner. or partnership, as the case may be, and the withdrawing partner or the personal representative of the deceased Partner. If they cannot agree on an appraiser, then the appraiser shall be that Manber of the Appraisal Institute ("M ~anber") as then appointed by the President of the Harrisburg Chapter of that Institute, and upon failure of 9 such appointment, by that Member appointed by the President Judge of Zhe pauphin- County Court of Ccnmati Pleas. No value shall be attributed to partnership goodwill in the appraisal made under this subsection. 'II~e oost of any appraisal shall be shared equally by the purchasing partner or the partnership, as the case may be, on one hand, and the withdrawing partner or the personal representative of the deceased partner, on the other hand. Section 11.3 seditious Determination of Valuation - 4he parties arxi their assigns and successors in ingest agree that they will proceed as expeditiously as possible in deteaznining the value of the interest of the withdrawing or deceased partner. Section 11.4 Balance in Drawing Acco~mt - ~e balance in the drawing account of a withdrawing or deceased partner is to be treated as an obligation of the partnership to the partner or an obligation of the partner to the partnership. Any amount cued, whether to the partner or to the partnership, as reflected in the drawing acco~mt of a withdrawing or deceased partner shall be paid within thirty {30) days after the withdrawal or death of the partner. Section 11.5 Value by Agreement - 7~e partners may, at any time aril. from time to time, determine the appraised value of the partnership PropPr-r;es described in Section 11.2 above by w~animously executing and f i]ing with the partnership a written instr~nrnnt wherein such deterntination is set forth, whereupon, for the period of time stated in the instmm~ent the value so determined shall supersede the provision in Section 11.2 (for independent appraisals ar~d the value agreed herein shall adjust book value as therein described), but shall not supersede Section 11.4. Such written instnmient may but need not read as follows 10 "~'he ur~lersic~ned, being all the parties to that certain Pa~rtne!rGh; p Agreement, dated G C 'f ` f ~ , 1988, do hereby, pursuant to Section 11.5 of said Agree:~nt, agree that between January 1, 1987 and Decembex 31, 1988, both dates inclusive, the aggregate appraised value of all tangible personal property and real property of the PAC Industries Partnership shall be an amount equal to Seven Hundred Fifty Zhousarxi and 00/100 ($750,000.00) Dollars." ARTI(.[E %II Ztnas of Pavmerit to a Wig ar . Deceased Pa*-~-s+p!*- Section 12.1 Payments to a Withd*~ ncr or Deceased Partner - The payment for the value of a partner's interest in the partnership, as determined under Article XI, shall be made by the purchaser in twelve (12) equal quarterly payments (inclusive of interest as hP.re;naftsr defined). with the first .payment due at closing of the transfer, provided however, in the event of a deceased partner, if any proceeds of any insurance awned by the partnership anti described in Article XIII hereof is received on the life of the deceased partner, the amount so received by the partnership shall be applied against the purchase price, to the extent thereof, and only the balance of the purchase price, if any, shall be paid in installn~nts . The purchase price may be prepaid at any time, in whole or in girt and without penalty or praniiun, but any partial prepayment shall be applied against installments in the reverse order of maturity. 11 Section 12.2 Collateral - Any portion of the purchase price for a ' partnership interest acquired under the provisions hereof not paid ' ;ately upon closing of transfer of the interest shall be evidenced by the prami_ssozy note of the purchaser, which note shall authorize confession of judgment in the event of default and otherwise be in form acceptable to the withdrawing partner or personal representative of a deceased partner. If the purchaser is the partnership, the note shall be secured by a mortgage ~ the partnership real property and if the purchaser is an individual partner, the note shall be secured by a collateral assignment of his partnership interest (that previausly held as well as that acquired in such transaction), which assignment shall be in form acceptable to the withdrawing partner or personal representative of a deceased partner. Section 12.3 Closing - In the event of the exercise of any option to use by a rr~na;n;ri~ partner, closing shall occur within forty-five (45) days of exercise. In the event of the death of a partner, closing shall occur within ninety (90) days of the partner's death. In each instance, the precise time and location of closing shall be set forth in a written notice fran the purchaser to the seller. Time is of the essence hereof. Section 12.4 Interest on Payments -Payments shall bear a fixed rate of interest over the entire teen of any obligation at the Mid-Tenn Applicable Federal Rate issued by the Internal Revenue Service under Section 1274 (d) of the Internal Revenue Code for the month preceding the month in which the option or obligation causing the transaction is triggered by notice of withdraw, non-exercise of any primatiy option or death of a partner. In no event shall the interest rate determined under the preceding sentence exceed the max; n'~+TM~ lawful rate of interest that may be charged 12 under the laws of the Cca~am~nwealth of Pennsylvania. Section 12.5 Indemnificati-on - Zhe purchaser shall deliver to the withdrawing partner or to the personal representative of a deceased partner an agrearient indemnifying the withdrawing partner or the estate of a deceased partner againGt any existing, future, 3rnohm and unlanown liabilities of the partnership. Neither the partnership nor any purchaser shall be liable to the estate of a deceased partner for any estate, inheritance, or succession taxes of such estate, whether by reasan of any ?n~,rance proceeds or otherwise. lA~tL'ICLB ~ Insuzanoe on Lives of Partners Section 13.1 .Amount of ~~~rance -The partnership may purr_t~ase- and own policies of life insurance an the life of each partner in respective amounts proportionate to each partner's interest in partnership profits and losses. The partnership shall be the beneficiary under any such policies. Section 13.2 Interests i.rl Face Amount of Tn~~rance -The successor in interest of a deceased partner shall have no interest in the proceeds of insurance an the life of the deceased partner. The excess of the proceeds over the cash surrender value of the policies shall be allocated to the capital accounts of the partners, exclusive of the deceased partner, in Proportion to each partner's interest in partnership profits and losses. 13 A~LZC[E %IV Volga i Dissolution ' Section 14.1 Winding Up the Partnership - On any voluntary dissolution, the partnership shall imrod.iately oatmence to wind up its affairs. The partners shall continue to share profits and losses during liquidation in the same proportions as before dissolution. The proceeds from liquidation of partnership assets shall be applied as follows: 1. 2b payment of debts of the partnership, other than to 2. Zb payment of amounts owed to partners for amounts borYr~aed from and not repaid to partners and for unpaid salaries, if any. - 3. 7.b return of the capital contributions of the partners - as reflected in their respective capital amounts. 4. Zb the partners in proportion to their interests in partnership profits and losses. Section 14.2 Gains or Losses in Winding Up -Any gain or loss cal disposition of partnership properties in the process of liquidation shall be credited or charged to the partners in the proportion of their interests in profits or losses. Any property distributed in kind in the liquidaticai shall be valued and treated as though the property were sold and the cash proceeds were distributed. the difference between the value of Property distributed in kind and its book value shall be treated as a gain or loss on sale of the property-and shall be credited or charged to the garlners in the proportions of their interests in profits or losses. 14 Section 14.3 Balance Oared by a Partner - A debit balance for arty reason in a partner' s -capital acorn~nt shall represent an obligation fran that partner to the partnership, to be paid in cash within sixty (60) days after written demand by the partnership. ~'ICLE %V Waives of Right to Court DeQ-'ee of Dissoluticn - the partziers agree that irreparable damage would be done to the goodwill and reputation of the firm if any partner should bring an action in court to dissolve this partnership. Care has been taken to provide fair arxi just payments to a partner whose relation with the fine is t-p,-rn~ Hated for any reason. Accordingly, each_ of the parties accepts the provisions made ~~ -this ~,-t~prsr; p agreer~nt- as his sole entitlement on tenni~ation of the partnership relationship. Each party hereby waives and renounces all rights to seek a court decree of dissolution or to seek the appointment by a court of a liquidator for the partnership. ARrICIE RVI Arbitration If any controversy of claim arising out of this partnershi-p agre~nt cannot be settled by the partziers, the controversy or claim shall be settled by arbitration in accordance with the rules of the American Arbitration Association then in effect, and judgment on the award may be entered in any court having jurisdiction. Any arbitration held pursuant hereto shall be held in Harrisburg, Pennsylvania- 15 ARTIQE %~Ta E~eaitian oaf (ya~te2va*~~ 'T'his Agregnent may be executed in a nimiber of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deatyad to be an original and all of which taken together shall constitute one and the same instnu~nt. IN ~nTI`II~;SS ~RE~, the partners have signed this Partnership Agree~~t on the day and year first above written. ~. ~ G- ~~- ~~ ~ ~ SEAL) SEAL} 16 A~`1~ C!F PC~iN~' I, wife of PIiiLIP F . COSTABILE, have - read the foregoing Agreanent and I agree to the provisions relating to the sale of a deceased Partner's interest and I do hereby agree that the provisions shall be binding on me in the event of my husband's death during the terns of and while this Agrearnnt may ~'~;n in effect. This acceptance is executed by me at the same time my husband is executing the said Agent. ~~u, ~~ . ,, A~'~E Cdr AC~tffi~ I, wife of ROCCO A. ~IABILE, have read the foregoing Agreement and I agree to the provisions relating to the sale of a deceased Partner's interest and I do herPl~y agree that the provisions shall be binding on me in the event of my husband's death during the terns of and while this Agreement may renain in effect . Zhis acceptance is executed by me at the same time my husband is executing the said Agx~ea~nt . / /, '~ ~ ~ AC~t~ I, wife of FI2ADIIC. M. O~STABII,E, have read the foregoing Agresnent and I agree to the provisions relating to the sale of a deceased Partner's interest and I do hereby agree that the provisions shall be biruiin~ on me in the event of my husband's death during the term of and while this Agrearrent may ranain i.n effect. ~i.s acceptance is executed by me at the same time my husband is executing the said Agreanent. ~~ .~~ Form 1065 Department of the Treasury Internal Revenue Service A Principal business activity U.S. Return of Partnership Income For calendar year 2009, or tax year beginning ,ending Name of partnership Use the REAL ESTATE iael. AC INDUSTRIES PARTNERSHIP B Principal product or service Other- Number, street, and room or suite no. If a P.O. box, see the instructions. COMM' L & RES . print 5341 JAYCEE AVENUE T . F! ~ C T N('S or City or town, state, and ZIP code C Business code number OMB No. 1545-0099 2009 D Employer identification number 23-1895159 E Date business started 06/12/1972 F Total assets 531110 ARRI5B R PA 17112 $ 1 381 424. G Check applicable boxes: (1) Initial return (2) Final return (3) Name change (4) Address change (5) 0 Amended return (6) 0 Technical termination -also check (1) or (2) H Check accounting method: (1) 0 Cash (2) ®Accrual (3) 0 Other (specify) - I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year - 3 J Check if Schedules C and M-3 are attached ................................................................................................................................................... 0 Caution. Include only trade or business income and expenses on lines la through 22 below. See the instructions for more information. ....... 1 a Gross receipts or sales 1a ............................................................................. b Less returns and allowances ib is 2 line 8) Cost of goods sold (Schedule A 2 , 3 . ....... Subtract line 2 from line ic rofit Gross ................... 3 ~, c 4 . ......................................................... ........... . p ......... and trusts (attach statement) estates Ordinary income (loss) from other partnerships ....................... 4 5 ............. , , ................. Net farm profit (loss) (attach Schedule F(Form 1040)) ....................... 5 ............................................ 6 ............. . line 17 (attach Form 4797) Part II ain (loss) from Form 4797 Net ....................... 6 . ............................... , , g 7 Other income (loss) (attach statement) .............. • .... 7 ..................................................................... ............. 8 Total income loss .Combine lines 3 throw h 7 ......................................................................... ....................... 8 ~ 9 ................. Salaries and wages (other than to partners) (less employment credits) ....................... 9 10 -.-. • ........................ .................... Guaranteed payments to partners ..... . .............. 10 ro Y 11 .......................................................................... .............. airs and maintenance Re ....................... 12 ---,-....,- .............................................................................. p ......... Bad debts ....................... 12 ................................................................................................................... y 13 ..................... Rent ....................... 13 0 14 ............................................................................................................. ................. Taxes and licenses ....................... 14 ............................................................................................... 15 .................................................................... Interest ....................... 15 ~ ........................................................... 16 ......... attach Form 4562) a Depreciation ~f required 16a .......................................... , . .......... b Less depreciation reported on Schedule A and elsewhere on return 16b 16c m 17 -•-_•• ......... . .......... ......... De letion Do not deduct oil and as de letion. ( 9 P ) ........................ 17 y 18 .. ................................................ P ............... etc Retirement plans ........................ 18 H 19 ................................................................................ ............. , ............ . ee benefit programs lo Em ........................ 19 c . ..................................................................................... p y 20 Other deductions (attach statement) ................ ~ ........................... ............................................................ ........ 21 Total deductions. Add the amounts shown in the far ri ht column for lines 9 throw h 20 .................. ........................ 21 22 Or dina business income loss .Subtract line 21 from line 8 ...................................................... ........................ 22 0 . Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of m correct, and complete. Declaration of preparar (other than general partner or limited liability company member manager) is based on all inform y knowledge and belief, it is true, ation of which preparer has any Sign knowledge. May the IRS discuss this return Here I ' ' with the preparer shown below (see instr.)? Date Signature of general partner or limited liability company member manager ® es No Preparar's Date Check if - O Preparer's SSN or PTIN P 0 0 2 2 917 4 Paid signature self-employed Prepare r's fser(°' SELIGMAN FRIEDMAN & CO. P.C. YOUS E'" 23-1311005 „~, n,,,,, i employed), 10 2 7 MTTMMA ROAD Phone no. '] 17 7 61- 0 211 - I ziP soda"~~ WORMLEYSBURG PA 17 0 4 3 For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Form 1065 (2009) sftoot LHA fz-is-os 1 2 3 4 5 6 7 8 9a b Check this box if there was a writedown of "subnormal" goods as described in Regulations section 1.471-2(c) - U ................................................ c Check this box if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) ........... ................ ..... .. . - 0 d Do the rules of section 263A (for property produced or acquired for resale) apply to the partnership? ............................................. ~ Yes 0 No e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? .......................... .......... ~ Yes 0 No If "Yes "attach ex lanation. Schedule B Other Information 1 What type of entity is filing this return? Check the applicable box: Yes No a ®Domestic general partnership b 0 Domestic limited partnership c 0 Domestic limited liability company d ~ Domestic limited liability partnership e 0 Foreign partnership f ~ Other- 2 At any time during the tax year, was any partner in the partnership a disregarded entity, a partnership (including an entity treated as a partnership), a trust, an S corporation, an estate (other than an estate of a deceased partner), or a nominee or similar person? ........................... X 3 At the end of the tax year: a Did any foreign or domestic corporation, partnership (including any entity treated as a partnership), trust, ortax-exempt organization own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital of the partnership? For rules of constructive ownership, see instructions. If "Yes;' attach Schedule B-1, Information on Partners Owning 50% or More of the Partnership ................................................... $ b Did any individual or estate own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital of the partnership? For rules of constructive ownership, see instructions. If "Yes;' attach Schedule B-1, Information on Partners Owning 50% or More of the Partnership ............... X 4 At the end of the tax year, did the partnership: a Own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of stock entitled to vote of any foreign or domestic cor oration? For rules of constructive ownership, see instructions. If "Yes;' com lete i throw h iv below .................................... X (i) Name of Corporation (ii) Employer Identification Number (if any) (iii) Country of Incorporation (~v) Percentage Owned in Voting Stodc b Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital in any foreign or domestic partnership (including an entity treated as a partnership) or in the beneficial interest of a trust? for rules of constructive ownership, see instructions. If "Yes;' com lete i throw h v below ........................................................................................................................... X (i) Name of Entity (~I) Employer Identification Number (f any) (iii) Type of Entity (iv) Country of Organization (V) Maximum Percentage Owned in Profit, Loss, or Capital Form 1065 (2009) 911011 12-15-09 Cost of Goods Sold I 23- Inventory at beginning of year .................... ................................................... Purchases less cost of items withdrawn for personal use ...................................... Cost of labor Additional section 263A Costs (attach statement) ............................................ Other costs (attach statement) .................................................................... Total. Add lines 1 through 5 .......................................................................... Inventory at end of year ................................................................................ Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 ._.._... Check all methods used for valuing closing inventory: (i) 0 Cost as described in Regulations section 1.471-3 (ii) ~ Lower of cost or market as described in Regulations section 1.471-4 (iii) ~ Other (specify method used and attach explanation) - 2 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310_2 Form 1065 2009 PAC INDUSTRIES PARTNERSHIP 23-1895159 Pae3 Yes No 5 Did the partnership file Form 8893, Election of Partnership Level Tax Treatment, or an election statement under section 6231(a)(1)(B)(ii) for artnershi -level tax treatment, that is in effect for this tax ear? See Form 8893 for more details ............................................................... X 6 Does the partnership satisfy all four of the following conditions? a The partnership's total receipts for the tax year were less than $250,000. b The partnership's total assets at the end of the tax year were less than $1 million. c Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return. d The partnership is not filing and is not required to file Schedule M-3 ...................... X If "Yes,° the partnership is not required to complete Schedules L, M-1, and M-2; Item F on page 1 of Form 1065; or Item L on Schedule K-1. 7 Is this artnershi a ublicl traded artnershi as defined in section 469 k 2 ? ....................................................................................... X 8 During the tax year, did the partnership have any debt that was cancelled, was forgiven, or had the terms modified so as to reduce the rinci al amount of the debt? ............................. X 9 Has this partnership filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide information on any ............................................................................................................ re ortable transaction? ...................................................... X 10 At any time during calendar year 2009, did the partnership have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements for Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts. If "Yes;' enter the name of the foreign county . - X 11 At any time during the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If "Yes," the partnership may have to file Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. See instructions ........................................................................................................................................................................... X 12a Is the partnership making, or had it previously made (and not revoked), a section 754 election? _________________________ __ X See instructions for details regarding a section 754 election. b Did the partnership make for this tax year an optional basis adjustment under section 743(b) or 734(b)? If "Yes;' attach a statement showing the computation and allocation of the basis adjustment. See instructions .................................................................................................. X c Is the partnership required to adjust the basis of partnership assets under section 743(b) or 734(b) because of a substantial built-in loss (as defined under section 743(4)) or substantial basis reduction (as defined under section 734(d))? If "Yes;' attach a statement showing the computation and allocation of the basis ad'ustment See instructions .............................................................................................................................. X 13 Check this box if, during the current or prior tax year, the partnership distributed any property received in a like-kind exchange or contributed such ro er to another ent' other than entities wholl -owned b the artnershi throw hout the tax ear ............................................. - 14 At any time during the tax year, did the partnership distribute to any partner atenancy-in-common or other undivided interest in partnership ro er .................................................................................................................................................................................... X 15 If the partnership is required to file Form 8858, Information Return of U.S. Persons With Respect To Foreign Disregarded Entities, enter the number of Forms 8858 attached. See instructions - 16 Does the partnership have any foreign partners? If "Yes;' enter the number of Forms 8805, Foreign Partner's Information Statement of Section 1446 Withholdin Tax, filed for this artnershi . - X 17 Enter the number of Forms 8865 Return of U.S. Persons With Res ect to Certain Forei n Partnershi s attached to this return. Designation of Tax Matters Partner (see instructions) Enter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: Name of Identifying designated TMP - ROCCO A COSTABILE number of TMP - 175-40-9493 If the TMP is an entity, name of TMP Phone representative - number of TMP - Address of - BOX 5 2 0 5 designated TMP GRANTVILLE , PA 17 0 2 8 Form 1065 (2009) ai~azi iz-is-oa 3 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310 2 Form 1065 2009 PAC INDUSTRIES PARTNERSHIP 23-1895159 Pa e4 Schedule K Partners' Distributive Share Items Total amount 1 Ordinary business income (loss) (Page 1, line 22) .................................................................................... . 1 0 . 2 Net rental real estate income (loss) (attach Form 8825) ........................S.EE...S.TATEMENT...1.......... 2 7 4 3 6 2 . 3 a Other gross rental income (loss) ............................................................ 3a b Expenses from other rental activities (attach statement) ..- ..... ......... 3b c Other net rental income (loss). Subtract line 3b from line 3a ........................................................................ 3c w 4 Guaranteed payments ........................................................................................................................... 4 J 5 Interest income ............................................................................. S.EE...STATEMENT...2.......... 5 617 . ~, 6 Dividends: a Ordinary dividends ........................................ .... .................................................. 6a ~ o b Qualified dividends 6b ......................................................... c 7 Royalties .............................. ......................................................................................................... 7 8 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) ............................................................ 8 9 a Net long-term capital gain (loss) (attach Schedule D (Form 1065)) ............................................................ 9a b Collectibles (28%) gain (loss) .................................................................. 9b c Unrecaptured section 1250 gain (attach statement) ................................. 9c 10 Net section 1231 gain (loss) (attach Form 4797) ....................................................................................... 10 11 Other income loss see instructions Type - 11 12 Section 179 deduction (attach Form 4562) ............................................................................................. 12 N ~ o 13 a Contributions ............................... . ........................................................................... ... 13a 3 b I nvestment interest expense ............................. ..................................... .......... 13b ~ c Section 59(e)(2) expenditures: (1) Type - (2) Amount- 13c 2 ~ d Other deductions see instructions T e - 13d ,~ o„ 14 a Net earnings (loss) from self-employment ................................................................................................ 14a 0 . b Gross farming or fishing income ........................................................................................................... 14b w c Gross nonfarm income ........................................................................................................................ 14c 15 aLow-income housing credit (section 42(1)(5)) ............................................................................................. 15a bLow-income housing credit (other) ------------------------- ................................................................................ 15b H v c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) ................................................... 15c L v d Other rental real estate credits (see instructions) Type - 15d e Other rental credits (see instructions) Type - 15e f Other credits see instructions T e - 15f 16 a Name of country or U.S. possession - b Gross income from all sources .......................... .---- 16b c Gross income sourced at partner level ...................................................................................................... 16c w c Foreign gross income sourced at partnership level ~ d category - e General category .._._- - f Other ..--.. - 16f c Deductions allocated and apportioned at partner level t= g Interestexpense- h Other ......................................................... - 16h ~ Deductions allocated and apportioned at partnership level to foreign source income '- c Passive i category - j General category ..---. - k Other -...-. - 16k °' I Total foreign taxes (check one): - Paid 0 Accrued 0 ............................................................... 161 mReductionintaxesavailableforcredit(attachstatement) ................. .-.....-.---..-...._----- ................................. 16m n Other forei n tax information attach statement ....................................................................................... 17 a Post-1986 depreciation adjustment ......................................................................................................... 17a 2 6 0 8. x y ~~ E b Adjusted gain or loss ........................................................................................................................... 17b c ~~ c Depletion (other than oil and gas) ............................................................................................................ 17c ~~ d Oil, gas, and geothermal properties -gross income ................... ................................................................. 17d agg a Oil, gas, and geothermal properties -deductions .................................................. -.......... 17e f Other AMT items attach statement ...................................................................................................... 17f 18 aTax-exempt interest income ...................................... . .... ................................................................ 8a ~ o b Other tax-exempt income ............................................. ......................................... ............................ 18b c Nondeductible expenses ........................................................................................................................ 18c ~ o 19 a Distributions of cash and marketable securities ............................................ ............................................. 19a 151 6 81. c b Distributions of other ro erty ............. P P ... ............................................................................................. 19b 20 a Investment income ......... ............................................................................................................ 20a 617 . p b Investment expenses ..................................................................... ~ -- ............ - 20b c Other items and amounts attach statement .......................................................................................... siioai ~z-is-os Form 1065 (2009) 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310 2 Form 1065 (2009) PAC INDUSTRIES PARTNERSHIP 2 3 -18 9 515 9 Paoe 5 Anal sis of Net Income Loss 1 Net income (loss). Combine Schedule K lines 1 throw h 11. From the result, subtract the sum of Schedule K, lines 12 throw h 13d, and 161 ............... 1 7 4 9 7 9 . 2 Analysis by (i) Corporate (ii) Individual (active) (iii) Individual (passive) (iv) Partnership (v) Exempt organization (vi) Nominee/Other partner type: a General partners 7 4 9 7 9. b Limited partners_ Schedule L Balance Sheets er Books Be innin of tax ear End of t ax ear Assets a b c d 1 Cash ................................................... 3 2 14 0 . 2a Trade notes and accounts receivable 9 8 7 5 . 13 3 3 5 . b Less allowance for bad debts .................. 9 8 7 5. 13 3 3 5. 3 Inventories 4 U.S.governmentobligations ..................... 5 Tax-exempt securities ........................... 6 Other current assets (attach statement) _.. STATEMENT 3 2 3 9 2 7 . 21 181. 7 Mortgage and real estate loans ............... 8 Other investments (attach statement) .._._. TATEMENT 4 51 213. 10 3 9 3 . 9a Buildings and other depreciable assets .. 1 8 5 6 2 8 8. 1 8 6 0 7 8 9. b Less accumulated depreciation _._......... 8 2 9 7 3 7. 1 0 2 6 5 51. 8 8 4 5 6 0. 9 7 6 2 2 9. 10a Depletable assets b Less accumulated depletion ..................... 11 Land (net of any amortization) .................. 3 2 6 7 9 6. 3 2 6 7 9 6. 12a Intangible assets (amort¢able only) ..,...,_. 14 9 9 8 . 14 9 9 8 . b Less accumulated amortization ............... 14 9 9 8. 14 9 9 8. 13 Other assets (attach statement) ............... TATEMENT 5 1 350. 1 350. 14 Total assets .......................................... 1 4 3 9 712. 1 3 81 4 2 4. Liabilities and Capital 15 Accounts payable ................................. 6 681. 8 174. 16 Mortgages, notes, bonds payable in less than 1 year 17 Other current liabilities (attach statement) TATEMENT 6 6 8 4 7 0. 19 3 5 0. 18 All nonrecourse loans ........................... 19 Mortgages, notes, bonds payable in 1 year or more 2 913 2 01. 2 9 8 9 6 0 5 . 20 Other liabilities (attach statement) ,.,,,,,,, TATEMENT 7 14 7 8 9 . 9 4 7 9 . 21 Partners' capital accounts ........................ <1 5 6 3 42 9 . <1 6 4 5 18 4 . 22 Total liabilities and ca ital ........................ 1 4 3 9 712. 1 3 81 4 2 4. Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note. Schedule M•3 may be required instead of Schedule M-1 (see instructions). 1 Net income (loss) per books ........................ 6 9 9 2 6 . 6 Income recorded on books this year not included 2 Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a,10,and 11, not recorded on books on Schedule K, lines 1 through 11 (itemize): aTax-exempt interest $ this year (itemize): 3 Guaranteed payments (other than health insurance) ................................................... 4 Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 161(itemize): a Depreciation $ 5, 0 5 3. b Travel and entertainment $ 5 Add lines 1 throw h 4 ............... Schedule M-2 Analysis 1 Balance at beginning of year ..._.. 2 Capital contributed: a Cash .____. b Property 3 Net income (loss) per books ,.,... 4 Other increases (itemize): 7 Deductions included on Schedule K, lines 1 through 13d, and 161, not charged against book income this year (itemize): a Depreciation $ 8 Add lines 6 and 7 .._... ................................. . 9 Income (loss) (Analysis of Net Income (Loss), 74,979. 151,681. 151,681. of Partners' Ca ital Accounts <1 5 6 3 4 2 9. Distributions: a Cash .................... b Property ........................... .................... 7 Other decreases (itemize): 69 926. 911042 1z-1s-o9 13530331 759605 594310 8 Add lines 6 and 7 :1 , 4 9 3 , 5 0 3 . Balance at end of year. Subtract line 8 from line 5 s 5 2009.05030 PAC INDUSTRIES PARTNERSHIP Form 1065 (2009) 594310_2 $825 Rental Real Estate Income and Expenses of a Form Partnership or an S Corporation (Rev. December 2008) Department of the Treasury - See instructions on page 2. Internal Revenue service - Attach to Form 1065, Form 1065-B, Or form 1120S. OMB No. 1545-1186 Name Employer identification number PAC INDUSTRIES PARTNERSHIP 23:1895159 1 Show the kind and location of each property. See page 2 to list additional properties. A COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE. , HARRISBURG, PA BCOMMERCIAL REAL ESTATE - 5341 JAYCEE AVE., HARRISBURG, PA CCOMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA D COMMERCIAL REAL ESTATE - CROYDON PA Rental Real Estate Income A B C D 2 Grossrents .............................. 2 73 601. 124 700. 15 460. 72 000. Rental Real Estate Expenses 3 Advertising .............................. 3 4 Auto and travel 4 5 Cleaning and maintenance .._......... 5 3 5 0 6. 6 Commissions 6 7 Insurance ................................. 7 8 Legal and other professionalfees ... 8 2 0 0 0. 3 8 1 5. 9lnterest .................................... 9 29 246. 36 556. 36 556. 43 071. 10 Repairs .................................... 10 5 7 8 3 . 11 Taxes t 1 13 10 3 . 12 Utilities .................................... 12 5 7 2 7. 3 9 4. 13 Wages and salaries ..................... 13 14 Depreciation (see instructions) ..-... 14 12 5 3 0 . 14 515. 4 3 7 4 . 17 9 6 4 . 15 Other (list) - 15 SEE STATEMENT 9 3 048. SEE STATEMENT 10 151. 16 Total expenses for each property. Add lines 3 through 15 ............... 16 5 3 2 8 6. 5 3 0 71. 6 4 7 9 6. 61 18 6. 17 Total gross rents. Add gross rents from line 2, columns Athrough H .......................................................... .............. 17 3 2 6 0 9 9 . 18 Total expenses. Add total expenses from line 16, columns A through H ....................................................... .............. 18 2 51 7 3 7 19 Net gain (loss) from Form 4797, Part I1, line 17, from the disposition of property from rental real estate activities 20a Net income (loss) from rental real estate activities from partnerships, estates, and trusts in which this partnership or S corporation is a partner or beneficiary (from Schedule K-1) ........................................... ............. . 20a b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (1) Name (2) Employer identification number 21 Net rental real estate income (loss). Combine lines 17 through 20a. Enter the result here and on: ~ Form 1065 or 11205: Schedule K, line 2, or .......................... ... 1 4 6 2 . • Form 1065-B: Part I, line 4 oa-2a-oa JWA For Paperwork Reduction Act Notice, see page 2 of form. 6 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP Form 8825 5943 (12-2006) 10_2 PAC INDUSTRIES PARTNERSHIP Form 8825(12-2008) 23-1895159 Page 1 Show the kind and location of each property. E COMMERCIAL REAL ESTATE - PITTSBURGH, PA PRESIDENTIAL REAL ESTATE - DILLSBURG PA G H Properties Rental Real Estate Income E F G H 2 Gross rents ................................. 2 13 9 0 0. 2 6 4 3 8. Rental Real Estate Expenses 3 Advertising ................................. 3 4 Auto and travel ......................... 4 5 Cleaning and maintenance ............... 5 6 Commissions .............................. 6 7 Insurance .................................... ~ 8 Legal and other professional fees .._... 8 9 Interest ....................................... 9 7 311. 10 Repairs ....................................... 10 11 Taxes .......................................... 11 12 Utilities 12 13 Wages and salaries ........................ 13 14 Depreciation (see instructions) ......... 14 3 8 7 . 15 Other (list) - STMT 11 11 7 0 0 . 15 16 Total expenses for each property. Add lines 3 throw h 15 .................. 18 11 7 0 0. 7 6 9 8. JWA a2oia2 of-zi-io 7 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP Form 8825(12-2006) 594310_2 PAC INDUSTRIES PARTNERSHIP 23-1895159 SCHEDULE K NET INCOME (LOSS) FROM RENTAL REAL ESTATE STATEMENT 1 DESCRIPTION AMOUNT COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE., HARRISBURG, PA 20,315. COMMERCIAL REAL ESTATE - 5341 JAYCEE AVE., HARRISBURG, PA 71,629. COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA <49,336.> COMMERCIAL REAL ESTATE - CROYDON PA 10,814. COMMERCIAL REAL ESTATE - PITTSBURGH, PA 2,200. RESIDENTIAL REAL ESTATE - DILLSBURG PA 18,740. TOTAL TO SCHEDULE K, LINE 2 74,362. SCHEDULE K INTEREST INCOME STATEMENT 2 DESCRIPTION U.S. BONDS OTHER INTEREST PASSED THROUGH FROM SCOTLAND LAUNDRY ASSOCIATES 617. TOTAL TO SCHEDULE K, LINE 5 617. SCHEDULE L OTHER CURRENT ASSETS STATEMENT 3 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR PREPAID REAL ESTATE TAXES 8,495. 11,602. A/R - RELATED ENTITY 15,432. 9,579. TOTAL TO SCHEDULE L, LINE 6 23,927. 21,181. SCHEDULE L OTHER INVESTMENTS STATEMENT 4 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR PA STATE BANK STOCK 10,393. 10,393. INVESTMENT - SCOTLAND LAUNDRY 40,820. 0. TOTAL TO SCHEDULE L, LINE 8 51,213. 10,393. 8 STATEMENT(S) 1, 2, 3, 4 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310_2 PAC INDUSTRIES PARTNERSHIP SCHEDULE L OTHER ASSETS STATEMENT 5 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR SECURITY DEPOSITS 1,350. 1,350. TOTAL TO SCHEDULE L, LINE 13 1,350. 1,350. 23-1895159 SCHEDULE L OTHER CURRENT LIABILITIES STATEMENT 6 DESCRIPTION BEGINNING OF TAX YEAR END OF TAX YEAR DEFERRED INCOME CASH OVERDRAFT TOTAL TO SCHEDULE L, LINE 17 68,470. 19,350. SCHEDULE L OTHER LIABILITIES STATEMENT 7 17,450. 19,350. 51,020. DESCRIPTION SECURITY DEPOSITS TOTAL TO SCHEDULE L, LINE 20 BEGINNING OF TAX YEAR 14,789. END OF TAX YEAR 9,479. 13530331 759605 594310 14,789. 9,479. 9 STATEMENT(S) 5, 6, 7 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310 2 PAC INDUSTRIES PARTNERSHIP 23-1895159 FORM 1065 PARTNERS' CAPITAL ACCOUNT SUMMARY STATEMENT 8 PARTNER BEGINNING CAPITAL SCHEDULE M-2 WITH- ENDING NUMBER CAPITAL CONTRIBUTED LNS 3, 4 & 7 DRAWALS CAPITAL 1 <510,293.> 23,310. 44,090. <531,073.> 2 <429,016.> 23,306. 52,597. <458,307.> 3 <624,120.> 23,310. 54,994. <655,804.> TOTAL <1,563,429.> 69,926. 151,681. <1,645,184.> 10 STATEMENT(S) 8 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310_2 PAC INDUSTRIES PARTNERSHIP 23-1895159 OTHER RENTAL EXPENSES STATEMENT 9 PROPERTY: COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA DESCRIPTION AMOUNT BANK SERVICE CHARGES 3,048. TOTAL TO RENTAL SCHEDULE, LINE 15 3,048. OTHER RENTAL EXPENSES STATEMENT 10 PROPERTY: COMMERCIAL REAL ESTATE - CROYDON PA DESCRIPTION AMOUNT PROFESSIONAL FEES 151. TOTAL TO RENTAL SCHEDULE, LINE 15 151. OTHER RENTAL EXPENSES STATEMENT 11 PROPERTY: COMMERCIAL REAL ESTATE - PITTSBURGH, PA DESCRIPTION AMOUNT MISCELLANEOUS 11,700. TOTAL TO RENTAL SCHEDULE, LINE 15 11,700. 11 STATEMENT(S) 9, 10, 11 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310_2 1 651109 Schedule K-1 ~oo~ ~ Final K-1 0 Amended K-1 OMB No.1545-0099 (Form 1065) For calendar year 2009, °, tax Department of the Treasury year beginning Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 1 Ordinary business income (loss) 0 . 15 Credits Credits, etc. 2 Net rental real estate income (loss) - See se orate instructions. 2 4 7 8 8 . 16 Foreign transactions P I I f i Ab h P hi 3 Other net rental income (loss) n ormat on out t e artners p art A Partnership's employer ident'rfication number 4 Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5 Interest income 206. PAC INDUSTRIES PARTNERSHIP 6a Ordinary dividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG PA 17112 6b Qualified dividends 8 6 9 . C IRS Center where partnership filed return CINCINNATI OH 7 Royalties 18 Tax-exempt income and D ~ Check if this is a publicly traded partnership (PTP) 8 Net short-term capital gain (loss) nondeductible expenses P 9a Net long-term capital gain (loss) artner Part II Information About the E Partner's identifying number 162-36-9922 9b Collectibles (28%) gain (loss) 19 Distributions 44 090. F Partner's name, address, city, state, and ZIP code 9c Unrecaptured sec 1250 gain 20 Other information PHILIP F COSTABILE 10 Net section 1231 gain (loss) 206 . 348 BLACKLATCH LANE CAMP HILL PA 17011 11 Other income (loss) G ®General partner or LLC 0 Limited partner or other LLC member-manager member H ®Domestic partner 0 Foreign partner Whattype of entity is this partner? INDIVIDUAL 12 Section 179 deduction J Partner's share of profit, loss, and capital: 13 Other deductions Beginning Ending Profit 33.3333334% 33.3333334% Loss 33.3333334% 33.3333334% Ca ital 3 3.3 3 3 3 3 3 4% 3 3.3 3 3 3 3 3 4% 14 Self-employment earnings (loss) K Partner's share of liabilities at year end: 0 . Nanrecourse ................................................ $ Qualified nonrecourse financing ........................ $ 'See attached statement for additional in formation. Recourse ...................................................... $ 9 9 9. 6 9 5. L Partner's capital account analysis: Beginning capital account .............................. $ <510 , 293 . Capital contributed during the year .................. $ Currentyear increase (decrease) ........................ $ 23 , 310. Withdrawals & distributions .............................. $( 44 , 0 9 0 .) Ending capital account .................................... $ <5 31, 0 7 3 . ®Tax basis G 0 AAP 0 Section 704(b) book Other (explain) M Did the partner contribute property with abuilt-in gain or loss? 0 Yes ® No If "Yes", attach statement see instructions ~ ~ o 9z~oa oe LHA For Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2009 12 1 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310 2 651109 Schedule K-1 2009 ~ Final K-1 ~ Amended K-1 OMB No. 1545-0099 (Form 1065) For calendar year 2009, or tax Department of the Treasury year beginning Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 1 Ordinary business income (loss) 0 . 15 Credits Credits, etc. 2 Net rental real estate income (loss) - See se crate instructions. 2 4 7 8 6 . 16 Foreign transactions P rt 1 I f ti Ab t th P rt hi 3 Other net rental income (loss) a n orma on ou e a ners p A Partnership's employer identification number 4 Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5 Interest income 205. PAC INDUSTRIES PARTNERSHIP 6a Ordinary dividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG PA 17112 6b Qualified dividends 870. C IRS Center where partnership filed return CINCINNATI OH 7 Royalties 18 Tax-exempt income and D ~ Check if this is a publicly traded partnership (PTP) 8 Net short-term capital gain (loss) nondeductible expenses P rt II I f ti Ab t th P rt 9a Net long-term capital gain (loss) n orma on ou e a ner a E Partner's identifying number 175-40-9493 9b Collectibles (28%) gain (loss) 19 Distributions 52 597. F Partner's name, address, city, state, and ZIP code 9c Unrecaptured sec 1250 gain 20 O ther information ROCCO A COSTABILE 10 Net section 1231 gain (loss) 205. BOX 5205 GRANTVILLE PA 17 0 2 8 11 Other income (loss) G ®General partner or LLC 0 Limited partner or other LLC member-manager member H ®Domestic partner ~ Foreign partner What type of entity is this partner? INDIVIDUAL 12 Section 179 deduction J Partner's share of profit, loss, and capital: 13 Other deductions Beginning Ending Profit 33.3333333% 33.3333333% Loss 33.3333333% 33.3333333% Ca ital 3 3.3 3 3 3 3 3 3% 3 3.3 3 3 3 3 3 3% 14 Self-employment earnings (loss) K Partner's share of liabilities at year end: 0 . Nonrecourse ................................................ $ Qualifiednonrecoursefinancing ------------------------ $ *Seeattachedstatementforadditionalinf ormation. Recourse ...................................................... $ 9 9 9, 6 9 4. L Partner's capital account analysis: Beginning capital account .............................. $ <42 9 , 016. Capital contributed during the year .................. $ Currentyear increase (decrease) ........................ $ 2 3 , 3 0 6 . Withdrawals & distributions .............................. $( 52 , 597 ~ Ending capital account .................................... $ <458,307. ®Tax basis G ~ AAP ~ Section 704(b) book Other (explain) M Did the partner contribute property with abuilt-in gain or loss? 0 Yes ® No If "Yes", attach statement see instructions o ~ o gz~os og LHA For Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2009 15 2 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310_2 651,109 Schedule K-1 Anna 0 Final K-1 ~ Amended K-1 OMB No.1545-0099 (Form 1065) For calendar year 2009, or tax '-vvv Department of the Treasury year beginning part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, t Ordinary business income (loss) 0 . 15 Credits Credits, etc. 2 Net rental real estate income (loss) - See se orate instructions. 2 4 7 8 8 . 16 Foreign transactions P hi P rt 1 I f ti Ab t th rt 3 Other net rental income (loss) ners p a n orma on ou e a A Partnership's employer identification number 4 Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5 Interest income 206. PAC INDUSTRIES PARTNERSHIP 6a Ordinary dividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG PA 17112 lib Qualified dividends 869. C IRS Center where partnership filed return CINCINNATI OH 7 Royalties 18 Tax-exempt income and D 0 Check if this is a publicly traded partnership (PTP) 8 Net short-term capital gain (loss) nondeductible expenses P II I f i Ab t th rt P 9a Net long-term capital gain (loss) ner n ormat on ou e a art E Partner's identifying number 191-42-8935 9b Collectibles (28%) gain (loss) 19 Distributions 54 994. F Partner's name, address, city, state, and ZIP code 9c Unrecaptured sec 1250 gain 20 Other information FRANK M COSTABILE 10 Net section 1231 gain (loss) 206 . 576 LESTER COURT HARRISBURG PA 17112 11 Other income (loss) G ®General partner or LLC 0 Limited partner or other LLC member-manager member H ®Domestic partner 0 Foreign partner What type of entity is this partner? INDIVIDUAL 12 Section 179 deduction J Partner's share of profit, loss, and capital: 13 Other deductions Beginning Ending Profit 33.3333333% 33.3333333% Loss 33.3333333% 33.3333333% Ca ital 3 3.3 3 3 3 3 3 3% 3 3.3 3 3 3 3 3 3% 14 Self-employment earnings (loss) K Partner's share of liabilities at year end: 0 . Nonrecourse ................................................ $ Qualifiednonrecoursefinancing ________________________ $ "See attached statement for additional inf ormation. Recourse ...................................................... $ 9 9 9 .6 9 5. L Partner's capital account analysis: Beginning capital account .............................. $ <624,120. Capital contributed during the year .. _....... $ Currentyear increase (decrease) ........................ $ 23 , 310. Withdrawals & distributions ........... $( 5 4 9 9 4 ~ Ending capital account .................................... $ <655,804. ®Tax basis G ~ AAP 0 Section 704(b) book Other (explain) M Did the partner contribute property with abuilt-in gain or loss? Yes ®No If "Yes", attach statement see instructions o ~ o 9iizst ~z-oa-o9 LHA For Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2009 18 3 13530331 759605 594310 2009.05030 PAC INDUSTRIES PARTNERSHIP 594310 2 Form 1065 Department of the Treasury Internal Revenue Service A Principal business activity U.S. Return of Partnership Income For calendar year 2008, or tax year beginning _ ,ending Name REAL ESTATE B Principal product or service COMM'L & RES. LEASING C Business code number Use the IRS AC INDUSTRIES PARTNERSHIP label. Other- Number, street, and room or suite no. If a P.O. box, see the instructions. wise, print 5 3 41 JAYCEE AVENUE or I City or town, state, and ZIP code OMB No. 1545-0099 2008 D Employer identificati[ number 23-1895159 E Date business started 06/12/1972 F Total assets 531110 ARRISBURG, PA 17112 $ 1,439,712. G Check applicable boxes: (1) Initial return (2) Final return (3) Name change (4) Address change (5) Amended return (8) ~ Technical termination -also check (1) or (2) H Check accounting method: (1) ~ Cash (2) 0 Accrual (3) 0 Other (specify) - I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year - 3 J Check if Schedule M-3 attached .......................... ................................................................................................................................. Caution. Include only trade orbusiness income and expenses on lines la through 22 below. See the instructions for more information. 1 a Gross receipts or sales 1a b Less returns and allowances .............................................................................. ib is 2 Cast of goods sold (Schedule A, line 8) ............................................................................................................ 2 ~, 3 Gross profit. Subtract line 2 from line 1c ............................................................................................................ 3 ~ o 4 Ordina Income loss from other artnershi s estates, and trusts attach statement SEE STATEMENT .1 rY~ ( ) P P, ( ) ................. 4 2 3 , 612 . 5 Net farm profit (loss) (attach Schedule F(Form 1040)) .................................................................................... 5 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) .................................................. ........ ..... 8 7 Other income (loss) (attach statement) ...................................................SEE._ .STATEMENT..2-.....-.... 7 94 , 391. 8 Total income (loss). Combine lines 3 through 7 ................................................................................................ 8 118 , 0 0 3 . 9 Salaries and wages (other than to partners) (less employment credits) . - .................................................................. 9 10 Guaranteed payments to partners ..................................................................................................................... 10 -~ 11 Repairs and maintenance - ............................................................................................................................ 11 12 Bad debts ................................................................................................................................................... 12 0 ~, 13 Rent ......................................................................................................................................................... 13 0 14 Taxes and licenses 14 ~ 15 Interest .................:.................................................................................................................................... 15 16 a Depreciation (if required, attach Form 4562) ................................................... 16a m r b Less depreciation reported on Schedule A and elsewhere on return ........................... i6b 18c 17 Depletion (Do not deduct oil and gas depletion.) ............. ............................................................................... 17 18 Retirement plans, etc ..................................................................................................................................... 18 rn c 19 Employee benefit programs .-._._.-_.. ................................................................................................................ 19 ~. U 7 ~ 20 Other deductions (attach statement) ............................................................................................................... 20 0 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20 .......................................... 21 22 Ordinary business income (loss .Subtract line 21 from line 8 .............................................................................. 22 118 , 0 0 3 . n er pena ties penury, ec are t at ave examine t is return, me u mg accompanying sc e u es an statements, an tote est my now a ge an a ie , it is true, correct, and complete. Declaration of preparer (other than general partner or limited liability company member manager) is based on all information of which preparer has any Sign knowledge. May the IRS discuss this return Here with the preparer shown below ' ignature o genera partner or smite is i sty company mein er manager ate (see insV.)7 ® Yes 0 No Paid Preparer's signature Date Check if self-employed -~ Preparer's SSN or PTIN P 0 0 2 2 917 4 Preparers Firm's name (or SEL IGMAN, FRIEDMAN & CO . P . C • yours it self- EIN ~ 3 -13110 0 5 Use Only employed), 10 2 7 MLTMMA ROAD address and Phone no. ~ '] 17) 7 61- 0 211 ZIP code WORMLEYSSURG , PA 1'/ U 4 j For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Form 1065 (2008) a11oo1 ~Hq 12-31-Oa Form 1065 (2008) PAC INDUSTRIES PARTNERSHIP 2 3 -18 9 515 9 Page 2 Schedule A Cost of Goods Sold (see the instructions) 1 Inventory at beginning of year ................................................................................................ ........................... 1 2 Purchases less cost of items withdrawn for personal use ............................................................... ........................... 2 3 Cost of labor .......................... .......................... ... ............ 3 4 Additional section 263A costs (attach statement) ..................................................................... ........................... 4 5 Other costs (attach statement) ................ ....... ......... ...... ...... ... .................. 5 6 Total. Add lines 1 through 5 ................................................................................................... ........................... 6 7 Inventory at end of year ...................................... ................................................................... ........................... 7 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 ................................. ........................... 8 9 a Check all methods used for valuing closing inventory: (i) 0 Cost as described in Regulations section 1.471-3 (ii) 0 Lower of cost or market as described in Regulations section 1.471-4 (iii) 0 Other (specify method used and attach explanation)- b Check this box if there was a writedown of "subnormal" goods as described in Regulations section 1.471-2(c) .............................................. c Check this box if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) ............................... ........ d Do the rules of section 263A (for property produced or acquired for resale) apply to the partnership? ............. ~ Yes ~ No ................................ e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? .................................... ~ Yes 0 No If "Yes," attach explanation. Schedule B Other Information 1 What type of entity is filing this return? Check the applicable box: Yes No a ©Domestic general partnership b 0 Domestic limited partnership c 0 Domestic limited liability company d ~ Domestic limited liability partnership e 0 Foreign partnership f ~ Other- 2 At any time during the tax year, was any partner in the partnership a disregarded entity, a partnership (including an entity treated as a partnership), a trust, an S corporation, an estate (other than an estate of a deceased partner), or a nominee or similar person? ........................... X 3 At the end of the tax year: a Did any foreign or domestic corporation, partnership (including any entity treated as a partnership), or trust own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital of the partnership? For rules of constructive ownership, see instructions. If "Yes;' complete (i) through (v) below ................................................................................................................................................ X (i) Name of Entity (II) Employer Identification Number ('rf any) (iii) Type of Entity (iv) Country of Or anization g (v) Maximum Percentage Owned in Proftt, Loss, or Capital b Did any individual or estate own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital of the partnership? For rules of constructive ownership, see instructions. If "Yes," complete (i) through (iv) below ....................................................................................... X (i) Name of Individual or Estate (II) SocPal Security Number or Employer Identification Number if n (iii) Country of Citizenship (see instructions) tv Maximum Percentage Owned in Profit, LOSS, or Capital 4 At the end of the tax year, did the partnership: a Own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of stock entitled to vote of any foreign or domestic corporation? For rules of constructive ownership, see instructions. If "Yes," complete (i) through (iv below .................................... X (i) Name of Corporation tt Employer Identification Number (lf any) (iii)Country of Incorporation (IV)percentage Owned in Voting Stock Form 1065 (2008) 911011 12-31-OB 2 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310_1 Form 1065 (2008) PAC INDUSTRIES PARTNERSHIP 23-1895159 Page 3 b Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital in any foreign or Yes No domestic partnership (including an entity treated as a partnership) or in the beneficial interest of a trust? For rules of constructive ownership, see instructions. If "Yes," complete (i) through (v) below . ............................................................. - ............................................... X (i) Name of Entity (ii) Employer Identification Number (if any) (iii)Type of Entity (iv) Country of Organization v Maximum Percentage Owned in Profit, Loss, or Capital 5 Did the partnership file Form 8893, Election of Partnership Level Tax Treatment, or an election statement under section 6231(a)(1)(B)(ii) for partnership-level tax treatment, that is in effect for this tax year? See Form 8893 for more details ............................................................... X 6 Does the partnership satisfy all four of the following conditions? a The partnership's total receipts for the tax year were less than $250,000. b The partnership's total assets at the end of the tax year were less than $ 1 million. c Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return. d The partnership is not filing and is not required to file Schedule M-3 .............................................................................................. ........... X If "Yes;' the partnership is not required to complete Schedules L, M-1, and M-2; Item F on page 1 of Form 1065; or Item L on Schedule K-1. 7 Is this partnership a publicly traded partnership as defined in section 469(k)(2)? ....................................................................................... X 8 During the tax year, did the partnership have any debt that was cancelled, was forgiven, or had the terms modified so as to reduce the principal amount of the debt? ......................................................................................................................................................... X 9 Has this partnership filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide information on any ................................................................ reportable transaction? ............................................................................... ................... X 10 At any time during calendar year 2008, did the partnership have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements far Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts. If "Yes," enter the name of the foreign country. - X 11 At any time during the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If "Yes," the partnership may have to file Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. See instructions ........................................................................................................................................................................... X 12a Is the partnership making, or had it previously made (and not revoked), a section 754 election? ............................................................. ... . X See instructions for details regarding a section 754 election. b Did the partnership make for this tax year an optional basis adjustment under section 743(b) or 734(b)? If "Yes," attach a statement showing the computation and allocation of the basis adjustment See instructions ................................................................................................. . X c Is the partnership required to adjust the basis of partnership assets under section 743(b) or 734(b) because of a substantial built-in loss (as defined under section 743(d)) or substantial basis reduction (as defined under section 734(d))? If "Yes," attach a statement showing the computation and allocation of the basis adjustment See instructions .............................................................................................................................. X 13 Check this box if, during the current or prior tax year, the partnership distributed any property received in a like-kind exchange or contributed such property to another entity (including a disregarded entity) ......................................................................................................... - 14 At any time during the tax year, did the partnership distribute to any partner atenancy-in-common or other undivided interest in partnership property? .................................................................................................................................................................................... X 15 If the partnership is required to file Form 8858, Information Return of U.S. Persons With Respect To Foreign Disregarded Entities, enter the number of Forms 8858 attached. See instructions - t6 Does the partnership have any foreign partners? If "Yes;' enter the number of Forms 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, filed for this partnership. - X 17 Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return. - Designation of Tax Matters Partner (see instructions) Enter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: Name of Identifying designated TMP - ROCCO A COSTABILE number of TMP - 175-40-9493 Address of - BOX 5 2 0 5 designated TMP GRANTV I LLE , PA 17 0 2 8 Form 1065 (2008) a1m21 1231-OB 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310_1 Form 1065 2008 PAC INDUSTRIES PARTNERSHIP 23-1895159 Page4 Schedule K Partners' Distributive Share Items Total amount 1 Ordinary business income (loss) (Page 1, line 22) ....................................................................................... 1 118 , 0 0 3 . 2 Net rental real estate income (loss) (attach Form 8825) ........................S.E.~....5.`,~'~,'~'.E.ME.N',~'.--.3.......... 2 16 3 , 2 6 3 . 3 a Other grass rental income (loss) ............................................................ 3a b Expenses from other rental activities (attach statement) .. ....... ......... 3b c Other net rental income (loss). Subtract line 3b from line 3a ........................................................ ................ 3c y 4 Guaranteed payments ........................................................................................................................... 4 0 J 5 Interest income .................................................................................................................................... 5 ~, 6 Dividends: a Ordinary dividends ...... ................................................................................................ 6a ~ o b Oualified dividends 6b ....................................................... 7 Royalties .......................................................................................................................................... 7 8 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) ............................................................ 8 9 a Net long-term capital gain (loss) (attach Schedule D (Form 1065)) ............................................................ 9a b Collectibles (28%) gain (loss) .................................................................. 9b c Unrecaptured section 1250 gain (attach statement) ................................. 9c 21, 917 . 10 Net section 1231 gain (loss) (attach Form 4797) ....................................................................................... 10 15 6 , 9 0 7 . 11 Other income (lass) (see instructions) Type - 11 12 Section 179 deduction (attach Form 4562) . .............................................. ....... ............. ...................... 12 N `0 13 a Contributions ............................................................................. SEE....STATEMENT....4.......... 13a 2 0 . 3 b Investment interest expense .................................................................................................................. 13b 4, 0 5 3. d c Section 59(e)(2) expenditures: (1) Type - (2) Amount- 13c(2) d Other deductions see instructions Type - SEE STATEMENT 5 13d 2 2 , 6 9 7 . ,~ o., 14 a Netearnings (loss) from self-employment ................................................................................................ 14a 9 0 , 817 . b Gross farming or fishing income ............................................................................................................ 14b w c Gross nonfarm income ........................................................................................................................ 14c 16 3 , 4 6 9 . 15 aLow-income housing credit (section 42(1)(5)) ............................................................................................. 15a y b Low-income housing credit (other) ................................ ...................................................................... 15b v c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) ................................................... 15c v d Other rental real estate credits (see instructions) Type - 15d e Other rental credits (see instructions) Type - 15e f Other credits see instructions) Type - 15f 16 a Name of country or U.S. possession - ............ b Gross income from all sources ............................................................................................................... 16b wr c Gross income sourced at partner level ...................................................................................................... 16c o Foreign gross income sourced at partnership level ~ d category - e General category ...... - f Other ,.,.._ - 16f Deductions allocated and apportioned at partner level t= g Interestexpense- h Other ......................................................... - i6h rn Deductions allocated and apportioned at partnership level to foreign source income c 1 C8~90fy - j General category ...... - k Other .._,._ - 16k Total foreign taxes (check one): - Paid 0 Accrued 0 ............................................................... 161 mReduction in taxes available for credit (attach statement) ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 16m n Other foreign tax information (attach statement) ....................................................................................... 17 a Post-1986 depreciation adjustment ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 17a 6 , 722 . xy ;F E b Adjusted gain or loss .,.. „ SEE STATEMENT 6 17b <7 2 91. ; c ~ ~ c Depletion (other than oil and gas) ............................................................................................................ 17c :: £~ d Oil, gas, and geothermal properties -gross income .................................................................................... 17d Qua a Oil, gas, and geothermal properties -deductions ......... ......... ........ .,.,..,, ..,,,,,, ,,.,,,,,,.,,,.,, 17e f Other AMT items (attach statement) ...................................................................................................... 17f 18 aTax-exempt interest income .................................................................................................................. 18a ~ o b Other tax-exempt income .................................................................................................................... 186 ~a cNondeductibleexpenses ........................................................................................................................ i8c ~ o 19 a Distributions of cash and marketable securities ._ ....................................................................................... 19a 1 , 6 9 5 , 9 8 0 . b Distributions of other properiy ............................................................................................................... 19b 20 a Investment income .............................................................................................................................. 20a p b Investment expenses ........................................................................................................................... 20b c Other items and amounts (attach statement) .......................................................................................... anoal 1231-08 form 1065 (2008) 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310_1 Farm 1065 (2008) PAC INDUSTRIES PARTNERSHIP 2 3 -18 9 515 9 Page 5 Anal sis of Net Income Loss) 1 Net income (loss). Combine Schedule K, lines 1 through 11. From the result, subVact the sum of Schedule K, lines 12 through 13d, and 161 ............... 1 411 , 4 0 3 . 2 Analysis by partner type: a General partners b Limited partners (i) Corporate (ii) Individual (active) (iii) Individual (passive) (iv) Partnership (v) Exempt organization (vi) Nominee/Other 411,403. Schedule L Balance Sheets er Books Beginning of tax year End of tax year Assets _ . 1 Cash ................................................... 2a Trade notes and accounts receivable ....... b Less allowance for bad debts ................ 3 Inventories .......................................... 4 U.S.governmentobligations ..................... 5 Tax-exempt securities ........................... 6 Other current assets (attach statement) ... 7 Mortgage and real estate loans ............... 8 Other investments (attach statement) ..___. 9a Buildings and other depreciable assets . b Less accumulated depreciation ............... 10a Depletable assets ................................. b Less accumulated depletion ..................... 11 Land (net of any amortization) .................. 12a Intangible assets (amortizable only) .....,... b Less accumulated amortization ............... 13 Other assets (attach statement) ............... 14 Total assets .......................................... Liabilities and Capital 15 Accounts payable .............................. i6 Mortgages, notes, bonds payable in less than 1 year 17 Other current liabilities (attach statement) 18 All nonrecourse loans ........................... 3,201. 9,875. 3,201. 9,875. STATEMENT 7 8,480. 23,927. STATEMENT 8 131,735. 51,213. 1,853,938. 1,856,288. 768,603. 1,085,335. 829,737. 1,026,551. 326,796. 326,796. 14,998. 14,998. 4,333. 10,665. 14,998. STATEMENT 9 1,350. 1,350. 1,567,563. 1,439,712. 2,328. ATEMENT 10 X98,529. 6,681. 19 Mortgages, notes, bonds payable in 1 year a more -~ , v ,~ ~s , a i ~ . ----- ~.. , 7 1.7 , c. y 1 . 20 Other liabilities (attach statement) ....,.... STATEMENT 11 9 9 , 7 8 9 . 14 , 7 8 9 . 2f Partners' capital accounts ,,,,,,,,,,,,,,,,,,,,,,,, <2 6 7, 2 9 8. <1, 5 6 3, 4 2 9.> 22 Total liabilities and capital ........................ 1 , 5 6 7 , 5 6 3 . 1, 4 3 9 , 712 . Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note. Schedule M-3 may be required instead of Schedule M-1 (see instructions). 1 Net income (loss) per books ........................ 3 9 9 , 8 4 9 . 6 Income recorded on books this year not included 2 Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not recorded on books this year (itemize): on Schedule K, lines 1 through 11 (itemize): aTax-exempt interest $ 3 Guaranteed payments (other than health insurance) ................................................... 7 Deductions included on Schedule K, lines 1 through 13d, and i61, not charged against 4 Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 161(itemize): book income this year (itemize): a Depreciation $ a Depreciation $ 11 , 3 5 4 . b Travel and entertainment $ 8 Add lines 6 and 7 .................................... STMT 13 2 0 0 . 11, 5 5 4 . s Income (loss) (Analysis of Net Income (Loss), 5 Add lines 1 through 4 .................................... 411 , 4 0 3 . line 1). Subtract line 8 from line 5 .................. 411 , 4 0 3 . Schedule M-2 Anal sis of Partners' Ca ital Accounts 1 Balance at beginning of year ........................... <267, 298. Distributions: aCash .._._.,...._,_._,......,..,...... 1, 695, 980. 2 Capital contributed: a Cash ........................... b Property ............__._........,.. b Property ..................... 7 Other decreases (itemize): 3 Net income(loss)perbooks ........................... 399,849. 4 Other increases (itemize): 5 Add lines 1 through 4 .................................... 12-31-08 11240916 759605 594310 8 Addlines6and7 ....................................... 1, 695, 980. 13 2 , 5 51. s Balance at end of year. Subtract line 6 from line 6 <1, 5 6 3 , 4 2 9 . > 5 Form 1065 (2008) 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310_1 8$25 Rental Real Estate Income and Expenses of a OMB No. 1545-7186 Form Partnershi or an S Cor oration (Rev. December 2006) p p Department of the Treasury - See instructions on page 2. Internal Revenue Service - Attach to Form 1065, Form 1065-B, or Form 1120S. Name Employer identification number PAC INDUSTRIES PARTNERSHIP 23:1895159 1 Show the kind and location of each property. See page 2 to list additional properties. A COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA B COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE. , HARRISBURG, PA CCOMMERCIAL REAL ESTATE - 5341 JAYCEE AVE. , HARRISBURG, PA DRESIDENTIAL REAL ESTATE - DILLSBURG PA Rental Real Estate Income A B C D 2 Grossrents .............................. 2 59, 419. 74, 773. 124, 200. 22, 000. Rental Real Estate Expenses 3 Advertising .............................. 3 4 Auto and travel ...................... 4 5 Cleaning and maintenance ........_... 5 2 8 8. 6 Commissions ........................... 6 7 Insurance ................................. 7 3 4 2. 8 Legalandother professional fees ... 8 1 1, 7 8 4. 9 Interest .................................... 9 28, 712. 27, 289. 29, 723. 6, 358. 10 Repairs .................................... 10 11 Taxes ....................................... 11 7 , 2 71 . 12 Utilities .................................... 12 13 Wages and salaries ..................... 13 14 Depreciation (see instructions) ...... 14 6 , 0 3 4 . 14 , 2 6 2 . 13 , 2 9 9 . 3 8 7 . 15 other (list) - STMT 14 4 , 3 01. SEE STATEMENT 15 15 2,641. SEE STATEMENT 16 3,777. SEE STATEMENT 17 1,067. 16 Total expenses for each property. Add lines3throughl5 ............... 16 58,732. 44,192. 46,7 99. 7,812. 17 Total gross rents. Add gross rents from line 2, columns A through H ......................................................... ............... 17 3 6 6 , 4 9 2 . 18 Total expenses. Add total expenses from line 16, columns A through H ........................................... ........... ............... 18 ( 2 0 3 , 2 2 9 19 Net gain (loss) from Form 4797, Part II, line 17, from the disposition of properly from rental real estate activities ................................................................................................................................. ............... 19 20a Net income (loss) from rental real estate activities from partnerships, estates, and trusts in which this partnership or S corporation is a partner or beneficiary (from Schedule K-1) .......................................... ............... 20a b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (i) Name (2) Employer identification number 21 Net rental real estate income (loss). Combine lines 17 through 20a. Enter the result here and on: • Form 1065 or 1120S:Schedule K, line 2, or ....................................................................................... ........... 1 6 3 , 2 6 3 . • Form 1065-B: Part I, line 4 77-o~-ofi JWA For Paperwork Reduction Act Notice, see page 2 of form. 6 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP Form 8825 (12-2006) 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 Form 8825 (2009) ~ Page 2 1 Show the kind and location of each property. E COMMERCIAL REAL ESTATE - CROYDON PA FCOMMERCIAL REAL ESTATE - PITTSBURGH, PA G H Rental Real Estate Income E F 2 Gross rents ................................. 2 7 2, 0 0 0. 14 , 10 0. Rental Real Estate Expenses 3 Advertising ................................. 3 4 Auto and travel 4 5 Cleaning and maintenance ............... 5 6 Commissions .............................. 6 7 Insurance .................................... 7 8 Legal and other professional fees ..... _ 8 9 Interest 9 18 , 9 4 4. 10 Repairs ....................................... 10 11 Taxes .......................................... 11 12 Utilities 12 13 Wages and salaries ........................ 13 14 Depreciation (see instructions) _....... 14 15 , 8 0 0 . 15 Other (list) ~ STMT 18 SEE STATEMENT 19 15 10,950. G H i6 Total expenses for each property. Add lines 3 through 15 .................. 16 3 4 , 7 4 4 . 10 , 9 5 0 . ~Wq Form 8825 (12-2006) e2oia2 i i-o~-os 7 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310_1 4797 Sales of Business Property Form (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2)) Department of the Treasury Internal Revenue Service (99) - Attach to your tax return. Name(s) shown on return PAC INDUSTRIES PARTNERSHIP Identifying number OMB No. 1545-0184 20~~ Attachment Sequence No. 27 23-1895159 Enter the gross proceeds from sales or exchanges reported to you for 2008 on Form(s) 1099-B or 1099-S (or substitute statement) that you are including on line 2, 10, or 20 (see instructions) ........................................................................ 1 Part I Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or Theft -Most Property Held More Than 1 Year (a) Description of property fb Date l ) acquired (mo., day, yr.) !!C Date l ) sold (mo., day, yr.) (d) Gross sales price (e)Depreciation allowed or allowable since ac uisition q (f) Cost or other basis, plus im rovements and ex ense of sale P (g) Gain or (loss) Subtract (f) from the sum of (d) and (e) 2PASSTHROUGH FROM SC TLAN LA Y ASSOCIA S 156,907. 3 Gain, if any, from Form 4684, line 45 .................................................................................................................................... 3 4 Section 1231 gain from installment sales from Form 6252, line 26 or 37 ......................................................... 4 5 Section 1231 gain or (loss) from like-kind exchanges from Form 8824 ..................................................................................... 5 6 Gain, if any, from line 32, from other than casualty or theft ...................................................................................................... 6 7 Combine lines 2 through 6. Enter the gain or (loss) here and on the appropriate line as follows: ..,.._ .. ..._.... ................ 7 15 6 , 9 0 7 . Partnerships (except electing large partnerships) and S corporations. Report the gain or (lass) following the instructions for Form 1065, Schedule K, line 10, or Form 1120S, Schedule K, line 9. Skip lines 8, 9, 11, and 12 below. Individuals, partners, S corporation shareholders, and all others. If line 7 is zero or a loss, enter the amount from line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you did not have any prior year section 1231 losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long-term capital gain on the Schedule D filed with your return and skip lines 8, 9, 11, and 12 below. 8 Nonrecaptured net section 1231 losses from prior years (see instructions) ................................................................................. 8 9 Subtract line 8 from line 7. If zero or less, enter -0-. If line 9 is zero, enter the gain from line 7 on line 12 below. If line 9 is more than zero, enter the amount from line 8 on line 12 below and enter the gain from line 9 as a long-term capital gain on the Schedule D filed with your return see instructions ....................................................................................... 9 Part II Ordinary Gains and Losses 10 Ordinary gains and losses not included on lines 11 through 16 (include property held 1 year or less): 11 Loss, if any, fromline7 ...................................... .................................................................................... ..... .................... t1 ( ) 12 Gain, if any, from line 7 or amount from line 8, if applicable .,,,.,• .................................................................... ........................ 12 13 Gain, if any, from line 31 ........................................................................................................................ ........................ 13 14 Net gain or (loss)from Form 4684, lines 37 and 44a ................................................................................... .....................•_._ 14 15 Ordinary gain from installment sales from Form 6252, line 25 or 36 ............................................................... ........................ 15 i6 Ordinary gain or (loss) from like-kind exchangesfrom Form 8824 •----------------------------------------------------------------- ------------------------ i6 17 Combine lines 10 through 16 ................................................................................................................. ......................... 17 18 For all except individual returns, enter the amount from line 17 on the appropriate line of your return and skip lines a and b below. For individual returns, complete lines a and b below: a If the loss on line 11 includes a loss from Form 4684, line 41, column (b)(ii), enter that part of the loss here. Enter the part of the loss from income-producing property on Schedule A (Form 1040), line 28, and the part of the loss from property used as an employee on Schedule A (Form 1040), line 23. Identify as from "Form 4797, line 18a." See instructions ................................................................................................................................... ......................... 18a b Redetermine the gain or (loss) on line 17 excluding the loss, if any, on line 18a. Enter here and on Form 1040, line 14 ................................................................................... .•-- - ..................................................-- -........................ 18b JWA For Paperwork Reduction Act Notice, see separate instructions. Form 4797 (2008) slsool 12-03-OS PAC INDUSTRIES PARTNERSHIP 23-1895159 Form 4797 (2009) Page 2 Part III Gain From Disposition of Property Under Sections 1245, 1250, 1252, 1254, and 1255 19 a Descri tion of section 1245, 1250, 1252, 1254, or 1255 pro a (b) Date acquired (mo., day, yr.) (c) Date sold (mo., day, yr.) A B C D These columns relate to the properties on lines 19A through 19D. ~ Property A Property B Property C Property D 20 Gross sales price (Note: See line 1 before completing.) 20 21 Cost or other basis plus expense of sale .................. 21 22 Depreciation (or depletion) allowed or allowable ...... 22 23 Adjusted basis. Subtract line 22 from line 21 .__......._. 23 24 Total gain. Subtract line 23 from line 20 .................. 24 25 If section 1245 property: a Depreciation allowed or allowable from line 22 ......_.. 254 b Enter the smallerof line 24 or 254 ........................ 25b 26 If section 1250 property: If straight line depreciation was used, enter -0- on line 26g, except for a corporation subject to section 291. a Additional depreciation after 1975 ........................ 64 b Applicable percentage multiplied by the smallerof line 24 or line 264 ............................................. 26b c Subtract line 264 from line 24. If residential rental property ar line 24 is not more than line 264, skip lines 26d and 26e ................................................. 28c d Additional depreciation after 1969 and before 1976 .,. 26d e Enter the smaller of line 26c or 26d ..................... 26e f Section 291 amount (corporations only) ............... 26f g Add lines 26b, 26e, and 26f ................................. 26g 27 If section 1252 property: Skip this section if you did not dispose of farmland or if this form is being completed for a partnership (other than an electing large partnership). a Soil, water, and land clearing expenses ,,,,,,,,,,,,,,,,,, 74 b Line 274 multiplied by applicable percentage ,,,,,.,,,,,, 27b c Enter the smaller of line 24 or 27b ........................ 27c 28 If section 1254 property: a Intangible drilling and development costs, expenditures for development of mines and other natural deposits, and mining exploration costs .............................. 84 b Enter the smaller of line 24 or 284 ........................ 28b 29 If section 1255 property: a Applicable percentage of payments excluded from income under section 126 .................................... 294 b Enter the smallerof line 24 or 294 ........................ 29b Summary of Part III Gains. Complete property columns A through D through line 29b before going to line 30. 30 Total gains for all properties. Add property columns A through D, line 24 ........................................................................ 31 Add property columns A through D, lines 25b, 26g, 27c, 28b, and 29b. Enter here and on line 13 ................. 31 ......................... 32 Subtract line 31 from line 30. Enter the portion from casualty or theft on Form 4684, line 39. Enter the portion from other than casualty or theft on Form 4797, line 6 ................................................................................................... 32 Part IV Recapture Amounts Under Sections 179 and 280F(b)(2) When Business Use Drops to 50% or instructions. 33 Section 179 expense deduction or depreciation allowable in prior years ............................ .............. 34 Recomputed depreciation (see instructions) 35 Recapture amount. Subtract line 34 from line 33. See the instructions for where to report .................. (a) Section (b) Section 179 280F(b)(2) staooz JWA t t-za-o9 PAC INDUSTRIES PARTNERSHIP EMPLOYER ID FORM 1065 INCOME (LOSS) FROM OTHER PARTNERSHIPS, ETC. STATEMENT 1 NAME AND ADDRESS SCOTLAND LAUNDRY ASSOCIATES 5341 JAYCEE AVENUE HARRISBURG, PA 17112 TOTAL TO FORM 1065, LINE 4 23-1895159 AMOUNT 25-1486010 23,612. 23,612. FORM 1065 OTHER INCOME STATEMENT 2 DESCRIPTION REALIZATION OF NON REFUNDABLE DEPOSIT OTHER INCOME TOTAL TO FORM 1065, LINE 7 AMOUNT 85,000. 9,391. 94,391. SCHEDULE K NET INCOME (LOSS) FROM RENTAL REAL ESTATE STATEMENT 3 DESCRIPTION COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE., HARRISBURG, PA COMMERCIAL REAL ESTATE - 5341 JAYCEE AVE., HARRISBURG, PA RESIDENTIAL REAL ESTATE - DILLSBURG PA COMMERCIAL REAL ESTATE - CROYDON PA COMMERCIAL REAL ESTATE - PITTSBURGH, PA TOTAL TO SCHEDULE K, LINE 2 SCHEDULE K DESCRIPTION AMOUNT 687. 30,581. 77,401. 14,188. 37,256. 3,150. CHARITABLE CONTRIBUTIONS PASSTHROUGH CONTRIBUTIONS FROM - TOTALS TO SCHEDULE K, LINE 13A TYPE CASH (50$) 163,263. STATEMENT 4 AMOUNT 20. 20. 10 STATEMENT(S) 1, 2, 3, 4 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 SCHEDULE K OTHER DEDUCTIONS DESCRIPTION SECTION 754 BASIS ADJUSTMENT FROM TOTAL INCLUDED IN SCHEDULE K, LINE 13D BEGINNING OF END OF TAX TAX YEAR YEAR SCHEDULE K ADJUSTED GAIN OR LOSS STATEMENT 6 DESCRIPTION AMT BASIS ADJUSTMENT FROM PASSTHROUGH TOTAL TO SCHEDULE K, LINE 17B ADJUSTED GAIN OR LOSS ALLOCABLE TO: ORDINARY GAIN OR LOSS SHORT-TERM CAPITAL GAIN OR LOSS LONG-TERM CAPITAL GAIN OR LOSS COLLECTIBLES - 28$ RATE SECTION 1231 GAIN OR LOSS UNRECAPTURED SECTION 1250 GAIN - 25$ RATE SCHEDULE L OTHER CURRENT ASSETS STATEMENT 7 DESCRIPTION PREPAID REAL ESTATE TAXES A/R - RELATED ENTITY TOTAL TO SCHEDULE L, LINE 6 11240916 759605 594310 STATEMENT 5 AMOUNT 22,697. 22,697. AMOUNT <7,291.> <7,291.> <7,291.> 8,480. 8,495. 0. 15,432. 8,480. 23,927. 11 STATEMENT(S) 5, 6, 7 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 SCHEDULE L OTHER INVESTMENTS STATEMENT 8 DESCRIPTION PA STATE BANK STOCK INVESTMENT - SCOTLAND LAUNDRY TOTAL TO SCHEDULE L, LINE 8 BEGINNING OF END OF TAX TAX YEAR YEAR 10,393. 10,393. 121,342. 40,820. 131,735. 51,213. SCHEDULE L OTHER ASSETS STATEMENT 9 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR SECURITY DEPOSITS 1,350. 1,350. TOTAL TO SCHEDULE L, LINE 13 1,350. 1,350. SCHEDULE L OTHER CURRENT LIABILITIES STATEMENT 10 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR DEFERRED INCOME 17,450. 17,450. CASH OVERDRAFT 4,025. 51,020. A/P - RELATED ENTITY 77,054. 0. TOTAL TO SCHEDULE L, LINE 17 98,529. 68,470. SCHEDULE L OTHER LIABILITIES STATEMENT 11 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR SECURITY DEPOSITS 99,789. 14,789. TOTAL TO SCHEDULE L, LINE 20 99,789. 14,789. 12 STATEMENT(S) 8, 9, 10, 11 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP FORM 1065 PARTNERS' CAPITAL ACCOUNT SUMMARY STATEMENT 12 PARTNER BEGINNING NUMBER CAPITAL 1 <51,803.> 2 <13,369.> 3 <202,126.> TOTAL <267,298.> CAPITAL SCHEDULE M-2 WITH- CONTRIBUTED LNS 3, 4 & 7 DRAWALS 23-1895159 ENDING CAPITAL 133,281. 591,771. <510,293.> 133,287. 548,934. <429,016.> 133,281. 555,275. <624,120.> 399,849. 1,695,980. <1,563,429.> 13 STATEMENT(S) 12 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 SCHEDULE M-1 EXPENSES RECORDED ON BOOKS NOT DEDUCTED IN RETURN STATEMENT 13 DESCRIPTION AMOUNT OTHER NON-DEDUCTIBLE EXPENSES OTHER NON-DEDUCTIBLE EXPENSES 200. TOTAL TO SCHEDULE M-1, LINE 4 200. OTHER RENTAL EXPENSES STATEMENT 14 PROPERTY: COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA DESCRIPTION AMOUNT AMORTIZATION 4,272• BANK SERVICE CHARGES 29• TOTAL TO RENTAL SCHEDULE, LINE 15 4,301. OTHER RENTAL EXPENSES STATEMENT 15 PROPERTY: COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE., HARRISBURG, PA DESCRIPTION AMORTIZATION MISCELLANEOUS TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT 3,199. <558.> 2,641. OTHER RENTAL EXPENSES STATEMENT 16 PROPERTY: COMMERCIAL REAL ESTATE - 5341 JAYCEE AVE., HARRISBURG, PA DESCRIPTION AMORTIZATION TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT 3,777. 3,777. 14 STATEMENT(S) 13, 14, 15, 16 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310_1 PAC INDUSTRIES PARTNERSHIP 23-1895159 OTHER RENTAL EXPENSES STATEMENT 17 PROPERTY: RESIDENTIAL REAL ESTATE - DILLSBURG PA DESCRIPTION AMORTIZATION TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT 1,067. 1,067. OTHER RENTAL EXPENSES STATEMENT 18 PROPERTY: COMMERCIAL REAL ESTATE - CROYDON PA DESCRIPTION PROFESSIONAL FEES TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT OTHER RENTAL EXPENSES STATEMENT 19 PROPERTY: COMMERCIAL REAL ESTATE - PITTSBURGH, PA DESCRIPTION MISCELLANEOUS TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT 10,950. 10,950. SE INCOME WORKSHEET OTHER SUBTRACTIONS FROM SE INCOME STATEMENT 20 DESCRIPTION ADJUSTMENT FOR PASSTHROUGH ORDINARY INCOME OR LOSS TOTAL TO SE INCOME WORKSHEET, LINE 2B AMOUNT 27,186. 27,186. 15 STATEMENT(S) 17, 18, 19, 20 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310 1 1 651108 Schedule K-1 'nnR ~ Final K-1 ~ Amended K-1 OMB No. 1545-0099 tr°rm iu°at For calendar year 2008, or tax ~~~" Department of the Treasury year beginning Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 10rdinary business income (loss) 3 9 , 3 3 4 . 15 Credits Credits, etc. 2Net rental real estate income (lass) - See separate instructions. 5 4 , 4 21 . 16 Foreign transactions Part I Information About the Partnership 3other net rental income (loss) A Partnership's employer identification number 4Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5lnterest income PAC INDUSTRIES PARTNERSHIP 6a0rdinarydividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG, PA 17112 6b0ualified dividends 2 , 241. C IRS Center where partnership filed return * <2 4 3 0 . > CINCINNATI , OH 7Royalties 18 Tax-exempt income and D ~ Check ff this is a publicly traded partnership (PTP) BNet short-term capital gain (loss) nondeductible expenses Part II Information About the Partner 9aNet long-term capital gain (loss) E Partner's identifying number 9bCollectibles (28%) gain (loss) 19 Distributions 591,771. 16 2- 3 6- 9 9 2 2 9c Unrecaptured sec 1250 gain F Partner's name, address, city, state, and ZIP code 7 , 3 0 6 . 20 Other information 10Net section 1231 gain (loss) PHILIP F COSTABILE 52,302. 3 4 8 BLACKLATCH LANE 110ther income (loss) CAMP HILL, PA 17011 G General partner or LLC Limited partner or other LLC member-manager member H ®Domestic partner ~ Foreign partner 12Section 179 deduction What type of entity is this partner? INDIVIDUAL 130ther deductions J Partner's share of profit, loss, and capital: 7 . Beginning Ending 1, 3 51. Profit 33.3333334°i° 33.3333334°i° * 7,566. Loss 3 3.3 3 3 3 3 3 4% 3 3.3 3 3 3 3 3 4% 14Self-employment earnings (loss) Capital 33.3333334% 33.3333334% 30,272. K Partner's share of liabilities at year end: 5 4 , 4 9 0 . Nonrecourse ................................................ $ *Seeattachedstatementforadditionalinformation. Qualifiednonrecoursefinancing ........................ $ Recourse ...................................................... $ 9 7 5, 9 9 7. L Partner's capital account analysis: Beginning capital account ............................. $ <51, 8 0 3 . Capital contributed during the year ................. $ Current year increase (decrease) .............. $ 13 3 , 2 81. Withdrawals&distributions .............................. $( 591, 771) Ending capital account .................................... $ <510 , 2 9 3 . ®Tax basis 0 GAAP 0 Section 704(b) book Other (explain) ?~ ,_ ~ ~ o LHA For Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2008 811261 12-31-OS 16 1 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310 1 2 651108 Schedule K-1 200 ~ Final K-1 0 Amended K-1 OMB No. 1545-0099 (Form 1065) For calendar year 2006, or tax Department of the Treasury year beginning Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 10rdinary business income (loss) 3 9 , 3 3 5 . 15 Credits Credits, etc. 2Net rental real estate income (loss) - See separate instructions. 5 4 , 4 21 . 1s Foreign transactions Part I Information About the Partnershi 30ther net rental income (loss) p A Partnership's employer identification number 4Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5lnterest income PAC INDUSTRIES PARTNERSHIP sa0rdinary dividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG, PA 17112 SbQualifieddividends 2, 240. C IRS Center where partnership filed return * <2 , 4 31. > CINCINNATI , OH - 7Royalties 18 Tax-exempt income and D ~ Check if this is a publicly traded partnership (PTP) SNet short-term capital gain (loss) nondeductible expenses Part II Information About the Partner 9aNet long-term capital gain (loss) E Partner's identifying number 9bCollectibles (28%) gain (loss) 19 Distributions 548,934. 17 5- 4 0- 9 4 9 3 9cUnrecaptured sec 1250 gain F Partner's name, address, city, state, and ZIP code 7 , 3 0 5 . 20 Other information 10Net section 1231 gain (loss) ROCCO A COSTABILE 52,303. BOX 5 2 0 5 110ther income (loss) GRANTVILLE, PA 17028 G General partner or LLC Limited partner or other LLC member-manager member H ©Domestic partner ~ Foreign partner 12Section 179 deduction What type of entity is this partner? INDIVIDUAL 130ther deductions J Partner's share of profit, loss, and capital: 6 . Beginning Ending 1, 3 51. Profit 33.3333333% 33.3333333% * 7,565. loss 3 3.3 3 3 3 3 3 3% 3 3.3 3 3 3 3 3 3% 14Self-employment earnings (loss) Capital 33.3333333% 33.3333333% 30, 273. K Partner's share of liabilities at year end: 5 4 , 4 8 9 . Nonrecourse ................................................ $ *See attached statementfor additional inf ormation. Qualified nonrecourse financing ........................ $ Recourse ...................................................... $ 9 7 5, 9 9 6. L Partner's capital account analysis: Beginning capital account .............................. $ <13,369. Capital contributed during the year .................. $ Current year increase (decrease) ............. $ 13 3 , 2 8 7 . Withdrawals &distributions .............................. $( 548 , 934) Ending capital account .................................... $ <4 2 9 , 016 . ©Tax basis ~ GAAP 0 Section 704(b) book 0 Other (explain) ?~ ~ ~ o LHA For Paperwork Reduction Act Notice, see Instructions }or form 1065. Schedule K-1 (Form 1065) 2008 sl2zst 72-31-09 20 2 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310 1 3 651108 Schedule K-1 '~nR 0 Final K-1 ~ Amended K-1 OMB No. 1545-0099 i~...... ~nce~ t' """ ' """~ For calendar year 2009, or tax - - - - Department of the Treasury year beginning Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 10rdinary business income (loss) 3 9 , 3 3 4 . 15 Credits Credits, etc. 2Net rental real estate income (loss) - See separate instructions. 5 4 , 4 21 . 16 Foreign transactions Part I Information About the Partnership 3other net rental income (loss) A Partnership's employer identification number 4Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5lnterest income PAC INDUSTRIES PARTNERSHIP 6a0rdinarydividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG, PA 17112 6b0ualified dividends 2 , 241. C IRS Center where partnership filed return * <2 4 3 0 . > CINCINNATI , OH 7Royalties 18 Tax-exempt income and D ~ Check if this is a publicly traded partnership (PTP) 8 Net short-term capital gain (loss) nondeductible expenses Part II Information About the Partner 9a Net long-term capital gain (loss) E Partner's identifying number 9bCollectibles (28%) gain (loss) 19 Distributions 555,275. 191- 4 2- 8 9 3 5 9clJnrecaptured sec 1250 gain F Partner's name, address, city, state, and ZIP code 7 , 3 0 6 . 20 Other information 10Net section 1231 gain (loss) FRANK M COSTABILE 52,302. 5 7 6 LESTER COURT 110ther income (loss) HARRISBURG, PA 17112 G General partner or LLC Limited partner or other LLC member-manager member H ©Domestic partner ~ Foreign partner 12Section 179 deduction I What type of entity is this partner? INDIVIDUAL 130ther deductions J Partner's share of profit, lass, and capital: 7 Beginning Ending 1 , 3 51. Profit 33.3333333% 33.3333333% * 7,566. Loss 3 3.3 3 3 3 3 3 3% 3 3. 3 3 3 3 3 3 3% 14Self-employment earnings (loss) Capital 33.3333333% 33.3333333% 30,272. K Partner's share of liabilities at year end: 5 4 , 4 9 0 . Nonrecourse ,.„ ............................................ $ *See attached statement for additional inf ormation. Qualifiednonrecoursefinancing ........................ $ Recourse ...................................................... $ 975 , 997 . L Partner's capital account analysis: Beginning capital account .............................. $ <2 0 2 ,12 6 . Capital contributed during the year .................. $ Current year increase (decrease) ................... $ 13 3 , 2 81. Withdrawals & distributions .............................. $( 555 , 275) Ending capital account ............... . .................. $ <6 2 4 ,12 0 . ©Tax basis ~ GAAP 0 Section 704(b) book Other (explain) ?~ ~ a~ ~ ~ o LHA For Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2008 attzst 72-37-09 24 3 11240916 759605 594310 2008.04000 PAC INDUSTRIES PARTNERSHIP 594310 1 1065 U.S. Return of Partnership Income Form For calendar ear 2007, or tax ear be innin Department of the Treasury y Y 9 9 ,and ending Internal Revenue Service A Principal business activity partnership OMB No. 1545-0099 2007 D Employer identification number REAL ESTATE IRS PAC INDUSTRIES PARTNERSHIP 23-1895159 label. B Principal product or service Other- Number, street, and room or suite no. If a P.O. box, see the instructions. E Date business started COMM'L & RES. P„~~ 5341 JAYCEE AVENUE 06/12/1972 LEASING or City or town, state, and ZIP code F Total assets type. C Business code number 531110 ARRISBURG, PA 17112 $ 1,567,563. G Check applicable boxes: (1) Initial return (2) Finai return (3) Name change (4) Address change (5) Amended return H Check accounting method: (1) 0 Cash (2) ~X Accrual (3) ~ Other (specify) - I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year - 3 J Check if Schedule M-3 attached .................. .......................................................................................................................................... Caution: Include only trade or business income and expenses on lines 1a through 22 below. See the instructions for more information. 1 a Gross receipts or sales is b Less returns and allowances ........................................................................... 1b is 2 Cast of goods sold (Schedule A, line 8) ............. ............................................................................. 2 E 3 Grass profit Subtract line 2 from line 1c ............................................................................................................ 3 4 Ordinary income (loss) from other partnerships, estates and trusts (attach schedule) SEE STATEMENT 1 4 -10 219 , -- .. . . , . 5 Net farm profit (loss) (attach Schedule F (Form 1040)) ..................................................................................... 5 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) ________________ _ 8 7 Other income loss attach schedule ( ) ( ) ............................................................................................................ 7 8 Total income (loss). Combine lines 3 through 7 ................................................................................................ 8 -10 , 219 . r.. 9 Salaries and wages (other than to partners) (less employment credits) g N ............. c 10 Guaranteed payments to partners ......................... .............. ........................................................................... 10 ~ 11 Repairs and maintenance ............................................................................................................................ 11 E 12 Bad debts ................... . ................................... 2 `0 13 Rent ..................................................... 13 w .................................................................................................... ~ 14 Taxes and licenses .............. ........................................................................................................................ 14 15 Interest ...................................................... 15 ................................................................................................ 2 .. 16 a Depreciation (if required, attach Form 4562) i6a ~ b Less depreciation reported on Schedule A and elsewhere on return ........................... 16b 16c ~ 17 Depletion (Do not deduct oil and gas depletion.) 17 .............................. ............................................................ 18 Retirement plans, etc . ...... .. 18 y . ....................................................... ................................................................... c .. 19 Employee benefit programs ..................................................................... .................................................... 19 v 0 20 Other deductions (attach schedule) ............................................................................................................... 20 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20 .......................................... 21 22 Ordinary business income loss). Subtract line 21 from line 8 .............................................................................. 22 -10 , 219 . Si n er pena tres per ury, ec are t at ave examme is return, inclu mg accompanying sc e u es an statements, an tote est o m correct, and complete. Declaration of preparer (other than general partner or limited liability company member) is based on all information of wh y now a ge an a ie , ~t is true, ich preparer has any knowledge. gn Here May the IRS discuss this return ' w ' ith the prepares shown below ignature o genera partner or imi a is i qty company mem er manager ate ( see instr.)? ® Yes ~ No Paid Preparer's signature Date Check iP oy - ~ self-em I ed Preparer's SSN ar PTIN p 0 0 2 2 917 4 ~""Nat`"`o yours if self-~y iii~"~r'L1VL•1riLV, ri~lr,111•1H.LV Oc l,.V. Y.l.;. t'" -L,i-1.11005 use only ernployea) 110 2 7 MUMMA ROAD Phone no. ~ `] 17 ~ 7 61- 0 211 address, and ZIP code WORMLEYSBURG , PA 17 0 4 3 _ For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Form 1065 (2007) 711oa1 JWA 12-z7-o7 Form 1065 (2007) PAC INDUSTRIES PARTNERSHIP 23-1895159 Page 2 Sold (see the in 1 Inventory at beginning of year ................................................................ 2 Purchases less cost of items withdrawn for personal use ............................ 3 Cost of labor ..................................................................................... 4 Additional section 263A costs (attach schedule) .................................... 5 Other costs (attach schedule) ............................................................. 6 Total. Add lines 1 through 5 ........................................................... . 7 Inventory at end of year ......................................................................... 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 9 a Check all methods used for valuing closing inventory: (i) ~ Costas described in Regulations section 1.471-3 (ii) 0 Lower of cost or market as described in Regulations section 1.471-4 (iii) ~ Other (specify method used and attach explanation) - b Check this box if there was a writedown of "subnormal" goods as described in Regulations section 1.471-2(c) . - .................................................. c Check this box if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) - 0 .................................... d Do the rules of section 263A (for property produced or acquired far resale) apply to the partnership? . _._ _.. __ ... ~ Yes ~ No e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? ................. .. . . ~ Yes ~ No If "Yes," attach explanation. Schedule B Other Information 1 What type of entity is filing this return? Check the applicable box: Yes No a ®Domestic general partnership b 0 Domestic limited partnership c 0 Domestic limited liability company d 0 Domestic limited liability partnership e 0 Foreign partnership f ~ Other - 2 Are any partners in this partnership also partnershiPs? ........................................................................................................................ X 3 During the partnership's tax year, did the partnership own any interest in another partnership or in any foreign entity that was disregarded as an entity separate from its owner under Regulations sections 301.7701-2 and 301.7701-3? If "Yes," see instructions for required attachment ............................................................................................................... X 4 Did the partnership file Form 8893, Election of Partnership Level TaxTreatment, or an election statement under section 6231(a)(1)(B)(ii) for partnership-level tax treatment, that is in effect for this tax year? See Form 8893 for more details ............................................................... X 5 Does this partnership meet all three of the following requirements? a The partnership's total receipts for the tax year were less than $250,000; b The partnership's total assets at the end of the tax year were less than $600,000; and c Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return .......................................................................................................................................................................................... X If "Yes," the partnership is not required to complete Schedules L, M-1, and M-2; Item F on page 1 of Form 1065; or Item L on Schedule K-1. 6 Does this partnership have any foreign partners? If "Yes," the partnership may have to file Farms 8804, 8805 and 8813. See the instructions .............................................................................. ........................................................................... 7 Is this partnership a publicly traded partnership as defined in section 469(k)(2)? .... ........................................... X 8 Has this partnership filed, or is it required to file, a return under section 6111 to provide information on any reportable transaction? ....... .......... X 9 At any time during calendar year 2007, did the partnership have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements for Form TD F 90-22.1. If "Yes; enter the name of the foreign country. - X 10 During the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If "Yes; the partnership may have to file Form 3520. See the instructions ..., ............................................................................................ X 11 Was there a distribution of property or a transfer (for example, by sale or death) of a partnership interest during the tax year? If "Yes," you may elect to adjust the basis of the partnership's assets under section 754 by attaching the statement described under Elections Made By the Partnership in the instructions .................................................................................................................. X 12 Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return - Designation of Tax Matters Partner (see the instructions) Enter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: Name of Identifying designated TMP - ROCCO A COSTABILE number of TMP - 175-40-9493 Address of - BOX 5 2 0 5 designated TMP GRANTV I LLE , PA 17 0 2 8 JWA Form 1 ~5 (2007) anon i2-2~-0~ 2 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 Farm 1065 (2007) PAC INDUSTRI E5 PARTNERSHIP 2 3 -18 9 515 9 Page 3 Schedule K~ Partners' Distrl!butrve Share Items r~rsi ~..,,,,,~r 1 Ordinary business income (loss) (Page 1, line 22) ........................................... ............. - - .. 1 -10 , 219 . 2 Net rental real estate income (loss) (attach Form 8825) ........................S.F.~E.. ..S.'~,~i.~.~~~,I~T'~....~.......... 2 2 2 3 , 2 01 . 3a Other gross rentalincome(loss) ................................................... . . . 3a b Expenses from other rental activities (attach statement) .._ -. .- -_ - 3b c Other net rental income (loss). Subtract line 3b from line 3a ............................ ........... . . .. 3c y 4 Guaranteed payments ..- ...................................... ....... ......... ........ .......... .... 4 J 5 Interest income ...................................................................................... ........................................... 5 d 6 Dividends: a Ordinary dividends - .................................................... .................... ................. 6a c b Qualified dividends 6b 7 Royalties ........................................................... - ........................... ............................................ 7 8 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) ................... ... . . . ... g 9a Net long-term capital gain (loss) (attach Schedule D (Form 1065)) .. .. ...-. ......... ................ .... ga b Collectibles (28%) gain (loss) ............................................................... 9b c Unrecaptured section 1250 gain (attach statement) ................... ... . ... 9c 10 Net section 1231 gain (loss) (attach Form 4797) .................................... . . - _ _, _ . 10 1 t Other income (loss) (see instructions) Type - 11 12 Section 179 deduction (attach Farm 4562) 12 y . .................................................... ........................................... `0 13a Contributions ................................................... . .. . . .. .-.SEE, STATEMENT. 3-__-..- . 13a 67 . 3 b Investment interest expense ....................................................................... ........................................... 13b 7, 9 3 5. o c Section 59(e)(2) expenditures: (1) Type - (2) Amount- 13c(2) d Other deductions (see instructions) Type - SEE STATEMENT 4 13d 2 8 , 3 7 2 . w o.. 14a Net earnings (loss) from self-employment .....-. . .......................................... ........................................... 14a -10,219. N E £ b Grass farming or fishing income ................................................................. ........................................... 14b w c Gross nonfarm income ............................................................................. ........................................... 14c 15a Low-income housing credit (section 42(1)(5)) ............................................... ........................................... 15a N b Low-income housing credit (other) .............................................................. ........................................... 15b m c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) ........... .......... .... ........ 15c v d Other rental real estate credits (see instructions) Type - 15d e Other rental credits (see instructions) Type - 15e f Other credits (see instructions) Type - 15f 18a Name of country or U.S. possession - .......... b Gross income from all sources .................................................................... ........................................... 18b H c Gross income sourced at partner level ................ .......................................... .......................... ....... .. . i6c o Foreign gross income sourced at partnership level ,~ d Passive a General cote o category - g ry ---.-. - f Other .,-,.- - 16f Deductions allocated and apportioned at partner level ~ g Interest expense - h Other .................... - ..................................... 16h a~ Deductions allocated and apportioned at partnership level to foreign source income c I ategory - j General category ._-... - k Other ...-.- - i6k °' I Totalforeigntaxes (check one): - Paid Q Accrued Q .................... ........................................... 181 m Reduction in taxes available for credit (attach statement) .................................... .......................................... i6m n Other foreign tax information (attach statement) ............................................ ........................................... 17a Post-1986 depreciation adjustment 17a 3 914 ........................... . 1 >~ >= _ b Adjusted gain or loss ............................................................................... ........................................... 17b ~- ~" c De letion other than oil and as P ( 9 ) .................................................................. .......................................... 17c ~~ d Oil, gas, and geothermal properties -gross income ------------------------------------ ---- - ----------- -- ---- -- ---- -------- ild ago a Oil, gas, and geothermal properties -deductions „ ........................................... ............................... ...... 17e f Other AMT items (attach statement) ............................................................... .......................................... 17f 18a Tax-exempt interest income 18a c b Other tax-exempt income ........................................................................... .......................................... 18b c Nondeductible expenses .............................................................................. .......................................... 18c c 19a Distributions of cash and marketable securities ............................................... ........ .. .. ....... .. 19a 384, 225. c b Distributions of other property ......................... ......... ......... ........ ........ ................ 19b t 20a Investment income .................................................................................... .......................................... 20a p b Investment expenses ................................................................. 20b c Other items and amounts (attach statement) .................................... JWA ~tio2i tz-2~-o~ Form 1065 (2007) 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 Form 1065 (2007) PAC INDUSTRIES PARTNERSHIP 23-1895159 Page4 Analysis of Net Income (Loss O 1 Net income (loss). Combine Schedule K, lines 1 through 11. From the result, subtract the sum of Schedule K, lines 12 through 13d and 161 .......... 1 17 6 6 0 8 2 Analysis by partner type: a General partners b Limited partners I Cor orate () p (ii) Individual (active) (iii) Individual (passive) (iv) Partnership (v) Exempt organization (vi) Nominee/Other 176,608. Schedule L Balance Sheets per Books ~ Beginning of tax Assets End of tax 1 Cash ........................................... 9, 6 0 2. 1. 2a Trade notes and accounts receivable .,....... 4 , 8 7 2 . 3 , 2 01. b Less allowance for bad debts ............. .... . 4 , 8 7 2 . 3 , 2 01 . 3 Inventories .......................................... 4 U.S.governmentobligations .................. 5 Tax-exempt securities ........................... 6 Other current assets (attach statement) ...... STATEMENT 5 8 0, 6 5 7. 8, 4 8 0. 7 Mortgage and real estate loans ............... 8 Other investments (attach statement) ....._. _. STATEMENT 6 10 , 3 9 3 . 131 , 7 3 5 . 9a Buildings and other depreciable assets ...... 1, 8 4 9, 5 7 8. 1, 8 5 3, 9 3 8. b Less accumulated depreciation ..... ..... ..... 7 0 5, 3 4 5. 1,14 4, 2 3 3. 7 6 8, 6 0 3. 1, 0 8 5, 3 3 5. 10a Depletable assets ................................. b Less accumulated depletion 11 Land (net of any amortization) ............. 326,796. 326,796. 12a Intangible assets (amortizable only) ..._..... 14 , 9 9 8 . 14 , 9 9 8 . b Less accumulated amortization ............... 3, 3 3 3. 11, 6 6 5. 4, 3 3 3. 10 , 6 6 5. 13 Other assets (attach statement) .......... ..... TATEMENT 7 1, 3 5 0 . 1, 3 5 0 . 14 Total assets ..................................... 1,589,568. 1,567,563. Liabilities and Capital 15 Accounts payable ................................. 697. 2,328. 16 Mortgages, notes, bonds payable in less than 1 year 17 Other current liabilities (attach statement) ... TATEMENT 8 17 , 5 5 0 . 9 8 , 5 2 9 . 18 All nonrecourse loans ........................... 19 Mortgages, notes, bonds payable in 1 year or more 1, 6 0 2 , 4 31. 1, 6 3 4 , 215 . 20 Other liabilities (attach statement) ...,...... _. TATEMENT 9 16 , 7 6 9 . 9 9 , 7 g 9 , 21 Partners'capitalaccounts ..................... -47,879. -267,298. 22 Total liabilities and capital .. ................... 1, 5 8 9, 5 6 8. 1, 5 6 7, 5 6 3. Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note: Schedule M•3 may be required instead of Schedule M-1 (see instructions). 1 Net income (loss) per books ..................... ... 16 4 , 8 0 6 . 6 Income recorded on books this year not included 2 Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not recorded on boo this year (itemize): ks on Schedule K, lines 1 through 11 (itemize): aTax-exempt interest $ 3 Guaranteed payments (other than health insurance) ............................................. ... 7 Deductions included on Schedule K, lines 1 through 13d,and 161, not charged against 4 Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 161(itemize): book income this year (itemize): a Depreciation $ a Depreciation $ 11, 0 4 2 . b Travel and entertainment $ 8 Add lines 6 and 7 ....................................... STMT 11 7 6 0 . 11, 8 0 2. 9 Income (loss) (Analysis of Net Income (Loss), 5 Add lines 1 through 4 ................................. ... 17 6 , 6 0 8 . line 1). Subtract line 8 from line 5 .................. 17 6 , 6 0 8 . Schedule M-2 Analysis of Partners' Ca ital Accounts 1 Balance at beginning of year ......................... .. -47, 879. 6 Distributions: aCash .,..._.._.._.._ _. _ .. 384, 225. 2 Capital contributed: a Cash ........ ...... ... b Property ....._.. . bProperty .................. ... 7 Other decreases (itemize): 3 Net income (loss) per books ............. ........... ... 16 4 , 8 0 6 . 4 Other increases (itemize): 5 Add lines 1 through 4 ..................... t2-2~-m JWA 13450314 759605 594310 8 Addlinessand7 ........................ _.... 384,225. 116 , 9 2 7 . 9 Balance at end of year. Subtract line a 6om line 5 - 2 6 7 , 2 9 8 . 4 Form 1065 (2007) 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310_1 8825 Rental Real Estate Income and Expenses of a OMB No. 1545-1786 Form Partnership or an S Cor oration (Rev. December 2006) p - ee instructions on a e 2. Department of the Treasury ~ Attach to Form 1065, Farm 1065 Bgor Form 1120S. Internal Revenue Service Name Employer identification number PAC INDUSTRIES PARTNERSHIP 23:1895159 A COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA B COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE. , HARRISBURG, PA CCOMMERCIAL REAL ESTATE - 5341 JAYCEE AVE., HARRISBURG, PA DRESIDENTTAr, REAr. F.GTATF - nTr.T.~Rrrur_ pn Prop erties Rental Real Estate Income A B C D 2 Grossrents ............................ 2 73, 200. 77, 991. 124, 200. 26, 300 . Rental Real Estate Expenses 3 Advertising ............. .. 3 4 Auto and travel ....,..._. 4 5 Cleaning and maintenance .,..._....._ 5 1 , 712 . 8 Commissions ........................... 6 7 Insurance ................................. 7 8 Legal and other professional fees ._. 8 5 , 418 . s Interest ................. . .... _ s 20, 365. 21, 313. 19, 808. 4, 836. 10 Repairs .................................... 10 1, 246. 1, 091. 1, 708. 11 Taxes .................................... 11 6 , 946. 1, 510 . 12 Utilities .................................... 12 1,168. 13 Wages and salaries ..................... 13 14 Depreciation (see instructions) ...... 14 6 , 7 0 4 . 12 , 6 41. 13 , 5 7 4 . 3 8 7 . 15 other (list) - STMT 12 1, 0 0 0 . 15 16 Total expenses for each property. Addlines3through 15 ............... 16 44, 559. 36, 555. 35, 0 90. 5, 223. 17 Total gross rents. Add gross rents from line 2, columns A thrcugh H ............. ......_..,..._.__._.... ..................... 17 3 8 6 , 9 91. 18 Total expenses. Add total expenses from line 16, columns A through H .................... .....,.._....... _. ............................ 18 ( 16 3 , 7 9 0 19 Net gain (loss) from Form 4797, Part II, line 17, from the disposition of property from rental real estate activities ................................................................................................................................................ 19 20a Net income (loss) from rental real estate activities from partnerships, estates, and trusts in which this partnership or S corporation is a partner or beneficiary (from Schedule K-1) ......................................................... 20a b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (1) Name (2) Employer identification number 21 Net rental real estate income (loss). Combine lines 17 through 20a. Enter the result here and on: • Form 1065 or1120S:ScheduleK,line2,or ................................ ................................................... 21 223,201. • Form 1085-B: Part I, line 4 72-7a-o~ JWA for Paperwork Reduction Act Notice, see page 2 of form. Form 8825 (12-2006) 5 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 Fam 8825 (2007) Page 2 1 Show the kind and location of each property. E COMMERCIAL REAL ESTATE - CROYDON PA FCOMMERCIAL REAL ESTATE - PITTSBURGH, PA G H Rental Real Estate Income E F G H 2 Gross rents ......................... _ 2 7 2, 0 0 0. 13 , 3 0 0. Rental Real Estate Expenses 3 Advertising ................................. 3 4 Auto and travel ........................... 4 5 Cleaning and maintenance ............... 5 6 Commissions .............................. 6 7 Insurance .................................... 7 8 Legal and other professional fees ...... 8 9 Interest .................... . ... .. 9 13, 588. 10 Repairs ....................................... 10 11 Taxes .......................................... 11 12 Utilities ....................................... 12 13 Wages and salaries ........................ 13 14 Depreciation (see instructions) _....... 14 16 , 4 7 9 . 15 Other (list) - STMT 13 5 0 0 . SEE STATEMENT 14 15 11,796. 16 Total expenses for each properly. Add lines3throughl5 .................. i6 30,567. 11,796. JWA Form 8825(12-2006) 7zoiaz 12-13-07 6 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 2007 Income from Passthroughs SCOTLAND LAUNDRY ASSOCIATES 5341 JAYCEE AVENUE HARRISBURG, PA 17112 I.D. NUMBER: 25-1486010 TYPE: PARTNERSHIP INCOME: ORDINARY INCOME (LOSS) -10,219 7zao2i 07-19-07 2007 Income from Passthroughs I.D. NUMBER: TYPE: PARTNERSHIP DEDUCTIONS: CASH CONTRIBUTIONS (50$) SECTION 754 BASIS ADJUSTMENT 67 28,372 ~zaozi o~-is-a~ 2007 Income from Passthroughs SUMMARY OF K-1 INFORMATION FOR ALL PASSTHROUGHS INCOME: ORDINARY INCOME (LOSS) DEDUCTIONS: CASH CONTRIBUTIONS (50~) SECTION 754 BASIS ADJUSTMENT -10,219 67 28,372 ~zaoz~ o~-is-o~ PAC INDUSTRIES PARTNERSHIP FORM 1065 INCOME (LOSS) FROM OTHER PARTNERSHIPS, ETC. STATEMENT 1 NAME AND ADDRESS SCOTLAND LAUNDRY ASSOCIATES 5341 JAYCEE AVENUE HARRISBURG,. PA 17112 TOTAL TO FORM 1065, LINE 4 SCHEDULE K NET INCOME (LOSS) FROM RENTAL REAL ESTATE STATEMENT 2 EMPLOYER ID AMOUNT 25-1486010 -10,219. 23-1895159 -10,219. DESCRIPTION COMMERCIAL REAL COMMERCIAL REAL COMMERCIAL REAL RESIDENTIAL REA COMMERCIAL REAL COMMERCIAL REAL ESTATE ESTATE ESTATE L ESTATE ESTATE ESTATE 7301 ALLENTOWN BLVD, HARRISBURG, PA 5321 JAYCEE AVE., HARRISBURG, PA 5341 JAYCEE AVE., HARRISBURG, PA DILLSBURG PA CROYDON PA PITTSBURGH, PA TOTAL TO SCHEDULE K, LINE 2 AMOUNT 28,641. 41,436. 89,110. 21,077. 41,433. 1,504. 223,201. SCHEDULE K CHARITABLE CONTRIBUTIONS STATEMENT 3 DESCRIPTION TYPE AMOUNT PASSTHROUGH CONTRIBUTIONS FROM - CASH (50$) TOTALS TO SCHEDULE K, LINE 13A 67. 67. SCHEDULE K OTHER DEDUCTIONS STATEMENT 4 DESCRIPTION SECTION 754 BASIS ADJUSTMENT FROM TOTAL INCLUDED IN SCHEDULE K, LINE 13D AMOUNT 28,372. 28,372. 7 STATEMENT(S) 1, 2, 3, 4 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP BEGINNING OF TAX YEAR SCHEDULE L OTHER CURRENT ASSETS STATEMENT 5 DESCRIPTION PREPAID REAL ESTATE TAXES ACCOUNTS RECEIVABLE - RELATED ENTIT TOTAL TO SCHEDULE L, LINE 6 8,095. 72,562. 23-1895159 END OF TAX YEAR 8,480. 80,657. 8,480. SCHEDULE L OTHER INVESTMENTS STATEMENT 6 DESCRIPTION PA STATE BANK STOCK INVESTMENT - SCOTLAND LAUNDRY TOTAL TO SCHEDULE L, LINE 8 BEGINNING OF TAX YEAR 10,393. 10,393. 131,735. SCHEDULE L OTHER ASSETS STATEMENT 7 DESCRIPTION SECURITY DEPOSITS TOTAL TO SCHEDULE L, LINE 13 BEGINNING OF END OF TAX TAX YEAR YEAR 1,350. 1,350. 1,350. 1,350. SCHEDULE L DESCRIPTION OTHER CURRENT LIABILITIES DEFERRED INCOME CASH OVERDRAFT A/P - RELATED ENTITY TOTAL TO SCHEDULE L, LINE 17 END OF TAX YEAR 10,393. 121,342. STATEMENT 8 BEGINNING OF END OF TAX TAX YEAR YEAR 17,550. 17,450. 4,025. 77,054. 17,550. 98,529. 8 STATEMENT(S) 5, 6, 7, 8 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 SCHEDULE L OTHER LIABILITIES STATEMENT 9 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR SECURITY DEPOSITS TOTAL TO SCHEDULE L, LINE 20 16,769. 99,789. 16,769. 99,789. FORM 1065 PARTNERS' CAPITAL ACCOUNT SUMMARY STATEMENT 10 PARTNER BEGINNING NUMBER CAPITAL CAPITAL SCHEDULE M- 2 CONTRIBUTED LNS 3, 4 & 7 WITH- DRAWALS ENDING CAPITAL 1 20,988. 54,936. 127,727. -51,803. 2 55,444. 54,934. 123,747. -13,369. 3 -124,311. 54,936. 132,751. -202,126. TOTAL -47,879. 164,806. 384,225. -267,298. 9 STATEMENT(S) 9, 10 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 SCHEDULE M-1 EXPENSES RECORDED ON BOOKS NOT DEDUCTED IN RETURN STATEMENT 11 DESCRIPTION AMOUNT OTHER NON-DEDUCTIBLE EXPENSES 760. TOTAL TO SCHEDULE M-1, LINE 4 760. OTHER RENTAL EXPENSES STATEMENT 12 PROPERTY: COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA DESCRIPTION AMOUNT AMORTIZATION 1,000. TOTAL TO RENTAL SCHEDULE, LINE 15 1,000. OTHER RENTAL EXPENSES STATEMENT 13 PROPERTY: COMMERCIAL REAL ESTATE - CROYDON PA DESCRIPTION AMOUNT PROFESSIONAL FEES 500. TOTAL TO RENTAL SCHEDULE, LINE 15 500. OTHER RENTAL EXPENSES STATEMENT 14 PROPERTY: COMMERCIAL REAL ESTATE - PITTSBURGH, PA DESCRIPTION MISCELLANEOUS TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT 11,796. 11,796. 10 STATEMENT(S) 11, 12, 13, 14 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 1 651107 Schedule K-1 'nn7 0 Final K-1 ~ Amended K-1 OMB No. 1545-0099 ir__- a tf °11 1 O°~~ For calendar year 2007, or tax ~ ~ ~ ' Department of the Treasury year beginning Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 10rdinary business income (loss) - 3 , 4 0 6 . 15 Credits Credits, etc. 2Net rental real estate income (loss) - See separate instructions. 7 4 , 4 0 0 . 16 Foreign transactions Part I Information About the Partnership 3other net rental income (loss) A Partnership's employer identification number 4Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5lnterest income PAC INDUSTRIES PARTNERSHIP 5a0rdinarydividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG, PA 17112 6bQualifieddividends 1,305. C IRS Center where partnership filed return OGDEN, UT 7Royalties 18 Tax-exempt income and D ~ Check if this is a publicly traded partnership (PTP) BNet short-term capital gain (loss) nondeductible expenses Part II Information About the Partner 9a Net long-term capital gain (loss) E Partner's identifying number 9bCollectibles (28%) gain (loss) 19 Distributions 127,727. 16 2- 3 6- 9 9 2 2 9cUnrecaptured sec 1250 gain F Partner's name, address, city, state, and ZIP code 20 Other information 10Netsection 1231 gain (loss) PHILIP F COSTABILE 3 4 8 BLACKLATCH LANE i f Other income (loss) CAMP HILL, PA 17011 G General partner or LLC Limited partner or other LLC member-manager member H ®Domestic partner 0 Foreign partner 12Section 179 deduction What type of entity is this partner? INDIVIDUAL 130ther deductions J Partner's share of profit, loss, and capital: 2 2 . Beginning Ending 2 , 645 . Profit 33.3333334% 33.3333334% * 9,457. Loss 3 3.3 3 3 3 3 3 4°i° 3 3.3 3 3 3 3 3 4°i° 14Self-employment earnings (loss) Capital 33.3333334% 33.3333334% -3,406. K Partner's share of liabilities at year end: Nonrecourse ................................................ $ `See attached statement for additional inf ormation. Qualified nonrecourse financing ........................ $ Recourse .................................................... $ 5 7 8 , 0 01. L Partner's capital account analysis: Beginning capital account .............................. $ 20, 988. Capital contributed during the year .................. $ Current year increase (decrease) ..................... $ 54 , 9 3 6 . Withdrawals & distributions .............................. $( 127 , 727) Ending capital account ................................. $ -51, 803. ®Tax basis ~ GAAP ~ Section 704(b) book Other (explain) T C o a~ ~ ~ o " JWA For Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2007 711zs1 12-31-07 11 1 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 2 651107 Schedule K-1 'nn7 0 Final K-1 ~ Amended K-1 OMB No. 1545-0099 ~f °11 1°°~~ For calendar year 2007, or tax ~ ~ ~ ' Department of the Treasury year beginning Part 111 Partner's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 10rdinary business income (loss) - 3 , 4 0 7 . 15 Credits Credits, etc. 2Net rental real estate income (lass) - See separate instructions. 7 4 , 4 01 . 15 Foreign transactions Part I Information About the Partnership 3other net rental income (loss) A Partnership's employer identification number 4Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5lnterest income PAC INDUSTRIES PARTNERSHIP 6a0rdinarydividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG, PA 17112 6b0ualifieddividends 1,304. C IRS Center where partnership filed return OGDEN, UT 7Royalties 18 Tax-exempt income and D ~ Check if this is a publicly traded partnership (PTP) BNet short-term capital gain (loss) nondeductible expenses Part II Information About the Partner 9aNet long-term capital gain (loss) E Partner's identifying number 9bCollectibles (28%) gain (loss) 19 Distributions 123,747. 17 5- 4 0- 9 4 9 3 9clJnrecapturedsee 1250 gain F Partner's name, address, city, state, and ZIP code 20 Other information 10Net section 1231 gain (loss) ROCCO A COSTABILE BOX 5 2 0 5 110ther income (loss) GRANTVILLE, PA 17028 G General partner or LLC Limited partner or other LLC member-manager member H ~ Domestic partner ~ Foreign partner 12Section 179 deduction I What type of entity is this partner? INDIVIDUAL 130ther deductions J Partner's share of profit, loss, and capital: 2 3 . Beginning Ending 2 , 6 4 5 . Profit 33.3333333°~° 33.3333333°~° * 9,458. Loss 3 3.3 3 3 3 3 3 3% 3 3.3 3 3 3 3 3 3% 14Self-employment earnings (loss) Capital 33.3333333% 33.3333333% -3,407. K Partner's share of liabilities at year end: Nonrecourse ................................................ $ "'See attached statement for additional inf ormation. Qualifiednonrecoursefinancing ........................ $ Recourse ...................................................... $ 5 7 8, 0 0 2. L Partner's capital account analysis: Beginning capital account .............................. $ 55,444. Capital contributed during the year .._.._. $ Current year increase (decrease) ..................... $ 54,934. Withdrawals & distributions .............................. $( 123 , 747) Ending capital account $ -13 3 6 9 . ® Tax basis ~ GAAP 0 Section 704(b) book Other (explain) ?~ o ~ ~ o " JWA for Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2007 711261 12-31-07 15 2 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 3 651107 Schedule K-1 ~~~~ ~ Final K-1 ~ Amended K-1 OMB No. 1545-0099 trorm ~uoaf For calendar year 2007, or tax ~""' ' Department of the Treasury year beginning Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 10rdinary business income (loss) - 3 , 4 0 6 . 15 Credits Credits, etc. 2Net rental real estate income (loss) ~ See separate instructions. 7 4 , 4 0 0 . 16 Foreign transactions Part I Information About the Partnershi 30ther net rental income (loss) p A Partnership's employer identification number 4Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5lnterest income PAC INDUSTRIES PARTNERSHIP lia0rdinarydividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG , PA 17112 6b0ualified dividends 1, 3 0 5 . C IRS Center where partnership filed return OGDEN, UT 7Royalties 18 Tax-exempt income and D ~ Check if this is a publicly traded partnership (PTP) BNet short-term capital gain (loss) nondeductible expenses Part II Information About the Partner 9a Net long-term capital gain (loss) E Partner's identifying number 9bCollectibles (28%) gain (loss) 19 Distributions 132,751. 191- 4 2- 8 9 3 5 9c Unrecaptured sec 1250 gain F Partner's name, address, city, state, and ZIP code 20 Other information 10Netsection 1231 gain (loss) FRANK M COSTABILE 5798 HIDDEN LAKE DRIVE 110therincome(loss) HARRISBURG, PA 17112 ~ General partner or LLC Limited partner or other LLC member-manager member H ©Domestic partner ~ Foreign partner 12Section 179 deduction What type of entity is this partner? INDIVIDUAL 130ther deductions J Partner's share of profit, loss, and capital: 2 2 . Beginning Ending 2 , 6 4 5 . Profit 33.3333333% 33.3333333% * 9,457. Loss 3 3. 3 3 3 3 3 3 3% 3 3. 3 3 3 3 3 3 3% 14Self-employment earnings (loss} Capital 33.3333333% 33.3333333% -3,406. K Partner's share of liabilities at year end: Nonrecourse ................................................ $ *See attached statementfor additional inf ormation. Qualifiednonrecoursefinancing ........................ $ Recourse ...................................................... $ 5 7 8 , 0 01. L Partner's capital account analysis: Beginning capital.account .............................. $ -124, 311. Capital contributed during the year .................. $ Currentyear increase (decrease) ..................... $ 54 , 9 3 6 . Withdrawals & distributions .............................. $( 132 , 751) Ending capital account .................................... $ -202,126. ® Tax basis 0 GAAP ~ Section 704(b) book Other (explain) T c o ~ ~ o ~` JWA Far Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2007 7ii2si 12-31-07 19 3 13450314 759605 594310 2007.05010 PAC INDUSTRIES PARTNERSHIP 594310 1 Form 1065 Department of the Treasury Internal Revenue Service A Principal business activity B Principal product or service COMM'L & RES. Business code number U.S. Return of Partnership Income OMB No. 1545-0099 For calendar year 200e, or tax year beginning ,and ending 2006 Name of partnership D Employer identification Use number the IRS l b l PAC INDUSTRIES PARTNERSHIP 23-189515 a e . Other- Number, street, and room or suite no. If a P.O. box, see the instructions. E Date business started wise' print 5 3 41 JAYCEE AVENUE 0 6 12 19 7: or City or town, state, and ZIP code F Total assets type. G Check applicable boxes: (1) LJ Initial return (2) LJ Final return (3) LJ Name change (4) U Address change (5) (~ Amended return H Check accounting method: (1) ~ Cash (2) ®Accrual (3) ~ Other (specify) - I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year - 3 J Check if Schedule M-3 required (attach Schedule M-3) ... . .............................................................................................................................. 0 Caution: Include only trade or business income and expenses on lines 1a through 22 below. See the instructions for more information. 1 a Gross receipts or sales ................................................................................... 1 a b Less returns and allowances ........................................................................... 1b is 2 Cost of goods sold (Schedule A, line 8) ............................................................................... ....................... 2 E 3 Gross profit. Subtract line 2 from line 1c .............. ...... -- - ............................................... 3 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach schedule) ................................................ 4 5 Net farm profit (loss) (attach Schedule F (Form 1040)) ....................................................................................... 5 8 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) ........................................................................ 6 7 Other income (loss) (attach schedule) ................................................................................................... . ~ 8 Total income loss .Combine lines 3 throw h 7 ................................................................................................ 8 9 Salaries and wages (other than to partners) (less employment credits) ------------------------------------------------------------------ 9 H c 10 Guaranteed payments to partners ------------------------------------------------------------------------- ....................................... 10 0 11 Repairs and maintenance .............................................................................................................................. 11 ~E 12 Bad debts 12 $ 13 Rent ......................................................................................................................................................... 13 w ~ 14 Taxes and licenses ....................................................................................................................................... 14 15 Interest ...................................................................................................................................................... 15 i6 a Depreciation ('rf required, attach Form 4562) ......................................................... 16a ~ b Less depreciation reported on Schedule A and elsewhere on return --.._--- ................... 16b 16c ~ 17 Depletion (Do not deduct oil and gas depletion.) ............................................................................................. 17 18 Retirement tans, etc. P ........................................................................................... ................................... 18 H c 19 Employee benefit programs ........ ............ ....................................................................................................... 19 r m 20 Other deductions (attach schedule) ............................................................................................................... 20 0 21 Total deductions. Add the amounts shown in the far ri ht column for lines 9 throw h 20 .......................................... 21 22 Ordinary business income (loss). Subtract line 21 from line 8 .............................................................................. 22 0 . 23 Credit for federal tele hone excise tax aid attach form 8913 .............................................................................. 23 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaraticn of preparer (other than general partner or limited liability company member) is based on all information of which preparer has any knowledge. Sign Here May the IRS discuss this return ' , with the preparar shown below Signature of general partner or limited liability company member manager Date (see instr.)? ®Yes 0 NO Preparer's Date Chedc if Preparer's SSN or PTIN Paid signature self-employed -~ P 0 0 2 2 917 4 Nreparer's Firm's name (or SELIGMAN FRIEDMAN & CO . P . C . EIN 2 3 -13110 0 5 yours if self- use only employed), 10 2 7 MUMMA ROAD Phone no. ~ '~ 17) 7 61- 0 211 address, and ZIP code WORMLEYSBURG PA 17 0 43 siiooi JWA For PrivacyAct and Paperwork Reduction Act Notice, see separate instructions. Form 1065 (2006) iz-ze-os Form 1065 2006 PAC INDUSTRIES PARTNERSHIP 2 3 -18 9 515 9 Pa e 2 Schedule A Cost of Goods Sold see the instructions 1 Inventory at beginning of year ............................................................................................... ..... 1 2 Purchases less cost of items withdrawn for personal use ........................................................... ....................... ..... 2 3 Cost of labor .................................................................................................................... ....................... ...... 3 4 Additional section 263A costs (attach schedule) .-...--.- . - ........................................ .................... ......... 4 5 Other costs (attach schedule) ......................................................................................... ................... ...... 5 6 Total. Add lines 1 through 5 ............................................................................................... ...................... ....... 6 7 Inventory at end of year ....... .............................................. ............................................. ..................... .................... 7 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 -.-... ........ g 9 a Check all methods used for valuing closing inventory: (i) 0 Cost as described in Regulations section 1.471-3 (ii) ~ Lower of cost or market as described in Regulations section 1.471-4 (iii) 0 Other (specify method used and attach explanation) - b Check this box if there was a writedown of "subnormal" goods as described in Regulations section 1.471-2(c) - ................................................. - 0 c Check this box if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) ...-. _ _ _ - 0 d Do the rules of section 263A (for property produced or acquired for resale) apply to the partnership? ...-_- _ -. ~ Yes ~ No e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? -- 0 Yes 0 No Schedule B Other Information 1 What type of entity is filing this return? Check the applicable box: Yes No a ®Domestic general partnership b ~ Domestic limited partnership c 0 Domestic limited liability company d ~ Domestic limited liability partnership e ~ Foreign partnership f ~ Other - 2 Are any partners in this partnership also partnerships? ..--..--. ................................................................................................ X 3 ........ During the partnership's tax year, did the partnership own any interest in another partnership or in any foreign ..... entity that was disregarded as an entity separate from its owner under Regulations sections 301.7701-2 and 301.7701-3? If yes, see instructions for required attachment ...................................................................... X 4 Did the partnership file Form 8893, Election of Partnership Level Tax Treatment, or an election statement under section 6231(a)(1)(B)(ii) for partnership-level tax treatment, that is in effect for this tax year? See Form 8893 for more details .................. .......................... X 5 .... Does this partnership meet all three of the following requirements? ..... a The partnership's total receipts for the tax year were less than $250,000; b The partnership's total assets at the end of the tax year were less than $600,000; and c Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return. If"Yes;'the partnership is not required to complete Schedules L, M-1, and M-2; Item F on page 1 of Form 1065; or Item N on Schedule K-1 ................................................. .................................................................................................... X 6 .... Does this partnership have any foreign partners? If "Yes;' the partnership may have to file Forms 8804 8805 ...... , and 8813. See the instructions ........................................................................................................................................... . X 7 . ....... Is this partnership a publicly traded partnership as defined in section 469(k)(2)? ........................................................................... ..... X 8 ...... Has this partnership filed, or is it required to file, a return under section 6111 to provide information on any reportable transaction? -.------. ...... X 9 At any time during calendar year 2006, did the partnership have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements for Form TD F 90-22.1. If "Yes," enter the name of the foreign country. - ~, 10 During the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If "Yes;' the partnership may have to file Form 3520. See the instructions 11 Was there a distribution of property or a transfer (for example, by sale or death) of a partnership interest during the tax year? If "Yes;' you may elect to adjust the basis of the partnership's assets under section 754 by attaching the statement described under Elections Made By the Partnership in the instructions ................................. ................................................................................. 12 Enter the number of Forms 8865. Return of U.S. Persons With Respect to Certain Foreign Partnerships attached to this return - Desrgnatron of Tax Matters Partner (see the instructions) Enter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: Name of Identifying designated TMP - ROCCO A. COSTABILE number of TMP - 175 40 9493 Address of BOX 5 2 0 5 designated TMP - GRANTVILLE PA 17 0 2 8 sNio , Form 1065 (2006) iz-za-oa 2 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 Form 1065 (2006) PAC INDUSTRIES PARTNERSHIP 23-1 f~9S1 ~4 pa„o~ Sc hedule K Partners' Distributive Share Items Total amount 1 Ordinary business income (loss) (page 1, line 22) . .......................................... ............................................ 1 0 . 2 Net rental real estate income (loss) (attach Form 8825) ........................SEE.. ..S.TATEMENT....1.......... 2 18 4 0 2 6 . 3a Other gross rental income (loss) ............................................................ 3a b Expenses from other rental activities (attach statement) -__.--..- .. 3b c Other net rental income (loss). Subtract line 3b from line 3a ......... ..... 3c w 4 Guaranteed payments -_..... ....................................... ........ .... .............. ........................ 4 5 Interest income ..................................................................................... .......................... 5 w 6 Dividends: a Ordinary dividends .............................................. 6a ............... ............................................ b Qualified dividends 6b 5 7 ...... ..................... ........................ Royalties ...................................................................................... ..... ............................................ 7 8 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) .............. ... .. g 9a Net long-term capital gain (loss) (attach Schedule D (Form 1065)) .. ......... ... ..... ....... .................. 9a b Collectibles (28%) gain (loss) ............................................................... 9b c Unrecaptured section 1250 gain (attach statement) ................ . . 9c 10 Net section 1231 gain (loss) (attach Form 4797) -_.-_..--_ .... ........................................... 10 11 Other income loss see instructions T e 11 N 12 Section 179 deduction (attach Form 4562) ........ ...................................... . . . .........--................-...-..- 12 o` 13a Contributions ............................... .................... ................................ .... ....... ........................ 13a ~ b Investment interest expense ....................................................................... ........................................... 13b o c Section 59(e)(2) expenditures: (1) Type - (2) Amount- 13c 2 d Other deductions see instructions T e 13d ,~ o.. 14a Net earnings (loss) from self-employment 4 ~ .................... . .......................... ........................................... a 0 . ~~ ~ b Gross farming or fishing income ................................................................. ........................................... 14b w c Gross nonfarm income ............................................................................. ........................................... 14c 15a Low-income housing credit (section 42(j)(5)) ------------------ ..... ........................................... 15a H b Low-income housing credit (other) ................. 15b c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) ------------ ------------- 15c V d Other rental real estate credits (see instructions) Type - 15d e Other rental credits (see instructions) Type - 15e f Other credits see instructions T e 15f 16a Name of country or U.S. possession - b Gross income from all sources ..................................................................... ............ .......................................... 16b H c Gross income sourced at partner level ............................................................ ........................ .................. 16c o Foreign gross income sourced at partnership level ~ d Passive - e Listed categories (attach stmt.) - f General limitation - 16f Deductions allocated and apportioned at partner level ~ g Interest expense - h Other ..................... .................................... - 16h rn . Deductions allocated and apportioned at partnership level to foreign source income ~ ti 1 Passive - j Listed categories (attach stmt) - k General limitation - 16k Total foreign taxes (check one): - Paid DAc crued 0 -------------------- - - 161 m Reduction in taxes available for credit (attach statement) ................... ......... ......... ......... ................. 16m n Other forei n tax information attach statement ............................................. ........................ x ~, 17a Post-1986 depreciation adjustment .....-----. ..................... ......... ................. 17a 4 , 2 2 3 . ;~ E b Ad'usted ain or loss 1 9 . 17b ............................................................................... .......................................... ~" c De letion other than oil and as P ( 9 ) 17 .................................................................. .......................................... c ;; ~~ d Oil, gas, and geothermal properties -gross income 17d ------------------------- Qua a Oil, gas, and geothermal properties -deductions -- --------- --------- 17e f Other AMT items attach statement .................... ......... ......... ......... . ........ ......... ................ 17f 18a Tax-exempt interest income ..... ................................................................ .......................................... 18a c b Other tax-exempt income .................................. .......................................... ......................................... 18b c Nondeductible expenses .--- .................................................................... ... .......................................... 18c `0 19a Distributions of cash and marketable securities 19a 110 896. ~ b Distributions of other property ................ ...._-._..-- 19b .c 20a Investment income ... ........... ................................................................ ..................................... 20a O b Investment expenses ................................................................. ................ .................................. ..... 20b c Other items and amounts attach statement .................................................... ......................................... sWoAz~ Form 1065 (2006) 12-26-OB 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 Form 1065 (2006) PAC INDUSTRIES PARTNERSHIP 23-1895159 Page4 Anal sis of Net Income Loss 1 Net income (loss). Combine Schedule K lines 1 throw h 11. From the result subtract the sum of Schedule K lines 12 throw h 13d d 161 1 18 4 0 2 6 2 Analysis by p type: artner (i) Corporate (ii) Individual active ( ) (iii) Individual (passive) an Iv Partnershi () p ............ (v) Exempt organization , (vi) Nominee/Other a General partners 18 4 0 2 6. b Limited artners Schedule L Balance Sheets er Books A t Be innin of tax ear End of tax ear sse s a b c d 1 Cash ................................................ -21 982. 9 602. 2a Trade notes and accounts receivable _,,,,,,,, 10 5 2 8 . 4 8 7 2 . b Less allowance for bad debts 10 5 2 8. 4 8 7 2. 3 Inventories 4 U.S.governmentobligations ,,,,,,,,,,,,,,,,,, 5 Tax-exempt securities 6 Other current assets (attach statement) ,,,,,, STATEMENT 2 8 8 114. 8 0 6 5 7. 7 Mortgage and real estate loans ............... 8 Other investments (attach statement) __..,,,,, STATEMENT 3 10 3 9 3 . 10 3 9 3 . 9a Buildings and other depreciable assets ,,,,,, 1 8 4 2 9 6 9. 1 8 4 9 5 7 8. b Less accumulated depreciation ,,,,,,,,,,,,,,, 6 4 8 7 0 3. 1 19 4 2 6 6. 7 0 5 3 4 5. 1 14 4 2 3 3. 10a Depletable assets ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, b Less accumulated depletion _„,,,,,,,,,,,,,,, 11 Land (net of any amortization) „_„_,_,__,,,, 3 2 6 7 9 6. 3 2 6 7 9 6. 12a Intangible assets (amortizable only) .,,__,,,, 14 9 9 8 . 14 9 9 8 . b Less accumulated amortization ,,,,,,,,,,,,,,, 2 3 3 3. 12 6 6 5. 3 3 3 3. 11 6 6 5. 13 Other assets (attach statement) ,,,,,,,,,,,,,,, STATEMENT 4 1 3 5 0. 1 3 5 0. 14 Total assets ....................................... 1 6 2 2 13 0. 1 5 8 9 5 6 8 Liabilities and Capital 15 Accounts payable .,,,,_ ........................... $ 6 5 , . 6 9 7 . 16 Mortgages, notes, bonds payable in less than 1 year 17 Other current liabilities (attach statement) ,,, STATEMENT 5 17 5 5 0 . 17 5 5 0 . 18 All nonrecourse loans ........................... 19 Mortgages, notes, bonds payable in 1 year w mwe 1 7 0 1 5 8 6. 1 6 0 2 4 31. 20 Other liabilities (attach statement) _,,,,,,,,.,, STATEMENT 6 13 3 6 9 . 16 7 6 9 . 21 Partners'capitalaccounts ,,,,,,,,,,,,,,,,,,,,, -111 240. -47 879. 22 Total liabilities and ca ital .. .. . 1 6 2 2 13 0. 1 5 8 9 5 6 8. Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note: Schedule M-3 may be required instead of Schedule M-1 (see instructions). 1 Net income (loss) per books ,,,,,,,,,,,,,,,,,,,,,,,, 174 2 57. 6 Income recorded on books this year not included 2 Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a,10,and 11, not recorded on books this year (itemize): on Schedule K, lines 1 through 11 (itemize): aTax-exempt interest $ 3 Guaranteed payments (other than health insurance) .................................... ..... 7 Deductions included on Schedule K, lines 1 through 13tl, and 161, not charged against 4 Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 161(itemize): book income this year (itemize): a Depreciation $ a Depreciation $ 9, 2 8 4. b Travel and entertainment $ 8 Add lines 6 and 7 ....................................... STMT 8 4 8 5 . 9 7 6 9. 9 Income (loss) (Analysis of Net Income (Loss) 5 Add lines 1 throw h 4 .................................... 18 4 0 2 6. , line 1. Subtract line 8 from line 5 .................. 18 4 0 2 6. Schedule M-2 Anal sis of Partners' Ca ital Accounts 1 Balance at beginning of year ,,,,,,,,,,,,,, ,,,,,,,,,,,, -111 2 4 0 . 6 Distributions: a Cash 110 8 9 6 2 Capital contributed: a Cash ,,,,,,,,,,,,,,,,,,,,,,,,,, b Property... . b Property ,,,,,,,,,,,,,,,,,,,,, ,,,.,,,,,,,,,... __. . 7 Other decreases (itemize): 3 Net income(loss)perbooks ,,,,,,,,,,,,,,,,,,,,,,,,,,, 174 257. 4 Other increases (itemize): 8 Add lines 6 and 7 110 8 9 6 5 Add lines 1 throw h 4 .................................... 6 3 017. ........................... 9 Balance at end of year. Subtract line 8 from line 5 '.~.. - t~ 7 . $ '~ (~ , ii~ie o6 JWA 11210310 759605 594310 2006.09000 4 PAC INDUSTRIES PARTNERSHIP Form 1065 (2006) 594310 1 8825 Form Rental Real Estate Income and Expenses of a Partnershi S C OMB No. ,545-1188 (Rev. December 2008) Department of the Treasury internal Revenue service or an or oration p p - See instructions on a e 2. P 9 - Attach to Form 1065, Form 1065-B, or Form 11205. Name PAC INDUSTRIES PARTNERSHIP Employer identification number 23 1895159 1 Show the kind and location of each property. See pa e 2 to list additional properties A COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE. HARRISBURG PA BCOMMERCIAL REAL ESTATE - 5341 JAYCEE AVE. HARRISBURG PA CCOMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD HARRISBURG PA D COMMERCIAL REAL ESTATE - CROYDON PA Prop erties Rental Real Estate Income A B C D 2 Grossrents .................... ....... 2 40 528. 128 850. 71 900. 72 000. Rental Real Estate Expenses 3 Advertising .............................. 3 4 Auto and travel 4 5 Cleaning and maintenance .-..-.-.._.- 5 9 5 . 6 Commissions ........................... 6 7 Insurance .......................... ..... 7 8 Legal and other professional fees ... 8 2 6 3 0. 9 Interest ....................... ............ 9 17 18 0. 2 3 4 0 0. 2 2 8 7 6. 18 518 . 10 Repairs .................................... 10 - 9 9 . 11 Taxes ....................................... 11 10 2 01. 6 7 01. 12 Utilities ---------------------- ------------ 12 13 Wages and salaries --------------------- 13 14 Depreciation (see instructions) ,....- 14 14 214. 13 4 0 8 . 5 9 9 5 . 17 4 0 9 . 15 Other (list) -STMT 9 19. SEE STATEMENT 10 15 1 000. SEE STATEMENT 11 -2 017. 16 Total expenses for each property. Add lines 3 through 15 ............... 16 41 614. 3 7 7 0 9. 3 6 2 8 0. 3 5 9 2 7. 17 Total gross rents. Add gross rents from line 2, columns A through H --------------------- 17 3 51 4 7 8 . 18 Total expenses. Add total expenses from line i6,columns Athrough H .............................. 18 16 7 4 5 2 19 Net gain (loss) from Form 4797, Part I I, line 17, from the disposition of property from rental real estate activities -------------------- ............................................................................................................................ 19 20a Net income (loss) from rental real estate activities from partnerships, estates, and trusts in which this partnership or S corporation is a partner or beneficiary (from Schedule K-1) „------------------------ 20a b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (1) Name (2) Employer identification number 21 Net rental real estate income (loss). Combine lines 17 through 20a. Enter the result here and on: • Form 1065 or 11205: Schedule K, line 2, or ------------------------ -- ..__.----...-_ ...................................................... .. 1 8 4 0 2 6 . • Form 1065-B: Part I line 4 820,41 ,2-,s-oe JWA For Paperwork Reduction Act Notice, see page 2 of form. Form 8825 (12-2006) 5 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 Form 8825 (2008) Page 2 1 Show the kind and location of each property. ECOMMERCIAL REAL ESTATE - PITTSBURGH PA PRESIDENTIAL REAL ESTATE - DILLSBURG PA G H Rental Real Estate Income E rro F ernes G H 2 Gross rents ............... ... .. .. 2 12 6 0 0. 2 5 6 0 0. Rental Real Estate Expenses 3 Advertising _..,-___._.. 3 100. 4 Auto and travel 4 5 Cleaning and maintenance ............... 5 6 Commissions 6 7 Insurance ................. ............ ~ 7 8 Legal and other professional fees ...... 8 9 Interest .................... ........ 9 5 2 3 5. 10 Repairs .. ............... ................ 10 11 Taxes .......................................... 11 12 Utilities ...................... .. .... 12 13 Wages and salaries ........................ 13 14 Depreciation (see instructions) .._.....- 14 3 $'7 15 Other (list) - STMT 12 10 2 0 0 . 15 18 Total expenses for each property. Add lines 3 throw h 15 .................. 18 10 2 0 0. 5 7 2 2. JWA s2olaz 12-15-OB Form 8825(12-2006) 6 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 SCHEDULE K NET INCOME (LOSS) FROM RENTAL REAL ESTATE STATEMENT 1 DESCRIPTION AMOUNT COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE., HARRISBURG, PA COMMERCIAL REAL ESTATE - 5341 JAYCEE AVE., HARRISBURG, PA COMMERCIAL REAL ESTATE - 7301 ALLENT OWN BLVD, HARRISBURG, PA COMMERCIAL REAL ESTATE - CROYDON PA COMMERCIAL REAL ESTATE - PITTSBURGH, PA RESIDENTIAL REAL ESTATE - DILLSBURG PA -1,086. 91,141. 35,620. 36,073. 2,400. 19,878. TOTAL TO SCHEDULE K, LINE 2 184,026. SCHEDULE L OTHER CURRENT ASSETS STATEMENT 2 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR PREPAID REAL ESTATE TAXES 7,447. 8,095. ACCOUNTS RECEIVABLE - RELATED ENTIT 80,667. 72,562. TOTAL TO SCHEDULE L, LINE 6 88,114. 80,657. SCHEDULE L OTHER INVESTMENTS STATEMENT 3 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR PA STATE BANK STOCK 10,393. 10,393. TOTAL TO SCHEDULE L, LINE 8 10,393. 10,393. SCHEDULE L OTHER ASSETS STATEMENT 4 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR SECURITY DEPOSITS 1,350. 1,350. TOTAL TO SCHEDULE L, LINE 13 1,350. 1,350. 7 STATEMENT(S) 1, 2, 3, 4 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 SCHEDULE L OTHER CURRENT LIABILITIES STATEMENT 5 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR DEFERRED INCOME 17,550. 17,550. TOTAL TO SCHEDULE L, LINE 17 17,550. 17,550. SCHEDULE L OTHER LIABILITIES STATEMENT 6 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR SECURITY DEPOSITS 13,369. 16,769. TOTAL TO SCHEDULE L, LINE 20 13,369. 16,769. FORM 1065 PARTNERS' CAPITAL ACCOUNT SUMMARY STATEMENT 7 PARTNER BEGINNING CAPITAL SCHEDULE M-2 WITH- ENDING NUMBER CAPITAL CONTRIBUTED LNS 3, 4 & 7 DRAWALS CAPITAL 1 -4,355. 58,084. 32,741. 20,988. 2 32,160. 58,089. 34,805. 55,444. 3 -139,045. 58,084. 43,350. -124,311. TOTAL -111,240. 174,257. 110,896. -47,879. 8 STATEMENT(S) 5, 6, 7 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP SCHEDULE M-1 EXPENSES RECORDED ON BOOKS NOT DEDUCTED IN RETURN STATEMENT 8 DESCRIPTION AMOUNT OTHER NON-DEDUCTIBLE EXPENSES 485. 23-1895159 TOTAL TO SCHEDULE M-1, LINE 4 485. OTHER RENTAL EXPENSES STATEMENT 9 PROPERTY: COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE., HARRISBURG, PA DESCRIPTION MISCELLANEOUS AMOUNT 19. TOTAL TO RENTAL SCHEDULE, LINE 15 19, OTHER RENTAL EXPENSES STATEMENT 10 PROPERTY: COMMERCIAL REAL ESTATE - 5341 JAYCEE AVE., HARRISBURG, PA DESCRIPTION AMOUNT AMORTIZATION 1,000. TOTAL TO RENTAL SCHEDULE, LINE 15 1,000. OTHER RENTAL EXPENSES STATEMENT 11 PROPERTY: COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA DESCRIPTION AMOUNT MISCELLANEOUS 26. BANK SERVICE CHARGES -2,043. TOTAL TO RENTAL SCHEDULE, LINE 15 -2,017. 9 STATEMENT(S) 8, 9, 10, 11 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 OTHER RENTAL EXPENSES STATEMENT 12 PROPERTY: COMMERCIAL REAL ESTATE - PITTSBURGH, PA DESCRIPTION RENT TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT 10,200. 10,200. 10 STATEMENT(S) 12 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 1 651106 Schedule K-1 ~nn~ ~ Final K-1 ~ Amended K-1 _ OMB No. 1545-0099 (Form 1065) For calendar year 2006, or tax "'""' Department of the Treasury year beginning Part 111 Partner's Share of Current Year Income, Deductions Credits and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 10rdinary business income (loss) 0 , 15 Credits Credits, etc. 2 Net rental real estate income (loss) See se ante instructions. 61 3 41. 16 Foreign transactions Part I Informati Ab t th P t hi 3other net rental income (loss) on ou e ar ners p A Partnership's employer identification number 4Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5lnterest income PAC INDUSTRIES PARTNERSHIP 6a0rdinarydividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG PA 17112 6b0ualifieddividends 1 408. C IRS Center where partnership filed return OGDEN UT 7 Royalties D ~ Check if this is a publicly traded partnership (PTP) 18 Tax-exempt income and E 0 Tax shelter registration number, if any F ~ Check if Form 8271 is attached 8 Net short-term capital gain (loss) nondeductible expenses 9a Net long-term capital gain (loss) P t II I f ti Ab t th P rt ar n orma on ou a ner e 9b Collectibles (28%) gain (loss) 19 Distributions G Partner's identifying number 3 2 7 41 . 16 2- 3 6- 9 9 2 2 9c Unrecaptured sec 1250 gain H Partner's name, address, city, state, and ZIP code 20 Other information 10Netsection 1231 gain (loss) PHILIP F. COSTABILE 348 BLACKLATCH LANE 110therincome(lass) CAMP HILL PA 17011 I ®General partner or LLC 0 Limited partner or other LLC member-manager member J ®Domestic partner ~ Foreign partner 12Section 179 deduction K What type of entity is this partner? INDIVIDUAL 130ther deductions L Partner's share of profit, loss, and capital: Beginning Ending Profit 33.3333334% 33.3333334% Loss 3 3.3 3 3 3 3 3 4% 3 3.3 3 3 3 3 3 4% 14Self-employment earnings (loss) Ca ital 33.3333334% 33.3333334% 0. M Partner's share of liabilities at year end: Nonrecourse ................................................ $ *Seeattachedstatementforadditionalinf ormation. Qualifiednonrecoursefinancing ........................ $ Recourse ...... ................................................ $ 5 3 9, 7 3 3. N Partner's capital account analysis: Beginning capital account .............................. $ -4, 355. Capital contributed during the year ................. $ Current year increase (decrease) ..................... $ 5 8 , 0 8 4 . Withdrawals&distributions .............................. $( 32,741,1 Ending capital account .................................... $ 2 0 , 9 8 8 . ®Tax basis 0 GAAP ~ Section 704(b) book Other ex lain ?~ c ~ ~ ~ 0 " JWA For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2008 eiizei of-oz-o~ 11 1 11210310 759605 594310 2006.090.00 PAC INDUSTRIES PARTNERSHIP 594310 1 651106 Schedule K-1 'nn~ 0 Final K-1 0 Amended K-1 OMB No. 1545-0099 trorm iub51 For calendar year 2008, o~ t~ "'"`'' Department of the Treasury year beginning Part I11 Partner's Share of Current Year Income, Deductions Credits and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 10rdinary business income (loss) 0 . 15 Credits Credits, etc. 2 Net rental real estate income (loss) See se orate instructions. 61 3 4 4 . 16 Foreign transactions Part 1 Information About the Partnershi 30ther net rental income (loss) p A Partnership's employer identification number 4Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5lnterest income PAC INDUSTRIES PARTNERSHIP 6a0rdinarydividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG PA 17112 6b0ualifieddividends 1 407. C IRS Center where partnership filed return OGDEN UT 7 Royalties D ~ Check if this is a publicly traded partnership (PTP) 18 Tax-exempt income and E 0 Tax shelter registration number, if any F ~ Check if Form 8271 is attached 8 Net short-term capital gain (loss) nondeductible expenses 9a Net long-term capital gain (loss) Part II Informatio Ab t th P rt n ou e a ner 9b Collectibles (28%) gain (loss) 19 Distributions G Partner's identifying number 3 4 8 0 5. 17 5- 4 0- 9 4 9 3 9c Unrecaptured sec 1250 gain H Partner's name, address, city, state, and ZIP code 20 Other information 10 Net section 1231 gain (loss) ROCCO A. COSTABILE BOX 5 2 0 5 110ther income (loss) GRANTVILLE PA 17028 I ®General partner or LLC 0 Limited partner or other LLC member-manager member J ®Domestic partner 0 Foreign partner 12Section 179 deduction K What type of entity is this partner? INDIVIDUAL 130ther deductions L Partner's share of profit, loss, and capital: Beginning Ending Profit 33.3333333°~° 33.3333333°~° Loss 3 3.3 3 3 3 3 3 3% 3 3.3 3 3 3 3 3 3% 14Self-employment earnings (loss) Ca ital 33.3333333% 33.3333333% 0. M Partner's share of liabilities at year end: Nonrecourse ................................................ $ *See attached statement for additional information. Qualifiednonrecoursefinancing ........................ $ Recourse .............. ~ ............................... $ 5 3 9, 7 3 4. N Partner's capital account analysis: Beginning capital account .............................. $ 32 ,160. Capital contributed during the year .................. $ Current year increase (decrease) ..................... $ 5 8 , 0 8 9 . Withdrawals & distributions .............................. $( 34 , 805 ~ Ending capital account $ 55 444. ® Tax basis ~ GAAP 0 Section 704(b) book Other ex lain ?~ c ~ ~ ~ o " JWA For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2006 aiizsi of-oz-o~ 14 2 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 3 651106 Schedule K-1 'nn~ ~ Final K-1 ~ Amended K-1 OMB No. 1545-0099 trorm iub9f For calendar year 2008,°,t~ '~""" Department of the Treasury year beginning Part III Partner's Share of Current Year Income, Deductions Credits and Other Items Internal Revenue Service ending Partner's Share of Income, Deductions, 10rdinary business income (loss) 0 . 15 Credits Credits, etc. 2 Net rental real estate income (loss) See se arate instructions. 61 3 41. 16 Foreign transactions Part I Information About the Partnershi 30ther net rental income (loss) p A Partnership's employer identification number 4Guaranteed payments 23-1895159 B Partnership's name, address, city, state, and ZIP code 5lnterest income PAC INDUSTRIES PARTNERSHIP 6a0rdinarytlividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG PA 17112 6b0ualifieddividends 1 408. C IRS Center where partnership filed return OGDEN UT 7Royalties D ~ Check if this is a publicly traded partnership (PTP) 18 Tax-exempt income and E 0 Tax shelter registration number,'rf any F ~ Check if Form 8271 is attached 8 Net short-term capital gain (loss) nondeductible expenses 9a Net long-term capital gain (loss) Part II I f ti Ab t th P rt n orma on ou e a ner 9b Collectibles (28%) gain (loss) 19 Distributions G Partner's identifying number 43 350. 191- 4 2- 8 9 3 5 9c Unrecaptured sec 1250 gain H Partner's name, address, city, state, and ZIP code 20 Other information 10 Net section 1231 gain (loss) FRANK M. COSTABILE 5798 HIDDEN LAKE DRIVE ii0therincome(loss) HARRISBURG PA 17112 I ®General partner or LLC 0 Limited partner or other LLC member-manager member J ®Domestic partner 0 Foreign partner 12Section 179 deduction K What type of entity is this partner? INDIVIDUAL 130ther deductions L Partner's share of profit, loss, and capital: Beginning Ending Profit 33.3333333% 33.3333333°~° Loss 3 3.3 3 3 3 3 3 3% 3 3.3 3 3 3 3 3 3% 14Self-employment earnings (loss) Ca ital 33.3333333% 33.3333333% 0. M Partner's share of liabilities at year end: Nonrecourse ................................................ $ *See attached statement for additional inf ormation. Oualifiednonrecoursefinancing ........................ $ Recourse ...................................................... $ 5 3 9, 7 3 3. N Partner's capital account analysis: Beginning capital account .............................. $ -13 9 , 0 4 5 . Capital contributed during the year .................. $ Current year increase (decrease) ..................... $ 5 8 , 0 8 4 . Withdrawals & distributions .............................. $( 4 3, 3 5 0 .) Ending capital account .................................. $ -12 4 , 311. ®Tax basis ~ GAAP 0 Section 704(b) book Other ex lain ?~ c ~ ~ ~ o " JWA For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2006 siizsi of-o2-o7 17 3 11210310 759605 594310 2006.09000 PAC INDUSTRIES PARTNERSHIP 594310 1 1065 U.S. Return of Partnership Income Form For calendar year 2005, or tax year beginning ,and ending Department of the Treasury Internal Revenue Service A Principal business activity Name of partnership Use the REAL ESTATE ~~e1 AC INDUSTRIES PARTNERSHIP B Principal product or service Other- Number, street, and room or suite no. If a P.O. box, see the instructions. COMM' L & RES . print 5 3 41 JAYCEE AVENUE LEASING or City or town, state, and ZIP code type. C Business code number 531110 ARRI BURG PA 17112 G Check applicable boxes: (1) Initial return (2) Final return (3) Name change (4) H Check accounting method: (1) ~ Cash (2) ® Accrual (3) O Other (specify) - I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year - OMB No. 1545-0099 2005 D Employer identifcation number 23-1895159 E Date business started 06 12 1972 F Total assets I$ 1, 622 ,130 Address change (5) O Amended return Caution: Include only trade or business income and expenses on lines 1a through 22 below. See the instructions for more information. 1 a Gross receipts or sales ............................................................................. 1a b Less returns and allowances ......................................... .. . ... . _._ ib is 2 Cost of goods sold (Schedule A, line 8) ........................~ ............................................................................. 2 ~ 3 Gross profit. Subtract line 2 from line 1c ............................................................................................................ 3 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach schedule) ........................... . . 4 5 Netfarm profit (loss) (attach Schedule F (Form 1040)) ......................................... ................ 5 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) ----- --------- ......... ......... ..... .......... 6 7 Other income (loss) (attach schedule) ............................................................................................................ 7 8 Total income loss .Combine lines 3 throw h 7 ................................................................................................ 8 9 Salaries and wages (other than to partners) (less employment credits) ................................................... g 10 Guaranteed payments to partners .................. ................................................................................................ 10 11 Repairs and maintenance ................................................................... ........................................................... 12 Bad debts .......................... ......... ................................................................................................................ 12 'L 13 Rent .................................................. .................................... ................................................................... 13 '° y 14 Taxes and licenses ..--.-..-.-, ........................................................................................................................... 14 c 15 Interest ...................................................................................................................................................... 15 16 a Depreciation ('If required, attach Form 4562) ......................................................... i6a y b Less depreciation reported on Schedule A and elsewhere on return ...... .................. 16b 16c t7 Depletion (Do not deduct oil and gas depletion.) .................... ......................................................... 17 v 18 Retirement plans, etc . .................................................................................................................................... 18 ~ 19 Employee benefit programs ._. - ....................................................................................................................... 19 0 ~ 20 Other deductions (attach schedule) ............................................................................................................... 20 m 0 21 Total deductions. Add the amounts shown in the far ri ht column for lines 9 throw h 20 .......................................... 21 22 Ordina business income loss .Subtract line 21 from line 8 .............................................................................. 22 0 . Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparar (other than general partner ~or limited liability company member) is based on afI information of which preparer has any knowledge. Sign Here May the IRS discuss this return with the preparer shown below ' Signature of general partner or limited liability company member Date (~ instr.)~ ONO ® Yes Preparer's Date Check if Preparar's SSN or PTIN Paid signature self-employed - O P 0 0 2 2 917 4 rreparers Firm'sname(or~SELIGMAN, FRIEDMAN & CO. P.C. E'" -23-17311005 use only emaiovedif- I10 2 7 MUNIl~IA ROAD Phone no. ~ '~ 1'/ ~ 7 61- 0 211 address, and ZIP code WORMLEYSBURG PA 17 0 4 3 iris os JVVA For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Form 1065 (2005) Form 1065 2005 PAC INDUSTRIES PARTNERSHIP 23-1895159 Pa e 2 Schedule A Cost of Goods Sold see the instructions 1 Inventory at beginning of year ~ . ............................................................................................ ............................ 1 2 Purchases less cost of items withdrawn for personal use ........................................................... ............ . . .... 2 3 Cost of labor 3 4 Additional section 263A costs (attach schedule) 4 5 Other costs (attach schedule) 5 6 Total. Add lines 1 through 5 ......................................................................... ...... ............................ 6 7 Inventory at end of year ........................................................................................................ ............................ 7 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 ........................ ............................ 8 9 a Check all methods used for valuing closing inventory: (i) ~ Cost as described in Regulations section 1.471-3 (ii) ~ Lower of cost or market as described in Regulations section 1.471-4 (iii) ~ Other (specify method used and attach explanation)- b Check this box if there was a writedown of "subnormal" goods as described in Regulations section 1.471-2(c) _ - U .................................................. c Check this box if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) - 0 d Do the rules of section 263A (for property produced or acquired for resale) apply to the partnership? ........................................... . 0 Yes 0 No e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? .................................... ~ Yes 0 No If "Yes " attach ex lanation. Schedule B Other Information 1 What type of entity is filing this return? Check the applicable box: a ®Domestic general partnership b 0 Domestic limited partnership c ~ Domestic limited liability company d ~ Domestic limited liability partnership e 0 Foreign partnership f ~ Other- 2 Are any partners in this partnership also partnerships? ....................................... ................................................................................. 3 During the partnership's tax year, did the partnership own any interest in another partnership or in any foreign entity that was disregarded as an entity separate from its owner under Regulations sections 301.7701-2 and 301.7701-3? If yes, see instructions for required attachment ......................................................................................................... ....... 4 Did the partnership file Form 8893, Election of Partnership Level Tax Treatment, or an election statement under section 6231(a)(1)(B)(n) for partnership-level tax treatment, that is in effect for this tax year? See Form 8893 for more details ....................................................... . 5 Does this partnership meet all three of the following requirements? a The partnership's total receipts for the tax year were less than $250,000; b The partnership's total assets at the end of the tax year were less than $600,000; and c Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return. If "Yes," the partnership is not required to complete Schedules L, M-1, and M-2; Item F on page 1 of Form 1065; or Item N on Schedule K-1 6 Does this partnership have any foreign partners? If "Yes," the partnership may have to file forms 8804, 8805 and 8813. See the instructions 7 Is this partnership a publicly traded partnership as defined in section 469(k)(2)? ....................................................................................... 8 Has this partnership filed, or is it required to file, a return under section 6111 to provide information on any reportable transaction? ..................... 9 At any time during calendar year 2005, did the partnership have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements for Form TD F 90-22.1. If "Yes;' enter the name of the foreign country. - 10 During the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If "Yes," the partnership may have to file Form 3520. See the instructions ................................................................................................ 11 Was there a distribution of property or a transfer (for example, by sale or death) of a partnership interest during the tax year? If "Yes;' you may elect to adjust the basis of the partnership's assets under section 754 by attaching the statement described under Elections Made By the Partnership in the instructions .......................................................................................... ........................ 12 Enter the number of Forms 8865. Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return - Designation of Tax Matters Partner (see the instructions) Enter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: X Name of Identifying designated TMP - ROCCO A. COSTABILE number of TMP - 175-40-9493 Address of - BOX 5 2 0 5 designated TMP GRANTVI LLE , PA 17 0 2 8 JWA Form 1065 (2005) s11o11 12-29-05 2 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310 1 Form 1065 (2005) PAC INDUSTRIES PARTNERSHIP 23-1895159 Pane3 Schedule K Partners' Distributive Share Items Total amount 1 Ordinary business income (loss) (page 1, line 22) , ........................................... ........................................... 1 0 . 2 Net rental real estate income (loss) (attach Form 8825) ........................SEE.. ..STATEMENT....1.......... 2 2 0 0 5 8 7 . 3a Other gross rental income (loss) ............................................................ 3a b Expenses from other rental activities (attach statement) .... ......... ........ 3b c Other net rental income (loss). Subtract line 3b from line 3a . .......................... ..................................... .... 3c y 4 Guaranteed payments .................................................. . .. ........ .............. .................. 4 J 5 Interest income ...................................................................................... ........................................... 5 131. m 6 Dividends: a Ordinary dividends ... . ........... ................................... ....... ...................... - 6a a b Qualified dividends ......................................................... 6b 7 Royalties ......................... ........... ........................................... 7 8 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) .................... ........................................... 8 9a Net long-term capital gain (loss) (attach Schedule D (Form 1065)) ... ......... ..... ......... .................. 9a b Collectibles (28%) gain (loss) .............................................................. 9b c Unrecaptured section 1250 gain (attach statement) .................................... 9c 2 2 2 6 8 . 10 Net section 1231 gain (loss) (attach Form 4797) ............................................ ...................... . ..... .. .. .. 10 3 2 8 0 8 . 11 Other income loss see instructions T e 11 y 12 Section 179 deduction (attach Form 4562) ..................................................... ............. .. . . ._ - .-- - 12 c 13a Contributions ...................................................... . ... ........................ ........................................... 13a b Investment interest expense ....................................................................... ........................................... 13b ~ c Section 59(e)(2) expenditures: (1) Type - (2) Amount- 13c 2 ~ d Other deductions see instructions T e 13d ,~ o+. 14a Net earnings (loss) from self-employment ---------------------------------- ............... ........................................... 14a 0 . c E £ b Gross farming or fishing income ................................................................. ..................................... 14b w c Gross nonfarm income ............................................................................. ........................................... 14c 15a Low-income housing credit (section 42(j)(5)) ------------------------ ....................... - -. ....................................... . 15a ,a L b Low-income housing credit (other) - ............................................................. -.----..-... ............................... 15b ~v a c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) - .......... ---------------------- ..................... 15c ~v ~ d Other rental real estate credits (see instructions) Type - 15d ¢ e Other rental credits (see instructions) Type - 15e f Other credits and credit reca lure see instructions T e 15f 16a Name of country or U.S. possession - --.-.---- b Gross income from all sources ------------------------------------------------- .......... ...... ........................................... i6b c Gross income sourced at partner level ........................................................... ......................................... 16c ~ Foreign gross income sourced at partnership level 0 v d Passive - e Listed categories (attach stmt.) - f General limitation - i6f H Deductions allocated and apportioned at partner level g Interest expense - h Other .................... - ..................................... i6h ~ Deductions allocated and apportioned at partnership level to foreign source income rn '~ i Passive - j Listed categories (attach stmt) - k General limitation - i6k ~ I Total forei n taxes check one): - Paid DAc crued 0 - 6 , g ( .................... ..................................... 1 1 m Reduction in taxes available for credit (attach statement) ................................... ........................................... 16m n Other forei n tax information attach statement ............................................ ........................................... % 17a Post-1986 depreciation adjustment 17a 4 6 8 5 . rn qtr ~ b ----------------------- ----- ------------ -- -- -------------- Adjusted gain or loss ---------------- ---- -- ------ ---- -- -- - ----- -------- 17b c ~ ~ c Depletion (other than oil and gas) ................................................................. ........................................... 17c ~~ d Oil, gas, and geothermal properties -gross income ----------------------------------------- ------------------------------------------- 17d Qua a Oil, gas, and geothermal properties -deductions - --------- --------- --------- --------- --------- ------------------ 17e f Other AMT items attach statement .............................................................. ........................................... 17f 18a Tax-exempt interest income ....................................................................... ........................................... i8a ~ o b Other tax-exempt income ........................................................................... .......................................... 18b c Nondeductible expenses ............................................................................. ........................................... 18c `0 19a Distributions of cash and marketable securities ------- ------------------------------------------- 19a 221 8 04 . c b Distributions of other property ........................ .......................................... .......................................... 19b r 20a Investment income ................................................................................... ........................................... 20a 131. O b Investment expenses ................................................................................ ........................................... 20b c Other items and amounts attach statement ................................................... .......................................... JWA Form 1065 (2005) siiozi i2-zs-os 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310 1 Form 1065 (2005) PAC INDUSTRIES PARTNERSHIP 2 3 -18 9 515 9 Pape 4 Anal sis of Net Income Loss 1 Net income (loss). Combine Schedule K lines 1 throw h 11. From the result subtract the sum of Schedule K lines 12 throw h 13d and 161 ............ 1 2 3 3 5 2 6 2 Analysis by partner type: a General partners b Limited artners (i) Corporate (ii) Individual (active) (iii) Individual (passive) (iv) Partnership (v) Exempt organization (vi) Nominee/Other 233 526. Note: Schedules L M-1 and M-2 are not re wired if Question 5 of Schedule B is answered "Yes." Schedule L Balance Sheets er Books Assets 1 Cash 2a Trade notes and accounts receivable .. 11 5 0 7 . b Less allowance for bad debts ................ .. 3 Inventories 4 U.S.governmentobligations ................ .. 5 Tax-exempt securities ......................... .. 6 Other current assets (attach statement) .... .. STATEMENT 2 7 Mortgage and real estate loans ............. .. 8 Other investments (attach statement) ._._... .. STATEMENT 3 9a Buildings and other depreciable assets __.. .. 1 9 6 5 8 0 7. b Less accumulated depreciation ........... .. .. 6 0 0 3 3 4. 10a Depletableassets ............................... .. b Less accumulated depletion . 11 Land (net of any amortization) ..... _. .. 12a Intangible assets (amort¢able only) ._..... ._ 14 9 9 8 . b Less accumulated amortization 1 3 3 3. 13 Other assets (attach statement) STATEMENT 4 ............... 14 Total assets ....................................... Liabilities and Capital 15 Accounts payable ................................. 16 Mortgages, notes, bonds payable in less than 1 year 17 Other current liabilities (attach statement) ... STATEMENT 5 18 All nonrecourse loans .................. 19 Mortgages, notes, bonds payable in 1 year or more 20 Other liabilities (attach statement) STATEMENT 6 21 Partners' capital accounts 22 Totat liabilities and capital Schedule M-1 I Reconciliation of Income 1 Net income (loss) per books .............. . . 2 Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not recorded on books this year (itemize): 3 Guaranteed payments (other than health insurance) ................................................ 4 Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 161(itemize): a Depreciation $ b Travel and entertainment $ STMT 8 6,725. 5 Add lines 1 through 4 ____ 1 Balance at beginning of year ................ ........... 2 Capital contributed: a Cash .............. ............. b Property ..................... 3 Net income (loss) per books .................. ........ 4 Other increases (itemize): ii ~2s-os JWA 09410309 759605 594310 of tax ear End of b c 49 403. _ 10 528. 11 507. 33 786. 10 393. 1 842 969. 1 365 473. 648 703. 335 096. 14 998. 13 665. 2 333. 500. 1,819,823. I 22,472.1 I 1, V i J , V 4 J. 1 oss er Books With Income Loss er Return 2 2 6 8 01.6 Income recorded on books this yyear not included on Schedule K, lines 1 through 11 (itemize): a Tax-exempt interest $ 7 Deductions included on Schedule K, lines 1 through 13d, and 161, not charged against book income this year (itemize): a Depreciation $ 6 7 2 5. 8 9 Add lines 6 and 7 ....................................... Income (loss) (Analysis of Net Income (Loss), 2 3 3 5 2 6. line 1. Subtract line 8 from line 5 .................. al Accounts -116 2 3 7. 6 Distributions: a Cash ....... .......................... b Property 7 ........................... Other decreases (itemize): 226 801. d -21 982. 10 528. 88 114. 10 393. 1 194 266. 326 796. 12 665. 1 350. 1,622,130. i 865. 17,550. 1,701,586. 13,369. -111,240. 1,622,130. 233,526. 221,804. 8 Add lines s and 7 ..................................... 221 8 04 , 110 , 5 6 4 . 9 Balance at end or year. Subtract line 8 from line 5 - 111 , 2 4 0 4 Form 1065 (2005) 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310_1 8825 Rental Real Estate Income and Expenses of a OMB No. 1545-1188 Form Partnership or an S Corporation Department of the Treasury - See instructions on page 2. 2005 Internal Revenue Service - Attach to Form 1065, Form 1065-B, or Form 1120S. Name ~ Employer identification number PAC INDUSTRIES PARTNERSHIP 231895159 1 Show the kind and location of each property. See page 2 to list additional properties. A COMMERCIAL REAL ESTATE - 3743 OVERBROOK ROAD, PITTSBURGH PA B COMMERCIAL REAL ESTATE 5321 JAYCEE AVE. , HARRISBURG, PA C COMMERCIAL REAL ESTATE - 5 3 41 JAYCEE AVE . , HARRISBURG , PA DCOMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA Rental Real Estate Income A B C D 2 Grossrents .............................. 2 17 150. 73 030. 130 135. 70 700. Rental Real Estate Expenses 3 Advertising ......................... 3 4 Auto and travel ........................ 4 5 Cleaning and maintenance ..-.-....... 5 3 3 4. 6 Commissions 6 7 Insurance ................................. 7 8 Legal and other professional fees -_- 8 3 2 0 5. 9lnterest .................................... 9 6 236. 18 160. 22 280. 19 971. 10 Repairs .................................... 10 5 5 6 . 11 Taxes ....................................... 11 5 893. 2 504. 7 956. 12 Utilities .................................... 12 13 Wages and salaries ..................... 13 14 Depreciation (see instructions) ..._.. 14 2 8 8 0. 15 5 4 7. 13 516. 5 3 4 4. 15 Other (list) - STMT 9 5 10 0 . SEE STATEMENT 10 15 4 714. SEE STATEMENT 11 1 015. 16 Total expenses for each property. Add lines 3 through 15 ............... 16 2 0 113. 4 0 9 2 5. 3 5 7 9 6. 3 8 3 81. 17 Total gross rents. Add gross rents from line 2, columns A through H ...................... ..._.......-....... ............................... 17 3 8 9 515 . 18 Total expenses. Add total expenses from line 16, columns Athrough H ..................................................................... 18 18 8 9 2 8 19 Net gain (loss) from Form 4797, Part II, line 17, from the disposition of property from rental real estate activities ................................................................................................................................................ 19 20a Net income (loss) from rental real estate activities from partnerships, estates, and trusts in which this partnership or S corporation is a partner or beneficiary (from Schedule K-1) ..................................................... .. 20a b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (1) Name (2) Employer identification number 21 Net rental real estate income (loss). Combine lines 17 through 20a. Enter the result here and on: • Form 1085 or1120S:ScheduleK,line2,or ................................................................................................... 1 00 587. • Form 1065-B: Part I line 4 ii~os os JWA for Paperwork Reduction Act Notice, see page 2 of form. Form 8825 (2005) 5 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP Pam 8825 (2005) 23-1895159 1 Show the kind and location of each property. E COMMERCIAL REAL ESTATE - CROYDON PA PRESIDENTIAL REAL ESTATE - DILLSBURG PA G H Prnnartiec Rental Real Estate Income E F G H 2 Grossrents ................................. 2 73 300. 25 200. Rental Real Estate Expenses 3 Advertising .............................. 3 4 Auto and travel ........................ 4 5 Cleaning and maintenance ............... 5 6 Commissions 6 7 Insurance .................................... ~ 8 Legal and other professional fees .,,_., 8 9 Interest ....................................... s 29 194. 5 442. 10 Repairs ....................................... 10 11 Taxes .......................................... 11 12 Utilities 12 13 Wages and salaries ........................ 13 14 Depreciation (see instructions) ._..,..,. 14 18 690. 387. 15 Other (list) - 15 16 Total expenses for each property. Add lines 3 throw h 15 .................. 16 4 7 8 8 4. 5 8 2 9. JWA szoiaz ii-os-os 6 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP Form 8825 (2005) 594310_1 4562 OMB No. 1545-0172 Form Depreciation and Amortization 2005 (Rev. January 2006) (Including Information on Listed Property) R- 2 Department of the Treasury Attachment Internal Revenue Service - See Separate II1StrUCtlOnS. - Attach t0 yOUI- taX return. Sequence No. 67 Name(s) shown on return Business or activity to which this form relates Identifying number COMMERCIAL REAL ESTATE - PAC INDUSTRIES PARTNERSHIP 5321'JAYCEE AVE. HARRI 23-1895159 Part I Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part 1. 1 Maximum amount. See the instructions for a higher limit for certain businesses .................................... 1 10 5 0 0 0 . 2 Total cost of section 179 property placed in service (see instructions) 2 ............................................................... 3 Threshold cost of section 179 property before reduction in limitation ......................................... 3 4 2 0 0 0 0 . 4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0• 4 ......................................................... rj Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filing separately, see instructions .. .............. .............. 5 6 (a) Description of property (b) Cost (business use only) (c) Elected cost 7 Listed property. Enter the amount from line 29 ............................................ ......... ~ 7 ~ 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 ........................ 9 Tentative deduction. Enter the smaller of line 5 or line 8 .................................................................. 10 Carryover of disallowed deduction from line 13 of your 2004 Form 4562 .......................................... 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11 .................. 13 Carryover of disallowed deduction to 2006. Add lines 9 and 10, less line 12 ......... - 13 Note: Do not use Part ll or Part ll! below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Do not include listed property.) 14 Special allowance for certain aircraft, certain property with a long production period, and qualified NYL or GO Zone property (other than listed property) placed in service during the tax year ................................................... 15 Property subject to section 168(f)(1) election ................................................................................. 16 Other depreciation fincludino ACRSI ~ hart III ~ MACRS Depreciation (Do not include listed property.) (See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2005 L 17 I 14 , 9 9 5 . .......................................... 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts check here - Section B -Assets Placed in Service During 2005 Tax Year Using the General Deorer_iatinn SvstPm (a) Classification of property (b) Month and year placed in service (c) Basis for depreciation (business/investment use only -see instructions) (~ Reriod~ p (e) Convention (f) Method (g) Depreciation deduction 19a 3- ear ro ert b 5- ear ro ert c 7- ear ro ert 3 8 6 2. 7 YRS HY DB 5 5 2 d 10- ear ro ert . e 15- ear ro ert f 20- ear pro ert 25- ear ro ert 25 rs. S/L h R id ti l l / 27.5 rs. MM S/L es en a renta property / 27.5 rs. MM S/L N id i l l / 39 rs. MM S/L onres ent rea property i a / MM S/L Section C -Assets Placed in Service During 2005 Tax Year Using the Alternative Denrer_iatinn CvrFurr~ __ _ 20a Class life S/L b 12- ear 12 rs. S/L c 40-year / 40 yrs. MM S/L rar[ iv Summary (see instructions) 21 Listed property. Enter amount from line 28 ...................................................................................................... 21 22 Total. Add amounts from line 12, lines 14 through 17, Gnes 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and Scorporations -see instr ...................... 22 15 5 4 7 , 23 For assets shown above and placed in service during the current year, enter the ortion of the basis attributable to section 263A costs ................................................ 23 s162s1 o1-os-os LHA For Paperwork Reduction Act Notice, see separate instructions. Form 4562 (2005) (Rev. 1-2006) 7 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310 1 Form 4562 (2005) (Rev. 1-2006) pAC INDUSTRIES PARTNERSHIP 2 3 -18 9 515 9 Page 2 Part V Listed Property (Include automobiles, certain other vehicles, cellular telephones, certain computers, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, a9 of Section B, and Section C if applicable. Section A -Depreciation and Other Information (Caution: See the instructions for limits for passenger automobiles.) 24a Do you have evidence to support the businesslnvestment use claimed? 0 Yes 0 No 24b If "Yes," is the evidence written? 0 Yes 0 No (a) (b) (c) (d) (e) (fl (g) (h) (i) Type of property Date Business/ Cost or Basis for depreciation Recovery Method/ Depreciation Elected placed in investment (business/investment (list vehicles first) service use peKCentage other basis use only) Period Convention deduction section 179 cost 25 Special allowance for certain aircraft, certain property with a long production period, and qualified NYL or GO Zone ro er laced in service Burin the tax ear and used more than 50% in a ualified business use .............................. 25 26 Property used more than 50% in a Qualified business use: 27 Property used 50% or less in a qualified business use: I __ I °io I I I I sn_ - I I 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 ~ 28 29 Add amounts in column (i), line 26. Enter here and on line 7, page 1 _ 29 Section B -Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other "more than 5% owner," or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. 30 Total business/investment miles driven during the (a) Vehicle (b) Vehicle (c) Vehicle (d) Vehicle (e) Vehicle (f) Vehicle year (do not include commuting miles) .................. 31 Total commuting miles driven during the year ... 32 Total other personal (noncommuting) miles driven ............................................................... 33 Total miles driven during the year. Add lines 30 through 32 .................................... 34 Was the vehicle available for personal use Yes No Yes No Yes No Yes No Yes No Yes No during off-duty hours? .................................... 35 Was the vehicle used primarily by a more than 5% owner or related person? .................. 36 Is another vehicle available for personal use? Section C -Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who are not more than 5% owners or related persons. 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by your Yes No employees? ................................................................................................................................................................................. 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instructions for vehicles used by corporate officers, directors, or 1 % or more owners .................................... 39 Do you treat all use of vehicles by employees as personal use? ................................................................................................... 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received? ......................................................................................................... 41 Do you meet the requirements concerning qualified automobile demonstration use? ..................................................................... Note: If your answer to 37, 38, 39, 40, or 41 is "Yes, " do not complete Section B for the covered vehicles. Part VI Amortization (a) I (b) I (c) I (d) (e) (fl Description of costs DateamorbZation Amortizable Code Amor<imtion Amortization begins amount section period or percentage f« this year 42 Amort¢ation of costs that begins during your 2005 tax year: 43 Amortization of costs that began before your 2005 tax year ................................................. . 44 Total. Add amounts in column (f). See the instructions for where to report ....... ...... ... 518252/01-OS-08 09410309 759605 594310 8 2005.09001 PAC INDUSTRIES PARTNERSHIP 44 I Form 4562 (2005) (Rev. 1-2006) 594310_1 4797 Sales of Business Property Form (Also Involuntary Conversions and Recapture Amounts Department of the Treasury Under Sections 179 and 280F(b)(2)) Internal Revenue Service (99) - Attach to your tax return. Name(s) shown on return Identifying number 2005 Attachment ~_ 1 Enter the gross proceeds from sales or exchanges reported to you for 2005 on Form(s) 1099-B or 1099-S (or substitute statement that ou are includin on line 2 10 or 20 see instructions ........................................................................ 1 Part 1 Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or Theft - Mest Prenerty HPlri Mnrp Than 1 voar (a) Description of property (b) Date acquired (mo., day, yr.) (C) Date sold (mo., day, yr.) ! ) d Gross sales price (e)Depreciation allowed or allowable since acquisition (f) Cost Pother basis, lus improvements and expense of sale (g) Gain or (loss) the sum of (d) and (e) 2 3 Gain, if any, from Form 4684, line 42 3 4 Section 1231 gain from installment sales from Form 6252, line 26 or 37 ..... 4 5 Section 1231 gain or (loss) from like-kind exchanges from Form 8824 5 6 Gain, if any, from line 32, from other than casualty or theft ................................................................................... ............ .... s 32 808. 7 Combine lines 2 through 6. Enter the gain or (loss) here and on the appropriate line as follows: 7 3 2 8 0 8 . Partnerships (except electing large partnerships) and S corporations. Report the gain or (loss) following the instructions for Form 1065, Schedule K, line 10, or Form 1120S, Schedule K, line 9. Skip lines 8, 9, 11, and 12 below. Individuals, partners, S corporation shareholders, and all others. If line 7 is zero or a loss, enter the amount from line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you did not have any prior year section 1231 losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long-term capital gain on the Schedule D filed with your return and skip lines 8, 9, 11, and 12 below. S Nonrecaptured net section 1231 losses from prior years (see instructions) 8 9 Subtract line 8 from line 7. If zero or less, enter -0-. If line 9 is zero, enter the gain from line 7 on line 12 below. If line 9 is more than zero, enter the amount from line 8 on line 12 below and enter the gain from line 9 as a long-term ca ital ain on the Schedule D filed with our return see instructions ..................................................................... ... 9 Part 11 Ordinary Gains and Losses 10 Ordinary gains and losses not inrluded nn lines 11 ihrnunh iR linrlnrie nrnnarty halri 1 voar nr lucel• 11 Loss, if any, from line 7 ............................................. ........................ 11 12 Gain, if any, from line 7 or amountfrom line 8, if applicable .---.---•-••------------- ......................... 12 13 Gain, if any, from line 31 14 Net gain or (loss) from Form 4684, lines 34 and 41a --...-----•--• ...................................................................... ........................ 14 15 Ordinary gain from installment sales from Form 6252, line 25 or 36 ..„..-.-..-,.••-------------------------- 15 16 Ordinary gain or (loss) from like-kind exchanges from Form 8824 ... ---.•-•,• ---.._._- --- •-• 16 17 Combine lines 10 through 16 ....................................•..._---.----- ......... ........ ............................ ........................ 17 18 For all except individual returns, enter the amount from line 17 on the appropriate line of your return and skip lines a and b below. For individual returns, complete lines a and b below: a If the loss on line 11 includes a loss from Form 4684, line 38, column (b)(ii), enter that part of the loss here. Enter the part of the loss from income-producing property on Schedule A (Form 1040), line 27, and the part of the loss from property used as an employee on Schedule A (Form 1040), line 22. Identify as from "Form 4797, line 18a." .................................................................................... See instructions - .............................................. ........................ 18a b Redetermine the gain or (loss) on line 17 excluding the loss, if any, on line 18a. Enter here and on Form 1040, line 14 ................................................................................................................................................ ........................ i8b ~wH ror t'aperworK Retluction Act Notice, see separate instructions. Form 4797 (2005) slaool 11-14-05 PAC INDUSTRIES PARTNERSHIP 23-1895159 Form 4797 2005) Pa e2 Part III Gain From Dis osition of Pro a Under Sections 1245 1250 1252 1254 and 1255 ' 19 a Descri tion of section 1245 1250 1252 1254 or 1255 ro er (b) Date acquired (mo., day, yr.) (c) Date sold (rno., day, yr.) A PITTSBURGH 102800 081905 B C D These columns relate to the properties on lines 19Athrou h 19D. - PropertyA PropertyB PropertyC PropertyD 20 Gross sales price (Note: See line 1 before completing.) 20 15 9 0 0 0 . 21 Cost or other basis plus expense of sale ..... ............. 21 14 8 4 6 0 . 22 Depreciation (or depletion) allowed or allowable ._.... 22 2 2 2 6 8 . 23 Adjusted basis. Subtract line 22 from line 21 __...._.. _. 23 12 6 19 2 . 24 Total gin. Subtract line 23 from line 20 .................. 24 3 2 8 0 8 . 25 If section 1245 property: a Depreciation allowed or allowable from line 22 25a b Enter the smaller of line 24 or 25a ........................ 25b 26 If section 1250 property: If straight line depreciation was used, enter -0-online 26g, except for a corporation subject to section 291. a Additional depreciation after 1975 ........................ 6a b Applicable percentage multiplied by the smaller of line 24 or line 26a ............................................. 26b c Subtract line 26a from line 24. If residential rental property or line 24 is not more than line 26a, skip lines 26d and 26e ................................................... 26c d Additional depreciation after 1969 and before 1976 26d e Enter the smaller of line 26c or 26d 26e f Section 291 amount (corporations only) __.......... 26f Add lines 26b 26e and 26f ................................. 26 0 . 27 If section 1252 property: Skip this section if you did not dispose of farmland orrf this form is being completed for a partnership (other than an electing large partnership). a Soil, water, and land clearing expenses .................. 7a b Line 27a multiplied by applicable percentage ..._..__._.. 27b c Enter the smaller of line 24 or 27b ........................ 27c 28 If section 1254 property: a Intangible drilling and development costs, expenditures for development of mines and other natural deposits, and mining exploration costs .............................. 8a b Enter the smaller of line 24 or 28a .. ...................... 28b 29 If section 1255 property: a Applicable percentage of payments excluded from income under section 126 ..... ........... . ... ........ ... ..... 29a b Enter the smaller of line 24 or 29a .. ..................... 29b Summary Of Part III Galns. Complete property columns A through D through line 29 h hefnre nninn to ling ~n 30 Total gains for all properties. Add property columns A through D, line 24 31 Add property columns A through D, lines 25b, 26g, 27c, 28b, and 29b. Enter here and on line 13 .......................................... 32 Subtract line 31 from line 30. Enter the portion from casualty or theft on Form 4684, line 36. Enter the portion from other than casualty or theft nn Form 4797_ line R Recapture Amounts Under Sections 179 and 280F(b)(2) When Business Use Drops to 50°io or Less (a) Section (b) Section 179 280F(b)(2) 33 Section 179 expense deduction or depreciation allowable in prior years ............. 34 Recomputed depreciation (see instructions) 35 Recapture amount Subtract line 34 from line 33. See the instructions for where to rennrt stsooz tt-ia-os JWA PAC INDUSTRIES PARTNERSHIP 23-1895159 SCHEDULE K NET INCOME (LOSS) FROM RENTAL REAL ESTATE STATEMENT 1 DESCRIPTION AMOUNT COMMERCIAL REAL ESTATE - 3743 OVERBROOK ROAD, PITTSBURGH PA -2,963. COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE., HARRISBURG, PA 32,105. COMMERCIAL REAL ESTATE - 5341 JAYCEE AVE., HARRISBURG, PA 94,339. COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA 32,319. COMMERCIAL REAL ESTATE - CROYDON PA 25,416. RESIDENTIAL REAL ESTATE - DILLSBURG PA 19,371. TOTAL TO SCHEDULE K, LINE 2 200,587. SCHEDULE L OTHER CURRENT ASSETS STATEMENT 2 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR PREPAID REAL ESTATE TAXES 9,967. 7,447. ACCOUNTS RECEIVABLE - RELATED ENTIT 19,668. 80,667. PREPAID EXPENSES - OTHER 4,151. 0. TOTAL TO SCHEDULE L, LINE 6 33,786. 88,114. SCHEDULE L OTHER INVESTMENTS STATEMENT 3 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR PA STATE BANK STOCK 10,393. 10,393. TOTAL TO SCHEDULE L, LINE 8 10,393. 10,393. SCHEDULE L OTHER ASSETS STATEMENT 4 BEGINNING OF END OF TAX DESCRIPTION TAX YEAR YEAR SECURITY DEPOSITS 500. 1,350. TOTAL TO SCHEDULE L, LINE 13 500. 1,350. 11 STATEMENT(S) 1, 2, 3, 4 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP BEGINNING OF TAX YEAR SCHEDULE L OTHER CURRENT LIABILITIES STATEMENT 5 DESCRIPTION DEFERRED INCOME TOTAL TO SCHEDULE L, LINE 17 23-1895159 END OF TAX YEAR 17,250. 17,550. 17,250. 17,550. SCHEDULE L OTHER LIABILITIES STATEMENT 6 DESCRIPTION SECURITY DEPOSITS TOTAL TO SCHEDULE L, LINE 20 BEGINNING OF END OF TAX TAX YEAR YEAR 13,369. 22,472. 13,369. 22,472. FORM 1065 PARTNERS' CAPITAL ACCOUNT SUMMARY STATEMENT 7 PARTNER BEGINNING CAPITAL NUMBER CAPITAL CONTRIBUTED SCHEDULE M-2 LNS 3 , 4 & 7 WITH- DRAWALS ENDING CAPITAL 1 -1,949. 75,601. 78,007. -4,355. 2 33,265. 75,599. 76,704. 32,160. 3 -147,553. 75,601. 67,093. -139,045. TOTAL -116,237. 226,801. 221,804. -111,240. SCHEDULE M-1 EXPENSES RECORDED ON BOOKS NOT DEDUCTED IN RETURN STATEMENT 8 DESCRIPTION OTHER NON-DEDUCTIBLE EXPENSES DEPRECIATION EXPENSE TOTAL TO SCHEDULE M-1, LINE 4 640. 6,085. AMOUNT 6,725. 12 STATEMENT(S) 5, 6, 7, 8 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310 1 PAC INDUSTRIES PARTNERSHIP 23-1895159 OTHER RENTAL EXPENSES STATEMENT 9 PROPERTY: COMMERCIAL REAL ESTATE - 3743 OVERBROOK ROAD, PITTSBURGH PA DESCRIPTION OTHER OPERATING EXPENSE TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT 5,100. 5,100. OTHER RENTAL EXPENSES STATEMENT 10 PROPERTY: COMMERCIAL REAL ESTATE - 5321 JAYCEE AVE., HARRISBURG, PA DESCRIPTION MISCELLANEOUS TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT 4,714. 4,714. OTHER RENTAL EXPENSES STATEMENT 11 PROPERTY: COMMERCIAL REAL ESTATE - 7301 ALLENTOWN BLVD, HARRISBURG, PA DESCRIPTION AMORTIZATION BANK SERVICE CHARGES TOTAL TO RENTAL SCHEDULE, LINE 15 AMOUNT 1,000. 15. 1,015. 13 STATEMENT(S) 9, 10, 11 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310 1 1 651105 Schedule K-1 2005 (Form 1065) For calendar year 2005, or tax Department of the Treasury year beginning Internal Revenue Service ending Partner's Share of Income, Deductions, Credits, etc. See se ante instructions. Part I Information About the Partnership A Partnership's employer identification number 23-1895159 B Partnership's name, address, city, state, and ZIP code PAC INDUSTRIES PARTNERSHIP 5341 JAYCEE AVENUE C IRS Center where partnership filed return CINCINNATI OH D 0 Check if this is a publicly traded partnership (PTP) E 0 Tax shelter registration number, if any F 0 Check if Form 8271 is attached -1 Final K-1 LJ Amended K-1 OMB No. 1545-009' Part III Partner's Share of Current Year Income, Deductions Credits and Other Items 10rdinary business income (loss) 15 Credits & credit recapture 2Net rental real estate income (loss) 66,862. 30ther net rental income (loss) 4Guaranteed payments 5lnterest income 44. 6a Ordinary dividends 6b Qualified dividends i6 Foreign transactions 17 Alternative min tax (AMT) items ~ 1.561. 7 Royalties 18 Tax-exempt income and 8 Net short-term capital gain (loss) nondeductible expenses 9a Net long-term capital gain (loss) Part II Information About the Partner G Partner's identifying number 162-36-9922 H Partner's name, address, city, state, and ZIP code PHILIP F. COSTABILE 348 BLACKLATCH LANE [''AMP xILL . PA 17011 9b Collectibles (28%) gain (loss) 19 78,007. 9cUnrecaptured sec 1250 gain ~ 7,423. 10 Net section 1231 gain (loss) ~ 10,936. 20 Other information 110ther income (loss) ®General partner or LLC U Limited partner or other LLC member-manager member J ®Domestic partner ~ Foreign partner 12Section 179 deduction K What type of entity is this partner? INDIVIDUAL 130ther deductions L Partner's share of profit, loss, and capital: Beginning Ending Profit 33.3333334% 33.3333334% Loss 3 3.3 3 3 3 3 3 4% 3 3.3 3 3 3 3 3 4% 14Self-employment earnings (loss) Ca ital 33.3333334% 33.3333334% 0. M Partner's share of liabilities at year end: Nonrecourse $ *See attached statement for addi Qualified nonrecourse financing ........................ $ Recourse 5 71, 6 5 2 . N Partner's capital account analysis: Beginning capital account .................... $ .......... -1, 9 4 9 . ~ Capital contributed during the year ........ .......... $ ~ Current year increase (decrease) ........... .......... $ 7 5 , 6 01. ~ Withdrawals&distributions .................... .......... $( 78 , 007 ~ o Ending capital account .......................... .......... $ -4 , 355. " ®Tax basis ~ GAAP ~ Section 704(b) book JWA For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2005 511281 01-11-06 14 1 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310_1 2 651105 ~nn~ n Final K-1 n Amended K-1 OMB No.1545-0099 scneame n- I `V V J ~ (Form 1065) For calendar year 2005, or tax b i i ur f th T t t -- Part III Partner's Share of Current Year Income, Deductions, Credits and Other Items nn ng y year eg reas men o e Depar Internal Revenue Service ending Deductions er's Share of Income P t 10rdinary business income (loss) 0 15 Credits & credit recapture , , ar n t dit C 2 Net rental real estate income (loss) c. s, e re See se orate instructions. 6 6 8 6 3 . 16 Foreign transactions 30ther net rental income (loss) Part 1 Information About the Partnership t'rfication number id l i ' 4Guaranteed payments en oyer s emp A Partnersh p 23-1895159 and ZIP code it state dd ' 5lnterest income y, , ress, c s name, a B Partnership 43. INDUSTRIES PARTNERSHIP 8a0rdinarydividends PAC 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items ISBURG PA 17112 6b0ualifieddividends 1 563. HARR filed return artnershi here t C IRS C p p en er w NCINNATI OH 7 Royalties CI D 0 Check if this is a publicly traded partnership (PTP) 18 Tax-exempt income and E 0 Tax shelter registration number, if any F 0 Check if Form 8271 is attached 8 Net short-term capital gain (loss) nondeductible expenses 9a Net long-term capital gain (loss) Part II Information About the Partner 9b Collectibles (28%) gain (loss) 19 Distributions number in identif ' t G P 7 6 7 0 4. g y ner s ar 17 5- 4 0- 9 4 9 3 9c Unrecaptured sec 1250 gain and ZIP code state city address tner's name H Pa 7 4 2 2 . 20 O ther information , , , , r 10 Net section 1231 gain (loss) 4 3 . COSTABILE ROCCO A 10 936. . BOX 5 2 0 5 110ther income (loss) GRANTVILLE PA 17028 artner or LLC 0 Limited partner or other LLC I ®General p er member member-mana g 0 Foreign partner ti t ®D 12Section 179 deduction ner c par omes J K What type of entity is this partner? INDIVIDUAL 130ther deductions and capital: rofit loss 's share of t P , , p ner ar L Ending innin Be g g Profit 33.3333333°~° 33.3333333°~° Loss 3 3.3 3 3 3 3 3 3% 3 3.3 3 3 3 3 3 3% 14Self-employment earnings (loss) 3333333% l 33 it C 33.3333333% 0. . a a ear end: e of liabilities at h t ' M P y ar ar ner s s $ Nonrecourse "`See attached statement for additional in formation. ..._. Qualified nonrecourse financing ........................ $ Recourse 5 71, 6 51. N Partner's capital account analysis: Beginning capital account $ 3 3 , 2 6 5 . .............................. Capital contributed during the year ................. $ Current year increase (decrease) .. ................ $ 75,599. Withdrawals & distributions ....... ....................... $( 7 6, 7 0 4 Ending capital account .................................... $ 32 , 160. ®Tax basis ~ GAAP 0 Section 704(b) book 0 Other ex lain ~ ~ ~ a o " JWA For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 1065. Schedule K-1 (Form 1065) 2005 sit2st of-ii-oe 17 2 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310_1 Philip F. Costabile Estate REV-1500 Schedule D Support PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 PAC INDUSTRIES, INC. NOTE RECEIVABLE TABLE OF CONTENTS PAGE NUMBER LETTER 1 STANDARD OF VALUE, SUMMARY DESCRIPTION OF THE ASSET, AND SOURCES OF INFORMATION 2 VALUATION APPROACH AND METHOD 3 DISCOUNTED CASH FLOW METHOD 3 - 5 CONCLUSION 6 APPENDIX A -REPRESENTATIONS OF THE VALUATION ANALYST ~ APPENDIX B -ASSUMPTIONS AND LIMITING CONDITIONS 8 - 9 APPENDIX C -PAC INDUSTRIES, INC. SUMMARY INCOME STATEMENTS - 2009 AND 2010 10 ATTACHMENTS • $1,950,000 SUBORDINATED NOTE AGREEMENT • CORRESPONDENCE REGARDING WARRANT VALUE Katherine A. Costabile 18 Crain Circle Lemoyne, Pennsylvania 17112-3544 Re: Note Receivable Valuation We have performed a calculation engagement, as that term is defined in the Statement on Standards for Valuation Services (SSVS) of the American Institute of Certified Public Accountants. We performed certain calculation procedures for the valuation of Philip F. Costabile's Note Receivable due from PAC Industries, Inc. as of December 14, 2009. The specific calculation procedures are detailed below. The calculation procedures were performed solely to assist in the matter of providing a value of the note receivable pursuant to the preparation of a Pennsylvania Inheritance Tax return for Philip F. Costabile and should not be used for any other purpose or by any other party for any purpose. This calculation engagement was conducted in accordance with the SSVS. The estimate of value that results from a calculation engagement is expressed as a calculated value. In a calculation engagement, the valuation analyst and the client agree on the specific valuation approaches and valuation methods the valuation analyst will use and the extent of the valuation procedures the valuation analyst will perform to estimate the value of the subject interest. A calculation engagement does not include all of the procedures required in a valuation engagement, as that term is defined in the SSVS. Had a valuation engagement been performed, the results might have been different. Based on our calculations as described in this report, which are based solely on procedures agreed upon as referred to above, the resulting calculated value for Mr. Costabile's Note Receivable due from PAC Industries, Inc. as of December 14, 2009 was $1,574,000. The calculated value is subject to the Representations of the Valuation Analyst found in Appendix A and the Assumptions and Limiting Conditions found in Appendix B. We have no obligation to update this report or our conclusion of value for information that comes to our attention after the date of this report. >~ ~~~ Harrisburg, Pennsylvania March 8, 2011 1 PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 STANDARD OF VALUE Fair market value is defined as the cash or cash equivalent price at which property would change hands between a willing buyer and a willing seller, neither being under a compulsion to buy or sell and both having reasonable knowledge of relevant facts. SUMMARY DESCRIPTION OF THE ASSET On July 16, 2009, the then-current owners of PAC Industries, Inc. sold all of their (common) stock to the PAC Industries, Inc. Employee Stock Ownership Plan (hereafter referred to as the "ESOP") for $9.35MM. Mr. Costabile owned 100,000 of the then-outstanding 300,000 shares of common stock, aone-third interest. Mr. Costabile, along with the other two owners, participated in financing the ESOP's purchase of the Corporation's stock by lending $1,950,000 to the PAC Industries, Inc. The total lent by the former owners was $5.85MM. These obligations are subordinate to the corporate debt owed to Fulton Bank for an original amount of $3.SMM. The Fulton Bank debt bears an annual rate of interest of 5.25 percent for the first five years and requires monthly principal and interest payments of $56,893. The note matures in July 2015. Each seller loan bears interest at annual rate of 3.88 percent that is fixed for the term of the loan. Interest-only payments are due for the first two years of the loan term, with the accrued interest due and payable on the last day of each June beginning in 2010. Beginning June 30, 2012, the note holder is to receive level, annual payments of principal in the amount of $325,000 plus accrued interest. The notes are to mature during 2017. Concurrent with the issuance of the debt security, Mr. Costabile received a stock warrant from PAC Industries, Inc. that allow him to purchase 38,988.33 shares of stock on the earlier of (a) July 31, 2017 or (b) the first July 31 after the subordinated note has been paid in full. This warrant was value at $55,667 on July 19, 2009. SOURCES OF INFORMATION We were provided with the following financial information for this engagement: Note Agreement dated July 17, 2009 between PAC Industries, Inc. and Philip F. Costabile. • David Waldstein correspondence dated October 19, 2009 regarding the value of the stock warrants (OID). • Selected income statement information for PAC Industries, Inc. (Appendix C). 2 PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 VALAATION APPROACH AND METHOD The debt instruments of PAC Industries, Inc. do not trade on any securities exchanges nor have there been any transactions involving the Corporation's debt securities. Consequently, we have not considered a market approach to valuing Mr. Costabile's note receivable from PAC Industries, Inc. The note receivable evidences an agreement by which Mr. Costabile has a right to receive future cash payments from PAC Industries, Inc. As such, the note receivable is not a tangible asset, such as real estate or personal property, and a cost approach to valuing this asset has not been considered. This right to future cash payments makes an income valuation approach most appropriate for the valuation of this asset. We have utilized a Discounted Cash Flow Method to estimate the (present) fair market value of the note receivable. DISCOUNTED CASH FLOW METHOD Under the Discounted Cash Flow Method of valuing a business, the expected cash flows from the investment during the anticipated holding period, along with its terminal value, are converted to a present value by the application of a discount rate. A discount rate is the cost of capital for a particular category of investment and is determined by market conditions as of a particular valuation date as they apply to the specific characteristics of the subject investment.' This discount rate is applied to the series of future income amounts to arrive at a present value for the investment. Based upon the terms of the subordinate note agreement, we have forecasted the anticipated future cash flows to be received by Mr. Costabile for the repayment period. Interest-only payments are schedule to be paid during 2010 and 2011, with annual principal payments of $325,000 plus interest to be paid from 2012 to 2017. We have benchmarked the discount rate applied to the forecasted cash flows with the total returns for long-term corporate bonds. The historical total return for long-term corporate bonds is 6.20 percent.2 Mr. Costabile's investment (note receivable) in PAC Industries, Inc. would have more risk associated with it than the pool of companies from which the benchmark rate was calculated. Consequently, we have considered a ten percent premium to the benchmark rate to address the incremental risk associated with Mr. Costabile's investment. This results in a discount rate of 6.82 percent. 3 ~ Pratt, Shannon. P., Robert F. Reilly, and Robert P. Schweihs, et. al. Valuing a Business: The Analysis and Appraisal of Closely- Held Companies, Third Edition, Chicago: Irwin Professional Publishing, pp. 157-158. 2 Morningstar's 2010 Ibbotson SBBI Valuation Yearbook, Table 2-1• Total Returns Income Returns, and Cayital Ap reciation of the Basic Asset Classes• Summary Statistics of Annual Returns, page 23. PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 DISCOUNTED CASH FLOW METHOD Pursuant to discussions with management and a review of selected financial information, it is apparent that the Corporation's current cash flow is unable to support servicing both the senior and subordinated debt, as is scheduled for 2012. Appendix C presents selected information from the 2009 and 2010 income statements for PAC Industries, Inc. as well as the 2012 required debt service for both the senior and subordinated debts. Management has indicated that the Corporation's remedy to this situation would be to enter into negotiations with the subordinated debt holders to defer principal payments on the subordinated debt until the senior debt obligation has been retired. Accordingly, we have considered an alternate analysis that considers deferral of principal payments until PAC Industries, Inc. has retired its senior debt. The discounted cash flow analysis under the assumption that the principal payments begin in 2010 as originally scheduled indicated a present value of $1,698,000. The discounted cash flow analysis under the assumption that the principal payments are deferred until 2016, after the senior debt is retired, indicated a present value of $1,561,000. We have accorded equal weighting to each of these scenarios occurring and have reconciled these results into one present value estimate of $1,630,000. We have presented our application of the Discounted Cash Flow Method to Mr. Costabile's note receivable on the following pages. 4 PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 Face Amount $1,950,000 Annual Interest Rate 3.88% Annual Principal Payments $325,000 SCHEDULED DEBT SERVICE 2010 2011 2012 2013 2014 2015 Interest Payment $75,660 $75,660 $75,660 $63,050 $50,440 $37,830 Principal Payment 0 0 325,000 325,000 325,000 325,000 Total Cash Flow 75,660 75,660 400,660 388,050 375,440 362,830 Discount Rate 6.82% 6.82% 6.82% 6.82% 6.82% 6.82% Present Value $70,829 $66,307 $328,714 $298,042 $269,946 $244,224 MODIFIED DEBT SERVICE SCHEDULE 2010 2011 2012 2013 2014 2015 Interest Payment $75,660 $75,660 $75,660 $75,660 $75,660 $75,660 Principal Payment 0 0 0 0 0 0 Total Cash Flow 75,660 75,660 75,660 75,660 75,660 75,660 Discount Rate 6.82% 6.82% 6.82% 6.82% 6.82% 6.82% Present Value $70,829 $66,307 $62,074 $58,111 $54,401 $50,927 Present Value -Scheduled Repayments Present Value -Deferred Repayments Average 5-1 2016 2017 Totals $25,220 $12,610 325,000 325,000 350,220 337,610 6.82% 6.82% $220,685 $199,157 $1,697,905 2016 2017 2018 2019 2020 2021 Totals $75,660 $63,050 $50,440 $37,830 $25,220 $12,610 325,000 325,000 325,000 325,000 325,000 325,000 400,660 388,050 375,440 362,830 350,220 337,610 6.82% 6.82% 6.82% 6.82% 6.82% 6.82% $252,469 $228,911 $207,332 $187,576 $169,497 $152,962 $1,561,397 $1,697,905 $1,561,397 $1,630,000 5-2 PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 CONCLUSION Concurrent with the issuance of the debt obligation, Mr. Costabile received a warrant from PAC Industries, Inc. that allows him to purchase 38,988.33 shares of stock on the earlier of (a) July 31, 2017 or (b) the first July 31 after the subordinated note has been paid in full. The warrant was valued at the time of issuance using OID (original issue discount) and was valued at $55,667 on July 19, 2009. We considered the value of the warrant relative to the value of the note receivable below. Present Value of Future Cash Flows Less: Market Value of Detachable Stock Warrant Market Value -Note Receivable $1,630,000 5~) $1.574.000 Based on our calculations as described in this report, which are based solely on procedures agreed upon as referred to above, the resulting calculated value for Mr. Costabile's Note Receivable due from PAC Industries, Inc. as of December 14, 2009 was $1,574,000. ONE MILLION, FIVE HUNDRED SEVENTY-FOUR THOUSAND DOLLARS $1,574,000 6 PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 APPENDIX A REPRESENTATIONS OF THE VALUATION ANALYST • The analyses and calculation of value included in the valuation report are subject to the specified assumptions and limiting conditions. • The valuation engagement was performed in accordance with the Statement on Standards for Valuation Services of the American Institute on Certified Public Accountants. • The parties for which the information and use of the valuation report is restricted are identified; the valuation report is not intended to be and should not be used by anyone other than such parties. • The valuation analyst has no obligation to update the report or calculation of value for information that comes to his or her attention after the date of the report. 7 PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 APPENDIX B ASSUMPTIONS AND LIMITING CONDITIONS • The calculation of value arrived at herein is valid only for the stated purpose as of the date of valuation. • Financial statements and other related information provided by PAC Industries, Inc. or its representatives, in the course of this engagement, have been accepted without any verification as fully and correctly reflecting the enterprise's business conditions and operating results for the respective periods, except as specifically noted herein. SF&Company, with respect to this engagement for business valuation services, has not audited, reviewed, or compiled the financial information provided to us and, accordingly, we express no audit opinion or any other form of assurance on this information. • This report and the calculation of value arrived at herein are for the exclusive use of our client for the sole and specific purposes as noted herein. They may not be used for any other purpose or by any other party for any other purpose. Furthermore, the report and calculation of value are not intended by the author and should not be construed by the reader to be investment advice in any manner whatsoever. The calculation of value is based upon information furnished by PAC Industries, Inc. and representatives of Mr. Costabile's estate. • Neither all nor any part of the contents of this report should be disseminated to the public through advertising media, public relations, news media, sales media, mail, direct transmittal, or any other means of communication without the prior written consent and approval of SF&Company. • SF&Company is not an environmental consultant or auditor, and it takes no responsibility for any actual or potential environmental liabilities. Any person entitled to rely on this report, wishing to know whether such liabilities exist, or the scope and their effect on the value of the property, is encouraged to obtain a professional environmental assessment. SF&Company does not conduct or provide environmental assessments and has not performed one for the subject company. 8 PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 APPENDIX B ASSUMPTIONS AND LIMITING CONDITIONS • SF&Company has not determined independently whether PAC Industries, Inc. is subject to any present or future liability relating to environmental matters nor the scope of any such liabilities. SF&Company's valuation takes no such liabilities into account, except as. they have been reported to SF&Company by PAC Industries, Inc. or by an environmental consultant working for PAC Industries, Inc., and then only to the extent that the liability as reported to us in an actual or estimated dollar amount. Such matters, if any, are noted in the report. To the extent such information has been reported to us, SF&Company has relied on it without verification and offers no warranty or representation as to its accuracy or completeness. • SF&Company has not made a specific compliance survey or analysis of the subject property to determine whether it is subject to, or in compliance with, the American Disabilities Act of 1990, and this valuation does not consider the effect, if any, of noncompliance. • Unless otherwise stated, no effort has been made to determine the possible effect, if any, on the subject business due to future federal, state, or local legislation, including any environmental or ecological matters or interpretations thereof. • Except as noted, we have relied on the representations of the owners, management, and other third parties concerning the value and useful condition of all equipment, real estate, investments used in the business, and any other assets or liabilities, except as specifically stated to the contrary in this report. We have not attempted to confirm whether or not all assets of the business are free and clear of liens and encumbrances or that the entity has good title to all assets. 9 PAC INDUSTRIES, INC. NOTE RECEIVABLE SUMMARY VALUATION REPORT DECEMBER 14, 2009 PAC INDUSTRIES, INC. SUMMARY INCOME STATEMENTS 2009 2010 NET SALES $13,609,651 $14,909,631 COST OF GOODS SOLD 10,255,435 11,127,179 GROSS PROFIT 3,354,216 3,782,452 SELLING AND DELIVERY EXPENSES 914,399 1,006,570 INCOME BEFORE GENERAL AND ADMINISTRATIVE EXPENSES 2,439,817 2,775,882 GENERAL AND ADMINISTRATIVE EXPENSES 1,933,340 2,024,742 INCOME FROM OPERATIONS 506,477 751,140 REQUIRED DEBT SERVICE Senior Debt ($56,893 per month) 682,716 682,716 Subordinated Debt: Annual Principal Payments (3@ $325,000) 975,000 975,000 Annual Interest Payments 226,800 226,800 TOTAL REQUIRED DEBT SERVICE 1,884,516 1,884,516 NET CASH FLOW (DEFICIT) ($1,378,039) ($1,133,376) 10 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND IS SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT AND SUCH LAWS. THIS NOTE MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN A TRANSACTION THAT IS EXEMPT UNDER THE PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS. MAKER RESERVES THE RIGHT PRIOR TO ANY SUCH TRANSACTION TO REQUIRE AN OPIMON OF COUNSEL TO PAYEE SATISFACTORY TO MAKER WITH RESPECT TO COMPLIANCE WITH THE FOREGOING RESTRICTIONS. THIS NOTE IS SUBJECT TO THE PROVISIONS OF A SUBORDINATION AGREEMENT OF EVEN DATE HEREWITH B1' AND AIYTONG THE LENDER, MAKER AND FULTON BANI{ {THE "SUBORDINATION AGREEMENT") THIS INSTRUMENT IS ALSO SUBJF,CT TO THE PROVISIONS OF ARTICLE 10 OF THE SUBORDINATED LOAN AND SECURITY AGREEMENT REFERRED TO BELOW. NOTWITHSTANDING ANY CONTRARY STATEMENT CONTAINED IN THE WITHIN INSTRUMENT, NO PAYMENT ON ACCOUNT OF_THE PRINCIPAL OR INTEREST HEREOF SHALL BECOME DUE OR BE PAID~~~~0 ACTIONS SHALL BETAKEN HEREUNDER EXCEPT IN ACCORDANCE ~3 `FF E TERMS OF SUCH ARTICLE 10. ~~ \`. SUBORDINATED NOTE $1,950,000 Harrisbuug, Pennsylvania July 17, 2009 FOR VALUE RECEIVED, the undersigned PAC Industries, Inc., a Pennsylvania corporation with offices at 5341 Jaycee Avenue, Harrisburg, PA ("Maker"), promises to pay to the order of PIIILIP F. COSTABILE, an individual (``Lender"}, the principal suin of ONE MILLION NINE HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($1,950;000), together with interest thereon, Notwithstanding the following provisions of this Note, all required and voluntary payments and prepayments under this Note are subject to the restrictions in Section 2.1 and Article 10 of the Subordinated Loan and Security Agreement (as defined below) and any restrictions imposed by or rights of the Bank pursuant to the Senior Loan Documents (as defined in the Subordinated Loan and Security Agreement), including without limitation the Subordination Agreement. 3 6511D5 dule K-1 2005 h S 0 Final K-1 0 Amended K-1 OMB No.1545-0099 e c (Form 10s5) For calendar year 2005, or tax ear beginning Department of the Treasury Part III Partner's Share of Current Year Income, Deductions Credits and Other Items y Internal Revenue Service ending Deductions Partner's Share of Income 10rdinary business income (loss) 0 15 Credits & credit recapture , , etc Credits 2 Net rental real estate income (loss) . , See se orate instructions. 6 6 8 6 2 . 16 Foreign transactions 30ther net rental income (loss) Part I Information About the Partnership er identification number lo hi 's em t A P 4Guaranteed payments y p p ar ners 23-1895159 and ZIP code state cit address 's name hi P t 5lnterest income , y, , , ners p ar B 44. PAC INDUSTRIES PARTNERSHIP 6a0rdinarydividends 5 3 41 JAYCEE AVENUE 17 Alternative min tax (AMT) items HARRISBURG PA 17112 6b0ualifiedtlividends 1 561. C IRS Center where partnership filed return CINCINNATI OH 7 Royalties D 0 Check if this is a publicly traded partnership (PTP) 18 Tax-exempt income and E 0 Tax shelter registration number, if any F ~ Check if Form 8271 is attached 8 Net short-term capital gain (loss) nondeductible expenses 9a Net long-term capital gain (loss) Part II Information About the Partner 9b Collectibles (28%) gain (loss) i9 Distributions number in G Partner's identif 6 7 0 9 3. g y 191- 4 2- 8 9 3 5 9c Unrecapturetl sec 1250 gain and ZIP code state city address H Partner's name 7 4 2 3 . 20 Other information , , , , 10Netsection 1231 gain (loss) 44 . COSTABILE FRANK M 10 936. . 5798 HIDDEN LAKE DRIVE 110therincome(loss) HARRISBURG PA 17112 artner or LLC 0 Limited partner or other LLC I ®General p member-manager member artner Q Foreign partner mestic J ®D 12Section 179 deduction p o is this partner? INDIVIDUAL e of entit K What t y yp 130ther deductions L Partner's share of profit, loss, and capital: Beginning Ending Profit 33.3333333% 33.3333333% Loss 3 3.3 3 3 3 3 3 3°~° 3 3. 3 3 3 3 3 3 3% 14Self-employment earnings (loss) Ca ital 33.3333333% 33.3333333% 0. M Partner's share of liabilities at year end: Nonrecourse ................................................ $ 'See attached statement foraddi Qual'rfiednonrecoursefinancing ........................ $ Recourse 5 71, 6 5 2 . N Partner's capital account analysis: Beginning capital account ............................. . $ -147,553. ~ Capital contributed during the year ................. . $ ~ Current year increase (decrease) . .......... ......... . $ 7 5 , 6 01. ~ Withdrawals & distributions ............................. . $( 6 7, 0 9 3 . ) o Ending capital account ................................... . $ -13 9 , 0 4 5 . '~ ®Tax basis ~ GAAP 0 Section 704(b) book 0 Other ex lain JWA For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 10s5. Schedule K-1 (Form 1065) 2005 511281 01-11-08 20 3 09410309 759605 594310 2005.09001 PAC INDUSTRIES PARTNERSHIP 594310_1 This Note is subject to the Stock Purchase Agreement dated as of the date hereof among PAC Industries, Inc. Employee Stock Ownership Trust (the "Tilist"), Richard A. Heeter, as Trustee of the Trust, Lender, Frank M. Costabile and Rocca A. Costabile and Maker, and the conditions set forth therein, and the Subordinated Loan and Security Agreement dated as of the date hereof (the "Subordinated Loan and Security Agreement") among Maker, Lender, Frank M. Costabile and Rocco A. Costabile. This Note is secured by the Subordinated Loan and Security Agreement. Payments of principal plus accrued interest, including mandatory prepayments, shall be made in the amounts and at the times set forth in Article 2 of the Subordinated Loan and Security Agreement. (each time of payment a "Payment Date'). The rate and amount of interest shall be determined according to Article 2 of the Subordinated Loan and Security Agreement. If,, at any time, the interest rate on this Note shall be deemed by any competent court of law, governmental agency or tribunal either to exceed the maximum rate of interest permitted by applicable law or to be an uiu•easonable interest rate, then, for such time as such interest rate is deemed excessive, its application shall be suspended and there shall Ue charged instead the maximum rate of interest permissible or reasonable under applicable law. This Note may be prepaid by Maker, in whole or in part, at airy time, without premium or penalty. If at time any installments of principal are required to be made under this Note, any voluntary or mandatory prepayments of principal shall be applied to such installments in the inverse order of their maturity. If any Event of Default has occurred and is continuing, Lender may at any time, at his option, by notice to Maker, declare this Note to be immediately due and payable; provided, however that if any Event of Default under Section $.1(d) or Section $. I (e) of the Subordinated Loan and Security Agreement occurs, this Note shall automatically become due and payable without notice, declaration or demand. Upon the occurrence and during the continuance of ally Event of Default, Lender may exercise all of the rights and remedies available to him at law or in equity or according to the Subordinated Loan and Security Agreement. All remedies available to Lender upon any Event of Default shall be exercised in accordance with and only to the extent permitted under the Subordinated Loan and Security Agreement and the Subordination Agreement. All sums payable to Lender hereunder shall be paid directly to Lender or to Lender's order in immediately available funds at Lender's principal residence or such other place as Lender may designate to Maker in writing from time to time. If any payment of principal or interest on this Note shall become due on a Saturday, Sunday, or bank holiday under the laws of the Commonwealth of Pennsylvania, such payment shall be made on the next succeeding business day. 2 All notices given in connection with this Note shall be given in accordance with the notice provisions of the Subordinated Loan and Security Agreement. Maker, to the fullest extent permitted by law, hereby waives: (i) presentment and demand for payment; (ii) protest and notice of protest, dishonor, default or nonpayment to Maker or any other person; and (iii) any demand for payment under this Note and any other notice or demand to which Maker might otherwise be entitled. Maker agrees that its obligations hereunder are absolute, unconditional and continuing and shall not be affected by any failure of Lender, inadvertent or deliberate, to protect, secure, insure, perfect or realize upon; or any negligence by Lender with respect to, airy collateral, sectuity interest or lien which may secure any of the obligations of Maker hereunder. No delay or omission on the part of Lender in exercising any right hereunder shall operate as a waiver of any such right or of any other right hereunder and a waiver of airy such right on any one occasion shall not be construed as a bar to or waiver of any such right on, any future occasion. This Note may not be amended, modified or waived except by an instruixient in writing signed by each of the parties hereto. This Note may not be released or discharged except by a written instrwnent signed by Lender. This Note shall bind Maker and its successors and assigns and inure to the benefit of the Lender and its successors and assigns. This Note is delivered to Lender in the Commonwealth of Pennsylvania, the laws of which, except for its rules relating to the choice anal conflict of laws, shall govern the . construction and enforcement hereof in all respects. [Signature page follows] IN WITNESS WHEREOF, Maker has duly executed this I~TOte as of the date set forth above. PAC INDUSTRIES, INC. ~,. Y-- Rocc~. C ' e, President ,. t Subject PAC Seller note 10/19/2009 03:59 PM Face Value of Seller Note: $5.85 million Value of Warrant (OID): $167k Value of Seller Note: $5.683 million David Waldstein GWaldsfer'n~sesadvisors.corn wwve. ~e s_a~{visgrs. c om 2 Philip F. Costabile Estate REV-1500 Schedule F Support LISTENING i5 JUST THE BEGINNING'" PHILIP F COSTABILE KATHERINE COSTABILE 18 CRAW CIR LEMOYNE PA 17043-1381 STATEMENT OF ACCOUNTS 3624-25092 STATEMENT PERIOD FROM THROUGH 11-27-09 12-28-09 0 PAGE 1 OF 2 1057 0022 31675 Y 7 ENCLOSURES 0 PRIME LIFE INTEREST CHECKING ACCOUNT: 3624-25092 PREVIOUS DEPOSITS/ CHECKS/ SERVICE ENDING STATEMENT BALANCE CREDITS 3 DEBITS 11 FEES BALANCE 327,105.51 2,901,61 37,388.13 .00 292,618.99 ACCOUNT/INTEREST INFORMATION INTEREST PAID THIS YEAR 82.16 DEPOSITS/ CHECKS/ DATE ACTIVITY DESCRIPTION REFERENCE CREDITS DEBIT5 BALANCE 11-27 BEGINNING BALANCE 327,105.51 11-30 MACYS PAYMENT 00077900000 830.81 CHECK PYMT 091128 274 70 326 12-02 1034 CHECK 1033 00307000110 8,440.00 . , 317,834.70 12-03 BANK OF AMERICA 00077900000 5,130.07 MORTGAGE DEC 09 XX>00<8657 312 , 704.63 12-07 wF NOME MTG AUTO PAY 00077900000 3,119.38 25 309 585 2060 0177890217 , . 12-1 12-23 CHECK CHECK 1037 00309605860 6,097.44 12--23 CHECK 1038 00309601605 3,984.33 298,952.85 12-24 DEPOSIT 00449800940 1,000.00 12-24 12-24 DEPOSIT CHECK. 1041 00449800920 00449800890 1,888.00 500.00 301,340.85 12-28 AMERICAN EXPRESS 00077900000 7,935.47 ELEC REMIT 091225060981225 12-28 CHECK 1009 00318607590 50.00 12-28 CHECK 1039 00321400910 750.00 61 13 292 618.99 12-28 INTEREST CREDIT . , 292 618 99 12-28 ENDING BALANCE , . CHECK SUMMARY INDICATES SKIP IN CHECK NUMBERS CHECK NO AMOUNT 50 00 CHECK NO 1037* AMOUNT 097.44 6 1009 1033* . 8,440.00 1038 , 3,984.33 1034 830.81 1039 750.00 1035 550.63 1041` ~ 500.00 TOTAL NUMBER OF CHECKS 8 70TAL AMOUNT OF CHECKS 21,203.21 X DIRECT FULTON BANK, N.A. INQUIRIES T0: PO BOX 504 FulcaiBanl,A.A. EAST PETERSBURG, PA 17520-0504 Atem~erF.D.LC TELEPHONE: 717-5$1-3000 OR 1-800-FULTON4 ~~~m~~~3~ Page 1 ~. , ~C~ r 1057 0022 31677 Y LISTENING IS JUST 7HE BEGINNING." STATEMENT OF ACCOUNTS 3624-25093 X STATEMENT PERIOD FROM THROUGH 11-27-09 12-28-09 7 PAGE 1 OF 1 PHILIP F COSTABILE ITF PHILIP A COSTABILE II 18 CRAIN CIR 0 ENCLOSURES LEMOYNE PA 17043-1381 0 FREE CHECKING - - ACCOUNT: 3624-25093 ~s...... ,..,~..,-.~~~ x.~, ,~.. ~. ,,... ,.. a..y. x.M ...x u,~, .-~~. ~v... ~ . ~,...u . ,.~, _~. PREVIOUS DEPOSITS/ CHECKS/ SERVICE ENDING STATEMENT BALANCE CREDITS 0 DEBITS 0 FEES BALANCE 192,355.88 .00 .00 .00 192,355.88 SERVICE FEE BALANCE INFORMATION FROM 11-27-09 THROUGH 12-28-09 AVERAGE LEDGER BALANCE 192,355.88 AVERAGE COLLECTED BALANCE 192,355.88 MINIMUM LEDGER BALANCE 192,355.$8 MINIMUM COLLECTED BALANCE 192,355.8$ EFFECTIVE DECEMBER 12, 2009 - OUR FUNDS AVAILABILITY POLICY HAS CHANGED. FUNDS DEPOSITED INTO YOUR ACCOUNT WILL GENERALLY BE AVAILABLE ON THE•FIRST BUSINESS DAY AFTER THE DAY WE RECEIVE THE DEPOSIT. DIRECT FULTON BANK, N.A. INQUIRIES T0: PO BOX 504 EAST PETERSBURG PA 17520-0504 FultmIIad:,K 1. TELEPHONE: 717-581-3000 FOR 1-800-FULTON4 a~ m•° Page 1 ~;. O ~ O O J N ~ 7 A ~ [~ ~ Q U N ~ J N 'C Q ~ C O O ~ ~ F ~ 0 0 ~i ri 0 '- o ~ ~r ~ o ~ c ~ ~ ~ ~ ~~ 0 0 0 o r, r` a~i v O O '•'~ ~ ~ ~ ~' ~mc~ ~ Q M° ~' Z N ~ `~ ~i f O Hi e~ d- i ~ ~ ~ ~~ i M M op 00 C4 W W ~~ ~ j ~ ~ N ~ ~ LL' o~ ~ ~ ~ ? ~ U ~_ o J N N H ~ ~ y ~ ,fi R ~ O G 0~0 W (/~ ~ 3~V ~~~ a 7 ~ O ~ N L~ Z N~ ~ ~ ¢ LL. ~ uNim ~~.a >~~ o ~ ~ O X 0 0 O U 0 0 z Q ~ Q.. Z ~- >- 1- ~ i- ~- N °z ~ J ~ m C11 ~ W~ J ~ O Q° ~ ~ ¢ a c°3_zzw ~ ~ Q } 0. LU cc O ~ F=.. U ~ a Q ~ ~ V e 9 'O ~a ~ ,(6 a ~ C = 'a Z U .-i a ~ ~ L O W O ~ C7 ~ ~ Q ~ j ~ ~~„ ~ F J ~ z J ti Q ~ 0. C9 p W s~-r Q ~° } p t'1 Ca ~ ~.. m ~~ _ ,`~I °m( r . ,~~ - !. ~~~ -- IM l~~ 1~'1~ e d d •. 7 T O v e O J ~ ~~w ~ ~ ~ ~_ .C ~ N O O ~ - O O ~ ~ 0 ~ c U U C w ~ b~D ~ '~ O ~ C U •~ ._ W :a o +s ~ ~ .~ ~ O ~a`~i~ I- o ~ ~ ~ ~ o ~ Y o v O m n. ~ ~ ~ 0 3 _~~ W a a~ +, ~--~~> w v > ~ ~ ~ ~ a Q ~ d ++ +~ v~i°~ ~ m o ~ ~ 0 ~ -° t .mac C ~ '~ ~ ~ t z ° O-a~m y N ~ h N ~ ~~~ z ~ N U z V ~ ~ ¢ro~ 0 N ci rn 0 rn rn °a M 0 a rn O a 0 O 0 H v 0 r v v ~ in a m v ~ •> E m a~ n. °' a ~ i ~ ~ .~ c c ~ ~ >, w o O >+ v - V O + ' O ~ ~ ~ T U V .C 3 ° ~ o ~I ~ J ycy c cpi ~~,, ~I ~ ~ Q1 ~ ~ ~ A v ~ Y 3~~ ' ~ C 0 ° 3 o W j d ~erfvr>naa~ace ~~aec~~>ll~ ~C~v1.lAa1: ~i;ateme>txi: For tiro trorlocf 11/18/2009 to 12/17/2009 For 24-hour Information, sic_In on to PP1C t3ank Online E3anking PHILIP F COSTA(31LE 1 _='lon pnc.com, ~ Primary account nutnber: 51-121)1-1858 Paye 2 of 5 PIdC points is a service mark of The PNG Financial Services Croup, inc. PNC Bank reserves the right to change Dr terminate the PNC ~JOints program. See Terms and Conditions for ccJrnplete d©tails. iKQl1fC ~-1C0 i!.~7H:•SY5"J1+!SY~Ylk•4:Q:2lti~ 3T •SZi2592R~.'@AIYl~ffi1R~ ~e1`~~S!'AA1FtAA6w^ ~~t7~')c~6~@t~l Philip F Costabile Kallterilte K Costabile ~Iftt>~esp®st I~!>tapt:E~u~a~ ~~~~:~alt~~~; ~ae~aa~>ra~~y Account number. 51-1201-1558 Overdra#t Protection Provided [3y: t:ontact f'1tlS: to osta)Itish Qverdrait Protoctiou balance Snnalt;aary fiaginning Deposits and Checks and other Ending balance other additions deductions balance 11.,93i.~19 1,853.3`? 5,2Qti.ti(1 S,G4)y.`~1 Average monthly Charges balance and fees 11,71;3.90 .00 'i'rausactian ~lauaa~aatry Checks paid/ Check Card POS Check CardlE3anY.card ~•Athdrawals signed transactions PPS PIN transacllons to { 0 7ofal ATM PNC Bank Other Dank transacllons ATA.d transactions ATM transactions 0 O U 8nt@Yt}st SUnaattar~ As of 12/17, a total of $188.82 in Interest was palcl 11115 year. Annual Percentage Nurnber• of days Average collected Interest Paid Yteld Earned {APYE) in Interest period balance for APYE ihls period U.1~I% ;ip i1,1ti8<}0 l.3`~ ~cti~ity [lets-ael It9eposits aatti ~t6er Atlttetia!!s There were 2 Deposits and Oiher Additions totaling $1,$8$.32. Date Amount Descrlptlon 1 `z/o9 i,s8~.oc) uilrct ucp~>sit • sr,c src 1 `?/ 1 `/ I „1`l ltttl`YCS1 I'al'InCllt Ala@cs[S Fltltij 5!t{a3littttt! tl~'vfaRL'I4S Check Oate Reference Check Date Reference number Amount pall number number Amount paid cumber 7Ci$ 1(1.00 1I/lit OS331ri49:T 759 ~')t).OO 1]/30 OSGCi713ti1i "ICi~I `k 150.0[} 11/23 031'IUn160 700 20.00 12/1J OS5l+.5ri902 755 1`2(}.5U 1`~/f)1 cf.43502817 `T(il J:iO.Ori ]Z/l~l 03500830G (;,G ]20.Ot} ]1/2`1 OS~i311ti013 7ti~1 •° b00.(}0 12/i~ )f2t535}720 7;i'1 300.01) 11/''>'1 03~iDili!127 7ti5 1,O00.0O 1<~/1G 075$92088 7Ci8 201).00 11/30 cSi5713g7 '1ti(i 5'15.0(1 12/15 520350+3ti3 " Gap in check sequence There were 12 checks listed totaling $3,731.'Sv. sZaaalting/Checi[ ~a~t1'LSlit>€atlraw~ls alud ~tatrclaast:s Date Amount Description There was 1 otherBanking Machine/Check I I/18 31.90 7Ci 1.1 C:ht°cl: Card Pun base Quality Caeancrs Card deductions totaling $31.90. ~lul8ae ant! iElsctlrataic L)latal[iug ~!t>!t~attsttoos There were 7 Online or Electronic Bankiny Date Amouni Description Dechtetions totaling $1,463.15. E 1/23 ] I~1.Ul) Direct ]'ayntrnl - i1G1 U(~.I CJtilities ti\\\\~S\~\Sfi-.37 11/3[3 tti9.'?? Dh•cr1 i'aymcnl • I?tcc• Svc YPI Lu t\1t\Z90?011rs l~/O1 •1LJ.50 llirccl 1'ayrnrlil • 1'a}•mcut i'r\\1'C: l~Jtifi~?63 Unline and Electronic Bankiny Deductions continued on next page i'erforin~uice Checlung Account Statement -,. PIVCBANK For ttto period 11/18/2008 to 12/17/2008 ',p For 2Q-hour information, sign onto PNC Bank Online Banking PHILIP F COSTABILE -;on pnacoln. Primary account number 51-1201-1858 Account nuntbcr: 5 i-1201-IS58 - cunlinued Page 3 of 5 ~Illllle c"1Htl ~leCti'OI11C BaAlltlll~ Detli1Ct10118 ^ CO17f11)UECI Date Amounl Descrlpiion 1'~! 10 12.Gti Direcl Pa)•ntcnt - Dircc4 Pa)' Atlantic City 1rl Zt\ltitl9l)97 ]'~/ lit ~1Ci,QU 1'ayntent,L'•Check Check Pytttt Fia C:u•dscn~lccs 7G2 E.;/15 719.99 Direct I'ayntent-Cash'I'rans 11'est Shore Club C:2U74 t'.',/ 15 352.78 I'a)•ment,L-Check Check Port Kohls Chg Pntl 07G3 [gaily B~tance Detail Date [3alance 1 1 / 18 11,9UCi.Ci<,i Date 1 L/2'1 [3alance 11,20(i,C~9 Date 12/09 I i!19 11,839.5<I 11/3U 1U,73G,37 12/lU I 1 /23 11,G2Ci.541 12/Ul lU,fiUf^i,37 12/ 1.1 Balance 12,153.37 Date 12/ 15 Balance 10,197.Sft ,12,~1.10~,71,.__ , 12/1G s,597.s9 l1,SG5,fiG 12/17 8,598.21 FORM8b3R•5005 03!0912011 14:10 METRO BANK GEUAR CUFF ~NETRO BAN K 00555 40159829 001 092240 KATHERINE K CQSTA8ILE OR PHILIP F GOSTAS3lLE 18 CRAW CIR LEtNOYNE PA 17043 Metro bank 3801 Paxson Street Ha7leburg PA 17111-1A1B 1-8BB-937-0004 (FA~717 903 5800 P.004l005 We're hero 7 days s week, z4 hours a o~sy st 1-898-937.0004. $ 8 9 9.11 5p pLU$ CH~CKlIdC6 05~ 0 A .. , . ., ,, ... ~~ 6899.11 a . Rlus 3 pspaslb and.Ott»r Cr~ttits ~ • • Leav Cheeks and Oiber DObHs • Ptus Interest Psld; ' ' Strttetntint Bala'nav as of OT/A'OiAO Transactions By Date Deto Dvaoripllon A .09 C MfiR Dei-~Nf izlieiue cUSTOMISR oEPC8tT IltIIR9%9 attt3'~0M6R DHA~044Vr 01!10110 14VTERL$7 PAYMENT Interest Summary i'BsElnnln0 intir~sst Rata ' • Nombir of Days in tMle 9tatvmvnt Pertrid ' • intvnst 6arJivd thts statetnartt Pedod Arinuat Pvraantape Yield Harped this atatvi»vnt Peti+sd (APY) tntvtsrt Pald Yvar to Dete L"'~~~ Q\~w~M hM~ • • 60100 b810yt7:07 . Debit Crvdtt dalm+oo 51,100!00 81,999.11 ' 5189.36 12,108.40 , 51,400.33 591AAt1.79 $0.28 59,047.07 .o.~~~e . .~ 60,28 •0;1~Ye ' 50.28 ` par:icd7a(t Fars t Is+ eat Petted I I • Sol00 0.00 OvvrdraR Feos Year (0 Dsto 50100 Rvtams Item Far !Ms tlNrmrnt Permed I 0.00 Returned (tern Foes Year to Data The Fees Summery above does nol reflect any refunded waived ISamE otodliad to your eacount. IMPORTANT ACCOUNT tNPORMA71oNf For your convsnbncv0 a summary f overdraft and non-avfgclont Lund fees now eppsars on your monfhly atatomont. Please note the summary doss not rsflsot qn »fundod or waived hems credited to your aoaount. ~g 8 6 a Cyole I Page 1 of 2 NOTk : SEE REVERSE &tDE FOR tMPORTAN7INFORMA?IOIV II Mambor FDIC 2 of 2 2009 STATEMENT SUMMARY Total interest paid in.2009 Property taxes paid in 2009 Ending principal balance EMPORTANT IRS REGULATIONS $35,725.95 _._.. ,Begmnmg_escrovobalance _ _._ ___ _ . $1,827.4} $5,249.11 _.Endinq escrgw balance _ _„ _ , , __ $1,47984 $541,985.41 FHANA case number NotApplicable YOU SHOULD CONSULT WITH THE IRS OR YOUR TAX ADVISOR IF YQU HAVE ANY QUESTIONS. BANK OF AMERICA, N.A, DOES NOT OFFER TAX ADVICE. Please verify thatthe Sociai Security Number (SSN listed on the IR5 Tax #orm is correct (see previous page). If the SSN is not correct, please provide us with the correct number immediately by writing to us at the address below or calling us at 7-800-669-6607. If you fait to provide us your correct SSN, you are subject to a $50 penalty imposed by the IRS and backup withholding of interest paid to you. Note: Please include your name and account number on all communications to us. BANK OF AMERICA, N.A. CUSTOMER SERVICE PO BOX 5170 SIMt VALLEY, CA 93062-5170 TRANSACTION HISTORY FOR 2009 ' Optional Ruydown Oats Description PmtlMo Ataonnt Ptinclpal Interest Escrow ' .Insurance Assistance late Charge Pertia~~ 2DD9 D1/058D09 Reginning8alance RE6ULARPAYMFNT 01/01/20119 54.132,99 3554A09.46 5r>~.72 Sf,DDD.00 $1,827.91 546599 EDAD SOHO 0AD 50.E 00 50 EOAO 00 SD A1105J28O5 MUiC. POSTING D1/018~ 09 SSQ,DD 521 258 551 ~.DD oD 30 50.00 SDAD SD.I~ 151,255.521 5DA0 SO,00 5 $OA0 , SQAD . 50.00 Otft4/1WS 02/0580D5 gTYTAXPMi REGULAR PAYMENT 01/0180 0P1Dt/Y0O9 , . 50.132.99 . 5569.E 52597.8D 5900.99 50.00 O SOHO 00 50 SOAO $DA0 ~ ~ ~ D2l9 MISG POSTING NT 8LJ018009 03J818099 $100,00 $4 13259 3100.00 5673.73 50.80 $2592.87 3D.oo 5466.99 SOH SOAD . StxoD . SOAO ' S0.o0 ~ 03(05/2oD9 REGULAR PAYME POSTING MISC 03101/2009 . 590A0 590.DD 3DA0 SOAO 50.00 50AD ' SD.w SOHO SD.~ 00 50 04 . REGUUtR PAYMENT 04/QL80D9 $4,13259 3G77.08 AD S5 52,988.E oD SO 546699 SO9D 50.00 SOAR S0A0 SOHO So.DO . ~ O4y3/2009 MISC.POST9NG 09/OS8009 09/018009 lu0,00 256.51) (S1 0 SO.fb . EOAO ($1,266b1) SQG1 Sow SDAO SOAq 09/13/2005 05/0b8008 CRYTAlSPMT REtgllAR PAYMENT ' 05f011~ . 54,432.99 560194 32,98456 5400.99 ..... 50.00 S0.0O 00 SOHO 50.00 5SL00 50AD 09f0O1~09 MISC. POSTIFlLi 85~180~ S10DA0 55 5100.0D 521 SO.oD 980 79 52 SOAD 596699 SOHO 50AD 50. SOAD $0A0 ~~! pg/~09 REGULAR PAYMENT 06!018009 OBlB18>~ 54,132 $t00.OD S100AD . , $D.OD SD.DO SO.DD 50.06 $0.00 X50 06/058009 OFJ25/2009 MISC.POSTING OVERAGE REFUND 05/018009 (5929.57) 99 SO•~ 47 368 9 S0•~ 52976 'N i5629b71 5960.99 SO.OD SO.OD SO.t10 50.011 50:00 50.00 50.00 58A0 07A168D09 o71De~ REGULAR PAYMENT Misc. POSTU4G 07/D18009 e71DtR~ 54.132 31ooAO . . St00.~1 . SD.oo SDAO SoAa sDAO AD SSAD 00 59 SDAo 00 50 p9Jp3I2009 CRYTAXPMT O7N18~ 551,385.04) 50.00 73 S&93 SD.~ S2572 27 [51,36094) &11135 50A0 50.00 SO SILO@ . SDAQ . 5050 DB/ tTEGULARPAYMEMT t18Po18099 9a>eL8~5 54,97735 S19oAO . sim.DO . 59AO ~.DO SOAD ~0.9o 50.00 soAo obfoe12eo9 '09/038009 nnsc. PDSrmG I~GUUIR PAYMENT 09N180D9 S9A7735 SINB•D2 AD S25875Q 50 W $41155 ' SDAa SORB SFtAD SOAK SO.OD SOHO S0. SAD 50.E 0 70J0?(14M NRSC. POSTRIG ' REGULAR PAYMENT DON18009 10Ni/20D9 51.00 S4A7738 3100 5702.40 • 52563.60_ 5411.35 50.00 SAD OD 50.00 00 30 So•9o SOAO 10/07!2009 MLSC. POSTR4G tOR18009 189D9 S1,D00.~ 355A4} 151 51A00.00 50.90 S0.0D 50.00 SAD 1St368A9) SDAD SAO SO. 50.E . 50.00 SDAO t0/t989O9 11/0 912 0 0 9 t3TYTA1IPNTT REGiRARPAYMENT 1014 111U18009 . 34.130.07 SIt1A7 52,969.53 5964A7 59A0 5oA9 AO SDAD SOAD EFI.00 00 50 11/Oal2M9 ~ MISC. POSTING 111018009 2 01 9D5 S1A~.QQ 07 190 54 51,090A0 57.38 59.E 52,945.E S09D S469A7 S09D 50A0 SO 50A0 50.00 . SAD 12)0112009 12!018008 . RESUYAR PAYMENT POSTING MISC 1 ) 8 121018009 . . S1AOD.00 57ADO.oo SOHO 50A9 SDAD SOAO SOA9 50.00 2009 . Ending balance 5541,955.41 51.479,84 50.E Cumberland County Board of Assessment Appeals Old Courthouse, First Floor One Courthouse Square Carlisle, PA 17413 00502452-2A-8740 Iualllaaa111nnha~nllnullnilalnlnnllaaalllaalnallal 16774 COSTABILE, PHILIP F T48 P1 & KATHERINE K COSTABILE 18 GRAIN CIRCLE LEMOYNE, PA 17043-13$1 Deadline for Scheduling an Informal Review Appointment: June 14, 2010 1=or details, please see the reverse side. NOTICE OF CHANGE OF ASSESSMENT The Cumberland County Board of Assessment Appeals is providing you with notice of the value on this properly, determined as a result of the Cumberland County countywide reassessment completed this year. The countywide reassessment values each property at current Fair Market Value, as of January 1, 2010, equalizing and establishing a uniform tax base so that properties of like characteristics and the same actual Fair Market Value will be taxed the same. VALUE NOTIFICATION MAILING DATES May 3, 2010 Muaic.z 12 - LEMOYNE BOROUGH School: 9 - WEST SRORE SD Location: 18 GRAIN CIRCLE THE WOODS AT BRIDGEPORT UNIT 15A PH 84 PG 67 Taxable Property trait/Lot ID: U-OO18A No Land, ImprOOemeats only Property Type: R Residential(Uader 10 Aeres) Homestead Approved ESTIMATED TAX IMPACT FORMAL APPEAL DEADLINE: June 14, 2010 Parcel identifier: 12-20-1858-0035-II15A 2010 Base Year Assessed Value Oid Assessed Value Fair Market Value (2010 Market x 100%) {2004 Market Land 0 0 0 Buildings 462, 800 462, 800 447, 660 TOTAL 462,800 462,800 447,660 2 010 Clean and Green Values Land NOT NOT NOT Buildings APPLICABLE APPLICABLE APPLICABLE TOTAL ,. ,. .,. ,. r ..,.: ,:. ::::....:.:.... .: a. .....::.: ~.,:.. ~ ..~ r . liecom ::Cear~~~+d;G`r~aen~values;@pplyto:qualifled::farrri:arid.;{orest:7atitl~anei _ :Q'effecti ~;op1yU o>auaQpi-,ca{aon.and'approyal::':.Clean.and.~i'~sn;appliCaiiQl~smsistbe~eceiYed .. ,.. , . ¢~tlae AssessmQnfdiflce no.;I~ter;tha[u,A,~O ~,m an Qct~er.15 20'!0 "ritose: previously approved fora/e~itar~i~Oraeen'do notrieecl to_ re=apply. The ESTIMATED impact statement printed below is our best estimate of change, based on 2010 COUNTY tax figures. THIS ESTIMATE DOES NOT INCLUDE ANY BOROUGH, TOWNSHIP, OR SCHOOL DISTRICT IMPACT. Current 2010 County mills = 2.579 Adjusted 2010 County mills = 2.074 $ 1,155 2010 COUNTY Tax BEFORE Reassessment. $ 960 2010 COUNTY Tax AFTER Reassessment. (see reverse side) ~ ~~~~' a~ ~ ~ L TI~I S DEED , MADE THE ~~ day of ~ ~~ in the year two thousand and eight (2008} BETWEEN FRANK M. BINGMAN and LINDA R. BINGMAN, his wife, of Lemoyne, Pennsylvania, Grantors, and PHILIP F. COSTABILE and KATHERINE K. COSTABILE, his wife, of Camp Hill, Pennsylvania, as Tenants in the Entireties, Grantees, WITNESSETH, that in consideration of------------------------- -------Five Hundred Twenty Thousand ($520,000.00}-------Dollars in hand. paid the receipt whereof is hereby acknowledged, the said grantors do hereby grant and convey to the grantees, ALL THAT CERTAIN condominium unit situate, lying and being in the Borough of Lemoyne, Cumberland County, Pennsylvania, described as Unit No. 15-A, The Woods at Bridgeport, a Condominium, a flexible condominium, (Unit 15-A} in a Declaration of Bridgeport Associates, Inc. ("Declarant") and Michael L. Martin, Inc. dated December 14, 1992, which has heretofore been submitted to the provisions of the Uniform Condominium Act, Act of July 2, 1980, P.L. 286, No. 82 (68 Pa. C.S.A. Section 3101, et seq.) by the recording of the said Declaration in the Office of the Recorder of Deeds, in and for Cumberland County, Pennsylvania, in Miscellaneous Book 433, Page 719, as amended by First Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 460, Page 838, as amended by the Second Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated February 17, 1995, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 419, Page 413, (see also revised plan recorded in Plan Book 69, Page 97), and as amended by the Third Amendment to Declaration of Condominium recorded in Miscellaneous Book 528, Page 38'6, and the Declaration Plat Building Ten, The Woods at Bridgeport,~a Condominium, by Hartman and Associates, dated August 20, 1996, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Plan Book 72, Page 134, as amended by the Fourth Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated September 13, 1996, recorded in Miscellaneous Book 530, Page 988, to convert Phase 3 in its entirety to the Condominium, consisting of Phase 3 in its entirety as set forth in Declaration Plat Building Ten, The Woods at Bridgeport, a Condominium, dated August 20, 1996, and recorded in Plan Book 72, Page 134, as amended by the Fifth Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated February 25, 1997, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 541, Page 981, and the Declaration Plat $uilding Nine, The Woods at Bridgeport, a Condominium, dated February 24, 1997, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Plan Book 74, Page 34, as amended by the Sixth Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated May 1, 1998, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 576, Page 1076, and the Declaration Plat Building Eight, The Woods at Bridgeport, a Condominium, dated April 10, 1998, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Right-of-Way Plan Book 11, Page•147, as amended by the Seventh Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated August 25, 1999, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 623, Page 935, and the Declaration Plat Building Four, The Woods at Bridgeport, a Condominium, dated August 25, 1999, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Right- of-Way Plan Book 12, Page 76, as amended by the Eighth Amendment Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated December 7, 1999, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 633, Page 34, as amended by the Ninth Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated October 30, 2000, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 659, Page 274, and the Declaration Plat Building Twelve, The Woods at Bridgeport, a Condominium, dated October 27, 2000, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Right-of-Way Plan Book 12, Page 117, as amended by the Tenth Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated February 14, 2001, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 667, Page 330, and the Declaration Plat Building Eleven, The Woods at Bridgeport, a Condominium, dated February 15, 2001, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Right-of-Way Plan Book 12, Page 126, as amended by the Eleventh Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated May 18, 2001, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 676, Page 1075, and the Declaration Plat Building Thirteen, The Woods at Bridgeport, a Condominium, dated May 16, 2001, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Right- of-Way Plan Book 12, Page 134, as amended by the Twelfth Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated December 4, 2001 and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 682, Page 4165 and the Declaration Plat Building Fourteen The Woods at Bridgeport, a Condominium dated November 28, 2001 and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Plan Book 84, Page 67, as amended by the Thirteenth Amendment to Declaration of Condominium for The Woods at Bridgeport, a Condominium, dated March 1, 2002 and recorded in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Miscellaneous Book 685, Page 736, and the Declaration Plat Building Fifteen The Woods at Bridgeport, a Condominium dated February 26, 2002 and recorded in the Office of the Recorder of Deeds in and fo•r ~ , Cumberland County, Pennsylvania, in Right-of-Way Plan Book 13, Page 4, together with a proportionate undivided interest in the common elements {as defined in subject declaration) of 4.263. Said property being known as 18 Crain Circle, Lemoyne, Pennsylvania 17043. TOGETHER with the benefits of and under and subject to the terms, covenants and conditions contained in the Declaration of The Woods at Bridgeport, a Condominium and Declaration Plats and Plans for The Woods at Bridgeport, a Condominium, as aforesaid. BEING THE SAME PREMISES which Michael L. Martin, Inc. and Bridgeport Associates, Inc. by deed dated March 1, 2002, and recorded March 4, 2002 in Cumberland County Deed Book 250, Page 3068, granted and conveyed unto Frank M. Bingman and Linda R. Bingman, husband and wife. AND the said grantors hereby covenant and agree that they will warrant specially the property hereby conveyed. ~IN WITNESS WHEREOF, said grantors have hereunto set their hand and seal the day and year first above written. Signed, Sealed and Delivered in the Presence of FRAN~BIN LINDA R. BINGMAN ~~e~Commonwealth of Pe:~c~~,~~~.".e ss. County of l7awQ~i.c~ On this, the 30~ day of ~„~-y 2008, before me, 6. ~o~-~ P ,,~1e~ the undersigned officer, personally appeared Frank M. Bingman and Linda R. Bingman, his wife, known to me (or satisfactorily proven) to be the persons whose names are subscribed to the within instrument, and acknowledged that they executed same for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. COMMONWEALTH OF PENNSYLVANIA NOTARIAL SEAL JANICE L. MEAOATH, Notary Public City of Harrisburg, Dauphin County My Commission Expires April 30, 2011 N tary Public Title of Officer State/Commonwealth of County of On this, the day of 2008, the undersigned officer, personally appeared known to me (or satisfactorily proven) to be the person subscribed to the within instrument, and acknowledged executed same for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand anc before me, whose name that official seal. Notary Public Title of Officer. ~ do hereby certify that the precise residence and complete post office address of the within named grantee is; O ~ra.~t~ Circ.~~ ~L2^noyc'~¢... ~ PA \~1 b`~3 Attorney for COMMONWEALTH OF PENNSYLVANIA County of ss. RECORDED on this day of A. D. 2 0 0 8, in the Recorder's office of the said County, in Deed Book Vol. Page Given under my hand and the seal .of the said office, the date above written. Recorder. ROBERT P. ZIEGLER RECORDER OF DEEDS CUMBERLAND COUNTY 1 COURTHOUSE SQUARE CARLISLE, PA 17013 717-240-6370 Instrument Number - 200825985 Recorded On 7/31/2008 At 10:18:28 AM '"Instrument Type -DEED Invoice Number - 26155 User ID - KW * Grantor - BINGMAN, FRANK M * Grantee - COSTABILE, PHII1P F * Customer - STEPHEN C NUDEL * FEES STATE TRANSFER TAX STATE WRIT TAX STATE JCS/ACCESS TO JUSTICE RECORDING FEES - RECORDER OF DEEDS AFFORDABLE HOUSING COUNTY ARCHIVES FEE ROD ARCHIVES FEE WEST SHORE SCHOOL DISTRICT LEMOYNE BOROUGH TOTAL PAID $5,200.00 $0.50 $10.00 $14.50 $11.50 $2.00 $3.00 $2,600.00 $2,600.00 $10,441.50 Certification Page DO NOT DETACH This page is now part of this legal document. I Certify this to be recorded in Cumberland County PA ag cuiye ,D ors G;/~.C'`'vT/ ° ° RECORDER O »so * -Information denoted by an asterisk may change during the verification process and may not be reflected on this page. * Total Pages - 6 GiIVINIAIIWIIIIBII Mar O1 2011 13:32:31 10b6232O1B6 -? 717 Moz-tga~~ S~rvza~~ 2/23/20 t;l. ],0 ; 2~ ; 2~ AM F McGann Appraisal Servi 9750 Merrill Lynch Page 004 2/422 ~O~~~:4c~Q~6~, Inc. 77o]ZSno6? I3b N0. '1079?708 APPRAISAL OF CgNt7QMINIUM LOCATED AT: saod renvat a~~ Ucean City. NJ 08~.',G FQR: MarrNl lyneh Cr~edle~ur>•x+lm6on dsa~ DcerLaka ~~.1 Jackaonvilla, Fl'J2?d& 80FZ~IOIN; rRR: K:tPrerine Castnbife ASS QF: uCpDOmlpri^_, c010 BY: Jortniforp. VMlniof9 Hore Mar 01 2011 13:32:41 18662320186 -> 717 X9 75 9750 Merrill Lynch Page 085 MArtF,a~~ S~XV:ie~~ 2/23/21.], lA ; 20 ; 23 ~M A ( 1~ 3/t~22 ~iA()--4~kk3--09F~ McCann Appraisal Services; Inc. 7I032580G2 Merrill Lynch Credit I;wq~wra6wn b80'? Uanrlska East JaokganvlNo, ft, a224U FIIONurrt4er:t0792788 In ecaurdurtrx+with ynt>r reryumtt, I have,gtpralaad the real property nt: sMtb GontralAve Oeenn Cliy, iJJ 08:26 The pu'poea of iNs appra~al le to duvefap rsr upinlun of the rncrkd vsiua ut ~tl subjac~ property. us lruptnvod. The properly rfghls appralsail are the fees{mple Interval in thaslte ~nd Imprnvt~mants• In my oPl~bn, th9 m~yet value of the property as of acrA~mlx:t r2. ?,G 10 rtr: a;ss,noo SevanHunckaciF.ic,~Ry-PivoTho+~~ncl UonaF Tho etlaalted report contafne tfia doscrlptlan, rittulysls flrtd suppurttiva data for iha wnolusions, tinel ppinl0o of value. desaiptlve phomgr~ptta, Ilntitiltg wnrtitlon~ 8ttd approprletd uertiflcaitens. ~~~ IonnKer D.VtAntmrs t filar @1 2@11 13.32:53 1866232@186 -> 71? 75 9758 Merrill Lynch Page @86 I~ort~a~e S~3rvic+~s 2/23/201,.1. 14 ; 20 ; 23 ALA PA,C1~ x;/022 800-~:~k~3~-09Q~ 710325862 !rt!d(hrldual Gondortt-nium UrAit IS,pprraise;i Rapo~E fApt+a. +6r9_7au The P~ re 01 tke iurtAnl(Y agprahAf wgort is to plor Flr IM bndxid+b n! rAh an pauaU, and pde wleq>, polled, ioion of the rrorkN ettlue of fte~ 'aCl Rdperty. _. _..,. .»:aaal~alaau..~~4~snL!.9va ......................._.._..._.........u~a~,5?9,4....... s~nr.~ca~n,.G!x....._...._ ..,......sVUASJy_-..x1n~t~a98.~e......._._...._ .. 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H!.9a..fn!_M,Paae4Af,4a+34boa1ld_(~!(,~ ' ~Qtl ArMroAd7 wvs alven a0 Lhd w icA t TL C xq " i ~ - _ , r t c os At,•~,,,~{,jJ,Og~ ~g ~~~E ~ were natda to Tlti+ t can ldarodAtle ~nvrolromU~PAp,~AolfnosainsolhcrwQronotdeartud,~,~as,ryfp#i~tla t:lararsi nmont _ _~ .. .`_^. _.-._ r .-._ _.... ._.... .. - t Tll-afNrlwbrmea 'uec' t,,,~ xtlkottocam+b[bnDaWi~wpppmlObalbrllontMfaekolaigyu8rx>+4feo BlwtOxtOehi+vronwttalexapoantan~vbtps,~._._-._ Q~ubix11o0ls6ilawapn{aioaaMarnfononlMiairolaprCofhlirflaNdAbnltAllMretaytmayra6arsM•sbes aortpletsQ,or C]wgaettoltsfo0ov'r¢taqu7sd tpisclbnf11a0d pnitr axvrwrOb!'rf paltllgqunaat Oa Caraalvnm Jeibpta/owp rolla9tMS elWapnnamath ,'~i@.. _l2rirJ%Rj!3J.11,~".~ie._ys' .is° d 9J9 ~ a t n41 0 . . . _ . .., . ..... u: r. of Itrc diant fir m ~ Ic_ nthn_,Q,~urnpSOa anlv_~,,,,~_„_,_.~.4.. _ _ _ _ awoA Un. wtnpum vAwl plsµaiWn otter lnprrW.aO raArk+r WUn orarr•v7evt lmvmrlX,q•OaaA roop Yl worp.alrMpnal v/easelrvtlnrn •rxl ttrtrtlpq wodhtewt. sail approhrrY torUtkodra,InY tnv) opMba of tho mgrpel wep,oK OulkrA, of thv real peporb toot k tpe xuA a t f l % o o l lA treport b i Rb, 000 9 0 /T:/z0~a Alt a•t. tor, IA• rali+ad b 1 t ,,.._..... ............. ~_.. _.. _ ._ .. ~lnT6^'"',...,.,ws 1 f~iwllFhwwt7F1tR2Ji Mar 81 2811 13:35:36 18662328186 -> Mprt~a.~~ a~rvzc~s 2/23/20x,1. 10 ; 20 ; 23 e~1M Individual Condominium Unit 717 ~75 9758 Merrill Lynch. P C3i~ 7/022 f: (2Q~~~~~'Q~t~~; t IJI 7'IUJ35aUGy ~praisal R©port ra,r®, lo7~ayco This report forrn i5 deNic,)tcd to report nn npptai.al of x unit In a ConBOminlutn project O~ n condominlurrt unit in a Fl~nnod unit tmvolopmont (EyUp), ThiG t'oparifonn L nptdeslgnod fa ltr{XFIt an appt'al,.gl of d rltanufachn'acl nvtita oro uuftnt n ronperatNo prokct. Thi3 appni3ai loporti3 xubjoct w the following scope ofwottr, intondod uso, intnncr¢d a nr, dofinidon of madtatvalvo, atntomontOf asxurnydinnx and timienp cond#gona, and cnrtlfications, tAadifieatiurt., adcgttons. nr dol 3nna w rise intended uaa, inlendcd user, rkFlnttlnn of mnntntvalua, oraaKUmpxon; and Ilmlang cnndfeprt!c arc not permi(tcd, Th appraiser may expand the scope at warir to inr.Iuda any acklittonat tuseRrch or anafysla necessary traxad on the eom~eriry of this npprdisal assifjiv,ten t Mpcgfications or tiolegonx to rho cnrdfiotrlion, eta also not perrcliltott Wrryrovcr, 7ddi(;ona# cerpiieatidns ~yt8tdp norCOnct#rutc m;ttn(tal alzarntionc to this appraisal mpoFt Such as Nose teGUi+ed by law orgtosn relatod to rite appl'slsel'~ congnuiny edttention nrm¢mh¢whip in . n ~pp+yral orpanlxvKOn, arc pctmittctl. SCOPE t7F yyt7Rf(t '1AO acoptt of work for pth vppra#sal i3 aaflnoq ty rho wmpioxity If thin a{ytm#sal . ~alynmcrtt anu eto +vlwlt'rng lgquilvntent; of this ai~}rrpi,ai Icponfontr, indtaliny dto following dothtltion of~ma+koty:>luo, aatomemaf aJ,umf7tiono and Ilrn#dng unnttittans, onN aerutiaanona. Thu nppralsarmust, ota minimc+m: (1) p¢ttnan n corrgstrle vi^:vai Inslwctloti of the intcdar and exrorlor araaa of tit¢ subject unit (2) inop¢ct and 3nalyz¢ the condominitrtn }trojoct, (1) insp¢ct the nniyh6orhood (A) etsyerr oath aF ate sanp:r+*~L>ir sates from al lraK Inc nt+•oct, (ti) reaearrA, v¢+iry, n d nnolyar. 0.71a frnrn icliabla pubGS andJnr priv, to :aurce~, pod (G) report Itt. or her 7n.plyyiy, Opinion., and wnduOlonn in chi: npprniaal +c port, 1N'FEHD® tJotii:r The intenckd use of ptu appraisal ropon la fortha lontlnr/clionttocv~luat¢ rite property dfatio rho subject of dt#s appraisal for a mortvatlr, finttnca !ran„ocsitsn. IfgT&NR6D USER; The intended ugrr of Vlla apprcisai r`pntt ig Uts Igndavdient MARKET VALUE The mo.t prola~l~le price which n ptvpcrty ntsoutd briny in O compr.Gdve and open market under , II conc6tiona raquislat to a fairaale, lira lxsyarand ,odor. oath acdn(} pivobntly. knva+ipdgaaitty and t4asvmini} iho prico is not a%actod by unduo :dmrdu.. lmplidtin tlti. cEfinition is rite Con2trmmxtion of a sole dO of a spapficd dale . n<i thn pn3s#ng pF gtle From nelrcr to rwy¢r tsdor conditions urhareby: (1) buyer and seller am typicagy mopvaasd; (2) bath parting cjre woU informed Orwell acNised and oath actin j to what he nr s#ra runstders his other a+vrt Lust interesC (~) a reasarrable time is' tlowad for exposure in the open marlteq (d) payment is made In tarma of u~sh in U. S. dollars or in torrns at Flrurnci,+rE xrrangarno tz compar,`rl>la tftnrato; and 13) the price reprasgnt, the nntrnvl conskleralion Inrate pmpnr(y sntd unatfeged try>xpegal or cren a tinanctng arSJles annreswan3" yr,nlac! tryanyonaasEOCintedwldt plea:+le grl)u9Amanta to eta umrWrab#eo rnutat be Fnado for xf+dcit+l oreroativa linandng ors.~tla', conea~a#anS Na adwawranto are neoaspary Forihost: cosr~ whtt?t are normaOY pelt! Lry 8elier; 89 a rayuitof ubritlon or Irv Nt s market area: dtn9a coats oro teat#ly Idcntl8ai~e once Uta allot pays tlta^.c cosh in virttt.+lty oii s<ntaa ir,nzactlons. 9paGnl rarcaSVa Anancinij adjusfmtmenta 41n be mado to the canparable pro#x+tty by tom#xuisons to financ#ng srm+3 offertrd by . thin! rty irrtitudonal landorthat is not already InvnWod in the property or t~naaeGOn. Any adjustment ATtouhl not t» Gq#culafed on a ochanical Ungar tar dallarwat of the financiny orconwssion but rho tbearamotrntof arry acljtrsimenishoutd aplaroxinwta th malket`3 roacaon to rite fin3ncing ar contaasions bpAdd on eta apptaisat'a juct~ttant &7'a76bti£NT OF fiw~9tlMPTION9 AHD LtMRFNbt t70N01TIOPfa: ?1to xpprsl•,.ers aer,ifrGgtian In this t>~pon t> subject to pro follaroing axsuntpgvrrs and prni9ng cancneon~: c i. The aplxalserwitl not Fee respon~lde formatter. of a lapel nattrro drat aifeeteith¢r'!te property tiring aitpralsecl orthn titlo roil. axca)a<lorinformation That he orshe bacama aw:fra of doting the razsarch'vlvdva~l in parfoim#ng dliE appraisal, 7h¢ xpprakeras3tmtea that the dsle is goad anti markawNe artci wiq not terxlerany opinions about eta tide. ':. TNe xppralsart+as prnvldad a skohsh to dtls appraisal capon to show the apptar.6nal dimen~ons nY rho (rnpmvomants. The Aitctch L irwludcd only tp a,aat rho raadnr in visuagting tltc pmpctpr and ttntlctfiNndn rho a ppraHer s dclcrm#na4on or its sixa, 3. Thr.apprairarhaanrsaminoctU,p,vait,nisilor+dmnp;dtntaraptpvidrs.JbythgFad ntEmptyrrnayMrrtwarnantASrancy(nr other darn soutcem} and hats noted fn this aw¢nisal mptsrtwhother any pprtion of the su tjaattsita l9looatad in an icbntAind ^specinl Flood Hazard Arna. Sacnt>ao the nppraisssr r oat a surveyor, ho or sho makes no utar. nwao, express or imr,6oc1, repnrcFnp thin tktarmMation. d• 1'hc appt~ipar vrdl natyNo taagtrwny ar appaarin court becaugp ho orsho rnaclo a appaisal of lfta plupCrty in tlue9tion, teltcsa 5p¢G7fit: 8trnnticmand lb do acs hdvC taco math: tsoFart:hand, or 79 oManvi:,.p to octal! try iaw• ~. Tha apptpisorhas noted in dsia appraisal raison any advotae condfdona (avrfi as nasdoU ropain. dotclioration, dto praranca of hazantous waswa, toxic std>stnnros, 4tG) obaarvad during rite inapocdon of the svbj¢et~proporty or drat ha orshe becat»a aworo of during trio reanaran invoked in parfonninp thin alspral:at UNO2A otlsenvice sgto<I in thta appraisal report, the appraicar h:t. no knowtatFge of any hidden ortnapl>arene ptty~e,9i <iofloianepsn or ackerse condlNons of din proporq• (nt>ch a:, lwt not gmited to, nnaded repairs, d¢tnnolBAnn, the Ixa,once of haxardatr. wastes, tp>Gt: atrbotancao, adv~rge nnvironmrnstl cpndition., sk.} that would make the property lessvahwabFe, and hao a«;umed prat there art no such conclltlons and makes no guarantees or watrsnde;,expra3:orimplind ?knee#>raisarwilinotlkrogpan3Hofor:wry;uchconrbpnsAtatdaaxt3torforanyonglnaarfn5)or a+at6ty that mlrprt bo taquhnd ro t5aeavor tsrhather audr eanc6tfons cxf;t Eat:;ttrso thR a~rpmlasrla oat an expert in the field M anrimnmrntDl ha7artts. fltl3 Opt>rai;pl YapoR must not ba corl,idarad , d an omironman ,+(aGSacsmant of the plGpdrty. 6, Tho appl'olxor has based his nr hot 5ppraisal tepoix end valtr~~on condtrotpn fprpr~ pppttriybl (hat is aubjacr w 3ad.fauoty corrtplopon, repraiYS,oralterntiant:on the assumption thatthe eompledon, repa#rs,oraitpradons'oFthe sub)oapropt+nywill Ixi }tfs t'fttrpteu In n profesctwtal n>,nnat I Page 889 Mar 01 2011 13:36:12 18662320186 -> 717 M~rt~ra~;~ at3,Y'Vj,GC35 2/23/2Q1.7. 1Q ; 2Q :23 AM k~ individual Condominium Unit ApRrai .. .. .._ . APPRAISER'S CERTIPICgT10N: Tna Apiaaicef isfdfiCS an(I sArec3 that; 1. I hovo, Ar n minimtsn, dcvalapcd and rcportod fiia appniaal in accorc)once wi41 eppmissl rt I)glt, :~, 1 petfUtTfletl 9 {:Arflplen! vlsUrl lnspet:p on vt' the rote lfer And CY.tprlnr Hrer+ of fie Cho unprrnomonls to fachni, spocific tatmt:. i Idrndiiod and re Iwtted dta phY«'ic.I dr;l ;ountsresw of 4t'n)c(UrKI Intpgit[y o[ ere proi>rny, I petformod dtis sppraisal in :+ccordsnco with the raq~dromenh of the Uniform v thatwete adopted and prcmulyAUtd by Ula Aptsrai~yl .>,tund:,Ir1c r~aard eF'1'ila Apprai ume d[ls appl~tt:at ropurtwa, ptep:+ract. I j 75 9750 Merrill Lynch F3/022 E30Q~~k~:~~U9f~ 7ta~~~a00w+ Ropott MA ta. 107927G8 acoi7a of work raq{arcrrwnM a4i tG[t in rhia property. I rNlxlrlao dte non[ntlop or that cotdrl aNect the IivAir(lity, nk of ProfasAlunsl Appraisal Practice r{xidatlen urtd drat rrera In place rt dtn S I [kxalaperl my opinlan of the mArketvalue of the r@tl prgparty it+al is IJtc nutry"ert o this report haaarl on the cyte . rorrrp7d2nn Approach to valu¢, ! hwo a(kWvAl¢ eorni~ainMe rnarkol'dAfa ta rkv¢(ala.y wltal>la solo Sonrpariaon approach for tills appraisal s=ciyinitrant I tutfher certify d+Jt I conaldgtad the tort sod Income APproacha. fA value Ia{rt dltl not drvelop them, unlce, nyrarrdec in[flaathdin This roiwn. a. I raasarrha[I, vAiifiod, analyzed. and raportsd on any urrrsnt ayraomont for Sato fo dle ,uhjoct pra)>Fny, any offcrinpforsAlo of tfie suu)ect proporty in tt{a Twelve rnana>!s poor to the efFucttve ante of tlvs npirat:.sl, ~rna die prla• snrax of the aub)ect Ixoperty form rrdnirntsn of d'gtC yrsrs prtur to Cho olfeedvr. dare of dtiS appraisal, unless udlCrwisG int'CIG-NCCtt III Oti: report. I fi. I raaaarchod. vnr~ad, Analyia [i, and rnpoRad an fiP prior solos aF rbs armtka ra Llq mica For a minimum of orlF yRar prior to rho date d?;Plo of the compar•zblc sale, [rtlesxolhorwise indic~[tocl in thin. mpot2 I ' 7. I seis(KUd and used cgfni>rtahlo sales dtOt era loaAdanally, tytyn)ct+lly: And h,ncl3on~xllY Ihn tr,OStslnblorta lho subject property. a, 1 rlwt: trot u~rf ¢amprrnl~ta sates that were ton ret:uttnl aomttlning r Irnsl srle rvtdi [he cont*rU purdrrse f.'{ce of y boron, thathaa been built orwill too Milton the IanrJ. I 9. i hasra reported actj((strrtants to the [amlxarAl>fe ssles Ihnt reftea dle market's reacG'tt to the tirlfetences laehveon thP_ subject property rod the eatnp9rnixe sales. 20. I vcr(fk:tl; cram + di-,inttra~ted sovtaq au inforrnetlon an yMs Cavort thatwaa provic{e Isy pnrye. rrho have n financial fnlarc:t In dto sots arrrnancsrtp of the avdjectproporcy. 1 I. 1 hews knawloelr~a end ox parianca M appraising dtla typo d pwporry in dtits maikat ~rea. 1:. I am aware of, and hsve rccrs: W. Itle neeeasary And Appropriate put•Jte rod prNrte dPa, sours., such ss muid{~o Gsdng 5t:roices, bx a°.,c36trtent rt:ooJd^,, public IAnd /acotCl, and oNef4trCh (lrw ,AUft:a'+ for area in which Hie prbl>,srtY la located, 13. I~ab4lktod the irdttrmatlon, 0aHnlatgs, and 0(l niORA f t/M1Ahod 4y Otl10r pPrdpt: and o ,pr4Fa¢d !n Ihl» 9p)NSiS81 r4pOrt imm rclloWe sourcaa Aat I bolicvc to I>o ttvo and wrroct I ib, !have Wkart rnto dartslUdmtlan ilia factors rhsthava art WrpPO[ on vnrue vri9•r rcslxd[ b a,u sulijec! naigtrbmtrooJ, mWrjact lnapony, Ond tna (u'mchnl6 of fie ausyact propatty to awarsp inflvancop in tiro rkrvoloprEtpnt d mY opinion or mA+uotvaluq. I Arva notad in tltia appnisAi raporl any ncWoro tahtfidona (such as, bvt net Ilmitod tit, rrootlo I tgl>aira, dawrioratiap, the ple.oncc of haxnt(bu:0 wnatas, tortie rU4AtAp4n's, arlvario orrvtrdnmanlAl crmdidona, at4,) rtYranrvwcl Utkry )ho inr,p¢ctinr{ rk alo aubp;tt propd+lry Or dleFl baeama AY,tera Of (kiting the re3oerth inv Olvttd T pC tfalttlihtf lfifs npprPlaPt I i7 ¢ canaidgruf thnAa AdY0r3C fAn[litionS 111 nfq anrtyti; of ma pn3porf,VValua, and nave Caportoet an dto gfrcct of ihp contA4on2 nn a value and rnana:laNaiBty nJ Cho aubjoct property. 15. I bars not Intotvingly vrithhekl any signiCcant infamafion from dsl~~ appraisal report nil to Cho )nest of my knawledya, a@ st7rErrxlPts and Intorma,aon n offs appraisol rrptlrtare hue end colrect 16, I sN tad in thin apptainerl ra port my pwrl por•anal, uirbiara(l and profanyionol gnaty Yfo, apinipne, qnd gorreluaign., which nee aubjoct c+tly to yle aaxrta»pdon« and limiting rundi6ona in this appraioal ropo2 I1I 17. I hovo no ptr~ant ar preapectiva intemsr in the pralxrrty drat is are ouh)oet of this ro r4 an<I 1 have no proms or pro3p2ctrve petrrDrttl faterastor lairc+ytth repeat b +he patUdprMb in the lranxanion. I rddnot hl e, aldtgr psrfiAlly or Cartlplately, my analysis ancaor opinion of market vaiWt in tots appraisal rBpan on eta race, cdor, ,ollylon, pox. A(1s. mAh+nl stows, han(iknp, fAM~.~I 94t4ts, arnadt>na1 oNgin of aidtar the prospective owners pr ooc~pantc of the oubjact propalty or of the pra.ont owner. or occupants of lho lxaparda, in ihs vicinity of Cho subjoct property oron any olhar ba,lc rgtribitod by law. ' 18, My emttoymont anWor aomfanaadon for pglfan»Ing tills Appraisal qr any lama or •tndcilyaaid appraral3wa, noicen(idonod or, any hyre{mtant arandatsklnatny, wntAn or otFtcrwlKe, Hrntl would report (or preaon nnnfy3ia aupporlingj a pn:Nalnrmtned apeuflc value, a prodaterminad minimum value; o rrmpo or dirocdon in valve. ,y vaiuA t tfavols the cause of any prury, or tits nlthrnrt[ont of a opeo~io result of oecurrance o} a spodFle sub.ayvant avant (each as approval o[ a ponrriny moM[~ayo town AppOGPlian). l9. I tmraonAlly plaparctl ail conchniort. and apirtions about Cho real a;tato thntwore sotfardt in this Appraisal report. Ili mliod on stgn)floant rent property Appraisal sse{attrtca Erom any fnclNkival orindiv(duals In Cho IaedonnAnoe nF this appraisal or the prcparadon of dtis appniaal rtel7ort I hovo nam¢el ^,ueh a[~vi(kxs)(a) and <Iiadosed the zporifit task, parfotmod in tiff nppraiaAl ropart t atltify d1At any individuvl so nAmer) i, qualified ro pertotm the arstta. I have not Aurhotixed anyone to make a chnngo to Any item In this appnY~I [ol>a•t: ihoraforer any chantict made so dtis apprasal is unautiiotizod and I wIU tako nv respon+slhlliry for it Ztl, I fdnndRcd 91c Icndt:dctiantin tht; appraisal rai'+onvha•ti thr, tntlivi[Jt[al, pr~inixAtio~+, ar;[r~rnt[or !t'e art(.7nixadorr tfrPFOtzlercd andwtll rocotve IhF".Appraihal+nport Page 010 Mar 81 Z@11 13 ; 36 $6 1@66232@1B6 -> Mart~a~'~ ,a~xva.a~s 2/23/2nJ,7, 1.0 ; 20 ; 23 Atfi Individual Condominium Unit 717:975 975@ Merrill Lynch Page @11 i P~l~i~ 9/072 f30O--fi:~F--09E!k I rtpSZSagsa Ipraieai Roport nr,tw. 1079a7co I. The lendr:ddienl may tlied¢se nr cgGbibuk glib appraisal report rq; Cte trgrrmvef :mother lender at the mr{ucH of'¢rC borrower; q1@ mOltyayoe p+'1tS gur,C,a+lsnt~ and ass{yna: m91'~QAya In ¢(nrl•, $(oventrn(tnt 3ppne01~G1 ant4rpit,o;:' oilier seagnclaly Itlattlat ry~raci(»n:+; darn toliccgon ar roporan9 scro;ce ,; Ixoreselonal np{>nisnl nrg.9nlzitlons; pay aepanmeni, agency. ar instn,menralNy of qie United Stato ,: ana any stab, the l7iavict of Golgrnbia, or otbor Juria<Acttonu wldtouS having tq obtain the appr,•rtaccr's: or UVrrvianry nltpraigol'':. tN?Fipligahlc) Cqn:;ni :a uGh cgnacnt rrtnat yP nbWinRd t~forl'+ Ihig a»Pti+i'-sl tnpnrt rna.Y t~G di:.Slo:rd or c9attilatrocf to any arbor piny (Inafudirrj{, tiutngtllniitcrl tp, qio puWio through ndrartiaili~, hulilir, relations, r,aw». aalc~, oro¢rar media). 2w• I .maw, Ye 9tat any ctf~clovvrC Vr diat,tbuggn of IfrL applaf.al fetmrt by me ar the I~rtclcY/gicnt m.9y Fie yubje qt Yq cc r6~in la v+q and tedulationo. Futnher, f am also sul>arat to rho prrr+islons of rho UnlForm 8tandnlcls of Profeeelonfll Apptalsnt prncgce that Irr4'tin to dt-.t:(q,urm ar:liatrlNulion by mc. T,J. Tho tforrotynr, anotnoNondar at m¢ roqu¢zt of tlttt lx>rntWer, qt¢ mgl'lgagaq gflt3 aYccoz^,ota sort a9siyna, moltgsyo Inafnar'3, govolnmon[„ttonaol~d et+tolprive~, . na ogiargocondary ma,kot patvcipanr3 may,ely on >ftio appraisal ropotc as hart of any mora,7gya rtnanca tran:ncrian Ntatlnvolveo any one ormo,o of thec¢ psartler.. i i 2d, It thta AI)praical tc pnrl w,+r IMnnrtllkod, a sn "rlnCimrdc m4ortt^ ran 4~inmy my "afacnnnic ~({nal+,re,' as Ihnsa eCtmq am ckfinad fn apt9icablo faciaral andigrsG~to I.~w<, (axclvding stgtlo anti virbo recarcliiip,), ors tacvintiln transmi, ivn of this ahh+aizal wtaort contntniny a cony orrcrx¢aontagon ql mY aignaa,re. qtn nppnlaal report &h¢fl boas affsctiva. cntgTCatilo and varid as if a tialmrvnlsion of thin appnix~l repott vuotc cblNolvtd conG4ining my original handwtiaoti signature. 25. Any intontlonal or neyllgentmislcpretientagon(s) contained in dill appraisal rcliort~nay rosctltin civil tialti8ry an<Norcriminal pemlges inutxliny, rn,t not 14nlled ro, Fin¢ orlmpdsunmont or ttggt anger rht: pravistane~gf floe Iti, Untl¢a Stnreo Cotl¢, Sectiop tU01, etsec~, or similarstste laws. 5UP~RV15t7ffiYAPPftAl6tilt'1:i Ctaf$1'IY';:CATIDtJ: TNo Sat»rvinoryApttralxorcortlFka»~ancl aytooa rhos , f. f directly supervtsad tY+e apprtfsor for this appnir.7l :,asiynmcnt h:rvo Io;xl the nil ai~^tt ,sport and agrnc wilt die spprai3ot; MnNlyXls, opinion„ alaterYtdtb, cgrlcfuSfons,.indllte Apprb'uv0t'yaiftlfi0apon. 2• I acC'oplRut foSl'XtpRN?ifity for tlto rpnMntO pf this Altjttyin I IRpgrt inry¢C@nr,~, bat nq1 imitad t¢, tha ,,ppf+iuet"~ %imtty;i9, oplnicna. ,datomonm, eonGV¢lona, and titre aplinisets rartilfcatlon. 3. 'flt¢apprafseritl®n6fledbtthfual>Iz•at9nlreportly¢ithoraeub,contalctoiorsnemptoyoooflltesuparviagry.appmisar(ortho epptifat Rrm), is rycallficd to perform this appmlct+t and taaecepL9hlc ro perform this gppat.;t1 under the ap{~Ilushte state rave. 4. 'Ibis nppraiaat rcpgd gompliC3 with die Uniform Stnnctanfa of f'mfcaaional Appmlot~ Pf, coca that wqm ¢doplod and prumufyated by th>y Agtnisal Standarcls 8onrd of The Aphmfsal Foundation txid thatworn in t>tsca at tha time tlifs appraisal ,>:poRwas prajxtlod. 3, tr Oiti bppraiadl repot! eras f+8nsmfgad A3 ¢n "clectrnrd0 moorti" Cgnlfiin§1U my "e1C~.tronfD ;39rlntUre," ns IA09e t!`Irn~ brC cleftnecl {ti spptketNo federal andlorstnw laws (exrJuding aucllo andvkleo regotdtnyn), or a fa~lmlle tninsmtsslon or 61I^, npprola»I report rgnWlnfng a softy or rcpctpontagon of my siyr,oture, Ste 4pNt'of*.nt report Shall hotas olfecd,re. anfoteealio and valid as If a p»parvo,ston of ttrla appRn)sil repgnwom delHe,edcanmtniny my o,fginml hendwritle,~slgnature. APPRAISER SUPERbtSORY A¢PRAISER (OhtY lt% REglllfa,E01 5iyriaturc,_,. "~ »_~.~ 3ignawm I 9 .......................__.................._.... _.._~a..._....._-.~......_..._.......--_..._..-_._.__..._.... Name ,lqn Nrrmc I Company Namo McC~nn AppnI8a18srvlccs, Inc Com n Nams I -- .. f~ r ...,...---__,_ _..,...___...~,._.._...,....,.._...._ company Aadro+•s a31, a whiee H, o~r~, P~ .~ c , ~nrry Addre--I vn I (' Telephono Numtxr 856 67Z"1210 ToM):atone Nt~nitie' Fntaq Adctrottss f c ~~~~• n231 _ ~•an.r,{,8t l:,nail Artctre:~ Date d F+ignaN+re .rid Report 09M ;/2U1G vale of 51ynatUrt! Ettectiva DA19 of ApprA3a»I 09;17JZOt0 9tnw Certifigsidon - 5tgteCOrllffcsrNUrte 42RCOQ?;OS00 •____ _~ grSCateUCame# af5tata uennsotk _... .. .......~...._.........~ SNto -` .....T._...,- ......._ _ .. ............._..,,....,.._._...,...~...,____. grOrhor(dtsr:rit>r)„_„~ ^atateJ) ••„_, Cnpirtdon0eltof crdffc.~gonorUcen~ 5tato NJ - Extirotton Dato of Corgfic,~don orLkcrrse 1JJf1~G91 ,~,~,,,, I . ApDRE55 t3F PROPERTY APPRAI5E0 SU8JEC7 PROPERTY S404CR21t?I.~~ ~_._.._.____,._._-_ umtd54oa ~3pfdnotinap0et3ut)jectprofxiety OeoanGity.M1lJ 68?2G ,~_____~ ~~ (,_,'Didetopoucxtonorofaubjnetpropertyfrom3ircet gat¢oflnsttoat~on, APPRAISEDVALUEOFSUB.,t_CTPRUPERTY'ti~8g,00D __ [j pfd'at8p¢ctlmo(Iornndextatforofsut~ectproperry ~~•'~' l,E?NOERfCtlEsN'f DAte or htoprcutlon _ ~-._._._~~ .T Nerve ...._..._......_...,.... ..___....._... ...._.... ..... ........ COMPARAt3t.E uA~lk"z3 Gompnny Namo AAcnill 1.Ynch rrocGtCo~tiG~n Did not irpcct~lcxtcrigr of sompnntt[a ~ttlcs Frrxn armrt ComNanY Addtas. 980E Qeer1~M£.~3?-!. Dicl hoyxtct oxtt;8o'r of wmp8royle ;.rhos from otrrot JaGtraonvitlc, F1-12246 Dax of Inap3t:t~nn Mar 81 2811 13:37:28 18662328186 -> 717 i ' {975 9750 Merril l Lynch Mart#,a,~a Sarvz~e~fs 2/23/20]..1 a.o ; ~Z(J ; 2~ AM ~ I i I a~ .~Q/n~~ ~o~--~~c--o~~~ Indivi dual Condominium Uni4 ~Ipjjarai sal ReFror t ,~„~, fo,y~9seV~ .w._...,_fEATVltE ,....,__ ~ _9UAJECL......._ ._.. Cp1R'Afj~~~CAf~~rx ~ .-__-' - --- CGfA!AFtABLE GALE N0.4 . ~__._ ~.- _..__._..CCnY?Aft/~EOALE N!x B rolaetsprd 9d Ud GunO'al Ava, !6 5dOd 52A~ L'enpnl Avn : SB3a Cr:ncrvl tlvc 1 _ ____-- °SY4 Centrvl Ave 1 ure a tJCenn Cityr NJ os2:IiT1 _4~ ...._.. . Oce,n Ci~_-__`_ i_,.„_ _ ocnnn ritl` ._..._ ...~ __-.,.._ _ pecan Cly__ _ Rtlattlhatm aty N(R N!A NIA t _ _._---_..._._..__ N(R .~4...~_".... ........__.. . ._r_._.. .._......._...... ...~ ........ ii I 7 .R~JAs.W,.6tf3°5!_._.._ _ 0 i5 m'bs NE -.___._.__.- 0.24 mils .;VV ........_ .............. I . .._._ 0.44 mllgw EtN ... .... . $5.!~.~LA _~..__._.__... s Rafimacs .45R.1i.»~Ptt.4y~.kai.... s s ,Y•2S U00 R.._511.47,os,¢_, s .;__598:34.+~:~. a99,?00 s 9e9 900 i_ Bt_I.~?,~.w1R out 6nugrta!„__ ...._,.. TAx andZou olf/MLS ...._..... T'At m5d tart ottrtv i s Tax nnri 2:aI uttrML$ Nupks(bnnufao(hhj,„_ , Mf.-'4iF39D12p D©AAJ33 clad . ... _---._...._......,,,___........_ MLSt'F36~1'fS gfJ _......._. _...._._..~ ........ 19~S Aet r._ Ml.,a`fkJ4^i R ^ pQMAl4 qcP r n VAWFADdtl3TMf.N18,__ ptCUUPT50N [7@tCItIPnCN .P>i.bzvicert p~CNPfION,_, ti~IfM-ounr. , , ,_ _ . LtEBfAi'TIQI4 ' ] 6Nahmn 9tthtrFhargkp ConvenGaaal { Aetivq -22,500 ._,..._ . . ... Aetivq .27,730 'E¢$.ttlt_ None known_._._.__i,_ .. Li~sng_--...~_ . _._-._.__ LSdna -~ rorrfBNaS'Ir,~„m~~ '1:/28%x009 . _ , . , ~ - N/n ~ ,,.a`_.___ N%A laralpn......,_.___.... .~ver2~* ._._. .. ., ~ . .~,..... . ., .,.,.~., vwi?9Lt'__...._...... .~......,~.~r~,.~, Avenctr_;r_._...,_- _ ~.._.,.._..... r ~, .~~..~.~.._... ~...m.._...~..~. +gvcrs~gg+ LxuorokrFns9lrtpa,,,,• faa,?irnRio_,,,,, Fcagin{p!e ____.:-.........__.._.._.,,..: Fcc7gmli8„•,,,,.,,._. Foaaimplo li4~VAk.AceelvaAart...... Eh l Co _N;A ..._....._....,...,.. m Gn Ni/;i..___... .... ......... ...._ G ~ NI.A..........,.... .... N(A.. ,._.._.......... rypll y nen9l m nR orrlnlnn Common Common grttrta.I4g~lb..__,.,,,, ,Grounds. Ground, • .Ground. Grounds l~~a~p „_,,,,._, 1st fl d tl i 9 st f! 1 1 at fl x pat8nl vVatRr FtA~a~r _-,,,,_,;,4,,,~8~ 50D Fvanial SM1!alRr,,,,~,_ Full Wacer_,_,,,,_, ~9~,QDU !u?SltlR.4'!41....._,..._.. .~lat ...... .......... Fint .. ....... `...._.__... _. ,.. ........,.. I=1at __.., . plat !2,RlgY~,~tgh~tton vera„~„a _ Av_8_rt~(c0 _;,__-_ ._ . ........... Hvern„ga .. ........, _ Averse _ - - /~nhol e, 17 'IS 5 'nod ~~d ` Gond Good.-.. xomn wort ~ e ~ ' z ~ 4 z € ~~ ~' ° ~ , .~. __ _._. ? !- - _ .._.. ~ ~ a ~ ~._.;~. 5 OD _ ~.. '!~St~.k14.@ _~6..,L3 Y:1~.lfeF.~.........._~ _,.,~i 50A C4:~ ~,.,.,......,.,..~. ..._.. 59d 0 tawrtsrl d Mnatte0 WA N/A N/A N/A ~~~~ .Ef'~.,d"',.:~.kf°.,.,.. N/R .,.,., NIA .~,.,,.,~..~, NIA N/A 1_..__. ._.9.&. vcra g___._.~._._..____._ !lY.4!r.51c _-._.._.. ~. _. .. _._..._ aro ~;et.~ r• A/anc Fwao„~, nc _ _..._ ~: ~c ~~ ~ --_ Aq Ada hate Ado uaw Adaut~?to___.„_ ... Asle vato .--~•..._..._.. 9+.~d0YE°A. ........ Capwrt... ._... CiJrort .s.... ......, i Car ... ........ j ....,...:.6.o0D CaJ7?g!5 . Mh Deeps Deeps _ i Decks I ... ....... Decks ..... t + -! 8 0 ~ 2 r M(uda4t~AR'ce uWWFdI, •Ita,05;i ttofNF, •3.1!A MNIWf. -13.31<~ nw .. QI1,9,oq~o(,~A-,/lLgr!p( t?gtes_P,tg..,,_(,QO, !s _ 742.50, ~ NO 9tYfe9 within No sAlea within 4sub 3.15! i „ ~P i No sale 87.2, 400 ~Dt$r..s0..9 within ~ 9tes ~,,3 ii 827.290 .. i .8~ttSa.. ~ No 3A1e9 wiUrin ~+ A:M ~-ilG~L'r ar laa~epr t~7 7La fk j ~ , within la • ,,, ,_ _ t a • iw'~ hi l .. ... . . w_ .._..... .__ ... .. ._. _..._,..._. __. . ,_. . _w......,... . y.-- ...._ • .~ e,, tr._.....__.. t n agf.Z,oar.,.,._...,. . -..... ,...._.._. Dqf;;?O!t.?K!~...____..,,_„~,,,,, , Pul~o P,ooad~•_.• ,_,__ Public Rewtd t pure R cord.._ ,_,,,_„ ~~PuS~ie Roeore! t u+mtnrr+tz+tiw wAumrgttnt~gah nun.....__._.,,.._.~,..,..._._.__.... _ ..... ........__ ._.__...._........~ ! . .....__... _..._... ... ...__._ _. .........._..,..~.,,,.... ...~,~..,.....,,...,,,. .. ...._.~.~ ~ . ,. .., ...r._.__,.......~.~.,,._...,.., ~ ._,,,.....a.,w...,~..,.~... ~~.,...,.,..,~,~.,.., ..........._.._.. ~,-~_._._._.._._.,_._ ._._ _.. _._..__._____. I .._._ _ .. _.__...~- __. •• LMT 'IV<n f~00 '•_-•-•'•'••••'~-~'~•'~'•'"•" 8gxa eR/rFUolwY.a063JAC enfarin.rq I Ary 14 Page 812 Maps/. Mar 81 281! 13:38:89 18662320!86 -> Mort~a~~ r~xvac~s 2/23/201, J, l,0 ; 20 ; 23 AM ADDENDt1M '.ro~rn_aa:ra,e: 59u¢Ga;ga av_!t_ Chv. otnn-i Jn --- _._~_-,-__... Lenc41. ~t+_rrlt-yM,h Cr~^:t co :;b~af:or~ ?17 975 9750 Merrill Lynch Paye 013 k~~Q~ ,11/022 E30Q~~9;~a~096~ F tr. tdq. PteiQhborhood Marke! C ondr-tiom Tnc morkat rn ihls area +ppeor a 16 Uc n+ ~ a~blc rnarkct a+~r the b&t 6- t: rngntha a8.cr . Ixcviou= rxri«r o(dedine, MArkoting irnesfar prvneny rxlced listings is 3-ts months Financing is generally through mixurre of Con+eniionnr and Gq+errttnNnt~l .aurces, SeUerconcrs; steno m0y be cnne(dernd tR aid in buyer qurdifkatlon with no imr,act an ntArkct value, Denoral Commonts I The appraieri ha3 cgmpttrted an inteliurand e; its ticrin9ftoctign of ttte -^.ut~jgct property. Ttre TG4A ut the comparable 2aloo )s ba>ad utt 1'ubilc roeot~cts. curb5ldo Irrepctctlnna. lairavlgt,g pt,pAotlma aFalrnllar prupnrtiea wilhinihemarkotaroa. , T1tc cho.on salco era conoida+nd roa,ortarxla altemotlvca to rho subjact F-avpatty and boat +c prosattmalhot vyluc indicator,; in the cublecfs marketing ores, No valUO has Ixten attributed to petran61 propa+ty crnnn-ttaatty Rama Wtdlln thtr r'~npprY , it i; cgrnmon and rylycat m the a+ra for crxxlaa to Im sharecVprivately ownec! with Ino known a3soria dnn nom=s I @nvironrnental 'Fhu ai7prafaerisnotan oxpertin the idanUdcation of hAZardoua and dehimental eiviranmenta! concQtirnu. The nlaptalsar's ruuthtP inspecdun olancl btyuiria., AlJriut dte stdajert iropetty dirt not rrveai any htfunttatlwt that IndicalectanyappatenlslcytlBcanlhacartlous substances nrdoMmenral onvtronmt~nWl condifirnr ruble!! would afioct dto M~orxtty negatively. J NolNol hborhood • Dpcriatlon The ;ub}eatts loca(ad in Octtyn City, whicTt is co+npo;rd of variou,ly styleti and cwnslttrctert sine Family hnrnas:. Trio cubjact ig cgnvettiendy iooamd (o~choplo. -hoppitlg, (yacea of wot':htp, reGloadonAt FAOUitieo ,ltd r,,uUiic uan3pgrtatiptt. The area appear , stable with no adve(>o eonditiarr7 Holed. f'rnppity rnabttanancpls gent: ralry good 3hc1 area ah0uld ex pC+ian+=e sary'sfdctoty rrtarttgtabii(ty. Major i'Oadways arc whin a •i•3 mqe tango. Saloo Comaariaon Cemtrrenta p Qrero[rgh search of the malkatgar~ wac unde+takon in order to lorato 1•;al®s whSSSah t2iatosent the beat deg+pa qF compArabtdty ro the NUniar,I ht t0tme qt IgcatiglY a1Kl 3mcnlly ICVet. All RJIRO am wiin an arrep(AtkR t'At1iUa altd coniribulo rawatxla nxtaWi.ltin~l value. M:t+1cNt snayysss: deo, not Irtcdeata A dmo 4 t.otmcnt Fs warrantdtl d(w iq an aluparandy arable market, A 2.59f< conservadve differential was udiit:ed foi sates dt t era acdve listings, as wAs derived bom ma+kot analysis. All comparabla~ stn airnilar In AppoAt, anA utility: AI :Ala; a+t} adjusted For cdffarancco irf amanldgo, No Boor adJu;.tment made s^, market sooty^,in dos^., trot ir~crrcatrt ono is naca„sly, q 10'71, difforondal was ulittrad at,cl dorivrxt htxh tnArkpt analysis lnr solos ct+traiderad In I ova a tell water vkrw. Oc>ign W(fcronco noted wlth no acyt Ptmont warraniad aw mantot analysis dons Hai lnciica~o a hlfj+cr profaronca for ca+tain ctyted pr,tpet8oa with s;im0aramonidea. Aye adjtrhnanf twt wArranted as is r censictoted In cgncAtion; Aa otclnr propeNeA undergo rautinm maintenance attd upkeep. No functktn3l obaolesCrnce ndtarJ duo to tog mixtthra wlthht the marftet place, Pr'oaertie~ veldt oust •)00 squnrrr foot differ'anoe 6 r Gt.A are adjusted py 830.00/sgtwre loot (rounded} nosed on tacai market dab. On slte imlNpJamonr., ~m actJuatetl nrcordingly. Au saipx stn locaterdtiathkt thta subjec('s markodnp Area and era oansidetad iea.ROnable purchttse altamadvtrs to the nubjoct props try. I Osiea arq vAthin recommended netandldtoxa ~19daflnan. Aftora thorot~ttt aaarrh fMl,s and loco( tax fYtcgrcla, d1o aamparalync u41IROd are con:hlart2d to Aa tlw ctoaast, most roccnt, mast "Nt r anct Batt compntmitltts availalye at Ume of observadotl. to dt0 BnBt esdmatetl market vat[+e. square Faola a asdmatas on car~pnrabfe Sa+es era based on inf+Nmadwt barn vattotts sources (Mi.S, A:~osSar's, ett:.?, AU x~te-,ate considered to Iii viable, :uppotQvtt salas to udlntt for rnia report in datotrntning ma,kotvalue. Avall~t~e ec7rnparsBios aro matuet tvAWlcats and only cltrrettl avaitAt,ln data Can Ire used. e1 It altquld ne noted (fiat the pltotorf. r'nph6 worq ken in the field tvtdt a c49ita1 cAmera. ThAy ltttvo not been Altered in any way, Ono orrttnre oamparaWa phntoo may hav® booty from the Multlpio L.Ispttg rlAtanaoa. 7hta sn[rrtaa is con:~dorod in bR ,v rrtliAlyo data soUrttp.PhptoyrApha era mots indicative of dta Actual cottcdUon Of d,c cgrnpAr'attlo at Ufe 6trte• it tra+rsfene?d. ± WARNING R~OAADIN{6 tti~' THIRD PARTY U3E QR THtS RSPORT TTte purpe°,a of d)is afiproi:a! report is to astdnatq the market value of ihR subject in fee Airnplo. fqr gttt client 7:la~d at pogo ono of the ypfxyiaa4 Its ysst{ptuos, pdvalo mortgage irt.uranao co~t•rpaniot:. f•'NA4A. FHLMC anct /ar 9®carrdaty rnarkett investors. It is far mnnpapta lending putlrnrre only. 7'11A wp rsl'3tsr AhaA have nq liatyliry to any Utird Forty whaMoevvr aS tong are oat rho chant fur (vhom offs rcion was prc~red and aro not entitled to the trH of this report of Ira tmna+nr. Tl,a passes: ion of A copy of des ropan does not endtla A thtt~ party ro u6itzta it for any other p[rrposa: i,a, tax appeal: divorce prgceor6ny, aqurt proceerJittfj, IatnKntptRY. oro• wlthqut the exprv79 d wducrt conaom of the aNi~fakor, Such oattsr app+ahsai pragiams fUncdons ptrrpasp2may req[ure a rtitfp nt appraisal fo>tnat (Form v, nRrfatlvc), a LUITgrrnC 8pprelral metltprl0lggy, rAffernltt elemenp or wtltc of adJU's pop, mArkolPrarRA Analy~tc, etc,. This +epgn was propa+rd to comply WiBt USPAP and underwriting gutdtyinel fqr mt'n'tyaye IentKny purposes nt4•NNrenr~F t v 1 Mar 01 261.1 13.38.42 I8GGZ320186. -> 717 975 9750 Merrill Lynch gaga 014 Mert~a~;t~ a~3xva.~t39 2/23/2011. 10:20;23 AM P~.C~~ 1.Z/022 X300-~:~:Fa~09~~ 18aro,•,,. R IW:hadM: ^e~ntrlr . l.snckr.:r+ertl9 ~yoa+cre t ca,;o•n~r• rarJy anti will not nr:;Y:~yatily rnuct Ihr, unkuWwrt reyiNrmrncnt . of ony oUrcr Urlyd wn~ty uu: in short t will pat bo hoicl ir=•FansiUle F~rany othei unknown usa ufthis re portnutiknowiny dto ptnt~rre lorwhich it will I~ 6ai&:Cd atld this aptrnlatnl Ig nuN antl Vain It sa VdllFgcl. If you ate not tlta r.&ont nriLa a .siyner_a :I,ttctl in rho lot[er tsf transrriiftal then you ~tn arr unauthatizmti a+~er nP Uti9 report and the re(x~rt ~ ntAi antl vaid. Further unattdiarixed tJ:Craf 1hM r'eportand the report l.,y t:nd unt;nown ~d+ird partymay re,ul4in iesµrt ta4ti~m tu~utghtby the antxa.i,tar. ~ rakKndenxg7r 2 Mar 81 2811 13:38:52 1E1G623ZO1B6 -> 717 975 9750 Merrill Lynch Page 015 M~rt~;a,~e a~sx'vir;~~ 2/23/201.]. 10 ; 20 ; 23 AM PA[~1M 13/022 ~OO~~;~FT09Q~; T1032580G2 Market Conditlans Addendtutt to theAntare1se112enort pbtlo_ lorsarsn Ttp pvdoeo dtMaplrrdaanbta troYide da brgolkibM n9J1aa6et and 6acadb rldrretoldig:dih>laatFel bends ah0 cnid3'aro pe.6laM lntie e+ldecf mgtdatood. 7hir'sa f°4'+l'e'd 11A9@.CA!tdtM.~lABgtitFhl:U'qPAfAl.i~BOA0.91fsSlkq.AaSRROF[31Lgf.Ap'1..L.7RQ6,.,....-..._._..__..._....._._........_ ...__..._... ..._......__. . _ . __....,...,..,.._........___..........,, Aaprly/rldrtaa ~Q4 Central AYa.__ ary G3Ccan Gi~••,.,.M. Btale P1J zg pme.08«:6 ' ._~._........_...-__ .-___._.._._..._. _____...~_I .eamt~xt.tta~!tes. s~~~?!~is laekpellata+ TMapc+lgar m+rt +w 1M Natialbntqued nn Ol+r fare ae the bepk is Iteher certl+pxan, atd nast patibe mpgal Rr ttaes rrtt:atta+a; rogerlig lprwirn astda Wb awogi irNlan wrdReta as ApNteq (n11p Nottt+Wrhdat wabrtalldh egnrt+eilrRi<faun Tlo aypa5tr real OA iagq itA Itrlormlker R pa natert h b ¢cakabbard +eiryah and rnwl p Wlfe grelrab as ItdbitAA bebr, Nan{ raddled daN 6 wnroa~ 6b of b carabaed urrefobb, t1a pttYabrr pMt pWlde an e>.pknttbA. Ef h temyNmd Ifot nit all data apucea +rql to stab la po.bo dais hx ns otoora mroe tropra: a h a gralhDb, brv+or, r8o arM.t+aarmaUrriuw ita dory h anarnlpk ddma onkiop pordo +to roQ+Fad krQrmlfbnao analrrOgo trHOry[at do rrodbR Ur+oglgbrr NwurrparlWOYOIbpo lhuaad b0.Mgttla-arpvaage P.oka Wa mgrga rnat F»Im1Arltn YaSc4 t Ippth tlaaur~ac:t pppyry. datarMnd U/ygtfrg Va rrlrrl! 1 w pe uad p d o l r a ear tol ta4~at r rtai ~1 n)._,{i eta +c o a r r rrF»f tarn wt oo la, PoiLT f,~, 2~,,,rid RAr I.B a»rdtw prtrti~9 M:otgp orrngTrrd tatplBatpe laaAeatw 8rd f3 2 1 bcrnn,•air gpnq Ood1N Held I qe dM 0~ dAI9'd Cb ab- L t dtbrp a 1 Abnx 3.0 Ra X42 bb R' d-8 t~ Gaaro -a i p Medbn abN pfie __ _ ...gyp. ROO .» 0 OIH~. 7$4.Q$0 irtcaagp,_, shT~le ~ DecAn,~gr ...... Mmlpn atk tmlaa llh~a mr atuFal .._~ t _1$_ tara~'vd eglfi Irrrartd pbaltgn Nd1lM Rkn T ,~ _... 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U's LaWef: Mcrrll t. neh Crodi Cort„wr~uori , ~~ ...~. ~ COtY1PARA8i.E F.0.1,J~C #1 5d9G Cnn~nlAve 9de Datt~ o7J2TJ?O t0 Bdtl Fp1Cbt $ 790,004 COMPAF2Afll.~ 5/il..~ IRd 5142 Ccntrnl Avo SgeDate; 04holZ0~0 fiAl9 PttCtit $ 76p,000 COMPAft/4$i.~r 8A1.~ tiE 94?8 Ccntrd Avc 2 t3ArsDada OaJ0I12010 3t9s PI'Ifkk $ 9?S,00o Mar 01 2011 13:45:43 I86623201H6 -> 717 ;975 9750 Merrill Lynch Page 021 I~ort~a~;a 3~x~vi.ce~ 2/23/20].]. 1.4;20;23 ~1M F~AC9E ~.~/022 AAA--~;~~~-09~r~k i I C014APARA®LE PF2OhfiRTY P HOTO AbD& NDi1M ~LVR; 1`.AinuAng C:ustAU{Ic .. _.__....,...... ~ileNn:, 1n79~7G8_ .................... $_QA:54!D4LentntlAV,e .,•,-• C~&49ap~71US?SSOG? _ ~i.,~.~aarl CtlX ...s.,.,. ._~_.._.._._. ..___._.~_.....-........'`~J,~h.N! ~ a C H I .{,.,.._ ~...w..~~c..~a ~.~, ~~~'.-~•-- l9ndtr McrrSl Qi t na Con T,,_, I _ COMPARABLE SALE J1d g2d~ Ccntr, t Avc 2 9depxtte 12/2S/sOD9 Sale Pricv; $ 8;5,000 CUMPARAgLE SCALE i~ 5698 CcnU'ol Ave i ' SdeD~~ NIA SAI9 Ptk~X ~ 599,900 CDMPAF2A~4&' SALE 1l8 9$$4 Gcntral Avo i &daD~a N/A !`inie Pfloe: S 9n9,9pa Mar 01 2011 13:46:55 .18662320186 -> P'l4rtF;e --- ------- ~ - - - 717 ;975 9750 Merrill Lynch Page B22 -~~~~~; Mar 01 Z@11 13:47:11 18662320186 -> Mort~a~~ a~rvzc~~ 2/23/2011 10;20;23 AM 717 X975 9750 Merrill Lynch Page @23 PANG 21/022 Q00~~~~~0964 I Mar 01 2011 13 49:43 18662328186 -> 717 975 9750 Merrill Ly»ch Page 824 Mpz't~a~a ~rvic~5 2/231201.1, l,0 ; 20:23 t1M PAQ1~ 22/022 QOQ~~k~k~--Q9Q~k ~,6ca1lOfl llinp 3qa ~'° MASTER DEED PREPARED BY: JAMES F. CRAWFORD, ESQ. ~1 DECLARATION OF CONDOMINIUM 5404 CENTRAL AVENUE CONDOMINIUM THIS 1993, by "GRANTOR" to those (attache premises and 'MASTER DEED, is made this day of ANDREW $. CHASE, JR. (hereinafter referred to as .) SAS, GRANTOR is the owner of the fee simple title lands and premises described in Exhibit A (hereto and made a part hereof,) which lands and are hereinafter referred to as the "Property;" WHER~P.S, GRANTOR intends to submit said tract of land and the b ildings and improvements thereon and the appur- tenances hereto belonging including, but not limited to, two certa n dwelling units, hereinafter referred to as "Units", ogether with certain roads, driveways, and other improveme ts, all as more particularly shown on a certain map entit~.ed "Survey of Premises" (attached hereto as Exhibit B~ prepared by Thomas P. Kaarr, P.L.S, and dated (INSERT D,TE HERE) , and WHER~AS, it is the intention of the GRANTOR to establish the form of ownership of the Property as a condomini m pursuant to the provisions of N.J.S. 46:8B-1 et sea. ( he New Jersey Condominium Act), under the name of 5404 CENTRAL AVENUE CONDOMINIUM, which condominium shall consist of two (2) units, and, for that purpose, it is the further intention of GRANTOR to cause this Master Deed to b executed and recorded, together with all necessary attachments and exhibits attached hereto and made a pat of this Master Deed, and amendments thereto; and , WHER~A5, the Grantor is about to establish the 5404 CENTRAL VENUE CONDOMINIUM ASSOCIATION, an unincorporated associati n, for the administration, operation, and managemen of 5404 CENTRAL AVENUE CONDOMINIUM, a Condomini m, and other improvements intended for the common us and enjoyment of the residents of the Property; and WHEREAS, it is the intention of the GRANTOR to develop a Property so that there will be two (2) units, all of which shall be located within the boundaries of the City of O can City, County of Cape May, and State of New Jersey, a~ more specifically defined and enumerated herein; THER FORE, WITNESSETH: 1. Rstablishment of Condomi a~'um~ The Grantor does hereby submit, declare and establish 5404 CENTRAL AVENUE CONDOMINIUM, A Condominium, in accordance with N.J.S. 46 88-1 through N.J.S.A. 46:8B-30, for that parcel of land d~scribed on Exhibit A aforesaid, and as more particula ly shown on Exhibit B, as aforesaid. The GRANTOR does hereby publish and declare that all ~f the property described above is held and shall be held, conveyed, hypothecated, encumbered, leased, rented oc~upied and improved subject to the following covenants conditions, restrictions, uses, limitations and obligations, all of which are declared and agreed to be in furtherance of a plan for the improvement of such property and dedication thereof into condominiums, and shall be deemed to~run with the land and shall be a burden and benefit tc~ the GRANTOR, his heirs and assigns, and any person ac uiring or owning an interest in the real property nd improvements, their grantees successors, heirs, ex cutors, administrators, devisees and assigns. 12. Definitions. For the purpose hereof the fol- lowing tezms shall have the following meanings, unless the context i~ which same are utilitzed clearly indicates otherwise (a) "Condominium Property" shall mean (i) all the lands des ribed in and shown on Exhibits A and B, as aforesaid; (ii) all improvements now or hereinafter construct d in, upon, over or through such lands, whether or not shown on any exhibit hereto; and (iii) all rights, roads, wa~ers, privileges and appurtenances thereto belonging or appertaining; and (iv) the entire entity created byl the execution and recording of this Master Deed. _I (b) "Unit" shall mean a part of the Condominium designated and intended for independent use as a residential dwelling, and shall not be deemed to mean any part of tY~e General Common Elements situated within or appurtena t to a Unit, as more specifically described in paragraph 4 hereof, but shall include those limited Common Elements rming a part of any particular Unit. The boundary ines of each Unit are the interior surfaces of its Perim er walls, bearing walls floors, ceilings, doors, do frames, trim and include nevertheless all of the window glass, window screens and window frames, and include b th the portion of the said building so described and the sp~jace encompassed thereby. The Unit also includes all of th plumbing, electrical and gas services, and apparatus, if any, attached to and a part of the Unit which excl sively provide utility services to said Unit. The Unit d es not include fee simple title to any parking facilities, porches, stoops, exterior stairways, patios, foundation , and land upon which the improvements are located. ~` (c) "Commoh Elements" shall have the same meaning as "common el ments" pursuant to N.J.S. 46:8B-3(d), except as same mad be modified by the provisions of paragraph 5 hereof. ~ (d) "Commo Expenses" shall, subject to the provisions of parag- a h 6 hereof, mean all those expenses anticipated by N.J.S. 46:SB-3, in addition to all expenses incurred by the Ass ciation, or their respective directors, officers, gents or employees, in the lawful performance of their r spective duties. (e) "Pro_ pe~ty" shall mean the Buildings, the land described ~n Exhibits A and B, and all improvements now or hereinafter constructed in, upon, over or through such lands. (f} "Associ.atiT on" shall mean the 5404 Central Avenue Condominium Association, an unincorporated association formed pursuant to Title 15A of the New Jersey Statutes, and formed~to administrate, manage, and operate the common affairs of the Unit owners of 5404 Central Avenue Condominiu~, and to repair, replace and maintain the general co~qunon elements of the Condominium. (g) "B~L~ws" shall mean the By-Laws of 5404 Central ~ {2) Avenue Condominium Association, attached hereto as Exhibit C, 1 (h) "Build inc1" shall mean any building containing a Unit(s) and/or any other enclosed structure constructed or hereafter constructed upon the land described in Exhibit A and show on Exhibit B. - (i) "Gra tor" shall refer to ANDREW B. CHASE, JR., who has made and executed this MASTER DEED. (j) "Master Deed" This instrument by which 5404 Central Avenue Condominium is established, as provided under th~ Condominium Act of the State of New Jersey. (k} "Unit owner" Any person or entity with an ownershi~ in a condominium unit in the project. (1) "Nana ement Committee " The governing body of the Property, elected pursuant to the terms and conditions of the By-Laws of the Association attached hereto and made a part hereof as Exhibit C. (m) "Nana er"- the person of firm designated by the Management committee to manage the affairs of the Property if such b~ so designated. UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE,ALL DEFTNITIONS SET FORTH IN N.J.S. 46:8B-3 ARE INCORPORATED HEREIN BY REFERENCE AND THE DEFINITIONS SET FORTH ABOVE SHALL BE USED IN CONNECTION THEREWITH. 3. General Description of Condominium. There is erected upon the parcel of land described in Exhibit A hereto,and as more fully set forth in Exhibit B attached hereto, a two story building containing two (2) separate living units, having approximately the same size and configuration. The unit on the first floor of the structure, commonly known as 5404 Central Avenue, shall hereinafter be referred to as "Unit A". The unit on the second floor of the structure shall hereinafter be referred to as "Unit B". Each unit consists of a one-floor dwelling having a width of approximately Twenty Eight (28) feet, and having an approximate length from the front of the building to the rear of the building of approximately Fifty-Six (56) feet. Each unit, in addition, contains a front bay-window which ,extends two feet beyond the end of the structure Ion the Southeast corner of the structure. Each unit also contains an exterior deck which extends along the front of the structure, and runs from six (6) feet to eight (8) feet in length. Each unit, in addition, contains an exterior deck running along the back sine of the structure, having a depth of Six (6) feet. Each unit contains a dining area which extends into a kitchen area; the kitchen area contains a food preparation island. Each unit contains a living area with a gas fireplace on the north wall of the living area. Each unit also contains a master bedroom with its own separate bathroom, together with three additional bedrooms (3) and an additional bathroom. Each unit has a center hallway and each unit has space for the heating system, washer, dryer and hot water heater. dimension Units wii on Exhib: to-time contain surface < unit and includes interior material flues, tl floors (: finished exclusive limited C not be to be limite which are Common E1 forth Both units are located entirely within the City of ocean City, each unit owner holding and continuing to hold a percentage of the Common Elements. Both units are essentially uniform in character and similar in design and size. The building is of frame construction and is constructed on pressure treated timber piling with stringers. The exterior walls of the structure consist of vinyl siding, and the roofing materials consist of plywood, felt paper and fiberglass shingles. The location of the building upon the parcel of land described in Exhibit A hereof is more particularly shown on Exhibit B, attached hereto. The architectural plans for the structure, showing the Front Elevation, Left Side Elevation Right Side Elevation, Rear Elevations, Foundation Plan, First Floor Section, Second Floor Section, Typical Wall Section, and Structural Wali Section, Notes & Specifications, are attached to this Master Deed, and are collectively referred to as~Exhibit D. The architectural plans are Ibased upon plans made by George Wray Thomas , P.E., P.P., R.A., dated 3/19/93 and bearing File #3293 4. Description and Designation of Units. The a, area and location of the Buildings and the two iin said Condominium are as shown geographically rs B and D as the same may be amended from time- ~ herein provided. Each Unit is intended to L1 space within the area bounded by the interior the exterior perimeter or party walls of each j.he floor and the ceiling. Each Unit also Fixtures, doors, windows, balcony or patio, falls and partitions, gypsum boards and/or facing ~n the walls and ceilings thereof, chimneys and inner decorated and/or finished surface of the ~cluding all flooring~ tile, ceramic tile, looring, carpeting a11d padding) and all other ~ts located within such Unit described, which are Ly appurtenant to such Units, and designated as Ammon Elements, although all or part thereof may dated within the Unit, and shall include, but not to, the following individual appurtenances not otherwise located in areas designated as ments or limited Common Elements hereinafter set (aj Complete heating system and any air conditioning systems; the fireplace system and X11 ductwork and flues comprising part of the Fireplace system, and the hearth bj Hot water heater; cj So much of the plumbing system extends from alls and floors into the interior air space; All electrical wires which extend from the lings, walls or floors into the interior air ce and fixtures, switches, outlets and circuit akers, together with the electrical panels (4) (e} Any and all master antenna and/or cable tele- vision wiring not otherwise designated as Common Elements. Each Unit also includes certain Common Elements and Limited Common Elements which are hereinafter described in this Master Deed. Interior partitions or nonbearing walls within the confines of each Unit may, from time-to-time, be removed or replaced subject to the prior written approval of the Board of Trustees of the Association. In the event a Unit Owner doe remove or replace any or all of the interior walls or partitions, no amendment of the Master Deed will be necessary or required. No Unit may be partitioned or sub-divided without the prior written approval of the holder oflany first mortgage loan on such Unit and the Board of 'xrustees of the Association. A Unit shall be described in the Unit Deed by unit designatien and such Unit Deed shall otherwise comply with the provisions of the Condominium Act. Every conveyance or lien using the unit designation assigned to a Unit shall be deemed to include its common interest in the Common E1 ments, and any interest in Limited Common Elements,.and sha21 include, without requiring specific reference thereto, or enumerating them, all the appurtenances thereto, whether specifically described or not, and Basements in favor of the Unit, and similarly shall be subject to all easements in favor of the other Units. ,5. Description of Common Elements. All appurtena ces and facilities and other items which are not part of tie Units hereinbefore described in paragraph 4, or part of the Limited Common Elements hereinafter described shall comprise the General Common Elements as geographi ally shown on Exhibits B and D as aforesaid. The Gener l Common Elements shall also include by way of descripti n, but not by way of limitation, the following: (a) All lands described in Exhibit A aforesaid,' whether improved or unimproved, and all portions of any building or structure not included within any Unit, not constituting a Limited Common Element (b) All private streets, curbs, sidewalks, and parking areas, and garage facilities, subject to easements and provisions set forth in paragraph 7 hereof, and not otherwise designated as a Limited Common Element (c) Any and all exterior walls and roof, together with all windows and window attachments, unless otherwise set forth as a Limited Common Element (d) Lawn areas, shrubbery, conduits, utility lines, waterways, bulkheading, subject to the easements and provisions set forth in this Master (e) Electric and telephone wiring networks throughout the Condominium not otherwise owned by public utility companies providing such service (f) Public connections for gas, electricity, light, telephone and water not owned by the public utility or other agencies providing such (5) services, including the electrical panels and/or the utility meters (not owned by the public utility supplying such services) (g) The foundations, columns, girders, beams, exterior bearing on main walls (including windows, and doors therein); roofs and floors, not otherwise designated as Limited Common Elements (h) Exterior lighting, including lighting for carports, and other facilities necessary for the upkeep and safety of the building and grounds; (i) Any easement or other right hereafter granted for the benefit of the Unit owners for access to or the use of the other General or Limited Common Elements, not included within the lands which are a part of the Condominium, or for any other purpose as set forth in this Master Deed; (j) All tangible personal property required for nth( operation, maintenance, and administration of 'the condominium, which may be owned by the 4516 Central Avenue Condominium Association; (k) All other elements of any improvement necessary or convenient for the existence, management, operation,. maintenance and safety of the Condominium or normally in common use; (1) All storm and sanitary sewers and other utility facilities which are installed in, upon, under or across the parcel of lands described in Exhibit A, hereof, not owned by any public utility; (m) The foundation of said structure including, but not limited to, the pilings and stringer foundation, the concret foundation and all venting systems incident to the foundation of the structure; {n) The stairway and landing on the north side of the building which provides access to Unit A and hich is also used by the owners of Unit B, together with the the exterior walls of the stairway and landing area, together with any ailings connected to such stairway and landing area; (o) Any and all sewer, water and electrical eters which are used to measure water, sewer and electricity I ~p) The entire roof area, with the exception of he deck on the roof, which is a limited common lenient belonging to Unit B (q) The exterior portion of the fireplace system hich extends to the exterior of the structure ~ncluding the exterior portion of the flues escription of Limited Common Elements. Certain yeas, which are designated on Exhibits B and D nclusive, are set aside as Limited common lements, and subject to the other provisions of his Master Deed, are for the exclusive use and enefit of the Unit Owners owning such Limited {6} Common Elements. The Limited Common Elements are as follows: (a) Limited Common Elements belonging to the owner(s) of Unit A include the following: (1) The entranceway door to Unit A located on the north side of the building, together with all flashing and other covering surrounding such door (2} The front and rear exterior decks extending from Unit A, as shown on Exhibit D (3) Any exterior electrical and water meters which measure electrical and water usage of Unit A (4} The parking area in the rear of the structure which is shown on Exhibit B as "Parking- Unit A", and the open storage area shown on Exhibit B as ''Storage-Unit A", both of which are located on the south side of the ~, structure (5) The exterior shower on the westerly side of the structure (b) Limited Common Elements belonging to the owners} of Unit B include following: (1} The entranceway door to Unit B located on the north side of the building, together with all flashing and other covering surrounding such door (2) The stairs and railings leading from Unit A to Unit B; (3) The exterior roof deck and the stairs and railings leading from the entranceway to Unit B to the exterior deck (4) The front and rear exterior decks extending from Unit B, as shown on Exhibit D (5) Any exterior electrical and water meters which measure electrical and water usage of Unit B (6) The parking area in the rear of the structure which is shown on Exhibit B as "parking- Unit B", and the open storage area shown on Exhibit B as "Storage-Unit B", both of which are ~ located on the north side of the structure (7) The exterior shower on the westerly i side of the structure (~) 6. Percentage Interest and Voting Rights. 11 owners of a Unit shall have such an estate herein as may be acquired by grant, by purchase r by operation of law, including an estate in ee simple; and every Unit Owner shall own a fifty per cent (50~) undivided interest in the eneral Common Elements, together with any asements set forth in this Master Deed, all ubject to any amendments as herein provided. he fee title to each Condominium Unit shall nclude both Units and the respective undivided nterest in the Common Elements, said undivided nterest in the Common Elements to be deemed to e conveyed or encumbered with its respective 'nit, even though the description in the nstrument of conveyance or encumbrance may refer rely to the fee title to a Unit. Any attempt to eparate the fee title to a Unit from the .redivided interest in the Common Elements ppurtenant to each Unit, shall be null and void. he respective undivided interest in the Common lements hereby established and to be conveyed ith the respective Units shall have a permanent haracter and shall not be altered or changed ithout the acquiescence of all Unit owners. The raptor, and its respective successors and ssigns and grantees, covenant and agree that the redivided interest in the Common Elements and the ee titles to the respective Units conveyed herewith, shall not be separately conveyed, ransferred, alienated or encumbered, and each of he said undivided interests shall be deemed to e conveyed, transferred, alienated or encumbered ith its respective Unit, not withstanding that he description in any instrument of conveyance, ~ansfer, alienation or encumbrance may refer ~ly to the fee title to the Unit. Each of the its of this Condominium shall be deemed to own fifty per cent (50~) interest in the Common elements of said Condominium. This percentage of ~terest, as herein set forth, shall be used to allocate the distribution of any proceeds of any eminent domain proceedings or resulting from any :~sualty loss and also be the percentage ,pertaining to the rights in the said Common ements. This percentage of interest shall also ~ the basis for apportioning the Common Expenses d Common Surplus. Owner of each Unit shall be entitled to one e each, with respect to matters concerning the ivities of the Condominium and its ociation. In the event that more than one son or persons own one particular Unit, said son or persons shall collectively be limited one vote. Common Expense Assessments; List of Payment. ~t shall be the affirmative and perpetual obligation .of the Association and its Management Committee to fix Comm Expense assessments in an amount at least sufficient. o maintain the exterior of the aforesaid Building aid to maintain and operate all other Common Elements. he amount of monies for Common Expenses of the Association deemed necessary by the Management Committee and the mangy er of expenditure thereof shall be a matter for the sol~ discretion of the Management Committee. The assessments shall be made as the Management Committee agrees and hall be payab`e)in installments as the 8 Management~Committee agrees. The Management Committee shall caus to be prepared, at least thirty (30) days in advance of the due date of each installment, a list of the Common Expenses incident to the maintenance and upkeep of the Common~Elements, and as far as practicable, a list of needed repairs. If requested by any Unit owner, a written notice of the Common Expense assessments shall be sent to every UnitlOwner subject thereto. qn or before December 1 next preceding the beginning Pf each calendar year the Management Committee shall estimate the charge to be paid during each year including a reasonable provision for contingencies and replacements and less any expected income and any surplus from the prior ydar's fund. Such estimated cash requirements shall be assessed 50$ to each Unit Owner, excepting hose maintenance items not to be shared equally by the owners, as set forth below. The estimates of the Management~Committee shall be in the form of an Anticipated Annual Budget. If an annual assessment is not made as required, an assessment shall be presumed to have been made in the amount of ~he last year's assessment, and any installments on such assessment shall be due upon each installment payment da~e until cha0ged by an amended assessment, which amended as essment must receive the approval of the' Management~Committee. The Common Expense assessments shall be evenly divided between the owners of Unit A and the owner(s) of Unit B. j Fn the event that the annual assessment referred to above proves to be insufficient, the budget and assessment may be amended from time-to-time by the Management~Committee, providing that nothing herein shall serve to prohibit or prevent the Board from imposing a lump sum assessment in the case of any immediate need or emergency. ~n addition to the annual assessments hereinbefo~e authorized, the Management Committee may levy in any assessment year, a serial assessment, applicable for that year only, for the purpose of deferring in whole or in part the cost of any construction or reconstruction, unexpected repair or replacement or a~described capital improvement upon or to the Common Elements, including the necessary ~urniture, fixtures, equipment, and other personal property related thereto, or for any other lawful purpose, provided that any such special Common Expense assessment must receive the unanimous approval of the owner(s) o• Unit A and B, the due date of any special assessment shall be fixed in the resolution authorizing such speci 1 assessment. very Unit Owner, by acceptance of a deed or other conv yance for a Unit, whether or not it shall be so expressed ~n any such deed or other conveyance, shall be deemed to ovenant and agree to pay to the Association such sums ~y way of annual or special Common Expense assessments as are herein or in the By-Laws of the Associatio more particularly described upon the purchase of a Unit, the portion of the then current annual assessments payable by the purchaser shall be an amount which bear the same relationship to the annual assessment as the remaining number of months in the then current annual assgssment bears to twelve. No portion of any month shal• be adjusted. The first annual assessment or portion th~reof for which a purchaser is liable shall be immediately due upon the closing of title to the purchaser. Tl a Association shall, upon the request of any (9) Unit Owner for a Common Expense assessment, or of the mortgagee f any Unit, furnish to such Unit Owner or mortgagee, a certificate in writing, signed by an officer of the Association, setting forth whether or not such Common Expense assessment has been paid. Such certificate shall constitute conclusive evidence of the payment of any Common Expense assessments therein stated to have been pall. i~o Unit owner may waive or otherwise avoid liability or Common expenses by non-use of the Common Elements. Each such assessment shall be a continuing lien upon the U it against which it was made and shall also be the personal obligation of the Owner of such Unit at the time when ~he Common Expense assessment fell due, together with such interest thereon and cost of collection thereof (includingireasonable attorney's fees). Liens for unpaid Common Expense assessments may be foreclosed by suit brought inithe name of the Association in the same manner as a foreclosure of a mortgage on real property. Suit to recover a money judgment far unpaid Common Expense assessments may be maintained without waiving the lien securing the same. the amount of any assessment, whether regular or special, assessed against the Unit Owner against any Unit, plus interest at the maximum legal interest rate per annum, and costs, including reasonable attorney fees, shall beco~e a lien upon the Condominium Unit upon the recording of a Claim of Lien as provided in the New Jersey Condominiu~ Act. Enforcement of such lien for non-payment of assessment may be made by the Management Committee or by any band or trust company ar title insurance company having an ~nterest in the said Unit. In any foreclosure or sale, tYne Unit Owner shall be required to pay the costs and expenses of such proceeding and reasonable attorney fees. I any lien for unpaid Common Expense assessments shall be subordinate to any lien for past due and unpaid taxes and the lien of any institutional first mortgage or mortgages ~ow or hereafter placed on any Unit; provided, however, that such subordination shall apply only to the sale or transfer of any such Unit pursuant to a decree or foreclosurg or any proceeding in lieu .of foreclosure. Such sale r transfer shall not relieve any such Unit from liability or any Common Expense assessments thereafter becoming d e, nor from the lien of any such subsequent Common Expense assessment. 'ORTGAGE PROTECTION: Notwithstanding all other provisions herein, the terms of Article V of the New Jersey Con ominium Act are incorporated herein by reference,Iand, in addition, no amendments to this paragraph ahall affect the right of the holder of any mortgage racorded prior to the recording of such amendment who does n t join in the execution thereof. Further, by subordination agreement executed by a majority of the Management Committee, the benefits of the above included provisionsfmay be extended to the mortgages not otherwise entitled tt}ereto. 2~he annual Common Expense assessments levied by the Manage~ent Committee shall be used exclusively for promoting hhe health, safety, pleasure and welfare of the I (io) members of'the Association, including, but without limitation: the maintenance and repair of the exterior of the aforesjaid building, limited to cleaning, painting, staining, end sandblasting of the exterior surfaces and finishes; roof repairs; maintenance, repair and replacement of the Common Elements and improvements on the Property; payment of all taxes and insurance premiums; all costs and gxpenses incidental to the operation and administration of the Association; and, such other items as may fro' time to time be deemed appropriate by the Management Committee. The Association and/or Management Committee ay also provide, by its rules and regulations, for ordina~y maintenance and minor repairs and replacemen s to be furnished to Units by Association personnel pr representatives and charged as a Common Expense. 1 ach Unit Owner shall promptly furnish, perform, and be responsible for, at his own expense, all of the maintenancg, repairs and replacements within his own Unit, provided however: (i) such maintenance repairs and replacements as may be required for the functioning of the common plu~bing, heating and water supply systems within any Buildifig in the Condominium shall be furnished by the Association, but any and all expenses incurred thereby shall be tie responsibility of the Owners of Units located in that Bu}lding; and ~ii) the Management Committee its agents andlemployees may effect emergency or other necessary repairs which the Unit Owner has failed to perform. Except as hereinbefore provided, maintenance, repairs an~ replacements of the plumbing fixtures and systems, heating and air conditioning systems, windows, doors, sky~.ights, balconies, patios, stairways, electrical systems an• receptacles, breaker boxes, kitchen appliances and equipm~nt, and lighting fixtures within any Unit or part of thg Common Elements appurtenant thereto shall be the Unit Otl~ner's responsibility at its sole cost and expense, a'md if any Unit Owner fails to perform such work the Condom~.nium Association and/or Management Committee may do so on the Unit Oviner's behalf and charge the reasonable expenses thereof to the Unit Owner. Maintenance, repair, replacement, cleaning and washing of all wallpa er, paint, paneling, floor covering, draperies, and window shades or curtains within any Unit shall be the Owner's re possibility at its sole cost and expense. ~f, due to the negligent act or omission of or misuse by ~7nit Owner, or a member of his family or household et, or a guest, occupant or foster of a member (whether authorized or unauthorized by~the Unit owner), damage sha}1 be caused to the Common Elements, or to a Unit(s) owned by others, or maintenance, repairs or replacements shall be required which would otherwise be a Common Exp nse, then such Unit Owner shall pay for such damage and be liable for any damages, liability, costs and expense, i eluding attorney's fees, caused by or arising out of sue circumstances; and such maintenance, repairs and replacements to the Common Elements or the Unit(s) shall be subject to the By-Laws and the rules and regulation of the Association. Easements Every Unit Owner, his successors and assign, shall have the following perpetual easements with respect to the property. (~a) A non-exclusive easement in, upon, over, under, across and through the Common Elements to kjjeep, maintain, use, operate, repair and replace Y~is Unit in its original position and in every s~,ubsequent position to which it changes by reason (11) the gradual forces of nature and the elements; An exclusive easement for the existence and tinuance of any encroachment by his Unit upon adjoining Unit or upon any Common Elements, existing or which may come into existence eafter as a result of construction, repair, fting, settlement, movement of any portion of Buildings or a Unit, or as a result of demnation or eminent domain proceedings, so t any such encroachment may remain undisturbed long as the Buildings stand; and A non-exclusive easement for ingress and ss to his Unit in, upon, under, over, across through the Common Elements; and ~ An exclusive easement to use and enjoy the sf~f''rfaces of the main walls, (including any wi~.ndows, doors, chimneys, balcony, stoops, or P do therein), ceilings and floors contained ithin his Unit; and ~ } (~) An easement in common with the owners of all o her Units to use all pipes, wires, ducts, c~bles, conduits, public utility lines, cable and m ster antenna television, and other Common E ements located in any of the other Units and s ruing his Unit; and A perpetual and non-exclusive easement in, er and through the Common Elements of the Con- minium and to use the roads, walks and common cilities within the Condominium subject to the ght of the Association; Promulgate rules and regulations for the use enjoyment of the common property; and i} Suspend the enjoyment and voting rights of y Unit owner for any period during which any sessment for Common Expenses remains unpaid, for any period during which any infraction of s published rules and regulations continues, it ing understood that any suspension for either n-payment of any assessment or a breach of the les and regulations of the Association shall t constitute a waiver or discharge of the Unit ner's obligation to pay the assessment; and ii) Charge admission and other fees for the use the Common Elements; and v) The right of the Association to dedicate or ansfer all or any part of the Common Elements, .her than the Buildings to any municipal, aunty, State, Federal or other public agency ithority, or utility, for such purposes and ibject to such conditions as may be agreed upon the Unit Owners, unless such dedication,. ~ansfer and determination as to such purpose and ~nditions shall be authorized by the unanimous >te of all votes eligible to be cast by all the iit Owners of the Association. A true copy of ich resolution shall be made and acknowledged by ie President or Vice President and Secretary of ie Association and shall be annexed to any istrument of dedication or transfer affecting ie Common Elements other than the Building, -ior to the recording thereof, in the Office of (12} County Clerk. tor, its successors and assigns, shall have following easements with respect to the erty: (~) A blanket and non-exclusive easement in, upon, through, under and across the Common Elements for the purpose of construction, installation, maintenance and repair of any improvements to the Units or Common Elements, and for ingress and egress of all the roadways and perking areas. In addition, Grantor hereby rgserves the irrevocable right to enter into, upon, over or under any Unit for such purposes as may be reasonably necessary by the Grantor or its agents to service any Unit therein, provided that requests for entry are made in advance and that s~ch entry is at a time reasonably convenient to t e Unit Owner(s). In case of an emergency, the right of such entry shall be immediate whether the Unit Owner is present at the time or not; and (~) A perpetual blanket and non-exclusive easement in, upon, over, under, across and through the Common Elements for surface water runoff and drainage caused by natural forces and elements, grading, and/or the improvements located upon the Property. No individual Unit Omer shall directly or indirectly interfere with o~ alter the drainage and runoff patterns and systems within the Condominium. T~e property shall also be subject to the fallowing easements: (a) The Association shall have a perpetual exclusive easement for the existence, continuance, and maintenance of any Common Elements, or of any improvements owned by it which presently or may hereafter encroach upon a Unit; and ~) The Association, its Board of Trustees, onager, or managing agent, shall have the crpetual and non-exclusive right of access to ich-Unit to inspect same to•remove any .olations set forth in this Master Deed, the By- iws or in any regulations promulgated by the csociation, and to perform any operations squired in connection with the maintenance, pairs or any operations required in connection th the maintenance, repairs or replacements of to the Common Elements, or any equipment, ~cilities affecting or serving other Unit(s) or ~e Common Elements; provided that requests for try are made in advance and that any such entry at a time reasonably convenient to the Unit er. In case of any emergency, such right of .try shall be immediate, whether the Unit Owner ~ present at the time or not, and w Any bank, mortgage banker or other .itutional lender who is the owner of a .gage which encumbers any Unit, its officers, its, and employees, shall have a blanket, ~etual and non-exclusive easement to enter the lominium or any part thereof to inspect the lition and repair of the Common Elements, or Unit so encumbered. This right shall be ~cised only during reasonable daylight hours, (13) then whenever practicable, only after advance ice to and with the permission of the ociation; and ) A blanket, perpetual and non-exclusive sement in, upon, over, across and through the moron Elements for the purpose of the stallation, maintenance, repair, service and placement of all sewer, water, power and lephone pipes, lines, mains, conduits, waters, les, transformers, master television antennas cable television facilities and any and all her equipment or machinery necessary or cidental to the proper functioning of any ility systems serving the Property, which sement shall be for the benefit of any vernmental agency, or utility company or other tity which requires same for the purpose of rnishina one or more of the foregoing services; A blanket, perpetual and non-exclusive sement of unobstructed ingress and egress in, sr, across end through the Common Elements to s City of Ocean City, the Association, their spective officers, agents and employees (but t the public in general) and all police, fire d ambulance personnel in the proper performance their respective duties, (including but not mited to emergency or other necessary repairs a Unit which the Unit Owner has failed to rform), and for repair and maintenance of the moron Elements. Except in the event of ergencies, the rights accompanying the sements provided for in this sub-paragraph all be exercised only during reasonable ylight hours and then, whenever practicable, ly after advance notice to and with permission the Unit Owner(s) directly affected thereby. 1 By-Laws and Administration: Chances in Documents; Power of Attorney. T e administration of the Common Elementsof the Condominiu and other common facilities shall be by the Associatio ~ in accordance with the provisions of the Condominiu Act, this Master Deed, the By-Laws, (attached hereto and harked as Exhibit C and incorporated herein) any rules a~d Regulations adopted pursuant such By-Laws and any other documents, amendments or supplements to the foregoing which may subsequently be required by a bank, mortgage broker, or other institutional lender designated by the Grantor to make mortgage loans on the subject premises, o~ by any governmental agency having regulatory jurisdictio over the Condominium or by any title insurance c~mpany selected by Grantor to insure title to any Unit(s)i. Grantor hereby reserves for itself, its successors end assigns, for a period of five (5) years from the da~e the first Unit is conveyed to an individual purchaser, the right to execute on behalf of all contract purchasers,~Unit Owners, mortgagees, other lienholders or parties claiming a legal or equitable interest in the Condominium any such agreements, documents, amendments or supplements to the above described documents which may be so required provided, however, that no such agreement, document, a~endment or supplement shall affect a material physical modification of a Unit, without the prior written consent of the Unit owner and his mortgagee or adversely affecting t~e priority or validity of a purchase money {14) lien on a UMit sold hereunder, without the prior written consent of ~he mortgagee or any institutional holder of a first mortgage. Any and all amendments or modifications shall be evidenced b an Amendment to Master Deed which shall be recorded in the Cape May County Clerk's Office and supplied to the owners of any and all units within ten (10) days o€ the date of the execution thereof. By acceptance of a deed to any Unit or by the acceptance of any other legal or equitable interest in the Condominiums each and every contract purchaser, Unit Owner or occupant holder of any mortgage or other liens, does automatically and irrevocably name, constitute, appoint and confirml(i) Grantor, its successors and assigns, as attorney-in-fact for the purpose of executing such amended Master Deed s) and other instrument(s) necessary to effect the foregoi g (provided that such power of attorney may not be used to adversely affect the priority or validity of any lien or the value of any Unit) and (ii) the Association as attorney-in-fact to acquire title to or lease any Unit whose owner desires to surrender, sell or lease the same, in the name of the Association or its designees, cQorporate or~otherwise, on behalf of all Unit Owners and to convey, sell, lease, mortgage (but not to vote the vo~es appurtenant thereto) or otherwise, dispose of any such Units so acquired or to sublease any units so leased by the Association. T~e powers of attorney aforesaid are expressly declared an acknowledged to be coupled with an interest in the subject matter hereof and the same shall run with the title to any and all Units and be binding upon the heirs, personal representatives, successors and assigns of any of the ~oregoing parties. Further, said powers of attorney sh 11 not be affected by the death or disability of any prin~ipal and is intended to deliver all right, title and interest of the principal in and to said powers. . Restrictions. Condominium is subject to all covenants, and easements of record and to the following restricts No Unit, except those Units owned by the ntor and used by it as sales offices, inistrative offices or models, shall be used any purpose other than as a private idence; No animals, livestock or poultry of any kind 11 be raised, bred, or kept in any Unit or in Common Elements. Dogs, cats or other Behold pets are permitted, not to exceed two the aggregate, provided that they are not t, bred or maintained for any commercial pose, and that they are housed within the t. No outside dog pens or yards shall be mitted. No trailer, tractor (except a small garden ctor), truck (commercial or unregistered), ile home, recreation vehicle, boat, boat iler or the like shall be stored or housed on Property, except within the garage; (15) (~) No portion of the Common Elements or other ~grtion of the Property thereof shall be used or maintained for the dumping, of rubbish or debris. Prash, garbage or other waste shall be kept in s~nitary containers on the Property for weekly or m•re frequent collection; (e) No exterior loudspeakers other than as contained in portable radios or television sets shall be permitted. No unshielded floodlights shall be installed in any exterior area of any Unit; ~f) No business, trade or profession shall be conducted in any Unit, except that of physician, dgntist, or other practitioner of the healing arts and sciences; attorney at law, accountant, paofessional engineer, architect, or artist, and tl~e use of the Property for any such purpose shall be restricted to not more than fifty per cent of the livable area of the first floor; and no exterior sign shall be erected or displayed except one non-illuminated sign, which shall be no larger tha3~ eight inches in height and thirty inches in length; (gg~) No external or visible radio, television, or ~t~y type of communication aerial shall be i stalled or affixed on or about the exterior of ay building constructed or erected on the P~operty, or elsewhere on such Property, except s the owners by unanimous approval may otherwise c~nsent to television and/or cable facilities; No signs of any kind shall be permitted upon premises except as provided in section (g) e; No Unit Owner or occupant shall build, plant maintain any matter or thing upon, in, over or der the Common Elements without the prior itten consent of the Association; No Unit Owner or occupant shall burn, chop or t anything on, over or above the Common Ele- nts; (~) Unit Owners shall not have any right to paint 0 otherwise decorate or change the appearance of arty portion of the exterior of any Building without the consent of the Association; To the extent that equipment, facilities and xtures, within any Unit{s) shall be connected similar equipment, facilities or fixtures fecting or serving other Unit(s) or the Common ements, then the use thereof by the individual it Owners shall be subject to the By-Laws and e rules and regulations of the Association; (~) Nothing shall be done or kept in any Unit or irk or upon the Common Elements which will increase the rates of insurance of the B~alding(s) or the contents thereof beyond the rtes applicable for Units, without the prior written consent of the Association. No Unit Omer shall permit anything to be done or kept in his Unit or in or upon the Common Elements which w311 result in the cancellation of insurance on any of the Buildings or the contents thereof, or (16) ich will be in violation of any law; (n) No noxious or offensive activities shall be carried on, in or upon the Common Elements or in any such Unit nor shall anything be done therein either willfully or negligently which may be or become an annoyance or nuisance to the other re- sidents in the Condominium; (o) No immoral, improper, offensive or unlawful ale shall be made of any Unit; and all valid lbws, zoning ordinances and regulations of all ~~vernmental bodies having jurisdiction thereof shall be observed; ( ) Nothing shall be done to any Unit or on or in t e Common Elements which will impair the struc- t~ral integrity of any Building or which will structurally change a Building. No Unit owner (gther than the Grantor) may make any structural additions, alterations or improvements in or to his Unit or in or to the Common Elements, without t~e prior written approval of the Association or i~pair any easement without the prior written consent of the Association. The Board of T ustees of the Association shall have the obligation to answer any written request received by it from a Unit Owner for approval of a proposed structural addition, alteration or i~provement in such Unit Owner.'s Unit within forty-five (45) days after receipt of such r quest, and failure to do so within the stipulated time shall constitute a consent to the proposed structural addition, alteration or i~pravement. Any application to any municipal a~thority for a permit to make an addition, alteration or improvement in or to any Unit must b~ approved by the Association and, if approved, s all be executed by the Board of Trustees of the Association and may then be submitted by the Unit Owner. Such approval, however, shall not incur a~y liability on the part of the Association to a~y contractor, subcontractor, or materialman on a count of such addition, alteration or i rovement, or to any person having any claim f r injury to parson or damage to property a ising therefrom. The Unit Owner shall furnish t e Association with a copy of any such permit w 1ch he has procured. The provisions of this sparagraph (p) shall not apply to Units owned b the Grantor until such Units have been i~itially sold and conveyed by the Grantor; The Common Elements shall be used only for furnishing of the services and facilities for h they are reasonably intended and suited and h are incident to the use and occupancy of Units; The Unit Owners shall have the right to lease it Unit, provided said lease is in writing and made subject to all provisions of this Master d, the By-Laws of the Association, and other :uments ref erred .to herein, including the right amendment reserved to the Grantor herein, and ~vided further that any failure of the lessee fully comply with the terms and conditions of :h documents shall constitute a default under lease. In no event shall any lease term be (17) a period of less than Two (2) weeks. (s) In the event a tenant of a Unit defaults under his lease by failure to comply with the provisions of this Master Deed, By-Laws or rules ar~d regulations of the Association, then, in addition to all other remedies which it may have, tY~e Association shall notify the Unit owners of stitch default(s) and demand that the same be cured through the Unit Owner's efforts within thirty (~0) days after such notice. If such defaults} i~ not cured within said thirty (30} day period, then the Unit Owner shall immediately thereafter, a~ his own cost and expense, institute and diligently prosecute an eviction action against his tenant on account of such default(s). Such action shall not be compromised or settled w•thout the prior written consent of the Association. In the event the Unit Owner fails to fulfill the foregoing obligation, then the Association shall have the right, but not the dt}ty, to institute and prosecute such action as atltorney-in-fact for the Unit Owner and at the Unit Owner's sole cost and expense, including all legal fees incurred. Said costs and expenses sI)all be deemed to constitute a lien on the p rticular Unit involved, and collection thereof my be enforced by the Association in the same m nner as the Association is entitled to enforce collection of Common Expenses. By acceptance of a d ed to any Unit, each and every Unit Owner does t~ereby automatically and irrevocably name, c nstitute,appoint and confirm the Association as his attorney-in-fact for the purposes described iU this subparagraph (s). ,•, Each Unit owner shall have the right to gage or encumber his Unit, provided that such .gage or encumbrance is made tc a bank, .gage banker, trust company, insurance zany, savings and loan association, pension or other institutional lender or is a ;hase money mortgage made to the Grantor or to immediate predecessor in•title to a Unit. All property taxes, special assessments and er charges imposed by any taxing authority are be separately assessed against and collected each Unit as a single parcel, as provided in New Jersey Condominium Act. In the event t for any year such taxes are not separately ed to each Unit, but are taxed on the Property a whole, then each Unit Owner shall pay his ~portionate undivided percentage interest in :Common Elements. Each Unit Owner shall pay for his own ephone, television, and other utilities, if which are separately metered or billed to h user by the respective utility company. lities which are not separately metered or led shall be treated as part of the Common Oblicrations of .Grantor. U ~til the conveyance of title to the first Unit, the Grantor shall be solely responsible for all Common Ex- penses. Fo lowing the first conveyance, the Owners of Units to wh~m title shall have been cohveyed shall be (18) responsible for their proportionate share of all Common Expenses. {Upon the conveyance to any particular Unit Owner(s) an;d the issuance of a Certificate of occupancy by the City of~i Ocean City for such Unit, the Unit owner(s) shall be responsible for his, her, or their proportionate share of the Common Expenses which shall be fifty percent (50~j of tie Common Expenses. Upon conveyance of the second Unit by the Grantor to the second Unit(s) Owners, and upon tt~e issuance of a Certificate of Occupancy by the City of OceIan City for such second Unit, the Owners of said secondlUnit shall thereafter pay his, her or their share of thlle proportionate Common Expenses, which share shall be fifty percent (50%) as hereinbefore mentioned. In the everut that the two Units are not simultaneously conveyed, t e Grantor shall remain responsible for its fifty perce~it (50~) share of the Common Expenses on the one remaining unconveyed Unit until title to such unconveyed ~Tnlt is transferred to a Unit owner. Once the Grantor has transferred title of both Units, the Owner(s) of said Units shall share the Common Expense hereinbefore described. j NPtwithstanding the foregoing, the Grantor covenants and agrees foY itself, its successors and assigns that for so long as it owns one or more of the Units, and subject to the exceptions expressly indicated, the Grantor{, its successors and assigns shall be governed by the prov'sions of and entitled to all rights and benefits reserved to Grantor pursuant to this Master Deed and all Exhabits attached hereto. 13. No Partition. .~ Subject to the provisions of the Master Deed and By-Laws of he Association and the Condominium Act, the Common Elem~nts shall remain undivided and no Unit Owner(s) sh 11 bring any action for partition or division thereof. I~i addition, the undivided percentage interest in the Comm n Elements shall not be separated from the Unit to whi~h it appertains and shall be deemed conveyed or encumbergd with the Unit even though such interest is not expressly mentioned or described in the conveyance or other instrµment. 14. Compliance by Owners; Membershib in the ' Association. E~ch Owner or occupant of a Unit shall comply with and sh 11 assume ownership or occupancy subject to the laws, rules and regulations of governmental authorities having jurisdiction over the Condominium, the provisions f this Master Deed, the By-Laws and rules and regulations~of the Association and any other documents, amendments Qr supplements to the foregoing as described in paragrap~n 10 hereof. Failure to comply with any such provisions, rules and regulations shall be grounds for injunctive belief by the Grantor, or the Association, and any Unit Owner, and for penalties and other available remedies at~law or in equity. Upon acceptance of a deed to a Unit, each Unit Owner shall automatically become a member of the Association and shall be a member so long as he shall hold legal title to his Unit, subject to all provisions of this Master Deed the Condominium Act, the By-Laws and rules and regulat~.ons of the Association for or by the Association, (19) ~.5. Damages Destruction or Condemnation. If any Building, improvement or Common Element or any part thereof is damaged or destroyed by fire, casualty or eminent domain, the repair, restoration or ultimate dispositio~t of any funds or proceeds thereby created shall be in acco dance with N.J.S. 46:8B-24 and 25, respectivoy. In the event the Association determines not to repair or restore the damaged property in accordance with N.J.5~ 46:8B-24, any insurance proceeds payable to a Unit owner as a result of damage or destruction to his Unit and(o share of the Common Elements are thereby assigned and shall be paid to the institutional holder of a first mortgage lien on said Unit for application to the sums secured by said mortgage with the excess, if any, paid to the Unit Owners. ].6. Insurance. ~~e Management Committee or the Association shall obtain andjmaintain in effect at all times, insurance of the type ar~d kind and in sufficient amounts, including in- surance fo such other risks of a similar and dissimilar nature, as~are or shall hereafter customarily be covered with respect to. other condominium projects similar in con- struction,design and use, which insurance shall be governed by the following provisions; } All policies shall be written with a company licensed to do business in the State of New Jersey, b. Exclusive authority to adjust losses under p licies hereafter in force for the Property s all be vested in the Management Committee or t e Association, subject to the rights of any l~nding institution holding a first mortgage on s id Property; c In no event shall the insurance coverage o twined and maintained by the Management Committee hereunder be brought into contribution w th insurance purchased by the individual Unit O~iners or their mortgagees; d~ The insurance coverage to be purchased by the M nagement Committee or the Association shall be complete comprehensive coverage, including both p rsonal liability and casualty, and said overage will extend to all areas of the building not owned by the individual Unit Owners. Said insurance shall include, but shall not be limited tc~, losses occasioned by fire, in a minimum a ount of which is to be considered the full replacement cost for the s ructure; at no time shall the amount of said lass insurance be permitted to fall below One H ndred percent (100%} of the value of replacement costs for the structure, and comprehensive liability insurance in a minimum amount of said policy amounts to be, reviewed bi-annually to ensure that the limits provide sufficient coverage, and to revise said p licy limits when necessary. In the event that ar~ individual Unit Owner must insure the structure portions of the common elements so as t~ satisfy the requirements of any lending insti- tution, the individual Unit owner shall be responsible for paying the portion of the insurance premium which is solely attributable to 20 t• :ess amounts required by such lending >titution over and above those amounts :essary to cover replacement of the structure _tions of the common elements. In the event ~t a loss should occur, and, as a result of id loss, a mortgagee insists that insurance ~ceeds be paid to that mortgagee as opposed to ing used to repair or replace the condominium ructure, the Unit Owner whose mortgage(s) /are satisfied as a result of any such surance payments to a mortgagee shall be sponsible to the association to contribute his o-rata share of those funds necessary to repair replace common elements, or terminate the ndominium regime, it being the purpose of this ause to insure that any unit owner contributing s pro-rata share for insurance coverage on the ilding shall not be deprived of any insurance oceeds paid on account of a loss of the ructure because of the presence of a mortgagee another Unit Owner's unit, when said mortgagee fuses to cooperate with the Association to aid the repair replacement or termination of the ndominium. ~ the date he: at any meet with the pr provided, h have been a lender, or lien on any withheld. in the Offi This paragr derogation Grantor pur of any conf h Unit Owner may obtain additional insurance his own expense to cover personal liability . casualty which may occur in or about the :mises described in the Unit Deed and including t portion of the Common Elements over which Unit Owner has an exclusive easement as 'fined and enumerated herein. Nevertheless, no .t Owner shall be entitled to exercise his ~ht to maintain insurance coverage in such a as to decrease the amount which the ~agement Committee on behalf of the owners may ilize under any insurance policy which the tagement Committee or the Association may have force and effect on the Property at any time. e Management Committee or the Association shall tain, and shall keep in effect if required, a anket insurance policy in the form and amounts tisfactory to the mortgagees holding first rtgages on the individual units, but without ejudice to the right of the. Unit owners to ~tain their own individual unit insurance. emiums for any such blanket insurance shall be common expense and such premium charge shall be ld in a separate escrow account for the sole .rpose of funding said insurance as premiums :come due. Amendment of Master Deed. is Master Deed may be amended at any time after eof by the unanimous vote of all Unit Owners ng of the Association duly held in accordance visions of the By-Laws of the Association wever, that any such material amendment shall proved in writing by each bank, mortgage ther institutional lender of a first mortgage Unit, which approval shall not be unreasonably o amendment shall be effective until recorded e of the Clerk of Cape May County, New Jersey. ph is by way of supplement to and not in .f the powers of amendment reserved to the ;uant to paragraph Eight (8) hereof and in case .ict between them, the least restrictive (21) provision s}iall apply. In the alternative, an amendment may be made; by an agreement, signed or acknowledged by all of the Unit Owners in the manner required for the execution o~ such a deed, and such amendment shall be effective when recorded in the public records of Cape May County, NewjJersey. 1~. Enforcement. Enforcement of this Master Deed shall be by any appropriate proceeding in law or equity in any court or administrative tribunal having jurisdiction against any person or p rsons, firm or corporation violating or attempting ~o violate or circumvent any covenant, such violation o~ threatened violation; or to recover damages; and, agains any Owner to enforce any lien created by this Master Deed~in any covenant herein contained, and failure by the Condominium Association or any member to enforce any covenant herein contained for any period of time shall in no event~be deemed a waiver or estoppel of the right to thereafter nforce the same. I~ the event the Condominium is not maintained in reasonable order, the City of Ocean City shall have the right to en er upon and maintain the Condominium in accordance with the provisions of N.J.5. 40:55D-43(b). The cost of such maintenance by the municipality shall be assessed prp rata against the Owners of each Unit affected thereby and shall become a lien and tax on each such Unit,and shill be enforceable by the City of Ocean City in the manner provided by law with respect to the real estate taxes assessed directly against each such Unit. F~rther, the City of Ocean City shall have a continuing ~.ien against each such Unit for its pro rata share of all real estate taxes due and payable to the City of Ocean Ci y for real estate taxes assessed against the Condominium Such lien shall be apportioned equally in the manner provided by law with respect to the real estate taxes asses~ed directly against eac~ such unit. 1~. Invalidity. Tie invalidity of any provisions of this Master Deed or Bylaws of the Association shall not be deemed to impair or a~fect in any manner the validity, enforceabil ty or effect the remainder of this Master Deed or said By-saws and in such event all of the other provisions f this Master Deed and said By-Laws shall continue in~full force and as if such invalid provision had never b en included therein. 2C}, Waiver. Ng provision contained in this Master Deed shall be deemed t~ have been abrogated or waived by reason of any failure to enforce the same, irrespective of the number of violations or breaches which may occur. i 2 Gender. T e use of the masculine gender in this Master Deed shall be deemed to refer to the feminine gender and the use of the singular shall be deemed to refer to the plural, and~vice versa, whenever the context so requires. (22) 22. Rule Against Perpetuities. If any provision of this Master Deed, or the By- Laws attached hereto as Exhibit "D" shall be interpreted to constitute a violation of the rule against perpetuities, then such provision shall be deemed to remain in effect until the death of the last survivor of the now living descendants of Robert F. Kennedy, deceased, former Senator of the State of New York, plus twenty-one 21) years thereafter. 23,. Ratification Confirmation and Approval of s Agreements. TY}e fact that some or all of the officers, trustees, members or employees of the Association and the Grantor mayibe identical, and the fact that the Grantor or its nominees, have heretofore or may hereafter enter into agreements `with the Association or with third parties, will not invalidate any such agreements and the Association and its members, from time to time, will be obligated to abide by and comply with the terms and conditions thereof. The purchase of a Unit, and the acceptance of the Deed therefore by any party, shall constitute the ratification, confirmation and approval by such purchaser, his heirs, legal representatives, successors and assigns, of the propriety and legality of said agreements or said agreement, or any other agreements authorized and permitted by the New Jersey Condominium Act, this Master Deed or the By-Laws of the Association. 2~. Rights Reserved to Grantor. Anything to the contrary herein or in the By-Laws of the Association notwithstanding, Grantor hereby reserves fob itself, its successors and assigns, for so long as it mwns one or more Units in the Condominium or for a period of five (5) years from the date hereof, whichever is later, the right to sell, lease, mortgage or sublease any unsold Units within the Condominium. 2a. Subject to anything to the contrary in this Master Deed~or the By-Laws of the Association, the following shall apply with respect to each institutional holder of a~first mortgage on any Unit: (A} The priar written approval of each institutional holder of a~first mortgage (hereinafter called "first mortgage") lien on any Unit in the condominium is required for the following: (~) The abandonment or termination of the Condominium except for abandonment or termination provided by law in the case of substantial destruction by fire or ther casualty or in the case of a taking by condemnation or eminent domain to the By-L~ which would owners in tl may be perm: Deed. Any material amendment to the Master Deed or ws including, but not limited to any amendment change the percentage interests of the Unit e Condominium, except for such amendments as tted pursuant. to paragraph 10 of this Master (23) (B) No unit in the Condominium may be partitioned or subdivided without the prior written appproval of the holder of any first mortgage lien on such unit. (C) Any lien the Association may have on any Unit in the Condominiu~ for the payment of Common Expense assessments attributable to such Unit is subordinate to the lien or equivalent security interest of any first mortgage on the Unit recorded prior to the date any such Common Expense assessments become due. (D) By virtue of the provisions of this Master Deed and the By-Laws of the Association, any institutional holder of a first ortgage on a Unit in the Condominium is, upon request, en~itled to: inspect the books and records of the Condo- nium during normal business hours; and (ii) ceive an annual audited financial statement of e Condominium within ninety (90) days following e end of any fiscal year of the Association; ovided, however, that if no such audited finan- al statement of the Condominium has been pre- red, the institutional holders shall incur all sts in the preparation of the same if they so .sire to have such financial statement; and ii) written notice of all meetings of the sociation and be permitted to designate a :presentative to attend all such meetings; (E) In the 'vent of substantial damage to or destruction of any Unit~or any part of the Common Elements, the institution 1 holder of any first mortgage on a Unit is entitled to timely written notice of any such damage or destruction No Unit Owner or other party shall have priority ov r such institutional holder with respect to the distribution to such Unit of any insurance proceeds. (F) If any nit or portion thereof, or the Common Elements or any port on thereof is made the subject matter of any condemnation or eminent domain proceeding or is otherwise sought to bg acquired by a condemning authority, then the institutional holder of any first mortgage on a Unit is entitled to,timely written notice of any such proceeding or proposed acquisition and no Unit Owner or other party shall have riority over such institutional holder with respect to he distribution to such Unit of the proceeds of any ewer or settlement. (G) If an institutional holder~of a first mortgage lien on the Unit ob airs title to a Unit as a result of foreclosure of the first mortgage, then such acquirer of title, his uccessors and assigns, is not liable for the share of Co mon Expenses or other assessments by the Association pertaining to such Unit or chargeable to the former Unit Owner which became due prior to acquisition of title as a result of the foreclosure. Such unpaid share of Common Expenses and other assessments shall be deemed to be Common Expenses collectible from all of the remaining U~it Owners including such acquirer, his successors nd assigns. 26. Duration. Th covenants and restrictions set forth in Section II f this Master Deed shall run with and bind all of the land included in the Condominium and shall inure to (24) the benefiir of and be enforceable by the Condominium Association) and the owners of any land subject to this Master Deed, their respective successors, assigns, heirs, executors, administrators, and personal representatives, for a peri d of forty years from the date this Master Deed is recorde~ in the Office of the Cape May County Clerk, at the end of which period such covenants and restrictions shall automatically be extended for successive periods of ten (10) years unless, by the unanimous vote of the Owners at the tim~ of the expiration of the initial period, or of any extension period, the Owners shall agree to and sign an instrument or instruments in which they shall agree to change theicavenants and restrictions in whole or in part; but no such agreement shall become binding unless written notice aontylaining the terms of the proposed agreement is sent to eve~'y owner at least ninety (90) days in advance of the action taken in authorizing said agreement; and, in any event,~any changes concerning any such agreement shall not become :effective and binding until three (3) years after the recording of the aforesaid fully executed agreement oar instruments containing such agreement, and provided further, that in no event may the Common Elements be conveyed to any third person, firm or corporation, without the express consent, by ordinance, of the governing body of the City of Ocean City, or such other municipal bodies as may then have zoning and subdivision control jur~.sdiction over said Property. 27. Arbitration Provision- I the event that the unit owners cannot agree on a certain i sue ar certain issues, and an irreconcilable conflict ex'sts which cannot otherwise be resolved, such conflict or conflicts shall be submitted to arbitration, in accordance with the rules and regulations of the American Arbitration Association. The costs of such arbitration) including the fees of the arbitration, and all adminis native expenses shall be divided equally between the two unit owners, unless the arbitrator finds that one pa ty has acted unreasonably or in bad faith, in which case he party that is found to have acted unreasonably or in bad faith, shall bear all of the fees and expenses incident to the arbitration. 28. Aaent for Service of Process- TY~e agent for service yof process, in the event of litigation n which the Association is involved, shall be the then-ac•ing President of the Association. The address for service of process shall be 5404 Central Avenue, Ocean City, N.J. 8226 29. Exhibits. Attached hereto and made a part hereof are the following e~hibits: Exhibit "A" - Metes and bounds description of the property. Exhibit "B" - Survey of premises - Lot 16, in Block 5402, Ocean City, Cape May County, New Jersey, dated (date) prepared by Thomas P. Karr, bearing Project Number (number) Exhibit "C" - By-Laws of 5404 Central Avenue Condominium Association (25) Exhibit "D" - Architectural Drawings depicting the various floor plans, elevations of the structure, foundation plans and general notes ans specifications, prepared by George Wray Thomas, P.E., P.P., R.A., dated 3/19/93, bearing File #3293, instrument written. Exhibit E- Proposed Budget of 5404 Central Avenue Condominium Association WETNESS WHEREOF, the Grantor has caused this > be executed the day and year first above ANDREW B. CHASE, JR., Grantor STATE OF COUNTY OF of , Public of AI3DREW B . the Granto signed thi the presen name there Deed for $ or to be p considerat JERSEY ) )SS. PE .MAY ) IT REMEMBERED, that on this day -93, before me, the subscriber, a Notary ie State of New Jersey, personally appeared iASE, JR., who personally came before me, and i, under oath, to my satisfaction, that he is named in the within instrument; that he has instrument as his voluntary act and dead in of deponent, who thereupon subscribed her ~ as attesting witness, and that he made this .00 as the full and actual consideration paid id for the transfer of title. (Such an is defined in N.J.S.A. 46:15-5.) NOTARY PUBLIC (26) s~~sxT ~- DESCRIPTION OF PROPERTY BE SUPPLIED BY SURVEYOR ~~~ ~~~ Y+3 O ~ H Hxt' H m a+ H H r ~ co H H t=J t+7 K d nx 00 x° czi i ExxIBIT c BY-LAWS OF i 8404 CENTRAL AVENUE CONDOMINIUM ASSOCIATION ARTICLE I NATURE OF BY-LAWS Section 1. administra Associatio a non-prof 15A of the the manage of 5404 Ce referred t been estat were apper indicated N.J.S.A. These By-Laws are intended to govern the ion of 5404 Central Avenue Condominium hereinafter referred to as the "Association", t membership association organized under Title Revised Statutes of New Jersey, together with ent and administration of the common elements tral Avenue, A Condominium, hereinafter as 5404 Central Avenue Condominium, which has Dished by a Master Deed to which these By-Laws led and labeled Exhibit C. Unless clearly ;o the contrary all definitions set forth in +'.6:8B-3 are il~corporated herein by reference. ARTICLE II MANAGEMENT COMMITTEE Associatio which shal designee b acting as or more pe Number and ualifications. The affairs of the shall be governed by a Management Committee be composed of one designee per Unit, said nq a Titleholder to the Unit, all of which community as a whole. In the event that two ons individually own one Unit, one shall be selected to act as the designee per unit. SECTION 2. General Powers. The property, affairs and business of the Association shall be managed by the Management Committee, which shall have all of those powers granted to it by the law and by the Articles of the Associatio: In addition, it shall have the following powers herein granted or necessarily implied which it shall exero'~ise in its sole discretion: ( ) Operation, care, upkeep and maintenance of the Common Elements. ( ) Employ, by contract or otherwise, a Manager or outside independent contractor to oversee, supervise, and follow3out the responsibility of the Management Committee.ll,Said Manager or said independent contractor shall be compensated upon such terms as the Management Committee deems necessary and proper. ( ) Adoption and amendment of the Rules and Regulation .covering the details of the operation and use of property. (tl) Purchasing or leasing or otherwise acquiring in the nameli of the Association or its designee, on behalf of all Unit) Owners, Units offered for sale or lease or surrendered by their Owners to the Management Committee, with the pr~4oviso that the Association shall not have a right of fist refusal to purchase any Condominium Unit being sold. (C-1) (!e} Purchasing of Units, regardless of type, at foreclosure or other judicial sales in the name of the Association, or its designee, on behalf of all dwelling Unit Owners, subject to any superior rights of any lending institutior)s holding a first mortgage on said property. (~) Selling, leasing, mortgaging, or otherwise dealing with Units acquired by, and subleasing Units leased by the Association or its designee, on behalf of all dwelling Unit Owners. (~) Making of repairs, additions and improvements to or alterations of the property in accordanceiwith other provisions of these By-Laws after damage or destruction by fire or other casualty, or as a result of cfondemnation or eminent domain proceedings. (~) Enforcement of obligations of Unit Owners, including allocation of profits and expenses, and the performingof anything and everything else necessary and proper for the sound management of the Condominium, including the right to bring law suits to enforce the Rules and Regulations promulgated by the Management Committee,~or as set foYth in these By-Laws. The ManagementjCommittee shall have the power to levy fines against the Unit Owners for violations of reasonable Rules and Regulations established by it to govern the conduct of the Unit O jeers. No fine may be levied until the Unit Owner has been provided with at least 14 day written notice of t e alleged violation by the Management Committee. ~ Each fine shall carry a maximum amount of $50.00, and there shall not be more than one fine for any one violati n except that for each day a violation continues fter the end of the notice period, without satisfactory response from the Unit Owner, it shall be considered 'a separate violation. Collection of fines may be enforce against the Unit Owner or Unit Owners involved as if the fines were a common charge owed by the particulari[Jnit Owner or Unit Owners. (~,) Employ a Managing Agent and/or a Manager for the Condominium at a compensation to be established by the Management ~ommittee to perform such duties and services as the Management Committee shall authorize, including but not limited to the duties granted to the Management Committee as set forth above. The Management Committee may delegate to the Manager or Managing Agent such powers as may be necessary to carry out the function of the Management]COmmittee. This section, however, shall not be construed to require the hiring of a manager or managing agent. ~ I (~) Employ any person, firm, etc., to provide the necessa}xy maintenance and repair for herein, including the care of'•all plants, the maintenance of the buildings, park areas,;walks and sidewalks and all other areas under the care o the Management Committee. ( ) Employ professional counsel to obtain advice from persons, firms or corporations, such as but not limited to accountants and attorneys at law. ( ) Maintain businesslike relations with Owners or occupants whose service requests shall be received, considered nd recorded in systematic fashion, in order to show the ac ion taken with respect to each. As part of a continuing rogram, secure full performance by such Owners or occupant of all such items and maintenance for which they are responsible. i) Take such action as may be necessary to ( C-2 ) :~ comply prom~tly with any and all orders or requirements affecting the Association placed herein by any federal, state, county or municipal authority having jurisdiction thereover and order of the Board of Fire Underwriters or other simil~r bodies. (n) Place and keep in force all of the insurance coverage hereinafter described in Article VIII hereof. Z~ addition to the above, the Management shall be governed by~the fallowing with respect to its physical duties and responsibilities: 1~ Common Expenses ._ The Management Committee shall have ~he duty to collect as "common expenses" assessed against each Unit Owner, his, her or their heirs, administrat rs, successors and assigns, a proportionate part of the~Common Expense of the entire Condominium as provided injthe Master Deed and in accordance with applicable law. The Management Committee shall have the power to estimate the cost in advance on an annual basis and to give'notice thereof to the individual Unit Owners in the mann~r herein provided and the same shall be a lien against each dwelling unit. 2t Notice. The Management Committee shall give notice to each such Unit Owner in writing of the amount, estimated b~ the Management Committee, of Common Expenses for the man~.gement of the Association for the ensuing fiscal period, directed to the member at its last address known to th Management Committee of ordinary mail. The said notice shall be conclusively presumed to have been delivered fave (5) days after deposit in the United States mails. If ~n annual assessment is not made as required, an assessment shall be presumed to have been made in the amount of tie last prior year's assessment, and quarterly installments on such assessment shall be due upon each installment payment date until changed by an amended assessment.) In the event the annual assessment proves to be insufficient, the budget and assessments may be amended at any timejby the Management Committee provided that nothing heri?in shall serve to prohibit or prevent the Management ommittee from imposing a lump sum assessment in the case of an immediate need or emergency. Notice shall be delivered on or before December 1st of each year. an instalh Committee assessment balance of stated in after deli than ten { by registe occur. 4 Association designated and in whic~ deposited. ~ be only by ~ by the Manai, agreement m. the Manager for payment 5. Acceleration of Assessment Installments UnOn Default. a member shall be in default in the payment of it upon an assessment, the Management ~ accelerate the remaining installments of the >on notice to the member, and the then unpaid ie assessment shall come due upon the date a notice, but not less than five (5) days ^y of the notice to the member, or not less ~ days after the mailing of such notice to him i or certified mail, whichever shall first Bank Accounts. The depository of the shall be such a bank or banks as shall be °rom time to time by the Management Committee i the monies of the Association shall be Withdrawal of monies from such accounts shall :becks signed by such persons as are authorized cement Committee, provided that a management iy include among its provisions authority for to sign checks on behalf of the Association of the obligations of the Association. Interest and Counsel Fees. The Management (C-3) Committee,jat its option, shall have the right in connection jcaith the collection of this, or any other charge, tojimpose an interest charge at the legal maximum if such paynnent is made after the date certain stated in such notice. In the event that the Management Committee shall effectuate collection of said charges by report to counsel, the Management Committee may add to the aforesaid charge or charges a sum or sums of at least twenty (20$) percent of the gross amount due as counsel fees, in addition to; such costs allowable by law. :•. 6 Expenditures of Funds._ The amount of monies for Common expenses deemed necessary by the Management Committee and the manner of expenditure thereof, including but not limiited to the allocation thereof, shall be a matter for the sole discretion of the Management Committee. 7{ Disbursement. The Management Committee shall take and hoild the funds as collected and shall disburse the same fo'•r the purpose and in the manner set forth herein and ~~as required by law. 8; Reserves. The Management Committee shall not be obligated to expend all of the revenues collected in any accounting period, but shall maintain a reasonable reserve forjamong other things, emergencies, contingencies of bad weather or uncollected accounts. Said reserve fund or funds shall, however, be kept in interest bearing securities ;either short or long term, or in an insured interest behring savings account(s). The foregoing shall not be cons rued to mean that the Management Committee shall not b~ permitted to keep additional cash on hand, in a checking pr petty cash account, for the necessary discharge of its function. 9~ Annual Inspection. The Management Committee shall submit its books, records and memoranda to an annual inspection py the Unit owners and shall deliver a summary fiscal repobt on or before December 1st of each year after the first a~nual meeting. The individual Unit Owners, however, by unanimous vote, may waive such summary fiscal report and/fir the inspection of the books, records and memoranda referred to in this section.. 10~ Accounts. The receipts and expenditures of the Association shall be credited and charged to accounts under the following classifications as shall be appropriate all of which expenditures shall be Common Expenses: () Current expenses, which shall include all receipts and expenditures, within the year for wk)ich the budget is made, including a reasonable a~lowance for contingencies and working funds, e cept expenditures chargeable to reserves, to additional improvements or to operations. The balance of this fund at the end of each year Sall be applied to reduce the assessments for c rrent expenses far the succeeding year, or may bed distributed to the membership as the Management Committee shall determine; (i~) Reserve for deferred maintenance, which shill include funds for maintenance items that occur less frequently than annually. SECTION 3 (Election And Term Of Office. Thirty (30) days after the Units have been transferred to the contemplated Owners, thejfirst meeting of the Unit Owners shall be held. Said meeting shall be considered the first annual j (C-4) meeting of the Unit Owners. All Unit Owners shall be deemed members of the Management Committee and shall hold office so 1Qng as they continue to retain ownership of a Unit. At all meetings of the Management Committee, each Unit Owner shall have one vote in accordance with the provisions of the Master Deed. Upon transfer of any Unit to a new Owner, the new Owner shall be entitled to sit on the Management Committee and shall have one vote on Committee matters. SECTION 4 iVacancies._ If by reason of death or otherwise a Unit Owned is unable to serve in his capacity as a member of the Management Committee, a duly qualified representative of the Unit Owner may so serve, or failing same, the Management Committee may continue to function with the members then available. A majority of any meeting of ~he Management Committee shall be qualified to act on any matter, and a quorum necessary for action shall be the presence of two members. SECTION 5 Compensation No member of the Management Committee shall receive any compensation for acting as a member. However, members of the Management Committee may be reimbursed for out o~ pocket expenses and may be compensatedtifor services rendered to or for the Condominium~in other capacity. i SECTION 6 iMeetinu of the Manaaement Committee. The first meeting of the Management Committee shall be the first meetifig of the Unit Owners as described hereinabove. Thereafter, regular meetings of the Management Committee may be held(at such time and place as shall be determined from time t~ time by a majority of the members of the Management Committee, but at least two meetings shall be held each ygar. Notice of regular meetings of the Management committee shall be given to each member of the Committee b~ mail or telegram at least three business days prior to thg day of the meeting. Special meetings of the Management ommittee may be called by the President on three busin~ss days notice to each member of the Committee given by ma l or telegram, which notice shall state the time, place and purpose of the meeting. Special meetings of the Comm~ttee shall be called by the President or the Secretary i like manner and on like notice on the written request of ~t least three members of the Committee. Any member of tie Management Committee may. at any time, waive notice of a~y meeting of the Committee~in writing, and such waiver shall be deemed equivalent to the giving of notice. Act al attendance by members of the Committee at any meeting~of the Committee shall constitute a waiver of notice by him of the place and time thereof. ~F~'TION 7 Non-Waiver. All the rights, duties and privileges of the Management Committee shall be deemed to be continuing and shall not be exhausted by any single act or series o€ acts. To the same extent, the failure to use or employ any remedy or right hereunder or hereafter granted shad not preclude its exercise in the future nor shall any custom bind the Committee. ARTICLE III OFFICERS SECTION 1Designation. The principal officers of the Association shall be a President and a Vice-President, who shall be me~bers of the Management Committee, and a Secretary and a Treasurer. The Management Committee may also appoin such other Assistant Treasurers and Assistant (C-5) Secretariesias in its judgement may be necessary. Any two offices, except that of President and Vice President, may be held by ~ne person. SECTION 2 Election of Officers. The officers of the Associations shall be elected annually by the Management Committee a~ the first Management Committee meeting of each year, and such officers shall hold office at the pleasure of~the Management Committee, or until his terra shall expiry, which said term shall be for one year or until the Hirst meeting of the following year. SECTION 3. !Removal of Officers. Upon the affirmative vote of themajority of all the members of the Management Committee, any officer may be removed either with or without cause, and his successor elected at any regular meeting of the Management Committee, or at any special meeting of the Committee called for such purpose. SECTION 4. +President. The President shall be the chief executive o~ficer of the Association. He shall preside at all meetings of the Association and of the Management Committee. ~He shall have all of the general powers and duties which are usually vested in the office of President of an Association, including but not limited to the power to appoint committees from among the members of the Association from time to time as he may in his discretion deem appropriate to assist in the conduct of the affairs of the Association. SECTION 5 (Vice President. The Vice President shall take the place of the President and perform his duties whenever the president shall be absent or unable to act. If neither thejPresident nor the Vice President is able to act, the Management Committee shall appoint some other member to do so on an interim basis. The Vice President shall also perform such duties as shall from time to time be imposed jlpon him by the Management Committee. SECTION 6 ~Secretarv. The Secretary shall keep the minutes of all meetings of the Management Committee and the minutes~of all meetings of the members of the Association, he shall have charge of such books and papers as the Management Committee may direct; and he shall, in general, perform all the duties incidental to the office of the 5ecr tary. The Secretary need not be a member of the Management Committee, but may be appointed by the Committee. SECTION 7. iTreasurer. The Treasurer shall have the responsibility for Association funds and securities and shall be re'TSponsible for keeping full and accurate accounts of;all receipts and disbursements in books belonging to the Association. He shall be responsible for the deposit{of all monies and other valuable effects in the same and to the credit of the Association in such depositories as may from time to time be authorized by the Management Committee. In the event the Management Committee shall engage the services of a Manager, the functions of the Treasurer may be delegated to the Manager. SECTION 8 Other Duties and Powers The officers shall have such o~her duties, powers and responsibilities as shall, fromltime to time be authorized by the Management Committee. SECTION 9 Annual Meeting. Unless modified by agreement of all members of the Management Committee, an annual meeting of ~:he Unit Owners shall be held in the City of Ocean City on or about Labor Day of each year, at the f (C-6) of the members. ~ ARTICLE IV I FISCAL YEAR Tk}fe fiscal year of the Association shall be an a calendar y ar basis. i ARTICLE V TITLE TO UNITS I SECTION i. Regardless of the number of individual owners of any separate Unit, there shall only be one vote for said Unit and only one designated representative to act on the Management Committee. ARTICLE VI ., MAI~iTENANCE, REPAIR & ALTERATION OF PROPERTY i ~ SECTION 1.1 Maintenance and Repair. Each member shall promptly perform at his own risk, cost and expense all maintenance and repair with respect to the portion of each Unit owned~by him or each area over which he has an exclusive se, which does nat comprise a part of the remaining ommon Elements, and which if omitted would adversely ffect the safety of the building in which his dwelling U it is located or any part or parts thereof belonging in whole or in part to other members; and each member shall be liable for any damages, liabilities, costs or expenses, including attorney fees, caused by or arising out of his failure to promptly perform any such maintenanc and repair work. SECTION 2. All maintenance, repairs and replacements to the CommonElements to be maintained by the Management Committee shall be made by the Management Committee and charged to 'all Unit owners as common expense. All payment vouchers a~e to be approved by either the President or Treasurer of the Management Committee.: SECTION 3. I or otherwis, portion of ' located. Th~ to the Mana~ repairs, th~~i Association. group of me: matter or t: except with in writing place trash above the C on, over or Owner does Unit Owners shall not have~any right to paint decorate or change the appearance of any he exterior of the building in which a Unit is Unit Owner is responsible to promptly report cement Committee any defect or need for responsibility for which is that of the Except as herein provided, no member or fibers shall build, plant, or maintain any ping upon, over or under the Common Elements, express permission of the Management Committee 'first hand and obtained, nor shall any member garbage, excess materials of any kind on or Ammon Elements, nor burn, chop or cut anything above the Common Elements, over which the Unit cot have an exclusive easement. ARTICLE VII INSURANCE Subject to ~ Committee a; be required obtainable, >rovisions of the Master Deed, the Management insurance trustee for each Unit Owner, shall to obtain and maintain to the extent without prejudice to the right of each Unit (c-~) Owner to insure his own unit for his own benefit, insurance policies in such broad form against fire, loss by iighten}ng, flood, wind storm, vandalism, and such additionallextended coverage as may be reasonably necessary ~n an amount equal to the full replacement value of the improvements erected upon the premises. Such policies shall contain a standard mortgage clause in favor of each mor~,tgagee of the Unit. All such policies shall provide th t adjustment of loss shall be made by the Management~Committee. j ARTICLE VIII t ESTERIOR PORCHES AND BTAIRWAY3 Any exterior porch, stairway or patio to which there is a direct access from the interior of only one Unit shall constituteia Common Element, but for the exclusive use of the owner Rf the Unit, as set forth in the Master Deed. The owners{of the Unit to which same is attached or connected shall make repairs thereto, caused by their own negligence,; misuse or neglect and shall be responsible for snow removal thereon. AY~y other normal repairs or maintenance to or with respect to said Common Elements shall be the responsibility of the Association. ARTICLE IR i ADDITIONS, ALTERATIONS, IMPROVEMENTS BY THE UNIT OWNERS No Unit Owner shall make any structural additions, structural partition, wall change or structural alteration or improve ent in or to his Unit without the prior written consent of the Management Committee and the mortgagee of the said Unit. The Management Committee shall have the obligation `to answer any written request by a Unit Owner for approv 1 of a proposed structural addition, alteration or improve ent in such Unit Owner's Unit within sixty (60) days after such request. Any application to any municipal authority or a permit to make an addition, alteration or improvemen in or to any Unit shall be executed by the Management Committee, only without, however, incurring any liability on the part of the Management Committee or any of them to~any contractor, subcontractor or material man on account 'of such addition, alteration or improvement, or to any person having any claim for injury to person or damage to property arising therefrom. The provisions of this section shall not apply to Units owned by the Grantor until such ;Units have been initially sold by the Grantor. ARTICLE X RIGHT OF ACCESS Subject to the provisions of the Master Deed, each unit Owner shalllgrant a right of access to his Unit to the Grantor and; the Manager and/or the Managing Agent and/or any other person authorized by the Management Committee for the purpose of making inspection and for the purpose of correcting any condition originating in his Unit and threateningfanother Unit or Common Element or for the purpose of performing necessary installations, alterations or repairs to the electrical or mechanical services or other Common Elements in his Unit or elsewhere in the building witthin which the Unit is located, provided that requests fo`r entry are made in advance and that any such entry is at;a time reasonably convenient to the Unit Owner. In base of an emergency such right of entry shall 1 (c-s~ be immedi~te whether the Unit Owner is present at the time or not. ~ AI2TTGLE XI j UTILITIES Water andsewage shall be supplied by the public utilities serving the area to the Project as a whole, and all such expense cdnnected therewith shall be paid for by the Management Committee as a common expense in accordance with the respective percentage interest contained in this Master Deed. Water and sewage shall not be metered separately for each Unit. All other utilities for the respective-Units such as electricity, gas (if there be any), tel phone, etc. shall be metered separately and billed to~each but the placement of trash in the appro- priate Cit+,y collection area shall be the responsibility of the respective Unit Owners in accordance with this Master Deed, By-paws, and Rules and Regulations. ARTICLE XII MISCELLANEOUS SECTION 1~ Examination of Books. Each Unit Owner and each mortgagee of a Unit shall be permitted to examine the books of account of the Management Committee at a reasonable time on business days. SECTION 2~ Notices. All notices hereunder to the Association shall be sent by registered or certified mail to the Management Committee in care of the President of the Assoc.~ation and/or the managing agent, if there be a managing agent. All notices to any Unit Owner shall be sent registered or certified mail to the building in which the Unit is situated or to such other address as may have been designated by him from time to time in writing to the Management Committee. All notice shall be deemed to have been given when mailed except notice of change of address which shall be deemed to have been given when received. S~'CTION 3~ Invalidity. The invalidity of any part of these By-Laws shall not impair or affect in any manner the enforceability or effect of the balance of these By-Laws. SECTION 4! Waiver. No restriction, condition, obligation, or covenant contained in these By-Laws shall be deemed;to have been abrogated or waived by reason of the failure to enforce the same irrespective of the number of violat}ons or breaches thereof which may occur. i S,._ECTION 5~ Arbitration. The arbitration provisions contained;in the Master Deed are applicable hereto. p~RmrCLE XIII AMENDMENTS These By-Laws or any of them may be altered or repealed or new By-Latgis may be made, at any meeting of the Association duly constituted for such purpose, a quorum being present, by an aff~.rmative vote of 100$ of the votes entitled to be cast in person or by proxy except that none of the right of the Grantor hereunder may be removed by amendment to the By-Lags without the consent of the Grantor. (c-9) be immedia~e whether the Unit owner is present at the time or not. , ARTICLE XI UTILITIES Water and ~s'ewage shall be supplied by the public utilities serving the area to the Project as a whole, and all such expense connected therewith shall be paid for by the Management~Committee as a common expense in accordance with the respective percentage interest contained in this Master Dee Water and sewage shall not be metered separately for each Unit. All other utilities for the respective,Units such as electricity, gas (if there be any), telephone, etc. shall be metered separately and billed to each but the placement of trash in the appro- priate City collection area shall be the responsibility of the respective Unit Owners in accordance with this Master Deed, By-Laws, and Rules and Regulations. ARTICLE XII MISCELLANEOUS SECTION 1.. Examination of Books. Each Unit Owner and each mortgagee of a Unit shall be permitted to examine the books of account of the Management Committee at a reasonablejtime on business days. SECTION 2.1 Notices. All notices hereunder to the Association shall be sent by registered or certified mail to the Management Committee in care of the President of the Associ tion and/or the managing agent, if there be a managing a~.ent. All notices to any Unit Owner shall be sent registl~ered or certified mail to the building in which the Unit is~situated or to such other address as may have been designated by him from time to time in writing to the Management Committee. All notice shall be deemed to have been given $ahen mailed except notice of change of address which shall~be deemed to have been given when received. SECTION 3. IInv~ lidity. The invalidity of any part of these By-Laws shall not impair or affect in any manner the enforceability or effect of the balance of these By-Laws. SECTION 4. (Waiver. No restrigtion, condition, obligation,~or covenant contained in these By-Laws shall be deemed t have been abrogated or waived by reason of the failure~to enforce the same irrespective of the number of violatio}'is or breaches thereof which may occur. .ration. The arbitration provisions Master Deed are applicable hereto. ARTICLS XIII AMENDMENTS These By-Las or any of them may be altered or repealed or new By-Laws may be made, at any meeting of the Association duly consti uted for such purpose, a quorum being present, by an affir~ative vote of 100$ of the votes entitled to be cast in per on or by proxy except that none of the right of the Gran~or hereunder may be removed by amendment to the By-Lawsllll,without the consent of the Grantor. (C-9) ARTICLE XIV TsNFORCEMENT The Associa to enforce regulation the followi offending p undone; by position an cost or any before any by law; by The foregoi other poweY um :ion shall have the power, at its sole option, :he terms of this instrument or any rule or promulgated pursuant thereto, by any or all of ig: Self-help; by sending notice to the arty to cause certain things to be done or restoring the Association to its original i charging the breaching party with the entire part thereof; by taking any other action ;ourt, summary or otherwise, as may be provided :omplaint to the duly constituted authorities. ig shall be construed to be in addition to any granted herein and by the New Jersey Act, not in limitation thereof. ARTICLE XV i EXCULPA~ILiTY OF MANAGEMENT COMMITTEE AND OFFICERS Neither the~Management Committee as a body nor any members thereof nor; any officer of the Association shall be personally ~iab~.e to an Unit Owner in any respect for any action or lack of action arising out of the execution of his office.~Each Unit Owner shall be bound by the good faith actio{~s of, the Management Committee and officers of the Association in the execution of the duties of said Committee a d officers. Unless acting in bad faith, no member of the Management Committee or officer of the Association shall be liable to any Unit Owner or other person for 'isfeasance or malfeasance in office. Nothing above the c ntrary, the officers and directors appointed by and on b alf of the developer shall nat be exculpated from their fiduciary relationship. ARTICLE XVI CONFLICT Anything to the contrary herein notwithstanding, if any provision o this instrument is in conflict with or contradiction to the New Jersey Condominium Act, or with the requirements of any other law, then the requirements of said Actor other law shall~be deemed controlling. ARTICLE XVII RIILES AND REGULATIONS The Managea Regulation. accepting ' various as bound by t, these By-L rules and Management nt Committee may adopt such Rules and as it deems form time to time appropriate. By e individual Unit Deed, all Owners and their gnees and successors in interest agree to be terms and conditions of the Master Deed and 's and further agree to abide by any reasonable :gulations which may be promulgated by the 'oitunittee. ~• {C-10) EXIiIBIT D ARCHITECTURAL PLANS BE REDUCED, PHOTOCOPIED AND ADDED AN EXHIBIT ON THE DAY OF SETTLEMENT EXHIBIT E OSED ANNUAL BUDGET FOR OA CENTRAL AVENUE (~MINIUM ASSOCIATION i) Approp~'iation for Contingencies 2) Insurance- Fire, theft, comprehensive, casually and liability 3) Insurace- Flood 4) Miscellaneous Repairs 5) Garden}ng and landscaping services 6) Snow re'~moval 7) Yearly reserve for future maintenance and repairs 8) Water and sewer Philip F. Costabile Estate REV-1500 Schedule I Support DECEASED 104 0 Label F (See ~ instructions A on page 14.) B E Use the IRS ~ label. FI Otherwise, E please print R or type. E Presidential Election Campaig Filing Status Check only one box. Exemptions U.S. Individual Income Tax Retum or the year Jan. 1-Dec. 31, 2009. or other tax year beginning Your first name and initial PHILIP F. If a joint return, spouse's first name and initial ~~,; ~~ . number and street). If you have a P 2009 (g9) IRS Usa Only - Do not write a staple in this space. 2009, ending , 20 _ Last name (Dec. 12/14/09) OSTABILE Last name OSTABILE see page 14. Apt no. 18 GRAIN CIRCLE City, town ar post office, state, and ZIP code. If you have a foreign address, see page 14. LEMOYNE PA 17043-8412 t Your social security number 162 ~ 36 :9922 Spouse's social security number 181 € 42 :9043 You must enter ~ your SSN(s) above. Checking a box below will not change yourtax a refund. n - Check here 'rf you, or your spouse rf filing )olntly, want $3 o y., to this fund (see page 14) LJ You U us 1 Single 4 Head of household (with qualifying person). If the qualifying 2 ®Married filing jointly (even if only one had income) person is a child but not your dependent, enter this child's 3 0 Married filing separately. Enter spouse's SSN above name here. - and full name here. - 5 6a Yourself. If someone can claim you as a dependent, do not check box 6a b ®S ouse ••~~~••~~ c Dependents: Last name (1) First name ................... 2 D endent's social security number (3) Dependent's relationship to you ~ _ 1E Chlltl tOf cnf~ataxcredn (SEE pagE 17) KAITLYN COSTABILE 182:70 :3027 HILD If more than four dependents, see page 17 and check here - 0 child (see page 16) Boxes checked 2 ~ on Ba and 8b _ No. of children on ~ who: 1 ~ lived Wlttl y0U ~ did not live with you due to divorce or separation (see page 18) _ Dependants on 8c not entered above Add numbers a I vtal ~ru~~~~~~ ~~ ~„~~~~ ,.,,..~,.,u .......................... W-2 h F .... 7 91, 2 3 6. Income 7 ............................... orm(s) Wages, salaries, tips, etc. Attac uired B if l d .............................. ............. .... 8a 6 , 7 21 . Attach Form(s) W-2 here. Also 8a b ............................... req e u Taxable interest Attach Sche Tax-exempt interest Do not include on line 8a ............................... ired B if l h d ... .. Sb 3 4 9 . 9a 2 5 9 3. attach Forms W-2G and 1099-R if tax 9a b ........................... requ e e u Ordinary dividends. Attach Sc Qualified dividends (see page 22) ----„ ....................... and local incometaxes t t f t ff ............................... 9b ................ 1 9 3 6 . ..... 0 5 , 15 was witlfheld. 10 -„ ... e s o s a se Taxable refunds, credits, or o ............................... ............ 11 11 Alimony received ..................................................................... le C or C-EZ d h h S ............................... ................. . 12 If you did not 12 .................................................... u e c Business income or (loss). Attac ~ check here If not required uired D if d l h ... ......... - 13 2 449 893. get a W-2, 13 , . req u e e Capital gain or (loss). Attach Sc 4797 F .-- ................ ., .. ... 14 see page 22. 14 orm .................................... Other gains or (losses). Attach 15 ...................... ....b Taxable amount ........... . . 15b t d b l 15a IRA distributions ..................... a 16 b Taxable amount ................. ..... 16b 17 3 4 0 . o u ose, Enc not attach, any 16a a pensions and annuities ,,.......... A etc trusts orations S cor hi ttach Schedule E ............. ..... 17 -11 510 . payment Also, 17 . , , p ps, Rental real estate, royalties, partners l F d h S ...... ............. ..... 18 please use V 18 .................................... u e c e Farm income or (loss). Attach Unemployment compensation in excess of $2,400 per recipient .............................. ............. ... 19 . Form 104O- 19 (see page 27) ................................... 3 4 3 . I 2 6 20 .............................. I b Taxable amount ( ............... see page 27) lob 2 2 3 20a 21 , a Social security benefits ............ 1 Other income. List type and amount (see page 29) 21 35 434. 22 Add the amounts in the far ri ht column for lines 7 throw h 21. This is e 29) a see our total in 23 come ...... ............ 22 2 6 2 9 2 5 0 . 23 ................................................... g p Educator expenses ( Certain business expenses of reservists, performing artists, and fae-basis government FZ 108 24 Adjusted G 24 ............................................... - officials. Attach Form 2108 or 2 Attach Form 8889 count deduction i .. . 25 ross Income 25 .................... . ngs ac Health sav Attach Form 3903 .... 2li 2g ......................................... Moving expenses. Attach Schedule SE ment tax lo lf- f .... 27 5 6 9 . 27 . ................... . y emp se One-half o and qualified plans SIMPLE d SEP l lf .... 28 28 .,• ....................... , , oye -emp Se lth insurance deduction (see page 30) d h l .... 29 29 ................. ea oye Self-emp ithdrawal of savings l .... 30 30 ........................................ y w Penally on ear ient's SSN - id b Reci ..... 31a 31a p Alimony pa e 31) a i 32 32 .................................................... g on (see p IRA deduct est deduction (see page 34) t i l ..... 33 33 ............................ er n oan Student . Attach Form 8917 ction d d f ..... ..... 34 34 ........................... . u e ees Tuition and Attach Form 8903 activities deduction ti d 35 35 .......... . on uc Domestic pro h35 ..... 36 5 6 9 . .--•• ................................ 36 Add lines 23 through3laand32throug 9oD02o°~ 37 Subtract line 36 from line 22. This is our ad'usted rose income LHA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see Page 97. ........................ ..............~-~•~ 37 2 628 681. Form 1040 (2009) Form,oao(xoo9> PHILIP F. & KATHERINE K. COSTABILE ].bZ-3b-77G~ 38 Tax and 38 Amount from line 37 (adjusted gross Income ......................................... Credits 39a Check Q You were born before January 2,1945, 0 Blind. ~ Totai boxes Standard if: ~ 0 Spouse was born before January 2,1945, ~ Blind. checked ..- -~939b b If your spouse ltemizes on a separate return or you were actual-status alien, see Page 35 and check here .. - • -. Deduction for - ................................. • Peoplewno 40a d,~k ar,y 40a Itemized deductions (from Schedule A) or your standard deduction (see left margin - 40b 0 box on line lt you are inaeasing your standard deduction by certain real estate taxes, new motor vehicle taxes, or a net b disaster loss. attach Schedule L and check here (see page 35) -. • ......................................... 39a,39b,or 41 ... ........................................................ aobor wno 41 Subtract line 40a from line 38 ................. ~ • ~ ~--•~•--'-~-'-~-"-"~--~--- can be claimed ae a 42 Exemptions. If line 38 is $125,100 or less and you did not provide housing to a Midwestern displaced individua , dependent. 42 multiply $3,650 by the number on line 6d. Otherwise, see page 37 .......................................................~---• 43 43 Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- ...........................~~•~~~_ 44 44 Tax. Check if any tax is from: a 0 Form(s) 8814 b 0 Form 4972 ................................................. • All others: - 45 Singlear 45 Alternative minimum tax. Attach Form 6251 ...................................................................................... Married filing .............................. - 46 46 Add lines 44 and 45 ................................................................................... . separately. 47 7 8 . Ss,7oo 47 Foreign tax credit Attach Form 1116 if required ...................................... Married filing 48 Credit for child and dependent care expenses. Attach Form 2441 -• ............... 48 jointly or 49 °a~'~'i"g 49 Education credits from Form 8863, line 29 ....................................... • • • ~ ~ ~ 50 widow(er), g,,,aoo 50 Retirement savings contributions credit Attach Form 8880 ........................ Head of 51 Child tax credit (see page 42) 51 household, [] 8396 b 0 8839 c ~ 5695 __ 52 sa,35o 52 Credits from Form: a 53 53 Other credits from Form: a Q 3800 b Q 8801 c [~ 54 ..... 54 Add lines 47 through 53. These are your total cre lts ......................................................................... 55 Subtract line 54 from line 46. If line 54 is more than line 46, enter -0- ................................................... 56 Other 56 Self-employment tax. Attach Schedule SE ............................................................................................. 57 Taxes 57 Unreported social security and Medicare tax from Form; a ~ 4137 b 0 8919 --• .............................. 58 58 Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required • ............................. 59 59 Additional taxes: a 0 AEIC payments b ~ Household employment taxes. Attach Schedule H ..•.....-...... ...................................... - 60 60 Add lines 55 throw h 59. This is our total tax ........................................... s1 35 772. Payments 61 Federal income tax withheld from Forms W-2 and 1099 .............................. 62 2009 estimated tax payments and amount applied from 2008 return ..-,.-...... 62 19 7 5 0 0 . 63 Making work pay and government retiree credits. Attach Schedule M --•.....-..- 63 If you have g4a Earned income credit (EIC) .................................................................. 64a a qualifying child, attach b Nontaxable combat pay election .• ............. 64b 65 s°nedule Elc. 65 Additional child tax credit Attach Form 8812 • •-..-. 86 Refundable education credit from Form 8863, line 16 • ................................ 66 67 First-time homebuyer credit Attach Form 5405 ....................................... 67 68 Amount paid with request for extension to file (see page 72) -•• ..................... 88 89 Excess social secur'dy and tier 1 RRTA tax withheld (see page 72) -• ............. 89 70 Credits from Form: a 02439 b 04136 c 08801 d 08885 --. 70 71 Add lines 61, 62, 63, 64a, and 65 throw h 70. These are our total a menu ....................................... - 71 • 72 ' ....... ... Refund 72 If line li is more than line 60, subtract line 60 from line 71. This Is the amoun you overpal ........::.:.- ~ 73a Direct deposit? 73 a Amount of line 72 ou want refunded to you. If Form 8888 is attached~~c u~ek here .................... Sea Page 73 RouUnp Q Checking 0 Savings - d numher and flIl in 73b, - b numher - C Type: 73c, and 73d, or Form 8888. 74 Amount of line 72 ou want a lied to our 2010 estimated tax ......... ~ 74 75 Amount 75 Amount you owe. Subtract line 71 from line 60. For details on how to pay, see page 74 •-.-• ...................... - You Owe 78 Estimated tax enal see a e 74 ......................................................... 76 1 14 0 . ' t ith the IRS (see page 75)? ®Yes. Complete the following 233,272. 143,853. No Third Party Do you want to allow another person to discuss this re urn w phone 1 0 211 Personal identification -17 0 4 Desi nee Designee's no. - 71.7 - 7 6 - number IN g na,,,e -MICHAEL S . SIGNOR CPA _ Under penalties of parlury. I mare ~~ I have examined this retum and accompanying schedules ararsha~ e' k o Id~to~ a best of my knowledge and belief, they are true, correct, .Sign and complete. Declaration of preparar (other than taxpayer) is based on all information of which prep Daytime phone number Here Your signature piling as SurVl ~~1g Sp gta~ccupatron Joint retum? ' I SABLED 717 - 6 5 7- 0 4 0 7 See page ,5. Ouse's occupation Keep a copy Spouse's signature. If a joint return, both must sign. Date SP ~ Your ETIRED records. Date Check if seK- Preparar's SSN or PT1N Paid Preparar's ' empl°yed [] P 0 0 2 2 917 4 PI'eparer'S~gnature EIN Use Only Seli an Friedman & Co. P.C 23 :2708607 Firm's name (or Phone no ~ 17 - 7 61- 0 211 yours lt salt-em- ' 10 2 7 MU1~Il~IA ROAD 9,0002 PloYed), address, ,o-zo-o9 and ZIP code WOgMI,EYSBURG PA 17 0 Page 2 >.,628,681. 173,636. 2,455,045. 7,299. 2,447,746. 356,977. 17,949. 374.926. 78. 4,848. 1,137. 98 2of2 2009 STATEMENT SUMMARY Si,®27.41 Total interest paid in.2009 $35,725.95 Beginning escrowbalance $L 47984 Property axes said in 2009_......... _ _. $5.249.11 Ending escrow balance NotAppiicabie Ending principal balance $541,985.41 ` FHANA case number IMPORTANT IR5 REGULATIONS YOU SHOUED CONSULT WITH THE IRS OR YOUR TAX ADVISOR IF YOU HAKE ANY QUESTIONS. BANK OF AMERICA, N.A. DOES NOT OFFER TAX ADVICE. please verify thatthe Social Security Number (SSN) listed on the IRS Tax form is correct (see previous page), If the SSN is not correct, please provide us with the correct number immediate{y by writing to us at the address below or calling us at 1-800-669-6807. If you fait to provide us your correct SSN, you are subject to a $50 penalty imposed by the IRS and backup withholding of interest paid to you. Note: Please inRclAu~eR OF AMERICA, N Acount number on all communications to us. CUSTOMER SERVICE PO BOX 5170 SIMf VALLEY. CA 93062-517!3 TRANSACTION HISTORY FOR 2009 Dp0onel Buydown PtM1Mo Amount ipa Princ Interest Escrow insurance Assistance Late Charge Par0a1~~ Date 28D9 Deswiption Beginning Bai~ce 9 ~~ ~ 12 55 DOD90 53 51,827A1 5966.99 SDAD SOAD 50.E 10A0 D1N512D09. REGULARPAYMENT O11D3/2609 01N1/2~9 14,1329 550.00 . x.00 , 50.00 509D 50.08 >~AO A0 50.00 10AD SAO SDAO 01/M12809 01j1412~ MDiC.PDSTiNG CITYTAXPM7 0110'1/2009 111256.521 10A0 6 50.00 091 00 52 111,z3s.521 50,OD 50.00 10 50.00 SOAO 50AD 02lfbJ20D9 REGULALI PAYMEtitT 0210tROD9 54.13299 5100.0D 56M.o 11W.00 . . SOAD 50.00 ~ 00 MISC.PDSTING Nr 0210112l1i19 03181/2009 $4,13296 3299297 ~ 59.60. SOAD mA0 10AD x. 10.00 X1009 031051~D6 RE6UTAR INIYME MISC.POS'fING 09/07/2009 S60A6 ~ ~~~~ 0 S4fiBgg SoAO $p,OD zoo SDAD 1DAD 04/83120D9 REGULAR PAYMENT 04/01/2009 14.13259 550A0 1677 S9DAD SOAO SO.Iq SDAO SOAO 1DAD x,00 A0 g4/D:y2009 MISC.POSTING Q9/Ot/2~9 09/01/2009 256.51) (51 $9.OD 50A0 {1121~51i 10.011 SDAO D SD.61i Satl0 50 ~ 09/1312009 CRYTAXPMT REGULAR PAYMENT ' 05Nt(21M19 . 14.132,99 $601.04 52,98496 A 54.99 SD911 .... SOA9 00 50 50A 10A0 $0,OD SDAO f 091~fY009 MISC. POSTING 85/01111109 St09.00 5.100.0D 1 P SO D. 52 90 . ENi R ~10~ B ~ , ~ ~~O ~ Sp,~ SOAD 30A0 p5/9 MISG.POSTMIG 11YERAGERtTIIND O6J01 ~ 06/p1/2009 (SSZ9.67) 111• ~ 6 63 1 It520.671 99 5458 10AD $OA6 SOA0 50,00 30:~ 59AD 1A00 ~ 0)1068009 REGULAR PAYMENT 07/D1120119 10.13299 55M.97 2.97 . . SDAO 0710BIZ~ 0`;IYQ09 MISC.POSTING Ci!'YTANPMT D7N112009 ISt.388.04} 50.00 10AD 227 ISt,388.691 36 $411 SOAO SO.W SO.W ~~ 50.00 ~~~ 961 REGUTARPAYMENT 00/01/2009 S9,O7T.98 11.73 SZ97 0 . ~~ 10.OD ~ ~. 50.00 BBl0611009 •Oy/R9lzm9 MISC. pOS1'R9G REGUtpRPAYMENT ~n,36 m S2,g87~ 1DAO 141198 ~ SA.~ ~ SOA9 5096 10AD SoAD SDAD ~~ • 6+bsc. PDStiNG o9ro71zo99 D9 1 51a1AD 90 D77 S9 S?ooi 5702A0 12.`183.60.. 1917.38 10AD S9A0 ~ 10.0D 70(OZ120M REGUI.ARPAYMENT 0 /20 1010 1010112009 . . 1t,D0D.00 11.oo0.QD SDAD SOAD SDAO ~'~ so9o ~ ~ 1111 10/t9?20M NDSC. p0S~ tUTYTAxPMT 70101/20D9 is1.36e941 Sa9D S69D 959 53 IS1.369~09) $954A7 . 50.00 50,00 10A0 SOAD 50.00 /1/D9/2~D9 REGULAR PAYMENT 11/iif/20~ 54.130.07 0 5717A? OOOA0 S1 . 52, 56.E SDA11 ~'~ 59.OD ~'~ ~ it/0412~9 . MISGPDSTiNG T 11/018809 12)d18009 51,O~A 10.13DA7 , 51za36 52,999 5469'07 10.OD ~ ~ SOA0 ~~ ~ 12/0112009 . REGt11J1RPAYMEN ' 121018009 17fiN1.W 7 ~~ ~~ ~ ~~ 1210'1/2009 pRgC,pOS rING i,985A1 S54 51~ 2009 Ending Balencs WESTAB GENERIC Local Earned Income Tax Re#urn 2009 Taxpayer's name and address COSTABILE, PHILIP F.(Dec. 12/14/09) & KATHERINE K. 18 CRAIN CIRCLE LEMOYNE, PA 17043-8412 Income 1. Gross earnings reported on W-2's ....................................................................... 2. Allowable nonreimbursed employee business expense ............................................. 3. Other income/loss ............. ................................................................. ............... 4. Losses from business, profession, farm, etc ............................................................ 5. Taxable W-2 earnings • . ..... ............................. .................................... 6. Net income/loss from business profession, farm, etc ..,..,..• ....................................••. 7. TOTAL TAXABLE EARNED INCOME ............... ... ~.......-..................... Tax Computatian 6. Tax rate ...................... ............................................... 9. TAX LIABILITY ................................................... Payments and Credits i0. Tax withheld .................... ...................................................... i1. Estimated tax payments ..................... ....................................................... 12. Oreditforprioryearoverpayment ••~-• •••••••-••••--•••-~••••°••••• 13. Creditfor tax paid to Phikadelphia•.--,• ..................................................................... 14. Credit for tax paid to other states ........................................................................... 15. Other credits .............................................. ........................................................ 15. TOTAL PAYMENTS AND CREOITS • ........................................................•.............. Refand or Amount Due 17. Tax due ..................... 18. OccapationaUothertaxes • ••••• ............................... 19. Interest ..................................... .................................................................... 20. Late penalty .........................•--............. ................................................ 21. Amount due ...................... ............................................. .................................. 22. Overpayment ............................... ................................................................... 23. Amount applied to next year's estimated tax ........................................................... 24. Amount due with return •,• ..................................AMOUNTYOU f)VifF .................... 25. Amount to be refunded ...........................................................................REFUNt; Your social security number 162-36-9922 Spouse's social security number 181-42-9043 Part-year dates from to Taxpayer from to Spouse Tax a er/Joins Souse 1. 2. 1 189. 3_ 8 044. 4. 5. 6 855 . 6. 7. 6 855. s. 1.4500 % 1.4500 °~ s. 99. 0.' t0. ti. 12. 13. i4. i5. 16. 17. ~ ~ 18. i9. 20. 21. 99. o. 22. 23. 24. 99. 0. 25. 0 . MAIL THIS RETURN T0: WESTAB 3607 ROSEMONT AVE., P.O. BOX 656 CAMP HILL, PA 17001-0656 Under penalty of perjury, l declare that I have examined the return and to the best of my knowledge and belief, it is true, correct, and complete. Filing a8 SLti:'V]:Villg Spouse Date Spouse's Signature Oate Taxpayer's Signature Prepared by Other Than Taxpayer Date Seligman, FrietlEnan & Co . , P . C. oa900°za-oe 10 2 7 MtJMMA ROAD WORIiRLgYSBURG, PA 17043 RECIPIENT'SfLENl7ER'S name, street address. city, stale, and ZIP wdo 01/01/ WeAs Fargo Bank, N.A. ~~-~- Return Mait Operations ~,~. PO Box 14411 Des Moines, IA 50306-3411 TTY DeailHard of Hearing: (800) 934-9998 Fax #: (886) 278-9179 ^ CORRECTED (it dtackvd> Phone #:{866) 234-6271 PAYER'Sl80RROWER'Snome, stree! address, dty, stale, and Z4P wde PHILIP F COSTABILE KATHERINE K COSTABILE 18 CRAW CIRCLE LEMOYNE, PA 17043 I ~ 'Caution; The amount shown may riot by hnry deoucUbJe by yotr: Umits based on the Bart amount artd the cost end value o/Ihe securedpropertymay appy. Also, you mey ony deduct interest to tho eMent r7 wasinaufed by you, vdually' paid by you, antl no! reimbursed byenofharparson. OMB No. 15atroaol MORTGAGE 209. INTEREST Substitute Farm laso Capy S F r Pa er RECIPfENT Facleral idvngi'raUon no. ~ y 94-1347393 The intormagon ar boxes PAYER'S soda) security number ~ 1, 2, 3, and 4 [s important tax information and is , X)()(-xx-9922 being furnished to dte Internal~Revenuo Service. ;t Morlgage~Mterest received from tf you are required to file payer(sHoarrdwer(s)• $23 139.10 a return, a nvgiigance , penalty or other sanction 2 Prints paid on purchase of prumipal residence may be imposed on y«. if ~~ (See Sox 2 on back) ~~ the IRS detormtnes that . an underpayment of tax 3 Rehrnd of overpaid iMVrest results because ycu (See Box 3 on back) ,'6(),QQ overstated v deduction for ibis mortgage interest or d Mortgage Insurance Premiums $Q,QQ for these pWnts or because you did.not report ~mis reNnd of Accountrwrriber (optional) 5 Real Estate'faxes interest on your return. 0177890217 $6,799.59 Form togs substdute SEE BACK SIDE FOR IMPORTANT INFORMATION {Keep for your records) tJepartmenl of the Treasury -internal f2everara Service Please consu{t a Tax Advisor about the deductibility of any payments made by you or others. $413,888.02 BEGINNING BALANCE $108.590.50 PRINCIPAL APPLIED $305,297.52 ENDING BALANCE 18 CRAW CIRCLE LEMOYNE PA 17043 ,$3,039.Si TOTAL CURRENT PAYMENT. $578.71 ESCROW PORTION OF PMT _ -2009 INTEREST DETAIL____...~_._._----------_____~.~~--- T4TALINTEREST APPLIED 2009 $23,139.10 2009 MORTGAGE INTEREST RE+CEt1fEA FROM PAYEWBORROWER(S) $23,139.10 if you have questions about your loan, you can use our automates! "Personal Mortgage Information Line" at the tot! free ntJmber listed at the top of this statement. By selecting one of the options listed, you can receive information regarding: - Taxes paid year-to-date -The amount & date of your last payment - In#erest paid year-to-date • - Other valuable information Wetls Fargo Home Mortgage, a division of Wells Fargo Bank, N.A., be{ieves customers (~me first. You can always count on us to provide theexcellent service you've come to expect. o920aTraWt74 .\CNWF00aT ETN14Ca2d 3 ------ (1 w ~' mE ~; o ~ !E c ' ~. W V .- .nl. a6 E ~ O: U. .~ ~.~ ~ ~. ~ ,m ~ • ° Q :~ .~ ci ~ w ' ic~ ~4 \ E ~O ~ 3 m m .c ;o itiv ~. ~ m mod: ~ ~ _~ Ea ;E -~ . o ~ ~ ~. '£' 3 a ~. ~ E 0 ~.~ E£ ~ ~ ~ m r.. o ~ ~, ' ~ ~ aY •N~T ~ a3 U ~ d Q ~L1... ~y .= 7S~ ~Y d O E ~ ~ ~ N m U ~ ~ N m. Rv ~~ t6 ~ G~f ~ -~ .c C E m ~~ C. T ~! ~ ~ . > ? 7 ~ p Q G~ ~ '~ ~ O jam.=0: ~ ~ :o ~ ~ q C ~ C ~~ ; ~ ~. CA ._ ,Y Q r ~~ C ~ a+. f6 ' U - W J. ~ T' 0 ~ rc 'T, 00 ~:~ 3 j O m ~~~> d C 4 c •~ o a ti D o E ~ m~ ~ Vic; my ~ '~ i , W ._ . ,.~ + M 2 ~ ~ ' fC m ~ ~ ' ~- E iii w 3 u .'.~; ~? Q ~ ~'. ~ ~ o ~ _ ~: _ '~ ~ ' O. ~' ~ ~m C S C c '~ w. V Ll i w: v Q O ~ o it ~ fC c~: GG ~ m F- W P+~ (s+ ~ ~ m 0 +° a ~~ ~ ~ tt ~ 0 °- ~ Z : ~ ~ ,-~ .-~ : O O .0. :~ ; .,q ~,A$T wz~.rr ~I~ID `r~sTAP~1EraT I, L~IIILfP F. Ct~STFiI31LE, of Cu.rnbPrlanci County, per~aisylvania, declare t~^~is Co Yee my Last i.Vi11 and Testament, hereby revoking any and all Wil}.s by me anytime here#~ofaxQ made. FIRST`: I c#.ireet tY-at s-~11 of my funeral expenses kla~gaid.~ ~ ~ •:-;~ } `'-f~= f the Unified G?`r}o~ ~ SECU~}D: i direct t1'tat the amount o ~ ~.~~ ~ stia7l be paid L•o PHILIP P . CC?sTAIIILE I'ArtIL'f `I'I~F3S'T', to h~~n ~.• ~:~, -- ~., Trust €car the tnortc~Fit of my ~~ife, IiATE3~+F{.TI~7L 1{. C4S'x`A~IL~~3.`he c? - ~ .f=~ri :~-~ • ~ n to the bene€it of my wife, KA.THEFtXNE I4. ~ Trust shall pay• Ct}S~'t~BILE, dux~.ng her IifeCime alt income aid, at L'he e~S,scr~t.ioxi of the Trustee, all Isrincipal rzc'c~:ssa~yr for the suppoxt, ~oTn€ort, healt~i, r~elfare,• maintenance and ettjoyinerlt ©f my wife', i{A`PHERINE K. CC7STA13SLE . fiHI~: Upon i:he death of my ~~ife, KATF3FRIT~F,L K.. C{?,S'TAF37T,F, thc~ reinaini.ng Trust pri~riicipal from al.l Trusts shat.i be paid to mX children pursuant to the ftgllocsing terms: 9'hc Trust (s} shall be divided £i.€ty perc:or~t {5fl~} to my san., ~I~[ILIP :A.. CQS`1'A£tiLl:, T.l', and fifty pexcen't {54~) to my daughter, K~,ITr,Y~+I C45TABI~;E. N'OCiRT~i: 'ro my tvffe, IQATHfsftI~E K. COS'I'ALiILE, I give, devise and bequeath. all of the rest:, re~kdue and remainder of my Estate, real and personal., of wlzai:ever nature anc~ wheresoever situate. Zf. my ~tiie, ii31THEKINE K. COS`I'ABII,E, does not survive me then the rest, residue anal remainder of my Estate, read. and pezsonal, o€ whatever nature and. wheresoever situ2~tc, shall be sold and liquidated by mY ExecutprfE,cecutx~x and the prdc:eec~s t31eYG'~xt7A1 shall be distri}auted fifty pex'cent t5Q'~) to mY son, PHII,IB A. COS'1'kgZLE, Z i , and f i €ty peree~-it 1 S f3 ~ } to ~1~r daughter , KAITLYi~ (~05`~A,BI LE . FT~'Tl-T: P•iy ExecutorlExecutrix shal-~-. establish a '~xust or' Trusts in a fir~ancia7, insLiE:ution (s) at my ErecutorlF.xecut~ciY discretion. The Trustee shall be t~xE~ ~:~~sL1NG of Harrisburg, .~~enns~,~lvania. If. BRET KErSL1idG, cannot act as Trustee for any reason, then I appoint RIC~I~KL~ ItEE'f`E!2 0£ biethanicsburg, Pennsylvania Co be TLUStee. All Trustees Warned Herein shell serve vrithou~: bontl. SIXTH: The Trustee shall pay for my c~~ilclrenlbeneficiaries from respeci;ive Truss: SZrares the Trust income and ~r$ncipaX as fo~.Zows : ' p,. Z~ the event that a child/beneficiary pursues secondary eduCa.ti.on, then j One-half {1!2} of pr~.rc~zpal anr~ accumu7.ated eaxning's, inl:er~st and da.~ridends t1lereon, calculated from thu date. of rt-y death, shall bye Made available trhen needeclr at. the di6creLion of the' ~rust;ee, for. secQndai:~ educ:atit~n; trade school, college; graduate schoo}. and the like, i..ric.~utiing expenses for. tuition,, roans. board and oth~r.rel.atet~ expenses. The Trustee shall have the digcxeti:on t.o utilize additional TrUSt flind.s in excess oi- the amount ser. forth in this paragraph in t}~e event that additional. funds arP necessary for t12e direct ?. e~~~enses z:cldted to educatiozial pursuits of each child/.beneticiar~j; 2) Ta distribute one-half (Ij?.? ox each child's/benefkciaryrs remaixzir~g Trust principal •~~thez3 Path a~:l:ains the age of trvet~ty-five {25) years f.ox business, medical, resiaentia~, uses, subject to the 't'rustee's discrati.on; 3} To distx'ibute L'he remaining principal and accrued zz~tereat whezt eacYz attains the age of thirty (3 (~) ~+ears , SE'V~N~S: A~iy income nat expended as groaided herein shall be accumulated and added to the Trust Erri:ncpal. The Trust shall terminate on the date .when there is nc~ living beneficiary of ~ti3,~ie under the age o.£ tY~irL•y (3A} years. qii ~ucli termination, the Trust property., iricludxng accumulated and. usitlisburseci income.. shall crest in aria be distr~.butetl to -ny l~ene~z~ciaxies in equal shares or to I:ht;ir respeeeivc issue per. stir~es. $IGHTfi. Iin. the went arry benefx~ar~r' predeceases rye or predeceases any disCxibuCzon due tzim/her, then said beneficiary's share shall }~e di icr~ibutpd to leis/he-t issue per stirpes. I3XNTH; In the event tl2at aZl benefieaax~.es hereunder do not survive me or L--heir distribution hereunder, then in that event, I give devise and bequeath. a}.i ~o~ the rest, r~siducs and xer~ai.nder of rmj l~state to the 'Thomas H. Starzl Transplantation Institute at 3 khe Unittezsity o£ 1'a.ttsburgh t~eda.cal Center. TENTH: The ixit+~rest of bene£ieiaries in principal. or incarne shall nat be subject to the claims o£ arsy crediGoxsr any spouse for alimony or supper-rt, ar othcrs~ ar to legal process, and may Wert be inzroluntarily alienated err encumbered s;ccept that nat~~iny in this artic3e shall~precluc~e the assignment, of all err any Part ©f a beneficiary's interQSt to hisJher descent~ants. ELEVE2J`!'i-i: Tn dandling the Trust estat2F the 'Prustee shall have complete power to manage, invest, sell and do and perform any and all athex acts and. th~.ngs deemed by the Trustee necessary ar advisable in the manageme-~t of the Trust estate that -nay. be done by an ab~a~.~iL•e owner of property ncAuding the sale, ~listx3.butioti a~d~ax rett';ntian gar thebeiietit af. the bane€iciaxzes of any property here~:~i andlar the acqui.9ition: of any Rdditivxia~. assts '1`WE;LI'Ttis My k~neficiaries as data=mined i:n accordance with Ghe gravisians Y~erez:n may se3.ecL• sp~eca.f.ic items of my fistate to be retai~cxed. by them. The fair market ~talue of those items shal3. be determined by my bexzeficiaries or key tie FxecutaxfExecutr~.x if they are unaks~.e l:Q agree ate a fazr. market value. The disi:ributioxi due any of my berieficiara.es shall be xeduced by the .fair market valise of any items ch4sen.by each of them. TgIRTEEN`t1I ; T txcreby nominate. constitute and appoint mY wife, KATHERIATE K. COSTA73zbF, to be the executrix of my Estate. 4 Lf my wife, K~!TH}3RIi4TE K. Cc7STIiBILE, car~.not act as Executrix fay any rsason then I appoia~i: my sQn., P.HII,IF' A. COSTABIL,E, I I , tty ba the Bseeutox. The E:cecutriYfr:xecutor shal.I serve ~~~iL•hou~. bond. III 4~JIThTESS ~~~1~;I~ROF, I have heretiritc set my hand and seal to theve fa.ve f5} typeWri#:ten gages ae, and for, my i,ast Sail. and Testament, ttlis _ "~ tiay of. ~~:~~P 3,~3 r~~~.,`2409. ' T~,~ ^, /~ P I ' F . CQSTA}3I~.,I: 5 Gammon*rrea~.th of Pennsylvan~.a Canty +a~ Uaupha.n I, JPHxX,TP ~'. C4S'1"ABILE, the Test~taz vrhose Warne is S~ iified the attac3~et3. or foregoi-rig insi:rument, having b~,en fully ti according to law, do he;ceby acknowledge that I signed anti executed the instx~tm~nt as any ,Last Wa1X and '1'eslaamerit, and that. I signed it willingly and as my frame and voluntary aet for the pu~oses therein expressed. Svtaxn to or affirmed and a.ckiZataledr~ed befa~e me by PHxL20U9. C45TABI.LE, the 'T'estator, this E1~ day of .~~ .. ~.. _ ~'- . PHI IP ~. COST~F3II,H l;ary ublic" 1 CWri iVWEA1.7H.4F PENS. LYi'~11A ~lT{4~i,~: ~.sEAt. ..:...:. . 3AfWC~ L. kiEADATH 'i~1+j:.~u~c iiiEy vi Harrisb~ug, i~~atipli~i:G,. ~Sy ~9a11C~5~Ofl ~i1>~* ~!~ ~~ ~Y+!?~. ~c~mmonwealth of Perltlsylvan~a County' of. Dauphin and ~w., ~ S}..~u k- __ the 5•ri tnes~es whose names are signed to tha attached or foregoing instruroex~e, being duly qualified according to lave, dry dept~4e and say that vie were present and sa~r the Testator sign and execute the instruncent as hxs Last still and Testament, k.hat the ~'sstator signed w~l~.ingly and e3tecuted iL• as hip; i:~-ee and vo3.urxta~y act L•or the purposes therein expressed; that each suk~scriba.ng witness zn the hearing and sight of the Testator sigcted tha Will ac a witness, anc~ that to the best of our ~Cno;•rladge Che Testator z~as at the tzme eighteen t28] or mare years of ache, ¢f sound ~e~inci anti under na constacaint or undue influence. Sworn t4 QX of f irniec3. and s±abscri~ed k~efore me by anti t~ ~ , tivitrie ses; this _~1 Y itft ~~ a~..f ~ ~ 1 nn ' - '- _~. ~j~. t~ ~ri~ses . .~- • c~~.~` -----. IJOk 'y Public . Vtitri. s C ~tOd~W~AtTH 4f P£Flti8Y~.YANi~i ~1i3iA~i SERI. lANiS',E ~..1JI~ADl~'~f, Notary Pa1i~; • t~ty:uR.#iarrlsti~B. Dat-p~in Gow-ty sSion expires ~~ 3fl, 241 Page 1 of 2 From: (717) 761.0211 Pan Morgan SFdcomrpam 1027 Murma Road Wortnleyaburg, PA 17043 Origin ~: GTYA {. Ship Date: 11MAR11 ActWpt 2.0 LB CAD: 9923686IINET3130 ~II II~III~IIVII~IIBIIYI SHIP T0: (717) 240-6100 69.L SENDER Register of Wilis Cumberland County Courthouse 1 COURT HOUSE SQ CARLISLE, PA 17013 y + ~1I~r~ yy' ' }4S 1i1'L ~trK~ L ~ ' i i.., ~ i ,i r,~ ~, t. r~r ,~ i ~~ t ~ ~ ~I ~~'t~,'~r wi ~f ai,,' '~~ re rri ,~ry~'~~ I r•L~I~~i~irti~~ I~~,.' I'I~ ~r r, I ~. ik ~~ ~1 r, ~~M:i ~ d 1~,tr ~~ ' ~ . ~~r ~ ~ I 16 GTYA ~r ~II~II~I~I~IIII II~~I~II~IIII~III~~ After printing this label: 1. Use the 'Print' budon on this page to print your label to your laser or inkjet printer. 2. Fold the printed page along the horizontal line. 3. Place label in shipping pouch and affix it to your shipment so that the barcode portion of the label can be read and scanned. Warning. use only then panted ongu~ai label for shipping. Using a photocopy of this label fur shipping purposes is fraudulent and could result In additional billing charges, along with the cancellation of your 1=edEx ac^runt nu~~iUer. Use of this system constltutes your agreement to the service conditions in the current FedEx Service Guide, available on fedex.com.FedEx will not be responsible for any Gaim in excess_Qf EJSp per package, whether the result of toss, damage, delay, non-0elivery,misdelivery,or misinformation, unless you declare a higher value, pay an addtional charge, document your actual lass and file a timely Gaim.Limitafionsfouad in the curtest FedEx Service Guide apply. Vour right to recover from FedEx for any loss. including intrinsic valueof the package, bss of sales, income interest, profit, attorney's fees, costs, and other forms of damage whether direct, incidental,consequential, or special is limited to the greater of E100 or the authorized declared value. Rewvery cannot exceed actual documented Ioss.Maximum for items of extraordinary value is E5oo, e.g. jewelry, precious metals, negotiable instruments and other items listed in our ServiceGuide. Written claims must be filed within strict time limits, see current FedEx Service Guide. n ^-. ~ _ _ r-- ~ - . :-rl _ ,_' _ =p ~ 1 77 ~', =L C7 ..,. '7~ -r-- r ,!ice - - r1 ~~~ r- ~'~ ,__. ^•l https://www.fedex.com/shipping/html/en//PrintIFrame.html 3/11 /2011 Seligman, Friedman & Company, P.C. F~~Co~ANY ~ ~ ~ 1027 Mumma Road, Wormleysburg, PA 17043 T 717.761.0211 f 717.975.9750 1423 N. Atherton Street, State College, PA 16803 T 814.238.8474 F 814.234.3523 96 S. George Street, Suite 350, York, PA 17401 T 717.843.0040 f 717.843.0075 73 E. Forrest Avenue, Shrewsbury, PA 17361 T 717.227.0004 F 717.227.0052 10 Wyntre Brooke Drive, York, PA 17403 T 717.741.0004 F 717.741.0361 March 15, 2011 info@sfc-cpa.com www.sfc-cpa.com Register of Wills Cumberland County Courthouse 1 Courthouse Square Carlisle, Pennsylvania 17013-3387 Attention: Chris RE: Estate of Philip F. Costabile SSN: 162-36-9922 Dear Chris, You recently informed us that when we filed the Inheritance Tax Return for the above estate; we had not included the required processing fee. Per your instructions, we are enclosing the $15.00 check to cover this fee. Thank you for your assistance. Sincerely, SF&COMPANY j~WV ~ ~ - =z: ~ ; Michael S. Sig or, A, ABV ;;gin ~,; - _~ r-n -- 1j MSS/kdl `"" ~ ,-~ --z ' ~~~~~ ~~ rte r __ :_ ~-rt Enclosure ~' ~: ~ - ' D - --n c.