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Notice to Recipients

Summary. The information, projections and disclosures in (i) this document, (ii) any materials provided in the Data Site (defined below), and (iii) any verbal communications by Kolter (defined below) relating to, or in connection with, the aforementioned matters (collectively, the “Presentation”), are being furnished on a confidential basis solely for informational purposes regarding The Kolter Group LLC, its predecessors and affiliates (collectively, for the purposes of this Notice to Recipients as well as the Presentation, “Kolter”). The information contained herein does not purport to be all-inclusive or to contain all of the information that a (current or prospective) principal or agent counterparty (each a “Counterparty”) in a (existing or potential) transaction (the “Transaction”) may require. In all cases, Counterparties should conduct their own investigations, due diligence, and analyses of Kolter, the Transaction and all other information set forth in the Presentation.

Additional Information Available Upon Request. Upon request to datarequest@kolter.com, or as otherwise initiated by Kolter, Kolter will make available to Counterparty a data site (the “Data Site”) that may contain materials relevant to Counterparty’s evaluation of the Transaction. The contents of the Data Site may change at any time, with or without notice to Counterparty, and such changes may involve without limitation the addition of new materials and/or modification of existing materials. Counterparty is solely responsible for remaining up-to-date on the contents of the Data Site. Notes on the methodology for all calculations performed by Kolter herein (including, without limitation, those pertaining to the performance of Kolter’s historical, current and future investments) can be made available upon request, as can any third-party sources for estimates and information provided herein.

For Discussion Purposes Only. No Solicitation. An offer to sell or the solicitation of an offer to purchase securities by Kolter will be made only by means of a Limited Liability Company operating agreement (or its equivalent) and a subscription agreement (if any), all of which will be provided in writing by Kolter (collectively, the “Offering Documents”). Unless attached to the Offering Documents by Kolter, the (i) information in the Presentation is for discussion purposes only and shall not be a legally binding agreement, except with respect to the provisions of this Notice to Recipients; (ii) information in the Presentation is not, and may not be relied on in any manner as legal, tax, investment, accounting or other advice; and (iii) the Presentation shall not constitute an offer to sell, or a solicitation of an offer to buy, any securities or instruments or to participate in any investment strategy with Kolter, nor shall there be any sale of securities in any state, country or jurisdiction in which such solicitation or sale would be unlawful prior to registration or qualification of the securities under the laws of any such state, country or jurisdiction. If such an offer is made, it will only be made by means of the Offering Documents, which would contain material information (including certain risks of investing in the applicable transaction) not contained in this Presentation and/or Notice to Recipients and which would supersede and qualify in its entirety the information set forth herein. Any decision to invest in any transaction should be made only after reviewing the Offering Documents, conducting such investigations as the Counterparty deems necessary and consulting the Counterparty’s own legal, accounting and tax advisers to make an independent determination of the suitability and consequences of an investment in such transaction. In the event that the descriptions or terms described herein are inconsistent with or contrary to the descriptions in or terms of the Offering Documents, the Offering Documents shall control.

Forward Looking Statements. The Presentation contains “forward-looking statements,” which can be identified by the use of forward-looking terminology or the negatives thereof. These may include financial estimates and their underlying assumptions, statements about plans, objectives and expectations with respect to future operations, and statements regarding future performance. Forward-looking statements can be identified by, among other things, the use of forward-looking terminology such as “believes,” “expects,” “seeks,” “pro-forma,” “anticipates,” “intends,” “plans,” “estimates,” “forecasts,” “projects,” “future,” “may,” “will,” “could,” “should,” “would,” or other variations or comparable terminology, discussions of strategy or intentions or other statements that necessarily depend on future events or reference future periods. Examples of forward-looking statements include, but are not limited to, statements about the Transaction’s expected future financial results and/or position; revenues; costs of construction, services and other expenses; business plans (including, but not limited to, existing or in-place: (i) entitlements or (ii) acreage or (iii) proforma lot counts); strategic objectives; financing plans; and statements about the real estate market. Forward-looking statements are inherently uncertain and necessarily dependent upon assumptions, estimates, and data that may be incorrect or imprecise and involve known or unknown risks, uncertainties, and other factors. Kolter cannot assure any Counterparty that estimates, assumptions and/or projections will be correct and, if such estimates, assumptions and/or projections are not achieved or are proven invalid, actual results will differ from those projected, and such difference may be material. Counterparties should not consider Kolter’s forward-looking statements as predictions of future events or circumstances. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Notice to Recipients. Kolter disclaims any obligation to (i) update or review any forward-looking statement in the event it later turns out to be inaccurate as a result of new information, future developments, or otherwise; and (ii) update investors on any factors that may affect the likelihood of realizing the Transaction’s expectations.

No Representations. No Reliance. Assumptions. Nothing contained in the Presentation is, or shall be relied upon as, a promise or representation (i) as to the past or future performance of Kolter or any of its projects; or (ii) of any financing, organizational, partnership, purchase and sale or any other agreements summarized therein. The Presentation may include certain statements, estimates, projections, and information regarding the markets in which Kolter transacts and/or derived from third party sources, all of which have not been independently verified by Kolter. While such information is believed to be reliable for purposes used herein, no representations are made as to the accuracy or completeness thereof and Kolter takes no responsibility for, and has not independently verified, any such information. Kolter’s statements, information, results and projections in the Presentation are based, in part, on numerous assumptions including calculation methodologies, the national and local economies, competition from applicable projects, the market in which any applicable project is located, various methods of project valuation, and interest rates. Kolter’s statements, information and market analysis regarding the investment opportunity in the Presentation represent the subjective views of Kolter, based on assumptions Kolter believed reasonable, but that may or may not prove to be correct. Kolter cannot assure Counterparties that Kolter’s views are accurate, and nothing contained in the Presentation is or should be relied upon as a representation or promise as to future performance and/or conditions. There can be no assurance that any of the trends described in the Presentation will continue or will not reverse. In considering any information contained in the Presentation, Counterparties should bear in mind that past events and trends do not imply, predict or guarantee, and are not necessarily indicative of, future events or results. There can be no assurance that the Transaction will achieve comparable results, implement its investment strategy, achieve its objectives or avoid substantial losses or that any expected returns will be met. Industry experts may disagree with the assumptions set forth in the Presentation and with Kolter’s views of the market and the Transaction’s prospects. The information in the Presentation is summary in nature and has been included solely for illustrative or discussion purposes. Any information regarding the Transaction should be independently verified, and no representations or warranties (express or implied) are made as to the accuracy or completeness of any information furnished by or on behalf of Kolter, who shall have no liability to any person arising out of or relating to the use of the information and/or any errors therein and/or omissions therefrom. Actual results will vary from Kolter’s results and projections herein, and such variation may be material in one or more respects. Each Counterparty, except as provided in the Offering Documents, expressly disclaims that it is relying upon, or has relied upon, any communication, promise, statement, inducement, information, representation and/or warranty (express or implied) contained in the Presentation or otherwise regarding the Transaction. Each Counterparty represents that it shall rely solely on its own information and judgment in making the decision to enter into any transaction. The Presentation presents information as of the date it was created. Kolter does not intend to update, amend or otherwise revise the Presentation following its creation. Neither the subsequent delivery of the Presentation nor any sale of securities shall be deemed a representation that there has been no change in the affairs, prospects, attributes and/or other information regarding the Transaction since the date thereof.

No Assurance of Investment Return. Counterparties should be aware that an investment in the Transaction is speculative and involves a high degree of risk. There can be no assurance that the Transaction will achieve comparable results, implement its investment strategy, achieve its objectives or avoid substantial losses or that any expected returns will be met (or that the returns will be commensurate with the risks of investing in the type of transaction described herein). The real estate in which the Transaction may invest (directly or indirectly) is a speculative investment and will be subject to significant business and financial risks. The Transaction’s performance may be volatile. An investment should only be considered by sophisticated investors who can afford to lose all or a substantial amount of their investment. The Transaction’s fees and expenses may offset or exceed its profits.

Real Estate Investment Risks. Investments in real estate face numerous risks that could impair financial returns, potentially lead to the loss of principal and potentially require additional equity. These risks include: changes in the general economic climate; changes in local market conditions; changes in legislation and regulatory requirements; uninsured losses; litigation; acts of God; acts of terrorism; energy, labor or supply shortages; cost inflation; pandemic; utility disruptions; adverse weather conditions; competition; financial condition of buyers; the availability and terms of financing; and other factors beyond the reasonable control of Kolter. Additionally, the use of debt financing (i) may involve cross-default and cross-collateralization with other assets, (ii) involves a heightened degree of risk, (iii) inherently makes an investment more sensitive to adverse economic factors (such as a significant rise in interest rates, a downturn in the economy, deterioration in the condition of investments, declines in revenues and increases in expenses), and (iv) can exaggerate the financial effect on the value of an investment resulting from a change in one or more of these factors. Real estate investments are relatively illiquid and, therefore, Counterparties should be aware that they will be required to bear the financial risks of an investment in the Transaction for an indefinite period of time. No assurance can be given that the fair market value of any real estate investment will not decrease in the future or that the Transaction will recognize the full value of its investment. Additionally, deterioration of real estate fundamentals generally may negatively impact the performance of the Transaction. The Transaction is intended for long-term investment by investors that can accept the risks associated with making highly speculative, primarily illiquid investments in privately negotiated transactions. There is no organized secondary market for Counterparties’ interests in the Transaction nor is there an organized market for which to sell the Transaction’s underlying investment, and none is expected to develop. Withdrawal and transfer of interests in the Transaction are subject to various restrictions. In addition, certain geographic regions and/or property types in which the Transaction is invested may be more adversely affected by economic pressures when compared to other geographic regions and/or property types.

ERISA Fiduciary Disclosure. The information in the Presentation has not been provided in a fiduciary capacity under ERISA, and it is not intended to be, and should not be considered as, impartial investment advice.

Opinions. Opinions expressed reflect the current opinions of Kolter as of the date appearing in the Presentation only and are based on Kolter’s opinions of the current market environment, which is subject to change. Certain information contained in the Presentation discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice.

Conflicts of Interest. There may be occasions when Kolter will encounter potential conflicts of interest in connection with the Transaction’s activities including, without limitation, the allocation of investment and/or business opportunities, the performance of business and/or transactions with Kolter’s affiliates, and the diverse interests of the Transaction’s investors. There can be no assurance that Kolter will identify, mitigate, or resolve conflicts of interest in a manner that is favorable to the Transaction’s investors.

Reliance on Key Management Personnel. The success of the Transaction will depend, in large part, upon the skill and expertise of certain Kolter professionals. In the event of the death, disability or departure of any key Kolter professionals, the business and the performance of the Transaction may be adversely affected. Some Kolter professionals may have other responsibilities, including senior management responsibilities, throughout Kolter and, therefore, conflicts are expected to arise in the allocation of such personnel’s time (including as a result of such personnel deriving financial benefit from these other activities, including fees and performance-based compensation).

Leverage. The Transaction may use leverage, and the Transaction may utilize borrowings from Kolter in advance of or in lieu of receiving investors’ capital contributions. The use of leverage or borrowings magnifies investment, market and certain other risks to a significant degree. The Transaction’s performance will be affected by the availability and terms of any leverage, as such leverage will enhance returns to the extent such returns exceed the costs of borrowings. The leveraged capital structure will increase the Transaction’s exposure to certain factors such as rising interest rates, downturns in the economy, or deterioration in the financial condition of real estate assets. In the event the Transaction cannot generate adequate cash flow to meet its debt service, the Transaction may suffer a partial or total loss of capital, which may adversely affect the returns of the Transaction. In the case of borrowings used in advance of or in lieu of receiving investors’ capital contributions, such use will result in higher or lower reported returns than if investors’ capital had been contributed at the inception of an investment, because calculations of returns to investors are based on the payment date of investors’ capital contributions. In addition, because the Transaction will pay all expenses, including interest, associated with the use of leverage or borrowings, investors will indirectly bear such costs.

Return Metrics. Any reference to “IRR” or “internal rate of return” refers to an internal rate of return, compounded annually. Each such return was determined by applying the Microsoft Excel IRR and/or XIRR function to the applicable stream of (actual and/or projected) cash flows. The IRR further may assume that cash is invested and distributed as-needed on a monthly basis, with no assumption of cash reserves. However, it is likely that such investments will carry cash reserves, and such reserves will (i) reduce actual IRR and multiple achieved by investors and (ii) increase actual equity requirements. Unless noted otherwise, individual project pro formas incorporate cash flows from project inception. However, in certain cases a partnership may close after a project was acquired by Kolter. Even in such cases, rollup cash flows (combining multiple partnership projects) will begin with partnership closing. As a result, IRRs in rollup analyses may appear higher than those in individual project pro formas (because the partnership is carrying such projects for less than their full duration). The analyses herein may assume the use of senior debt at the lower of (a) estimated market levels and (b) the levels required to generate opportunistic returns. Similarly, following peak equity, monthly distributions to equity holders may be assumed to be the lower of (i) cash available for distribution and (ii) the levels required to generate opportunistic returns. The use of (b) and (ii) above are for the sake of conservativeness. All else equal, they will lower projected IRRs. This methodology may result in certain projects assuming less debt than others. Unless otherwise noted, debt details provided by Kolter will reflect the “high water mark.” Post-acquisition, as project conditions resolve, Kolter may revert to (a) and (i) to generate the debt and distribution assumptions in any given pro forma. Unless otherwise noted, return metrics do not include a fund or administrative fee (or its equivalent), if any.

Confidentiality. The Presentation and the fact that discussions are taking place regarding a Transaction (including the status thereof), shall be kept confidential and shall not, without the prior written consent of The Kolter Group LLC, be reproduced or disclosed by you or your employees, agents and/or representatives (collectively, “Representatives”) in any manner whatsoever, in whole or in part, and shall not be used by the Representatives, other than in connection with evaluating the Transaction described above. Moreover, unless otherwise required by law, you agree to reveal the information in the Presentation only to those Representatives who need to know the information in the Presentation for the purpose of evaluating the Transaction, who are informed by you of the confidential nature of the Presentation, and who agree to be bound by the terms and conditions on this Notice to Recipients. You agree that the same degree of care to maintain the confidentiality of the Presentation will be applied by the Representatives as you use to maintain the confidentiality of your own confidential information, and you agree that you will be liable for any breach of this provision or the other terms and conditions on this Notice to Recipients by any of your Representatives. To the extent of any conflict between this paragraph and any written agreement executed by the applicable parties, such written agreement will prevail.


The Kolter Group LLC