Stakeholder Investment Structure

Investment Structure

Each entitlement project will use a Single Entity Limited Liability Company (SELLC). TrendAmerica Land Entitlements LLC will be the Manager of the SELLC. Investors will be Members of the SELLC, holding membership interests proportionate to the percentage that their investment represents of the total funds raised for a project. The Manager handles day-to-day operations and the entitlement process; investors are passive, with consent rights limited to the major decisions described below.

Investor Returns: A Tiered Structure

Distributions from each project's sale follow a waterfall based on the annualized return investors achieve on a project:

1. Investors first receive 100% of distributions until they have received their capital back plus a 20% annualized preferred return.
2. Above a 20% return, profits are split 70% to investors and 30% to the Manager, until investors reach a 25% annualized return.
3. Above a 25% return, profits are split 60% to investors and 40% to the Manager, until investors reach a 30% annualized return.
4. Above a 30% return, profits are split 50% to investors and 50% to the Manager. Returns in this tier are uncapped and subject to the same equal split — a performance incentive to push each project's return as high as possible, with every additional dollar shared equally between the principals and stakeholders.

Note: The preferred return and each hurdle are priorities in the distribution waterfall. They are targets, not guaranteed payments and not a debt of the Manager. Returns depend on each project's outcome and are not guaranteed.

Project Funding Requirements

Below are TrendAmerica Project Funding Requirement Examples to Entitle Land to Tentative Subdivision or Plan Development Map Approval. Investor capital funds the land acquisition deposits and entitlement costs; the balance of the land purchase price is paid from the homebuilder's proceeds at the double-escrow close:

Land Purchase Price	Entitlement Funding Required	Purchase Contract Extension Deposits	Total Investment
$1,000,000	$200,000 – $250,000	$50,000 – $75,000	$250,000 – $325,000
$3,000,000	$250,000 – $300,000	$75,000 – $100,000	$325,000 – $400,000
$5,000,000	$350,000 – $400,000	$100,000 – $150,000	$450,000 – $550,000
$7,000,000	$400,000 – $500,000	$150,000 – $200,000	$550,000 – $700,000
$10,000,000	$600,000 – $700,000	$200,000 – $250,000	$800,000 – $950,000

The figures above are estimates only, based on the past experience of TrendAmerica and its principals; the actual funding required is determined on a project-by-project basis and may vary across the funding requirement spectrum shown. The above land acquisition transactions include deposits which are credited against the Purchase Price. Those amounts are accounted for in the Total Investment figures estimated above. The above figures are estimates based upon experience, keeping in mind that every deal is unique and different.

Manager Compensation

• Acquisition Fee: 1% of a project's land purchase price, earned only when a project successfully closes. Nothing is charged on projects that do not close.
• Entitlement Management Fee: 10% of a project's approved entitlement budget, paid over the entitlement period as the work is performed.
• No disposition fee.
• If a Manager affiliate brokers the sale of an entitled project to a homebuilder, any commission is at or below market rate and is disclosed as a related-party transaction.

The Manager's primary compensation is its share of project profits above the preferred return (the promote), which aligns the Manager's incentives with investors.

Double Escrow Close

We use a Double Escrow Close structure where we use the new Homebuilder's purchase money — not Investor Funds — to pay the underlying land owner when we roll-over the deal. Investor capital funds the deposits and entitlement costs, and the balance of the land purchase price is paid from the homebuilder's proceeds at the double-escrow close.

This approach provides two key benefits:

• Less Up-Front Capital Investment required from investors
• Full Control over the property during the entitlement process, marketing, negotiating, and re-sale to new homebuilders

The conditions and terms in the TrendAmerica/Homebuilder Sales Agreement we execute with the Homebuilder will typically require closing 30-60 days after execution of the Sales Agreement.