PRIVATE INVESTMENT MEMORANDUM FOR PREFERRED EQUITY FOR THE LUXURY CONDOMINIUM TOWER CONSTRUCTION PROJECT AT 1000 SOUTH MICHIGAN AVENUE CHICAGO, ILLINOIS OFFERING OF PREFERRED EQUITY PREFERRED INVESTED CAPITAL OF $91,250,000 NOVEMBER 1, 2019 FOR INFORMATION AS TO THIS OFFERING PLEASE CONTACT TIME EQUITIES SECURITIES LLC 55 FIFTH AVENUE, 15TH FLOOR NEW YORK, NY 10003 (212) 206-6032 TIME EQUITIES SECURITIES LLC Confidential Private Investment Memorandum (“Memorandum”) for Investment Opportunity for the Luxury Condominium Tower Construction Project for 1000 South Michigan Avenue Chicago, Illinois Summary of the Offering The following is the offering for Preferred Equity in 1000 South Michigan Preferred LLC (the “Class A Company”) for the construction project located at 1000 South Michigan Avenue, Chicago, Illinois (the “Property” or “1000M”) to build a 72 story, 656,000 sf, , skyline changing luxury condominium tower, consisting of 450 residential condominium units, 430 space parking garage, approximately 40,000 square feet of amenity space on two floors (including outdoor pool/sun deck, fitness center, spa, game room, children’s playroom, movie theatre and observation deck) and approximately 950 square feet of ground floor retail space. The Property was previously used as surface parking and measures 32,339 sf of land area (134’ x 241’) or 0.74 acres. Upon completion 1000 M would be the tallest building in the iconic row of skyscrapers on Michigan Avenue across from Grant Park. Based on unit count, 1000 M will be Chicago’s 4th largest condominium development since 2000. 2 The Preferred Return to be paid to Investors for the Preferred Equity shall be a cumulative 10.5% per annum, without compounding. The Owner shall provide the Preferred Equity Investors quarterly minimum payments at 5.25% per annum during the period of construction (“Minimum Quarterly Payments”). After construction is completed, the Owner shall continue to pay the Preferred Equity Investors, the Minimum Quarterly Payments and accrue the balance of Preferred Return (5.25% per annum) until cash available for distribution from net sales and/or loan proceeds, rental income and/or other sources of funds (including but not limited to funds from the Sponsor Members) provides payment of all or part of the unpaid accrual of the Preferred Return. It is estimated that $16,767,188 of the Preferred Invested Capital will be used to fund the Minimum Quarterly Payments over a projected 48-month period. The total Invested Capital for this Offering is $91,250,000. (“Preferred Invested Capital”). Such Preferred Invested Capital will fund approximately 15% of the total Project Costs ($70,987,175) under the Construction Loan, plus the aggregate amount of $20,267,188 to fund the Minimum Quarterly Payments to the Preferred Equity Investors, and the commissions for this Offering. Affiliates of the Class A Manager have committed to subscribe for up to $5,000,000 of the Preferred Invested Capital. In the Financial Forecast, the Preferred Invested Capital, plus the accrued and unpaid Preferred Return, is estimated to be repaid within 48 months from the loan proceeds of the projected Inventory Loan. The total estimated Project Costs, including the value of the land, hard and soft costs, is $473,236,018. As reflected in the Sources and Uses Schedule, set forth below, the Construction Loan will fund 72.5% of the total Project costs. The Preferred Equity will fund the incremental 15%, up to 87.5% of the total Project costs. The Sponsor Members will contribute the final 12.5%, filling out the capital stack up to 100% of the estimated total Project costs under the Construction Loan. The current owner of the land is 1000 South Michigan Equities LLC, an Illinois limited liabilty company (the “Owner”). The Owner has owned the land since April 22, 2016. The Manager of the Owner is 1000 South Michigan Manager LLC, an Illinois limited liability company (the “Manager”). The managers of the Manager of the Owner are Francis Greenburger and Robert Kantor. The Class A Company will become the Class A or Preferred Equity Member in the Owner. The Manager of the Class A Company is Time Equities, Inc., a New York corporation. Francis Greenburger is the Chief Executive Office and Chairman of Time Equities, Inc. as well as its sole shareholder and director. Robert Kantor is the President of Time Equities, Inc. Reference to the Manager of the Class A Company is referred to as the “Class A Manager”. The other members of the Owner will be its existing members, which will be the Class B Members or Sponsor Members (the “Sponsor Members” or “Class B Members”). Affiliates of Time Equities, Inc. and Francis Greenburger will own a 75% interest in the Sponsor Members. The Project is a joint venture with JK Equities and Oak Capital, and they will own a 25% interest in the Sponsor Members. Reference to the “Class B Members” or “Sponsor Members” shall mean the existing members of the Owner who will become the Class B Members or Sponsor Members of the Owner in the Amended and Restated Operating Agreement for the Owner. 3 Goldman Sachs Bank, USA (the “Construction Lender” or “Lender”) has provided a terms sheet for the construction loan (“Construction Loan Terms”) for an amount up to 72.5% of the approval project budget, which Project budget is currently estimated at $473,247,834, but is subject to change. This current Project budget includes estimated total construction loan proceeds of $343,096,113 (the “Construction Loan”). Francis Greenburger is required, under the Construction Loan Terms, to provide a Completion Guaranty as to the completion of the Building, a Payment Guaranty for 75% of the principal balance of the Loan and Guaranty as to the interest due under the Loan that is not funded from loan proceeds. See section below describing the loan terms for the Construction Loan, including the guarantees to be provided by Francis Greenburger. Closing for the land and predevelopment loan (“Land Loan”) with the Construction Lender is anticipated to occur in early November 2019. The amount for such land loan is $27,550,000. This loan amount is based on 72.5% of the appraised value for the land, which is $38,000,000. The Land Loan will refinance the existing mortgage held by Citizen Bank with an outstanding balance of approximately $16,400,000. The remaining proceeds of the Land Loan will be advanced on a monthly basis to cover Project costs (anticipated to be for mostly soft costs and closing costs). The amount of the Land Loan shall be refinanced when the Construction Loan closes. 4 Under the Amended and Restated Operating Agreement for the Owner, cash available for distribution shall be paid to the Class A Company, for the benefit of the Preferred Equity Investors, first in the amount of the accrued unpaid Preferred Return (including the Minimum Quarterly Payments) and then to pay down the amount of the Preferred Invested Capital until it is reduced to zero, before any distributions are paid by the Owner to the Sponsor Members. Any distributions on a cumulative basis, in excess of the Preferred Return shall be applied to reduce the amount of the Preferred Invested Capital. The Class A Company shall not have any residual interest in the Owner, after both their Preferred Return and Preferred Invested Capital has been paid off in full. The Sponsor Members shall be entitled to all of the remaining distributions after this occurs. The Preferred Invested Capital and the Preferred Return may be prepaid by the Owner at any time without penalty for any such early prepayment. The Class A Company (on behalf of the Preferred Equity Investors) shall be entitled to payment of their Preferred Return calculated through the date of prepayment as to any such early prepayment of all or any part of the Preferred Invested Capital and/or Preferred Return. Francis Greenburger shall guaranty repayment, by no later than December 31, 2025 (the “Due Date”) to the Class A Company, for the benefit of the Preferred Equity Investors, the amount equal to 15% of the amount of the Preferred Invested Capital raised which, if the entire amount of Preferred Invested Capital is raised, the guaranteed amount would be $13,687,500 (“Guaranteed Amount”). For example, if the Preferred Equity lost up to 15% of its value, the Guaranteed Amount would cover 100% of such lost value. The Financial Forecast, included in this Private Placement Memorandum, provides two scenarios where the Preferred Equity is projected to be paid off within 48 months after the first funding. One Scenario projects 65% of the units and 30% of the garage spaces being sold and the other Scenario projects 45% of the units and 30% of the garage spaces being sold, in either case upon completion of construction. In both Scenarios the Financial Forecast projects obtaining an Inventory Loan of $142,908,993 for approximately 158 units under the first scenario (65% sold) and $224,571,274 for approximately 248 units, under the second scenario (45% sold). Such Inventory Loan is projected to occur in December 2023 and proceeds from such Inventory Loan under either Scenario are estimated to be in an amount sufficient to pay off in full the Preferred Invested Capital (included any accrued and unpaid Preferred Return). The minimum investment is $250,000 payable in full upon execution and delivery of one’s subscription agreement, although the Class A Manager may accept investments of a lesser amount. The Class A Manager may, in its discretion, accept or reject any subscriptions in whole or in part. The Offering shall continue until subscriptions are sold and funded for the total amount of the Preferred Invested Capital.