1034-00004 · Group Strathmore Corp · GRAT Documents

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GRAT TRUSTEE ACKNOWLEDGMENT AND ACCEPTANCE

Acknowledgment and Acceptance of Trusteeship by Jonathan R. Caldwell for the Caldwell 2023 Securities GRAT, Caldwell 2023 Realty GRAT, and Caldwell 2023 Carried Interest GRAT

Executed in counterparts on the respective funding dates of each GRAT (April 15, 2023; May 1, 2023; June 1, 2023), with this consolidated Acknowledgment executed as of June 1, 2023

RECITALS

A. Identity of Grantor and Trustee. Jonathan Robert Caldwell, an individual residing at 418 East 72nd Street, Apt. 14A, New York, New York 10021 (Social Security Number ending in 4781; date of birth: March 14, 1956) (hereinafter, the "Grantor" or the "Trustee," as applicable), serves in his dual capacity as Grantor and Trustee of each of the three grantor retained annuity trusts identified in this Acknowledgment and Acceptance (each, a "GRAT," and collectively, the "GRATs"). The Grantor established each GRAT during the period from April 15, 2023 through June 1, 2023 as part of a coordinated estate and gift tax planning strategy, and has accepted appointment as the initial Trustee of each GRAT in accordance with the terms of the respective Trust Agreements described below.

B. Identification of the Three GRATs. The Grantor has established the following three irrevocable grantor retained annuity trusts, each governed by the laws of the State of New York:

(i) Caldwell 2023 Securities GRAT ("GRAT A"). GRAT A is an irrevocable trust established pursuant to a Trust Agreement dated April 15, 2023 (the "GRAT A Trust Agreement"). GRAT A was funded on April 15, 2023 with publicly traded securities having an aggregate fair market value of Sixty Million Dollars ($60,000,000) as of the funding date. The securities transferred to GRAT A are described in detail on Schedule A to the GRAT A Trust Agreement.

(ii) Caldwell 2023 Realty GRAT ("GRAT B"). GRAT B is an irrevocable trust established pursuant to a Trust Agreement dated May 1, 2023 (the "GRAT B Trust Agreement"). GRAT B was funded on May 1, 2023 with membership interests in Stonecrest Realty Holdings LLC, a New York limited liability company with its principal office at 330 Madison Avenue, Suite 2401, New York, New York 10017 ("Stonecrest"). The membership interests transferred to GRAT B represent an approximate 59.7% membership interest in Stonecrest and have a pre-discount fair market value of Eighty Million Dollars ($80,000,000) as of the funding date. For United States federal gift tax purposes, a combined lack-of-marketability and lack-of-control discount of twenty-five percent (25%) has been applied to the transferred interests, resulting in a post-discount value of Sixty Million Dollars ($60,000,000) for gift tax reporting purposes. The membership interests transferred to GRAT B are described in detail on Schedule A to the GRAT B Trust Agreement.

(iii) Caldwell 2023 Carried Interest GRAT ("GRAT C"). GRAT C is an irrevocable trust established pursuant to a Trust Agreement dated June 1, 2023 (the "GRAT C Trust Agreement"). GRAT C was funded on June 1, 2023 with limited partnership interests and a carried-interest position in entities managed by Caldwell Ridgeline Capital LLC, a Delaware limited liability company with its principal office at 280 Park Avenue, 35th Floor, New York, New York 10017 ("Caldwell Ridgeline Capital"), specifically:

(a) a limited partnership interest in Caldwell Ridgeline Fund IV LP, having a fair market value of Twelve Million Dollars ($12,000,000), to which a combined lack-of-marketability and lack-of-control discount of thirty-five percent (35%) has been applied for gift tax reporting purposes;

(b) a limited partnership interest in Caldwell Ridgeline Fund V LP, having a fair market value of Fourteen Million Dollars ($14,000,000), to which a combined lack-of-marketability and lack-of-control discount of thirty-five percent (35%) has been applied for gift tax reporting purposes; and

(c) a carried-interest position in Caldwell Ridgeline Fund VI LP, having a fair market value of Twelve Million Dollars ($12,000,000), to which a discount of thirty percent (30%) has been applied for gift tax reporting purposes;

resulting in a total pre-discount fair market value of Thirty-Eight Million Dollars ($38,000,000) and a post-discount value of Twenty-Five Million Three Hundred Thousand Dollars ($25,300,000) for United States federal gift tax reporting purposes. The LP interests and carried-interest position transferred to GRAT C are described in detail on Schedule A to the GRAT C Trust Agreement.

The GRAT A Trust Agreement, the GRAT B Trust Agreement, and the GRAT C Trust Agreement are hereinafter referred to individually as a "Trust Agreement" and collectively as the "Trust Agreements."

C. Common Remainder Beneficiary. Each GRAT designates the Caldwell Family Dynasty Trust as the sole remainder beneficiary upon the termination of the applicable annuity term. The Caldwell Family Dynasty Trust is an irrevocable trust established by the Grantor on April 1, 2023, with situs in the State of Delaware. The Caldwell Family Dynasty Trust is administered by Thomas R. Caldwell, as family co-trustee, and Northgate Trust Company of Delaware, as institutional co-trustee (principal office: 1201 North Market Street, Suite 1600, Wilmington, Delaware 19801; contact: Philip A. Rossiter, Senior Vice President — Trust Administration). The Caldwell Family Dynasty Trust was established as a multi-generational trust for the benefit of the Grantor's descendants and is intended to qualify for exemption from the federal generation-skipping transfer tax upon the allocation of the Grantor's GST exemption at the appropriate time, as further described in Section 6.2 below.

D. Zeroed-Out Structure. Each GRAT is designed as a "zeroed-out" grantor retained annuity trust under Section 2702 of the Internal Revenue Code of 1986, as amended (the "Code" or "IRC"), and the Treasury Regulations promulgated thereunder. The annuity payments from each GRAT have been calculated to produce a taxable gift of zero dollars ($0) based on the applicable Section 7520 rate in effect at the time of funding of each respective GRAT. The zeroed-out structure is intended to permit the transfer of any appreciation in the trust property in excess of the Section 7520 rate to the Caldwell Family Dynasty Trust as remainder beneficiary without the imposition of federal gift tax or generation-skipping transfer tax.

E. Legal Counsel. The Trustee has been advised in connection with the establishment, funding, and administration of each GRAT by Calderwood & Harkness LLP, 375 Park Avenue, 42nd Floor, New York, New York 10152 (the "Firm"). The Firm's engagement in this matter has been conducted under Matter No. 1034-00004, with the following professionals assigned to the matter:

• Victoria Chambers, Partner — Trusts, Estates & Private Wealth Group (Responsible Partner)

• Sylvia Hartwell, Partner — Tax Specialty Group (Tax Specialist)

• Monica Reyes, Senior Associate — Trusts, Estates & Private Wealth Group (Lead Associate)

• Elliot Nguyen, Associate — Trusts, Estates & Private Wealth Group (Working Associate)

The Trustee acknowledges that he has had the opportunity to consult with counsel and to review all relevant documents prior to executing this Acknowledgment and Acceptance.

NOW, THEREFORE, in consideration of the premises and the Trustee's acceptance of the trust responsibilities set forth in the Trust Agreements, Jonathan R. Caldwell hereby executes this Acknowledgment and Acceptance as follows:

SECTION 1 — ACCEPTANCE OF TRUSTEESHIP

1.1 Acceptance as to GRAT A (Caldwell 2023 Securities GRAT). Jonathan R. Caldwell hereby acknowledges receipt of the executed Trust Agreement dated April 15, 2023 for the Caldwell 2023 Securities GRAT (GRAT A), together with all schedules and exhibits attached thereto, and hereby accepts appointment as Trustee thereof effective as of April 15, 2023. The Trustee shall serve in such capacity for the full duration of the annuity term of GRAT A, which is a two (2)-year term commencing on April 15, 2023 and ending on April 15, 2025, unless the Trustee's service is earlier terminated by reason of death, incapacity, or resignation in accordance with the provisions of the GRAT A Trust Agreement.

1.2 Acceptance as to GRAT B (Caldwell 2023 Realty GRAT). Jonathan R. Caldwell hereby acknowledges receipt of the executed Trust Agreement dated May 1, 2023 for the Caldwell 2023 Realty GRAT (GRAT B), together with all schedules and exhibits attached thereto, and hereby accepts appointment as Trustee thereof effective as of May 1, 2023. The Trustee shall serve in such capacity for the full duration of the annuity term of GRAT B, which is a three (3)-year term commencing on May 1, 2023 and ending on May 1, 2026, unless the Trustee's service is earlier terminated by reason of death, incapacity, or resignation in accordance with the provisions of the GRAT B Trust Agreement.

1.3 Acceptance as to GRAT C (Caldwell 2023 Carried Interest GRAT). Jonathan R. Caldwell hereby acknowledges receipt of the executed Trust Agreement dated June 1, 2023 for the Caldwell 2023 Carried Interest GRAT (GRAT C), together with all schedules and exhibits attached thereto, and hereby accepts appointment as Trustee thereof effective as of June 1, 2023. The Trustee shall serve in such capacity for the full duration of the annuity term of GRAT C, which is a three (3)-year term commencing on June 1, 2023 and ending on June 1, 2026, unless the Trustee's service is earlier terminated by reason of death, incapacity, or resignation in accordance with the provisions of the GRAT C Trust Agreement.

1.4 Scope of Acceptance. The Trustee's acceptance of the trusteeship of each GRAT encompasses all powers, duties, responsibilities, and obligations conferred upon or imposed upon the Trustee by the applicable Trust Agreement, by this Acknowledgment and Acceptance, and by applicable law, including but not limited to the New York Estates, Powers and Trusts Law ("NY EPTL"), the New York Prudent Investor Act (NY EPTL § 11-2.3), and the New York Principal and Income Act (NY EPTL § 11-A), as each may be amended from time to time. The Trustee acknowledges that his acceptance is unconditional with respect to each GRAT and that he assumes all fiduciary obligations attendant thereto as of the respective effective dates stated in Sections 1.1, 1.2, and 1.3 above.

SECTION 2 — ACKNOWLEDGMENT OF TRUST PROPERTY

2.1 GRAT A Trust Property. The Trustee hereby acknowledges receipt of, and confirms that he holds in his custody as Trustee of GRAT A, the trust property described in Schedule A of the GRAT A Trust Agreement, consisting of publicly traded securities having an aggregate fair market value of Sixty Million Dollars ($60,000,000) as of the date of funding, April 15, 2023. The fair market value of the publicly traded securities was determined based on the closing prices of the respective securities on the New York Stock Exchange, the NASDAQ Global Select Market, and other applicable national securities exchanges on April 15, 2023, as adjusted for any securities for which the valuation date fell on a non-trading day. The Trustee further confirms that title to such securities has been duly transferred to the Caldwell 2023 Securities GRAT through properly executed stock powers, broker account re-registrations, and such other transfer instruments as were necessary to vest legal title in the trust, and that such securities are held in a brokerage account at Vireo National Bank (Account No. ending in -7923) registered in the name of "Jonathan R. Caldwell, Trustee of the Caldwell 2023 Securities GRAT dated April 15, 2023."

2.2 GRAT B Trust Property. The Trustee hereby acknowledges receipt of, and confirms that he holds in his custody as Trustee of GRAT B, the trust property described in Schedule A of the GRAT B Trust Agreement, consisting of an approximate 59.7% membership interest in Stonecrest Realty Holdings LLC, a New York limited liability company, with a pre-discount fair market value of Eighty Million Dollars ($80,000,000) as of the date of funding, May 1, 2023. The Trustee confirms that he has executed the Assignment of Stonecrest Realty Holdings LLC Membership Interest to the Caldwell 2023 Realty GRAT, dated as of May 1, 2023, and that such Assignment has been delivered to and acknowledged by Stonecrest Realty Holdings LLC. The Trustee further confirms that the transfer of the membership interests has been reflected on the books and records of Stonecrest Realty Holdings LLC and that all required consents under the Stonecrest Operating Agreement, if any, have been obtained. For purposes of ongoing administrative matters relating to the Stonecrest membership interests, the Trustee acknowledges that Robert M. Sinclair, Chief Operating Officer of Stonecrest Realty Holdings LLC, shall serve as the primary point of contact for coordination of distributions, capital calls, and other matters affecting the trust property.

2.3 GRAT C Trust Property. The Trustee hereby acknowledges receipt of, and confirms that he holds in his custody as Trustee of GRAT C, the trust property described in Schedule A of the GRAT C Trust Agreement, consisting of limited partnership interests and a carried-interest position in the following entities managed by Caldwell Ridgeline Capital LLC:

(a) Fund IV LP Interest: A limited partnership interest in Caldwell Ridgeline Fund IV LP, having a fair market value of Twelve Million Dollars ($12,000,000) as of June 1, 2023, prior to the application of any valuation discounts;

(b) Fund V LP Interest: A limited partnership interest in Caldwell Ridgeline Fund V LP, having a fair market value of Fourteen Million Dollars ($14,000,000) as of June 1, 2023, prior to the application of any valuation discounts; and

(c) Fund VI Carried Interest: A carried-interest position in Caldwell Ridgeline Fund VI LP, having a fair market value of Twelve Million Dollars ($12,000,000) as of June 1, 2023, prior to the application of any valuation discounts.

The aggregate pre-discount fair market value of the GRAT C trust property is Thirty-Eight Million Dollars ($38,000,000). The Trustee confirms that he has executed the Assignment of Caldwell Ridgeline Capital LP Interests and Carried Interest to the Caldwell 2023 Carried Interest GRAT, dated as of June 1, 2023, and that such Assignment has been delivered to and acknowledged by Caldwell Ridgeline Capital LLC, as general partner or managing member of each of the applicable entities. The Trustee further confirms that the transfers have been reflected on the books and records of each applicable fund entity and that all required consents and notices under the respective limited partnership agreements and operating agreements have been obtained or delivered. For purposes of ongoing administrative matters, including valuation updates, distribution coordination, and compliance with fund-level governance provisions, the Trustee acknowledges that Gregory S. Fenton, Chief Financial Officer of Caldwell Ridgeline Capital LLC, shall serve as the primary point of contact.

2.4 Appraisal Acknowledgment. The Trustee hereby acknowledges that independent appraisals of the GRAT B trust property (Stonecrest Realty Holdings LLC membership interests) and the GRAT C trust property (Caldwell Ridgeline Fund IV LP, Fund V LP, and Fund VI LP interests) have been prepared by Ashford Valuation Group LLC (Dr. Leonard K. Whitfield, ASA, Managing Partner, 1120 Avenue of the Americas, Suite 3500, New York, New York 10036). The appraisal reports for both GRAT B and GRAT C were completed and delivered to the Trustee and to Calderwood & Harkness LLP on June 15, 2023. The Trustee has reviewed the appraisal reports and acknowledges the following valuation discounts applied for United States federal gift tax reporting purposes:

(a) Stonecrest Realty Holdings LLC membership interests (GRAT B): A combined lack-of-marketability and lack-of-control discount of twenty-five percent (25%), resulting in a post-discount fair market value of Sixty Million Dollars ($60,000,000) for gift tax purposes;

(b) Caldwell Ridgeline Fund IV LP and Fund V LP interests (GRAT C): A combined lack-of-marketability and lack-of-control discount of thirty-five percent (35%) applied to each LP interest; and

(c) Caldwell Ridgeline Fund VI LP carried-interest position (GRAT C): A discount of thirty percent (30%) applied to the carried-interest position;

resulting in a post-discount fair market value for the GRAT C trust property, in the aggregate, of Twenty-Five Million Three Hundred Thousand Dollars ($25,300,000) for gift tax purposes.

The Trustee acknowledges that the appraisal reports prepared by Ashford Valuation Group LLC form the basis for the valuations reported on the Grantor's IRS Form 709 for the 2023 tax year, and the Trustee agrees to cooperate fully with any IRS examination, audit, or challenge of such valuations, as further described in Section 6.3 below.

SECTION 3 — ACKNOWLEDGMENT OF FIDUCIARY DUTIES

3.1 General Fiduciary Standard. The Trustee acknowledges that he owes fiduciary duties of the highest order to the beneficiaries of each GRAT. Specifically, the Trustee owes duties of loyalty, prudence, and impartiality to both the Grantor, in his capacity as the annuitant entitled to receive fixed annuity payments during each GRAT's annuity term, and to the Caldwell Family Dynasty Trust, as the remainder beneficiary entitled to receive the remaining trust property upon the termination of each GRAT's annuity term. The Trustee acknowledges that these fiduciary duties are imposed by the terms of the applicable Trust Agreement, by applicable provisions of the New York Estates, Powers and Trusts Law, and by common law principles governing the administration of trusts. The Trustee further acknowledges that any breach of fiduciary duty may give rise to personal liability on the part of the Trustee and may jeopardize the intended tax treatment of the GRATs.

3.2 Duty to Preserve Trust Property. The Trustee acknowledges his obligation to preserve, protect, and manage the trust property of each GRAT in a prudent manner throughout the duration of the applicable annuity term. Without limiting the generality of the foregoing:

(a) With respect to GRAT A (publicly traded securities): The Trustee acknowledges the duty to maintain custody of the publicly traded securities held in the trust portfolio, to monitor the performance and allocation of such securities, and to manage the portfolio consistent with the investment provisions set forth in Article [IV] of the GRAT A Trust Agreement. The Trustee shall cause the securities to be held in a properly titled brokerage account and shall ensure that all dividends, interest, and other distributions received with respect to the securities are properly credited to the trust.

(b) With respect to GRAT B (Stonecrest Realty Holdings LLC membership interests): The Trustee acknowledges that the trust property consists of illiquid membership interests in a privately held limited liability company. The Trustee shall oversee the interests held by GRAT B in coordination with the management of Stonecrest Realty Holdings LLC, including Robert M. Sinclair, Chief Operating Officer. The Trustee shall exercise all rights attendant to the membership interests, including voting rights, distribution rights, and consent rights, in a manner consistent with his fiduciary obligations and the terms of the Stonecrest Operating Agreement.

(c) With respect to GRAT C (LP interests and carried-interest position): The Trustee acknowledges that the trust property consists of illiquid limited partnership interests and a carried-interest position in private investment fund vehicles managed by Caldwell Ridgeline Capital LLC. The Trustee acknowledges that these interests are subject to the terms and restrictions of the applicable limited partnership agreements and operating agreements, including restrictions on transfer, requirements for capital contributions, and governance provisions. The Trustee shall comply with all applicable transfer, notice, and governance provisions of Caldwell Ridgeline Capital LLC and the respective fund entities, and shall coordinate with Gregory S. Fenton, Chief Financial Officer of Caldwell Ridgeline Capital LLC, regarding all administrative matters affecting the trust property.

3.3 Duty of Impartiality. The Trustee acknowledges the dual interest of the Grantor, as annuitant during the annuity term, and the Caldwell Family Dynasty Trust, as the remainder beneficiary, in the trust property of each GRAT. The Trustee acknowledges the obligation to balance these interests equitably during the annuity term, recognizing that the annuitant has a fixed claim to annuity payments and that the remainder beneficiary is entitled to any excess appreciation in the trust property remaining after all annuity payments have been satisfied. The Trustee shall not take any action that unduly favors one beneficiary class at the expense of the other, except to the extent that the structure of a zeroed-out GRAT inherently prioritizes the timely payment of the annuity obligation.

3.4 Duty of Record-Keeping and Accounting. The Trustee acknowledges the duty to maintain complete, accurate, and contemporaneous books and records for each GRAT, including but not limited to records of all trust property, receipts and disbursements of income and principal, all annuity payments made or to be made, valuations of trust property (including periodic revaluations as required for in-kind distributions), and all correspondence, agreements, and other documents relating to the administration of each GRAT. The Trustee further acknowledges the obligation to provide formal accountings as required by the respective Trust Agreements or as required by applicable law, including upon reasonable request by the remainder beneficiary or its trustees. The Trustee shall coordinate with Martin J. Prescott, CPA, of Strathmore Corporation & Greaves LLP, 600 Third Avenue, 28th Floor, New York, New York 10016, for all tax reporting purposes, including the preparation and filing of federal and state income tax returns and gift tax returns relating to the GRATs.

3.5 Grantor Trust Status. The Trustee acknowledges that each GRAT is treated as a "grantor trust" for United States federal income tax purposes during the entire annuity term, pursuant to Sections 671 through 679 of the Internal Revenue Code. As a consequence of this grantor trust status, all items of income, deduction, and credit of each GRAT are reportable on the Grantor's personal federal and applicable state income tax returns (currently, the joint return filed by Jonathan R. Caldwell and Eleanor V. Caldwell). The Trustee shall cooperate with the Grantor's tax advisors in providing all information necessary for the accurate reporting of the trust's income, gains, losses, and deductions on the Grantor's tax returns. No separate income tax returns (IRS Form 1041) need be filed for the GRATs during the annuity term, although informational returns with a grantor trust statement may be filed as required by Treasury Regulations.

SECTION 4 — ANNUITY PAYMENT OBLIGATIONS

4.1 GRAT A Annuity Payment Schedule. The Trustee acknowledges the obligation to make the following annuity payments from the Caldwell 2023 Securities GRAT (GRAT A) to the Grantor during the two (2)-year annuity term:

Payment 1: Thirty-Two Million One Hundred Ninety-Five Thousand One Hundred Twenty-Two Dollars ($32,195,122), due and payable on or before April 15, 2024 (the first anniversary of the funding date).

Payment 2: Thirty-Two Million One Hundred Ninety-Five Thousand One Hundred Twenty-Two Dollars ($32,195,122), due and payable on or before April 15, 2025 (the second anniversary of the funding date and the termination of the annuity term).

The annuity payments set forth above have been calculated as a level annuity amount designed to produce a zeroed-out taxable gift of zero dollars ($0) under IRC § 2702, based on a corpus of Sixty Million Dollars ($60,000,000), a two (2)-year annuity term, and an applicable Section 7520 rate of 5.0% (the rate published by the Internal Revenue Service for March 2023, the month elected for valuation purposes by the Grantor on the applicable Form 709).

4.2 GRAT B Annuity Payment Schedule. The Trustee acknowledges the obligation to make the following annuity payments from the Caldwell 2023 Realty GRAT (GRAT B) to the Grantor during the three (3)-year annuity term:

Payment 1: Twenty-Nine Million Three Hundred Seventy-Five Thousand Eight Hundred Fifty-Nine Dollars ($29,375,859), due and payable on or before May 1, 2024 (the first anniversary of the funding date).

Payment 2: Twenty-Nine Million Three Hundred Seventy-Five Thousand Eight Hundred Fifty-Nine Dollars ($29,375,859), due and payable on or before May 1, 2025 (the second anniversary of the funding date).

Payment 3: Twenty-Nine Million Three Hundred Seventy-Five Thousand Eight Hundred Fifty-Nine Dollars ($29,375,859), due and payable on or before May 1, 2026 (the third anniversary of the funding date and the termination of the annuity term).

The annuity payments set forth above have been calculated as a level annuity amount designed to produce a zeroed-out taxable gift of zero dollars ($0) under IRC § 2702, based on a pre-discount corpus of Eighty Million Dollars ($80,000,000) (representing the Stonecrest Realty Holdings LLC membership interests), a three (3)-year annuity term, and an applicable Section 7520 rate of 5.0% (the rate published by the Internal Revenue Service for April 2023, the month elected for valuation purposes by the Grantor on the applicable Form 709).

4.3 GRAT C Annuity Payment Schedule. The Trustee acknowledges the obligation to make the following annuity payments from the Caldwell 2023 Carried Interest GRAT (GRAT C) to the Grantor during the three (3)-year annuity term:

Payment 1: Thirteen Million Nine Hundred Fifty-Three Thousand Seven Hundred Fifty-Nine Dollars ($13,953,759), due and payable on or before June 1, 2024 (the first anniversary of the funding date).

Payment 2: Thirteen Million Nine Hundred Fifty-Three Thousand Seven Hundred Fifty-Nine Dollars ($13,953,759), due and payable on or before June 1, 2025 (the second anniversary of the funding date).

Payment 3: Thirteen Million Nine Hundred Fifty-Three Thousand Seven Hundred Fifty-Nine Dollars ($13,953,759), due and payable on or before June 1, 2026 (the third anniversary of the funding date and the termination of the annuity term).

The annuity payments set forth above have been calculated as a level annuity amount designed to produce a zeroed-out taxable gift of zero dollars ($0) under IRC § 2702, based on a pre-discount corpus of Thirty-Eight Million Dollars ($38,000,000) (representing the Caldwell Ridgeline Fund IV LP, Fund V LP, and Fund VI LP interests), a three (3)-year annuity term, and an applicable Section 7520 rate of 5.0% (the rate published by the Internal Revenue Service for May 2023, the month elected for valuation purposes by the Grantor on the applicable Form 709).

4.4 Timely Payment Requirement. The Trustee acknowledges that the annuity payments specified in Sections 4.1, 4.2, and 4.3 above must be made on or before the respective due dates set forth therein. The Trustee further acknowledges that the failure to make timely annuity payments in the full required amounts may jeopardize the zeroed-out status of the applicable GRAT under IRC § 2702 and the applicable Treasury Regulations, potentially resulting in the recharacterization of the retained annuity interest and the imposition of federal gift tax on the full value of the trust property transferred to the GRAT. The Trustee shall take all necessary and prudent steps to ensure the availability of sufficient liquid assets or distributable property to satisfy each annuity payment when due.

Annuity payments may be made in cash or in kind (by distribution of trust property to the Grantor) at the Trustee's discretion, subject to the terms and conditions set forth in each Trust Agreement. In the event that an annuity payment is made in kind, in whole or in part, the trust property so distributed must be valued at its fair market value as of the date of distribution, as determined by an independent appraisal or other reliable valuation methodology, and such valuation must be contemporaneously documented in the trust records. The Trustee shall ensure that any in-kind distribution of trust property is properly documented by a written instrument of distribution reflecting the property distributed, the fair market value thereof, and the annuity payment obligation being satisfied.

4.5 Substitute Asset Authority. The Trustee acknowledges that each Trust Agreement grants the Grantor the power, exercisable in a non-fiduciary capacity without the approval or consent of any person acting in a fiduciary capacity, to substitute assets of equivalent value for trust property, in accordance with IRC § 675(4)(C) and the Treasury Regulations thereunder. The Trustee acknowledges that the exercise of this substitution power is a key feature of the grantor trust structure and must be properly documented with contemporaneous fair market value determinations of both the trust property being released and the substitute property being contributed. The Trustee shall cooperate with the Grantor in facilitating any such substitution, provided that the substitution results in the trust holding property of equivalent value and does not impair the trust's ability to satisfy the annuity payment obligations or otherwise compromise the integrity of the GRAT structure.

SECTION 5 — REMAINDER DISTRIBUTION OBLIGATIONS

5.1 Distribution upon Termination of Annuity Term. The Trustee acknowledges that upon the expiration of the annuity term of each GRAT, after all required annuity payments have been satisfied in full, the Trustee shall distribute the remaining trust property of such GRAT — that is, any trust property representing appreciation in excess of the cumulative annuity amounts and the Section 7520 hurdle rate — to the Caldwell Family Dynasty Trust as the designated remainder beneficiary. The anticipated dates for remainder distributions are as follows:

(a) GRAT A Remainder Distribution: On or promptly after April 15, 2025, following the termination of the two (2)-year annuity term of the Caldwell 2023 Securities GRAT.

(b) GRAT B Remainder Distribution: On or promptly after May 1, 2026, following the termination of the three (3)-year annuity term of the Caldwell 2023 Realty GRAT.

(c) GRAT C Remainder Distribution: On or promptly after June 1, 2026, following the termination of the three (3)-year annuity term of the Caldwell 2023 Carried Interest GRAT.

All remainder distributions shall be coordinated with Thomas R. Caldwell, in his capacity as family co-trustee of the Caldwell Family Dynasty Trust, and Philip A. Rossiter, Senior Vice President — Trust Administration, at Northgate Trust Company of Delaware, in its capacity as institutional co-trustee of the Caldwell Family Dynasty Trust. The Trustee shall provide reasonable advance notice to the co-trustees of the Caldwell Family Dynasty Trust prior to the anticipated date of each remainder distribution, and shall cooperate in the preparation and execution of all instruments of transfer, assignments, and other documentation necessary to effectuate the distribution of trust property from each GRAT to the Caldwell Family Dynasty Trust.

5.2 Mortality Contingency. The Trustee acknowledges that if the Grantor dies during the annuity term of any GRAT, the remaining trust property of that GRAT (or a portion thereof, as determined under applicable Treasury Regulations) will be included in the Grantor's gross estate for United States federal estate tax purposes under IRC § 2036. In such event, the provisions of the applicable Trust Agreement governing the disposition of trust property upon the death of the Grantor during the annuity term shall control. The Trustee acknowledges that such provisions have been coordinated with the Grantor's overall estate plan, including the Amended and Restated Caldwell Revocable Trust (effective April 1, 2023; original instrument dated October 3, 2010) and the Last Will and Testament of Jonathan R. Caldwell (executed April 1, 2023), to ensure the orderly administration of the Grantor's estate in the event of the Grantor's death during any GRAT's annuity term. The Trustee further acknowledges the importance of prompt notification to counsel and to the co-trustees of the Caldwell Family Dynasty Trust in the event of the Grantor's death during any annuity term.

SECTION 6 — TAX COMPLIANCE ACKNOWLEDGMENTS

6.1 Gift Tax Reporting. The Trustee acknowledges that the funding of each GRAT constitutes a completed gift for United States federal gift tax purposes and is required to be reported on IRS Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) for the 2023 calendar year. The Trustee further acknowledges that the preparation and filing of the Grantor's 2023 Form 709 is being coordinated between Sylvia Hartwell of Calderwood & Harkness LLP, in her capacity as tax specialist for the matter, and Martin J. Prescott, CPA, of Strathmore Corporation & Greaves LLP, in his capacity as the Grantor's tax return preparer. The following values are reported for United States federal gift tax purposes on the Grantor's 2023 Form 709:

(a) GRAT A (Caldwell 2023 Securities GRAT): Corpus of Sixty Million Dollars ($60,000,000); no valuation discounts applied; zeroed-out annuity; taxable gift equals zero dollars ($0).

(b) GRAT B (Caldwell 2023 Realty GRAT): Pre-discount corpus of Eighty Million Dollars ($80,000,000); post-discount corpus of Sixty Million Dollars ($60,000,000) after application of a twenty-five percent (25%) combined lack-of-marketability and lack-of-control discount; zeroed-out annuity calculated on the pre-discount corpus; taxable gift equals zero dollars ($0).

(c) GRAT C (Caldwell 2023 Carried Interest GRAT): Pre-discount corpus of Thirty-Eight Million Dollars ($38,000,000); post-discount corpus of Twenty-Five Million Three Hundred Thousand Dollars ($25,300,000) after application of applicable discounts (thirty-five percent (35%) for Fund IV and Fund V LP interests; thirty percent (30%) for Fund VI carried interest); zeroed-out annuity calculated on the pre-discount corpus; taxable gift equals zero dollars ($0).

The Trustee agrees to cooperate fully in the preparation, review, and filing of the Form 709 and all supporting schedules and disclosures, including adequate disclosure statements under Treasury Regulation § 301.6501(c)-1(f) to commence the running of the statute of limitations with respect to the reported transfers.

6.2 GST Exemption — ETIP Acknowledgment. The Trustee acknowledges that no allocation of the Grantor's generation-skipping transfer ("GST") tax exemption may be made to any GRAT remainder interest during the applicable annuity term. This restriction arises from the estate tax inclusion period ("ETIP") rules set forth in IRC § 2642(f), which provide that no GST exemption allocation is effective with respect to a trust during any period in which the trust property would be includible in the Grantor's gross estate (other than by reason of IRC § 2035) if the Grantor were to die during such period. Because each GRAT's trust property is subject to inclusion in the Grantor's gross estate under IRC § 2036 during the annuity term, the ETIP for each GRAT extends through the end of the applicable annuity term. Accordingly, the allocation of GST exemption to the GRAT remainder interests will occur upon the termination of each GRAT's annuity term, at which time the remainder trust property is distributed to the Caldwell Family Dynasty Trust. The Trustee shall coordinate with counsel and the Grantor's tax advisors to ensure that timely and proper allocations of GST exemption are made upon the close of each ETIP.

6.3 Coordination with Appraisals. The Trustee acknowledges that the appraisal reports prepared by Ashford Valuation Group LLC, received by the Trustee and counsel on June 15, 2023, form the basis for the valuation of the GRAT B and GRAT C trust property for federal gift tax reporting purposes. The Trustee agrees to cooperate fully with any examination, audit, or challenge by the Internal Revenue Service with respect to the valuations reflected on the Grantor's Form 709, including by making available all records, correspondence, and documents relating to the transferred property, by facilitating access to the appraisers and to the management of Stonecrest Realty Holdings LLC and Caldwell Ridgeline Capital LLC, and by providing such additional information or testimony as may be reasonably requested by counsel in connection with any such examination or proceeding.

SECTION 7 — REPRESENTATIONS AND COVENANTS OF THE TRUSTEE

7.1 Capacity. Jonathan R. Caldwell represents and warrants that he has full legal capacity to serve as Trustee of each of the three GRATs and that no legal disability, incapacity, judicial order, or conflict of interest prevents him from fulfilling his fiduciary duties as Trustee. The Trustee further represents that he is a citizen of the United States, that he is not subject to any pending or threatened legal proceeding that would impair his ability to serve as Trustee, and that he has not been adjudicated as incapacitated, incompetent, or otherwise unable to manage his own affairs or the affairs of any trust.

7.2 Review of Trust Agreements. The Trustee represents and warrants that he has read, reviewed, and understands the terms and provisions of each of the three Trust Agreements, including all articles, sections, schedules, and exhibits attached thereto. The Trustee specifically represents that he has reviewed and understands the provisions of Schedule A to each Trust Agreement (describing the funded trust property), the annuity payment schedules, the investment and administrative provisions, the successor trustee provisions, the provisions governing the death of the Grantor during the annuity term, and the provisions governing the distribution of the remainder to the Caldwell Family Dynasty Trust.

7.3 Independent Advice. The Trustee represents and warrants that he has received the advice of legal counsel in connection with the establishment, funding, and administration of the GRATs. Specifically, the Trustee has been advised by Calderwood & Harkness LLP, including tax advice provided by Sylvia Hartwell, Partner, regarding the federal gift tax, estate tax, generation-skipping transfer tax, and income tax consequences of the GRAT structures, the zeroed-out annuity calculations, and the valuation discounts applied to the GRAT B and GRAT C trust property. The Trustee acknowledges that he has had the opportunity to ask questions of counsel and to review all relevant documents and calculations prior to accepting the trusteeship of each GRAT.

The Trustee further acknowledges that Eleanor V. Caldwell, his spouse, has been separately represented by Pemberton, Locke & Strauss LLP (Rachel F. Dunlap, Esq., 405 Lexington Avenue, 26th Floor, New York, New York 10174) with respect to her review and consent to the estate planning structures established by the Grantor, including the three GRATs, the Caldwell Family Dynasty Trust, and the Amended and Restated Caldwell Revocable Trust. The Trustee acknowledges that Mrs. Caldwell's separate representation was obtained to ensure that any spousal consent required or advisable in connection with the gift tax reporting (including any consent under IRC § 2513 for gift-splitting purposes, if applicable) or estate planning documentation was given with the benefit of independent legal advice.

7.4 No Delegation of Trustee Duties (During Annuity Term). The Trustee acknowledges and agrees that he shall serve personally as Trustee of each GRAT during the duration of each GRAT's annuity term and shall not delegate his trustee duties or powers to any other person, except as expressly permitted by the applicable Trust Agreement. The foregoing shall not preclude the Trustee from engaging the services of agents, advisors, custodians, investment managers, accountants, attorneys, or other professionals as authorized by the Trust Agreements and applicable law, provided that the Trustee retains ultimate authority and responsibility for all decisions relating to the administration of each GRAT. Nothing in this Section 7.4 shall be construed to limit the operation of the successor trustee provisions described in Section 8 below.

7.5 Covenant to Comply with IRC § 2702. The Trustee covenants and agrees that he shall administer each GRAT in strict compliance with the requirements of IRC § 2702 and the applicable Treasury Regulations promulgated thereunder, including Treasury Regulations § 25.2702-3. Without limiting the generality of the foregoing, the Trustee covenants that he shall:

(a) make all required annuity payments in the amounts and on or before the dates specified in Section 4 of this Acknowledgment and Acceptance and in the respective Trust Agreements;

(b) not make any distribution of trust property to any person other than the Grantor (as annuitant) during the annuity term, except as expressly permitted by the applicable Trust Agreement and by IRC § 2702;

(c) not commute, prepay, or accelerate any annuity payment except as required or permitted by the terms of the applicable Trust Agreement and applicable law;

(d) not issue any additional interests in any GRAT to any person, and not accept additional contributions to any GRAT after the funding date; and

(e) take all other actions necessary or appropriate to preserve the zeroed-out status of each GRAT and to ensure that the retained annuity interest qualifies as a "qualified interest" under IRC § 2702(b).

SECTION 8 — SUCCESSOR TRUSTEE PROVISIONS

8.1 Appointment Upon Termination of Annuity Term. The Trustee acknowledges that upon the termination of each GRAT's annuity term and the completion of the distribution of the remaining trust property (the remainder) to the Caldwell Family Dynasty Trust as remainder beneficiary, the Trustee's role with respect to that GRAT shall terminate. Following the distribution of the remainder, the trust property will be held and administered by the co-trustees of the Caldwell Family Dynasty Trust (Thomas R. Caldwell, as family co-trustee, and Northgate Trust Company of Delaware, as institutional co-trustee) in accordance with the terms of the Caldwell Family Dynasty Trust instrument. The Trustee acknowledges that any final accounting or administrative actions required to effectuate the termination of a GRAT shall be completed promptly following the termination of the annuity term.

8.2 Incapacity or Death of Trustee During Annuity Term. The Trustee acknowledges the successor trustee provisions set forth in each Trust Agreement, which govern the appointment of a successor trustee in the event that the Trustee becomes incapacitated, dies, resigns, or is otherwise unable to serve during the annuity term of any GRAT. The Trustee acknowledges that, in connection with the GRAT planning, Jonathan R. Caldwell executed a Durable General Power of Attorney on April 1, 2023, designating Eleanor V. Caldwell as his primary agent and Thomas R. Caldwell as his successor agent, with authority to act on the Grantor's behalf in connection with the administration of trust matters, including the GRATs, in the event of the Grantor's incapacity. The successor trustee provisions of each Trust Agreement and the Durable General Power of Attorney are intended to work in tandem to ensure the uninterrupted administration of each GRAT, including the timely satisfaction of annuity payment obligations, in the event that the Trustee is unable to serve.

SECTION 9 — INSURANCE AND INDEMNIFICATION

9.1 Liability Standard. The Trustee acknowledges the liability standard set forth in each Trust Agreement governing the Trustee's exposure to personal liability for losses sustained by the trust or its beneficiaries. The Trustee understands that, under applicable New York law and the terms of the Trust Agreements, the Trustee may be held liable for any loss to the trust or its beneficiaries resulting from a breach of fiduciary duty, including but not limited to acts of bad faith, willful misconduct, gross negligence, or self-dealing. The Trustee further acknowledges that the exculpation provisions, if any, set forth in the Trust Agreements are subject to the limitations imposed by New York law, including NY EPTL § 11-1.7 and applicable case law, and that no provision of any Trust Agreement shall be construed to relieve the Trustee of liability for a breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries.

9.2 No Compensation. The Trustee acknowledges and agrees that he shall serve without separate trustee compensation for each of the three GRATs, in recognition of his dual role as Grantor and Trustee of each GRAT. The Trustee's waiver of compensation is voluntary and is consistent with the intent to minimize the expenses of the GRATs during the annuity term. The foregoing shall not preclude the reimbursement of the Trustee for reasonable out-of-pocket expenses incurred in the administration of the GRATs, including professional fees of accountants, appraisers, and legal counsel, to the extent that such expenses are authorized by the applicable Trust Agreement and are properly chargeable to the trust.

SECTION 10 — GOVERNING LAW

This Acknowledgment and Acceptance, and all rights and obligations of the Trustee hereunder, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice-of-law or conflict-of-laws rules or provisions that would cause the application of the laws of any other jurisdiction. The governing law provisions of this Acknowledgment and Acceptance are consistent with, and supplemental to, the governing law provisions set forth in each of the three Trust Agreements, each of which is governed by the laws of the State of New York.

SECTION 11 — MISCELLANEOUS

11.1 Notices. All notices, requests, demands, consents, and other communications required or permitted to be given under this Acknowledgment and Acceptance or in connection with the administration of any GRAT shall be in writing and shall be deemed to have been duly given when delivered personally, when sent by overnight courier of national reputation, or when sent by United States certified mail, return receipt requested, postage prepaid, to the following addresses (or such other address as the Trustee may designate in writing from time to time):

If to the Trustee:

Jonathan R. Caldwell 418 East 72nd Street, Apt. 14A New York, New York 10021

With a copy to:

Calderwood & Harkness LLP 375 Park Avenue, 42nd Floor New York, New York 10152

Attn: Victoria Chambers / Monica Reyes

Matter No. 1034-00004

11.2 Counterparts. This Acknowledgment and Acceptance may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Acknowledgment and Acceptance by facsimile or portable document format (PDF) transmission shall be valid and effective for all purposes as if executed in original form.

11.3 Entire Understanding. This Acknowledgment and Acceptance is supplemental to, and is intended to be read in conjunction with, the three Trust Agreements identified in Recital B above. Nothing in this Acknowledgment and Acceptance is intended to supersede, modify, or amend any provision of any Trust Agreement. In the event of any conflict between the terms of this Acknowledgment and Acceptance and the terms of any Trust Agreement, the terms of the applicable Trust Agreement shall control.

EXECUTION

IN WITNESS WHEREOF, the undersigned has executed this GRAT Trustee Acknowledgment and Acceptance as of June 1, 2023, as the consolidated execution date for all three GRATs.

TRUSTEE:

________________________________________

Jonathan Robert Caldwell

In his capacity as Trustee of: (i) Caldwell 2023 Securities GRAT (ii) Caldwell 2023 Realty GRAT (iii) Caldwell 2023 Carried Interest GRAT

Date: June 1, 2023

Address: 418 East 72nd Street, Apt. 14A

New York, New York 10021

NOTARY ACKNOWLEDGMENT. STATE OF NEW YORK COUNTY OF NEW YORK

On this 1st day of June, 2023, before me, the undersigned, a Notary Public in and for said State, personally appeared Jonathan Robert Caldwell, known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity as Trustee of the Caldwell 2023 Securities GRAT, the Caldwell 2023 Realty GRAT, and the Caldwell 2023 Carried Interest GRAT, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

________________________________________

Notary Public, State of New York

Name (printed): ________ Commission No.: ________ My Commission Expires: ________

[NOTARIAL SEAL]

WITNESS ATTESTATION. The undersigned, each being of legal age and competent to serve as a witness, hereby attest that they witnessed the execution of this Acknowledgment and Acceptance by Jonathan Robert Caldwell on June 1, 2023.

Witness 1:

________________________________________

Monica Reyes Senior Associate Calderwood & Harkness LLP 375 Park Avenue, 42nd Floor New York, New York 10152

Witness 2:

________________________________________

Elliot Nguyen Associate Calderwood & Harkness LLP 375 Park Avenue, 42nd Floor New York, New York 10152

EXHIBIT A — SUMMARY TABLE OF GRAT TERMS

The following table summarizes the key terms and structural features of each GRAT for reference purposes. This Exhibit A is incorporated by reference into this Acknowledgment and Acceptance and is provided for convenience only. In the event of any discrepancy between this Exhibit A and the terms of any Trust Agreement, the terms of the applicable Trust Agreement shall control.

This Acknowledgment and Acceptance has been prepared by Calderwood & Harkness LLP, 375 Park Avenue, 42nd Floor, New York, New York 10152, in connection with Matter No. 1034-00004. This document is intended solely for the use of Jonathan R. Caldwell in his capacities as Grantor and Trustee of the GRATs identified herein and is not intended to confer any rights upon any third party.

Item	GRAT A (Securities)	GRAT B (Realty)	GRAT C (Carried Interest)
Trust Agreement Date	April 15, 2023	May 1, 2023	June 1, 2023
Funding Date	April 15, 2023	May 1, 2023	June 1, 2023
Trust Property	Publicly traded securities	59.7% membership interest in Stonecrest Realty Holdings LLC	Fund IV LP, Fund V LP, Fund VI Carried Interest (Caldwell Ridgeline Capital)
Corpus FMV (Pre-discount)	$60,000,000	$80,000,000	$38,000,000
discount Applied	N/A	25% (combined DLOM/DLOC)	35% (LP interests); 30% (carried interest)
Corpus FMV (Post-discount)	$60,000,000	$60,000,000	$25,300,000
Annuity Term	2 years	3 years	3 years
§ 7520 Rate	5.0% (March 2023)	5.0% (April 2023)	5.0% (May 2023)
Annual Annuity Payment	$32,195,122	$29,375,859	$13,953,759
Annuity Payment Dates	April 15, 2024; April 15, 2025	May 1, 2024; May 1, 2025; May 1, 2026	June 1, 2024; June 1, 2025; June 1, 2026
Remainder Beneficiary	Caldwell Family Dynasty Trust	Caldwell Family Dynasty Trust	Caldwell Family Dynasty Trust
Taxable Gift	$0	$0	$0
Governing Law	New York	New York	New York
Appraiser	N/A	Ashford Valuation Group LLC	Ashford Valuation Group LLC
Trustee	Jonathan R. Caldwell	Jonathan R. Caldwell	Jonathan R. Caldwell
Grantor Trust Status	Yes (IRC §§ 671–679)	Yes (IRC §§ 671–679)	Yes (IRC §§ 671–679)

GRAT TRUSTEE ACKNOWLEDGMENT AND ACCEPTANCE
Acknowledgment and Acceptance of Trusteeship by Jonathan R. Caldwell for the Caldwell 2023 Securities GRAT, Caldwell 2023 Realty GRAT, and Caldwell 2023 Carried Interest GRAT
Executed in counterparts on the respective funding dates of each GRAT (April 15, 2023; May 1, 2023; June 1, 2023), with this consolidated Acknowledgment executed as of June 1, 2023
RECITALS
A. Identity of Grantor and Trustee. Jonathan Robert Caldwell, an individual residing at 418 East 72nd Street, Apt. 14A, New York, New York 10021 (Social Security Number ending in 4781; date of birth: March 14, 1956) (hereinafter, the "Grantor" or the "Trustee," as applicable), serves in his dual capacity as Grantor and Trustee of each of the three grantor retained annuity trusts identified in this Acknowledgment and Acceptance (each, a "GRAT," and collectively, the "GRATs"). The Grantor established each GRAT during the period from April 15, 2023 through June 1, 2023 as part of a coordinated estate and gift tax planning strategy, and has accepted appointment as the initial Trustee of each GRAT in accordance with the terms of the respective Trust Agreements described below.
B. Identification of the Three GRATs. The Grantor has established the following three irrevocable grantor retained annuity trusts, each governed by the laws of the State of New York:
(i) Caldwell 2023 Securities GRAT ("GRAT A"). GRAT A is an irrevocable trust established pursuant to a Trust Agreement dated April 15, 2023 (the "GRAT A Trust Agreement"). GRAT A was funded on April 15, 2023 with publicly traded securities having an aggregate fair market value of Sixty Million Dollars ($60,000,000) as of the funding date. The securities transferred to GRAT A are described in detail on Schedule A to the GRAT A Trust Agreement.
(ii) Caldwell 2023 Realty GRAT ("GRAT B"). GRAT B is an irrevocable trust established pursuant to a Trust Agreement dated May 1, 2023 (the "GRAT B Trust Agreement"). GRAT B was funded on May 1, 2023 with membership interests in Stonecrest Realty Holdings LLC, a New York limited liability company with its principal office at 330 Madison Avenue, Suite 2401, New York, New York 10017 ("Stonecrest"). The membership interests transferred to GRAT B represent an approximate 59.7% membership interest in Stonecrest and have a pre-discount fair market value of Eighty Million Dollars ($80,000,000) as of the funding date. For United States federal gift tax purposes, a combined lack-of-marketability and lack-of-control discount of twenty-five percent (25%) has been applied to the transferred interests, resulting in a post-discount value of Sixty Million Dollars ($60,000,000) for gift tax reporting purposes. The membership interests transferred to GRAT B are described in detail on Schedule A to the GRAT B Trust Agreement.
(iii) Caldwell 2023 Carried Interest GRAT ("GRAT C"). GRAT C is an irrevocable trust established pursuant to a Trust Agreement dated June 1, 2023 (the "GRAT C Trust Agreement"). GRAT C was funded on June 1, 2023 with limited partnership interests and a carried-interest position in entities managed by Caldwell Ridgeline Capital LLC, a Delaware limited liability company with its principal office at 280 Park Avenue, 35th Floor, New York, New York 10017 ("Caldwell Ridgeline Capital"), specifically:
(a) a limited partnership interest in Caldwell Ridgeline Fund IV LP, having a fair market value of Twelve Million Dollars ($12,000,000), to which a combined lack-of-marketability and lack-of-control discount of thirty-five percent (35%) has been applied for gift tax reporting purposes;
(b) a limited partnership interest in Caldwell Ridgeline Fund V LP, having a fair market value of Fourteen Million Dollars ($14,000,000), to which a combined lack-of-marketability and lack-of-control discount of thirty-five percent (35%) has been applied for gift tax reporting purposes; and
(c) a carried-interest position in Caldwell Ridgeline Fund VI LP, having a fair market value of Twelve Million Dollars ($12,000,000), to which a discount of thirty percent (30%) has been applied for gift tax reporting purposes;
resulting in a total pre-discount fair market value of Thirty-Eight Million Dollars ($38,000,000) and a post-discount value of Twenty-Five Million Three Hundred Thousand Dollars ($25,300,000) for United States federal gift tax reporting purposes. The LP interests and carried-interest position transferred to GRAT C are described in detail on Schedule A to the GRAT C Trust Agreement.
The GRAT A Trust Agreement, the GRAT B Trust Agreement, and the GRAT C Trust Agreement are hereinafter referred to individually as a "Trust Agreement" and collectively as the "Trust Agreements."
C. Common Remainder Beneficiary. Each GRAT designates the Caldwell Family Dynasty Trust as the sole remainder beneficiary upon the termination of the applicable annuity term. The Caldwell Family Dynasty Trust is an irrevocable trust established by the Grantor on April 1, 2023, with situs in the State of Delaware. The Caldwell Family Dynasty Trust is administered by Thomas R. Caldwell, as family co-trustee, and Northgate Trust Company of Delaware, as institutional co-trustee (principal office: 1201 North Market Street, Suite 1600, Wilmington, Delaware 19801; contact: Philip A. Rossiter, Senior Vice President — Trust Administration). The Caldwell Family Dynasty Trust was established as a multi-generational trust for the benefit of the Grantor's descendants and is intended to qualify for exemption from the federal generation-skipping transfer tax upon the allocation of the Grantor's GST exemption at the appropriate time, as further described in Section 6.2 below.
D. Zeroed-Out Structure. Each GRAT is designed as a "zeroed-out" grantor retained annuity trust under Section 2702 of the Internal Revenue Code of 1986, as amended (the "Code" or "IRC"), and the Treasury Regulations promulgated thereunder. The annuity payments from each GRAT have been calculated to produce a taxable gift of zero dollars ($0) based on the applicable Section 7520 rate in effect at the time of funding of each respective GRAT. The zeroed-out structure is intended to permit the transfer of any appreciation in the trust property in excess of the Section 7520 rate to the Caldwell Family Dynasty Trust as remainder beneficiary without the imposition of federal gift tax or generation-skipping transfer tax.
E. Legal Counsel. The Trustee has been advised in connection with the establishment, funding, and administration of each GRAT by Calderwood & Harkness LLP, 375 Park Avenue, 42nd Floor, New York, New York 10152 (the "Firm"). The Firm's engagement in this matter has been conducted under Matter No. 1034-00004, with the following professionals assigned to the matter:
•  Victoria Chambers, Partner — Trusts, Estates & Private Wealth Group (Responsible Partner)
•  Sylvia Hartwell, Partner — Tax Specialty Group (Tax Specialist)
•  Monica Reyes, Senior Associate — Trusts, Estates & Private Wealth Group (Lead Associate)
•  Elliot Nguyen, Associate — Trusts, Estates & Private Wealth Group (Working Associate)
The Trustee acknowledges that he has had the opportunity to consult with counsel and to review all relevant documents prior to executing this Acknowledgment and Acceptance.
NOW, THEREFORE, in consideration of the premises and the Trustee's acceptance of the trust responsibilities set forth in the Trust Agreements, Jonathan R. Caldwell hereby executes this Acknowledgment and Acceptance as follows:
SECTION 1 — ACCEPTANCE OF TRUSTEESHIP
1.1 Acceptance as to GRAT A (Caldwell 2023 Securities GRAT). Jonathan R. Caldwell hereby acknowledges receipt of the executed Trust Agreement dated April 15, 2023 for the Caldwell 2023 Securities GRAT (GRAT A), together with all schedules and exhibits attached thereto, and hereby accepts appointment as Trustee thereof effective as of April 15, 2023. The Trustee shall serve in such capacity for the full duration of the annuity term of GRAT A, which is a two (2)-year term commencing on April 15, 2023 and ending on April 15, 2025, unless the Trustee's service is earlier terminated by reason of death, incapacity, or resignation in accordance with the provisions of the GRAT A Trust Agreement.
1.2 Acceptance as to GRAT B (Caldwell 2023 Realty GRAT). Jonathan R. Caldwell hereby acknowledges receipt of the executed Trust Agreement dated May 1, 2023 for the Caldwell 2023 Realty GRAT (GRAT B), together with all schedules and exhibits attached thereto, and hereby accepts appointment as Trustee thereof effective as of May 1, 2023. The Trustee shall serve in such capacity for the full duration of the annuity term of GRAT B, which is a three (3)-year term commencing on May 1, 2023 and ending on May 1, 2026, unless the Trustee's service is earlier terminated by reason of death, incapacity, or resignation in accordance with the provisions of the GRAT B Trust Agreement.
1.3 Acceptance as to GRAT C (Caldwell 2023 Carried Interest GRAT). Jonathan R. Caldwell hereby acknowledges receipt of the executed Trust Agreement dated June 1, 2023 for the Caldwell 2023 Carried Interest GRAT (GRAT C), together with all schedules and exhibits attached thereto, and hereby accepts appointment as Trustee thereof effective as of June 1, 2023. The Trustee shall serve in such capacity for the full duration of the annuity term of GRAT C, which is a three (3)-year term commencing on June 1, 2023 and ending on June 1, 2026, unless the Trustee's service is earlier terminated by reason of death, incapacity, or resignation in accordance with the provisions of the GRAT C Trust Agreement.
1.4 Scope of Acceptance. The Trustee's acceptance of the trusteeship of each GRAT encompasses all powers, duties, responsibilities, and obligations conferred upon or imposed upon the Trustee by the applicable Trust Agreement, by this Acknowledgment and Acceptance, and by applicable law, including but not limited to the New York Estates, Powers and Trusts Law ("NY EPTL"), the New York Prudent Investor Act (NY EPTL § 11-2.3), and the New York Principal and Income Act (NY EPTL § 11-A), as each may be amended from time to time. The Trustee acknowledges that his acceptance is unconditional with respect to each GRAT and that he assumes all fiduciary obligations attendant thereto as of the respective effective dates stated in Sections 1.1, 1.2, and 1.3 above.
SECTION 2 — ACKNOWLEDGMENT OF TRUST PROPERTY
2.1 GRAT A Trust Property. The Trustee hereby acknowledges receipt of, and confirms that he holds in his custody as Trustee of GRAT A, the trust property described in Schedule A of the GRAT A Trust Agreement, consisting of publicly traded securities having an aggregate fair market value of Sixty Million Dollars ($60,000,000) as of the date of funding, April 15, 2023. The fair market value of the publicly traded securities was determined based on the closing prices of the respective securities on the New York Stock Exchange, the NASDAQ Global Select Market, and other applicable national securities exchanges on April 15, 2023, as adjusted for any securities for which the valuation date fell on a non-trading day. The Trustee further confirms that title to such securities has been duly transferred to the Caldwell 2023 Securities GRAT through properly executed stock powers, broker account re-registrations, and such other transfer instruments as were necessary to vest legal title in the trust, and that such securities are held in a brokerage account at Vireo National Bank (Account No. ending in -7923) registered in the name of "Jonathan R. Caldwell, Trustee of the Caldwell 2023 Securities GRAT dated April 15, 2023."
2.2 GRAT B Trust Property. The Trustee hereby acknowledges receipt of, and confirms that he holds in his custody as Trustee of GRAT B, the trust property described in Schedule A of the GRAT B Trust Agreement, consisting of an approximate 59.7% membership interest in Stonecrest Realty Holdings LLC, a New York limited liability company, with a pre-discount fair market value of Eighty Million Dollars ($80,000,000) as of the date of funding, May 1, 2023. The Trustee confirms that he has executed the Assignment of Stonecrest Realty Holdings LLC Membership Interest to the Caldwell 2023 Realty GRAT, dated as of May 1, 2023, and that such Assignment has been delivered to and acknowledged by Stonecrest Realty Holdings LLC. The Trustee further confirms that the transfer of the membership interests has been reflected on the books and records of Stonecrest Realty Holdings LLC and that all required consents under the Stonecrest Operating Agreement, if any, have been obtained. For purposes of ongoing administrative matters relating to the Stonecrest membership interests, the Trustee acknowledges that Robert M. Sinclair, Chief Operating Officer of Stonecrest Realty Holdings LLC, shall serve as the primary point of contact for coordination of distributions, capital calls, and other matters affecting the trust property.
2.3 GRAT C Trust Property. The Trustee hereby acknowledges receipt of, and confirms that he holds in his custody as Trustee of GRAT C, the trust property described in Schedule A of the GRAT C Trust Agreement, consisting of limited partnership interests and a carried-interest position in the following entities managed by Caldwell Ridgeline Capital LLC:
(a) Fund IV LP Interest: A limited partnership interest in Caldwell Ridgeline Fund IV LP, having a fair market value of Twelve Million Dollars ($12,000,000) as of June 1, 2023, prior to the application of any valuation discounts;
(b) Fund V LP Interest: A limited partnership interest in Caldwell Ridgeline Fund V LP, having a fair market value of Fourteen Million Dollars ($14,000,000) as of June 1, 2023, prior to the application of any valuation discounts; and
(c) Fund VI Carried Interest: A carried-interest position in Caldwell Ridgeline Fund VI LP, having a fair market value of Twelve Million Dollars ($12,000,000) as of June 1, 2023, prior to the application of any valuation discounts.
The aggregate pre-discount fair market value of the GRAT C trust property is Thirty-Eight Million Dollars ($38,000,000). The Trustee confirms that he has executed the Assignment of Caldwell Ridgeline Capital LP Interests and Carried Interest to the Caldwell 2023 Carried Interest GRAT, dated as of June 1, 2023, and that such Assignment has been delivered to and acknowledged by Caldwell Ridgeline Capital LLC, as general partner or managing member of each of the applicable entities. The Trustee further confirms that the transfers have been reflected on the books and records of each applicable fund entity and that all required consents and notices under the respective limited partnership agreements and operating agreements have been obtained or delivered. For purposes of ongoing administrative matters, including valuation updates, distribution coordination, and compliance with fund-level governance provisions, the Trustee acknowledges that Gregory S. Fenton, Chief Financial Officer of Caldwell Ridgeline Capital LLC, shall serve as the primary point of contact.
2.4 Appraisal Acknowledgment. The Trustee hereby acknowledges that independent appraisals of the GRAT B trust property (Stonecrest Realty Holdings LLC membership interests) and the GRAT C trust property (Caldwell Ridgeline Fund IV LP, Fund V LP, and Fund VI LP interests) have been prepared by Ashford Valuation Group LLC (Dr. Leonard K. Whitfield, ASA, Managing Partner, 1120 Avenue of the Americas, Suite 3500, New York, New York 10036). The appraisal reports for both GRAT B and GRAT C were completed and delivered to the Trustee and to Calderwood & Harkness LLP on June 15, 2023. The Trustee has reviewed the appraisal reports and acknowledges the following valuation discounts applied for United States federal gift tax reporting purposes:
(a) Stonecrest Realty Holdings LLC membership interests (GRAT B): A combined lack-of-marketability and lack-of-control discount of twenty-five percent (25%), resulting in a post-discount fair market value of Sixty Million Dollars ($60,000,000) for gift tax purposes;
(b) Caldwell Ridgeline Fund IV LP and Fund V LP interests (GRAT C): A combined lack-of-marketability and lack-of-control discount of thirty-five percent (35%) applied to each LP interest; and
(c) Caldwell Ridgeline Fund VI LP carried-interest position (GRAT C): A discount of thirty percent (30%) applied to the carried-interest position;
resulting in a post-discount fair market value for the GRAT C trust property, in the aggregate, of Twenty-Five Million Three Hundred Thousand Dollars ($25,300,000) for gift tax purposes.
The Trustee acknowledges that the appraisal reports prepared by Ashford Valuation Group LLC form the basis for the valuations reported on the Grantor's IRS Form 709 for the 2023 tax year, and the Trustee agrees to cooperate fully with any IRS examination, audit, or challenge of such valuations, as further described in Section 6.3 below.
SECTION 3 — ACKNOWLEDGMENT OF FIDUCIARY DUTIES
3.1 General Fiduciary Standard. The Trustee acknowledges that he owes fiduciary duties of the highest order to the beneficiaries of each GRAT. Specifically, the Trustee owes duties of loyalty, prudence, and impartiality to both the Grantor, in his capacity as the annuitant entitled to receive fixed annuity payments during each GRAT's annuity term, and to the Caldwell Family Dynasty Trust, as the remainder beneficiary entitled to receive the remaining trust property upon the termination of each GRAT's annuity term. The Trustee acknowledges that these fiduciary duties are imposed by the terms of the applicable Trust Agreement, by applicable provisions of the New York Estates, Powers and Trusts Law, and by common law principles governing the administration of trusts. The Trustee further acknowledges that any breach of fiduciary duty may give rise to personal liability on the part of the Trustee and may jeopardize the intended tax treatment of the GRATs.
3.2 Duty to Preserve Trust Property. The Trustee acknowledges his obligation to preserve, protect, and manage the trust property of each GRAT in a prudent manner throughout the duration of the applicable annuity term. Without limiting the generality of the foregoing:
(a) With respect to GRAT A (publicly traded securities): The Trustee acknowledges the duty to maintain custody of the publicly traded securities held in the trust portfolio, to monitor the performance and allocation of such securities, and to manage the portfolio consistent with the investment provisions set forth in Article [IV] of the GRAT A Trust Agreement. The Trustee shall cause the securities to be held in a properly titled brokerage account and shall ensure that all dividends, interest, and other distributions received with respect to the securities are properly credited to the trust.
(b) With respect to GRAT B (Stonecrest Realty Holdings LLC membership interests): The Trustee acknowledges that the trust property consists of illiquid membership interests in a privately held limited liability company. The Trustee shall oversee the interests held by GRAT B in coordination with the management of Stonecrest Realty Holdings LLC, including Robert M. Sinclair, Chief Operating Officer. The Trustee shall exercise all rights attendant to the membership interests, including voting rights, distribution rights, and consent rights, in a manner consistent with his fiduciary obligations and the terms of the Stonecrest Operating Agreement.
(c) With respect to GRAT C (LP interests and carried-interest position): The Trustee acknowledges that the trust property consists of illiquid limited partnership interests and a carried-interest position in private investment fund vehicles managed by Caldwell Ridgeline Capital LLC. The Trustee acknowledges that these interests are subject to the terms and restrictions of the applicable limited partnership agreements and operating agreements, including restrictions on transfer, requirements for capital contributions, and governance provisions. The Trustee shall comply with all applicable transfer, notice, and governance provisions of Caldwell Ridgeline Capital LLC and the respective fund entities, and shall coordinate with Gregory S. Fenton, Chief Financial Officer of Caldwell Ridgeline Capital LLC, regarding all administrative matters affecting the trust property.
3.3 Duty of Impartiality. The Trustee acknowledges the dual interest of the Grantor, as annuitant during the annuity term, and the Caldwell Family Dynasty Trust, as the remainder beneficiary, in the trust property of each GRAT. The Trustee acknowledges the obligation to balance these interests equitably during the annuity term, recognizing that the annuitant has a fixed claim to annuity payments and that the remainder beneficiary is entitled to any excess appreciation in the trust property remaining after all annuity payments have been satisfied. The Trustee shall not take any action that unduly favors one beneficiary class at the expense of the other, except to the extent that the structure of a zeroed-out GRAT inherently prioritizes the timely payment of the annuity obligation.
3.4 Duty of Record-Keeping and Accounting. The Trustee acknowledges the duty to maintain complete, accurate, and contemporaneous books and records for each GRAT, including but not limited to records of all trust property, receipts and disbursements of income and principal, all annuity payments made or to be made, valuations of trust property (including periodic revaluations as required for in-kind distributions), and all correspondence, agreements, and other documents relating to the administration of each GRAT. The Trustee further acknowledges the obligation to provide formal accountings as required by the respective Trust Agreements or as required by applicable law, including upon reasonable request by the remainder beneficiary or its trustees. The Trustee shall coordinate with Martin J. Prescott, CPA, of Strathmore Corporation & Greaves LLP, 600 Third Avenue, 28th Floor, New York, New York 10016, for all tax reporting purposes, including the preparation and filing of federal and state income tax returns and gift tax returns relating to the GRATs.
3.5 Grantor Trust Status. The Trustee acknowledges that each GRAT is treated as a "grantor trust" for United States federal income tax purposes during the entire annuity term, pursuant to Sections 671 through 679 of the Internal Revenue Code. As a consequence of this grantor trust status, all items of income, deduction, and credit of each GRAT are reportable on the Grantor's personal federal and applicable state income tax returns (currently, the joint return filed by Jonathan R. Caldwell and Eleanor V. Caldwell). The Trustee shall cooperate with the Grantor's tax advisors in providing all information necessary for the accurate reporting of the trust's income, gains, losses, and deductions on the Grantor's tax returns. No separate income tax returns (IRS Form 1041) need be filed for the GRATs during the annuity term, although informational returns with a grantor trust statement may be filed as required by Treasury Regulations.
SECTION 4 — ANNUITY PAYMENT OBLIGATIONS
4.1 GRAT A Annuity Payment Schedule. The Trustee acknowledges the obligation to make the following annuity payments from the Caldwell 2023 Securities GRAT (GRAT A) to the Grantor during the two (2)-year annuity term:
Payment 1: Thirty-Two Million One Hundred Ninety-Five Thousand One Hundred Twenty-Two Dollars ($32,195,122), due and payable on or before April 15, 2024 (the first anniversary of the funding date).
Payment 2: Thirty-Two Million One Hundred Ninety-Five Thousand One Hundred Twenty-Two Dollars ($32,195,122), due and payable on or before April 15, 2025 (the second anniversary of the funding date and the termination of the annuity term).
The annuity payments set forth above have been calculated as a level annuity amount designed to produce a zeroed-out taxable gift of zero dollars ($0) under IRC § 2702, based on a corpus of Sixty Million Dollars ($60,000,000), a two (2)-year annuity term, and an applicable Section 7520 rate of 5.0% (the rate published by the Internal Revenue Service for March 2023, the month elected for valuation purposes by the Grantor on the applicable Form 709).
4.2 GRAT B Annuity Payment Schedule. The Trustee acknowledges the obligation to make the following annuity payments from the Caldwell 2023 Realty GRAT (GRAT B) to the Grantor during the three (3)-year annuity term:
Payment 1: Twenty-Nine Million Three Hundred Seventy-Five Thousand Eight Hundred Fifty-Nine Dollars ($29,375,859), due and payable on or before May 1, 2024 (the first anniversary of the funding date).
Payment 2: Twenty-Nine Million Three Hundred Seventy-Five Thousand Eight Hundred Fifty-Nine Dollars ($29,375,859), due and payable on or before May 1, 2025 (the second anniversary of the funding date).
Payment 3: Twenty-Nine Million Three Hundred Seventy-Five Thousand Eight Hundred Fifty-Nine Dollars ($29,375,859), due and payable on or before May 1, 2026 (the third anniversary of the funding date and the termination of the annuity term).
The annuity payments set forth above have been calculated as a level annuity amount designed to produce a zeroed-out taxable gift of zero dollars ($0) under IRC § 2702, based on a pre-discount corpus of Eighty Million Dollars ($80,000,000) (representing the Stonecrest Realty Holdings LLC membership interests), a three (3)-year annuity term, and an applicable Section 7520 rate of 5.0% (the rate published by the Internal Revenue Service for April 2023, the month elected for valuation purposes by the Grantor on the applicable Form 709).
4.3 GRAT C Annuity Payment Schedule. The Trustee acknowledges the obligation to make the following annuity payments from the Caldwell 2023 Carried Interest GRAT (GRAT C) to the Grantor during the three (3)-year annuity term:
Payment 1: Thirteen Million Nine Hundred Fifty-Three Thousand Seven Hundred Fifty-Nine Dollars ($13,953,759), due and payable on or before June 1, 2024 (the first anniversary of the funding date).
Payment 2: Thirteen Million Nine Hundred Fifty-Three Thousand Seven Hundred Fifty-Nine Dollars ($13,953,759), due and payable on or before June 1, 2025 (the second anniversary of the funding date).
Payment 3: Thirteen Million Nine Hundred Fifty-Three Thousand Seven Hundred Fifty-Nine Dollars ($13,953,759), due and payable on or before June 1, 2026 (the third anniversary of the funding date and the termination of the annuity term).
The annuity payments set forth above have been calculated as a level annuity amount designed to produce a zeroed-out taxable gift of zero dollars ($0) under IRC § 2702, based on a pre-discount corpus of Thirty-Eight Million Dollars ($38,000,000) (representing the Caldwell Ridgeline Fund IV LP, Fund V LP, and Fund VI LP interests), a three (3)-year annuity term, and an applicable Section 7520 rate of 5.0% (the rate published by the Internal Revenue Service for May 2023, the month elected for valuation purposes by the Grantor on the applicable Form 709).
4.4 Timely Payment Requirement. The Trustee acknowledges that the annuity payments specified in Sections 4.1, 4.2, and 4.3 above must be made on or before the respective due dates set forth therein. The Trustee further acknowledges that the failure to make timely annuity payments in the full required amounts may jeopardize the zeroed-out status of the applicable GRAT under IRC § 2702 and the applicable Treasury Regulations, potentially resulting in the recharacterization of the retained annuity interest and the imposition of federal gift tax on the full value of the trust property transferred to the GRAT. The Trustee shall take all necessary and prudent steps to ensure the availability of sufficient liquid assets or distributable property to satisfy each annuity payment when due.
Annuity payments may be made in cash or in kind (by distribution of trust property to the Grantor) at the Trustee's discretion, subject to the terms and conditions set forth in each Trust Agreement. In the event that an annuity payment is made in kind, in whole or in part, the trust property so distributed must be valued at its fair market value as of the date of distribution, as determined by an independent appraisal or other reliable valuation methodology, and such valuation must be contemporaneously documented in the trust records. The Trustee shall ensure that any in-kind distribution of trust property is properly documented by a written instrument of distribution reflecting the property distributed, the fair market value thereof, and the annuity payment obligation being satisfied.
4.5 Substitute Asset Authority. The Trustee acknowledges that each Trust Agreement grants the Grantor the power, exercisable in a non-fiduciary capacity without the approval or consent of any person acting in a fiduciary capacity, to substitute assets of equivalent value for trust property, in accordance with IRC § 675(4)(C) and the Treasury Regulations thereunder. The Trustee acknowledges that the exercise of this substitution power is a key feature of the grantor trust structure and must be properly documented with contemporaneous fair market value determinations of both the trust property being released and the substitute property being contributed. The Trustee shall cooperate with the Grantor in facilitating any such substitution, provided that the substitution results in the trust holding property of equivalent value and does not impair the trust's ability to satisfy the annuity payment obligations or otherwise compromise the integrity of the GRAT structure.
SECTION 5 — REMAINDER DISTRIBUTION OBLIGATIONS
5.1 Distribution upon Termination of Annuity Term. The Trustee acknowledges that upon the expiration of the annuity term of each GRAT, after all required annuity payments have been satisfied in full, the Trustee shall distribute the remaining trust property of such GRAT — that is, any trust property representing appreciation in excess of the cumulative annuity amounts and the Section 7520 hurdle rate — to the Caldwell Family Dynasty Trust as the designated remainder beneficiary. The anticipated dates for remainder distributions are as follows:
(a) GRAT A Remainder Distribution: On or promptly after April 15, 2025, following the termination of the two (2)-year annuity term of the Caldwell 2023 Securities GRAT.
(b) GRAT B Remainder Distribution: On or promptly after May 1, 2026, following the termination of the three (3)-year annuity term of the Caldwell 2023 Realty GRAT.
(c) GRAT C Remainder Distribution: On or promptly after June 1, 2026, following the termination of the three (3)-year annuity term of the Caldwell 2023 Carried Interest GRAT.
All remainder distributions shall be coordinated with Thomas R. Caldwell, in his capacity as family co-trustee of the Caldwell Family Dynasty Trust, and Philip A. Rossiter, Senior Vice President — Trust Administration, at Northgate Trust Company of Delaware, in its capacity as institutional co-trustee of the Caldwell Family Dynasty Trust. The Trustee shall provide reasonable advance notice to the co-trustees of the Caldwell Family Dynasty Trust prior to the anticipated date of each remainder distribution, and shall cooperate in the preparation and execution of all instruments of transfer, assignments, and other documentation necessary to effectuate the distribution of trust property from each GRAT to the Caldwell Family Dynasty Trust.
5.2 Mortality Contingency. The Trustee acknowledges that if the Grantor dies during the annuity term of any GRAT, the remaining trust property of that GRAT (or a portion thereof, as determined under applicable Treasury Regulations) will be included in the Grantor's gross estate for United States federal estate tax purposes under IRC § 2036. In such event, the provisions of the applicable Trust Agreement governing the disposition of trust property upon the death of the Grantor during the annuity term shall control. The Trustee acknowledges that such provisions have been coordinated with the Grantor's overall estate plan, including the Amended and Restated Caldwell Revocable Trust (effective April 1, 2023; original instrument dated October 3, 2010) and the Last Will and Testament of Jonathan R. Caldwell (executed April 1, 2023), to ensure the orderly administration of the Grantor's estate in the event of the Grantor's death during any GRAT's annuity term. The Trustee further acknowledges the importance of prompt notification to counsel and to the co-trustees of the Caldwell Family Dynasty Trust in the event of the Grantor's death during any annuity term.
SECTION 6 — TAX COMPLIANCE ACKNOWLEDGMENTS
6.1 Gift Tax Reporting. The Trustee acknowledges that the funding of each GRAT constitutes a completed gift for United States federal gift tax purposes and is required to be reported on IRS Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) for the 2023 calendar year. The Trustee further acknowledges that the preparation and filing of the Grantor's 2023 Form 709 is being coordinated between Sylvia Hartwell of Calderwood & Harkness LLP, in her capacity as tax specialist for the matter, and Martin J. Prescott, CPA, of Strathmore Corporation & Greaves LLP, in his capacity as the Grantor's tax return preparer. The following values are reported for United States federal gift tax purposes on the Grantor's 2023 Form 709:
(a) GRAT A (Caldwell 2023 Securities GRAT): Corpus of Sixty Million Dollars ($60,000,000); no valuation discounts applied; zeroed-out annuity; taxable gift equals zero dollars ($0).
(b) GRAT B (Caldwell 2023 Realty GRAT): Pre-discount corpus of Eighty Million Dollars ($80,000,000); post-discount corpus of Sixty Million Dollars ($60,000,000) after application of a twenty-five percent (25%) combined lack-of-marketability and lack-of-control discount; zeroed-out annuity calculated on the pre-discount corpus; taxable gift equals zero dollars ($0).
(c) GRAT C (Caldwell 2023 Carried Interest GRAT): Pre-discount corpus of Thirty-Eight Million Dollars ($38,000,000); post-discount corpus of Twenty-Five Million Three Hundred Thousand Dollars ($25,300,000) after application of applicable discounts (thirty-five percent (35%) for Fund IV and Fund V LP interests; thirty percent (30%) for Fund VI carried interest); zeroed-out annuity calculated on the pre-discount corpus; taxable gift equals zero dollars ($0).
The Trustee agrees to cooperate fully in the preparation, review, and filing of the Form 709 and all supporting schedules and disclosures, including adequate disclosure statements under Treasury Regulation § 301.6501(c)-1(f) to commence the running of the statute of limitations with respect to the reported transfers.
6.2 GST Exemption — ETIP Acknowledgment. The Trustee acknowledges that no allocation of the Grantor's generation-skipping transfer ("GST") tax exemption may be made to any GRAT remainder interest during the applicable annuity term. This restriction arises from the estate tax inclusion period ("ETIP") rules set forth in IRC § 2642(f), which provide that no GST exemption allocation is effective with respect to a trust during any period in which the trust property would be includible in the Grantor's gross estate (other than by reason of IRC § 2035) if the Grantor were to die during such period. Because each GRAT's trust property is subject to inclusion in the Grantor's gross estate under IRC § 2036 during the annuity term, the ETIP for each GRAT extends through the end of the applicable annuity term. Accordingly, the allocation of GST exemption to the GRAT remainder interests will occur upon the termination of each GRAT's annuity term, at which time the remainder trust property is distributed to the Caldwell Family Dynasty Trust. The Trustee shall coordinate with counsel and the Grantor's tax advisors to ensure that timely and proper allocations of GST exemption are made upon the close of each ETIP.
6.3 Coordination with Appraisals. The Trustee acknowledges that the appraisal reports prepared by Ashford Valuation Group LLC, received by the Trustee and counsel on June 15, 2023, form the basis for the valuation of the GRAT B and GRAT C trust property for federal gift tax reporting purposes. The Trustee agrees to cooperate fully with any examination, audit, or challenge by the Internal Revenue Service with respect to the valuations reflected on the Grantor's Form 709, including by making available all records, correspondence, and documents relating to the transferred property, by facilitating access to the appraisers and to the management of Stonecrest Realty Holdings LLC and Caldwell Ridgeline Capital LLC, and by providing such additional information or testimony as may be reasonably requested by counsel in connection with any such examination or proceeding.
SECTION 7 — REPRESENTATIONS AND COVENANTS OF THE TRUSTEE
7.1 Capacity. Jonathan R. Caldwell represents and warrants that he has full legal capacity to serve as Trustee of each of the three GRATs and that no legal disability, incapacity, judicial order, or conflict of interest prevents him from fulfilling his fiduciary duties as Trustee. The Trustee further represents that he is a citizen of the United States, that he is not subject to any pending or threatened legal proceeding that would impair his ability to serve as Trustee, and that he has not been adjudicated as incapacitated, incompetent, or otherwise unable to manage his own affairs or the affairs of any trust.
7.2 Review of Trust Agreements. The Trustee represents and warrants that he has read, reviewed, and understands the terms and provisions of each of the three Trust Agreements, including all articles, sections, schedules, and exhibits attached thereto. The Trustee specifically represents that he has reviewed and understands the provisions of Schedule A to each Trust Agreement (describing the funded trust property), the annuity payment schedules, the investment and administrative provisions, the successor trustee provisions, the provisions governing the death of the Grantor during the annuity term, and the provisions governing the distribution of the remainder to the Caldwell Family Dynasty Trust.
7.3 Independent Advice. The Trustee represents and warrants that he has received the advice of legal counsel in connection with the establishment, funding, and administration of the GRATs. Specifically, the Trustee has been advised by Calderwood & Harkness LLP, including tax advice provided by Sylvia Hartwell, Partner, regarding the federal gift tax, estate tax, generation-skipping transfer tax, and income tax consequences of the GRAT structures, the zeroed-out annuity calculations, and the valuation discounts applied to the GRAT B and GRAT C trust property. The Trustee acknowledges that he has had the opportunity to ask questions of counsel and to review all relevant documents and calculations prior to accepting the trusteeship of each GRAT.
The Trustee further acknowledges that Eleanor V. Caldwell, his spouse, has been separately represented by Pemberton, Locke & Strauss LLP (Rachel F. Dunlap, Esq., 405 Lexington Avenue, 26th Floor, New York, New York 10174) with respect to her review and consent to the estate planning structures established by the Grantor, including the three GRATs, the Caldwell Family Dynasty Trust, and the Amended and Restated Caldwell Revocable Trust. The Trustee acknowledges that Mrs. Caldwell's separate representation was obtained to ensure that any spousal consent required or advisable in connection with the gift tax reporting (including any consent under IRC § 2513 for gift-splitting purposes, if applicable) or estate planning documentation was given with the benefit of independent legal advice.
7.4 No Delegation of Trustee Duties (During Annuity Term). The Trustee acknowledges and agrees that he shall serve personally as Trustee of each GRAT during the duration of each GRAT's annuity term and shall not delegate his trustee duties or powers to any other person, except as expressly permitted by the applicable Trust Agreement. The foregoing shall not preclude the Trustee from engaging the services of agents, advisors, custodians, investment managers, accountants, attorneys, or other professionals as authorized by the Trust Agreements and applicable law, provided that the Trustee retains ultimate authority and responsibility for all decisions relating to the administration of each GRAT. Nothing in this Section 7.4 shall be construed to limit the operation of the successor trustee provisions described in Section 8 below.
7.5 Covenant to Comply with IRC § 2702. The Trustee covenants and agrees that he shall administer each GRAT in strict compliance with the requirements of IRC § 2702 and the applicable Treasury Regulations promulgated thereunder, including Treasury Regulations § 25.2702-3. Without limiting the generality of the foregoing, the Trustee covenants that he shall:
(a) make all required annuity payments in the amounts and on or before the dates specified in Section 4 of this Acknowledgment and Acceptance and in the respective Trust Agreements;
(b) not make any distribution of trust property to any person other than the Grantor (as annuitant) during the annuity term, except as expressly permitted by the applicable Trust Agreement and by IRC § 2702;
(c) not commute, prepay, or accelerate any annuity payment except as required or permitted by the terms of the applicable Trust Agreement and applicable law;
(d) not issue any additional interests in any GRAT to any person, and not accept additional contributions to any GRAT after the funding date; and
(e) take all other actions necessary or appropriate to preserve the zeroed-out status of each GRAT and to ensure that the retained annuity interest qualifies as a "qualified interest" under IRC § 2702(b).
SECTION 8 — SUCCESSOR TRUSTEE PROVISIONS
8.1 Appointment Upon Termination of Annuity Term. The Trustee acknowledges that upon the termination of each GRAT's annuity term and the completion of the distribution of the remaining trust property (the remainder) to the Caldwell Family Dynasty Trust as remainder beneficiary, the Trustee's role with respect to that GRAT shall terminate. Following the distribution of the remainder, the trust property will be held and administered by the co-trustees of the Caldwell Family Dynasty Trust (Thomas R. Caldwell, as family co-trustee, and Northgate Trust Company of Delaware, as institutional co-trustee) in accordance with the terms of the Caldwell Family Dynasty Trust instrument. The Trustee acknowledges that any final accounting or administrative actions required to effectuate the termination of a GRAT shall be completed promptly following the termination of the annuity term.
8.2 Incapacity or Death of Trustee During Annuity Term. The Trustee acknowledges the successor trustee provisions set forth in each Trust Agreement, which govern the appointment of a successor trustee in the event that the Trustee becomes incapacitated, dies, resigns, or is otherwise unable to serve during the annuity term of any GRAT. The Trustee acknowledges that, in connection with the GRAT planning, Jonathan R. Caldwell executed a Durable General Power of Attorney on April 1, 2023, designating Eleanor V. Caldwell as his primary agent and Thomas R. Caldwell as his successor agent, with authority to act on the Grantor's behalf in connection with the administration of trust matters, including the GRATs, in the event of the Grantor's incapacity. The successor trustee provisions of each Trust Agreement and the Durable General Power of Attorney are intended to work in tandem to ensure the uninterrupted administration of each GRAT, including the timely satisfaction of annuity payment obligations, in the event that the Trustee is unable to serve.
SECTION 9 — INSURANCE AND INDEMNIFICATION
9.1 Liability Standard. The Trustee acknowledges the liability standard set forth in each Trust Agreement governing the Trustee's exposure to personal liability for losses sustained by the trust or its beneficiaries. The Trustee understands that, under applicable New York law and the terms of the Trust Agreements, the Trustee may be held liable for any loss to the trust or its beneficiaries resulting from a breach of fiduciary duty, including but not limited to acts of bad faith, willful misconduct, gross negligence, or self-dealing. The Trustee further acknowledges that the exculpation provisions, if any, set forth in the Trust Agreements are subject to the limitations imposed by New York law, including NY EPTL § 11-1.7 and applicable case law, and that no provision of any Trust Agreement shall be construed to relieve the Trustee of liability for a breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries.
9.2 No Compensation. The Trustee acknowledges and agrees that he shall serve without separate trustee compensation for each of the three GRATs, in recognition of his dual role as Grantor and Trustee of each GRAT. The Trustee's waiver of compensation is voluntary and is consistent with the intent to minimize the expenses of the GRATs during the annuity term. The foregoing shall not preclude the reimbursement of the Trustee for reasonable out-of-pocket expenses incurred in the administration of the GRATs, including professional fees of accountants, appraisers, and legal counsel, to the extent that such expenses are authorized by the applicable Trust Agreement and are properly chargeable to the trust.
SECTION 10 — GOVERNING LAW
This Acknowledgment and Acceptance, and all rights and obligations of the Trustee hereunder, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice-of-law or conflict-of-laws rules or provisions that would cause the application of the laws of any other jurisdiction. The governing law provisions of this Acknowledgment and Acceptance are consistent with, and supplemental to, the governing law provisions set forth in each of the three Trust Agreements, each of which is governed by the laws of the State of New York.
SECTION 11 — MISCELLANEOUS
11.1 Notices. All notices, requests, demands, consents, and other communications required or permitted to be given under this Acknowledgment and Acceptance or in connection with the administration of any GRAT shall be in writing and shall be deemed to have been duly given when delivered personally, when sent by overnight courier of national reputation, or when sent by United States certified mail, return receipt requested, postage prepaid, to the following addresses (or such other address as the Trustee may designate in writing from time to time):
If to the Trustee:
Jonathan R. Caldwell 418 East 72nd Street, Apt. 14A New York, New York 10021
With a copy to:
Calderwood & Harkness LLP 375 Park Avenue, 42nd Floor New York, New York 10152
Attn: Victoria Chambers / Monica Reyes
Matter No. 1034-00004
11.2 Counterparts. This Acknowledgment and Acceptance may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Acknowledgment and Acceptance by facsimile or portable document format (PDF) transmission shall be valid and effective for all purposes as if executed in original form.
11.3 Entire Understanding. This Acknowledgment and Acceptance is supplemental to, and is intended to be read in conjunction with, the three Trust Agreements identified in Recital B above. Nothing in this Acknowledgment and Acceptance is intended to supersede, modify, or amend any provision of any Trust Agreement. In the event of any conflict between the terms of this Acknowledgment and Acceptance and the terms of any Trust Agreement, the terms of the applicable Trust Agreement shall control.
EXECUTION
IN WITNESS WHEREOF, the undersigned has executed this GRAT Trustee Acknowledgment and Acceptance as of June 1, 2023, as the consolidated execution date for all three GRATs.
TRUSTEE:
________________________________________
Jonathan Robert Caldwell
In his capacity as Trustee of: (i) Caldwell 2023 Securities GRAT (ii) Caldwell 2023 Realty GRAT (iii) Caldwell 2023 Carried Interest GRAT
Date: June 1, 2023
Address: 418 East 72nd Street, Apt. 14A
New York, New York 10021
NOTARY ACKNOWLEDGMENT.  STATE OF NEW YORK COUNTY OF NEW YORK
On this 1st day of June, 2023, before me, the undersigned, a Notary Public in and for said State, personally appeared Jonathan Robert Caldwell, known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity as Trustee of the Caldwell 2023 Securities GRAT, the Caldwell 2023 Realty GRAT, and the Caldwell 2023 Carried Interest GRAT, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
________________________________________
Notary Public, State of New York
Name (printed): ________ Commission No.: ________ My Commission Expires: ________
[NOTARIAL SEAL]
WITNESS ATTESTATION.  The undersigned, each being of legal age and competent to serve as a witness, hereby attest that they witnessed the execution of this Acknowledgment and Acceptance by Jonathan Robert Caldwell on June 1, 2023.
Witness 1:
________________________________________
Monica Reyes Senior Associate Calderwood & Harkness LLP 375 Park Avenue, 42nd Floor New York, New York 10152
Witness 2:
________________________________________
Elliot Nguyen Associate Calderwood & Harkness LLP 375 Park Avenue, 42nd Floor New York, New York 10152
EXHIBIT A — SUMMARY TABLE OF GRAT TERMS
The following table summarizes the key terms and structural features of each GRAT for reference purposes. This Exhibit A is incorporated by reference into this Acknowledgment and Acceptance and is provided for convenience only. In the event of any discrepancy between this Exhibit A and the terms of any Trust Agreement, the terms of the applicable Trust Agreement shall control.
This Acknowledgment and Acceptance has been prepared by Calderwood & Harkness LLP, 375 Park Avenue, 42nd Floor, New York, New York 10152, in connection with Matter No. 1034-00004. This document is intended solely for the use of Jonathan R. Caldwell in his capacities as Grantor and Trustee of the GRATs identified herein and is not intended to confer any rights upon any third party.
Item | GRAT A (Securities) | GRAT B (Realty) | GRAT C (Carried Interest)
Trust Agreement Date | April 15, 2023 | May 1, 2023 | June 1, 2023
Funding Date | April 15, 2023 | May 1, 2023 | June 1, 2023
Trust Property | Publicly traded securities | 59.7% membership interest in Stonecrest Realty Holdings LLC | Fund IV LP, Fund V LP, Fund VI Carried Interest (Caldwell Ridgeline Capital)
Corpus FMV (Pre-discount) | $60,000,000 | $80,000,000 | $38,000,000
discount Applied | N/A | 25% (combined DLOM/DLOC) | 35% (LP interests); 30% (carried interest)
Corpus FMV (Post-discount) | $60,000,000 | $60,000,000 | $25,300,000
Annuity Term | 2 years | 3 years | 3 years
§ 7520 Rate | 5.0% (March 2023) | 5.0% (April 2023) | 5.0% (May 2023)
Annual Annuity Payment | $32,195,122 | $29,375,859 | $13,953,759
Annuity Payment Dates | April 15, 2024; April 15, 2025 | May 1, 2024; May 1, 2025; May 1, 2026 | June 1, 2024; June 1, 2025; June 1, 2026
Remainder Beneficiary | Caldwell Family Dynasty Trust | Caldwell Family Dynasty Trust | Caldwell Family Dynasty Trust
Taxable Gift | $0 | $0 | $0
Governing Law | New York | New York | New York
Appraiser | N/A | Ashford Valuation Group LLC | Ashford Valuation Group LLC
Trustee | Jonathan R. Caldwell | Jonathan R. Caldwell | Jonathan R. Caldwell
Grantor Trust Status | Yes (IRC §§ 671–679) | Yes (IRC §§ 671–679) | Yes (IRC §§ 671–679)

GRAT TRUSTEE ACKNOWLEDGMENT AND ACCEPTANCE

RECITALS

EXECUTION

TRUSTEE:

NOTARY ACKNOWLEDGMENT. STATE OF NEW YORK COUNTY OF NEW YORK

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