Contract analysis

I. EXECUTIVE SUMMARY The purpose of this memorandum is to summarize all Uniform Commercial Code ("UCC") filing requirements arising in connection with the closing of the $240,000,000 permanent CMBS mortgage loan (the "Permanent Loan") from Clarendon Metropolitan Insurance Company ("Clarendon" or the "Lender") to Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC (collectively, the fourteen special purpose en

II. BACKGROUND A. Transaction Overview Fairwater Real Estate Investment Trust ("Fairwater REIT" or the "REIT"), a Maryland real estate investment trust listed on the New York Stock Exchange under the ticker symbol FWTR, acquired a fourteen-property multifamily portfolio known as the "Sun Belt Portfolio" (comprising approximately 4,200 apartment units) from Meridian Sunstone Holdings LLC on June 30, 2025, for a total

III. CATEGORY A: DELAWARE UCC-1 FILINGS — EQUITY PLEDGE A. Nature of Collateral In connection with the Permanent Loan, Fairwater Operating Partnership, L.P. will pledge 100% of its membership interests in each of the fourteen SPE Borrowers to Clarendon Metropolitan Insurance Company as secured party, pursuant to a Pledge and Security Agreement to be executed at closing. This pledge is a critical component of the Perm

IV. CATEGORY B: UCC-1 FIXTURE FILINGS — PROPERTY-LEVEL A. Nature of Collateral In addition to the equity pledge described in Section III, the Permanent Loan security package includes security interests in all fixtures, personal property, and equipment located at each of the fourteen Sun Belt Portfolio properties. These items include, without limitation, appliances, HVAC systems, water heaters, lighting fixtures, cabi

1. Debtor Name. Each fixture filing must identify the applicable SPE Borrower as debtor by its exact legal name as set forth in its Certificate of Formation on file with the Delaware Secretary of State. Under UCC § 9-503(a)(1), for a registered organization, the debtor name on the financing statement must be the name of the debtor indicated on the public organic record of the debtor's jurisdiction of organization. An

2. Secured Party Name and Address. Each fixture filing must identify Clarendon Metropolitan Insurance Company as the secured party, with its address at 1 MetroTech Center, Brooklyn, NY 11201.

3. Collateral Description. Each fixture filing must include a description of the collateral that reasonably identifies the fixtures, equipment, and personal property located at the applicable property. The collateral description should be consistent with the collateral description set forth in the applicable security agreement and mortgage instrument. A typical collateral description for a CMBS fixture filing would c

4. Real Property Description. Each fixture filing must include a description of the related real property that is sufficient to give constructive notice of the filing under the real property recording laws of the applicable state. This will typically be the full legal description of the property (metes and bounds, lot and block, or plat reference) as set forth in the recorded mortgage or deed of trust instrument. The

5. Indication of Fixture Filing. Each UCC-1 must indicate that it covers fixtures and that it is to be filed in the real property records. On the standard UCC-1 form (Form UCC1), this is accomplished by checking the applicable boxes in Item 6 (indicating "This FINANCING STATEMENT covers ... fixtures") and by filing the document in the real property recording office rather than with the secretary of state.

6. Record Owner of Real Property. Each fixture filing must include the name of the record owner of the real property if the debtor does not have an interest of record in the real property. In this case, each SPE debtor is the record owner of its respective property, so this requirement is satisfied by the identification of the debtor itself. However, as a best practice, we will include a specific indication of the re

7. Debtor Organizational Information. Each SPE Borrower is organized as a limited liability company under the laws of the State of Delaware. The Delaware file number for each SPE should be included on the UCC-1 form (in the organizational ID field), together with an indication of "Delaware" as the jurisdiction of organization and "LLC" as the type of organization. The Delaware file numbers for each SPE must be confir

8. Debtor Address. The mailing address for each SPE debtor should be listed as: c/o Fairwater Real Estate Investment Trust, 8400 Chesapeake Center Drive, Suite 1200, Columbia, MD 21044. This is the principal office address where all correspondence for the SPE Borrowers is received.

V. CATEGORY C: UCC-3 TERMINATION STATEMENTS — BRIDGE LOAN A. Overview. Upon the repayment of the $240,000,000 Bridge Loan from the proceeds of the Permanent Loan at closing, all UCC filings made in connection with the Bridge Loan must be terminated by the filing of UCC-3 termination statements. Termination of these filings is essential to (i) clear the Lender's lien position under the Permanent Loan, (ii) satisfy the

1. Pre-Closing Escrow: We recommend obtaining fully executed UCC-3 termination statements from KNB/Halcourt Briggs & Devlin LLP in escrow prior to the closing date. These termination statements should be delivered to Calderwood & Harkness (or to the closing escrow agent, if applicable) with authorization from KNB to file the termination statements upon confirmation that (a) the Permanent Loan has funded, (b) the brid

2. Simultaneous Filing: On the closing date, the new UCC-1 filings for the Permanent Loan (Delaware equity pledge and fourteen county fixture filings) and the UCC-3 termination statements for the Bridge Loan should be filed simultaneously or in immediate sequence. In practice, this means that the filing agent or local counsel in each jurisdiction should be instructed to file both the UCC-3 termination and the new UCC

3. Gap Period Considerations: Because the Bridge Loan filings and the Permanent Loan filings both cover the same collateral, there is a theoretical risk of a brief "gap" during which the Bridge Loan liens have been terminated but the Permanent Loan liens have not yet been filed. This gap is mitigated by the simultaneous filing approach and by the fact that UCC filings are effective upon filing (or, in some jurisdicti

4. Review of Termination Statements: All UCC-3 termination statements prepared by Halcourt Briggs & Devlin LLP should be reviewed by Calderwood & Harkness prior to closing to confirm the accuracy of: (a) the file numbers of the original UCC-1 filings being terminated; (b) the debtor names; (c) the secured party names; and (d) the indication that each filing is being terminated in its entirety (as opposed to a partial

5. Request for Filing Acknowledgments: As noted above, we have requested from Halcourt Briggs & Devlin LLP copies of all original UCC-1 filing acknowledgments for the Bridge Loan filings, including file numbers and filing dates. These acknowledgments are essential for the preparation of the UCC-3 termination statements and should be obtained as soon as possible. D. Estimated UCC-3 Termination Filing Fees The estimate

VI. CONSOLIDATED FEE SCHEDULE The following table sets forth a consolidated summary of all estimated UCC filing fees in connection with the closing of the Permanent Loan: All amounts set forth above are estimates based on our review of currently published filing fee schedules for the applicable filing offices. These amounts will be confirmed with each filing office closer to the closing date and will be updated accor

VII. TIMELINE AND ACTION ITEMS A. Pre-Closing (Now through November 14, 2025) The following pre-closing action items should be completed in the timeframes indicated below:

1. Immediately (by October 21, 2025): Obtain from Halcourt Briggs & Devlin LLP (Kenneth R. Delacroix) copies of all UCC-1 filing acknowledgments (including file numbers and filing dates) for all Bridge Loan filings in Delaware and all fourteen counties. This request was made in our coordination letter dated October 10, 2025 to Mr. Delacroix. If we have not received a response by October 21, 2025, a follow-up communic

2. By October 25, 2025: Conduct a comprehensive UCC search in the Delaware Secretary of State's records against Fairwater Operating Partnership, L.P. as debtor. The purpose of this search is to identify all existing UCC filings encumbering the SPE membership interests and to confirm that no liens exist other than the Bridge Loan filings (which will be terminated at closing). The search results should be reviewed prom

3. By November 1, 2025: Prepare and finalize all new UCC-1 financing statements for the Permanent Loan, including: (a) one Delaware equity pledge UCC-1 financing statement (or fourteen separate filings, if required by the Lender); and (b) fourteen county fixture filing UCC-1 financing statements (one per property). Draft forms of all filings should be circulated to Ashworth McPhail LLP (Joanna C. Wexler) for the Lend

4. By November 1, 2025: Confirm the exact county of filing for: (a) the Cypress Bend property in Katy, Texas (Harris County or Fort Bend County); and (b) the Heritage at Stonebriar property in Frisco, Texas (Collin County or Denton County). These determinations must be made based on the legal descriptions set forth in the title commitments issued by Marlowe Asset Management Title Insurance Group, Inc. and/or the prop

5. By November 7, 2025: Receive fully executed UCC-3 termination statements from Halcourt Briggs & Devlin LLP for all Bridge Loan filings (Delaware equity pledge and fourteen county fixture filings). These termination statements should be delivered to Calderwood & Harkness to be held in escrow pending the closing. All termination statements should be reviewed by Calderwood & Harkness upon receipt to confirm accuracy

6. By November 7, 2025: Confirm filing procedures, accepted filing methods (electronic, mail, or in-person only), and estimated turnaround times for each of the fourteen county filing offices. Identify any counties that do not accept electronic filings or that require in-person delivery, and make arrangements for local counsel or a national filing agent to handle such filings. Additionally, identify any county office

1. File Delaware UCC-1 (Equity Pledge): File the Delaware equity pledge UCC-1 financing statement with the Delaware Secretary of State via the electronic filing portal. Same-day electronic filing is available, and the filing should be submitted as soon as possible after confirmation of Permanent Loan funding and Bridge Loan payoff.

2. File 14 County Fixture Filings: Coordinate with local counsel or filing agents in each of the five states (Texas, Georgia, Florida, North Carolina, and Tennessee) to file all fourteen county fixture filings in the applicable real property recording offices on the closing date. For counties that accept electronic filing, filings should be submitted electronically. For counties that require in-person delivery or mai

3. Authorize Release and Filing of UCC-3 Terminations: Upon confirmation that (a) the Permanent Loan has funded, (b) the bridge payoff wire has been transmitted and confirmed by KNB, and (c) all Permanent Loan closing conditions have been satisfied, authorize the release and filing of all UCC-3 termination statements for the Bridge Loan filings (one or more Delaware terminations and fourteen county terminations). Fil

4. Obtain Filing Acknowledgments: Obtain filing acknowledgments (including file numbers and filing dates) for all new UCC-1 filings from the Delaware Secretary of State and each of the fourteen county filing offices. Copies of all filing acknowledgments should be delivered to Clarendon Metropolitan Insurance Company and Ashworth McPhail LLP as promptly as practicable following closing. C. Post-Closing (Within 5 Busin

1. Confirm Receipt of Filing Acknowledgments: Confirm receipt of filing acknowledgments from the Delaware Secretary of State and all fourteen county filing offices for the new UCC-1 filings. Follow up with any filing offices that have not provided acknowledgments within the expected processing time. Prepare a summary log of all new UCC-1 filings (including file numbers, filing dates, and filing offices) for the post-

2. Confirm UCC-3 Bridge Terminations Processed: Confirm that all UCC-3 termination statements for the Bridge Loan filings have been accepted and processed by the Delaware Secretary of State and each of the fourteen county filing offices. Obtain copies of all UCC-3 filing acknowledgments from Halcourt Briggs & Devlin LLP or the applicable filing agents. If any termination filing is rejected or returned for correction,

3. Deliver Certified Copies to Lender: Deliver certified copies of all new UCC-1 filings (Delaware equity pledge and fourteen county fixture filings) to Clarendon Metropolitan Insurance Company as part of the post-closing deliverables required under the Permanent Loan agreement. The specific post-closing delivery deadline should be confirmed from the loan agreement (typically within thirty days after closing), and th

4. Calendar Continuation Filing Dates: Under UCC § 9-515(a), a filed financing statement is effective for a period of five years after the date of filing. If a continuation statement is not filed within the six-month window preceding the five-year lapse date (i.e., between four years and six months and five years after the original filing date), the financing statement will lapse and the perfection of the secured par

VIII. LOCAL COUNSEL COORDINATION Filing UCC-1 fixture filings in fourteen county recording offices across five states will require coordination with local counsel or a national filing agent in each jurisdiction. Fixture filings in certain jurisdictions may have specific format requirements, local filing conventions, or procedural nuances that differ from the standard UCC-1 form, and some county offices may require in

IX. OPEN ITEMS AND QUESTIONS The following items remain open and require resolution prior to the finalization of the UCC filings. We will address each of these items in the timeframes set forth in Section VII and will circulate updated information as it becomes available.

1. Lender Filing Preferences. Confirm with Ashworth McPhail LLP (Joanna C. Wexler) whether Clarendon Metropolitan requires any additional UCC-1 filings beyond the equity pledge filing in Delaware and the fixture filings in the fourteen counties. Certain CMBS lenders require "belt and suspenders" filings — for example, UCC-1 filings against each SPE Borrower at the Delaware Secretary of State covering personal propert

2. Consolidated vs. Separate Delaware Filing. Confirm whether a single consolidated Delaware UCC-1 financing statement covering all fourteen SPE membership interests is acceptable to Clarendon, or whether the Lender requires fourteen separate UCC-1 filings (one per SPE). As noted above, the cost difference is significant ($181.00 for a single filing versus $2,534.00 for fourteen separate filings), and there is no leg

3. Delaware File Numbers. Obtain the exact Delaware file numbers for Fairwater Operating Partnership, L.P. and each of the fourteen SPE LLCs (Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC) from the organizational documents in our files or from a search of the Delaware Division of Corporations records. These file numbers are required fields on the UCC-1 financing statement form and must be accurately sta

4. County Determination for Katy and Frisco Properties. Confirm the county of filing for: (a) the Cypress Bend property in Katy, Texas (Harris County or Fort Bend County); and (b) the Heritage at Stonebriar property in Frisco, Texas (Collin County or Denton County). This determination must be based on the legal descriptions set forth in the title commitments issued by Marlowe Asset Management Title Insurance Group, I

5. Holiday Closures and Filing Backlogs. Verify whether any of the fourteen county filing offices will be closed or operating on reduced schedules during the week of November 24–28, 2025, which is Thanksgiving week. The target closing date of November 28, 2025 falls on Friday of Thanksgiving week, and it is possible that some county offices may be closed on that date or may have reduced staffing. If any county office

6. Closing Costs and Funds Flow Coordination. Coordinate with Lisa Morrow on the inclusion of all UCC filing fees (new filings and termination filings) in the Estimated Closing Costs Memorandum and the Funds Flow Memorandum being prepared for the Permanent Loan closing. The estimated total of approximately $1,682.00 in UCC filing fees should be allocated to the appropriate line items in those documents, with a notati

X. ATTACHMENTS The following attachments will be appended to this memorandum as they are prepared or obtained: Attachment A: Draft UCC-1 Financing Statement — Delaware Equity Pledge (Fairwater Operating Partnership, L.P. as debtor; Clarendon Metropolitan Insurance Company as secured party; covering 100% of membership interests in each of the fourteen SPE Borrowers). To be prepared. Attachment B: Form UCC-1 Fixture Fi