Contract analysis

Section 1.1 — Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below: "Agreement" means this Transition Services Agreement, including all Schedules and exhibits attached hereto, as the same may be amended, modified, or supplemented from time to time in accordance with the terms hereof. "Buyer" means Fairwater Real Estate Investment Trust, a Maryland real estate investmen

Section 1.2 — Rules of Construction. Unless the context otherwise requires: (a) the headings and captions used in this Agreement are inserted for convenience of reference only and shall not affect the interpretation of this Agreement; (b) the word "including" (and its correlatives) means "including without limitation"; (c) references to "days" mean calendar days unless the term "business days" is expressly used; (d)

ARTICLE 2 — TRANSITION SERVICES

Section 2.1 — Scope of Services. During the Transition Services Period, Service Provider shall provide the Transition Services described in this Article 2 and in Schedule B attached hereto, in each case subject to the terms and conditions of this Agreement. Service Provider shall provide the Transition Services in a manner consistent with the standard of care exercised by Service Provider in managing the Properties d

Section 2.2 — Property Management Services. During the Transition Services Period, Service Provider shall continue to provide day-to-day property management operations for all fourteen (14) Properties, including the following: (a) Building Operations and Maintenance. Service Provider shall continue to oversee and manage the day-to-day operations, maintenance, and repair of all buildings, structures, grounds, parking

Section 2.3 — Accounting Transition Services. Service Provider shall provide the following accounting and financial transition services during the Transition Services Period: (a) Financial Records Transfer. Service Provider shall transfer and migrate all property-level financial records, general ledgers, accounts payable records, accounts receivable records, and reporting systems from Service Provider's accounting pl

Section 2.4 — Operating Account Transition. Service Provider shall cooperate with Recipient in transitioning signatory authority and operational control of all Operating Accounts at Magnolia Commerce Bank, N.A. to Recipient or its designees, in accordance with the following: (a) Service Provider shall assist Recipient in preparing and submitting all documentation required by Magnolia Commerce Bank, N.A. to effect the

Section 2.5 — Vendor Contract Novation. Service Provider shall cooperate with Recipient in novating, assigning, or terminating the sixty-three (63) Service Contracts, as follows: (a) Contracts to Be Novated or Assigned. For each Service Contract that Recipient elects to continue, Service Provider shall (i) provide introductions between Recipient Personnel and the applicable vendor, (ii) deliver to Recipient copies of

Section 2.6 — Tenant Communication and Coordination. Service Provider shall cooperate with Recipient in implementing the tenant notification and relationship transition process, as follows: (a) Tenant Notification Letters. Tenant notification letters, in the form and pursuant to the distribution list prepared by Calderwood & Harkness LLP, were distributed on June 7, 2024, to all eighty-seven (87) tenants, notifying e

Section 2.7 — Insurance Transition. Service Provider shall cooperate with Recipient in effecting the transition of insurance coverage for the Properties from Service Provider's existing insurance programs to Recipient's new insurance policies, as follows: (a) Recipient has procured replacement property and casualty insurance coverage for the Properties through Ironclad Indemnity Insurance Company, 500 College Road Ea

Section 2.8 — Information Technology and Systems. Service Provider shall provide the following information technology transition services during the Transition Services Period: (a) Service Provider shall provide Recipient with access to all property management software, databases, tenant portals, building management systems, and other technology platforms used by Service Provider in managing the Properties, including

Section 2.9 — Regulatory and Compliance Transition. Service Provider shall cooperate with Recipient in connection with any regulatory filings, permits, licenses, or compliance obligations that are required to be updated to reflect the change of ownership of the Target Entities and the Properties, as follows: (a) Service Provider shall assist Recipient in identifying and updating all business licenses, fire and safety

ARTICLE 3 — SERVICE FEES AND PAYMENT

Section 3.1 — Monthly Service Fee. In consideration of Service Provider's provision of the Transition Services, Recipient shall pay Service Provider a Monthly Service Fee of Three Hundred Seventy-Five Thousand Dollars ($375,000), payable in arrears on the first business day of each calendar month following the month in which services were rendered, in accordance with the payment schedule set forth on Schedule D attac

Section 3.2 — Payment Method. All payments due under this Agreement shall be made by wire transfer of immediately available funds to Service Provider's designated account at Magnolia Commerce Bank, N.A., in accordance with wire instructions to be provided by Service Provider to Recipient under separate cover prior to the first payment due date. Recipient shall provide Service Provider with reasonable advance notice o

Section 3.3 — Reimbursable Expenses. In addition to the Monthly Service Fee, Recipient shall reimburse Service Provider for reasonable, documented out-of-pocket expenses actually incurred by Service Provider in connection with the provision of the Transition Services, provided that (a) such expenses are pre-approved in writing by Recipient (or Recipient's designated representative, Leah Torrance) prior to being incur

Section 3.4 — Taxes. All amounts payable by Recipient under this Agreement are exclusive of any applicable sales, use, value-added, or similar transactional taxes. To the extent that any such taxes are imposed on the Transition Services or the fees payable hereunder, such taxes shall be borne by Recipient and shall be invoiced by Service Provider as a separate line item, accompanied by appropriate documentation. For

Section 3.5 — Late Payment. Any amount due under this Agreement that is not paid when due shall bear interest from the date such payment was due until the date of actual payment at a rate equal to the lesser of (i) one and one-half percent (1.5%) per month (or any portion thereof) and (ii) the maximum rate of interest permitted by applicable law. The accrual of interest under this Section 3.5 shall not constitute a w

ARTICLE 4 — SERVICE PROVIDER PERSONNEL

Section 4.1 — Key Personnel. Service Provider shall designate Sean Kilpatrick (Portfolio Manager) as the primary point of contact and project manager for the Transition Services. Mr. Kilpatrick shall be responsible for coordinating the delivery of all Transition Services, maintaining regular communication with Recipient Personnel, overseeing the work of Service Provider Personnel assigned to the Transition Services,

Section 4.2 — Recipient's Key Personnel. Recipient designates Leah Torrance (Senior Vice President, Asset Management / Senior Vice President, Operations) as Recipient's primary point of contact for all matters relating to the Transition Services. Ms. Torrance shall be responsible for coordinating Recipient's receipt of the Transition Services, directing the activities of Recipient Personnel, and communicating Recipie

Section 4.3 — Independent Contractor Relationship. The parties acknowledge and agree that Service Provider is an independent contractor and not an employee, agent, joint venturer, or partner of Recipient or Buyer. All Service Provider Personnel are employees or contractors of Service Provider and not of Recipient or Buyer. Service Provider shall be solely responsible for the compensation, benefits, payroll taxes, and

ARTICLE 5 — TRANSITION MILESTONES AND REPORTING

Section 5.1 — Transition Plan. Within five (5) business days of the Closing Date (i.e., by June 13, 2024), Service Provider and Recipient shall mutually agree on a detailed Transition Plan setting forth the specific milestones, deliverables, responsible parties, and target completion dates for each category of Transition Services described in Article 2 and Schedule B. The Transition Plan shall address the sequencing

Section 5.2 — Weekly Status Reports. Service Provider shall prepare and deliver to Recipient, no later than 5:00 p.m. Eastern Time each Friday during the Transition Services Period (or the next preceding business day if Friday is not a business day), a written status report summarizing the following: (a) progress against the milestones and deliverables set forth in the Transition Plan, including percentage completion

Section 5.3 — Monthly Transition Meetings. The parties shall conduct monthly in-person or video conference meetings to review the overall progress of the Transition Services, discuss any open issues or concerns, and agree on priorities and action items for the following month. Such meetings shall be attended at a minimum by Sean Kilpatrick (for Service Provider) and Leah Torrance (for Recipient), together with such o

Section 5.4 — Transition Completion Certificate. Upon the completion of all Transition Services (or upon the Expiration Date, whichever is earlier), the parties shall execute a Transition Completion Certificate confirming that (a) all Transition Services have been satisfactorily completed in accordance with this Agreement, or (b) identifying any remaining open items that have not been completed as of such date, toget

ARTICLE 6 — STANDARD OF CARE; LIMITATION OF LIABILITY

Section 6.1 — Standard of Care. Service Provider shall perform the Transition Services with the same degree of care, skill, and diligence as Service Provider exercised in managing the Properties during the twelve (12)-month period prior to the Closing Date, and in accordance with (a) applicable federal, state, and local laws, rules, regulations, and ordinances, (b) prudent and customary property management practices

Section 6.2 — Indemnification by Service Provider. Service Provider shall indemnify, defend, and hold harmless Recipient, Buyer, each Target Entity, and their respective members, managers, officers, directors, employees, agents, successors, and assigns (collectively, the "Recipient Indemnified Parties") from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fee

Section 6.3 — Indemnification by Recipient. Recipient shall indemnify, defend, and hold harmless Service Provider and its members, managers, officers, directors, employees, agents, successors, and assigns (collectively, the "Service Provider Indemnified Parties") from and against any and all Losses arising out of, resulting from, or relating to: (a) the gross negligence or willful misconduct of Recipient or any Recip

Section 6.4 — Limitation of Liability. IN NO EVENT SHALL EITHER PARTY'S AGGREGATE LIABILITY UNDER THIS AGREEMENT EXCEED THE TOTAL SERVICE FEE OF ONE MILLION ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($1,125,000), EXCEPT IN CASES OF GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES ARISING

ARTICLE 7 — TERM AND TERMINATION

Section 7.1 — Term. This Agreement commences on the Closing Date (June 6, 2024) and shall continue in full force and effect until the Expiration Date (September 4, 2024), unless earlier terminated or extended in accordance with the provisions of this Article 7.

Section 7.2 — Early Termination by Recipient. Recipient may terminate this Agreement, in whole or in part, at any time upon not less than fifteen (15) days' prior written notice to Service Provider. Such termination may be effected on a service-category basis (as described in Schedule B) or on a Property-by-Property basis, in Recipient's sole discretion. In the event of any partial termination, the Monthly Service Fe

Section 7.3 — Termination for Cause. Either party may terminate this Agreement immediately upon written notice to the other party if: (a) the other party commits a material breach of any representation, warranty, covenant, or obligation under this Agreement and fails to cure such breach within ten (10) business days after receipt of written notice from the non-breaching party specifying the nature of such breach in r

Section 7.4 — Extension. The Transition Services Period may be extended for up to two (2) additional periods of thirty (30) calendar days each (each, an "Extension Period") upon the mutual written agreement of the parties. During any Extension Period, Service Provider shall continue to provide such Transition Services as the parties mutually agree, and Recipient shall pay Service Provider the Monthly Service Fee of T

Section 7.5 — Effect of Termination or Expiration. Upon the termination or expiration of this Agreement: (a) Service Provider shall promptly (and in no event later than ten (10) business days after the effective date of termination or expiration) deliver to Recipient all records, files, documents, keys, access cards, security codes, access credentials, and any other property in Service Provider's possession or contro

ARTICLE 8 — BOOKS, RECORDS, AND ACCESS

Section 8.1 — Delivery of Records. Service Provider shall deliver to Recipient, at no additional cost, complete copies (or originals, where originals are in Service Provider's possession) of all books, records, files, documents, and data relating to the Properties and the Target Entities, including the following: (a) lease files, including originals and copies, for all eighty-seven (87) Leases, together with all amen

Section 8.2 — Access to Service Provider's Personnel and Records. During the Transition Services Period and for a period of twelve (12) months following the expiration or termination of this Agreement, Service Provider shall make its personnel (including former employees with knowledge of the Properties) reasonably available to Recipient for questions, information requests, clarifications, and follow-up matters relat

Section 8.3 — Cooperation with Auditors. Service Provider shall cooperate fully and in good faith with Recipient's accounting firm, Ashford Prewitt LLP, and Buyer's internal audit team in connection with any audit, review, or examination of financial records relating to the pre-closing period or the Transition Services Period. Without limiting the foregoing, Service Provider shall cooperate with the post-closing pror

Section 9.1 — Confidential Information. Each party (a "Receiving Party") shall maintain the confidentiality of all non-public, proprietary, or confidential information received from the other party (the "Disclosing Party") in connection with this Agreement and the Transition Services (collectively, "Confidential Information"). Confidential Information shall include, without limitation, tenant information, lease terms

Section 9.2 — Exceptions. The obligations set forth in Section 9.1 shall not apply to information that: (a) is or becomes publicly available through no fault of the Receiving Party; (b) was known to the Receiving Party prior to its disclosure by the Disclosing Party, as demonstrated by the Receiving Party's written records; (c) is independently developed by the Receiving Party without use of or reference to the Discl

Section 9.3 — Survival. The obligations of each party under this Article 9 shall survive the expiration or termination of this Agreement for a period of two (2) years.

ARTICLE 10 — REPRESENTATIONS AND WARRANTIES

Section 10.1 — Mutual Representations. Each party represents and warrants to the other party, as of the date of this Agreement, as follows: (a) it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation; (b) it has full limited liability company power and authority to execute, deliver, and perform this Agreement, and the execution, delivery, and performance of this Ag

Section 10.2 — Service Provider's Representations. Service Provider further represents and warrants to Recipient, as of the date of this Agreement, as follows: (a) Argyle Property Services LLC is a Delaware limited liability company and an affiliate of Seller; (b) Service Provider has the necessary personnel, expertise, systems, and resources to provide the Transition Services contemplated by this Agreement in a comp

Section 10.3 — Recipient's Representations. Recipient further represents and warrants to Service Provider, as of the date of this Agreement, as follows: (a) Fairwater Property Management LLC is a Maryland limited liability company and a wholly owned subsidiary of Fairwater Real Estate Investment Trust; (b) Recipient has the necessary personnel, resources, infrastructure, and systems to receive the Transition Services

Section 11.1 — Service Provider's Insurance. During the Transition Services Period and for a period of one (1) year thereafter (with respect to claims-made policies), Service Provider shall maintain at its own expense the following insurance coverages: (a) Commercial General Liability Insurance with limits of not less than Two Million Dollars ($2,000,000) per occurrence and Five Million Dollars ($5,000,000) in the ag

Section 11.2 — Recipient's Insurance. Recipient (through Buyer) shall maintain property and casualty insurance covering the Properties through Ironclad Indemnity Insurance Company, 500 College Road East, Princeton, New Jersey 08540, as brokered by Hartwick Gunderson & Associates, Inc. (account executive: Peter Langford), effective as of the Closing Date and continuing throughout the Transition Services Period and the

ARTICLE 12 — DISPUTE RESOLUTION

Section 12.1 — Escalation. Any dispute, controversy, or claim arising out of or relating to this Agreement or the Transition Services (a "Dispute") shall first be referred to the designated representatives of the parties — Sean Kilpatrick for Service Provider and Leah Torrance for Recipient — for attempted resolution through good-faith negotiations. The designated representatives shall meet (in person or by telephone

Section 12.2 — Executive Escalation. If the Dispute is not resolved within the ten (10)-business-day period described in Section 12.1, the Dispute shall be escalated to senior executive representatives of the parties for resolution. Service Provider's senior executive representatives shall be Victor Lansdell or Elise Rathborne of Greystone Meridian Capital LLC, and Recipient's senior executive representative shall be

Section 12.3 — Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to any conflicts of law principles that would result in the application of the laws of any other jurisdiction, consistent with the governing law provision of the PSA. Each party irrevocably and unconditionally (a) submits to the exclusive jurisdiction of

Section 13.1 — Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed duly given (a) when delivered by hand, (b) one (1) business day after being sent by nationally recognized overnight courier service (with tracking confirmation), or (c) when sent by email (with confirmation of receipt), to th