Contract analysis

From: Douglas Fairchild <dfairchild@calderwoodharkness.com> To: Marcus Devereaux <mdevereaux@fairwaterreit.com> Cc: David Elgin Park <dpark@fairwaterreit.com> Date: Mon, 03 Jun 2024 06:47:00 -0000 Subject: Closing Readiness Update — GMP Fund III Portfolio Acquisition

Please find below a comprehensive closing readiness update as of end of day today, June 3, 2024, for the GMP Fund III portfolio acquisition.

We are targeting closing on Thursday, June 6, 2024, in accordance with the extended outside closing date established under the Second Amendment to the Purchase and Sale Agreement (dated May 28, 2024, which extended the original May 31 outside date to June 7, 2024). As detailed below, all closing conditions are satisfied or expected to be satisfied by June 6, with one critical item still outstanding — the Pinnacle Fed

*Pinnacle Federal Bank, N.A. (Loans 1-A through 1-H; $421,600,000 OPB)*

This consent remains outstanding and was the sole reason for the closing extension from May 31 to June 7. However, based on my conversation today with Sandra Whitfield at Whitfield & Archer LLP (Pinnacle's outside counsel), Pinnacle's credit committee approved the change of control last Friday. The consent letter is in final form and is expected to be executed and delivered no later than tomorrow, June 4, 2024.

The Replacement Carve-Out Guaranty (with Fairwater as guarantor, replacing GMP Fund III) has been finalized and is ready for execution. Financial covenants have been confirmed at $500,000,000 minimum tangible net worth and $50,000,000 minimum liquid assets. The Assumption Agreement for the Pinnacle loans is in agreed form and ready for execution upon receipt of the consent.

The consent fee is $1,054,000 (0.25% of $421,600,000 OPB), split 50/50 with Seller, resulting in Buyer's share of $527,000 for this lender. Wire instructions have been confirmed.

*Veltrano Capital Lending Corp. (Loans 2-A through 2-D; $142,300,000 OPB)*

Consent received and executed on May 17, 2024 — confirmed in hand. The Replacement Guaranty and Assumption Agreement have been executed. Consent fee of $711,500 (0.50% of OPB; split 50/50) has been paid.

*Sycamore Life Insurance Company (Loans 3-A and 3-B; $48,100,000 OPB)*

Consent received and executed on May 22, 2024 — confirmed in hand. The Replacement Guaranty and Assumption Agreement have been executed. Consent fee of $60,125 (0.125% of OPB; split 50/50) has been paid.

Total consent fees across all three lenders: $1,825,625. Buyer's aggregate share: $912,812.50; Seller's aggregate share: $912,812.50.

We have received and reviewed 79 of 87 tenant estoppel certificates as of today. ABR coverage stands at approximately 91.4% of in-place base rent ($68,371,200 of $74,800,000), which well exceeds the PSA threshold of 80% ($59,840,000). All estoppels from tenants occupying 25,000+ RSF (Major Tenants) have been received.

The six estoppel discrepancies previously identified (flagged in Grace's May 8 memorandum) have been resolved through Seller's supplemental disclosure. The estoppel condition precedent under the PSA is satisfied.

Thirty-four of 38 required Major Tenant SNDAs (tenants with ABR ≥ $1,500,000 per annum) have been executed and are in hand (89.5%). For the four outstanding SNDAs, Seller and Buyer have agreed to a post-closing carve-out side letter under which the remaining SNDAs are to be delivered within 30 days post-closing, with a $200,000 holdback from Seller's closing proceeds pending delivery.

The SNDA condition precedent under the PSA is satisfied with this carve-out mechanism in place.

Final ALTA Owner's Policies (2021 form) are in pro forma, reviewed and approved for all 14 properties, with an aggregate insured amount of $1,100,000,000 allocated per the property schedule. All 23 title objection items have been resolved per Seller's cure (Blackridge Hayes response dated April 8; our acceptance dated April 11).

Final ALTA/NSPS surveys, certified to Fairwater, Commonwealth National Title, and each lender, have been received and reviewed with no outstanding survey corrections. The gap indemnity/bring-down letter from Commonwealth National Title (Kenneth Stanhope) has been confirmed.

Title insurance premiums are estimated at $2,420,000 (Buyer's cost); wire instructions for Commonwealth Title have been confirmed. All requested endorsements — owner's comprehensive, access, survey, zoning, contiguity, and others — have been confirmed.

**5. DUE DILIGENCE / ENVIRONMENTAL / PCA / ZONING**

The due diligence period expired on April 15, 2024. The diligence contingency was waived, and the additional hard deposit of $27,500,000 was posted on April 16, bringing total deposits to $55,000,000 held by Commonwealth National Title.

Phase I ESAs came back clean for 12 of 14 properties. The two exceptions — Westlake Distribution Hub and Lakeland Crossings Industrial — reported de minimis recognized environmental conditions that are controlled and do not require Phase II investigation.

The PCA credit of $1,070,000 (50% of $2,140,000 in estimated immediate repair costs across Buckhead Place, Cool Springs, Lakeland Crossings, and SouthPark) will be credited to Buyer at closing as a purchase price reduction, per the First Amendment dated April 12, 2024. The adjusted purchase price is $1,098,930,000.

Zoning confirmation letters have been obtained for all 14 properties.

Transfer tax returns and declarations have been prepared by Sylvia Hartwell and coordinated with local counsel in all applicable jurisdictions. Estimated total transfer taxes are $3,850,000 (split 50/50; Buyer's share $1,925,000), broken down as follows:

- Georgia: ~$1,250,000 - Texas: $0 - Florida: ~$1,680,000 - Tennessee: ~$740,000 - North Carolina: ~$180,000

We are coordinating with Naomi Ikeda at Ashford Prewitt on the Form 8594 and purchase price allocation per Exhibit K to the PSA.

**7. REPRESENTATIONS & WARRANTIES INSURANCE**

The Sentinel Specialty Insurance Company policy ($55,000,000 limit; $11,000,000 retention, dropping to $5,500,000 at 12 months post-closing) is in final form and ready to bind at closing. The premium is $1,402,500 (2.55% of the $55,000,000 policy limit); the wire to Sentinel has been prepared. A no-claims declaration will be executed by Fairwater at closing. This has been coordinated through Peter Langford at Hartwic

The Earnest Money Deposit escrow ($55,000,000 aggregate) release instructions have been prepared for application to the purchase price at closing.

The Indemnity Escrow ($16,500,000; 1.5% of purchase price) escrow agreement with Commonwealth National Title is in execution form, with an 18-month term running through December 6, 2025.

The following documents are in final, execution-ready form:

- All 14 Assignments and Assumptions of Membership Interests (one per Target Entity) - Seller's and Buyer's Closing Certificates - FIRPTA Certificate (non-foreign person affidavit) from GMP Fund III — confirmed - Secretary's Certificates for both Seller (Greystone Meridian Capital LLC, as GP) and Buyer (Fairwater REIT board resolutions) - Bill of Sale, Assignment and Assumption of Leases/Contracts/Intangibles, and Te

We have confirmation that the Aldgate National Bank revolver draw of approximately $488,000,000 (SOFR + 130 bps) is approved and that funds will be available for closing-day wires. Trevor Kingsley at Aldgate is coordinating on their end.

**11. FUNDS FLOW & SETTLEMENT STATEMENTS**

The funds flow memorandum is in final draft. We will circulate it to Blackridge Hayes (Nathaniel Pryce / Thomas Keating) and Commonwealth Title for sign-off tomorrow.

Buyer's and Seller's settlement statements have been prepared. Net cash to Seller is approximately $486,930,000 (purchase price less the PCA credit, subject to proration adjustments). Wire instructions for Seller (GMP Fund III account at Magnolia Commerce Bank) have been verified.

Opinions from all five local counsel firms have been confirmed in final form and are ready for delivery at closing:

- Breckenridge Osgood (Texas) - Talmadge Beaumont (Georgia) - Haversham Cole (North Carolina) - Ellsworth Ridley (Tennessee) - Palmetto Strauss (Florida)

*Tomorrow, June 4:* - Expect Pinnacle consent letter. Upon receipt, confirm with Sandra Whitfield and execute the Pinnacle Replacement Guaranty and Assumption Agreement.

*Wednesday, June 5:* - Final circulation of funds flow and settlement statements for all-party sign-off. - Pre-closing call with the Blackridge Hayes team to walk through the closing agenda.

*Thursday, June 6 — Closing Day:* - Execute and deliver all closing documents. - Fund all closing-day wires. - Bind the R&W insurance policy. - Record transfer tax filings (where applicable). - Mail tenant notification letters on June 7.

*Contingency Note:* If the Pinnacle consent is not received by June 4, we have until the June 7 outside date under the Second Amendment. However, based on today's conversation with Whitfield & Archer, we do not anticipate needing the additional day.

*Post-Closing:* - 90-day proration true-up (deadline September 4, 2024) - 4 outstanding SNDAs due within 30 days - Entity-level filings: Delaware Secretary of State amendments, foreign qualification updates in 5 states, and UCC-3 terminations

Marcus, we are well-positioned for a June 6 closing. I would be happy to schedule a call tomorrow morning with you, David, and the Calderwood Harkness team to walk through any questions or items you would like to discuss in further detail.

In the meantime, Grace Nakamura and Rafael Dominguez are available for any follow-up tonight or tomorrow. Please do not hesitate to reach out.

I will have the updated Pre-Closing Checklist & Responsibilities Matrix, the draft Funds Flow Memorandum, and the draft Closing Agenda (June 6, 2024) available for circulation first thing in the morning.

Douglas Fairchild Partner Calderwood Harkness LLP 1200 Avenue of the Americas, 42nd Floor New York, NY 10036 T: (212) 555-0184 | M: (917) 555-0291 dfairchild@calderwoodharkness.com

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