Contract analysis

I. EXECUTIVE SUMMARY AND PURPOSE The purpose of this memorandum is to consolidate the findings from all due diligence workstreams conducted by Calderwood & Harkness LLP ("C&H" or the "Firm") and its advisors in connection with Fairwater Real Estate Investment Trust's ("Fairwater" or "Buyer") proposed acquisition of one hundred percent (100%) of the membership interests in fourteen (14) single-purpose Delaware limited

II. TRANSACTION STRUCTURE AND KEY DATES RECAP A. Transaction Structure The transaction is structured as an entity-level purchase pursuant to which Fairwater will acquire one hundred percent (100%) of the membership interests in each of the fourteen (14) Target Entities. Each Target Entity is a Delaware limited liability company formed as a single-purpose entity for the sole purpose of holding title to, and operating,

III. TITLE REVIEW A. Overview Title commitments were obtained from Commonwealth National Title Insurance Company ("Commonwealth Title") for all fourteen (14) properties in the portfolio. The title officer for the engagement is Kenneth Stanhope, Senior Vice President and Title Officer, with Virginia Moorehead, Assistant Vice President and National Counsel, serving as national counsel for the transaction. The commitmen

IV. SURVEY REVIEW A. Overview ALTA/NSPS Land Title Surveys conforming to the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys were commissioned from Meridian Land Surveying, Inc. ("Meridian") for all fourteen (14) properties. The surveys were prepared under the supervision and certification of Daniel Caulfield, PLS, PE, the firm's principal surveyor. The survey instruction letter specifying

V. LEASE AUDIT A. Portfolio Overview C&H conducted a comprehensive review of all eighty-seven (87) leases across the fourteen-property portfolio. The lease audit included a review of each lease agreement (including all amendments, modifications, supplements, and related correspondence), comparison of lease terms against the rent roll and tenant information provided by Seller, and analysis of all material lease provis

Section 7.3 of the PSA requires Seller to deliver tenant estoppel certificates from tenants representing at least eighty percent (80%) of in-place base rent (i.e., Fifty-Nine Million Eight Hundred Forty Thousand Dollars ($59,840,000) of the $74,800,000 total) and from every tenant occupying 25,000 or more RSF (each a "Major Tenant"), in form reasonably acceptable to Buyer and Buyer's lenders, on or before May 15, 202

Section 7.4 of the PSA requires Buyer to deliver subordination, non-disturbance, and attornment agreements ("SNDAs") to all Major Tenants (defined as tenants with annual base rent of $1,500,000 or more per annum). Based on the current rent roll, thirty-eight (38) Major Tenant SNDAs are required. The form of SNDA is set forth in PSA Exhibit F. SNDAs are being prepared for distribution to the Major Tenants, and the dis

VI. ENVIRONMENTAL DUE DILIGENCE A. Overview Phase I Environmental Site Assessments ("Phase I ESAs") were prepared by Trident Environmental Group LLC ("Trident") for all fourteen (14) properties in the portfolio. The Phase I ESAs were conducted in accordance with ASTM E1527-21, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process, and were supervised by Rachel Kwan, Senio

VII. PROPERTY CONDITION ASSESSMENTS A. Overview Property Condition Assessments ("PCAs") were prepared by Rampart Building Sciences, Inc. ("Rampart") for all fourteen (14) properties in the portfolio. The PCAs were conducted in accordance with ASTM E2018-15, Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process, and were supervised by Alan Westbrook, PE. The PCAs included vi

VIII. ZONING AND LAND USE COMPLIANCE A. Overview C&H conducted a comprehensive zoning and land use compliance analysis for all fourteen (14) properties in the portfolio, in coordination with local counsel in each of the five jurisdictions. The analysis included review of applicable zoning ordinances, zoning maps, certificates of occupancy, building permits, and relevant municipal records, as well as direct communicat

IX. LOAN DOCUMENT REVIEW — ASSUMED DEBT ($612,000,000) A. Overview C&H conducted a comprehensive review of the loan documents for the three existing mortgage loan facilities to be assumed by Fairwater as part of the entity-level acquisition. The aggregate outstanding principal balance of the three facilities is Six Hundred Twelve Million Dollars ($612,000,000) as of February 28, 2024, the date of PSA execution. The t

X. ENTITY-LEVEL DUE DILIGENCE A. Overview C&H conducted entity-level due diligence with respect to all fourteen (14) Target Entities and GMP Fund III (the Seller). This workstream included the review of organizational documents, certificates of formation, certificates of good standing, operating agreements, UCC-1 financing statement searches, judgment and lien searches, and litigation searches in all relevant jurisdi

XI. TAX DUE DILIGENCE A. REIT Qualification C&H's tax partner, Sylvia Hartwell, conducted an analysis of the impact of the portfolio acquisition on Fairwater's status as a real estate investment trust ("REIT") under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). Ms. Hartwell's analysis confirms the following: • All fourteen (14) properties qualify as "real estate assets" for p