Contract analysis

I. Executive Summary The purpose of this memorandum is to flag six (6) tenant estoppel certificates received to date that contain material discrepancies when compared against the rent roll attached as Exhibit H to the Purchase and Sale Agreement dated February 28, 2024 (the "PSA"), between Greystone Meridian Partners Fund III, L.P. ("Seller" or "GMP Fund III") and Fairwater Real Estate Investment Trust ("Buyer" or "F

II. Background and PSA Requirements A. Transaction Overview Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, is acquiring one hundred percent (100%) of the membership interests in fourteen (14) single-purpose Delaware limited liability companies (collectively, the "Target Entities") from Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership. The transaction is stru

Section 7.2(a) — ABR Coverage Threshold. Section 7.2(a) of the PSA requires Seller to deliver to Buyer, on or before the estoppel delivery deadline, estoppel certificates from tenants whose leases, in the aggregate, represent at least eighty percent (80%) of total in-place annual base rent across the portfolio. Based on the Exhibit H rent roll reflecting total in-place ABR of $74,800,000, this threshold equates to $5

Section 7.2(b) — Major Tenant Requirement. In addition to the aggregate ABR coverage threshold, Section 7.2(b) requires Seller to obtain and deliver estoppel certificates from every "Major Tenant," defined in the PSA as any tenant occupying 25,000 or more RSF in any property in the portfolio. As of the Exhibit H rent roll date, there are twenty-three (23) Major Tenants across the portfolio. The Major Tenant estoppel

III. Detailed Analysis of Six (6) Discrepant Estoppel Certificates Set forth below is a detailed analysis of each of the six (6) estoppel certificates identified as containing material discrepancies when compared against the Exhibit H rent roll. For each discrepancy, we identify the property, the Target Entity, the tenant, the nature of the variance, the potential explanation, and our recommendation. A. Discrepancy N

IV. Summary Table of Discrepancies The following table summarizes the six (6) estoppel certificate discrepancies identified in Section III above:

V. Impact on Closing Conditions and ABR Threshold A. Combined ABR of the Six Discrepant Tenancies The six tenants identified in Section III represent the following aggregate annual base rent under the Exhibit H rent roll: The combined ABR of the six discrepant tenancies is approximately $20,634,000, representing approximately 27.6% of total portfolio ABR of $74,800,000. B. Effect on 80% ABR Threshold If any or all of

VI. Communication with Seller's Counsel Simultaneously with the delivery of this memorandum, a letter has been transmitted via email and overnight courier to Blackridge Hayes LLP, Seller's outside counsel, at the following addresses: Nathaniel Pryce, Esq. Thomas Keating, Esq. Blackridge Hayes LLP One Liberty Plaza, 38th Floor New York, New York 10006 The letter identifies all six (6) discrepancies in detail, organize

1. Written Supplemental Disclosure for each discrepancy, providing a complete explanation of the variance between the estoppel certificate and the Exhibit H rent roll, signed by or on behalf of an authorized representative of the Seller.

2. Copies of Supporting Documentation, including any lease amendments, renewal option exercise notices, rent abatement letters or credit agreements, security deposit adjustment notices, burn-down certifications, or other instruments that account for the discrepancy.

3. Updated Rent Roll reflecting current rental rates, lease terms, and tenant information as of a date no earlier than May 1, 2024, to replace or supplement the December 31, 2023 Exhibit H rent roll for purposes of the closing.

4. Confirmation of Correct Security Deposit Amounts with respect to the Birchwood Technology Group Inc. and Suncoast Warehousing & Distribution LLC tenancies, supported by bank statements or account ledgers from Magnolia Commerce Bank, N.A., where the Target Entity operating accounts are maintained, confirming the deposit balances currently held. The letter requests that all responsive materials be delivered to Calde

VII. Recommendations and Next Steps Based on the analysis set forth above, we recommend the following course of action:

1. Await Seller Supplemental Disclosure. The deal team should await Seller's response to the letter transmitted to Blackridge Hayes LLP requesting supplemental disclosure for each of the six (6) identified discrepancies. The requested response deadline is May 13, 2024.

2. Review Supplemental Documentation. Upon receipt of any supplemental disclosure, lease amendments, renewal notices, rent abatement letters, security deposit documentation, or other materials from the Seller, the Calderwood & Harkness deal team should promptly review each item for consistency with the corresponding estoppel certificate. The Estoppel Tracking Spreadsheet should be updated to reflect the status of eac

3. Approve Reconciled Estoppel Certificates. If the discrepancies are satisfactorily explained through the Seller's supplemental disclosure and supporting documentation, the six (6) estoppel certificates should be approved and counted toward the 80% ABR threshold. The ABR coverage percentage should be recalculated to confirm that the threshold is met (or to quantify the remaining gap, if any).

4. Address Unresolved Discrepancies. If any discrepancy is not satisfactorily resolved by the May 15, 2024 estoppel delivery deadline, the following actions should be considered: (a) Determine whether the unresolved estoppel certificate(s) must be excluded from the ABR coverage calculation and, if so, whether the remaining acceptable estoppel certificates are sufficient to satisfy the 80% ABR threshold; (b) Assess wh

5. Update Outstanding Diligence Issues Tracker. Rafael Dominguez should update the Outstanding Diligence Issues Tracker maintained by Calderwood & Harkness to reflect each of the six (6) discrepancies, the status of Seller's response, and any open items requiring resolution prior to closing.

6. Coordinate with Fairwater In-House Team. Calderwood & Harkness should coordinate with Fairwater's in-house real estate team — specifically, Marcus Devereaux (Senior Vice President, Acquisitions), Leah Torrance (Vice President, Asset Management), and Camille Oduya (In-House Real Estate Counsel) — regarding any material implications of the estoppel discrepancies for asset management, leasing strategy, or post-closin

7. Adjust Closing Proration Statement and Security Deposit Schedule. To the extent that any security deposit discrepancy is confirmed (Discrepancies No. 3 and No. 6), the revised security deposit figures must be reflected in the closing proration statement and the security deposit schedule delivered at closing. These adjustments should be communicated to Kenneth Stanhope at Commonwealth National Title Insurance Compa

VIII. Privileged and Confidential Notice This memorandum has been prepared by Calderwood & Harkness LLP and constitutes an attorney-client privileged communication and attorney work product within the meaning of the attorney-client privilege and the work product doctrine. This memorandum was prepared in connection with the representation of Fairwater Real Estate Investment Trust in its acquisition of the membership i