Contract analysis

I. Executive Summary This memorandum sets forth the results of my review and analysis of the construction loan commitment letter (the "Term Sheet" or "Commitment Letter") dated November 18, 2025, issued by Meridian National Bank, N.A. ("Meridian" or the "Lender"), through its Real Estate Finance Division (contact: Kevin P. Driscoll, Senior Vice President, Real Estate Finance, 200 South Charles Street, Baltimore, MD 2

II. Summary of Key Loan Terms This Section sets forth a summary of the principal terms of the Commitment Letter, together with preliminary analytical observations regarding each term. A. Borrower. The Borrower under the Commitment Letter is Harbor Point Development JV, LLC, a Delaware limited liability company formed for the purpose of owning, developing, and operating the Project. HP JV's registered agent in Delawar

I. Security / Collateral The Commitment Letter requires the following collateral package, which is standard for an institutional construction loan of this nature: (i) A first priority deed of trust/mortgage (the "Deed of Trust") on the approximately 8.2-acre Project site located at 1500–1580 Wills Street, Baltimore, Maryland 21231 (Block 7419, Lots 1 through 6, Baltimore City), together with all improvements, easemen

III. Equity Funding Conditions and Capital Call Coordination One of the most significant structural issues in the Commitment Letter is the interaction between the Lender's equity-first requirements and the staged equity funding mechanics established in the Operating Agreement and the Capital Contribution Agreement among the JV members. This Section analyzes these interrelationships and identifies potential areas of c

IV. Completion Guaranty Analysis The Completion Guaranty is among the most consequential aspects of the construction loan documentation from Fairwater's perspective. As the sole named guarantor of completion, Fairwater assumes significant financial exposure for the successful delivery of the Project. This Section provides a detailed analysis of the anticipated completion guaranty terms and recommends specific negotia

1. Negotiate a clear definition of "Completion" tied to the issuance of a TCO (not a final CO) for both towers and all retail space.

2. Seek automatic guaranty burn-off upon substantial completion, without any requirement for stabilization, lease-up, or debt service coverage thresholds.

3. Exclude minor punch-list items and seasonal landscaping from the Completion definition, with a holdback mechanism as an alternative.

4. Resist any extension of guaranty obligations beyond the scope of physical construction completion — the guaranty should not cover lease-up risk or stabilization risk.

5. Negotiate guarantor financial covenants that account for REIT mandatory distribution obligations and are calibrated to Fairwater's current financial condition.

6. Negotiate a right to cure with reasonable notice period (at least 30 days, with extension for diligent cure) before the Completion Guaranty can be called.

7. Advise Fairwater to negotiate with Prescott for a contribution guaranty, co-guaranty, or back-stop obligation allocating completion risk proportionate to each party's equity ownership (70/30).

V. Recourse Carve-Out Guaranty ("Bad Boy" Guaranty) Analysis In addition to the Completion Guaranty, the Commitment Letter contemplates a standard Recourse Carve-Out Guaranty (commonly referred to as a "Bad Boy" Guaranty) from Fairwater, under which the Guarantor assumes personal liability for losses arising from certain specified acts or omissions of the Borrower. While the construction loan is generally structured

VI. Borrower Covenants Analysis This Section analyzes the affirmative covenants, negative covenants, and financial covenants that are anticipated to be imposed on the Borrower under the definitive loan documentation. A. Affirmative Covenants The Commitment Letter references the following affirmative covenants, which are standard for institutional construction loan facilities: (i) Financial Reporting. The Borrower wil

VII. Draw Mechanics and Construction Budget The construction draw mechanics are the operational engine of the Loan and must be carefully structured to ensure that construction proceeds smoothly, that the Lender's interests are protected, and that the Borrower retains adequate flexibility to manage the construction process efficiently. A. Draw Request Procedures The Commitment Letter contemplates monthly draw requests