Contract analysis

Section 1.1 — Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Operating Agreement or, if not defined therein, in the JV Agreement. "Agreed Percentage" means, with respect to each Member, such Member's percentage interest in the Company, as set forth below and

Section 1.2 — Cross-References. Terms used in this Agreement that are not defined in Section 1.1 but are defined in the Operating Agreement or the JV Agreement shall have the meanings ascribed to such terms therein. In the event of a conflict between the definitions contained in this Agreement and those contained in the Operating Agreement, the definitions in the Operating Agreement shall control, except to the exten

ARTICLE II — INITIAL CAPITAL CONTRIBUTIONS

Section 2.1 — Amount of Initial Capital Contributions. Each Member shall make an initial capital contribution to the Company (each, an "Initial Capital Contribution") in an aggregate amount equal to twenty-five percent (25%) of the Total Equity Commitment, or Sixty Million Dollars ($60,000,000) in the aggregate. The Initial Capital Contribution of each Member shall be as follows: (a) Fairwater Member: Eighteen Millio

Section 2.2 — Timing of Initial Capital Contributions. Each Member shall fund its respective Initial Capital Contribution on or before January 30, 2026 (the "Initial Funding Date"), which is the target initial equity funding date and the anticipated date of closing of the land acquisition for the Project. Each Initial Capital Contribution shall be made by wire transfer of immediately available funds to the Company's

Section 2.3 — Use of Initial Capital Contributions. The Initial Capital Contributions shall be applied by the Company for the following purposes: (a) Land Acquisition. Payment of the purchase price for the Project site in the amount of Fifty-Four Million Dollars ($54,000,000), payable to Harbor East Land Holdings, LLC (Vincent A. DeLuca, sole member), as seller, pursuant to the Purchase and Sale Agreement for the Pro

Section 2.4 — Pre-Formation Expenditure Credit. The Fairwater Member shall receive a credit against its Initial Capital Contribution for pre-JV development expenditures previously incurred by or on behalf of Fairwater Real Estate Investment Trust and reimbursed to Fairwater Real Estate Investment Trust under the Pre-Formation Expenditure Reimbursement Agreement dated as of January 12, 2026 (the "Pre-Formation Expendi

Section 2.5 — Conditions to Initial Funding. The obligation of each Member to fund its Initial Capital Contribution shall be subject to the satisfaction (or waiver in writing by both Members) of each of the following conditions on or before the Initial Funding Date: (a) Transaction Documents. The JV Agreement, the Operating Agreement, and all ancillary documents contemplated thereby shall have been duly executed and

ARTICLE III — SUBSEQUENT CAPITAL CONTRIBUTIONS

Section 3.1 — Obligation to Make Subsequent Capital Contributions. Each Member shall make subsequent capital contributions to the Company (each, a "Subsequent Capital Contribution") from time to time as needed to fund the Project in accordance with the Approved Budget, in proportion to their respective Agreed Percentages (Fairwater Member: 30%; Prescott Member: 70%). The aggregate amount of Subsequent Capital Contrib

Section 3.2 — Capital Call Procedures. The Managing Member shall issue Capital Calls for Subsequent Capital Contributions in accordance with the following procedures: (a) The Managing Member shall deliver a Capital Call Notice to each Member specifying: (i) the aggregate amount of the Capital Call; (ii) each Member's pro rata share of such Capital Call based on its Agreed Percentage; (iii) the purpose of the Capital

Section 3.3 — Frequency and Limitations. The Managing Member shall observe the following limitations with respect to the timing and frequency of Capital Calls: (a) Monthly Limitation. No more than one (1) Capital Call shall be issued in any calendar month, unless an emergency expenditure is required as described in Section 3.3(b) below. (b) Emergency Capital Calls. Notwithstanding Section 3.3(a), the Managing Member

Section 3.4 — Additional Capital Contributions Beyond Total Equity Commitment. In the event the Managing Member determines that additional equity beyond the Two Hundred Forty Million Dollar ($240,000,000) Total Equity Commitment is needed for the Project, whether as a result of cost overruns, the failure to obtain or maintain the Construction Loan or any refinancing thereof, uninsured or underinsured losses, or any o

Section 3.5 — Member Loans. If additional capital is needed beyond the Total Equity Commitment and one Member elects not to fund its pro rata share pursuant to Section 3.4, the other Member may advance the shortfall to the Company as a loan (a "Member Loan") on the following terms: (a) Interest Rate. Each Member Loan shall bear interest at a rate per annum equal to the lesser of (i) Term SOFR (as determined on the da

Section 4.1 — Capital Contribution Default. A "Capital Contribution Default" shall occur if a Member fails to fund its pro rata share of a duly issued Capital Call within ten (10) Business Days after the stated due date set forth in the applicable Capital Call Notice (for clarity, the stated due date shall be not fewer than fifteen (15) Business Days after delivery of the Capital Call Notice; accordingly, a Capital C

Section 4.2 — Non-Defaulting Member Remedies (Election). If the Defaulting Member fails to cure the Capital Contribution Default within the Cure Period, the Non-Defaulting Member may, in its sole and absolute discretion, elect one or more of the following remedies by delivering written notice to the Defaulting Member within thirty (30) days after the expiration of the Cure Period: (a) Contribution by Non-Defaulting M

Section 4.3 — Dilution Mechanics. If the Non-Defaulting Member elects to dilute the Defaulting Member's interest pursuant to Section 4.2(b), the following procedures and mechanics shall apply: (a) The Non-Defaulting Member shall contribute to the Company the amount that the Defaulting Member failed to fund (the "Default Amount"), and such contribution shall be treated as a Capital Contribution by the Non-Defaulting M

Section 4.4 — Forced Sale / Buy-Out of Defaulting Member's Interest. If the Non-Defaulting Member elects a forced buy-out of the Defaulting Member's interest pursuant to Section 4.2(c), the following terms and procedures shall apply: (a) Purchase Price. The Non-Defaulting Member shall purchase, and the Defaulting Member shall sell, the Defaulting Member's entire membership interest in the Company at a purchase price

Section 4.5 — Default Loans. If the Non-Defaulting Member elects to contribute the Default Amount as a Default Loan pursuant to Section 4.2(a), the following terms shall apply: (a) Interest Rate. Each Default Loan shall bear interest at a rate per annum equal to the greater of (i) fifteen percent (15%) per annum and (ii) the prime rate as published in The Wall Street Journal on the date of the Default Loan advance pl

Section 4.6 — Suspension of Defaulting Member's Rights. During the pendency of an uncured Capital Contribution Default, the Defaulting Member's rights and privileges shall be restricted as follows: (a) Voting Rights. The Defaulting Member shall have no voting rights on any matter requiring Member consent or approval under this Agreement, the Operating Agreement, or the JV Agreement, and the Non-Defaulting Member shal

Section 5.1 — Establishment and Maintenance. A separate capital account (a "Capital Account") shall be established and maintained for each Member in accordance with Treasury Regulation § 1.704-1(b)(2)(iv) and the principles of Section 704(b) of the Code. The Capital Account of each Member shall reflect such Member's Initial Capital Contribution, Subsequent Capital Contributions, allocations of income, gain, loss, ded

Section 5.2 — Adjustments to Capital Accounts. Each Member's Capital Account shall be adjusted as follows: (a) Increases. A Member's Capital Account shall be increased by (i) the amount of such Member's Capital Contributions (including Initial Capital Contributions and Subsequent Capital Contributions), (ii) the amount of net income and gain allocated to such Member, and (iii) any other items required to be credited

Section 5.3 — No Interest on Capital Accounts. No Member shall be entitled to receive interest on its Capital Account balance or on any Capital Contribution made to the Company. The foregoing shall not limit or affect the accrual of interest on Default Loans or Member Loans as expressly provided in Sections 4.5 and 3.5 of this Agreement, respectively.

Section 5.4 — No Right of Withdrawal. No Member shall have the right to withdraw or reduce its Capital Contribution or Capital Account balance, in whole or in part, except (a) upon the dissolution and winding up of the Company in accordance with the Operating Agreement, or (b) as otherwise expressly provided in the Operating Agreement, including the buy-sell provisions thereof, which are first exercisable after Janua

Section 5.5 — Negative Capital Account Obligation. No Member shall be required to restore a deficit in its Capital Account, except to the extent required by (a) Treasury Regulation § 1.704-1(b)(2)(ii)(b)(3) (the qualified income offset provisions), (b) the minimum gain chargeback provisions of the Operating Agreement, or (c) any other mandatory restoration obligation set forth in the Operating Agreement in compliance

ARTICLE VI — CAPITAL CALL BUDGET AND APPROVAL PROCESS

Section 6.1 — Relationship to Approved Budget. All Capital Calls shall be made in accordance with the Approved Budget as adopted and amended from time to time pursuant to the Operating Agreement. The Approved Budget shall cover the full scope of the Project, including, without limitation, land acquisition costs (Fifty-Four Million Dollars ($54,000,000)), hard construction costs (Four Hundred Thirty-Two Million Dollar

Section 6.2 — Budget Reporting. The Managing Member shall deliver to the Prescott Member quarterly budget-to-actual reports within thirty (30) days after the end of each fiscal quarter of the Company. Such reports shall set forth, in reasonable detail, actual expenditures compared to the Approved Budget on a line-item basis, together with explanations for any material variances. In addition, the Managing Member shall

Section 6.3 — Coordination with Construction Loan. Capital Calls for Subsequent Capital Contributions shall be coordinated with draws under the Three Hundred Thirty-Six Million Dollar ($336,000,000) Construction Loan from Meridian National Bank, N.A. Equity contributions from the Members shall be funded in advance of, or pari passu with, Construction Loan draws, as required by the Construction Loan documents. The Man

ARTICLE VII — TOTAL EQUITY COMMITMENTS

Section 7.1 — Maximum Commitments. The maximum total equity commitment of each Member to the Company under this Agreement shall be as follows: (a) Fairwater Member: Seventy-Two Million Dollars ($72,000,000), representing thirty percent (30%) of the Two Hundred Forty Million Dollar ($240,000,000) Total Equity Commitment; (b) Prescott Member: One Hundred Sixty-Eight Million Dollars ($168,000,000), representing seventy

Section 7.2 — Fairwater Equity Funding Commitment. The Fairwater Member's commitment to fund its Total Equity Commitment of Seventy-Two Million Dollars ($72,000,000) is supported by that certain Fairwater Equity Funding Commitment Letter executed by Patricia S. Liang, Chief Financial Officer, and Theresa M. Calloway, General Counsel, of Fairwater Real Estate Investment Trust, which letter confirms that the Board of T

Section 7.3 — Prescott Equity Funding Commitment. The Prescott Member's commitment to fund its Total Equity Commitment of One Hundred Sixty-Eight Million Dollars ($168,000,000) is supported by the internal investment committee approval of Prescott Capital Partners, LP, obtained on November 5, 2025, and by the organizational documents of Prescott HP Investor, LLC, which was formed as a sole-purpose investment vehicle

ARTICLE VIII — DISTRIBUTIONS AND RELATIONSHIP TO WATERFALL

Section 8.1 — Cross-Reference to Operating Agreement. Distributions of net cash flow, net proceeds from capital events (including sales, refinancings, and other dispositions), and any other distributable amounts of the Company shall be made in accordance with the distribution waterfall set forth in the Operating Agreement, which provides for the following priority of distributions: First: Return of Capital — One hund

Section 8.2 — Priority of Default Loans and Member Loans. Notwithstanding Section 8.1, all outstanding Default Loans and Member Loans, including all accrued and unpaid interest thereon, shall be repaid in full from distributions of the Company prior to the application of the distribution waterfall set forth in Section 8.1. Default Loans shall have priority of repayment over Member Loans. As between multiple outstandi

Section 8.3 — REIT Distribution Requirements. The Fairwater Member shall have the right, pursuant to the REIT Compliance Side Letter and the Operating Agreement, to cause the Company to distribute to the Fairwater Member at least one hundred percent (100%) of the REIT taxable income attributable to the Fairwater Member's interest in the Company, to the extent necessary for Fairwater Real Estate Investment Trust to sa

ARTICLE IX — TRANSFERS AND RESTRICTIONS

Section 9.1 — Restrictions on Transfer. No Member may sell, transfer, assign, convey, pledge, hypothecate, encumber, or otherwise dispose of all or any portion of its membership interest in the Company, except as expressly permitted by the Operating Agreement, including the buy-sell and right of first offer provisions set forth therein, which are first exercisable after January 12, 2031, the fifth (5th) anniversary o

Section 9.2 — Pledge to Construction Lender. Notwithstanding the restrictions set forth in Section 9.1, each Member acknowledges and agrees that its membership interest in the Company may be pledged to, or a security interest therein may be granted in favor of, Meridian National Bank, N.A. as required by the Construction Loan documents, subject to the terms and conditions of any applicable intercreditor agreement, pl

ARTICLE X — REPRESENTATIONS AND WARRANTIES

Section 10.1 — Representations of Each Member. Each Member hereby represents and warrants to the other Member as of the Effective Date as follows: (a) Due Organization. Such Member is duly organized or formed, validly existing, and in good standing under the laws of its jurisdiction of organization or formation, and has all requisite power and authority to own its properties and conduct its business as currently cond

Section 10.2 — Additional Representations of the Fairwater Member. In addition to the representations and warranties set forth in Section 10.1, the Fairwater Member hereby represents and warrants to the Prescott Member as of the Effective Date as follows: (a) Fairwater Real Estate Investment Trust is duly organized as a Maryland real estate investment trust and is listed on the New York Stock Exchange under the ticke

Section 10.3 — Additional Representations of the Prescott Member. In addition to the representations and warranties set forth in Section 10.1, the Prescott Member hereby represents and warrants to the Fairwater Member as of the Effective Date as follows: (a) Prescott Capital Partners, LP is duly organized and validly existing under the laws of the State of Delaware. The investment committee of Prescott Capital Partne

Section 11.1 — Cooperation. Each Member covenants and agrees to cooperate with the other Member in good faith to (a) fund Capital Calls in a timely manner in accordance with this Agreement, (b) provide such financial information, certifications, and documentation as may be reasonably requested by the other Member or as may be required by the Construction Loan documents or applicable law, and (c) take all actions reas

Section 11.2 — Compliance with Construction Loan. The Members shall at all times ensure that equity funding for the Project meets the requirements and conditions imposed by the Construction Loan from Meridian National Bank, N.A., including, without limitation, equity-before-debt funding sequencing requirements, maintenance of required Interest Reserves, delivery of equity contribution certifications, and compliance w

Section 11.3 — Tax Matters. The Members shall cooperate with each other and with Alderman & Fields, CPAs, LLP (Robert E. Alderman, Engagement Partner), the Company's independent accounting firm, in connection with the preparation and timely filing of all federal, state, and local tax returns of the Company and the maintenance of Capital Accounts in accordance with this Agreement and the Operating Agreement. All alloc

Section 11.4 — Insurance. The Managing Member shall procure and maintain, or cause to be procured and maintained, all insurance required by the Operating Agreement and the Construction Loan documents, including, without limitation: (a) Builder's risk insurance at full replacement cost, with the carrier being Greystone Mutual Insurance Company, covering all risks of direct physical loss or damage to the Project during

ARTICLE XII — ACCOUNTING AND RECORDS

Section 12.1 — Books and Records. The Managing Member shall maintain, or cause to be maintained, complete and accurate books and records of all Capital Contributions, Capital Accounts, distributions, and all other financial transactions of the Company. Such books and records shall be maintained on the accrual basis of accounting in accordance with generally accepted accounting principles, consistently applied, and sh

Section 12.2 — Fiscal Year. The fiscal year of the Company shall be the calendar year, commencing on January 1 and ending on December 31 of each year. The first fiscal year of the Company shall be a short year commencing on the date of formation and ending on December 31, 2026.

Section 12.3 — Audit Rights. Each Member shall have the right, at its own expense, to inspect, examine, and audit the books and records of the Company upon reasonable prior written notice to the Managing Member. The Managing Member shall provide reasonable access to such books and records during normal business hours at the Company's principal office. In addition, annual audited financial statements of the Company sh

Section 12.4 — Capital Account Statements. The Managing Member shall deliver to each Member quarterly Capital Account statements within thirty (30) days after the end of each fiscal quarter. Such statements shall set forth, in reasonable detail, the following information for each Member: (a) the beginning Capital Account balance for the quarter, (b) Capital Contributions made during the quarter, (c) allocations of in

ARTICLE XIII — INDEMNIFICATION

Section 13.1 — Indemnification of Non-Defaulting Member. A Defaulting Member shall indemnify, defend, and hold harmless the Non-Defaulting Member, the Company, and their respective members, managers, partners, officers, directors, employees, agents, and representatives from and against any and all losses, damages, costs, expenses (including reasonable attorneys' fees and disbursements), claims, liabilities, penalties