Contract analysis

ARTICLE I — DEFINITIONS As used in this Agreement, the following capitalized terms shall have the meanings set forth below. Other capitalized terms used herein shall have the meanings assigned to them elsewhere in this Agreement. "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this defi

ARTICLE II — FORMATION AND ORGANIZATION OF THE COMPANY

Section 2.1 — Formation The Company has been or shall be formed as a Delaware limited liability company by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to Section 18-201 of the Delaware Act, substantially in the form attached hereto as Exhibit A. The name of the Company shall be Harbor Point Development JV, LLC. The registered agent of the Company in the State

Section 2.2 — Foreign Qualification The Company shall promptly qualify as a foreign limited liability company in the State of Maryland by filing the requisite registration documents with the Maryland State Department of Assessments and Taxation (MD SDAT), as the Company will conduct business and own real property in Baltimore City, Maryland. The Managing Member shall cause such filing to be made prior to the Company'

Section 2.3 — Purpose The purpose of the Company shall be strictly limited to: (a) acquiring the Property from Harbor East Land Holdings, LLC, for a purchase price of Fifty-Four Million Dollars ($54,000,000) pursuant to the Land PSA; (b) developing, constructing, owning, leasing, operating, managing, and maintaining the Project on the Property; (c) obtaining and maintaining the Construction Loan from Meridian Nationa

Section 2.4 — Term The Company shall continue in existence from the date of the filing of the Certificate of Formation until dissolved and its affairs wound up in accordance with Article XIII of this Agreement. The Company shall have a perpetual term and shall not be subject to any fixed termination date; provided, however, that the Company shall be dissolved upon the occurrence of any event of dissolution set forth

Section 2.5 — Principal Office The principal office of the Company shall be located at 7200 Pratt Street, Suite 1400, Baltimore, MD 21202, care of Fairwater Real Estate Investment Trust, or at such other location within the Baltimore metropolitan area as the Managing Member may designate from time to time with the consent of the Capital Partner. The Company may establish such additional offices as the Managing Member

Section 2.6 — Title to Property All property acquired by the Company, whether real, personal, or mixed, tangible or intangible, shall be held in the name of the Company. No Member shall have any individual ownership interest in any Company property. Each Member's interest in the Company shall constitute personal property, and no Member shall have any interest in the specific assets or property of the Company, except

ARTICLE III — MEMBERS AND PERCENTAGE INTERESTS

Section 3.1 — Members The Members of the Company and their respective holding entities are as follows: (a) Fairwater HP Manager, LLC (Managing Member) — a Maryland limited liability company, EIN: 52-2201889, whose sole member is Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (NYSE: FWT), EIN: 52-2198437, MD SDAT ID: D19847321, with headquarters at 7200 Pratt Street, Suite 1400, Baltim

Section 3.2 — Percentage Interests The Percentage Interests of the Members in the Company are as follows: The Percentage Interests have been determined based on the ratio of each Member's Capital Commitment to the Total JV Equity. The Percentage Interests shall be subject to adjustment only as expressly provided in this Agreement, including pursuant to the dilution provisions of Section 5.2 in the event of a Funding

Section 3.3 — Representations and Warranties of Members Each Member hereby represents and warrants to the other Member, as of the Effective Date, as follows: (a) Organization and Good Standing. Such Member is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation, and has full power and authority to own its assets, carry on its business, and enter into and perform its o

Section 3.4 — No Admission of Additional Members No additional members may be admitted to the Company without the prior written consent of both Members, which consent may be withheld by either Member in its sole and absolute discretion. The admission of any additional member to the Company shall constitute a Major Decision under Section 7.3 of this Agreement. Any additional member admitted to the Company shall execut

ARTICLE IV — CAPITAL CONTRIBUTIONS

Section 4.1 — Capital Commitments Each Member hereby commits to contribute capital to the Company in the following aggregate amounts (each, a "Capital Commitment"): Each Member's Capital Commitment represents such Member's maximum obligation to contribute equity capital to the Company, and each Member shall fund its Capital Commitment in accordance with the capital call procedures set forth in this Article IV. The Me

Section 4.2 — Initial Capital Contributions At the initial equity funding and land closing (the "Initial Closing"), targeted to occur on or about January 30, 2026, or such other date as the Members may mutually agree, each Member shall contribute to the Company twenty-five percent (25%) of its total Capital Commitment (the "Initial Capital Contribution"), as follows: The Initial Capital Contributions, together with t

Section 4.3 — Subsequent Capital Calls Following the Initial Closing, the Managing Member may from time to time issue capital call notices (each, a "Capital Call Notice") to the Members for additional Capital Contributions on a pro rata basis in accordance with their respective Percentage Interests (30% Fairwater / 70% Prescott) to fund amounts required under the Approved Budget that are not funded by Construction Lo

Section 4.4 — Capital Accounts A separate Capital Account shall be established and maintained for each Member in accordance with Section 704(b) of the Internal Revenue Code and the Treasury Regulations thereunder. Each Member's Capital Account shall be: (a) credited with (i) the amount of cash contributed by such Member to the Company, (ii) the fair market value of any property contributed by such Member (net of liab

Section 4.5 — No Interest on Capital No Member shall earn or be entitled to receive any interest on its Capital Contributions or its Capital Account balance by reason of such contributions or balance; provided, however, that nothing in this Section 4.5 shall be construed to limit any Member's right to receive the Preferred Return under Article VI, which Preferred Return is a distribution priority and not interest on

Section 4.6 — No Withdrawal of Capital No Member may withdraw or reduce its Capital Contribution or its Capital Account, in whole or in part, except through distributions authorized under Article VI or Article XIII of this Agreement. No Member shall have the right to demand or receive the return of its Capital Contribution or any portion thereof, and no Member shall have the right to receive property other than cash

Section 4.7 — Pre-Formation Expenditure Reimbursement The Members acknowledge that Fairwater Real Estate Investment Trust has incurred certain pre-formation expenditures on behalf of the Project prior to the formation of the Company, including deposits made under the Land PSA, zoning counsel fees, architectural and design fees, environmental assessment costs (including Phase I and Phase II environmental site assessme

ARTICLE V — DEFAULT ON CAPITAL CONTRIBUTIONS; DILUTION

Section 5.1 — Failure to Fund If any Member fails to fund its pro rata share of a capital call within the fifteen (15)-business-day notice period set forth in Section 4.3 (or, in the case of the Initial Capital Contribution, on or before the Initial Closing date) (a "Funding Default"), the non-defaulting Member (the "Non-Defaulting Member") shall have the following remedies, which remedies shall be in addition to, an

Section 5.2 — Dilution Mechanics If the Non-Defaulting Member elects the dilution remedy under Section 5.1(b), the Percentage Interests of the Members shall be adjusted as follows: (a) The Non-Defaulting Member's additional Capital Contribution (equal to the Defaulting Member's unfunded share of the capital call) shall be credited to the Non-Defaulting Member's Capital Account. (b) The Percentage Interests shall be r

Section 5.3 — Cure Period Upon the occurrence of a Funding Default, the Non-Defaulting Member shall deliver written notice thereof to the Defaulting Member (a "Default Notice"). The Defaulting Member shall have a period of ten (10) business days following receipt of such Default Notice (the "Cure Period") within which to cure the Funding Default by funding the full amount of its unfunded share of the capital call, to

Section 6.1 — Definitions For purposes of this Article VI: "Net Cash Flow" means, for any period, the gross receipts of the Company from all sources during such period (including rental income, retail revenue, parking income, interest income, and all other revenues) less the following: (i) operating expenses of the Project and the Company for such period, (ii) debt service payments on the Construction Loan and any ot

Section 6.2 — Distribution of Net Cash Flow Net Cash Flow shall be distributed to the Members on a quarterly basis, within forty-five (45) days after the end of each calendar quarter, in the following order of priority (the "Waterfall"): Tier 1 — Return of Capital. First, one hundred percent (100%) to the Members, pro rata in accordance with their respective Percentage Interests (30% to Fairwater Member / 70% to Pres

Section 6.3 — Distribution of Capital Event Proceeds Capital Event Proceeds shall be distributed to the Members through the same Waterfall (Tiers 1 through 5) as set forth in Section 6.2, applied cumulatively with all prior distributions of Net Cash Flow. Upon a final liquidating distribution in connection with the dissolution and winding up of the Company, all remaining assets of the Company (after satisfaction of C

Section 6.4 — Tax Distributions Notwithstanding the foregoing distribution provisions, the Company shall make quarterly estimated tax distributions (each, a "Tax Distribution") to each Member in an amount sufficient to cover such Member's estimated federal and state income tax liability attributable to allocations of taxable income from the Company for the applicable quarter. For purposes of this Section 6.4, each Me

Section 6.5 — REIT Required Distributions Notwithstanding the foregoing, the Company shall distribute to the Fairwater Member at least one hundred percent (100%) of the REIT taxable income (as defined under Sections 856 through 860 of the Internal Revenue Code and the Treasury Regulations thereunder) attributable to Fairwater's interest in the Company, to the extent necessary for Fairwater Real Estate Investment Trus

Section 6.6 — Withholding The Company shall be entitled to withhold from any distribution to a Member any amounts required to be withheld by applicable federal, state, or local tax law, including any withholding required under Sections 1441 through 1446 of the Internal Revenue Code or any state or local equivalent. Any amounts so withheld shall be treated as having been distributed to the relevant Member for all purp

ARTICLE VII — MANAGEMENT AND GOVERNANCE

Section 7.1 — Managing Member Fairwater HP Manager, LLC shall serve as the Managing Member of the Company. Fairwater, acting through the Managing Member, shall be responsible for the day-to-day management and operations of the Company and the Project, including: (a) day-to-day management and oversight of all Company affairs; (b) development and construction oversight of the Project, including coordination with archit

Section 7.2 — Authority of Managing Member Subject to the Approved Budget and the Major Decision requirements of Section 7.3, the Managing Member shall have full authority to act on behalf of the Company in the ordinary course of the Company's business, including the authority to: (a) execute, deliver, and perform contracts, agreements, instruments, and other documents on behalf of the Company in connection with the

Section 7.3 — Major Decisions Requiring Consent of Both Members Notwithstanding the authority granted to the Managing Member in Section 7.2, the following actions shall require the prior written consent of both the Managing Member and the Capital Partner (each, a "Major Decision"), and the Managing Member shall not take or cause the Company to take any Major Decision without such prior written consent:

1. Approval of the initial Project development budget and the annual operating budget for each Fiscal Year, and any amendments to any Approved Budget that would result in any budgeted line item being exceeded by more than five percent (5%) of the budgeted amount for such line item or any increase in the Total Project Cost.

2. Any single expenditure or commitment exceeding Five Hundred Thousand Dollars ($500,000) that is not included in the Approved Budget and is not otherwise contemplated by this Agreement.

3. Entering into, modifying, extending, refinancing, or terminating the Construction Loan, or any other financing, loan, mortgage, deed of trust, or encumbrance of the Property or any other Company asset.

4. Any sale, transfer, exchange, conveyance, or other disposition of the Property or any material portion thereof (including any individual building, tower, or phase of the Project), or any agreement or commitment to do the same.

5. Any sale, transfer, pledge, hypothecation, encumbrance, or other disposition of a Member's interest in the Company, except for Permitted Transfers under Section 9.2.

6. Admission of additional members to the Company.

7. Settlement of any litigation, arbitration, governmental investigation, or claim involving the Company or the Project with a settlement value or exposure in excess of Two Hundred Fifty Thousand Dollars ($250,000).

8. Any election to rebuild, restore, or wind down the Project and the Company following a casualty loss or condemnation event affecting all or a material portion of the Property or the Project.

9. Any voluntary filing for bankruptcy, receivership, insolvency, or dissolution of the Company, or any consent to an involuntary filing.

10. Entering into any transaction, agreement, or arrangement with an Affiliate of any Member (other than the Development Management Agreement, the Property Management Agreement, and such other Affiliate agreements as are expressly contemplated by this Agreement on terms previously approved by both Members), or any amendment, modification, or termination of any such Affiliate agreement.

11. Selection, replacement, or termination of the Company's independent auditor or tax return preparer (currently Alderman & Fields, CPAs, LLP).

12. Execution of, or any material modification to, the GMP Contract with Pinnacle General Contractors, Inc., or selection of a replacement general contractor.

13. Any action or omission that would cause the Company to fail to comply with the single-purpose entity covenants set forth in Section 2.3, or that would cause Fairwater Real Estate Investment Trust to fail to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code or to violate any REIT requirement. The consent of both Members to a Major Decision may be evidenced by written approval delivered

Section 7.4 — Deadlock If the Members are unable to agree on any Major Decision after good-faith negotiations between the Members' senior representatives for a period of thirty (30) days following the date on which either Member first delivers written notice of its position to the other Member (a "Deadlock"), either Member may invoke the buy-sell provisions of Article XI (subject to the five (5)-year lockout period f

Section 7.5 — Budgets and Reporting The Managing Member shall prepare and submit to the Capital Partner the following budgets and reports: (a) Initial Development Budget. An initial Project development budget (which shall be consistent with the Total Project Cost of $576,000,000 as set forth in Schedule 2), to be submitted to and approved by both Members prior to the Initial Closing. The initial development budget sh

Section 7.6 — Officers and Authorized Signatories The Managing Member may designate officers of the Company, including a president, one or more vice presidents, a secretary, and a treasurer, to act on behalf of the Company in connection with the administration of its day-to-day affairs. Such officers shall serve at the pleasure of the Managing Member and shall have such authority and responsibilities as the Managing

Section 7.7 — Bank Accounts All Company funds shall be deposited in accounts at one or more financial institutions approved by both Members. The Managing Member shall be authorized to open and manage such accounts in the name of the Company, subject to the following: (a) withdrawals from any Company bank account in an amount exceeding $[_] shall require dual signatures of one (1) authorized signatory designated by th

ARTICLE VIII — FEES AND COMPENSATION

Section 8.1 — Development Management Fee The Company shall pay to Fairwater Real Estate Investment Trust (or its designee) a development management fee (the "Development Management Fee") equal to three and one-half percent (3.5%) of hard costs incurred in connection with the development and construction of the Project. Based on total estimated hard costs of Four Hundred Thirty-Two Million Dollars ($432,000,000), the

Section 8.2 — Property Management Fee Following the stabilization of the Project (defined as the date on which the Project has achieved and maintained an average physical occupancy of ninety-three percent (93%) or greater for a period of three (3) consecutive months), the Company shall pay to Fairwater Real Estate Investment Trust (or its designee) a property management fee (the "Property Management Fee") equal to th

Section 8.3 — Disposition Fee Upon any sale, exchange, or other disposition of the Property or any material portion thereof, the Company shall pay to Fairwater Real Estate Investment Trust (or its