CALDERWOOD & HARKNESS LLP 425 Park Avenue New York, New York 10022
INTERNAL MEMORANDUM — PRIVILEGED & CONFIDENTIAL
August 11, 2025
TO: Office of the General Counsel / Finance & Administration Department
FROM: Philip Hartmann, Partner, Banking & Finance
RE: Matter Opening Memorandum — New Matter No. 1036-00001 — Fairwater Real Estate Investment Trust — Permanent Take-Out Financing
This memorandum and all attachments hereto are protected by the attorney-client privilege and the work product doctrine. This memorandum is intended solely for internal use by Calderwood & Harkness LLP personnel and authorized administrative staff in connection with the opening, staffing, billing, and conflicts administration of the above-referenced matter. This memorandum should not be distributed outside the firm or disclosed to any third party without the prior written authorization of the undersigned Responsible Partner.
1. Matter Identification
This memorandum is submitted in connection with the opening of a new client matter in the firm's Banking & Finance practice group. The key administrative identifiers for the matter are as follows:
Matter Number: 1036-00001
Practice Group: Banking & Finance
Matter Type: Real Estate Finance / CMBS Take-Out Financing
Date Opened: August 11, 2025
Office: New York (425 Park Avenue)
This matter involves the representation of an existing firm client, Fairwater Real Estate Investment Trust, in connection with permanent take-out financing of a $240,000,000 senior secured bridge credit facility. The matter is classified as a real estate finance engagement with a commercial mortgage-backed securities ("CMBS") component, given that the proposed permanent lender intends to originate the loan for contribution to a CMBS trust. Additional detail regarding the nature and scope of the engagement is provided in Section 3 below.
The matter has been assigned to the Banking & Finance practice group and will be administered out of the firm's New York office. All timekeepers currently assigned to the matter are based in the New York office, although local counsel engagements in multiple jurisdictions are anticipated as described in Section 5 of this memorandum.
2. Client Information
2.1 Client Entity Details
Client Full Legal Name: Fairwater Real Estate Investment Trust
Short Name / Commonly Known As: Fairwater REIT; FREIT
Entity Type: Maryland real estate investment trust
Jurisdiction of Organization: State of Maryland
Maryland State Department of Assessments and Taxation (SDAT) Entity ID: D19483726
Employer Identification Number (EIN): 52-2847193
New York Stock Exchange Ticker Symbol: FWTR
Fiscal Year End: December 31
Fairwater Real Estate Investment Trust is a publicly traded Maryland real estate investment trust listed on the New York Stock Exchange under the ticker symbol "FWTR." As a publicly traded REIT, Fairwater is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and is required to maintain compliance with the Internal Revenue Code provisions governing real estate investment trusts (Sections 856–860). These characteristics impose heightened confidentiality obligations on the firm, as discussed in Section 10 below, and require ongoing coordination with Fairwater's corporate and securities counsel on governance and compliance matters.
2.2 Client Addresses
Headquarters Address / Billing Address:
Fairwater Real Estate Investment Trust 8400 Chesapeake Center Drive, Suite 1200 Columbia, Maryland 21044
Registered Agent Address (Maryland):
7 Saint Paul Street, Suite 820 Baltimore, Maryland 21202
2.3 Primary Client Contact
David A. Whitfield, General Counsel
Mr. Whitfield serves as General Counsel of Fairwater REIT and is the primary point of contact for all matters relating to this engagement. All substantive legal communications, document drafts, and strategic recommendations should be directed to Mr. Whitfield in the first instance unless he designates otherwise. Mr. Whitfield has confirmed his availability for regular status calls throughout the duration of the engagement and has indicated that he will attend all material negotiation sessions.
2.4 Additional Client Contacts
The following individuals have been identified by Mr. Whitfield as authorized client contacts for purposes of this engagement:
• Naomi T. Sinclair, Chief Financial Officer — Ms. Sinclair will serve as the primary financial contact and will be responsible for coordinating the delivery of financial statements, operating budgets, rent rolls, and other financial due diligence materials. She will also be the primary liaison with Beacon Ridge Capital Advisors LLC, Fairwater's financial advisor, regarding economic terms, rate lock mechanics, and loan sizing.
• Rachel S. Donahue, Senior Vice President, Capital Markets — Ms. Donahue will serve as the day-to-day business contact for the capital markets aspects of the transaction, including coordination of term sheet commentary, commitment letter provisions, and CMBS-specific structuring issues. She has significant experience with prior CMBS transactions and will serve as the primary interface with Clarendon Metropolitan Insurance Company's origination team.
• Jonathan R. Calder, Chief Executive Officer — Mr. Calder should be contacted only in the event of escalation or for matters requiring CEO-level approval. Routine communications should not be directed to Mr. Calder without prior consultation with Mr. Whitfield.
2.5 Existing Client Status
Fairwater Real Estate Investment Trust is an existing client of the firm. Calderwood & Harkness previously represented Fairwater in connection with the negotiation, documentation, and closing of the $240,000,000 senior secured bridge credit facility dated June 30, 2025, provided by a syndicate of lenders led by Kensington National Bank, N.A. as administrative agent. The firm's representation in that prior engagement encompassed the bridge loan agreement, the related security documents, and the acquisition closing with respect to the Sun Belt Portfolio. The matter number for the bridge credit facility engagement is to be confirmed with the firm's records department and cross-referenced to this new matter file.
The client's financial standing with the firm is current. There are no outstanding invoices or collection issues. The firm's prior engagement with Fairwater was conducted on a standard hourly billing basis, and the client has demonstrated prompt and consistent payment practices throughout the relationship.
3. Matter Description
3.1 Transaction Overview
Calderwood & Harkness LLP has been engaged to represent Fairwater Real Estate Investment Trust and its subsidiaries in connection with the negotiation, documentation, and closing of permanent take-out financing to replace the existing $240,000,000 senior secured bridge credit facility. The bridge facility, dated as of June 30, 2025, was provided by a syndicate of lenders led by Kensington National Bank, N.A., as administrative agent, with Pinnacle Trust Company, Greystone Commerce Bank, and Redfield Capital Markets, LLC participating as syndicate lenders. The bridge facility was used to fund Fairwater's acquisition of a 14-property multifamily portfolio located across the Sun Belt region (the "Sun Belt Portfolio") from Meridian Sunstone Holdings LLC for a total purchase price of $385,000,000. The balance of the acquisition purchase price was funded through a combination of equity contributions from Fairwater Operating Partnership, L.P. and the assumption of certain existing subordinate obligations.
The bridge facility has an initial maturity date of December 31, 2025, with limited extension options, and was always intended to serve as temporary acquisition financing pending the arrangement of permanent take-out financing. The current engagement involves the permanent financing necessary to retire the bridge facility in full prior to its maturity.
3.2 Proposed Permanent Lender
Clarendon Metropolitan Insurance Company
NAIC Number: 38921 Headquarters: 1 MetroTech Center, Brooklyn, New York 11201
Clarendon Metropolitan Insurance Company is a large domestic insurance company that operates an active CMBS conduit origination platform. The proposed permanent loan will be originated by Clarendon Metropolitan with the intention that the loan will be contributed to a CMBS securitization trust. The anticipated trust designation is CLRN 2025-C14, although this designation is indicative only and remains subject to final pooling decisions by the loan's securitization sponsor. The CMBS conduit origination structure has significant implications for the documentation process, as the loan documents must conform to CMBS rating agency and servicer requirements, and the loan will be subject to standard CMBS servicing arrangements following securitization.
3.3 Proposed Loan Terms
The proposed permanent financing is expected to be structured on the following indicative terms, as reflected in the preliminary term sheet received from Clarendon Metropolitan's origination desk:
• Proposed Loan Amount: $240,000,000 (full take-out of the outstanding bridge principal amount)
• Interest Rate: 6.25% per annum, fixed for the term of the loan
• Loan Term: Ten (10) years
• Amortization: Thirty (30) year amortization schedule
• Recourse: Non-recourse, subject to a standard CMBS carve-out guaranty providing for personal liability of the guarantor upon the occurrence of certain specified "bad boy" events and environmental liabilities
• Defeasance / Prepayment: Expected to include standard CMBS defeasance provisions; yield maintenance or prepayment premium provisions to be negotiated
• Cash Management: Lockbox structure with standard CMBS cash management provisions, including cash trap triggers based on debt service coverage ratio thresholds
These terms are preliminary and subject to negotiation. The final terms will be reflected in the commitment letter and loan documents.
3.4 Borrower Entities
The permanent loan will be made to fourteen (14) single-purpose entity borrowers, each structured as a Delaware limited liability company:
Fairwater Sun Belt I LLC Fairwater Sun Belt II LLC Fairwater Sun Belt III LLC Fairwater Sun Belt IV LLC Fairwater Sun Belt V LLC Fairwater Sun Belt VI LLC Fairwater Sun Belt VII LLC Fairwater Sun Belt VIII LLC Fairwater Sun Belt IX LLC Fairwater Sun Belt X LLC Fairwater Sun Belt XI LLC Fairwater Sun Belt XII LLC Fairwater Sun Belt XIII LLC Fairwater Sun Belt XIV LLC
Each of the foregoing entities is a Delaware limited liability company organized as a special purpose entity ("SPE") in compliance with standard CMBS bankruptcy-remoteness requirements. Each SPE borrower is wholly owned by Fairwater Operating Partnership, L.P., a Delaware limited partnership (EIN: 52-2847201), which serves as Fairwater REIT's operating partnership. The property management function for the Sun Belt Portfolio is performed by Fairwater Residential Management LLC, a client affiliate with EIN 52-2953810. The organizational structure of the borrower entities and their relationship to the operating partnership and the REIT will need to be confirmed and, where necessary, supplemented during the due diligence process to ensure compliance with the lender's SPE requirements.
3.5 Guarantor. Fairwater Real Estate Investment Trust will serve as the non-recourse carve-out guarantor under the permanent loan. In this capacity, Fairwater REIT will guaranty the borrower entities' obligations under the loan documents solely with respect to certain enumerated "bad boy" acts (such as voluntary bankruptcy filings, fraud, misapplication of funds, and environmental liabilities) as well as ongoing environmental indemnification obligations. The scope of the guaranty carve-outs is a key negotiation point in CMBS transactions and will be a focus of the firm's negotiation efforts with lender's counsel.
3.6 Target Closing Date
The target closing date for the permanent take-out financing is November 28, 2025. This target has been established to provide approximately one month of cushion prior to the bridge loan's initial maturity date of December 31, 2025. Given the number of properties involved (14 properties across 5 states), the complexity of the CMBS documentation package, and the need to coordinate title, survey, and local law matters across multiple jurisdictions, adherence to this timeline will require disciplined project management and proactive coordination among all parties.
4. Related Matters and Cross-References
4.1 Prior Calderwood & Harkness Engagement
This matter is directly related to a prior Calderwood & Harkness engagement for Fairwater REIT involving the negotiation, documentation, and closing of the $240,000,000 senior secured bridge credit facility that closed on June 30, 2025. The bridge facility was provided by a syndicate led by Kensington National Bank, N.A. as administrative agent. Philip Hartmann served as the Responsible Partner on the bridge facility matter. The matter number for that prior engagement is to be confirmed with the firm's records department and should be cross-referenced to this new matter file to ensure continuity and efficient retrieval of relevant background documents, including the acquisition closing binder, bridge loan documents, organizational documents of the borrower SPEs, and title and survey materials obtained in connection with the acquisition.
Significant work product and institutional knowledge from the bridge facility engagement will be directly applicable to this permanent financing engagement, including familiarity with the Sun Belt Portfolio properties, the borrower entity organizational structures, and the client's transaction team. The staffing continuity between the two engagements — with Philip Hartmann, Lisa Morrow, and Marcus Leung each having worked on the bridge facility — should provide meaningful efficiencies.
4.2 Coordination with Crestline & Alderman LLP
Regular coordination will be required with Crestline & Alderman LLP, Fairwater's regular outside corporate and securities counsel. The lead partner at Crestline & Alderman for Fairwater matters is Patricia S. Keene. Crestline & Alderman's offices are located at One South Street, Suite 2800, Baltimore, Maryland 21202.
Crestline & Alderman's scope of representation includes REIT compliance matters, corporate governance (including board resolutions authorizing the permanent financing), securities law considerations (including any required public disclosure of the refinancing), and tax structuring advice. Calderwood & Harkness's engagement does not extend to securities, tax, or regulatory advice, and all inquiries from Fairwater personnel relating to those topics should be referred to Crestline & Alderman. Notwithstanding this division of responsibility, close coordination between the two firms will be necessary to ensure that the permanent loan documents are consistent with Fairwater's REIT qualification requirements and that all board and governance approvals are properly obtained and documented.
4.3 Financial Advisor
Fairwater's financial advisor for the permanent take-out financing is Beacon Ridge Capital Advisors LLC. The primary contact at Beacon Ridge is Dennis P. Nakamura, Partner. Beacon Ridge's offices are located at 300 Park Avenue, Suite 1800, New York, New York 10022. Beacon Ridge has been advising Fairwater on the selection of the permanent lender, the negotiation of economic terms, and the structuring of the rate lock mechanism. Beacon Ridge is expected to remain actively involved throughout the commitment letter phase and closing process, and Calderwood & Harkness personnel should expect regular interaction with Mr. Nakamura's team on economic and structural matters.
5. Staffing and Timekeeper Assignments
5.1 Responsible Partner
Name: Philip Hartmann Title: Partner, Banking & Finance Role: Overall matter supervision; lead negotiation with lender's counsel; client relationship management Timekeeper ID: To be assigned by the firm's time and billing system upon matter activation
Mr. Hartmann will serve as the Responsible Partner for this engagement and will exercise overall supervision of the firm's work product and strategic direction. He will lead all substantive negotiations with Ashworth McPhail LLP, counsel to Clarendon Metropolitan Insurance Company, and will serve as the primary relationship partner for communications with David A. Whitfield, Fairwater's General Counsel. Mr. Hartmann has extensive experience in CMBS origination and take-out financing transactions and represented Fairwater in the bridge credit facility closing in June 2025, providing continuity and institutional knowledge for this engagement.
5.2 Billing Partner
Name: Claudia Merritt Title: Partner, Banking & Finance Role: Billing oversight; fee arrangement management; invoice review and approval Timekeeper ID: To be assigned by the firm's time and billing system upon matter activation
Ms. Merritt will serve as the Billing Partner and will be responsible for all billing administration, including monthly invoice preparation and review, disbursement tracking, and compliance with the firm's billing policies. Ms. Merritt will review all draft invoices prior to submission to the client and will coordinate with the Finance & Administration Department on any billing inquiries or adjustments. Any issues relating to fee arrangements, rate adjustments, or alternative billing proposals should be directed to Ms. Merritt in the first instance.
5.3 Lead Associate
Name: Lisa Morrow Title: Associate, Banking & Finance Role: Day-to-day project management; lead drafting of loan documents, opinion letters, and memoranda; coordination with opposing counsel; title and due diligence review oversight Timekeeper ID: To be assigned by the firm's time and billing system upon matter activation
Ms. Morrow will serve as the Lead Associate and will be responsible for the day-to-day management and execution of this engagement. Her responsibilities will include drafting and negotiating all primary loan documents (including the loan agreement, promissory note, guaranty, environmental indemnity, mortgages, assignments of leases and rents, and cash management agreement), preparing borrower's counsel legal opinions, and overseeing the title and due diligence review process. Ms. Morrow will serve as the primary point of contact for coordination with Ashworth McPhail LLP (the permanent lender's counsel), where the lead partner is Joanna C. Wexler. Ms. Morrow worked on the bridge credit facility engagement for Fairwater and has familiarity with the Sun Belt Portfolio and the borrower entity structures.
5.4 Working Associate
Name: Marcus Leung Title: Associate, Banking & Finance Role: Supporting drafting; due diligence; closing checklist management; good standing and existence certificate coordination; research assignments Timekeeper ID: To be assigned by the firm's time and billing system upon matter activation
Mr. Leung will serve as the Working Associate and will support Ms. Morrow in all aspects of the engagement. His primary responsibilities will include supporting the drafting of loan documents, conducting and managing due diligence (including title commitment and survey review, UCC search review, organizational document review, and lien search analysis), maintaining the master closing checklist, coordinating the procurement of good standing and existence certificates from the relevant Secretaries of State and state agencies in Maryland, Delaware, Texas, Georgia, Florida, North Carolina, and Tennessee, and undertaking legal research assignments as directed by Mr. Hartmann or Ms. Morrow. Mr. Leung participated in the bridge credit facility engagement and has working familiarity with the borrower entity documentation.
5.5 Additional Staffing Notes
Local Counsel Engagements. Given that the Sun Belt Portfolio comprises 14 multifamily properties located across five states — Texas, Georgia, Florida, North Carolina, and Tennessee — the firm anticipates the need to engage local counsel in each of those jurisdictions. Local counsel will be retained to provide local law opinions (enforceability, mortgage lien validity, and related matters), to coordinate mortgage recording and documentary stamp tax requirements, and to address jurisdictional-specific legal issues that may arise during the documentation and closing process. The identity of local counsel in each state is to be determined; the selection process will be coordinated with Mr. Whitfield and, where applicable, with Fairwater's existing local counsel relationships. Once engaged, each local counsel firm will be set up as a separate vendor or sub-matter as appropriate.
Paralegal Support. Paralegal support will be assigned from the Banking & Finance practice group for document management, filing coordination, closing binder compilation, and general closing support. The specific paralegal assignment will be confirmed by the practice group's paralegal coordinator and communicated to the matter team upon confirmation. The assigned paralegal will be responsible for maintaining the document management system sub-matter codes, coordinating Severin Partners LLC and courier deliveries, and assisting with the preparation of signature pages and closing sets.
6. Billing Rates and Fee Arrangements
6.1 Standard Hourly Rates (2025)
The following standard hourly rates will apply to this engagement, consistent with the firm's current published rate schedule as previously communicated to Fairwater Real Estate Investment Trust:
The foregoing rates are the firm's standard 2025 rates for the applicable timekeeper classifications. No discounted or capped fee arrangement applies to this matter. Billing rates are subject to annual adjustment in accordance with the firm's standard rate revision schedule, although no mid-year rate adjustment is anticipated for the 2025 calendar year. In the event that additional attorneys or paralegals are staffed on the matter (including, without limitation, attorneys from other practice groups providing specialized support), their standard hourly rates will apply and will be communicated to the client in the ordinary course.
6.2 Fee Arrangement
This engagement will be billed on a standard hourly basis. No alternative fee arrangement, flat fee, success fee, or contingency arrangement has been proposed or agreed upon for this matter.
Billing Frequency: Monthly. Invoices will be prepared and submitted on a monthly cycle, with each invoice covering the prior calendar month's recorded time and disbursements.
Payment Terms: Net thirty (30) days from the date of each invoice.
Billing Rates Confirmation: The billing rates set forth above are consistent with the firm's current rate schedule as communicated to Fairwater REIT in connection with the executed engagement letter dated August 11, 2025.
6.3 Billing Address
All invoices should be directed to:
Fairwater Real Estate Investment Trust 8400 Chesapeake Center Drive, Suite 1200 Columbia, Maryland 21044
Attention: Accounts Payable / Office of the General Counsel
Electronic billing is available and preferred by the client. The Finance & Administration Department should coordinate with Ms. Sinclair's office regarding electronic billing portal setup if not already configured from the prior engagement.
7. Estimated Budget
7.1 Fee Estimate
Estimated Total Legal Fees: $450,000 – $600,000
The estimated fee range reflects the anticipated scope of the firm's work in connection with this engagement and is presented as a good-faith estimate based on the firm's experience with comparable CMBS take-out financing transactions of similar complexity and scale. The range accounts for variability that may arise from the following factors:
(a) the complexity and number of negotiation rounds with Ashworth McPhail LLP on the permanent loan documents, including the extent of lender-driven CMBS-specific provisions and rating agency requirements;
(b) complications that may arise in the due diligence or title review process across 14 properties located in 5 states, including curative title work, survey updates, and resolution of exception items;
(c) the scope of SPE organizational document revisions required to satisfy Clarendon Metropolitan's bankruptcy-remoteness requirements;
(d) the extent of bridge payoff coordination required with Kensington National Bank, N.A. and its counsel, Halcourt Briggs & Devlin LLP; and
(e) any unforeseen issues arising from the CMBS securitization timeline or pooling requirements.
The estimated fee range covers the following work streams:
• Review of and commentary on the preliminary term sheet received from Clarendon Metropolitan
• Preparation of board resolutions authorizing the permanent financing (in coordination with Crestline & Alderman LLP)
• Review and negotiation of the commitment letter issued by Clarendon Metropolitan
• Drafting and negotiation of all permanent loan documents, including the loan agreement, promissory note, non-recourse carve-out guaranty, environmental indemnity agreement, mortgages/deeds of trust for 14 properties across 5 states, assignments of leases and rents, cash management agreement, and SPE organizational documents and amendments
• Preparation of borrower's counsel legal opinions (enforceability opinion, due authorization opinion, and such other opinions as may be required by the lender)
• Preparation of closing deliverables, including officer's certificates, secretary's certificates, good standing certificates, incumbency certificates, and bring-down certificates
• Coordination of bridge facility payoff, including review and negotiation of payoff letter from Kensington National Bank, N.A., and coordination with Halcourt Briggs & Devlin LLP regarding release of existing liens and security interests
• UCC-1 financing statement preparation and filing; UCC-3 termination coordination for existing bridge facility filings
• Title commitment and survey review across all 14 properties, including identification and resolution of title exception items and endorsement requirements
• Closing checklist management and pre-closing and closing coordination
This estimate is not a fee cap or guaranteed maximum, and actual fees may fall above or below the estimated range depending on the factors described above. The client has been advised of the estimated range in connection with the engagement letter.
7.2 Disbursement Estimate
Estimated Out-of-Pocket Disbursements: $25,000 – $40,000
The estimated disbursement range covers the following categories of anticipated out-of-pocket costs:
• UCC, tax lien, judgment, and litigation search fees across multiple jurisdictions (Delaware, Maryland, Texas, Georgia, Florida, North Carolina, Tennessee, and relevant federal courts)
• Good standing and existence certificate fees from the Secretaries of State of Maryland, Delaware, Texas, Georgia, Florida, North Carolina, and Tennessee
• Filing fees for UCC-1 financing statements and mortgage recordings (to the extent borne by the firm and passed through as disbursements)
• Overnight delivery and courier charges (Severin Partners LLC, messenger services)
• Travel expenses (to the extent in-person closing attendance or property site visits are required)
• Document reproduction and binding costs
• Online research charges (Westmark Data Systems, Sundial Solutions, and other legal research platforms)
7.3 Local Counsel Fee Estimate
Local counsel fees in the five states where the Sun Belt Portfolio properties are located (Texas, Georgia, Florida, North Carolina, and Tennessee) will be billed separately through those engagements or, at the client's direction, passed through as disbursements on Calderwood & Harkness invoices. The aggregate estimated cost of local counsel across the five jurisdictions is $75,000 – $125,000, depending on the scope of local law opinions required, the complexity of mortgage recording procedures, and the extent of jurisdictional-specific issues that may need to be addressed. This estimate will be refined once local counsel has been engaged and the specific scope of their respective assignments has been defined.
7.4 Budget Exclusions
The following categories of costs are excluded from the fee and disbursement estimates set forth above and will be payable directly by the borrower or its affiliates to the applicable third-party service providers:
• Title insurance premiums — payable directly by the borrower to Marlowe Asset Management Title Insurance Group, Inc., the title insurer
• Appraisal fees — payable directly by the borrower to Thornfield Appraisal Group LLC, the appraiser engaged by Clarendon Metropolitan
• Recording taxes and transfer taxes — payable directly at closing in the applicable recording jurisdictions
• Lender's counsel fees — Ashworth McPhail LLP, counsel to Clarendon Metropolitan Insurance Company; while customarily payable by the borrower in CMBS transactions, Ashworth McPhail's fees will be billed directly by that firm to Fairwater (or to the lender for reimbursement by Fairwater), and are not included in Calderwood & Harkness's budget
• Financial advisory fees — Beacon Ridge Capital Advisors LLC; payable directly by Fairwater pursuant to Fairwater's separate advisory engagement with Beacon Ridge
8. Adverse and Related Parties for Conflict Monitoring
The following parties have been identified as adverse parties, related parties, or parties of interest in connection with this matter. All listed parties have been run through the firm's conflicts checking system. The conflicts check was completed on August 9, 2025, and no conflicts were identified. A separate Conflicts Check Memorandum documenting the search results and analysis has been prepared by Lisa Morrow and is on file.
8.1 Client and Client Affiliates
• Fairwater Real Estate Investment Trust — Client
• Fairwater Operating Partnership, L.P. — Client affiliate; operating partnership; parent entity of borrower SPEs (EIN: 52-2847201)
• Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC — Client SPE subsidiaries; borrower entities under the proposed permanent loan (14 Delaware limited liability companies)
• Fairwater Residential Management LLC — Client affiliate; property manager for the Sun Belt Portfolio (EIN: 52-2953810)
8.2 Proposed Permanent Lender and Lender's Counsel
• Clarendon Metropolitan Insurance Company — Proposed permanent lender; adverse party (NAIC No. 38921; headquartered at 1 MetroTech Center, Brooklyn, New York 11201)
• Ashworth McPhail LLP — Counsel to Clarendon Metropolitan Insurance Company; opposing counsel (Lead Partner: Joanna C. Wexler)
8.3 Bridge Facility Parties
• Kensington National Bank, N.A. — Administrative agent under the existing bridge credit facility; payoff counterparty
• Halcourt Briggs & Devlin LLP — Counsel to Kensington National Bank, N.A. under the bridge credit facility; coordination counterparty
• Pinnacle Trust Company — Syndicate lender under the bridge credit facility
• Greystone Commerce Bank — Syndicate lender under the bridge credit facility
• Redfield Capital Markets, LLC — Syndicate lender under the bridge credit facility
8.4 Acquisition Parties
• Meridian Sunstone Holdings LLC — Seller of the Sun Belt Portfolio; potential residual obligations under the acquisition agreement (including survival of certain representations and warranties and indemnification obligations)
• Lattimore & Pryce LLP — Counsel to Meridian Sunstone Holdings LLC in the acquisition
8.5 Other Third Parties
• Marlowe Asset Management Title Insurance Group, Inc. — Title insurer for the Sun Belt Portfolio
8.6 Conflicts Confirmation
The conflicts check was completed on August 9, 2025. No conflicts were identified. The Conflicts Check Memorandum prepared by Lisa Morrow is on file and is incorporated by reference. Ongoing conflicts monitoring will be conducted in accordance with firm policy, and the conflicts system will be updated to include any additional parties identified during the course of the engagement, including local counsel firms, additional lender parties (e.g., master servicer, special servicer, and trustee entities associated with the anticipated CMBS trust CLRN 2025-C14), and any other parties that become involved in the transaction.
9. Key Transaction Dates and Milestones
The following table sets forth the key dates and milestones for this engagement, including both historical dates and target dates for future milestones. Target dates are subject to adjustment as the transaction progresses and are presented as the current best estimates based on discussions with the client and its financial advisor.
The critical path for this engagement is driven by the bridge maturity date of December 31, 2025. The target closing date of November 28, 2025 provides approximately one month of schedule cushion, which, based on the firm's experience with multi-property CMBS closings, represents a reasonable but not generous buffer. Any material delays in the term sheet, commitment letter, or loan document phases could compress the available cushion significantly. Accordingly, the staffing and work prioritization for this matter should reflect the time-sensitive nature of the engagement, as discussed further in Section 10 below.
10. Special Instructions and Administrative Notes
10.1 Confidentiality and MNPI Protocols
All work product generated in connection with this engagement is subject to the attorney-client privilege and the work product doctrine. Additionally, Fairwater Real Estate Investment Trust is a publicly traded company listed on the New York Stock Exchange (ticker: FWTR). All personnel assigned to this matter must observe the firm's material non-public information ("MNPI") protocols. Information regarding the proposed permanent financing, the terms of the proposed loan, the identity of the proposed lender, and the status of negotiations constitutes material non-public information until such time as Fairwater makes any required public disclosure. No external communications regarding the refinancing should be made without express client authorization. Personal trading restrictions in FWTR securities apply to all personnel with access to this matter's files and information, in accordance with the firm's insider trading compliance policy.
10.2 Document Management
All documents generated or received in connection with this engagement are to be maintained in the firm's document management system under matter number 1036-00001. The following sub-matter codes should be created upon matter activation to facilitate organized document storage and retrieval:
(a) 1036-00001-A — Term Sheet and Commitment Letter (b) 1036-00001-B — Loan Documents (drafting, negotiation, and execution) (c) 1036-00001-C — Due Diligence (title, survey, UCC, organizational, environmental) (d) 1036-00001-D — Closing (closing checklist, signature pages, closing certificates, closing binder) (e) 1036-00001-E — Bridge Payoff Coordination (payoff letter, lien releases, UCC terminations)
All incoming and outgoing correspondence, draft documents, and final executed documents should be filed in the appropriate sub-matter folder. Email correspondence should be filed in accordance with the firm's email archiving policy for active litigation and transactional matters. The assigned paralegal will be responsible for maintaining the organizational integrity of the document management system throughout the engagement.
10.3 Time-Sensitive Matter Designation
This matter is designated as a time-sensitive matter for purposes of the firm's resource allocation and staffing protocols. The bridge credit facility matures on December 31, 2025, which constitutes a hard external deadline that cannot be unilaterally extended by the client. Failure to close the permanent financing prior to the bridge maturity date would expose Fairwater to significant financial risk, including the potential for default under the bridge facility, acceleration of the bridge loan, and the loss of the bridge exit fee waiver (available only if repayment occurs prior to March 31, 2026, assuming any extension option is exercised).
The target closing date of November 28, 2025 provides approximately one month of cushion before the hard deadline. Staffing assignments and workload prioritization across the Banking & Finance practice group should reflect the urgency of this timeline. Mr. Hartmann or Ms. Morrow should promptly escalate any staffing conflicts or resource constraints that could jeopardize the target closing date to the practice group leader and, if necessary, to the Office of the General Counsel.
10.4 Coordination with Other Counsel
As noted in Section 4.2, regular coordination with Crestline & Alderman LLP (Patricia S. Keene, Lead Partner) is expected on REIT compliance, corporate governance, and securities law matters. Calderwood & Harkness's engagement does not extend to securities law, tax advice, or regulatory compliance advice, and care should be taken to ensure that the scope of the firm's representation remains within the boundaries established in the engagement letter. All requests from the client or from Crestline & Alderman for work outside the scope of the engagement letter should be referred to Mr. Hartmann for evaluation before any such work is undertaken.
Coordination with Halcourt Briggs & Devlin LLP, counsel to Kensington National Bank, N.A. under the bridge credit facility, will be necessary in connection with bridge payoff procedures, including the preparation and negotiation of the payoff letter, the coordination of lien releases and UCC termination statements, and the funding mechanics for the bridge repayment on the permanent loan closing date. This coordination is expected to intensify during the weeks immediately preceding the target closing date.
10.5 Engagement Letter
An executed engagement letter dated August 11, 2025 is on file. The engagement letter was executed by David A. Whitfield, General Counsel, on behalf of Fairwater Real Estate Investment Trust, and by Philip Hartmann on behalf of Calderwood & Harkness LLP. The scope of the engagement is limited to the permanent take-out financing transaction described in this memorandum and does not extend to securities, tax, regulatory, or other advisory services. A copy of the executed engagement letter has been filed in the firm's document management system under matter 1036-00001.
11. Approvals
The undersigned hereby confirm their respective approvals for the opening of Matter No. 1036-00001 in accordance with the firm's matter intake procedures.
Responsible Partner Approval
PHILIP HARTMANN Partner, Banking & Finance Calderwood & Harkness LLP
Signature: ________
Date: ________
Billing Partner Approval
CLAUDIA MERRITT Partner, Banking & Finance Calderwood & Harkness LLP
Signature: ________
Date: ________
Conflicts Clearance
Conflicts check completed and cleared: August 9, 2025