rate-lock-deposit-side-letter.docx

1036-00001 · Banking & Finance practice group · Term Sheet & Commitment

rate-lock-deposit-side-letter.docx DOCUMENT Finance & Banking

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CALDERWOOD & HARKNESS LLP Attorneys at Law 425 Park Avenue New York, New York 10022 Telephone: (212) 555-7800 Facsimile: (212) 555-7801 www.calderwoodharkness.com

September 15, 2025

RATE LOCK DEPOSIT SIDE LETTER AGREEMENT

Reference Number: CL-CMBS-2025-09-0347

Re: $240,000,000 Fixed-Rate Mortgage Loan — Sun Belt Portfolio (14 Properties)

This Rate Lock Deposit Side Letter Agreement (this "Side Letter") is entered into as of September 15, 2025, by and between:

Fairwater Operating Partnership, L.P., a Delaware limited partnership (the "Depositor" or "Borrower"), having its principal place of business at 8400 Chesapeake Center Drive, Suite 1200, Columbia, Maryland 21044, Employer Identification Number 52-2847201, Attention: Naomi T. Sinclair, Chief Financial Officer, acting through its general partner, Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (NYSE: FWTR);

and

Clarendon Metropolitan Insurance Company, a New York domiciled insurance company (the "Lender"), having its principal place of business at 1 MetroTech Center, Brooklyn, New York 11201, NAIC Number 38921, Attention: Garrett W. Hollister, Head of CMBS Originations.

Depositor and Lender are each referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS (A), Depositor, through its wholly owned subsidiaries — 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, and Fairwater Sun Belt XIV LLC, each a Delaware limited liability company (collectively, the "SPE Borrowers") — owns a portfolio of fourteen (14) multifamily residential properties comprising approximately four thousand two hundred (4,200) apartment units located across the states of Texas, Georgia, Florida, North Carolina, and Tennessee (collectively, the "Sun Belt Portfolio");

WHEREAS (B), Depositor has submitted a loan application to Lender dated September 15, 2025 (the "Loan Application"), requesting a permanent fixed-rate mortgage loan in the aggregate principal amount of Two Hundred Forty Million and No/100 Dollars ($240,000,000) (the "Proposed Loan"), to be secured by first-priority mortgage liens on each of the properties constituting the Sun Belt Portfolio;

WHEREAS (C), the Proposed Loan is intended to take out and replace in full an existing Two Hundred Forty Million and No/100 Dollar ($240,000,000) senior secured bridge credit facility, dated as of June 30, 2025, provided by a lending syndicate led by Kensington National Bank, N.A., as administrative agent (the "Bridge Facility"), which Bridge Facility is currently outstanding and secured by the Sun Belt Portfolio;

WHEREAS (D), Lender delivered to Depositor a term sheet dated August 25, 2025 (the "Term Sheet"), which provides, among other things, for a fixed interest rate of 6.25% per annum, a ten (10)-year term maturing in 2035, a thirty (30)-year amortization schedule, and monthly debt service payments of principal and interest of approximately One Million Four Hundred Seventy-Seven Thousand Eight Hundred Forty-Six and No/100 Dollars ($1,477,846), resulting in aggregate annual debt service of approximately Seventeen Million Seven Hundred Thirty-Four Thousand One Hundred Fifty-Two and No/100 Dollars ($17,734,152);

WHEREAS (E), as a material condition to Lender's agreement to lock the interest rate on the Proposed Loan at the rate set forth in the Term Sheet, Depositor is required to deliver to Lender a rate lock deposit in the amount of Two Million Four Hundred Thousand and No/100 Dollars ($2,400,000), representing one percent (1.00%) of the principal amount of the Proposed Loan (the "Deposit"); and

WHEREAS (F), the Parties desire to set forth the terms and conditions governing the Deposit, including, without limitation, the circumstances under which the Deposit shall be refundable or non-refundable, the application of the Deposit at the closing of the Proposed Loan, the escrow arrangements for the Deposit, and related matters.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

SECTION 1: DEPOSIT AMOUNT AND DELIVERY

1.1 Amount. Depositor shall deliver to Lender, simultaneously with the execution and delivery of this Side Letter, a deposit in the amount of Two Million Four Hundred Thousand and No/100 Dollars ($2,400,000.00) (the "Deposit"). The Deposit represents one percent (1.00%) of the principal amount of the Proposed Loan. The Deposit shall be held, applied, and returned (or retained) in accordance with the terms and conditions of this Side Letter.

1.2 Method of Delivery. The Deposit shall be delivered by wire transfer of immediately available federal funds to the account designated by Lender in Exhibit A attached hereto and incorporated herein by reference. Depositor shall initiate the wire transfer on the date of execution of this Side Letter and shall use commercially reasonable efforts to ensure that the funds are received by Lender no later than 5:00 p.m. Eastern Time on the business day immediately following the date hereof. The wire transfer shall be made in accordance with the wire instructions set forth in Exhibit A and shall include the reference number specified in Section 1.3 below.

1.3 Reference Number. The Deposit shall be identified by reference number CL-CMBS-2025-09-0347 in all wire transfer instructions, correspondence, invoices, statements, and records relating to this Side Letter. All communications between the Parties with respect to the Deposit shall reference such number prominently.

1.4 Acknowledgment of Receipt. Lender shall promptly confirm receipt of the Deposit in writing (which may be by email) to Depositor at the notice addresses set forth in Section 10 of this Side Letter, and in any event shall confirm receipt no later than two (2) business days following actual receipt of the Deposit. Such confirmation shall include the date and amount of funds received, the reference number, and the name and account number of the Escrow Account (as defined below) into which the Deposit has been placed.

SECTION 2: ESCROW OF DEPOSIT

2.1 Escrow Account. Upon receipt of the Deposit, Lender shall deposit the Deposit into a segregated, interest-bearing escrow account (the "Escrow Account") maintained at an FDIC-insured depository institution selected by Lender in its sole but reasonable discretion. The Escrow Account shall be established and maintained in the name of Lender, as escrow agent, for the benefit of Depositor, and shall be separate and apart from Lender's general operating accounts and investment portfolios. Lender shall not commingle the Deposit with any other funds of Lender or any third party. As of the date hereof, Lender has designated Greaves Bancorp as the depository institution for the Escrow Account.

2.2 Interest Accrual. Interest shall accrue on the Deposit at the rate offered by the depository institution on comparable escrow deposits or money market instruments of similar tenor and size, as determined by the depository institution from time to time. All interest accrued on the Deposit shall be for the account of Depositor and shall be treated as the property of Depositor, subject to the terms of this Side Letter regarding the disposition of the Deposit. Lender shall not direct the investment of the Deposit in any instruments other than those customarily offered by the depository institution for escrow accounts, unless otherwise instructed in writing by Depositor and agreed to by Lender.

2.3 Reporting. Lender shall provide Depositor with quarterly statements of the Escrow Account, delivered within fifteen (15) business days following the end of each calendar quarter, reflecting the balance of the Deposit, all interest accrued during the applicable quarter, and any deductions, withdrawals, or charges applied to the Escrow Account. Lender shall also provide a final statement of the Escrow Account within ten (10) business days following the disposition of the Deposit (whether by application at Closing, return to Depositor, or retention by Lender).

2.4 Tax Reporting. All interest earned on the Deposit shall be reported as income of Depositor for federal, state, and local tax purposes. Lender (or the depository institution) shall issue to Depositor an IRS Form 1099-INT (or successor form) for each calendar year in which interest is earned on the Deposit. Depositor shall provide to Lender a completed and executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification) upon execution of this Side Letter, reflecting Depositor's legal name as "Fairwater Operating Partnership, L.P." and Employer Identification Number 52-2847201. Depositor shall promptly notify Lender of any change in its taxpayer identification number or tax status.

SECTION 3: RATE LOCK

3.1 Rate Lock Period. Upon Lender's receipt and confirmation of the Deposit in accordance with Sections 1.2 and 1.4 hereof, Lender shall lock the fixed interest rate on the Proposed Loan at six and twenty-five hundredths percent (6.25%) per annum (the "Locked Rate") for a period commencing on the date hereof, September 15, 2025, and expiring at 5:00 p.m. Eastern Time on November 28, 2025 (the "Rate Lock Expiration Date"), unless extended in accordance with Section 3.2 below (the period from the date hereof through the Rate Lock Expiration Date, as the same may be extended, the "Rate Lock Period"). During the Rate Lock Period, Lender shall not increase, adjust, or otherwise modify the Locked Rate, and the Locked Rate shall remain available to Depositor for the Proposed Loan, subject to the satisfaction of all conditions precedent to Closing.

3.2 Extension of Rate Lock. If the closing of the Proposed Loan (the "Closing") has not occurred by the Rate Lock Expiration Date due to delays caused by Lender or attributable to Lender's actions or omissions, or due to conditions beyond the reasonable control of Depositor (including, without limitation, delays in the completion of third-party reports, title searches, governmental approvals, or other matters not within Depositor's direct control), the Rate Lock Period shall be automatically extended for an additional thirty (30) calendar days, such that the Rate Lock Expiration Date shall be extended to December 28, 2025, without the payment of any additional fee or deposit by Depositor. Any further extensions of the Rate Lock Period beyond December 28, 2025 shall require the prior mutual written agreement of both Parties and may, at Lender's discretion, be subject to the payment by Depositor of a rate lock extension fee in an amount to be agreed upon by the Parties at the time of such further extension. Notwithstanding the foregoing, Lender shall not unreasonably withhold, condition, or delay its consent to any reasonable request by Depositor for an extension of the Rate Lock Period.

3.3 Locked Rate Terms. The Locked Rate of 6.25% per annum shall apply to the Proposed Loan in the aggregate principal amount of Two Hundred Forty Million and No/100 Dollars ($240,000,000), with a ten (10)-year term, a thirty (30)-year amortization schedule, and level monthly payments of principal and interest of approximately One Million Four Hundred Seventy-Seven Thousand Eight Hundred Forty-Six and No/100 Dollars ($1,477,846), resulting in aggregate annual debt service of approximately Seventeen Million Seven Hundred Thirty-Four Thousand One Hundred Fifty-Two and No/100 Dollars ($17,734,152), all as more fully described in and subject to the terms and conditions of the Term Sheet. For the avoidance of doubt, the Locked Rate represents a spread of approximately 225 basis points over the interpolated yield of the ten-year U.S. Treasury Note as of the date of the Term Sheet. The Parties acknowledge that the specific amortization schedule, payment dates, and other loan economics shall be finalized in the definitive loan documents to be negotiated and executed by the Parties.

SECTION 4: APPLICATION OF DEPOSIT AT CLOSING

4.1 Credit Against Closing Costs. At the Closing, the Deposit (together with all accrued and unpaid interest thereon) shall be fully refundable to Depositor and shall, at Depositor's election, be applied as a credit against Depositor's closing costs and expenses incurred in connection with the Proposed Loan. Closing costs and expenses to which the Deposit may be applied include, without limitation: (a) the origination fee payable by Depositor to Lender in the amount of One Million Eight Hundred Thousand and No/100 Dollars ($1,800,000), representing seventy-five hundredths of one percent (0.75%) of the principal amount of the Proposed Loan; (b) recording taxes, mortgage recording taxes, intangibles taxes, and transfer taxes, if any, payable in connection with the recordation of the mortgages, deeds of trust, or deeds to secure debt encumbering the Sun Belt Portfolio properties in the applicable jurisdictions of Texas, Georgia, Florida, North Carolina, and Tennessee; (c) title insurance premiums payable to Marlowe Asset Management Title Insurance Group, Inc. in connection with the issuance of lender's title insurance policies for each property; (d) survey costs; (e) appraisal fees; (f) environmental assessment fees; (g) legal fees and disbursements of counsel to Depositor and counsel to Lender; and (h) such other fees, costs, and expenses as are customarily incurred by a borrower in connection with the closing of a commercial mortgage loan of this nature.

4.2 Application Mechanics. Depositor shall notify Lender in writing (which may be by email to the notice addresses set forth in Section 10 hereof) not less than five (5) business days prior to the anticipated Closing date as to the manner in which the Deposit (and all accrued interest thereon) shall be applied. Such notice shall specify the particular closing costs and expenses against which Depositor elects to apply the Deposit and the respective amounts thereof. If Depositor does not provide such written notice within the time period specified herein, the entire Deposit, together with all accrued and unpaid interest thereon, shall be returned to Depositor by wire transfer of immediately available federal funds on the Closing date to the account designated by Depositor in its Closing instructions.

4.3 Excess. To the extent the Deposit, together with all accrued and unpaid interest thereon, exceeds the aggregate amount of Depositor's closing costs and expenses against which the Deposit is to be applied pursuant to Section 4.1, any such excess shall be returned to Depositor by wire transfer of immediately available federal funds on the Closing date to the account designated by Depositor in its Closing instructions. Lender shall deliver to Depositor, at or promptly following Closing, a written reconciliation statement reflecting the application of the Deposit and interest, including a detailed itemization of all closing costs against which the Deposit was credited and the amount of any excess returned.

SECTION 5: REFUNDABILITY OF DEPOSIT — LENDER DEFAULT OR FAILURE OF LENDER CONDITIONS

5.1 Full Refund upon Lender Default. If the Closing fails to occur by the Rate Lock Expiration Date (as the same may be extended pursuant to Section 3.2) due to (a) Lender's breach of or default under this Side Letter, the Term Sheet, or the commitment letter to be issued by Lender in connection with the Proposed Loan (the "Commitment Letter"), including, without limitation, Lender's failure or refusal to fund the Proposed Loan in accordance with the terms thereof, or (b) Lender's failure to satisfy any of Lender's conditions precedent to Closing, including, without limitation, Lender's failure to approve appraisals, title conditions, survey matters, environmental conditions, or property management arrangements, in each case through no fault, act, or omission of Depositor, the SPE Borrowers, or the Guarantor, then the entire Deposit, together with all accrued and unpaid interest thereon, shall be promptly returned to Depositor by wire transfer of immediately available federal funds within five (5) business days of Lender's receipt of Depositor's written demand therefor. Depositor's right to a refund of the Deposit under this Section 5.1 shall be in addition to, and shall not limit, any other rights or remedies available to Depositor at law or in equity arising out of Lender's breach or default.

5.2 Condemnation, Casualty, or Force Majeure. If the Closing fails to occur by the Rate Lock Expiration Date (as the same may be extended pursuant to Section 3.2) due to (a) a material condemnation or taking by any governmental authority affecting one or more of the properties in the Sun Belt Portfolio, (b) a material casualty (including, without limitation, fire, flood, hurricane, earthquake, or other natural disaster) affecting one or more of the properties in the Sun Belt Portfolio, or (c) a force majeure event, including, without limitation, acts of God, war, terrorism, epidemic, pandemic, civil unrest, governmental orders or restrictions, or other events beyond the reasonable control of either Party, then the Deposit, together with all accrued and unpaid interest thereon, shall be fully refundable to Depositor and shall be returned by wire transfer of immediately available federal funds within five (5) business days of Depositor's written demand therefor. For purposes of this Section 5.2, a condemnation or casualty shall be deemed "material" if it affects any property or properties with an aggregate appraised value in excess of ten percent (10%) of the total appraised value of the Sun Belt Portfolio, or if it renders any property uninhabitable or unsuitable for its intended use as multifamily residential property.

5.3 Mutual Termination. If both Parties mutually agree in writing to terminate the Proposed Loan transaction prior to Closing for any reason whatsoever, the Deposit, together with all accrued and unpaid interest thereon, shall be returned to Depositor by wire transfer of immediately available federal funds within five (5) business days following the date of such mutual written agreement to terminate. Any such mutual termination agreement shall be in writing and signed by both Parties.

SECTION 6: NON-REFUNDABILITY OF DEPOSIT — BORROWER DEFAULT

6.1 General Rule. If the Closing fails to occur by the Rate Lock Expiration Date (as the same may be extended pursuant to Section 3.2) for any reason other than (a) Lender default or failure of Lender's conditions as described in Section 5.1, (b) condemnation, casualty, or force majeure as described in Section 5.2, or (c) mutual termination as described in Section 5.3, then the Deposit shall become non-refundable and shall be retained by Lender as liquidated damages. Without limiting the generality of the foregoing, the Deposit shall become non-refundable in any circumstance in which Depositor (i) elects not to close the Proposed Loan for any reason, (ii) fails to satisfy any of Borrower's conditions precedent to Closing set forth in the Commitment Letter or the definitive loan documents, (iii) fails to deliver any required documentation, certification, or instrument within the time periods specified in the Commitment Letter or definitive loan documents, (iv) otherwise defaults under this Side Letter, the Term Sheet, or the Commitment Letter, or (v) experiences a material adverse change in the financial condition of Depositor, the SPE Borrowers, or the Guarantor that results in Lender's refusal to fund.

6.2 Liquidated Damages. The Parties acknowledge and agree that the Deposit constitutes a reasonable pre-estimate of Lender's actual damages in the event that Depositor fails to close the Proposed Loan, and that such damages include, without limitation: (a) Lender's costs and expenses incurred in connection with interest rate hedging transactions entered into by Lender in reliance on the anticipated funding of the Proposed Loan, including the cost of unwinding forward rate locks, interest rate swaps, and other derivative instruments; (b) Lender's costs and expenses incurred in connection with the underwriting, due diligence, and credit approval of the Proposed Loan, including internal personnel costs, third-party consultant fees, and travel expenses; (c) legal fees and expenses incurred by Lender and its counsel, Ashworth McPhail LLP, in connection with the negotiation, preparation, and review of this Side Letter, the Term Sheet, the Commitment Letter, and the definitive loan documents; (d) the opportunity cost to Lender of having reserved capital and resources for the Proposed Loan during the Rate Lock Period; and (e) any mark-to-market losses or other economic losses resulting from changes in prevailing interest rates during the Rate Lock Period. The Parties further acknowledge and agree that such damages would be extremely difficult and impracticable to calculate with precision, and that the Deposit amount of Two Million Four Hundred Thousand Dollars ($2,400,000) bears a reasonable relationship to the range of damages that could be anticipated as a result of Depositor's failure to close. The Parties expressly agree that the Deposit is not intended as, and shall not be construed as, a penalty.

6.3 Sole and Exclusive Remedy. In the event the Deposit is retained by Lender pursuant to this Section 6, such retention shall constitute Lender's sole and exclusive remedy for Depositor's failure to close the Proposed Loan, and Lender shall have no further claim, right, or cause of action against Depositor, the SPE Borrowers, the Guarantor, or any of their respective officers, directors, trustees, partners, members, managers, employees, agents, or affiliates, arising out of or related to this Side Letter, the Term Sheet, the Loan Application, or the Proposed Loan. The foregoing limitation shall not apply to (a) any obligation of Depositor to reimburse Lender for third-party costs and expenses that are expressly stated in this Side Letter or the Term Sheet to be payable by Depositor regardless of whether the Proposed Loan closes, or (b) any indemnification obligations of Depositor that survive termination of this Side Letter, the Term Sheet, or the Commitment Letter.

6.4 Accrued Interest. In the event the Deposit becomes non-refundable and is retained by Lender pursuant to this Section 6, all accrued and unpaid interest on the Deposit in the Escrow Account as of the date of such retention shall also be retained by Lender as part of the liquidated damages, and Depositor shall have no claim or right to any such accrued interest.

SECTION 7: CONDITIONS PRECEDENT TO CLOSING (CROSS-REFERENCE)

7.1 The Parties acknowledge that the Closing of the Proposed Loan is subject to the satisfaction (or waiver by Lender, in its sole discretion) of certain conditions precedent, which conditions shall be more fully set forth in the Commitment Letter and the definitive loan documents. Without limiting the generality of the foregoing, the Parties anticipate that such conditions precedent shall include, without limitation, the following:

(a) Completion of satisfactory MAI appraisals of each of the fourteen (14) Sun Belt Portfolio properties by Thornfield Appraisal Group LLC, or such other nationally recognized appraisal firm as may be approved by Lender, in each case reflecting an aggregate appraised value of the Sun Belt Portfolio sufficient to support the Proposed Loan at the loan-to-value ratio specified in the Term Sheet;

(b) Delivery of satisfactory Phase I environmental site assessments, prepared in accordance with ASTM Standard Practice E1527-21, for each of the fourteen (14) Sun Belt Portfolio properties, and, if recommended by such Phase I assessments, completion of Phase II environmental investigations, in each case by an environmental consulting firm approved by Lender;

(c) Issuance of lender's title insurance policies by Marlowe Asset Management Title Insurance Group, Inc. (or a title insurance underwriter acceptable to Lender) for each of the fourteen (14) Sun Belt Portfolio properties, in the aggregate amount of the Proposed Loan, with such endorsements as Lender may reasonably require, insuring the first-priority lien of the applicable mortgage, deed of trust, or deed to secure debt;

(d) Delivery of current ALTA/NSPS land title surveys for each of the fourteen (14) Sun Belt Portfolio properties, prepared by a licensed surveyor acceptable to Lender, certified to Lender and the title insurance company, and reflecting no survey exceptions or encroachments that are unacceptable to Lender;

(e) Execution and delivery of all definitive loan documents, including, without limitation, the Loan Agreement, Promissory Note (or Notes), Guaranty Agreement (to be executed by Fairwater Real Estate Investment Trust, as guarantor), Environmental Indemnity Agreement, Mortgages (or Deeds of Trust or Deeds to Secure Debt, as applicable under the laws of each state in which the Sun Belt Portfolio properties are located, namely Texas, Georgia, Florida, North Carolina, and Tennessee), Cash Management Agreement, and the organizational documents for each SPE Borrower, in each case in form and substance satisfactory to Lender and its counsel;

(f) Delivery of legal opinions from Calderwood & Harkness LLP, as counsel to Depositor and the SPE Borrowers, including, without limitation, opinions as to due authorization, enforceability, no conflict, true sale/substantive consolidation (if applicable), and such other opinions as Lender and its counsel may reasonably require;

(g) Receipt of certified copies of organizational documents (including certificates of formation, limited partnership agreements, limited liability company agreements, and declarations of trust, as applicable), certificates of good standing (or certificates of existence), and resolutions authorizing the transactions contemplated hereby, for each SPE Borrower, the Depositor, and the Guarantor (Fairwater Real Estate Investment Trust);

(h) Delivery of officer's closing certificates executed by an authorized officer of the Guarantor, certifying as to the accuracy of representations and warranties, the satisfaction of conditions precedent, the absence of defaults, and such other matters as Lender may reasonably require;

(i) No material adverse change shall have occurred in the financial condition, business, operations, assets, liabilities, or prospects of Depositor, any SPE Borrower, or the Guarantor since the date of the most recent financial statements delivered to Lender, and no event shall have occurred that could reasonably be expected to have a material adverse effect on the Sun Belt Portfolio or the ability of any such entity to perform its obligations under the loan documents; and

(j) No event of default shall exist and be continuing under the Bridge Facility, and Lender shall have received a customary payoff letter from Kensington National Bank, N.A., as administrative agent under the Bridge Facility, confirming the outstanding balance of the Bridge Facility and providing wire instructions for the payoff and discharge thereof at Closing, together with customary UCC termination statements and mortgage releases.

7.2 For the avoidance of doubt, failure to satisfy any condition precedent to Closing that is attributable to Depositor's actions, omissions, or failure to perform, or the actions, omissions, or failure to perform of any SPE Borrower or the Guarantor, shall not entitle Depositor to a refund of the Deposit, and the Deposit shall be subject to retention by Lender as provided in Section 6 of this Side Letter.

SECTION 8: REPRESENTATIONS AND WARRANTIES

8.1 Depositor's Representations and Warranties. Depositor hereby represents and warrants to Lender, as of the date hereof, as follows:

(a) Organization and Existence. Depositor is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is duly qualified to do business and in good standing in each jurisdiction where the nature of its business or the ownership of its properties requires such qualification, including, without limitation, the State of Maryland and each state in which the Sun Belt Portfolio properties are located.

(b) General Partner; REIT Status. The sole general partner of Depositor is Fairwater Real Estate Investment Trust, a real estate investment trust duly organized and validly existing under the laws of the State of Maryland. Fairwater Real Estate Investment Trust has elected and currently maintains its status as a real estate investment trust within the meaning of Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. Fairwater Real Estate Investment Trust's common shares of beneficial interest are listed and traded on the New York Stock Exchange under the ticker symbol "FWTR."

(c) Power and Authority. Depositor has full power and authority to execute, deliver, and perform its obligations under this Side Letter and to consummate the transactions contemplated hereby, including, without limitation, the delivery of the Deposit and the closing of the Proposed Loan.

(d) Due Authorization. The execution, delivery, and performance of this Side Letter by Depositor have been duly authorized by all necessary partnership action on the part of Depositor and all necessary trust action on the part of its general partner, including, without limitation, authorization by the Board of Trustees of Fairwater Real Estate Investment Trust pursuant to a resolution duly adopted at a meeting of the Board of Trustees held on September 8, 2025, at which a quorum was present and acting throughout.

(e) Binding Obligation. This Side Letter constitutes a legal, valid, and binding obligation of Depositor, enforceable against Depositor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the enforcement of creditors' rights generally, and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(f) Source of Funds. The funds constituting the Deposit are derived from lawful sources and do not represent the proceeds of any illegal activity. Depositor is in compliance with all applicable anti-money laundering laws and regulations, including, without limitation, the Bank Secrecy Act and the USA PATRIOT Act.

8.2 Lender's Representations and Warranties. Lender hereby represents and warrants to Depositor, as of the date hereof, as follows:

(a) Organization and Existence. Lender is an insurance company duly organized, validly existing, and in good standing under the laws of the State of New York, and is duly licensed and authorized to conduct the business of insurance in the State of New York and in each jurisdiction where the nature of its business requires such licensing or authorization.

(b) Power and Authority. Lender has full power and authority to execute, deliver, and perform its obligations under this Side Letter, including, without limitation, the obligation to hold the Deposit in escrow and to lock the Locked Rate during the Rate Lock Period.

(c) Binding Obligation. This Side Letter constitutes a legal, valid, and binding obligation of Lender, enforceable against Lender in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the enforcement of creditors' rights generally, and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

SECTION 9: RELATIONSHIP TO TERM SHEET AND COMMITMENT LETTER

9.1 Supplement to Term Sheet. This Side Letter supplements, and shall be read in conjunction with, the Term Sheet dated August 25, 2025, previously executed and delivered by the Parties. In the event of any conflict, inconsistency, or ambiguity between the terms of this Side Letter and the terms of the Term Sheet with respect to the Deposit, the treatment of the Deposit, the Rate Lock, or any other matter expressly addressed in this Side Letter, the terms of this Side Letter shall control and prevail.

9.2 Incorporation into Commitment Letter. Upon the issuance by Lender and execution by the Parties of the Commitment Letter (which Lender anticipates issuing on or about October 1, 2025), the terms of this Side Letter regarding the Deposit shall be incorporated into and governed by the Commitment Letter. To the extent the Commitment Letter contains provisions relating to the Deposit, the Rate Lock, escrow arrangements, or the refundability or non-refundability of the Deposit that conflict with or are inconsistent with the terms of this Side Letter, the terms of the Commitment Letter shall supersede and replace the corresponding provisions of this Side Letter with respect to such matters, and this Side Letter shall be deemed amended accordingly. The Parties shall cooperate in good faith to ensure that the deposit provisions of the Commitment Letter are consistent with the material economic terms set forth in this Side Letter.

9.3 No Binding Commitment to Fund. Notwithstanding anything to the contrary contained in this Side Letter, nothing in this Side Letter shall constitute a binding commitment by Lender to fund the Proposed Loan or any portion thereof. Lender's obligation to fund the Proposed Loan shall arise only upon the execution and delivery by both Parties of the Commitment Letter and the definitive loan documents, and the satisfaction (or waiver by Lender) of all conditions precedent to funding set forth therein. The Parties acknowledge that Lender's agreement to lock the Locked Rate and to hold the Deposit in escrow does not create an obligation on the part of Lender to issue the Commitment Letter or to fund the Proposed Loan.

SECTION 10: NOTICES

10.1 All notices, demands, requests, consents, approvals, and other communications required or permitted to be given under this Side Letter shall be in writing and shall be deemed to have been duly given and received: (a) upon delivery, if delivered by personal delivery or by hand; (b) on the next business day following deposit with a nationally recognized overnight courier service (with proof of delivery requested), prepaid for overnight delivery; or (c) upon confirmation of receipt, if sent by email (with read receipt or written confirmation of receipt from the recipient); in each case addressed as follows:

If to Depositor:

Fairwater Operating Partnership, L.P. 8400 Chesapeake Center Drive, Suite 1200 Columbia, Maryland 21044

Attention: Naomi T. Sinclair, Chief Financial Officer

Email: nsinclair@fairwaterreit.com

With a copy (which shall not constitute notice) to:

David A. Whitfield, General Counsel Fairwater Operating Partnership, L.P. 8400 Chesapeake Center Drive, Suite 1200 Columbia, Maryland 21044

Email: dwhitfield@fairwaterreit.com

And a copy (which shall not constitute notice) to:

Calderwood & Harkness LLP 425 Park Avenue New York, New York 10022

Attention: Philip Hartmann, Esq.

Email: phartmann@calderwoodharkness.com

If to Lender:

Clarendon Metropolitan Insurance Company 1 MetroTech Center Brooklyn, New York 11201

Attention: Garrett W. Hollister, Head of CMBS Originations

Email: ghollister@clarendonmet.com

With a copy (which shall not constitute notice) to:

Ashworth McPhail LLP 51 Madison Avenue, 24th Floor New York, New York 10010

Attention: Joanna C. Wexler, Esq.

Email: jwexler@ashworthmcphail.com

Either Party may change its notice address by giving written notice of such change to the other Party in accordance with this Section 10.

SECTION 11: MISCELLANEOUS PROVISIONS

11.1 Governing Law. This Side Letter shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to any conflicts of law principles that would result in the application of the laws of any other jurisdiction. The Parties acknowledge that the State of New York has a substantial relationship to the Parties and the transactions contemplated by this Side Letter.

11.2 Jurisdiction and Venue. Each of the Parties hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the state courts of the State of New York sitting in the Borough of Manhattan, City of New York, and the United States District Court for the Southern District of New York, for the purposes of any suit, action, or proceeding arising out of or relating to this Side Letter, and each Party hereby irrevocably and unconditionally waives any objection to the laying of venue of any such suit, action, or proceeding in any such court, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.

11.3 Entire Agreement. This Side Letter, together with the Term Sheet, constitutes the entire agreement between the Parties with respect to the Deposit and the rate lock arrangements described herein, and supersedes all prior and contemporaneous oral or written agreements, understandings, representations, and warranties of the Parties with respect to the subject matter hereof. No Party has relied on any statement, representation, or warranty not expressly set forth in this Side Letter in entering into this Side Letter.

11.4 Amendments. This Side Letter may not be amended, modified, supplemented, or waived except by a written instrument duly executed by both Depositor and Lender (or their respective authorized representatives). No oral amendment, modification, or waiver shall be effective for any purpose.

11.5 Successors and Assigns. This Side Letter shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that Depositor may not assign, transfer, or delegate any of its rights, interests, or obligations under this Side Letter without the prior written consent of Lender, which consent may be withheld in Lender's sole and absolute discretion. Lender may assign its rights under this Side Letter to any affiliate of Lender or to any successor lender on the Proposed Loan without the consent of Depositor, provided that Lender gives written notice of such assignment to Depositor.

11.6 Counterparts. This Side Letter may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. Signatures transmitted by electronic means, including by email in portable document format (PDF), or by electronic signature platforms such as Brightwater Software or Ashford Health IT, shall be deemed original signatures for all purposes and shall be binding upon the Parties.

11.7 Severability. If any provision of this Side Letter, or the application of any such provision to any person or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Side Letter shall not be affected or impaired thereby, and such remaining provisions shall remain in full force and effect. In the event any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to replace such provision with a valid and enforceable provision that achieves, to the greatest extent possible, the economic, business, and other purposes of the invalid, illegal, or unenforceable provision.

11.8 Waiver. No failure or delay by either Party in exercising any right, power, or remedy under this Side Letter shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. All rights and remedies provided herein are cumulative and not exclusive of any rights or remedies otherwise available at law or in equity.

11.9 Headings. The section headings and captions contained in this Side Letter are included for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Side Letter.

11.10 Confidentiality. The terms of this Side Letter and all information exchanged between the Parties in connection herewith, including, without limitation, the financial terms of the Proposed Loan, the Locked Rate, the amount of the Deposit, and any proprietary business information of either Party, shall be treated as strictly confidential and shall not be disclosed by either Party to any third party without the prior written consent of the other Party, except for disclosures: (a) required by applicable law, regulation, governmental order, or court order (including, without limitation, disclosures required under the Securities Exchange Act of 1934, as amended, or the rules and regulations of the New York Stock Exchange); (b) to the Parties' respective legal counsel, financial advisors, accountants, and other professional advisors retained in connection with the Proposed Loan, including Calderwood & Harkness LLP (counsel to Depositor), Ashworth McPhail LLP (counsel to Lender), Beacon Ridge Capital Advisors LLC (financial advisor to Depositor), and Whitmore Hargrove & Co., P.C. (accountants to Depositor), in each case on a need-to-know basis and subject to obligations of confidentiality; (c) to the applicable depository institution holding the Escrow Account; and (d) to rating agencies, trustees, servicers, and investors in connection with any contemplated securitization of the Proposed Loan.

11.11 Tax Treatment. The Deposit shall not be treated as income of Lender for federal, state, or local tax purposes unless and until the Deposit becomes non-refundable and is retained by Lender pursuant to Section 6 of this Side Letter. Until such time, the Deposit shall be treated as a deposit held in escrow for the account of Depositor. Depositor shall bear sole responsibility for any and all tax consequences arising from the Deposit and any interest earned thereon, including, without limitation, the obligation to report and pay any federal, state, or local income taxes attributable to interest earned on the Deposit. Each Party shall cooperate with the other Party in connection with the preparation and filing of any tax returns or reports that may be required in connection with the Deposit.

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IN WITNESS WHEREOF, the Parties have caused this Rate Lock Deposit Side Letter Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

FAIRWATER OPERATING PARTNERSHIP, L.P.

By: Fairwater Real Estate Investment Trust,

its General Partner

By: ________

Name: Naomi T. Sinclair

Title: Chief Financial Officer

Date: September 15, 2025

CLARENDON METROPOLITAN INSURANCE COMPANY

By: ________

Name: Garrett W. Hollister

Title: Head of CMBS Originations

Date: September 15, 2025

ACKNOWLEDGED AND AGREED

The undersigned, Calderwood & Harkness LLP, as counsel to Depositor, acknowledges and agrees to the escrow provisions set forth in Section 2 of this Side Letter solely with respect to its role, if any, in connection with such escrow arrangements, and confirms its agreement to serve as counsel to Depositor in connection with the Proposed Loan transaction described herein.

CALDERWOOD & HARKNESS LLP

By: ________

Name: Philip Hartmann

Title: Partner

Date: September 15, 2025

EXHIBIT A

WIRE INSTRUCTIONS FOR DEPOSIT

The Deposit in the amount of $2,400,000.00 shall be delivered by wire transfer of immediately available federal funds to the following account:

Depository Institution: Greaves Bancorp

ABA/Routing Number: 021000021

Account Name: Clarendon Metropolitan Insurance Company — Escrow Account

Account Number: 8472-5039-6611

SWIFT Code (if applicable): CHASUS33

Reference: CL-CMBS-2025-09-0347 — Fairwater Operating Partnership, L.P. Rate Lock Deposit

Attention: Escrow Operations — CMBS Originations

All wire transfer instructions must include the reference number CL-CMBS-2025-09-0347 to ensure proper identification and crediting of the Deposit. Depositor shall confirm the wire transfer by email to Garrett W. Hollister at the email address set forth in Section 10 of this Side Letter, promptly following the initiation of the wire transfer.

Lender reserves the right to designate an alternative depository institution or account for the receipt of the Deposit by providing written notice to Depositor not less than two (2) business days prior to the anticipated date of the wire transfer.

EXHIBIT B

FORM W-9 OF DEPOSITOR

Depositor shall deliver to Lender, simultaneously with the execution of this Side Letter, a completed and executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification), reflecting the following information:

Name: Fairwater Operating Partnership, L.P.

Business Name/Disregarded Entity Name: N/A

Federal Tax Classification: Partnership

Address: 8400 Chesapeake Center Drive, Suite 1200, Columbia, Maryland 21044

Employer Identification Number (EIN): 52-2847201

Certification: Signed and certified by Naomi T. Sinclair, Chief Financial Officer, on behalf of Fairwater Operating Partnership, L.P.

The completed Form W-9 shall be delivered to Lender at the notice address set forth in Section 10 of this Side Letter or to such other address as Lender may designate.

This Exhibit B is provided for reference purposes only. A fully executed original IRS Form W-9 shall be delivered separately by Depositor to Lender.

CALDERWOOD & HARKNESS LLP Attorneys at Law 425 Park Avenue New York, New York 10022 Telephone: (212) 555-7800 Facsimile: (212) 555-7801 www.calderwoodharkness.com
September 15, 2025
RATE LOCK DEPOSIT SIDE LETTER AGREEMENT
Reference Number: CL-CMBS-2025-09-0347
Re: $240,000,000 Fixed-Rate Mortgage Loan — Sun Belt Portfolio (14 Properties)
This Rate Lock Deposit Side Letter Agreement (this "Side Letter") is entered into as of September 15, 2025, by and between:
Fairwater Operating Partnership, L.P., a Delaware limited partnership (the "Depositor" or "Borrower"), having its principal place of business at 8400 Chesapeake Center Drive, Suite 1200, Columbia, Maryland 21044, Employer Identification Number 52-2847201, Attention: Naomi T. Sinclair, Chief Financial Officer, acting through its general partner, Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (NYSE: FWTR);
and
Clarendon Metropolitan Insurance Company, a New York domiciled insurance company (the "Lender"), having its principal place of business at 1 MetroTech Center, Brooklyn, New York 11201, NAIC Number 38921, Attention: Garrett W. Hollister, Head of CMBS Originations.
Depositor and Lender are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS (A), Depositor, through its wholly owned subsidiaries — 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, and Fairwater Sun Belt XIV LLC, each a Delaware limited liability company (collectively, the "SPE Borrowers") — owns a portfolio of fourteen (14) multifamily residential properties comprising approximately four thousand two hundred (4,200) apartment units located across the states of Texas, Georgia, Florida, North Carolina, and Tennessee (collectively, the "Sun Belt Portfolio");
WHEREAS (B), Depositor has submitted a loan application to Lender dated September 15, 2025 (the "Loan Application"), requesting a permanent fixed-rate mortgage loan in the aggregate principal amount of Two Hundred Forty Million and No/100 Dollars ($240,000,000) (the "Proposed Loan"), to be secured by first-priority mortgage liens on each of the properties constituting the Sun Belt Portfolio;
WHEREAS (C), the Proposed Loan is intended to take out and replace in full an existing Two Hundred Forty Million and No/100 Dollar ($240,000,000) senior secured bridge credit facility, dated as of June 30, 2025, provided by a lending syndicate led by Kensington National Bank, N.A., as administrative agent (the "Bridge Facility"), which Bridge Facility is currently outstanding and secured by the Sun Belt Portfolio;
WHEREAS (D), Lender delivered to Depositor a term sheet dated August 25, 2025 (the "Term Sheet"), which provides, among other things, for a fixed interest rate of 6.25% per annum, a ten (10)-year term maturing in 2035, a thirty (30)-year amortization schedule, and monthly debt service payments of principal and interest of approximately One Million Four Hundred Seventy-Seven Thousand Eight Hundred Forty-Six and No/100 Dollars ($1,477,846), resulting in aggregate annual debt service of approximately Seventeen Million Seven Hundred Thirty-Four Thousand One Hundred Fifty-Two and No/100 Dollars ($17,734,152);
WHEREAS (E), as a material condition to Lender's agreement to lock the interest rate on the Proposed Loan at the rate set forth in the Term Sheet, Depositor is required to deliver to Lender a rate lock deposit in the amount of Two Million Four Hundred Thousand and No/100 Dollars ($2,400,000), representing one percent (1.00%) of the principal amount of the Proposed Loan (the "Deposit"); and
WHEREAS (F), the Parties desire to set forth the terms and conditions governing the Deposit, including, without limitation, the circumstances under which the Deposit shall be refundable or non-refundable, the application of the Deposit at the closing of the Proposed Loan, the escrow arrangements for the Deposit, and related matters.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
SECTION 1: DEPOSIT AMOUNT AND DELIVERY
1.1 Amount. Depositor shall deliver to Lender, simultaneously with the execution and delivery of this Side Letter, a deposit in the amount of Two Million Four Hundred Thousand and No/100 Dollars ($2,400,000.00) (the "Deposit"). The Deposit represents one percent (1.00%) of the principal amount of the Proposed Loan. The Deposit shall be held, applied, and returned (or retained) in accordance with the terms and conditions of this Side Letter.
1.2 Method of Delivery. The Deposit shall be delivered by wire transfer of immediately available federal funds to the account designated by Lender in Exhibit A attached hereto and incorporated herein by reference. Depositor shall initiate the wire transfer on the date of execution of this Side Letter and shall use commercially reasonable efforts to ensure that the funds are received by Lender no later than 5:00 p.m. Eastern Time on the business day immediately following the date hereof. The wire transfer shall be made in accordance with the wire instructions set forth in Exhibit A and shall include the reference number specified in Section 1.3 below.
1.3 Reference Number. The Deposit shall be identified by reference number CL-CMBS-2025-09-0347 in all wire transfer instructions, correspondence, invoices, statements, and records relating to this Side Letter. All communications between the Parties with respect to the Deposit shall reference such number prominently.
1.4 Acknowledgment of Receipt. Lender shall promptly confirm receipt of the Deposit in writing (which may be by email) to Depositor at the notice addresses set forth in Section 10 of this Side Letter, and in any event shall confirm receipt no later than two (2) business days following actual receipt of the Deposit. Such confirmation shall include the date and amount of funds received, the reference number, and the name and account number of the Escrow Account (as defined below) into which the Deposit has been placed.
SECTION 2: ESCROW OF DEPOSIT
2.1 Escrow Account. Upon receipt of the Deposit, Lender shall deposit the Deposit into a segregated, interest-bearing escrow account (the "Escrow Account") maintained at an FDIC-insured depository institution selected by Lender in its sole but reasonable discretion. The Escrow Account shall be established and maintained in the name of Lender, as escrow agent, for the benefit of Depositor, and shall be separate and apart from Lender's general operating accounts and investment portfolios. Lender shall not commingle the Deposit with any other funds of Lender or any third party. As of the date hereof, Lender has designated Greaves Bancorp as the depository institution for the Escrow Account.
2.2 Interest Accrual. Interest shall accrue on the Deposit at the rate offered by the depository institution on comparable escrow deposits or money market instruments of similar tenor and size, as determined by the depository institution from time to time. All interest accrued on the Deposit shall be for the account of Depositor and shall be treated as the property of Depositor, subject to the terms of this Side Letter regarding the disposition of the Deposit. Lender shall not direct the investment of the Deposit in any instruments other than those customarily offered by the depository institution for escrow accounts, unless otherwise instructed in writing by Depositor and agreed to by Lender.
2.3 Reporting. Lender shall provide Depositor with quarterly statements of the Escrow Account, delivered within fifteen (15) business days following the end of each calendar quarter, reflecting the balance of the Deposit, all interest accrued during the applicable quarter, and any deductions, withdrawals, or charges applied to the Escrow Account. Lender shall also provide a final statement of the Escrow Account within ten (10) business days following the disposition of the Deposit (whether by application at Closing, return to Depositor, or retention by Lender).
2.4 Tax Reporting. All interest earned on the Deposit shall be reported as income of Depositor for federal, state, and local tax purposes. Lender (or the depository institution) shall issue to Depositor an IRS Form 1099-INT (or successor form) for each calendar year in which interest is earned on the Deposit. Depositor shall provide to Lender a completed and executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification) upon execution of this Side Letter, reflecting Depositor's legal name as "Fairwater Operating Partnership, L.P." and Employer Identification Number 52-2847201. Depositor shall promptly notify Lender of any change in its taxpayer identification number or tax status.
SECTION 3: RATE LOCK
3.1 Rate Lock Period. Upon Lender's receipt and confirmation of the Deposit in accordance with Sections 1.2 and 1.4 hereof, Lender shall lock the fixed interest rate on the Proposed Loan at six and twenty-five hundredths percent (6.25%) per annum (the "Locked Rate") for a period commencing on the date hereof, September 15, 2025, and expiring at 5:00 p.m. Eastern Time on November 28, 2025 (the "Rate Lock Expiration Date"), unless extended in accordance with Section 3.2 below (the period from the date hereof through the Rate Lock Expiration Date, as the same may be extended, the "Rate Lock Period"). During the Rate Lock Period, Lender shall not increase, adjust, or otherwise modify the Locked Rate, and the Locked Rate shall remain available to Depositor for the Proposed Loan, subject to the satisfaction of all conditions precedent to Closing.
3.2 Extension of Rate Lock. If the closing of the Proposed Loan (the "Closing") has not occurred by the Rate Lock Expiration Date due to delays caused by Lender or attributable to Lender's actions or omissions, or due to conditions beyond the reasonable control of Depositor (including, without limitation, delays in the completion of third-party reports, title searches, governmental approvals, or other matters not within Depositor's direct control), the Rate Lock Period shall be automatically extended for an additional thirty (30) calendar days, such that the Rate Lock Expiration Date shall be extended to December 28, 2025, without the payment of any additional fee or deposit by Depositor. Any further extensions of the Rate Lock Period beyond December 28, 2025 shall require the prior mutual written agreement of both Parties and may, at Lender's discretion, be subject to the payment by Depositor of a rate lock extension fee in an amount to be agreed upon by the Parties at the time of such further extension. Notwithstanding the foregoing, Lender shall not unreasonably withhold, condition, or delay its consent to any reasonable request by Depositor for an extension of the Rate Lock Period.
3.3 Locked Rate Terms. The Locked Rate of 6.25% per annum shall apply to the Proposed Loan in the aggregate principal amount of Two Hundred Forty Million and No/100 Dollars ($240,000,000), with a ten (10)-year term, a thirty (30)-year amortization schedule, and level monthly payments of principal and interest of approximately One Million Four Hundred Seventy-Seven Thousand Eight Hundred Forty-Six and No/100 Dollars ($1,477,846), resulting in aggregate annual debt service of approximately Seventeen Million Seven Hundred Thirty-Four Thousand One Hundred Fifty-Two and No/100 Dollars ($17,734,152), all as more fully described in and subject to the terms and conditions of the Term Sheet. For the avoidance of doubt, the Locked Rate represents a spread of approximately 225 basis points over the interpolated yield of the ten-year U.S. Treasury Note as of the date of the Term Sheet. The Parties acknowledge that the specific amortization schedule, payment dates, and other loan economics shall be finalized in the definitive loan documents to be negotiated and executed by the Parties.
SECTION 4: APPLICATION OF DEPOSIT AT CLOSING
4.1 Credit Against Closing Costs. At the Closing, the Deposit (together with all accrued and unpaid interest thereon) shall be fully refundable to Depositor and shall, at Depositor's election, be applied as a credit against Depositor's closing costs and expenses incurred in connection with the Proposed Loan. Closing costs and expenses to which the Deposit may be applied include, without limitation: (a) the origination fee payable by Depositor to Lender in the amount of One Million Eight Hundred Thousand and No/100 Dollars ($1,800,000), representing seventy-five hundredths of one percent (0.75%) of the principal amount of the Proposed Loan; (b) recording taxes, mortgage recording taxes, intangibles taxes, and transfer taxes, if any, payable in connection with the recordation of the mortgages, deeds of trust, or deeds to secure debt encumbering the Sun Belt Portfolio properties in the applicable jurisdictions of Texas, Georgia, Florida, North Carolina, and Tennessee; (c) title insurance premiums payable to Marlowe Asset Management Title Insurance Group, Inc. in connection with the issuance of lender's title insurance policies for each property; (d) survey costs; (e) appraisal fees; (f) environmental assessment fees; (g) legal fees and disbursements of counsel to Depositor and counsel to Lender; and (h) such other fees, costs, and expenses as are customarily incurred by a borrower in connection with the closing of a commercial mortgage loan of this nature.
4.2 Application Mechanics. Depositor shall notify Lender in writing (which may be by email to the notice addresses set forth in Section 10 hereof) not less than five (5) business days prior to the anticipated Closing date as to the manner in which the Deposit (and all accrued interest thereon) shall be applied. Such notice shall specify the particular closing costs and expenses against which Depositor elects to apply the Deposit and the respective amounts thereof. If Depositor does not provide such written notice within the time period specified herein, the entire Deposit, together with all accrued and unpaid interest thereon, shall be returned to Depositor by wire transfer of immediately available federal funds on the Closing date to the account designated by Depositor in its Closing instructions.
4.3 Excess. To the extent the Deposit, together with all accrued and unpaid interest thereon, exceeds the aggregate amount of Depositor's closing costs and expenses against which the Deposit is to be applied pursuant to Section 4.1, any such excess shall be returned to Depositor by wire transfer of immediately available federal funds on the Closing date to the account designated by Depositor in its Closing instructions. Lender shall deliver to Depositor, at or promptly following Closing, a written reconciliation statement reflecting the application of the Deposit and interest, including a detailed itemization of all closing costs against which the Deposit was credited and the amount of any excess returned.
SECTION 5: REFUNDABILITY OF DEPOSIT — LENDER DEFAULT OR FAILURE OF LENDER CONDITIONS
5.1 Full Refund upon Lender Default. If the Closing fails to occur by the Rate Lock Expiration Date (as the same may be extended pursuant to Section 3.2) due to (a) Lender's breach of or default under this Side Letter, the Term Sheet, or the commitment letter to be issued by Lender in connection with the Proposed Loan (the "Commitment Letter"), including, without limitation, Lender's failure or refusal to fund the Proposed Loan in accordance with the terms thereof, or (b) Lender's failure to satisfy any of Lender's conditions precedent to Closing, including, without limitation, Lender's failure to approve appraisals, title conditions, survey matters, environmental conditions, or property management arrangements, in each case through no fault, act, or omission of Depositor, the SPE Borrowers, or the Guarantor, then the entire Deposit, together with all accrued and unpaid interest thereon, shall be promptly returned to Depositor by wire transfer of immediately available federal funds within five (5) business days of Lender's receipt of Depositor's written demand therefor. Depositor's right to a refund of the Deposit under this Section 5.1 shall be in addition to, and shall not limit, any other rights or remedies available to Depositor at law or in equity arising out of Lender's breach or default.
5.2 Condemnation, Casualty, or Force Majeure. If the Closing fails to occur by the Rate Lock Expiration Date (as the same may be extended pursuant to Section 3.2) due to (a) a material condemnation or taking by any governmental authority affecting one or more of the properties in the Sun Belt Portfolio, (b) a material casualty (including, without limitation, fire, flood, hurricane, earthquake, or other natural disaster) affecting one or more of the properties in the Sun Belt Portfolio, or (c) a force majeure event, including, without limitation, acts of God, war, terrorism, epidemic, pandemic, civil unrest, governmental orders or restrictions, or other events beyond the reasonable control of either Party, then the Deposit, together with all accrued and unpaid interest thereon, shall be fully refundable to Depositor and shall be returned by wire transfer of immediately available federal funds within five (5) business days of Depositor's written demand therefor. For purposes of this Section 5.2, a condemnation or casualty shall be deemed "material" if it affects any property or properties with an aggregate appraised value in excess of ten percent (10%) of the total appraised value of the Sun Belt Portfolio, or if it renders any property uninhabitable or unsuitable for its intended use as multifamily residential property.
5.3 Mutual Termination. If both Parties mutually agree in writing to terminate the Proposed Loan transaction prior to Closing for any reason whatsoever, the Deposit, together with all accrued and unpaid interest thereon, shall be returned to Depositor by wire transfer of immediately available federal funds within five (5) business days following the date of such mutual written agreement to terminate. Any such mutual termination agreement shall be in writing and signed by both Parties.
SECTION 6: NON-REFUNDABILITY OF DEPOSIT — BORROWER DEFAULT
6.1 General Rule. If the Closing fails to occur by the Rate Lock Expiration Date (as the same may be extended pursuant to Section 3.2) for any reason other than (a) Lender default or failure of Lender's conditions as described in Section 5.1, (b) condemnation, casualty, or force majeure as described in Section 5.2, or (c) mutual termination as described in Section 5.3, then the Deposit shall become non-refundable and shall be retained by Lender as liquidated damages. Without limiting the generality of the foregoing, the Deposit shall become non-refundable in any circumstance in which Depositor (i) elects not to close the Proposed Loan for any reason, (ii) fails to satisfy any of Borrower's conditions precedent to Closing set forth in the Commitment Letter or the definitive loan documents, (iii) fails to deliver any required documentation, certification, or instrument within the time periods specified in the Commitment Letter or definitive loan documents, (iv) otherwise defaults under this Side Letter, the Term Sheet, or the Commitment Letter, or (v) experiences a material adverse change in the financial condition of Depositor, the SPE Borrowers, or the Guarantor that results in Lender's refusal to fund.
6.2 Liquidated Damages. The Parties acknowledge and agree that the Deposit constitutes a reasonable pre-estimate of Lender's actual damages in the event that Depositor fails to close the Proposed Loan, and that such damages include, without limitation: (a) Lender's costs and expenses incurred in connection with interest rate hedging transactions entered into by Lender in reliance on the anticipated funding of the Proposed Loan, including the cost of unwinding forward rate locks, interest rate swaps, and other derivative instruments; (b) Lender's costs and expenses incurred in connection with the underwriting, due diligence, and credit approval of the Proposed Loan, including internal personnel costs, third-party consultant fees, and travel expenses; (c) legal fees and expenses incurred by Lender and its counsel, Ashworth McPhail LLP, in connection with the negotiation, preparation, and review of this Side Letter, the Term Sheet, the Commitment Letter, and the definitive loan documents; (d) the opportunity cost to Lender of having reserved capital and resources for the Proposed Loan during the Rate Lock Period; and (e) any mark-to-market losses or other economic losses resulting from changes in prevailing interest rates during the Rate Lock Period. The Parties further acknowledge and agree that such damages would be extremely difficult and impracticable to calculate with precision, and that the Deposit amount of Two Million Four Hundred Thousand Dollars ($2,400,000) bears a reasonable relationship to the range of damages that could be anticipated as a result of Depositor's failure to close. The Parties expressly agree that the Deposit is not intended as, and shall not be construed as, a penalty.
6.3 Sole and Exclusive Remedy. In the event the Deposit is retained by Lender pursuant to this Section 6, such retention shall constitute Lender's sole and exclusive remedy for Depositor's failure to close the Proposed Loan, and Lender shall have no further claim, right, or cause of action against Depositor, the SPE Borrowers, the Guarantor, or any of their respective officers, directors, trustees, partners, members, managers, employees, agents, or affiliates, arising out of or related to this Side Letter, the Term Sheet, the Loan Application, or the Proposed Loan. The foregoing limitation shall not apply to (a) any obligation of Depositor to reimburse Lender for third-party costs and expenses that are expressly stated in this Side Letter or the Term Sheet to be payable by Depositor regardless of whether the Proposed Loan closes, or (b) any indemnification obligations of Depositor that survive termination of this Side Letter, the Term Sheet, or the Commitment Letter.
6.4 Accrued Interest. In the event the Deposit becomes non-refundable and is retained by Lender pursuant to this Section 6, all accrued and unpaid interest on the Deposit in the Escrow Account as of the date of such retention shall also be retained by Lender as part of the liquidated damages, and Depositor shall have no claim or right to any such accrued interest.
SECTION 7: CONDITIONS PRECEDENT TO CLOSING (CROSS-REFERENCE)
7.1 The Parties acknowledge that the Closing of the Proposed Loan is subject to the satisfaction (or waiver by Lender, in its sole discretion) of certain conditions precedent, which conditions shall be more fully set forth in the Commitment Letter and the definitive loan documents. Without limiting the generality of the foregoing, the Parties anticipate that such conditions precedent shall include, without limitation, the following:
(a) Completion of satisfactory MAI appraisals of each of the fourteen (14) Sun Belt Portfolio properties by Thornfield Appraisal Group LLC, or such other nationally recognized appraisal firm as may be approved by Lender, in each case reflecting an aggregate appraised value of the Sun Belt Portfolio sufficient to support the Proposed Loan at the loan-to-value ratio specified in the Term Sheet;
(b) Delivery of satisfactory Phase I environmental site assessments, prepared in accordance with ASTM Standard Practice E1527-21, for each of the fourteen (14) Sun Belt Portfolio properties, and, if recommended by such Phase I assessments, completion of Phase II environmental investigations, in each case by an environmental consulting firm approved by Lender;
(c) Issuance of lender's title insurance policies by Marlowe Asset Management Title Insurance Group, Inc. (or a title insurance underwriter acceptable to Lender) for each of the fourteen (14) Sun Belt Portfolio properties, in the aggregate amount of the Proposed Loan, with such endorsements as Lender may reasonably require, insuring the first-priority lien of the applicable mortgage, deed of trust, or deed to secure debt;
(d) Delivery of current ALTA/NSPS land title surveys for each of the fourteen (14) Sun Belt Portfolio properties, prepared by a licensed surveyor acceptable to Lender, certified to Lender and the title insurance company, and reflecting no survey exceptions or encroachments that are unacceptable to Lender;
(e) Execution and delivery of all definitive loan documents, including, without limitation, the Loan Agreement, Promissory Note (or Notes), Guaranty Agreement (to be executed by Fairwater Real Estate Investment Trust, as guarantor), Environmental Indemnity Agreement, Mortgages (or Deeds of Trust or Deeds to Secure Debt, as applicable under the laws of each state in which the Sun Belt Portfolio properties are located, namely Texas, Georgia, Florida, North Carolina, and Tennessee), Cash Management Agreement, and the organizational documents for each SPE Borrower, in each case in form and substance satisfactory to Lender and its counsel;
(f) Delivery of legal opinions from Calderwood & Harkness LLP, as counsel to Depositor and the SPE Borrowers, including, without limitation, opinions as to due authorization, enforceability, no conflict, true sale/substantive consolidation (if applicable), and such other opinions as Lender and its counsel may reasonably require;
(g) Receipt of certified copies of organizational documents (including certificates of formation, limited partnership agreements, limited liability company agreements, and declarations of trust, as applicable), certificates of good standing (or certificates of existence), and resolutions authorizing the transactions contemplated hereby, for each SPE Borrower, the Depositor, and the Guarantor (Fairwater Real Estate Investment Trust);
(h) Delivery of officer's closing certificates executed by an authorized officer of the Guarantor, certifying as to the accuracy of representations and warranties, the satisfaction of conditions precedent, the absence of defaults, and such other matters as Lender may reasonably require;
(i) No material adverse change shall have occurred in the financial condition, business, operations, assets, liabilities, or prospects of Depositor, any SPE Borrower, or the Guarantor since the date of the most recent financial statements delivered to Lender, and no event shall have occurred that could reasonably be expected to have a material adverse effect on the Sun Belt Portfolio or the ability of any such entity to perform its obligations under the loan documents; and
(j) No event of default shall exist and be continuing under the Bridge Facility, and Lender shall have received a customary payoff letter from Kensington National Bank, N.A., as administrative agent under the Bridge Facility, confirming the outstanding balance of the Bridge Facility and providing wire instructions for the payoff and discharge thereof at Closing, together with customary UCC termination statements and mortgage releases.
7.2 For the avoidance of doubt, failure to satisfy any condition precedent to Closing that is attributable to Depositor's actions, omissions, or failure to perform, or the actions, omissions, or failure to perform of any SPE Borrower or the Guarantor, shall not entitle Depositor to a refund of the Deposit, and the Deposit shall be subject to retention by Lender as provided in Section 6 of this Side Letter.
SECTION 8: REPRESENTATIONS AND WARRANTIES
8.1 Depositor's Representations and Warranties. Depositor hereby represents and warrants to Lender, as of the date hereof, as follows:
(a) Organization and Existence. Depositor is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is duly qualified to do business and in good standing in each jurisdiction where the nature of its business or the ownership of its properties requires such qualification, including, without limitation, the State of Maryland and each state in which the Sun Belt Portfolio properties are located.
(b) General Partner; REIT Status. The sole general partner of Depositor is Fairwater Real Estate Investment Trust, a real estate investment trust duly organized and validly existing under the laws of the State of Maryland. Fairwater Real Estate Investment Trust has elected and currently maintains its status as a real estate investment trust within the meaning of Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. Fairwater Real Estate Investment Trust's common shares of beneficial interest are listed and traded on the New York Stock Exchange under the ticker symbol "FWTR."
(c) Power and Authority. Depositor has full power and authority to execute, deliver, and perform its obligations under this Side Letter and to consummate the transactions contemplated hereby, including, without limitation, the delivery of the Deposit and the closing of the Proposed Loan.
(d) Due Authorization. The execution, delivery, and performance of this Side Letter by Depositor have been duly authorized by all necessary partnership action on the part of Depositor and all necessary trust action on the part of its general partner, including, without limitation, authorization by the Board of Trustees of Fairwater Real Estate Investment Trust pursuant to a resolution duly adopted at a meeting of the Board of Trustees held on September 8, 2025, at which a quorum was present and acting throughout.
(e) Binding Obligation. This Side Letter constitutes a legal, valid, and binding obligation of Depositor, enforceable against Depositor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the enforcement of creditors' rights generally, and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
(f) Source of Funds. The funds constituting the Deposit are derived from lawful sources and do not represent the proceeds of any illegal activity. Depositor is in compliance with all applicable anti-money laundering laws and regulations, including, without limitation, the Bank Secrecy Act and the USA PATRIOT Act.
8.2 Lender's Representations and Warranties. Lender hereby represents and warrants to Depositor, as of the date hereof, as follows:
(a) Organization and Existence. Lender is an insurance company duly organized, validly existing, and in good standing under the laws of the State of New York, and is duly licensed and authorized to conduct the business of insurance in the State of New York and in each jurisdiction where the nature of its business requires such licensing or authorization.
(b) Power and Authority. Lender has full power and authority to execute, deliver, and perform its obligations under this Side Letter, including, without limitation, the obligation to hold the Deposit in escrow and to lock the Locked Rate during the Rate Lock Period.
(c) Binding Obligation. This Side Letter constitutes a legal, valid, and binding obligation of Lender, enforceable against Lender in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the enforcement of creditors' rights generally, and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
SECTION 9: RELATIONSHIP TO TERM SHEET AND COMMITMENT LETTER
9.1 Supplement to Term Sheet. This Side Letter supplements, and shall be read in conjunction with, the Term Sheet dated August 25, 2025, previously executed and delivered by the Parties. In the event of any conflict, inconsistency, or ambiguity between the terms of this Side Letter and the terms of the Term Sheet with respect to the Deposit, the treatment of the Deposit, the Rate Lock, or any other matter expressly addressed in this Side Letter, the terms of this Side Letter shall control and prevail.
9.2 Incorporation into Commitment Letter. Upon the issuance by Lender and execution by the Parties of the Commitment Letter (which Lender anticipates issuing on or about October 1, 2025), the terms of this Side Letter regarding the Deposit shall be incorporated into and governed by the Commitment Letter. To the extent the Commitment Letter contains provisions relating to the Deposit, the Rate Lock, escrow arrangements, or the refundability or non-refundability of the Deposit that conflict with or are inconsistent with the terms of this Side Letter, the terms of the Commitment Letter shall supersede and replace the corresponding provisions of this Side Letter with respect to such matters, and this Side Letter shall be deemed amended accordingly. The Parties shall cooperate in good faith to ensure that the deposit provisions of the Commitment Letter are consistent with the material economic terms set forth in this Side Letter.
9.3 No Binding Commitment to Fund. Notwithstanding anything to the contrary contained in this Side Letter, nothing in this Side Letter shall constitute a binding commitment by Lender to fund the Proposed Loan or any portion thereof. Lender's obligation to fund the Proposed Loan shall arise only upon the execution and delivery by both Parties of the Commitment Letter and the definitive loan documents, and the satisfaction (or waiver by Lender) of all conditions precedent to funding set forth therein. The Parties acknowledge that Lender's agreement to lock the Locked Rate and to hold the Deposit in escrow does not create an obligation on the part of Lender to issue the Commitment Letter or to fund the Proposed Loan.
SECTION 10: NOTICES
10.1 All notices, demands, requests, consents, approvals, and other communications required or permitted to be given under this Side Letter shall be in writing and shall be deemed to have been duly given and received: (a) upon delivery, if delivered by personal delivery or by hand; (b) on the next business day following deposit with a nationally recognized overnight courier service (with proof of delivery requested), prepaid for overnight delivery; or (c) upon confirmation of receipt, if sent by email (with read receipt or written confirmation of receipt from the recipient); in each case addressed as follows:
If to Depositor:
Fairwater Operating Partnership, L.P. 8400 Chesapeake Center Drive, Suite 1200 Columbia, Maryland 21044
Attention: Naomi T. Sinclair, Chief Financial Officer
Email: nsinclair@fairwaterreit.com
With a copy (which shall not constitute notice) to:
David A. Whitfield, General Counsel Fairwater Operating Partnership, L.P. 8400 Chesapeake Center Drive, Suite 1200 Columbia, Maryland 21044
Email: dwhitfield@fairwaterreit.com
And a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 425 Park Avenue New York, New York 10022
Attention: Philip Hartmann, Esq.
Email: phartmann@calderwoodharkness.com
If to Lender:
Clarendon Metropolitan Insurance Company 1 MetroTech Center Brooklyn, New York 11201
Attention: Garrett W. Hollister, Head of CMBS Originations
Email: ghollister@clarendonmet.com
With a copy (which shall not constitute notice) to:
Ashworth McPhail LLP 51 Madison Avenue, 24th Floor New York, New York 10010
Attention: Joanna C. Wexler, Esq.
Email: jwexler@ashworthmcphail.com
Either Party may change its notice address by giving written notice of such change to the other Party in accordance with this Section 10.
SECTION 11: MISCELLANEOUS PROVISIONS
11.1 Governing Law. This Side Letter shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to any conflicts of law principles that would result in the application of the laws of any other jurisdiction. The Parties acknowledge that the State of New York has a substantial relationship to the Parties and the transactions contemplated by this Side Letter.
11.2 Jurisdiction and Venue. Each of the Parties hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the state courts of the State of New York sitting in the Borough of Manhattan, City of New York, and the United States District Court for the Southern District of New York, for the purposes of any suit, action, or proceeding arising out of or relating to this Side Letter, and each Party hereby irrevocably and unconditionally waives any objection to the laying of venue of any such suit, action, or proceeding in any such court, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
11.3 Entire Agreement. This Side Letter, together with the Term Sheet, constitutes the entire agreement between the Parties with respect to the Deposit and the rate lock arrangements described herein, and supersedes all prior and contemporaneous oral or written agreements, understandings, representations, and warranties of the Parties with respect to the subject matter hereof. No Party has relied on any statement, representation, or warranty not expressly set forth in this Side Letter in entering into this Side Letter.
11.4 Amendments. This Side Letter may not be amended, modified, supplemented, or waived except by a written instrument duly executed by both Depositor and Lender (or their respective authorized representatives). No oral amendment, modification, or waiver shall be effective for any purpose.
11.5 Successors and Assigns. This Side Letter shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that Depositor may not assign, transfer, or delegate any of its rights, interests, or obligations under this Side Letter without the prior written consent of Lender, which consent may be withheld in Lender's sole and absolute discretion. Lender may assign its rights under this Side Letter to any affiliate of Lender or to any successor lender on the Proposed Loan without the consent of Depositor, provided that Lender gives written notice of such assignment to Depositor.
11.6 Counterparts. This Side Letter may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. Signatures transmitted by electronic means, including by email in portable document format (PDF), or by electronic signature platforms such as Brightwater Software or Ashford Health IT, shall be deemed original signatures for all purposes and shall be binding upon the Parties.
11.7 Severability. If any provision of this Side Letter, or the application of any such provision to any person or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Side Letter shall not be affected or impaired thereby, and such remaining provisions shall remain in full force and effect. In the event any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to replace such provision with a valid and enforceable provision that achieves, to the greatest extent possible, the economic, business, and other purposes of the invalid, illegal, or unenforceable provision.
11.8 Waiver. No failure or delay by either Party in exercising any right, power, or remedy under this Side Letter shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. All rights and remedies provided herein are cumulative and not exclusive of any rights or remedies otherwise available at law or in equity.
11.9 Headings. The section headings and captions contained in this Side Letter are included for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Side Letter.
11.10 Confidentiality. The terms of this Side Letter and all information exchanged between the Parties in connection herewith, including, without limitation, the financial terms of the Proposed Loan, the Locked Rate, the amount of the Deposit, and any proprietary business information of either Party, shall be treated as strictly confidential and shall not be disclosed by either Party to any third party without the prior written consent of the other Party, except for disclosures: (a) required by applicable law, regulation, governmental order, or court order (including, without limitation, disclosures required under the Securities Exchange Act of 1934, as amended, or the rules and regulations of the New York Stock Exchange); (b) to the Parties' respective legal counsel, financial advisors, accountants, and other professional advisors retained in connection with the Proposed Loan, including Calderwood & Harkness LLP (counsel to Depositor), Ashworth McPhail LLP (counsel to Lender), Beacon Ridge Capital Advisors LLC (financial advisor to Depositor), and Whitmore Hargrove & Co., P.C. (accountants to Depositor), in each case on a need-to-know basis and subject to obligations of confidentiality; (c) to the applicable depository institution holding the Escrow Account; and (d) to rating agencies, trustees, servicers, and investors in connection with any contemplated securitization of the Proposed Loan.
11.11 Tax Treatment. The Deposit shall not be treated as income of Lender for federal, state, or local tax purposes unless and until the Deposit becomes non-refundable and is retained by Lender pursuant to Section 6 of this Side Letter. Until such time, the Deposit shall be treated as a deposit held in escrow for the account of Depositor. Depositor shall bear sole responsibility for any and all tax consequences arising from the Deposit and any interest earned thereon, including, without limitation, the obligation to report and pay any federal, state, or local income taxes attributable to interest earned on the Deposit. Each Party shall cooperate with the other Party in connection with the preparation and filing of any tax returns or reports that may be required in connection with the Deposit.
[Remainder of this page intentionally left blank. Signature pages follow.]
IN WITNESS WHEREOF, the Parties have caused this Rate Lock Deposit Side Letter Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.
FAIRWATER OPERATING PARTNERSHIP, L.P.
By: Fairwater Real Estate Investment Trust,
its General Partner
By: ________
Name: Naomi T. Sinclair
Title: Chief Financial Officer
Date: September 15, 2025
CLARENDON METROPOLITAN INSURANCE COMPANY
By: ________
Name: Garrett W. Hollister
Title: Head of CMBS Originations
Date: September 15, 2025
ACKNOWLEDGED AND AGREED
The undersigned, Calderwood & Harkness LLP, as counsel to Depositor, acknowledges and agrees to the escrow provisions set forth in Section 2 of this Side Letter solely with respect to its role, if any, in connection with such escrow arrangements, and confirms its agreement to serve as counsel to Depositor in connection with the Proposed Loan transaction described herein.
CALDERWOOD & HARKNESS LLP
By: ________
Name: Philip Hartmann
Title: Partner
Date: September 15, 2025
EXHIBIT A
WIRE INSTRUCTIONS FOR DEPOSIT
The Deposit in the amount of $2,400,000.00 shall be delivered by wire transfer of immediately available federal funds to the following account:
Depository Institution: Greaves Bancorp
ABA/Routing Number: 021000021
Account Name: Clarendon Metropolitan Insurance Company — Escrow Account
Account Number: 8472-5039-6611
SWIFT Code (if applicable): CHASUS33
Reference: CL-CMBS-2025-09-0347 — Fairwater Operating Partnership, L.P. Rate Lock Deposit
Attention: Escrow Operations — CMBS Originations
All wire transfer instructions must include the reference number CL-CMBS-2025-09-0347 to ensure proper identification and crediting of the Deposit. Depositor shall confirm the wire transfer by email to Garrett W. Hollister at the email address set forth in Section 10 of this Side Letter, promptly following the initiation of the wire transfer.
Lender reserves the right to designate an alternative depository institution or account for the receipt of the Deposit by providing written notice to Depositor not less than two (2) business days prior to the anticipated date of the wire transfer.
EXHIBIT B
FORM W-9 OF DEPOSITOR
Depositor shall deliver to Lender, simultaneously with the execution of this Side Letter, a completed and executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification), reflecting the following information:
Name: Fairwater Operating Partnership, L.P.
Business Name/Disregarded Entity Name: N/A
Federal Tax Classification: Partnership
Address: 8400 Chesapeake Center Drive, Suite 1200, Columbia, Maryland 21044
Employer Identification Number (EIN): 52-2847201
Certification: Signed and certified by Naomi T. Sinclair, Chief Financial Officer, on behalf of Fairwater Operating Partnership, L.P.
The completed Form W-9 shall be delivered to Lender at the notice address set forth in Section 10 of this Side Letter or to such other address as Lender may designate.
This Exhibit B is provided for reference purposes only. A fully executed original IRS Form W-9 shall be delivered separately by Depositor to Lender.

RATE LOCK DEPOSIT SIDE LETTER AGREEMENT

RECITALS

SECTION 1: DEPOSIT AMOUNT AND DELIVERY

SECTION 2: ESCROW OF DEPOSIT

SECTION 3: RATE LOCK

SECTION 4: APPLICATION OF DEPOSIT AT CLOSING

SECTION 7: CONDITIONS PRECEDENT TO CLOSING (CROSS-REFERENCE)

SECTION 8: REPRESENTATIONS AND WARRANTIES

SECTION 9: RELATIONSHIP TO TERM SHEET AND COMMITMENT LETTER

SECTION 10: NOTICES

SECTION 11: MISCELLANEOUS PROVISIONS

FAIRWATER OPERATING PARTNERSHIP, L.P.

CLARENDON METROPOLITAN INSURANCE COMPANY

ACKNOWLEDGED AND AGREED

CALDERWOOD & HARKNESS LLP

EXHIBIT A

WIRE INSTRUCTIONS FOR DEPOSIT

EXHIBIT B

FORM W-9 OF DEPOSITOR

Record

Parties

Dates

Amounts