1036-00004 · Client 1036 · Closing

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BUYER'S CLOSING CERTIFICATE

Delivered pursuant to Section 9.2(d) of that certain Purchase and Sale Agreement, dated as of February 28, 2024

This Buyer's Closing Certificate (this "Certificate") is delivered pursuant to Section 9.2(d) of that certain Purchase and Sale Agreement, dated as of February 28, 2024 (as amended by that certain First Amendment to Purchase and Sale Agreement, dated as of April 12, 2024, and that certain Second Amendment to Purchase and Sale Agreement, dated as of May 28, 2024, collectively, the "Agreement"), by and between Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership ("Seller"), and Fairwater Real Estate Investment Trust, a Maryland real estate investment trust ("Buyer").

Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

Date: June 6, 2024

Section 1. Identification of Certifying Party

The undersigned hereby certifies that the certifying party delivering this Certificate is identified as follows:

Full Legal Name: Fairwater Real Estate Investment Trust

Entity Type: Real Estate Investment Trust organized under the laws of the State of Maryland

Principal Office Address: 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044

NYSE Ticker Symbol: FREIT

Employer Identification Number (EIN): 52-2198437

Role Under the Agreement: Buyer

Certifying Officer: Marcus Devereaux, Executive Vice President, Acquisitions, duly authorized to execute this Certificate on behalf of Buyer pursuant to resolutions adopted by the Board of Trustees of Fairwater Real Estate Investment Trust on February 26, 2024, as further confirmed by the Secretary's Certificate delivered concurrently herewith.

The undersigned, Marcus Devereaux, in his capacity as Executive Vice President, Acquisitions of Buyer, hereby delivers this Certificate to Seller as a condition to Seller's obligation to close the transactions contemplated by the Agreement.

Section 2. Reference to Agreement and Transaction

The Agreement provides for Buyer's acquisition of one hundred percent (100%) of the membership interests (the "Interests") in each of the following fourteen (14) entities (each, a "Target Entity" and collectively, the "Target Entities"), each of which is a Delaware limited liability company:

1. GMP Fairfield I LLC

2. GMP Fairfield II LLC

3. GMP Westlake LLC

4. GMP Katy LLC

5. GMP Alliance LLC

6. GMP Lakeland LLC

7. GMP Southport LLC

8. GMP Murfreesboro LLC

9. GMP Buckhead LLC

10. GMP SouthPark LLC

11. GMP Cool Springs LLC

12. GMP Brickell LLC

13. GMP Peachtree LLC

14. GMP Mount Juliet LLC

Each Target Entity is the direct or indirect owner of one or more multifamily residential real property assets located across the Southeastern United States, as more particularly described in the Agreement and the exhibits and schedules attached thereto.

The aggregate purchase price for the Interests is One Billion One Hundred Million Dollars ($1,100,000,000) (the "Purchase Price"), subject to the PCA Repair Credit in the amount of One Million Seventy Thousand Dollars ($1,070,000) and prorations as set forth in the Agreement.

The Purchase Price is being paid through a combination of the assumption of existing mortgage indebtedness and cash equity as follows:

(a) Assumed Mortgage Debt. Buyer is assuming aggregate mortgage indebtedness of Six Hundred Twelve Million Dollars ($612,000,000) encumbering the properties owned by the Target Entities, consisting of the following loan facilities:

(b) Cash Equity at Closing. Buyer is paying cash equity at Closing of approximately Four Hundred Eighty-Eight Million Dollars ($488,000,000), as adjusted for the PCA Repair Credit and prorations calculated in accordance with the provisions of the Agreement.

The closing of the transactions contemplated by the Agreement (the "Closing") is occurring on June 6, 2024 (the "Closing Date").

This Certificate is delivered as a condition to Seller's obligation to close under the Agreement, as expressly required by Section 9.2(d) thereof. The delivery of this Certificate by Buyer to Seller on the Closing Date constitutes the satisfaction of such condition.

Section 3. Bring-Down of Representations and Warranties

The undersigned hereby certifies, on behalf of Buyer, that each of the representations and warranties of Buyer set forth in the Agreement (including, without limitation, those contained in Article V thereof) is true, correct, and complete in all material respects as of the date hereof (the Closing Date), with the same force and effect as if made on and as of the Closing Date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true, correct, and complete in all material respects as of such earlier date. Without limiting the generality of the foregoing, the undersigned specifically confirms the truth, correctness, and completeness in all material respects of the following representations and warranties:

3.1 Organization and Authority

Buyer is a real estate investment trust duly organized, validly existing, and in good standing under the laws of the State of Maryland. Buyer has all requisite power and authority under its declaration of trust, bylaws, and applicable law to (a) own, lease, and operate its properties and conduct its business as currently conducted, (b) execute, deliver, and perform its obligations under the Agreement and all closing documents to be executed and delivered by Buyer in connection with the transactions contemplated thereby, and (c) consummate the transactions contemplated by the Agreement. Buyer is duly qualified to transact business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on Buyer's ability to consummate the transactions contemplated by the Agreement.

3.2 Authorization; Binding Obligation

The execution, delivery, and performance of the Agreement and all documents and instruments to be executed and delivered by Buyer in connection with the transactions contemplated thereby have been duly authorized by all necessary action on the part of Buyer, including, without limitation, approval by the Board of Trustees of Fairwater Real Estate Investment Trust at a duly convened meeting held on February 26, 2024, at which a quorum was present and acting throughout, and no further action or approval on the part of Buyer, its Board of Trustees, its shareholders, or any other person or entity is necessary for the valid execution, delivery, and performance by Buyer of the Agreement and all related closing documents. The Agreement and all closing documents executed and delivered by Buyer in connection with the transactions contemplated thereby constitute the legal, valid, and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws of general applicability relating to or affecting creditors' rights generally and to general equitable principles (whether considered in a proceeding in equity or at law).

3.3 No Conflicts; Consents

Neither the execution and delivery of the Agreement nor the consummation of the transactions contemplated thereby will:

(a) violate or conflict with the declaration of trust, bylaws, or other organizational documents of Buyer;

(b) violate any applicable law, statute, rule, regulation, ordinance, order, judgment, writ, injunction, or decree of any federal, state, local, or foreign governmental authority applicable to Buyer or any of its properties or assets; or

(c) result in a breach of, constitute a default (with or without notice or lapse of time, or both) under, give rise to a right of termination, cancellation, or acceleration under, or require any consent, approval, waiver, or notice under, any material contract, agreement, instrument, license, permit, mortgage, indenture, note, bond, or other obligation to which Buyer is a party or by which any of its properties or assets may be bound,

except, in the case of clause (c), for consents that have been obtained and delivered to Seller as of or prior to the Closing Date. All governmental and regulatory approvals, consents, filings, registrations, and notices, if any, required in connection with Buyer's execution and delivery of the Agreement and the consummation by Buyer of the transactions contemplated thereby have been duly obtained, made, or given, as applicable, or are not required under applicable law.

3.4 Financial Capacity

Buyer has, or has access to, sufficient immediately available funds (including, without limitation, through its $750,000,000 unsecured revolving credit facility with Aldgate National Bank, N.A., as administrative agent, pursuant to that certain Amended and Restated Credit Agreement dated as of September 15, 2023, as amended) to consummate the transactions contemplated by the Agreement, including, without limitation, the payment of the cash equity consideration of approximately Four Hundred Eighty-Eight Million Dollars ($488,000,000) (as adjusted for the PCA Repair Credit and prorations), and to pay all costs, fees, expenses, and other amounts required to be paid by Buyer at or prior to the Closing. Buyer's obligations under the Agreement are not subject to any financing contingency, and the availability of financing is not a condition to Buyer's obligation to consummate the transactions contemplated by the Agreement.

3.5 Litigation. There is no action, suit, proceeding, arbitration, investigation, inquiry, or claim pending or, to the knowledge of Buyer (as defined in Section 6 hereof), threatened in writing against or affecting Buyer before any court, arbitrator, governmental authority, or administrative body that (a) would materially impair or delay Buyer's ability to consummate the transactions contemplated by the Agreement, (b) challenges or seeks to enjoin, restrain, or prohibit the consummation of any of the transactions contemplated by the Agreement, or (c) would, if adversely determined, reasonably be expected to have a material adverse effect on Buyer's ability to perform its obligations under the Agreement or any closing document.

3.6 ERISA. Buyer is not, and will not be, acquiring the membership interests in the Target Entities with the assets of any "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any "plan" as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), or with the assets of any entity that is deemed to hold the assets of any such plan pursuant to 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA. No portion of the funds used by Buyer to pay the Purchase Price or any other amounts due under the Agreement constitutes or will constitute "plan assets" within the meaning of ERISA or the regulations promulgated thereunder.

3.7 OFAC/Anti-Money Laundering

Buyer is not, and none of its affiliates, officers, directors, or trustees is, a person or entity (a) whose name appears on the list of Specially Designated Nationals and blocked Persons published by the Office of Foreign Assets Control of the United States Department of the Treasury ("OFAC"), the list of persons identified under Section 1 of Executive Order 13224, or any other list of persons or entities with whom transactions are prohibited or restricted under any order, regulation, or rule administered by OFAC, the Financial Crimes Enforcement Network ("FinCEN"), or any other governmental authority; (b) who is a citizen or resident of, or located in, a country that is the subject of comprehensive sanctions maintained by the United States; or (c) who is otherwise prohibited from participating in the transactions contemplated by the Agreement under the International Emergency Economic Powers Act, the Trading with the Enemy Act, the USA PATRIOT Act of 2001, or any other applicable anti-terrorism or anti-money laundering statute, regulation, executive order, or governmental guidance. Buyer has established and maintains an anti-money laundering compliance program in compliance with applicable provisions of the Bank Secrecy Act, as amended by the USA PATRIOT Act, and the regulations promulgated thereunder.

3.8 No Bankruptcy

No petition in bankruptcy (whether voluntary or involuntary), assignment for the benefit of creditors, or petition seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future federal, state, or other law or regulation relating to bankruptcy, insolvency, or other relief for debtors has been filed by or against Buyer, and no such filing is contemplated by Buyer or, to the knowledge of Buyer, threatened against Buyer. Buyer has not made an assignment for the benefit of creditors, admitted in writing its inability to pay its debts generally as they become due, or been adjudicated a bankrupt. Buyer is not insolvent and the consummation of the transactions contemplated by the Agreement will not render Buyer insolvent. No receiver, trustee, custodian, or similar fiduciary has been appointed for Buyer or for any substantial part of its assets, and no such appointment is pending or, to the knowledge of Buyer, threatened.

3.9 REIT Status

Buyer has elected to be taxed as a real estate investment trust ("REIT") under Sections 856 through 860 of the Code, commencing with its taxable year ended December 31, 2003, and has satisfied all requirements for qualification as a REIT for each taxable year since such initial election. Buyer has not revoked, and does not intend to revoke, such REIT election. To the knowledge of Buyer, no event or circumstance has occurred or exists that would cause Buyer to fail to qualify as a REIT for its current taxable year or any subsequent taxable year. The acquisition of the Interests and the consummation of the transactions contemplated by the Agreement will not cause Buyer to fail to qualify as a REIT under the Code.

3.10 Replacement Guarantor Covenants

As of the Closing Date, Buyer satisfies each of the replacement guarantor financial covenants required under the lender consent agreements obtained from Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company (collectively, the "Lender Consent Agreements") in connection with the assumption of the existing mortgage indebtedness encumbering the properties owned by the Target Entities, including, without limitation:

(a) Minimum Tangible Net Worth. Buyer has a tangible net worth (calculated in accordance with generally accepted accounting principles consistently applied, as defined in the Lender Consent Agreements) of not less than Five Hundred Million Dollars ($500,000,000) as of the Closing Date; and

(b) Minimum Liquid Assets. Buyer has liquid assets (consisting of unrestricted cash and cash equivalents, as defined in the Lender Consent Agreements) of not less than Fifty Million Dollars ($50,000,000) as of the Closing Date.

Buyer covenants and agrees that it shall maintain compliance with such replacement guarantor financial covenants for the duration of the applicable loan terms, as set forth in the Replacement Guaranties and the Lender Consent Agreements.

Section 4. Compliance with Covenants

The undersigned hereby certifies, on behalf of Buyer, that Buyer has performed and complied in all material respects with all covenants, agreements, and obligations required by the Agreement to be performed or complied with by Buyer at or prior to the Closing. Without limiting the generality of the foregoing, Buyer has performed and complied with the following covenants and obligations:

(a) Earnest Money Deposits. Buyer has delivered the earnest money deposit in the amount of Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000) on March 1, 2024, and the additional deposit in the amount of Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000) on April 16, 2024, totaling Fifty-Five Million Dollars ($55,000,000) in aggregate, to Commonwealth National Title Insurance Company, as escrow agent, in accordance with the terms of the Agreement and the Escrow Agreement.

(b) Buyer Closing Documents. Buyer has prepared, executed, and delivered to Seller (or to the escrow agent, as applicable) all closing documents required to be delivered by Buyer under the Agreement, including those documents enumerated in Section 9.2 of the Agreement.

(c) Assignments and Assumptions of Membership Interests. Buyer has executed and delivered fourteen (14) separate Assignments and Assumptions of Membership Interests (one for each Target Entity), in the forms attached to the Agreement as Exhibit C, pursuant to which Seller has assigned, transferred, conveyed, and delivered to Buyer, and Buyer has accepted and assumed, one hundred percent (100%) of the membership interests in each of the Target Entities.

(d) Replacement Guaranties. Buyer has executed and delivered the Replacement Guaranties in favor of each of the following lenders in connection with the assumption of the existing mortgage indebtedness:

(i) Pinnacle Federal Bank, N.A. (with respect to the $421,600,000 loan facility);

(ii) Veltrano Capital Lending Corp. (with respect to the $142,300,000 loan facility); and

(iii) Sycamore Life Insurance Company (with respect to the $48,100,000 loan facility).

(e) Assumption Agreements. Buyer has executed and delivered Assumption Agreements for all assumed loan facilities, pursuant to which Buyer has assumed the obligations of the borrowers under each such loan facility (to the extent required under the applicable Lender Consent Agreements) and has agreed to be bound by the terms and conditions thereof.

(f) Indemnity Escrow Agreement. Buyer has executed and delivered the Indemnity Escrow Agreement, dated as of the Closing Date, by and among Buyer, Seller, and Commonwealth National Title Insurance Company, as escrow agent, pursuant to which Sixteen Million Five Hundred Thousand Dollars ($16,500,000) of the Purchase Price has been deposited into the Indemnity Escrow Account to secure Seller's indemnification obligations under the Agreement.

(g) Transition Services Agreement. Buyer has executed and delivered the Transition Services Agreement with Argyle Property Services LLC, an affiliate of Seller, pursuant to which Argyle Property Services LLC will provide property management and transition services for a ninety (90)-day transition period commencing on the Closing Date, at a fee of Three Hundred Seventy-Five Thousand Dollars ($375,000) per month.

(h) Buyer's Share of Transfer Taxes. Buyer has paid or caused to be paid One Million Nine Hundred Twenty-Five Thousand Dollars ($1,925,000), representing Buyer's fifty percent (50%) share of the estimated aggregate transfer taxes of Three Million Eight Hundred Fifty Thousand Dollars ($3,850,000) payable in connection with the transactions contemplated by the Agreement, in accordance with Section 11.4 of the Agreement.

(i) Buyer's Share of Lender Consent Fees. Buyer has paid or caused to be paid Nine Hundred Twelve Thousand Eight Hundred Twelve Dollars and Fifty Cents ($912,812.50), representing Buyer's fifty percent (50%) share of the aggregate lender consent fees of One Million Eight Hundred Twenty-Five Thousand Six Hundred Twenty-Five Dollars ($1,825,625) payable to the lenders in connection with the assumption of the existing mortgage indebtedness, in accordance with Section 11.5 of the Agreement.

(j) Title Insurance Premiums. Buyer has paid or caused to be paid estimated title insurance premiums in the aggregate amount of Two Million Four Hundred Twenty Thousand Dollars ($2,420,000) in connection with the issuance of owner's title insurance policies by Commonwealth National Title Insurance Company for the properties owned by the Target Entities.

(k) Representations and Warranties Insurance Premium. Buyer has paid the representations and warranties insurance premium in the amount of One Million Four Hundred Two Thousand Five Hundred Dollars ($1,402,500) to Sentinel Specialty Insurance Company in connection with the binding of the representations and warranties insurance policy (Policy No. SSI-RW-2024-06187) obtained by Buyer in connection with the transactions contemplated by the Agreement.

(l) Replacement Property and Casualty Insurance. Buyer has bound replacement property and casualty insurance coverage with Ironclad Indemnity Insurance Company, effective as of 12:01 a.m. Eastern Time on the Closing Date, covering all properties owned by the Target Entities, in amounts and with coverage terms that satisfy the requirements of the assumed loan documents and the Lender Consent Agreements.

Section 5. No Material Adverse Effect

The undersigned hereby certifies, on behalf of Buyer, that since the date of the Agreement (February 28, 2024) through and including the Closing Date, no event, change, circumstance, occurrence, condition, development, effect, or state of facts has occurred or arisen that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on Buyer's ability to consummate the transactions contemplated by the Agreement and to perform its obligations thereunder or under any closing document delivered in connection therewith. Without limiting the foregoing, Buyer's financial condition, business operations, creditworthiness, and regulatory standing have not materially and adversely changed since the date of the Agreement.

Section 6. Knowledge Individuals

All representations and warranties of Buyer contained in the Agreement or this Certificate that are qualified by the phrases "knowledge," "to the knowledge of Buyer," "to Buyer's knowledge," or words of similar import are made to the actual knowledge of the following individuals (collectively, the "Knowledge Individuals"), in each case after due and reasonable inquiry of those employees and advisors of Buyer who would reasonably be expected to have information relevant to the applicable representation or warranty:

• Marcus Devereaux, Executive Vice President, Acquisitions

• Leah Torrance, Senior Vice President, Asset Management

• David Elgin Park, General Counsel

For purposes of this Certificate, "actual knowledge" means the conscious awareness of a fact or other matter by the applicable Knowledge Individual, after reasonable inquiry, without any independent investigation or verification beyond such reasonable inquiry. No Knowledge Individual shall have any personal liability with respect to any representation, warranty, or certification made herein.

Section 7. Accuracy of Closing Documents

The undersigned hereby certifies, on behalf of Buyer, that all information provided by Buyer in the closing documents delivered in connection with the Closing, including, without limitation, this Buyer's Closing Certificate, the Secretary's Certificate of Buyer, and all financial statements, certificates, representations, and other information delivered to Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company (and their respective servicers and agents) in connection with the Lender Consent Agreements and the assumption of the existing mortgage indebtedness, is true, correct, and complete in all material respects as of the Closing Date. Buyer has not knowingly omitted to state any material fact necessary to make the statements contained in such closing documents, in light of the circumstances under which they were made, not misleading.

Section 8. Survival

This Certificate and the representations, warranties, certifications, and statements contained herein shall survive the Closing for the periods set forth in Section 12.1 of the Agreement, as follows:

(a) General Representations. The representations and warranties set forth in Section 3 of this Certificate (other than the Tax Representations described in clause (b) below) shall survive the Closing for a period of eighteen (18) months following the Closing Date, expiring at 11:59 p.m. Eastern Time on December 6, 2025.

(b) Tax Representations. The representations and warranties set forth in Section 3.6 (ERISA) and Section 3.9 (REIT Status) of this Certificate (collectively, the "Tax Representations") shall survive the Closing for a period of thirty-six (36) months following the Closing Date, expiring at 11:59 p.m. Eastern Time on June 6, 2027.

No claim may be made or asserted by Seller against Buyer with respect to any representation, warranty, or certification contained in this Certificate after the expiration of the applicable survival period, except to the extent that a claim based upon such representation, warranty, or certification has been asserted in writing prior to the expiration of such survival period, in which case such representation, warranty, or certification shall survive with respect to such timely asserted claim until such claim has been finally resolved.

Section 9. Governing Law

This Certificate shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to any principles of conflicts of law that would cause the application of the laws of any other jurisdiction, consistent with Section 14.8 of the Agreement. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of New York sitting in the County of New York and the United States District Court for the Southern District of New York for the purpose of any suit, action, or proceeding arising out of or relating to this Certificate, and each party irrevocably waives any objection that it may now or hereafter have to the laying of venue of any such suit, action, or proceeding in any such court.

Section 10. Counterparts and Electronic Signatures

This Certificate may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Certificate by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document shall have the same effect as delivery of an originally executed counterpart. The parties agree that electronic signatures, whether digital or encrypted, are intended to authenticate this Certificate and shall have the same force and effect as manual signatures.

IN WITNESS WHEREOF, the undersigned has executed this Buyer's Closing Certificate as of the date first set forth above.

BUYER:

FAIRWATER REAL ESTATE INVESTMENT TRUST, a Maryland real estate investment trust

By: ________

Name: Marcus Devereaux

Title: Executive Vice President, Acquisitions

Date: June 6, 2024

Address for Notices to Buyer:

Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044

Attention: David Elgin Park, General Counsel

Telephone: (443) 555-8200

Email: dpark@fairwaterreit.com

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

Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022

Attention: Douglas Fairchild

Telephone: (212) 555-6400

Email: dfairchild@calderwoodharkness.com

Lender	Assumed Principal Balance
Pinnacle Federal Bank, N.A.	$421,600,000
Veltrano Capital Lending Corp.	$142,300,000
Sycamore Life Insurance Company	$48,100,000
Total Assumed Debt	$612,000,000

BUYER'S CLOSING CERTIFICATE
Delivered pursuant to Section 9.2(d) of that certain Purchase and Sale Agreement, dated as of February 28, 2024
This Buyer's Closing Certificate (this "Certificate") is delivered pursuant to Section 9.2(d) of that certain Purchase and Sale Agreement, dated as of February 28, 2024 (as amended by that certain First Amendment to Purchase and Sale Agreement, dated as of April 12, 2024, and that certain Second Amendment to Purchase and Sale Agreement, dated as of May 28, 2024, collectively, the "Agreement"), by and between Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership ("Seller"), and Fairwater Real Estate Investment Trust, a Maryland real estate investment trust ("Buyer").
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.
Date: June 6, 2024
Section 1. Identification of Certifying Party
The undersigned hereby certifies that the certifying party delivering this Certificate is identified as follows:
Full Legal Name: Fairwater Real Estate Investment Trust
Entity Type: Real Estate Investment Trust organized under the laws of the State of Maryland
Principal Office Address: 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044
NYSE Ticker Symbol: FREIT
Employer Identification Number (EIN): 52-2198437
Role Under the Agreement: Buyer
Certifying Officer: Marcus Devereaux, Executive Vice President, Acquisitions, duly authorized to execute this Certificate on behalf of Buyer pursuant to resolutions adopted by the Board of Trustees of Fairwater Real Estate Investment Trust on February 26, 2024, as further confirmed by the Secretary's Certificate delivered concurrently herewith.
The undersigned, Marcus Devereaux, in his capacity as Executive Vice President, Acquisitions of Buyer, hereby delivers this Certificate to Seller as a condition to Seller's obligation to close the transactions contemplated by the Agreement.
Section 2. Reference to Agreement and Transaction
The Agreement provides for Buyer's acquisition of one hundred percent (100%) of the membership interests (the "Interests") in each of the following fourteen (14) entities (each, a "Target Entity" and collectively, the "Target Entities"), each of which is a Delaware limited liability company:
1.  GMP Fairfield I LLC
2.  GMP Fairfield II LLC
3.  GMP Westlake LLC
4.  GMP Katy LLC
5.  GMP Alliance LLC
6.  GMP Lakeland LLC
7.  GMP Southport LLC
8.  GMP Murfreesboro LLC
9.  GMP Buckhead LLC
10.  GMP SouthPark LLC
11.  GMP Cool Springs LLC
12.  GMP Brickell LLC
13.  GMP Peachtree LLC
14.  GMP Mount Juliet LLC
Each Target Entity is the direct or indirect owner of one or more multifamily residential real property assets located across the Southeastern United States, as more particularly described in the Agreement and the exhibits and schedules attached thereto.
The aggregate purchase price for the Interests is One Billion One Hundred Million Dollars ($1,100,000,000) (the "Purchase Price"), subject to the PCA Repair Credit in the amount of One Million Seventy Thousand Dollars ($1,070,000) and prorations as set forth in the Agreement.
The Purchase Price is being paid through a combination of the assumption of existing mortgage indebtedness and cash equity as follows:
(a) Assumed Mortgage Debt. Buyer is assuming aggregate mortgage indebtedness of Six Hundred Twelve Million Dollars ($612,000,000) encumbering the properties owned by the Target Entities, consisting of the following loan facilities:
(b) Cash Equity at Closing. Buyer is paying cash equity at Closing of approximately Four Hundred Eighty-Eight Million Dollars ($488,000,000), as adjusted for the PCA Repair Credit and prorations calculated in accordance with the provisions of the Agreement.
The closing of the transactions contemplated by the Agreement (the "Closing") is occurring on June 6, 2024 (the "Closing Date").
This Certificate is delivered as a condition to Seller's obligation to close under the Agreement, as expressly required by Section 9.2(d) thereof. The delivery of this Certificate by Buyer to Seller on the Closing Date constitutes the satisfaction of such condition.
Section 3. Bring-Down of Representations and Warranties
The undersigned hereby certifies, on behalf of Buyer, that each of the representations and warranties of Buyer set forth in the Agreement (including, without limitation, those contained in Article V thereof) is true, correct, and complete in all material respects as of the date hereof (the Closing Date), with the same force and effect as if made on and as of the Closing Date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true, correct, and complete in all material respects as of such earlier date. Without limiting the generality of the foregoing, the undersigned specifically confirms the truth, correctness, and completeness in all material respects of the following representations and warranties:
3.1 Organization and Authority
Buyer is a real estate investment trust duly organized, validly existing, and in good standing under the laws of the State of Maryland. Buyer has all requisite power and authority under its declaration of trust, bylaws, and applicable law to (a) own, lease, and operate its properties and conduct its business as currently conducted, (b) execute, deliver, and perform its obligations under the Agreement and all closing documents to be executed and delivered by Buyer in connection with the transactions contemplated thereby, and (c) consummate the transactions contemplated by the Agreement. Buyer is duly qualified to transact business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on Buyer's ability to consummate the transactions contemplated by the Agreement.
3.2 Authorization; Binding Obligation
The execution, delivery, and performance of the Agreement and all documents and instruments to be executed and delivered by Buyer in connection with the transactions contemplated thereby have been duly authorized by all necessary action on the part of Buyer, including, without limitation, approval by the Board of Trustees of Fairwater Real Estate Investment Trust at a duly convened meeting held on February 26, 2024, at which a quorum was present and acting throughout, and no further action or approval on the part of Buyer, its Board of Trustees, its shareholders, or any other person or entity is necessary for the valid execution, delivery, and performance by Buyer of the Agreement and all related closing documents. The Agreement and all closing documents executed and delivered by Buyer in connection with the transactions contemplated thereby constitute the legal, valid, and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws of general applicability relating to or affecting creditors' rights generally and to general equitable principles (whether considered in a proceeding in equity or at law).
3.3 No Conflicts; Consents
Neither the execution and delivery of the Agreement nor the consummation of the transactions contemplated thereby will:
(a) violate or conflict with the declaration of trust, bylaws, or other organizational documents of Buyer;
(b) violate any applicable law, statute, rule, regulation, ordinance, order, judgment, writ, injunction, or decree of any federal, state, local, or foreign governmental authority applicable to Buyer or any of its properties or assets; or
(c) result in a breach of, constitute a default (with or without notice or lapse of time, or both) under, give rise to a right of termination, cancellation, or acceleration under, or require any consent, approval, waiver, or notice under, any material contract, agreement, instrument, license, permit, mortgage, indenture, note, bond, or other obligation to which Buyer is a party or by which any of its properties or assets may be bound,
except, in the case of clause (c), for consents that have been obtained and delivered to Seller as of or prior to the Closing Date. All governmental and regulatory approvals, consents, filings, registrations, and notices, if any, required in connection with Buyer's execution and delivery of the Agreement and the consummation by Buyer of the transactions contemplated thereby have been duly obtained, made, or given, as applicable, or are not required under applicable law.
3.4 Financial Capacity
Buyer has, or has access to, sufficient immediately available funds (including, without limitation, through its $750,000,000 unsecured revolving credit facility with Aldgate National Bank, N.A., as administrative agent, pursuant to that certain Amended and Restated Credit Agreement dated as of September 15, 2023, as amended) to consummate the transactions contemplated by the Agreement, including, without limitation, the payment of the cash equity consideration of approximately Four Hundred Eighty-Eight Million Dollars ($488,000,000) (as adjusted for the PCA Repair Credit and prorations), and to pay all costs, fees, expenses, and other amounts required to be paid by Buyer at or prior to the Closing. Buyer's obligations under the Agreement are not subject to any financing contingency, and the availability of financing is not a condition to Buyer's obligation to consummate the transactions contemplated by the Agreement.
3.5 Litigation.  There is no action, suit, proceeding, arbitration, investigation, inquiry, or claim pending or, to the knowledge of Buyer (as defined in Section 6 hereof), threatened in writing against or affecting Buyer before any court, arbitrator, governmental authority, or administrative body that (a) would materially impair or delay Buyer's ability to consummate the transactions contemplated by the Agreement, (b) challenges or seeks to enjoin, restrain, or prohibit the consummation of any of the transactions contemplated by the Agreement, or (c) would, if adversely determined, reasonably be expected to have a material adverse effect on Buyer's ability to perform its obligations under the Agreement or any closing document.
3.6 ERISA.  Buyer is not, and will not be, acquiring the membership interests in the Target Entities with the assets of any "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any "plan" as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), or with the assets of any entity that is deemed to hold the assets of any such plan pursuant to 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA. No portion of the funds used by Buyer to pay the Purchase Price or any other amounts due under the Agreement constitutes or will constitute "plan assets" within the meaning of ERISA or the regulations promulgated thereunder.
3.7 OFAC/Anti-Money Laundering
Buyer is not, and none of its affiliates, officers, directors, or trustees is, a person or entity (a) whose name appears on the list of Specially Designated Nationals and blocked Persons published by the Office of Foreign Assets Control of the United States Department of the Treasury ("OFAC"), the list of persons identified under Section 1 of Executive Order 13224, or any other list of persons or entities with whom transactions are prohibited or restricted under any order, regulation, or rule administered by OFAC, the Financial Crimes Enforcement Network ("FinCEN"), or any other governmental authority; (b) who is a citizen or resident of, or located in, a country that is the subject of comprehensive sanctions maintained by the United States; or (c) who is otherwise prohibited from participating in the transactions contemplated by the Agreement under the International Emergency Economic Powers Act, the Trading with the Enemy Act, the USA PATRIOT Act of 2001, or any other applicable anti-terrorism or anti-money laundering statute, regulation, executive order, or governmental guidance. Buyer has established and maintains an anti-money laundering compliance program in compliance with applicable provisions of the Bank Secrecy Act, as amended by the USA PATRIOT Act, and the regulations promulgated thereunder.
3.8 No Bankruptcy
No petition in bankruptcy (whether voluntary or involuntary), assignment for the benefit of creditors, or petition seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future federal, state, or other law or regulation relating to bankruptcy, insolvency, or other relief for debtors has been filed by or against Buyer, and no such filing is contemplated by Buyer or, to the knowledge of Buyer, threatened against Buyer. Buyer has not made an assignment for the benefit of creditors, admitted in writing its inability to pay its debts generally as they become due, or been adjudicated a bankrupt. Buyer is not insolvent and the consummation of the transactions contemplated by the Agreement will not render Buyer insolvent. No receiver, trustee, custodian, or similar fiduciary has been appointed for Buyer or for any substantial part of its assets, and no such appointment is pending or, to the knowledge of Buyer, threatened.
3.9 REIT Status
Buyer has elected to be taxed as a real estate investment trust ("REIT") under Sections 856 through 860 of the Code, commencing with its taxable year ended December 31, 2003, and has satisfied all requirements for qualification as a REIT for each taxable year since such initial election. Buyer has not revoked, and does not intend to revoke, such REIT election. To the knowledge of Buyer, no event or circumstance has occurred or exists that would cause Buyer to fail to qualify as a REIT for its current taxable year or any subsequent taxable year. The acquisition of the Interests and the consummation of the transactions contemplated by the Agreement will not cause Buyer to fail to qualify as a REIT under the Code.
3.10 Replacement Guarantor Covenants
As of the Closing Date, Buyer satisfies each of the replacement guarantor financial covenants required under the lender consent agreements obtained from Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company (collectively, the "Lender Consent Agreements") in connection with the assumption of the existing mortgage indebtedness encumbering the properties owned by the Target Entities, including, without limitation:
(a) Minimum Tangible Net Worth. Buyer has a tangible net worth (calculated in accordance with generally accepted accounting principles consistently applied, as defined in the Lender Consent Agreements) of not less than Five Hundred Million Dollars ($500,000,000) as of the Closing Date; and
(b) Minimum Liquid Assets. Buyer has liquid assets (consisting of unrestricted cash and cash equivalents, as defined in the Lender Consent Agreements) of not less than Fifty Million Dollars ($50,000,000) as of the Closing Date.
Buyer covenants and agrees that it shall maintain compliance with such replacement guarantor financial covenants for the duration of the applicable loan terms, as set forth in the Replacement Guaranties and the Lender Consent Agreements.
Section 4. Compliance with Covenants
The undersigned hereby certifies, on behalf of Buyer, that Buyer has performed and complied in all material respects with all covenants, agreements, and obligations required by the Agreement to be performed or complied with by Buyer at or prior to the Closing. Without limiting the generality of the foregoing, Buyer has performed and complied with the following covenants and obligations:
(a) Earnest Money Deposits. Buyer has delivered the earnest money deposit in the amount of Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000) on March 1, 2024, and the additional deposit in the amount of Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000) on April 16, 2024, totaling Fifty-Five Million Dollars ($55,000,000) in aggregate, to Commonwealth National Title Insurance Company, as escrow agent, in accordance with the terms of the Agreement and the Escrow Agreement.
(b) Buyer Closing Documents. Buyer has prepared, executed, and delivered to Seller (or to the escrow agent, as applicable) all closing documents required to be delivered by Buyer under the Agreement, including those documents enumerated in Section 9.2 of the Agreement.
(c) Assignments and Assumptions of Membership Interests. Buyer has executed and delivered fourteen (14) separate Assignments and Assumptions of Membership Interests (one for each Target Entity), in the forms attached to the Agreement as Exhibit C, pursuant to which Seller has assigned, transferred, conveyed, and delivered to Buyer, and Buyer has accepted and assumed, one hundred percent (100%) of the membership interests in each of the Target Entities.
(d) Replacement Guaranties. Buyer has executed and delivered the Replacement Guaranties in favor of each of the following lenders in connection with the assumption of the existing mortgage indebtedness:
(i) Pinnacle Federal Bank, N.A. (with respect to the $421,600,000 loan facility);
(ii) Veltrano Capital Lending Corp. (with respect to the $142,300,000 loan facility); and
(iii) Sycamore Life Insurance Company (with respect to the $48,100,000 loan facility).
(e) Assumption Agreements. Buyer has executed and delivered Assumption Agreements for all assumed loan facilities, pursuant to which Buyer has assumed the obligations of the borrowers under each such loan facility (to the extent required under the applicable Lender Consent Agreements) and has agreed to be bound by the terms and conditions thereof.
(f) Indemnity Escrow Agreement. Buyer has executed and delivered the Indemnity Escrow Agreement, dated as of the Closing Date, by and among Buyer, Seller, and Commonwealth National Title Insurance Company, as escrow agent, pursuant to which Sixteen Million Five Hundred Thousand Dollars ($16,500,000) of the Purchase Price has been deposited into the Indemnity Escrow Account to secure Seller's indemnification obligations under the Agreement.
(g) Transition Services Agreement. Buyer has executed and delivered the Transition Services Agreement with Argyle Property Services LLC, an affiliate of Seller, pursuant to which Argyle Property Services LLC will provide property management and transition services for a ninety (90)-day transition period commencing on the Closing Date, at a fee of Three Hundred Seventy-Five Thousand Dollars ($375,000) per month.
(h) Buyer's Share of Transfer Taxes. Buyer has paid or caused to be paid One Million Nine Hundred Twenty-Five Thousand Dollars ($1,925,000), representing Buyer's fifty percent (50%) share of the estimated aggregate transfer taxes of Three Million Eight Hundred Fifty Thousand Dollars ($3,850,000) payable in connection with the transactions contemplated by the Agreement, in accordance with Section 11.4 of the Agreement.
(i) Buyer's Share of Lender Consent Fees. Buyer has paid or caused to be paid Nine Hundred Twelve Thousand Eight Hundred Twelve Dollars and Fifty Cents ($912,812.50), representing Buyer's fifty percent (50%) share of the aggregate lender consent fees of One Million Eight Hundred Twenty-Five Thousand Six Hundred Twenty-Five Dollars ($1,825,625) payable to the lenders in connection with the assumption of the existing mortgage indebtedness, in accordance with Section 11.5 of the Agreement.
(j) Title Insurance Premiums. Buyer has paid or caused to be paid estimated title insurance premiums in the aggregate amount of Two Million Four Hundred Twenty Thousand Dollars ($2,420,000) in connection with the issuance of owner's title insurance policies by Commonwealth National Title Insurance Company for the properties owned by the Target Entities.
(k) Representations and Warranties Insurance Premium. Buyer has paid the representations and warranties insurance premium in the amount of One Million Four Hundred Two Thousand Five Hundred Dollars ($1,402,500) to Sentinel Specialty Insurance Company in connection with the binding of the representations and warranties insurance policy (Policy No. SSI-RW-2024-06187) obtained by Buyer in connection with the transactions contemplated by the Agreement.
(l) Replacement Property and Casualty Insurance. Buyer has bound replacement property and casualty insurance coverage with Ironclad Indemnity Insurance Company, effective as of 12:01 a.m. Eastern Time on the Closing Date, covering all properties owned by the Target Entities, in amounts and with coverage terms that satisfy the requirements of the assumed loan documents and the Lender Consent Agreements.
Section 5. No Material Adverse Effect
The undersigned hereby certifies, on behalf of Buyer, that since the date of the Agreement (February 28, 2024) through and including the Closing Date, no event, change, circumstance, occurrence, condition, development, effect, or state of facts has occurred or arisen that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on Buyer's ability to consummate the transactions contemplated by the Agreement and to perform its obligations thereunder or under any closing document delivered in connection therewith. Without limiting the foregoing, Buyer's financial condition, business operations, creditworthiness, and regulatory standing have not materially and adversely changed since the date of the Agreement.
Section 6. Knowledge Individuals
All representations and warranties of Buyer contained in the Agreement or this Certificate that are qualified by the phrases "knowledge," "to the knowledge of Buyer," "to Buyer's knowledge," or words of similar import are made to the actual knowledge of the following individuals (collectively, the "Knowledge Individuals"), in each case after due and reasonable inquiry of those employees and advisors of Buyer who would reasonably be expected to have information relevant to the applicable representation or warranty:
•  Marcus Devereaux, Executive Vice President, Acquisitions
•  Leah Torrance, Senior Vice President, Asset Management
•  David Elgin Park, General Counsel
For purposes of this Certificate, "actual knowledge" means the conscious awareness of a fact or other matter by the applicable Knowledge Individual, after reasonable inquiry, without any independent investigation or verification beyond such reasonable inquiry. No Knowledge Individual shall have any personal liability with respect to any representation, warranty, or certification made herein.
Section 7. Accuracy of Closing Documents
The undersigned hereby certifies, on behalf of Buyer, that all information provided by Buyer in the closing documents delivered in connection with the Closing, including, without limitation, this Buyer's Closing Certificate, the Secretary's Certificate of Buyer, and all financial statements, certificates, representations, and other information delivered to Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company (and their respective servicers and agents) in connection with the Lender Consent Agreements and the assumption of the existing mortgage indebtedness, is true, correct, and complete in all material respects as of the Closing Date. Buyer has not knowingly omitted to state any material fact necessary to make the statements contained in such closing documents, in light of the circumstances under which they were made, not misleading.
Section 8. Survival
This Certificate and the representations, warranties, certifications, and statements contained herein shall survive the Closing for the periods set forth in Section 12.1 of the Agreement, as follows:
(a) General Representations. The representations and warranties set forth in Section 3 of this Certificate (other than the Tax Representations described in clause (b) below) shall survive the Closing for a period of eighteen (18) months following the Closing Date, expiring at 11:59 p.m. Eastern Time on December 6, 2025.
(b) Tax Representations. The representations and warranties set forth in Section 3.6 (ERISA) and Section 3.9 (REIT Status) of this Certificate (collectively, the "Tax Representations") shall survive the Closing for a period of thirty-six (36) months following the Closing Date, expiring at 11:59 p.m. Eastern Time on June 6, 2027.
No claim may be made or asserted by Seller against Buyer with respect to any representation, warranty, or certification contained in this Certificate after the expiration of the applicable survival period, except to the extent that a claim based upon such representation, warranty, or certification has been asserted in writing prior to the expiration of such survival period, in which case such representation, warranty, or certification shall survive with respect to such timely asserted claim until such claim has been finally resolved.
Section 9. Governing Law
This Certificate shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to any principles of conflicts of law that would cause the application of the laws of any other jurisdiction, consistent with Section 14.8 of the Agreement. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of New York sitting in the County of New York and the United States District Court for the Southern District of New York for the purpose of any suit, action, or proceeding arising out of or relating to this Certificate, and each party irrevocably waives any objection that it may now or hereafter have to the laying of venue of any such suit, action, or proceeding in any such court.
Section 10. Counterparts and Electronic Signatures
This Certificate may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Certificate by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document shall have the same effect as delivery of an originally executed counterpart. The parties agree that electronic signatures, whether digital or encrypted, are intended to authenticate this Certificate and shall have the same force and effect as manual signatures.
IN WITNESS WHEREOF, the undersigned has executed this Buyer's Closing Certificate as of the date first set forth above.
BUYER:
FAIRWATER REAL ESTATE INVESTMENT TRUST, a Maryland real estate investment trust
By: ________
Name: Marcus Devereaux
Title: Executive Vice President, Acquisitions
Date: June 6, 2024
Address for Notices to Buyer:
Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044
Attention: David Elgin Park, General Counsel
Telephone: (443) 555-8200
Email: dpark@fairwaterreit.com
With a copy to (which shall not constitute notice):
Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022
Attention: Douglas Fairchild
Telephone: (212) 555-6400
Email: dfairchild@calderwoodharkness.com
Lender | Assumed Principal Balance
Pinnacle Federal Bank, N.A. | $421,600,000
Veltrano Capital Lending Corp. | $142,300,000
Sycamore Life Insurance Company | $48,100,000
Total Assumed Debt | $612,000,000

BUYER'S CLOSING CERTIFICATE

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