SECRETARY'S CERTIFICATE OF FAIRWATER REAL ESTATE INVESTMENT TRUST
Delivered in connection with the Purchase and Sale Agreement dated as of February 28, 2024 (as amended by the First Amendment dated April 12, 2024, and the Second Amendment dated May 28, 2024), by and between Greystone Meridian Partners Fund III, L.P. ("Seller") and Fairwater Real Estate Investment Trust ("Buyer")
Dated: June 6, 2024
The undersigned, David Elgin Park, hereby certifies that he is the duly appointed General Counsel and Secretary of Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (hereinafter referred to as "Fairwater" or the "Trust"), with its principal office located at 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044. The Trust's shares of beneficial interest are listed and traded on the New York Stock Exchange under the ticker symbol "FREIT." The Trust's Employer Identification Number is 52-2198437.
This Secretary's Certificate (this "Certificate") is delivered pursuant to Section 8.2(d) of the Purchase and Sale Agreement dated as of February 28, 2024 (as defined below, the "PSA"), 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"), as amended by (i) the First Amendment to Purchase and Sale Agreement dated as of April 12, 2024, and (ii) the Second Amendment to Purchase and Sale Agreement dated as of May 28, 2024 (the PSA, together with such amendments, collectively, the "Agreement"). The Agreement provides for the acquisition by Buyer of one hundred percent (100%) of the membership interests in each of the fourteen (14) property-owning Delaware limited liability companies identified on Exhibit A attached hereto (collectively, the "Target Entities"), for an aggregate purchase price of One Billion One Hundred Million Dollars ($1,100,000,000), subject to adjustment as provided in the Agreement (the "Purchase Price"), and the assumption of certain outstanding mortgage indebtedness encumbering the real properties owned by the Target Entities, together with all related transactions contemplated by the Agreement and the ancillary documents delivered in connection therewith (collectively, the "Transaction").
All capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
In my capacity as General Counsel and Secretary of the Trust, and not in my individual capacity, I hereby certify to Seller as follows:
1. Organization and Good Standing. Fairwater Real Estate Investment Trust is a real estate investment trust duly organized, validly existing, and in good standing under the laws of the State of Maryland. The Trust's Declaration of Trust was originally filed with the State Department of Assessments and Taxation of Maryland on June 19, 2003, and, as amended from time to time, remains in full force and effect as of the date hereof. The Trust has not been dissolved, and no proceedings have been instituted or are pending for the dissolution, liquidation, or winding up of the Trust.
The Trust has all requisite trust power and authority under the Declaration of Trust, the Bylaws (as defined below), and applicable law to enter into, execute, deliver, and perform its obligations under the Agreement and all ancillary documents to which it is or will be a party in connection with the Transaction, including, without limitation:
(a) each of the fourteen (14) Assignments and Assumptions of Membership Interests, pursuant to which Seller shall assign, and Buyer shall acquire and assume, one hundred percent (100%) of the membership interests in each of the Target Entities;
(b) the Replacement Carve-Out Guaranties to be executed and delivered by the Trust in favor of each of Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company, in connection with the assumption of the outstanding mortgage indebtedness;
(c) the Assumption Agreements to be executed and delivered by the Trust or its designees in connection with the assumption of the existing loan facilities with Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company;
(d) the Escrow Agreement for the Indemnity Escrow, to be entered into by and among Buyer, Seller, and Commonwealth National Title Insurance Company, as escrow agent; and
(e) the Transition Services Agreement, to be entered into by and between Buyer and Seller in connection with the post-closing transition of property management, accounting, and related services for the properties owned by the Target Entities.
2. Board of Trustees Resolutions — Authorization. At a duly called and convened meeting of the Board of Trustees of Fairwater Real Estate Investment Trust held on February 22, 2024 (the "Board Meeting"), at which a quorum of the members of the Board of Trustees was present and acting throughout the duration of the meeting in accordance with the Declaration of Trust and the Bylaws, the Board of Trustees duly adopted the resolutions attached hereto as Exhibit B (the "Resolutions"). Due notice of the Board Meeting was given to all Trustees in accordance with the Declaration of Trust, the Bylaws, and applicable Maryland law, and the Board Meeting was conducted in compliance with all applicable requirements.
The Resolutions authorized, among other things, the following actions by and on behalf of the Trust:
(a) The acquisition by the Trust of one hundred percent (100%) of the membership interests in each of the fourteen (14) Target Entities from Greystone Meridian Partners Fund III, L.P., for an aggregate purchase price of One Billion One Hundred Million Dollars ($1,100,000,000), subject to the proration and adjustment mechanisms set forth in the Agreement, including, without limitation, adjustments for prorated rents, operating expenses, real estate taxes, utility charges, and other items customarily prorated in transactions of this nature.
(b) The assumption by the Trust and/or its designees of approximately Six Hundred Twelve Million Dollars ($612,000,000) in aggregate outstanding mortgage indebtedness encumbering the real properties owned by the Target Entities, comprising:
(i) Four Hundred Twenty-One Million Six Hundred Thousand Dollars ($421,600,000) in aggregate outstanding principal balance under the Master Loan Agreement dated September 15, 2020, by and among certain of the Target Entities, as borrowers, and Pinnacle Federal Bank, N.A., as lender, evidenced by Promissory Notes designated as Loans 1-A, 1-B, 1-C, 1-D, 1-E, 1-F, 1-G, and 1-H;
(ii) One Hundred Forty-Two Million Three Hundred Thousand Dollars ($142,300,000) in aggregate outstanding principal balance under the Loan Agreement dated February 1, 2021, by and among certain of the Target Entities, as borrowers, and Veltrano Capital Lending Corp., as lender, evidenced by Promissory Notes designated as Loans 2-A, 2-B, 2-C, and 2-D; and
(iii) Forty-Eight Million One Hundred Thousand Dollars ($48,100,000) in aggregate outstanding principal balance under the Note Purchase Agreement dated November 22, 2019, by and among certain of the Target Entities, as issuers, and Sycamore Life Insurance Company, as noteholder, evidenced by Promissory Notes designated as Loans 3-A and 3-B.
(c) The payment by the Trust of cash equity at the Closing in the approximate amount of Four Hundred Eighty-Eight Million Dollars ($488,000,000) (representing the difference between the Purchase Price and the aggregate assumed indebtedness, subject to proration adjustments and credits), to be funded from a combination of the Trust's available cash on hand and a draw on its Seven Hundred Fifty Million Dollar ($750,000,000) unsecured revolving credit facility (the "Revolver") with Aldgate National Bank, N.A., as administrative agent, pursuant to the Amended and Restated Credit Agreement dated as of August 14, 2022 (as amended, the "Credit Agreement").
(d) The execution, delivery, and performance by the Trust of the PSA and all exhibits, schedules, amendments, and ancillary documents contemplated thereby or delivered in connection therewith, including, without limitation, all closing certificates, affidavits, notices, consents, estoppels, and other instruments required or contemplated under the Agreement.
(e) The execution and delivery by the Trust of Replacement Carve-Out Guaranties in favor of each of Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company, replacing the existing carve-out guaranties delivered by Seller or its affiliates, which Replacement Carve-Out Guaranties shall include, among other covenants, financial covenants requiring the Trust to maintain (1) a minimum tangible net worth of not less than Five Hundred Million Dollars ($500,000,000) and (2) minimum liquid assets of not less than Fifty Million Dollars ($50,000,000), in each case calculated in accordance with generally accepted accounting principles, consistently applied.
(f) The execution and delivery by the Trust and/or its designees of loan assumption agreements with respect to each of the three lender facilities described in clause (b) above, together with such other documents and instruments as may be required by the applicable lenders in connection with the consent to and effectuation of such loan assumptions.
(g) The deposit by the Trust of (1) Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000) as the Earnest Money Deposit, and (2) Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000) as the Additional Deposit (together, an aggregate of Fifty-Five Million Dollars ($55,000,000)) with Commonwealth National Title Insurance Company, as escrow agent, pursuant to the terms of the Agreement and the escrow instructions delivered in connection therewith.
(h) The funding by the Trust at Closing of an indemnity escrow in the amount of Sixteen Million Five Hundred Thousand Dollars ($16,500,000) (representing 1.5% of the Purchase Price) with Commonwealth National Title Insurance Company, as escrow agent, pursuant to the terms of the Indemnity Escrow Agreement, to secure Buyer's indemnification obligations under Article 11 of the Agreement.
(i) The procurement by the Trust of a buyer-side representations and warranties insurance policy (the "R&W Policy") from Sentinel Specialty Insurance Company, with a policy limit of Fifty-Five Million Dollars ($55,000,000), a retention (self-insured amount) of Eleven Million Dollars ($11,000,000), and a one-time premium of One Million Four Hundred Two Thousand Five Hundred Dollars ($1,402,500), together with applicable taxes, surplus lines fees, and broker commissions, such R&W Policy to be bound prior to or concurrently with the Closing.
(j) The payment by the Trust of its allocable share of all Transaction-related costs and expenses, including, without limitation: (1) consent fees payable to the applicable lenders in the aggregate amount of Nine Hundred Twelve Thousand Eight Hundred Twelve Dollars and Fifty Cents ($912,812.50); (2) transfer taxes in the estimated aggregate amount of One Million Nine Hundred Twenty-Five Thousand Dollars ($1,925,000); (3) title insurance premiums in the estimated aggregate amount of Two Million Four Hundred Twenty Thousand Dollars ($2,420,000); (4) survey costs in the estimated aggregate amount of One Hundred Ninety-Six Thousand Dollars ($196,000); and (5) all other closing costs, recording fees, due diligence expenses, legal fees, and other costs and expenses incurred by or on behalf of the Trust in connection with the Transaction, in each case as allocated between Buyer and Seller in accordance with the terms of the Agreement.
(k) The authorization of any officer of the Trust, including, without limitation, Jonathan R. Whitmore, Chief Executive Officer, Patricia Sung-Calloway, Chief Financial Officer, Marcus Devereaux, Executive Vice President of Acquisitions, David Elgin Park, General Counsel and Secretary, and such other officers, employees, or agents as any of the foregoing may designate from time to time in writing, to execute and deliver, in the name and on behalf of the Trust, any and all documents, instruments, agreements, certificates, and other writings, and to take any and all actions, as such officer or authorized person may deem necessary, advisable, or appropriate in order to carry out the intent and purposes of the Resolutions and to consummate the Transaction and all related transactions contemplated by the Agreement.
The Resolutions have not been amended, modified, rescinded, or revoked in whole or in part and remain in full force and effect as of the date hereof. No other or further resolutions have been adopted by the Board of Trustees, or any committee thereof, that would modify, supersede, or otherwise affect the Resolutions or the authority granted thereby.
3. No Further Approvals Required. No further approval, consent, authorization, or other action by the Board of Trustees, any committee thereof (including, without limitation, the Executive Committee, the Audit Committee, or the Investment Committee of the Board of Trustees), or any holder of beneficial interests in the Trust is required in connection with the execution, delivery, and performance by the Trust of the Agreement, the ancillary documents, or any other instrument or agreement contemplated thereby, or the consummation of the Transaction and the other transactions contemplated by the Agreement. Without limiting the foregoing, the Transaction does not constitute a merger, consolidation, statutory share exchange, or transfer of substantially all of the assets of the Trust requiring the approval of holders of beneficial interests under the Declaration of Trust or the Maryland REIT Law.
4. Bylaws. Attached hereto as Exhibit C is a true, correct, and complete copy of the Amended and Restated Bylaws of Fairwater Real Estate Investment Trust (the "Bylaws"), as currently in effect. The Bylaws have not been further amended, modified, supplemented, or restated since the date of the Resolutions (February 22, 2024), and no action has been taken by the Board of Trustees or any committee thereof to amend, modify, supplement, or restate the Bylaws.
5. Incumbency of Authorized Signatories. The following persons are, as of the date hereof, the duly elected or appointed officers of Fairwater Real Estate Investment Trust, holding the respective offices set forth opposite their names below, and the signatures set forth opposite their respective names are their true and genuine signatures. Each such person is authorized to execute and deliver documents, instruments, and agreements on behalf of the Trust in connection with the Transaction and the other transactions contemplated by the Agreement:
Each of the foregoing officers has been duly elected or appointed and qualified in accordance with the Declaration of Trust and the Bylaws, and each continues to serve in the capacity set forth above as of the date of this Certificate.
6. Knowledge Individuals. For purposes of the Agreement, including, without limitation, any representations, warranties, covenants, or agreements of Buyer that are qualified by the phrase "to Buyer's knowledge" or words of similar import, the "Buyer's Knowledge Individuals" are the following persons:
(a) Marcus Devereaux, Executive Vice President, Acquisitions;
(b) Leah Torrance, Senior Vice President, Asset Management; and
(c) David Elgin Park, General Counsel and Secretary.
Each of the foregoing individuals is a current officer or employee of the Trust with primary responsibility for the subject matters to which the knowledge qualification pertains.
7. No Conflicts; No Defaults. The execution, delivery, and performance by the Trust of the Agreement and the ancillary documents contemplated thereby, and the consummation of the Transaction and the other transactions contemplated by the Agreement, do not and will not:
(a) violate or conflict with the Declaration of Trust or the Bylaws of the Trust;
(b) violate, contravene, or conflict with any order, judgment, injunction, decree, writ, stipulation, determination, or award entered by or with any governmental authority applicable to or binding upon the Trust or any of its properties or assets; or
(c) to the undersigned's knowledge, after due inquiry, result in a breach of, or constitute a default (or an event that, with the giving of notice or the lapse of time, or both, would constitute a default) under, or give rise to a right of termination, acceleration, or cancellation under, any material agreement, indenture, mortgage, deed of trust, note, or other instrument to which the Trust is a party or by which the Trust or any of its properties or assets is bound, including, without limitation, the Trust's $750,000,000 unsecured revolving credit facility with Aldgate National Bank, N.A., as administrative agent, pursuant to the Amended and Restated Credit Agreement dated as of August 14, 2022, as amended. The Trust has obtained or will obtain prior to the Closing all consents, waivers, and approvals required under the Credit Agreement in connection with the consummation of the Transaction.
8. Representations in PSA. The certifications contained in this Certificate are made in support of Buyer's Closing Certificate delivered simultaneously herewith pursuant to Section 8.2(c) of the Agreement and are intended solely for the benefit of Seller and its successors and assigns, as and to the extent provided in the Agreement. Nothing in this Certificate is intended to, nor shall it be construed to, expand, modify, alter, or otherwise amend the representations and warranties of Buyer set forth in Article 6 of the Agreement or any other provision of the Agreement or the ancillary documents. In the event of any conflict or inconsistency between the terms of this Certificate and the terms of the Agreement, the terms of the Agreement shall control and govern.
EXHIBITS
Exhibit A — List of Target Entities
The following is a complete list of the fourteen (14) property-owning Delaware limited liability companies constituting the Target Entities, together with their respective Employer Identification Numbers:
Each Target Entity is a limited liability company duly formed and validly existing under the laws of the State of Delaware.
Exhibit B — Certified Copy of Resolutions of the Board of Trustees of Fairwater Real Estate Investment Trust, adopted February 22, 2024
[Full text of Resolutions attached hereto, covering all authorizations described in Paragraph 2 of this Certificate.]
Exhibit C — Amended and Restated Bylaws of Fairwater Real Estate Investment Trust
[Complete copy of the Amended and Restated Bylaws, as currently in effect, attached hereto.]
IN WITNESS WHEREOF, the undersigned has executed this Secretary's Certificate as of June 6, 2024.
FAIRWATER REAL ESTATE INVESTMENT TRUST
By: ________
Name: David Elgin Park
Title: General Counsel and Secretary
Address:
7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044
COUNTER-CERTIFICATION
The undersigned, Jonathan R. Whitmore, Chief Executive Officer of Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, hereby confirms that David Elgin Park is the duly appointed General Counsel and Secretary of the Trust, that he holds such office as of the date hereof, and that he is authorized to execute and deliver the foregoing Secretary's Certificate on behalf of the Trust. The undersigned further confirms that the signature of David Elgin Park appearing on the foregoing Secretary's Certificate is his true and genuine signature.
FAIRWATER REAL ESTATE INVESTMENT TRUST
By: ________
Name: Jonathan R. Whitmore
Title: Chief Executive Officer
Date: June 6, 2024
| Name | Title | Signature |
| Jonathan R. Whitmore | Chief Executive Officer | ________ |
| Patricia Sung-Calloway | Chief Financial Officer | ________ |
| Marcus Devereaux | Executive Vice President, Acquisitions | ________ |
| David Elgin Park | General Counsel and Secretary | ________ |
| Camille Oduya | In-House Real Estate Counsel, Assistant Secretary | ________ |
| No. | Entity Name | EIN |
| 1. | GMP Fairfield I LLC | 84-2310561 |
| 2. | GMP Fairfield II LLC | 84-2310578 |
| 3. | GMP Westlake LLC | 84-2415693 |
| 4. | GMP Katy LLC | 84-2415710 |
| 5. | GMP Alliance LLC | 84-2415728 |
| 6. | GMP Lakeland LLC | 84-2527834 |
| 7. | GMP Southport LLC | 84-2527849 |
| 8. | GMP Murfreesboro LLC | 84-2527856 |
| 9. | GMP Buckhead LLC | 84-2639901 |
| 10. | GMP SouthPark LLC | 84-2639918 |
| 11. | GMP Cool Springs LLC | 84-2639925 |
| 12. | GMP Brickell LLC | 84-2639932 |
| 13. | GMP Peachtree LLC | 84-2741063 |
| 14. | GMP Mount Juliet LLC | 84-2741070 |