ASSUMPTION AND ASSUMPTION AGREEMENT
(Veltrano Capital Lending Corp. Loans 2-A through 2-D)
Dated as of June 6, 2024
Reference: Loan Agreement dated February 1, 2021, as amended (the "Loan Agreement"), by and among Veltrano Capital Lending Corp. ("Lender") and the Borrowers identified therein
This ASSUMPTION AND ASSUMPTION AGREEMENT (this "Agreement") is made and entered into as of June 6, 2024 (the "Closing Date"), by and among:
(i) VELTRANO CAPITAL LENDING CORP., a Delaware corporation, with its principal office at 200 South Biscayne Boulevard, Suite 3100, Miami, Florida 33131 ("Lender");
(ii) FAIRWATER REAL ESTATE INVESTMENT TRUST, a Maryland real estate investment trust, with its principal office at 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044 ("Buyer" or "New Owner");
(iii) GREYSTONE MERIDIAN PARTNERS FUND III, L.P., a Delaware limited partnership, with its principal office at 3300 Peachtree Road NE, Suite 2200, Atlanta, Georgia 30326 ("Seller" or "Original Owner"); and
(iv) The Borrowers (as defined below), each acknowledged and agreed to by such Borrowers as set forth on the signature pages hereto.
RECITALS
A. The Loan Agreement. Veltrano Capital Lending Corp., a Delaware corporation ("Lender"), with its principal office at 200 South Biscayne Boulevard, Suite 3100, Miami, Florida 33131, entered into that certain Loan Agreement dated as of February 1, 2021, as amended from time to time (the "Loan Agreement"), with the following borrower entities (each a "Borrower" and collectively the "Borrowers"):
(i) GMP Buckhead LLC, a Delaware limited liability company (EIN 84-2639901) — Loan 2-A — securing the property commonly known as Buckhead Place Office Tower, located at 3380 Peachtree Road NE, Atlanta, Georgia 30326;
(ii) GMP SouthPark LLC, a Delaware limited liability company (EIN 84-2639918) — Loan 2-B — securing the property commonly known as SouthPark Corporate Center, located at 6200 Fairview Road, Charlotte, North Carolina 28210;
(iii) GMP Cool Springs LLC, a Delaware limited liability company (EIN 84-2639925) — Loan 2-C — securing the property commonly known as Cool Springs Office Park, located at 5000 Virginia Way, Brentwood, Tennessee 37027; and
(iv) GMP Brickell LLC, a Delaware limited liability company (EIN 84-2639932) — Loan 2-D — securing the property commonly known as Brickell Bay Office Building, located at 1450 Brickell Avenue, Miami, Florida 33131.
B. Loan Terms. As of February 28, 2024, the aggregate outstanding principal balance of Loans 2-A, 2-B, 2-C, and 2-D under the Loan Agreement (collectively, the "Loans") is One Hundred Forty-Two Million Three Hundred Thousand and No/100 Dollars ($142,300,000). The Loans bear interest at a fixed rate of 4.68% per annum and mature on March 1, 2029. The Loans are secured by, among other things, deeds of trust, mortgages, deeds to secure debt, security agreements, and assignments of leases and rents encumbering each of the four properties identified in Recital A above, together with all other documents, instruments, and agreements executed and delivered in connection with the Loans (collectively, and as more particularly defined in the Loan Agreement, the "Loan Documents"). A complete list of the Loan Documents is set forth on Exhibit A attached hereto and incorporated herein by reference.
C. The Purchase and Sale Agreement. Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership ("Seller" or "Original Owner"), and Fairwater Real Estate Investment Trust, a Maryland real estate investment trust ("Buyer" or "New Owner"), entered into that certain Purchase and Sale Agreement dated as of February 28, 2024, as amended by the First Amendment to Purchase and Sale Agreement dated April 12, 2024, and the Second Amendment to Purchase and Sale Agreement dated May 28, 2024 (as so amended, the "PSA"), pursuant to which Buyer has acquired one hundred percent (100%) of the membership interests in each Borrower, constituting a change of control under the Loan Agreement (the "Transfer"). The Transfer is part of a larger transaction contemplated by the PSA involving the acquisition of a fourteen (14)-property office portfolio for a total purchase price of $1,100,000,000.
D. Existing Guarantor. In connection with the Loan Agreement and the Loans, Greystone Meridian Partners Fund III, L.P. (in such capacity, the "Original Guarantor") previously executed and delivered in favor of Lender that certain Guaranty Agreement dated as of February 1, 2021 (the "Original Guaranty"), providing certain non-recourse carve-out guaranty obligations with respect to the Loans. Victor Lansdell and Elise Rathborne are the Co-Founders and Managing Partners of Greystone Meridian Capital LLC, a Delaware limited liability company, which serves as the general partner of the Original Guarantor.
E. Lender Consent. Lender has consented to the Transfer and the change of control contemplated by the PSA pursuant to that certain Consent Letter dated May 17, 2024, executed by Lender (the "Consent"), a copy of which is attached hereto as Exhibit B. The Consent is subject to, among other conditions, the execution and delivery of this Agreement and the Replacement Guaranty (as defined below), and the satisfaction of the other conditions set forth therein. In connection with the Consent, a consent fee in the amount of Seven Hundred Eleven Thousand Five Hundred and No/100 Dollars ($711,500), representing fifty basis points (0.50%) of the aggregate outstanding principal balance of the Loans of $142,300,000, has been paid to Lender, with such fee borne equally by Buyer ($355,750) and Seller ($355,750). The consent fee paid to Lender is part of total consent fees of $1,825,625 payable across all three lender facilities in connection with the transactions contemplated by the PSA.
F. Replacement Guaranty. Simultaneously with the execution and delivery of this Agreement, Fairwater Real Estate Investment Trust (in such capacity, the "Replacement Guarantor") is executing and delivering in favor of Lender a Replacement Carve-Out Guaranty dated as of the date hereof (the "Replacement Guaranty"), a copy of which is attached hereto as Exhibit C, replacing the Original Guarantor as the non-recourse carve-out guarantor under the Loan Documents. The Replacement Guaranty contains, among other things, covenants requiring the Replacement Guarantor to maintain a minimum tangible net worth of not less than Five Hundred Million and No/100 Dollars ($500,000,000) and minimum liquid assets of not less than Fifty Million and No/100 Dollars ($50,000,000) at all times during the term of the Loans.
G. Purpose. The parties hereto desire to confirm that Buyer has assumed all of the obligations of Seller with respect to the Borrowers and the Loan Documents, to confirm Lender's release of Original Owner and Original Guarantor from their respective obligations arising after the Closing Date (subject to certain exceptions), and to set forth the terms and conditions of such assumption, release, and related matters.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 *Defined Terms.* As used in this Agreement, the following terms shall have the meanings set forth below:
"Agreement" means this Assumption and Assumption Agreement, dated as of June 6, 2024, including all exhibits and schedules attached hereto, as the same may be amended, modified, or supplemented from time to time in accordance with the terms hereof.
"Borrowers" means, collectively, GMP Buckhead LLC, a Delaware limited liability company, GMP SouthPark LLC, a Delaware limited liability company, GMP Cool Springs LLC, a Delaware limited liability company, and GMP Brickell LLC, a Delaware limited liability company, and "Borrower" means any one of them individually.
"Buyer" or "New Owner" means Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, EIN 52-2198437, with its principal office at 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044.
"Closing Date" means June 6, 2024.
"Consent" means the Consent Letter dated May 17, 2024, executed by Veltrano Capital Lending Corp. in favor of the parties hereto, consenting to the Transfer and the change of control with respect to the Borrowers, a copy of which is attached hereto as Exhibit B.
"Effective Date" means the Closing Date.
"Lender" means Veltrano Capital Lending Corp., a Delaware corporation, with its principal office at 200 South Biscayne Boulevard, Suite 3100, Miami, Florida 33131, together with its successors and assigns.
"Loan Agreement" means that certain Loan Agreement dated as of February 1, 2021, by and among Lender and the Borrowers, as heretofore amended, modified, or supplemented from time to time, including all amendments, restatements, modifications, supplements, extensions, renewals, and replacements thereof.
"Loan Documents" has the meaning ascribed to such term in the Loan Agreement; for the avoidance of doubt, the Loan Documents include, without limitation, the Loan Agreement, the promissory notes evidencing each of the Loans, the deeds of trust, mortgages, deeds to secure debt, security agreements, assignments of leases and rents, environmental indemnity agreements, the Original Guaranty (to the extent it remains in effect as provided herein), and all other documents, instruments, certificates, and agreements executed and delivered in connection with Loans 2-A, 2-B, 2-C, and 2-D under the Loan Agreement, as more particularly described in Exhibit A attached hereto.
"Loans" means Loans 2-A, 2-B, 2-C, and 2-D under the Loan Agreement, having an aggregate outstanding principal balance of One Hundred Forty-Two Million Three Hundred Thousand and No/100 Dollars ($142,300,000) as of February 28, 2024 (subject to scheduled amortization thereafter through the Closing Date).
"New Owner" means Fairwater Real Estate Investment Trust, a Maryland real estate investment trust.
"Original Guarantor" means Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership, in its capacity as guarantor under the Original Guaranty.
"Original Guaranty" means that certain Guaranty Agreement dated as of February 1, 2021, executed by the Original Guarantor in favor of Lender in connection with the Loan Documents, providing non-recourse carve-out guaranty obligations with respect to the Loans.
"Original Owner" or "Seller" means Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership, EIN 83-1647205, with its principal office at 3300 Peachtree Road NE, Suite 2200, Atlanta, Georgia 30326.
"Properties" means, collectively, (a) Buckhead Place Office Tower, located at 3380 Peachtree Road NE, Atlanta, Georgia 30326, (b) SouthPark Corporate Center, located at 6200 Fairview Road, Charlotte, North Carolina 28210, (c) Cool Springs Office Park, located at 5000 Virginia Way, Brentwood, Tennessee 37027, and (d) Brickell Bay Office Building, located at 1450 Brickell Avenue, Miami, Florida 33131, and "Property" means any one of them individually. A schedule describing the Properties in further detail is attached hereto as Exhibit D.
"PSA" means that certain Purchase and Sale Agreement dated as of February 28, 2024, by and between Seller and Buyer, as amended by the First Amendment to Purchase and Sale Agreement dated April 12, 2024, and the Second Amendment to Purchase and Sale Agreement dated May 28, 2024, as further amended, modified, or supplemented from time to time.
"Replacement Guarantor" means Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, in its capacity as guarantor under the Replacement Guaranty.
"Replacement Guaranty" means that certain Replacement Carve-Out Guaranty dated as of the date hereof, executed and delivered by the Replacement Guarantor in favor of Lender, replacing the Original Guaranty, a copy of which is attached hereto as Exhibit C.
"Transfer" means the acquisition by Buyer of one hundred percent (100%) of the membership interests in each Borrower pursuant to the PSA, constituting a change of control under the Loan Agreement.
Section 1.2 *Incorporation by Reference.* Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the Loan Agreement. In the event of any conflict between the definitions set forth in this Agreement and those set forth in the Loan Agreement, the definitions in this Agreement shall control solely for purposes of this Agreement.
ARTICLE II
ASSUMPTION OF OBLIGATIONS
Section 2.1 *Assumption by New Owner.* Effective as of the Closing Date (June 6, 2024), New Owner hereby irrevocably assumes, and agrees to perform, observe, comply with, and be bound by, all of the obligations, covenants, agreements, terms, conditions, and liabilities of Original Owner (in its capacity as direct or indirect owner of the Borrowers) under and pursuant to each of the Loan Documents, as if New Owner had been an original signatory and party thereto. From and after the Closing Date, all references in the Loan Documents to the "Owner," "Equity Owner," "Controlling Party," or similar terms referring to the direct or indirect owner of the Borrowers shall be deemed to refer to New Owner. New Owner acknowledges that it has received and reviewed copies of all of the Loan Documents, including all amendments, modifications, and supplements thereto, and that it is fully familiar with the terms, conditions, and obligations set forth therein. New Owner further acknowledges that each Borrower (GMP Buckhead LLC, GMP SouthPark LLC, GMP Cool Springs LLC, and GMP Brickell LLC) continues to be bound by its obligations as borrower under the Loan Documents, and that the Transfer and the change of control do not release, discharge, diminish, or otherwise modify the obligations of the Borrowers thereunder.
Section 2.2 *Specific Assumed Obligations.* Without limiting the generality of the assumption set forth in Section 2.1 above, New Owner specifically and expressly assumes the following obligations under the Loan Documents:
(a) Payment Obligations. All payment obligations under the Loans, including without limitation the obligation to cause each Borrower to pay all principal (including scheduled amortization and any amounts due at maturity), interest at the fixed rate of 4.68% per annum, late charges, default interest, prepayment premiums (including any yield maintenance or defeasance costs), and any other amounts due and payable under the Loan Documents, when and as the same shall become due.
(b) Insurance, Taxes, and Maintenance. All obligations to cause each Borrower to maintain required insurance coverages (including property, casualty, general liability, umbrella, flood, earthquake, terrorism, and such other coverages as required by the Loan Documents), to pay all real property taxes, assessments, and governmental charges when due, and to maintain the Properties in good condition and repair in accordance with the standards set forth in the Loan Documents.
(c) Environmental Compliance. All obligations with respect to environmental compliance and the environmental indemnity agreements executed in connection with the Loans, including all obligations under the Environmental Indemnity Agreements for each Property, and all obligations to comply with applicable Environmental Laws (as defined in the Loan Documents).
(d) Leasing. All obligations relating to leasing of the Properties, including without limitation compliance with tenant lease approval requirements, delivery of copies of proposed leases and lease amendments for Lender review and approval (to the extent required by the Loan Documents), and compliance with all tenant notification requirements.
(e) Financial Reporting. All obligations relating to the delivery of financial statements (including annual audited financial statements and quarterly unaudited financial statements), operating budgets, rent rolls, capital expenditure reports, and other reporting requirements set forth in the Loan Documents, including compliance with all deadlines and formatting requirements specified therein.
(f) Single-Purpose Entity Status. All obligations to maintain the single-purpose entity status of each Borrower as required by the Loan Documents, including compliance with separateness covenants, restrictions on additional indebtedness, maintenance of separate books and records, and observance of all organizational formalities.
(g) Reserves and Escrows. All obligations relating to reserves, escrows, impound accounts, and replacement reserve accounts established under the Loan Documents, including the obligation to make all required deposits thereto and to comply with all conditions and restrictions on disbursements therefrom.
(h) Transfer Restrictions. All obligations to comply with transfer restrictions set forth in the Loan Documents, including without limitation any future change of control provisions, prohibitions on encumbrances, and requirements for Lender consent to transfers of interests in the Borrowers or in the Properties.
Section 2.3 *No Release of Borrowers.* Nothing contained in this Agreement, including the assumption of obligations by New Owner set forth in Sections 2.1 and 2.2 above, shall be construed to release, discharge, or otherwise modify the obligations of any Borrower under the Loan Documents. Each Borrower remains primarily liable for all of its obligations under the Loan Documents, and the assumption by New Owner of the obligations of Original Owner is in addition to, and not in substitution for, the continuing obligations of the Borrowers. The execution and delivery of this Agreement shall not constitute a novation of any Borrower's obligations under the Loan Documents.
ARTICLE III
RELEASE OF ORIGINAL OWNER AND ORIGINAL GUARANTOR
Section 3.1 *Release of Original Owner. Subject to the terms and conditions of this Agreement, Lender hereby releases, remises, and forever discharges Original Owner (Greystone Meridian Partners Fund III, L.P.) from all obligations, liabilities, covenants, and agreements of Original Owner (in its capacity as direct or indirect owner of the Borrowers) under and pursuant to the Loan Documents arising from and after the Closing Date (June 6, 2024); provided, however*, that such release shall not extend to, and Original Owner shall remain liable for:
(a) any obligations under the Loan Documents that accrued prior to the Closing Date and remain unperformed, unfulfilled, or unsatisfied as of the Closing Date; and
(b) any indemnification obligations of Original Owner relating to or arising from acts, omissions, events, conditions, or circumstances occurring, existing, or arising prior to the Closing Date, including without limitation any obligations under the Environmental Indemnity Agreements to the extent arising from conditions existing prior to the Closing Date.
For the avoidance of doubt, Original Owner shall remain liable for any breach of its representations and warranties contained in this Agreement.
Section 3.2 *Release of Original Guarantor. Subject to the terms and conditions of this Agreement, Lender hereby releases, remises, and forever discharges Original Guarantor (Greystone Meridian Partners Fund III, L.P.) from all obligations, liabilities, and agreements of Original Guarantor under and pursuant to the Original Guaranty arising from and after the Closing Date (June 6, 2024); provided, however*, that such release shall not extend to, and Original Guarantor shall remain liable for:
(a) any liability for acts, omissions, events, conditions, or circumstances occurring, existing, or arising prior to the Closing Date that would constitute recourse carve-out events or "springing recourse" triggers under the Original Guaranty, regardless of when any claim with respect thereto is asserted; and
(b) any pending claims of which Lender has given written notice to Original Guarantor prior to the Closing Date.
Upon the effectiveness of the Replacement Guaranty, the Original Guaranty shall be of no further force and effect with respect to acts, omissions, events, conditions, or circumstances occurring, existing, or arising from and after the Closing Date, except as expressly set forth in clauses (a) and (b) above. For the avoidance of doubt, to the extent that the Original Guaranty covers liabilities relating to events occurring prior to the Closing Date, such coverage shall continue in full force and effect notwithstanding the execution and delivery of the Replacement Guaranty.
Section 3.3 *Replacement Guaranty Effectiveness. Lender hereby acknowledges receipt of the Replacement Guaranty executed and delivered by Fairwater Real Estate Investment Trust, as Replacement Guarantor, dated as of the date hereof, a copy of which is attached hereto as Exhibit C*. Lender confirms that the Replacement Guaranty is in form and substance satisfactory to Lender and that all conditions to Lender's acceptance of the Replacement Guaranty as set forth in the Consent have been satisfied. From and after the Closing Date, the Replacement Guaranty shall be deemed a "Loan Document" for all purposes under the Loan Agreement and the other Loan Documents, and the Replacement Guarantor shall be deemed the "Guarantor" for all purposes thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NEW OWNER
New Owner hereby represents and warrants to Lender and Original Owner as of the Closing Date as follows:
Section 4.1 *Organization and Authority.* 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. New Owner has all requisite power and authority under its declaration of trust, bylaws, and applicable law to execute, deliver, and perform its obligations under this Agreement and the Replacement Guaranty, and to consummate the transactions contemplated hereby and thereby. New Owner's principal executive office is located at 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044. New Owner's common shares of beneficial interest are listed on the New York Stock Exchange under the ticker symbol "FREIT," and New Owner had a market capitalization of approximately Four Billion Eight Hundred Million Dollars ($4,800,000,000) as of the fourth quarter of 2023. The principal officers of New Owner relevant to the transactions contemplated by this Agreement are: Jonathan R. Whitmore, Chief Executive Officer; Patricia Sung-Calloway, Chief Financial Officer; Marcus Devereaux, Executive Vice President, Acquisitions; and David Elgin Park, General Counsel.
Section 4.2 *Due Authorization.* The execution, delivery, and performance by New Owner of this Agreement and the Replacement Guaranty, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary action on the part of New Owner, including all necessary action by New Owner's board of trustees. No further corporate, trust, or other organizational action is required on the part of New Owner to authorize the execution, delivery, and performance of this Agreement and the Replacement Guaranty.
Section 4.3 *No Conflict.* The execution, delivery, and performance by New Owner of this Agreement and the Replacement Guaranty, and the consummation of the transactions contemplated hereby and thereby, do not and will not (a) violate, conflict with, or result in a breach of any provision of New Owner's declaration of trust or bylaws, (b) violate, conflict with, or result in a breach of any applicable law, rule, regulation, order, judgment, decree, or injunction of any court or governmental authority applicable to New Owner, or (c) result in a breach of, constitute a default under, or give rise to any right of termination, cancellation, or acceleration under, any material agreement, mortgage, deed of trust, indenture, or other instrument to which New Owner is a party or by which New Owner or any of its properties or assets may be bound.
Section 4.4 *Enforceability.* This Agreement constitutes, and the Replacement Guaranty when executed and delivered will constitute, the legal, valid, and binding obligation of New Owner, enforceable against New Owner in accordance with its respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith, and fair dealing), regardless of whether considered in a proceeding in equity or at law.
Section 4.5 *Financial Condition.* New Owner represents and warrants that, as of the Closing Date:
(a) New Owner has a tangible net worth (determined in accordance with generally accepted accounting principles consistently applied) of not less than Five Hundred Million and No/100 Dollars ($500,000,000);
(b) New Owner has liquid assets (consisting of cash, cash equivalents, and marketable securities readily convertible to cash) of not less than Fifty Million and No/100 Dollars ($50,000,000); and
(c) the foregoing minimum tangible net worth and minimum liquid asset covenants are consistent with, and replicate, the financial covenants set forth in the Replacement Guaranty.
New Owner's equity funding source for the acquisition of the membership interests in the Borrowers consists of cash on hand and a draw on Fairwater's Seven Hundred Fifty Million and No/100 Dollar ($750,000,000) unsecured revolving credit facility with Aldgate National Bank, N.A. (as administrative agent), pursuant to that certain Credit Agreement dated as of August 14, 2022 (the "Revolving Credit Facility"), bearing interest at an applicable margin of SOFR plus 130 basis points. New Owner represents that the draw on the Revolving Credit Facility in connection with the transactions contemplated by the PSA does not violate any covenant or restriction contained in the Revolving Credit Facility or any other material agreement to which New Owner is a party.
Section 4.6 *No Default.* To New Owner's knowledge, as of the Closing Date, no event of default, and no event or condition that, with the giving of notice, the passage of time, or both, would constitute an event of default, exists under the Loan Documents (other than the change of control that has been consented to by Lender pursuant to the Consent and this Agreement).
Section 4.7 *REIT Status. New Owner is a real estate investment trust that has elected to be taxed as a real estate investment trust ("REIT") under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code*"), and New Owner has maintained its qualification as a REIT for each taxable year since its initial election. New Owner is not aware of any circumstances that would reasonably be expected to cause it to fail to qualify as a REIT under the Code.
Section 4.8 *Knowledge Individuals.* For purposes of this Agreement, references to New Owner's "knowledge" or matters "known" to New Owner mean the actual, present, conscious knowledge of Marcus Devereaux (Executive Vice President, Acquisitions), Leah Torrance (Senior Vice President, Operations), and David Elgin Park (General Counsel), in each case without independent investigation or inquiry, except to the extent such persons have obtained knowledge in the ordinary course of performing their respective duties on behalf of New Owner.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ORIGINAL OWNER
Original Owner hereby represents and warrants to Lender and New Owner as of the Closing Date as follows:
Section 5.1 *Organization and Authority.* Greystone Meridian Partners Fund III, L.P. is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware. The general partner of Original Owner is Greystone Meridian Capital LLC, a Delaware limited liability company. The Managing Partners of Greystone Meridian Capital LLC are Victor Lansdell and Elise Rathborne, who serve as Co-Founders and Managing Partners. Original Owner's principal office is located at 3300 Peachtree Road NE, Suite 2200, Atlanta, Georgia 30326. Original Owner's registered agent in the State of Delaware is located at 1209 Orange Street, Wilmington, Delaware 19801. Original Owner has all requisite power and authority under its limited partnership agreement and applicable law to execute, deliver, and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.
Section 5.2 *Due Authorization.* The execution, delivery, and performance by Original Owner of this Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary action on the part of Original Owner, including authorization by its general partner, Greystone Meridian Capital LLC, and by the Managing Partners thereof. No further partnership, limited liability company, or other organizational action is required on the part of Original Owner or its general partner to authorize the execution, delivery, and performance of this Agreement.
Section 5.3 *No Default.* To Original Owner's knowledge (which, for purposes of this Agreement, means the actual, present, conscious knowledge of Victor Lansdell, Co-Founder and Managing Partner, Elise Rathborne, Co-Founder and Managing Partner, and Sean Kilpatrick, Senior Vice President, Asset Management, in each case without independent investigation or inquiry, except to the extent such persons have obtained knowledge in the ordinary course of performing their respective duties on behalf of Original Owner), as of the Closing Date, no event of default, and no event or condition that, with the giving of notice, the passage of time, or both, would constitute an event of default, exists under the Loan Documents. All payments and obligations of the Borrowers under the Loan Documents are current and have been performed through the Closing Date, and no sums are past due or in arrears.
Section 5.4 *Loan Balance Confirmation.* Original Owner confirms that, as of February 28, 2024, the aggregate outstanding principal balance of the Loans is One Hundred Forty-Two Million Three Hundred Thousand and No/100 Dollars ($142,300,000), allocated among the Loans as follows:
The foregoing balances are subject to scheduled amortization occurring between February 28, 2024, and the Closing Date, and the parties acknowledge that the actual outstanding principal balance as of the Closing Date may differ from the amounts set forth above by the amount of any scheduled principal payments made during such period.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF LENDER
Lender hereby represents and warrants to New Owner and Original Owner as of the Closing Date as follows:
Section 6.1 *Authority.* Veltrano Capital Lending Corp. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement. The execution, delivery, and performance of this Agreement by Lender have been duly authorized by all necessary corporate action on the part of Lender.
Section 6.2 *Consent.* Lender confirms that the Consent dated May 17, 2024, remains in full force and effect as of the Closing Date and has not been revoked, modified, or withdrawn. Lender's consent to the Transfer and the change of control with respect to the Borrowers is effective as of the Closing Date, conditioned upon and subject to (a) the execution and delivery of this Agreement by all parties hereto, (b) the execution and delivery of the Replacement Guaranty by the Replacement Guarantor, and (c) the payment of the consent fee of Seven Hundred Eleven Thousand Five Hundred and No/100 Dollars ($711,500), representing fifty basis points (0.50%) of the aggregate outstanding principal balance of the Loans of $142,300,000. Lender confirms that all of the foregoing conditions have been satisfied as of the Closing Date.
Section 6.3 *No Default by Borrowers.* To Lender's knowledge, as of the Closing Date, no event of default by any Borrower under the Loan Documents exists, other than the change of control with respect to the Borrowers that has been consented to by Lender pursuant to the Consent and this Agreement. Lender has not delivered to any Borrower or to Original Owner any written notice of default that remains outstanding and unresolved as of the Closing Date.
ARTICLE VII
LOAN TERMS CONFIRMATION
Section 7.1 *Confirmation of Loan Terms.* The parties hereby confirm that the following terms and conditions of the Loans remain unchanged and in full force and effect as of the Closing Date:
(a) Outstanding Principal Balance. The aggregate outstanding principal balance of the Loans is One Hundred Forty-Two Million Three Hundred Thousand and No/100 Dollars ($142,300,000) as of February 28, 2024, subject to scheduled amortization through the Closing Date.
(b) Interest Rate. The Loans bear interest at a fixed rate of four and sixty-eight hundredths percent (4.68%) per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months.
(c) Maturity Date. The Loans mature on March 1, 2029. No extension or modification of the maturity date has been made or is contemplated by this Agreement.
(d) Monthly Payments. Monthly payment dates, monthly payment amounts (including principal and interest components), and all other payment terms remain as set forth in the Loan Agreement and the promissory notes evidencing the Loans.
(e) Prepayment. All prepayment provisions remain as set forth in the Loan Agreement, including without limitation the yield maintenance and defeasance provisions applicable to the Loans.
(f) Financial Covenants. All financial covenants, reporting requirements, and operating covenants applicable to the Borrowers and/or the owner of the Borrowers remain in full force and effect as set forth in the Loan Agreement and the other Loan Documents.
Section 7.2 *No Modification.* Except as expressly set forth in this Agreement (including the release of Original Owner and Original Guarantor and the substitution of New Owner and Replacement Guarantor), this Agreement does not modify, amend, supplement, restate, or otherwise change any term, condition, covenant, or provision of the Loan Agreement or any of the other Loan Documents. All terms, conditions, covenants, and provisions of the Loan Documents shall remain in full force and effect in accordance with their respective terms.
Section 7.3 *Loan Documents Remain in Effect.* The Loan Documents continue in full force and effect in accordance with their respective terms. Nothing contained in this Agreement shall be deemed or construed to constitute a novation of the Loans, the Loan Agreement, or any of the other Loan Documents. The Loans remain in existence as the same Loans under the Loan Agreement, and the Loan Documents remain in existence as the same Loan Documents, subject only to the modifications expressly set forth herein. The liens, security interests, and encumbrances created by the Loan Documents continue unimpaired and in full force and effect, securing the Loans and all other obligations under the Loan Documents.
ARTICLE VIII
COVENANTS OF NEW OWNER
New Owner hereby covenants and agrees with Lender as follows:
Section 8.1 *Compliance with Loan Documents.* From and after the Closing Date, New Owner shall cause each Borrower to comply with all obligations, covenants, agreements, terms, and conditions applicable to such Borrower under the Loan Documents, and New Owner shall itself comply with all obligations, covenants, agreements, terms, and conditions applicable to New Owner (as the direct or indirect owner of the Borrowers) under the Loan Documents. New Owner shall exercise its rights as the sole member of each Borrower in a manner consistent with the obligations of such Borrower under the Loan Documents.
Section 8.2 *Financial Reporting.* New Owner shall deliver, or cause to be delivered, to Lender all financial statements, operating statements, rent rolls, capital expenditure reports, operating budgets, leasing activity reports, and all other reports and information required to be delivered to Lender under the Loan Documents, in each case in the form, at the times, and containing the information required by the Loan Documents. Without limiting the generality of the foregoing, New Owner shall cause each Borrower to deliver to Lender (a) annual audited financial statements of such Borrower within ninety (90) days after the end of each fiscal year, (b) quarterly unaudited financial statements of such Borrower within forty-five (45) days after the end of each fiscal quarter, and (c) annual operating budgets for each Property within thirty (30) days prior to the commencement of each fiscal year, in each case to the extent required by the Loan Documents.
Section 8.3 *Net Worth and Liquidity Covenants.* New Owner (in its capacity as Replacement Guarantor under the Replacement Guaranty) shall maintain at all times during the term of the Loans (a) a minimum tangible net worth (determined in accordance with generally accepted accounting principles consistently applied) of not less than Five Hundred Million and No/100 Dollars ($500,000,000), and (b) minimum liquid assets (consisting of cash, cash equivalents, and marketable securities readily convertible to cash) of not less than Fifty Million and No/100 Dollars ($50,000,000), in each case as more particularly set forth in the Replacement Guaranty. New Owner shall deliver to Lender, upon Lender's request (not more frequently than quarterly), a certificate of the Chief Financial Officer of New Owner certifying compliance with the foregoing covenants, together with such supporting documentation as Lender may reasonably request.
Section 8.4 *Insurance.* New Owner shall cause each Borrower to maintain, at all times during the term of the Loans, all insurance coverages required by the Loan Documents, including without limitation property insurance, casualty insurance, general liability insurance, umbrella/excess liability insurance, flood insurance (if applicable), terrorism insurance, and such other coverages as may be required by the Loan Documents. New Owner represents that, effective as of the Closing Date, new property and casualty insurance policies for the Properties have been placed through Hartwick Gunderson & Associates, Inc. (as insurance broker) with Ironclad Indemnity Insurance Company (as insurer), and that such policies comply in all material respects with the requirements of the Loan Documents. New Owner shall deliver to Lender evidence of such insurance coverages (including certificates of insurance, evidence of loss payee and additional insured endorsements naming Lender, and copies of policies upon request) promptly following the Closing Date and thereafter as required by the Loan Documents.
Section 8.5 *Property Management. New Owner acknowledges and agrees that property management for the four Properties shall transition from Argyle Property Services LLC (an affiliate of Seller, managed by Sean Kilpatrick, Senior Vice President, Asset Management) to Fairwater Property Management LLC (a wholly owned subsidiary of New Owner, managed by Leah Torrance, Senior Vice President, Operations), pursuant to and in accordance with that certain Transition Services Agreement dated as of the date hereof by and between Seller (or its affiliate) and New Owner (the "Transition Services Agreement*"), providing for a transition period of ninety (90) days from the Closing Date at a management fee of Three Hundred Seventy-Five Thousand and No/100 Dollars ($375,000) per month payable by New Owner to Argyle Property Services LLC during the transition period. New Owner shall provide Lender with written notice of the change in property manager as required by the Loan Documents, and shall deliver to Lender such information regarding Fairwater Property Management LLC and the proposed management arrangements as Lender may reasonably request. New Owner shall not permit any change in the property manager for any Property without Lender's prior written consent, to the extent such consent is required by the Loan Documents.
Section 8.6 *Operating Accounts.* The parties acknowledge that, as of the Closing Date, the operating accounts, reserve accounts, and escrow accounts for the Borrowers are maintained at Magnolia Commerce Bank, N.A., located at 225 Peachtree Street NE, Suite 100, Atlanta, Georgia 30303 (contact: Linda Prescott, Vice President, Commercial Banking). New Owner shall comply with all requirements under the Loan Documents regarding deposit accounts, lockbox arrangements, cash management agreements, and account control agreements. New Owner shall not change the depository bank or the lockbox bank, or modify any cash management arrangements, without Lender's prior written consent to the extent required by the Loan Documents.
ARTICLE IX
INDEMNIFICATION
Section 9.1 *New Owner Indemnification. From and after the Closing Date, New Owner shall indemnify, defend, and hold harmless Lender and its affiliates, and their respective officers, directors, employees, agents, representatives, successors, and assigns (collectively, the "Lender Indemnified Parties"), from and against any and all losses, claims, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and disbursements) (collectively, "Losses*") arising from, in connection with, or related to: (a) any breach by New Owner of any of its obligations, covenants, or agreements under this Agreement or the Replacement Guaranty; (b) any acts or omissions of New Owner, the Borrowers, or any of their respective agents, employees, contractors, or representatives occurring from and after the Closing Date with respect to the Properties, the Loans, or the Loan Documents; and (c) any breach of any representation or warranty of New Owner contained in this Agreement, regardless of when such breach is discovered.
Section 9.2 *Original Owner Indemnification.* Original Owner shall indemnify, defend, and hold harmless the Lender Indemnified Parties from and against any and all Losses arising from, in connection with, or related to any acts, omissions, events, conditions, or circumstances occurring, existing, or arising prior to the Closing Date with respect to the Properties, the Loans, or the Loan Documents, including without limitation any Losses arising from any breach of any representation or warranty of Original Owner contained in this Agreement or from any breach of any obligation of Original Owner or the Borrowers under the Loan Documents that accrued prior to the Closing Date.
Section 9.3 *Survival.* The indemnification obligations set forth in this Article IX, and the representations and warranties set forth in Articles IV, V, and VI, shall survive the execution and delivery of this Agreement and shall continue in full force and effect indefinitely (or, if the Loan Documents specify a limitation period for indemnification obligations, for the period specified in the Loan Documents, but in no event for less than six (6) years after the Closing Date). The obligations of Original Owner under Section 9.2 shall survive the release of Original Owner under Section 3.1 to the extent relating to acts, omissions, events, conditions, or circumstances occurring, existing, or arising prior to the Closing Date.
ARTICLE X
CONDITIONS SATISFIED
Section 10.1 *Conditions to Effectiveness.* The parties acknowledge and confirm that all of the following conditions to the effectiveness of the Consent and this Agreement have been satisfied as of the Closing Date:
(a) Consent Fee. Payment of the consent fee of Seven Hundred Eleven Thousand Five Hundred and No/100 Dollars ($711,500), representing fifty basis points (0.50%) of the aggregate outstanding principal balance of the Loans of $142,300,000, has been made to Lender by wire transfer of immediately available funds, with such fee borne equally by Buyer ($355,750) and Seller ($355,750).
(b) Assumption Agreement. This Agreement has been duly executed and delivered by Lender, New Owner, Original Owner, and each of the Borrowers.
(c) Replacement Guaranty. The Replacement Guaranty has been duly executed and delivered by Fairwater Real Estate Investment Trust, as Replacement Guarantor, in favor of Lender, in form and substance satisfactory to Lender.
(d) Financial Condition. Lender has received satisfactory evidence of New Owner's financial condition, including certification of compliance with the minimum tangible net worth covenant ($500,000,000) and the minimum liquid assets covenant ($50,000,000), together with such supporting financial statements and documentation as Lender has required.
(e) Insurance. Lender has received satisfactory evidence of all required insurance coverages for the Properties, including certificates of insurance, loss payee endorsements, and additional insured endorsements naming Lender.
(f) Organizational Documents. Lender has received copies of the organizational documents of New Owner (including its declaration of trust and bylaws), certificates of good standing for New Owner from the State of Maryland and each other state in which the Properties are located, and certified resolutions of New Owner's board of trustees authorizing the execution and delivery of this Agreement and the Replacement Guaranty.
(g) Legal Opinions. Lender has received legal opinions from (i) Calderwood & Harkness LLP (Douglas Fairchild, Responsible Partner), counsel to New Owner, addressing such matters as Lender has reasonably required, including enforceability, due authorization, and no conflict, and (ii) local counsel in each state in which the Properties are located, as applicable, in each case in form and substance reasonably satisfactory to Lender.
(h) Lender's Counsel Fees. All fees and expenses of Lender's counsel, Cranford McCabe LLP (Leo Cranford, Partner), 100 Southeast Second Street, Suite 3000, Miami, Florida 33131, incurred in connection with the review, negotiation, and documentation of the Consent, this Agreement, the Replacement Guaranty, and the transactions contemplated hereby, have been paid in full by or on behalf of New Owner.
ARTICLE XI
MISCELLANEOUS
Section 11.1 *Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to conflicts of laws principles that would require the application of the law of any other jurisdiction. The choice of New York law is consistent with the governing law provisions of the PSA and the Loan Agreement. Each party hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Court for the Southern District of New York for the purpose of any action or proceeding arising out of or relating to this Agreement, and each party irrevocably waives any objection it may have to the laying of venue in any such court or any claim of forum non conveniens*.
Section 11.2 *Notices.* All notices, requests, demands, consents, approvals, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given (a) when delivered personally, (b) one (1) Business Day after being sent by nationally recognized overnight courier service (such as Severin Partners LLC or Halcyon Partners LLC), (c) three (3) Business Days after being sent by certified or registered mail, return receipt requested, postage prepaid, or (d) when sent by email (with confirmation of receipt), to the parties at the following addresses (or at such other address as any party may designate by written notice to the other parties in accordance with this Section):
If to Lender:
Veltrano Capital Lending Corp. 200 South Biscayne Boulevard, Suite 3100 Miami, Florida 33131
Attention: Denise Alvarado, Managing Director
Email: dalvarado@ridgemontcap.com
with a copy (which shall not constitute notice) to:
Cranford McCabe LLP 100 Southeast Second Street, Suite 3000 Miami, Florida 33131
Attention: Leo Cranford
Email: lcranford@cranfordmccabe.com
If to New Owner:
Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044
Attention: David Elgin Park, General Counsel
Email: dpark@fairwaterreit.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022
Attention: Douglas Fairchild
Email: dfairchild@calderwoodharkness.com
If to Original Owner:
Greystone Meridian Partners Fund III, L.P. 3300 Peachtree Road NE, Suite 2200 Atlanta, Georgia 30326
Attention: Victor Lansdell
Email: vlansdell@greystonemeridian.com
with a copy (which shall not constitute notice) to:
Blackridge Hayes LLP 1285 Avenue of the Americas, 34th Floor New York, New York 10019
Attention: Nathaniel Pryce
Email: npryce@blackridgehayes.com
Section 11.3 *Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. No party may assign its rights or obligations under this Agreement without the prior written consent of the other parties hereto; provided, however*, that Lender may assign its rights and obligations under this Agreement in connection with any assignment or transfer of the Loans and the Loan Documents in accordance with the terms of the Loan Agreement.
Section 11.4 *Amendments.* This Agreement may not be amended, modified, supplemented, restated, or waived except by a written instrument duly executed by Lender, New Owner, and Original Owner (or, in the case of a waiver, by the party granting the waiver). No oral agreement, course of dealing, or course of performance shall be effective to amend or modify this Agreement.
Section 11.5 *Counterparts; Electronic Signatures.* This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile, portable document format (PDF), or other electronic means (including Brightwater Software or similar electronic signature platforms) shall be effective as delivery of a manually executed counterpart of this Agreement. Electronic signatures shall be deemed original signatures for all purposes and shall be valid and binding on the parties hereto.
Section 11.6 *Entire Agreement.* This Agreement, together with the Loan Documents, the Consent, the Replacement Guaranty, and the PSA (as among Buyer and Seller), constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, representations, and warranties, both written and oral, with respect to such subject matter. No party has relied on any representation or warranty not expressly set forth in this Agreement in entering into this Agreement.
Section 11.7 *Severability.* If any term, provision, covenant, or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal, void, or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner.
Section 11.8 *No Waiver.* No waiver by any party of any provision of this Agreement shall be effective unless such waiver is set forth in a writing executed by the waiving party. No failure or delay by any party in exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, and no single or partial exercise of any right, power, or privilege shall preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies of each party under this Agreement are cumulative and are not exclusive of any other rights or remedies that such party may have at law, in equity, or otherwise.
Section 11.9 *Construction.* The headings and captions contained in this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of this Agreement. Unless the context otherwise requires: (a) the singular shall include the plural, and the plural shall include the singular; (b) "including" means "including without limitation" and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it; (c) references to "herein," "hereof," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) references to any Section, Article, Exhibit, or Schedule are references to Sections, Articles, Exhibits, or Schedules of this Agreement; and (e) references to any agreement or document are to such agreement or document as amended, modified, supplemented, restated, or replaced from time to time.
Section 11.10 *Relationship to PSA. This Agreement is being executed and delivered pursuant to, and in satisfaction of certain conditions under, the PSA. In the event of any conflict between this Agreement and the PSA with respect to the rights and obligations as between Buyer and Seller (in their capacities as parties to the PSA), the PSA shall control; provided, however*, that as between Lender and any other party hereto, the Loan Documents (including this Agreement) shall control, and no provision of the PSA shall diminish, limit, or otherwise affect the rights of Lender under the Loan Documents.
Section 11.11 *Counsel Representation.* Each party acknowledges that it has been represented by competent legal counsel in connection with the negotiation, drafting, and execution of this Agreement:
(a) New Owner has been represented by Calderwood & Harkness LLP, 450 Park Avenue, 28th Floor, New York, New York 10022, and 1700 K Street NW, Suite 900, Washington, DC 20006. The principal attorneys representing New Owner in connection with this transaction are Douglas Fairchild (Partner, Real Estate), Angela Fontaine (Partner, Real Estate), Grace Nakamura (Counsel, Real Estate), and Rafael Dominguez (Associate, Real Estate), with tax matters handled by Sylvia Hartwell (Partner, Tax).
(b) Original Owner has been represented by Blackridge Hayes LLP, 1285 Avenue of the Americas, 34th Floor, New York, New York 10019. The principal attorneys representing Original Owner in connection with this transaction are Nathaniel Pryce (Partner), Ingrid Solberg (Partner), and Thomas Keating (Counsel).
(c) Lender has been represented by Cranford McCabe LLP, 100 Southeast Second Street, Suite 3000, Miami, Florida 33131. The principal attorney representing Lender in connection with this transaction is Leo Cranford (Partner).
Each party acknowledges that this Agreement is the product of arm's-length negotiation between the parties and their respective counsel, and that no provision of this Agreement shall be construed against any party by reason of having drafted or proposed such provision.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have executed this Assumption and Assumption Agreement as of the date first written above.
LENDER:
VELTRANO CAPITAL LENDING CORP., a Delaware corporation
By: ________
Name: Denise Alvarado
Title: Managing Director
Date: June 6, 2024
NEW OWNER / 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
ORIGINAL OWNER / SELLER:
GREYSTONE MERIDIAN PARTNERS FUND III, L.P., a Delaware limited partnership
By: Greystone Meridian Capital LLC,
its General Partner
By: ________
Name: Victor Lansdell
Title: Co-Founder & Managing Partner
Date: June 6, 2024
ACKNOWLEDGMENT AND AGREEMENT OF BORROWERS
Each of the undersigned Borrowers hereby acknowledges and agrees to the terms and conditions of this Agreement, confirms that it has received a copy of this Agreement, and confirms that it remains bound by all of its obligations under the Loan Documents. Each Borrower further acknowledges and consents to the assumption by New Owner of the obligations of Original Owner as set forth herein.