1036-00004 · Client 1036 · Lender Consents

consent-request-letter-pinnacle.docx DOCUMENT Real Estate

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Contract analysis Extract to table

CALDERWOOD & HARKNESS LLP

Attorneys at Law

450 Park Avenue, 28th Floor New York, New York 10022 Telephone: (212) 506-7000 Facsimile: (212) 506-7001

1700 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 429-3200 Facsimile: (202) 429-3201

March 8, 2024

Sandra Whitfield, Esq. Partner Whitfield & Archer LLP 717 Texas Avenue, Suite 2500 Houston, Texas 77002

Counsel to Pinnacle Federal Bank, N.A.

Re: Request for Lender Consent to Change of Control — Loans 1-A through 1-H Master Loan Agreement dated September 15, 2020, as amended (the "Master Loan Agreement") Borrowers: GMP Fairfield I LLC, GMP Fairfield II LLC, GMP Westlake LLC, GMP Katy LLC, GMP Alliance LLC, GMP Lakeland LLC, GMP Southport LLC, and GMP Murfreesboro LLC (collectively, the "Borrowers") Lender: Pinnacle Federal Bank, N.A. ("Pinnacle" or "Lender") Aggregate Outstanding Principal Balance: $421,600,000 (as of February 28, 2024)

Dear Ms. Whitfield:

1. Introduction and Engagement Identification

This firm represents Fairwater Real Estate Investment Trust ("Fairwater" or "Buyer"), a Maryland real estate investment trust with its principal offices located at 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044. Fairwater is publicly traded on the New York Stock Exchange under the ticker symbol "FREIT" and, as of the fourth quarter of 2023, maintained a market capitalization of approximately $4.8 billion. Our representation of Fairwater in connection with the transaction described in this letter is being handled under Calderwood & Harkness LLP matter number 1036-00004.

The purpose of this letter is to formally request the consent of Pinnacle Federal Bank, N.A. to the change of control of each of the Borrower entities identified above in connection with Fairwater's proposed acquisition of 100% of the membership interests in each such entity, as described in greater detail in Section 2 below. We understand that Bradley Carston, Senior Vice President, serves as Pinnacle's loan officer responsible for the credit facilities referenced herein, and we respectfully request that this letter and the enclosed materials be directed to his attention as well.

We have set forth below a comprehensive summary of the proposed transaction, the financial profile and qualifications of Fairwater as the proposed transferee and replacement guarantor, a description of the proposed replacement guaranty and assumption agreement, and a complete list of the materials enclosed herewith for Pinnacle's review. We are prepared to provide any additional information or documentation that Pinnacle or your firm may require to evaluate this consent request.

2. Transaction Overview

2.1 Purchase and Sale Agreement

Pursuant to a Purchase and Sale Agreement dated February 28, 2024 (the "PSA"), between Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership ("Seller" or "GMP Fund III"), and Fairwater, Buyer has agreed to acquire 100% of the membership interests in each of fourteen (14) single-purpose Delaware limited liability companies, including each of the eight Borrowers identified above. The acquisition encompasses the entirety of the Seller's real estate portfolio held through the GMP Fund III vehicle.

The general partner of GMP Fund III is Greystone Meridian Capital LLC, a Delaware limited liability company, whose managing partners are Victor Lansdell and Elise Rathborne. The Seller's principal office is located at 3300 Peachtree Road NE, Suite 2200, Atlanta, Georgia 30326. Seller is represented in the transaction by Blackridge Hayes LLP, with lead partner Nathaniel Pryce, at 1285 Avenue of the Americas, 34th Floor, New York, New York 10019.

The PSA was negotiated at arm's length between the Buyer and Seller, each with the benefit of independent legal and financial counsel, and was executed following an extensive due diligence and underwriting process conducted by Fairwater's acquisitions team.

2.2 Purchase Price and Structure

The aggregate purchase price for the entire fourteen-property portfolio is $1,100,000,000 (one billion one hundred million dollars). The transaction is structured as an entity-level acquisition, pursuant to which Fairwater will acquire 100% of the membership interests in each of the fourteen property-owning limited liability companies. This is not an asset purchase; the underlying real property will remain titled in the name of each respective Borrower entity, and the existing loan documents will remain in place, subject to the assumption and change of control consent addressed in this letter.

The equity portion of the purchase price — that is, the aggregate purchase price net of assumed mortgage indebtedness — is approximately $488,000,000 (four hundred eighty-eight million dollars), calculated as follows:

Aggregate Purchase Price: $1,100,000,000

Less: Total Assumed Mortgage Debt (across three lender facilities): ($612,000,000)

Cash Equity at Closing: $488,000,000

Fairwater intends to fund the cash equity at closing through a combination of cash on hand and an anticipated draw of approximately $488,000,000 on Fairwater's existing $750,000,000 unsecured revolving credit facility with Aldgate National Bank, N.A. (as administrative agent), dated August 14, 2022, bearing interest at a rate of SOFR plus 130 basis points. The revolving credit facility provides Fairwater with ample liquidity to consummate the acquisition, and Fairwater's draw following closing will leave approximately $262,000,000 of undrawn capacity under that facility. Additional details regarding Fairwater's revolving credit facility are set forth in Section 3.3 below.

2.3 Assumed Debt — Pinnacle Loans

In connection with the acquisition, Fairwater proposes to assume all obligations of the Borrowers under the Master Loan Agreement dated September 15, 2020, as amended, and each of the eight individual loan supplements (designated as Loans 1-A through 1-H) thereunder. The key terms of the Pinnacle credit facilities are summarized as follows:

Master Loan Agreement: Dated September 15, 2020, as amended

Aggregate Outstanding Principal Balance (as of February 28, 2024): $421,600,000

Interest Rate: Fixed at 4.22% per annum

Maturity Date: July 1, 2028

The eight individual loan supplements and their corresponding Borrower entities, secured properties, and property details are set forth in the table below:

The eight secured properties comprise an aggregate of approximately 3,730,000 rentable square feet of institutional-quality logistics and industrial distribution space situated in major Sun Belt metropolitan areas. Current rent rolls and occupancy summaries for each of the eight properties are enclosed for Pinnacle's reference.

For completeness, we note that the remaining six properties in the fourteen-property portfolio are secured by separate mortgage loan facilities with two other institutional lenders. Specifically:

• Veltrano Capital Lending Corp.: Loans 2-A through 2-D, with an aggregate outstanding principal balance of $142,300,000; and

• Sycamore Life Insurance Company: Loans 3-A and 3-B, with an aggregate outstanding principal balance of $48,100,000.

Separate consent requests are being submitted to Veltrano Capital Lending Corp. and Sycamore Life Insurance Company, and their respective counsel, concurrently with this letter. The aggregate assumed mortgage indebtedness across all three lender facilities totals $612,000,000.

2.4 Change of Control Triggering Event

The transfer of 100% of the membership interests in each Borrower entity from GMP Fund III to Fairwater constitutes a "change of control" as that term is defined in the Master Loan Agreement. As Pinnacle and its counsel are aware, the Master Loan Agreement requires the prior written consent of the Lender as a condition to any direct or indirect transfer or change of control of the Borrower entities. Accordingly, Lender consent is required as a condition precedent to the consummation of the transaction contemplated by the PSA, and we are submitting this request in compliance with that requirement.

We wish to emphasize that no changes to the loan terms, interest rate, maturity date, amortization schedule, reserve requirements, or any other material provision of the existing loan documents are being proposed in connection with this change of control. The loans will remain in place on their existing terms, and Fairwater's intent is to continue to perform all borrower obligations in strict accordance with the loan documents through the scheduled maturity date.

2.5 Anticipated Timeline

The key milestones and deadlines applicable to the transaction are as follows:

• PSA Execution Date: February 28, 2024

• Due Diligence Period Expiration: April 15, 2024

• Lender Consent Deadline (per PSA): May 24, 2024

• Scheduled Closing Date: May 31, 2024

In light of the foregoing timeline, and in particular the PSA-mandated lender consent deadline, we respectfully request that Pinnacle endeavor to provide its consent on or before May 24, 2024. We are prepared to work expeditiously with your firm and Pinnacle's loan servicing team to address any questions, provide supplemental information, and finalize the form of the consent documentation within that timeframe. We recognize and appreciate that Pinnacle will require adequate time to review the enclosed materials and conduct its own internal underwriting, and we stand ready to facilitate that process in any way that may be helpful.

3. Information Regarding Fairwater (Proposed Transferee / Replacement Guarantor)

3.1 Entity Information

Set forth below is a summary of key entity information regarding Fairwater Real Estate Investment Trust, as the proposed transferee and replacement guarantor:

Full Legal Name: Fairwater Real Estate Investment Trust

Entity Type: Maryland Real Estate Investment Trust (publicly traded REIT)

State of Organization: Maryland

Employer Identification Number (EIN): 52-2198437

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

Chief Executive Officer: Jonathan R. Whitmore

Chief Financial Officer: Patricia Sung-Calloway

Executive Vice President, Acquisitions: Marcus Devereaux

General Counsel: David Elgin Park

An organizational chart showing the full corporate structure of Fairwater Real Estate Investment Trust and its subsidiaries, including the post-closing ownership structure of each of the eight Borrower entities, is enclosed herewith as part of the Enclosures listed in Section 8. A certificate of good standing for Fairwater from the State Department of Assessments and Taxation of Maryland is also enclosed.

3.2 Portfolio and Financial Profile

Fairwater is listed on the New York Stock Exchange under the ticker symbol "FREIT" and, as of the fourth quarter of 2023, maintained a market capitalization of approximately $4.8 billion. Fairwater is one of the largest publicly traded owners and operators of logistics, industrial, and suburban office properties in the southeastern and south-central United States.

Fairwater's existing portfolio consists of sixty-two (62) logistics, industrial, and suburban office properties located across eleven (11) states, comprising approximately 18.4 million rentable square feet. The portfolio maintains a weighted-average remaining lease term of 6.2 years, with a diversified tenant base and strong occupancy levels.

Following the successful consummation of the proposed acquisition, Fairwater's portfolio will expand to seventy-six (76) properties comprising approximately 23.6 million rentable square feet. The acquisition is consistent with Fairwater's strategic objective of expanding its Sun Belt logistics footprint by acquiring high-quality industrial distribution assets at a below-replacement-cost basis. The portfolio being acquired carries a weighted-average in-place capitalization rate of approximately 6.8%, which Fairwater believes represents an attractive risk-adjusted return profile relative to comparable transactions in the current market environment.

3.3 Financial Statements and Creditworthiness

In support of this consent request, we are enclosing the following financial information for Pinnacle's review and evaluation:

1. Fairwater's audited consolidated financial statements for the fiscal years ended December 31, 2022, and December 31, 2023, prepared by Ashford Prewitt LLP (independent auditors; engagement partner Martin Ashford, CPA);

2. Fairwater's unaudited quarterly financial statements for the period ended September 30, 2023; and

3. Fairwater's most recent annual report on Form 10-K as filed with the U.S. Securities and Exchange Commission.

The enclosed financial statements reflect Fairwater's strong and well-capitalized financial position. Fairwater hereby represents that, as of the date hereof and as of the anticipated closing date, it satisfies and will satisfy the Guarantor Financial Covenants set forth in the Master Loan Agreement, including:

• Minimum Tangible Net Worth: Fairwater's tangible net worth exceeds $500,000,000, the threshold required under the Master Loan Agreement; and

• Minimum Liquid Assets: Fairwater's liquid assets exceed $50,000,000, the threshold required under the Master Loan Agreement.

Fairwater's liquidity position is further supported by its existing unsecured revolving credit facility in the aggregate amount of $750,000,000 with Aldgate National Bank, N.A. (as administrative agent), dated August 14, 2022. The administrative agent contact for this facility is Trevor Kingsley, Managing Director, Real Estate Banking Group, Aldgate National Bank, N.A., 383 Madison Avenue, New York, New York 10179. As noted above, even after funding the anticipated draw at closing, Fairwater will retain approximately $262,000,000 of undrawn capacity under this facility, ensuring continued robust liquidity.

We believe that the enclosed financial information will demonstrate that Fairwater is a creditworthy, well-capitalized successor to the existing guarantor and that the change of control will not adversely affect Pinnacle's credit position with respect to the loans.

3.4 Property Management

Following the closing of the acquisition, the eight secured properties will be managed by Fairwater Property Management LLC, a wholly owned subsidiary of Fairwater Real Estate Investment Trust, with offices at 7200 Chesapeake Parkway, Suite 1150, Columbia, Maryland 21044. The senior executive responsible for property operations is Leah Torrance, Senior Vice President, Operations.

Fairwater Property Management LLC currently manages all sixty-two properties in Fairwater's existing portfolio and maintains an experienced staff of regional property managers, asset managers, and operations professionals with deep expertise in the logistics and industrial asset class.

The transition from the current property manager, Argyle Property Services LLC — an affiliate of the Seller managed by Sean Kilpatrick — will occur over a ninety (90) day period following closing pursuant to a Transition Services Agreement that has been negotiated between Buyer and Seller. The Transition Services Agreement provides for the orderly transfer of property management responsibilities, tenant relationships, vendor contracts, and operational systems, and is designed to ensure continuity of property operations and tenant services throughout the transition period.

4. Replacement Guaranty

In connection with the proposed change of control, Fairwater proposes to execute a Replacement Carve-Out Guaranty in favor of Pinnacle Federal Bank, N.A., replacing Greystone Meridian Partners Fund III, L.P. as the carve-out guarantor under each of the eight loans. A draft form of the Replacement Guaranty, substantially in the form attached as Exhibit S to the PSA, is enclosed herewith for Pinnacle's review and comment.

The proposed Replacement Guaranty incorporates the following financial covenants applicable to Fairwater as the replacement guarantor:

• Minimum Tangible Net Worth of Guarantor: $500,000,000; and

• Minimum Liquid Assets of Guarantor: $50,000,000.

These financial covenants are consistent with the covenants currently applicable to GMP Fund III under the existing guaranty and are identical to the thresholds set forth in the Master Loan Agreement. Fairwater confirms its current and projected compliance with each of these financial covenants and undertakes to maintain compliance throughout the remaining term of the loans.

Upon Pinnacle's consent to the change of control and the execution and delivery of the Replacement Guaranty by Fairwater, we respectfully request that Pinnacle release GMP Fund III from its existing guaranty obligations under the Master Loan Agreement and each applicable loan supplement. The release of GMP Fund III's guaranty obligations is a condition to closing under the PSA, and the form of release is addressed in the enclosed draft Assumption Agreement.

5. Consent Fee

We acknowledge that, pursuant to the terms of the Master Loan Agreement, a consent fee is payable to Pinnacle in connection with the grant of the change of control consent requested herein. Based on our review of the applicable provisions of the Master Loan Agreement, we understand the consent fee to be calculated as follows:

Consent Fee Rate: 0.25% of the aggregate outstanding principal balance

Aggregate Outstanding Principal Balance (as of February 28, 2024): $421,600,000

Calculated Consent Fee: $421,600,000 × 0.0025 = $1,054,000

Pursuant to the terms of the PSA, consent fees payable to lenders in connection with the change of control are shared equally between Buyer and Seller. Accordingly, with respect to the Pinnacle consent fee, the allocation is as follows:

• Buyer's Share: $527,000

• Seller's Share: $527,000

For informational purposes, the aggregate consent fees payable across all three lender facilities (Pinnacle, Veltrano Capital Lending Corp., and Sycamore Life Insurance Company) total $1,825,625, with each of Buyer and Seller bearing $912,812.50 of that aggregate amount.

Wire instructions for payment of the consent fee will be provided upon Pinnacle's confirmation of the fee amount and readiness to issue the consent. We respectfully request that Pinnacle confirm the calculated consent fee amount of $1,054,000 and provide Pinnacle's wire transfer instructions at its earliest convenience so that payment may be coordinated in advance of the scheduled closing date.

6. Assumption Agreement

In addition to the Replacement Guaranty described in Section 4 above, Fairwater proposes to enter into an Assumption Agreement with Pinnacle, pursuant to which Fairwater will formally assume all borrower obligations under the Master Loan Agreement and each of the eight individual loan supplements. A draft form of the Assumption Agreement is enclosed herewith for Pinnacle's review and comment.

The Assumption Agreement will confirm, among other things, that:

(a) all existing loan terms, including the interest rate, maturity date, amortization schedule, reserve requirements, and all other material provisions of the Master Loan Agreement and each loan supplement, remain unchanged and in full force and effect;

(b) each Borrower entity, now wholly owned by Fairwater, continues to be bound by all of its obligations under the loan documents;

(c) Fairwater, as the new indirect owner and controlling party of each Borrower, acknowledges and assumes all obligations and liabilities of the Borrowers under the loan documents; and

(d) the representations and warranties of the Borrowers set forth in the loan documents are reaffirmed as of the closing date, subject to such updates and modifications as may be disclosed to and approved by Pinnacle in connection with the consent process.

To be clear, no modifications to the loan terms, interest rate, maturity, amortization, reserves, or any other provision of the existing loan documents are being proposed in connection with this request. The Assumption Agreement is intended solely to memorialize the change of control, the assumption of obligations by Fairwater, the substitution of the replacement guarantor, and the release of the existing guarantor.

7. Additional Information Regarding the Borrower Entities

Each of the eight Borrower entities is and will remain a single-purpose Delaware limited liability company organized solely for the purpose of owning and operating its respective secured property. Following the closing of the change of control, each Borrower's operating agreement will be amended and restated to reflect Fairwater as the sole member of each entity. There will be no changes to the legal existence, organizational structure, or single-purpose entity restrictions applicable to any Borrower. Each Borrower will continue to comply in all respects with the separateness covenants and single-purpose entity requirements set forth in the Master Loan Agreement and the applicable loan supplements.

For Pinnacle's records, the Employer Identification Numbers for each of the Borrower entities are set forth below:

Certificates of formation and good standing for each of the eight Borrower entities from the Secretary of State of the State of Delaware are enclosed.

8. Enclosures

The following documents are enclosed with this letter for Pinnacle's review:

1. Copy of the executed Purchase and Sale Agreement dated February 28, 2024, together with all exhibits and schedules thereto;

2. Fairwater's audited consolidated financial statements for the fiscal years ended December 31, 2022, and December 31, 2023 (prepared by Ashford Prewitt LLP, independent auditors);

3. Fairwater's unaudited quarterly financial statements for the period ended September 30, 2023;

4. Fairwater's most recent annual report on Form 10-K as filed with the U.S. Securities and Exchange Commission;

5. Draft Replacement Carve-Out Guaranty (Fairwater Real Estate Investment Trust in favor of Pinnacle Federal Bank, N.A.);

6. Draft Assumption Agreement (Pinnacle Loans 1-A through 1-H);

7. Organizational chart of Fairwater Real Estate Investment Trust and its subsidiaries, including post-closing ownership structure of each of the eight Borrower entities;

8. Certificate of good standing for Fairwater Real Estate Investment Trust (State Department of Assessments and Taxation of Maryland);

9. Certificates of formation and good standing for each of the eight Borrower entities (Secretary of State of the State of Delaware); and

10. Current rent rolls and occupancy summary for each of the eight secured properties.

9. Request for Response and Contact Information

We respectfully request that Pinnacle and Whitfield & Archer review the enclosed materials and provide any comments on the draft Replacement Guaranty and Assumption Agreement at their earliest convenience. As noted above, the PSA-mandated lender consent deadline is May 24, 2024, and the scheduled closing date is May 31, 2024. We are mindful of these deadlines and wish to ensure that Pinnacle has ample time to conduct its review.

In particular, we request that Pinnacle:

(a) confirm the consent fee amount of $1,054,000 (0.25% of the aggregate outstanding principal balance of $421,600,000) and provide Pinnacle's wire transfer instructions for payment thereof;

(b) identify any additional information, financial statements, certifications, or documentation that Pinnacle may require in connection with its evaluation of this consent request; and

(c) provide any comments, revisions, or proposed modifications to the draft Replacement Guaranty and Assumption Agreement enclosed herewith.

We are prepared to provide any additional information or documentation that Pinnacle or your firm may require to facilitate and expedite the consent process.

The primary contacts at Calderwood & Harkness LLP for correspondence and questions regarding this consent request are as follows:

Douglas Fairchild, Partner Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022 Telephone: (212) 506-7120

Email: dfairchild@calderwoodharkness.com

Grace Nakamura, Associate Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022 Telephone: (212) 506-7244

Email: gnakamura@calderwoodharkness.com

Rafael Dominguez, Associate Calderwood & Harkness LLP 1700 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 429-3318

Email: rdominguez@calderwoodharkness.com

In addition, the following client representatives at Fairwater have authorized direct communication with Pinnacle and its counsel regarding this consent request:

Marcus Devereaux, Executive Vice President, Acquisitions Fairwater Real Estate Investment Trust Telephone: (443) 812-4501

Email: mdevereaux@fairwaterreit.com

David Elgin Park, General Counsel Fairwater Real Estate Investment Trust Telephone: (443) 812-4400

Email: dpark@fairwaterreit.com

Camille Oduya, In-House Real Estate Counsel Fairwater Real Estate Investment Trust Telephone: (443) 812-4415

Email: coduya@fairwaterreit.com

We appreciate Pinnacle's prompt attention to this request and look forward to working with you and your client to complete the consent process in an efficient and timely manner. Please do not hesitate to contact any of the individuals identified above with any questions or requests for additional information.

Very truly yours,