consent-request-letter-ridgemont.docx

1036-00004 · Client 1036 · Lender Consents

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

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CALDERWOOD & HARKNESS LLP Attorneys at Law 450 Park Avenue, 28th Floor New York, New York 10022 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com

March 8, 2024

VIA EMAIL AND OVERNIGHT COURIER

Leo Cranford, Esq., Partner Cranford McCabe LLP 100 Southeast Second Street, Suite 3000 Miami, Florida 33131

Re: Request for Lender Consent to Change of Control — Loans 2-A, 2-B, 2-C, and 2-D

Borrowers: GMP Buckhead LLC, GMP SouthPark LLC, GMP Cool Springs LLC, and GMP Brickell LLC

Lender: Veltrano Capital Lending Corp.

Loan Agreement: Loan Agreement dated February 1, 2021, as amended from time to time (the "Loan Agreement")

Aggregate Outstanding Principal Balance: $142,300,000 (as of February 28, 2024)

Dear Mr. Cranford:

I. Introduction and Representation

We write to you on behalf of our client, Fairwater Real Estate Investment Trust ("Fairwater" or "Buyer"), a Maryland real estate investment trust headquartered 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, had a market capitalization of approximately $4.8 billion. This matter is designated internally at Calderwood & Harkness LLP ("C&H") under matter number 1036-00004.

This letter is directed to Cranford McCabe LLP in its capacity as counsel to Veltrano Capital Lending Corp. ("Veltrano" or "Lender"), a Delaware corporation with offices at 200 South Biscayne Boulevard, Suite 3100, Miami, Florida 33131. We understand that the principal contact at Veltrano for purposes of this consent request is Denise Alvarado, Managing Director. We respectfully request that you forward a copy of this letter and the accompanying enclosures to Ms. Alvarado and to such other persons at Veltrano as may be appropriate.

The purpose of this letter is to formally request Veltrano's prior written consent to a change of control of each of the four borrower entities under the Loan Agreement, as more fully described below, in connection with Fairwater's proposed acquisition of a portfolio of commercial real estate assets from Greystone Meridian Partners Fund III, L.P. We enclose herewith the information and documentation that we believe will be necessary for Veltrano to evaluate this consent request, and we stand ready to provide any additional materials that Veltrano may require.

II. Description of the Transaction

Fairwater has entered into a Purchase and Sale Agreement dated February 28, 2024 (the "PSA") with Greystone Meridian Partners Fund III, L.P. ("GMP Fund III" or "Seller"), a Delaware limited partnership. GMP Fund III's general partner is Greystone Meridian Capital LLC, a Delaware limited liability company. Seller's principal offices are located at 3300 Peachtree Road NE, Suite 2200, Atlanta, Georgia 30326.

Pursuant to the PSA, Fairwater has agreed to acquire one hundred percent (100%) of the membership interests in each of fourteen (14) property-owning, single-purpose Delaware limited liability companies (the "Property Entities") from GMP Fund III. Four of these Property Entities — GMP Buckhead LLC, GMP SouthPark LLC, GMP Cool Springs LLC, and GMP Brickell LLC — are the borrower entities under the Veltrano Loan Agreement (each, a "Borrower" and collectively, the "Borrowers"). The transaction is structured as an entity-level purchase of membership interests, which will result in a change of control of each Property Entity, including each of the Borrowers.

The aggregate purchase price for the entire portfolio is One Billion One Hundred Million Dollars ($1,100,000,000). The transaction also involves the assumption by Fairwater of approximately Six Hundred Twelve Million Dollars ($612,000,000) in aggregate existing mortgage debt across three separate lender facilities, of which One Hundred Forty-Two Million Three Hundred Thousand Dollars ($142,300,000) is attributable to the Veltrano loans described herein. The balance of the purchase price, approximately Four Hundred Eighty-Eight Million Dollars ($488,000,000) in cash equity, will be funded at closing from Fairwater's cash on hand and available borrowings under its existing $750,000,000 unsecured revolving credit facility with Aldgate National Bank, N.A.

The anticipated closing date of the transaction is May 31, 2024, subject to the satisfaction of customary closing conditions, including the receipt of lender consents as described in this letter.

III. Identification of the Veltrano Loans

The Loan Agreement, dated February 1, 2021, was entered into between Veltrano Capital Lending Corp., as Lender, and each of the four Borrowers listed below, as amended from time to time. The Loan Agreement governs four separate loans (referred to herein and in the Loan Agreement as Loans 2-A, 2-B, 2-C, and 2-D), each of which is secured by a first-priority mortgage lien on the applicable real property and related collateral. Set forth below is a detailed identification of each loan, the applicable Borrower, and the corresponding mortgaged property.

A. Loan 2-A

Borrower: GMP Buckhead LLC (EIN: 84-2639901), a Delaware limited liability company

Property: Buckhead Place Office Tower, located at 3380 Peachtree Road NE, Atlanta, Georgia 30326

Property Type: Office

Size: Approximately 285,000 rentable square feet

Year Built: 2018

B. Loan 2-B

Borrower: GMP SouthPark LLC (EIN: 84-2639918), a Delaware limited liability company

Property: SouthPark Corporate Center, located at 6200 Fairview Road, Charlotte, North Carolina 28210

Property Type: Office

Size: Approximately 218,000 rentable square feet

Year Built: 2017

C. Loan 2-C

Borrower: GMP Cool Springs LLC (EIN: 84-2639925), a Delaware limited liability company

Property: Cool Springs Office Park, located at 5000 Virginia Way, Brentwood, Tennessee 37027

Property Type: Office

Size: Approximately 196,000 rentable square feet

Year Built: 2016

D. Loan 2-D

Borrower: GMP Brickell LLC (EIN: 84-2639932), a Delaware limited liability company

Property: Brickell Bay Office Building, located at 1450 Brickell Avenue, Miami, Florida 33131

Property Type: Office

Size: Approximately 152,000 rentable square feet

Year Built: 2019

E. Aggregate Loan Terms

The following terms apply to the Veltrano loans on an aggregate basis:

IV. Basis for Consent Request — Change of Control Provisions

Section 5.02(a) of the Loan Agreement (as we understand its provisions based on our review of the publicly available form and information provided to us by Seller's counsel) contains restrictions on the direct or indirect transfer of ownership interests in any Borrower entity without the prior written consent of the Lender. Specifically, the Loan Agreement provides that no Transfer (as defined therein) of any direct or indirect ownership interest in any Borrower, or any interest in any entity that directly or indirectly controls any Borrower, shall be permitted without the prior written consent of Veltrano, which consent may be granted or withheld in Veltrano's reasonable discretion, subject to the satisfaction of certain conditions set forth in the Loan Agreement.

The proposed transaction contemplates the transfer of one hundred percent (100%) of the membership interests in each of GMP Buckhead LLC, GMP SouthPark LLC, GMP Cool Springs LLC, and GMP Brickell LLC from GMP Fund III to Fairwater. This transfer unequivocally constitutes a "change of control" and a "Transfer" as defined in the Loan Agreement, thereby triggering the requirement for Veltrano's prior written consent.

Accordingly, Fairwater hereby formally requests that Veltrano grant its prior written consent to the change of control of each of the four Borrower entities, such consent to be effective as of the closing of the transaction contemplated by the PSA. We believe that the information and documentation enclosed herewith will demonstrate to Veltrano's satisfaction that Fairwater is a creditworthy and experienced successor owner, and that the proposed change of control will not adversely affect the interests of Veltrano under the Loan Agreement.

V. Description of Fairwater REIT — Proposed New Owner and Guarantor

To assist Veltrano in its evaluation of the consent request, we provide the following summary information regarding Fairwater:

Full Legal Name: Fairwater Real Estate Investment Trust, a Maryland real estate investment trust

Headquarters: 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044

NYSE Ticker: FREIT

Market Capitalization: Approximately $4.8 billion (as of Q4 2023)

Senior Management:

• Jonathan R. Whitmore — Chief Executive Officer

• Patricia Sung-Calloway — Chief Financial Officer

• Marcus Devereaux — Executive Vice President, Acquisitions

• David Elgin Park — General Counsel

Fairwater currently owns and operates a diversified portfolio of sixty-two (62) logistics, industrial, and suburban office properties across eleven (11) states, comprising approximately 18.4 million rentable square feet. The portfolio's weighted-average remaining lease term is approximately 6.2 years, and Fairwater's tenant base includes a number of investment-grade and nationally recognized corporate tenants. Fairwater has extensive experience in the acquisition, financing, management, and disposition of commercial real estate assets, including office properties of the type securing the Veltrano loans.

Fairwater is prepared to replace GMP Fund III as the carve-out guarantor under the Loan Agreement by executing a replacement guaranty in form substantially similar to the existing carve-out guaranty delivered by GMP Fund III, or in such other form as may be reasonably agreed upon between Fairwater and Veltrano. A draft form of the proposed replacement guaranty is enclosed with this letter (described in Section VIII below).

Fairwater represents that it is currently in compliance with the guarantor financial covenants customarily required under the Loan Agreement, including, without limitation: (i) a minimum tangible net worth of not less than Five Hundred Million Dollars ($500,000,000); and (ii) minimum liquid assets of not less than Fifty Million Dollars ($50,000,000). The enclosed audited and unaudited financial statements will confirm Fairwater's satisfaction of these financial tests.

VI. Consent Fee

Fairwater acknowledges that the Loan Agreement provides for the payment of a consent fee in connection with any approved Transfer or change of control. Based on our understanding of the applicable provisions of the Loan Agreement, the consent fee is calculated at a rate of fifty basis points (0.50%) of the aggregate outstanding principal balance of the Veltrano loans as of the date of the consent. The calculation is as follows:

$142,300,000 × 0.50% = $711,500

Pursuant to Section 8.04(b) of the PSA, the total consent fees payable across all three lender facilities in connection with the transaction (aggregating $1,825,625) are to be borne equally (50/50) between Buyer and Seller. Accordingly, Fairwater's share of the Veltrano consent fee is $355,750, and Seller's share of the Veltrano consent fee is $355,750.

The full consent fee of $711,500 will be paid to Veltrano by wire transfer on or before the closing date of the transaction, or at such earlier time or in such manner as may be directed by Veltrano. We will coordinate wire transfer instructions with your office and with Ms. Alvarado in advance of closing.

VII. Proposed Replacement Guaranty

As noted in Section V above, Fairwater proposes to deliver a replacement carve-out guaranty (the "Replacement Guaranty") in favor of Veltrano, replacing GMP Fund III as the guarantor under the Loan Agreement. Upon the execution and delivery of the Replacement Guaranty by Fairwater, GMP Fund III would be released from its obligations under the existing carve-out guaranty, in accordance with the terms of the consent and the Loan Agreement.

A draft form of the Replacement Guaranty is enclosed herewith. The enclosed form is based upon the form attached as Exhibit S to the PSA, which was negotiated between Buyer and Seller and is intended to be substantially similar to the existing carve-out guaranty in its substantive terms and conditions. The key financial covenants of the proposed Replacement Guaranty include:

(a) Minimum Tangible Net Worth: The Replacement Guarantor shall maintain a tangible net worth of not less than $500,000,000 at all times during the term of the Replacement Guaranty.

(b) Minimum Liquid Assets: The Replacement Guarantor shall maintain liquid assets (as defined in the Replacement Guaranty) of not less than $50,000,000 at all times during the term of the Replacement Guaranty.

We respectfully request that Veltrano and Cranford McCabe LLP review the enclosed form of Replacement Guaranty and provide any comments or revisions at your earliest convenience. We are committed to working collaboratively with you and Veltrano to finalize a form of Replacement Guaranty that is acceptable to all parties.

VIII. Enclosed Materials

The following materials are enclosed with this letter for Veltrano's review and evaluation in connection with the consent request:

1. Copy of the Purchase and Sale Agreement dated February 28, 2024 (execution version, with selected relevant exhibits; certain exhibits and schedules not material to the consent request have been omitted for brevity, but are available upon request).

2. Fairwater REIT organizational documents, including the Declaration of Trust and Bylaws.

3. Fairwater REIT most recent audited financial statements for the fiscal year ended December 31, 2023, prepared by Ashford Prewitt LLP (Martin Ashford, CPA, Engagement Partner).

4. Fairwater REIT most recent interim (unaudited) financial statements for the quarter ended December 31, 2023.

5. Certificate of Good Standing for Fairwater Real Estate Investment Trust, issued by the State Department of Assessments and Taxation of Maryland.

6. Certified board resolutions of Fairwater's Board of Trustees authorizing the acquisition of the portfolio and the assumption of existing mortgage indebtedness, including the Veltrano loans.

7. Draft Replacement Carve-Out Guaranty (form per PSA Exhibit S).

8. Draft Assumption Agreement for the Veltrano loans.

9. Organizational chart showing the pre-closing and post-closing ownership structure of the Borrower entities.

10. Fairwater REIT insurance certificates and current coverage summary for existing portfolio properties.

Should Veltrano require any additional information, documentation, or supplemental materials in order to complete its evaluation of the consent request, we will endeavor to provide the same promptly upon request.

IX. Assumption of Borrower Obligations

Fairwater confirms its intention to assume, effective as of the closing of the transaction, all of the obligations of the Borrower entities under the Loan Agreement and the related loan documents, and to be bound by all of the terms and conditions thereof. In furtherance of this assumption, Fairwater will execute an assumption agreement (the "Assumption Agreement") in form and substance reasonably satisfactory to Veltrano. A draft form of the Assumption Agreement is included among the enclosed materials.

For the avoidance of doubt, the four Borrower entities — GMP Buckhead LLC, GMP SouthPark LLC, GMP Cool Springs LLC, and GMP Brickell LLC — will continue as the named borrower entities under the Loan Agreement following the closing. The transaction does not involve any merger, dissolution, or reorganization of the Borrower entities; rather, only the ownership of such entities will change from GMP Fund III to Fairwater. The Borrowers will continue to hold title to their respective mortgaged properties, and all existing loan documents, including the mortgages, assignments of rents and leases, and related security instruments, will remain in full force and effect.

Fairwater is not requesting any modification to the terms of the Veltrano loans. The interest rate (4.68% per annum, fixed), the maturity date (March 1, 2029), the amortization schedule, and all other material terms and conditions of the Loan Agreement will remain unchanged following the change of control. This consent request relates solely to the change in ownership of the Borrower entities and the substitution of the carve-out guarantor.

X. Timeline and Requested Response

Time is of the essence with respect to the consent process. The PSA establishes the following key dates relevant to this consent request:

• Lender Consent Deadline: May 24, 2024

• Scheduled Closing Date: May 31, 2024

We respectfully request that Veltrano and Cranford McCabe LLP review the enclosed materials and provide either (a) a draft consent letter in form acceptable to Veltrano, or (b) comments to the enclosed form of lender consent attached as Exhibit R to the PSA, at your earliest convenience and in any event no later than April 30, 2024. This timeline is intended to allow adequate time for the negotiation and execution of the consent letter, the Replacement Guaranty, the Assumption Agreement, and any other related documentation prior to the consent deadline of May 24, 2024.

We recognize that Veltrano may require additional information or may wish to conduct its own due diligence regarding Fairwater and the proposed transaction. C&H and Fairwater are available to provide any additional information, financial data, property-level documentation, or other materials that Veltrano may require to evaluate the consent request. We are also available to schedule a call or meeting with Veltrano's deal team at any mutually convenient time to discuss the transaction and the consent process.

XI. Seller's Counsel Coordination

We note for your information that Seller is represented in connection with the transaction by Blackridge Hayes LLP, with the following contacts:

Nathaniel Pryce, Partner Thomas Keating, Senior Associate Blackridge Hayes LLP 1285 Avenue of the Americas, 34th Floor New York, New York 10019

C&H has coordinated this consent request with Blackridge Hayes LLP and with Seller, and Seller has confirmed its willingness to cooperate in providing any borrower-level documentation, certifications, rent rolls, operating statements, or other property-level information that Veltrano may require in connection with its review. Any requests for borrower-level or property-level information should be directed to either C&H or Blackridge Hayes, and we will coordinate the response with Seller.

XII. Contact Information

The primary contacts at C&H for this consent workstream are as follows:

Douglas Fairchild, Partner Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022 Telephone: (212) 554-7120

Email: dfairchild@calderwoodharkness.com

Grace Nakamura, Lead Associate Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022 Telephone: (212) 554-7344

Email: gnakamura@calderwoodharkness.com

Rafael Dominguez, Associate Calderwood & Harkness LLP 1700 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 887-6210

Email: rdominguez@calderwoodharkness.com

The primary client contacts at Fairwater are as follows:

Marcus Devereaux, Executive Vice President, Acquisitions Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044 Telephone: (410) 772-5500

Email: mdevereaux@fairwaterreit.com

David Elgin Park, General Counsel Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044 Telephone: (410) 772-5510

Email: dpark@fairwaterreit.com

Camille Oduya, In-House Real Estate Counsel Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044 Telephone: (410) 772-5525

Email: coduya@fairwaterreit.com

We look forward to working with you and Veltrano to finalize the consent on a timely basis. We appreciate your prompt attention to this matter and are available to discuss any aspect of this request at your convenience. Please do not hesitate to contact me or any member of our team should you have questions or require additional information.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Fairchild, Partner

Telephone: (212) 554-7120

Email: dfairchild@calderwoodharkness.com

cc: (via email)

Marcus Devereaux, Executive Vice President, Acquisitions, Fairwater Real Estate Investment Trust David Elgin Park, General Counsel, Fairwater Real Estate Investment Trust Camille Oduya, In-House Real Estate Counsel, Fairwater Real Estate Investment Trust Denise Alvarado, Managing Director, Veltrano Capital Lending Corp. Nathaniel Pryce, Partner, Blackridge Hayes LLP Thomas Keating, Senior Associate, Blackridge Hayes LLP Angela Fontaine, Partner, Calderwood & Harkness LLP Grace Nakamura, Associate, Calderwood & Harkness LLP

Enclosures (as listed above)

Term	Detail
Aggregate Outstanding Principal Balance (as of February 28, 2024)	$142,300,000
Interest Rate	Fixed at 4.68% per annum
Maturity Date	March 1, 2029
Current Carve-Out Guarantor	Greystone Meridian Partners Fund III, L.P.

CALDERWOOD & HARKNESS LLP Attorneys at Law 450 Park Avenue, 28th Floor New York, New York 10022 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com
March 8, 2024
VIA EMAIL AND OVERNIGHT COURIER
Leo Cranford, Esq., Partner Cranford McCabe LLP 100 Southeast Second Street, Suite 3000 Miami, Florida 33131
Re: Request for Lender Consent to Change of Control — Loans 2-A, 2-B, 2-C, and 2-D
Borrowers: GMP Buckhead LLC, GMP SouthPark LLC, GMP Cool Springs LLC, and GMP Brickell LLC
Lender: Veltrano Capital Lending Corp.
Loan Agreement: Loan Agreement dated February 1, 2021, as amended from time to time (the "Loan Agreement")
Aggregate Outstanding Principal Balance: $142,300,000 (as of February 28, 2024)
Dear Mr. Cranford:
I. Introduction and Representation
We write to you on behalf of our client, Fairwater Real Estate Investment Trust ("Fairwater" or "Buyer"), a Maryland real estate investment trust headquartered 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, had a market capitalization of approximately $4.8 billion. This matter is designated internally at Calderwood & Harkness LLP ("C&H") under matter number 1036-00004.
This letter is directed to Cranford McCabe LLP in its capacity as counsel to Veltrano Capital Lending Corp. ("Veltrano" or "Lender"), a Delaware corporation with offices at 200 South Biscayne Boulevard, Suite 3100, Miami, Florida 33131. We understand that the principal contact at Veltrano for purposes of this consent request is Denise Alvarado, Managing Director. We respectfully request that you forward a copy of this letter and the accompanying enclosures to Ms. Alvarado and to such other persons at Veltrano as may be appropriate.
The purpose of this letter is to formally request Veltrano's prior written consent to a change of control of each of the four borrower entities under the Loan Agreement, as more fully described below, in connection with Fairwater's proposed acquisition of a portfolio of commercial real estate assets from Greystone Meridian Partners Fund III, L.P. We enclose herewith the information and documentation that we believe will be necessary for Veltrano to evaluate this consent request, and we stand ready to provide any additional materials that Veltrano may require.
II. Description of the Transaction
Fairwater has entered into a Purchase and Sale Agreement dated February 28, 2024 (the "PSA") with Greystone Meridian Partners Fund III, L.P. ("GMP Fund III" or "Seller"), a Delaware limited partnership. GMP Fund III's general partner is Greystone Meridian Capital LLC, a Delaware limited liability company. Seller's principal offices are located at 3300 Peachtree Road NE, Suite 2200, Atlanta, Georgia 30326.
Pursuant to the PSA, Fairwater has agreed to acquire one hundred percent (100%) of the membership interests in each of fourteen (14) property-owning, single-purpose Delaware limited liability companies (the "Property Entities") from GMP Fund III. Four of these Property Entities — GMP Buckhead LLC, GMP SouthPark LLC, GMP Cool Springs LLC, and GMP Brickell LLC — are the borrower entities under the Veltrano Loan Agreement (each, a "Borrower" and collectively, the "Borrowers"). The transaction is structured as an entity-level purchase of membership interests, which will result in a change of control of each Property Entity, including each of the Borrowers.
The aggregate purchase price for the entire portfolio is One Billion One Hundred Million Dollars ($1,100,000,000). The transaction also involves the assumption by Fairwater of approximately Six Hundred Twelve Million Dollars ($612,000,000) in aggregate existing mortgage debt across three separate lender facilities, of which One Hundred Forty-Two Million Three Hundred Thousand Dollars ($142,300,000) is attributable to the Veltrano loans described herein. The balance of the purchase price, approximately Four Hundred Eighty-Eight Million Dollars ($488,000,000) in cash equity, will be funded at closing from Fairwater's cash on hand and available borrowings under its existing $750,000,000 unsecured revolving credit facility with Aldgate National Bank, N.A.
The anticipated closing date of the transaction is May 31, 2024, subject to the satisfaction of customary closing conditions, including the receipt of lender consents as described in this letter.
III. Identification of the Veltrano Loans
The Loan Agreement, dated February 1, 2021, was entered into between Veltrano Capital Lending Corp., as Lender, and each of the four Borrowers listed below, as amended from time to time. The Loan Agreement governs four separate loans (referred to herein and in the Loan Agreement as Loans 2-A, 2-B, 2-C, and 2-D), each of which is secured by a first-priority mortgage lien on the applicable real property and related collateral. Set forth below is a detailed identification of each loan, the applicable Borrower, and the corresponding mortgaged property.
A. Loan 2-A
Borrower: GMP Buckhead LLC (EIN: 84-2639901), a Delaware limited liability company
Property: Buckhead Place Office Tower, located at 3380 Peachtree Road NE, Atlanta, Georgia 30326
Property Type: Office
Size: Approximately 285,000 rentable square feet
Year Built: 2018
B. Loan 2-B
Borrower: GMP SouthPark LLC (EIN: 84-2639918), a Delaware limited liability company
Property: SouthPark Corporate Center, located at 6200 Fairview Road, Charlotte, North Carolina 28210
Property Type: Office
Size: Approximately 218,000 rentable square feet
Year Built: 2017
C. Loan 2-C
Borrower: GMP Cool Springs LLC (EIN: 84-2639925), a Delaware limited liability company
Property: Cool Springs Office Park, located at 5000 Virginia Way, Brentwood, Tennessee 37027
Property Type: Office
Size: Approximately 196,000 rentable square feet
Year Built: 2016
D. Loan 2-D
Borrower: GMP Brickell LLC (EIN: 84-2639932), a Delaware limited liability company
Property: Brickell Bay Office Building, located at 1450 Brickell Avenue, Miami, Florida 33131
Property Type: Office
Size: Approximately 152,000 rentable square feet
Year Built: 2019
E. Aggregate Loan Terms
The following terms apply to the Veltrano loans on an aggregate basis:
IV. Basis for Consent Request — Change of Control Provisions
Section 5.02(a) of the Loan Agreement (as we understand its provisions based on our review of the publicly available form and information provided to us by Seller's counsel) contains restrictions on the direct or indirect transfer of ownership interests in any Borrower entity without the prior written consent of the Lender. Specifically, the Loan Agreement provides that no Transfer (as defined therein) of any direct or indirect ownership interest in any Borrower, or any interest in any entity that directly or indirectly controls any Borrower, shall be permitted without the prior written consent of Veltrano, which consent may be granted or withheld in Veltrano's reasonable discretion, subject to the satisfaction of certain conditions set forth in the Loan Agreement.
The proposed transaction contemplates the transfer of one hundred percent (100%) of the membership interests in each of GMP Buckhead LLC, GMP SouthPark LLC, GMP Cool Springs LLC, and GMP Brickell LLC from GMP Fund III to Fairwater. This transfer unequivocally constitutes a "change of control" and a "Transfer" as defined in the Loan Agreement, thereby triggering the requirement for Veltrano's prior written consent.
Accordingly, Fairwater hereby formally requests that Veltrano grant its prior written consent to the change of control of each of the four Borrower entities, such consent to be effective as of the closing of the transaction contemplated by the PSA. We believe that the information and documentation enclosed herewith will demonstrate to Veltrano's satisfaction that Fairwater is a creditworthy and experienced successor owner, and that the proposed change of control will not adversely affect the interests of Veltrano under the Loan Agreement.
V. Description of Fairwater REIT — Proposed New Owner and Guarantor
To assist Veltrano in its evaluation of the consent request, we provide the following summary information regarding Fairwater:
Full Legal Name: Fairwater Real Estate Investment Trust, a Maryland real estate investment trust
Headquarters: 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044
NYSE Ticker: FREIT
Market Capitalization: Approximately $4.8 billion (as of Q4 2023)
Senior Management:
• Jonathan R. Whitmore — Chief Executive Officer
• Patricia Sung-Calloway — Chief Financial Officer
• Marcus Devereaux — Executive Vice President, Acquisitions
• David Elgin Park — General Counsel
Fairwater currently owns and operates a diversified portfolio of sixty-two (62) logistics, industrial, and suburban office properties across eleven (11) states, comprising approximately 18.4 million rentable square feet. The portfolio's weighted-average remaining lease term is approximately 6.2 years, and Fairwater's tenant base includes a number of investment-grade and nationally recognized corporate tenants. Fairwater has extensive experience in the acquisition, financing, management, and disposition of commercial real estate assets, including office properties of the type securing the Veltrano loans.
Fairwater is prepared to replace GMP Fund III as the carve-out guarantor under the Loan Agreement by executing a replacement guaranty in form substantially similar to the existing carve-out guaranty delivered by GMP Fund III, or in such other form as may be reasonably agreed upon between Fairwater and Veltrano. A draft form of the proposed replacement guaranty is enclosed with this letter (described in Section VIII below).
Fairwater represents that it is currently in compliance with the guarantor financial covenants customarily required under the Loan Agreement, including, without limitation: (i) a minimum tangible net worth of not less than Five Hundred Million Dollars ($500,000,000); and (ii) minimum liquid assets of not less than Fifty Million Dollars ($50,000,000). The enclosed audited and unaudited financial statements will confirm Fairwater's satisfaction of these financial tests.
VI. Consent Fee
Fairwater acknowledges that the Loan Agreement provides for the payment of a consent fee in connection with any approved Transfer or change of control. Based on our understanding of the applicable provisions of the Loan Agreement, the consent fee is calculated at a rate of fifty basis points (0.50%) of the aggregate outstanding principal balance of the Veltrano loans as of the date of the consent. The calculation is as follows:
$142,300,000 × 0.50% = $711,500
Pursuant to Section 8.04(b) of the PSA, the total consent fees payable across all three lender facilities in connection with the transaction (aggregating $1,825,625) are to be borne equally (50/50) between Buyer and Seller. Accordingly, Fairwater's share of the Veltrano consent fee is $355,750, and Seller's share of the Veltrano consent fee is $355,750.
The full consent fee of $711,500 will be paid to Veltrano by wire transfer on or before the closing date of the transaction, or at such earlier time or in such manner as may be directed by Veltrano. We will coordinate wire transfer instructions with your office and with Ms. Alvarado in advance of closing.
VII. Proposed Replacement Guaranty
As noted in Section V above, Fairwater proposes to deliver a replacement carve-out guaranty (the "Replacement Guaranty") in favor of Veltrano, replacing GMP Fund III as the guarantor under the Loan Agreement. Upon the execution and delivery of the Replacement Guaranty by Fairwater, GMP Fund III would be released from its obligations under the existing carve-out guaranty, in accordance with the terms of the consent and the Loan Agreement.
A draft form of the Replacement Guaranty is enclosed herewith. The enclosed form is based upon the form attached as Exhibit S to the PSA, which was negotiated between Buyer and Seller and is intended to be substantially similar to the existing carve-out guaranty in its substantive terms and conditions. The key financial covenants of the proposed Replacement Guaranty include:
(a) Minimum Tangible Net Worth: The Replacement Guarantor shall maintain a tangible net worth of not less than $500,000,000 at all times during the term of the Replacement Guaranty.
(b) Minimum Liquid Assets: The Replacement Guarantor shall maintain liquid assets (as defined in the Replacement Guaranty) of not less than $50,000,000 at all times during the term of the Replacement Guaranty.
We respectfully request that Veltrano and Cranford McCabe LLP review the enclosed form of Replacement Guaranty and provide any comments or revisions at your earliest convenience. We are committed to working collaboratively with you and Veltrano to finalize a form of Replacement Guaranty that is acceptable to all parties.
VIII. Enclosed Materials
The following materials are enclosed with this letter for Veltrano's review and evaluation in connection with the consent request:
1. Copy of the Purchase and Sale Agreement dated February 28, 2024 (execution version, with selected relevant exhibits; certain exhibits and schedules not material to the consent request have been omitted for brevity, but are available upon request).
2. Fairwater REIT organizational documents, including the Declaration of Trust and Bylaws.
3. Fairwater REIT most recent audited financial statements for the fiscal year ended December 31, 2023, prepared by Ashford Prewitt LLP (Martin Ashford, CPA, Engagement Partner).
4. Fairwater REIT most recent interim (unaudited) financial statements for the quarter ended December 31, 2023.
5. Certificate of Good Standing for Fairwater Real Estate Investment Trust, issued by the State Department of Assessments and Taxation of Maryland.
6. Certified board resolutions of Fairwater's Board of Trustees authorizing the acquisition of the portfolio and the assumption of existing mortgage indebtedness, including the Veltrano loans.
7. Draft Replacement Carve-Out Guaranty (form per PSA Exhibit S).
8. Draft Assumption Agreement for the Veltrano loans.
9. Organizational chart showing the pre-closing and post-closing ownership structure of the Borrower entities.
10. Fairwater REIT insurance certificates and current coverage summary for existing portfolio properties.
Should Veltrano require any additional information, documentation, or supplemental materials in order to complete its evaluation of the consent request, we will endeavor to provide the same promptly upon request.
IX. Assumption of Borrower Obligations
Fairwater confirms its intention to assume, effective as of the closing of the transaction, all of the obligations of the Borrower entities under the Loan Agreement and the related loan documents, and to be bound by all of the terms and conditions thereof. In furtherance of this assumption, Fairwater will execute an assumption agreement (the "Assumption Agreement") in form and substance reasonably satisfactory to Veltrano. A draft form of the Assumption Agreement is included among the enclosed materials.
For the avoidance of doubt, the four Borrower entities — GMP Buckhead LLC, GMP SouthPark LLC, GMP Cool Springs LLC, and GMP Brickell LLC — will continue as the named borrower entities under the Loan Agreement following the closing. The transaction does not involve any merger, dissolution, or reorganization of the Borrower entities; rather, only the ownership of such entities will change from GMP Fund III to Fairwater. The Borrowers will continue to hold title to their respective mortgaged properties, and all existing loan documents, including the mortgages, assignments of rents and leases, and related security instruments, will remain in full force and effect.
Fairwater is not requesting any modification to the terms of the Veltrano loans. The interest rate (4.68% per annum, fixed), the maturity date (March 1, 2029), the amortization schedule, and all other material terms and conditions of the Loan Agreement will remain unchanged following the change of control. This consent request relates solely to the change in ownership of the Borrower entities and the substitution of the carve-out guarantor.
X. Timeline and Requested Response
Time is of the essence with respect to the consent process. The PSA establishes the following key dates relevant to this consent request:
• Lender Consent Deadline: May 24, 2024
• Scheduled Closing Date: May 31, 2024
We respectfully request that Veltrano and Cranford McCabe LLP review the enclosed materials and provide either (a) a draft consent letter in form acceptable to Veltrano, or (b) comments to the enclosed form of lender consent attached as Exhibit R to the PSA, at your earliest convenience and in any event no later than April 30, 2024. This timeline is intended to allow adequate time for the negotiation and execution of the consent letter, the Replacement Guaranty, the Assumption Agreement, and any other related documentation prior to the consent deadline of May 24, 2024.
We recognize that Veltrano may require additional information or may wish to conduct its own due diligence regarding Fairwater and the proposed transaction. C&H and Fairwater are available to provide any additional information, financial data, property-level documentation, or other materials that Veltrano may require to evaluate the consent request. We are also available to schedule a call or meeting with Veltrano's deal team at any mutually convenient time to discuss the transaction and the consent process.
XI. Seller's Counsel Coordination
We note for your information that Seller is represented in connection with the transaction by Blackridge Hayes LLP, with the following contacts:
Nathaniel Pryce, Partner Thomas Keating, Senior Associate Blackridge Hayes LLP 1285 Avenue of the Americas, 34th Floor New York, New York 10019
C&H has coordinated this consent request with Blackridge Hayes LLP and with Seller, and Seller has confirmed its willingness to cooperate in providing any borrower-level documentation, certifications, rent rolls, operating statements, or other property-level information that Veltrano may require in connection with its review. Any requests for borrower-level or property-level information should be directed to either C&H or Blackridge Hayes, and we will coordinate the response with Seller.
XII. Contact Information
The primary contacts at C&H for this consent workstream are as follows:
Douglas Fairchild, Partner Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022 Telephone: (212) 554-7120
Email: dfairchild@calderwoodharkness.com
Grace Nakamura, Lead Associate Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022 Telephone: (212) 554-7344
Email: gnakamura@calderwoodharkness.com
Rafael Dominguez, Associate Calderwood & Harkness LLP 1700 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 887-6210
Email: rdominguez@calderwoodharkness.com
The primary client contacts at Fairwater are as follows:
Marcus Devereaux, Executive Vice President, Acquisitions Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044 Telephone: (410) 772-5500
Email: mdevereaux@fairwaterreit.com
David Elgin Park, General Counsel Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044 Telephone: (410) 772-5510
Email: dpark@fairwaterreit.com
Camille Oduya, In-House Real Estate Counsel Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044 Telephone: (410) 772-5525
Email: coduya@fairwaterreit.com
We look forward to working with you and Veltrano to finalize the consent on a timely basis. We appreciate your prompt attention to this matter and are available to discuss any aspect of this request at your convenience. Please do not hesitate to contact me or any member of our team should you have questions or require additional information.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Fairchild, Partner
Telephone: (212) 554-7120
Email: dfairchild@calderwoodharkness.com
cc: (via email)
Marcus Devereaux, Executive Vice President, Acquisitions, Fairwater Real Estate Investment Trust David Elgin Park, General Counsel, Fairwater Real Estate Investment Trust Camille Oduya, In-House Real Estate Counsel, Fairwater Real Estate Investment Trust Denise Alvarado, Managing Director, Veltrano Capital Lending Corp. Nathaniel Pryce, Partner, Blackridge Hayes LLP Thomas Keating, Senior Associate, Blackridge Hayes LLP Angela Fontaine, Partner, Calderwood & Harkness LLP Grace Nakamura, Associate, Calderwood & Harkness LLP
Enclosures (as listed above)
Term | Detail
Aggregate Outstanding Principal Balance (as of February 28, 2024) | $142,300,000
Interest Rate | Fixed at 4.68% per annum
Maturity Date | March 1, 2029
Current Carve-Out Guarantor | Greystone Meridian Partners Fund III, L.P.

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