1036-00004 · Client 1036 · Post-Closing

amended-restated-operating-agreements-14-entities.docx DOCUMENT Real Estate

104 / 172 ← → ✕

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

450 Park Avenue, 28th Floor New York, New York 10022 Tel: (212) 558-4000	Fax: (212) 558-3588
1700 K Street NW, Suite 900 Washington, DC 20006 Tel: (202) 956-7500	Fax: (202) 956-7599

Matter No. 1036-00004

June 14, 2024

MEMORANDUM

David and Camille:

As you are aware, the closing of the portfolio acquisition by Fairwater Real Estate Investment Trust, a Maryland real estate investment trust ("Fairwater REIT" or the "Buyer"), of 100% of the membership interests in each of the fourteen (14) property-owning single-purpose Delaware limited liability companies (each, a "Target Entity" and collectively, the "Target Entities") from Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership ("GMP Fund III" or the "Seller"), occurred on June 6, 2024 (the "Closing Date"). The acquisition was consummated pursuant to 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 (collectively, the "PSA"), at an aggregate purchase price of $1,100,000,000.

In connection with the Closing and in furtherance of Fairwater REIT's post-closing organizational objectives, we have prepared, and enclose herewith, fourteen (14) individual Amended and Restated Limited Liability Company Operating Agreements (each, an "Amended Agreement" and collectively, the "Amended Agreements"), one for each Target Entity. Each Amended Agreement amends and restates in its entirety the prior Limited Liability Company Operating Agreement of the respective Target Entity LLC that was in effect during GMP Fund III's period of ownership (each, a "Prior Operating Agreement").

Each Amended Agreement reflects Fairwater Real Estate Investment Trust as the sole member of the respective Target Entity effective as of the Closing Date, June 6, 2024. The Amended Agreements are uniform in their substantive terms and have been drafted in substantially identical form, with entity-specific information (including LLC name, employer identification number, property description, lender information, and state of foreign qualification) inserted for each Target Entity as appropriate.

All fourteen (14) Amended Agreements are governed by the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq., as each Target Entity was organized under, and continues to exist under, the laws of the State of Delaware. Each Target Entity is registered to do business as a foreign limited liability company in the state in which its respective property is located (Georgia, Texas, Florida, Tennessee, or North Carolina, as applicable).

The Amended Agreements incorporate and are consistent with the single-purpose entity ("SPE") covenants required under the respective mortgage loan documents for each Target Entity. The three lender relationships — Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company — each impose SPE requirements that have been reflected in Article VII of each Amended Agreement. Additionally, Article XII of each Amended Agreement addresses the assumed loan obligations and cross-references the Assumption Agreements and Replacement Carve-Out Guaranties executed at Closing.

Execution Instructions. Each Amended Agreement requires execution by an authorized officer of Fairwater Real Estate Investment Trust. We recommend that the signatory be either Marcus Devereaux, Executive Vice President, Acquisitions, or David Elgin Park, General Counsel, each of whom has been authorized by the Board of Trustees to execute documents in connection with this transaction pursuant to the Board Resolution dated February 15, 2024. Each Amended Agreement should be signed, dated, and retained in the corporate records of the respective Target Entity. We recommend maintaining originals at Fairwater REIT's principal office in Columbia, Maryland, with copies provided to this firm for the transaction closing binders.

Delaware Filings. Corresponding manager change filings (Certificates of Amendment to the respective Certificates of Formation) with the Delaware Secretary of State are being separately prepared and filed by our office. We anticipate filing all fourteen (14) amendments within the next ten (10) business days. We will circulate stamped copies upon receipt from the Secretary of State's office.

Foreign Qualification Updates. We are also coordinating with local counsel in each of the applicable property states (Georgia, Texas, Florida, Tennessee, and North Carolina) to update the foreign qualification filings for each Target Entity to reflect the change in ownership and management. We will provide a status update on these filings under separate cover.

Index of Enclosed Agreements. The fourteen (14) Amended Agreements are tabbed and organized as set forth in the table below:

Please do not hesitate to contact me at (212) 558-4127 or gnakamura@calderwoodharkness.com, or Douglas Fairchild at (212) 558-4055 or dfairchild@calderwoodharkness.com, should you have any questions regarding the enclosed Amended Agreements or any other post-closing matters.

Very truly yours,

Grace Nakamura Partner Calderwood & Harkness LLP

cc: Douglas Fairchild, Calderwood & Harkness LLP Marcus Devereaux, EVP Acquisitions, Fairwater REIT

Enclosures (14)

TAB 1

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

GMP FAIRFIELD I LLC

a Delaware Limited Liability Company

Effective as of June 6, 2024

Sole Member: Fairwater Real Estate Investment Trust

AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF GMP FAIRFIELD I LLC

This Amended and Restated Limited Liability Company Operating Agreement (this "Agreement") of GMP Fairfield I LLC, a Delaware limited liability company (the "Company"), is entered into and effective as of June 6, 2024 (the "Effective Date"), by Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (the "Member").

RECITALS

A. Formation. The Company was formed as a limited liability company under the laws of the State of Delaware by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware on March 12, 2020. The Company's registered agent is located at 1209 Orange Street, Wilmington, Delaware 19801.

B. Prior Operating Agreement. The Company was previously governed by that certain Limited Liability Company Operating Agreement dated as of March 12, 2020, by and between Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership (the "Former Member"), as the sole member (the "Prior Operating Agreement"). The Former Member was a Delaware limited partnership whose general partner was Greystone Meridian Capital LLC, a Delaware limited liability company.

C. Acquisition and Transfer. Pursuant to that certain Purchase and Sale Agreement dated as of February 28, 2024 (the "PSA"), as amended by that certain First Amendment to Purchase and Sale Agreement dated April 12, 2024, and that certain Second Amendment to Purchase and Sale Agreement dated May 28, 2024, by and between the Former Member, as seller, and Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (the "Member" or "FREIT"), as buyer, and pursuant to that certain Assignment and Assumption of Membership Interests dated as of June 6, 2024, the Former Member assigned, transferred, conveyed, and delivered 100% of the membership interests in the Company to the Member. The Member now desires to amend and restate the Prior Operating Agreement in its entirety to reflect the Member as the sole member of the Company and to set forth the terms and conditions governing the Company going forward.

D. Single-Purpose Entity. The Company was formed and has been operated as a single-purpose entity for the purpose of owning, operating, managing, leasing, and maintaining the real property described on Exhibit A hereto (the "Property"). The Company shall continue to be operated as a single-purpose entity in accordance with the covenants set forth herein and as required by the applicable mortgage loan documents encumbering the Property.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Member hereby amends and restates the Prior Operating Agreement in its entirety as follows:

ARTICLE I — DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below:

Section 1.1 "Act" means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq., as amended from time to time.

Section 1.2 "Agreement" means this Amended and Restated Limited Liability Company Operating Agreement, as it may be further amended, restated, supplemented, or otherwise modified from time to time.

Section 1.3 "Assumed Loans" means the mortgage loans encumbering the Property as more particularly described on Exhibit B hereto, including the obligations of the Company under Loan 1-A pursuant to the Master Loan Agreement dated September 15, 2020, as amended, with Pinnacle Federal Bank, N.A.

Section 1.4 "Capital Account" means the capital account maintained for the Member in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv) and the provisions of Article IV hereof.

Section 1.5 "Certificate of Formation" means the Certificate of Formation of the Company as filed with the Secretary of State of the State of Delaware on March 12, 2020, as the same may be amended, restated, or supplemented from time to time.

Section 1.6 "Code" means the Internal Revenue Code of 1986, as amended from time to time. References to specific sections of the Code shall include corresponding provisions of any successor statute.

Section 1.7 "Company" means GMP Fairfield I LLC, a Delaware limited liability company.

Section 1.8 "Effective Date" means June 6, 2024.

Section 1.9 "Fiscal Year" means the calendar year, or such other fiscal year as the Member may designate in accordance with applicable provisions of the Code and this Agreement.

Section 1.10 "Lender" means Pinnacle Federal Bank, N.A., a national banking association, its successors and assigns, as the lender under the Loan Documents.

Section 1.11 "Loan Documents" means the loan documents described on Exhibit B hereto, including the Master Loan Agreement dated September 15, 2020, as amended, and all promissory notes, mortgages, deeds of trust, security agreements, guaranties, environmental indemnity agreements, and other documents executed in connection therewith, as any of the foregoing may be amended, restated, supplemented, or otherwise modified from time to time.

Section 1.12 "Manager" means the Person designated as the manager of the Company pursuant to Article V hereof.

Section 1.13 "Member" means Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (EIN: 52-2198437), and any successor or permitted assignee admitted as a member of the Company in accordance with this Agreement.

Section 1.14 "Membership Interest" means 100% of the limited liability company interest in the Company, including the right to receive allocations of income, gain, loss, deduction, and credit of the Company, the right to receive distributions from the Company, and the right to participate in the management and affairs of the Company to the extent provided herein.

Section 1.15 "Person" means any individual, corporation, partnership, limited partnership, limited liability company, trust, estate, association, joint venture, governmental authority, or other entity of any kind or nature.

Section 1.16 "Prior Operating Agreement" means the Limited Liability Company Operating Agreement of the Company dated as of March 12, 2020, originally entered into by the Former Member, as amended and in effect immediately prior to the Effective Date.

Section 1.17 "Property" means the real property described on Exhibit A hereto, together with all buildings, improvements, structures, and fixtures located thereon, and all personal property, equipment, supplies, permits, licenses, entitlements, contract rights, and other tangible and intangible assets owned by the Company and related to such real property.

Section 1.18 "Property Manager" means Fairwater Property Management LLC, a Maryland limited liability company (EIN: 52-3847291), or such other property manager as the Member may designate from time to time; provided, however, that during the ninety (90)-day transition period following the Effective Date (through approximately September 4, 2024), Argyle Property Services LLC, a Georgia limited liability company, shall serve as the interim property manager pursuant to the Transition Services Agreement dated as of June 6, 2024.

Section 1.19 "REIT" means a real estate investment trust as defined in Sections 856 through 860 of the Code.

Section 1.20 "SPE Requirements" means the single-purpose entity requirements set forth in Section 7.1 of this Agreement.

Section 1.21 "Treasury Regulations" means the regulations promulgated by the United States Department of the Treasury under the Code, as such regulations may be amended from time to time (including corresponding provisions of any successor regulations).

ARTICLE II — ORGANIZATION

Section 2.1 Formation. The Company was formed as a limited liability company pursuant to the Act by the filing of its Certificate of Formation with the Secretary of State of the State of Delaware on March 12, 2020. The rights and obligations of the Member and the administration, dissolution, and termination of the Company shall be governed by this Agreement and the Act. To the extent that the provisions of this Agreement are inconsistent with any non-mandatory provisions of the Act, this Agreement shall control. The Company is hereby continued under this Agreement effective as of the Effective Date.

Section 2.2 Name. The name of the Company is GMP Fairfield I LLC. The Company may do business under such other name or names as the Member or Manager may determine from time to time, subject to compliance with applicable law, including the Act and the laws of any jurisdiction in which the Company is qualified to do business, and the Loan Documents. Any change in the name of the Company shall be effected by filing an amendment to the Certificate of Formation with the Secretary of State of the State of Delaware and making any necessary filings in each jurisdiction in which the Company is qualified to do business.

Section 2.3 Registered Office and Registered Agent. The registered office of the Company in the State of Delaware is at 1209 Orange Street, Wilmington, Delaware 19801. The registered agent of the Company at such address is Pemberton Industries, or such other registered agent as the Member may designate from time to time. The Member may change the registered office or registered agent from time to time by filing the appropriate amendment or other document with the Secretary of State of the State of Delaware in accordance with the Act.

Section 2.4 Principal Office. The principal office of the Company shall be located at 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044, which is the principal office of the Member, or at such other place or places as the Member may designate from time to time. The Company may maintain such other offices and places of business as the Member may from time to time determine.

Section 2.5 Foreign Qualification. The Company is, or promptly following the Effective Date shall be, qualified to do business as a foreign limited liability company in the State of Georgia, in which state the Property is located. The Member or Manager shall cause the Company to qualify to do business as a foreign limited liability company in any other jurisdiction where the nature of the Company's business or the ownership or leasing of its property requires such qualification. Post-closing foreign qualification filings are being updated to reflect the change in ownership and management of the Company.

Section 2.6 Term. The Company shall have perpetual existence unless and until dissolved in accordance with Article IX of this Agreement or the Act. The existence of the Company as a separate legal entity shall continue until the cancellation of the Company's Certificate of Formation as provided in the Act.

Section 2.7 Purpose and Powers. The purpose of the Company is limited to: (a) owning, holding, operating, managing, leasing, maintaining, improving, and disposing of the Property; (b) entering into and performing its obligations under the Loan Documents and any lease, service contract, management agreement, or other agreement related to the Property; (c) engaging in all activities necessary, incidental, or related to the foregoing; and (d) such other activities as are consistent with the SPE Requirements and the Loan Documents. The Company shall have all powers necessary or convenient to carry out the foregoing purposes, subject to the limitations set forth herein, in the Act, and in the Loan Documents. The Company shall not engage in any business or activity that is inconsistent with the foregoing purposes or that would violate the SPE Requirements or the Loan Documents.

Section 2.8 Employer Identification Number. The Employer Identification Number of the Company assigned by the Internal Revenue Service is 84-2310561.

ARTICLE III — MEMBER

Section 3.1 Sole Member. Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, is the sole member of the Company, holding 100% of the Membership Interest. The address of the Member for all purposes of this Agreement, including for the giving of notices, is as follows:

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

Attention: David Elgin Park, General Counsel

Telephone: (410) 872-5000

Email: dpark@fairwaterreit.com

With a copy to:

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

Attention: Douglas Fairchild

Telephone: (212) 558-4055

Email: dfairchild@calderwoodharkness.com

Section 3.2 Admission of the Member. The Member was admitted to the Company as the sole member effective as of June 6, 2024, upon the execution and delivery of the Assignment and Assumption of Membership Interests by the Former Member and the Member, and upon the receipt by the Company of evidence of the transfer of 100% of the membership interests in the Company from the Former Member to the Member. No additional members shall be admitted to the Company without the prior written consent of the Member and, to the extent required by the Loan Documents, the prior written consent of the Lender.

Section 3.3 Liability of the Member. The Member shall not be personally liable for the debts, obligations, or liabilities of the Company solely by reason of being a member of the Company, whether arising in contract, tort, or otherwise. The liability of the Member shall be limited to the fullest extent provided under Section 18-303 of the Act and other applicable law. Except as otherwise expressly provided in this Agreement, the Loan Documents, or as required by law, no member of the Company shall be required to make any contribution to the capital of the Company, lend any funds to the Company, or have any liability for the repayment of any capital contribution made by such member.

Section 3.4 Authority of the Member. The Member shall have the full power and authority to take any and all actions on behalf of the Company that are not delegated to the Manager pursuant to Article V hereof, subject to any restrictions or limitations contained in the Loan Documents. Without limiting the generality of the foregoing, the following actions shall require the approval of the Member (which may be given or withheld in the Member's sole and absolute discretion):

(a) any amendment to this Agreement or the Certificate of Formation;

(b) the admission of any additional members to the Company;

(d) any sale, transfer, mortgage, pledge, encumbrance, or other disposition of all or substantially all of the assets of the Company (other than in the ordinary course of business and other than in connection with the Assumed Loans);

(e) any merger, conversion, consolidation, or domestication of the Company;

(f) the filing of any voluntary petition for relief under any federal or state bankruptcy or insolvency law, or any consent to the appointment of a receiver, liquidator, assignee, custodian, trustee, or sequestrator of the Company or any of its assets;

(g) any action that would cause the Company to violate the SPE Requirements or the Loan Documents; and

(h) any other action that, under the Act or this Agreement, requires the vote, consent, or approval of the members of the Company.

ARTICLE IV — CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS

Section 4.1 Initial Capital Contribution. The Member's initial capital contribution to the Company consists of the Membership Interest acquired from the Former Member pursuant to the PSA and the Assignment and Assumption of Membership Interests dated as of June 6, 2024. The value of the Member's initial capital contribution is deemed to be equal to the portion of the aggregate purchase price under the PSA (being $1,100,000,000 in the aggregate for all fourteen (14) Target Entities) allocated to the Company and the Property pursuant to the Purchase Price Allocation Schedule attached as Exhibit K to the PSA, as such allocation was determined based on the appraised values prepared by Stonebridge Valuation Advisors, LLC.

Section 4.2 Additional Capital Contributions. The Member may, but shall not be obligated to, make additional capital contributions to the Company from time to time as the Member, in its sole discretion, deems necessary or appropriate for the business and operations of the Company, including for the purpose of funding capital improvements to the Property, paying debt service under the Loan Documents, curing defaults, funding reserves, or meeting other obligations of the Company. No additional capital contribution shall be required of the Member except as the Member may voluntarily elect.

Section 4.3 Capital Account. A single capital account shall be maintained for the Member in accordance with the provisions of Treasury Regulation Section 1.704-1(b)(2)(iv). The capital account of the Member shall be increased by the amount of any capital contributions made by the Member and by allocations to the Member of items of income and gain, and shall be decreased by the amount of any distributions made to the Member and by allocations to the Member of items of loss, deduction, and expenditure. The capital account shall be further adjusted as required by the Treasury Regulations.

Section 4.4 No Interest on Capital. No interest shall be paid on any capital contribution made by the Member or on any balance in the Member's capital account.

Section 4.5 Return of Capital. The Member shall not have the right to withdraw or demand the return of any capital contribution, except upon the dissolution and winding up of the Company in accordance with Article IX hereof. The Member shall look solely to the assets of the Company for the return of its capital contributions.

ARTICLE V — MANAGEMENT

Section 5.1 Manager-Managed Company. The Company shall be manager-managed in accordance with Section 18-402 of the Act. The Member hereby designates Fairwater Real Estate Investment Trust as the initial Manager of the Company effective as of the Effective Date. The Member may appoint any Person, including itself, as Manager of the Company, and may remove and replace the Manager at any time in its sole and absolute discretion, with or without cause, by written instrument. Any vacancy in the position of Manager shall be filled by the Member. The Manager shall serve until the earlier of (i) the Manager's removal by the Member, (ii) the Manager's resignation (which shall be effective upon thirty (30) days' prior written notice to the Member, unless a shorter period is agreed to by the Member), or (iii) the Manager's dissolution, bankruptcy, or insolvency.

Section 5.2 Authority of the Manager. Subject to the provisions of Section 3.4 hereof and the restrictions and covenants contained in the Loan Documents, the Manager shall have the full power and authority to manage the business and affairs of the Company on a day-to-day basis and to take all actions that the Manager deems necessary or appropriate in furtherance of the purposes of the Company, including, without limitation, the following:

(a) entering into, executing, delivering, performing, and terminating leases, subleases, licenses, service contracts, maintenance agreements, and other agreements relating to the Property in the ordinary course of business;

(b) engaging property managers, including Fairwater Property Management LLC, a Maryland limited liability company, as well as contractors, consultants, engineers, architects, attorneys, accountants, and other professionals and service providers as the Manager deems necessary or appropriate;

(c) opening and maintaining bank accounts in the name of the Company, including operating accounts at Magnolia Commerce Bank, N.A., 225 Peachtree Street NE, Suite 100, Atlanta, Georgia 30303 (Account Representative: Linda Prescott, Vice President, Commercial Banking), and making deposits and withdrawals therefrom, and designating authorized signatories for such accounts;

(d) executing, delivering, and filing any and all documents, instruments, certificates, and filings that the Manager deems necessary or appropriate, including tax returns, governmental filings, and regulatory submissions;

(e) prosecuting, defending, compromising, and settling any and all claims, actions, suits, or proceedings involving the Company, and engaging counsel in connection therewith;

(f) paying operating expenses, debt service on the Assumed Loans, real property taxes, insurance premiums, management fees, and other obligations of the Company from the Company's funds;

(g) making capital improvements, tenant improvements, and other improvements to the Property as the Manager deems necessary or appropriate, subject to any approval or consent requirements under the Loan Documents;

(h) collecting rents, revenues, and other amounts due to the Company from tenants, subtenants, licensees, and other parties;

(i) borrowing money and incurring indebtedness on behalf of the Company (subject to Section 7.1(c) hereof and the restrictions in the Loan Documents);

(j) maintaining insurance coverages as required by Article XI hereof and the Loan Documents; and

(k) taking all other actions that the Manager deems necessary, convenient, or incidental to the management, operation, and administration of the Company and the Property.

All actions taken by the Manager in accordance with this Agreement shall be binding upon the Company, the Member, and all Persons claiming any interest in the Company. Third parties dealing with the Company shall be entitled to rely conclusively upon the authority of the Manager to act on behalf of the Company without further inquiry. Notwithstanding the foregoing, the authority of the Manager shall at all times be subject to the SPE Requirements set forth in Section 7.1 hereof and the restrictions and covenants contained in the Loan Documents.

Section 5.3 Officers. The Manager may, from time to time, appoint one or more officers of the Company, who may be given the title of President, Vice President, Secretary, Treasurer, or such other titles as the Manager deems appropriate. Officers shall have such authority, functions, and duties as may be designated by the Manager from time to time, and shall serve at the pleasure of the Manager. Any officer may be removed by the Manager at any time, with or without cause. The initial officers of the Company shall be designated by the Member in a separate written resolution following the execution of this Agreement.

Section 5.4 Compensation. The Manager shall not receive any separate compensation for serving as Manager of the Company but shall be entitled to reimbursement from the Company for all reasonable out-of-pocket costs and expenses incurred by the Manager in connection with its management of the Company and the Property, including, without limitation, travel expenses, legal fees, accounting fees, and other professional fees. Such reimbursement shall be an expense of the Company.

Section 5.5 Standard of Care; Indemnification.

(a) Standard of Care. The Manager shall manage the business and affairs of the Company in good faith and with reasonable care. The Manager shall not be liable to the Company or the Member for any act or omission taken or suffered by the Manager in good faith and reasonably believed to be within the scope of the Manager's authority under this Agreement, absent willful misconduct, bad faith, or gross negligence on the part of the Manager.

(b) Indemnification. The Company shall indemnify, defend, and hold harmless the Manager and its respective officers, directors, trustees, employees, agents, and representatives (each, an "Indemnified Person") to the fullest extent permitted by the Act and applicable law against all losses, claims, damages, liabilities, judgments, fines, penalties, costs, and expenses (including reasonable attorneys' fees and expenses) incurred by such Indemnified Person in connection with any threatened, pending, or completed action, suit, proceeding, or claim, whether civil, criminal, administrative, or investigative, arising out of or relating to the Indemnified Person's service to the Company, provided that such Indemnified Person acted in good faith and in a manner such Indemnified Person reasonably believed to be in or not opposed to the best interests of the Company, and provided further that no indemnification shall be provided with respect to any matter as to which the Indemnified Person shall have been finally adjudicated to have committed willful misconduct, bad faith, or gross negligence.

(c) Exculpation. No Indemnified Person shall be liable, responsible, or accountable in damages or otherwise to the Company or the Member for any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Company and in a manner reasonably believed by such Indemnified Person to be within the scope of the authority conferred upon such Indemnified Person by this Agreement, except for any act or omission constituting willful misconduct, bad faith, or gross negligence.

(d) Advancement. The Company shall, to the fullest extent permitted by the Act, advance expenses incurred by an Indemnified Person in connection with any proceeding described in this Section 5.5 prior to the final disposition of such proceeding, upon receipt by the Company of an undertaking by or on behalf of such Indemnified Person to repay such amounts if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified hereunder.

Section 5.6 Property Management.

(a) Permanent Property Manager. The Manager shall engage Fairwater Property Management LLC, a Maryland limited liability company, having its principal office at 7200 Chesapeake Parkway, Suite 1150, Columbia, Maryland 21044 (Senior Vice President, Operations: Leah Torrance), as the property manager for the Property (the "Property Manager"), effective following the expiration or earlier termination of the Transition Services Agreement described in subsection (b) below. The terms and conditions of the property management engagement, including the management fee, scope of services, reporting requirements, and other terms, shall be set forth in a separate Property Management Agreement to be entered into between the Company and the Property Manager.

(b) Transition Period. During the ninety (90)-day post-closing transition period commencing on the Effective Date and continuing through approximately September 4, 2024, Argyle Property Services LLC, a Georgia limited liability company, having its principal office at 3300 Peachtree Road NE, Suite 2200, Atlanta, Georgia 30326 (Portfolio Manager: Sean Kilpatrick), shall continue to serve as property manager for the Property pursuant to that certain Transition Services Agreement dated as of June 6, 2024, by and between the Former Member and the Member. The transition management fee during such period shall be Three Hundred Seventy-Five Thousand Dollars ($375,000) per month, for a total transition management fee of One Million One Hundred Twenty-Five Thousand Dollars ($1,125,000) over the ninety (90)-day period. The Manager shall oversee the transition of property management responsibilities from Argyle Property Services LLC to Fairwater Property Management LLC and shall use commercially reasonable efforts to ensure an orderly and complete transition within such ninety (90)-day period.

ARTICLE VI — ALLOCATIONS AND DISTRIBUTIONS

Section 6.1 Allocations. All items of income, gain, loss, deduction, and credit of the Company for each Fiscal Year (or portion thereof) shall be allocated one hundred percent (100%) to the Member, as the sole member of the Company.

Section 6.2 Distributions. The Manager shall cause the Company to distribute available cash (after payment of, or provision for, all expenses, debt service, and other obligations of the Company) to the Member at such times and in such amounts as the Manager determines in its reasonable discretion, subject to the following: (a) the retention of reasonable reserves for working capital, debt service, capital expenditures, deferred maintenance, tenant improvements, leasing commissions, and contingencies, as determined by the Manager; (b) compliance with the Loan Documents, including any cash management, lockbox, sweep, or reserve requirements imposed by the Lender or any servicer; and (c) compliance with the Act, including the prohibition against distributions that would render the Company unable to pay its debts as they become due in the ordinary course of business.

Section 6.3 Tax Distributions. The Manager shall cause the Company to distribute to the Member, at least quarterly, amounts reasonably estimated to be sufficient to enable the Member to satisfy its tax liability attributable to allocations of taxable income from the Company for such quarter, taking into account applicable federal, state, and local tax rates. Tax distributions shall be made to the extent of available cash and subject to compliance with the Loan Documents. Tax distributions made pursuant to this Section 6.3 shall be treated as advances against, and shall reduce, any subsequent distributions otherwise payable to the Member under Section 6.2.

Section 6.4 REIT Compliance. The Manager shall cause distributions to be made in a manner consistent with the Member's obligations to qualify and maintain its status as a REIT under Sections 856 through 860 of the Code. The Manager shall cooperate in good faith with the Member to ensure that the Company's operations and distributions support the Member's compliance with, among other things, (a) the 75% gross income test under Section 856(c)(3) of the Code, (b) the 95% gross income test under Section 856(c)(2) of the Code, and (c) the 75% asset test under Section 856(c)(4) of the Code. The Manager shall consult with the Member and the Member's tax advisors regarding any proposed action or transaction that could reasonably be expected to adversely affect the Member's qualification as a REIT.

ARTICLE VII — SINGLE-PURPOSE ENTITY COVENANTS

Section 7.1 SPE Requirements. The Company shall at all times comply with the following single-purpose entity requirements (collectively, the "SPE Requirements"), which are incorporated herein for the benefit of the Lender under the Loan Documents and which shall not be amended, modified, or waived without the prior written consent of the Lender to the extent required by the Loan Documents:

(a) The Company shall not engage in any business or activity other than the ownership, operation, management, leasing, and maintenance of the Property and activities incidental thereto.

(b) The Company shall not own any assets other than the Property and related personal property, permits, licenses, entitlements, and contract rights associated with the ownership and operation of the Property.

(c) The Company shall not incur any indebtedness other than the Assumed Loans and trade payables incurred in the ordinary course of business of owning and operating the Property, which trade payables shall be paid when due and shall not be evidenced by notes.

(d) The Company shall not commingle its assets or funds with those of any other Person, including the Member or any affiliate of the Member. All funds of the Company shall be maintained in accounts held in the name of the Company and separate from the accounts of any other Person.

(e) The Company shall maintain its own separate books, records, and financial statements, separate and apart from the books, records, and financial statements of the Member and any other Person. The Company's financial statements shall reflect only the assets, liabilities, and results of operations of the Company.

(f) The Company shall maintain separate bank accounts at Magnolia Commerce Bank, N.A., or such other financial institution as may be approved by the Manager and, to the extent required, by the Lender. No other Person shall have access to or signatory authority over the Company's bank accounts except as authorized by the Manager.

(g) The Company shall hold itself out to the public, creditors, and all other Persons as a separate and distinct entity from the Member and all other Persons. The Company shall conduct its affairs in a manner that is not misleading to other Persons as to the Company's identity and separateness from any other Person.

(h) The Company shall conduct its business in its own name. The Company shall use its own name on all contracts, correspondence, invoices, purchase orders, checks, and other business documents and shall not use the name of any other Person for such purposes except to identify the Company as an affiliate or subsidiary of the Member.

(i) The Company shall observe all limited liability company formalities required by the Act and this Agreement, including the holding of meetings or the adoption of written consents as necessary.

(j) The Company shall not guarantee or become obligated for the debts, liabilities, or obligations of any other Person, including the Member or any affiliate of the Member, and shall not hold itself out as being responsible for the debts, liabilities, or obligations of any other Person.

(k) The Company shall not make loans to, or acquire obligations of, any other Person, including the Member or any affiliate of the Member.

(l) The Company shall pay its own liabilities, debts, and expenses solely from its own funds. No other Person shall pay or be responsible for any liabilities, debts, or expenses of the Company (other than capital contributions made by the Member or advances pursuant to the Loan Documents).

(m) The Company shall not dissolve, liquidate, consolidate, merge, or convert into any other form of entity without the prior written consent of the Lender, to the extent required by the Loan Documents.

(n) The Company shall not file or consent to the filing of any voluntary petition for relief under Title 11 of the United States Code (the Bankruptcy Code) or any other federal or state bankruptcy, insolvency, or similar law, and shall not consent to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, or other similar official of the Company or any of its assets, without the affirmative vote or written consent of any independent director or independent manager of the Company, if and to the extent required by the Loan Documents.

(o) The Company shall maintain adequate capital in light of its contemplated business operations and shall not be rendered insolvent by any distribution made to the Member or any other transaction.

(p) The Company shall file its own tax returns (to the extent required by applicable law) and shall not file a consolidated tax return with any other Person, except (i) as part of the Member's consolidated or combined tax return where required or permitted by applicable law, or (ii) where the Company's separate filing is not required because the Company is treated as a disregarded entity for federal income tax purposes.

Section 7.2 Independent Director/Manager. To the extent required by the Loan Documents, the Company shall at all times have at least one (1) independent director or independent manager (the "Independent Manager") who is an individual that is not, and has not been during the preceding five (5) years, an affiliate, member, manager, officer, employee, director, or creditor of the Company, the Member, or any affiliate of the Member or the Company, other than in such person's capacity as an independent director or independent manager of the Company or of another single-purpose entity that is an affiliate of the Member. No voluntary petition for relief under any federal or state bankruptcy or insolvency law shall be filed by or on behalf of the Company, and no dissolution or winding up of the Company shall be commenced by the Company, without the prior written consent of such Independent Manager. The provisions of this Section 7.2 shall be applicable only to the extent expressly required by the specific Loan Documents governing the Assumed Loans of the Company, and the Company shall confirm with the Lender and its counsel whether the appointment of an Independent Manager is required for this Company. If an Independent Manager is required, the initial Independent Manager shall be designated by the Member within thirty (30) days of the Effective Date.

ARTICLE VIII — BOOKS, RECORDS, AND TAX MATTERS

Section 8.1 Books and Records. The Manager shall keep or cause to be kept complete and accurate books and records of the Company at the principal office of the Company or at such other location as the Manager may determine from time to time. Such books and records shall include, without limitation, the following: (a) a current list of the name, address, and membership interest of the Member; (b) copies of the Certificate of Formation and this Agreement, as currently in effect; (c) copies of all federal, state, and local income tax returns and financial statements of the Company; (d) the Company's books of account; and (e) minutes or records of all actions taken by the Member or Manager. The books and records of the Company shall be maintained in accordance with generally accepted accounting principles ("GAAP") consistently applied. The Member and its duly authorized representatives shall have full access to inspect, examine, and copy all books, records, and documents of the Company at all reasonable times during normal business hours.

Section 8.2 Fiscal Year. The fiscal year of the Company shall be the calendar year, commencing on January 1 and ending on December 31 of each year, or such portion thereof during which the Company is in existence.

Section 8.3 Tax Classification. For United States federal income tax purposes, the Company shall be treated as a disregarded entity pursuant to Treasury Regulation Section 301.7701-3(b)(1)(ii), because the Company has a single owner that is not treated as a corporation for federal income tax purposes. All items of income, gain, loss, deduction, and credit of the Company shall be reported on the Member's federal income tax return. No election shall be made on IRS Form 8832 (Entity Classification Election) or otherwise to classify the Company as an association taxable as a corporation for federal income tax purposes. The default classification of the Company as a disregarded entity shall be maintained at all times.

Section 8.4 Tax Returns. The Manager shall cause the preparation and timely filing of all tax returns, reports, and information statements required to be filed by or on behalf of the Company under applicable federal, state, and local law, including, without limitation, state income and franchise tax filings in the State of Georgia (the state in which the Property is located) and the State of Delaware (the state of formation of the Company). The preparation of all such tax returns and filings shall be coordinated with Ashford Prewitt LLP, 1 South Street, Suite 2700, Baltimore, Maryland 21202 (Tax Partner: Naomi Ikeda, CPA), or such other accounting firm as the Member may designate from time to time. The costs and expenses of preparing and filing all tax returns shall be an expense of the Company.

Section 8.5 Tax Matters Member. The Member shall be the "tax matters partner" of the Company within the meaning of Section 6231(a)(7) of the Code (as in effect prior to the Bipartisan Budget Act of 2015) and the "partnership representative" of the Company within the meaning of Section 6223(a) of the Code (as in effect after the Bipartisan Budget Act of 2015), to the extent any such designation is applicable to the Company. All tax elections and decisions regarding tax matters of the Company shall be made by the Member in its sole and absolute discretion.

Section 8.6 REIT Reporting. The Manager shall cause the Company to provide the Member with all financial and tax information reasonably necessary for the Member to comply with its REIT reporting and compliance obligations, including, without limitation, all information necessary for the Member to perform its annual REIT qualification testing under Sections 856 through 860 of the Code and to prepare and file the Member's federal income tax return (IRS Form 1120-REIT) and any applicable state and local tax returns. Such information shall be provided on a timely basis and in such format as the Member may reasonably request.

ARTICLE IX — DISSOLUTION AND WINDING UP

Section 9.1 Events of Dissolution. The Company shall be dissolved only upon the occurrence of any of the following events: (a) a written determination by the Member to dissolve the Company; (b) the sale, exchange, or other disposition of all or substantially all of the assets of the Company and the receipt by the Company of all consideration therefor; (c) the entry of a judicial decree of dissolution of the Company under Section 18-802 of the Act; or (d) as otherwise required by the Act. No dissolution of the Company shall be effected in violation of the Loan Documents or the SPE Requirements without the prior written consent of the Lender to the extent required by the Loan Documents and, if applicable, the prior written consent of the Independent Manager as provided in Section 7.2 hereof.

Section 9.2 Winding Up. Upon dissolution of the Company, the Manager (or, if there is no Manager, a liquidating agent appointed by the Member) shall wind up the affairs of the Company, liquidate and reduce to cash (to the extent necessary or appropriate) the assets of the Company, and apply and distribute the proceeds thereof in the following order of priority:

First, to the payment and discharge of all debts and liabilities of the Company (other than debts and liabilities owed to the Member), including all amounts owed to the Lender under the Loan Documents, in the order of priority required by applicable law;

Second, to the establishment of such reserves as the Manager or liquidating agent reasonably deems necessary for any remaining contingent, unliquidated, or unforeseen liabilities or obligations of the Company (which reserves, when they become unnecessary, shall be distributed in accordance with the provisions of this Section 9.2);

Third, to the payment of any debts and liabilities owed by the Company to the Member; and

Fourth, to the distribution of the balance, if any, to the Member.

Section 9.3 Certificate of Cancellation. Upon the completion of the winding up of the affairs of the Company, the distribution of all of the Company's assets, and the payment of all of the Company's debts and liabilities, the Manager or liquidating agent shall cause a Certificate of Cancellation to be filed with the Secretary of State of the State of Delaware in accordance with Section 18-203 of the Act, and shall take all other actions necessary to terminate the existence of the Company in each jurisdiction in which the Company is qualified to do business.

Section 9.4 No Involuntary Dissolution. The Member shall not be subject to involuntary dissolution or removal from the Company. The death, disability, bankruptcy, insolvency, dissolution, or withdrawal of the Member shall not cause the dissolution of the Company. In the event of the bankruptcy, insolvency, dissolution, or withdrawal of the Member, the Company shall continue with any successor, assignee, personal representative, heir, executor, administrator, trustee, or other legal representative of the Member, and such Person shall be admitted as a member of the Company and shall be bound by the terms of this Agreement.

ARTICLE X — TRANSFER OF MEMBERSHIP INTERESTS

Section 10.1 Restrictions on Transfer. The Member shall not sell, assign, transfer, pledge, hypothecate, encumber, or otherwise dispose of all or any portion of the Membership Interest (whether voluntarily, involuntarily, or by operation of law) without compliance with the Loan Documents, including obtaining any required consent or approval of the Lender under the change of control provisions contained therein. The parties acknowledge that the Loan Documents contain restrictions on the transfer of membership interests in the Company and that the transfer of 100% of the membership interests in the Company from the Former Member (GMP Fund III) to the Member (Fairwater REIT) required and obtained the consent of the Lender, Pinnacle Federal Bank, N.A. (consent letter dated June 4, 2024). Any future transfer of all or any portion of the Membership Interest shall likewise require compliance with all applicable change of control provisions and consent requirements in the Loan Documents.

Section 10.2 Permitted Transfers. Notwithstanding the provisions of Section 10.1 hereof, the Member may transfer all or any portion of the Membership Interest to a wholly owned subsidiary or affiliate of the Member without the consent of any other Person, provided that such transfer does not violate the Loan Documents or any other agreement to which the Company is a party or by which the Company's assets are bound, and provided further that, to the extent the Loan Documents require Lender consent for such a transfer, such consent has been obtained prior to the effectiveness of such transfer. Any transferee admitted as a member of the Company pursuant to this Section 10.2 shall be bound by all of the terms and conditions of this Agreement and shall execute such documents and instruments as the Manager may reasonably request to evidence such Person's agreement to be bound hereby.

ARTICLE XI — INSURANCE

Section 11.1 Property and Liability Insurance. The Manager shall maintain, or cause to be maintained, property, casualty, general liability, umbrella/excess liability, workers' compensation, and such other insurance coverages as are required by the Loan Documents and as are set forth on the Schedule of Required Insurance attached as Exhibit M to the PSA, or as may otherwise be required by applicable law or deemed prudent by the Manager. All property and casualty insurance policies shall name the Lender (or its servicer) as mortgagee and loss payee, to the extent required by the Loan Documents. All liability insurance policies shall name the Lender and its servicer as additional insureds, to the extent required by the Loan Documents. The insurance carrier for the Company's property and casualty insurance program is Ironclad Indemnity Insurance Company, 500 College Road East, Princeton, New Jersey 08540. The Company's insurance broker is Hartwick Gunderson & Associates, Inc., 100 North Charles Street, Suite 1200, Baltimore, Maryland 21201 (Account Executive: Peter Langford). The Manager shall deliver to the Lender evidence of insurance and certificates of insurance as and when required by the Loan Documents.

Section 11.2 Representations and Warranties Insurance. The parties acknowledge the existence of a buyer-side representations and warranties insurance policy issued by Sentinel Specialty Insurance Company (the "R&W Policy") in connection with the acquisition of the fourteen (14) Target Entities, including the Company, pursuant to the PSA. The R&W Policy has a total policy limit of Fifty-Five Million Dollars ($55,000,000) and a retention amount of Eleven Million Dollars ($11,000,000) (dropping to Five Million Five Hundred Thousand Dollars ($5,500,000) at twelve (12) months following the Closing Date). The R&W Policy covers the representations and warranties made by the Former Member in the PSA and is an aggregate policy covering all fourteen (14) Target Entities. Claims under the R&W Policy shall be administered by the Member in accordance with the terms thereof.

ARTICLE XII — ASSUMED LOAN DOCUMENTS

Section 12.1 Compliance with Loan Documents. The Company shall comply with all terms, conditions, covenants, representations, and warranties contained in the Loan Documents, as assumed by the Member pursuant to that certain Assumption Agreement dated as of June 6, 2024, by and between the Company, the Member, and the Lender. The Assumed Loans with respect to this Company are governed by the following:

Lender: Pinnacle Federal Bank, N.A., a national banking association

Loan Agreement: Master Loan Agreement dated September 15, 2020, as amended by that certain First Amendment to Master Loan Agreement dated March 1, 2022, and that certain Second Amendment to Master Loan Agreement dated June 6, 2024

Loan Designation: Loan 1-A (one of eight loans under the Master Loan Agreement secured by properties held by the eight Pinnacle Federal Bank borrower entities)

Interest Rate: 4.22% per annum (fixed)

Maturity Date: July 1, 2028

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

Lender Consent: Consent letter dated June 4, 2024

Lender's Counsel: Whitfield & Hargrove LLP, 1100 Peachtree Street NE, Suite 2800, Atlanta, Georgia 30309 (Partner: Jonathan Whitfield)

Section 12.2 Replacement Guaranty. In connection with the Closing, Fairwater Real Estate Investment Trust executed and delivered in favor of the Lender a Replacement Carve-Out Guaranty dated as of June 6, 2024 (the "Replacement Guaranty"), replacing Greystone Meridian Partners Fund III, L.P. as the carve-out guarantor under the Loan Documents. Pursuant to the Replacement Guaranty, the Member has guaranteed to the Lender the payment and performance of certain non-recourse carve-out obligations of the Company, subject to the terms and conditions set forth therein. The financial covenants of the Member as guarantor under the Replacement Guaranty include, without limitation: (a) maintenance of a minimum tangible net worth of not less than Five Hundred Million Dollars ($500,000,000); and (b) maintenance of minimum liquid assets of not less than Fifty Million Dollars ($50,000,000), in each case as determined in accordance with the Replacement Guaranty.

Section 12.3 Conflicts with Loan Documents. In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of the Loan Documents, the provisions of the Loan Documents shall control and prevail to the extent of such conflict or inconsistency. Without limiting the foregoing, to the extent that the Loan Documents impose requirements or restrictions on the Company that are more restrictive than those set forth in this Agreement (including, without limitation, with respect to SPE Requirements, transfer restrictions, insurance requirements, reserve requirements, or reporting obligations), the Company shall comply with the more restrictive requirements of the Loan Documents.

ARTICLE XIII — MISCELLANEOUS

Section 13.1 Amendments. This Agreement may be amended, restated, supplemented, or otherwise modified only by a written instrument signed by the Member. No amendment to this Agreement shall be effective to the extent it would cause a violation of the Loan Documents or the SPE Requirements without the prior written consent of the Lender to the extent required by the Loan Documents.

Section 13.2 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware (including the Act), without regard to the conflicts of laws principles thereof that would require the application of the laws of any other jurisdiction.

Section 13.3 Severability. If any provision of this Agreement, or the application of any such provision to any Person or circumstance, is held by a court of competent jurisdiction or other authority to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions of this Agreement shall continue in full force and effect. To the extent permitted by applicable law, the parties hereto waive any provision of law that renders any provision of this Agreement invalid, illegal, or unenforceable in any respect.

Section 13.4 Entire Agreement. This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, representations, and warranties, whether oral or written, relating to the governance and operation of the Company, including, without limitation, the Prior Operating Agreement, which is hereby amended and restated in its entirety and shall be of no further force or effect.

Section 13.5 Notices. All notices, requests, demands, consents, approvals, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by a nationally recognized overnight courier service (with written confirmation of receipt), or (c) sent by certified or registered mail, return receipt requested, postage prepaid, in each case addressed as follows:

If to the Member:

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

Attention: David Elgin Park, General Counsel

Telephone: (410) 872-5000

Email: dpark@fairwaterreit.com

With a copy to:

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

Attention: Douglas Fairchild

Telephone: (212) 558-4055

Email: dfairchild@calderwoodharkness.com

Either party may change its address for notices by giving written notice of such change in accordance with this Section 13.5.

Section 13.6 Waiver. No waiver by the Member of any provision of this Agreement or of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver shall be effective unless set forth in a writing signed by the Member.

Section 13.7 Headings. The article and section headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Agreement.

Section 13.8 Counterparts. This Agreement may be executed in one or more counterparts (including by means of facsimile or portable document format (.pdf)

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP
450 Park Avenue, 28th Floor New York, New York 10022 Tel: (212) 558-4000 | Fax: (212) 558-3588
1700 K Street NW, Suite 900 Washington, DC 20006 Tel: (202) 956-7500 | Fax: (202) 956-7599
Matter No. 1036-00004
June 14, 2024
MEMORANDUM
David and Camille:
As you are aware, the closing of the portfolio acquisition by Fairwater Real Estate Investment Trust, a Maryland real estate investment trust ("Fairwater REIT" or the "Buyer"), of 100% of the membership interests in each of the fourteen (14) property-owning single-purpose Delaware limited liability companies (each, a "Target Entity" and collectively, the "Target Entities") from Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership ("GMP Fund III" or the "Seller"), occurred on June 6, 2024 (the "Closing Date"). The acquisition was consummated pursuant to 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 (collectively, the "PSA"), at an aggregate purchase price of $1,100,000,000.
In connection with the Closing and in furtherance of Fairwater REIT's post-closing organizational objectives, we have prepared, and enclose herewith, fourteen (14) individual Amended and Restated Limited Liability Company Operating Agreements (each, an "Amended Agreement" and collectively, the "Amended Agreements"), one for each Target Entity. Each Amended Agreement amends and restates in its entirety the prior Limited Liability Company Operating Agreement of the respective Target Entity LLC that was in effect during GMP Fund III's period of ownership (each, a "Prior Operating Agreement").
Each Amended Agreement reflects Fairwater Real Estate Investment Trust as the sole member of the respective Target Entity effective as of the Closing Date, June 6, 2024. The Amended Agreements are uniform in their substantive terms and have been drafted in substantially identical form, with entity-specific information (including LLC name, employer identification number, property description, lender information, and state of foreign qualification) inserted for each Target Entity as appropriate.
All fourteen (14) Amended Agreements are governed by the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq., as each Target Entity was organized under, and continues to exist under, the laws of the State of Delaware. Each Target Entity is registered to do business as a foreign limited liability company in the state in which its respective property is located (Georgia, Texas, Florida, Tennessee, or North Carolina, as applicable).
The Amended Agreements incorporate and are consistent with the single-purpose entity ("SPE") covenants required under the respective mortgage loan documents for each Target Entity. The three lender relationships — Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company — each impose SPE requirements that have been reflected in Article VII of each Amended Agreement. Additionally, Article XII of each Amended Agreement addresses the assumed loan obligations and cross-references the Assumption Agreements and Replacement Carve-Out Guaranties executed at Closing.
Execution Instructions. Each Amended Agreement requires execution by an authorized officer of Fairwater Real Estate Investment Trust. We recommend that the signatory be either Marcus Devereaux, Executive Vice President, Acquisitions, or David Elgin Park, General Counsel, each of whom has been authorized by the Board of Trustees to execute documents in connection with this transaction pursuant to the Board Resolution dated February 15, 2024. Each Amended Agreement should be signed, dated, and retained in the corporate records of the respective Target Entity. We recommend maintaining originals at Fairwater REIT's principal office in Columbia, Maryland, with copies provided to this firm for the transaction closing binders.
Delaware Filings. Corresponding manager change filings (Certificates of Amendment to the respective Certificates of Formation) with the Delaware Secretary of State are being separately prepared and filed by our office. We anticipate filing all fourteen (14) amendments within the next ten (10) business days. We will circulate stamped copies upon receipt from the Secretary of State's office.
Foreign Qualification Updates. We are also coordinating with local counsel in each of the applicable property states (Georgia, Texas, Florida, Tennessee, and North Carolina) to update the foreign qualification filings for each Target Entity to reflect the change in ownership and management. We will provide a status update on these filings under separate cover.
Index of Enclosed Agreements. The fourteen (14) Amended Agreements are tabbed and organized as set forth in the table below:
Please do not hesitate to contact me at (212) 558-4127 or gnakamura@calderwoodharkness.com, or Douglas Fairchild at (212) 558-4055 or dfairchild@calderwoodharkness.com, should you have any questions regarding the enclosed Amended Agreements or any other post-closing matters.
Very truly yours,
Grace Nakamura Partner Calderwood & Harkness LLP
cc: Douglas Fairchild, Calderwood & Harkness LLP Marcus Devereaux, EVP Acquisitions, Fairwater REIT
Enclosures (14)
TAB 1
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
GMP FAIRFIELD I LLC
a Delaware Limited Liability Company
Effective as of June 6, 2024
Sole Member: Fairwater Real Estate Investment Trust
AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF GMP FAIRFIELD I LLC
This Amended and Restated Limited Liability Company Operating Agreement (this "Agreement") of GMP Fairfield I LLC, a Delaware limited liability company (the "Company"), is entered into and effective as of June 6, 2024 (the "Effective Date"), by Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (the "Member").
RECITALS
A. Formation. The Company was formed as a limited liability company under the laws of the State of Delaware by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware on March 12, 2020. The Company's registered agent is located at 1209 Orange Street, Wilmington, Delaware 19801.
B. Prior Operating Agreement. The Company was previously governed by that certain Limited Liability Company Operating Agreement dated as of March 12, 2020, by and between Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership (the "Former Member"), as the sole member (the "Prior Operating Agreement"). The Former Member was a Delaware limited partnership whose general partner was Greystone Meridian Capital LLC, a Delaware limited liability company.
C. Acquisition and Transfer. Pursuant to that certain Purchase and Sale Agreement dated as of February 28, 2024 (the "PSA"), as amended by that certain First Amendment to Purchase and Sale Agreement dated April 12, 2024, and that certain Second Amendment to Purchase and Sale Agreement dated May 28, 2024, by and between the Former Member, as seller, and Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (the "Member" or "FREIT"), as buyer, and pursuant to that certain Assignment and Assumption of Membership Interests dated as of June 6, 2024, the Former Member assigned, transferred, conveyed, and delivered 100% of the membership interests in the Company to the Member. The Member now desires to amend and restate the Prior Operating Agreement in its entirety to reflect the Member as the sole member of the Company and to set forth the terms and conditions governing the Company going forward.
D. Single-Purpose Entity. The Company was formed and has been operated as a single-purpose entity for the purpose of owning, operating, managing, leasing, and maintaining the real property described on Exhibit A hereto (the "Property"). The Company shall continue to be operated as a single-purpose entity in accordance with the covenants set forth herein and as required by the applicable mortgage loan documents encumbering the Property.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Member hereby amends and restates the Prior Operating Agreement in its entirety as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below:
Section 1.1 "Act" means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq., as amended from time to time.
Section 1.2 "Agreement" means this Amended and Restated Limited Liability Company Operating Agreement, as it may be further amended, restated, supplemented, or otherwise modified from time to time.
Section 1.3 "Assumed Loans" means the mortgage loans encumbering the Property as more particularly described on Exhibit B hereto, including the obligations of the Company under Loan 1-A pursuant to the Master Loan Agreement dated September 15, 2020, as amended, with Pinnacle Federal Bank, N.A.
Section 1.4 "Capital Account" means the capital account maintained for the Member in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv) and the provisions of Article IV hereof.
Section 1.5 "Certificate of Formation" means the Certificate of Formation of the Company as filed with the Secretary of State of the State of Delaware on March 12, 2020, as the same may be amended, restated, or supplemented from time to time.
Section 1.6 "Code" means the Internal Revenue Code of 1986, as amended from time to time. References to specific sections of the Code shall include corresponding provisions of any successor statute.
Section 1.7 "Company" means GMP Fairfield I LLC, a Delaware limited liability company.
Section 1.8 "Effective Date" means June 6, 2024.
Section 1.9 "Fiscal Year" means the calendar year, or such other fiscal year as the Member may designate in accordance with applicable provisions of the Code and this Agreement.
Section 1.10 "Lender" means Pinnacle Federal Bank, N.A., a national banking association, its successors and assigns, as the lender under the Loan Documents.
Section 1.11 "Loan Documents" means the loan documents described on Exhibit B hereto, including the Master Loan Agreement dated September 15, 2020, as amended, and all promissory notes, mortgages, deeds of trust, security agreements, guaranties, environmental indemnity agreements, and other documents executed in connection therewith, as any of the foregoing may be amended, restated, supplemented, or otherwise modified from time to time.
Section 1.12 "Manager" means the Person designated as the manager of the Company pursuant to Article V hereof.
Section 1.13 "Member" means Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (EIN: 52-2198437), and any successor or permitted assignee admitted as a member of the Company in accordance with this Agreement.
Section 1.14 "Membership Interest" means 100% of the limited liability company interest in the Company, including the right to receive allocations of income, gain, loss, deduction, and credit of the Company, the right to receive distributions from the Company, and the right to participate in the management and affairs of the Company to the extent provided herein.
Section 1.15 "Person" means any individual, corporation, partnership, limited partnership, limited liability company, trust, estate, association, joint venture, governmental authority, or other entity of any kind or nature.
Section 1.16 "Prior Operating Agreement" means the Limited Liability Company Operating Agreement of the Company dated as of March 12, 2020, originally entered into by the Former Member, as amended and in effect immediately prior to the Effective Date.
Section 1.17 "Property" means the real property described on Exhibit A hereto, together with all buildings, improvements, structures, and fixtures located thereon, and all personal property, equipment, supplies, permits, licenses, entitlements, contract rights, and other tangible and intangible assets owned by the Company and related to such real property.
Section 1.18 "Property Manager" means Fairwater Property Management LLC, a Maryland limited liability company (EIN: 52-3847291), or such other property manager as the Member may designate from time to time; provided, however, that during the ninety (90)-day transition period following the Effective Date (through approximately September 4, 2024), Argyle Property Services LLC, a Georgia limited liability company, shall serve as the interim property manager pursuant to the Transition Services Agreement dated as of June 6, 2024.
Section 1.19 "REIT" means a real estate investment trust as defined in Sections 856 through 860 of the Code.
Section 1.20 "SPE Requirements" means the single-purpose entity requirements set forth in Section 7.1 of this Agreement.
Section 1.21 "Treasury Regulations" means the regulations promulgated by the United States Department of the Treasury under the Code, as such regulations may be amended from time to time (including corresponding provisions of any successor regulations).
ARTICLE II — ORGANIZATION
Section 2.1 Formation. The Company was formed as a limited liability company pursuant to the Act by the filing of its Certificate of Formation with the Secretary of State of the State of Delaware on March 12, 2020. The rights and obligations of the Member and the administration, dissolution, and termination of the Company shall be governed by this Agreement and the Act. To the extent that the provisions of this Agreement are inconsistent with any non-mandatory provisions of the Act, this Agreement shall control. The Company is hereby continued under this Agreement effective as of the Effective Date.
Section 2.2 Name. The name of the Company is GMP Fairfield I LLC. The Company may do business under such other name or names as the Member or Manager may determine from time to time, subject to compliance with applicable law, including the Act and the laws of any jurisdiction in which the Company is qualified to do business, and the Loan Documents. Any change in the name of the Company shall be effected by filing an amendment to the Certificate of Formation with the Secretary of State of the State of Delaware and making any necessary filings in each jurisdiction in which the Company is qualified to do business.
Section 2.3 Registered Office and Registered Agent. The registered office of the Company in the State of Delaware is at 1209 Orange Street, Wilmington, Delaware 19801. The registered agent of the Company at such address is Pemberton Industries, or such other registered agent as the Member may designate from time to time. The Member may change the registered office or registered agent from time to time by filing the appropriate amendment or other document with the Secretary of State of the State of Delaware in accordance with the Act.
Section 2.4 Principal Office. The principal office of the Company shall be located at 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044, which is the principal office of the Member, or at such other place or places as the Member may designate from time to time. The Company may maintain such other offices and places of business as the Member may from time to time determine.
Section 2.5 Foreign Qualification. The Company is, or promptly following the Effective Date shall be, qualified to do business as a foreign limited liability company in the State of Georgia, in which state the Property is located. The Member or Manager shall cause the Company to qualify to do business as a foreign limited liability company in any other jurisdiction where the nature of the Company's business or the ownership or leasing of its property requires such qualification. Post-closing foreign qualification filings are being updated to reflect the change in ownership and management of the Company.
Section 2.6 Term. The Company shall have perpetual existence unless and until dissolved in accordance with Article IX of this Agreement or the Act. The existence of the Company as a separate legal entity shall continue until the cancellation of the Company's Certificate of Formation as provided in the Act.
Section 2.7 Purpose and Powers. The purpose of the Company is limited to: (a) owning, holding, operating, managing, leasing, maintaining, improving, and disposing of the Property; (b) entering into and performing its obligations under the Loan Documents and any lease, service contract, management agreement, or other agreement related to the Property; (c) engaging in all activities necessary, incidental, or related to the foregoing; and (d) such other activities as are consistent with the SPE Requirements and the Loan Documents. The Company shall have all powers necessary or convenient to carry out the foregoing purposes, subject to the limitations set forth herein, in the Act, and in the Loan Documents. The Company shall not engage in any business or activity that is inconsistent with the foregoing purposes or that would violate the SPE Requirements or the Loan Documents.
Section 2.8 Employer Identification Number. The Employer Identification Number of the Company assigned by the Internal Revenue Service is 84-2310561.
ARTICLE III — MEMBER
Section 3.1 Sole Member. Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, is the sole member of the Company, holding 100% of the Membership Interest. The address of the Member for all purposes of this Agreement, including for the giving of notices, is as follows:
Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044
Attention: David Elgin Park, General Counsel
Telephone: (410) 872-5000
Email: dpark@fairwaterreit.com
With a copy to:
Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022
Attention: Douglas Fairchild
Telephone: (212) 558-4055
Email: dfairchild@calderwoodharkness.com
Section 3.2 Admission of the Member. The Member was admitted to the Company as the sole member effective as of June 6, 2024, upon the execution and delivery of the Assignment and Assumption of Membership Interests by the Former Member and the Member, and upon the receipt by the Company of evidence of the transfer of 100% of the membership interests in the Company from the Former Member to the Member. No additional members shall be admitted to the Company without the prior written consent of the Member and, to the extent required by the Loan Documents, the prior written consent of the Lender.
Section 3.3 Liability of the Member. The Member shall not be personally liable for the debts, obligations, or liabilities of the Company solely by reason of being a member of the Company, whether arising in contract, tort, or otherwise. The liability of the Member shall be limited to the fullest extent provided under Section 18-303 of the Act and other applicable law. Except as otherwise expressly provided in this Agreement, the Loan Documents, or as required by law, no member of the Company shall be required to make any contribution to the capital of the Company, lend any funds to the Company, or have any liability for the repayment of any capital contribution made by such member.
Section 3.4 Authority of the Member. The Member shall have the full power and authority to take any and all actions on behalf of the Company that are not delegated to the Manager pursuant to Article V hereof, subject to any restrictions or limitations contained in the Loan Documents. Without limiting the generality of the foregoing, the following actions shall require the approval of the Member (which may be given or withheld in the Member's sole and absolute discretion):
(a) any amendment to this Agreement or the Certificate of Formation;
(b) the admission of any additional members to the Company;
(c) any dissolution of the Company;
(d) any sale, transfer, mortgage, pledge, encumbrance, or other disposition of all or substantially all of the assets of the Company (other than in the ordinary course of business and other than in connection with the Assumed Loans);
(e) any merger, conversion, consolidation, or domestication of the Company;
(f) the filing of any voluntary petition for relief under any federal or state bankruptcy or insolvency law, or any consent to the appointment of a receiver, liquidator, assignee, custodian, trustee, or sequestrator of the Company or any of its assets;
(g) any action that would cause the Company to violate the SPE Requirements or the Loan Documents; and
(h) any other action that, under the Act or this Agreement, requires the vote, consent, or approval of the members of the Company.
ARTICLE IV — CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
Section 4.1 Initial Capital Contribution. The Member's initial capital contribution to the Company consists of the Membership Interest acquired from the Former Member pursuant to the PSA and the Assignment and Assumption of Membership Interests dated as of June 6, 2024. The value of the Member's initial capital contribution is deemed to be equal to the portion of the aggregate purchase price under the PSA (being $1,100,000,000 in the aggregate for all fourteen (14) Target Entities) allocated to the Company and the Property pursuant to the Purchase Price Allocation Schedule attached as Exhibit K to the PSA, as such allocation was determined based on the appraised values prepared by Stonebridge Valuation Advisors, LLC.
Section 4.2 Additional Capital Contributions. The Member may, but shall not be obligated to, make additional capital contributions to the Company from time to time as the Member, in its sole discretion, deems necessary or appropriate for the business and operations of the Company, including for the purpose of funding capital improvements to the Property, paying debt service under the Loan Documents, curing defaults, funding reserves, or meeting other obligations of the Company. No additional capital contribution shall be required of the Member except as the Member may voluntarily elect.
Section 4.3 Capital Account. A single capital account shall be maintained for the Member in accordance with the provisions of Treasury Regulation Section 1.704-1(b)(2)(iv). The capital account of the Member shall be increased by the amount of any capital contributions made by the Member and by allocations to the Member of items of income and gain, and shall be decreased by the amount of any distributions made to the Member and by allocations to the Member of items of loss, deduction, and expenditure. The capital account shall be further adjusted as required by the Treasury Regulations.
Section 4.4 No Interest on Capital. No interest shall be paid on any capital contribution made by the Member or on any balance in the Member's capital account.
Section 4.5 Return of Capital. The Member shall not have the right to withdraw or demand the return of any capital contribution, except upon the dissolution and winding up of the Company in accordance with Article IX hereof. The Member shall look solely to the assets of the Company for the return of its capital contributions.
ARTICLE V — MANAGEMENT
Section 5.1 Manager-Managed Company. The Company shall be manager-managed in accordance with Section 18-402 of the Act. The Member hereby designates Fairwater Real Estate Investment Trust as the initial Manager of the Company effective as of the Effective Date. The Member may appoint any Person, including itself, as Manager of the Company, and may remove and replace the Manager at any time in its sole and absolute discretion, with or without cause, by written instrument. Any vacancy in the position of Manager shall be filled by the Member. The Manager shall serve until the earlier of (i) the Manager's removal by the Member, (ii) the Manager's resignation (which shall be effective upon thirty (30) days' prior written notice to the Member, unless a shorter period is agreed to by the Member), or (iii) the Manager's dissolution, bankruptcy, or insolvency.
Section 5.2 Authority of the Manager. Subject to the provisions of Section 3.4 hereof and the restrictions and covenants contained in the Loan Documents, the Manager shall have the full power and authority to manage the business and affairs of the Company on a day-to-day basis and to take all actions that the Manager deems necessary or appropriate in furtherance of the purposes of the Company, including, without limitation, the following:
(a) entering into, executing, delivering, performing, and terminating leases, subleases, licenses, service contracts, maintenance agreements, and other agreements relating to the Property in the ordinary course of business;
(b) engaging property managers, including Fairwater Property Management LLC, a Maryland limited liability company, as well as contractors, consultants, engineers, architects, attorneys, accountants, and other professionals and service providers as the Manager deems necessary or appropriate;
(c) opening and maintaining bank accounts in the name of the Company, including operating accounts at Magnolia Commerce Bank, N.A., 225 Peachtree Street NE, Suite 100, Atlanta, Georgia 30303 (Account Representative: Linda Prescott, Vice President, Commercial Banking), and making deposits and withdrawals therefrom, and designating authorized signatories for such accounts;
(d) executing, delivering, and filing any and all documents, instruments, certificates, and filings that the Manager deems necessary or appropriate, including tax returns, governmental filings, and regulatory submissions;
(e) prosecuting, defending, compromising, and settling any and all claims, actions, suits, or proceedings involving the Company, and engaging counsel in connection therewith;
(f) paying operating expenses, debt service on the Assumed Loans, real property taxes, insurance premiums, management fees, and other obligations of the Company from the Company's funds;
(g) making capital improvements, tenant improvements, and other improvements to the Property as the Manager deems necessary or appropriate, subject to any approval or consent requirements under the Loan Documents;
(h) collecting rents, revenues, and other amounts due to the Company from tenants, subtenants, licensees, and other parties;
(i) borrowing money and incurring indebtedness on behalf of the Company (subject to Section 7.1(c) hereof and the restrictions in the Loan Documents);
(j) maintaining insurance coverages as required by Article XI hereof and the Loan Documents; and
(k) taking all other actions that the Manager deems necessary, convenient, or incidental to the management, operation, and administration of the Company and the Property.
All actions taken by the Manager in accordance with this Agreement shall be binding upon the Company, the Member, and all Persons claiming any interest in the Company. Third parties dealing with the Company shall be entitled to rely conclusively upon the authority of the Manager to act on behalf of the Company without further inquiry. Notwithstanding the foregoing, the authority of the Manager shall at all times be subject to the SPE Requirements set forth in Section 7.1 hereof and the restrictions and covenants contained in the Loan Documents.
Section 5.3 Officers. The Manager may, from time to time, appoint one or more officers of the Company, who may be given the title of President, Vice President, Secretary, Treasurer, or such other titles as the Manager deems appropriate. Officers shall have such authority, functions, and duties as may be designated by the Manager from time to time, and shall serve at the pleasure of the Manager. Any officer may be removed by the Manager at any time, with or without cause. The initial officers of the Company shall be designated by the Member in a separate written resolution following the execution of this Agreement.
Section 5.4 Compensation. The Manager shall not receive any separate compensation for serving as Manager of the Company but shall be entitled to reimbursement from the Company for all reasonable out-of-pocket costs and expenses incurred by the Manager in connection with its management of the Company and the Property, including, without limitation, travel expenses, legal fees, accounting fees, and other professional fees. Such reimbursement shall be an expense of the Company.
Section 5.5 Standard of Care; Indemnification.
(a) Standard of Care. The Manager shall manage the business and affairs of the Company in good faith and with reasonable care. The Manager shall not be liable to the Company or the Member for any act or omission taken or suffered by the Manager in good faith and reasonably believed to be within the scope of the Manager's authority under this Agreement, absent willful misconduct, bad faith, or gross negligence on the part of the Manager.
(b) Indemnification. The Company shall indemnify, defend, and hold harmless the Manager and its respective officers, directors, trustees, employees, agents, and representatives (each, an "Indemnified Person") to the fullest extent permitted by the Act and applicable law against all losses, claims, damages, liabilities, judgments, fines, penalties, costs, and expenses (including reasonable attorneys' fees and expenses) incurred by such Indemnified Person in connection with any threatened, pending, or completed action, suit, proceeding, or claim, whether civil, criminal, administrative, or investigative, arising out of or relating to the Indemnified Person's service to the Company, provided that such Indemnified Person acted in good faith and in a manner such Indemnified Person reasonably believed to be in or not opposed to the best interests of the Company, and provided further that no indemnification shall be provided with respect to any matter as to which the Indemnified Person shall have been finally adjudicated to have committed willful misconduct, bad faith, or gross negligence.
(c) Exculpation. No Indemnified Person shall be liable, responsible, or accountable in damages or otherwise to the Company or the Member for any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Company and in a manner reasonably believed by such Indemnified Person to be within the scope of the authority conferred upon such Indemnified Person by this Agreement, except for any act or omission constituting willful misconduct, bad faith, or gross negligence.
(d) Advancement. The Company shall, to the fullest extent permitted by the Act, advance expenses incurred by an Indemnified Person in connection with any proceeding described in this Section 5.5 prior to the final disposition of such proceeding, upon receipt by the Company of an undertaking by or on behalf of such Indemnified Person to repay such amounts if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified hereunder.
Section 5.6 Property Management.
(a) Permanent Property Manager. The Manager shall engage Fairwater Property Management LLC, a Maryland limited liability company, having its principal office at 7200 Chesapeake Parkway, Suite 1150, Columbia, Maryland 21044 (Senior Vice President, Operations: Leah Torrance), as the property manager for the Property (the "Property Manager"), effective following the expiration or earlier termination of the Transition Services Agreement described in subsection (b) below. The terms and conditions of the property management engagement, including the management fee, scope of services, reporting requirements, and other terms, shall be set forth in a separate Property Management Agreement to be entered into between the Company and the Property Manager.
(b) Transition Period. During the ninety (90)-day post-closing transition period commencing on the Effective Date and continuing through approximately September 4, 2024, Argyle Property Services LLC, a Georgia limited liability company, having its principal office at 3300 Peachtree Road NE, Suite 2200, Atlanta, Georgia 30326 (Portfolio Manager: Sean Kilpatrick), shall continue to serve as property manager for the Property pursuant to that certain Transition Services Agreement dated as of June 6, 2024, by and between the Former Member and the Member. The transition management fee during such period shall be Three Hundred Seventy-Five Thousand Dollars ($375,000) per month, for a total transition management fee of One Million One Hundred Twenty-Five Thousand Dollars ($1,125,000) over the ninety (90)-day period. The Manager shall oversee the transition of property management responsibilities from Argyle Property Services LLC to Fairwater Property Management LLC and shall use commercially reasonable efforts to ensure an orderly and complete transition within such ninety (90)-day period.
ARTICLE VI — ALLOCATIONS AND DISTRIBUTIONS
Section 6.1 Allocations. All items of income, gain, loss, deduction, and credit of the Company for each Fiscal Year (or portion thereof) shall be allocated one hundred percent (100%) to the Member, as the sole member of the Company.
Section 6.2 Distributions. The Manager shall cause the Company to distribute available cash (after payment of, or provision for, all expenses, debt service, and other obligations of the Company) to the Member at such times and in such amounts as the Manager determines in its reasonable discretion, subject to the following: (a) the retention of reasonable reserves for working capital, debt service, capital expenditures, deferred maintenance, tenant improvements, leasing commissions, and contingencies, as determined by the Manager; (b) compliance with the Loan Documents, including any cash management, lockbox, sweep, or reserve requirements imposed by the Lender or any servicer; and (c) compliance with the Act, including the prohibition against distributions that would render the Company unable to pay its debts as they become due in the ordinary course of business.
Section 6.3 Tax Distributions. The Manager shall cause the Company to distribute to the Member, at least quarterly, amounts reasonably estimated to be sufficient to enable the Member to satisfy its tax liability attributable to allocations of taxable income from the Company for such quarter, taking into account applicable federal, state, and local tax rates. Tax distributions shall be made to the extent of available cash and subject to compliance with the Loan Documents. Tax distributions made pursuant to this Section 6.3 shall be treated as advances against, and shall reduce, any subsequent distributions otherwise payable to the Member under Section 6.2.
Section 6.4 REIT Compliance. The Manager shall cause distributions to be made in a manner consistent with the Member's obligations to qualify and maintain its status as a REIT under Sections 856 through 860 of the Code. The Manager shall cooperate in good faith with the Member to ensure that the Company's operations and distributions support the Member's compliance with, among other things, (a) the 75% gross income test under Section 856(c)(3) of the Code, (b) the 95% gross income test under Section 856(c)(2) of the Code, and (c) the 75% asset test under Section 856(c)(4) of the Code. The Manager shall consult with the Member and the Member's tax advisors regarding any proposed action or transaction that could reasonably be expected to adversely affect the Member's qualification as a REIT.
ARTICLE VII — SINGLE-PURPOSE ENTITY COVENANTS
Section 7.1 SPE Requirements. The Company shall at all times comply with the following single-purpose entity requirements (collectively, the "SPE Requirements"), which are incorporated herein for the benefit of the Lender under the Loan Documents and which shall not be amended, modified, or waived without the prior written consent of the Lender to the extent required by the Loan Documents:
(a) The Company shall not engage in any business or activity other than the ownership, operation, management, leasing, and maintenance of the Property and activities incidental thereto.
(b) The Company shall not own any assets other than the Property and related personal property, permits, licenses, entitlements, and contract rights associated with the ownership and operation of the Property.
(c) The Company shall not incur any indebtedness other than the Assumed Loans and trade payables incurred in the ordinary course of business of owning and operating the Property, which trade payables shall be paid when due and shall not be evidenced by notes.
(d) The Company shall not commingle its assets or funds with those of any other Person, including the Member or any affiliate of the Member. All funds of the Company shall be maintained in accounts held in the name of the Company and separate from the accounts of any other Person.
(e) The Company shall maintain its own separate books, records, and financial statements, separate and apart from the books, records, and financial statements of the Member and any other Person. The Company's financial statements shall reflect only the assets, liabilities, and results of operations of the Company.
(f) The Company shall maintain separate bank accounts at Magnolia Commerce Bank, N.A., or such other financial institution as may be approved by the Manager and, to the extent required, by the Lender. No other Person shall have access to or signatory authority over the Company's bank accounts except as authorized by the Manager.
(g) The Company shall hold itself out to the public, creditors, and all other Persons as a separate and distinct entity from the Member and all other Persons. The Company shall conduct its affairs in a manner that is not misleading to other Persons as to the Company's identity and separateness from any other Person.
(h) The Company shall conduct its business in its own name. The Company shall use its own name on all contracts, correspondence, invoices, purchase orders, checks, and other business documents and shall not use the name of any other Person for such purposes except to identify the Company as an affiliate or subsidiary of the Member.
(i) The Company shall observe all limited liability company formalities required by the Act and this Agreement, including the holding of meetings or the adoption of written consents as necessary.
(j) The Company shall not guarantee or become obligated for the debts, liabilities, or obligations of any other Person, including the Member or any affiliate of the Member, and shall not hold itself out as being responsible for the debts, liabilities, or obligations of any other Person.
(k) The Company shall not make loans to, or acquire obligations of, any other Person, including the Member or any affiliate of the Member.
(l) The Company shall pay its own liabilities, debts, and expenses solely from its own funds. No other Person shall pay or be responsible for any liabilities, debts, or expenses of the Company (other than capital contributions made by the Member or advances pursuant to the Loan Documents).
(m) The Company shall not dissolve, liquidate, consolidate, merge, or convert into any other form of entity without the prior written consent of the Lender, to the extent required by the Loan Documents.
(n) The Company shall not file or consent to the filing of any voluntary petition for relief under Title 11 of the United States Code (the Bankruptcy Code) or any other federal or state bankruptcy, insolvency, or similar law, and shall not consent to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, or other similar official of the Company or any of its assets, without the affirmative vote or written consent of any independent director or independent manager of the Company, if and to the extent required by the Loan Documents.
(o) The Company shall maintain adequate capital in light of its contemplated business operations and shall not be rendered insolvent by any distribution made to the Member or any other transaction.
(p) The Company shall file its own tax returns (to the extent required by applicable law) and shall not file a consolidated tax return with any other Person, except (i) as part of the Member's consolidated or combined tax return where required or permitted by applicable law, or (ii) where the Company's separate filing is not required because the Company is treated as a disregarded entity for federal income tax purposes.
Section 7.2 Independent Director/Manager. To the extent required by the Loan Documents, the Company shall at all times have at least one (1) independent director or independent manager (the "Independent Manager") who is an individual that is not, and has not been during the preceding five (5) years, an affiliate, member, manager, officer, employee, director, or creditor of the Company, the Member, or any affiliate of the Member or the Company, other than in such person's capacity as an independent director or independent manager of the Company or of another single-purpose entity that is an affiliate of the Member. No voluntary petition for relief under any federal or state bankruptcy or insolvency law shall be filed by or on behalf of the Company, and no dissolution or winding up of the Company shall be commenced by the Company, without the prior written consent of such Independent Manager. The provisions of this Section 7.2 shall be applicable only to the extent expressly required by the specific Loan Documents governing the Assumed Loans of the Company, and the Company shall confirm with the Lender and its counsel whether the appointment of an Independent Manager is required for this Company. If an Independent Manager is required, the initial Independent Manager shall be designated by the Member within thirty (30) days of the Effective Date.
ARTICLE VIII — BOOKS, RECORDS, AND TAX MATTERS
Section 8.1 Books and Records. The Manager shall keep or cause to be kept complete and accurate books and records of the Company at the principal office of the Company or at such other location as the Manager may determine from time to time. Such books and records shall include, without limitation, the following: (a) a current list of the name, address, and membership interest of the Member; (b) copies of the Certificate of Formation and this Agreement, as currently in effect; (c) copies of all federal, state, and local income tax returns and financial statements of the Company; (d) the Company's books of account; and (e) minutes or records of all actions taken by the Member or Manager. The books and records of the Company shall be maintained in accordance with generally accepted accounting principles ("GAAP") consistently applied. The Member and its duly authorized representatives shall have full access to inspect, examine, and copy all books, records, and documents of the Company at all reasonable times during normal business hours.
Section 8.2 Fiscal Year. The fiscal year of the Company shall be the calendar year, commencing on January 1 and ending on December 31 of each year, or such portion thereof during which the Company is in existence.
Section 8.3 Tax Classification. For United States federal income tax purposes, the Company shall be treated as a disregarded entity pursuant to Treasury Regulation Section 301.7701-3(b)(1)(ii), because the Company has a single owner that is not treated as a corporation for federal income tax purposes. All items of income, gain, loss, deduction, and credit of the Company shall be reported on the Member's federal income tax return. No election shall be made on IRS Form 8832 (Entity Classification Election) or otherwise to classify the Company as an association taxable as a corporation for federal income tax purposes. The default classification of the Company as a disregarded entity shall be maintained at all times.
Section 8.4 Tax Returns. The Manager shall cause the preparation and timely filing of all tax returns, reports, and information statements required to be filed by or on behalf of the Company under applicable federal, state, and local law, including, without limitation, state income and franchise tax filings in the State of Georgia (the state in which the Property is located) and the State of Delaware (the state of formation of the Company). The preparation of all such tax returns and filings shall be coordinated with Ashford Prewitt LLP, 1 South Street, Suite 2700, Baltimore, Maryland 21202 (Tax Partner: Naomi Ikeda, CPA), or such other accounting firm as the Member may designate from time to time. The costs and expenses of preparing and filing all tax returns shall be an expense of the Company.
Section 8.5 Tax Matters Member. The Member shall be the "tax matters partner" of the Company within the meaning of Section 6231(a)(7) of the Code (as in effect prior to the Bipartisan Budget Act of 2015) and the "partnership representative" of the Company within the meaning of Section 6223(a) of the Code (as in effect after the Bipartisan Budget Act of 2015), to the extent any such designation is applicable to the Company. All tax elections and decisions regarding tax matters of the Company shall be made by the Member in its sole and absolute discretion.
Section 8.6 REIT Reporting. The Manager shall cause the Company to provide the Member with all financial and tax information reasonably necessary for the Member to comply with its REIT reporting and compliance obligations, including, without limitation, all information necessary for the Member to perform its annual REIT qualification testing under Sections 856 through 860 of the Code and to prepare and file the Member's federal income tax return (IRS Form 1120-REIT) and any applicable state and local tax returns. Such information shall be provided on a timely basis and in such format as the Member may reasonably request.
ARTICLE IX — DISSOLUTION AND WINDING UP
Section 9.1 Events of Dissolution. The Company shall be dissolved only upon the occurrence of any of the following events: (a) a written determination by the Member to dissolve the Company; (b) the sale, exchange, or other disposition of all or substantially all of the assets of the Company and the receipt by the Company of all consideration therefor; (c) the entry of a judicial decree of dissolution of the Company under Section 18-802 of the Act; or (d) as otherwise required by the Act. No dissolution of the Company shall be effected in violation of the Loan Documents or the SPE Requirements without the prior written consent of the Lender to the extent required by the Loan Documents and, if applicable, the prior written consent of the Independent Manager as provided in Section 7.2 hereof.
Section 9.2 Winding Up. Upon dissolution of the Company, the Manager (or, if there is no Manager, a liquidating agent appointed by the Member) shall wind up the affairs of the Company, liquidate and reduce to cash (to the extent necessary or appropriate) the assets of the Company, and apply and distribute the proceeds thereof in the following order of priority:
First, to the payment and discharge of all debts and liabilities of the Company (other than debts and liabilities owed to the Member), including all amounts owed to the Lender under the Loan Documents, in the order of priority required by applicable law;
Second, to the establishment of such reserves as the Manager or liquidating agent reasonably deems necessary for any remaining contingent, unliquidated, or unforeseen liabilities or obligations of the Company (which reserves, when they become unnecessary, shall be distributed in accordance with the provisions of this Section 9.2);
Third, to the payment of any debts and liabilities owed by the Company to the Member; and
Fourth, to the distribution of the balance, if any, to the Member.
Section 9.3 Certificate of Cancellation. Upon the completion of the winding up of the affairs of the Company, the distribution of all of the Company's assets, and the payment of all of the Company's debts and liabilities, the Manager or liquidating agent shall cause a Certificate of Cancellation to be filed with the Secretary of State of the State of Delaware in accordance with Section 18-203 of the Act, and shall take all other actions necessary to terminate the existence of the Company in each jurisdiction in which the Company is qualified to do business.
Section 9.4 No Involuntary Dissolution. The Member shall not be subject to involuntary dissolution or removal from the Company. The death, disability, bankruptcy, insolvency, dissolution, or withdrawal of the Member shall not cause the dissolution of the Company. In the event of the bankruptcy, insolvency, dissolution, or withdrawal of the Member, the Company shall continue with any successor, assignee, personal representative, heir, executor, administrator, trustee, or other legal representative of the Member, and such Person shall be admitted as a member of the Company and shall be bound by the terms of this Agreement.
ARTICLE X — TRANSFER OF MEMBERSHIP INTERESTS
Section 10.1 Restrictions on Transfer. The Member shall not sell, assign, transfer, pledge, hypothecate, encumber, or otherwise dispose of all or any portion of the Membership Interest (whether voluntarily, involuntarily, or by operation of law) without compliance with the Loan Documents, including obtaining any required consent or approval of the Lender under the change of control provisions contained therein. The parties acknowledge that the Loan Documents contain restrictions on the transfer of membership interests in the Company and that the transfer of 100% of the membership interests in the Company from the Former Member (GMP Fund III) to the Member (Fairwater REIT) required and obtained the consent of the Lender, Pinnacle Federal Bank, N.A. (consent letter dated June 4, 2024). Any future transfer of all or any portion of the Membership Interest shall likewise require compliance with all applicable change of control provisions and consent requirements in the Loan Documents.
Section 10.2 Permitted Transfers. Notwithstanding the provisions of Section 10.1 hereof, the Member may transfer all or any portion of the Membership Interest to a wholly owned subsidiary or affiliate of the Member without the consent of any other Person, provided that such transfer does not violate the Loan Documents or any other agreement to which the Company is a party or by which the Company's assets are bound, and provided further that, to the extent the Loan Documents require Lender consent for such a transfer, such consent has been obtained prior to the effectiveness of such transfer. Any transferee admitted as a member of the Company pursuant to this Section 10.2 shall be bound by all of the terms and conditions of this Agreement and shall execute such documents and instruments as the Manager may reasonably request to evidence such Person's agreement to be bound hereby.
ARTICLE XI — INSURANCE
Section 11.1 Property and Liability Insurance. The Manager shall maintain, or cause to be maintained, property, casualty, general liability, umbrella/excess liability, workers' compensation, and such other insurance coverages as are required by the Loan Documents and as are set forth on the Schedule of Required Insurance attached as Exhibit M to the PSA, or as may otherwise be required by applicable law or deemed prudent by the Manager. All property and casualty insurance policies shall name the Lender (or its servicer) as mortgagee and loss payee, to the extent required by the Loan Documents. All liability insurance policies shall name the Lender and its servicer as additional insureds, to the extent required by the Loan Documents. The insurance carrier for the Company's property and casualty insurance program is Ironclad Indemnity Insurance Company, 500 College Road East, Princeton, New Jersey 08540. The Company's insurance broker is Hartwick Gunderson & Associates, Inc., 100 North Charles Street, Suite 1200, Baltimore, Maryland 21201 (Account Executive: Peter Langford). The Manager shall deliver to the Lender evidence of insurance and certificates of insurance as and when required by the Loan Documents.
Section 11.2 Representations and Warranties Insurance. The parties acknowledge the existence of a buyer-side representations and warranties insurance policy issued by Sentinel Specialty Insurance Company (the "R&W Policy") in connection with the acquisition of the fourteen (14) Target Entities, including the Company, pursuant to the PSA. The R&W Policy has a total policy limit of Fifty-Five Million Dollars ($55,000,000) and a retention amount of Eleven Million Dollars ($11,000,000) (dropping to Five Million Five Hundred Thousand Dollars ($5,500,000) at twelve (12) months following the Closing Date). The R&W Policy covers the representations and warranties made by the Former Member in the PSA and is an aggregate policy covering all fourteen (14) Target Entities. Claims under the R&W Policy shall be administered by the Member in accordance with the terms thereof.
ARTICLE XII — ASSUMED LOAN DOCUMENTS
Section 12.1 Compliance with Loan Documents. The Company shall comply with all terms, conditions, covenants, representations, and warranties contained in the Loan Documents, as assumed by the Member pursuant to that certain Assumption Agreement dated as of June 6, 2024, by and between the Company, the Member, and the Lender. The Assumed Loans with respect to this Company are governed by the following:
Lender: Pinnacle Federal Bank, N.A., a national banking association
Loan Agreement: Master Loan Agreement dated September 15, 2020, as amended by that certain First Amendment to Master Loan Agreement dated March 1, 2022, and that certain Second Amendment to Master Loan Agreement dated June 6, 2024
Loan Designation: Loan 1-A (one of eight loans under the Master Loan Agreement secured by properties held by the eight Pinnacle Federal Bank borrower entities)
Interest Rate: 4.22% per annum (fixed)
Maturity Date: July 1, 2028
Aggregate Outstanding Principal Balance (all eight Pinnacle loans): $421,600,000 (as of February 28, 2024)
Lender Consent: Consent letter dated June 4, 2024
Lender's Counsel: Whitfield & Hargrove LLP, 1100 Peachtree Street NE, Suite 2800, Atlanta, Georgia 30309 (Partner: Jonathan Whitfield)
Section 12.2 Replacement Guaranty. In connection with the Closing, Fairwater Real Estate Investment Trust executed and delivered in favor of the Lender a Replacement Carve-Out Guaranty dated as of June 6, 2024 (the "Replacement Guaranty"), replacing Greystone Meridian Partners Fund III, L.P. as the carve-out guarantor under the Loan Documents. Pursuant to the Replacement Guaranty, the Member has guaranteed to the Lender the payment and performance of certain non-recourse carve-out obligations of the Company, subject to the terms and conditions set forth therein. The financial covenants of the Member as guarantor under the Replacement Guaranty include, without limitation: (a) maintenance of a minimum tangible net worth of not less than Five Hundred Million Dollars ($500,000,000); and (b) maintenance of minimum liquid assets of not less than Fifty Million Dollars ($50,000,000), in each case as determined in accordance with the Replacement Guaranty.
Section 12.3 Conflicts with Loan Documents. In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of the Loan Documents, the provisions of the Loan Documents shall control and prevail to the extent of such conflict or inconsistency. Without limiting the foregoing, to the extent that the Loan Documents impose requirements or restrictions on the Company that are more restrictive than those set forth in this Agreement (including, without limitation, with respect to SPE Requirements, transfer restrictions, insurance requirements, reserve requirements, or reporting obligations), the Company shall comply with the more restrictive requirements of the Loan Documents.
ARTICLE XIII — MISCELLANEOUS
Section 13.1 Amendments. This Agreement may be amended, restated, supplemented, or otherwise modified only by a written instrument signed by the Member. No amendment to this Agreement shall be effective to the extent it would cause a violation of the Loan Documents or the SPE Requirements without the prior written consent of the Lender to the extent required by the Loan Documents.
Section 13.2 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware (including the Act), without regard to the conflicts of laws principles thereof that would require the application of the laws of any other jurisdiction.
Section 13.3 Severability. If any provision of this Agreement, or the application of any such provision to any Person or circumstance, is held by a court of competent jurisdiction or other authority to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions of this Agreement shall continue in full force and effect. To the extent permitted by applicable law, the parties hereto waive any provision of law that renders any provision of this Agreement invalid, illegal, or unenforceable in any respect.
Section 13.4 Entire Agreement. This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, representations, and warranties, whether oral or written, relating to the governance and operation of the Company, including, without limitation, the Prior Operating Agreement, which is hereby amended and restated in its entirety and shall be of no further force or effect.
Section 13.5 Notices. All notices, requests, demands, consents, approvals, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by a nationally recognized overnight courier service (with written confirmation of receipt), or (c) sent by certified or registered mail, return receipt requested, postage prepaid, in each case addressed as follows:
If to the Member:
Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044
Attention: David Elgin Park, General Counsel
Telephone: (410) 872-5000
Email: dpark@fairwaterreit.com
With a copy to:
Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022
Attention: Douglas Fairchild
Telephone: (212) 558-4055
Email: dfairchild@calderwoodharkness.com
Either party may change its address for notices by giving written notice of such change in accordance with this Section 13.5.
Section 13.6 Waiver. No waiver by the Member of any provision of this Agreement or of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver shall be effective unless set forth in a writing signed by the Member.
Section 13.7 Headings. The article and section headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Agreement.
Section 13.8 Counterparts. This Agreement may be executed in one or more counterparts (including by means of facsimile or portable document format (.pdf)

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

MEMORANDUM

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

GMP FAIRFIELD I LLC

RECITALS

Record

Parties

Dates

Amounts