MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 100 International Drive, Suite 2600 Baltimore, Maryland 21202
FROM: Cynthia Ho, Lead Associate, Real Estate Practice Group
TO: Douglas Fairchild, Responsible Partner, Real Estate Practice Group
CC: Angela Fontaine, Billing Partner, Real Estate Practice Group; Grace Nakamura, Working Associate, Real Estate Practice Group; Sylvia Hartwell, Specialist Partner, Tax Practice Group
DATE: September 15, 2025
RE: Conflicts Clearance — Fairwater Real Estate Investment Trust / Harbor Point Development Joint Venture
MATTER NO.: 1036-00005
1. Purpose and Summary of Conclusions
This memorandum documents the results of the conflicts of interest check conducted in connection with Calderwood & Harkness LLP's ("C&H" or the "Firm") proposed engagement by Fairwater Real Estate Investment Trust ("Fairwater" or "FREIT"), a Maryland-domiciled publicly traded real estate investment trust (NYSE: FWT; EIN: 52-2198437; Maryland State Department of Assessments and Taxation ID: D19847321), headquartered at 7200 Pratt Street, Suite 1400, Baltimore, Maryland 21202.
The proposed engagement concerns the representation of Fairwater in the formation and negotiation of a $240,000,000 institutional joint venture (the "Joint Venture" or "JV") with Prescott Capital Partners, LP ("Prescott"), a Delaware limited partnership and institutional real estate fund, for the development of "Harbor Point Towers," a Class A mixed-use project encompassing approximately 1.6 million gross square feet of residential, office, and ground-floor retail space on an 8.2-acre waterfront site located at 1500–1580 Wills Street, Baltimore, Maryland 21231 (Block 7419, Lots 1–6, Baltimore City) (the "Project"). The total projected development cost for the Project is approximately $576,000,000, consisting of $240,000,000 in joint venture equity capital and $336,000,000 in construction debt financing from Meridian National Bank, N.A.
The conflicts search described in this memorandum was conducted on September 15, 2025, in accordance with the Firm's Conflicts of Interest Policy (effective January 1, 2024, as most recently amended March 15, 2025), and the Maryland Lawyers' Rules of Professional Conduct (the "MLRPC"), including without limitation Rules 1.7 (Conflict of Interest: Current Clients), 1.9 (Duties to Former Clients), 1.10 (Imputation of Conflicts of Interest: General Rule), 1.13 (Organization as Client), and 1.18 (Duties to Prospective Client). The search encompassed all parties identified as potential participants in the transaction, their known affiliates, key principals, officers, directors, and counsel, as more particularly described in Section 3 of this memorandum.
Summary Conclusion: Based on the comprehensive analysis set forth below, no disqualifying conflicts of interest have been identified that would preclude Calderwood & Harkness LLP from undertaking the proposed representation of Fairwater in connection with the Harbor Point Development JV matter. Two prior representations were flagged during the conflicts search, both of which have been analyzed and cleared as described in Sections 5 and 6 below. The engagement may proceed, subject to the disclosure and administrative conditions noted in Section 8.
2. Proposed Engagement — Description of Matter
2.1 Client Identification
Client: Fairwater Real Estate Investment Trust, a Maryland real estate investment trust organized under Title 8 of the Maryland Corporations and Associations Code and qualified as a real estate investment trust under Sections 856–860 of the Internal Revenue Code of 1986, as amended. Fairwater's shares of beneficial interest are listed on the New York Stock Exchange under the ticker symbol "FWT." As of its most recent annual report on Form 10-K (fiscal year ended December 31, 2024), Fairwater reported total assets of approximately $4.2 billion and a portfolio of 37 multifamily and mixed-use properties concentrated in the Mid-Atlantic region.
2.2 Primary Client Contacts
The following individuals have been identified as Fairwater's primary contacts for this engagement:
• Theresa M. Calloway, General Counsel, Fairwater Real Estate Investment Trust — Ms. Calloway will serve as the primary legal contact for the engagement and will coordinate internal approvals, privilege matters, and communications with the Board of Trustees as necessary.
• Marcus D. Okonkwo, Executive Vice President of Development, Fairwater Real Estate Investment Trust — Mr. Okonkwo is the primary business contact for this Joint Venture and has been designated by Fairwater's executive team as the day-to-day decision-maker on transaction negotiations, development timeline, and construction-related matters.
• Harold K. Brennan, Chief Executive Officer and Chairman of the Board of Trustees, Fairwater Real Estate Investment Trust — Mr. Brennan will be involved in high-level strategic decisions and will execute transaction documents on behalf of Fairwater.
• Patricia S. Liang, Chief Financial Officer, Fairwater Real Estate Investment Trust — Ms. Liang will be the principal contact for financial modeling, capital contribution structuring, distribution waterfall negotiations, and construction loan documentation.
2.3 Scope of Representation
Calderwood & Harkness has been asked to represent Fairwater in the negotiation, drafting, and closing of all legal documentation necessary to form and capitalize the Harbor Point Development JV, LLC (a Delaware limited liability company to be formed) (the "JV Entity" or "HP JV"), and to close the related real property acquisition and development financing transactions. The scope of the proposed engagement includes the following workstreams:
(a) JV Formation and Governance Documents. Drafting and negotiation of the Limited Liability Company Agreement (Operating Agreement) of Harbor Point Development JV, LLC, the Amended and Restated Limited Liability Company Agreement, and all related governance documents, including management committee charters, major decision protocols, buy-sell provisions, deadlock resolution mechanisms, and transfer restriction provisions.
(b) Capital Contribution Agreements. Structuring and documentation of equity commitments to the JV Entity, including Fairwater's $72,000,000 capital commitment (through its wholly owned subsidiary, Fairwater HP Manager, LLC) and Prescott's $168,000,000 capital commitment (through Prescott HP Investor, LLC), including capital call mechanics, default provisions, dilution remedies, and distribution waterfall provisions (including promote/carried interest structures at designated IRR hurdles).
(c) Property Acquisition Documents. Review and assignment of the existing Purchase and Sale Agreement between Harbor East Land Holdings, LLC (as seller) and Fairwater (or its designee) for the acquisition of the 8.2-acre development site at 1500–1580 Wills Street, Baltimore, Maryland 21231, at an agreed purchase price of $54,000,000, and preparation of all closing documents related thereto, including the assignment and assumption agreement, settlement statement, and title affidavits.
(d) Development and Construction Document Review. Review of the Guaranteed Maximum Price ("GMP") construction contract to be entered into between the JV Entity and Pinnacle General Contractors, Inc. for the design and construction of Harbor Point Towers, for purposes of confirming conformity with the JV Agreement requirements, lender requirements under the construction loan documents, and customary protective provisions for the benefit of the JV's members. Calderwood & Harkness's role in this workstream is limited to review for JV and lender compliance; Fairwater's business team and/or separate construction counsel will handle the primary negotiation of the GMP contract terms.
(e) Construction Loan Documentation Review. Review and negotiation of the construction loan documentation for the $336,000,000 senior secured construction loan facility to be provided by Meridian National Bank, N.A. (the "Construction Lender"), including the loan agreement, promissory note, deed of trust, assignment of leases and rents, guaranty agreements, environmental indemnity, and related security documents. Calderwood & Harkness will serve as borrower's counsel in the construction loan closing and will deliver a customary borrower's counsel opinion letter to the Construction Lender and its counsel.
(f) Tax Structuring and REIT Compliance. In coordination with Sylvia Hartwell and the Tax Practice Group, analysis and documentation of the tax structuring of the Joint Venture to ensure: (i) classification of HP JV as a partnership for federal income tax purposes; (ii) compliance with the Section 704(b) "substantial economic effect" safe harbor and appropriate Section 704(c) allocation methodologies; (iii) compliance with Fairwater's REIT qualification requirements under Sections 856–860 of the Internal Revenue Code, including REIT savings provisions in the Operating Agreement, prohibited transaction safe harbor compliance, and related-party rent restrictions; and (iv) appropriate state and local tax planning for the Delaware LLC structure.
(g) Title, Survey, Environmental, and Zoning Diligence Review. Review of title commitments, ALTA surveys, Phase I and Phase II environmental site assessments, zoning opinions, and related due diligence materials, and coordination with Tidewater Insurance Group, Inc. (title insurer), Bayline Environmental Consultants, LLC (environmental consultant), and Calvert Surveying & Engineering, Inc. (surveyor) as necessary to satisfy closing conditions.
(h) Closing Deliverables and Opinion Letters. Preparation of all closing checklists, signature packages, escrow instructions, and opinion letters required for the JV formation closing and the construction loan closing, including the borrower's counsel opinion letter to Meridian National Bank, N.A. and any opinion letters required by Prescott's counsel.
2.4 Target Signing Date
The parties have established a target signing date of January 12, 2026, for the execution and delivery of the JV Agreement and all ancillary transaction documents, with a simultaneous or near-simultaneous closing of the land acquisition and construction loan.
2.5 Engagement Team
The following Calderwood & Harkness personnel have been designated to staff this engagement:
Additional associates and paralegals may be assigned as the engagement progresses. Any additions to the engagement team will be cross-referenced against the conflicts database at the time of assignment.
3. Parties Searched
The following is a comprehensive description of all parties and affiliated entities run through the Firm's conflicts database in connection with this engagement. For each party, the search included the party's full legal name, all known short names and trade names, entity type, jurisdiction of organization, employer identification number (where known), and the names of key principals, officers, and contacts.
3.1 Client and Client Affiliates
(a) Fairwater Real Estate Investment Trust. Maryland real estate investment trust; NYSE: FWT; EIN: 52-2198437; MD SDAT ID: D19847321; principal office: 7200 Pratt Street, Suite 1400, Baltimore, Maryland 21202. Fairwater is the proposed client in this engagement and the sponsor and co-venturer for the Harbor Point Towers project.
(b) Fairwater HP Manager, LLC. Maryland limited liability company; EIN: 52-2201889; a wholly owned subsidiary of Fairwater Real Estate Investment Trust, formed to serve as the Managing Member of the JV Entity and to hold Fairwater's 30% membership interest in Harbor Point Development JV, LLC. This entity has been recently organized by Fairwater's in-house counsel and is not yet operational.
(c) Harold K. Brennan. Chief Executive Officer and Chairman of the Board of Trustees, Fairwater Real Estate Investment Trust. Mr. Brennan will be an authorized signatory on transaction documents on behalf of Fairwater.
(d) Patricia S. Liang. Chief Financial Officer, Fairwater Real Estate Investment Trust. Ms. Liang will serve as the principal financial contact.
(e) Marcus D. Okonkwo. Executive Vice President, Development, Fairwater Real Estate Investment Trust. Mr. Okonkwo is the designated business contact for the JV transaction and has primary authority over development and construction matters.
(f) Theresa M. Calloway. General Counsel, Fairwater Real Estate Investment Trust. Ms. Calloway is the designated legal contact for purposes of this engagement.
3.2 Counterparty and Counterparty Affiliates
(a) Prescott Capital Partners, LP. Delaware limited partnership; EIN: 13-4587612; an institutional real estate private equity fund (Fund IV, 2023 vintage, with approximately $3.8 billion in committed capital); principal office: 400 Lexington Avenue, 32nd Floor, New York, New York 10170. Prescott is the counterparty to the Joint Venture and will hold a 70% economic interest in the JV Entity through its subsidiary, Prescott HP Investor, LLC.
(b) Prescott Capital GP, LLC. Delaware limited liability company; the general partner of Prescott Capital Partners, LP. Searched as an affiliate of the counterparty.
(c) Prescott HP Investor, LLC. Delaware limited liability company; EIN: 13-4603217; Prescott's designated JV holding subsidiary, to hold the 70% membership interest in Harbor Point Development JV, LLC.
(d) Jonathan R. Whitfield. Co-Managing Partner, Prescott Capital Partners, LP. Mr. Whitfield is a senior decision-maker at Prescott and will be involved in approving the JV transaction terms.
(e) Diana L. Sutherland. Co-Managing Partner, Prescott Capital Partners, LP. Ms. Sutherland is a senior decision-maker at Prescott with approval authority over Fund IV investments.
(f) Andrew M. Castellano. Senior Principal and Deal Lead, Prescott Capital Partners, LP. Mr. Castellano is the designated Prescott contact for the Harbor Point JV negotiation and will serve as the Prescott-side principal on day-to-day deal matters.
3.3 Counterparty's Counsel
(a) Whitmore, Calder & Briggs LLP. New York limited liability partnership; principal office: 51 West 52nd Street, New York, New York 10019. WCB is representing Prescott Capital Partners, LP and its affiliates in connection with the Joint Venture.
(b) Samuel T. Briggs III. Lead Partner, Real Estate Practice Group, Whitmore, Calder & Briggs LLP.
(c) Megan R. Osterhaus. Associate, Real Estate Practice Group, Whitmore, Calder & Briggs LLP.
3.4 Joint Venture Entity
(a) Harbor Point Development JV, LLC. Delaware limited liability company (to be formed); EIN: 84-6213950 (application pending); registered agent: Incorporators & Associates, Inc., 1209 Orange Street, Wilmington, Delaware 19801. This is the JV entity to be formed in connection with the transaction, which will acquire the development site and develop the Project.
3.5 Construction Lender
(a) Meridian National Bank, N.A. National banking association chartered under the laws of the United States; principal office: 200 South Charles Street, Baltimore, Maryland 21201. Meridian is the proposed construction lender for the $336,000,000 senior secured construction loan facility.
(b) Kevin P. Driscoll. Senior Vice President, Real Estate Finance Division, Meridian National Bank, N.A. Mr. Driscoll is the designated loan officer and relationship manager for the construction loan.
3.6 Land Seller
(a) Harbor East Land Holdings, LLC. Maryland limited liability company; sole member: Vincent A. DeLuca; principal office: c/o 700 Aliceanna Street, Suite 100, Baltimore, Maryland 21202. Harbor East Land Holdings is the current owner of the development site and the seller under the Purchase and Sale Agreement at an agreed price of $54,000,000.
(b) Vincent A. DeLuca. Sole member and manager of Harbor East Land Holdings, LLC. Mr. DeLuca is a Baltimore-based real estate developer and investor.
3.7 General Contractor
(a) Pinnacle General Contractors, Inc. Maryland corporation; principal office: 8520 Philadelphia Road, Rosedale, Maryland 21237. Pinnacle is the proposed general contractor for the construction of Harbor Point Towers under a Guaranteed Maximum Price contract.
(b) Raymond S. Muñoz. Chief Executive Officer, Pinnacle General Contractors, Inc.
3.8 Title Insurer
(a) Tidewater Insurance Group, Inc. Maryland corporation; principal office: 9100 Greenspring Avenue, Lutherville, Maryland 21093. Tidewater is the proposed title insurer for the land acquisition and will issue an owner's policy and a lender's policy of title insurance.
3.9 Appraiser.
(a) Stonebridge Appraisal Associates, LLC. Maryland limited liability company; principal office: 211 East Lombard Street, Suite 300, Baltimore, Maryland 21202. Stonebridge has been retained to prepare the independent appraisal of the development site and projected completed value of Harbor Point Towers for construction loan underwriting purposes.
3.10 JV Accountant / Tax Advisor
(a) Alderman & Fields, CPAs, LLP. Maryland limited liability partnership; principal office: 1 South Street, Suite 1800, Baltimore, Maryland 21202. Alderman & Fields has been engaged as the accountant and tax return preparation firm for the JV Entity.
(b) Robert E. Alderman. Engagement Partner, Alderman & Fields, CPAs, LLP.
3.11 Environmental Consultant
(a) Bayline Environmental Consultants, LLC. Maryland limited liability company; principal office: 3045 Boston Street, Suite 200, Baltimore, Maryland 21224. Bayline has been retained to prepare the Phase I Environmental Site Assessment (and, if warranted, Phase II investigation) for the development site.
3.12 Surveyor / Civil Engineer
(a) Calvert Surveying & Engineering, Inc. Maryland corporation; principal office: 620 North Eutaw Street, Baltimore, Maryland 21201. Calvert has been retained to prepare the ALTA/NSPS land title survey and provide civil engineering services for the development site.
3.13 Insurance Carrier
(a) Greystone Mutual Insurance Company. Pennsylvania mutual insurance company. Greystone is the proposed insurance carrier for builder's risk insurance and property insurance during the construction phase of the Project.
3.14 Registered Agents
(a) National Registered Agents of Maryland, Inc. Registered agent for Fairwater Real Estate Investment Trust; 311 West Saratoga Street, Baltimore, Maryland 21201. Purely ministerial service provider.
(b) Incorporators & Associates, Inc. Registered agent for Harbor Point Development JV, LLC in Delaware; 1209 Orange Street, Wilmington, Delaware 19801. Purely ministerial service provider.
4. Conflicts Database Search Methodology
4.1 Database Search
All searches described in this memorandum were conducted on September 15, 2025, using Calderwood & Harkness's firm-wide conflicts management and checking system ("C&H ConflictsCheck"), which is the Firm's centralized database of current and former client and matter information maintained pursuant to the Firm's Conflicts of Interest Policy.
For each party listed in Section 3 above, the following search terms were entered into C&H ConflictsCheck:
• Full legal name of the entity or individual (e.g., "Fairwater Real Estate Investment Trust," "Prescott Capital Partners, LP," "Harold K. Brennan");
• All known short names, trade names, and "doing business as" names (e.g., "Fairwater," "FREIT," "Prescott Capital," "Prescott");
• Stock exchange ticker symbols, where applicable (e.g., "FWT");
• Employer identification numbers (EINs), where known (e.g., "52-2198437," "13-4587612");
• All known affiliates and subsidiaries (e.g., "Fairwater HP Manager, LLC," "Prescott Capital GP, LLC," "Prescott HP Investor, LLC");
• Individual names of all principals, officers, directors, and key contacts identified by the client or discovered during intake (including common variations and maiden names, where known); and
• Address-based searches to identify potential "silent" relationships not captured by name-based searches alone.
4.2 Scope of Archival Search
The database search encompassed the following records:
• All active matters currently open in the Firm's matter management system;
• All closed matter archives for the prior seven (7) years (i.e., matters closed on or after September 15, 2018), consistent with the Firm's Conflicts of Interest Policy retention requirements;
• The Firm's lateral hire prior representations list, which includes prior representations disclosed by all attorneys who laterally joined Calderwood & Harkness within the last seven (7) years as part of the Firm's lateral onboarding conflicts clearance process; and
• The Firm's prospective client and declined representation log, which captures inquiries from prospective clients that did not result in an engagement but may give rise to duties under Maryland Rule 1.18.
4.3 Manual Inquiries
In addition to the automated database search, the following manual inquiry was undertaken:
A firm-wide conflicts clearance email was distributed on September 15, 2025, at 8:17 a.m. Eastern Time, to all partners and counsel-level attorneys in the following practice groups: Real Estate; Corporate / Mergers & Acquisitions; Litigation; and Tax. The email identified the proposed client (Fairwater), the proposed engagement (Harbor Point Development Joint Venture), and all counterparties and significant third parties listed in Section 3, and requested that each recipient confirm whether he or she was aware of any current or former representation of, or adverse relationship with, any of the listed parties that might not be reflected in the Firm's electronic records. All responses were received by 5:00 p.m. Eastern Time on September 15, 2025. No attorney identified any additional conflicts or potential conflicts beyond those captured in the database search. The individual responses are documented in Appendix B to this memorandum.
4.4 Limitations. As with any conflicts search, the results are only as comprehensive as the information contained in the Firm's records and the accuracy of the identifying information provided by the client and other sources. If additional parties are added to the transaction, or if the scope of the engagement materially changes, a supplemental conflicts search will be required.
5. Results of Conflicts Search
5.1 Fairwater Real Estate Investment Trust (Client)
Calderwood & Harkness has an existing attorney-client relationship with Fairwater Real Estate Investment Trust, having represented Fairwater on three prior matters in the last five years:
(a) Matter No. 1036-00005 — Fairwater / Canton Crossing Acquisition. Calderwood & Harkness represented Fairwater in the acquisition of the Canton Crossing mixed-use development in southeast Baltimore for approximately $87,000,000 in 2021. Douglas Fairchild served as lead partner and Cynthia Ho served as lead associate. The matter was completed and closed on August 14, 2021.
(b) Matter No. 1036-00005 — Fairwater / Federal Hill Portfolio Acquisition. Calderwood & Harkness represented Fairwater in the acquisition of a four-property multifamily portfolio in the Federal Hill neighborhood of Baltimore for approximately $112,000,000 in 2023. Douglas Fairchild served as lead partner and Cynthia Ho served as lead associate, with Angela Fontaine serving as billing partner. The matter was completed and closed on March 22, 2023.
(c) Matter No. 1036-00005 — Fairwater / Inner Harbor Retail Lease. Calderwood & Harkness represented Fairwater in the negotiation of a 15-year ground-floor retail lease at one of Fairwater's Inner Harbor properties, with a national retail tenant. Douglas Fairchild served as lead partner. The matter was completed and closed on November 8, 2024.
All three prior matters were completed and closed in the ordinary course. No conflict arises from these prior representations; to the contrary, they confirm the existence of an ongoing attorney-client relationship between the Firm and Fairwater, which is the foundation for the proposed new engagement. No representations adverse to Fairwater were identified in the database search.
Conclusion: No conflict. Existing client relationship confirmed.
5.2 Prescott Capital Partners, LP (Counterparty)
The conflicts search returned no results for Prescott Capital Partners, LP, Prescott Capital GP, LLC, Prescott HP Investor, LLC, or any other entity bearing the "Prescott" name in the real estate or private equity fund context. Calderwood & Harkness has not represented any Prescott-affiliated entity in any capacity, and no representations adverse to any Prescott entity were identified.
Individual searches for Jonathan R. Whitfield, Diana L. Sutherland, and Andrew M. Castellano returned no results in the Firm's database. None of these individuals has been a client, adversary, or contact of the Firm, and no lateral hire has disclosed a prior relationship with any of them.
Conclusion: No conflict with respect to Prescott Capital Partners, LP or any of its affiliates or principals.
5.3 Whitmore, Calder & Briggs LLP (Counterparty's Counsel)
The conflicts search returned no results for Whitmore, Calder & Briggs LLP or any variant thereof. Calderwood & Harkness has not represented WCB or any of its partners or associates in any capacity, and no representations adverse to WCB were identified.
Individual searches for Samuel T. Briggs III and Megan R. Osterhaus returned no results in the Firm's database.
Conclusion: No conflict.
5.4 Meridian National Bank, N.A. (Construction Lender)
Flagged Result. The conflicts search returned one result for Meridian National Bank, N.A.:
Matter No. 1036-00005 — Meridian National Bank / Chesapeake Industrial REIT Credit Facility. Calderwood & Harkness's Corporate/M&A Practice Group, led by Partner Thomas R. Whitaker, represented Chesapeake Industrial REIT (an unrelated client) as borrower's counsel in a $75,000,000 revolving credit facility in which Meridian National Bank, N.A. served as administrative agent and lead lender. In that engagement, Calderwood & Harkness's client was Chesapeake Industrial REIT, not Meridian. However, the Firm interacted with Meridian and its counsel during the negotiation and closing process in the ordinary course of the loan transaction. The matter was completed and closed on March 31, 2024, approximately eighteen (18) months prior to the date of this memorandum.
In the present engagement, Calderwood & Harkness will represent Fairwater (the borrower and/or guarantor under the construction loan) rather than Meridian (the lender). Meridian will be independently represented by its own counsel in the construction loan transaction. The Firm is not currently adverse to Meridian in any pending matter; Fairwater and Meridian are cooperating parties in the construction loan transaction (i.e., borrower and lender working toward the common objective of closing the construction financing), although Calderwood & Harkness will negotiate certain terms of the construction loan documentation on Fairwater's behalf and will advocate for borrower-favorable positions on matters such as default and cure provisions, reserve requirements, and guaranty scope.
The prior representation of Chesapeake Industrial REIT in the 2024 credit facility did not involve the receipt by Calderwood & Harkness of any confidential or proprietary information from Meridian that could be material or relevant to the present transaction. Calderwood & Harkness's role in the prior matter was as borrower's counsel, and its communications with Meridian were limited to the negotiation of loan documentation terms on an arm's-length basis.
An additional search for Kevin P. Driscoll (SVP, Real Estate Finance, Meridian) returned no results in the Firm's database.
Assessment: No disqualifying conflict exists under Maryland Rule 1.7 (because Meridian is not a current client of the Firm) or Maryland Rule 1.9 (because Meridian was not a former client of the Firm in the prior matter — the Firm's client was Chesapeake Industrial REIT). Nonetheless, disclosure to Fairwater is recommended as a matter of best practice and transparency, and should be included in the engagement letter. See Section 6.1 for further analysis.
5.5 Harbor East Land Holdings, LLC / Vincent A. DeLuca (Land Seller)
The conflicts search returned no results for Harbor East Land Holdings, LLC or any variant thereof. Calderwood & Harkness has not represented Harbor East Land Holdings in any capacity, and no representations adverse to it were identified.
An individual search for Vincent A. DeLuca returned no results in the Firm's database. Mr. DeLuca has not been a client, adversary, or contact of the Firm.
Conclusion: No conflict.
5.6 Pinnacle General Contractors, Inc. (General Contractor)
Flagged Result. The conflicts search returned one result for Pinnacle General Contractors, Inc.:
Matter No. 1036-00005 — Atlas Mechanical Services, Inc. v. Pinnacle General Contractors, Inc. Calderwood & Harkness's Litigation Practice Group, led by Partner Maria C. DelVecchio, represented Atlas Mechanical Services, Inc. (a mechanical subcontractor) in a construction defect and payment dispute against Pinnacle General Contractors, Inc. in the Circuit Court for Baltimore City. In that matter, Pinnacle was the opposing party (defendant and counterclaim plaintiff), and Calderwood & Harkness advocated against Pinnacle's interests on behalf of its client, Atlas Mechanical. The matter was resolved by settlement on October 17, 2022, and was closed on November 3, 2022, approximately three (3) years prior to the date of this memorandum.
In the present engagement, Pinnacle is a third-party contractor to the Joint Venture, not an adverse party to Fairwater and not a counterparty in the JV transaction. Pinnacle is not Calderwood & Harkness's client and has never been a client of the Firm. Calderwood & Harkness's role with respect to Pinnacle in the present engagement is limited to reviewing the GMP construction contract (expected to be substantially negotiated and executed by December 20, 2025, by Fairwater's business team and/or separate construction counsel) for conformity with JV agreement requirements and construction lender requirements. Calderwood & Harkness will not be directly negotiating against Pinnacle or advocating adversely to Pinnacle's interests.
An additional search for Raymond S. Muñoz (CEO, Pinnacle) returned no results in the Firm's database.
Assessment: No disqualifying conflict exists. Under Maryland Rule 1.9, no former-client conflict arises because Pinnacle was never a client of the Firm — it was the opposing party in prior litigation. No duties of confidentiality or loyalty are owed to a former adversary. Furthermore, the Firm's current role vis-à-vis Pinnacle is non-adversarial. See Section 6.2 for further analysis.
5.7 Tidewater Insurance Group, Inc. (Title Insurer)
The conflicts search returned no results for Tidewater Insurance Group, Inc. or any variant thereof. Calderwood & Harkness has not represented Tidewater in any capacity, and no representations adverse to Tidewater were identified.
Conclusion: No conflict.
5.8 Stonebridge Appraisal Associates, LLC (Appraiser)
The conflicts search returned no results for Stonebridge Appraisal Associates, LLC or any variant thereof. Calderwood & Harkness has not represented Stonebridge in any capacity, and no representations adverse to Stonebridge were identified.
Conclusion: No conflict.
5.9 Alderman & Fields, CPAs, LLP / Robert E. Alderman (JV Accountant / Tax Advisor)
The conflicts search returned no results for Alderman & Fields, CPAs, LLP or any variant thereof. An individual search for Robert E. Alderman likewise returned no results. Calderwood & Harkness has not represented Alderman & Fields or Mr. Alderman in any capacity, and no representations adverse to them were identified.
Conclusion: No conflict.
5.10 Bayline Environmental Consultants, LLC (Environmental Consultant)
The conflicts search returned no results for Bayline Environmental Consultants, LLC or any variant thereof. Calderwood & Harkness has not represented Bayline in any capacity, and no representations adverse to Bayline were identified.
Conclusion: No conflict.
5.11 Calvert Surveying & Engineering, Inc. (Surveyor / Civil Engineer)
The conflicts search returned no results for Calvert Surveying & Engineering, Inc. or any variant thereof. Calderwood & Harkness has not represented Calvert in any capacity, and no representations adverse to Calvert were identified.
Conclusion: No conflict.
5.12 Greystone Mutual Insurance Company (Insurance Carrier)
The conflicts search returned no results for Greystone Mutual Insurance Company or any variant thereof. Calderwood & Harkness has not represented Greystone in any capacity, and no representations adverse to Greystone were identified.
Conclusion: No conflict.
5.13 Registered Agents
The conflicts search returned no results for National Registered Agents of Maryland, Inc. or Incorporators & Associates, Inc. Both entities serve as purely ministerial registered agent service providers and are not substantive participants in the transaction. No attorney-client relationship, adverse relationship, or other relationship of significance exists between the Firm and either registered agent.
Conclusion: No conflict.
6. Analysis of Flagged Matters
Two matters were flagged during the conflicts search process. This section provides a detailed analysis of each flagged matter, the applicable rules of professional conduct, and the disposition of each.
6.1 Meridian National Bank, N.A. — Prior Representation (Closed)
Matter Reference: Matter No. 1036-00005 — Meridian National Bank / Chesapeake Industrial REIT Credit Facility.
Date of Closing: March 31, 2024.
Practice Group Involved: Corporate / Mergers & Acquisitions Practice Group (Partner: Thomas R. Whitaker).
Nature of Prior Representation: Calderwood & Harkness represented Chesapeake Industrial REIT, not Meridian, as borrower's counsel in a $75,000,000 revolving credit facility in which Meridian served as administrative agent and lead lender. The Firm's engagement was solely with Chesapeake Industrial REIT. Meridian was represented by its own counsel (Jones, Redmond & Associates LLP). The Firm's interactions with Meridian were limited to arm's-length negotiation of credit agreement terms on behalf of the Firm's client, Chesapeake Industrial REIT. No confidential or proprietary information of Meridian was received by Calderwood & Harkness during this engagement. The subject matter of the prior engagement (a revolving credit facility for an industrial REIT) is substantively unrelated to the present transaction (a construction loan for a mixed-use development joint venture).
Analysis Under Maryland Rules of Professional Conduct:
Maryland Rule 1.7 (Current Client Conflicts): Rule 1.7 restricts a lawyer from representing a client if the representation involves a concurrent conflict of interest — that is, if the representation of one client will be directly adverse to another client, or if there is a significant risk that the representation will be materially limited by the lawyer's responsibilities to another client, a former client, a third person, or a personal interest. Meridian National Bank is not a current client of Calderwood & Harkness. No matter is currently open for Meridian, and the Firm has no ongoing engagement, retainer, or advisory relationship with Meridian. Rule 1.7 does not apply.
Maryland Rule 1.9 (Former Client Conflicts): Rule 1.9 restricts a lawyer from representing a person in the same or a substantially related matter in which the person's interests are materially adverse to those of a former client, unless the former client gives informed consent, confirmed in writing. Meridian was not a former client of Calderwood & Harkness. In the prior engagement, the Firm represented Chesapeake Industrial REIT; Meridian was the counterparty lender. No attorney-client relationship, express or implied, was formed between Calderwood & Harkness and Meridian. Rule 1.9 does not apply with respect to Meridian.
Practical Considerations: Although no formal conflict exists, the fact that Calderwood & Harkness interacted with Meridian and its lending team in a prior transaction (even on behalf of a different client) creates a relationship that warrants disclosure to Fairwater in the interests of transparency and best practice. There is no information asymmetry concern — the Firm did not obtain Meridian's confidential information — and the Firm's advocacy for Fairwater in the construction loan negotiation will not be compromised in any way by the prior interaction. Moreover, in the present transaction, Fairwater and Meridian are not adversaries in the litigation sense; they are parties to a commercial lending transaction in which their interests are substantially aligned with respect to the successful closing and funding of the construction loan, notwithstanding the customary negotiation of borrower-protective and lender-protective provisions.
Determination: No conflict exists. As a matter of best practice and transparency, the prior interaction with Meridian will be disclosed to Fairwater in the engagement letter. Because no formal conflict exists, a written waiver or informed consent under Rule 1.7 or 1.9 is not legally required. However, if the engagement partner (Douglas Fairchild) determines that an abundance of caution warrants the inclusion of waiver language in the engagement letter, the conflicts team will prepare appropriate language for inclusion. This determination is left to the engagement partner's professional judgment.
6.2 Pinnacle General Contractors, Inc. — Prior Adverse Litigation (Closed)
Matter Reference: Matter No. 1036-00005 — Atlas Mechanical Services, Inc. v. Pinnacle General Contractors, Inc.
Date of Settlement and Closing: Settlement reached October 17, 2022; matter closed November 3, 2022.
Practice Group Involved: Litigation Practice Group (Partner: Maria C. DelVecchio).
Nature of Prior Matter: Calderwood & Harkness represented Atlas Mechanical Services, Inc. (a mechanical subcontractor) in a construction defect and payment dispute against Pinnacle General Contractors, Inc. The action was filed in the Circuit Court for Baltimore City and alleged, among other things, that Pinnacle had improperly withheld retainage and back-charged Atlas Mechanical for alleged deficiencies in HVAC installation work that were, in fact, attributable to design errors by the project architect. Pinnacle filed a counterclaim against Atlas Mechanical alleging defective workmanship and delay damages. The matter was resolved by a confidential settlement agreement. Calderwood & Harkness's client was Atlas Mechanical; Pinnacle was the opposing party and was represented by its own counsel throughout the litigation.
Analysis Under Maryland Rules of Professional Conduct:
Maryland Rule 1.9 (Former Client Conflicts): Rule 1.9 governs duties to former clients and restricts representation adverse to a former client in the same or a substantially related matter. The threshold question is whether Pinnacle was ever a "client" of Calderwood & Harkness. The answer is clearly no. Pinnacle was the opposing party in the prior litigation, not a client. No attorney-client relationship, express or implied, was ever formed between Calderwood & Harkness and Pinnacle. Accordingly, Rule 1.9 does not impose any duty of loyalty or confidentiality running from the Firm to Pinnacle.
Maryland Rule 1.7 (Current Client Conflicts): Pinnacle is not a current client of the Firm. Rule 1.7 does not apply.
Positional Considerations: In the present engagement, Calderwood & Harkness's role with respect to Pinnacle is limited to reviewing the GMP contract between the JV Entity and Pinnacle for conformity with JV agreement and construction lender requirements. The Firm will not be directly negotiating with Pinnacle, advocating against Pinnacle's interests, or taking any position adverse to Pinnacle. Fairwater's business team (led by Marcus D. Okonkwo) and/or separate construction counsel retained by Fairwater will handle the primary negotiation of the GMP contract terms with Pinnacle. Calderwood & Harkness's review function is a standard part of institutional JV and construction loan practice and does not place the Firm in an adversarial posture vis-à-vis Pinnacle.
Confidential Information: During the prior litigation, Calderwood & Harkness may have obtained information about Pinnacle through the discovery process and litigation proceedings. However, any such information was obtained in the adversarial context of litigation (not in a confidential attorney-client relationship) and is either part of the public record or subject to the confidential settlement agreement between Atlas Mechanical and Pinnacle. In no event does the Firm owe Pinnacle a duty of confidentiality with respect to information obtained during litigation against Pinnacle.
Determination: No conflict exists. The Firm has no present or former duties to Pinnacle that would restrict its ability to represent Fairwater in the present engagement. This flagged result will be noted in the matter file for the record, but no disclosure to Fairwater is required, as Pinnacle was never a client of the Firm. No consent, waiver, or other action is needed.
7. Related-Party and Inter-Party Conflict Considerations
In transactions involving the formation of a joint venture between two or more sophisticated institutional parties, it is important to define clearly which entity or entities the Firm represents, and to confirm that no joint representation or implied attorney-client relationships exist that could give rise to conflicts.
7.1 Identification of Client
Calderwood & Harkness LLP is representing only Fairwater Real Estate Investment Trust in this engagement. By extension, the Firm represents Fairwater's wholly owned subsidiary, Fairwater HP Manager, LLC, which is being formed at Fairwater's direction to serve as the Managing Member of the JV Entity and to hold Fairwater's 30% membership interest. Because Fairwater HP Manager, LLC is a wholly owned subsidiary of Fairwater with no independent management or decision-making authority, representation of Fairwater encompasses representation of this subsidiary for purposes of this transaction, consistent with Maryland Rule 1.13 and its commentary on constituent representation within organizational structures.
7.2 Entities Not Represented
The Firm does not represent, and will not undertake to represent, any of the following in connection with this engagement:
(a) Harbor Point Development JV, LLC (the JV Entity). Although Calderwood & Harkness will draft the formation documents for the JV Entity (including the Certificate of Formation to be filed in Delaware, the initial Operating Agreement, and the Amended and Restated Operating Agreement), these documents are being prepared at Fairwater's direction and in Fairwater's interest, not on behalf of the JV Entity as an independent client. The JV Entity, once formed, will have two members (Fairwater HP Manager, LLC and Prescott HP Investor, LLC), and the Firm's duty of loyalty runs exclusively to Fairwater. If any inter-member dispute arises during the formation process or thereafter, Calderwood & Harkness will represent only Fairwater's interests and will not serve as counsel to the JV Entity.
(b) Prescott Capital Partners, LP, Prescott Capital GP, LLC, Prescott HP Investor, LLC, or any other Prescott affiliate. Prescott is the counterparty to the Joint Venture and is independently represented by Whitmore, Calder & Briggs LLP. No joint representation of Fairwater and Prescott exists or is contemplated.
(c) Meridian National Bank, N.A. Meridian is the construction lender and will be independently represented by its own counsel. Calderwood & Harkness's role with respect to Meridian is limited to negotiating the construction loan documentation on behalf of Fairwater (as borrower/guarantor) and delivering a customary borrower's counsel opinion letter at closing.
(d) Pinnacle General Contractors, Inc. The Firm does not represent and will not represent Pinnacle in any capacity.
(e) Any other transaction party identified in Section 3 of this memorandum.
7.3 Operating Agreement Negotiation
The Operating Agreement and JV Agreement for Harbor Point Development JV, LLC will be negotiated between Calderwood & Harkness (on behalf of Fairwater) and Whitmore, Calder & Briggs LLP (on behalf of Prescott). This is a standard arm's-length negotiation between sophisticated parties represented by independent counsel. No joint representation issue arises. The governance provisions, distribution waterfall, promote structures, buy-sell mechanisms, and all other material terms will be the product of adversarial negotiation, with each side represented by its own counsel.
7.4 Borrower's Counsel Opinion Letter
Calderwood & Harkness will deliver a customary borrower's counsel opinion letter to Meridian National Bank, N.A. and its counsel in connection with the closing of the $336,000,000 construction loan facility. The delivery of a third-party opinion letter is a standard and customary practice in real estate finance transactions and does not create an attorney-client relationship between Calderwood & Harkness and Meridian. The opinion letter will be governed by customary limiting conditions and qualifications, and will expressly state that it is delivered solely for the benefit of the addressee in connection with the specific transaction and may not be relied upon by any other party or for any other purpose. This practice is consistent with the American Bar Association's Statement on the Role of Customary Practice in the Preparation and Understanding of Third-Party Legal Opinions and with established Maryland practice.
7.5 Engagement Letter Clarification
The engagement letter to Fairwater will include an express statement identifying Fairwater as the sole client in this engagement, confirming that the Firm does not represent the JV Entity, Prescott, Meridian, or any other transaction party, and noting that the delivery of opinion letters to third parties does not create an attorney-client relationship with such third parties.