CLOSING CERTIFICATE AND SECRETARY'S CERTIFICATE
OF
FAIRWATER REAL ESTATE INVESTMENT TRUST
Delivered in connection with the Joint Venture Agreement and Amended and Restated Operating Agreement of Harbor Point Development JV, LLC, each dated as of January 12, 2026
January 12, 2026
Delivered to:
Prescott HP Investor, LLC a Delaware limited liability company (the sole member of which is Prescott Capital Partners, LP, a Delaware limited partnership) c/o Prescott Capital Partners, LP 375 Park Avenue, 41st Floor New York, New York 10152
Delivered by:
Patricia S. Liang, Chief Financial Officer, and Theresa M. Calloway, General Counsel, of Fairwater Real Estate Investment Trust, a Maryland real estate investment trust ("Fairwater" or the "Trust")
Fairwater Real Estate Investment Trust 7200 Pratt Street, Suite 1400 Baltimore, Maryland 21202 Maryland SDAT ID: D19847321 Employer Identification Number: 52-2198437 New York Stock Exchange Ticker Symbol: FWT
RECITALS
WHEREAS, Fairwater HP Manager, LLC, a Maryland limited liability company and wholly owned subsidiary of Fairwater Real Estate Investment Trust ("Fairwater Manager"), and Prescott HP Investor, LLC, a Delaware limited liability company ("Prescott Investor"), have entered into that certain Joint Venture Agreement dated as of January 12, 2026 (the "JV Agreement"), relating to the formation and governance of Harbor Point Development JV, LLC, a Delaware limited liability company (the "JV" or "HP JV");
WHEREAS, Fairwater Manager and Prescott Investor have entered into that certain Amended and Restated Operating Agreement of Harbor Point Development JV, LLC dated as of January 12, 2026 (the "Operating Agreement"), setting forth the respective rights, obligations, and governance arrangements of the members of the JV;
WHEREAS, Fairwater Manager and Prescott Investor have entered into that certain Capital Contribution Agreement dated as of January 12, 2026 (the "Capital Contribution Agreement"), governing the timing, amounts, and mechanics of equity capital contributions to the JV;
WHEREAS, the JV Agreement, the Operating Agreement, the Capital Contribution Agreement, and all other agreements, instruments, certificates, and documents executed by Fairwater, Fairwater Manager, or the JV in connection therewith or contemplated thereby, including without limitation the Development Management Agreement, the form of Property Management Agreement, the REIT Compliance Side Letter, the Tax Protection Agreement, the Pre-Formation Expenditure Reimbursement Agreement, the Assignment and Assumption of Purchase and Sale Agreement, the Fairwater Equity Funding Commitment Letter, the forms of Completion Guaranty, Recourse Carve-Out Guaranty, and Environmental Indemnity Agreement, are collectively referred to herein as the "Transaction Documents";
WHEREAS, this Closing Certificate and Secretary's Certificate (this "Certificate") is being delivered pursuant to Section 7.2(d) of the JV Agreement and Section 3.4(a)(iii) of the Operating Agreement as a condition to the closing of the transactions contemplated thereby;
WHEREAS, the transactions contemplated by the Transaction Documents involve the formation of Harbor Point Development JV, LLC for the purpose of acquiring, developing, constructing, leasing, managing, and eventually disposing of a Class A mixed-use development project known as "Harbor Point Towers," which project will consist of two twenty-eight (28)-story residential towers containing approximately six hundred ten (610) residential units and approximately forty-five thousand (45,000) square feet of ground-floor retail space, to be located on an approximately 8.2-acre waterfront site situated at 1500–1580 Wills Street, Baltimore, Maryland 21231 (Block 7419, Lots 1 through 6, Baltimore City) (the "Project");
WHEREAS, total JV equity for the Project is Two Hundred Forty Million Dollars ($240,000,000), with Fairwater's equity commitment through Fairwater Manager being Seventy-Two Million Dollars ($72,000,000), representing thirty percent (30%) of total JV equity, and Prescott's equity commitment through Prescott Investor being One Hundred Sixty-Eight Million Dollars ($168,000,000), representing seventy percent (70%) of total JV equity; and
WHEREAS, the total project cost for the Project is estimated at Five Hundred Seventy-Six Million Dollars ($576,000,000), consisting of (i) approximately Fifty-Four Million Dollars ($54,000,000) for land acquisition, (ii) approximately Four Hundred Thirty-Two Million Dollars ($432,000,000) in hard construction costs, and (iii) approximately Ninety Million Dollars ($90,000,000) in soft costs, with construction loan financing in the amount of Three Hundred Thirty-Six Million Dollars ($336,000,000) to be provided by Meridian National Bank, N.A.
NOW, THEREFORE, the undersigned, in their respective capacities as Chief Financial Officer and General Counsel of Fairwater Real Estate Investment Trust, hereby certify to Prescott HP Investor, LLC as follows:
SECTION 1: DEFINITIONS
All capitalized terms used but not otherwise defined in this Certificate shall have the respective meanings ascribed to such terms in the JV Agreement or the Operating Agreement, as applicable. To the extent that a term is defined in both the JV Agreement and the Operating Agreement, the definition in the JV Agreement shall control for purposes of this Certificate unless the context clearly requires otherwise. As used in this Certificate, the following terms shall have the meanings set forth below:
"Board" means the Board of Trustees of Fairwater Real Estate Investment Trust.
"Fairwater" means Fairwater Real Estate Investment Trust, a Maryland real estate investment trust.
"Fairwater Manager" means Fairwater HP Manager, LLC, a Maryland limited liability company and wholly owned subsidiary of Fairwater.
"JV" means Harbor Point Development JV, LLC, a Delaware limited liability company.
"JV Agreement" means the Joint Venture Agreement dated as of January 12, 2026, by and between Fairwater Manager and Prescott Investor.
"Operating Agreement" means the Amended and Restated Operating Agreement of Harbor Point Development JV, LLC dated as of January 12, 2026, by and between Fairwater Manager and Prescott Investor.
"Prescott Investor" means Prescott HP Investor, LLC, a Delaware limited liability company.
"Signing Date" means January 12, 2026.
"Transaction Documents" has the meaning set forth in the Recitals.
SECTION 2: ORGANIZATION AND GOOD STANDING
2.1 Fairwater Real Estate Investment Trust
Fairwater Real Estate Investment Trust is a real estate investment trust duly formed, validly existing, and in good standing under the laws of the State of Maryland. Fairwater was formed on March 11, 1997, and has continuously maintained its existence and good standing since such date. The Maryland State Department of Assessments and Taxation ("SDAT") identification number for Fairwater is D19847321. Fairwater's Employer Identification Number is 52-2198437.
Fairwater's registered agent for service of process in the State of Maryland is National Registered Agents of Maryland, Inc., 311 West Saratoga Street, Baltimore, Maryland 21201. Such registered agent appointment is current and in full force and effect.
Fairwater is duly qualified to transact business and is in good standing in each jurisdiction in which the nature of its business or the ownership, leasing, or operation of its properties requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a material adverse effect on the business, financial condition, or results of operations of Fairwater or on the ability of Fairwater to perform its obligations under the Transaction Documents.
Fairwater's shares of beneficial interest are listed and traded on the New York Stock Exchange under the ticker symbol "FWT." As of the date hereof, Fairwater has approximately 142,500,000 common shares of beneficial interest outstanding. Fairwater's total consolidated assets as of its most recent annual report are approximately Four Billion One Hundred Million Dollars ($4,100,000,000), and its revenues for the fiscal year ended December 31, 2024 were approximately Six Hundred Twelve Million Dollars ($612,000,000). Fairwater's current portfolio consists of thirty-eight (38) mixed-use and multifamily properties located across the Mid-Atlantic region of the United States, encompassing approximately 12,400 residential units and approximately 1.6 million square feet of commercial space.
A certificate of good standing for Fairwater issued by the Maryland SDAT, dated within thirty (30) days of the Signing Date, is attached hereto as part of Exhibit C.
2.2 Fairwater HP Manager, LLC
Fairwater HP Manager, LLC is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Maryland. Fairwater Manager was formed on November 14, 2025, pursuant to Articles of Organization filed with the Maryland SDAT. Fairwater Manager's Employer Identification Number is 52-2201889.
The sole member of Fairwater HP Manager, LLC is Fairwater Real Estate Investment Trust. There are no other members, equity holders, or persons holding any economic or governance interest in Fairwater Manager. Fairwater Manager has been formed solely for the purpose of serving as the Managing Member of Harbor Point Development JV, LLC and holding a thirty percent (30%) membership interest therein, and Fairwater Manager has not engaged, and will not engage, in any business activities other than those related to the JV and the Project.
Fairwater Manager is governed by its Operating Agreement dated November 14, 2025, a true and correct copy of which is attached hereto as part of Exhibit D. Fairwater Manager has no employees; all personnel services are provided by Fairwater and its affiliates.
A certificate of good standing for Fairwater HP Manager, LLC issued by the Maryland SDAT, dated within thirty (30) days of the Signing Date, is attached hereto as part of Exhibit C.
SECTION 3: AUTHORIZATION
3.1 Board Authorization
The Board of Trustees of Fairwater Real Estate Investment Trust has duly and validly authorized the execution, delivery, and performance by Fairwater and Fairwater Manager of each of the Transaction Documents and all of the transactions contemplated thereby. The Board acted by unanimous written consent dated December 18, 2025, and a true, correct, and complete copy of the resolutions adopted by the Board (the "Board Resolutions") is attached hereto as Exhibit A. The Board Resolutions have not been amended, modified, supplemented, or rescinded in any respect and remain in full force and effect as of the date hereof.
The Board Resolutions specifically authorize, among other things, the following:
(a) the formation of Fairwater HP Manager, LLC as a wholly owned subsidiary of Fairwater for the purpose of participating in the JV;
(b) the formation of Harbor Point Development JV, LLC with Prescott HP Investor, LLC, and the entry by Fairwater Manager into the JV Agreement, the Operating Agreement, and the Capital Contribution Agreement;
(c) the commitment by Fairwater, through Fairwater Manager, of Seventy-Two Million Dollars ($72,000,000) in equity capital to the JV, representing thirty percent (30%) of the total JV equity of Two Hundred Forty Million Dollars ($240,000,000);
(d) the funding of the initial capital call in the amount of Eighteen Million Dollars ($18,000,000), representing Fairwater's thirty percent (30%) share of the Sixty Million Dollar ($60,000,000) initial capital call (which initial call represents twenty-five percent (25%) of total JV equity);
(e) the execution, delivery, and performance of the Development Management Agreement by and between the JV and Fairwater (or its designated affiliate), pursuant to which Fairwater will provide development management services for the Project;
(f) the execution, delivery, and performance of the form of Property Management Agreement to be entered into upon substantial completion of the Project;
(g) the execution, delivery, and performance of the Completion Guaranty, Recourse Carve-Out Guaranty, and Environmental Indemnity Agreement, in each case in favor of Meridian National Bank, N.A. in connection with the construction loan financing;
(h) the execution, delivery, and performance of the REIT Compliance Side Letter, the Tax Protection Agreement, and the Pre-Formation Expenditure Reimbursement Agreement;
(i) the assignment to the JV, at or prior to the land closing, of that certain Purchase and Sale Agreement for the property located at 1500–1580 Wills Street, Baltimore, Maryland 21231, and the execution of the Assignment and Assumption of Purchase and Sale Agreement in connection therewith;
(j) the execution, delivery, and performance of the Fairwater Equity Funding Commitment Letter; and
(k) such other and further actions by the officers of Fairwater as may be necessary, desirable, or appropriate to consummate and carry out the transactions contemplated by the Transaction Documents, including without limitation the execution and delivery of any additional certificates, instruments, or agreements as may be required in connection therewith.
The Board Resolutions were adopted in accordance with all applicable provisions of the Declaration of Trust of Fairwater, the Bylaws of Fairwater, and the laws of the State of Maryland. At the time of adoption, a quorum of the Board was present (or, in the case of action by written consent, all trustees consented), and the vote or consent met or exceeded the requisite threshold for approval under the Declaration of Trust and Bylaws.
3.2 No Further Approvals Required
No further consent, approval, authorization, or order of the Board, any committee thereof (including without limitation the Audit Committee, the Compensation Committee, or the Nominating and Corporate Governance Committee), or the shareholders of Fairwater is required for the execution, delivery, and performance of the Transaction Documents or the consummation of the transactions contemplated thereby. Without limiting the generality of the foregoing, no vote or consent of the holders of the common shares of beneficial interest of Fairwater is required under (i) the Declaration of Trust of Fairwater, (ii) the Bylaws of Fairwater, (iii) the Maryland REIT Law, (iv) the rules and regulations of the New York Stock Exchange, or (v) any other applicable law, rule, or regulation, in connection with the execution, delivery, or performance of the Transaction Documents or any of the transactions contemplated thereby.
3.3 Sole Member Authorization — Fairwater HP Manager, LLC
Fairwater Real Estate Investment Trust, as the sole member of Fairwater HP Manager, LLC, has duly and validly authorized Fairwater Manager to execute, deliver, and perform each of the Transaction Documents to which Fairwater Manager is a party, and to take all actions necessary or desirable in connection with the transactions contemplated thereby, including without limitation serving as the Managing Member of Harbor Point Development JV, LLC and holding a thirty percent (30%) membership interest therein. A true, correct, and complete copy of the written consent of the sole member of Fairwater HP Manager, LLC, dated December 18, 2025, is attached hereto as Exhibit B. Such consent has not been amended, modified, supplemented, or rescinded and remains in full force and effect as of the date hereof.
SECTION 4: INCUMBENCY
4.1 Authorized Signatories of Fairwater Real Estate Investment Trust
The undersigned hereby certify that each of the following persons is, as of the date hereof, a duly elected or appointed officer of Fairwater Real Estate Investment Trust, holding the office set forth opposite such person's name below, and that the signature set forth opposite such person's name is such person's true and genuine signature. Each such person is duly authorized to execute any and all Transaction Documents and any other documents, instruments, or certificates to be executed on behalf of Fairwater in connection with the transactions contemplated by the Transaction Documents:
Each of the foregoing officers has been duly elected or appointed to the office indicated above in accordance with the Declaration of Trust and Bylaws of Fairwater and continues to hold such office as of the date hereof. No proceedings for the removal or replacement of any of the foregoing officers have been commenced or are contemplated.
4.2 Authorized Signatories of Fairwater HP Manager, LLC
The undersigned hereby certify that each of the following persons is, as of the date hereof, a duly authorized officer, manager, or authorized person of Fairwater HP Manager, LLC and is duly authorized to execute any and all Transaction Documents and any other documents, instruments, or certificates to be executed on behalf of Fairwater Manager in connection with the transactions contemplated by the Transaction Documents:
The foregoing authorizations are set forth in the Operating Agreement of Fairwater HP Manager, LLC and the written consent of the sole member of Fairwater HP Manager, LLC, copies of which are attached hereto as Exhibit D and Exhibit B, respectively.
SECTION 5: REPRESENTATIONS AND WARRANTIES — TRUTH AND ACCURACY
The undersigned certifying officers hereby certify that, as of the Signing Date (January 12, 2026):
5.1 Representations and Warranties True and Correct
Each of the representations and warranties made by Fairwater and Fairwater Manager in the JV Agreement (including without limitation Article IV thereof), the Operating Agreement (including without limitation Section 4.1 thereof), the Capital Contribution Agreement, and each other Transaction Document to which Fairwater or Fairwater Manager is a party, is true and correct in all material respects as of the date hereof, with the same force and effect as though each such representation and warranty had been made on and as of the date hereof. To the extent that any such representation or warranty specifically relates to an earlier date (including, without limitation, representations made as of the date of execution of any predecessor agreement or as of a specified financial statement date), such representation or warranty is true and correct in all material respects as of such earlier date. No disclosure, qualification, or exception that would be required to make any such representation or warranty true and correct as of the date hereof has been omitted from the disclosure schedules delivered in connection with the Transaction Documents.
5.2 Specific Confirmations
In furtherance of, and without limiting the generality of, the certifications set forth in Section 5.1, the undersigned specifically confirm the following:
No Violations. The execution, delivery, and performance by Fairwater and Fairwater Manager of the Transaction Documents to which each is a party, and the consummation of the transactions contemplated thereby, do not and will not:
(a) violate, conflict with, or result in any breach of any provision of the Declaration of Trust or Bylaws of Fairwater or the Operating Agreement of Fairwater Manager;
(b) violate any law, statute, rule, regulation, order, judgment, writ, injunction, or decree of any governmental authority applicable to Fairwater or Fairwater Manager or any of their respective properties or assets;
(c) result in any breach of, or constitute a default (or an event that with the giving of notice or lapse of time or both would become a default) under, or give rise to any right of termination, amendment, acceleration, or cancellation under, any material agreement, contract, indenture, mortgage, deed of trust, loan agreement, note, bond, license, permit, lease, or other instrument or obligation to which Fairwater or Fairwater Manager is a party or by which any of their respective properties or assets is bound or affected, including without limitation Fairwater's existing $750,000,000 unsecured revolving credit facility with Greaves Bancorp as administrative agent, Fairwater's outstanding $500,000,000 in senior unsecured notes, and any mortgage or deed of trust encumbering any property in Fairwater's existing portfolio; or
(d) result in the creation or imposition of any lien, pledge, charge, security interest, encumbrance, or restriction of any kind on any property or asset of Fairwater or Fairwater Manager, other than as expressly contemplated by the Transaction Documents.
No Litigation. There is no action, suit, claim, investigation, inquiry, arbitration, or proceeding pending or, to the knowledge of the undersigned certifying officers (after due inquiry of senior management of Fairwater), threatened against or affecting Fairwater, Fairwater Manager, or any of their respective properties or assets before or by any court, arbitrator, governmental body, agency, or official that (i) would reasonably be expected to materially and adversely affect the ability of Fairwater or Fairwater Manager to perform their respective obligations under the Transaction Documents, (ii) challenges or seeks to prevent, enjoin, alter, or materially delay the consummation of any of the transactions contemplated by the Transaction Documents, or (iii) would reasonably be expected to have a material adverse effect on the financial condition, business, properties, or results of operations of Fairwater. Without limiting the generality of the foregoing, there is no pending or threatened litigation relating to the Project site, the JV, or any of the Transaction Documents.
No Material Adverse Change. Since the date of the most recent audited consolidated financial statements of Fairwater (being the consolidated financial statements for the fiscal year ended December 31, 2024, as included in Fairwater's Annual Report on Form 10-K filed with the Securities and Exchange Commission), there has been no material adverse change in the financial condition, business, properties, results of operations, or prospects of Fairwater or its consolidated subsidiaries, taken as a whole. For purposes of this certification, a "material adverse change" includes, without limitation, any change, event, circumstance, or condition that has resulted in, or would reasonably be expected to result in, a decrease in the consolidated net asset value of Fairwater of more than five percent (5%) or a downgrade of Fairwater's credit rating below investment grade.
REIT Status. Fairwater has elected and continues to qualify as a real estate investment trust (a "REIT") under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated thereunder. Fairwater has satisfied all requirements for REIT qualification for each taxable year since its initial election to be taxed as a REIT and intends to continue to satisfy such requirements for the current taxable year and for each subsequent taxable year. The consummation of the transactions contemplated by the Transaction Documents will not cause Fairwater to fail to qualify as a REIT under the Code, and the certifying officers have no reason to believe that any action taken or to be taken in connection with the Transaction Documents will jeopardize Fairwater's REIT status. Fairwater has received no notice from the Internal Revenue Service challenging or questioning Fairwater's qualification as a REIT.
5.3 Enforceability. Each Transaction Document to which Fairwater or Fairwater Manager is a party has been duly executed and delivered by Fairwater or Fairwater Manager, as applicable, and constitutes a legal, valid, and binding obligation of Fairwater or Fairwater Manager, as applicable, enforceable against Fairwater or Fairwater Manager, as applicable, in accordance with its respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity, whether applied in a proceeding at law or in equity (including the possible unavailability of specific performance, injunctive relief, or other equitable remedies).
SECTION 6: SATISFACTION OF CLOSING CONDITIONS
The undersigned certifying officers hereby certify that each condition to closing set forth in the Transaction Documents that is required to be satisfied by Fairwater or Fairwater Manager on or prior to the Signing Date has been duly and fully satisfied (or, to the extent permitted, waived by the party entitled to the benefit thereof). Without limiting the generality of the foregoing, the undersigned specifically certify the satisfaction of the following closing conditions:
6.1 Delivery of Executed Transaction Documents
Fairwater and Fairwater Manager have duly executed and delivered (or, in the case of documents to be executed at a subsequent closing, have approved the form of and are prepared to execute and deliver) each of the following Transaction Documents:
(a) Joint Venture Agreement dated as of January 12, 2026, by and between Fairwater Manager and Prescott Investor;
(b) Amended and Restated Operating Agreement of Harbor Point Development JV, LLC dated as of January 12, 2026, by and between Fairwater Manager and Prescott Investor;
(c) Capital Contribution Agreement dated as of January 12, 2026, by and between Fairwater Manager and Prescott Investor;
(d) Development Management Agreement dated as of January 12, 2026, by and between the JV and Fairwater (or its designated affiliate), pursuant to which Fairwater will provide development management services for the Project in consideration of a development management fee as set forth therein;
(e) Form of Property Management Agreement, approved as to form and substance by Fairwater Manager and Prescott Investor, to be executed at or promptly following substantial completion of the Project;
(f) REIT Compliance Side Letter dated as of January 12, 2026, by and between Fairwater, Fairwater Manager, and Prescott Investor, setting forth certain agreements and accommodations relating to Fairwater's status as a REIT;
(g) Tax Protection Agreement dated as of January 12, 2026, by and between Fairwater and the JV;
(h) Pre-Formation Expenditure Reimbursement Agreement dated as of January 12, 2026, by and between Fairwater and the JV, providing for the reimbursement of approximately Three Million Two Hundred Thousand Dollars ($3,200,000) in pre-formation development costs incurred by Fairwater;
(i) Assignment and Assumption of Purchase and Sale Agreement, to be executed at the land closing (currently targeted for January 30, 2026), pursuant to which Fairwater will assign to the JV all of Fairwater's right, title, and interest in and to that certain Purchase and Sale Agreement dated September 8, 2025, by and between Fairwater and Harbor Point Land Holdings, LLC, for the property located at 1500–1580 Wills Street, Baltimore, Maryland 21231;
(j) Fairwater Equity Funding Commitment Letter dated as of January 12, 2026, confirming Fairwater's irrevocable commitment, through Fairwater Manager, to fund its Seventy-Two Million Dollar ($72,000,000) equity commitment to the JV;
(k) Completion Guaranty in favor of Meridian National Bank, N.A. (form approved as to form and substance by Fairwater, Prescott Investor, and Meridian National Bank, N.A.; to be executed at the construction loan closing, currently targeted for February 15, 2026);
(l) Recourse Carve-Out Guaranty in favor of Meridian National Bank, N.A. (form approved as to form and substance; to be executed at the construction loan closing); and
(m) Environmental Indemnity Agreement in favor of Meridian National Bank, N.A. (form approved as to form and substance; to be executed at the construction loan closing).
6.2 Formation and Qualification Filings
The following entity formation and qualification filings have been duly completed:
(a) The Certificate of Formation of Harbor Point Development JV, LLC was filed with the Secretary of State of the State of Delaware on November 21, 2025, and is in full force and effect. The registered agent for Harbor Point Development JV, LLC in the State of Delaware is Incorporators & Associates, Inc., 1209 Orange Street, Wilmington, Delaware 19801. The JV has applied for and expects to receive an Employer Identification Number (EIN: 84-6213950, application pending).
(b) The Certificate of Formation (Articles of Organization) of Fairwater HP Manager, LLC was filed with the Maryland SDAT on November 14, 2025, and is in full force and effect. Fairwater Manager's Employer Identification Number is 52-2201889.
(c) An Application for Registration of Harbor Point Development JV, LLC as a foreign limited liability company in the State of Maryland has been filed with the Maryland SDAT, and such registration is pending or has been approved.
6.3 Good Standing Certificates
The following good standing certificates have been obtained and are attached hereto as Exhibit C:
(a) Certificate of good standing (Certificate of Status) for Fairwater Real Estate Investment Trust issued by the Maryland SDAT, dated within thirty (30) days of the Signing Date;
(b) Certificate of good standing (Certificate of Status) for Fairwater HP Manager, LLC issued by the Maryland SDAT, dated within thirty (30) days of the Signing Date; and
(c) Certificate of good standing for Harbor Point Development JV, LLC issued by the Secretary of State of the State of Delaware, dated within thirty (30) days of the Signing Date.
6.4 Evidence of Insurance
Evidence of the following insurance coverages has been obtained, or binding commitments therefor have been secured, in accordance with the insurance requirements set forth in the Transaction Documents:
(a) Builder's Risk Insurance: Builder's risk insurance in the amount of full replacement cost during the construction period, including coverage for materials in transit and materials stored off-site, issued by Greystone Mutual Insurance Company (A.M. Best Rating: A, XV). Policy to be effective upon commencement of construction and to remain in effect through substantial completion.
(b) Commercial General Liability Insurance: Commercial general liability insurance with limits of not less than Ten Million Dollars ($10,000,000) per occurrence and Twenty Million Dollars ($20,000,000) in the aggregate, including coverage for premises and operations, products/completed operations, contractual liability, and personal and advertising injury.
(c) Umbrella/Excess Liability Insurance: Umbrella or excess liability insurance with limits of not less than Fifty Million Dollars ($50,000,000) per occurrence and in the aggregate, in excess of the commercial general liability, automobile liability, and employer's liability coverages.
(d) Title Insurance: Owner's title insurance policy to be issued by Tidewater Insurance Group, Inc., in the amount of Fifty-Four Million Dollars ($54,000,000) (land acquisition value) at the land closing, with endorsement provisions for the policy amount to be increased to full project cost upon completion of construction. Preliminary title commitment has been issued and is subject to satisfaction of standard requirements.
6.5 Diligence Items Delivered
The following due diligence items have been completed and delivered to the parties in accordance with the requirements of the Transaction Documents:
(a) Phase I Environmental Site Assessment: A Phase I Environmental Site Assessment of the Project site was completed on November 25, 2025, by Bayline Environmental Consultants, LLC, in accordance with ASTM Standard E1527-21. The Phase I ESA identified no recognized environmental conditions ("RECs") requiring further investigation or remediation.
(b) ALTA/NSPS Survey: An ALTA/NSPS Land Title Survey of the Project site was prepared and delivered on December 3, 2025, by Calvert Surveying & Engineering, Inc. The survey was prepared in accordance with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys and includes Table A items as specified by the parties and the title company.
(c) Title Commitment: A commitment for title insurance was issued on December 9, 2025, by Tidewater Insurance Group, Inc., Commitment No. MD-2025-78412, and copies thereof, together with copies of all documents referred to therein as exceptions, have been delivered to the parties and their respective counsel.
(d) Appraisal: An appraisal of the Project site (as-is, as-entitled) was prepared and delivered on December 15, 2025, by Stonebridge Appraisal Associates, LLC, MAI-designated appraiser. The appraisal was prepared in compliance with the Uniform Standards of Professional Appraisal Practice ("USPAP") and the requirements of Meridian National Bank, N.A.
(e) GMP Contract: A Guaranteed Maximum Price ("GMP") construction contract for the Project was executed on December 20, 2025, by and between Fairwater (to be assigned to the JV at land closing) and Pinnacle General Contractors, Inc. (Raymond S. Muñoz, Chief Executive Officer), establishing a guaranteed maximum price for the hard construction costs of the Project. The GMP contract includes provisions for value engineering, allowances, and contingency, and is subject to assignment to the JV with the consent of Pinnacle General Contractors, Inc.
(f) Zoning Confirmation: The Project site is fully entitled for the proposed development. The Baltimore City Council approved a Planned Unit Development ("PUD") for the Project site pursuant to Ordinance No. 24-0417, dated June 14, 2024, permitting the construction of two twenty-eight (28)-story residential towers with ground-floor retail, consistent with the Project plans. Building permits are expected to be issued in the first quarter of 2026, and the issuance of building permits is not a condition to the signing of the Transaction Documents.
6.6 Third-Party Approvals and Consents
(a) Prescott Investment Committee Approval: Prescott Capital Partners, LP's investment committee approved the investment in the JV and the commitment of One Hundred Sixty-Eight Million Dollars ($168,000,000) in equity capital through Prescott Investor on November 5, 2025.
(b) Governmental Consents: No governmental consents, approvals, authorizations, registrations, filings, or notices are required for the execution and delivery of the Transaction Documents by Fairwater or Fairwater Manager that have not been obtained or made, other than (i) building permits for the Project, which are expected to be issued in the first quarter of 2026 and which are not conditions to the execution of the Transaction Documents, and (ii) routine post-closing filings and notifications.
(c) Third-Party Consents: No consents of any third parties under any agreement, contract, instrument, lease, license, or other obligation to which Fairwater or Fairwater Manager is a party, or by which any of their respective properties or assets is bound, are required in connection with the execution, delivery, or performance of the Transaction Documents that have not been obtained. Without limiting the foregoing, the transactions contemplated by the Transaction Documents do not trigger any change-of-control or assignment provisions under Fairwater's existing credit facilities, note purchase agreements, or other material agreements.
6.7 Legal Opinions
Calderwood & Harkness LLP, counsel to Fairwater, is prepared to deliver a Borrower's Counsel Opinion Letter, substantially in the form agreed upon by the parties and Meridian National Bank, N.A., at the construction loan closing (currently targeted for February 15, 2026). Such opinion letter will address, among other things, the due organization and valid existence of Fairwater, Fairwater Manager, and the JV, the due authorization and enforceability of the construction loan documents, and the absence of conflicts with applicable law and existing agreements. The responsible partner at Calderwood & Harkness LLP is Douglas Fairchild, and the billing partner is Angela Fontaine, both located at 100 International Drive, Suite 2600, Baltimore, Maryland 21202.
6.8 JV Accountant Engagement
Alderman & Fields, CPAs, LLP (engagement partner: Robert E. Alderman) has been engaged to provide JV-level accounting services, annual audit services, and tax return preparation for Harbor Point Development JV, LLC. The engagement letter was executed on December 22, 2025, and covers the period from formation of the JV through December 31, 2027, with automatic annual renewals thereafter unless terminated by either party. Alderman & Fields, CPAs, LLP is a registered public accounting firm in good standing with the Maryland State Board of Public Accountancy and the American Institute of Certified Public Accountants.
SECTION 7: KEY-PERSON CONFIRMATION
As of the date hereof, each of the following "Key Persons" identified in Section 8.6 of the Operating Agreement remains employed by and actively involved in the affairs of Fairwater and the JV:
(a) Harold K. Brennan, Chief Executive Officer and Chairman of the Board of Trustees of Fairwater Real Estate Investment Trust. Mr. Brennan continues to serve in such capacities and is actively engaged in the strategic oversight and governance of Fairwater and the JV.
(b) Marcus D. Okonkwo, Executive Vice President, Development, of Fairwater Real Estate Investment Trust. Mr. Okonkwo serves as the primary business contact for the JV and is actively and personally involved in the day-to-day oversight of the development, design, and construction of the Project. Mr. Okonkwo is designated as the "Development Executive" under the Development Management Agreement and will serve as the principal liaison between Fairwater, the JV, Prescott Investor, and Pinnacle General Contractors, Inc. with respect to all matters relating to the Project.
As of the date hereof, no "Key Person Event" (as defined in Section 8.6(b) of the Operating Agreement) has occurred or is reasonably anticipated. Neither Mr. Brennan nor Mr. Okonkwo has tendered a resignation, received a notice of termination, or given any indication of an intention to depart from his current position at Fairwater.
For the avoidance of doubt, the undersigned acknowledge that, pursuant to Section 8.6(c) of the Operating Agreement, upon the departure of both Harold K. Brennan and Marcus D. Okonkwo from their respective positions at Fairwater (whether by resignation, termination, death, disability, or otherwise) without approved replacements being designated and accepted by Prescott Investor within ninety (90) days of the departure of the second Key Person, Prescott Investor shall have the right, exercisable in its sole discretion, to remove Fairwater Manager as the Managing Member of the JV and to designate a replacement Managing Member, all in accordance with the procedures set forth in the Operating Agreement.
SECTION 8: NO DEFAULT
The undersigned certifying officers hereby certify that, as of the date hereof, no Event of Default (as defined in Article XII of the Operating Agreement) or event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default under any Transaction Document has occurred and is continuing with respect to Fairwater or Fairwater Manager. Without limiting the generality of the foregoing, neither Fairwater nor Fairwater Manager has received any written notice from any party alleging the occurrence of any default or Event of Default under any Transaction Document.
For reference, the Operating Agreement provides in Section 12.2 that, in the event of a material default by the Managing Member under the Operating Agreement (other than a default that is not susceptible to cure or a default arising from willful misconduct or fraud), the Managing Member shall have a thirty (30)-day cure period following receipt of written notice of such default from Prescott Investor, which cure period shall be extended for an additional reasonable period (not to exceed sixty (60) days in the aggregate) if the Managing Member has commenced and is diligently pursuing a cure.
Additionally, neither Fairwater nor Fairwater Manager is in default under any other material agreement, contract, instrument, or obligation to which it is a party or by which its properties are bound, where such default would reasonably be expected to have a material adverse effect on the ability of Fairwater or Fairwater Manager to perform its obligations under the Transaction Documents.
SECTION 9: CAPITAL COMMITMENT CONFIRMATION
Fairwater hereby confirms its irrevocable commitment, through Fairwater HP Manager, LLC, to fund Seventy-Two Million Dollars ($72,000,000) in total equity capital contributions to Harbor Point Development JV, LLC, representing thirty percent (30%) of the total JV equity of Two Hundred Forty Million Dollars ($240,000,000), in accordance with the terms and conditions set forth in the Capital Contribution Agreement and the Operating Agreement.
Without limiting the generality of the foregoing:
(a) Initial Capital Call. Fairwater confirms its obligation to fund Eighteen Million Dollars ($18,000,000) as its thirty percent (30%) share of the initial capital call of Sixty Million Dollars ($60,000,000) (representing twenty-five percent (25%) of total JV equity). Such initial capital contribution is to be funded at or prior to the initial equity funding date and land closing, which is currently targeted for January 30, 2026. Fairwater's initial capital contribution will be funded by wire transfer of immediately available funds to the JV's designated account in accordance with the funding mechanics set forth in the Capital Contribution Agreement.
(b) Subsequent Capital Calls. Subsequent capital calls shall be funded by Fairwater (through Fairwater Manager) on a pro rata basis (at Fairwater's thirty percent (30%) share) within fifteen (15) business days of receipt of a capital call notice issued in accordance with Section 5.3 of the Operating Agreement. Capital calls shall be issued in accordance with the approved JV budget and development schedule, subject to the approval rights set forth in the Operating Agreement.
(c) Sufficiency of Funds. Fairwater has, and as of the date of each capital call will have, sufficient available capital, liquidity, and/or access to credit facilities to timely fund its equity commitment to the JV. As of the date hereof, Fairwater has approximately $385,000,000 in available liquidity, consisting of unrestricted cash on hand, availability under its unsecured revolving credit facility, and other committed sources, which is more than sufficient to fund Fairwater's aggregate equity commitment of $72,000,000 to the JV.
SECTION 10: GOVERNING LAW
This Certificate shall be governed by and construed in accordance with the laws of the State of Maryland, without giving effect to any principles of conflicts of law that would result in the application of the laws of any other jurisdiction. Any dispute arising out of or relating to this Certificate shall be resolved in accordance with the dispute resolution provisions set forth in Section 14.8 of the JV Agreement.
SECTION 11: RELIANCE
This Certificate is being delivered to Prescott HP Investor, LLC for its benefit and reliance in connection with the closing of the transactions contemplated by the Transaction Documents. Prescott Investor is entitled to rely on the certifications, representations, and confirmations set forth herein as being true and correct as of the date hereof and as of the date of each subsequent closing under the Transaction Documents (unless superseded by a subsequently delivered certificate), and the delivery of this Certificate is a material inducement to Prescott Investor's willingness to consummate the transactions contemplated by the Transaction Documents and to fund its equity commitment to the JV.
In addition to Prescott Investor, this Certificate may also be relied upon by Meridian National Bank, N.A. and its counsel in connection with the construction loan closing and the issuance of the Three Hundred Thirty-Six Million Dollar ($336,000,000) construction loan to the JV, and Meridian National Bank, N.A. shall be an express third-party beneficiary of this Certificate for such purpose.
For purposes of the Transaction Documents and this Certificate, the following law firms serve as outside counsel to the respective parties:
(a) Counsel to Fairwater: Calderwood & Harkness LLP, 100 International Drive, Suite 2600, Baltimore, Maryland 21202. Responsible partner: Douglas Fairchild, Esq. Billing partner: Angela Fontaine, Esq.
(b) Counsel to Prescott: Whitmore, Calder & Briggs LLP, 51 West 52nd Street, New York, New York 10019. Lead partner: Samuel T. Briggs III, Esq.
This Certificate shall not be deemed to create any obligation of Fairwater or Fairwater Manager to any person other than as expressly set forth herein and in the Transaction Documents.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned have executed this Closing Certificate and Secretary's Certificate as of the date first written above.
FAIRWATER REAL ESTATE INVESTMENT TRUST
By: ________
Name: Patricia S. Liang
Title: Chief Financial Officer
By: ________
Name: Theresa M. Calloway
Title: General Counsel
[Signature Page to Closing Certificate and Secretary's Certificate of Fairwater Real Estate Investment Trust]
EXHIBIT A
BOARD RESOLUTIONS
True and Correct Copy of the Resolutions of the Board of Trustees of Fairwater Real Estate Investment Trust
The following is a true, correct, and complete copy of the resolutions adopted by unanimous written consent of the Board of Trustees of Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, effective as of December 18, 2025. These resolutions have not been amended, modified, supplemented, revoked, or rescinded in any respect and remain in full force and effect as of January 12, 2026.
UNANIMOUS WRITTEN CONSENT OF THE BOARD OF TRUSTEES OF FAIRWATER REAL ESTATE INVESTMENT TRUST
Effective as of December 18, 2025
The undersigned, being all of the members of the Board of Trustees (the "Board") of Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (the "Trust"), hereby take the following actions and adopt the following resolutions by unanimous written consent in lieu of a meeting, pursuant to Article III, Section 14 of the Bylaws of the Trust and Section 8-205(c) of the Maryland General Corporation Law (as applicable to Maryland real estate investment trusts pursuant to the Maryland REIT Law):
WHEREAS, the Board has reviewed and considered a presentation by management of the Trust regarding a proposed joint venture with Prescott HP Investor, LLC, a Delaware limited liability company ("Prescott Investor"), the sole member of which is Prescott Capital Partners, LP, a Delaware limited partnership, for the purpose of developing a Class A mixed-use development project known as "Harbor Point Towers" in Baltimore, Maryland (the "Project"); and
WHEREAS, the Board has reviewed the terms of the proposed Joint Venture Agreement, the proposed Amended and Restated Operating Agreement of Harbor Point Development JV, LLC, the proposed Capital Contribution Agreement, and the other Transaction Documents (as defined therein), and has determined that the terms thereof are fair to the Trust and in the best interests of the Trust and its shareholders;
NOW, THEREFORE, BE IT RESOLVED, that the formation of Fairwater HP Manager, LLC, a Maryland limited liability company, as a wholly owned subsidiary of the Trust for the purpose of serving as the Managing Member of Harbor Point Development JV, LLC, is hereby authorized, ratified, confirmed, and approved;
RESOLVED FURTHER, that the formation of Harbor Point Development JV, LLC, a Delaware limited liability company, together with Prescott HP Investor, LLC, as a joint venture for the purpose of acquiring, developing, constructing, leasing, managing, and disposing of the Project, is hereby authorized, ratified, confirmed, and approved;
RESOLVED FURTHER, that the commitment by the Trust, through Fairwater HP Manager, LLC, of Seventy-Two Million Dollars ($72,000,000) in equity capital to Harbor Point Development JV, LLC, representing thirty percent (30%) of total JV equity of Two Hundred Forty Million Dollars ($240,000,000), is hereby authorized, ratified, confirmed, and approved;
RESOLVED FURTHER, that the initial capital call funding in the amount of Eighteen Million Dollars ($18,000,000), representing the Trust's thirty percent (30%) share of the Sixty Million Dollar ($60,000,000) initial capital call (representing twenty-five percent (25%) of total JV equity), is hereby authorized, ratified, confirmed, and approved;
RESOLVED FURTHER, that the execution, delivery, and performance by the Trust and Fairwater HP Manager, LLC of the Joint Venture Agreement, the Amended and Restated Operating Agreement of Harbor Point Development JV, LLC, the Capital Contribution Agreement, the Development Management Agreement, the form of Property Management Agreement, the Completion Guaranty, the Recourse Carve-Out Guaranty, the Environmental Indemnity Agreement, the REIT Compliance Side Letter, the Tax Protection Agreement, the Pre-Formation Expenditure Reimbursement Agreement, the Assignment and Assumption of Purchase and Sale Agreement, the Fairwater Equity Funding Commitment Letter, and all other documents, agreements, instruments, and certificates to be executed and delivered by the Trust or Fairwater HP Manager, LLC in connection with the transactions contemplated thereby (collectively, the "Transaction Documents"), are hereby authorized, ratified, confirmed, and approved;
RESOLVED FURTHER, that the assignment to Harbor Point Development JV, LLC of that certain Purchase and Sale Agreement for the property located at 1500–1580 Wills Street, Baltimore, Maryland 21231, is hereby authorized, ratified, confirmed, and approved;
RESOLVED FURTHER, that each of Harold K. Brennan, Chief Executive Officer and Chairman of the Board; Patricia S. Liang, Chief Financial Officer; Marcus D. Okonkwo, Executive Vice President, Development; and Theresa M. Calloway, General Counsel, acting individually or together, is hereby authorized and directed to execute and deliver, on behalf of the Trust and Fairwater HP Manager, LLC, the Transaction Documents and any and all other documents, instruments, certificates, and agreements as any such officer may deem necessary, desirable, or appropriate to effectuate the purposes and intent of these resolutions, the execution and delivery thereof by any such officer to be conclusive evidence of his or her authorization to do so;
RESOLVED FURTHER, that each of the officers named above, acting individually or together, is hereby authorized and directed to take all such further actions and to execute and deliver all such further documents, instruments, certificates, and agreements as any such officer may deem necessary, desirable, or appropriate to consummate and carry out the transactions contemplated by the Transaction Documents and by these resolutions; and
RESOLVED FURTHER, that all actions heretofore taken by the officers and agents of the Trust in connection with the matters contemplated by these resolutions are hereby ratified, confirmed, and approved in all respects.
I, Theresa M. Calloway, General Counsel of Fairwater Real Estate Investment Trust, hereby certify that the foregoing is a true, correct, and complete copy of the resolutions adopted by unanimous written consent of the Board of Trustees of the Trust, effective as of December 18, 2025, and that such resolutions have not been amended, modified, supplemented, revoked, or rescinded in any respect and remain in full force and effect as of January 12, 2026.
________________________________________
Theresa M. Calloway General Counsel Fairwater Real Estate Investment Trust
Date: January 12, 2026
EXHIBIT B
SOLE MEMBER CONSENT OF FAIRWATER HP MANAGER, LLC
Written Consent of the Sole Member of Fairwater HP Manager, LLC
The following is a true, correct, and complete copy of the written consent of Fairwater Real Estate Investment Trust, as the sole member of Fairwater HP Manager, LLC, a Maryland limited liability company. This consent has not been amended, modified, supplemented, revoked, or rescinded in any respect and remains in full force and effect as of January 12, 2026.
WRITTEN CONSENT OF THE SOLE MEMBER OF FAIRWATER HP MANAGER, LLC
Effective as of December 18, 2025
The undersigned, Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, being the sole member (the "Sole Member") of Fairwater HP Manager, LLC, a Maryland limited liability company ("Fairwater Manager"), hereby takes the following actions and grants the following authorizations and approvals by written consent in lieu of a meeting:
RESOLVED, that Fairwater Manager is hereby authorized and directed to enter into and execute the Joint Venture Agreement, the Amended and Restated Operating Agreement of Harbor Point Development JV, LLC, the Capital Contribution Agreement, and each of the other Transaction Documents (as defined in the Joint Venture Agreement) to which Fairwater Manager is or will be a party, and to perform its obligations thereunder as the Managing Member of Harbor Point Development JV, LLC, holding a thirty percent (30%) membership interest therein;
RESOLVED FURTHER, that Fairwater Manager is hereby authorized and directed to fund, from capital contributions received from the Sole Member, an aggregate of Seventy-Two Million Dollars ($72,000,000) in equity capital contributions to Harbor Point Development JV, LLC, in accordance with the Capital Contribution Agreement and the Operating Agreement;