[sheet: Cover Memo]

Field	Value
MEMORANDUM	PRIVILEGED & CONFIDENTIAL — INTERNAL BILLING RECORD
To	Leonard Cross, Billing Partner, Tax Practice Group
From	Garrett Simmons, Lead Associate, Tax
Date	October 1, 2025
Re	Pre-Bill Memorandum — Matter No. 1036-00006: Fairwater Real Estate Investment Trust — REIT-Qualification Ruling Request
Client	Fairwater Real Estate Investment Trust
Client Address	2400 Harbor Promenade, Suite 1100, Baltimore, MD 21202
Client EIN	52-4718263
NYSE Ticker	FREIT
Client Contact (Tax)	Jonathan M. Hirota, Vice President, Tax
Client Contact (Legal)	Anita Bashar Reeves, General Counsel
Matter Number	1036-00006
Matter Description	Preparation and submission of private letter ruling request to the IRS National Office seeking confirmation that the proposed acquisition of the Southgate Portfolio (11 mixed-use properties, $812 million) from Thornfield Development Group, LLC and the formation of Fairwater Southgate TRS, Inc. will not jeopardize Fairwater's REIT qualification under IRC §§ 856–860
Engagement Letter Date	July 14, 2025
Responsible Partner	Sylvia Hartwell
Billing Partner	Leonard Cross
Fee Arrangement	Hourly
Fee Cap	$485,000 (exclusive of disbursements and IRS user fee)
Billing Period	July 14, 2025 through September 30, 2025
Matter Status	Closing — Ruling request submitted September 22, 2025; awaiting IRS acknowledgment letter and conference scheduling
Ruling Request Submission Date	September 22, 2025 (Severin Partners LLC overnight, tracking no. 7749-2281-3364)
IRS Branch (Anticipated)	Associate Chief Counsel (Income Tax & Accounting), Branch 2 — Financial Institutions & Products
Summary of Fees Incurred	Calculated total: $412,712.50; courtesy write-down applied: ($112.50); billed total: $412,600.00
Summary of Disbursements Incurred	$2,814.37 (Severin Partners LLC, printing, online research charges)

IRS User Fee (Client-Reimbursable)	$38,000.00 (Category 2, Rev. Proc. 2025-1, Appendix A; Ridgeline National Bank check no. 00471826 payable to United States Treasury)
Remaining Fee Cap Headroom	$72,400.00 ($485,000 − $412,600)
Recommendation	Issue interim invoice for $412,600.00 in fees plus $2,814.37 in disbursements plus $38,000.00 IRS user fee (total: $453,414.37). Note that additional fees may be incurred for preparation of supplemental submissions to the IRS, pre-ruling conference preparation, and attendance at any IRS conference. Estimated IRS processing timeline is 90–180 days from acknowledgment of receipt.
Prepared By	Garrett Simmons, Lead Associate
Reviewed By	Sylvia Hartwell, Responsible Partner

[sheet: Timekeeper Detail]

Timekeeper	Title / Role	Hourly Rate	Hours Billed	Calculated Fees	Write-Down	Net Billed Fees
Sylvia Hartwell	Responsible Partner, Tax	$1,450.00	78.0	$113,100.00	$0.00	$113,100.00
Leonard Cross	Billing Partner, Tax	$1,375.00	22.5	$30,937.50	$0.00	$30,937.50
Garrett Simmons	Lead Associate, Tax	$875.00	196.0	$171,500.00	$0.00	$171,500.00
Leila Nazari	Working Associate, Tax	$650.00	149.5	$97,175.00	$0.00	$97,175.00
SUBTOTAL (Calculated)	446.0	$412,712.50
Courtesy Write-Down	($112.50)	($112.50)
TOTAL BILLED FEES	446.0	$412,712.50	($112.50)	$412,600.00

[sheet: Disbursements]

Item No.	Date	Description	Vendor / Payee	Amount	Category	Notes
1	September 22, 2025	Severin Partners LLC Overnight — Ruling Request Package to IRS National Office, 1111 Constitution Avenue NW, Washington, DC 20224	Severin Partners LLC	$87.42	Delivery / Courier	Tracking no. 7749-2281-3364
2	July–September 2025	Printing and reproduction — ruling request drafts, exhibits, final submission copies	Internal / Outside Vendor	$614.95	Printing	Multiple print runs including final submission per Rev. Proc. 2025-1 copy requirements
3	July–September 2025	Online legal research charges (Westmark Data Systems, tax research databases)	Research Services	$2,112.00	Research	Statutory, regulatory, and PLR research for IRC §§ 856(c)(4), 856(d), 856(d)(7)
SUBTOTAL — Standard Disbursements	$2,814.37
4	September 22, 2025	IRS User Fee — Private Letter Ruling Request, Category 2, Rev. Proc. 2025-1, Appendix A	United States Treasury (Ridgeline National Bank check no. 00471826)	$38,000.00	Client-Reimbursable / IRS Fee	Separate client-reimbursable item; not counted against fee cap
SUBTOTAL — IRS User Fee	$38,000.00
TOTAL DISBURSEMENTS	$40,814.37

[sheet: Fee Cap Analysis]

Description	Amount	Notes
Engagement Fee Cap (per Engagement Letter dated July 14, 2025)	$485,000.00	Exclusive of disbursements and IRS user fee
Total Billed Fees (through September 30, 2025)	$412,600.00	After courtesy write-down of $112.50
Remaining Fee Cap Headroom	$72,400.00	= $485,000.00 − $412,600.00

Estimated Additional Fees — IRS Conference Preparation

Sylvia Hartwell (est. 10–15 hrs @ $1,450/hr)	$14,500 – $21,750	Pre-ruling conference attendance and preparation
Garrett Simmons (est. 20–30 hrs @ $875/hr)	$17,500 – $26,250	Drafting supplemental submissions, conference prep
Leila Nazari (est. 10–15 hrs @ $650/hr)	$6,500 – $9,750	Research and support for conference prep
Estimated Range of Additional Fees	$38,500 – $57,750	Within remaining headroom of $72,400
Projected Total Fees at Completion (Low Estimate)	$451,100.00	$412,600 + $38,500
Projected Total Fees at Completion (High Estimate)	$470,350.00	$412,600 + $57,750
Projected Remaining Headroom (Low)	$33,900.00	$485,000 − $451,100
Projected Remaining Headroom (High)	$14,650.00	$485,000 − $470,350

[sheet: Invoice Summary]

Line Item	Amount	Notes
Professional Fees (through September 30, 2025)	$412,600.00	446.0 total hours; courtesy write-down of $112.50 applied
Disbursements — Standard (Severin Partners LLC, printing, research)	$2,814.37	See Disbursements sheet for detail
Disbursements — IRS User Fee (Client-Reimbursable)	$38,000.00	Category 2, Rev. Proc. 2025-1; Ridgeline National Bank check no. 00471826
TOTAL PROPOSED INTERIM INVOICE	$453,414.37

Billing Instructions

Bill-To Contact	Anita Bashar Reeves, General Counsel, Fairwater Real Estate Investment Trust
Bill-To Address	2400 Harbor Promenade, Suite 1100, Baltimore, MD 21202
Matter Number	1036-00006
Client Matter Reference	Fairwater REIT-Qualification Ruling Request
Payment Terms	Net 30 days from invoice date
Note to Billing Partner	Additional fees may be incurred for IRS conference preparation and any supplemental submissions. Estimated IRS processing timeline: 90–180 days from acknowledgment. Matter is currently in closing status pending IRS acknowledgment letter.

[sheet: Matter Reference]

Category	Item	Detail
Matter	Matter Number	1036-00006
Matter	Matter Description	Fairwater REIT-Qualification Ruling Request — PLR under IRC §§ 856–860
Matter	Matter Status	Closing (ruling request submitted; awaiting IRS acknowledgment)
Matter	Engagement Letter Date	July 14, 2025
Client	Full Legal Name	Fairwater Real Estate Investment Trust
Client	EIN	52-4718263
Client	NYSE Ticker	FREIT
Client	Headquarters	2400 Harbor Promenade, Suite 1100, Baltimore, MD 21202
Client	CEO	Margaret Eloise Kwan
Client	CFO	Douglas R. Pellegrini
Client	General Counsel	Anita Bashar Reeves
Client	VP, Tax	Jonathan M. Hirota
Client	Registered Agent	Capitol Registered Agents, Inc., 7 Saint Paul Street, Suite 820, Baltimore, MD 21202
Client	Independent Auditor / Tax Advisor	Gresham Lowell CPAs LLP (Nolan S. Carruthers, CPA, Engagement Partner)
Transaction	Counterparty / Seller	Thornfield Development Group, LLC (EIN 83-2956104)
Transaction	Seller's Parent	Rowan Capital Partners, LP (Calvin J. Murchison, Managing Partner)
Transaction	Seller's Counsel	Pemberton Locke & Avery LLP (Rachel D. Whitford)
Transaction	Financial Advisor	Mercer Strauss & Co., LLC (Ian K. Padilla & Ostrander LLP, Managing Director)
Transaction	Lender	Ridgeline National Bank, N.A. (Patricia F. Langdon, Relationship Manager)
Transaction	Title / Escrow	Whitecliff Title & Escrow Company
Transaction	Independent Appraiser	Caldwell Valuation Group, LLC (appraisal dated August 30, 2025)
Transaction	Aggregate Purchase Price	$812,000,000 (Southgate Portfolio — 11 mixed-use properties, 3.1M sq. ft.)
Transaction	Proposed TRS	Fairwater Southgate TRS, Inc. (Maryland corporation, to be formed)
Transaction	Projected TRS Asset Value	$147,000,000 (1.83% of projected $8.03B total assets)

Transaction	Intercompany Lease Base Rent	$18,700,000/year; 2.5% annual escalator; 10-year term with two 5-year renewals; triple-net
Transaction	Projected TRS Annual Gross Revenue	$38,400,000
IRS Submission	Submission Date	September 22, 2025
IRS Submission	Severin Partners LLC Tracking No.	7749-2281-3364
IRS Submission	User Fee Amount	$38,000 (Category 2, Rev. Proc. 2025-1, Appendix A)
IRS Submission	User Fee Check	Ridgeline National Bank check no. 00471826, payable to United States Treasury
IRS Submission	Form 2848 Representatives	Sylvia Hartwell (PTIN P01882447) and Garrett Simmons (PTIN P02094518)
IRS Submission	Anticipated IRS Branch	Associate Chief Counsel (Income Tax & Accounting), Branch 2 — Financial Institutions & Products
IRS Submission	Estimated Processing Time	90–180 days from acknowledgment of receipt
Engagement Team	Responsible Partner	Sylvia Hartwell ($1,450/hr)
Engagement Team	Billing Partner	Leonard Cross ($1,375/hr)
Engagement Team	Lead Associate	Garrett Simmons ($875/hr)
Engagement Team	Working Associate	Leila Nazari ($650/hr)
Key Dates	PSA Executed	August 1, 2025
Key Dates	Draft Ruling Request Circulated	September 15, 2025
Key Dates	Client Sign-Off	September 19, 2025 (Jonathan M. Hirota)
Key Dates	IRS Submission	September 22, 2025
Key Dates	Fees Through Date	September 30, 2025
Key Dates	Matter Opened	October 1, 2025
Key Dates	Expected Acquisition Closing	Q1 2026 (subject to IRS ruling)
REIT Metrics	REIT Election Effective Date	December 31, 2009
REIT Metrics	Pre-Acquisition Total Assets	$7,820,000,000
REIT Metrics	Projected Post-Acquisition Total Assets	$8,030,000,000 ($7,820M + $812M − $602M dispositions)
REIT Metrics	75% Asset Test	81.9% ($6,580M ÷ $8,030M) — passes (> 75%)
REIT Metrics	TRS Asset Test (20% limit)	1.83% ($147M ÷ $8,030M) — passes (< 20%)

REIT Metrics	75% Gross Income Test	80.3% ($493M ÷ $614M) — passes (> 75%)
REIT Metrics	95% Gross Income Test	97.1% ($596M ÷ $614M) — passes (> 95%)
REIT Metrics	2024 Distribution Ratio	92.7% of REIT taxable income — passes (> 90%)
REIT Metrics	Market Capitalization (9/30/2025)	~$4,370,000,000

[sheet: Cover Memo]
Field | Value
MEMORANDUM | PRIVILEGED & CONFIDENTIAL — INTERNAL BILLING RECORD
To | Leonard Cross, Billing Partner, Tax Practice Group
From | Garrett Simmons, Lead Associate, Tax
Date | October 1, 2025
Re | Pre-Bill Memorandum — Matter No. 1036-00006: Fairwater Real Estate Investment Trust — REIT-Qualification Ruling Request
Client | Fairwater Real Estate Investment Trust
Client Address | 2400 Harbor Promenade, Suite 1100, Baltimore, MD 21202
Client EIN | 52-4718263
NYSE Ticker | FREIT
Client Contact (Tax) | Jonathan M. Hirota, Vice President, Tax
Client Contact (Legal) | Anita Bashar Reeves, General Counsel
Matter Number | 1036-00006
Matter Description | Preparation and submission of private letter ruling request to the IRS National Office seeking confirmation that the proposed acquisition of the Southgate Portfolio (11 mixed-use properties, $812 million) from Thornfield Development Group, LLC and the formation of Fairwater Southgate TRS, Inc. will not jeopardize Fairwater's REIT qualification under IRC §§ 856–860
Engagement Letter Date | July 14, 2025
Responsible Partner | Sylvia Hartwell
Billing Partner | Leonard Cross
Fee Arrangement | Hourly
Fee Cap | $485,000 (exclusive of disbursements and IRS user fee)
Billing Period | July 14, 2025 through September 30, 2025
Matter Status | Closing — Ruling request submitted September 22, 2025; awaiting IRS acknowledgment letter and conference scheduling
Ruling Request Submission Date | September 22, 2025 (Severin Partners LLC overnight, tracking no. 7749-2281-3364)
IRS Branch (Anticipated) | Associate Chief Counsel (Income Tax & Accounting), Branch 2 — Financial Institutions & Products
Summary of Fees Incurred | Calculated total: $412,712.50; courtesy write-down applied: ($112.50); billed total: $412,600.00
Summary of Disbursements Incurred | $2,814.37 (Severin Partners LLC, printing, online research charges)
IRS User Fee (Client-Reimbursable) | $38,000.00 (Category 2, Rev. Proc. 2025-1, Appendix A; Ridgeline National Bank check no. 00471826 payable to United States Treasury)
Remaining Fee Cap Headroom | $72,400.00 ($485,000 − $412,600)
Recommendation | Issue interim invoice for $412,600.00 in fees plus $2,814.37 in disbursements plus $38,000.00 IRS user fee (total: $453,414.37). Note that additional fees may be incurred for preparation of supplemental submissions to the IRS, pre-ruling conference preparation, and attendance at any IRS conference. Estimated IRS processing timeline is 90–180 days from acknowledgment of receipt.
Prepared By | Garrett Simmons, Lead Associate
Reviewed By | Sylvia Hartwell, Responsible Partner
[sheet: Timekeeper Detail]
Timekeeper | Title / Role | Hourly Rate | Hours Billed | Calculated Fees | Write-Down | Net Billed Fees
Sylvia Hartwell | Responsible Partner, Tax | $1,450.00 | 78.0 | $113,100.00 | $0.00 | $113,100.00
Leonard Cross | Billing Partner, Tax | $1,375.00 | 22.5 | $30,937.50 | $0.00 | $30,937.50
Garrett Simmons | Lead Associate, Tax | $875.00 | 196.0 | $171,500.00 | $0.00 | $171,500.00
Leila Nazari | Working Associate, Tax | $650.00 | 149.5 | $97,175.00 | $0.00 | $97,175.00
SUBTOTAL (Calculated) | 446.0 | $412,712.50
Courtesy Write-Down | ($112.50) | ($112.50)
TOTAL BILLED FEES | 446.0 | $412,712.50 | ($112.50) | $412,600.00
[sheet: Disbursements]
Item No. | Date | Description | Vendor / Payee | Amount | Category | Notes
1 | September 22, 2025 | Severin Partners LLC Overnight — Ruling Request Package to IRS National Office, 1111 Constitution Avenue NW, Washington, DC 20224 | Severin Partners LLC | $87.42 | Delivery / Courier | Tracking no. 7749-2281-3364
2 | July–September 2025 | Printing and reproduction — ruling request drafts, exhibits, final submission copies | Internal / Outside Vendor | $614.95 | Printing | Multiple print runs including final submission per Rev. Proc. 2025-1 copy requirements
3 | July–September 2025 | Online legal research charges (Westmark Data Systems, tax research databases) | Research Services | $2,112.00 | Research | Statutory, regulatory, and PLR research for IRC §§ 856(c)(4), 856(d), 856(d)(7)
SUBTOTAL — Standard Disbursements | $2,814.37
4 | September 22, 2025 | IRS User Fee — Private Letter Ruling Request, Category 2, Rev. Proc. 2025-1, Appendix A | United States Treasury (Ridgeline National Bank check no. 00471826) | $38,000.00 | Client-Reimbursable / IRS Fee | Separate client-reimbursable item; not counted against fee cap
SUBTOTAL — IRS User Fee | $38,000.00
TOTAL DISBURSEMENTS | $40,814.37
[sheet: Fee Cap Analysis]
Description | Amount | Notes
Engagement Fee Cap (per Engagement Letter dated July 14, 2025) | $485,000.00 | Exclusive of disbursements and IRS user fee
Total Billed Fees (through September 30, 2025) | $412,600.00 | After courtesy write-down of $112.50
Remaining Fee Cap Headroom | $72,400.00 | = $485,000.00 − $412,600.00
Estimated Additional Fees — IRS Conference Preparation
  Sylvia Hartwell (est. 10–15 hrs @ $1,450/hr) | $14,500 – $21,750 | Pre-ruling conference attendance and preparation
  Garrett Simmons (est. 20–30 hrs @ $875/hr) | $17,500 – $26,250 | Drafting supplemental submissions, conference prep
  Leila Nazari (est. 10–15 hrs @ $650/hr) | $6,500 – $9,750 | Research and support for conference prep
Estimated Range of Additional Fees | $38,500 – $57,750 | Within remaining headroom of $72,400
Projected Total Fees at Completion (Low Estimate) | $451,100.00 | $412,600 + $38,500
Projected Total Fees at Completion (High Estimate) | $470,350.00 | $412,600 + $57,750
Projected Remaining Headroom (Low) | $33,900.00 | $485,000 − $451,100
Projected Remaining Headroom (High) | $14,650.00 | $485,000 − $470,350
[sheet: Invoice Summary]
Line Item | Amount | Notes
Professional Fees (through September 30, 2025) | $412,600.00 | 446.0 total hours; courtesy write-down of $112.50 applied
Disbursements — Standard (Severin Partners LLC, printing, research) | $2,814.37 | See Disbursements sheet for detail
Disbursements — IRS User Fee (Client-Reimbursable) | $38,000.00 | Category 2, Rev. Proc. 2025-1; Ridgeline National Bank check no. 00471826
TOTAL PROPOSED INTERIM INVOICE | $453,414.37
Billing Instructions
Bill-To Contact | Anita Bashar Reeves, General Counsel, Fairwater Real Estate Investment Trust
Bill-To Address | 2400 Harbor Promenade, Suite 1100, Baltimore, MD 21202
Matter Number | 1036-00006
Client Matter Reference | Fairwater REIT-Qualification Ruling Request
Payment Terms | Net 30 days from invoice date
Note to Billing Partner | Additional fees may be incurred for IRS conference preparation and any supplemental submissions. Estimated IRS processing timeline: 90–180 days from acknowledgment. Matter is currently in closing status pending IRS acknowledgment letter.
[sheet: Matter Reference]
Category | Item | Detail
Matter | Matter Number | 1036-00006
Matter | Matter Description | Fairwater REIT-Qualification Ruling Request — PLR under IRC §§ 856–860
Matter | Matter Status | Closing (ruling request submitted; awaiting IRS acknowledgment)
Matter | Engagement Letter Date | July 14, 2025
Client | Full Legal Name | Fairwater Real Estate Investment Trust
Client | EIN | 52-4718263
Client | NYSE Ticker | FREIT
Client | Headquarters | 2400 Harbor Promenade, Suite 1100, Baltimore, MD 21202
Client | CEO | Margaret Eloise Kwan
Client | CFO | Douglas R. Pellegrini
Client | General Counsel | Anita Bashar Reeves
Client | VP, Tax | Jonathan M. Hirota
Client | Registered Agent | Capitol Registered Agents, Inc., 7 Saint Paul Street, Suite 820, Baltimore, MD 21202
Client | Independent Auditor / Tax Advisor | Gresham Lowell CPAs LLP (Nolan S. Carruthers, CPA, Engagement Partner)
Transaction | Counterparty / Seller | Thornfield Development Group, LLC (EIN 83-2956104)
Transaction | Seller's Parent | Rowan Capital Partners, LP (Calvin J. Murchison, Managing Partner)
Transaction | Seller's Counsel | Pemberton Locke & Avery LLP (Rachel D. Whitford)
Transaction | Financial Advisor | Mercer Strauss & Co., LLC (Ian K. Padilla & Ostrander LLP, Managing Director)
Transaction | Lender | Ridgeline National Bank, N.A. (Patricia F. Langdon, Relationship Manager)
Transaction | Title / Escrow | Whitecliff Title & Escrow Company
Transaction | Independent Appraiser | Caldwell Valuation Group, LLC (appraisal dated August 30, 2025)
Transaction | Aggregate Purchase Price | $812,000,000 (Southgate Portfolio — 11 mixed-use properties, 3.1M sq. ft.)
Transaction | Proposed TRS | Fairwater Southgate TRS, Inc. (Maryland corporation, to be formed)
Transaction | Projected TRS Asset Value | $147,000,000 (1.83% of projected $8.03B total assets)
Transaction | Intercompany Lease Base Rent | $18,700,000/year; 2.5% annual escalator; 10-year term with two 5-year renewals; triple-net
Transaction | Projected TRS Annual Gross Revenue | $38,400,000
IRS Submission | Submission Date | September 22, 2025
IRS Submission | Severin Partners LLC Tracking No. | 7749-2281-3364
IRS Submission | User Fee Amount | $38,000 (Category 2, Rev. Proc. 2025-1, Appendix A)
IRS Submission | User Fee Check | Ridgeline National Bank check no. 00471826, payable to United States Treasury
IRS Submission | Form 2848 Representatives | Sylvia Hartwell (PTIN P01882447) and Garrett Simmons (PTIN P02094518)
IRS Submission | Anticipated IRS Branch | Associate Chief Counsel (Income Tax & Accounting), Branch 2 — Financial Institutions & Products
IRS Submission | Estimated Processing Time | 90–180 days from acknowledgment of receipt
Engagement Team | Responsible Partner | Sylvia Hartwell ($1,450/hr)
Engagement Team | Billing Partner | Leonard Cross ($1,375/hr)
Engagement Team | Lead Associate | Garrett Simmons ($875/hr)
Engagement Team | Working Associate | Leila Nazari ($650/hr)
Key Dates | PSA Executed | August 1, 2025
Key Dates | Draft Ruling Request Circulated | September 15, 2025
Key Dates | Client Sign-Off | September 19, 2025 (Jonathan M. Hirota)
Key Dates | IRS Submission | September 22, 2025
Key Dates | Fees Through Date | September 30, 2025
Key Dates | Matter Opened | October 1, 2025
Key Dates | Expected Acquisition Closing | Q1 2026 (subject to IRS ruling)
REIT Metrics | REIT Election Effective Date | December 31, 2009
REIT Metrics | Pre-Acquisition Total Assets | $7,820,000,000
REIT Metrics | Projected Post-Acquisition Total Assets | $8,030,000,000 ($7,820M + $812M − $602M dispositions)
REIT Metrics | 75% Asset Test | 81.9% ($6,580M ÷ $8,030M) — passes (> 75%)
REIT Metrics | TRS Asset Test (20% limit) | 1.83% ($147M ÷ $8,030M) — passes (< 20%)
REIT Metrics | 75% Gross Income Test | 80.3% ($493M ÷ $614M) — passes (> 75%)
REIT Metrics | 95% Gross Income Test | 97.1% ($596M ÷ $614M) — passes (> 95%)
REIT Metrics | 2024 Distribution Ratio | 92.7% of REIT taxable income — passes (> 90%)
REIT Metrics | Market Capitalization (9/30/2025) | ~$4,370,000,000

[sheet: Cover Memo]

Record

Parties

Dates

Amounts