Contract analysis

I. Executive Summary and Purpose This memorandum analyzes the prepayment provisions, exit fee mechanics, and lien release procedures under the existing $240,000,000 Senior Secured Bridge Credit Facility (the "Bridge Credit Agreement"), dated as of June 30, 2025, among Fairwater Operating Partnership, L.P. (the "Borrower"), Fairwater Real Estate Investment Trust ("FREIT" or the "Guarantor"), the syndicate lenders part

II. Overview of Bridge Credit Facility — Key Terms Set forth below is a summary of the material terms of the Bridge Credit Agreement relevant to the prepayment and lien release analysis. A. Parties. The Bridge Credit Agreement was entered into as of June 30, 2025, among: • Borrower: Fairwater Operating Partnership, L.P., a Delaware limited partnership and the operating partnership subsidiary through which FREIT condu

III. Voluntary Prepayment Provisions A. Right to Prepay Without Premium

Section 2.05(a) of the Bridge Credit Agreement expressly permits the Borrower to prepay the outstanding principal in whole or in part at any time without prepayment premium or penalty. The relevant provision states: "The Borrower may, upon not less than five (5) Business Days' prior written notice to the Administrative Agent, prepay the outstanding principal amount of the Loans in whole or in part, without premium or

IV. Exit Fee Analysis A. Exit Fee Amount

Section 2.09 of the Bridge Credit Agreement provides for an exit fee (the "Exit Fee") in an amount equal to 0.50% of the outstanding principal balance at the time of repayment. Based on the current outstanding principal of $240,000,000, the Exit Fee is calculated as follows: $240,000,000 × 0.50% = $1,200,000 The Exit Fee is payable to KNB as administrative agent, on behalf of the Lenders, at the time of repayment of

V. Payoff Procedures A. Payoff Request Letter The Borrower (Fairwater Operating Partnership, L.P.) should deliver a formal payoff request letter to KNB requesting the following: (1) Written Payoff Statement. A written payoff statement setting forth the total amount required to pay off the bridge facility in full as of the anticipated payoff date, itemized as follows: (a) Outstanding principal ($240,000,000); (b) Accr

VI. Lien Release Mechanics A. Overview of Collateral to be Released Upon full repayment of the bridge facility, all collateral security granted to KNB (as administrative agent for the benefit of the Lenders) must be released. The collateral consists of multiple types of security interests, many of which are memorialized in recorded instruments in multiple jurisdictions. The following is a comprehensive summary of the

1. Mortgage Liens (14 Properties, 5 States). First-priority mortgages or deeds of trust (as applicable under state law) on each of the fourteen (14) Sun Belt Portfolio properties. The properties are located in five states — Texas, Georgia, Florida, North Carolina, and Tennessee — with varying legal requirements for the form and recording of mortgage release instruments. A detailed state-by-state analysis is provided

2. Equity Pledges. Pledge of 100% of the membership interests in each of the fourteen (14) SPE limited liability companies (Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC), granted by Fairwater Operating Partnership, L.P. in favor of KNB pursuant to the Pledge and Security Agreement dated June 30, 2025. Release of the equity pledge will require termination of the related UCC financing statements, as disc

3. Assignments of Leases and Rents. Collateral assignments of all tenant leases and rental income with respect to each of the fourteen (14) properties, granted by each SPE in favor of KNB. In some states, the assignment of leases and rents is incorporated into the mortgage or deed of trust and will be released with the mortgage release instrument; in others, a separate recorded release instrument may be required. See

4. Assignments of Property Management Agreements. Collateral assignments of the property management agreements between each SPE and Fairwater Residential Management LLC (effective July 1, 2025), granted by each SPE in favor of KNB. These are typically unrecorded documents and can be released by letter agreement. See Section VI.E below.

5. UCC Financing Statements. UCC-1 financing statements filed in connection with the equity pledge (Delaware Secretary of State filings) and UCC-1 fixture filing financing statements filed in each county where a property is located. Termination of these filings by UCC-3 termination statements is required upon payoff. See Section VI.C below. B. State-by-State Mortgage Release Requirements The following is a state-by-s

1. Texas (5 Properties). Properties and SPEs: Legal Framework. Texas is a deed of trust state. The security instruments for each of the five Texas properties are deeds of trust recorded in the applicable county or counties. Release of each deed of trust is accomplished by the execution and recording of a Release of Deed of Trust (sometimes referred to as a Deed of Release or Release of Lien). Execution Requirements.

2. Georgia (3 Properties). Properties and SPEs: Legal Framework. Georgia uses security deeds (also referred to as deeds to secure debt) rather than mortgages or deeds of trust. Release of a security deed is accomplished by the execution and recording of a Cancellation of Security Deed in the real property records of the applicable county. Execution Requirements. The Cancellation of Security Deed must be executed by t

3. Florida (3 Properties). Properties and SPEs: Legal Framework. Florida is a mortgage state. The security instruments for each of the three Florida properties are mortgages recorded in the applicable county. Release of each mortgage is accomplished by the execution and recording of a Satisfaction of Mortgage (or Release of Mortgage) in the official records of the applicable county. Execution Requirements. The Satisf

4. North Carolina (2 Properties). Properties and SPEs: Legal Framework. North Carolina is a deed of trust state. Release of a deed of trust is accomplished by the execution and recording of a Cancellation of Deed of Trust, or by the entry of a cancellation on the margin of the recorded deed of trust (a "marginal cancellation"), though marginal cancellations are less common for commercial transactions. Execution Requi

5. Tennessee (1 Property). Properties and SPEs: Legal Framework. Tennessee is a deed of trust state. Release of the deed of trust is accomplished by the execution and recording of a Release of Deed of Trust or, in some cases, by a marginal release entered on the margin of the recorded deed of trust in the register's office. Execution Requirements. The Release of Deed of Trust must be executed by the lender or its age

VII. Coordination with Halcourt Briggs & Devlin LLP A. Advance Preparation of Release Documents The complexity of the lien release mechanics — fourteen (14) properties across five (5) states, with multiple types of security interests in each jurisdiction — requires substantial advance preparation. Release documents must be drafted in state-specific forms, reviewed for accuracy, executed by authorized signatories of K

1. Draft Payoff Letter. A draft payoff letter from KNB, setting forth the payoff amount, per diem interest, wire instructions, and confirmation of the Exit Fee waiver, for review and negotiation in advance of the payoff date.

2. Mortgage/Deed of Trust Release Documents. Forms of all mortgage or deed of trust release documents for each of the fourteen (14) properties, prepared in the state-specific forms required for Texas (Release of Deed of Trust), Georgia (Cancellation of Security Deed), Florida (Satisfaction of Mortgage), North Carolina (Cancellation of Deed of Trust), and Tennessee (Release of Deed of Trust).

3. UCC-3 Termination Statements. UCC-3 termination statement forms for all UCC-1 financing statements filed in connection with the bridge closing, including the Delaware Secretary of State filing(s) for the equity pledge and the county-level fixture filings.

4. UCC Filing Schedule. A complete schedule of all UCC-1 filings made at the bridge closing, including filing numbers, filing dates, filing jurisdictions, debtor and secured party information, and a description of the collateral covered by each filing.

5. Assignments of Leases and Rents — Release/Termination. Confirmation as to whether the Assignments of Leases and Rents for each property were recorded as separate instruments or were incorporated into the mortgages or deeds of trust, and, if separate instruments, forms of termination or release documents for each.

6. Termination of Collateral Assignment of Property Management Agreements. A form of termination letter for the collateral assignments of property management agreements, to be executed by KNB.

7. Wire Instructions. Wire transfer instructions for the payoff, payable to KNB as administrative agent on behalf of the syndicate Lenders.

8. Proposed Timeline. A proposed timeline for the delivery, review, execution, and recording of all release documents, coordinated with the target closing date of November 28, 2025. We recommend sending this coordination letter no later than October 10, 2025 to allow Halcourt Briggs & Devlin adequate time to prepare all documents, coordinate with KNB's internal teams, and address any issues that may arise. A seven-we

VIII. Timing Considerations and Risk Factors A. Timeline Pressure The timeline for the bridge payoff presents manageable but not unlimited cushion. The key dates are as follows: The thirty-three (33) day cushion between the target Permanent Loan closing date (November 28, 2025) and the hard bridge maturity (December 31, 2025) provides a meaningful buffer in the event of closing delays. However, this cushion is finite

IX. Recommendations and Action Items Based on the foregoing analysis, we recommend the following action items. We have organized these recommendations in approximate chronological order and have indicated the responsible party and target date for each.

1. Deliver Payoff Request Letter. Submit a formal payoff request letter to KNB (Attention: Thomas J. Pagano, Managing Director, Real Estate Finance, 600 Lexington Avenue, New York, NY 10022) by mid-October 2025 requesting a written payoff statement as of the estimated November 28, 2025 closing date, with a per diem interest calculation, wire instructions, and confirmation of Exit Fee waiver eligibility. Responsible:

2. Engage Halcourt Briggs & Devlin Early. Send a comprehensive coordination letter to Kenneth R. Delacroix at Halcourt Briggs & Devlin LLP (1221 Avenue of the Americas, New York, NY 10020) requesting draft release documents, UCC filing schedule, and a proposed timeline for the preparation and execution of all release instruments, as described in detail in Section VII.A above. Responsible: Calderwood & Harkness. Targe

3. Obtain UCC Filing Schedule. Request from Halcourt Briggs & Devlin a complete schedule of all UCC-1 filings (Delaware equity pledge filings and county-level fixture filings) made in connection with the bridge closing, with filing numbers, filing dates, debtor/secured party information, and descriptions of collateral covered. This schedule is essential for preparing and verifying the corresponding UCC-3 termination

4. Coordinate with Marlowe Asset Management Title. Engage Marlowe Asset Management Title Insurance Group, Inc. (901 Main Street, Suite 1100, Dallas, TX 75202) to coordinate the recording of release documents across all five states, confirm e-recording availability in each county, arrange for local agents to handle in-person recordings where necessary, and address gap coverage and title insurance requirements for the

5. Pre-Sign Release Documents. Request that KNB pre-execute all release instruments (mortgage/deed of trust releases, UCC-3 termination statements, terminations of assignments of leases and rents, terminations of collateral assignments of property management agreements) in advance of closing, to be held in escrow pending receipt of the payoff wire. Negotiate and finalize escrow instructions for the pre-signed release

6. Confirm Exit Fee Waiver Eligibility. Provide KNB with a copy of the Clarendon Metropolitan commitment letter promptly upon receipt (target October 1, 2025) to confirm that the proposed Permanent Loan qualifies as "permanent CMBS financing" for purposes of the Exit Fee waiver under Section 2.09(b) of the Bridge Credit Agreement. Obtain written confirmation from KNB (or its counsel) that the Exit Fee will be waived

7. Monitor Covenant Compliance. Continue monitoring Fairwater's compliance with the financial covenants under the Bridge Credit Agreement (portfolio LTV ≤ 65%; portfolio DSC