Document:

EX-10.1

LOAN AGREEMENT

Dated as of February 7, 2014

Between

IRT EAGLE RIDGE APARTMENTS OWNER, LLC

as Borrower

and

BANK OF AMERICA, N.A.

as Lender

TABLE OF CONTENTS

Page

	 	 	 
	EXHIBIT A

EXHIBIT B

SCHEDULE 4.25

SCHEDULE 9.1

	 	Borrower Equity Ownership Structure

[Intentionally Omitted]

Lease Exceptions

Required Repairs

LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of February 7, 2014 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”), between BANK OF AMERICA,
N.A., a national banking association, having an address at 214 North Tryon Street, NC1-027-15-01,
Charlotte, North Carolina 28255 (together with its successors and/or assigns, “Lender”) and IRT
EAGLE RIDGE APARTMENTS OWNER, LLC, a Delaware limited liability company, having an address at Cira
Centre, 2929 Arch Street, 17th Floor, Philadelphia, Pennsylvania 19104 (together with
its successors and/or assigns, “Borrower”).

RECITALS:

WHEREAS, Borrower desires to obtain the Loan from Lender.

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with the
terms of this Agreement and the other Loan Documents.

NOW, THEREFORE, in consideration of the making of the Loan by Lender and the covenants,
agreements, representations and warranties set forth in this Agreement, the parties hereto hereby
covenant, agree, represent and warrant as follows:

ARTICLE 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1. Definitions

For all purposes of this Agreement, except as otherwise expressly required or unless the
context clearly indicates a contrary intent:

“Act” shall mean Chapter 18 of Title 6 of the Delaware Code, as amended from time to
time, and any successor statute or statutes.

“Additional Required Repair” shall have the meaning set forth in
Section 9.7(f) hereof.

“Affiliate” shall mean, as to any Person, any other Person that (i) owns directly or
indirectly twenty percent (20%) or more of all equity interests in such Person, and/or (ii) is in
Control of, is Controlled by or is under common Control with such Person, and/or (iii) is a
director or officer of, or a general partner or managing member in, such Person or of an Affiliate
of such Person.

“Affiliated Manager” shall mean any property manager in which Borrower, Guarantor, any
SPE Component Entity or any Affiliate of any of such entities has, directly or indirectly, any
legal, beneficial or economic interest.

“Agreements” shall have the meaning set forth in the Mortgage.

“ALTA” shall mean American Land Title Association, or any successor thereto.

“Alteration Threshold” means five percent (5%) of the outstanding principal balance of
the Loan.

“Annual Budget” shall mean the operating budget for the applicable fiscal year of
Borrower detailing on a monthly basis, consistent with the manner in which Borrower’s operating
statements are presented, projected cash flow for such fiscal year and all planned capital
expenditures for the Property, delivered in accordance with Section 5.11(a)(iv) hereof.

“Assignment of Management Agreement” shall mean that certain Assignment and
Subordination of Management Agreement and Consent of Manager dated the date hereof among Lender,
Borrower and Manager, as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

“Award” shall mean any compensation paid by any Governmental Authority in connection
with a Condemnation in respect of all or any part of the Property.

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”,
as amended from time to time, and any successor statute or statutes and all rules and regulations
from time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy,
insolvency or creditors’ rights.

“Business Day” shall mean any day other than a Saturday, Sunday or any other day on
which national banks in New York, New York or Charlotte, North Carolina, or the place of business
of the trustee under a Securitization (or, if no Securitization has occurred, Lender), or any
servicer of the Loan or the financial institution that maintains any collection account for or on
behalf of any servicer of the Loan or any Reserve Funds or the New York Stock Exchange or the
Federal Reserve Bank of New York is not open for business.

“Cash Management Account” shall have the meaning set forth in Section 10.1(b)
hereof.

“Cash Management Agreement” shall mean that certain Cash Management Agreement dated as
of the date hereof among Borrower, Lender, Manager, and Cash Management Bank, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to time.

“Cash Management Bank” shall mean Wells Fargo Bank, N.A. or any successor Eligible
Institution approved or appointed by Lender pursuant to the terms of the Cash Management Agreement.

“Cash Sweep Period” shall mean the period commencing on the first day of the calendar
month following the month during which Lender notifies Borrower of its determination that the Debt
Service Coverage Ratio is less than 1.20 to 1.00 for two (2) consecutive calendar quarters, and
ending on the last day of the calendar month during which Lender notifies Borrower of its
determination that the Debt Service Coverage Ratio equals or exceeds 1.20 to 1.00 for two (2)
consecutive calendar quarters.

“Casualty” shall have the meaning set forth in Section 8.2 hereof.

“Closing Date” shall mean the date of the funding of the Loan.

“Company” shall have the meaning set forth in Section 6.1(b)(ii) hereof.

“Condemnation” shall mean a temporary or permanent taking by any Governmental
Authority as the result, in lieu or in anticipation, of the exercise of the right of condemnation
or eminent domain, of all or any part of the Property, or any interest therein or right accruing
thereto, including any right of access thereto or any change of grade affecting the Property or any
part thereof.

“Control” shall mean, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or other beneficial interests, by
contract or otherwise, and Control shall not be deemed absent solely because another Person shall
have veto power with respect to major decisions. The terms “Controlled” and “Controlling” shall
have correlative meanings.

“Creditors’ Rights Laws” shall mean with respect to any Person any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution, assignment for the
benefit of creditors, composition or other relief with respect to its debts or debtors.

“DBRS” shall mean DBRS, Inc., and its successors in interest.

“Debt” shall mean the outstanding principal amount set forth in, and evidenced by,
this Agreement and the Note together with all interest accrued and unpaid thereon and all other
sums due to Lender in respect of the Loan under the Note, this Agreement, the Mortgage or any other
Loan Document.

“Debt Service” shall mean, with respect to any particular period of time, scheduled
principal and/or interest payments under the Note.

“Debt Service Coverage Ratio” shall mean, as of any date of determination, the ratio,
as determined by Lender, of (i) Underwritten Net Cash Flow to (ii) the aggregate amount of Debt
Service which would be due for the applicable period; provided, however, if
payments of principal are not due for such period, Debt Service shall be calculated using a payment
constant based on the Interest Rate and an amortization period of thirty (30) years.

“Default” shall mean the occurrence of any event hereunder or under any other Loan
Document which, but for the giving of notice or passage of time, or both, would be an Event of
Default.

“Default Rate” shall mean the lesser of (i) the Maximum Legal Rate, or (ii) four
percent (4%) above the Interest Rate.

“Defeasance Collateral” shall have the meaning set forth in Section
2.7(a)(iv)(B) hereof.

“Defeasance Security Agreement” shall have the meaning set forth in Section
2.7(a)(iv)(A) hereof.

“Deposit Account” shall have the meaning set forth in Section 10.1(a) hereof.

“Deposit Account Control Agreement” shall mean the deposit account control agreement,
blocked account agreement, or similar tri-party agreement, in form and substance satisfactory to
Lender, by and among Borrower, Lender and Deposit Bank, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time, relating to the operation and
maintenance of, and application of funds in, the Deposit Account.

“Deposit Bank” shall mean any Eligible Institution selected by Borrower and approved
by Lender pursuant to this Agreement acting as Deposit Bank under the Deposit Account Control
Agreement.

“Eligible Account” shall mean a separate and identifiable account from all other funds
held by the holding institution that is either (i) an account or accounts maintained with a federal
or state chartered depository institution or trust company which complies with the definition of
Eligible Institution or (ii) a segregated trust account or accounts maintained with the corporate
trust department of a federal or state chartered depository institution or trust company acting in
its fiduciary capacity which, in the case of a federally chartered depository institution or trust
company acting in its fiduciary capacity is subject to the regulations regarding fiduciary funds on
deposit therein under 12 C.F.R. §9.10(b), and in the case of a state chartered depository
institution or trust company, is subject to regulations substantially similar to 12 C.F.R.
§9.10(b), having in either case a combined capital surplus of at least $50,000,000 and subject to
supervision or examination by federal and state authority. An Eligible Account shall not be
evidenced by a certificate of deposit, passbook or other instrument.

“Eligible Institution” shall mean (i) prior to a Securitization, Bank of America,
N.A., (ii) a depository institution or trust company insured by the Federal Deposit Insurance
Corporation (a) the short term unsecured debt obligations, commercial paper or other short term
deposits of which are rated at least “A-1” by S&P, “P-1” by Moody’s and “F-1” by Fitch and “R-1
(middle)” by DBRS, in the case of accounts in which funds are held for thirty (30) days or less, or
(b) the long term unsecured debt obligations of which are rated at least “AA” by S&P (or “A-” if
the short term unsecured debt obligations are rated at least “A-1” by S&P), “Aa2” by Moody’s, and
“AA+” by Fitch (or “A-” if the short term unsecured debt obligations are rated at least “F-1” by
Fitch) and “AA” by DBRS, in the case of accounts in which funds are held for more than thirty (30)
days; provided that after a Securitization only the foregoing ratings requirements of each
Rating Agency rating such Securitization shall apply, or (iii) an institution for which a Rating
Agency Confirmation has been obtained.

“Embargoed Person” shall mean any Person identified by OFAC or any other Person with
whom a Person resident in the United States of America may not conduct business or transactions by
prohibition of federal law or Executive Order of the President of the United States of America.

“Environmental Indemnity” shall mean that certain Environmental Indemnity Agreement,
dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan for the
benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time and any successor statutes thereto and applicable regulations issued pursuant
thereto in temporary or final form.

“Event of Default” shall have the meaning set forth in Section 11.1 hereof.

“Excess Cash” shall have the meaning set forth in the Cash Management Agreement.

“Excess Cash Reserve Account” shall have the meaning set forth in Section 9.5
hereof.

“Excess Cash Reserve Funds” shall have the meaning set forth in Section 9.5
hereof.

“Exculpated Parties” shall have the meaning set forth in Section 15.1(a)
hereof.

“Extraordinary Expense” shall mean an operating expense or capital expenditure with
respect to the Property that (i) is not set forth on the Annual Budget, (ii) is not an Operating
Expense that has been approved by Lender, and (iii) is not subject to payment by withdrawals from
the Required Repair Account or the Replacement Reserve Account.

“Fitch” shall mean Fitch Ratings, Inc. and its successors in interest.

“GAAP” shall mean generally accepted accounting principles in the United States of
America as of the date of the applicable financial report.

“Governmental Authority” shall mean any court, board, agency, department, commission,
office or other authority of any nature whatsoever for any governmental unit (federal, state,
county, municipal, city, town, special district or otherwise) whether now or hereafter in
existence.

“Guarantor” shall mean Independence Realty Operating Partnership, LP, a Delaware
limited partnership.

“Guaranty” shall mean that certain Guaranty Agreement, dated as of the date hereof,
executed by Guarantor in connection with the Loan for the benefit of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to time.

“Improvements” shall have the meaning set forth in the granting clause of the
Mortgage.

“Indebtedness” shall mean, for any Person, without duplication: (i) all indebtedness
of such Person for borrowed money, for amounts drawn under a letter of credit, or for the deferred
purchase price of property for which such Person or its assets is liable, (ii) all unfunded amounts
under a loan agreement, letter of credit, or other credit facility for which such Person would be
liable if such amounts were advanced thereunder, (iii) all amounts required to be paid by such
Person as a guaranteed payment to partners or a preferred or special dividend, including any
mandatory redemption of shares or interests, except if the partnership, operating or similar
agreement provides that the same is waived to the extent such Person lacks funds to pay the same,
(iv) all indebtedness guaranteed by such Person, directly or indirectly, (v) all obligations under
leases that constitute capital leases for which such Person is liable, (vi) all obligations of such
Person under interest rate swaps, caps, floors, collars and other interest hedge agreements, in
each case whether such Person is liable contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person otherwise assures a creditor against
loss, and (vii) any other amounts substantially similar to those listed in clauses (i) through (vi)
above.

“Indemnified Parties” shall mean (i) Lender, (ii) any prior owner or holder of the
Loan or any portion thereof or Participations in the Loan, (iii) any servicer, sub-servicer or
prior servicer or sub-servicer of the Loan, (iv) any Investor or any prior Investor in any
Securities, (v) any trustees, custodians or other fiduciaries who hold or who have held a full or
partial interest in the Loan for the benefit of any Investor or other third party, (vi) any
receiver or other fiduciary appointed in a foreclosure or other enforcement action or other
Creditors Rights Laws proceeding, (vii) any officers, directors, shareholders, partners, members,
employees, agents, servants, representatives, contractors, subcontractors, affiliates or
subsidiaries of any and all of the foregoing, and (viii) the heirs, legal representatives,
successors and assigns of any and all of the foregoing (including, without limitation, any
successors by merger, consolidation or acquisition of all or a substantial portion of the
Indemnified Parties’ assets and business), in all cases whether during the term of the Loan or as
part of or following a foreclosure of the Mortgage.

“Insurance Premiums” shall have the meaning set forth in Section 8.1(b)
hereof.

“Insurance Proceeds” shall have the meaning set forth in Section 8.4(b)
hereof.

“Interest Accrual Period” shall mean (i) prior to the first Payment Date, the Interim
Interest Accrual Period, and (ii) commencing on the first Payment Date and continuing on each
Payment Date thereafter, the calendar month immediately preceding such Payment Date.

“Interest-Bearing Reserve Funds” shall mean all Reserve Funds other than the Tax and
Insurance Reserve Funds.

“Interest Rate” shall mean a rate per annum equal to four and 67/100 percent (4.67%).

“Interim Interest Accrual Period” shall mean the period from and including the Closing
Date through and including the last day of the calendar month in which the Closing Date occurs,
provided, however, there shall be no “Interim Interest Accrual Period” in the event
the Closing Date is the first day of a calendar month.

“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended, as
it may be further amended from time to time, and any successor statutes thereto, and applicable
U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

“Investor” shall have the meaning set forth in Section 13.3 hereof.

“IRT Member” shall have the meaning set forth in Section 7.3 hereof.

“IRT GP” shall have the meaning set forth in Section 7.3 hereof.

“Kroll” shall mean Kroll Bond Rating Agency, Inc., and its successors in interest.

“Lease” shall have the meaning set forth in the Mortgage.

“Lease Modification” shall have the meaning set forth in Section 5.13(c)
hereof.

“Legal Requirements” shall mean all statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental Authorities affecting the Borrower
or the Property or any part thereof, or the construction, use, alteration, ownership or operation
thereof, whether now or hereafter enacted and in force, and all permits, licenses, authorizations
and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances
contained in any instruments, either of record or known to Borrower, at any time in force affecting
the Borrower or the Property or any part thereof, including, without limitation, any of which may
(i) require repairs, modifications or alterations in or to the Property or any part thereof, or
(ii) in any way limit the use and enjoyment thereof.

“Lien” shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting
Borrower or any direct or indirect interest in Borrower, the Property, any portion thereof or any
interest therein, including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar
liens and encumbrances.

“LLC Agreement” shall have the meaning set forth in Section 6.1(b)(ii) hereof.

“Loan” shall mean the loan made by Lender to Borrower pursuant to this Agreement.

“Loan Documents” shall mean, collectively, this Agreement, the Note, the Mortgage, the
Environmental Indemnity, the Guaranty, the Assignment of Management Agreement, the Deposit Account
Control Agreement, the Cash Management Agreement and any and all other documents, agreements and
certificates executed and/or delivered in connection with the Loan, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

“Lockout Period” shall mean the period commencing on the Closing Date and continuing
through and including the last day of the calendar month immediately preceding the Payment Date
occurring in September, 2023.

“Losses” shall mean any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts, damages (other than
punitive or special damages), losses (other than diminution in value), costs, expenses, fines,
penalties, charges, fees, judgments, awards, amounts paid in settlement of whatever kind or nature
(including but not limited to reasonable legal fees and other costs of defense).

“LTV Ratio” shall have the meaning set forth in Section 8.4(c) hereof.

“Major Lease” shall mean as to the Property (i) any Lease which, individually or when
aggregated with all other leases at the Property with the same Tenant or its Affiliate, either
(a) accounts for five percent (5%) or more of the Property’s rental income, or (b) demises 5,000
square feet or more of the Property’s gross leasable area, (ii) any Lease which contains any
option, offer, right of first refusal or other similar entitlement to acquire all or any portion of
the Property, (iii) any Lease under which the Tenant is an Affiliate of Borrower or Guarantor, or
(iv) any instrument guaranteeing or providing credit support for any Lease meeting the requirements
of (i) or (ii) above.

“Management Agreement” shall mean the property management agreement entered into by
and between Borrower and Manager, pursuant to which Manager is to provide management and other
services with respect to the Property, as the same may be amended, restated, replaced, supplemented
or otherwise modified in accordance with the terms of this Agreement.

“Manager” shall mean Jupiter Communities, LLC, a Delaware limited liability company,
d/b/a RAIT Residential, or such other entity selected as the manager of the Property in accordance
with the terms of this Agreement.

“Material Action” shall mean, as to any Person, to file any insolvency, or
reorganization case or proceeding, to institute proceedings to have such Person be adjudicated
bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any
relief under any law relating to relief from debts or the protection of debtors, to consent to the
filing or institution of bankruptcy or insolvency proceedings against such Person, to file a
petition seeking, or consent to, reorganization or relief with respect to such Person under any
applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar
official of or for such Person or a substantial part of its property, to make any assignment for
the benefit of creditors of such Person, to admit in writing such Person’s inability to pay its
debts generally as they become due (unless such admission is true), or to take action in
furtherance of any of the foregoing.

“Material Adverse Effect” shall mean a material adverse effect on the value, current
use or operation of the Property, the financial condition of the Borrower or Guarantor, the
security intended to be provided by the Mortgage, the current ability of the Property to generate
sufficient cash flow to service the Loan, Borrower’s ability to pay its obligations when due, or
Borrower’s ability to perform its obligations under the Loan Documents.

“Maturity Date” shall mean the Payment Date occurring in March, 2024.

“Maximum Legal Rate” shall have the meaning set forth in Section 2.4(d)
hereof.

“Member” shall have the meaning set forth in Section 6.1(b)(ii) hereof.

“Mold” shall mean any mold, fungi, bacterial or microbial matter present at or in the
Property, including, without limitation, building materials which is in a condition, location or a
type which may pose a significant risk to human health or safety or the environment, or may result
in a Material Adverse Effect.

“Monthly Payment Amount” shall mean with respect to each Payment Date, a payment equal
to the amount of interest which has accrued during the related Interest Accrual Period computed at
the Interest Rate.

“Moody’s” shall mean Moody’s Investors Service, Inc., and its successors in interest.

“Morningstar” shall mean Morningstar Credit Ratings, LLC., and its successors in
interest.

“Mortgage” shall mean that certain first priority mortgage/deed of trust/deed to
secure debt and security agreement dated as of the date hereof, executed and delivered by Borrower
as security for the Loan and encumbering the Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

“Net Proceeds” shall have the meaning set forth in Section 8.4(b) hereof.

“Net Proceeds Deficiency” shall have the meaning set forth in
Section 8.4(b)(vi) hereof.

“New Mezzanine Loan” shall have the meaning set forth in Section 13.8 hereof.

“Note” shall mean that certain promissory note of even date herewith in the principal
amount of $18,850,000.00, made by Borrower in favor of Lender, as the same may be amended,
restated, replaced, severed, supplemented or otherwise modified from time to time.

“OFAC” shall have the meaning set forth in Section 4.38 hereof.

“Operating Expenses” shall mean, with respect to any period of time, the total of all
expenses actually paid or payable by Borrower, computed in accordance with GAAP (or such other
method of accounting acceptable to Lender), of whatever kind relating to the operation, maintenance
and management of the Property, including without limitation and without duplication, utilities,
ordinary repairs and maintenance, Insurance Premiums, license fees, Property Taxes and Other
Charges, advertising expenses, payroll and related taxes, computer processing charges, management
fees, administrative, security and general expenses, utilities, operational equipment or other
lease payments as approved by Lender, but specifically excluding depreciation and
amortization, income taxes, Debt Service, capital expenditures, any item of expense for which
reimbursement is received under any insurance policy or be paid by a third party, and any item of
expense that would otherwise be covered by the provisions hereof but which is paid by any Tenant
under such Tenant’s Lease or other agreement, and deposits into the Reserve Accounts.

“Operating Income” shall mean, with respect to any period of time, all income, derived
from the ownership and operation of the Property from whatever source, including, but not limited
to, rental income from all tenants paying rent and in actual physical occupancy (by the tenant, its
Affiliate or a sublessee) of their demised premises pursuant to Leases in full force and effect
(whether base rent, additional rent or escalations), utility, real estate tax or other
miscellaneous expense recoveries, common area maintenance, service fees or charges, license fees,
parking fees, rent concessions or credits, and other required pass-throughs, business interruption
or rent loss insurance; but excluding sales, use and occupancy or other taxes on receipts required
to be accounted for by Borrower to any Governmental Authority, tax rebates, refunds and
uncollectible accounts, proceeds from the sale of furniture, fixtures and equipment or any other
sale, transfer or exchange, proceeds from any financing, capital contributions, interest income
from any source other than the escrow accounts, Reserve Accounts or other accounts required
pursuant to the Loan Documents, Insurance Proceeds (other than business interruption or rent loss
insurance), Awards, unforfeited tenant security, utility and other similar deposits, any other
extraordinary, non-recurring revenues, income from tenants not paying rent, income from tenants in
the form of a lease termination payment, income from tenants in bankruptcy under Leases not assumed
in the bankruptcy proceeding, and any disbursements to Borrower from the Reserve Accounts.

“Other Charges” shall mean all ground rents, maintenance charges, impositions other
than Property Taxes, and any other charges, including, without limitation, vault charges and
license fees for the use of vaults, chutes and similar areas adjoining the Property, now or
hereafter levied or assessed or imposed against the Property or any part thereof, which may become
a Lien against the Property.

“Outparcel” shall have the meaning set forth in Section 7.5(a) hereof.

“Participations” shall have the meaning set forth in Section 13.1 hereof.

“Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56,
and the related regulations issued thereunder, including temporary regulations.

“Payment Date” shall mean the first (1st) day of each month beginning on
April, 2014.

“Permitted Debt” shall mean (i) trade and operational indebtedness incurred in the
ordinary course of business with trade creditors, provided such indebtedness is
(a) unsecured, (b) not evidenced by a note, (c) on commercially reasonable terms and conditions,
and (d) due not more than sixty (60) days past the date incurred and paid on or prior to such date,
and/or (ii) financing leases and purchase money indebtedness incurred in the ordinary course of
business relating to Personal Property on commercially reasonable terms and conditions;
provided, however, the aggregate amount of the indebtedness described in (i) and
(ii) shall not exceed at any time two percent (2%) of the outstanding principal amount of the Note.

“Permitted Encumbrances” shall mean collectively, (i) the Lien and security interests
created by the Loan Documents, (ii) all Liens, encumbrances and other matters expressly set forth
as exceptions in the Title Insurance Policy, (iii) Liens, if any, for Property Taxes imposed by any
Governmental Authority not yet due or delinquent, and (iv) such other title and survey exceptions
as Lender has approved or may approve in writing in Lender’s sole discretion.

“Permitted Investments” shall mean any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, including those issued by a
servicer of the Loan, the trustee under any securitization or any of their respective Affiliates,
payable on demand or having a maturity date not later than the Business Day immediately prior to
the date on which the funds used to acquire such investment are required to be used under this
Agreement and meeting one of the appropriate standards set forth below:

(i) direct obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency or instrumentality thereof,
provided that each such obligation is backed by the full faith and credit of the United
States;

(ii) demand or time deposits in, unsecured certificates of deposit of, money market deposit
accounts of, or bankers’ acceptances issued by, any depository institution or trust company
incorporated or organized under the laws of the United States of America or any State thereof
and subject to supervision and examination by federal or state banking authorities, so long as
the commercial paper or other short-term debt obligations of such depository institution or
trust company are rated in the highest short-term debt rating category of Fitch, Moody’s or S&P
or in the case of any such Rating Agency such lower rating as is the subject of a Rating Agency
Confirmation and, if the investment described in this clause has a term in excess of three
months, the long-term debt obligations of such depository institution or trust company have been
assigned a rating by each Rating Agency at least equal to “AAA” (or the equivalent) by each of
the Rating Agencies (or, if not rated by a particular Rating Agency, (a) an equivalent (or
higher) rating such as that listed above by at least two Rating Agencies has been assigned to
the long-term debt obligations of such depository institution or trust company or (b) such
Rating Agency has issued a Rating Agency Confirmation with respect to such investment as a
Permitted Investment);

(iii) repurchase agreements or obligations with respect to any security set forth in
clause (i) above where such security has a remaining maturity of one (1) year or less
and where such repurchase obligation has been entered into with a depository institution or
trust company (acting as principal) set forth in clause (ii) above and which meets the
minimum rating requirement for such entity set forth above;

(iv) commercial paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more than one year
after the date of issuance thereof), so long as the short term obligations of the issuer of such
commercial paper are rated in the highest short-term debt rating category of each Rating Agency
(or, in the case of any such Rating Agency, such lower rating as is the subject of a Rating
Agency Confirmation) and, if such commercial paper has a term in excess of three months, the
long-term debt obligations of the issuer of such commercial paper are rated “AAA” (or the
equivalent) by each of Fitch (or, if not rated by Fitch, otherwise acceptable to Fitch as
confirmed in a Rating Agency Confirmation), Moody’s (or, if not rated by Moody’s, otherwise
acceptable to Moody’s as confirmed in a Rating Agency Confirmation) and S&P (or, if not rated by
S&P, otherwise acceptable to S&P as confirmed in a Rating Agency Confirmation); provided
that the investments described in this clause must (a) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (b) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate index plus a fixed
spread (if any) and must move proportionately with that index, and (c) such investments must not
be subject to liquidation prior to their maturity;

(v) guaranteed reinvestment agreements maturing within 365 days or less issued by any bank,
insurance company or other corporation the short-term unsecured debt obligations of which are
rated in the highest short-term debt rating category of each of Fitch (or such lower rating for
which Rating Agency Confirmation is obtained from Fitch), Moody’s (or such lower rating for
which Rating Agency Confirmation is obtained from Moody’s) and S&P (or such lower rating for
which Rating Agency Confirmation is obtained from S&P) and the long-term unsecured debt
obligations of which are rated in the highest long-term category by Fitch (or such lower rating
for which Fitch has provided a Rating Agency Confirmation), Moody’s (or such lower rating for
which Moody’s has provided a Rating Agency Confirmation) and S&P (or such lower rating for which
Rating Agency Confirmation is obtained from S&P);

(vi) money market funds (including those managed or advised by the Certificate
Administrator or its affiliates) that maintain a constant asset value and that are rated by
Fitch or S&P and by Moody’s in its highest money market fund ratings category;

(vii) an obligation, security or investment that, but for the failure to satisfy one or
more of the minimum rating(s) set forth in the applicable clause, would be listed in above, and
is the subject of a Rating Agency Confirmation from each Rating Agency for which the minimum
rating(s) set forth in the applicable clause is not satisfied with respect to such obligation,
security or investment; and

(viii) any other security, obligation or investment which has been approved as a Permitted
Investment in writing by (a) Lender and (b) each Rating Agency, as evidenced by a Rating Agency
Confirmation;

provided (a) such investment is held for a temporary period pursuant to
Section 1.860G-2(g)(i) of the U.S. Treasury Regulations, (b) such investment is payable by the
obligor in U.S. dollars, and (c) that no such instrument shall be a Permitted Investment (1) if
such instrument evidences either (A) a right to receive only interest payments or only principal
payments with respect to the obligations underlying such instrument or (B) a right to receive both
principal and interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield to maturity of
greater than 120% of the yield to maturity at par of such underlying obligations, or (2) if it may
be redeemed at a price below the purchase price or (3) if it is not treated as a “permitted
investment” that is a “cash flow investment” under Section 860G(a)(5) of the Internal Revenue Code;
and provided, further, that any such instrument shall have a maturity date no later
than the date such instrument is required to be used to satisfy the obligations under this
Agreement, and, in any event, shall not have a maturity in excess of one (1) year; any such
instrument must have a predetermined fixed dollar of principal due at maturity that cannot vary or
change; interest on any variable rate instrument shall be tied to a single interest rate index plus
a single fixed spread (if any) and move proportionally with that index; and provided,
further, that no amount may be invested in investments treated as equity interests for
Federal income tax purposes. For the purpose of this definition, units of investment funds
(including money market funds) shall be deemed to mature daily.

“Person” shall mean any individual, corporation, partnership, joint venture, limited
liability company, estate, trust, unincorporated association, any federal, state, county or
municipal government or any bureau, department or agency thereof and any fiduciary acting in such
capacity on behalf of any of the foregoing.

“Personal Property” shall have the meaning set forth in the granting clause of the
Mortgage.

“PML” shall have the meaning set forth in Section 8.1(a)(v) hereof.

“Policies” shall have the meaning set forth in Section 8.1(b) hereof.

“Prescribed Laws” shall mean, collectively, (i) Patriot Act, (ii) Executive Order No.
13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, (iii)
the International Emergency Economic Power Act, 50 U.S.C. § 1701 et seq., and (iv) all other Legal
Requirements relating to money laundering or terrorism.

“Prohibited Transfer” shall have the meaning set forth in Section 7.2(a)
hereof.

“Property” shall mean the parcel of real property, the Improvements thereon and all
Personal Property owned by Borrower and encumbered by the Mortgage, together with all rights
pertaining to such property and Improvements, as more particularly described in the granting clause
of the Mortgage and referred to therein as the “Property”.

“Property Condition Report” shall mean a report prepared by a company satisfactory to
Lender regarding the physical condition of the Property, satisfactory in form and substance to
Lender in its sole discretion.

“Property Taxes” shall mean all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed against the Property or
part thereof.

“Purchase Agreement” shall mean that certain Agreement for Purchase of Real Estate
and Related Property dated as of December 19, 2013 by and between JRC/CSE Eagle Ridge JV, LLC, a
Delaware limited partnership, as seller, and Guarantor, as predecessor in interest to Borrower, as
purchaser, as amended by a First Amendment to Agreement for Purchase of Real Estate and Related
Property dated as of January 21, 2014 and a Second Amendment to Agreement for Purchase of Real
Estate and Related Property dated as of January 27, 2014 and assigned to Borrower pursuant to that
certain Assignment and Assumption dated as of January 31, 2014.

“Qualified Manager” shall mean Manager or a reputable and experienced professional
property management organization approved by Lender, which approval shall not have been
unreasonably withheld and which may, at Lender’s option, be conditioned upon Lender’s receipt of a
Rating Agency Confirmation.

“Rating Agencies” shall mean each of S&P, Moody’s, Fitch, Morningstar, Kroll and DBRS
or any other nationally-recognized statistical rating agency (and any successor to any of the
foregoing) designated by Lender, provided that each of the foregoing shall be deemed
included within the definition of “Rating Agencies” only if such rating agency is rating (or is
anticipated by Lender to rate) the Securities.

“Rating Agency Confirmation” shall mean, with respect to any matter, confirmation in
writing (which may be in electronic form) by each applicable Rating Agency that a proposed action,
failure to act or other event with respect to which such Rating Agency Confirmation is sought will
not in and of itself result in the downgrade, withdrawal or qualification of the then-current
rating assigned to any Securities (if then rated by such Rating Agency); provided that upon
receipt of a written acknowledgment or waiver (which may be in electronic form and whether or not
specifically identifying the matter or in general, press release form) from a Rating Agency
indicating its decision not to review or to waive review of the matter for which Rating Agency
Confirmation is sought, or following the failure of a Rating Agency to respond to the request for
which Rating Agency Confirmation is sought within the time frames and in the manner prescribed in
any pooling or trust and servicing agreement governing the administration of all or any portion of
the Loan, the requirement to obtain Rating Agency Confirmation for such matter at such time will be
considered not to apply (as if such requirement did not exist for such matter at such time) with
respect to such Rating Agency. In the event that, at any given time, no Securities are then
outstanding, then the term Rating Agency Confirmation shall be deemed instead to require the prior
written consent of Lender.

“REA” shall mean any construction, operation and reciprocal easement agreement or
similar agreement (including any separate agreement or other agreement between Borrower and one or
more other parties to an REA with respect to such REA) affecting the Property or portion thereof.

“Release Date” shall have the meaning set forth in Section 2.7(a)(ii) hereof.

“REMIC Opinion” shall mean, with respect to any proposed matter or transaction, an
opinion of counsel acceptable to Lender, in form and substance satisfactory to Lender and, if
required in accordance with the terms of the transaction documents relating to a Securitization,
the Rating Agencies, that the completion of such matter or transaction will not directly or
indirectly result in or cause the REMIC Trust or any of its assets to fail to qualify or maintain
its status as a REMIC Trust.

“REMIC Trust” shall mean any “real estate mortgage investment conduit” within the
meaning of Section 860D of the Internal Revenue Code that holds an interest in all or any portion
of the Loan.

“REMIC Prohibition Period” shall mean the two (2) year period commencing with the
“startup day” within the meaning of Section 860G(a)(9) of the Internal Revenue Code of any REMIC
Trust that holds the Note or any interest therein. In no event shall Lender have any obligation to
notify Borrower that a REMIC Prohibition Period is in effect with respect to the Loan, except that
Lender shall notify Borrower if any REMIC Prohibition Period is in effect with respect to the Loan
after receiving Borrower’s notice described in Section 2.7(a)(ii); provided,
however, that the failure of Lender to so notify Borrower shall not impose any liability
upon Lender or grant Borrower any right to defease the Loan during any such REMIC Prohibition
Period.

“Renewal Lease” shall have the meaning set forth in Section 5.13(a) hereof.

“Rent Roll” shall have the meaning set forth in Section 4.25 hereof.

“Rents” shall have the meaning set forth in the Mortgage.

“Replacement Reserve Account” shall have the meaning set forth in
Section 9.2(b) hereof.

“Replacement Reserve Funds” shall have the meaning set forth in Section 9.2(b)
hereof.

“Replacement Reserve Monthly Deposit” shall have the meaning set forth in
Section 9.2(b) hereof.

“Replacements” shall have the meaning set forth in Section 9.2(a) hereof.

“Required Approval Lease” shall have the meaning set forth in Section 5.13(a)
hereof.

“Required Repair Account” shall have the meaning set forth in Section 9.1(b)
hereof.

“Required Repair Funds” shall have the meaning set forth in Section 9.1(b)
hereof.

“Required Repairs” shall have the meaning set forth in Section 9.1(a) hereof.

“Required Work” shall have the meaning set forth in Section 9.6 hereof.

“Reserve Accounts” shall mean the Required Repair Account, the Tax and Insurance
Reserve Account, the Replacement Reserve Account, the Excess Cash Reserve Account, or any other
escrow account established by the Loan Documents.

“Reserve Funds” shall mean the Tax and Insurance Reserve Funds, the Replacement
Reserve Funds, the Required Repair Funds, the Excess Cash Reserve Funds, or any other escrow funds
established by the Loan Documents.

“Restoration” shall mean, following the occurrence of a Casualty or a Condemnation
which is of a type necessitating the repair of the Property, the completion of the repair and
restoration of the Property to a condition such that the Property shall be at least equal in value
to that immediately prior to such Casualty or Condemnation, and as near as possible to the
condition the Property was in immediately prior to such Casualty or Condemnation, with such
alterations as may be reasonably approved by Lender.

“Restoration Consultant” shall have the meaning set forth in
Section 8.4(b)(iii) hereof.

“Restoration Retainage” shall have the meaning set forth in Section 8.4(b)(iv)
hereof.

“Restoration Threshold” shall mean an amount equal to five percent (5%) of the
outstanding principal balance of the Loan.

“Restricted Party” shall have the meaning set forth in Section 7.1 hereof.

“Securities” shall have the meaning set forth in Section 13.1 hereof.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Securitization” shall have the meaning set forth in Section 13.1 hereof.

“Special Member” shall have the meaning set forth in Section 6.1(b)(ii)
hereof.

“SPE Component Entity” shall have the meaning set forth in Section 6.1(b)(i)
hereof.

“S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors in interest.

“Standard Form of Lease” shall have the meaning set forth in Section 5.13(a)
hereof.

“State” shall mean the state in which the Property or any part thereof is located.

“Successor Borrower” shall have the meaning set forth in Section 2.7(c)
hereof.

“Tax and Insurance Reserve Funds” shall have the meaning set forth in
Section 9.4 hereof.

“Tax and Insurance Reserve Account” shall have the meaning set forth in
Section 9.4 hereof.

“Tenant” shall mean any Person leasing, subleasing or otherwise occupying any portion
of the Property under a Lease or other occupancy agreement with Borrower.

“Title Insurance Policy” shall mean that certain ALTA (or its equivalent) mortgagee
title insurance policy issued with respect to the Property and insuring the lien of the Mortgage.

“Transfer” shall have the meaning set forth in Section 7.1 hereof.

“Transferee” shall have the meaning set forth in Section 7.4 hereof.

“Transferee Principal” shall have the meaning set forth in Section 7.4(d)
hereof.

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as
in effect in the State where the applicable Property is located.

“Underwritten Net Cash Flow” shall mean, as of the end of any calendar quarter and
calculated with respect to the preceding six (6) month period, the amount determined by Lender as
the excess of (a) the sum of: (i) in-place base rents and expense reimbursements (to the extent
such amounts are recurring in nature and properly included as Operating Income) received by
Borrower under bona fide Leases at the Property with Tenants paying rent as of the date of such
calculation and actual percentage rents received by Borrower under such Leases; plus (ii) actual
amounts received by Borrower from the ownership and operation of the Property to the extent such
amounts are recurring in nature and properly included as Operating Income during such period; over
(b) Operating Expenses, in each case adjusted to (i) include (A) an amount for vacancy loss equal
to the greater of (1) a vacancy rate of five percent (5%) at the Property and (2) the actual
vacancy rate at the Property; (B) an amount for management fees equal to the greater of (1) a three
percent (3%) of effective gross income and (2) the management fees actually paid under the
Management Agreement and (C) an amount for capital expenditures equal to $250.00 per apartment unit
at the Property per annum (regardless of whether deposits to a reserve account for such items is
required under this Agreement); and (ii) exclude (A) amounts representing non-recurring items and
(B) amounts received from any Affiliate of Borrower or Guarantor or from any Tenant in default
under its Lease or in bankruptcy (unless such Lease has been assumed in the bankruptcy proceeding).
Lender’s calculation of Underwritten Net Cash Flow shall be final absent manifest error.

Section 1.2. Principles of Construction

All references to sections and schedules are to sections and schedules in or to this Agreement
unless otherwise specified. All uses of the word “including” shall mean “including, without
limitation” unless the context shall indicate otherwise. Unless otherwise specified, the words
“hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless
otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.

ARTICLE 2

GENERAL TERMS

Section 2.1. The Loan

Subject to and upon the terms and conditions set forth herein, Lender hereby agrees to make
and Borrower hereby agrees to accept the Loan on the Closing Date.

Section 2.2. Disbursement to Borrower

Borrower may request and receive only one borrowing in respect of the Loan and any amount
borrowed and repaid in respect of the Loan may not be reborrowed.

Section 2.3. The Note, Mortgage and Loan Documents

The Loan shall be evidenced by the Note and this Agreement and secured by the Mortgage and the
other Loan Documents.

Section 2.4. Interest Rate

(a) General. Interest on the outstanding principal balance of the Loan shall accrue
from the Closing Date up to but excluding the Maturity Date at the Interest Rate. Except as
otherwise set forth herein or in the other Loan Documents, interest shall be paid in arrears.

(b) Default Rate. Upon the occurrence and during the continuance of an Event of
Default, interest on the outstanding principal balance of the Loan and, to the extent permitted by
law, overdue interest and other amounts due in respect of the Loan shall accrue at a rate per annum
equal to the Default Rate and all references in the Note, this Agreement or the other Loan
Documents to the “Interest Rate” shall be deemed to refer to the Default Rate. Interest at the
Default Rate shall be computed from the occurrence of the Event of Default until the earlier of
(i) the actual receipt and collection of the Debt (or that portion thereof that is then due) and
(ii) the cure of such Event of Default. To the extent permitted by applicable law, interest at the
Default Rate shall be added to the Debt, shall itself accrue interest at the same rate as the Loan
and shall be secured by the Mortgage. This paragraph shall not be construed as an agreement or
privilege to extend the date of the payment of the Debt, nor as a waiver of any other right or
remedy accruing to Lender by reason of the occurrence of any Event of Default; the acceptance of
any payment from Borrower shall not be deemed to cure or constitute a waiver of any Event of
Default; and Lender retains its rights under the Note, this Agreement and the other Loan Documents
to accelerate and to continue to demand payment of the Debt upon the occurrence of and during the
continuance of any Event of Default, despite any payment by Borrower to Lender.

(c) Interest Calculation. Interest shall be computed based on the daily rate produced
assuming a three hundred sixty (360) day year, multiplied by the actual number of days elapsed
during each Interest Accrual Period. Borrower understands and acknowledges that such interest
accrual method results in more interest accruing on the Loan than if either a thirty (30) day month
and a three hundred sixty (360) day year or the actual number of days and a three hundred sixty
five (365) day year were used to compute the accrual of interest on the Loan.

(d) Usury Savings. This Agreement and the Note are subject to the express condition
that at no time shall Borrower be obligated or required to pay interest on the principal balance of
the Loan at a rate which could subject Lender to either civil or criminal liability as a result of
being in excess of the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by
the Note and as provided for herein or in the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent jurisdiction to govern the interest rate
provisions of the Loan (such rate, the “Maximum Legal Rate”). If, by the terms of the Note, this
Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due on the Loan at a rate in excess of the Maximum Legal Rate,
the Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately
reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate
shall be deemed to have been payments in reduction of principal and not on account of the interest
due hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Loan until payment in full
so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal
Rate of interest from time to time in effect and applicable to the Loan for so long as the Loan is
outstanding.

Section 2.5. Loan Payments

(a) Payment Before Maturity. On the Closing Date, Borrower shall pay to Lender
interest for the Interim Interest Accrual Period and on each Payment Date through and including the
Maturity Date, Borrower shall pay to Lender the Monthly Payment Amount.

(b) Payment on Maturity. Borrower shall pay to Lender on the Maturity Date the
outstanding principal balance of the Loan, all accrued and unpaid interest and all other amounts
due hereunder and under the Note, the Mortgage and the other Loan Documents.

(c) Application of Payments. Prior to the occurrence of an Event of Default, all
monthly payments made as scheduled pursuant to this Agreement and the Note shall be applied first
to the payment of interest computed at the Interest Rate, and the balance toward the reduction of
the principal amount of the Debt. All voluntary and involuntary prepayments on the Debt shall be
applied, to the extent thereof, to accrued but unpaid interest on the amount prepaid, to the
outstanding principal amount, and any other sums due and unpaid to the Lender in connection with
the Loan, in such manner and order as Lender may elect in its sole and absolute discretion,
including, but not limited to, application to principal installments in inverse order of maturity.
Following the occurrence of an Event of Default, any payment made on the Debt shall be applied to
accrued but unpaid interest, late charges, accrued fees, the unpaid principal amount of the Debt,
and any other sums due and unpaid to Lender in connection with the Loan, in such manner and order
as Lender may elect in its sole and absolute discretion.

(d) Method and Place of Payment.

(i) Each payment by Borrower hereunder shall be made to Lender at its offices or at such
other place as Lender may designate from time to time in writing.

(ii) All payments and prepayments under this Agreement and the Note shall be made to Lender
not later than 2:00 P.M. Charlotte, North Carolina time.

(iii) Whenever any payment hereunder shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the first Business Day preceding such Payment Date.

(iv) All payments made by Borrower hereunder or under the other Loan Documents shall be
made irrespective of, and without any deduction for, any setoff, defense or counterclaims.

(v) Remittances in payment of any part of the indebtedness other than in the required
amount in immediately available U.S. funds shall not, regardless of any receipt or credit issued
therefor, constitute payment until the required amount is actually received by the holder hereof
in immediately available U.S. funds and shall be made and accepted subject to the condition that
any check or draft may be handled for collection in accordance with the practices of the
collecting bank or banks.

(e) Late Payment Charge. If any principal, interest or other payment due under the
Loan Documents (other than the outstanding principal amount of the Loan due on the Maturity Date)
is not paid by Borrower on or prior to the fifth (5th) day after the date the same is
due (after taking into account the payment date convention set forth in Section 2.5(d)(iii)
hereof) (or such greater period, if any, required by applicable Legal Requirements), Borrower shall
pay to Lender upon demand an amount equal to the lesser of four percent (4%) of such unpaid sum or
the maximum amount permitted by applicable Legal Requirements in order to defray the expense
incurred by Lender in handling and processing such delinquent payment and to compensate Lender for
the loss of the use of such delinquent payment. Any such amount shall be secured by the Mortgage
and the other Loan Documents to the extent permitted by applicable law.

Section 2.6. Loan Prepayments

(a) Voluntary. Except as otherwise expressly permitted under this Agreement, no
voluntary prepayments, whether in whole or in part, of the Loan or any other amount at any time due
and owing under this Agreement can be made by Borrower or any other Person without the express
prior written consent of Lender and Lender shall have no obligation to accept any prepayment except
when made in accordance with the terms hereof. Following the expiration of the Lockout Period,
Borrower may, at its option and upon giving Lender not less than thirty (30) (and not more than
ninety (90)) days prior written notice, prepay the Loan in whole (but not in part) on any date
without payment of any penalty (such notice being revocable by Borrower by notice to Lender not
later than two (2) Business Days prior to the scheduled prepayment date provided Borrower pays all
of Lender’s reasonable costs and expenses incurred in connection with the notice of prepayment and
revocation). Any prepayment received by Lender on a day other than a Payment Date shall include
the amount of interest which would have accrued thereon if such prepayment was made on the next
Payment Date.

(b) Mandatory. Borrower shall prepay the Loan in an amount equal to all Net Proceeds
which, pursuant to the provisions of Section 8.4(c) hereof, Lender elects to retain and
apply toward the reduction of the principal amount of the Debt. Any such prepayment shall be held
by Lender and applied on the next Payment Date. Borrower shall not be required to pay any
prepayment premium in connection with any prepayment made pursuant to this Section 2.6(b).

(c) After Event of Default. If, after the occurrence and during the continuance of an
Event of Default, but prior to the expiration of the Lockout Period, Lender shall accelerate the
Debt and Borrower thereafter tenders payment of all or any part of the Debt, or if all or any
portion of the Debt is recovered by Lender after such Event of Default, such payment shall be
deemed an attempt to circumvent the prohibition against prepayment set forth in this Agreement and
Borrower shall pay to Lender, in addition to the Debt, (i) the amount of interest which would have
accrued thereon through the end of the month in which payment is tendered if such payment is not
made on a Payment Date, and (ii) an amount equal to five percent (5%) of the portion of the
principal balance of the Debt, or, after a Securitization, the amount which, when added to the
principal balance of the Debt, will be sufficient to purchase Defeasance Collateral (as adjusted
based on the portion of the Loan being prepaid), whichever is greater.

Section 2.7. Defeasance 

(a) Notwithstanding any provisions of this Article 2 to the contrary, at any time
following the earlier of (1) the expiration of the REMIC Prohibition Period, or (2) three (3) years
from the first Payment Date, Borrower may cause the release of the Property from the Lien of the
Mortgage and the other Loan Documents upon the satisfaction of the following conditions:

(i) no Event of Default shall have occurred and be continuing;

(ii) not less than thirty (30) (but not more than ninety (90)) days prior written notice
shall be given to Lender specifying a date on which the Defeasance Collateral is to be delivered
(the “Release Date”); provided, however, that Borrower shall have the right to
cancel or extend (by no more than thirty (30) days) such notice by providing Lender with notice
of cancellation or extension not less than ten (10) days prior to the scheduled Release Date,
provided that Borrower shall pay all of Lender’s costs and expenses incurred as a result
of such cancellation or extension;

(iii) all sums due under this Agreement, the Note and under the other Loan Documents up to
the Release Date, including, without limitation, all fees, costs and expenses incurred by Lender
and its agents in connection with such release (including, without limitation, reasonable legal
fees and expenses for the review and preparation of the Defeasance Security Agreement and of the
other materials described in Section 2.7(a)(iv) below and any related documentation, and
any servicing fees, Rating Agency fees or other costs related to such release), shall be paid in
full on or prior to the Release Date;

(iv) Borrower shall deliver to Lender on or prior to the Release Date:

(A) a pledge and security agreement, in form and substance which would be
satisfactory to a prudent lender, creating a first priority security interest in
favor of Lender in the Defeasance Collateral (the “Defeasance Security Agreement”);

(B) direct non-callable obligations of the United States of America or, to the
extent satisfying Rating Agency criteria, other obligations which are “government
securities” within the meaning of Section 2(a)(16) of the Investment Company Act of
1940 that provide for payments on a Business Day prior and as close as possible to
each successive Payment Date after the Release Date through the end of the Lockout
Period, with each such payment being equal to or greater than the amount of the
corresponding Monthly Payment Amount required to be paid under this Agreement and
the Note and all amounts necessary to pay the outstanding principal balance and all
other amounts due and payable on the day the Lockout Period ends (the “Defeasance
Collateral”), duly endorsed by the holder thereof as directed by Lender or
accompanied by a written instrument of transfer in form and substance which would be
satisfactory to a prudent lender (including, without limitation, such certificates,
documents and instruments as may be required by the depository institution holding
such securities or the issuer thereof, as the case may be, to effectuate book entry
transfers and pledges through the book entry facilities of such institution) in
order to perfect upon the delivery of the Defeasance Security Agreement the first
priority security interest therein in favor of Lender in conformity with all
applicable state and federal laws governing granting of such security interests;

(C) a certificate of Borrower certifying that all of the requirements set forth
in this Section 2.7(a) have been satisfied;

(D) one or more opinions of counsel for Borrower in form and substance and
delivered by counsel which would be reasonably satisfactory to a prudent lender
stating, among other things, that (1) Lender has a perfected first priority security
interest in the Defeasance Collateral and that the Defeasance Security Agreement is
enforceable against Borrower in accordance with its terms, and (2) the release of
the lien of the Mortgage and the pledge of Defeasance Collateral will not directly
or indirectly result in or cause any REMIC Trust that holds the Note to fail to
maintain its status as a REMIC Trust;

(E) a certificate in form and scope which would be satisfactory to a prudent
lender from an independent certified public accountant acceptable to Lender
certifying that the Defeasance Collateral will generate amounts sufficient to make
all payments of principal and interest due under this Agreement and the Note
(including the scheduled outstanding principal balance of the Loan on the last day
of the Lockout Period);

(F) such other certificates, opinions, documents and instruments as a prudent
lender would reasonably require; and

(G) in the event the Loan is held by a REMIC Trust and if required by Lender,
Lender has obtained a Rating Agency Confirmation.

(b) Upon compliance with the requirements of Section 2.7(a), the Property shall be
released from the Lien of the Mortgage and the other Loan Documents, and the Defeasance Collateral
shall constitute collateral which shall secure the Note and all other obligations under the Loan
Documents. Lender shall, at Borrower’s expense, execute and deliver any agreements reasonably
requested by Borrower to release the lien of the Mortgage and the other Loan Documents from the
Property.

(c) As a condition to the release of the Property in accordance with Section 2.7,
Borrower shall assign all its obligations and rights under this Agreement and the Note, together
with the pledged Defeasance Collateral, to a successor entity designated by Borrower and approved
by Lender in its reasonable discretion (“Successor Borrower”). Lender’s right to approve the
Successor Borrower shall, at the sole option of Bank of America, N.A., be exercised by Bank of
America, N.A. and shall be retained by Bank of America, N.A. (or any successor or assign pursuant
to an assignment of such retained rights separate and apart from the transfer or Securitization of
all or any portion of the Loan), notwithstanding any transfer or Securitization of all or any
portion of the Loan. Successor Borrower shall execute an assignment and assumption agreement in
form and substance which would be reasonably satisfactory to a prudent lender pursuant to which it
shall assume Borrower’s obligations under this Agreement, the Note and the Defeasance Security
Agreement. As conditions to such assignment and assumption, Borrower shall (i) deliver to Lender
one or more opinions of counsel in form and substance and delivered by counsel which would be
reasonably satisfactory to a prudent lender stating, among other things, that such assignment and
assumption agreement is enforceable against Borrower and the Successor Borrower in accordance with
its terms and that this Agreement, the Note, the Defeasance Security Agreement and the other Loan
Documents, as so assigned and assumed, are enforceable against the Successor Borrower in accordance
with their respective terms, and opining to such other matters relating to Successor Borrower and
its organizational structure as Lender may reasonably require, and (ii) pay all fees, costs and
expenses incurred by Lender or its agents and Successor Borrower in connection with such assignment
and assumption (including, without limitation, reasonable legal fees and expenses and for the
review of the proposed transferee and the preparation of the assignment and assumption agreement
and related certificates, documents and instruments and any fees payable to any Rating Agencies and
their counsel in connection with the issuance of the confirmation referred to above, and excluding
any assumption fee which may otherwise be due pursuant to the other Loan Documents). Upon such
assignment and assumption, Borrower shall be relieved of its obligations under this Agreement and
the Note, the other Loan Documents and the Defeasance Security Agreement arising from and after the
Release Date, except as expressly set forth in the assignment and assumption agreement.

(d) Following the consummation of the defeasance contemplated by this Section 2.7,
Lender shall promptly return all Reserve Funds to Borrower by wire transfer.

Section 2.8. Loan Assignment

At the request of Borrower in connection with any full prepayment or repayment of the Loan in
accordance with the terms of this Agreement and the other Loan Documents, Lender shall: (i) assign
the Mortgage to any new lender in connection with a refinance of the Loan in accordance with the
terms of an assignment document prepared by counsel to Borrower and approved by Lender, which
assignment documents shall be without representation or warranty by, or recourse to, Lender,
provided that Lender shall represent that such assignment document has been duly authorized,
executed and delivered and that Lender has not assigned or encumbered the Mortgage, (ii) deliver to
or as directed by Borrower the original executed Note and all other original executed notes (or
copies thereof if no such original executed note was delivered to Lender in connection with the
closing of the Loan) which may have been consolidated, amended and/or restated in connection with
the closing of the Loan or, with respect to any note the original of which had been delivered and
endorsed to Lender and such original has been lost, destroyed or mutilated, a lost note affidavit
for the benefit of the assignee lender and the title insurance company insuring the Mortgage, as
assigned, in form sufficient to permit such title insurance company to insure the lien of the
Mortgage as assigned to and held by the assignee without exception for any matter relating to the
lost, destroyed or mutilated note, (iii) execute and deliver an allonge with respect to the Note
and, to the extent endorsed to Lender, any other note(s) as described in the preceding clause
(ii) above without recourse, covenant or warranty of any nature, express or implied (except as
to the outstanding principal balance of the Loan and that Lender owns the Note free of any liens
and encumbrances and has the authority to execute and deliver the allonge), (iv) deliver the
original executed Mortgage or a certified copy of record, and (v) execute and deliver such other
instruments of conveyance, assignment, termination, severance and release (including appropriate
UCC-3 termination statements) in recordable form as may reasonably be requested by Borrower to
evidence such assignment and/or severance. All reasonable out-of-pocket costs and expenses
incurred by Lender, including, without limitation, reasonable attorney’s fees, in connection with
the foregoing shall be paid by Borrower.

ARTICLE 3

CONDITIONS PRECEDENT

Section 3.1. Conditions Precedent

The obligation of Lender to make the Loan hereunder is subject to the fulfillment by Borrower
or waiver by Lender of all of the conditions precedent to closing set forth in the application or
term sheet for the Loan delivered by Borrower to Lender and the commitment or commitment rider, if
any, to the application for the Loan issued by Lender.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

	 	 	 
	Borrower represents and warrants to Lender as of the Closing Date that:

	Section 4.1.

	 	Organization
	
 
	 	 

Borrower (a) has been duly organized and is validly existing and in good standing with
requisite power and authority to own its properties and to transact the businesses in which it is
now engaged, (b) is duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified in connection with its properties, businesses and
operations, (c) possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and to transact the businesses in which it
is now engaged, and the sole business of Borrower is the ownership, management and operation of the
Property, and (d) has full power, authority and legal right to mortgage, grant, bargain, sell,
pledge, assign, warrant, transfer and convey the Property pursuant to the terms of the Loan
Documents, and has full power, authority and legal right to keep and observe all of the terms of
the Loan Documents to which it is a party. Borrower represents and warrants that the chart
attached hereto as Exhibit A sets forth an accurate listing of the direct and indirect
owners of the equity interests in Borrower, each SPE Component Entity (if any) and each Guarantor
(when not an individual).

Section 4.2. Status of Borrower

Borrower’s exact legal name is correctly set forth on the first page of this Agreement, on the
Mortgage and on any UCC-1 Financing Statements filed in connection with the Loan. Borrower is an
organization of the type specified on the first page of this Agreement. Borrower is incorporated
in or organized under the laws of the state of Delaware. Borrower’s principal place of business and
chief executive office, and the place where Borrower keeps its books and records, including
recorded data of any kind or nature, regardless of the medium of recording, including software,
writings, plans, specifications and schematics, has been for the preceding four months (or, if
less, the entire period of the existence of Borrower) the address of Borrower set forth on the
first page of this Agreement. Borrower’s organizational identification number, if any, assigned by
the state of incorporation or organization is 5459838.

Section 4.3. Validity of Documents

Borrower has taken all necessary action to authorize the execution, delivery and performance
of this Agreement and the other Loan Documents to which it is a party. This Agreement and such
other Loan Documents have been duly executed and delivered by or on behalf of Borrower and
constitute the legal, valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, subject only to applicable bankruptcy, insolvency and
similar laws affecting rights of creditors generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at
law).

Section 4.4. No Conflicts

The execution, delivery and performance of this Agreement and the other Loan Documents by
Borrower will not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of
Borrower pursuant to the terms of any agreement or instrument to which Borrower is a party or by
which any of Borrower’s property or assets is subject, nor will such action result in any violation
of the provisions of any statute or any order, rule or regulation of any Governmental Authority
having jurisdiction over Borrower or any of Borrower’s properties or assets, in each case which
would reasonably be expected to have or does have a Material Adverse Effect, and any consent,
approval, authorization, order, registration or qualification of or with any Governmental Authority
required for the execution, delivery and performance by Borrower of this Agreement or any of the
other Loan Documents has been obtained and is in full force and effect.

Section 4.5. Litigation

There are no actions, suits or proceedings at law or in equity by or before any Governmental
Authority or other agency now pending or, to Borrower’s knowledge, threatened against or affecting
Borrower, any Guarantor, Manager or the Property, which actions, suits or proceedings, if
determined against Borrower, any Guarantor, Manager or the Property, in each case which would
reasonably be expected to have or does have a Material Adverse Effect (after taking into account
all applicable insurance coverage).

Section 4.6. Agreements

Borrower is not a party to any agreement or instrument or subject to any restriction which
would reasonably be expected to have or does have a Material Adverse Effect. Borrower is not in
default in any material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument to which it is a
party or by which Borrower or the Property is bound. Borrower has no material financial obligation
under any agreement or instrument to which Borrower is a party or by which Borrower or the Property
is otherwise bound, other than (a) obligations incurred in connection with any Permitted Debt,
(b) obligations under the Loan Documents and/or (c) Permitted Encumbrances.

Section 4.7. Solvency

Borrower has (a) not entered into the transaction or executed the Note, this Agreement or any
other Loan Documents with the actual intent to hinder, delay or defraud any creditor and
(b) received reasonably equivalent value in exchange for their obligations under such Loan
Documents. Giving effect to the Loan, the fair saleable value of the assets of Borrower exceeds
and will, immediately following the making of the Loan, exceed the total liabilities of Borrower,
including, without limitation, subordinated, unliquidated, disputed and contingent liabilities. No
petition in bankruptcy has been filed against Borrower, any Guarantor, any SPE Component Entity (if
any) or Affiliated Manager in the last ten (10) years, and neither Borrower nor any Guarantor, any
SPE Component Entity (if any) or Affiliated Manager in the last ten (10) years has made an
assignment for the benefit of creditors or taken advantage of any Creditors Rights Laws. Neither
Borrower nor any Guarantor, any SPE Component Entity (if any) or Affiliated Manager is
contemplating either the filing of a petition by it under any Creditors Rights Laws or the
liquidation of all or a major portion of Borrower’s assets or property, and Borrower has no
knowledge of any Person contemplating the filing of any such petition against Borrower or any
Guarantor, any SPE Component Entity (if any) or Affiliated Manager.

Section 4.8. Full and Accurate Disclosure

No statement of fact made by or on behalf of Borrower in this Agreement or in any of the other
Loan Documents or in any other document or certificate delivered by or on behalf of Borrower in
connection with this Loan contains any untrue statement of a material fact or omits to state any
material fact, to Borrower’s knowledge, necessary to make statements contained herein or therein
not materially misleading. There is no material fact presently known to Borrower which has not
been disclosed which would reasonably be expected to have or does have a Material Adverse Effect.

Section 4.9. No Plan Assets

Borrower is not an employee benefit plan, as defined in Section 3(3) of ERISA, subject to
Title I of ERISA and none of the assets of Borrower constitutes or will constitute “plan assets” of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. Borrower is not a
governmental plan within the meaning of Section 3(32) of ERISA. Transactions by or with Borrower
are not subject to state statutes regulating investment of, and fiduciary obligations with respect
to, governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code currently in effect, which prohibit or otherwise restrict the transactions
contemplated by this Agreement. With respect to any multiemployer plan to which Borrower or any
entity that is under common control with Borrower within the meaning of ERISA Section 4001(a)(14)
is or has been obligated to contribute, neither Borrower nor any such entity has incurred any
material liability under ERISA Section 515 of ERISA or Title IV of ERISA which is or remains
unsatisfied.

Section 4.10. Not a Foreign Person

Borrower is not a foreign corporation, foreign partnership, foreign trust, foreign estate or
nonresident alien or a disregarded entity owned by any of them (as those terms are defined in the
Internal Revenue Code).

Section 4.11. Enforceability

The Loan Documents are not subject to any right of rescission, set-off, counterclaim or
defense by Borrower, including the defense of usury, nor, to Borrower’s knowledge, would the
operation of any of the terms of the Loan Documents, or the exercise of any right thereunder,
render the Loan Documents unenforceable, and Borrower has not asserted any right of rescission,
set-off, counterclaim or defense with respect thereto. No Default or Event of Default exists under
or with respect to any Loan Document.

Section 4.12. Business Purposes

The Loan is solely for the business purpose of Borrower, and is not for personal, family,
household, or agricultural purposes.

Section 4.13. Compliance

Borrower and, to Borrower’s knowledge, the Property, and the use and operation thereof, comply
in all material respects with all Legal Requirements, including, without limitation, building and
zoning ordinances and codes and the Americans with Disabilities Act. Borrower is not in default or
violation of any order, writ, injunction, decree or demand of any Governmental Authority which
would reasonably be expected to have a Material Adverse Effect, and Borrower has received no
written notice of any such default or violation. There has not been committed by Borrower or, to
Borrower’s knowledge, any other Person in occupancy of or involved with the operation or use of the
Property any act or omission affording any Governmental Authority the right of forfeiture as
against the Property or any part thereof or any monies paid in performance of Borrower’s
obligations under any of the Loan Documents.

Section 4.14. Financial Information

All financial data, including, without limitation, the balance sheets, statements of cash
flow, statements of income and operating expense and rent rolls, that have been delivered to Lender
in respect of Borrower, any Guarantor and/or, to Borrower’s knowledge, the Property (a) are true,
complete and correct in all material respects, (b) accurately represent the financial condition of
Borrower, Guarantor or the Property, as applicable, as of the date of such reports, and (c) to the
extent prepared or audited by an independent certified public accounting firm, have been prepared
in accordance with GAAP throughout the periods covered, except as disclosed therein. Since the
date of such financial statements, there has been no change in the financial condition, operations
or business of Borrower or Guarantor from that set forth in said financial statements which would
reasonably be expected to have or has had a Material Adverse Effect.

Section 4.15. Condemnation

No Condemnation or other proceeding has been commenced or, to Borrower’s knowledge, is
threatened or contemplated with respect to all or any portion of the Property or for the relocation
of roadways providing access to the Property.

Section 4.16. Utilities and Public Access; Parking

The Property is located on or adjacent to a public road and has access to such road directly,
or has access via an irrevocable perpetual easement or right of way permitting ingress and egress
to and from a public road. To Borrower’s knowledge, the Property is served by water, sewer,
sanitary sewer and storm drain facilities adequate to service the Property for full utilization of
the Property for its intended uses. To Borrower’s knowledge, all public utilities necessary to the
full use and enjoyment of the Property as currently used and enjoyed are located either in the
public right-of-way abutting the Property (which are connected so as to serve the Property without
passing over other property) or in recorded easements serving the Property and such easements are
set forth in and insured by the Title Insurance Policy. All roads necessary for the use of the
Property for its current purposes have been completed and dedicated to public use and accepted by
all Governmental Authorities. The Property has, or is served by, parking to the extent required to
comply with all Legal Requirements.

Section 4.17. Separate Lots

The Property is assessed for real estate tax purposes as one or more wholly independent tax
lot or lots, separate from any adjoining land or improvements not constituting a part of such lot
or lots, and no other land or improvements is assessed and taxed together with the Property or any
portion thereof.

Section 4.18. Assessments

To Borrower’s knowledge, there are no pending or proposed special or other assessments for
public improvements or otherwise affecting the Property, nor are there any contemplated
improvements to the Property that may result in such special or other assessments.

Section 4.19. Insurance

Borrower has obtained and has delivered to Lender certified copies of all Policies or, to the
extent such Policies are not available as of the Closing Date, certificates of insurance with
respect to all such Policies reflecting the insurance coverages, amounts and other requirements set
forth in this Agreement. No claims related to or involving Borrower or the Property have been made
under any of the Policies, and to Borrower’s knowledge, no Person, including Borrower, has done, by
act or omission, anything which would impair the coverage of any of the Policies.

Section 4.20. Use of Property

The Property is used exclusively as an apartment complex and other appurtenant and related
uses.

Section 4.21. Certificate of Occupancy; Licenses

To Borrower’s knowledge, all certifications, permits, licenses and approvals, including,
without limitation, certificates of completion or occupancy and any applicable liquor license
required for the legal use, occupancy and operation of the Property for the purpose intended
herein, have been obtained and are valid and in full force and effect. Borrower shall keep and
maintain (or cause to be kept and maintained) all licenses necessary for the operation of the
Property for the purpose intended herein. To Borrower’s knowledge, the use being made of the
Property is in conformity with the final certificate of occupancy (or compliance, if applicable)
and any other permits or licenses issued for the Property.

Section 4.22. Flood Zone

None of the Improvements on the Property are located in an area identified by the Federal
Emergency Management Agency as an area having special flood hazards, or, if any portion of the
Improvements is located within such area, Borrower has obtained the insurance prescribed in
Section 8.1(a)(iv).

Section 4.23. Physical Condition

Except as set forth in the Property Condition Report, to Borrower’s knowledge after due
inquiry, the Property, including, without limitation, all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good condition, order and
repair in all material respects (ordinary wear and tear excepted). Except as set forth in the
Property Condition Report, to Borrower’s knowledge after due inquiry, there exists no structural or
other material defects or damages in the Property, as a result of a Casualty or otherwise, and
whether latent or otherwise. Borrower has not received notice from any insurance company or
bonding company of any defects or inadequacies in the Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of extraordinary premiums or
charges thereon or of any termination or threatened termination of any policy of insurance or bond.

Section 4.24. Boundaries

To Borrower’s knowledge and in reliance on, and except as otherwise specifically disclosed in,
the survey certified to Lender in connection with the Loan, (a) none of the Improvements which were
included in determining the appraised value of the Property lie outside the boundaries and building
restriction lines of the Property to any material extent, and (b) no improvements on adjoining
properties encroach upon the Property and no easements or other encumbrances upon the Property
encroach upon any of the Improvements so as to have a Material Adverse Effect.

Section 4.25. Leases and Rent Roll

Except as set forth in the rent roll for the Property which has been certified by Borrower as
true, correct and complete and delivered to Lender in connection with the closing of the Loan (the
“Rent Roll”) or as set forth on Schedule 4.25 attached hereto: (a) each Lease is in full
force and effect; (b) [intentionally omitted]; (c) the Tenants under the Leases have commenced the
payment of rent under the Leases, there are no offsets, claims or defenses to the enforcement
thereof, and Borrower has no monetary obligations to any Tenant under any Lease; (d) all Rents due
and payable under the Leases have been paid and no portion thereof has been paid for any period
more than thirty (30) days in advance; (e) the rent payable under each Lease is the amount of fixed
rent set forth in the Rent Roll, and Borrower has not received notice of any claim or basis for a
claim by the Tenant thereunder for an offset or adjustment to the rent; (f) no Tenant, to
Borrower’s knowledge, has made any written claim of a material default against the landlord under
any Lease which remains outstanding nor has Borrower or Manager received, by telephonic, in-person,
e-mail or other communication, any notice of a material default under any Lease; (g) to Borrower’s
knowledge there is no present material default by the Tenant under any Lease; (h) all security
deposits under the Leases have been collected by Borrower; (i) Borrower is the sole owner of the
entire landlord’s interest in each Lease; (j) each Lease is the valid, binding and enforceable
obligation of Borrower and there are no agreements with the Tenants under the Leases other than as
expressly set forth in the Leases; (k) to Borrower’s knowledge after due inquiry, no Person has any
possessory interest in, or right to occupy, the Property or any portion thereof except under the
terms of a Lease; (l) none of the Leases contains any option or offer to purchase or right of first
refusal or right of first offer to purchase or lease the Property or any part thereof; (m) neither
the Leases nor the Rents have been assigned, pledged or hypothecated except to Lender, and no other
Person has any interest therein except the Tenants thereunder; and (n) to Borrower’s knowledge no
conditions exist or events have occurred which now give any Tenant the right to terminate its Lease
or pay reduced Rent pursuant to the provisions of its Lease and/or the REA. Borrower represents
that it has heretofore delivered to Lender true, correct and complete copies of all Leases and any
and all amendments or modifications thereof.

Section 4.26. Filing and Recording Taxes

All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid
by any Person under applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or enforcement of any of the
Loan Documents, including, without limitation, the Mortgage, have been paid or will be paid by
Borrower.

Section 4.27. Management Agreement

The Management Agreement is in full force and effect and there is no default thereunder by any
party thereto and no event has occurred that, with the passage of time and/or the giving of notice
would constitute a default thereunder. No management fees under the Management Agreement are
accrued and unpaid.

Section 4.28. Illegal Activity

No portion of the Property has been or will be purchased, improved, equipped or fixtured with
proceeds of any illegal activity, and no part of the proceeds of the Loan will be used in
connection with any illegal activity.

Section 4.29. Construction Expenses

All costs and expenses of any and all labor, materials, supplies and equipment incurred by
Borrower and used in the construction maintenance or repair of the Improvements have been paid in
full. To Borrower’s knowledge after due inquiry, there are no claims for payment for work, labor
or materials affecting the Property which are or may become a lien prior to, or of equal priority
with, the Liens created by the Loan Documents.

Section 4.30. Personal Property

Borrower has paid in full for, and is the owner of, all Personal Property (other than Tenants’
property) used in connection with the operation of the Property, free and clear of any and all
security interests, liens or encumbrances, except for Permitted Encumbrances and the Lien and
security interest created by the Loan Documents.

Section 4.31. Taxes

Borrower has filed all federal, state, county, municipal, and city income, personal property
and other tax returns required to have been filed by it and has paid all taxes and related
liabilities which have become due pursuant to such returns or pursuant to any assessments received
by it. Borrower does not know of any basis for any additional assessment in respect of any such
taxes and related liabilities for prior years.

Section 4.32. Title

Borrower has good, marketable and insurable fee simple title to the real property comprising
part of the Property and good title to the balance of the Property, free and clear of all Liens
whatsoever except the Permitted Encumbrances. None of the Permitted Encumbrances, individually or
in the aggregate, would reasonably be expected to have nor does have a Material Adverse Effect.
The Mortgage, when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection therewith, will create
(a) a valid, perfected first priority lien on the Property, subject only to Permitted Encumbrances
and (b) perfected security interests in and to, and perfected collateral assignments of, all
personalty owned by the Borrower (including the Leases), all in accordance with the terms hereof,
in each case subject only to Permitted Encumbrances. To Borrower’s knowledge, there are no claims
for payment for work, labor or materials affecting the Property which are or may become a Lien
prior to, or of equal priority with, the Liens created by the Loan Documents.

Section 4.33. Federal Reserve Regulations

No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring
any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such Regulation U or any
other Regulations of such Board of Governors, or for any purposes prohibited by Legal Requirements
or prohibited by the terms and conditions of this Agreement or the other Loan Documents.

Section 4.34. Investment Company Act

Borrower is not (a) an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, or (b) subject to
any other federal or state law or regulation which purports to restrict or regulate its ability to
borrow money.

Section 4.35. Tax and Judgment Liens

There are no tax or judgment Liens encumbering any property owned by Borrower, Guarantor or
IRT GP or any wholly owned subsidiary of Guarantor or IRT GP.

Section 4.36. No Change in Facts or Circumstances; Disclosure

All information submitted by Borrower or its Affiliates to Lender in all financial statements,
rent rolls, reports, certificates and other documents submitted in connection with the Loan or in
satisfaction of the terms thereof and all statements of fact made by Borrower in this Agreement or
in any other Loan Document, are accurate, complete and correct in all material respects. There has
been no material adverse change in any condition, fact, circumstance or event that would make any
such information inaccurate, incomplete or otherwise misleading in any material respect or that
otherwise would reasonably expected to have or does have a Material Adverse Effect. Borrower has
disclosed to Lender all material facts of which Borrower has knowledge and has not failed to
disclose any material fact of which Borrower has knowledge that could cause any representation or
warranty made herein to be materially misleading.

Section 4.37. Intellectual Property

All trademarks, trade names and service marks necessary to the business of Borrower as
presently conducted or as Borrower contemplates conducting its business are in good standing and,
to the extent of Borrower’s actual knowledge, uncontested. Borrower has not infringed, is not
infringing, and has not received notice of infringement with respect to asserted trademarks, trade
names and service marks of others. To Borrower’s knowledge, there is no infringement by others of
trademarks, trade names and service marks of Borrower.

Section 4.38. Compliance with Prescribed Laws

None of Borrower or any Person who Controls Borrower currently is identified by the Office of
Foreign Assets Control, Department of the Treasury (“OFAC”) or otherwise qualifies as a Embargoed
Person, and Borrower has implemented procedures to ensure that no Person who now or hereafter owns
a direct or indirect equity interest in Borrower is an Embargoed Person or is Controlled by an
Embargoed Person. Borrower is not in violation of any Prescribed Laws.

Section 4.39. Brokers and Financial Advisors

Except as set forth on Schedule 4.39, Borrower has dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with the transactions
contemplated by this Agreement.

Section 4.40. Purchase Agreement

The Purchase Agreement is in full force and effect, Borrower has delivered to Lender a true,
correct and complete copy of the Purchase Agreement together with all modifications and amendments
thereto, and there have been no further modifications or amendments thereto. There is no default
under the Purchase Agreement by any party thereto and, to Borrower’s knowledge, no event has
occurred that, with the passage of time and/or the giving of notice would constitute a default
thereunder.

Section 4.41. Survival

Borrower agrees that, unless expressly provided otherwise, all of the representations and
warranties of Borrower set forth in this Article 4 and elsewhere in this Agreement and in
the other Loan Documents shall be deemed given and made as of the date hereof and shall survive for
so long as any portion of the Debt remains owing to Lender. All representations, warranties,
covenants and agreements made in this Agreement or in the other Loan Documents by Borrower shall be
deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter
made by Lender or on its behalf. As used in this Agreement, “Borrower’s knowledge” shall mean the
collective knowledge of Borrower and its officers, directors, members and employees after (a)
performing any and all due diligence and due inquiry, including, without limitation, inspections
and studies and (b) reviewing any and all representations and warranties made by the seller of the
Property under the Purchase Agreement.

ARTICLE 5

BORROWER COVENANTS

From the date hereof and until repayment of the Debt in full and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the Lien of the Mortgage
(and all related obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:

Section 5.1. Existence; Compliance with Requirements

(a) Borrower shall do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its existence and all of its rights, licenses, permits and franchises and
comply with all applicable Legal Requirements. Borrower shall not commit, permit or suffer to
exist any act or omission affording any Governmental Authority the right of forfeiture as against
the Property or any part thereof or any monies paid in performance of Borrower’s obligations under
any of the Loan Documents.

(b) After prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the Legal Requirements affecting the Property, provided that (i) no Event of
Default has occurred and is continuing; (ii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which Borrower or the
Property is subject and shall not constitute a default thereunder; (iii) neither the Property, any
part thereof or interest therein, any of the Tenants, nor Borrower shall be affected in any
material adverse way as a result of such proceeding; (iv) non-compliance with the Legal
Requirements shall not impose civil or criminal liability on Borrower or Lender; (v) Borrower shall
have furnished the security as may be required in the proceeding, or required by Lender if no such
security has been furnished in the proceeding, to ensure compliance by Borrower with the Legal
Requirements; and (vi) Borrower shall have furnished to Lender all other items reasonably requested
by Lender in connection therewith.

Section 5.2. Maintenance and Use of Property

Borrower shall cause the Property to be maintained in a good, safe and insurable condition and
in compliance with all applicable Legal Requirements, and shall promptly make all repairs to the
Property, above grade and below grade, interior and exterior, structural and nonstructural,
ordinary and extraordinary, unforeseen and foreseen except where the failure to so comply would not
reasonably be expected to have and does not have a Material Adverse Effect. All repairs made by
Borrower shall be made in a good and workmanlike manner, shall be comparable or better in quality
and class to the original work and shall comply with all applicable Legal Requirements and
insurance requirements. The Improvements and the Personal Property shall not be removed,
demolished or other than in accordance with the provisions of Section 5.21, materially
altered (except for normal replacement of the Personal Property) without the prior written consent
of Lender, which consent shall not be unreasonably withheld, conditioned or delayed. If under
applicable zoning provisions the use of all or any portion of the Property is or shall become a
nonconforming use, Borrower will not cause or permit the nonconforming use to be discontinued or
the nonconforming Improvement to be abandoned without the express prior written consent of Lender,
which consent shall not be unreasonably withheld, conditioned or delayed.

Section 5.3. Waste

Borrower shall not commit or suffer any material physical waste of the Property or make any
change in the use of the Property which will in any way materially increase the risk of fire or
other hazard arising out of the operation of the Property, or take any action that would reasonably
be expected to invalidate or give cause for cancellation of any Policy, or do or permit to be done
thereon anything that would reasonably be expected to in any way materially impair the value of the
Property or the security for the Loan. Borrower will not, without the prior written consent of
Lender, permit any drilling or exploration for or extraction, removal, or production of any
minerals from the surface or the subsurface of the Property, regardless of the depth thereof or the
method of mining or extraction thereof.

Section 5.4. Taxes and Other Charges

(a) Borrower shall pay all Property Taxes and Other Charges now or hereafter levied or
assessed or imposed against the Property or any part thereof as the same become due and payable;
provided, however, Borrower’s obligation to directly pay Property Taxes shall be
suspended for so long as Borrower complies with the terms and provisions of Section 9.4
hereof. Borrower shall furnish to Lender receipts for the payment of the Property Taxes and the
Other Charges at least five (5) days prior to the date the same shall become delinquent
(provided, however, that Borrower is not required to furnish such receipts for
payment of Property Taxes in the event that such Property Taxes have been paid by Lender pursuant
to Section 9.4 hereof). Borrower shall not suffer and shall promptly cause to be paid and
discharged any Lien or charge whatsoever which may be or become a Lien or charge against the
Property, and shall pay when due for all utility services provided to the Property. If Borrower
shall fail to pay any Property Taxes or Other Charges in accordance with this Section 5.4
and is not contesting or causing a contesting of such Property Taxes or Other Charges in accordance
with Section 5.4(b) below, or if there are insufficient funds in the Tax and Insurance
Reserve Account to pay any Property Taxes or Other Charges, Lender shall have the right, but shall
not be obligated, to pay such Property Taxes or Other Charges, and Borrower shall repay to Lender,
on demand, any amount paid by Lender, with interest thereon at the Default Rate from the date of
the advance thereof to the date of repayment, and such amount shall constitute a portion of the
Debt secured by the Mortgage.

(b) After prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any Property Taxes or Other
Charges, provided that (i) no Event of Default is continuing; (ii) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other instrument to which
Borrower is subject and shall not constitute a default thereunder and such proceeding shall be
conducted in accordance with all applicable Legal Requirements; (iii) neither the Property nor any
part thereof or direct or indirect interest therein will be in danger of being sold, forfeited,
terminated, canceled or lost; (iv) Borrower shall promptly upon final determination thereof pay the
amount of any such Property Taxes or Other Charges, together with all costs, interest and penalties
which may be payable in connection therewith; (v) such proceeding shall suspend the collection of
such contested Property Taxes or Other Charges from the Property or Borrower shall have paid all of
the Property Taxes or Other Charges under protest; (vi) Borrower shall furnish such security as may
be required in the proceeding, or if no such security has been furnished in the proceeding,
Borrower shall furnish such reserve deposits as may be requested by Lender, to ensure the payment
of any such Property Taxes or Other Charges, together with all interest and penalties thereon
(unless Borrower has paid all of the Property Taxes or Other Charges under protest); (vii) failure
to pay such Property Taxes or Other Charges will not subject Borrower or Lender to any civil or
criminal liability; (viii) such contest is not reasonably expected to have and does not have a
Material Adverse Effect; and (ix) Borrower shall, upon request by Lender, give Lender prompt notice
of the status of such proceedings and/or confirmation of the continuing satisfaction of the
conditions set forth in clauses (i) through (viii) of this Section 5.4(b).
Lender may pay over any such cash deposit or part thereof held by Lender to the claimant entitled
thereto at any time when, in the reasonable judgment of Lender, the entitlement of such claimant is
established or the Property (or part thereof or interest therein) shall be in danger of being sold,
forfeited, terminated, canceled or lost or there shall be any danger of the Lien of the Mortgage
being primed by any related Lien.

Section 5.5. Litigation

Borrower shall give prompt written notice to Lender of any litigation or governmental
proceedings pending or threatened in writing against any of Borrower, Guarantor or the Property
which would reasonably be expected to have or does have a Material Adverse Effect.

Section 5.6. Access to Property

Borrower shall permit agents, representatives and employees of Lender to inspect the Property
or any part thereof during normal business hours on Business Days upon reasonable advance notice
(which may be given telephonically or by e-mail), subject to the rights of Tenants under their
Leases and Borrower’s usual and customary safety requirements and accompanied by a representative
of Borrower.

Section 5.7. Notice of Default

Borrower shall promptly advise Lender (a) of any event or condition that would reasonably be
expected to have or does have a Material Adverse Effect of which Borrower has knowledge, and (b) of
the occurrence of any Default or Event of Default of which Borrower has knowledge.

Section 5.8. Cooperate in Legal Proceedings

Borrower shall at Borrower’s expense, cooperate fully with Lender with respect to any
proceedings before any court, board or other Governmental Authority which would reasonably be
expected to have, or does have, a Material Adverse Effect and, in connection therewith, permit
Lender, at its election, to participate in any such proceedings, other than those proceedings where
Borrower and Lender are adverse parties.

Section 5.9. Performance by Borrower

Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term
and provision to be observed and performed by Borrower under this Agreement and the other Loan
Documents and any other agreement or instrument affecting or pertaining to the Property and any
amendments, modifications or changes thereto (except to the extent waived by the counterparty
thereto, provided that such action or failure to act by Borrower does not otherwise require
Lender’s consent under the Loan Documents).

Section 5.10. Awards; Insurance Proceeds

Borrower shall cooperate with Lender in obtaining for Lender (to the extent that this
Agreement provides for such Awards or Insurance Proceeds to be paid to Lender) the benefits of any
Awards or Insurance Proceeds lawfully or equitably payable in connection with the Property, and
Lender shall be reimbursed for any expenses incurred in connection therewith (including reasonable,
actual attorneys’ fees and disbursements, the cost of any Restoration Consultant and the payment by
Borrower of the expense of an appraisal on behalf of Lender in case of a Casualty or Condemnation
affecting the Property or any part thereof) out of such Awards or Insurance Proceeds.

Section 5.11. Financial Reporting

(a) Borrower shall keep adequate books and records of account in accordance with GAAP (or such
other method of accounting reasonably acceptable to Lender), consistently applied and shall furnish
to Lender:

(i) quarterly (and prior to a Securitization, if requested by Lender, monthly) rent rolls,
prepared and certified by Borrower, detailing the names of all Tenants, the portion of
Improvements occupied by each Tenant, the base rent, additional rent and any other charges
payable under each Lease, and the term of each Lease, including the commencement and expiration
dates, the extent to which any Tenant is in default under any Lease, and any other information
as is reasonably required by Lender, within thirty (30) days after the end of each calendar
quarter;

(ii) quarterly (and prior to a Securitization, if requested by Lender, monthly), including
year-to-date, and annual operating statements of the Property, prepared and certified by
Borrower, detailing the revenues received, the expenses incurred, the net operating income
before and after debt service (principal and interest) and capital expenditures and containing
such other information as is necessary and sufficient to fairly represent the financial position
and results of operation of the Property, as well as a comparison of budgeted revenues and
expenses to actual revenues and expenses (together with a detailed explanation of any variance
of five percent (5%) or more), within thirty (30) days after the end of each calendar month and
quarter; and

(iii) an Annual Budget not later than thirty (30) days prior to the commencement of each
fiscal year of Borrower, which, during the continuance of a Cash Sweep Period, shall be subject
to the approval of Lender, along with any amendments or modifications thereto. In the event
that such Annual Budget is subject to Lender’s approval in accordance with the foregoing and
Lender objects to a proposed Annual Budget submitted by Borrower, Lender shall advise Borrower
of such objections within fifteen (15) days after receipt thereof (and deliver to Borrower a
reasonably detailed description of such objections) and Borrower shall promptly revise such
Annual Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections
to such revised Annual Budget within ten (10) days after receipt thereof (and deliver to
Borrower a reasonably detailed description of such objections) and Borrower shall promptly
revise the same in accordance with the process described in this subsection until Lender
approves the Annual Budget. Until such time that Lender approves a proposed Annual Budget,
which approval shall not be unreasonably withheld, conditioned or delayed, the most recent
Annual Budget shall apply; provided that, such approved Annual Budget shall be adjusted
to reflect (A) actual increases in Property Taxes, Insurance Premiums, utilities expenses and
expenses under the Management Agreement and (B) up to five percent (5%) increases in any
budgeted line items provided such increases do not exceed a ten percent (10%) increase in the
Annual Budget in the aggregate; and

(iv) a quarterly calculation of the Debt Service Coverage Ratio for the immediately
preceding two (2) calendar quarters as of the last day of such period, prepared and certified by
Borrower, within thirty (30) days of the end of the quarter.

(b) Upon request from Lender, following the occurrence and during the continuance of an Event
of Default, Borrower shall promptly furnish to Lender:

(i) a property management report for the Property, showing the number of inquiries made
and/or rental applications received from tenants or prospective tenants and deposits received
from tenants and any other information requested by Lender, but no more frequently than
quarterly; and

(ii) an accounting of all security deposits held in connection with any Lease of any part
of the Property, including the name and identification number of the accounts in which such
security deposits are held, the name and address of the financial institutions in which such
security deposits are held and the name of the Person to contact at such financial institution,
along with any authority or release necessary for Lender to obtain information regarding such
accounts directly from such financial institutions.

(c) Borrower shall furnish Lender such other additional financial or management information as
may, from time to time, be reasonably required by Lender in form and substance satisfactory to
Lender, and shall furnish to Lender and its agents convenient facilities for the examination and
audit of any such books and records.

Section 5.12. Estoppel Statement

After request by Lender, Borrower shall within ten (10) Business Days furnish Lender or any
proposed assignee of the Loan with a statement, duly acknowledged and certified, setting forth
(i) the original principal amount of the Loan, (ii) the rate of interest on the Loan, (iii) the
unpaid principal amount of the Loan, (iv) the date installments of interest and/or principal were
last paid, (v) the Maturity Date, (vi) offsets or defenses to the payment of the Debt, if any, and
(vii) that the Note, this Agreement, the Mortgage and the other Loan Documents are valid, legal and
binding obligations and have not been modified or if modified, giving particulars of such
modification.

Section 5.13. Leasing Matters

(a) Except as otherwise consented to by Lender in writing, all Leases shall be written on the
standard form of lease which shall have been approved by Lender. Upon request, Borrower shall
furnish Lender with executed copies of all Leases. No material changes may be made to the
Lender-approved standard form of lease without the prior written consent of Lender, such consent
not to be unreasonably withheld, conditioned or delayed. In addition, all renewals of Leases and
all proposed leases shall provide for rental rates and terms comparable to existing local market
rates and terms and shall be arm’s-length transactions with bona fide, independent third party
tenants. All proposed commercial Leases and modifications and renewals of existing Leases for
commercial space shall be subject to the prior approval of Lender and its counsel, which shall not
be unreasonably withheld, at Borrower’s expense. All Leases shall provide that they are
subordinate to the Mortgage and that the tenant agrees to attorn to Lender.

(b) Borrower (i) shall observe and perform all the material obligations imposed upon the
landlord under the Leases and shall not do or permit to be done anything to materially impair the
value of the Leases as security for the Debt; (ii) shall enforce all of the material terms,
covenants and conditions contained in the Leases upon the part of the Tenant thereunder to be
observed or performed, short of termination thereof; provided, however, with
respect to multifamily residential property, a residential Lease may be terminated in the event of
a default by the tenant thereunder; (iii) shall not collect any of the Rents more than one (1)
month in advance; and (iv) shall not execute any other assignment of the landlord’s interest in the
Leases or the Rents.

(c) Notwithstanding the provisions of subsection (a) above, renewals of existing
commercial Leases and proposed Leases for commercial space shall not be subject to the prior
approval of Lender, provided all of the following conditions are satisfied: (i) the rental income
pursuant to the renewal or proposed Lease is not more than five percent (5%) of the total rental
income for the Property, (ii) the renewal or proposed Lease has a base term of less than six (6)
years including options to renew, (iii) rent, credits, free rents or concessions which have been
granted under the renewal or proposed Lease shall be market, (iv) the renewal or proposed Lease is
subject and subordinate to the Mortgage and the tenant thereunder shall have agreed to attorn to
Lender, (v) the renewal or proposed Lease is on the standard form of lease approved by Lender,
(vi) the renewal or proposed Lease does not contain any option, offer, right of first refusal,
right of first offer or other similar right to acquire all or any portion of the Property, (vii)
the renewal or proposed Lease provides for rental rates and terms comparable to existing market
rates and terms and is an arm’s-length transaction with a bona fide, independent third party
tenant, and (viii) the renewal or proposed Lease shall satisfy other criteria as shall be required
by Lender in its sole discretion. Borrower shall deliver to Lender copies of all Leases which are
entered into pursuant to the preceding sentence together with Borrower’s certification that it has
satisfied all of the conditions of the preceding sentence within thirty (30) days after the
execution of the Lease.

Section 5.14. Property Management

(a) Borrower shall (i) diligently perform and observe all of the material terms, covenants and
conditions required to be performed and observed by it under the Management Agreement and do all
things necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly
notify Lender of any default under the Management Agreement of which it is aware; (iii) promptly
deliver to Lender a copy of any notice of default or other material notice received by Borrower
under the Management Agreement; (iv) promptly give notice to Lender of any notice or information
that Borrower receives which indicates that Manager is terminating the Management Agreement or that
Manager is otherwise discontinuing its management of the Property; and (v) promptly enforce the
performance and observance of all of the material covenants required to be performed and observed
by Manager under the Management Agreement.

(b) If at any time, (i) Manager shall become insolvent or a debtor in a bankruptcy proceeding;
(ii) an Event of Default has occurred and is continuing; (iii) a default has occurred and is
continuing under the Management Agreement, subject to any applicable grace, notice, and/or cure
period or (iv) Manager has engaged in gross negligence, fraud, willful misconduct or
misappropriation of funds, Borrower shall, at the request of Lender, terminate the Management
Agreement upon thirty (30) days prior notice to Manager and replace Manager with a Qualified
Manager on terms and conditions satisfactory to Lender, it being understood and agreed that the
management fee for such replacement manager shall not exceed then prevailing market rates.

(c) [Intentionally Omitted].

(d) Borrower shall not, without the prior written consent of Lender (which consent shall not
be unreasonably withheld, conditioned or delayed): (i) surrender, terminate or cancel, or consent
to the surrender, termination or cancellation of, the Management Agreement or replace Manager or
enter into any other management agreement with respect to the Property; (ii) consent to the
assignment by Manager of its interest under the Management Agreement except to a Qualified Manager;
(iii) reduce or consent to the reduction of the term of the Management Agreement; (iv) increase or
consent to the increase of the amount of any charges under the Management Agreement; or
(v) otherwise modify, change, supplement, alter or amend, or waive or release any of the terms and
conditions under, the Management Agreement in any material respect. In the event that Borrower
replaces Manager at any time during the term of Loan pursuant to this subsection, such Manager
shall be deemed to be a Qualified Manager.

Section 5.15. Liens

Borrower shall not, without the prior written consent of Lender, create, incur, assume or
suffer to exist any Lien on any portion of the Property or permit any such action to be taken,
except Permitted Encumbrances.

Section 5.16. Debt Cancellation

Borrower shall not cancel or otherwise forgive or release any material claim or debt (other
than termination of Leases in accordance herewith) owed to Borrower by any Person, except for
adequate consideration and in the ordinary course of Borrower’s business.

Section 5.17. Zoning

Borrower shall not (i) initiate or consent to any zoning reclassification of any portion of
the Property or seek any variance under any existing zoning ordinance or (ii) use or permit the use
of any portion of the Property in any manner that is reasonably likely to result in such use
becoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule
or regulation, in each case without the prior written consent of Lender.

Section 5.18. ERISA

(a) Borrower shall not engage in any transaction which would cause any obligation, or action
taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note,
this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA.

(b) Borrower shall deliver to Lender such certifications or other evidence from time to time
throughout the term of the Loan, as requested by Lender in its sole discretion, that (i) Borrower
is not and does not maintain an “employee benefit plan” as defined in Section 3(3) of ERISA, which
is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of
ERISA; (ii) Borrower is not subject to state statutes regulating investments of, or fiduciary
obligations with respect to, governmental plans; and (iii) one or more of the following
circumstances is true:

(A) Equity interests in Borrower are publicly offered securities, within the
meaning of 29 C.F.R. §2510.3-101(b)(2);

(B) Less than twenty-five percent (25%) of each outstanding class of equity
interests in Borrower are held by “benefit plan investors” within the meaning of 29
C.F.R. §2510.3-101(f)(2); or

(C) Borrower qualifies as an “operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).

Section 5.19. No Joint Assessment

Borrower shall not suffer, permit or initiate the joint assessment of the real property
comprising the Property with (a) any other real property constituting a tax lot separate from the
Property, or (b) any portion of the Property which may be deemed to constitute personal property,
or any other procedure whereby the Lien of any taxes which may be levied against such personal
property shall be assessed or levied or charged to such real property.

Section 5.20. Reciprocal Easement Agreements

Borrower shall not enter into, terminate or modify any REA without Lender’s prior written
consent, which consent shall not be unreasonably withheld, conditioned or delayed.

Section 5.21. Alterations

Lender’s prior written approval shall be required in connection with any alterations to any
Improvements, exclusive of alterations to tenant spaces required under any Lease existing on the
date hereof or entered into in accordance with the terms of this Agreement (including standard
alterations undertaken in connection with preparing residential units for tenant occupancy) and
alterations undertaken as part of a Restoration in accordance with the terms of this Agreement,
(a) that are reasonably expected to have or does have a Material Adverse Effect on the Property,
(b) that are structural in nature or have a material adverse effect on any utility or HVAC system
contained in the Improvements or the exterior of any building constituting a part of any
Improvements or (c) that, together with any other alterations undertaken at the same time
(including any related alterations, improvements or replacements), are reasonably anticipated to
have a cost in excess of the Alteration Threshold. If the total unpaid amounts incurred and to be
incurred with respect to such alterations to the Improvements shall at any time exceed the
Alteration Threshold, Borrower shall promptly deliver to Lender as security for the payment of such
amounts and as additional security for Borrower’s obligations under the Loan Documents any of the
following: (i) cash, (ii) direct non-callable obligations of the United States of America or other
obligations which are “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940, to the extent acceptable to the applicable Rating Agencies, or
(iii) a letter of credit acceptable to Lender in its sole and absolute discretion. Such security
shall be in an amount equal to the excess of the total unpaid amounts incurred and to be incurred
with respect to such alterations to the Improvements over the Alteration Threshold.

Section 5.22. Agreements

During the term of the Loan: (a) Borrower shall fulfill and perform each and every material
term, covenant and provision of the Agreements to be fulfilled or performed by Borrower thereunder,
if any, in a commercially reasonable manner; (b) Borrower shall, in the manner provided for in this
Agreement, give prompt notice to Lender of any material written default notice received by Borrower
under any of the Agreements, together with a complete copy of any such notice; (c) Borrower shall
enforce, short of termination thereof, the performance and observance of each and every material
term, covenant and provision of the Agreements to be performed or observed, if any, by the other
parties thereto in a commercially reasonable manner; and (d) Borrower shall not terminate or amend
any of the material terms or provisions of any of the Agreements, except as may be permitted
pursuant to the terms of the Agreements and done in the ordinary course of business or as may be
commercially reasonable in Borrower’s ordinary course of business, without the prior written
consent of Lender, which consent shall not be unreasonably withheld, conditioned or delayed.

Section 5.23. Compliance with Prescribed Laws

Borrower shall not (a) be or become subject at any time to any law, regulation, or list of any
government agency (including, without limitation, the list maintained by OFAC and accessible
through the OFAC website) that prohibits or limits any lender from making any advance or extension
of credit to Borrower or from otherwise conducting business with Borrower, or (b) fail to provide
documentary and other evidence of Borrower’s identity as may be requested by any Lender at any time
to enable any Lender to verify Borrower’s identity or to comply with Prescribed Laws. In addition,
Borrower hereby agrees to provide to Lender any additional information with respect to Borrower
that Lender deems necessary from time to time in order to ensure compliance with Prescribed Laws.

Section 5.24. Tax Credits

Borrower shall not claim a low income housing credit for the Property under Section 42 of the
Internal Revenue Code without Lender’s prior written consent.

Section 5.25. Purchase Agreement

Borrower shall not, without the prior written consent of Lender (which consent shall not be
unreasonably withheld, conditioned or delayed), modify, change, supplement, alter or amend, or
waive or release any of the terms and conditions under, the Purchase Agreement in any material
respect.

ARTICLE 6

ENTITY COVENANTS

Section 6.1. Single Purpose Entity/Separateness

Borrower represents, warrants and covenants as follows:

(a) Borrower has not and will not:

(i) engage in any business or activity other than the ownership, operation and maintenance
of the Property, and activities incidental thereto;

(ii) acquire or own any assets other than (A) the Property, and (B) such incidental
Personal Property as may be necessary for the ownership and operation of the Property;

(iii) merge into or consolidate with any Person, or dissolve, terminate, liquidate in whole
or in part, transfer or otherwise dispose of all or substantially all of its assets or change
its legal structure;

(iv) (A) fail to observe all organizational formalities necessary to maintain its separate
existence, or fail to preserve its existence as an entity duly organized, validly existing and
in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of
its organization or formation, or (B) amend, modify, terminate or fail to comply with the
provisions of its organizational documents, in each case without the prior written consent of
Lender;

(v) own any subsidiary, or make any investment in, any Person;

(vi) commingle its assets with the assets of any other Person, or permit any Affiliate or
constituent party independent access to its bank accounts;

(vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing
any obligation), other than the Debt and Permitted Debt;

(viii) fail to maintain its records, books of account, bank accounts, financial statements,
accounting records and other entity documents separate and apart from those of any other Person;
except that Borrower’s financial position, assets, liabilities, net worth and operating results
may be included in the consolidated financial statements of an Affiliate, provided that
(A) appropriate notation shall be made on such consolidated financial statements to indicate the
separate identity of Borrower from such Affiliate and that Borrower’s assets and credit are not
available to satisfy the debts and other obligations of such Affiliate or any other Person, and
(B) Borrower’s assets, liabilities and net worth shall also be listed on Borrower’s own separate
balance sheet;

(ix) except for capital contributions or capital distributions permitted under the terms
and conditions of the Borrower’s organizational documents and properly reflected on its books
and records, enter into any transaction, contract or agreement with any general partner, member,
shareholder, principal, guarantor of the obligations of Borrower, or any Affiliate of the
foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable
and substantially similar to those that would be available on an arm’s-length basis with
unaffiliated third parties;

(x) maintain its assets in such a manner that it will be costly or difficult to segregate,
ascertain or identify its individual assets from those of any other Person;

(xi) assume or guaranty the debts of any other Person, hold itself out to be responsible
for the debts of any other Person, or otherwise pledge its assets to secure the obligations of
any other Person or hold out its credit or assets as being available to satisfy the obligations
of any other Person;

(xii) make any loans or advances to any Person, or own any stock or securities of, any
Person, or buy or hold evidence of indebtedness issued by any other Person;

(xiii) fail to (A) file its own tax returns separate from those of any other Person, except
to the extent that Borrower is treated as a “disregarded entity” for tax purposes and is not
required to file tax returns under applicable Legal Requirements, and (B) pay any taxes required
to be paid under applicable Legal Requirements; provided, however, that the
Borrower shall not have any obligation to reimburse its equityholders or their Affiliates for
any taxes that such equityholders or their Affiliates may incur as a result of any profits or
losses of the Borrower;

(xiv) fail to (A) hold itself out to the public as a legal entity separate and distinct
from any other Person, (B) conduct its business solely in its own name or (C) correct any known
misunderstanding regarding its separate identity;

(xv) fail to intend to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its contemplated business
operations; provided, however, that the foregoing shall not require Borrower’s
members, partners or shareholders to make additional capital contributions to Borrower;

(xvi) without the unanimous written consent of all of its partners or members, as
applicable, and the written consent of all directors or managers of Borrower or each SPE
Component Entity, as applicable, take any Material Action or action that might cause such entity
to become insolvent;

(xvii) fail to fairly and reasonably allocate shared expenses (including, without
limitation, shared office space and services performed by an employee of an Affiliate) among the
Persons sharing such expenses;

(xviii) fail to intend to remain solvent or pay its own liabilities (including, without
limitation, salaries of its own employees) only from its own funds; provided,
however, that the foregoing shall not require Borrower’s members, partners or
shareholders to make additional capital contributions to Borrower;

(xix) acquire obligations or securities of its partners, members, shareholders or other
affiliates, as applicable;

(xx) [intentionally omitted];

(xxi) fail to maintain a sufficient number of employees in light of its contemplated
business operations; provided, however, that the foregoing shall not require
Borrower’s members, partners or shareholders to make additional capital contributions to
Borrower;

(xxii) fail to maintain and use separate stationery, invoices and checks bearing its own
name;

(xxiii) have any of its obligations guaranteed by an Affiliate, except as contemplated by
the Loan Documents; or

(xxiv) identify itself as a department or division of any other Person.

(b) (i) If Borrower is a partnership or limited liability company (other than a single-member
Delaware limited liability company formed under the Act which complies with the requirements of
subsection (b)(ii) below), each general partner in the case of a partnership, or the
managing member in the case of a limited liability company (each an “SPE Component Entity”) of
Borrower, as applicable, shall be a corporation or a limited liability company whose sole asset is
its interest in Borrower, provided that if such SPE Component Entity is a limited liability
company (other than a single-member Delaware limited liability company), each of its managing
members shall also be a SPE Component Entity. Each SPE Component Entity (A) will at all times
comply with each of the covenants, terms and provisions contained in Sections 6.1(a)(iii)
through (vi) and (viii) through (xxiv) inclusive, as well as the
requirements of clause (ii) below if such SPE Component Entity is a single member limited
liability company formed under the Act, as if such representation, warranty or covenant was made
directly by such SPE Component Entity; (B) will not engage in any business or activity other than
owning an interest in Borrower; (C) will not acquire or own any assets other than its partnership,
membership, or other equity interest in Borrower; (D) will not own any subsidiary, or make any
investment in any Person other than its investment in Borrower; (E) will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any obligation) and (F) will
cause Borrower to comply with the provisions of this Section 6.1. Prior to the withdrawal
or the disassociation of any SPE Component Entity from Borrower, Borrower shall immediately appoint
a new general partner or managing member whose articles of incorporation or limited liability
company agreement, as applicable, are substantially similar to those of such SPE Component Entity
and, if an opinion letter pertaining to substantive consolidation was required at closing, deliver
a new opinion letter acceptable to Lender and the Rating Agencies with respect to the new SPE
Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower is a
single member Delaware limited liability company, so long as Borrower maintains such formation
status and complies with the requirements set forth in subsections (ii) and (iii)
below, the SPE Component Entity requirement as set forth in this section shall not be applicable.

(ii) In the event Borrower or SPE Component Entity is a single member limited liability
company formed under the Act (as applicable, the “Company”), the limited liability company
agreement of the Company (the “LLC Agreement”) shall provide that (A) upon the occurrence of any
event that causes the sole member of the Company (“Member”) to cease to be the member of the
Company (other than (1) upon an assignment by Member of all of its limited liability company
interest in the Company and the admission of the transferee in accordance with the Loan
Documents and the LLC Agreement, or (2) the resignation of Member and the admission of an
additional member of the Company in accordance with the terms of the Loan Documents and the LLC
Agreement), the personal representative of Member shall, within ninety (90) days, agree in
writing to continue the existence of the Company and to the admission of such personal
representative or its nominee or designee, as the case may be, as a substitute member of the
Company, effective as of the occurrence of the event that caused the Member to cease to be a
member of the Company, and a natural person duly designated under the LLC Agreement (“Special
Member”) shall, without any action of any other Person and simultaneously with the Member
ceasing to be the member of the Company, automatically be admitted to the Company and shall
continue the existence of the Company without dissolution, and (B) Special Member may not resign
from the Company or transfer its rights as Special Member unless a successor Special Member has
been admitted to the Company as Special Member in accordance with the requirements of the Act.
The LLC Agreement shall further provide that (v) Special Member shall automatically cease to be
a member of the Company upon the admission to the Company of a substitute Member, (w) Special
Member shall be a member of the Company that has no interest in the profits, losses and capital
of the Company and has no right to receive any distributions of the assets of the Company, (x)
pursuant to Section 18-301 of the Act, Special Member shall not be required to make any capital
contributions to the Company and shall not receive a limited liability company interest in the
Company, (y) Special Member, in its capacity as Special Member, may not bind the Company, and
(z) except as required by any mandatory provision of the Act, Special Member, in its capacity as
Special Member, shall have no right to vote on, approve or otherwise consent to any action by,
or matter relating to, the Company, including, without limitation, the merger, consolidation or
conversion of the Company. Prior to its admission to the Company as Special Member, Special
Member shall not be a member of the Company. Any action initiated by or brought against Member
or Special Member under any Creditors Rights Laws shall not cause Member or Special Member to
cease to be a member of the Company and upon the occurrence of such an event, the existence of
the Company shall continue without dissolution. The LLC Agreement shall also provide that each
of Member and Special Member waives any right it might have to agree in writing to dissolve the
Company upon the occurrence of any action initiated by or brought against Member or Special
Member under any Creditors Rights Laws, or the occurrence of an event that causes Member or
Special Member to cease to be a member of the Company.

(c) The organizational documents of Borrower and each SPE Component Entity shall provide an
express acknowledgment that Lender is an intended third-party beneficiary of the “special purpose”
provisions of such organizational documents.

(d) Notwithstanding the foregoing, Lender has reviewed and approved the limited liability
company agreement of the Company and the structure of the Company in effect on the Closing Date.

Section 6.2. Change of Name, Identity or Structure

Borrower shall not change or permit to be changed (a) Borrower’s name, (b) Borrower’s identity
(including its trade name or names), (c) Borrower’s principal place of business set forth on the
first page of this Agreement, (d) the corporate, partnership or other organizational structure of
Borrower, each SPE Component Entity (if any), or Guarantor, (e) Borrower’s state of organization,
or (f) Borrower’s organizational identification number, without in each case notifying Lender of
such change in writing at least thirty (30) days prior to the effective date of such change and, in
the case of a change in Borrower’s structure or state of organization, without first obtaining the
prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned or
delayed. At the request of Lender, Borrower shall execute a certificate in form satisfactory to
Lender listing the trade names under which Borrower intends to operate the Property, and
representing and warranting that Borrower does business under no other trade name with respect to
the Property. If Borrower does not now have an organizational identification number and later
obtains one, or if the organizational identification number assigned to Borrower subsequently
changes, Borrower shall promptly notify Lender of such organizational identification number or
change.

Section 6.3. Business and Operations

Borrower will qualify to do business and will remain in good standing under the laws of the
State as and to the extent the same are required for the ownership, maintenance, management and
operation of the Property.

ARTICLE 7

NO SALE OR ENCUMBRANCE

Section 7.1. Transfer Definitions

For purposes of this Article 7 “Restricted Party” shall mean Borrower, Guarantor, any
SPE Component Entity (if any), any Affiliated Manager, or any shareholder, partner, member or
non-member manager, or any direct or indirect legal or beneficial owner of Borrower, Guarantor, any
SPE Component Entity (if any), any Affiliated Manager or any non-member manager, other than a
natural person; and a “Transfer” shall mean a voluntary or involuntary sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, grant of any options with respect to, or any other
transfer or disposition of (directly or indirectly, voluntarily or involuntarily, by operation of
law or otherwise, and whether or not for consideration or of record) of a legal or beneficial
interest.

Section 7.2. No Sale/Encumbrance

(a) Borrower shall not, without the prior written consent of Lender, cause or permit a
Transfer of the Property or any part thereof or any legal or beneficial interest therein nor permit
a Transfer of an interest in any Restricted Party, nor otherwise permit a dissolution of a
Restricted Party, other than pursuant to Leases of space in the Improvements to Tenants in
accordance with the provisions of Section 5.13 or as otherwise expressly permitted in
accordance with the terms of this Agreement (in each case, a “Prohibited Transfer”).

(b) A Prohibited Transfer shall include, but not be limited to, (i) an installment sales
agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid
in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property
for other than actual occupancy by a space tenant thereunder or a sale, assignment or other
transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to
any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or
Transfer of such corporation’s stock or the creation or issuance of new stock in one or a series of
transactions; (iv) if a Restricted Party is a limited, general or limited liability partnership or
joint venture, any merger or consolidation or the change, removal, resignation or addition of a
general partner or the Transfer of the partnership interest of any general or limited partner or
any profits or proceeds relating to such partnership interests or the creation or issuance of new
partnership interests; (v) if a Restricted Party is a limited liability company, any merger or
consolidation or the change, removal, resignation or addition of a managing member or non-member
manager (or if no managing member, any member) or the Transfer of the membership interest of any
member or any profits or proceeds relating to such membership interest or the creation or issuance
of new membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger,
consolidation or the Transfer of the legal or beneficial interest in such Restricted Party or the
creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation
of Manager (including, without limitation, an Affiliated Manager) other than in accordance with
Section 5.14.

Section 7.3. Permitted Transfers

Notwithstanding anything contained in the Loan Documents to the contrary, the following
Transfers of legal or beneficial equity interests shall not be deemed to be a Prohibited Transfer
and shall not require the consent of Lender or compliance with the provisions of Section
7.4 hereof:

(a) a Transfer (but not the pledge) by devise or descent or by operation of law upon the death
or as a result of the legal incapacity of a natural person of such Person’s interest in a
Restricted Party to the person or persons lawfully entitled thereto, provided Borrower
delivers written notice to Lender as soon as practicable thereafter and that such Restricted Party
is promptly reconstituted, if applicable, following the death or incapacity of such person;

(b) Transfers (but not pledges) made in good faith for estate planning purposes of an
individual’s interests in any Restricted Party to the spouse or any lineal descendant of such
individual, or to a trust for the benefit of any one or more of such individual, spouse or lineal
descendant, provided such Restricted Party is reconstituted, if required, following such
Transfer;

(c) the Transfer (but not the pledge) of the stock, partnership or membership interests (as
the case may be) in a Restricted Party or the creation or issuance of additional limited
partnership interests in Guarantor and the subsequent Transfer (but not the pledge) thereof;

provided, however, with respect to clauses (a), (b), and
(c) above,

(i) no such Transfers shall result in a change in Control of Borrower, Guarantor, any SPE
Component Entity or any Affiliated Manager,

(ii) following such Transfer, (x) IRT Eagle Ridge Apartments Member, LLC, a Delaware limited
liability company (“IRT Member”) shall own not less than one hundred percent (100%) of the direct
equity interests in, and Control, Borrower, (y) Guarantor shall own not less than one hundred
percent (100%) of the direct equity interests in, and Control, IRT Member and (z) Independence
Realty Trust, Inc., a Maryland corporation (“IRT GP”) shall own not less than five percent (5%) of
the direct equity interests in, and Control and act as the sole general partner of, Guarantor,

(iii) following such Transfer, Borrower and any SPE Component Entity shall continue to satisfy
the requirements of Section 6.1 hereof,

(iv) as a condition to each such Transfer, (A) except with respect to clause (a),
Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer,
(B) Borrower shall continue to comply with the representations, warranties and covenants contained
in Sections 4.38, 5.18 and 5.23 hereof (and upon request of Lender, deliver
to Lender a statement signed by an authorized offer of Borrower which certifies to such compliance,
and (C) to the extent any transferee will own twenty percent (20%) or more of the direct or
indirect ownership interests in Borrower immediately following such transfer (provided such
transferee owned less than twenty percent (20%) of the direct or indirect ownership interests in
Borrower as of the Closing Date), Lender may request and Borrower shall deliver, at Borrower’s sole
cost and expense, customary searches (including without limitation credit, judgment, lien,
litigation, bankruptcy, criminal and watch list) the results of which shall be acceptable to Lender
with respect to such transferee; or

(d) the sale, transfer or issuance of shares of common stock in any Restricted Party that is
publicly traded and listed on the New York Stock Exchange or another nationally recognized
publicly-traded stock exchange.

Upon request from Lender, Borrower shall promptly deliver to Lender an updated organizational
chart reflecting each Transfer made pursuant to this Section 7.3. All out-of-pocket
reasonable costs and expenses incurred by Lender in connection with its review of any of the
foregoing Transfers shall be paid by Borrower whether or not any such Transfer is consummated.

Section 7.4. Assumption

Notwithstanding the foregoing provisions of this Article 7, following the date which
is six (6) months from the Closing Date, Lender shall not unreasonably withhold consent to a
Transfer of the Property in its entirety or one hundred percent (100%) of the ownership interests
in Borrower to, and the assumption of the Loan by, any Person (a “Transferee”) provided
that each of the following terms and conditions are satisfied:

(a) no Event of Default shall be continuing at the time the notice in clause (b) below is
received by Lender or at the time of the Transfer;

(b) Borrower shall (i) deliver written notice to Lender of the terms of such proposed Transfer
not less than sixty (60) days before the date on which such Transfer is scheduled to close and,
concurrently therewith, all such information concerning the proposed Transfer and Transferee as
Lender shall reasonably require in evaluating an initial extension of credit, which information
shall include, without limitation, a fully executed copy of the purchase and sale agreement and all
amendments and assignments thereof, as well as the sources and uses of funds or closing or
settlement statement relating to the Transfer and (ii) pay to Lender a non-refundable processing
fee in the amount of $10,000. Lender shall have the right to approve or disapprove the proposed
Transfer based on its (or the servicer’s on behalf of Lender) then current underwriting and credit
requirements for similar loans secured by similar properties which loans are sold in the secondary
market, such approval not to be unreasonably withheld. In determining whether to give or withhold
its approval of the proposed Transfer, Lender shall consider the experience and track record of
Transferee and its principals in owning and operating facilities similar to the Property, the
financial strength of Transferee and its principals, the general business standing of Transferee
and its principals and Transferee’s and its principals’ relationships and experience with
contractors, vendors, tenants, lenders and other business entities; provided,
however, that, notwithstanding Lender’s agreement to consider the foregoing factors in
determining whether to give or withhold such approval, such approval shall be given or withheld
based on what Lender determines to be commercially reasonable and, if given, may be given subject
to such conditions as Lender may deem reasonably appropriate;

(c) Borrower shall pay to Lender, concurrently with the closing of such proposed Transfer,
(i) a non-refundable assumption fee in an amount equal to one half percent (0.5%) of the then
outstanding principal balance of the Note, and (ii) all reasonable out-of-pocket costs and
expenses, including reasonable attorneys’ fees and disbursements and Rating Agency fees, incurred
by Lender in connection with the proposed Transfer (which such fees under this clause (ii)
shall be paid whether or not the proposed Transfer actually occurs);

(d) (i) Transferee shall assume and agree to pay the Debt as and when due and shall assume all
other obligations of Borrower under the Loan Documents subject to the provisions of Article
15 hereof and, prior to or concurrently with the closing of such Transfer, Transferee and its
constituent partners, members or shareholders as Lender may require, shall execute, without any
cost or expense to Lender, such documents and agreements as Lender shall reasonably require to
evidence and effectuate said assumption and (ii) if required by Lender, a Person affiliated with
Transferee and acceptable to Lender (a “Transferee Principal”) shall assume the obligations of
Guarantor under the Loan Documents with respect to all acts and events occurring or arising after
the closing of the Transfer;

(e) Borrower and Transferee, without any cost to Lender, shall furnish any information
requested by Lender for the preparation of, and shall authorize Lender to file, new financing
statements and financing statement amendments and other documents to the fullest extent permitted
by applicable Legal Requirements, and shall execute any additional documents reasonably requested
by Lender;

(f) Borrower shall deliver to Lender, without any cost or expense to Lender, such endorsements
to Lender’s Title Insurance Policy insuring that fee simple or leasehold title to the Property, as
applicable, is vested in Transferee (subject to Permitted Encumbrances), hazard insurance
endorsements or certificates and other similar materials as Lender may deem necessary at the time
of the transfer, all in form and substance satisfactory to Lender;

(g) Transferee shall furnish to Lender, all documents evidencing Transferee’s organization and
good standing, and the qualification of the signers to execute the assumption of the Debt, which
documents shall include certified copies of all documents relating to the organization and
formation of Transferee and of the entities, if any, which are partners or members of Transferee.
Transferee and such constituent partners, members or shareholders of Transferee (as the case may
be), as Lender shall reasonably require, shall comply with the covenants set forth in Article
6 hereof;

(h) Transferee shall assume the obligations of Borrower under any Management Agreement or
provide a new management agreement with a new manager which meets with the requirements of
Section 5.14 hereof and assign to Lender as additional security such new management
agreement pursuant to an Assignment of Management Agreement in form and substance reasonably
satisfactory to Lender;

(i) Transferee shall assume the obligations of Borrower under any Deposit Account Control
Agreement or provide a new Deposit Account Control Agreement with a new Deposit Bank in form and
substance reasonably satisfactory to Lender;

(j) Transferee shall furnish to Lender, if required by the Lender, a REMIC Opinion, and an
opinion of counsel satisfactory to Lender and its counsel (A) that Transferee’s formation documents
provide for the matters described in subparagraph (g) above, (B) that the assumption of the Debt
has been duly authorized, executed and delivered, and that the assumption agreement and the other
Loan Documents are valid, binding and enforceable against Transferee in accordance with their
terms, (C) that Transferee and any entity which is a controlling stockholder, member or general
partner of Transferee, have been duly organized, and are in existence and good standing, and
(E) with respect to such other matters as Lender may reasonably request;

(k) if required by Lender, Lender shall receive a Rating Agency Confirmation; and

(l) Borrower’s obligations under the purchase and sale agreement pursuant to which the
Transfer is proposed to occur shall expressly be subject to the satisfaction of the terms and
conditions of this Section 7.4.

The consent of Lender with respect to a Transfer of the Property in its entirety to, and the
assumption of the Loan by, a Transferee pursuant to this Section 7.4 shall not be construed
to be a waiver of the right of Lender to consent to any subsequent Transfer of the Property. Upon
the Transfer of the Property pursuant to this Section 7.4, Borrower and Guarantor shall be
relieved of all liability under the Loan Documents for acts, events, conditions, or circumstances
occurring or arising after the date of such transfer, except to the extent that such acts, events,
conditions, or circumstances are the proximate result of acts, events, conditions, or circumstances
that existed prior to the date of such transfer, whether or not discovered prior or subsequent to
the date of such transfer.

Section 7.5. Immaterial Transfers and Easements, Etc.

(a) Borrower may, without the consent of Lender, (i) make immaterial Transfers of unimproved,
non-income producing portions of the Property to Governmental Authorities for dedication or public
use (each an “Outparcel”), and (ii) grant easements, restrictions, covenants, reservations and
rights of way in the ordinary course of business for access, water and sewer lines, telephone or
other fiber optic or other data transmission lines, electric lines or other utilities or for other
similar purposes, provided that no such Transfer, conveyance or encumbrance set forth in
the foregoing clauses (i) or (ii) shall materially impair the utility and operation
of the Property or reasonably be expected to, or does, have a Material Adverse Effect. In
connection with any Transfer permitted pursuant to this Section 7.5, Lender shall execute
and deliver any instrument reasonably necessary or appropriate, in the case of the Transfers
referred to in clause (i) above, to release the portion of the Property affected by such
Condemnation or such Transfer from the Lien of the Mortgage or, in the case of clause (ii)
above, to subordinate the Lien of the Mortgage to such easements, restrictions, covenants,
reservations and rights of way or other similar grants upon receipt by Lender of:

(A) fifteen (15) days prior written notice thereof;

(B) a copy of the instrument or instruments of Transfer;

(C) a certificate from an officer of Borrower stating (1) with respect to any
Transfer, the consideration, if any, being paid for the Transfer, and (2) that such
Transfer does not materially impair the utility and operation of the Property and
would not reasonably be expected to have and does not have a Material Adverse
Effect; and

(D) reimbursement of all of Lender’s reasonable out-of-pocket costs and
expenses (including reasonable attorneys’ fees and disbursements) incurred in
connection with such Transfer (which shall be paid by Borrower whether or not the
proposed Transfer actually occurs).

(b) Notwithstanding the foregoing provisions of this Section 7.5, for so long as the
Loan is included in a REMIC Trust in connection with a Securitization, no release of the Outparcel
from the Lien of the Mortgage will be permitted unless, immediately after the Release, either (i)
the LTV Ratio is equal to or less than one hundred twenty-five percent (125%) (such value to be
determined, in Lender’s sole discretion, by any commercially reasonable method permitted to a REMIC
Trust, based solely on the value of the real property excluding personal property and going concern
value, if any) or (ii) the principal balance of the Loan is paid down by the least of the following
amounts: (A) an amount equal to the net proceeds or other compensation paid by a Governmental
Authority in connection with a Transfer described in Section 7.5(a)(i), (B) the fair market
value of the Outparcel at the time of release, or (C) an amount such that the LTV Ratio (as so
determined by Lender) does not increase after the release, unless the Lender receives an opinion of
counsel that the Securitization will not fail to maintain its status as a REMIC Trust as a result
of the release.

ARTICLE 8

INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

Section 8.1. Insurance

(a) Borrower shall obtain and maintain, or cause to be obtained and maintained, at all times
insurance for Borrower and the Property providing at least the following coverages:

(i) insurance with respect to the Improvements and the Personal Property providing coverage
for losses sustained by fire and other risks and hazards covered by a standard extended coverage
insurance policy providing “special” form coverage (A) in an amount equal to not less than one
hundred percent (100%) of the full insurable value written on a replacement cost basis, which
for purposes of this Agreement shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with no deduction for
depreciation; (B) containing either an agreed amount endorsement with respect to the
Improvements and Personal Property or a waiver of all co-insurance provisions; (C) providing for
no “all other perils” deductible in excess of the greater of $25,000 or five percent (5%) of
underwritten net cash flow as determined by Lender for all such insurance coverage; (D) insuring
against at least those risks and hazards that are commonly insured against under a “special
causes of loss” form of policy, as the same shall exist on the date hereof (including, without
limitation, windstorm and “named storm” coverage), together with any increase in the scope of
coverage provided under such form after the date hereof; (E) with loss payable to Lender; and
(F) if any of the Improvements or the use of the Property shall at any time constitute legal
non-conforming structures or uses, providing coverage for contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction Endorsements and containing
an “Ordinance or Law Coverage” or “Enforcement” endorsement;

(ii) commercial general liability insurance against claims for personal injury, bodily
injury, death or property damage occurring upon, in or about the Property (including “dram shop”
or other liquor liability coverage if alcoholic beverages are dispensed at the Property), with
such insurance (A) to be on the so-called “occurrence” form with a general aggregate limit of
not less than $2,000,000 and a per occurrence limit of not less than $1,000,000; (B) to continue
at not less than the aforesaid limit until required to be changed by Lender in writing by reason
of changed economic conditions making such protection inadequate; (C) to cover at least the
following hazards: (1) premises and operations; (2) products and completed operations;
(3) independent contractors; and (4) contractual liability covering, to the maximum extent
permitted by law, Borrower’s obligation to indemnify Lender as required under this Agreement;
and (D) naming Lender as additional insured;

(iii) loss of rents or business interruption insurance, as applicable, (A) with loss
payable to Lender; (B) covering all risks required to be covered by the insurance provided for
in subsections (i) and (iv) through (vii); and (C) which provides that
after the physical loss to the Improvements and Personal Property occurs, the loss of rents or
income, as applicable, will be insured until completion of Restoration or the expiration of
twelve (12) months, whichever first occurs, and notwithstanding that the policy may expire prior
to the end of such period; and (D) which contains an extended period of indemnity endorsement
which provides that after the physical loss to the Improvements and Personal Property has been
repaired, the continued loss of income will be insured until such income either returns to the
same level it was at prior to the loss, or the expiration of six (6) months from the date that
the Property is repaired or replaced and operations are resumed, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such period. The amount of such
loss of rents or business interruption insurance, as applicable, shall be determined prior to
the date hereof and at least once each year thereafter based on Lender’s reasonable estimate of
the net operating income from the Property for the succeeding period of coverage as required
above. All proceeds payable to Lender pursuant to this subsection shall be held by
Lender and shall be applied to the obligations secured by the Loan Documents from time to time
due and payable hereunder and under the Note; provided, however, that nothing
herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations
secured by the Loan Documents on the respective dates of payment provided for in the Note, this
Agreement and the other Loan Documents except to the extent such amounts are actually paid out
of the proceeds of such loss of rents or business interruption insurance, as applicable;

(iv) if any portion of the Improvements is currently or at any time in the future located
in a “special flood hazard area” designated by the Federal Emergency Management Agency, flood
hazard insurance covering building and contents in an amount equal to the maximum amount of such
insurance available under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be
amended, together with such “excess flood” insurance naming Lender as loss payee in such amount
and with such deductible as Lender may reasonably require;

(v) if the Property is located in an area with a high degree of seismic risk as determined
by Lender, and the probable maximum loss (“PML”) as determined by Lender in the event of an
earthquake would exceed 20% of the full replacement cost of the Improvements, earthquake
insurance in form and substance satisfactory to Lender in an amount not less than one hundred
percent (100%) of the PML or such additional amount as may be required by Lender; with such PML
being based on a 475-year return period, exposure period of 50 years and a 10% probability of
exceedance, provided that such earthquake insurance shall be on terms consistent with
the special causes of loss form required under subsection (i) above;

(vi) at all times during which structural construction, repairs or alterations are being
made with respect to the Improvements, and only if the Property coverage form does not otherwise
apply, (A) owner’s contingent or protective liability insurance covering claims not covered by
or under the terms or provisions of the above mentioned commercial general liability insurance
policy; and (B) the insurance provided for in subsection (i) above written in a
so-called Builder’s Risk Completed Value form (1) on a non-reporting basis, (2) against “special
causes of loss” insured against pursuant to subsection (i) above, (3) including
permission to occupy the Property, and (4) with an agreed amount endorsement waiving
co-insurance provisions;

(vii) comprehensive boiler and machinery insurance, if applicable, in amounts as shall be
reasonably required by Lender on terms consistent with the commercial property insurance policy
required under subsection (i) above;

(viii) workers’ compensation, subject to the statutory limits of the State, and employer’s
liability insurance in respect of any work or operations on or about the Property, or in
connection with the Property or its operation (if applicable);

(ix) excess liability insurance in an amount as may be required by Lender on terms
consistent with the commercial general liability insurance required under
subsection (ii) above;

(x) the insurance required under this Section 8.1(a) above shall cover perils of
terrorism and acts of terrorism and Borrower shall maintain insurance for loss resulting from
perils and acts of terrorism on terms (including amounts) consistent with those required under
Section 8.1(a) above at all times during the term of the Loan; and

(xi) such additional insurance policies and coverage, and in such amounts, (A) as may be
required pursuant to any and all agreements, declarations, covenants, and/or other arrangements
to which Borrower is a party or to which Borrower or the Property is subject, including, without
limitation, any declarations of covenants, conditions and restrictions or similar covenants
and/or restrictions affecting the Property, franchise agreements, licenses or leases, and (B) as
Lender from time to time may reasonably request against such other insurable hazards (including,
but not limited to, sinkhole, mine subsidence, mold, spores or fungus) which at the time are
commonly insured against for property similar to the Property located in or around the region in
which the Property is located.

(b) All insurance provided for in Section 8.1(a) shall be obtained under valid and
enforceable policies (collectively, the “Policies” or in the singular, the “Policy”) meeting the
requirements of Section 8.1(a) and shall otherwise be acceptable to Lender as to amounts,
forms, deductibles, loss payees and insureds. The Policies shall be issued by financially sound
and responsible insurance companies authorized and admitted to do business in the State and having
a financial strength rating of at least “A” and a financial size category of at least “VIII” from
Alfred M. Best Company, Inc. and a claims paying ability and financial strength rating of at least
“A-” or better by S&P (and the equivalent ratings for Moody’s, Fitch and DBRS to the extent each
such Rating Agency rates the insurance company and is rating the Securities) or such other ratings
approved by Lender. To the extent such Policies are not available as of the Closing Date, Borrower
shall deliver to Lender prior to the Closing Date an Acord 28 or similar certificate of insurance
evidencing the coverages and amounts required hereunder and, upon request of Lender as soon as
available after the Closing Date, certified copies of all Policies. Not less than ten (10) days
prior to the expiration dates of any insurance coverage in place with respect to the Property,
Borrower shall deliver to Lender an Acord 28 or similar certificate, accompanied by evidence
satisfactory to Lender of payment of the premiums due in connection therewith (the “Insurance
Premiums”), and, as soon as available thereafter, certified copies of all renewal Policies.

(c) Any Policy may be in the form of a blanket insurance policy, provided that such
policy shall provide the same protection as would a separate Policy insuring only the Property in
compliance with the provisions of Section 8.1(a) hereof; provided, however,
any blanket insurance policy that does not specifically allocate to the Property the amount of
coverage from time to time required hereunder shall be subject to Lender’s reasonable approval
after taking into account, among other things, the amount, location, number, type and size of
properties covered by such blanket insurance policy.

(d) All Policies provided for or contemplated by Section 8.1(a) shall (i) other than
the coverage referenced in clause (a)(viii) above, name Lender as the additional insured,
as its interests may appear, and (ii) other than the coverage referenced in clauses
(a)(ii), (viii) and (ix) above, contain a standard non-contributory mortgagee
clause in favor of Lender providing that the loss thereunder shall be payable to Lender.

(e) All Policies provided for in Section 8.1(a) shall contain clauses or endorsements
to the effect that:

(i) no act or negligence of Borrower, or anyone acting for Borrower, or of any Tenant or
other occupant, or failure to comply with the provisions of any Policy, which might otherwise
result in a forfeiture of the insurance or any part thereof, shall in any way affect the
validity or enforceability of the insurance insofar as Lender is concerned;

(ii) the Policies shall not be canceled without at least thirty (30) days (or in the case
of non-payment of Insurance Premiums, ten (10) days) prior written notice to Lender and any
other party named therein as an additional insured;

(iii) the issuers thereof shall give written notice to Lender if the Policies have not been
renewed thirty (30) days prior to its expiration; and

(iv) Lender shall not be liable for any Insurance Premiums thereon or subject to any
assessments thereunder.

(f) If at any time Lender is not in receipt of written evidence that all insurance required
hereunder is in full force and effect, Lender shall have the right, without notice to Borrower, to
take such action as Lender deems necessary to protect its interest in the Property, including,
without limitation, obtaining such insurance coverage as Lender in its sole discretion deems
appropriate. All premiums incurred by Lender in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Borrower to Lender upon demand and, until paid,
shall be secured by the Mortgage and shall bear interest at the Default Rate.

Section 8.2. Casualty

If the Property shall be damaged or destroyed, in whole or in part, by fire or other casualty
(a “Casualty”), Borrower shall give prompt notice of such damage to Lender and shall promptly
commence and diligently prosecute the Restoration in accordance with Section 8.4. Borrower
shall pay all costs of such Restoration whether or not such costs are covered by insurance. Lender
may, but shall not be obligated to, make proof of loss if not made promptly by Borrower. Borrower
shall adjust all claims for Insurance Proceeds that are in amounts less than the Restoration
Threshold and Lender shall have the right to approve any adjustment of claims for Insurance
Proceeds in amounts equal to or in excess of the Restoration Threshold; provided,
however, if an Event of Default has occurred and is continuing, Lender shall have the
exclusive right to participate in the adjustment of claims for Insurance Proceeds. Borrower shall
cooperate with Lender in obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable in connection with the Property and Lender shall be reimbursed for any expenses
incurred by Lender in connection therewith, including without limitation, reasonable out-of-pocket
attorneys’ fees.

Section 8.3. Condemnation

Borrower shall promptly give Lender notice of the actual or threatened commencement of any
proceeding for the Condemnation of the Property of which Borrower has knowledge and shall deliver
to Lender copies of any and all documents served in connection with such proceedings. To the
extent the amount of the condemnation award is expected to exceed the Restoration Threshold, Lender
may participate in any such proceedings, and Borrower shall from time to time deliver to Lender all
documents requested by it to permit such participation. Borrower shall, at its expense, diligently
prosecute any such proceedings, and to the extent the amount of the condemnation award is expected
to exceed the Restoration Threshold, shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding any
taking by any public or quasi-public authority through Condemnation or otherwise (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of such taking),
Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in
the Note and in this Agreement and the Debt shall not be reduced until any Award shall have been
actually received and applied by Lender, after the deduction of expenses of collection, to the
reduction or discharge of the Debt. Lender shall not be limited to the interest paid on the Award
by the condemning authority but shall be entitled to receive out of the Award interest at the rate
or rates provided herein or in the Note. If the Property or any portion thereof is taken by a
condemning authority, Borrower shall promptly commence and diligently prosecute the Restoration and
otherwise comply with the provisions of Section 8.4, whether or not Lender makes any Net
Proceeds available pursuant to Section 8.4. If the Property is sold, through foreclosure
or otherwise, prior to the receipt by Lender of the Award, Lender shall have the right, whether or
not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive the
Award, or a portion thereof sufficient to pay the Debt.

Section 8.4. Restoration

The following provisions shall apply in connection with the Restoration of the Property:

(a) If the Net Proceeds shall be less than the Restoration Threshold and the costs of
completing the Restoration shall be less than the Restoration Threshold, the Net Proceeds will be
disbursed by Lender to Borrower upon receipt of Borrower’s written undertaking to expeditiously
commence and to satisfactorily complete with due diligence the Restoration in accordance with the
terms of this Agreement.

(b) If the Net Proceeds are equal to or greater than the Restoration Threshold or the costs of
completing the Restoration are equal to or greater than the Restoration Threshold, Lender shall
make the Net Proceeds available for the Restoration subject to the conditions of and in accordance
with the provisions of this Section 8.4. The term “Net Proceeds” for purposes of this
Section 8.4 shall mean: (i) the net amount of all insurance proceeds received by Lender as
a result of a Casualty (excluding insurance proceeds from rent loss, liability or workers’
compensation coverage), after deduction of its reasonable costs and expenses (including, but not
limited to, reasonable counsel fees and disbursements), if any, in collecting the same (“Insurance
Proceeds”), or (ii) the net amount of the Award as a result of a Condemnation, after deduction of
its reasonable costs and expenses (including, but not limited to, reasonable counsel fees and
disbursements), if any, in collecting the same (“Condemnation Proceeds”), whichever the case may
be.

(i) Net Proceeds shall be made available to Borrower for Restoration provided that
each of the following conditions are met:

(A) no Event of Default shall have occurred and be continuing;

(B) (1) in the event the Net Proceeds are Insurance Proceeds, less than thirty
percent (30%) of the total floor area of the Improvements on the Property has been
damaged, destroyed or rendered unusable as a result of a Casualty and the amount of
damage does not exceed thirty percent (30%) of the Property’s fair market value (as
reasonably determined by Lender) immediately prior to the occurrence of such
Casualty, or (2) in the event the Net Proceeds are Condemnation Proceeds, less than
ten percent (10%) of the land constituting the Property is taken, such land is
located along the perimeter or periphery of the Property, and less than fifteen
percent (15%) of the aggregate floor area of the Improvements is taken and the
taking does not exceed fifteen percent (15%) of the Property’s fair market value
immediately prior to the occurrence of such taking;

(C) [Intentionally Omitted];

(D) Borrower shall commence the Restoration as soon as reasonably practicable
(but in no event later than the earlier of (i) one hundred twenty (120) days after
such Casualty or Condemnation, whichever the case may be, occurs or (ii) thirty (30)
days after the Borrower’s receipt of all necessary permits and approvals) and shall
diligently pursue the same to satisfactory completion;

(E) Lender shall be satisfied that all scheduled payments of principal and
interest under the Note, which will be incurred during the period of Restoration
will be covered out of the Net Proceeds, insurance coverage referred to in
Section 8.1(a)(iii) above, or other funds of Borrower;

(F) Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (1) six (6) months prior to the Maturity Date,
(2) such time as may be required under applicable zoning law, ordinance, rule or
regulation, or (3) the expiration of the insurance coverage referred to in
Section 8.1(a)(iii);

(G) Lender shall be satisfied that the fair market value and cash flow from the
Property six (6) months from the date that the Property is repaired or replaced and
operations are resumed will not be less than the fair market value and cash flow
immediately prior to the Casualty or Condemnation, as applicable;

(H) the Property and the use thereof after the Restoration will be in
compliance with and permitted under all Legal Requirements;

(I) the Restoration shall be done and completed by Borrower in a diligent
fashion and in compliance with all applicable Legal Requirements;

(J) such Casualty or Condemnation, as applicable, does not result in the
permanent loss of access to the Property or the Improvements that would reasonably
be expected to have a Material Adverse Effect;

(K) Borrower shall deliver, or cause to be delivered, to Lender a detailed
budget certified by Borrower’s architect or engineer setting forth the cost of
completing the Restoration, which budget shall be acceptable to Lender, together
with complete plans and specifications for the Restoration; and

(L) the Net Proceeds together with any cash or cash equivalent deposited by
Borrower with Lender are sufficient in Lender’s reasonable judgment to cover the
cost of the Restoration.

(ii) Net Proceeds shall be held by Lender and, until disbursed in accordance with the
provisions of this Section 8.4(b), shall constitute additional security for the Debt and
other obligations under the Loan Documents. Net Proceeds shall be disbursed by Lender to, or as
directed by, Borrower from time to time during the course of the Restoration, upon receipt of
evidence satisfactory to Lender that (A) all the conditions precedent to such advance, including
those set forth in Section 8.4(b)(i), have been satisfied, (B) all materials installed
and work and labor performed (except to the extent that they are to be paid for out of the
requested disbursement) in connection with the related Restoration item have been paid for in
full, and (C) there exist no notices of pendency, stop orders, mechanic’s or materialman’s liens
or notices of intention to file same, or any other liens or encumbrances of any nature
whatsoever on the Property which have not either been fully bonded to the satisfaction of Lender
and discharged of record or in the alternative fully insured to the satisfaction of Lender by
the title company issuing the Title Insurance Policy. Insurance Proceeds from rent loss or
business interruption coverage, as applicable, which are required to be maintained by Borrower
pursuant to Section 8.1(a), shall be controlled by Lender at all times, shall not be
subject to the provisions of this Section 8.4 and shall be used solely for the payment
of the obligations under the Loan Documents and operating expenses.

(iii) All plans and specifications required in connection with the Restoration shall be
subject to prior review and acceptance in all respects by Lender and by an independent
consulting engineer selected by Lender (the “Restoration Consultant”), in each case, which shall
not be unreasonably withheld, conditioned or delayed. Lender shall have the use of the plans
and specifications and all permits, licenses and approvals required or obtained in connection
with the Restoration. The identity of the contractors, subcontractors and materialmen engaged
in the Restoration, as well as the contracts in excess of $50,000 under which they have been
engaged, shall be subject to prior review and acceptance by Lender and the Restoration
Consultant, in each case, which shall not be unreasonably withheld, conditioned or delayed. All
costs and expenses incurred by Lender in connection with making the Net Proceeds available for
the Restoration, including, without limitation, reasonable counsel fees and disbursements and
the Restoration Consultant’s usual, customary and reasonable fees, shall be paid by Borrower.

(iv) In no event shall Lender be obligated to make disbursements of the Net Proceeds in
excess of an amount equal to the costs actually incurred from time to time for work in place as
part of the Restoration, as certified by the Restoration Consultant, minus the Restoration
Retainage. The term “Restoration Retainage” shall mean an amount equal to five percent (5%) of
the costs actually incurred for work in place as part of the Restoration, as certified by the
Restoration Consultant, until the Restoration has been completed. The Restoration Retainage
shall be reduced to zero upon receipt by Lender of satisfactory evidence that fifty percent
(50%) of the Restoration has been completed. The Restoration Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this Section 8.4(b), be less
than the amount actually held back by Borrower from contractors, subcontractors and materialmen
engaged in the Restoration. The Restoration Retainage shall not be released until the
Restoration Consultant certifies to Lender that the Restoration has been completed in accordance
with the provisions of this Section 8.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate Governmental
Authorities, and Lender receives evidence satisfactory to Lender that the costs of the
Restoration have been paid in full or will be paid in full out of the Restoration Retainage;
provided, however, that Lender will release the portion of the Restoration
Retainage being held with respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Restoration Consultant certifies to Lender that the
contractor, subcontractor or materialman has satisfactorily completed all work and has supplied
all materials in accordance with the provisions of the contractor’s, subcontractor’s or
materialman’s contract, the contractor, subcontractor or materialman delivers the lien waivers
and evidence of payment in full of all sums due to the contractor, subcontractor or materialman
as may be reasonably requested by Lender or by the title company issuing the Title Insurance
Policy, and Lender receives an endorsement to the Title Insurance Policy insuring the continued
priority of the lien of the Mortgage and evidence of payment of any premium payable for such
endorsement. If required by Lender, the release of any such portion of the Restoration
Retainage shall be approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.

(v) Lender shall not be obligated to make disbursements of the Net Proceeds more frequently
than once every calendar month.

(vi) If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the
reasonable opinion of Lender in consultation with the Restoration Consultant, be sufficient to
pay in full the balance of the costs which are estimated by the Restoration Consultant to be
incurred in connection with the completion of the Restoration, Borrower shall deposit the
deficiency (the “Net Proceeds Deficiency”) with Lender before any further disbursement of the
Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall be held by
Lender and shall be disbursed for costs actually incurred in connection with the Restoration on
the same conditions applicable to the disbursement of the Net Proceeds, and until so disbursed
pursuant to this Section 8.4(b) shall constitute additional security for the Debt and
other obligations under the Loan Documents.

(vii) The excess, if any, of the Insurance Proceeds and the remaining balance, if any, of
the Net Proceeds Deficiency deposited with Lender after the Restoration Consultant certifies to
Lender that the Restoration has been completed in accordance with the provisions of this
Section 8.4(b), and the receipt by Lender of evidence satisfactory to Lender that all
costs incurred in connection with the Restoration have been paid in full, shall be remitted by
Lender to Borrower, provided no Event of Default shall have occurred and shall be
continuing under the Note, this Agreement or any of the other Loan Documents.

(c) All Net Proceeds not required to be made available for Restoration, returned to Borrower
as excess Net Proceeds pursuant to Section 8.4(b)(vii), or in the case of Condemnation
Proceeds, applied by Lender in accordance with this Section 8.4(c), may (i) be retained and
applied by Lender toward the payment of the Debt whether or not then due and payable in such order,
priority and proportions as Lender in its sole discretion shall deem proper, or, (ii) at the sole
discretion of Lender, be paid, either in whole or in part, to Borrower for such purposes and upon
such conditions as Lender shall designate. If, pursuant to this Section 8.4, Lender shall
receive and retain Net Proceeds, the Debt shall be reduced only by the amount thereof received and
retained by Lender and actually applied by Lender in reduction thereof; provided, however, that in
the event the Net Proceeds are applied to the Debt due to Lender not making the Net Proceeds
available for Restoration and such Net Proceeds are not sufficient to repay the Debt in its
entirety, then for so long as no Event of Default has occurred and is continuing, Borrower shall be
permitted to prepay the remainder of the outstanding Debt in compliance with the requirements of
Article 2, without the requirement for defeasance or the payment of any prepayment
premiums, fee or penalty. Following the Securitization of the Loan, if, after a taking of any
portion of the Property by a condemning authority, the ratio of the unpaid principal balance of the
Loan to the value of the remaining Property (as determined by Lender using any commercially
reasonable valuation method, but based solely on the value of real property and excluding personal
property and going-concern value) (the “LTV Ratio”) is greater than one hundred twenty-five percent
(125%), then Borrower shall be required to repay a portion of the principal balance of the Debt by
an amount equal to the least of the following amounts: (i) all Condemnation Proceeds, (ii) the fair
market value of such portion of the Property taken at the time of the taking, and (iii) an amount
such that the LTV Ratio following the taking is not greater than the LTV Ratio immediately prior to
the taking.

(d) In the event of foreclosure of the Mortgage, or other transfer of title to the Property in
extinguishment in whole or in part of the Debt, all right, title and interest of Borrower in and to
the Policies then in force concerning the Property and all proceeds payable thereunder shall
thereupon vest in the purchaser at such foreclosure, Lender or other transferee in the event of
such other transfer of title.

ARTICLE 9

RESERVE FUNDS

Section 9.1. Required Repairs

(a) Borrower shall make the repairs and improvements to the Property set forth on Schedule
9.1 and as more particularly described in the Property Condition Report prepared in connection
with the closing of the Loan (such repairs hereinafter referred to as “Required Repairs”).
Borrower shall complete the Required Repairs in a good and workmanlike manner on or before the date
that is twelve (12) months from the Closing Date or within such other time frame for completion
specifically set forth on Schedule 9.1.

(b) Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s
agent to fund the Required Repairs (the “Required Repair Account”) into which Borrower shall
deposit on the date hereof the amount of $0.00, which amount equals one hundred twenty-five percent
(125%) of the estimated cost for the completion of the Required Repairs. Amounts so deposited
shall hereinafter be referred to as the “Required Repair Funds”.

(c) Upon the earliest to occur of (i) the timely completion of all Required Repairs and any
Additional Required Repairs, if any, in accordance with the requirements of this Agreement, as
verified by Lender in its reasonable discretion, and provided no Event of Default is then
continuing, (ii) the payment in full of the Debt or (iii) the earlier release of the Lien of the
Mortgage (and all related obligations) in accordance with the terms of this Agreement and the other
Loan Documents, all amounts remaining on deposit, if any, in the Required Repair Account shall be
promptly returned to Borrower.

Section 9.2. Replacements

(a) On an ongoing basis throughout the term of the Loan, Borrower shall make capital repairs,
replacements and improvements necessary to keep the Property in good order and repair and in a good
marketable condition or prevent deterioration of the Property beyond normal wear and tear
(collectively, the “Replacements”). Borrower shall complete all Replacements in a good and
workmanlike manner as soon as commercially reasonable after commencing to make each such
Replacement.

(b) Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s
agent to fund the Replacements (the “Replacement Reserve Account”) into which Borrower shall
deposit on the date hereof $0.00. In addition, Borrower shall deposit $8,665.00 (the “Replacement
Reserve Monthly Deposit”) into the Replacement Reserve Account on each Payment Date. Amounts so
deposited shall hereinafter be referred to as “Replacement Reserve Funds.”

(c) All sums on deposit in the Replacement Reserve Account shall be disbursed to Borrower upon
the earliest to occur of (i) payment in full of the Debt or (ii) the release of the Lien of the
Mortgage (and all related obligations) in accordance with the terms of this Agreement and the other
Loan Documents.

	 	 	 
	Section 9.3.

	 	[Intentionally Omitted]
	
 
	 	 
	Section 9.4.

	 	Tax and Insurance Reserve Funds
	
 
	 	 

(a) Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s
agent sufficient to discharge Borrower’s obligations for the payment of Taxes and Insurance
Premiums pursuant to Section 5.4 and Section 8.1 hereof (the “Tax and Insurance
Reserve Account”) into which Borrower shall deposit on the date hereof $529,216.94, which amount,
when added to the required monthly deposits set forth in the next sentence, shall be sufficient to
make the payments of Property Taxes and Insurance Premiums as required herein. Borrower shall
deposit into the Tax and Insurance Reserve Account on each Payment Date (a) one-twelfth of the
Property Taxes that Lender estimates will be payable during the next ensuing twelve (12) months or
such higher amount necessary to accumulate with Lender sufficient funds to pay all such Property
Taxes at least thirty (30) days prior to the earlier of (i) the date that the same will become
delinquent and (ii) the date that additional charges or interest will accrue due to the non-payment
thereof, and (b) except to the extent Lender has waived in writing the insurance escrow because the
insurance required hereunder is maintained under a blanket insurance Policy acceptable to Lender in
accordance with Section 8.1(c), one-twelfth of the Insurance Premiums that Lender estimates
will be payable during the next ensuing twelve (12) months for the renewal of the coverage afforded
by the Policies upon the expiration thereof or such higher amount necessary to accumulate with
Lender sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies (said amounts in (a) and (b) above hereinafter called the “Tax and
Insurance Reserve Funds”). Lender will apply the Tax and Insurance Reserve Funds to payments of
Property Taxes and Insurance Premiums required to be made by Borrower pursuant to
Section 5.4 and Section 8.1 hereof. In making any disbursement from the Tax and
Insurance Reserve Account, Lender may do so according to any bill, statement or estimate procured
from the appropriate public office or tax lien service (with respect to Property Taxes) or insurer
or agent (with respect to Insurance Premiums), without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or
title or claim thereof. If the amount of the Tax and Insurance Reserve Funds shall exceed the
amounts due for Property Taxes and Insurance Premiums pursuant to Section 5.4 and
Section 8.1 hereof, Lender shall, in its sole discretion, return any excess to Borrower or
credit such excess against future payments to be made to the Tax and Insurance Reserve Account. If
at any time Lender reasonably determines that the Tax and Insurance Reserve Funds are not or will
not be sufficient to pay Property Taxes and Insurance Premiums by the dates set forth in (a) and
(b) above, Lender shall notify Borrower of such determination and Borrower shall pay to Lender any
amount necessary to make up the deficiency within ten (10) Business Days after notice from Lender
to Borrower requesting payment thereof.

(b) All sums on deposit in the Tax and Insurance Reserve Account shall be disbursed to
Borrower upon the earliest to occur of (i) payment in full of the Debt or (ii) the release of the
Lien of the Mortgage (and all related obligations) in accordance with the terms of this Agreement
and the other Loan Documents.

Section 9.5. Excess Cash; Operating Expenses; Extraordinary Expenses

(a) Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s
agent into which Borrower shall deposit all Excess Cash on each Payment Date during the
continuation of a Cash Sweep Period (the “Excess Cash Reserve Account”). Amounts so deposited
shall hereinafter be referred to as the “Excess Cash Reserve Funds”. Excess Cash Reserve Funds
shall be held by Lender as additional security for the Loan; provided, however, during the
continuance of an Event of Default, Lender shall have the right, but not the obligation, in its
sole discretion to apply Excess Cash Reserve Funds to the Debt in such order and in such manner as
Lender shall elect. Provided no Event of Default has occurred and is continuing, all sums on
deposit in the Excess Cash Reserve Account shall be disbursed to Borrower upon the earlier to occur
of (i) payment in full of the Debt, (ii) the release of the Lien of the Mortgage (and all related
obligations) in accordance with the terms of this Agreement, or (iii) the discontinuation of a Cash
Sweep Period. In the event a Cash Sweep Period occurs twice during the term of the Loan, Borrower
shall not be entitled to any disbursement of Excess Cash Reserve Funds during the remaining term of
the Loan, the Cash Sweep Period shall continue, and Borrower shall continue to be obligated to pay
Excess Cash to Lender on each Payment Date until the Debt is paid in full.

(b) During the continuation of a Cash Sweep Period, Borrower shall submit to Lender not later
than the twentieth (20th) day of each calendar month, a statement certified by Borrower in the form
required by Lender (i) setting forth those Operating Expenses and Extraordinary Expenses (as well
as a reasonably detailed explanation thereof) to be paid by Borrower during the following calendar
month, (ii) stating that no Operating Expenses or Extraordinary Expenses are more than sixty (60)
days past due. Together with each such request, Borrower shall furnish Lender with bills and all
other documents necessary for the payment of the Operating Expenses and/or Extraordinary Expenses
which are the subject of such request. Only those Operating Expenses which are consistent with the
Annual Budget, as well as those Operating Expenses and Extraordinary Expenses otherwise approved by
Lender in writing in its reasonable discretion, shall be approved for payment and shall be
disbursed to Borrower on the next Payment Date.

Section 9.6. Required Work

Borrower shall diligently pursue all Required Repairs and Replacements (collectively, the
“Required Work”) to completion in accordance with the following requirements:

(a) Lender reserves the right, at its option, to approve all contracts or work orders with
materialmen, mechanics, suppliers, subcontractors, contractors or other parties providing labor or
materials in connection with the Required Work to the extent such contracts or work orders exceed
$200,000. Upon Lender’s request, Borrower shall assign any contract or subcontract to Lender to
the extent such contract or subcontract exceeds $200,000.

(b) In the event Lender determines in its reasonable discretion that any Required Work is not
being or has not been performed in a workmanlike or timely manner, Lender shall provide Borrower
with written notice of such fact and shall have the option to withhold disbursement for such
unsatisfactory Required Work until Borrower has remedied any deficiencies specified in Lender’s
notice.

(c) During the continuance of an Event of Default, in order to facilitate Lender’s completion
of the Required Work, Borrower grants Lender the right to enter onto the Property and perform any
and all work and labor necessary to complete the Required Work and/or employ watchmen to protect
the Property from damage. All sums so expended by Lender, to the extent not from the Reserve
Funds, shall be deemed to have been advanced under the Loan to Borrower and secured by the
Mortgage. For this purpose Borrower constitutes and appoints Lender its true and lawful
attorney-in-fact with full power of substitution to complete or undertake the Required Work in the
name of Borrower upon Borrower’s failure to do so in a workmanlike and timely manner. Such power
of attorney shall be deemed to be a power coupled with an interest and cannot be revoked. Borrower
empowers said attorney-in-fact as follows: (i) to use any of the Reserve Funds for the purpose of
making or completing the Required Work; (ii) to make such additions, changes and corrections to the
Required Work as shall be reasonably necessary or desirable to complete the Required Work;
(iii) to employ such contractors, subcontractors, agents, architects and inspectors as shall be
reasonably required for such purposes; (iv) to pay, settle or compromise all existing bills and
claims which are or may become Liens against the Property, or as may be reasonably necessary or
desirable for the completion of the Required Work, or for clearance of title; (v) to execute all
applications and certificates in the name of Borrower which may be required by any of the contract
documents; (vi) to prosecute and defend all actions or proceedings in connection with the Property
or the rehabilitation and repair of the Property; and (vii) to do any and every act which Borrower
might do on its own behalf to fulfill the terms of this Agreement.

(d) Nothing in this Section 9.6 shall: (i) make Lender responsible for making or
completing the Required Work; (ii) require Lender to expend funds in addition to the Reserve Funds
to make or complete any Required Work; (iii) obligate Lender to proceed with the Required Work; or
(iv) obligate Lender to demand from Borrower additional sums to make or complete any Required Work.

(e) Borrower shall permit Lender and Lender’s agents and representatives (including, without
limitation, Lender’s engineer, architect, or inspector) or third parties performing Required Work
pursuant to this Section 9.6 to enter onto the Property, together with a representative of
Borrower, during normal business hours (subject to the rights of tenants under their Leases) to
inspect the progress of any Required Work and all materials being used in connection therewith, to
examine all plans and shop drawings relating to such Required Work which are or may be kept at the
Property. Borrower shall use commercially reasonable efforts to cause all contractors and
subcontractors to cooperate with Lender and Lender’s representatives or such other persons
described above in connection with inspections described in this Section 9.6 or the
completion of Required Work pursuant to this Section 9.6.

(f) Lender may, to the extent any Required Work would reasonably require an inspection of the
Property, inspect the Property at Borrower’s expense prior to making a disbursement of the Reserve
Funds in order to verify completion of the Required Work for which reimbursement is sought.
Borrower shall pay Lender a reasonable inspection fee not exceeding $1,000 for each such
inspection. Lender may require that such inspection be conducted by an appropriate independent
qualified professional selected by Lender and/or may require a copy of a certificate of completion
by an independent qualified professional acceptable to Lender prior to the disbursement of the
Reserve Funds. Borrower shall pay the expense of the inspection as required hereunder, whether
such inspection is conducted by Lender or by an independent qualified professional.

(g) The Required Work and all materials, equipment, fixtures, or any other item comprising a
part of any Required Work shall be constructed, installed or completed, as applicable, free and
clear of all mechanic’s, materialman’s or other Liens (except for Permitted Encumbrances).

(h) Before each disbursement of the Reserve Funds for Required Work in excess of $50,000,
Lender may require Borrower to provide Lender with a search of title to the Property effective to
the date of the disbursement, which search shows that no mechanic’s or materialmen’s or other Liens
of any nature have been placed against the Property since the date of recordation of the Mortgage
and that title to the Property is free and clear of all Liens (except for Permitted Encumbrances).

(i) All Required Work shall comply with all Legal Requirements and applicable insurance
requirements including, without limitation, applicable building codes, special use permits,
environmental regulations, and requirements of insurance underwriters.

(j) Borrower hereby assigns to Lender all rights and claims Borrower may have against all
Persons supplying labor or materials in connection with the Required Work; provided,
however, that Lender may not pursue any such rights or claims unless an Event of Default
has occurred and remains uncured.

Section 9.7. Release of Reserve Funds

(a) Upon written request from Borrower and satisfaction of the requirements set forth in this
Agreement, Lender shall disburse to Borrower amounts from (i) the Required Repair Account to the
extent necessary to pay for or reimburse Borrower for the actual costs of each Required Repair (but
not exceeding one hundred twenty-five percent (125%) of the original estimated cost of such
Required Repair as set forth on Schedule 9.1, unless Lender has agreed to reimburse
Borrower for such excess cost pursuant to Section 9.7(f)) or (ii) the Replacement Reserve
Account to the extent necessary to pay for or reimburse Borrower for the actual costs of any
approved Replacements. Notwithstanding the preceding sentence, in no event shall Lender be
required to (x) disburse any amounts which would cause the amount of funds remaining in the
Required Repair Account after any disbursement (other than with respect to the final disbursement)
to be less than one hundred twenty-five percent (125%) of the then current estimated cost of
completing all remaining Required Repairs for the Property, (y) disburse funds from any of the
Reserve Accounts if an Event of Default exists, or (z) disburse funds from the Replacement Reserve
Account to reimburse Borrower for the costs of routine repairs or maintenance to the Property or
for costs which are to be reimbursed from funds held in the Required Repair Account.

(b) With each request for disbursement, Borrower shall certify in writing to Lender that all
Required Work has been performed in accordance with all Legal Requirements and that all such
Required Work has been completed lien free and paid for in full or will be paid for in full upon
disbursement of the requested funds. In addition, each request for disbursement in excess of
$50,000 shall be on a form provided or approved by Lender and shall (i) include copies of invoices
for all items or materials purchased and all labor or services provided, (ii) specify (A) the
Required Work for which the disbursement is requested, (B) the quantity and price of each item
purchased, if the Required Work includes the purchase or replacement of specific items, (C) the
price of all materials (grouped by type or category) used in any Required Work other than the
purchase or replacement of specific items, and (D) the cost of all contracted labor or other
services applicable to each Required Work for which such request for disbursement is made, (iii) if
requested by Lender, conditional lien waivers from each contractor, supplier, materialman, mechanic
or subcontractor with respect to the completion of its work or delivery of its materials. Except
as provided in Section 9.7(d), each request for disbursement shall be made only after
completion of the Required Repair, Replacement (or the portion thereof completed in accordance with
Section 9.7(d)), as applicable, for which disbursement is requested. Borrower shall
provide Lender evidence satisfactory to Lender in its reasonable judgment of such completion or
performance.

(c) Any lien waiver delivered hereunder shall conform to all Legal Requirements and shall
cover all work performed and materials supplied (including equipment and fixtures) for the Property
by that contractor, supplier, subcontractor, mechanic or materialman through the date covered by
the current disbursement request.

(d) If the cost of any item of Required Work exceeds $50,000, a request for disbursement from
the Reserve Accounts may be made after completion of a portion of the work under such contract,
provided (A) the materials for which the request is made are on site at the Property and are
properly secured or have been installed in the Property, (B) all other conditions in this Agreement
for disbursement have been satisfied, and (C) in the case of a Replacement, funds remaining in the
Replacement Reserve Account are, in Lender’s judgment, sufficient to complete such Replacement and
other Replacements when required.

(e) Borrower shall not make a request for, nor shall Lender have any obligation to make, any
disbursement from any Reserve Account more frequently than once in any calendar month and (except
in connection with the final disbursement) in any amount less than the lesser of (i) $10,000 or
(ii) the total cost of the Required Work for which the disbursement is requested.

(f) In the event Borrower requests a disbursement from the Required Repair Account to pay for
or to reimburse Borrower for the actual cost of labor or materials used in connection with repairs
or improvements other than the Required Repairs specified on Schedule 9.1, or for a
Required Repair to the extent the cost of such Required Repair exceeds one hundred twenty-five
(125%) of the estimated cost of such Required Repair as set forth on Schedule 9.1 (in
either case, an “Additional Required Repair”), Borrower shall disclose in writing to Lender the
reason why funds in the Required Repair Account should be used to pay for such Additional Required
Repair. If Lender determines that (i) such Additional Required Repair is of the type intended to
be covered by the Required Repair Account, (ii) such Additional Required Repair is not covered or
is not of the type intended to be covered by the Replacement Reserve Account, (iii) costs for such
Additional Required Repair are reasonable, (iv) the funds in the Required Repair Account are
sufficient to pay for such Additional Required Repair and all other Required Repairs for the
Property specified on Schedule 9.1, and (v) all other conditions for disbursement under
this Agreement have been met, Lender may disburse funds from the Required Repair Account.

(g) Lender’s disbursement of any Reserve Funds or other acknowledgment of completion of any
Required Work in a manner satisfactory to Lender shall not be deemed a certification or warranty by
Lender to any Person that the Required Work has been completed in accordance with Legal
Requirements.

(h) If the funds in any Reserve Account should exceed the amount of payments actually applied
by Lender for the purposes of the account, Lender in its sole discretion shall either return any
excess to Borrower or credit such excess against future payments to be made to that Reserve
Account. If at any time Lender reasonably determines that the Reserve Funds are not or will not be
sufficient to make the required payments, Lender shall notify Borrower of such determination and
Borrower shall pay to Lender any amount necessary to make up the deficiency within ten (10) days
after notice from Lender to Borrower requesting payment thereof.

(i) The insufficiency of any balance in any of the Reserve Accounts shall not relieve Borrower
from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents.

Section 9.8. Reserve Funds Generally

(a) Reserve Funds shall not be invested except in such Permitted Investments as determined and
directed by Lender or its loan servicer.  Except for Interest-Bearing Reserve Funds, all income and
interest earned on the investment of Reserve Funds shall be for the account of and be retained by
Lender or such loan servicer. All income and interest earned on the investment of Interest-Bearing
Reserve Funds shall be for the account of Borrower. In no event shall Lender or its loan servicer
be required to invest Reserve Funds in any particular type of Permitted Investment or select any
particular account or credit funds therein at any particular rate of interest, provided
that selection of the account and the rate of interest credited to Borrower on funds deposited
therein shall be consistent with the general standards at the time being utilized by Lender or its
loan servicer, as applicable, in establishing similar accounts for loans of comparable type. Any
income or interest credited to Borrower hereunder shall be part of the applicable Reserve Account
and shall be disbursed in accordance with Section 9.7 above; provided,
however, that Lender may, at its election, retain any such interest for its own account
during the occurrence and continuance of an Event of Default. Borrower agrees that it shall
include all interest to which it is entitled under the terms hereof as the income of Borrower and
shall be the owner of the Reserve Funds for federal and applicable state and local tax purposes,
except to the extent that Lender retains any interest for its own account during the occurrence and
continuance of an Event of Default as provided herein.

(b) Borrower grants to Lender a first-priority perfected security interest in, and assigns and
pledges to Lender, each of the Reserve Accounts and any and all Reserve Funds now or hereafter
deposited in the Reserve Accounts as additional security for payment of the Debt. Until expended
or applied in accordance herewith, the Reserve Accounts and the Reserve Funds shall constitute
additional security for the Debt. The provisions of this Section 9.8 are intended to give
Lender “control” of the Reserve Accounts within the meaning of the UCC.

(c) The Reserve Accounts and any and all Reserve Funds now or hereafter deposited in the
Reserve Accounts shall be subject to the exclusive dominion and control of Lender, which shall hold
the Reserve Accounts and any or all Reserve Funds now or hereafter deposited in the Reserve
Accounts subject to the terms and conditions of this Agreement. Without limitation of the
foregoing, Borrower and Lender acknowledge and agree that: (i) each Reserve Account is a
“securities account” (within the meaning of Section 8-501(a) of the UCC); (ii) all property held in
any Reserve Account (including without limitation cash) shall be treated as a “financial asset”
(within the meaning of Section 8-102(a)(9) of the UCC); and (iii) the security interest of Lender
therein shall be automatically perfected by control pursuant to Sections 8-106(e) and 9-106(a) of
the UCC. Borrower shall have no right of withdrawal from the Reserve Accounts or any other right
or power with respect to the Reserve Accounts or any or all of the Reserve Funds now or hereafter
deposited in the Reserve Accounts, except as expressly provided in this Agreement.

(d) Lender shall furnish or cause to be furnished to Borrower, without charge, an annual
accounting of each Reserve Account in the normal format of Lender or its loan servicer, showing
credits and debits to such Reserve Account and the purpose for which each debit to each Reserve
Account was made.

(e) As long as no Event of Default is continuing, Lender shall make disbursements from the
Reserve Accounts in accordance with this Agreement. All such disbursements shall be deemed to have
been expressly pre-authorized by Borrower, and shall not be deemed to constitute the exercise by
Lender of any remedies against Borrower unless an Event of Default has occurred and is continuing
and Lender has expressly stated in writing its intent to proceed to exercise its remedies as a
secured party, pledgee or lienholder with respect to the Reserve Accounts.

(f) If any Event of Default is continuing, Borrower shall immediately lose all of its rights
to receive disbursements from the Reserve Accounts until the earlier to occur of (i) the date on
which such Event of Default is cured to Lender’s satisfaction, or (ii) the payment in full of the
Debt. In addition, at Lender’s election, Borrower shall lose all of its rights to receive interest
on the Interest Bearing Reserve Funds during the occurrence and continuance of an Event of Default.
Upon the occurrence and continuance of any Event of Default, Lender may exercise any or all of its
rights and remedies as a secured party, pledgee and lienholder with respect to the Reserve
Accounts. Without limitation of the foregoing, during the continuance of any Event of Default,
Lender may use and disburse the Reserve Funds (or any portion thereof) for any of the following
purposes: (A) repayment of the Debt, including, but not limited to, principal prepayments and the
prepayment premium applicable to such full or partial prepayment (as applicable); (B) reimbursement
of Lender for all losses, fees, costs and expenses (including, without limitation, reasonable legal
fees) suffered or incurred by Lender as a result of such Event of Default; (C) payment of any
amount expended in exercising any or all rights and remedies available to Lender at law or in
equity or under this Agreement or under any of the other Loan Documents; (D) payment of any item
from any of the Reserve Accounts as required or permitted under this Agreement; or (E) any other
purpose permitted by applicable Legal Requirements; provided, however, that any
such application of funds shall not cure or be deemed to cure any Event of Default. Without
limiting any other provisions hereof, each of the remedial actions described in the immediately
preceding sentence shall be deemed to be a commercially reasonable exercise of Lender’s rights and
remedies as a secured party with respect to the Reserve Funds and shall not in any event be deemed
to constitute a setoff or a foreclosure of a statutory banker’s lien. Nothing in this Agreement
shall obligate Lender to apply all or any portion of the Reserve Funds to effect a cure of any
Event of Default, or to pay the Debt, or in any specific order of priority. The exercise of any or
all of Lender’s rights and remedies under this Agreement or under any of the other Loan Documents
shall not in any way prejudice or affect Lender’s right to initiate and complete a foreclosure
under the Mortgage.

(g) The Reserve Funds shall not constitute escrow or trust funds and may be commingled in one
or more Eligible Accounts with other funds controlled by Lender or its loan servicer, including,
without limitation, funds pledged in favor of Lender by other borrowers, whether for the same
purposes as the Reserve Accounts or otherwise. Without limiting any other provisions of this
Agreement or any other Loan Document, the Reserve Accounts may be established and held in such name
or names as Lender or its loan servicer, as agent for Lender, shall deem appropriate, including,
without limitation, in the name of Lender or such loan servicer as agent for Lender. In the case
of any Reserve Account which is held in a commingled account, Lender or its loan servicer, as
applicable, shall maintain records sufficient to enable it to determine at all times which portion
of such account is related to the Loan. The Reserve Accounts are solely for the protection of
Lender. With respect to the Reserve Accounts, Lender shall have no responsibility beyond the
allowance of due credit for the sums actually received by Lender or beyond the reimbursement or
payment of the costs and expenses for which such accounts were established in accordance with their
terms. Upon assignment of the Loan by Lender, any Reserve Funds shall be turned over to the
assignee and any responsibility of Lender as assignor shall terminate. The requirements of this
Agreement concerning the Reserve Accounts in no way supersede, limit or waive any other rights or
obligations of the parties under any of the Loan Documents or under applicable Legal Requirements.

(h) Borrower shall not, without obtaining the prior written consent of Lender, further pledge,
assign or grant any security interest in the Reserve Accounts or the Reserve Funds deposited
therein or permit any Lien to attach thereto, except for the security interest granted in this
Section 9.8, or any levy to be made thereon, or any UCC Financing Statements, except those
naming Lender as the secured party, to be filed with respect thereto.

(i) Borrower will maintain the security interest created by this Section 9.8 as a
first priority perfected security interest and will defend the right, title and interest of Lender
in and to the Reserve Accounts and the Reserve Funds against the claims and demands of all Persons
whomsoever. At any time and from time to time, upon the written request of Lender, and at the sole
expense of Borrower, Borrower will promptly and duly execute and deliver such further instruments
and documents and will take such further actions as Lender reasonably may request for the purpose
of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein
granted.

(j) Lender shall be protected in acting upon any notice, resolution, request, consent, order,
certificate, report, opinion, bond or other paper, document or signature believed by Lender to be
genuine, and it may be assumed conclusively that any Person purporting to give any of the foregoing
in connection with the Reserve Account’s has been duly authorized to do so. Lender may consult
with counsel, and the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered by them hereunder and in good faith in
accordance therewith. Lender shall not be liable to Borrower for any act or omission done or
omitted to be done by Lender in reliance upon any instruction, direction or certification received
by Lender and without gross negligence or willful misconduct.

(k) Beyond the exercise of reasonable care in the custody thereof, Lender shall not have any
duty as to any Reserve Funds in its possession or control as agent therefor or bailee thereof or
any income thereon or the preservation of rights against any person or otherwise with respect
thereto. In no event shall Lender or its Affiliates, agents, employees or bailees, be liable or
responsible for any loss or damage to any of the Reserve Funds, or for any diminution in value
thereof, by reason of the act or omission of Lender, except to the extent that such loss or damage
results from Lender’s gross negligence or willful misconduct or intentional nonperformance by
Lender of its obligations under this Agreement.

ARTICLE 10

CASH MANAGEMENT

Section 10.1. Deposit Account and Cash Management Account

(a) Borrower covenants that it shall, upon the commencement of a Cash Sweep Period, promptly
establish and thereafter maintain, pursuant to the Deposit Account Control Agreement, an Eligible
Account with Deposit Bank into which Borrower shall, and shall cause Manager to, deposit or cause
to be deposited, all Rents and other revenue from the Property (such account, all funds at any time
on deposit therein and any proceeds, replacements or substitutions of such account or funds
therein, are collectively referred to herein as the “Deposit Account”). In the event Deposit Bank
ceases to qualify as an Eligible Institution, resigns as Deposit Bank, or defaults under or
terminates the Deposit Account Control Agreement, Borrower shall cooperate with Lender in
designating a successor Eligible Institution and transferring the Deposit Account to such Eligible
Institution, each within thirty (30) days after request by Lender. After the occurrence and during
the continuance of an Event of Default, in the event Borrower fails to do so, Lender shall have the
right, and Borrower hereby grants to Lender a power of attorney (which power of attorney shall be
coupled with an interest and irrevocable so long as any portion of the Debt remains outstanding),
to designate a successor Eligible Institution to serve as Deposit Bank.

(b) Borrower acknowledges and confirms that, pursuant to the Cash Management Agreement, an
Eligible Account with Cash Management Bank into which funds in the Deposit Account shall be
transferred pursuant to the terms of Section 10.2(b) hereof (such account, the sub-accounts
thereof, all funds at any time on deposit therein and any proceeds, replacements or substitutions
of such account or funds therein, are collectively referred to herein as the “Cash Management
Account”) shall be established.

(c) The Deposit Account and Cash Management Account shall each be in the name of Borrower for
the benefit of Lender, provided that Borrower shall be the owner of all funds on deposit in
such accounts for federal and applicable state and local tax purposes.

(d) The Deposit Account and Cash Management Account shall be subject to the exclusive dominion
and control of Lender and, except as otherwise expressly provided herein, neither Borrower, Manager
nor any other party claiming on behalf of, or through, Borrower or Manager, shall have any right of
withdrawal therefrom or any other right or power with respect thereto.

Section 10.2. Deposits and Withdrawals

(a) Borrower covenants that:

(i) Upon the commencement of a Cash Sweep Period, Borrower shall, and shall cause Manager
to, deposit all amounts received by Borrower or Manager from the operation of the Property,
including, without limitation, Rents into the Deposit Account within two (2) Business Days after
receipt thereof;

(ii) Upon the commencement of a Cash Sweep Period, Borrower shall, and shall cause Manager
to, instruct all Persons that maintain open accounts with Borrower or Manager with respect to
the Property, if any, or with whom Borrower or Manager does business on an “accounts receivable”
basis with respect to the Property, if any, to deliver all payments due under such accounts
directly to the Deposit Account or a post office address maintained by Deposit Bank for
processing deposits to the Deposit Account, as applicable. Neither Borrower nor Manager shall
direct any such Person to make payments due under such accounts, if any, in any other manner;

(iii) All Rents or other income from the Property shall (A) be deemed additional security
for payment of the Debt and shall be held in trust for the benefit, and as the property, of
Lender, and (B) not be commingled with any other funds or property of Borrower or Manager;

(iv) [Intentionally Omitted]; and

(v) If a Cash Sweep Period is in effect and so long as any portion of the Debt remains
outstanding, neither Borrower, Manager nor any other Person shall open or maintain any accounts
other than the Deposit Account into which revenues from the ownership and operation of the
Property are initially deposited. The foregoing shall not prohibit Borrower from utilizing one
or more separate accounts for the disbursement or retention of funds that have been transferred
to Borrower pursuant to the express terms of this Agreement during a Cash Sweep Period.

(b) Borrower hereby irrevocably authorizes Lender to instruct Deposit Bank to transfer, or
cause to be transferred, on each Business Day during a Cash Sweep Period by wire transfer or other
method of transfer mutually agreeable to Deposit Bank and Lender of immediately available funds,
all collected and available balances in the Deposit Account (subject to any minimum retained or
“peg” balance that may be required pursuant to the terms of the Deposit Account Control Agreement)
to (i) prior to a Cash Sweep period, such account as shall be specified by Borrower in writing to
Lender and Deposit Bank and (ii) during a Cash Sweep Period, the Cash Management Account to be held
until disbursed pursuant to the terms of the Cash Management Agreement.

(c) Notwithstanding anything to the contrary herein, Borrower acknowledges that Borrower is
responsible for monitoring the sufficiency of funds deposited in the Cash Management Account and
that Borrower is liable for any deficiency in available funds which may be necessary to pay all
amounts due from time to time under the Loan Documents, irrespective of whether Borrower has
received any account statement, notice or demand from Cash Management Bank.

(d) If an Event of Default shall have occurred and be continuing, Borrower hereby irrevocably
authorizes Lender to make any and all withdrawals from the Deposit Account and Cash Management
Account and transfers between any of the Reserve Accounts as Lender shall determine in Lender’s
sole and absolute discretion and Lender may use all funds contained in any such accounts for any
purpose, including but not limited to repayment of the Debt in such order, proportion and priority
as Lender may determine in its sole and absolute discretion. Lender’s right to withdraw and apply
funds as stated herein shall be in addition to all other rights and remedies provided to Lender
under this Agreement, the Note, the Mortgage and the other Loan Documents.

Section 10.3. Security Interest

(a) To secure the full and punctual payment of the Debt and performance of all obligations of
Borrower now or hereafter existing under this Agreement and the other Loan Documents, Borrower
hereby grants to Lender a first-priority perfected security interest in the Deposit Account, all
interest, cash, checks, drafts, certificates and instruments, if any, from time to time deposited
or held therein, any and all amounts invested in Permitted Investments, and all “proceeds” (as
defined in the UCC as in effect in the state in which the Deposit Account is located or maintained)
of any or all of the foregoing. Furthermore, Borrower shall not, without obtaining the prior
written consent of Lender, further pledge, assign or grant any security interest in any of the
foregoing or permit any Lien to attach thereto or any levy to be made thereon or any UCC Financing
Statements to be filed with respect thereto. Borrower will maintain the security interest created
by this Section 10.3(a) as a first priority perfected security interest and will defend the
right, title and interest of Lender in and to the Deposit Account against the claims and demands of
all Persons whomsoever. The security interest created hereby shall remain in full force and effect
until payment in full of the Debt. Upon payment in full of the Debt, this security interest shall
terminate without further notice from any party and Lender shall execute such instruments and
documents as may be reasonably requested by Borrower to evidence such termination.

(b) Borrower authorizes Lender to file any financing statement or statements required by
Lender to establish or maintain the validity, perfection and priority of the security interest
granted herein in connection with the Deposit Account. Borrower agrees that at any time and from
time to time, at the expense of Borrower, Borrower will promptly and duly execute and deliver all
further instruments and documents, and take all further action, that may be necessary or desirable,
or that Lender may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby (including, without limitation, any security interest in
and to any Permitted Investments) or to enable Lender to exercise and enforce its rights and
remedies hereunder.

(c) During the continuance of an Event of Default, Lender may exercise any or all of its
rights and remedies as a secured party, pledgee and lienholder with respect to the Deposit Account.
Without limitation of the foregoing, upon and during the continuance of any Event of Default,
Lender may use the Deposit Account for any of the following purposes: (A) repayment of the Debt,
including, but not limited to, principal prepayments and the prepayment premium applicable to such
full or partial prepayment (as applicable); (B) reimbursement of Lender for all Losses suffered or
incurred by Lender as a result of such Event of Default; (C) payment of any amount expended in
exercising any or all rights and remedies available to Lender at law or in equity or under this
Agreement or under any of the other Loan Documents; (D) payment of any item as required or
permitted under this Agreement; or (E) any other purpose permitted by Legal Requirements;
provided, however, that any such application of funds shall not cure or be deemed
to cure any Event of Default. Without limiting any other provisions hereof, each of the remedial
actions described in the immediately preceding sentence shall be deemed to be a commercially
reasonable exercise of Lender’s rights and remedies as a secured party with respect to the Deposit
Account and shall not in any event be deemed to constitute a setoff or a foreclosure of a statutory
banker’s lien. Nothing in this Agreement shall obligate Lender to apply all or any portion of the
Deposit Account to effect a cure of any Event of Default, or to pay the Debt, or in any specific
order of priority. The exercise of any or all of Lender’s rights and remedies under this Agreement
or under any of the other Loan Documents shall not in any way prejudice or affect Lender’s right to
initiate and complete a foreclosure under the Mortgage.

(d) Notwithstanding anything to the contrary contained herein, for purposes of this
Article 10, (i) “Business Day” shall mean a day on which Lender and Deposit Bank are both
open for the conduct of substantially all of their respective banking business at the office in the
city in which the Note is payable, with respect to Lender, and at the office in the city where the
Deposit Account is maintained, with respect to Deposit Bank (in both instances, excluding Saturdays
and Sundays), and (ii) with regard to issues of perfection and priority of security interests
granted hereunder, for purposes of the UCC, the State of New York shall be deemed to be the Deposit
Bank’s jurisdiction (within the meaning of Sections §9-304(b) and §8-110(a) of the UCC).

ARTICLE 11

EVENTS OF DEFAULT; REMEDIES

Section 11.1. Event of Default

The occurrence of any one or more of the following events shall constitute an “Event of
Default”:

(a) if any portion of the Debt is not paid prior to the fifth (5th) day following
the date the same is due or if the entire Debt is not paid on or before the Maturity Date;

(b) except as otherwise expressly provided in the Loan Documents, if any of the Property Taxes
or Other Charges are not paid when the same are due and payable, unless there is sufficient money
in the Tax and Insurance Reserve Account for payment of amounts then due and payable and Lender’s
access to such money has not been constrained or restricted in any manner;

(c) if the Policies are not kept in full force and effect;

(d) if (i) Borrower breaches in any material respect any covenant with respect to itself or
any SPE Component Entity (if any) contained in Article 6 or (ii) a Prohibited Transfer
occurs;

(e) if any representation or warranty of, or with respect to, Borrower, Guarantor, any SPE
Component Entity, or any member, general partner, principal or beneficial owner of any of the
foregoing, made herein, in any other Loan Document, or in any certificate, report, financial
statement or other instrument or document furnished to Lender at the time of the closing of the
Loan or during the term of the Loan shall have been false or misleading in any material respect
when made;

(f) [intentionally omitted];

(g) if (i) Borrower, or any managing member or general partner of Borrower, Guarantor, or any
SPE Component Entity (if any) shall commence any case, proceeding or other action (A) under any
Creditors Rights Laws, seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization, or (B) seeking appointment of
a receiver, trustee, custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or Borrower, any managing member or general partner of Borrower,
Guarantor, or any SPE Component Entity (if any) shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against Borrower, any managing member or general
partner of Borrower, Guarantor, or any SPE Component Entity (if any) any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged
or unbonded for a period of ninety (90) days; or (iii) there shall be commenced against Borrower,
any managing member or general partner of Borrower, Guarantor, or any SPE Component Entity (if any)
any case, proceeding or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets which results in the
entry of any order for any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within ninety (90) days from the entry thereof; or (iv) Borrower, any
managing member or general partner of Borrower, Guarantor, or any SPE Component Entity (if any)
shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
Borrower, any managing member or general partner of Borrower, Guarantor, or any SPE Component
Entity (if any) shall generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due;

(h) if Borrower shall be in default beyond applicable notice and grace periods under any other
mortgage, deed of trust, deed to secure debt or other security agreement covering any part of the
Property, whether it be superior or junior in lien to the Mortgage;

(i) if the Property becomes subject to any mechanic’s, materialman’s or other Lien other than
a Lien for any Property Taxes or Other Charges not then due and payable and the Lien shall remain
undischarged of record (by payment, bonding or otherwise) for a period of thirty (30) days after
Borrower has knowledge thereof;

(j) if any federal tax lien is filed against Borrower, any member or general partner of
Borrower, Guarantor, or any SPE Component Entity (if any) or the Property and same is not
discharged of record (by payment, bonding or otherwise) within thirty (30) days after Borrower has
knowledge thereof;

(k) if a judgment is filed against the Borrower in excess of $50,000 which is not vacated,
dismissed, discharged or bonded over within thirty (30) days after Borrower has knowledge thereof;

(l) if any default occurs under any guaranty or indemnity executed in connection herewith and
such default continues after the expiration of applicable grace periods, if any;

(m) [intentionally omitted];

(n) if Borrower breaches in any material respect any covenant contained in Section
10.2 hereof and such breach continues for two (2) Business Days after written notice from
Lender; or

(o) if Borrower shall continue to be in default under any other term, covenant or condition of
this Agreement or any of the Loan Documents not covered in the foregoing clauses of this
Section 11.1, for more than ten (10) days after notice from Lender in the case of any
default which can be cured by the payment of a sum of money or for thirty (30) days after notice
from Lender in the case of any other default, provided that if such default (other than any
default which can be cured by the payment of a sum of money) cannot reasonably be cured within such
thirty (30) day period and Borrower shall have commenced to cure such default within such thirty
(30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for so long as it shall require Borrower in the exercise of due
diligence to cure such default, it being agreed that no such extension shall be for a period in
excess of ninety (90) days.

Section 11.2. Remedies

(a) Upon the occurrence of an Event of Default (other than an Event of Default described in
Section 11.1(g) above with respect to Borrower and SPE Component Entity only) and at any
time thereafter Lender may, in addition to any other rights or remedies available to it pursuant to
this Agreement and the other Loan Documents or at law or in equity, take such action, without
notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower
and in the Property, including, without limitation, declaring the Debt to be immediately due and
payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the
Loan Documents against Borrower and the Property, including, without limitation, all rights or
remedies available at law or in equity. Upon any Event of Default described in
Section 11.1(g) above (with respect to Borrower and SPE Component Entity only), the Debt
and all other obligations of Borrower hereunder and under the other Loan Documents shall
immediately and automatically become due and payable, without notice or demand, and Borrower hereby
expressly waives any such notice or demand, anything contained herein or in any other Loan Document
to the contrary notwithstanding.

(b) Upon the occurrence of an Event of Default, all or any one or more of the rights, powers,
privileges and other remedies available to Lender against Borrower under this Agreement or any of
the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in
equity may be exercised by Lender at any time and from time to time, whether or not all or any of
the Debt shall be declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and remedies under any of
the Loan Documents with respect to the Property. Any such actions taken by Lender shall be
cumulative and concurrent and may be pursued independently, singularly, successively, together or
otherwise, at such time and in such order as Lender has determined in its sole discretion, to the
fullest extent permitted by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan
Documents.

ARTICLE 12

[INTENTIONALLY OMITTED]

ARTICLE 13

SECONDARY MARKET

Section 13.1. Transfer of Loan

Lender may, at any time, sell, transfer or assign the Loan or any portion thereof or interest
therein, or grant participations therein (“Participations”) or issue mortgage pass-through
certificates or other securities (“Securities”) evidencing a beneficial interest in a rated or
unrated public offering or private placement (each of the foregoing, a “Securitization”).

Section 13.2. Delegation of Servicing

At the option of Lender, the Loan may be serviced by one or more servicers selected by Lender
and Lender may delegate all or any portion of its responsibilities under this Agreement and the
other Loan Documents to such servicer or servicers pursuant to a servicing agreement between Lender
and such servicer.

Section 13.3. Dissemination of Information

Lender may forward to each purchaser, transferee, assignee, or servicer of, and each
participant, or investor in, the Loan, or any interest therein, or any Securities or any of their
respective successors (collectively, the “Investor”) or any Rating Agency evaluating the Loan (and
any other credit rating agency that has elected to be treated as a nationally recognized
statistical rating organization for purposes of Section 15E of the Exchange Act without regard to
whether or not such credit rating agency has been engaged by the Lender or other Person in
anticipation of a Securitization) or any Securities, each prospective Investor, and any
organization maintaining databases on the underwriting and performance of commercial mortgage
loans, all documents and information which Lender now has or may hereafter acquire relating to the
Debt and to Borrower, any managing member or general partner thereof, Guarantor, any SPE Component
Entity (if any) and the Property, including financial statements, whether furnished by Borrower or
otherwise, as Lender determines necessary or desirable. Borrower irrevocably waives any and all
rights it may have under applicable Legal Requirements to prohibit such disclosure, including but
not limited to any right of privacy.

Section 13.4. Cooperation

Borrower agrees to cooperate with Lender in connection with any sale or transfer of the Loan
or any interest therein or any Securities created pursuant to this Article 13, including,
without limitation, (a) the delivery of an estoppel certificate required in accordance with
Section 5.12(a) and such other documents as may be reasonably requested by Lender, (b) the
execution of such amendments to the Loan Documents as may be requested by the holder of the Note or
the Rating Agencies or otherwise to effect the Securitization or to satisfy Rating Agency
requirements including, without limitation, bifurcation of the Loan into two or more separate
notes; provided, however, that Borrower shall not be required to modify or amend
any Loan Document if such modification or amendment would (i) change the interest rate, the stated
maturity or the amortization of principal set forth herein or in the Note, except in connection
with a bifurcation of the Loan which may result in varying fixed interest rates and amortization
schedules, but which shall have the same initial weighted average interest rate as the original
Note, (ii) modify or amend any other material economic term of the Loan, or (iii) increase
Borrower’s obligations and liabilities or decrease Borrower’s rights under the Loan Documents other
than to a de minimis extent, and (c) make changes to the organizational documents of Borrower and
its principals and/or use its best efforts to cause changes to the legal opinions delivered by
Borrower in connection with the Loan, provided, that such changes shall not result in a
material adverse economic effect to Borrower. Borrower shall also furnish and Borrower consents to
Lender furnishing to such Investors or such prospective Investors or such Rating Agency any and all
information concerning the Property, the Leases, the financial condition of Borrower, or Guarantor
as may be requested by Lender, any Investor, any prospective Investor or any Rating Agency in
connection with any sale or transfer of the Loan or any Participations or Securities.

	 	 	 
	Section 13.5.

	 	[Intentionally Omitted]
	
 
	 	 
	Section 13.6.

	 	[Intentionally Omitted]
	
 
	 	 
	Section 13.7.

	 	[Intentionally Omitted]
	
 
	 	 
	Section 13.8.

	 	New Mezzanine Loan
	
 
	 	 

Lender, without in any way limiting Lender’s other rights hereunder, shall have the right, in
its sole and absolute discretion, at any time to require Borrower to restructure a portion of the
Loan and create a mezzanine loan (the “New Mezzanine Loan”) to the owners of the direct equity
interests in Borrower which shall be secured by a pledge of such direct equity interests, and for
which different interest rates and debt service payments may be established for the Loan and the
New Mezzanine Loan in such order of priority as may be designated by Lender; provided, that
(i) the total amounts of the Loan and the New Mezzanine Loan shall equal the amount of the Loan
immediately prior to the restructuring, (ii) the weighted average interest rate of the Loan and the
New Mezzanine Loan, shall on the date created equal the interest rate which was applicable to the
Loan immediately prior to the restructuring and (iii) the debt service payments on the Loan and the
New Mezzanine Loan shall on the date created equal the debt service payment which was due under the
Loan immediately prior to the restructuring; and provided further that any such
restructuring carried out after the closing of the Loan shall be at no material cost to Borrower.
Borrower shall cooperate with all reasonable requests of Lender in order to restructure the Loan
and create the New Mezzanine Loan and shall (A) execute and deliver such documents including,
without limitation, in the case of the New Mezzanine Loan, a mezzanine note, a mezzanine loan
agreement, a pledge and security agreement and a mezzanine deposit account agreement, (B) cause
Borrower’s counsel to deliver such legal opinions and (C) create such bankruptcy remote borrower
under the New Mezzanine Loan as, in the case of each of (A), (B) and (C) above, shall be reasonably
required by Lender and required by any Rating Agency in connection therewith, all in form and
substance reasonably satisfactory to Lender and satisfactory to any such Rating Agency, including
the severance of this Agreement, the Mortgage and other Loan Documents if requested. In the event
Borrower fails to execute and deliver such documents to Lender within ten (10) Business Days
following such request by Lender, Borrower hereby absolutely and irrevocably appoints Lender as its
true and lawful attorney, coupled with an interest, in its name and stead to make and execute all
documents necessary or desirable to effect such transactions, Borrower ratifying all that such
attorney shall do by virtue thereof. It shall be an Event of Default if Borrower fails to comply
with any of the terms, covenants or conditions of this Section 13.8 after the expiration of
ten (10) Business Days after notice thereof.

Section 13.9. Costs and Expenses

All reasonable third party out-of-pocket costs and expenses incurred by Borrower or Guarantor
in connection with Borrower’s compliance with requests made under Sections 13.4 or 13.8
hereof shall be paid by Borrower; provided, however, Borrower shall not be
obligated to spend more than $5,000.00, in the aggregate, for such costs and expenses.

ARTICLE 14

INDEMNIFICATIONS

Section 14.1. General Indemnification

Borrower shall indemnify, defend and hold harmless the Indemnified Parties from and against
any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to any one or more of the following:
(a) any accident, injury to or death of persons or loss of or damage to property occurring in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property
or adjacent parking areas, streets or ways; (b) any use, nonuse or condition in, on or about the
Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (c) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof; (d) any failure of the
Property to be in compliance with any Legal Requirements; (e) any and all claims and demands
whatsoever which may be asserted against Lender by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants, or agreements
contained in any Lease; (f) the holding or investing of the Reserve Accounts or the Cash Management
Account or the performance of the Required Work or Additional Required Repairs, or (g) the payment
of any commission, charge or brokerage fee to anyone which may be payable in connection with the
funding of the Loan (collectively, the “Indemnified Liabilities”); provided,
however, that Borrower shall not have any obligation to Lender hereunder to the extent that
such Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or willful
misconduct of Lender. To the extent that the undertaking to indemnify, defend and hold harmless
set forth in the preceding sentence may be unenforceable because it violates any law or public
policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under
applicable Legal Requirements to the payment and satisfaction of all Indemnified Liabilities
incurred by the Indemnified Parties.

Section 14.2. Mortgage and Intangible Tax Indemnification

Borrower shall pay and, at its sole cost and expense, protect, defend, indemnify, release and
hold harmless the Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any
way relating to, any tax on or with respect to the making and/or recording of the Mortgage, the
Note or any of the other Loan Documents, but excluding any income, franchise or other similar
taxes.

Section 14.3. ERISA Indemnification

Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold
harmless the Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys’ fees and costs incurred in the investigation, defense, and
settlement of Losses incurred in correcting any prohibited transaction or in the sale of a
prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA that
may be required, in Lender’s sole discretion) that the Indemnified Parties may incur, directly or
indirectly, as a result of a default under Section 4.9 or Section 5.18 of this
Agreement.

Section 14.4. Survival

The obligations and liabilities of Borrower under this Article 14 shall fully survive
indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of
foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of the
Mortgage.

ARTICLE 15

EXCULPATION

Section 15.1. Exculpation

(a) Except as otherwise provided herein or in the other Loan Documents, Lender shall not
enforce the liability and obligation of Borrower to perform and observe the obligations contained
herein or in the other Loan Documents by any action or proceeding wherein a money judgment shall be
sought against (1) Borrower (except as set forth in this Section 15.1 and the Environmental
Indemnity), (2) Guarantor (except as set forth in the Guaranty and the Environmental Indemnity),
(3) any Affiliate of Borrower, (4) any Person owning, directly or indirectly, any legal or
beneficial interest in Borrower or any Affiliate of Borrower or (5) any direct or indirect limited
partner, member, principal, officer, beneficiary, trustee, advisor, shareholder, employee, agent,
Affiliate or director of any Persons described in clauses (1) through (5) above
(collectively, subject to the exceptions in clauses (1) and (2) above, the “Exculpated Parties”),
except that Lender may bring a foreclosure action, action for specific performance or other
appropriate action or proceeding to enable Lender to enforce and realize upon this Agreement, the
Note, the Mortgage and the other Loan Documents, and the interest in the Property, the Rents and
any other collateral given to Lender created by this Agreement, the Note, the Mortgage and the
other Loan Documents; provided, however, that any judgment in any such action or
proceeding shall be enforceable against Borrower, only to the extent of Borrower’s interest in the
Property, in the Rents and in any other collateral given to Lender. Lender, by accepting this
Agreement, the Note, the Mortgage and the other Loan Documents, agrees that it shall not, except as
otherwise provided in this Section 15.1, sue for, seek or demand any deficiency judgment
against any Exculpated Party in any such action or proceeding, under or by reason of or under or in
connection with this Agreement, the Note, the Mortgage or the other Loan Documents. The provisions
of this Section 15.1 shall not, however, (i) constitute a waiver, release or impairment of
any obligation evidenced or secured by this Agreement, the Note, the Mortgage or the other Loan
Documents; (ii) impair the right of Lender to name Borrower as a party defendant in any action or
suit for judicial foreclosure and sale under this Agreement and the Mortgage; (iii) affect the
validity or enforceability of any indemnity (including, without limitation, those contained in
Article 14 of this Agreement and the Environmental Indemnity), guaranty, master lease or
similar instrument made in connection with this Agreement, the Note, the Mortgage and the other
Loan Documents; (iv) impair the right of Lender to obtain the appointment of a receiver; (v) impair
the enforcement of the assignment of leases provisions contained in the Mortgage; or (vi) impair
the right of Lender to obtain a deficiency judgment or other judgment on the Note against Borrower
if necessary to obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled
under this Agreement; provided, however, Lender shall only enforce such judgment to
the extent of the Insurance Proceeds and/or Awards.

(b) Notwithstanding the provisions of this Section 15.1 to the contrary, Borrower
shall be personally liable to Lender for Losses due to:

(i) fraud or intentional misrepresentation by an Exculpated Party in connection with the
execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan
Documents, or any certificate, report, financial statement or other instrument or document
furnished to Lender at the time of the closing of the Loan or during the term of the Loan and in
connection with the Loan;

(ii) the gross negligence or willful misconduct of an Exculpated Party;

(iii) any Exculpated Party’s misapplication or misappropriation of Rents received by
Borrower during the continuance of an Event of Default;

(iv) any Exculpated Party’s misapplication or misappropriation of tenant security deposits
(including the failure to deliver to Lender tenant security deposits upon foreclosure or deed in
lieu thereof, to the extent not applied in accordance with the applicable Leases prior to the
occurrence of an Event of Default) or Rents collected in advance;

(v) the misapplication or the misappropriation of Insurance Proceeds or Awards by any
Exculpated Party;

(vi) Borrower’s failure to pay Property Taxes, Insurance, Other Charges, charges for labor
or materials or other charges that can create liens on the Property beyond any applicable notice
and cure periods specified herein (provided that there shall be no liability hereunder to the
extent that (A) sums sufficient to pay such amounts have been deposited in escrow with Lender
pursuant to the terms hereof and Borrower has not made a claim against such escrowed amounts or
otherwise taken action to restrict Lender from applying such sums for the purpose of paying such
items) or (B) there is insufficient cash flow from the operation of the Property to pay such
items);

(vii) [intentionally omitted];

(viii) material physical waste to the Property caused by the intentional acts or omissions
of any Exculpated Party when there is sufficient cash flow from the operation of the Property to
avoid such waste from occurring;

(ix) Borrower’s failure during the continuance of any Event of Default to deliver to Lender
upon demand all Rents and books and records relating to the Property;

(x) Borrower’s assertion or raising of any defense to a proceeding instituted by Lender
(whether judicial or otherwise) for the foreclosure of the Mortgage following an Event of
Default caused by Borrower’s failure to timely pay the Monthly Payment Amount or the Debt due on
the Maturity Date, which defense is determined by a court of competent jurisdiction to be
brought in bad faith;

(xi) Breach by Borrower of any representation, warranty or covenant set forth in
Section 10.1(a) or Section 10.2(a) hereof; or

(xii) the breach of any representation, warranty or covenant of any Borrower with respect
to itself or any SPE Component Entity set forth in Article 6 hereof.

(c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as
set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further
force and effect and the Debt shall be fully recourse to Borrower in the event (i) of a breach by
Borrower or any SPE Component Entity of any of the covenants set forth in Article 6 hereof
that is expressly cited in a court’s decision as a basis for a substantive consolidation (other
than a substantive consolidation petitioned for or joined in by Lender) of the Borrower with any
other Person in a proceeding under any Creditors’ Rights Laws, (ii) Borrower incurs any
Indebtedness other than the Debt and Permitted Debt without the prior written consent of Lender or
except as expressly permitted in this Agreement, (iii) of the occurrence of a Prohibited Transfer,
(iv) the Property or any part thereof shall become an asset in a bankruptcy or insolvency
proceeding initiated by Borrower, (v) Borrower, Guarantor or any Affiliate, officer, director, or
representative which Controls, directly or indirectly, Borrower or Guarantor files, or joins in the
filing of, an involuntary petition against Borrower under any Creditors Rights Laws, or solicits or
causes to be solicited petitioning creditors for the filing of any involuntary petition against
Borrower from any Person under any Creditors Rights Laws; (vi) Borrower files an answer consenting
to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any
other Person under any Creditors Rights Laws, or solicits or causes to be solicited petitioning
creditors for any involuntary petition from any Person; or (vii) any Affiliate, officer, director,
or representative which Controls Borrower consents to or acquiesces in or joins in an application
for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of
the Property.

(d) Nothing herein shall be deemed to be a waiver of any right which Lender may have under
Section 506(a), 506(b), 1111(b) or any other provision of the U.S. Bankruptcy Code to file a claim
for the full amount of the indebtedness secured by the Mortgage or to require that all collateral
shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement,
the Note, the Mortgage or the other Loan Documents.

ARTICLE 16

NOTICES

Section 16.1. Notices

All notices, consents, approvals and requests required or permitted hereunder or under any
other Loan Document shall be given in writing and shall be effective for all purposes if hand
delivered or sent by (a) certified or registered United States mail, postage prepaid, return
receipt requested, (b) expedited prepaid overnight delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, or by (c) telecopier (with answer back
acknowledged provided an additional notice is given pursuant to subsection (b) above), addressed as
follows (or at such other address and Person as shall be designated from time to time by any party
hereto, as the case may be, in a written notice to the other parties hereto in the manner provided
for in this Section):

	 	 	 	If to Lender: Bank of America, N.A.

	 	 	 
	c/o Capital Markets Servicing Group
	900 West Trade Street, Suite 650
	Mail Code: NC1-026-06-01
	Charlotte, North Carolina 28255
	Attention: Servicing Manager
	Telephone No: (866) 531-0957
	Facsimile No.: (704) 317-4501
	With a copy to:

If to Borrower:
	 	Frost Brown Todd LLC

400 West Market Street

Suite 3200

Louisville, Kentucky 40202

Attention: Barry A. Hines, Esq.

Facsimile No.: (502) 581-1087

IRT Eagle Ridge Apartments Owner, LLC

	 	 	 
	c/o Independence Realty Advisors, LLC
	With a copy to:
	 	2929 Arch Street, 17th Floor

Philadelphia, Pennsylvania 19104

Attention: Farrell Ender

Telephone No.: (215) 243-9040

Facsimile No.: (215) 405-2945

RAIT Financial Trust

2929 Arch Street, 17th Floor

Philadelphia, Pennsylvania 19104

Attention: Jamie Reyle, Esq.

Telephone No.: (215) 243-9019

Facsimile No.: (215) 405-2945

A notice shall be deemed to have been given: in the case of hand delivery, at the time of
delivery; in the case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; or in the case of expedited prepaid delivery and telecopy, upon the
first attempted delivery on a Business Day.

ARTICLE 17

FURTHER ASSURANCES

Section 17.1. Replacement Documents

Upon receipt of an affidavit of an officer of Lender as to the loss, theft, destruction or
mutilation of the Note or any other Loan Document which is not of public record: (i) with respect
to any Loan Document other than the Note, Borrower will issue, in lieu thereof, a replacement of
such other Loan Document, dated the date of such lost, stolen, destroyed or mutilated Loan Document
in the same principal amount thereof and otherwise of like tenor and (ii) with respect to the Note,
(a) Borrower will execute a reaffirmation of the Debt as evidenced by such Note acknowledging that
Lender has informed Borrower that the Note was lost, stolen destroyed or mutilated and that such
Debt continues to be an obligation and liability of the Borrower as set forth in the Note, a copy
of which shall be attached to such reaffirmation and (b) if requested by Lender, Borrower will
execute a replacement note and Lender or Lender’s custodian (at Lender’s option) shall provide to
Borrower Lender’s (or Lender’s custodian’s) then standard form of lost note affidavit, which such
form shall be reasonably acceptable to Borrower.

Section 17.2. Recording of Mortgage, etc.

Upon the execution and delivery of the Mortgage and thereafter, Borrower shall from time to
time cause the Mortgage and any of the other Loan Documents creating a lien or security interest or
evidencing the lien hereof upon the Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect and perfect the lien or security
interest hereof upon, and the interest of Lender in, the Property. Borrower will pay all taxes,
filing, registration or recording fees, and all expenses incident to the preparation, execution,
acknowledgment and/or recording of the Note, the Mortgage, the other Loan Documents, any note, deed
of trust or mortgage supplemental hereto, any security instrument with respect to the Property and
any instrument of further assurance, and any modification or amendment of the foregoing documents,
and all federal, state, county and municipal taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of the Mortgage or the Loan, any
deed of trust or mortgage supplemental hereto, any security instrument with respect to the Property
or any instrument of further assurance, and any modification or amendment of the foregoing
documents, except where prohibited by law so to do.

Section 17.3. Further Acts, etc.

Borrower will, at the cost of Borrower, and without expense to Lender, do, execute,
acknowledge and deliver all and every further acts, deeds, conveyances, deeds of trust, mortgages,
assignments, security agreements, control agreements, notices of assignments, transfers and
assurances as Lender shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Lender the property and rights hereby
mortgaged, deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Borrower may be or may hereafter become
bound to convey or assign to Lender, or for carrying out the intention or facilitating the
performance of the terms of this Agreement or for filing, registering or recording the Mortgage, or
for complying with all Legal Requirements. Borrower, on demand, will execute and deliver, and in
the event it shall fail to so execute and deliver, hereby authorizes Lender to execute in the name
of Borrower or without the signature of Borrower to the extent Lender may lawfully do so, one or
more financing statements and financing statement amendments to evidence more effectively, perfect
and maintain the priority of the security interest of Lender in the Property. Borrower grants to
Lender an irrevocable power of attorney coupled with an interest for the purpose of exercising and
perfecting any and all rights and remedies available to Lender at law and in equity, including
without limitation, such rights and remedies available to Lender pursuant to this
Section 17.3.

Section 17.4. Changes in Tax, Debt, Credit and Documentary Stamp Laws

(a) If any law is enacted or adopted or amended after the date of this Agreement which deducts
the Debt from the value of the Property for the purpose of taxation or which imposes a tax, either
directly or indirectly, on the Debt or Lender’s interest in the Property, Borrower will pay the
tax, with interest and penalties thereon, if any. If Lender is advised by counsel chosen by it
that the payment of tax by Borrower would be unlawful or taxable to Lender or unenforceable or
provide the basis for a defense of usury then Lender shall have the option by written notice of not
less than one hundred twenty (120) days to declare the Debt immediately due and payable.

(b) Borrower will not claim or demand or be entitled to any credit or credits on account of
the Debt for any part of the Property Taxes or Other Charges assessed against the Property, or any
part thereof, and no deduction shall otherwise be made or claimed from the assessed value of the
Property, or any part thereof, for real estate tax purposes by reason of the Mortgage or the Debt.
If such claim, credit or deduction shall be required by law, Lender shall have the option, by
written notice of not less than one hundred twenty (120) days, to declare the Debt immediately due
and payable.

If at any time the United States of America, any State thereof or any subdivision of any such
State shall require revenue or other stamps to be affixed to the Note, the Mortgage, or any of the
other Loan Documents or impose any other tax or charge on the same, Borrower will pay for the same,
with interest and penalties thereon, if any.

Section 17.5. Expenses

Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender
(including, following a Securitization, the securitization trust, any servicer, trust advisor,
trustee or certificate administrator) upon receipt of written notice from Lender for all reasonable
costs and expenses (including reasonable, actual attorneys’ fees and disbursements and the
allocated costs of internal legal services and all actual disbursements of internal counsel)
reasonably incurred by Lender in accordance with this Agreement (all of which shall be deemed part
of the Debt) in connection with (a) the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents and the consummation of the transactions contemplated hereby
and thereby and all the costs of furnishing all opinions by counsel for Borrower (including without
limitation any opinions requested by Lender as to any legal matters arising under this Agreement or
the other Loan Documents with respect to the Property); (b) Lender’s customary surveillance and
actions to monitor Borrower’s ongoing performance of and compliance with Borrower’s respective
agreements and covenants contained in this Agreement and the other Loan Documents on its part to be
performed or complied with after the Closing Date, including, without limitation, confirming
compliance with environmental and insurance requirements; (c) following a request by Borrower,
Lender’s ongoing performance and compliance with all agreements and conditions contained in this
Agreement and the other Loan Documents on its part to be performed or complied with after the
Closing Date; (d) any prepayment, release of the Property, assumption or modification of the Loan;
(e) the negotiation, preparation, execution, delivery and administration of any consents,
amendments, waivers or other modifications to this Agreement and the other Loan Documents and any
other documents or matters requested by Borrower or Lender; (f) securing Borrower’s compliance with
any requests made pursuant to the provisions of this Agreement; (g) without duplication of costs
and expenses incurred pursuant to clause (a) above, the filing and recording fees and expenses,
title insurance and reasonable fees and expenses of counsel for providing to Lender all required
legal opinions, and other similar expenses incurred in creating and perfecting the Lien in favor of
Lender pursuant to this Agreement and the other Loan Documents; (h) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting Borrower, this Agreement,
the other Loan Documents, the Property, or any other security given for the Loan; (i) any breach of
the Loan Documents by Borrower, Guarantor or any Affiliate of any of the foregoing; (j) the
preservation or protection of the collateral (including, without limitation, taxes and insurance,
property inspections and appraisals, legal fees and litigation expenses) following or resulting
from an Event of Default under the Loan Documents; and (k) enforcing any obligations of or
collecting any payments due from Borrower under this Agreement, the other Loan Documents or with
respect to the Property or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a “work-out” or of any insolvency or
bankruptcy proceedings; provided, however, that Borrower shall not be liable for
the payment of any such costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender.

In the event that Borrower takes any action or requests any consent or approval of Lender
(including, following a Securitization, the securitization trust, any servicer, trust advisor,
trustee or certificate administrator) under the provisions of this Agreement or any other Loan
Document and the taking of such action by Borrower or the giving of such consent or approval by
Lender is or may be conditioned upon the receipt of a Rating Agency Confirmation, or, in accordance
with the terms of the transaction documents relating to a Securitization, a Rating Agency
Confirmation is required in order for such action to be taken by Borrower or the consent of Lender
to be given, or, following or resulting from a default by Borrower or the Loan becoming a specially
serviced loan, a Rating Agency Confirmation is otherwise required in connection with the servicing
of the Loan or the administration of the securitization trust, Borrower shall provide any
indemnities required and pay all of the costs and expenses of Lender, Lender’s servicer and each
Rating Agency in connection therewith (including reasonable attorneys’ fees and expenses), and, if
applicable, shall pay any fees imposed by any Rating Agency as a condition to the delivery of such
confirmation.

Section 17.6. Cost of Enforcement

In the event (a) that the Mortgage is foreclosed in whole or in part, (b) of the bankruptcy,
insolvency, rehabilitation or other similar proceeding in respect of Borrower or any of its
constituent Persons or an assignment by Borrower or any of its constituent Persons for the benefit
of its creditors, or (c) Lender exercises any of its other remedies under this Agreement or any of
the other Loan Documents, Borrower shall be chargeable with and agrees to pay all costs of
collection and defense, including reasonable attorneys’ fees and costs, incurred by Lender or
Borrower in connection therewith and in connection with any appellate proceeding or post-judgment
action involved therein, together with all required service or use taxes, all of which shall be
deemed part of the Debt. In addition, Borrower shall be responsible for any fees and expenses of
Lender or any servicer, trustee and any third-party fees and expenses, including, without
limitation, special servicing fees, work-out fees, liquidation fees, and reasonable attorneys’ fees
and disbursements in connection with a modification or restructuring of the Loan, special servicing
or work-out of the Loan or enforcement of the Loan Documents.

ARTICLE 18

WAIVERS

Section 18.1. Remedies Cumulative; Waivers

The rights, powers and remedies of Lender under this Agreement shall be cumulative and not
exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to
this Agreement or the other Loan Documents, or existing at law or in equity or otherwise. Lender’s
rights, powers and remedies may be pursued singularly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender’s sole discretion. No delay or omission to
exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy,
right or power or shall be construed as a waiver thereof, but any such remedy, right or power may
be exercised from time to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver of any subsequent
Default or Event of Default by Borrower or to impair any remedy, right or power consequent thereon.

Section 18.2. Modification, Waiver in Writing

No modification, amendment, extension, discharge, termination or waiver of any provision of
this Agreement, or of the Note, or of any other Loan Document, nor consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by
the party against whom enforcement is sought, and then such waiver or consent shall be effective
only in the specific instance, and for the purpose, for which given. Except as otherwise expressly
provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances.

Section 18.3. Delay Not a Waiver

Neither any failure nor any delay on the part of Lender in insisting upon strict performance
of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Note or under any other Loan Document, or any other instrument given as
security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege. In particular, and not by way of limitation, by accepting payment after the
due date of any amount payable under this Agreement, the Note or any other Loan Document, Lender
shall not be deemed to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to declare a default for
failure to effect prompt payment of any such other amount.

Section 18.4. Trial by Jury

BORROWER AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND
EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER AND
BORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY BORROWER AND LENDER.

Section 18.5. Waiver of Notice

Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with
respect to matters for which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of
notice. Borrower hereby expressly waives the right to receive any notice from Lender with respect
to any matter for which this Agreement or the other Loan Documents do not specifically and
expressly provide for the giving of notice by Lender to Borrower.

Section 18.6. Remedies of Borrower

In the event that a claim or adjudication is made that Lender or its agents have acted
unreasonably or unreasonably delayed acting in any case where by law or under this Agreement or the
other Loan Documents, Lender or such agent, as the case may be, has an obligation to act reasonably
or promptly, Borrower agrees that neither Lender nor its agents shall be liable for any monetary
damages, and Borrower’s sole remedies shall be limited to commencing an action seeking injunctive
relief or declaratory judgment. The parties hereto agree that any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action seeking declaratory
judgment. Lender agrees that, in such event, it shall cooperate in expediting any action seeking
injunctive relief or declaratory judgment.

Section 18.7. Waiver of Marshalling of Assets

To the fullest extent permitted by law, Borrower, for itself and its successors and assigns,
waives all rights to a marshalling of the assets of Borrower, Borrower’s partners and others with
interests in Borrower, and of the Property, and agrees not to assert any right under any laws
pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters whatsoever to defeat,
reduce or affect the right of Lender under the Loan Documents to a sale of the Property for the
collection of the Debt without any prior or different resort for collection or of the right of
Lender to the payment of the Debt out of the net proceeds of the Property in preference to every
other claimant whatsoever.

Section 18.8. Waiver of Statute of Limitations

Borrower hereby expressly waives and releases, to the fullest extent permitted by law, the
pleading of any statute of limitations as a defense to payment of the Debt or performance of its
Other Obligations.

Section 18.9. Waiver of Counterclaim

Borrower hereby waives the right to assert a counterclaim, other than a compulsory
counterclaim, in any action or proceeding brought against it by Lender or its agents.

ARTICLE 19

GOVERNING LAW

Section 19.1. Governing Law

This Agreement shall be governed, construed, applied and enforced in accordance with the laws
of the State and applicable laws of the United States of America.

Section 19.2. Severability

Wherever possible, each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable Legal Requirements, but if any provision of this Agreement
shall be prohibited by or invalid under applicable Legal Requirements, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

Section 19.3. Preferences

To the extent Borrower makes a payment or payments to Lender, which payment or proceeds or any
part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or
required to be repaid to a trustee, receiver or any other party under any Creditors Rights Laws,
state or federal law, common law or equitable cause, then, to the extent of such payment or
proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be
revived and continue in full force and effect, as if such payment or proceeds had not been received
by Lender.

ARTICLE 20

MISCELLANEOUS

Section 20.1. Survival

This Agreement and all covenants, agreements, representations and warranties made herein and
in the certificates delivered pursuant hereto shall survive the making by Lender of the Loan and
the execution and delivery to Lender of the Note, and shall continue in full force and effect so
long as all or any of the Debt is outstanding and unpaid unless a longer period is expressly set
forth herein or in the other Loan Documents. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the legal representatives, successors and
assigns of such party. All covenants, promises and agreements in this Agreement, by or on behalf
of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of
Lender.

Section 20.2. Lender’s Discretion

Whenever pursuant to this Agreement, Lender exercises any right given to it to approve or
disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to
approve or disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive.

Section 20.3. Headings

The Article and/or Section headings and the Table of Contents in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this Agreement for any
other purpose.

Section 20.4. Schedules Incorporated

The Schedules annexed hereto are hereby incorporated herein as a part of this Agreement with
the same effect as if set forth in the body hereof.

Section 20.5. Offsets, Counterclaims and Defenses

Any assignee of Lender’s interest in and to this Agreement, the Note and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower may otherwise have against any assignor of such
documents, and no such unrelated counterclaim or defense shall be interposed or asserted by
Borrower in any action or proceeding brought by any such assignee upon such documents and any such
right to interpose or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.

Section 20.6. No Joint Venture or Partnership; No Third Party Beneficiaries

(a) Borrower and Lender intend that the relationships created hereunder and under the other
Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between
Borrower and Lender nor to grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender.

(b) This Agreement and the other Loan Documents are solely for the benefit of Lender and
Borrower and nothing contained in this Agreement or the other Loan Documents shall be deemed to
confer upon anyone other than Lender and Borrower any right to insist upon or to enforce the
performance or observance of any of the obligations contained herein or therein. All conditions to
the obligations of Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender and no other Person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that Lender will refuse to make
the Loan in the absence of strict compliance with any or all thereof and no other Person shall
under any circumstances be deemed to be a beneficiary of such conditions, any or all of which may
be freely waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deems it
advisable or desirable to do so.

(c) The general partners, members, principals and (if Borrower is a trust) beneficial owners
of Borrower are experienced in the ownership and operation of properties similar to the Property,
and Borrower and Lender are relying solely upon such expertise and business plan in connection with
the ownership and operation of the Property. Borrower is not relying on Lender’s expertise,
business acumen or advice in connection with the Property.

(d) Notwithstanding anything to the contrary contained herein, Lender is not undertaking the
performance of (i) any obligations under the Leases; or (ii) any obligations with respect to such
agreements, contracts, certificates, instruments, franchises, permits, trademarks, licenses and
other documents.

(e) By accepting or approving anything required to be observed, performed or fulfilled or to
be given to Lender pursuant to this Agreement, the Mortgage, the Note or the other Loan Documents,
including, without limitation, any officer’s certificate, balance sheet, statement of profit and
loss or other financial statement, survey, appraisal, or insurance policy, Lender shall not be
deemed to have warranted, consented to, or affirmed the sufficiency, the legality or effectiveness
of same, and such acceptance or approval thereof shall not constitute any warranty or affirmation
with respect thereto by Lender.

(f) Borrower recognizes and acknowledges that in accepting this Agreement, the Note, the
Mortgage and the other Loan Documents, Lender is expressly and primarily relying on the truth and
accuracy of the representations and warranties set forth in Article 4 of this Agreement
without any obligation to investigate the Property and notwithstanding any investigation of the
Property by Lender; that such reliance existed on the part of Lender prior to the date hereof, that
the warranties and representations are a material inducement to Lender in making the Loan; and that
Lender would not be willing to make the Loan and accept this Agreement, the Note, the Mortgage and
the other Loan Documents in the absence of the warranties and representations as set forth in
Article 4 of this Agreement.

Section 20.7. Publicity

All news releases, publicity or advertising by Borrower or its Affiliates through any media
intended to reach the general public which refers to the Loan, Lender, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, or any of their Affiliates shall be subject to the prior written
approval of Lender, not to be unreasonably withheld. Lender shall be permitted to make any news
releases, publicity or advertising by Lender or its Affiliates through any media intended to reach
the general public which refers to the Loan, the Property, Borrower and their respective Affiliates
without the approval of Borrower or any such Persons. Borrower also agrees that Lender may share
any information pertaining to the Loan with Bank of America Corporation, including its bank
subsidiaries, Merrill Lynch, Pierce, Fenner & Smith Incorporated and any other Affiliates of the
foregoing, in connection with the sale or transfer of the Loan or any Participations and/or
Securities created.

Section 20.8. Conflict; Construction of Documents; Reliance

In the event of any conflict between the provisions of this Agreement and any of the other
Loan Documents, the provisions of this Agreement shall control. The parties hereto acknowledge
that they were represented by competent counsel in connection with the negotiation, drafting and
execution of the Loan Documents and that such Loan Documents shall not be subject to the principle
of construing their meaning against the party which drafted same. Borrower acknowledges that, with
respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into
the Loan without relying in any manner on any statements, representations or recommendations of
Lender or any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any
limitation whatsoever in the exercise of any rights or remedies available to it under any of the
Loan Documents or any other agreements or instruments which govern the Loan by virtue of the
ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them
may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or
take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights
or remedies. Borrower acknowledges that Lender engages in the business of real estate financings
and other real estate transactions and investments which may be viewed as adverse to or competitive
with the business of Borrower or its Affiliates.

Section 20.9. Duplicate Originals; Counterparts

This Agreement and each of the other Loan Documents may be executed in any number of duplicate
originals, and each duplicate original shall be deemed to be an original. This Agreement and each
of the other Loan Documents (and each duplicate original) also may be executed in any number of
counterparts, each of which shall be deemed an original and all of which together constitute a
fully executed agreement even though all signatures do not appear on the same document.

Section 20.10. Joint and Several Liability.

If the Borrower consists of more than one Person or entity, the obligations and liabilities of
each such Person hereunder are joint and several.

Section 20.11. Entire Agreement

This Agreement and the other Loan Documents contain the entire agreement of the parties hereto
and thereto in respect of the transactions contemplated hereby and thereby, and all prior
agreements among or between such parties, whether oral or written between Borrower and Lender are
superseded by the terms of this Agreement and the other Loan Documents.

[NO FURTHER TEXT ON THIS PAGE]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
by their duly authorized representatives, all as of the day and year first above written.

	 	 	 	BORROWER:

IRT EAGLE RIDGE APARTMENTS OWNER, LLC, a Delaware
limited liability company

	 	 	 	By:
IRT EAGLE RIDGE APARTMENTS MEMBER, LLC, a
Delaware limited liability company, its Sole
Member

	 	 	 	By:
INDEPENDENCE REALTY OPERATING PARTNERSHIP,
LP, a Delaware limited partnership, its Sole
Member

	 	 	 	By:
INDEPENDENCE REALTY TRUST, INC., a
Maryland corporation, its General
Partner

	 	 	 	By:
INDEPENDENCE REALTY ADVISORS,
LLC, a Delaware limited liability
company, its authorized agent

By: /s/ Farrell Ender

Farrell Ender, President

LENDER:

BANK OF AMERICA, N.A., a national banking association

By: /s/ Steven Wasser

Name: Steven Wasser

Title: Managing Director

EXHIBIT A

Borrower Equity Ownership StructureEXHIBIT B

[Intentionally Omitted]

SCHEDULE 4.25

Lease Exceptions

NONESCHEDULE 4.39

Brokers and Financial Advisors

NONESCHEDULE 9.1

Required Repairs

NONEEX-10.2

Loan No. 3421465

PROMISSORY NOTE

$18,850,000.00 February 7, 2014

FOR VALUE RECEIVED Borrower, having its principal place of business at c/o Independence Realty
Advisors, LLC, Cira Centre, 2929 Arch Street, 17th Floor, Philadelphia, Pennsylvania
19104, hereby unconditionally promises to pay to the order of BANK OF AMERICA, N.A., a national
banking association, having an address at 214 North Tryon Street, NC1-027-15-01,
Charlotte, North Carolina 28255 (“Lender”), or at such other place as the holder hereof may
from time to time designate in writing, the principal sum of EIGHTEEN MILLION EIGHT HUNDRED FIFTY
THOUSAND AND 00/100 DOLLARS ($18,850,000.00), or so much thereof as is advanced, in lawful money of
the United States of America, with interest thereon to be computed from the date of this Note at
the Interest Rate, and to be paid in accordance with the terms of this Note and that certain Loan
Agreement dated the date hereof between Borrower and Lender (as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”). All
capitalized terms not defined herein shall have the respective meanings set forth in the Loan
Agreement.

Article 1 – PAYMENT TERMS; MANNER OF PAYMENT

Borrower agrees to pay the principal sum of this Note and interest on the unpaid principal sum
of this Note from time to time outstanding at the rates and at the times specified in Article 2 of
the Loan Agreement and the outstanding balance of the principal sum of this Note and all accrued
and unpaid interest thereon shall be due and payable on the Maturity Date. This Note is subject to
default interest as provided in Article 2 of the Loan Agreement.

Article 2 – DEFAULT AND ACCELERATION

The Debt shall without notice become immediately due and payable at the option of Lender if
any payment required in this Note is not paid on or prior to the date when due, subject to
applicable notice and cure periods, if any, provided in the Loan Documents, or if not paid on the
Maturity Date or on the occurrence of any other Event of Default.

Article 3  – LOAN DOCUMENTS

This Note is secured by the Mortgage and the other Loan Documents. All of the terms,
covenants and conditions contained in the Loan Agreement, the Mortgage and the other Loan Documents
are hereby made part of this Note to the same extent and with the same force as if they were fully
set forth herein. In the event of a conflict or inconsistency between the terms of this Note and
the Loan Agreement, the terms and provisions of the Loan Agreement shall govern.

Article 4  – SAVINGS CLAUSE

Notwithstanding anything to the contrary, (a) all agreements and communications between
Borrower and Lender are hereby and shall automatically be limited so that, after taking into
account all amounts deemed interest, the interest contracted for, charged or received by Lender
shall never exceed the Maximum Legal Rate, (b) in calculating whether any interest exceeds the
Maximum Legal Rate, all such interest shall be amortized, prorated, allocated and spread over the
full amount and term of all principal indebtedness of Borrower to Lender, and (c) if through any
contingency or event, Lender receives or is deemed to receive interest in excess of the lawful
maximum, any such excess shall be deemed to have been applied toward payment of the principal of
any and all then outstanding indebtedness of Borrower to Lender, or if there is no such
indebtedness, shall immediately be returned to Borrower.

Article 5  – NO ORAL CHANGE

This Note may not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Borrower or Lender, but only by an agreement
in writing signed by the party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.

Article 6  – WAIVERS

Borrower and all others who may become liable for the payment of all or any part of the Debt
do hereby severally waive presentment and demand for payment, notice of dishonor, notice of
intention to accelerate, notice of acceleration, protest and notice of protest and non payment and
all other notices of any kind except as expressly provided in the Loan Agreement. No release of
any security for the Debt or extension of time for payment of this Note or any installment hereof,
and no alteration, amendment or waiver of any provision of this Note, the Loan Agreement or the
other Loan Documents made by agreement between Lender or any other Person shall release, modify,
amend, waive, extend, change, discharge, terminate or affect the liability of Borrower, and any
other Person who may become liable for the payment of all or any part of the Debt, under this Note,
the Loan Agreement or the other Loan Documents. No notice to or demand on Borrower shall be deemed
to be a waiver of the obligation of Borrower or of the right of Lender to take further action
without further notice or demand as provided for in this Note, the Loan Agreement or the other Loan
Documents. If Borrower is a limited liability company, the agreements herein contained shall
remain in force and be applicable, notwithstanding any changes in the individuals comprising the
limited liability company, and the term “Borrower,” as used herein, shall include any alternate or
successor limited liability company, but any predecessor limited liability company and its members
shall not thereby be released from any liability. If Borrower is a partnership, the agreements
herein contained shall remain in force and be applicable, notwithstanding any changes in the
individuals comprising the partnership, and the term “Borrower,” as used herein, shall include any
alternate or successor partnership, but any predecessor partnership and their partners shall not
thereby be released from any liability. If Borrower is a corporation, the agreements contained
herein shall remain in full force and be applicable notwithstanding any changes in the shareholders
comprising, or the officers and directors relating to, the corporation, and the term “Borrower” as
used herein, shall include any alternative or successor corporation, but any predecessor
corporation shall not be relieved of liability hereunder. (Nothing in the foregoing sentence shall
be construed as a consent to, or a waiver of, any prohibition or restriction on transfers of
interests in such borrowing entity which may be set forth in the Loan Agreement, the Mortgage or
any other Loan Documents.) If Borrower consists of more than one person or party, the obligations
and liabilities of each person or party shall be joint and several.

Article 7  – TRIAL BY JURY

BORROWER AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST WITH REGARD TO THIS NOTE, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY
BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS
TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER AND BORROWER IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY BORROWER AND LENDER.

Article 8  – TRANSFER

Upon the transfer of this Note, Borrower hereby waiving notice of any such transfer, Lender
may deliver all the collateral mortgaged, granted, pledged or assigned pursuant to the Loan
Documents, or any part thereof, to the transferee who shall thereupon become vested with all the
rights herein or under applicable law given to Lender with respect thereto, and Lender shall
thereafter forever be relieved and fully discharged from any liability or responsibility in the
matter arising from events thereafter occurring; but Lender shall retain all rights hereby given to
it with respect to any liabilities and the collateral not so transferred.

Article 9  – EXCULPATION

The provisions of Article 15 of the Loan Agreement are hereby incorporated by reference into
this Note to the same extent and with the same force as if fully set forth herein.

Article 10  – GOVERNING LAW

This Note shall be governed, construed, applied and enforced in accordance with Article 19 of
the Loan Agreement.

Article 11  – NOTICES

All notices or other written communications hereunder shall be delivered in accordance with
Article 16 of the Loan Agreement.

[NO FURTHER TEXT ON THIS PAGE]

IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day and year first
above written.

BORROWER:

IRT EAGLE RIDGE APARTMENTS OWNER, LLC, a Delaware
limited liability company

	 	 	 	By:
IRT EAGLE RIDGE APARTMENTS MEMBER, LLC, a
Delaware limited liability company, its Sole
Member

	 	 	 	By:
INDEPENDENCE REALTY OPERATING PARTNERSHIP,
LP, a Delaware limited partnership, its Sole
Member

	 	 	 	By:
INDEPENDENCE REALTY TRUST, INC., a
Maryland corporation, its General
Partner

	 	 	 	By:
INDEPENDENCE REALTY ADVISORS,
LLC, a Delaware limited liability
company, its authorized agent

By:       /s/ Farrell

Ender—

Farrell Ender, President

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