exv10w3






Exhibit 10.3




EXECUTION VERSION




$125,000,000




CREDIT AGREEMENT



Dated as of October 19, 2010



among



CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, LP,



as Borrower,



CAMPUS CREST COMMUNITIES, INC.,



as Parent Guarantor,



THE GUARANTORS NAMED HEREIN,



as Guarantors,



THE INITIAL LENDERS, INITIAL ISSUING BANK AND

SWING LINE BANK NAMED HEREIN,



as Initial Lenders, Initial Issuing Bank and Swing Line Bank, and



CITIBANK, N.A.,



as Administrative Agent and as Collateral Agent.



RAYMOND JAMES BANK FSB



Syndication Agent



RBC CAPITAL MARKETS BARCLAYS CAPITAL INC. GOLDMAN SACHS BANK USA



Co-Documentation Agents



CITIGROUP GLOBAL MARKETS INC.           RAYMOND JAMES BANK FSB



Joint Lead Arrangers and Joint Book Running Managers



 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	 	 	 
	 	 	 	 
	ARTICLE I
	 	 	 
	DEFINITIONS AND ACCOUNTING TERMS
	 	 	 
	 	 	 
	 	 	 	 
	SECTION 1.01.	 	Certain Defined Terms
	 	 	1	 
	SECTION 1.02.	 	Computation of Time Periods; Other Definitional Provisions
	 	 	34	 
	SECTION 1.03.	 	Accounting Terms
	 	 	34	 
	 	 	 
	 	 	 	 
	ARTICLE II
	 	 	 
	AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
	 	 	 
	 	 	 
	 	 	 	 
	SECTION 2.01.	 	The Advances and the Letters of Credit
	 	 	34	 
	SECTION 2.02.	 	Making the Advances
	 	 	36	 
	SECTION 2.03.	 	Issuance of and Drawings and Reimbursement Under Letters of Credit
	 	 	38	 
	SECTION 2.04.	 	Repayment of Advances
	 	 	41	 
	SECTION 2.05.	 	Termination or Reduction of the Commitments
	 	 	42	 
	SECTION 2.06.	 	Prepayments
	 	 	43	 
	SECTION 2.07.	 	Interest
	 	 	44	 
	SECTION 2.08.	 	Fees
	 	 	45	 
	SECTION 2.09.	 	Conversion of Advances
	 	 	46	 
	SECTION 2.10.	 	Increased Costs, Etc.
	 	 	47	 
	SECTION 2.11.	 	Payments and Computations
	 	 	48	 
	SECTION 2.12.	 	Taxes
	 	 	51	 
	SECTION 2.13.	 	Sharing of Payments, Etc.
	 	 	54	 
	SECTION 2.14.	 	Use of Proceeds
	 	 	54	 
	SECTION 2.15.	 	Evidence of Debt
	 	 	55	 
	SECTION 2.16.	 	Extension of Termination Date
	 	 	55	 
	SECTION 2.17.	 	Increase in the Aggregate Commitments
	 	 	56	 
	 	 	 
	 	 	 	 
	ARTICLE III
	 	 	 
	CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
	 	 	 
	 	 	 
	 	 	 	 
	SECTION 3.01.	 	Conditions Precedent to the Effectiveness of this Agreement
	 	 	58	 
	SECTION 3.02.	 	Conditions Precedent to Each Borrowing, Issuance, Renewal,
Extension and Increase
	 	 	66	 
	SECTION 3.03.	 	Determinations Under Section 3.01 and 3.02
	 	 	67	 
	 	 	 
	 	 	 	 
	ARTICLE IV
	 	 	 
	REPRESENTATIONS AND WARRANTIES
	 	 	 
	 	 	 
	 	 	 	 
	SECTION 4.01.	 	Representations and Warranties of the Loan Parties
	 	 	67	 






i









 






	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	 
	ARTICLE V
	 	 	 
	COVENANTS OF THE LOAN PARTIES
	 	 	 
	 	 	 
	 	 	 	 
	SECTION 5.01.	 	Affirmative Covenants
	 	 	79	 
	SECTION 5.02.	 	Negative Covenants
	 	 	85	 
	SECTION 5.03.	 	Reporting Requirements
	 	 	95	 
	SECTION 5.04.	 	Financial Covenants
	 	 	99	 
	SECTION 5.05.	 	Ground Lease Covenants
	 	 	101	 
	 	 	 
	 	 	 	 
	ARTICLE VI
	 	 	 
	EVENTS OF DEFAULT
	 	 	 
	 	 	 
	 	 	 	 
	SECTION 6.01.	 	Events of Default
	 	 	103	 
	SECTION 6.02.	 	Actions in Respect of the Letters of Credit upon Default
	 	 	106	 
	 	 	 
	 	 	 	 
	ARTICLE VII
	 	 	 
	GUARANTY
	 	 	 
	 	 	 
	 	 	 	 
	SECTION 7.01.	 	Guaranty; Limitation of Liability
	 	 	106	 
	SECTION 7.02.	 	Guaranty Absolute
	 	 	107	 
	SECTION 7.03.	 	Waivers and Acknowledgments
	 	 	108	 
	SECTION 7.04.	 	Subrogation
	 	 	109	 
	SECTION 7.05.	 	Guaranty Supplements
	 	 	110	 
	SECTION 7.06.	 	Indemnification by Guarantors
	 	 	110	 
	SECTION 7.07.	 	Subordination
	 	 	110	 
	SECTION 7.08.	 	Continuing Guaranty
	 	 	111	 
	 	 	 
	 	 	 	 
	ARTICLE VIII
	 	 	 
	THE AGENTS
	 	 	 
	 	 	 
	 	 	 	 
	SECTION 8.01.	 	Authorization and Action; Appointment of Supplemental Collateral Agents
	 	 	112	 
	SECTION 8.02.	 	Agents’ Reliance, Etc.
	 	 	113	 
	SECTION 8.03.	 	Citibank and Affiliates
	 	 	113	 
	SECTION 8.04.	 	Lender Party Credit Decision
	 	 	114	 
	SECTION 8.05.	 	Indemnification by Lender Parties
	 	 	114	 
	SECTION 8.06.	 	Successor Agents
	 	 	115	 
	SECTION 8.07.	 	Relationship of Agents and Lenders
	 	 	116	 
	 	 	 
	 	 	 	 
	ARTICLE IX
	 	 	 
	MISCELLANEOUS
	 	 	 
	 	 	 
	 	 	 	 
	SECTION 9.01.	 	Amendments, Etc.
	 	 	116	 
	SECTION 9.02.	 	Notices, Etc.
	 	 	117	 
	SECTION 9.03.	 	No Waiver; Remedies
	 	 	120	 
	SECTION 9.04.	 	Costs and Expenses
	 	 	120	 
	SECTION 9.05.	 	Right of Set-off
	 	 	121	 
	SECTION 9.06.	 	Binding Effect
	 	 	122	 
	SECTION 9.07.	 	Assignments and Participations; Replacement Notes
	 	 	122	 






ii









 






	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	 
	SECTION 9.08.	 	Execution in Counterparts
	 	 	126	 
	SECTION 9.09.	 	No Liability of the Issuing Banks
	 	 	126	 
	SECTION 9.10.	 	Confidentiality
	 	 	126	 
	SECTION 9.11.	 	Release of Collateral
	 	 	129	 
	SECTION 9.12.	 	Patriot Act Notification
	 	 	130	 
	SECTION 9.13.	 	Jurisdiction, Etc.
	 	 	130	 
	SECTION 9.14.	 	Governing Law
	 	 	130	 
	SECTION 9.15.	 	WAIVER OF JURY TRIAL
	 	 	130	 






iii









 






SCHEDULES




	 	 	 	 	 

	Schedule I
	 	 	 	Commitments and Applicable Lending Offices
	Schedule II
	 	—	 	Borrowing Base Assets
	Schedule III
	 	—	 	Excluded Recourse Properties
	Schedule IV
	 	—	 	Ground Leases
	Schedule 4.01(b)
	 	—	 	Subsidiaries
	Schedule 4.01(f)
	 	—	 	Material Litigation
	Schedule 4.01(n)
	 	—	 	Existing Debt
	Schedule 4.01(o)
	 	—	 	Surviving Debt
	Schedule 4.01(p)
	 	—	 	Existing Liens
	Schedule 4.01(q)
	 	 	 	 
	Part I
	 	—	 	Real Property
	Part II
	 	—	 	Management Agreements
	Schedule 4.01(r)
	 	—	 	Environmental Concerns
	Part I
	 	—	 	Non-compliance with Law
	Part II
	 	—	 	Storage Tanks, Asbestos, etc.
	Part III
	 	—	 	Remedial Action, etc.
	Part IV
	 	—	 	Site Assessments, etc.
	Schedule 4.01(x)
	 	—	 	Plans and Welfare Plans






EXHIBITS




	 	 	 	 	 

	Exhibit A
	 	—	 	Form of Note
	Exhibit B
	 	—	 	Form of Notice of Borrowing
	Exhibit C
	 	—	 	Form of Guaranty Supplement
	Exhibit D
	 	—	 	Form of Assignment and Acceptance
	Exhibit E-1
	 	—	 	Form of Opinion of Greenberg Traurig LLP
	Exhibit E-2
	 	—	 	Form of Opinion of Bradley Arant Boult Cummings LLP
	Exhibit E-3
	 	—	 	Form of Opinion of Saul Ewing LLP
	Exhibit E-4
	 	—	 	Form of Opinion of Local Counsel for the Loan Parties
	Exhibit F
	 	—	 	Form of Security Agreement
	Exhibit G
	 	—	 	Form of Mortgage
	Exhibit H
	 	—	 	Form of Assignment of Leases
	Exhibit I
	 	—	 	Form of Borrowing Base Certificate
	Exhibit J
	 	—	 	Form of Hazardous Indemnity Agreement
	Exhibit K
	 	—	 	Form of Manager’s Subordination
	Exhibit L
	 	—	 	Form of Pledge Agreement







iv











 





CREDIT AGREEMENT




          CREDIT AGREEMENT dated as of October 19, 2010 (this “Agreement”) among Campus Crest
Communities Operating Partnership, LP, a Delaware limited partnership (the “Borrower”), Campus
Crest Communities, Inc., a Maryland corporation (the “Parent Guarantor”), the entities listed on
the signature pages hereof as the subsidiary guarantors (together with any Additional Guarantors
(as hereinafter defined) acceding hereto pursuant to Section 5.01(j) or 7.05, the “Subsidiary
Guarantors” and, together with the Parent Guarantor, the “Guarantors”), the banks, financial
institutions and other institutional lenders listed on the signature pages hereof as the initial
lenders (the “Initial Lenders”), the Swing Line Bank (as hereinafter defined), CITIBANK, N.A.
(“Citibank”), as the initial issuer of Letters of Credit (as hereinafter defined) (the “Initial
Issuing Bank”), CITIBANK, as administrative agent (together with any successor administrative agent
appointed pursuant to Article VIII, the “Administrative Agent”) for the Lender Parties (as
hereinafter defined), and CITIBANK, as collateral agent (together with any successor collateral
agent appointed pursuant to Article VIII, the “Collateral Agent”, and together with the
Administrative Agent, the “Agents”) for the Secured Parties (as hereinafter defined).




ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS




          SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):





     “Acceding Lender” has the meaning specified in Section 2.17(d).




     “Accession Agreement” has the meaning specified in Section 2.17(d)(i).




     “Additional Guarantor” has the meaning specified in Section 7.05.




     “Adjusted EBITDA” means (a) EBITDA for the consecutive four fiscal quarters of the
Parent Guarantor most recently ended for which financial statements are required to be
delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, less
(b) the Capital Expenditure Reserve for all Assets for such four fiscal quarters, provided
that calculations which pertain to the fiscal quarters of the Parent Guarantor ending on or
prior to September 30, 2010 shall be made on a pro forma basis, including to give effect to
the IPO and the Formation Transactions.




     “Adjusted Net Operating Income” means, with respect to any Borrowing Base Asset, (a)
the Net Operating Income attributable to such Borrowing Base Asset less (b) the Capital
Expenditure Reserve for such Borrowing Base Asset, less (c) the Management Fee Adjustment
for such Borrowing Base Asset, in each case for the consecutive four fiscal quarters most
recently ended for which financial statements are required to be delivered to the Lender
Parties pursuant to Section 5.03(b) or (c), as the case may be.



 









 






     “Administrative Agent” has the meaning specified in the recital of parties to this
Agreement.




     “Administrative Agent’s Account” means the account of the Administrative Agent
maintained by the Administrative Agent with Citibank, N.A., at its office at 1615 Brett
Road, New Castle, Delaware 19720, ABA No. 021000089, Account No. 36852248, Account Name:
Agency/Medium Term Finance, Reference: Campus Crest Revolving Credit Facility, Attention:
Global Loans/Agency, or such other account as the Administrative Agent shall specify in
writing to the Lender Parties.




     “Advance” means a Revolving Credit Advance, a Swing Line Advance or a Letter of Credit
Advance.




     “Affiliate” means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a director or
officer of such Person. For purposes of this definition, the term “control” (including the
terms “controlling”, “controlled by” and “under common control with”) of a Person means the
possession, direct or indirect, of the power to vote 15% or more of the Voting Interests of
such Person or to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Interests, by contract or otherwise.




     “Affiliate Ground Lease” means a Ground Lease with respect to which the ground lessor
and ground lessee are Loan Parties.




     “Agents” has the meaning specified in the recital of parties to this Agreement.




     “Agreement” has the meaning specified in the recital of parties to this Agreement.




     “Agreement Value” means, for each Hedge Agreement, on any date of determination, an
amount determined by the Administrative Agent equal to: (a) in the case of a Hedge
Agreement documented pursuant to the Master Agreement (Multicurrency-Cross Border) published
by the International Swap and Derivatives Association, Inc. (the “Master Agreement”), the
amount, if any, that would be payable by any Loan Party or any of its Subsidiaries to its
counterparty to such Hedge Agreement, as if (i) such Hedge Agreement was being terminated
early on such date of determination, (ii) such Loan Party or Subsidiary was the sole
“Affected Party”, and (iii) the Administrative Agent was the sole party determining such
payment amount (with the Administrative Agent making such determination pursuant to the
provisions of the form of Master Agreement); or (b) in the case of a Hedge Agreement traded
on an exchange, the mark-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party to
such Hedge Agreement determined by the Administrative Agent based on the settlement price of
such Hedge Agreement on such date of determination; or (c) in all other cases, the
mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such
Hedge Agreement to the Loan Party or Subsidiary of a Loan Party to such Hedge Agreement
determined by the Administrative Agent as the amount, if any, by which (i) the present



2









 






value of the future cash flows to be paid by such Loan Party or Subsidiary exceeds (ii)
the present value of the future cash flows to be received by such Loan Party or Subsidiary
pursuant to such Hedge Agreement; capitalized terms used and not otherwise defined in this
definition shall have the respective meanings set forth in the above described Master
Agreement.




     “Applicable Lending Office” means, with respect to each Lender Party, such Lender
Party’s Domestic Lending Office in the case of a Base Rate Advance and such Lender Party’s
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.




     “Applicable Margin” means, at any date of determination, a percentage per annum
determined by reference to the Leverage Ratio as set forth below:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable Margin	 	Applicable Margin
	 	 	 	 	 	 	for Base Rate	 	for Eurodollar Rate
	Pricing Level	 	Leverage Ratio	 	Advances	 	Advances
	I
	 	 	≥ 55	%	 	 	2.50	%	 	 	3.50	%
	II
	 	≥
 50% but < 55%	 	 	2.25	%	 	 	3.25	%
	III
	 	≥
 45% but < 50%	 	 	2.00	%	 	 	3.00	%
	IV
	 	 	< 45	%	 	 	1.75	%	 	 	2.75	%







The Applicable Margin for each Base Rate Advance shall be determined by reference to the
Leverage Ratio in effect from time to time, and the Applicable Margin for any Interest
Period for all Eurodollar Rate Advances comprising part of the same Borrowing shall be
determined by reference to the Leverage Ratio in effect on the first day of such Interest
Period; provided, however, that (a) the Applicable Margin shall initially be at Pricing
Level IV on the Closing Date, (b) no change in the Applicable Margin resulting from the
Leverage Ratio shall be effective until three Business Days after the date on which the
Administrative Agent receives (i) the financial statements required to be delivered pursuant
to Section 5.03(b) or (c), as the case may be, and (ii) a certificate of the Chief Financial
Officer (or other Responsible Officer performing similar functions) of the Borrower
demonstrating the Leverage Ratio, and (c) the Applicable Margin shall be at Pricing Level I
for so long as the Borrower has not submitted to the Administrative Agent as and when
required under Section 5.03(b) or (c), as applicable, the information described in clause
(b) of this proviso.




     “Appraisal” means an appraisal complying with the requirements of the Federal Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time,
commissioned by and prepared for the account of the Administrative Agent (for the benefit of
the Lenders) by a MAI appraiser selected by the Administrative Agent in consultation with
the Borrower, and otherwise in scope, form and substance satisfactory to the Collateral
Agent.




     “Appraised Value” means, as of any date of determination with respect to any Borrowing
Base Asset, the appraised value of such Borrowing Base Asset on an “as-is”



3









 






basis, in each case as set forth in the most recent Appraisal of such Borrowing Base
Asset delivered to the Administrative Agent on or before such date of determination.




     “Approved Electronic Communications” means each Communication that any Loan Party is
obligated to, or otherwise chooses to, provide to the Administrative Agent pursuant to any
Loan Document or the transactions contemplated therein, including any financial statement,
financial and other report, notice, request, certificate and other information materials
required to be delivered pursuant to Sections 5.03(b), (c), (e), (g), and (k); provided,
however, that solely with respect to delivery of any such Communication by any Loan Party to
the Administrative Agent and without limiting or otherwise affecting either the
Administrative Agent’s right to effect delivery of such Communication by posting such
Communication to the Approved Electronic Platform or the protections afforded hereby to the
Administrative Agent in connection with any such posting, “Approved Electronic
Communication” shall exclude (i) any notice of borrowing, letter of credit request, swing
loan request, notice of conversion or continuation, and any other notice, demand,
communication, information, document and other material relating to a request for a new, or
a conversion of an existing, Borrowing, (ii) any notice pursuant to Section 2.06(a) and any
other notice relating to the payment of any principal or other amount due under any Loan
Document prior to the scheduled date therefor, (iii) all notices of any Default or Event of
Default and (iv) any notice, demand, communication, information, document and other material
required to be delivered to satisfy any of the conditions set forth in Article III or any
other condition to any Borrowing or other extension of credit hereunder or any condition
precedent to the effectiveness of this Agreement.




     “Approved Electronic Platform” has the meaning specified in Section 9.02(c).




     “Approved Manager” means with respect to any Campus Housing Asset (i) an affiliate of
the Parent Guarantor, or (ii) a nationally recognized campus housing manager (a) with (or
controlled by a Person or Persons with) at least ten years of experience in the campus
housing management industry, (b) that is engaged pursuant to a written management agreement
in form and substance reasonably satisfactory to the Administrative Agent and (c) that has
entered into a subordination agreement in form and substance reasonably satisfactory to the
Administrative Agent. The Administrative Agent confirms that as of the Closing Date the
existing manager of the Campus Housing Assets shown on Part III of Schedule 4.01(q) hereto
is satisfactory to the Administrative Agent. For purposes of this definition, the term
“control” (including the term “controlled by”) of a Person means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of Voting Interests, by contract or otherwise.




     “Arrangers” means, collectively, CGMI and Raymond James Bank FSB, each as joint lead
arranger and joint book running manager.




     “Assets” means Campus Housing Assets, Development Assets and Joint Venture Assets.



4









 






     “Asset Value” means, at any date of determination, (a) in the case of any Campus
Housing Asset where the related certificate of occupancy was issued twelve or more months
prior to such date of determination, (i) the Net Operating Income attributable to such Asset
less the Management Fee Adjustment for such Asset, in each case for the consecutive four
fiscal quarters most recently ended for which financial statements are required to be
delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be
divided by (ii) 8.25%, (b) in the case of any Development Asset and any Campus Housing Asset
where the related certificate of occupancy was issued less than twelve months prior to such
date of determination, the book value of such Development Asset or such Campus Housing Asset
as determined in accordance with GAAP (but excluding any deduction for accumulated
depreciation on such Assets), (c) in the case of any Joint Venture Asset that, but for such
Asset being owned by a Joint Venture, would qualify as a Campus Housing Asset under the
definition thereof where the related certificate of occupancy was issued twelve or more
months prior to such date of determination, the JV Pro Rata Share of (i) the Net Operating
Income attributable to such Asset less the Management Fee Adjustment for such Asset, in each
case for the consecutive four fiscal quarters most recently ended for which financial
statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or
(c), as the case may be divided by (ii) 8.25% and (d) in the case of any other Joint Venture
Asset, the JV Pro Rata Share of the book value of such Joint Venture Asset as determined in
accordance with GAAP (but excluding any deduction for accumulated depreciation on such
Assets).




     “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender
Party and an Eligible Assignee, and accepted by the Administrative Agent, in accordance with
Section 9.07 and in substantially the form of Exhibit D hereto.




     “Assignments of Leases” has the meaning specified in Section 3.01(a)(iii).




     “Available Amount” of any Letter of Credit means, at any time, the maximum amount
available to be drawn under such Letter of Credit at such time (assuming compliance at such
time with all conditions to drawing).




     “Bankruptcy Law” means any applicable law governing a proceeding of the type referred
to in Section 6.01(f) or Title 11, U.S. Code, or any similar foreign, federal or state law
for the relief of debtors.




     “Base Rate” means a fluctuating interest rate per annum in effect from time to time,
which rate per annum shall at all times be equal to the highest of (a) the rate of interest
announced publicly by Citibank, N.A. in New York, New York, from time to time, as Citibank,
N.A.’s base rate, (b) 1/2 of 1% per annum above the Federal Funds Rate and (c) the one-month
Eurodollar Rate plus 1% per annum.




     “Base Rate Advance” means an Advance that bears interest as provided in Section
2.07(a)(i).



5









 






     “BBA Proposal Package” means, with respect to any Proposed Borrowing Base Asset, the
following items, each in form and substance satisfactory to the Administrative Agent and in
sufficient copies for each Lender:




     (a) a description of such Asset in detail satisfactory to the Administrative Agent,




     (b) a projected cash flow analysis of such Asset prepared in a form reasonably
acceptable to the Administrative Agent,




     (c) a statement of operating expenses for such Asset for the immediately preceding 36
consecutive calendar months (or, if not in operation for 36 consecutive calendar months, the
total period of operations),




     (d) an operating expense and capital expenditures budget for such Asset for the next
succeeding 12 consecutive months,




     (e) a current rent roll, and




     (f) if such Asset is then the subject of an acquisition transaction, a copy of the
purchase agreement with respect thereto and a schedule of the proposed sources and uses of
funds for such transaction.




     “Borrower” has the meaning specified in the recital of parties to this Agreement.




     “Borrower’s Account” means the account of the Borrower maintained by the Borrower with
[                         ] at its office at [                         ], ABA No. [                         ], Account No.
[                         ] or such other account as the Borrower shall specify in writing to the
Administrative Agent.




     “Borrowing” means a borrowing consisting of simultaneous Revolving Credit Advances of
the same Type made by the Lenders or a Swing Line Borrowing.




     “Borrowing Base Assets” means (a) those Campus Housing Assets for which the applicable
conditions (as may be determined by the Administrative Agent in its sole discretion) in
Section 3.01 and, if applicable, Section 5.01(k) have been satisfied and as the
Administrative Agent and the Required Lenders, in their sole discretion, shall have elected
to treat as Borrowing Base Assets for purposes of this Agreement, and (b) the Campus Housing
Assets listed on Schedule II hereto on the Closing Date.




     “Borrowing Base Certificate” means a certificate in substantially the form of Exhibit I
hereto, duly certified by the Chief Financial Officer (or other Responsible Officer
performing similar functions) of the Parent Guarantor.




     “Borrowing Base Conditions” means, with respect to any Proposed Borrowing Base Asset,
that such Proposed Borrowing Base Asset



6









 






     (a) is a Campus Housing Asset located in one of the 48 contiguous states of the United
States of America or the District of Columbia that has been in operation for at least one
year;




     (b) is wholly-owned directly or indirectly by the Borrower either in fee simple
absolute or subject to a Qualifying Ground Lease;




     (c) is fully operating and not under significant development or redevelopment;




     (d) is free of all material structural defects or architectural deficiencies, title
defects, environmental or other material matters (including a casualty event or
condemnation) that could reasonably be expected to have a material adverse effect on the
value, use or ability to sell or refinance such Asset;




     (e) is operated by an Approved Manager or any other property manager approved by the
Administrative Agent;




     (f) is not subject to mezzanine Debt financing;




     (g) is not, and no interest of the Borrower or any of its Subsidiaries therein is,
subject to any Lien (other than Permitted Liens) or any Negative Pledge; and




     (h) is 100% owned by a Loan Party that is a single-purpose Subsidiary of the Borrower
and (1) none of the Borrower’s or the Parent Guarantor’s direct or indirect Equity Interests
in such Subsidiary is subject to any Lien (other than Permitted Liens) or any Negative
Pledge and (2)(x) on or prior to the date such Asset is added to the Collateral, such
Subsidiary shall have become a Guarantor hereunder, and (y) the Borrower directly, or
indirectly through a Subsidiary, has the right to take the following actions without the
need to obtain the consent of any Person: (i) to create Liens on such Asset and on the
Equity Interests in such Subsidiary as security for Debt of the Borrower or such Subsidiary,
as applicable, and (ii) to sell, transfer or otherwise dispose of such Asset.




     “Borrowing Base Debt Service Coverage Ratio” means, at any date of determination, the
ratio of (a) the aggregate Adjusted Net Operating Income for all Borrowing Base Assets to
(b) the payments that would be required to be made over a twelve month period on an assumed
Debt in an aggregate principal amount equal to the Facility Exposure at such date, assuming
a thirty year amortization schedule, level payments of interest and applying an interest
rate equal to the greater of (i) 7.50% per annum and (ii) the rate per annum at such date
for 10-year United States Treasury Securities plus the Applicable Margin in respect of
Eurodollar Rate Advances.




     “Borrowing Base Value” means, with respect to any Borrowing Base Asset, an amount equal
to 60% of the Appraised Value of such Borrowing Base Asset.




     “Business Day” means a day of the year on which banks are not required or authorized by
law to close in New York City and, if the applicable Business Day relates



7









 






to any Eurodollar Rate Advances, on which dealings are carried on in the London
interbank market.




     “Campus Housing Asset” means Real Property that operates or is intended to be operated
as student housing, but excluding any Joint Venture Asset.




     “Capital Expenditure Reserve” means, with respect to any Campus Housing Asset at any
date of determination, $125 times the number of beds comprising such Asset.




     “Capitalized Leases” means all leases that have been or should be, in accordance with
GAAP, recorded as capitalized leases.




     “Cash” means coin or currency of the United States of America or immediately available
federal funds, including such funds delivered by wire transfer.




     “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the Administrative Agent and the Issuing Bank (as applicable), as
collateral for the Available Amount of any Letter of Credit, cash or deposit account
balances or, if the Issuing Bank benefitting from such collateral shall agree in its sole
discretion, other credit support, in each case pursuant to documentation in form and
substance satisfactory to (a) the Administrative Agent and (b) the Issuing Bank. “Cash
Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds
of such cash collateral and other credit support.




     “Cash Equivalents” means any of the following, to the extent owned by the applicable
Loan Party or any of its Subsidiaries free and clear of all Liens (other than Liens created
under the Collateral Documents) and having a maturity of not greater than 90 days from the
date of issuance thereof: (a) readily marketable direct obligations of the Government of
the United States or any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the Government of the United States, (b)
certificates of deposit of or time deposits with any commercial bank that is a Lender Party
or a member of the Federal Reserve System, issues (or the parent of which issues) commercial
paper rated as described in clause (c) below, is organized under the laws of the United
States or any State thereof and has combined capital and surplus of at least $1,000,000,000
or (c) commercial paper in an aggregate amount of not more than $50,000,000 per issuer
outstanding at any time, issued by any corporation organized under the laws of any State of
the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or
“A-1” (or the then equivalent grade) by S&P.




     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended from time to time.




     “CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability
Information System maintained by the U.S. Environmental Protection Agency.




     “CGMI” means Citigroup Global Markets Inc.



8









 






     “Change of Control” means the occurrence of any of the following (after giving effect
to the consummation of the IPO and the Formation Transactions):




     (a) any Person or two or more Persons acting in concert shall have acquired and shall
continue to have following the date hereof beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Interests of the Parent Guarantor (or other securities
convertible into such Voting Interests) representing 35% or more of the combined voting
power of all Voting Interests of the Parent Guarantor; or




     (b) there is a change in the composition of the Parent Guarantor’s Board of Directors
over a period of 24 consecutive months (or less) such that a majority of Board members
(rounded up to the nearest whole number) ceases, by reason of one or more proxy contests for
the election of Board members, to be comprised of individuals who either (i) have been
Board members continuously since the beginning of such period or (ii) have been elected or
nominated for election as Board members during such period by at least a majority of the
Board members described in clause (i) who were still in office at the time such election or
nomination was approved by the Board; or




     (c) any Person or two or more Persons acting in concert shall have acquired and shall
continue to have following the date hereof, by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation will result in its or their
acquisition of the power to direct, directly or indirectly, the management or policies of
the Parent Guarantor; or




     (d) the Parent Guarantor ceases to be (i) the indirect legal and beneficial owner of
all of the general partnership interests in the Borrower, (ii) the direct legal and
beneficial owner of all of the membership interests in Campus Crest Communities GP, LLC or
(iii) the direct or indirect legal and beneficial owner of not less than 75% of the limited
partnership interests in the Borrower; or




     (e) Campus Crest Communities GP, LLC ceases to be the general partner of the Borrower;
or




     (f) the Parent Guarantor or Campus Crest Communities GP, LLC shall create, incur,
assume or suffer to exist any Lien on the Equity Interests in Campus Crest Communities GP,
LLC or the Borrower owned by it; or




     (g) the Borrower ceases to be the direct or indirect legal and beneficial owner of all
of the Equity Interests in each direct and indirect Subsidiary that owns or leases a
Borrowing Base Asset.




     “Citibank” has the meaning specified in the recital of the parties to this Agreement.




     “Closing Date” means the date hereof or such other date as may be agreed upon by the
Borrower and the Administrative Agent.



9









 






     “Collateral” means all “Collateral” and all “Mortgaged Property” referred to in the
Collateral Documents and all other property that is or is intended to be subject to any Lien
in favor of the Collateral Agent for the benefit of the Secured Parties and includes,
without limitation, all Borrowing Base Assets.




     “Collateral Agent” has the meaning specified in the recital of parties to this
Agreement.




     “Collateral Documents” means the Security Agreement, the Pledge Agreement, the
Mortgages, the Assignments of Leases and any other agreement entered into by a Loan Party
that creates or purports to create a Lien in favor of the Collateral Agent for the benefit
of the Secured Parties.




     “Collateral Deliverables” means, with respect to any Proposed Borrowing Base Asset, the
following items, each in form and substance satisfactory to the Administrative Agent (unless
otherwise specified) and in sufficient copies for each Lender:




     (i) A certificate of the Chief Financial Officer (or other Responsible Officer)
of the Borrower, dated the date of the addition of such Proposed Borrowing Base
Asset to the Collateral as a Borrowing Base Asset, confirming that (A) the Proposed
Borrowing Base Asset satisfies all Borrowing Base Conditions, (B) no Default or
Event of Default has occurred or is continuing, and the addition of such Proposed
Borrowing Base Asset as a Borrowing Base Asset shall not cause or result in a
Default or Event of Default, (C) the representations and warranties contained in the
Loan Documents are true and correct in all material respects (or, if qualified as to
materiality, in all respects) on and as of such date (except to the extent that such
representations and warranties specifically refer to an earlier date, in which case
they are true and correct as of such earlier date), and (D) the Loan Parties are in
compliance with the covenants contained in Section 5.04 (both immediately before and
on a pro forma basis immediately after the addition of such Proposed Borrowing Base
Property as a Borrowing Base Asset), together with supporting information
demonstrating such compliance;




     (ii) A Borrowing Base Certificate demonstrating that the Total Borrowing Base
Value (calculated on a pro forma basis after giving effect to the addition of such
Proposed Borrowing Base Asset to the Collateral as a Borrowing Base Asset and to any
Advances made at the time thereof) will be greater than or equal to the Facility
Exposure;




     (iii) each of the items set forth in Sections 3.01(a)(ii), (iii), (v), (vi),
(vii), (viii), (ix), (xi), (xiii), (xv) and, to the extent applicable, 5.01(j),
mutatis mutandis, in each case in respect of such Proposed Borrowing Base Asset or
the Loan Party or proposed Loan Party which owns such Proposed Borrowing Base Asset;




     (iv) An Appraisal of such Proposed Borrowing Base Asset;



10









 






     (v) Reports supplementing Schedules II, 4.01(b), 4.01(q) and 4.01(r) hereto,
including descriptions of such changes in the information included in such Schedules
as may be necessary for such Schedules to be accurate and complete, certified as
correct and complete by a Responsible Officer of the Borrower, provided that for
purposes of the definition of the term Borrowing Base Assets, the supplement to
Schedule II shall become effective only upon (A) delivery of all Collateral
Deliverables and approval thereof by the Administrative Agent, and (B) approval of
the Proposed Borrowing Base Asset as a Borrowing Base Asset pursuant to the
definition of “Borrowing Base Assets”; and




     (vi) Such other approvals, opinions or documents as any Lender Party through
the Administrative Agent may reasonably request.




     “Commitment” means a Revolving Credit Commitment, a Swing Line Commitment or a Letter
of Credit Commitment.




     “Commitment Date” has the meaning specified in Section 2.17(b).




     “Commitment Increase” has the meaning specified in Section 2.17(a).




     “Communications” means each notice, demand, communication, information, document and
other material provided for hereunder or under any other Loan Document or otherwise
transmitted between the parties hereto relating to this Agreement, the other Loan Documents,
any Loan Party or its Affiliates, or the transactions contemplated by this Agreement or the
other Loan Documents including, without limitation, all Approved Electronic Communications.




     “Conditional Approval Notice” has the meaning specified in Section 5.01(k).




     “Consolidated” refers to the consolidation of accounts in accordance with GAAP.




     “Contingent Obligation” means, with respect to any Person, any Obligation or
arrangement of such Person to guarantee or intended to guarantee any Debt, leases, dividends
or other payment Obligations (“primary obligations”) of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without limitation, (a)
the direct or indirect guarantee, endorsement (other than for collection or deposit in the
ordinary course of business), co making, discounting with recourse or sale with recourse by
such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay
or similar payments, if required, regardless of nonperformance by any other party or parties
to an agreement or (c) any Obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any
such primary obligation or (B) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof. The



11









 






amount of any Contingent Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such Contingent
Obligation is made (or, if less, the maximum amount of such primary obligation for which
such Person may be liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder), as determined
by such Person in good faith.




     “Conversion”, “Convert” and “Converted” each refer to a conversion of Advances of one
Type into Advances of the other Type pursuant to Section 2.07(d), 2.09 or 2.10.




     “Current Party” has the meaning specified in Section 9.07(k).




     “Customary Carve-Out Agreement” has the meaning specified in the definition of
Non-Recourse Debt.




     “Debt” of any Person means, without duplication for purposes of calculating financial
ratios, (a) all Debt for Borrowed Money of such Person, (b) all Obligations of such Person
for the deferred purchase price of property or services other than trade payables incurred
in the ordinary course of business and not overdue by more than 60 days, (c) all Obligations
of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all
Obligations of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Obligations of such Person as
lessee under Capitalized Leases, (f) all Obligations of such Person under acceptance, letter
of credit or similar facilities, (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Equity Interests in such
Person or any other Person (other than Preferred Interests that are issued by any Loan Party
or Subsidiary thereof and classified as either equity or minority interests pursuant to
GAAP) or any warrants, rights or options to acquire such Equity Interests, (h) all
Obligations of such Person in respect of Hedge Agreements, valued at the Agreement Value
thereof, (i) all Contingent Obligations of such Person and (j) all indebtedness and other
payment Obligations referred to in clauses (a) through (i) above of another Person secured
by (or for which the holder of such Debt has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become liable for
the payment of such indebtedness or other payment Obligations; provided, however, that in
the case of the Parent Guarantor and its Subsidiaries, “Debt” shall also include, without
duplication, the JV Pro Rata Share of Debt for each Joint Venture.




     “Debt for Borrowed Money” of any Person means all items that, in accordance with GAAP,
would be classified as indebtedness on a Consolidated balance sheet of such Person;
provided, however, that in the case of the Parent Guarantor and its Subsidiaries “Debt for
Borrowed Money” shall also include, without duplication, the JV Pro Rata



12









 






Share of Debt for Borrowed Money for each Joint Venture; provided further that as used
in the definition of “Fixed Charge Coverage Ratio”, in the case of any acquisition or
disposition of any direct or indirect interest in any Asset (including through the
acquisition or disposition of Equity Interests) by the Parent Guarantor or any of its
Subsidiaries during the consecutive four fiscal quarters of the Parent Guarantor most
recently ended for which financial statements are required to be delivered to the Lender
Parties pursuant to Section 5.03(b) or (c), as the case may be, the term “Debt for Borrowed
Money” (a) shall include, in the case of an acquisition, any Debt for Borrowed Money
directly relating to such Asset existing immediately following such acquisition computed as
if such indebtedness also existed for the portion of such period that such Asset was not
owned by the Parent Guarantor or such Subsidiary, and (b) shall exclude, in the case of a
disposition, for such period any Debt for Borrowed Money to which such Asset was subject to
the extent such Debt for Borrowed Money was repaid or otherwise terminated upon the
disposition of such Asset.




     “Default” means any Event of Default or any event that would constitute an Event of
Default but for the requirement that notice be given or time elapse or both.




     “Development Assets” means all Real Property acquired for development into Campus
Housing Assets that, in accordance with GAAP, would be classified as development property on
a Consolidated balance sheet of the Parent Guarantor and its Subsidiaries.




     “Dividend Payout Ratio” means, at any date of determination, the ratio, expressed as a
percentage, of (a) the sum, without duplication, of all dividends paid by the Parent
Guarantor on account of any common stock or preferred stock of Parent Guarantor, except
dividends payable solely in additional Equity Interests of the same class, to (b) Funds From
Operations, in each case for the four consecutive fiscal quarters of the Parent Guarantor
most recently ended (or, in the case of the first, second or third fiscal quarter of the
Parent Guarantor for which financial statements are required to be delivered to the Lender
Parties pursuant to Section 5.03(b) or (c), as the case may be, one, two or three
consecutive fiscal quarters, respectively).




     “Domestic Lending Office” means, with respect to any Lender Party, the office of such
Lender Party specified as its “Domestic Lending Office” opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party, as
the case may be, or such other office of such Lender Party as such Lender Party may from
time to time specify to the Borrower and the Administrative Agent.




     “EBITDA” means, at any date of determination, the sum of the following items, in each
case for the four consecutive fiscal quarters of the Parent Guarantor most recently ended:
(a) the sum of (i) net income (or net loss) (excluding gains (or losses) from extraordinary,
infrequent, and unusual items), (ii) interest expense, (iii) income tax expense, (iv)
depreciation expense, (v) amortization expense, and (vi) to the extent subtracted in
computing net income, expenses incurred in connection with the Formation Transactions and
the IPO and other non-recurring items, in each case of the Parent



13









 






Guarantor and its Subsidiaries determined on a Consolidated basis and in accordance
with GAAP for such four fiscal quarter period, less, to the extent not already deducted, all
rentals payable under leases of real or personal (or mixed) property, in each case, of or by
the Parent Guarantor and its Subsidiaries for the consecutive four fiscal quarters of the
Parent Guarantor most recently ended for which financial statements are required to be
delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, plus
(b) with respect to each Joint Venture, the JV Pro Rata Share of the sum of (i) net income
(or net loss) (excluding gains (or losses) from extraordinary and unusual items), (ii)
interest expense, (iii) income tax expense, (iv) depreciation expense, (v) amortization
expense, and (vi) to the extent subtracted in computing net income of such Joint Venture,
non-recurring items, in each case of such Joint Venture determined on a Consolidated basis
and in accordance with GAAP for such four fiscal quarter period, less, to the extent not
already deducted, all rentals payable under leases of real or personal (or mixed) property,
in each case, of or by the Parent Guarantor and its Subsidiaries for the consecutive four
fiscal quarters of the Parent Guarantor most recently ended for which financial statements
are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as
the case may be; provided, however, that for purposes of this definition, in the case of any
acquisition or disposition of any direct or indirect interest in any Asset (including
through the acquisition or disposition of Equity Interests) by the Parent Guarantor or any
of its Subsidiaries during such four fiscal quarter period, EBITDA will be adjusted (1) in
the case of an acquisition, by adding thereto an amount equal to the acquired Asset’s actual
EBITDA (computed as if such Asset was owned by the Parent Guarantor or one of its
Subsidiaries for the entire four fiscal quarter period) generated during the portion of such
four fiscal quarter period that such Asset was not owned by the Parent Guarantor or such
Subsidiary, and (2) in the case of a disposition, by subtracting therefrom an amount equal
to the actual EBITDA generated by the Asset so disposed of during such four fiscal quarter
period; provided further that calculations which pertain to the fiscal quarters of the
Parent Guarantor ending on or prior to September 30, 2010 shall be made on a pro forma
basis, including to give effect to the IPO and the Formation Transactions.




     “Effective Date” means the first date on which the conditions set forth in Article III
shall be satisfied.




     “Eligible Assignee” means (a) with respect to the Revolving Credit Facility, (i) a
Lender; (ii) an Affiliate or Fund Affiliate of a Lender; (iii) if at the time an assignment
is effected pursuant to Section 9.07 a Default has occurred and is continuing, then any of
(A) a commercial bank organized under the laws of the United States, or any State thereof,
respectively, and having total assets in excess of $500,000,000; (B) a savings and loan
association or savings bank organized under the laws of the United States or any State
thereof, and having total assets in excess of $500,000,000; (C) a commercial bank organized
under the laws of any other country that is a member of the OECD or has concluded special
lending arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any such country, and having total
assets in excess of $500,000,000, so long as such bank is acting through a branch or agency
located in the United States; (D) the central bank of any country that is a member of the
OECD; or (E) a finance company, insurance company or other



14









 






financial institution or fund (whether a corporation, partnership, trust or other
entity) that is engaged in making, purchasing or otherwise investing in commercial loans in
the ordinary course of its business and having total assets in excess of $500,000,000; and
(iv) any other Person approved by the Administrative Agent, and, unless a Default has
occurred and is continuing at the time any assignment is effected pursuant to Section 9.07,
approved by the Borrower, each such approval not to be unreasonably withheld or delayed, and
(b) with respect to the Letter of Credit Facility, a Person of the type described under
subclause (iii)(A) or (C) of this definition that is approved by the Administrative Agent
and, unless a Default has occurred and is continuing at the time any assignment is effected
pursuant to Section 9.07, approved by the Borrower, each such approval not to be
unreasonably withheld or delayed; provided, however, that neither any Loan Party nor any
Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition; and
provided further that if Borrower does not disapprove a potential Eligible Assignee in
writing within five (5) Business Days after such request for approval, then Borrower’s
approval hereunder shall be deemed given.




     “Environmental Action” means any enforcement action, suit, demand, demand letter, claim
of liability, notice of non-compliance or violation, notice of liability or potential
liability, investigation, enforcement proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or Hazardous Material
or arising from alleged injury or threat to health, safety or the environment, including,
without limitation, (a) by any governmental or regulatory authority for enforcement,
cleanup, removal, response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or third party for damages, contribution, indemnification, cost
recovery, compensation or injunctive relief.




     “Environmental Law” means any Federal, state, local or foreign statute, law, ordinance,
rule, regulation, code, order, writ, judgment, injunction, decree or judicial or agency
interpretation, policy or guidance relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.




     “Environmental Permit” means any permit, approval, identification number, license or
other authorization required under any Environmental Law.




     “E013224” has the meaning specified in Section 4.01(aa).




     “Equity Interests” means, with respect to any Person, shares of capital stock of (or
other ownership or profit interests in) such Person, warrants, options or other rights for
the purchase or other acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible into or exchangeable
for shares of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or other acquisition from such Person of such
shares (or such other interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust interests therein),



15









 






whether voting or nonvoting, and whether or not such shares, warrants, options, rights
or other interests are authorized or otherwise existing on any date of determination.




     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.




     “ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member
of the controlled group of any Loan Party, or under common control with any Loan Party,
within the meaning of Section 414 of the Internal Revenue Code.




     “ERISA Event” means (a)(i) the occurrence of a reportable event, within the meaning of
Section 4043 of ERISA, with respect to any Plan unless the 30 day notice requirement with
respect to such event has been waived by the PBGC or (ii) the requirements of Section
4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12)
or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum funding waiver with
respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a
lien under Section 303(k) of ERISA shall have been met with respect to any Plan; or (g) the
institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to administer,
such Plan.




     “Eurocurrency Liabilities” has the meaning specified in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time to time.




     “Eurodollar Lending Office” means, with respect to any Lender Party, the office of such
Lender Party specified as its “Eurodollar Lending Office” opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party (or,
if no such office is specified, its Domestic Lending Office), or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower and the
Administrative Agent.




     “Eurodollar Rate” means, for any Interest Period for all Eurodollar Rate Advances
comprising part of the same Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the rate per annum (rounded upward, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be the offered rate that
appears on the Reuters Screen LIBOR01 Page (or any successor thereto)



16









 






as the British Bankers
Association London interbank offered rate for deposits in U.S.
Dollars (for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period, or, if for any reason such
rate is not available, the average (rounded upward, if necessary, to the nearest 1/100 of
1%, if such average is not such a multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of the Reference Bank in London, England to
prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount substantially equal to such
Reference Bank’s Eurodollar Rate Advance comprising part of such Borrowing to be outstanding
during such Interest Period (or, if such Reference Bank shall not have such a Eurodollar
Rate Advance, $1,000,000) and for a period equal to such Interest Period by (b) a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.




     “Eurodollar Rate Advance” means an Advance that bears interest as provided in Section
2.07(a)(ii).




     “Eurodollar Rate Reserve Percentage” means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, the reserve percentage applicable two
Business Days before the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate Advances is determined)
having a term equal to such Interest Period.




     “Events of Default” has the meaning specified in Section 6.01.




     “Existing Debt” means Debt of each Loan Party and its Subsidiaries outstanding
immediately before giving effect to the Formation Transactions.




     “Excluded Recourse Properties” means the Real Property listed on Schedule III hereto on
the Closing Date.




     “Extension Date” has the meaning specified in Section 2.16.




     “Facility” means the Revolving Credit Facility, the Swing Line Facility or the Letter
of Credit Facility.




     “Facility Exposure” means, at any date of determination, the sum of (a) the aggregate
principal amount of all outstanding Advances, plus (b) the amount (not less than zero) equal
to the Available Amount under all outstanding Letters of Credit less all amounts then on
deposit in the L/C Cash Collateral Account, plus (c) all Obligations of



17









 






the Loan Parties in
respect of Secured Hedge Agreements, valued at the Agreement Value thereof.




     “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal
for each day during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for such day for
such transactions received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.




     “Fee Letter” means the fee letter dated as of August 2, 2010 among Borrower, Parent
Guarantor, Campus Crest Group, LLC, the Subsidiary Guarantors and CGMI, as the same may be
amended from time to time.




     “Fiscal Year” means a fiscal year of the Parent Guarantor and its Consolidated
Subsidiaries ending on December 31 in any calendar year.




     “Fixed Charge Coverage Ratio” means, at any date of determination, the ratio of (a)
Adjusted EBITDA to (b) the sum of (i) interest (including capitalized interest (but
excluding capitalized interest with respect to construction financing of Real Property prior
to the issuance of the related certificate of occupancy)) payable on, and amortization of
debt discount in respect of, all Debt for Borrowed Money plus (ii) scheduled amortization of
principal amounts of all Debt for Borrowed Money payable (excluding maturities) plus (iii)
cash dividends payable on any Preferred Interests; provided, however, that calculations
which pertain to the fiscal quarters of the Parent Guarantor ending on or prior to September
30, 2010 shall be made on a pro forma basis, including to give effect to the IPO and the
Formation Transactions.




     “Formation Transactions” means the “formation transactions” all as more fully described
in the Registration Statement and otherwise on terms reasonably satisfactory to the
Administrative Agent.




     “Fund Affiliate” means, with respect to any Lender that is a fund that invests in bank
loans, any other fund that invests in bank loans and is advised or managed by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.




     “Funds From Operations” means, with respect to the Parent Guarantor, net income
(computed in accordance with GAAP), excluding gains (or losses) from sales of property and
extraordinary and unusual items, plus depreciation and amortization, and after adjustments
for unconsolidated Joint Ventures, provided that any determination of Funds From Operations
which pertains to the fiscal quarters of the Parent Guarantor ending on or prior to
September 30, 2010 shall be made on a pro forma basis, including to give effect to the IPO
and the Formation Transactions. Adjustments for unconsolidated Joint Ventures will be
calculated to reflect funds from operations on the same basis.



18









 






     “GAAP” has the meaning specified in Section 1.03.




     “Good Faith Contest” means the contest of an item as to which: (a) such item is
contested in good faith, by appropriate proceedings, (b) reserves that are adequate are
established with respect to such contested item in accordance with GAAP or such contested
item is bonded over in accordance with statutory lien bonding procedures and (c) the failure
to pay or comply with such contested item during the period of such contest could not
reasonably be expected to result in a Material Adverse Effect.




     “Ground Lease” means each Affiliate Ground Lease, the Ground Lease (Mobile) and any
other Qualifying Ground Lease with respect to a Proposed Borrowing Base Asset that becomes
part of the Collateral, and “Ground Leases” means each Affiliate Ground Lease, Ground Lease
(Mobile) and the such other ground leases, collectively. As of the Closing Date, all Ground
Leases are as set forth on Schedule IV.




     “Ground Lease (Mobile)” means, collectively, (i) that certain Ground Lease Agreement,
dated as of September 8, 2006, between the University of South Alabama, as landlord and
master lessor, and USA Research and Technology Corporation, as master lessee, recorded in
the public records of Mobile County, Alabama on September 6, 2006 in Book 6040, Page 661, as
amended by that certain First Amendatory Ground Lease, between the same parties, dated
October 3, 2007, recorded in the Mobile Records on October 24, 2007 in Book 6278, Page 1536
and (ii) that certain Ground Lease, dated March 14, 2008, between USA Research and
Technology Corporation, as sub-landlord and sub-ground lessor, and Campus Crest at Mobile
Phase II, LLC, as sub-ground lessee, as amended by that certain First Amendment to Ground
Lease dated on or about the date hereof, as evidenced by that certain Memorandum of Ground
Lease, dated March 18, 2008, recorded in the public records of Mobile County, Alabama on
March 31, 2008 in Book 6355, Page 1270, and that certain First Amendment to Memorandum of
Ground Lease dated on or about the date hereof, to be recorded in said public records.




     “Ground Lease (Mobile) Default” has the meaning specified in Section 4.01(z)(iv).




     “Ground Leased Property (Mobile)” means the Campus Housing Asset located at the
University of South Alabama, Mobile, Alabama, which property is subject to the Ground Lease
(Mobile).




     “Ground Lease Payments” means all ground rents, square footage rents and percentage
rents and any other payments or rents owing under a Ground Lease.




     “Ground Lessor (Mobile)” means, with respect to the master ground lease, the University
of South Alabama, and, with respect to the sub-ground lease, USA Research and Technology
Corporation, together with each of its respective successors and assigns, as master ground
lessor and sub-ground lessor, respectively, under the Ground Lease (Mobile).




     “Guaranteed Obligations” has the meaning specified in Section 7.01.



19









 






     “Guarantor Deliverables” means each of the items set forth in Section 5.01(j).




     “Guarantors” has the meaning specified in the recital of parties to this Agreement.




     “Guaranty” means the Guaranty by the Guarantors pursuant to Article VII, together with
any and all Guaranty Supplements required to be delivered pursuant to Section 5.01(j) or
Section 7.05.




     “Guaranty Supplement” means a supplement entered into by an Additional Guarantor in
substantially the form of Exhibit C hereto.




     “Hazardous Indemnity Agreement” means each of the Environmental Indemnity Agreements
regarding Hazardous Materials now or hereafter made by the Borrower, Parent Guarantor and
Guarantors owning Borrowing Base Assets in favor of the Administrative Agent and the
Lenders, in substantially the form of Exhibit J hereto, as the same may be modified, amended
or ratified, pursuant to which the Borrower, Parent Guarantor and such Subsidiary Guarantor
agree to indemnify the Administrative Agent and the Lenders with respect to Hazardous
Materials and Environmental Laws.




     “Hazardous Materials” means (a) petroleum or petroleum products, by-products or
breakdown products, radioactive materials, asbestos-containing materials, polychlorinated
biphenyls, radon gas and mold and (b) any other chemicals, materials or substances
designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant
under any Environmental Law.




     “Hedge Agreements” means interest rate swap, cap or collar agreements, interest rate
future or option contracts, currency swap agreements, currency future or option contracts
and other hedging agreements.




     “Hedge Bank” means any Lender Party or an Affiliate of a Lender Party in its capacity
as a party to a Secured Hedge Agreement.




     “Increase Date” has the meaning specified in Section 2.17(a).




     “Increasing Lender” has the meaning specified in Section 2.17(b).




     “Indemnified Costs” has the meaning specified in Section 8.05(a).




     “Indemnified Party” has the meaning specified in Section 7.06(a).




     “Information” has the meaning specified in Section 9.10.




     “Initial Extension of Credit” means the earlier to occur of the initial Borrowing and
the initial issuance of a Letter of Credit hereunder.




     “Initial Issuing Bank” has the meaning specified in the recital of parties to this
Agreement.



20









 






     “Initial Lenders” has the meaning specified in the recital of parties to this
Agreement.




     “Insufficiency” means, with respect to any Plan, the amount, if any, of its unfunded
benefit liabilities, as defined in Section 4001(a)(18) of ERISA.




     “Interest Period” means, for each Eurodollar Rate Advance comprising part of the same
Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of
the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the
last day of the period selected by the Borrower pursuant to Section 2.07(c) and in
conformity with the provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The duration of each such
Interest Period shall be one, two, three or six months, as the Borrower may select;
provided, however, that:




     (a) the Borrower may not select any Interest Period with respect to any
Eurodollar Rate Advance that ends after the Termination Date;




     (b) Interest Periods commencing on the same date for Eurodollar Rate Advances
comprising part of the same Borrowing shall be of the same duration;




     (c) whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day; provided, however, that if such extension
would cause the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the next
preceding Business Day; and




     (d) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the calendar
month that succeeds such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.




     “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.




     “Investment” means (a) any loan or advance to any Person, any purchase or other
acquisition of any Equity Interests or Debt or the assets comprising a division or business
unit or a substantial part or all of the business of any Person, any capital contribution to
any Person or any other direct or indirect investment in any Person, including, without
limitation, any acquisition by way of a merger or consolidation and any arrangement pursuant
to which the investor incurs Debt of the types referred to in clause (i) or (j) of the
definition of “Debt” in respect of any Person, and (b) the purchase or other acquisition of
any real property.



21









 






     “IPO” means the initial public offering of common stock in the Parent Guarantor and its
registration as a public company with the Securities and Exchange Commission.




     “Issuing Bank” means the Initial Issuing Bank and any other Lender approved as an
Issuing Bank by the Administrative Agent and the Borrower and any Eligible Assignee to which
a Letter of Credit Commitment hereunder has been assigned pursuant to Section 9.07 so long
as each such Lender or each such Eligible Assignee expressly agrees to perform in accordance
with their terms all of the obligations that by the terms of this Agreement are required to
be performed by it as an Issuing Bank and notifies the Administrative Agent of its
Applicable Lending Office and the amount of its Letter of Credit Commitment (which
information shall be recorded by the Administrative Agent in the Register) for so long as
such Initial Issuing Bank, Lender or Eligible Assignee, as the case may be, shall have a
Letter of Credit Commitment.




     “Joint Venture” means any joint venture (a) in which the Parent Guarantor or any of its
Subsidiaries holds any Equity Interest, (b) that is not a Subsidiary of the Parent Guarantor
or any of its Subsidiaries and (c) the accounts of which would not appear on the
Consolidated financial statements of the Parent Guarantor.




     “Joint Venture Assets” means, with respect to any Joint Venture at any time, the assets
owned by such Joint Venture at such time.




     “JV Pro Rata Share” means, with respect to any Joint Venture at any time, the fraction,
expressed as a percentage, obtained by dividing (a) the total book value of all Equity
Interests in such Joint Venture held by the Parent Guarantor and any of its Subsidiaries by
(b) the total book value of all outstanding Equity Interests in such Joint Venture at such
time.




     “L/C Cash Collateral Account” means an account of the Borrower to be maintained with
the Administrative Agent, in the name of the Administrative Agent and under the sole control
and dominion of the Administrative Agent and subject to the terms of this Agreement.




     “L/C Related Documents” has the meaning specified in Section 2.04(c)(ii)(A).




     “L/C Termination Date Exposure” means the Available Amount under any Letter of Credit
with an expiration date later than 30 days before the Termination Date.




     “Lender Default” has the meaning specified in Section 9.07(k).




     “Lender Party” means any Lender, the Swing Line Bank or any Issuing Bank.




     “Lenders” means the Initial Lenders, each Acceding Lender that shall become a party
hereto pursuant to Section 2.17 and each Person that shall become a Lender hereunder
pursuant to Section 9.07 for so long as such Initial Lender or Person, as the case may be,
shall be a party to this Agreement.



22









 






     “Letter of Credit Advance” means an advance made by any Issuing Bank or any Lender
pursuant to Section 2.03(c).




     “Letter of Credit Agreement” has the meaning specified in Section 2.03(a).




     “Letter of Credit Commitment” means, with respect to any Issuing Bank at any time, the
amount set forth opposite such Issuing Bank’s name on Schedule I hereto under the caption
“Letter of Credit Commitment” or, if such Issuing Bank has entered into one or more
Assignment and Acceptances, set forth for such Issuing Bank in the Register maintained by
the Administrative Agent pursuant to Section 9.07(d) as such Issuing Bank’s “Letter of
Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to
Section 2.05.




     “Letter of Credit Facility” means, at any time, an amount equal to the lesser of (a)
the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at such time, and
(b) $15,000,000, as such amount may be reduced at or prior to such time pursuant to Section
2.05.




     “Letters of Credit” has the meaning specified in Section 2.01(b).




     “Leverage Ratio” means, at any date of determination, the ratio of Total Debt (but
excluding, in all cases, any Contingent Obligations associated with the Excluded Recourse
Properties) to Total Asset Value as at the end of the most recently ended fiscal quarter of
the Parent Guarantor for which financial statements are required to be delivered to the
Lender Parties pursuant to Section 5.03(b) or (c), as the case may be.




     “Lien” means any lien, security interest or other charge or encumbrance of any kind, or
any other type of preferential arrangement, including, without limitation, the lien or
retained security title of a conditional vendor and any easement, right of way or other
encumbrance on title to real property.




     “Loan Documents” means (a) this Agreement, (b) the Notes, (c) the Fee Letter, (d) each
Letter of Credit Agreement, (e) each Guaranty Supplement, (f) the Collateral Documents, (g)
each Hazardous Indemnity Agreement, (h) each Manager’s Subordination and (i) each Secured
Hedge Agreement, in each case, as amended.




     “Loan Parties” means the Borrower and the Guarantors.




     “Management Agreements” means (a) the Management Agreements set forth on Part III of
Schedule 4.01(q) hereto (as amended or supplemented from time to time in accordance with the
provisions hereof), and (b) any Management Agreement in respect of a Borrowing Base Asset
entered into in compliance with Section 5.01(p).




     “Management Fee Adjustment” means, with respect to any Asset for any fiscal period, the
greater of (i) an amount equal to 4.0% of the total revenues generated from the operation of
such Asset for such fiscal period and (ii) all actual management fees payable in respect of
such Asset during such fiscal period.



23









 






     “Manager’s Subordination” means each of the Manager’s Consent and Subordination of
Management Agreements, now or hereafter made by an Approved Manager, the Borrower and the
Administrative Agent, in substantially the form of Exhibit K hereto, as the same may be
modified, amended or ratified.




     “Margin Stock” has the meaning specified in Regulation U.




     “Material Adverse Change” means a material adverse change in the business, condition
(financial or otherwise), results of operations or prospects of the Borrower or the Borrower
and its Subsidiaries, taken as a whole.




     “Material Adverse Effect” means a material adverse effect on (a) the business,
condition (financial or otherwise), operations or prospects of the Borrower and its
Subsidiaries, taken as a whole, (b) the rights and remedies of any Agent or any Lender Party
under any Loan Document, (c) the ability of any Loan Party to perform its Obligations under
any Loan Document to which it is or is to be a party, (d) the value of the Collateral or (e)
the value, use or ability to sell or refinance any Borrowing Base Asset.




     “Material Contract” means each contract to which the Borrower or any of its
Subsidiaries is a party involving aggregate consideration payable to or by the Borrower or
such Subsidiary in an amount of $5,000,000 or more per annum or otherwise material to the
business, condition (financial or otherwise), operations, performance, properties or
prospects of the Borrower and its Subsidiaries, taken as a whole. Without limitation of the
foregoing, the Management Agreements shall be deemed to comprise Material Contracts
hereunder.




     “Material Debt” means (a) Recourse Debt of Borrower that is outstanding in a principal
amount (or, in the case of any Hedge Agreement, an Agreement Value) of $10,000,000 or more,
either individually or in the aggregate or (b) any other Debt of any Loan Party or any
Subsidiary of a Loan Party that is outstanding in a principal amount (or, in the case of any
Hedge Agreement, an Agreement Value) of $25,000,000 or more, either individually or in the
aggregate; in each case (i) whether or not the primary obligation of the applicable obligor,
(ii) whether the subject of one or more separate debt instruments or agreements, and (iii)
exclusive of Debt outstanding under this Agreement. For the avoidance of doubt, Material
Debt may include Refinancing Debt to the extent comprising Material Debt as defined herein.




     “Material Litigation” has the meaning specified in Section 3.01(f).




     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.




     “Mortgage Policies” has the meaning specified in Section 3.01(a)(iii)(B).




     “Mortgages” has the meaning specified in Section 3.01(a)(iii).




     “Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, to which any Loan Party or any ERISA Affiliate is making



24









 






or accruing an obligation to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions.




     “Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA
Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or
(b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.




     “Negative Pledge” means, with respect to any asset, any provision of a document,
instrument or agreement (other than a Loan Document) which prohibits or purports to prohibit
the creation or assumption of any Lien on such asset as security for Debt of the Person
owning such asset or any other Person.




     “Net Operating Income” means, with respect to any Borrowing Base Asset for any
applicable measurement period, (a) the total rental and other revenue from the operation of
such Borrowing Base Asset for such period, minus (b) all expenses and other proper charges
incurred in connection with the operation and maintenance of such Borrowing Base Asset for
such period (including, without limitation, management fees, repairs, real estate and
chattel taxes, bad debt expenses and all rentals payable under leases of real or personal
(or mixed) property, in each case, with respect to such Borrowing Base Asset for such
period), but before payment or provision for debt service charges, income taxes and
depreciation, amortization and other non-cash expenses, all as determined in accordance with
GAAP and in each case for consecutive four fiscal quarters of the Parent Guarantor most
recently ended.




     “Non-Recourse Debt” means Debt for Borrowed Money with respect to which recourse for
payment is limited to (a) any building(s) or parcel(s) of real property and any related
assets encumbered by a Lien securing such Debt for Borrowed Money and/or (b) (i) the general
credit of the Property-Level Subsidiary that has incurred such Debt for Borrowed Money,
and/or the direct Equity Interests therein and/or (ii) the general credit of the immediate
parent entity of such Property-Level Subsidiary, provided that such parent entity’s assets
consist solely of Equity Interests in such Property-Level Subsidiary, it being understood
that the instruments governing such Debt may include customary carve-outs to such limited
recourse (any such customary carve-outs or agreements limited to such customary carve-outs,
being a “Customary Carve-Out Agreement”) such as, for example, personal recourse to the
Parent Guarantor or any Subsidiary of the Parent Guarantor for fraud, misrepresentation,
misapplication or misappropriation of cash, waste, environmental claims, damage to
properties, non-payment of taxes or other liens despite the existence of sufficient cash
flow, interference with the enforcement of loan documents upon maturity or acceleration,
voluntary or involuntary bankruptcy filings, violation of loan document prohibitions against
transfer of properties or ownership interests therein and liabilities and other
circumstances customarily excluded by lenders from exculpation provisions and/or included in
separate indemnification and/or guaranty agreements in non-recourse financings of real
estate.




25











 






     “Note” means a promissory note of the Borrower payable to the order of any
Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate indebtedness
of the Borrower to such Lender resulting from the Revolving Credit Advances, Swing Line
Advances and Letter of Credit Advances made by such Lender.




     “Notice of Borrowing” has the meaning specified in Section 2.02(a).




     “Notice of Issuance” has the meaning specified in Section 2.03(a).




     “Notice of Renewal” has the meaning specified in Section 2.01(b).




     “Notice of Swing Line Borrowing” has the meaning specified in Section 2.02(b).




     “Notice of Termination” has the meaning specified in Section 2.01(b).




     “NPL” means the National Priorities List under CERCLA.




     “Obligation” means, with respect to any Person, any payment, performance or other
obligation of such Person of any kind, including, without limitation, any liability of such
Person on any claim, whether or not the right of any creditor to payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim
is discharged, stayed or otherwise affected by any proceeding referred to in Section
6.01(f). Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal, interest, Letter
of Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of any of the foregoing
that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such
Loan Party.




     “OECD” means the Organization for Economic Cooperation and Development.




     “OFAC” has the meaning specified in Section 4.01(aa).




     “Other Taxes” has the meaning specified in Section 2.12(b).




     “Parent Guarantor” has the meaning specified in the recital of parties to this
Agreement.




     “Participant” has the meaning specified in Section 2.03(c)(i).




     “Patriot Act” has the meaning specified in Section 9.12.




     “PBGC” means the Pension Benefit Guaranty Corporation (or any successor).



26









 






     “Permitted Liens” means such of the following as to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced (except as expressly
permitted under this definition of “Permitted Liens”):




     (a) Liens for taxes, assessments and governmental charges or levies the payment of
which is not, at the time, required by Section 5.01(b);




     (b) statutory Liens of banks and rights of set off and other Liens imposed by law, such
as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar
Liens arising in the ordinary course of business securing obligations, in each case, that
(i) are not overdue for a period of more than 30 days and (ii) individually or together with
all other Permitted Liens outstanding on any date of determination do not materially
adversely affect the use of the property to which they relate unless, in the case of (i) or
(ii) above, such Liens are the subject of a Good Faith Contest;




     (c) pledges or deposits to secure obligations under workers’ compensation or
unemployment laws or similar legislation or to secure public or statutory obligations;




     (d) easements, zoning restrictions, rights of way and other encumbrances on title to
real property that do not render title to the property encumbered thereby unmarketable or
materially adversely affect the use or value of such property for its present purposes;




     (e) Tenancy Leases;




     (f) Permitted Encumbrances (as defined in each of the Mortgages);




     (g) all Liens and other matters disclosed in the Mortgage Policies and such other title
and survey exceptions as the Administrative Agent has approved or may approve in writing in
its reasonable discretion;




     (h) Liens incurred or deposits made in the ordinary course of business to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money), so long as
no foreclosure, sale or similar proceedings have been commenced with respect to any portion
of the Collateral on account thereof;




     (i) any attachment or judgment Lien not constituting an Event of Default and not with
respect to any portion of the Collateral; or




     (j) Liens granted to the Administrative Agent for the benefit of the Lender Parties to
secure the Debt under the Loan Documents.




     “Person” means an individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency thereof.



27









 






     “Plan” means a Single Employer Plan or a Multiple Employer Plan.




     “Pledge Agreement” means the Pledge Agreement, made by the pledgors named therein in
favor of the Administrative Agent and the Lenders, in substantially the form of Exhibit L
hereto, as the same may be modified, amended or ratified.




     “Post Petition Interest” has the meaning specified in Section 7.07(b).




     “Potential Assignment Event Date” has the meaning specified in Section 9.01(b).




     “Potential Assignor Lender” has the meaning specified in Section 9.01(b).




     “Preferred Interests” means, with respect to any Person, Equity Interests issued by
such Person that are entitled to a preference or priority over any other Equity Interests
issued by such Person upon any distribution of such Person’s property and assets, whether by
dividend or upon liquidation.




     “Prohibited Person” has the meaning specified in Section 4.01(aa).




     “Property-Level Subsidiary” means any Subsidiary of the Borrower or any Joint Venture
that holds a direct fee or leasehold interest in any single building (or group of related
buildings, including, without limitation, buildings pooled for purposes of a Non-Recourse
Debt financing) or parcel (or group of related parcels, including, without limitation,
parcels pooled for purposes of a Non-Recourse Debt financing) of real property and related
assets and not in any other building or parcel of real property.




     “Proposed Borrowing Base Asset” has the meaning specified in Section 5.01(k).




     “Proposed Increased Commitment” has the meaning specified in Section 2.17(b).




     “Pro Rata Share” of any amount means, with respect to any Lender at any time, the
product of such amount times a fraction the numerator of which is the amount of such
Lender’s Revolving Credit Commitment at such time (or, if the Commitments shall have been
terminated pursuant to Section 2.05 or 6.01, such Lender’s Revolving Credit Commitment as in
effect immediately prior to such termination) and the denominator of which is the Revolving
Credit Facility at such time (or, if the Commitments shall have been terminated pursuant to
Section 2.05 or 6.01, the Revolving Credit Facility as in effect immediately prior to such
termination).




     “Purchasing Lender” has the meaning specified in Section 2.17(e).




     “Qualifying Ground Lease” means a ground lease of Real Property containing the
following terms and conditions: (a) a remaining term (exclusive of any unexercised
extension options that are subject to terms or conditions not yet agreed upon and specified
in such ground lease or an amendment thereto, other than a condition that the lessee not be
in default under such ground lease) of 30 years or more from the Closing Date; (b) the right
of the lessee to mortgage and encumber its interest in the leased



28









 






property without the consent of the lessor; (c) the obligation of the lessor to give
the holder of any mortgage Lien on such leased property written notice of any defaults on
the part of the lessee and agreement of such lessor that such lease will not be terminated
until such holder has had a reasonable opportunity to cure or complete foreclosures, and
fails to do so; (d) reasonable transferability of the lessee’s interest under such lease,
including the ability to sublease; and (e) such other rights customarily required by
mortgagees making a loan secured by the interest of the holder of a leasehold estate demised
pursuant to a ground lease.




     “Real Property” means all right, title and interest of the Borrower and each of its
Subsidiaries in and to any land and any improvements located thereon, together with all
equipment, furniture, materials, supplies, personal property and all other rights and
property within the scope of the definition of Mortgaged Property (as defined in the Form of
Mortgage attached hereto as Exhibit G) in which such Person has an interest now or hereafter
located on or used in connection with such land and improvements, and all appurtenances,
additions, improvements, renewals, substitutions and replacements thereof now or hereafter
acquired by such Person.




     “Recourse Debt” means Debt for which the Borrower or any of its Subsidiaries has
personal or recourse liability in whole or in part, exclusive of any such Debt for which
such personal or recourse liability is limited to obligations under Customary Carve-Out
Agreements.




     “Reference Bank” means Citibank, N.A.




     “Refinancing Debt” means, with respect to any Debt, any Debt extending the maturity of,
or refunding or refinancing, in whole or in part, such Debt, provided that (a) the terms of
any Refinancing Debt, and of any agreement entered into and of any instrument issued in
connection therewith, (i) do not provide for any Lien on any Borrowing Base Assets, and (ii)
are not otherwise prohibited by the Loan Documents and (b) the principal amount of such Debt
shall not exceed the original principal amount of the Debt (as such Debt may have been
increased from time to time) being extended, refunded or refinanced plus the amount of any
applicable premium and expenses.




     “Register” has the meaning specified in Section 9.07(d).




     “Registration Statement” means the Parent Guarantor’s Form S-11 Registration Statement
filed with the Securities and Exchange Commission in connection with the IPO, as amended.




     “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve
System, as in effect from time to time.




     “REIT” means a Person that is qualified to be treated for tax purposes as a real estate
investment trust under Sections 856-860 of the Internal Revenue Code.




     “Replacement Lender” has the meaning specified in Section 9.01(b).



29









 






     “Required Lenders” means, at any time, Lenders owed or holding greater than 66.67% of
the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b)
the aggregate Available Amount of all Letters of Credit outstanding at such time and (c) the
aggregate Unused Revolving Credit Commitments at such time. For purposes of this
definition, the aggregate principal amount of Swing Line Advances owing to the Swing Line
Bank and of Letter of Credit Advances owing to any Issuing Bank and the Available Amount of
each Letter of Credit shall be considered to be owed to the Revolving Lenders ratably in
accordance with their respective Revolving Credit Commitments.




     “Responsible Officer” means, with respect to any Loan Party, any officer of, or any
officer of any general partner or managing member of, such Loan Party, which Officer has (a)
responsibility for performing the underlying function that is the subject of the action
required of such officer hereunder, or (b) supervisory responsibility for such an officer.




     “Restricted Payments” has the meaning specified in Section 5.02(g).




     “Revolving Credit Advance” has the meaning specified in Section 2.01(a).




     “Revolving Credit Commitment” means, (a) with respect to any Lender at any time, the
amount set forth opposite such Lender’s name on Schedule I hereto under the caption
“Revolving Credit Commitment” or (b) if such Lender has entered into one or more Assignment
and Acceptances, set forth for such Lender in the Register maintained by the Administrative
Agent pursuant to Section 9.07(d) as such Lender’s “Revolving Credit Commitment”, as such
amount may be reduced at or prior to such time pursuant to Section 2.05.




     “Revolving Credit Facility” means, at any time, the aggregate amount of the Lenders’
Revolving Credit Commitments at such time.




     “S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies,
Inc., and any successor thereto.




     “Sale and Leaseback Transaction” shall mean any arrangement with any Person providing
for the leasing by the Parent Guarantor or any of its Subsidiaries of any Real Property that
has been sold or transferred or is to be sold or transferred by the Parent Guarantor or such
Subsidiary, as the case may be, to such Person.




     “Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002, as amended.




     “Secured Hedge Agreement” means any Hedge Agreement required or permitted under Article
V that is entered into by and between any Loan Party and any Hedge Bank and that is secured
by the Collateral Documents.




     “Secured Obligations” means, collectively, the “Secured Obligations” as defined in the
Security Agreement and the “Obligations” as defined in the Mortgages.



30









 






     “Secured Parties” means the Agents, the Lender Parties and the Hedge Banks.




     “Secured Recourse Debt Ratio” means, at any date of determination, the ratio, expressed
as a percentage, of (a) all Debt for which the Borrower and the Guarantors have personal or
recourse liability in whole or in part (exclusive of any such Debt for which such personal
or recourse liability is limited to obligations under Customary Carve-Out Agreements), plus,
without duplication, Contingent Obligations of the Borrower and the Guarantors, but
excluding, in all cases, any such Debt and Contingent Obligations (i) incurred pursuant to
the Loan Documents or (ii) associated with the Excluded Recourse Properties to (b) Total
Asset Value, in each case as at the end of the most recently ended fiscal quarter of the
Parent Guarantor for which financial statements are required to be delivered to the Lender
Parties pursuant to Section 5.03(b) or (c) as the case may be.




     “Securities Act” means the Securities Act of 1933, as amended to the date hereof and
from time to time hereafter, and any successor statute.




     “Securities Exchange Act” means the Securities Exchange Act of 1934, as amended to the
date hereof and from time to time hereafter, and any successor statute.




     “Security Agreement” has the meaning specified in Section 3.01(a)(ii).




     “Selling Lender”  has the meaning specified in Section 2.17(e).




     “Single Employer Plan” means a single employer plan, as defined in Section 4001(a)(15)
of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and
no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and
in respect of which any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.




     “Solvent” means, with respect to any Person on a particular date, that on such date (a)
the fair value of the property of such Person, on a going-concern basis, is greater than the
total amount of liabilities, including, without limitation, contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such Person, on a going-concern
basis, is not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s property would constitute an unreasonably small
capital. The amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time (including,
without limitation, after taking into account appropriate discount factors for the present
value of future contingent liabilities), represents the amount that can reasonably be
expected to become an actual or matured liability.



31









 






     “Standby Letter of Credit” means any Letter of Credit issued under the Letter of Credit
Facility, other than a Trade Letter of Credit.




     “Subordinated Obligations” has the meaning specified in Section 7.07.




     “Subsidiary” of any Person means any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) 50% or more of (a) the issued and
outstanding capital stock having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in the capital or profits of such
partnership, joint venture or limited liability company or (c) the beneficial interest in
such trust or estate, in each case, is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person’s other Subsidiaries.




     “Subsidiary Guarantor” has the meaning specified in the recital of parties to this
Agreement.




     “Supplemental Collateral Agent” has the meaning specified in Section 8.01(b).




     “Surviving Debt” means Debt of each Loan Party and its Subsidiaries outstanding
immediately before and after giving effect to the IPO, the Formation Transactions and the
Initial Extension of Credit.




     “Swing Line Advance” means an advance made by (a) the Swing Line Bank pursuant to
Section 2.01(c) or (b) any Lender pursuant to Section 2.02(b).




     “Swing Line Bank” means Citibank, in its capacity as the Lender of Swing Line Advances,
and its successors and permitted assigns in such capacity.




     “Swing Line Borrowing” means a borrowing consisting of a Swing Line Advance made by the
Swing Line Bank pursuant to Section 2.01(c) or the Lenders pursuant to Section 2.02(b).




     “Swing Line Commitment” means, with respect to the Swing Line Bank, the amount of the
Swing Line Facility set forth in Section 2.01(c), as such amount may be reduced at or prior
to such time pursuant to Section 2.05.




     “Swing Line Facility” has the meaning specified in Section 2.01(c).




     “Taxes” has the meaning specified in Section 2.12(a).




     “Tenancy Leases”  means operating leases, subleases, licenses, occupancy agreements and
rights-of-use entered into by the Borrower or any of its Subsidiaries in its capacity as a
lessor or a similar capacity in the ordinary course of business that do not materially and
adversely affect the use of the Real Property encumbered thereby for its



32









 






intended purpose (excluding any lease entered into in connection with a Sale and
Leaseback Transaction).




     “Termination Date” means the earlier of (a) the third anniversary of the Closing Date,
subject to the extension thereof pursuant to Section 2.16 and (b) the date of termination in
whole of the Revolving Credit Commitments, the Swing Line Commitment and the Letter of
Credit Commitments pursuant to Section 2.05 or 6.01.




     “Test Date” means (a) the last day of each fiscal quarter of the Parent Guarantor for
which financial statements are required to be delivered pursuant to Sections 5.03(b) or (c),
as the case may be, (b) the date of each Advance or the issuance or renewal of any Letter of
Credit, (c) the date of the addition of any Proposed Borrowing Base Asset to the Collateral
pursuant to Section 5.01(k), (d) the effective date of any merger permitted under Section
5.02(d), (e) the effective date of any Transfer permitted under Section 5.02(e)(ii)(C), (f)
with respect to an extension of the Termination Date pursuant to Section 2.16, the date of
delivery of financial statements of the Borrower thereunder, and (g) the date of the release
of Liens with respect to any Borrowing Base Asset.




     “Total Asset Value” means, at any date of determination, the sum of the Asset Values
for all Assets at such date plus unrestricted Cash and Cash Equivalents.




     “Total Borrowing Base Value” means, at any date of determination, the sum of the
Borrowing Base Values of all Borrowing Base Assets.




     “Total Debt” means, at any date of determination, all Debt of the Parent Guarantor and
its Subsidiaries as at the end of the most recently ended fiscal quarter of the Parent
Guarantor for which financial statements are required to be delivered to the Lender Parties
pursuant to Section 5.03(b) or (c), as the case may be.




     “Trade Letter of Credit” means any Letter of Credit that is issued under the Letter of
Credit Facility for the benefit of a supplier of inventory to the Borrower or any of its
Subsidiaries to effect payment for such inventory.




     “Transfer” has the meaning specified in Section 5.02(e)(i).




     “Type” refers to the distinction between Advances bearing interest at the Base Rate and
Advances bearing interest at the Eurodollar Rate.




     “Unused Fee” has the meaning specified in Section 2.08(a).




     “Unused Revolving Credit Commitment” means, with respect to any Lender at any date of
determination, (a) such Lender’s Revolving Credit Commitment at such time minus (b) the sum
of (i) the aggregate principal amount of all Revolving Credit Advances, Swing Line Advances
and Letter of Credit Advances made by such Lender (in its capacity as a Lender) and
outstanding at such time plus (ii) such Lender’s Pro Rata Share of (A) the aggregate
Available Amount of all Letters of Credit outstanding at such time, (B) the aggregate
principal amount of all Letter of Credit Advances made by the Issuing Banks pursuant to
Section 2.03(c) and outstanding at such time and (C) the



33









 






aggregate principal amount of all Swing Line Advances made by the Swing Line Bank
pursuant to Section 2.01(c) and outstanding at such time.




     “Voting Interests” means shares of capital stock issued by a corporation, or equivalent
Equity Interests in any other Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or the election or
appointment of persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.




     “Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA, that is
maintained for employees of any Loan Party or in respect of which any Loan Party could have
liability under applicable law.




     “Withdrawal Liability” has the meaning specified in Part I of Subtitle E of Title IV of
ERISA.



          SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In this
Agreement and the other Loan Documents in the computation of periods of time from a specified date
to a later specified date, the word “from” means “from and including” and the words “to” and
“until” each mean “to but excluding”. References in the Loan Documents to any agreement or
contract “as amended” shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in accordance with its
terms.




          SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements referred to in Section 4.01(g)
(“GAAP”).




ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT




          SECTION 2.01. The Advances and the Letters of Credit. (a) The Revolving Credit
Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to
make advances (each, a “Revolving Credit Advance”) to the Borrower from time to time on any
Business Day during the period from the date hereof until the Termination Date in an amount for
each such Advance not to exceed such Lender’s Unused Revolving Credit Commitment at such time.
Each Borrowing shall be in an aggregate amount of $1,000,000 or an integral multiple of $500,000 in
excess thereof and shall consist of Revolving Credit Advances made simultaneously by the Lenders
ratably according to their Revolving Credit Commitments. Within the limits of each Lender’s Unused
Revolving Credit Commitment in effect from time to time and prior to the Termination Date, the
Borrower may borrow under this Section 2.01(a), prepay pursuant to Section 2.06(a) and reborrow
under this Section 2.01(a).




          (b) Letters of Credit. Each Issuing Bank severally agrees, on the terms and
conditions hereinafter set forth, to issue (or cause its Affiliate that is a commercial bank to
issue on its behalf) letters of credit (the “Letters of Credit”), for the account of the Borrower
from time to time on any Business Day during the period from the date hereof until 30 days before
the






34









 







Termination Date in an aggregate Available Amount (i) for all Letters of Credit not to exceed
at any time the Letter of Credit Facility at such time, (ii) for all Letters of Credit issued by
such Issuing Bank not to exceed such Issuing Bank’s Letter of Credit Commitment at such time, and
(iii) for each such Letter of Credit not to exceed the Unused Revolving Credit Commitments of the
Lenders at such time. No Letter of Credit shall have an expiration date (including all rights of
the Borrower or the beneficiary to require renewal) later than the earlier of 30 days before the
Termination Date (provided such Letter of Credit may have an expiration date after the date that is
30 days before the Termination Date, but not after the Termination Date, so long as such Letter of
Credit obligates the Borrower to Cash Collateralize such Letter of Credit in accordance with
Section 2.03(e)) and (A) in the case of a Standby Letter of Credit one year after the date of
issuance thereof, but may by its terms be renewable annually upon notice (a “Notice of Renewal”)
given to the Issuing Bank that issued such Standby Letter of Credit and the Administrative Agent on
or prior to any date for notice of renewal set forth in such Letter of Credit but in any event at
least three Business Days prior to the date of the proposed renewal of such Standby Letter of
Credit and upon fulfillment of the applicable conditions set forth in Article III unless such
Issuing Bank has notified the Borrower (with a copy to the Administrative Agent) on or prior to the
date for notice of termination set forth in such Letter of Credit but in any event at least 30
Business Days prior to the date of automatic renewal of its election not to renew such Standby
Letter of Credit (a “Notice of Termination”) and (B) in the case of a Trade Letter of Credit, 180
days after the date of issuance thereof; provided, however, that the terms of each Standby Letter
of Credit that is automatically renewable annually shall (x) require the Issuing Bank that issued
such Standby Letter of Credit to give the beneficiary named in such Standby Letter of Credit notice
of any Notice of Termination, (y) permit such beneficiary, upon receipt of such notice, to draw
under such Standby Letter of Credit prior to the date such Standby Letter of Credit otherwise would
have been automatically renewed and (z) not permit the expiration date (after giving effect to any
renewal) of such Standby Letter of Credit in any event to be extended to a date later than 30 days
before the Termination Date (provided such Letter of Credit may have an expiration date after the
date that is 30 days before the Termination Date, but not after the Termination Date, so long as
such Letter of Credit obligates the Borrower to Cash Collateralize such Letter of Credit in
accordance with Section 2.03(e)). If either a Notice of Renewal is not given by the Borrower or a
Notice of Termination is given by the relevant Issuing Bank pursuant to the immediately preceding
sentence, such Standby Letter of Credit shall expire on the date on which it otherwise would have
been automatically renewed; provided, however, that even in the absence of receipt of a Notice of
Renewal the relevant Issuing Bank may in its discretion, unless instructed to the contrary by the
Administrative Agent or the Borrower, deem that a Notice of Renewal had been timely delivered and
in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under
this Agreement. Within the limits of the Letter of Credit Facility, and subject to the limits
referred to above, the Borrower may request the issuance of Letters of Credit under this Section
2.01(b), repay any Letter of Credit Advances resulting from drawings thereunder pursuant to Section
2.04(c) and request the issuance of additional Letters of Credit under this Section 2.01(b).




          (c) Swing Line Advances. The Borrower may request the Swing Line Bank to make, and
the Swing Line Bank agrees to make, on the terms and conditions hereinafter set forth, Swing Line
Advances to the Borrower from time to time on any Business Day during the period from the date
hereof until the Termination Date (i) in an aggregate amount not to exceed at any time outstanding
$10,000,000 (the “Swing Line Facility”) and (ii) in an amount for each






35









 







such Swing Line Borrowing not to exceed the aggregate of the Unused Revolving Credit
Commitments of the Lenders at such time. No Swing Line Advance shall be used for the purpose of
funding the payment of principal of any other Swing Line Advance. Each Swing Line Borrowing shall
be in an amount of $250,000 or an integral multiple of $250,000 in excess thereof and shall be made
as a Base Rate Advance. Within the limits of the Swing Line Facility and within the limits
referred to in clause (ii) above, the Borrower may borrow under this Section 2.01(c), repay
pursuant to Section 2.04(b) or prepay pursuant to Section 2.06(a) and reborrow under this Section
2.01(c).




          SECTION 2.02. Making the Advances. (a) Except as otherwise provided in Section 2.03,
each Borrowing (other than a Swing Line Borrowing) shall be made on notice, given not later than
12:00 Noon (New York City time) on the third Business Day prior to the date of the proposed
Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or not later than
12:00 Noon (New York City time) on the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the Borrower to the Administrative Agent, which shall give to
each Lender prompt notice thereof by telex or telecopier. Each such notice of a Borrowing (a
“Notice of Borrowing”) shall be by telephone, confirmed immediately in writing, or telex or
telecopier or e-mail, in each case in substantially the form of Exhibit B hereto, specifying
therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing,
(iii) aggregate amount of such Borrowing and (iv) in the case of a Borrowing consisting of
Eurodollar Rate Advances, initial Interest Period for each such Advance. Each Lender shall, before
12:00 Noon (New York City time) on the date of such Borrowing in the case of a Borrowing consisting
of Eurodollar Rate Advances and 1:00 P.M. (New York City time) on the date of such Borrowing in the
case of a Borrowing consisting of Base Rate Advances, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account, in
same day funds, such Lender’s ratable portion of such Borrowing in accordance with the respective
Commitments of such Lender and the other Lenders. After the Administrative Agent’s receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower by crediting the Borrower’s
Account; provided, however, that the Administrative Agent shall first make a portion of such funds
equal to the aggregate principal amount of any Swing Line Advances and Letter of Credit Advances
made by the Swing Line Bank or any Issuing Bank, as the case may be, and by any other Lender and
outstanding on the date of such Borrowing, plus interest accrued and unpaid thereon to and as of
such date, available to the Swing Line Bank or such Issuing Bank, as the case may be, and such
other Lenders for repayment of such Swing Line Advances and Letter of Credit Advances.




          (b) Each Swing Line Borrowing shall be made on notice, given not later than 12:00 Noon (New
York City time) on the date of the proposed Swing Line Borrowing, by the Borrower to the Swing Line
Bank and the Administrative Agent. Each such notice of a Swing Line Borrowing (a “Notice of Swing
Line Borrowing”) shall be by telephone, confirmed immediately in writing or by telecopier or
e-mail, in each case in substantially the form of Exhibit B hereto, specifying therein the
requested (i) date of such Borrowing, (ii) amount of such Borrowing and (iii) maturity of such
Borrowing (which maturity shall be no later than the earlier of (A) the fifteenth day after the
requested date of such Borrowing and (B) the Termination Date). The Swing Line Bank shall, before
1:00 P.M. (New York City time) on the date of such Swing Line Borrowing, make the amount thereof
available to the Administrative Agent at the






36









 







Administrative Agent’s Account, in same day funds. After the Administrative Agent’s receipt
of such funds and upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower by crediting the Borrower’s
Account. Upon written demand by the Swing Line Bank, with a copy of such demand to the
Administrative Agent, each other Lender shall purchase from the Swing Line Bank, and the Swing Line
Bank shall sell and assign to each such other Lender, such other Lender’s Pro Rata Share of such
outstanding Swing Line Advance as of the date of such demand, by making available for the account
of its Applicable Lending Office to the Administrative Agent for the account of the Swing Line
Bank, by deposit to the Administrative Agent’s Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Swing Line Advance to be purchased by such
Lender. The Borrower hereby agrees to each such sale and assignment. Each Lender agrees to
purchase its Pro Rata Share of an outstanding Swing Line Advance on (i) the Business Day on which
demand therefor is made by the Swing Line Bank, provided that notice of such demand is given not
later than 12:00 Noon (New York City time) on such Business Day or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. Upon any such assignment
by the Swing Line Bank to any other Lender of a portion of a Swing Line Advance, the Swing Line
Bank represents and warrants to such other Lender that the Swing Line Bank is the legal and
beneficial owner of such interest being assigned by it, but makes no other representation or
warranty and assumes no responsibility with respect to such Swing Line Advance, the Loan Documents
or any Loan Party. If and to the extent that any Lender shall not have so made the amount of such
Swing Line Advance available to the Administrative Agent, such Lender agrees to pay to the
Administrative Agent forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Swing Line Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such amount for the account of the Swing Line Bank on any Business Day, such amount so paid
in respect of principal shall constitute a Swing Line Advance made by such Lender on such Business
Day for purposes of this Agreement, and the outstanding principal amount of the Swing Line Advance
made by the Swing Line Bank shall be reduced by such amount on such Business Day.




          (c) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not
select Eurodollar Rate Advances for the initial Borrowing hereunder or for any Borrowing if the
aggregate amount of such Borrowing is less than $1,000,000 or if the obligation of the Lenders to
make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.07(d)(ii), 2.09 or 2.10
and (ii) there may not be more than six separate Interest Periods in effect hereunder at any time.




          (d) Each Notice of Borrowing and Notice of Swing Line Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender
against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on
or before the date specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.







37









 








          (e) Unless the Administrative Agent shall have received notice from a Lender prior to (x) the
date of any Borrowing consisting of Eurodollar Rate Advances or (y) 12:00 Noon (New York City time)
on the date of any Borrowing consisting of Base Rate Advances that such Lender will not make
available to the Administrative Agent such Lender’s ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available to the
Administrative Agent on the date of such Borrowing in accordance with subsection (a) of this
Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such Lender and the
Borrower severally agree to repay or pay to the Administrative Agent forthwith on demand such
corresponding amount and to pay interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid or paid to the Administrative Agent,
at (i) in the case of the Borrower, the interest rate applicable at such time under Section 2.07 to
Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If
the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of
such interest paid by the Borrower for such period. If such Lender shall pay to the Administrative
Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance as part
of such Borrowing for all purposes.




          (f) The failure of any Lender to make the Advance to be made by it as part of any Borrowing
shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on the date of any Borrowing.




          SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit. (a)
Request for Issuance. Each Letter of Credit shall be issued upon notice, given not later
than 12:00 Noon (New York City time) on the fifth Business Day prior to the date of the proposed
issuance of such Letter of Credit, by the Borrower to any Issuing Bank, which shall give to the
Administrative Agent and each Lender prompt notice thereof by telex, telecopier or e mail or by
means of the Approved Electronic Platform. Each such notice of issuance of a Letter of Credit (a
“Notice of Issuance”) shall be by telephone, confirmed immediately in writing, telex, telecopier or
e-mail, in each case specifying therein the requested (i) date of such issuance (which shall be a
Business Day), (ii) Available Amount of such Letter of Credit, (iii) expiration date of such Letter
of Credit, (iv) name and address of the beneficiary of such Letter of Credit and (v) form of such
Letter of Credit, and shall be accompanied by such application and agreement for letter of credit
as such Issuing Bank may specify to the Borrower for use in connection with such requested Letter
of Credit (a “Letter of Credit Agreement”). If the requested form of such Letter of Credit is
acceptable to such Issuing Bank in its sole discretion, such Issuing Bank will, upon fulfillment of
the applicable conditions set forth in Article III, make such Letter of Credit available to the
Borrower at its office referred to in Section 9.02 or as otherwise agreed with the Borrower in
connection with such issuance. In the event and to the extent that the provisions of any Letter of
Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern.







38









 








          (b) Letter of Credit Reports. Each Issuing Bank shall furnish (i) to each Lender and
the Borrower on the first Business Day of each month a written report summarizing issuance and
expiration dates of Letters of Credit issued by such Issuing Bank during the preceding month and
drawings during such month under all Letters of Credit issued by such Issuing Bank and (ii) to the
Administrative Agent and each Lender and the Borrower on the first Business Day of each calendar
quarter a written report setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit issued by such Issuing Bank.




          (c) Letter of Credit Participations; Drawing and Reimbursement.





     (i) Immediately upon the issuance by the Issuing Bank of any Letter of Credit, the Issuing
Bank shall be deemed to have sold and transferred to each Lender, and each Lender (in its capacity
under this Section 2.03(c), a “Participant”) shall be deemed irrevocably and unconditionally to
have purchased and received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation in such Letter of Credit, to the extent of such Participant’s Pro Rata
Share of the Available Amount of such Letter of Credit, each drawing or payment made thereunder and
the obligations of the Borrower under this Agreement with respect thereto, and any security
therefor or guaranty pertaining thereto. Upon any change in the Revolving Credit Commitments or
the Lenders’ respective Pro Rata Shares pursuant to Section 9.07, it is hereby agreed that, with
respect to all outstanding Letters of Credit and unpaid drawings relating thereto, there shall be
an automatic adjustment to the participations pursuant to this Section 2.03(c) to reflect the new
Pro Rata Shares of the assignor and assignee Lenders, as the case may be.




     (ii) In determining whether to pay under any Letter of Credit, the Issuing Bank shall
not have any obligation with respect to the other Revolving Credit Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit appear to
have been delivered and that they appear to substantially comply on their face with the
requirements of such Letter of Credit. Any action taken or omitted to be taken by the
Issuing Bank under or in connection with any Letter of Credit issued by it shall not create
for the Issuing Bank any resulting liability to the Borrower, any other Loan Party, any
Revolving Credit Lender or any other Person unless such action is taken or omitted to be
taken with gross negligence or willful misconduct on the part of the Issuing Bank (as
determined by a court of competent jurisdiction in a final non-appealable judgment).




     (iii) The payment by any Issuing Bank of a draft drawn under any Letter of Credit shall
constitute for all purposes of this Agreement the making by such Issuing Bank of a Letter of
Credit Advance, which shall be a Base Rate Advance, in the amount of such draft. In the
event that the Issuing Bank makes any payment under any Letter of Credit issued by it and
the Borrower shall not have reimbursed such amount in full to the Issuing Bank pursuant to
Section 2.04(c), the Issuing Bank shall promptly notify the Administrative Agent, which
shall promptly notify each Participant of such failure, and each Participant shall promptly
and unconditionally pay to the Administrative Agent for the account of the Issuing Bank the
amount of such Participant’s Pro Rata Share of such unreimbursed payment in U.S. dollars and
in same day funds. Upon such notification by the Administrative Agent to any Participant
required to fund a payment under a Letter of Credit, such Participant shall make available
to the Administrative Agent for the account



39









 






of the Issuing Bank its Pro Rata Share of an outstanding Letter of Credit Advance on
(i) the Business Day on which demand therefor is made by the Issuing Bank which made such
Advance, provided that notice of such demand is given not later than 11:00 A.M. (New York
City time) on such Business Day, or (ii) the first Business Day next succeeding such demand
if notice of such demand is given after such time. If such Lender shall pay to the
Administrative Agent such amount for the account of such Issuing Bank on any Business Day,
such amount so paid in respect of principal shall constitute a Letter of Credit Advance made
by such Lender on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Letter of Credit Advance made by such Issuing Bank shall be reduced
by such amount on such Business Day. If and to the extent that any Lender shall not have so
made the amount of such Letter of Credit Advance available to the Administrative Agent, such
Lender agrees to pay to the Administrative Agent forthwith on demand such amount together
with interest thereon, for each day from the date of demand by such Issuing Bank until the
date such amount is paid to the Administrative Agent, at the Federal Funds Rate for its
account or the account of such Issuing Bank, as applicable.




     (iv) Whenever the Issuing Bank receives a payment of a reimbursement obligation as to
which it has received any payments from the Participants pursuant to clause (iii) above, the
Issuing Bank shall pay to the Administrative Agent for the account of each such Participant
that has paid its Pro Rata Share thereof, in same day funds, an amount equal to such
Participant’s share (based upon the proportionate aggregate amount originally funded by such
Participant to the aggregate amount funded by all Participants) of the principal amount of
such reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.



          (d) Failure to Make Letter of Credit Advances. The failure of any Lender to make the
Letter of Credit Advance to be made by it on the date specified in Section 2.03(c) shall not
relieve any other Lender of its obligation hereunder to make its Letter of Credit Advance on such
date, but no Lender shall be responsible for the failure of any other Lender to make the Letter of
Credit Advance to be made by such other Lender on such date.




          (e) Cash Collateral.





     (i) If the expiration date of any Letter of Credit would be later than 30 days before
the Termination Date, then, any such Letter of Credit shall expressly provide, as a
condition to the Issuing Bank’s issuance of such Letter of Credit, that Borrower shall be
required, commencing on the date that is 30 days before the Termination Date and at all
times thereafter, to Cash Collateralize such Letter of Credit by delivering to
Administrative Agent Cash Collateral in an amount sufficient to cover all L/C Termination
Date Exposure. Borrower shall comply with the terms and conditions of any such Letter of
Credit requiring Cash Collateralization.




     (ii) All Cash Collateral (other than credit support not constituting funds subject to
deposit) shall be maintained in blocked, non-interest bearing deposit accounts at the
Administrative Agent. The Borrower hereby grants to (and subjects to the control of) the
Administrative Agent, for the benefit of the Administrative Agent and the Issuing



40









 






Bank, and agrees to maintain, a first priority security interest in all such cash,
deposit accounts and all balances therein, and all other property so provided as collateral
pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations
to which such Cash Collateral may be applied pursuant to Section 2.03(e). If at any
time the Administrative Agent determines that Cash Collateral is subject to any right or
claim of any Person other than the Administrative Agent as herein provided, or that the
total amount of such Cash Collateral is less than the applicable L/C Termination Date
Exposure and other obligations secured thereby, the Borrower will, promptly upon demand by
the Administrative Agent, pay or provide to the Administrative Agent additional Cash
Collateral in an amount sufficient to eliminate such deficiency.




     (iii) Notwithstanding anything to the contrary contained in this Agreement, Cash
Collateral provided under this Section 2.03(e) in respect of Letters of Credit shall
be held and applied to the satisfaction of the specific Available Amount of such Letters of
Credit and other obligations for which the Cash Collateral was so provided, prior to any
other application of such property as may be provided for herein.




     (iv) Cash Collateral (or the appropriate portion thereof) provided to reduce L/C
Termination Date Exposure or other obligations shall be released promptly following (i) the
elimination of the applicable L/C Termination Date Exposure or other obligations giving rise
thereto or (ii) the Administrative Agent’s good faith determination that there exists excess
Cash Collateral; provided, however, that the Person providing Cash Collateral and the
Issuing Bank may agree that Cash Collateral shall not be released but instead held to
support future anticipated L/C Termination Date Exposure or other obligations.



          SECTION 2.04. Repayment of Advances. (a) Revolving Credit Advances. The
Borrower shall repay to the Administrative Agent for the ratable account of the Lenders on the
Termination Date the aggregate outstanding principal amount of the Revolving Credit Advances then
outstanding.




          (b) Swing Line Advances. The Borrower shall repay to the Administrative Agent for the
account of (i) the Swing Line Bank and (ii) each other Lender that has made a Swing Line Advance by
purchase from the Swing Line Bank pursuant to Section 2.02(b), the outstanding principal amount of
each Swing Line Advance made by each of them on the earlier of the maturity date specified in the
applicable Notice of Swing Line Borrowing (which maturity shall be no later than the fifteenth day
after the requested date of such Swing Line Borrowing) and the Termination Date.




          (c) Letter of Credit Advances. (i) The Borrower shall repay to the Administrative
Agent for the account of each Issuing Bank and each other Lender that has made a Letter of Credit
Advance on the same day on which such Advance was made the outstanding principal amount of each
Letter of Credit Advance made by each of them.





     (ii) The Obligations of the Borrower under this Agreement, any Letter of Credit
Agreement and any other agreement or instrument relating to any Letter of Credit (and the
obligations of each Lender to reimburse the Issuing Bank with respect thereto)



41









 






shall be unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement, such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without limitation, the following
circumstances:




     (A) any lack of validity or enforceability of any Loan Document, any Letter of
Credit Agreement, any Letter of Credit or any other agreement or instrument relating
thereto (all of the foregoing being, collectively, the “L/C Related Documents”);




     (B) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Obligations of the Borrower in respect of any L/C Related
Document or any other amendment or waiver of or any consent to departure from all or
any of the L/C Related Documents;




     (C) the existence of any claim, set off, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of a Letter
of Credit (or any Persons for which any such beneficiary or any such transferee may
be acting), any Issuing Bank or any other Person, whether in connection with the
transactions contemplated by the L/C Related Documents or any unrelated transaction;




     (D) any statement or any other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;




     (E) payment by any Issuing Bank under a Letter of Credit against presentation
of a draft or certificate that does not strictly comply with the terms of such
Letter of Credit;




     (F) any exchange, release or non-perfection of any Collateral or other
collateral, or any release or amendment or waiver of or consent to departure from
the Guaranties or any other guarantee, for all or any of the Obligations of the
Borrower in respect of the L/C Related Documents; or




     (G) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including, without limitation, any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the Borrower
or a guarantor.



          SECTION 2.05. Termination or Reduction of the Commitments. (a) Optional.
The Borrower may, upon at least three Business Days’ notice to the Administrative Agent, terminate
in whole or reduce in part the unused portions of the Swing Line Facility, the Letter of Credit
Facility and the Unused Revolving Credit Commitments; provided, however, that each partial
reduction of a Facility (i) shall be in an aggregate amount of $1,000,000 (or, in the case of the
Swing Line Facility, $250,000) or an integral multiple of $250,000 in excess thereof and (ii) shall
be made ratably among the Lenders in accordance with their Commitments with respect to such
Facility.







42









 








          (b) Mandatory. (i) The Letter of Credit Facility shall be permanently reduced from
time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any,
by which the amount of the Letter of Credit Facility exceeds the Revolving Credit Facility after
giving effect to such reduction of the Revolving Credit Facility.





     (ii) The Swing Line Facility shall be permanently reduced from time to time on the date
of each reduction in the Revolving Credit Facility by the amount, if any, by which the
amount of the Swing Line Facility exceeds the Revolving Credit Facility after giving effect
to such reduction of the Revolving Credit Facility.



          SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon same day
notice in the case of Base Rate Advances and two Business Days’ notice in the case of Eurodollar
Rate Advances, in each case to the Administrative Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances comprising part of the same Borrowing in
whole or ratably in part, together with accrued interest to the date of such prepayment on the
aggregate principal amount prepaid; provided, however, that (i) each partial prepayment shall be in
an aggregate principal amount of $1,000,000 or an integral multiple of $250,000 in excess thereof
or, if less, the amount of the Advances outstanding and (ii) if any prepayment of a Eurodollar Rate
Advance is made on a date other than the last day of an Interest Period for such Advance, the
Borrower shall also pay any amounts owing pursuant to Section 9.04(c).




          (b) Mandatory. (i) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Revolving Credit Advances comprising part of the same Borrowings, the Swing
Line Advances and the Letter of Credit Advances and, to the extent all Advances have been prepaid,
make a deposit in the L/C Cash Collateral Account in an amount sufficient to cause (A) the Facility
Exposure not to exceed the lesser of the Revolving Credit Facility and the Total Borrowing Base
Value on such Business Day, (B) the Leverage Ratio not to exceed the applicable maximum Leverage
Ratio set forth in Section 5.04(a)(i) on such Business Day, and (C) the Facility Exposure not to
exceed the Total Borrowing Base Value as set forth in Section 5.04(b)(i) on such Business Day.





     (ii) The Borrower shall, on each Business Day, pay to the Administrative Agent for
deposit in the L/C Cash Collateral Account an amount sufficient to cause the aggregate
amount on deposit in the L/C Cash Collateral Account to equal the amount by which the
aggregate Available Amount of all Letters of Credit then outstanding exceeds the Letter of
Credit Facility on such Business Day. To the extent the funds on deposit in the L/C Cash
Collateral Account shall at any time exceed the total amount required to be deposited
therein pursuant to the terms of this Agreement, the Administrative Agent shall, promptly
upon request by the Borrower and provided that no Default or Event of Default shall then
have occurred or be continuing or would result therefrom, return such excess amount to the
Borrower.




     (iii) Prepayments of the Revolving Credit Facility made pursuant to clause (i) above
shall be first applied to prepay Letter of Credit Advances then outstanding until such
Advances are paid in full, second applied to prepay Swing Line Advances then



43









 






outstanding until such Advances are paid in full, third applied to prepay Revolving
Credit Advances then outstanding comprising part of the same Borrowings until such Advances
are paid in full and fourth deposited in the L/C Cash Collateral Account to cash
collateralize 100% of the Available Amount of the Letters of Credit then outstanding. Upon
the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash
Collateral Account, such funds shall be applied to reimburse the relevant Issuing Bank or
Lenders, as applicable.




     (iv) All prepayments under this subsection (b) shall be made together with accrued
interest to the date of such prepayment on the principal amount prepaid.



          SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender from the date of such
Advance until such principal amount shall be paid in full, at the following rates per annum:





     (i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from
time to time plus (B) the Applicable Margin in respect of Base Rate Advances in effect from
time to time, payable in arrears quarterly on the last day of each March, June, September
and December during such periods and on the date such Base Rate Advance shall be Converted
or paid in full.




     (ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for
such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance
plus (B) the Applicable Margin in respect of Eurodollar Rate Advances in effect on the first
day of such Interest Period, payable in arrears on the last day of such Interest Period and,
if such Interest Period has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of such Interest Period
and on the date such Eurodollar Rate Advance shall be Converted or paid in full.



          (b) Default Interest. Upon the occurrence and during the continuance of any Event of
Default, the Borrower shall pay interest on (i) the unpaid principal amount of each Advance owing
to each Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above and
on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required
to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest
extent permitted by law, the amount of any interest, fee or other amount payable under the Loan
Documents that is not paid when due, from the date such amount shall be due until such amount shall
be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at
a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid,
in the case of interest, on the Type of Advance on which such interest has accrued pursuant to
clause (a)(i) or (a)(ii) above and, in all other cases, on Base Rate Advances pursuant to clause
(a)(i) above.




          (c) Notice of Interest Period and Interest Rate. Each continuation of a Eurodollar
Rate Advance shall be made upon the Borrower’s irrevocable notice received by the






44









 







Administrative Agent, which may be given by telephone, including a specification of the
duration of the Interest Period with respect thereto. Each such notice must be received by the
Administrative Agent not later than 12:00 Noon (New York City time) three Business Days prior to
the first day of the subsequent Interest Period for the continuation of such Eurodollar Rate
Advance. Each telephonic notice by the Borrower pursuant to this Section 2.07(c) must be confirmed
promptly by delivery to the Administrative Agent of a written notice, appropriately completed and
signed by a Responsible Officer of the Borrower. Promptly after receipt of a Notice of Borrowing
pursuant to Section 2.02(a), a notice of Conversion pursuant to Section 2.09, a notice of
continuation of a Eurodollar Rate Advance pursuant to this subsection (c) or a notice of selection
of an Interest Period pursuant to the definition of “Interest Period”, the Administrative Agent
shall give notice to the Borrower and each Lender of the applicable Interest Period and the
applicable interest rate determined by the Administrative Agent for purposes of clause (a)(i) or
(a)(ii) above, and the applicable rate, if any, furnished by each Reference Bank for the purpose of
determining the applicable interest rate under clause (a)(ii) above.




          (d) Interest Rate Determination. (i) The Reference Bank agrees to furnish to the
Administrative Agent timely information for the purpose of determining each Eurodollar Rate. If
the Reference Bank shall not furnish such timely information to the Administrative Agent for the
purpose of determining any such interest rate, the Administrative Agent shall determine such
interest rate on the basis of timely information obtained by the Administrative Agent in its sole
reasonable discretion.





     (ii) If the Reuters Screen LIBOR01 Page (or a successor page) is unavailable and the
Administrative Agent is unable to determine the Eurodollar Rate for any Eurodollar Rate
Advances,




     (A) the Administrative Agent shall forthwith notify the Borrower and the
Lenders that the interest rate cannot be determined for such Eurodollar Rate
Advances,




     (B) each such Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance (or if such Advance is
then a Base Rate Advance, will continue as a Base Rate Advance), and




     (C) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such suspension
no longer exist.



          SECTION 2.08. Fees. (a) Unused Fee. The Borrower shall pay to the
Administrative Agent for the account of the Lenders an unused commitment fee (the “Unused Fee”),
from the date hereof in the case of each Initial Lender and from the effective date specified in
the Assignment and Acceptance or the Accession Agreement, as the case may be, pursuant to which it
became a Lender in the case of each other Lender until the Termination Date, payable in arrears
quarterly on the last day of each March, June, September and December,






45









 







commencing September 30, 2010, and on the Termination Date. The Unused Fee payable for the
account of each Lender shall be calculated for each period for which the Unused Fee is payable on
the average daily Unused Revolving Credit Commitment of such Lender during such period at the rate
of 0.40% per annum.




          (b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the Administrative
Agent for the account of each Lender a commission, payable in arrears, (a) quarterly on the last
day of each March, June, September and December commencing September 30, 2010, (b) on the earliest
to occur of the full drawing, expiration, termination or cancellation of any Letter of Credit, and
(c) on the Termination Date, on such Lender’s Pro Rata Share of the average daily aggregate
Available Amount during such quarter of all Letters of Credit outstanding from time to time for the
applicable period at the rate per annum equal to the Applicable Margin for Eurodollar Rate Advances
in effect from time to time.





     (ii) The Borrower shall pay to each Issuing Bank, for its own account, (A) a fronting
fee for each Letter of Credit issued by such Issuing Bank in an amount equal to 0.125% of
the Available Amount of such Letter of Credit on the date of issuance of such Letter of
Credit, payable on such date and (B) such other commissions, issuance fees, transfer fees
and other fees and charges in connection with the issuance or administration of each Letter
of Credit as the Borrower and such Issuing Bank shall agree.



          (c) Other Fees. The Borrower shall pay to each of Agent and Arranger for its own
account the fees, in the amounts and on the dates, set forth in the Fee Letter and such other fees
as may from time to time be agreed between the Borrower and Agent or Arranger.




          (d) Extension Fee. The Borrower shall pay to the Administrative Agent on the
Extension Date, for the account of each Lender, a Facility extension fee, in an amount equal to
0.50% of each Lender’s Revolving Credit Commitment then outstanding.




          SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower may on any
Business Day, upon notice given to the Administrative Agent not later than 12:00 Noon (New York
City time) on the third Business Day prior to the date of the proposed Conversion and subject to
the provisions of Sections 2.07 and 2.10, Convert all or any portion of the Advances of one Type
comprising the same Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day
of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(c), no Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(c) and each Conversion of Advances comprising part of the same
Borrowing under any Facility shall be made ratably among the Lenders in accordance with their
Commitments under such Facility. Each such notice of Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest
Period for such Advances. Each notice of Conversion shall be irrevocable and binding on the
Borrower.







46









 








          (b) Mandatory. (a) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than $1,000,000, such Advances shall automatically Convert into Base Rate
Advances.





     (i) If the Borrower shall fail to select the duration of any Interest Period for any
Eurodollar Rate Advances in accordance with the provisions contained in the definition of
“Interest Period” in Section 1.01, the Administrative Agent will forthwith so notify the
Borrower and the Lenders, whereupon each such Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance.




     (ii) Upon the occurrence and during the continuance of any Event of Default, (y) each
Eurodollar Rate Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (z) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.



          SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority (whether or not having
the force of law), there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of issuing
or maintaining or participating in Letters of Credit or of agreeing to make or of making or
maintaining Letter of Credit Advances (excluding, for purposes of this Section 2.10, any such
increased costs resulting from (y) Taxes or Other Taxes (as to which Section 2.12 shall govern) and
(z) changes in the basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such Lender Party is
organized or has its Applicable Lending Office or any political subdivision thereof), then the
Borrower shall from time to time, upon demand by such Lender Party (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party
additional amounts sufficient to compensate such Lender Party for such increased cost; provided,
however, that a Lender Party claiming additional amounts under this Section 2.10(a) agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost that may thereafter accrue and would not, in
the reasonable judgment of such Lender Party, be otherwise disadvantageous to such Lender Party. A
certificate as to the amount of such increased cost, submitted to the Borrower by such Lender
Party, shall be conclusive and binding for all purposes, absent manifest error.




          (b) If any Lender Party determines that compliance with any law or regulation or any guideline
or request from any central bank or other governmental authority (whether or not having the force
of law) affects or would affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the amount of such capital
is increased by or based upon the existence of such Lender Party’s commitment to lend or to issue
or participate in Letters of Credit hereunder and other






47









 







commitments of such type or the issuance or maintenance of or participation in the Letters of
Credit (or similar contingent obligations), then, upon demand by such Lender Party or such
corporation (with a copy of such demand to the Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender Party, from time to time as specified by such
Lender Party, additional amounts sufficient to compensate such Lender Party in the light of such
circumstances, to the extent that such Lender Party reasonably determines such increase in capital
to be allocable to the existence of such Lender Party’s commitment to lend or to issue or
participate in Letters of Credit hereunder or to the issuance or maintenance of or participation in
any Letters of Credit. A certificate as to such amounts submitted to the Borrower by such Lender
Party shall be conclusive and binding for all purposes, absent manifest error.




          (c) If, with respect to any Eurodollar Rate Advances, the Required Lenders notify the
Administrative Agent that the Eurodollar Rate for any Interest Period for such Advances will not
adequately reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Rate
Advances for such Interest Period, the Administrative Agent shall forthwith so notify the Borrower
and the Lenders, whereupon (i) each such Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrower that such Lenders have
determined that the circumstances causing such suspension no longer exist.




          (d) Notwithstanding any other provision of this Agreement, if the introduction of or any
change in or in the interpretation of any law or regulation shall make it unlawful, or any central
bank or other governmental authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Administrative Agent, (i) each
Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Administrative Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no longer exist; provided, however, that,
before making any such demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different Eurodollar Lending
Office if the making of such a designation would allow such Lender or its Eurodollar Lending Office
to continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or
maintain Eurodollar Rate Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.




          SECTION 2.11. Payments and Computations. (a) The Borrower shall make each payment
hereunder and under the Notes, irrespective of any right of counterclaim or set-off (except as
otherwise provided in Section 2.13), not later than 12:00 Noon (New York City time) on the day when
due in U.S. dollars to the Administrative Agent at the Administrative Agent’s Account in same day
funds, with payments being received by the Administrative Agent after such time being deemed to
have been received on the next succeeding Business Day. The Administrative Agent shall promptly
thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of
principal, interest, commitment fees or any other






48









 







Obligation then payable hereunder and under the Notes to more than one Lender Party, to such
Lender Parties for the account of their respective Applicable Lending Offices ratably in accordance
with the amounts of such respective Obligations then payable to such Lender Parties and (ii) if
such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender
Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon any Acceding Lender becoming a Lender
hereunder as a result of a Commitment Increase pursuant to Section 2.17 and upon the Administrative
Agent’s receipt of such Lender’s Accession Agreement and recording of information contained therein
in the Register, from and after the applicable Increase Date, the Administrative Agent shall make
all payments hereunder and under any Notes issued in connection therewith in respect of the
interest assumed thereby to such Acceding Lender. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register pursuant to Section
9.07(d), from and after the effective date of such Assignment and Acceptance, the Administrative
Agent shall make all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender Party assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to such effective date
directly between themselves.




          (b) The Borrower hereby authorizes each Lender Party and each of its Affiliates, if and to the
extent payment owed to such Lender Party is not made when due hereunder or, in the case of a
Lender, under the Note held by such Lender, to charge from time to time, to the fullest extent
permitted by law, against any or all of the Borrower’s accounts with such Lender Party any amount
so due.




          (c) All computations of interest based on the Base Rate shall be made by the Administrative
Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of
interest based on the Eurodollar Rate or the Federal Funds Rate and of fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of 360 days, in each
case for the actual number of days (including the first day but excluding the last day) occurring
in the period for which such interest, fees or commissions are payable. Each determination by the
Administrative Agent of an interest rate, fee or commission hereunder shall be conclusive and
binding for all purposes, absent manifest error.




          (d) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment of interest or
commitment fee, as the case may be; provided, however, that if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.




          (e) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to any Lender Party hereunder that the Borrower will not make such
payment in full, the Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon
such assumption, cause to be distributed to each






49









 







such Lender Party on such due date an amount equal to the amount then due such Lender Party.
If and to the extent the Borrower shall not have so made such payment in full to the Administrative
Agent, each such Lender Party shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Lender Party together with interest thereon, for each day from the date
such amount is distributed to such Lender Party until the date such Lender Party repays such amount
to the Administrative Agent, at the Federal Funds Rate.




          (f) Whenever any payment received by the Administrative Agent under this Agreement or any of
the other Loan Documents is insufficient to pay in full all amounts due and payable to the Agents
and the Lender Parties under or in respect of this Agreement and the other Loan Documents on any
date, such payment shall be distributed by the Administrative Agent and applied by the Agents and
the Lender Parties in the following order of priority:





     (i) first, to the payment of all of the fees, indemnification payments, costs and
expenses that are due and payable to the Agents (solely in their respective capacities as
Agents) under or in respect of this Agreement and the other Loan Documents on such date,
ratably based upon the respective aggregate amounts of all such fees, indemnification
payments, costs and expenses owing to the Agents on such date;




     (ii) second, to the payment of all of the fees, indemnification payments, costs and
expenses that are due and payable to the Issuing Banks (solely in their respective
capacities as such) under or in respect of this Agreement and the other Loan Documents on
such date, ratably based upon the respective aggregate amounts of all such fees,
indemnification payments, costs and expenses owing to the Issuing Banks on such date;




     (iii) third, to the payment of all of the indemnification payments, costs and expenses
that are due and payable to the Lenders under Section 9.04, Section 21 of the Security
Agreement and any similar section of any of the other Loan Documents on such date, ratably
based upon the respective aggregate amounts of all such indemnification payments, costs and
expenses owing to the Lenders on such date;




     (iv) fourth, to the payment of all of the amounts that are due and payable to the
Administrative Agent and the Lender Parties under Sections 2.10 and 2.12 on such date,
ratably based upon the respective aggregate amounts thereof owing to the Administrative
Agent and the Lender Parties on such date;




     (v) fifth, to the payment of all of the fees that are due and payable to the Lenders
under Section 2.08(a), (b)(i) and (e) on such date, ratably based upon the respective
aggregate Commitments of the Lenders under the Facilities on such date;




     (vi) sixth, to the payment of all of the accrued and unpaid interest on the Obligations
of the Borrower under or in respect of the Loan Documents that is due and payable to the
Administrative Agent and the Lender Parties under Section 2.07(b) on such date, ratably
based upon the respective aggregate amounts of all such interest owing to the Administrative
Agent and the Lender Parties on such date;




     (vii) seventh, to the payment of all of the accrued and unpaid interest on the Advances
that is due and payable to the Administrative Agent and the Lender Parties



50









 






under Section 2.07(a) on such date, ratably based upon the respective aggregate amounts
of all such interest owing to the Administrative Agent and the Lender Parties on such date;




     (viii) eighth, to the payment of any other accrued and unpaid interest comprising
Obligations that is due and payable to the Administrative Agent and the Lender Parties on
such date, ratably based upon the respective aggregate amounts of all such interest owing to
the Administrative Agent and the Lender Parties on such date;




     (ix) ninth, to the payment of the principal amount of all of the outstanding Advances
that are due and payable to the Administrative Agent and the Lender Parties on such date,
ratably based upon the respective aggregate amounts of all such principal and reimbursement
obligations owing to the Administrative Agent and the Lender Parties on such date, and to
deposit into the L/C Cash Collateral Account any contingent reimbursement obligations in
respect of outstanding Letters of Credit to the extent required by Section 6.02; and




     (x) tenth, to the payment of all other Obligations of the Loan Parties owing under or
in respect of the Loan Documents that are due and payable to the Administrative Agent and
the other Secured Parties on such date, ratably based upon the respective aggregate amounts
of all such Obligations owing to the Administrative Agent and the other Secured Parties on
such date.



          SECTION 2.12. Taxes. (a) Any and all payments by any Loan Party to or for the
account of any Lender Party or any Agent hereunder or under any other Loan Document shall be made,
in accordance with Section 2.11 or the applicable provisions of such other Loan Document, if any,
free and clear of and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender Party and each Agent, taxes that are imposed on its overall net income by the
United States and taxes that are imposed on its overall net income (and franchise taxes imposed in
lieu thereof) by the state or foreign jurisdiction under the laws of which such Lender Party or
such Agent, as the case may be, is organized or any political subdivision thereof and, in the case
of each Lender Party, taxes that are imposed on its overall net income (and franchise taxes imposed
in lieu thereof) by the state or foreign jurisdiction of such Lender Party’s Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments hereunder or under any
other Loan Document being hereinafter referred to as “Taxes”). If any Loan Party shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder or under any other Loan
Document to any Lender Party or any Agent, and unless such requirement arises from the failure of a
Lender to furnish the documentation described in Section 2.12(e), (i) the sum payable by such Loan
Party shall be increased as may be necessary so that after such Loan Party and any Agent have made
all required deductions (including deductions applicable to additional sums payable under this
Section 2.12) such Lender Party or such Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) such Loan Party shall make all
such deductions and (iii) such Loan Party shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.







51









 








          (b) In addition, each Loan Party shall pay any present or future stamp, documentary, excise,
property, intangible, mortgage recording or similar taxes, charges or levies that arise from any
payment made by such Loan Party hereunder or under any other Loan Documents or from the execution,
delivery or registration of, performance under, or otherwise with respect to, this Agreement, or
the other Loan Documents (hereinafter referred to as “Other Taxes”).




          (c) The Loan Parties shall indemnify each Lender Party and each Agent for and hold them
harmless against the full amount of Taxes and Other Taxes, and for the full amount of taxes of any
kind imposed or asserted by any jurisdiction on amounts payable by the Loan Parties under this
Section 2.12, imposed on or paid by such Lender Party or such Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 30 days from the date such Lender Party
or such Agent (as the case may be) makes written demand therefor.




          (d) Within 30 days after the date of any payment of Taxes, the appropriate Loan Party shall
furnish to the Administrative Agent, at its address referred to in Section 9.02, the original or a
certified copy of a receipt evidencing such payment, to the extent such receipt is issued therefor,
or other evidence of payment thereof reasonably satisfactory to the Administrative Agent. In the
case of any payment hereunder or under the other Loan Documents by or on behalf of a Loan Party
through an account or branch outside the United States or by or on behalf of a Loan Party by a
payor that is not a United States person, if such Loan Party determines that no Taxes are payable
in respect thereof, such Loan Party shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes. For purposes of subsections (d) and (e) of this
Section 2.12, the terms “United States” and “United States person” shall have the meanings
specified in Section 7701 of the Internal Revenue Code.




          (e) Each Lender Party organized under the laws of a jurisdiction outside the United States
shall, on or prior to the date of its execution and delivery of this Agreement in the case of each
Initial Lender Party, and on the date of the Assignment and Acceptance pursuant to which it becomes
a Lender Party in the case of each other Lender Party, and from time to time thereafter as
reasonably requested in writing by the Borrower (but only so long thereafter as such Lender Party
remains lawfully able to do so), provide each of the Administrative Agent and the Borrower with two
original Internal Revenue Service Forms W-8BEN or W-8EC1, as appropriate, or any successor or other
form prescribed by the Internal Revenue Service, certifying that such Lender Party is exempt from
or entitled to a reduced rate of United States withholding tax on payments pursuant to this
Agreement or any other Loan Document. If the forms provided by a Lender Party at the time such
Lender Party first becomes a party to this Agreement indicate a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender Party provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms; provided, however, that if, at the effective date of the
Assignment and Acceptance pursuant to which a Lender Party becomes a party to this Agreement, the
Lender Party assignor was entitled to payments under subsection (a) of this Section 2.12 in respect
of United States






52









 







withholding tax with respect to interest paid at such date, then, to such extent, the term
Taxes shall include (in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender Party assignee on such date. If any form or document referred to in this
subsection (e) requires the disclosure of information, other than information necessary to compute
the tax payable and information required on the date hereof by Internal Revenue Service form W-8BEN
or W-8EC1, that the applicable Lender Party reasonably considers to be confidential, such Lender
Party shall give notice thereof to the Borrower and shall not be obligated to include in such form
or document such confidential information. Upon the request of the Borrower, any Lender that is a
United States person and is not an exempt recipient for U.S. backup withholding purposes shall
deliver to the Borrower two copies of Internal Revenue Service form W-9 (or any successor form).




          (f) For any period with respect to which a Lender Party has failed to provide the Borrower
with the appropriate form or other document described in subsection (e) above (other than if such
failure is due to a change in law, or in the interpretation or application thereof, occurring after
the date on which a form or other document originally was required to be provided or if such form
or other document otherwise is not required under subsection (e) above), such Lender Party shall
not be entitled to indemnification under subsection (a) or (c) of this Section 2.12 with respect to
Taxes imposed by the United States by reason of such failure; provided, however, that should a
Lender Party become subject to Taxes because of its failure to deliver a form or other document
required hereunder, the Loan Parties shall take such steps as such Lender Party shall reasonably
request to assist such Lender Party to recover such Taxes.




          (g) Any Lender Party claiming any additional amounts payable pursuant to this Section 2.12
agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Eurodollar Lending Office if the making of such a
change would avoid the need for, or reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party.




          (h) In the event that an additional payment is made under Section 2.12(a) or (c) for the
account of any Lender Party and such Lender Party, in its sole discretion, determines that it has
finally and irrevocably received or been granted a credit against or release or remission for, or
repayment of, any tax paid or payable by it in respect of or calculated with reference to the
deduction or withholding giving rise to such payment, such Lender Party shall, to the extent that
it determines that it can do so without prejudice to the retention of the amount of such credit,
relief, remission or repayment, pay to the applicable Loan Party such amount as such Lender Party
shall, in its sole discretion, have determined to be attributable to such deduction or withholding
and which will leave such Lender Party (after such payment) in no worse position than it would have
been in if the applicable Loan Party had not been required to make such deduction or withholding.
Nothing herein contained shall interfere with the right of a Lender Party to arrange its tax
affairs in whatever manner it thinks fit nor oblige any Lender Party to claim any tax credit or to
disclose any information relating to its affairs or any computations in respect thereof, and no
Loan Party shall be entitled to review the tax records of any Lender Party or the Administrative
Agent, or require any Lender Party to do anything that would prejudice its






53









 







ability to benefit from any other credits, reliefs, remissions or repayments to which it may
be entitled.




          SECTION 2.13. Sharing of Payments, Etc. Subject to the provisions of Section 2.11(f),
if any Lender Party shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of set off, or otherwise, other than as a result of an assignment
pursuant to Section 9.07) (a) on account of Obligations due and payable to such Lender Party
hereunder and under the Notes at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender Party at such time
to (ii) the aggregate amount of the Obligations due and payable to all Lender Parties hereunder and
under the Notes at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder and under the Notes at such time obtained by all the Lender Parties at
such time or (b) on account of Obligations owing (but not due and payable) to such Lender Party
hereunder and under the Notes at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing to such Lender Party at such time to (ii)
the aggregate amount of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the Obligations owing (but
not due and payable) to all Lender Parties hereunder and under the Notes at such time obtained by
all of the Lender Parties at such time, such Lender Party shall forthwith purchase from the other
Lender Parties such interests or participating interests in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such purchasing Lender Party to
share the excess payment ratably with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender Party, such purchase
from each other Lender Party shall be rescinded and such other Lender Party shall repay to the
purchasing Lender Party the purchase price to the extent of such Lender Party’s ratable share
(according to the proportion of (i) the purchase price paid to such Lender Party to (ii) the
aggregate purchase price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party’s ratable share (according to the proportion of (i) the amount of such other
Lender Party’s required repayment to (ii) the total amount so recovered from the purchasing Lender
Party) of any interest or other amount paid or payable by the purchasing Lender Party in respect of
the total amount so recovered. The Borrower agrees that any Lender Party so purchasing an interest
or participating interest from another Lender Party pursuant to this Section 2.13 may, to the
fullest extent permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such interest or participating interest, as the case may be, as fully as
if such Lender Party were the direct creditor of the Borrower in the amount of such interest or
participating interest, as the case may be.




          SECTION 2.14. Use of Proceeds. The proceeds of the Advances and issuances of Letters
of Credit shall be available (and the Borrower agrees that it shall use such proceeds and Letters
of Credit) solely for (i) general corporate purposes of the Borrower and its Subsidiaries, (ii) the
development of new, and the renovation and expansion of existing, Campus Housing Assets and the
acquisition of such other assets and the making of such other Investments as are permitted by this
Agreement, (iii) the acquisition of land and/or improvements for the sole purpose of converting
such properties into Campus Housing Assets, (iv) the repayment in full (or refinancing) of existing
mortgage loans affecting Borrowing Base Assets, (v) the payment of fees and expenses related to the
Facilities and the other transactions






54









 







contemplated by the Loan Documents and (vi) the payment of fees and expenses related to the
IPO and the Formation Transactions.




          SECTION 2.15. Evidence of Debt. (a) Each Lender Party shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such
Lender Party resulting from each Advance owing to such Lender Party from time to time, including
the amounts of principal and interest payable and paid to such Lender Party from time to time
hereunder. The Borrower agrees that upon notice by any Lender Party to the Borrower (with a copy
of such notice to the Administrative Agent) to the effect that a promissory note or other evidence
of indebtedness is required or appropriate in order for such Lender Party to evidence (whether for
purposes of pledge, enforcement or otherwise) the Advances owing to, or to be made by, such Lender
Party, the Borrower shall promptly execute and deliver to such Lender Party, with a copy to the
Administrative Agent, a Note, in substantially the form of Exhibit A hereto, payable to the order
of such Lender Party in a principal amount equal to the Revolving Credit Commitment of such Lender
Party. All references to Notes in the Loan Documents shall mean Notes, if any, to the extent
issued hereunder. To the extent no Note has been issued to a Lender Party, this Agreement shall be
deemed to comprise conclusive evidence for all purposes of the indebtedness resulting from the
Advances and extensions of credit hereunder.




          (b) The Register maintained by the Administrative Agent pursuant to Section 9.07(d) shall
include a control account, and a subsidiary account for each Lender Party, in which accounts (taken
together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of
Advances comprising such Borrowing and, if appropriate, the Interest Period applicable thereto,
(ii) the terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the amount
of any principal or interest due and payable or to become due and payable from the Borrower to each
Lender Party hereunder, and (iv) the amount of any sum received by the Administrative Agent from
the Borrower hereunder and each Lender Party’s share thereof.




          (c) Entries made in good faith by the Administrative Agent in the Register pursuant to
subsection (b) above, and by each Lender Party in its account or accounts pursuant to subsection
(a) above, shall be prima facie evidence of the amount of principal and interest due and payable or
to become due and payable from the Borrower to, in the case of the Register, each Lender Party and,
in the case of such account or accounts, such Lender Party, under this Agreement, absent manifest
error; provided, however, that the failure of the Administrative Agent or such Lender Party to make
an entry, or any finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrower under this Agreement.




          SECTION 2.16. Extension of Termination Date. At least 30 days but not more than 60
days prior to the Termination Date, the Borrower, by written notice to the Administrative Agent,
may request, with respect to the Commitments then outstanding, a single one-year extension of the
Termination Date. The Administrative Agent shall promptly notify each Lender of such request and
the Termination Date in effect at such time shall, effective as at the Termination Date (the
“Extension Date”), be extended for an additional one year period, provided that (i) the
Administrative Agent shall have received not later than 30 days prior to the





55











 




Termination Date a new Appraisal of each Borrowing Base Asset, (ii) the Borrower shall
have paid the Extension Fees as described in Section 2.08(d) and (iii) on the Extension Date the
following statements shall be true and the Administrative Agent shall have received for the account
of each Lender Party a certificate signed by a Responsible Officer of the Borrower, dated the
Extension Date, stating that: (a) the representations and warranties contained in Section 4.01 are
true and correct in all material respects on and as of the Extension Date (except to the extent
that such representations and warranties specifically refer to an earlier date, in which case they
are true and correct as of such earlier date), and (b) no Default or Event of Default has occurred
and is continuing or would result from such extension. In the event that an extension is effected
pursuant to this Section 2.16 (but subject to the provisions of Sections 2.05, 2.06 and 6.01), the
aggregate principal amount of all Advances shall be repaid in full ratably to the Lenders on the
Termination Date as so extended. As of the Extension Date, any and all references in this
Agreement, the Notes, if any, or any of the other Loan Documents to the “Termination Date” shall
refer to the Termination Date as so extended.




          SECTION 2.17. Increase in the Aggregate Commitments. (a) The Borrower may, at any
time (but no more than twice in any consecutive 12-month period), by written notice to the
Administrative Agent, request an increase in the aggregate amount of the Revolving Credit
Commitments by not less than $5,000,000 (each such proposed increase, a “Commitment Increase”) to
be effective as of a date that is at least 90 days prior to the scheduled Termination Date then in
effect (the “Increase Date”) as specified in the related notice to the Administrative Agent;
provided, however, that (i) in no event shall the aggregate amount of the Commitments at any time
exceed $200,000,000 and (ii) on the date of any request by the Borrower for a Commitment Increase
and on the related Increase Date, the applicable conditions set forth in Article III shall be
satisfied.




          (b) The Administrative Agent shall promptly notify the Lenders of each request by the Borrower
for a Commitment Increase, which notice shall include (i) the proposed amount of such requested
Commitment Increase, (ii) the proposed Increase Date and (iii) the date by which Lenders wishing to
participate in the Commitment Increase must commit to an increase in the amount of their respective
Commitments (the “Commitment Date”). Each Lender that is willing to participate in such requested
Commitment Increase (each, an “Increasing Lender”) shall, in its sole discretion, give written
notice to the Administrative Agent on or prior to the Commitment Date of the amount by which it is
willing to increase its Commitment (the “Proposed Increased Commitment”). If the Lenders notify
the Administrative Agent that they are willing to increase the amount of their respective
Commitments by an aggregate amount that exceeds the amount of the requested Commitment Increase,
the requested Commitment Increase shall be allocated to each Lender willing to participate therein
in an amount equal to the Commitment Increase multiplied by the ratio of each Lender’s Proposed
Increased Commitment to the aggregate amount of Proposed Increased Commitments.




          (c) Promptly following each Commitment Date, the Administrative Agent shall notify the
Borrower as to the amount, if any, by which the Lenders are willing to participate in the requested
Commitment Increase. If the aggregate amount by which the Lenders are willing to participate in
any requested Commitment Increase on any such Commitment Date is less than the requested Commitment
Increase, then the Borrower may extend offers to one or more Eligible Assignees to participate in
any portion of the requested Commitment Increase that






56









 







has not been committed to by the Lenders as of the applicable Commitment Date; provided,
however, that the Commitment of each such Eligible Assignee shall be in an amount of not less than
$10,000,000.




          (d) On each Increase Date, each Eligible Assignee that accepts an offer to participate in a
requested Commitment Increase in accordance with Section 2.17(c) (an “Acceding Lender”) shall
become a Lender party to this Agreement as of such Increase Date and the Commitment of each
Increasing Lender for such requested Commitment Increase shall be so increased by the amount of its
Proposed Increased Commitment (or by the amount allocated to such Lender pursuant to the last
sentence of Section 2.17(b)) as of such Increase Date; provided, however, that the Administrative
Agent shall have received at or before 12:00 Noon (New York City time) on such Increase Date the
following, each dated such date:





     (i) an accession agreement from each Acceding Lender, if any, in form and substance
satisfactory to the Borrower and the Administrative Agent (each, an “Accession Agreement”),
duly executed by such Acceding Lender, the Administrative Agent and the Borrower;




     (ii) confirmation from each Increasing Lender of the increase in the amount of its
Commitment in a writing satisfactory to the Borrower and the Administrative Agent, together
with an amended Schedule I hereto as may be necessary for such Schedule I to be accurate and
complete, certified as correct and complete by a Responsible Officer of the Borrower; and




     (iii) such certificates or other information as may be required pursuant to Section
3.02.


On each Increase Date, upon fulfillment of the conditions set forth in the immediately preceding
sentence of this Section 2.17(d), the Administrative Agent shall notify the Lenders (including,
without limitation, each Acceding Lender) and the Borrower, at or before 1:00 P.M. (New York City
time), by telecopier or telex, of the occurrence of the Commitment Increase to be effected on such
Increase Date and shall record in the Register the relevant information with respect to each
Increasing Lender and each Acceding Lender on such date.




          (e) On the Increase Date, to the extent the Advances then outstanding and owed to any Lender
immediately prior to the effectiveness of the Commitment Increase shall be less than such Lender’s
Pro Rata Share (calculated immediately following the effectiveness of the Commitment Increase) of
all Advances then outstanding and owed to all Lenders (each such Lender, including any Acceding
Lender, a “Purchasing Lender”), then such Purchasing Lender, without executing an Assignment and
Acceptance, shall be deemed to have purchased an assignment of a pro rata portion of the Advances
then outstanding and owed to each Lender that is not a Purchasing Lender (a “Selling Lender”) in an
amount sufficient such that following the effectiveness of all such assignments the Advances
outstanding and owed to each Lender shall equal such Lender’s Pro Rata Share (calculated
immediately following the effectiveness of the Commitment Increase on the Increase Date) of all
Advances then outstanding and owed to all Lenders. The Administrative Agent shall calculate the
net amount to be paid by each Purchasing Lender and received by each Selling Lender in connection
with the assignments effected






57









 







hereunder on the Increase Date. Each Purchasing Lender shall make the amount of its required
payment available to the Administrative Agent, in same day funds, at the office of the
Administrative Agent not later than 12:00 P.M. (New York time) on the Increase Date. The
Administrative Agent shall distribute on the Increase Date the proceeds of such amount to each of
the Selling Lenders entitled to receive such payments at its Applicable Lending Office. If in
connection with the transactions described in this Section 2.17 any Lender shall incur any losses,
costs or expenses of the type described in Section 9.04(c), then the Borrower shall, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender any amounts required to compensate such Lender for such
losses, costs or expenses incurred in connection therewith.




ARTICLE III

CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT




          SECTION 3.01. Conditions Precedent to the Effectiveness of this Agreement. The
obligation of the Administrative Agent and each Lender Party to execute and deliver this Agreement
and the effectiveness of this Agreement is subject to the satisfaction of the following conditions
precedent before or concurrently with the Closing Date:





     (a) The Administrative Agent shall have received on or before the Closing Date the
following, each dated such day (unless otherwise specified), in form and substance
satisfactory to the Administrative Agent (unless otherwise specified) and (except for the
Notes, as to which one original of each shall be sufficient) in sufficient copies for each
Lender Party:




     (i) A Note duly executed by the Borrower and payable to the order of each
Lender.




     (ii) A security agreement in substantially the form of Exhibit F hereto
(together with each other security agreement and security agreement supplement
delivered pursuant to Section 5.01(j), in each case as amended, the “Security
Agreement”), duly executed by each Loan Party that owns Borrowing Base Assets,
together with:




     (A) copies of proper financing statements, to be duly filed under the
Uniform Commercial Code of all jurisdictions that the Collateral Agent may
deem necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the Collateral
Documents, covering the Collateral described therein,




     (B) completed requests for information dated a recent date, including
UCC, judgment, tax, litigation and bankruptcy searches with respect to each
applicable Loan Party, and, in the case of UCC searches, listing all
effective financing statements filed in the jurisdictions referred to in
clause (A) above and in such other jurisdictions specified by the
Administrative Agent that name any Loan Party as debtor, together with
copies of such financing statements,



58









 






     (C) evidence of the completion of all other recordings and filings of
or with respect to the Security Agreement that the Collateral Agent may deem
necessary or desirable in order to perfect and protect the Liens created
thereby,




     (D) certified copies of the Assigned Agreements referred to in the
Security Agreement (which shall include, without limitation, the Management
Agreement and all amendments thereto with respect to each Borrowing Base
Asset), together with a consent to such assignment, in substantially the
form of Exhibit C to the Security Agreement or otherwise in form and
substance satisfactory to the Administrative Agent, duly executed by each
party to such Assigned Agreements other than the Loan Parties;




     (E) a Manager’s Subordination executed and delivered by the manager of
each Borrowing Base Asset,




     (F) a Hazardous Indemnity Agreement,




     (G) a Pledge Agreement, together with certificated Equity Interests in
each Subsidiary that owns or leases a Borrowing Base Asset and stock powers
and membership interest powers (as the case may be) with respect thereto
executed in blank, all in form and substance acceptable to the
Administrative Agent, and




     (H) evidence that all other action that the Collateral Agent may deem
necessary or desirable in order to perfect and protect the first priority
liens and security interests created under the Security Agreement has been
taken (including, without limitation, receipt of duly executed payoff
letters, UCC termination statements and landlords’ and bailees’ waiver and
consent agreements).




     (iii) Deeds of trust, trust deeds and mortgages in substantially the form of
Exhibit G hereto (together with each other deed of trust, trust deed and mortgage
delivered pursuant to Section 5.01(j), in each case as amended, the “Mortgages”) and
assignments of leases and rents in substantially the form of Exhibit H hereto
(together with each other assignment of leases and rents delivered pursuant to
Section 5.01(j), in each case as amended, the “Assignments of Leases”) (in each case
with such changes as may be required to account for local law matters and otherwise
satisfactory in form and substance to the Collateral Agent) covering all Borrowing
Base Assets, duly executed by the appropriate Loan Party, together with:




     (A) evidence that counterparts of the Mortgages and Assignments of
Leases have been duly executed, acknowledged and delivered on or before the
day of the Initial Extension of Credit and are in form suitable for filing
or recording in all filing or recording offices that



59









 







the Collateral Agent may deem necessary or desirable in order to create
a valid first and subsisting Lien on the collateral described therein in
favor of the Collateral Agent for the benefit of the Secured Parties and
that all required affidavits, tax forms and filings pertaining to any
applicable documentary stamp, intangible and mortgage recordation taxes have
been executed and delivered by all appropriate parties and are in form
suitable for filing with all applicable governmental authorities,




     (B) fully paid American Land Title Association Lender’s Extended
Coverage title insurance policies (the “Mortgage Policies”) in form and
substance, with endorsements (including zoning endorsements where available
at reasonable cost) and in amount acceptable to the Collateral Agent,
issued, and coinsured and reinsured (if required), by title insurers
acceptable to the Collateral Agent, insuring the Mortgages to be valid first
and subsisting Liens on the property described therein, free and clear of
all defects (including, but not limited to, mechanics’ and materialmen’s
Liens) and encumbrances, excepting only Permitted Encumbrances, and
providing for such other affirmative insurance (including endorsements for
future advances under the Loan Documents and for mechanics’ and
materialmen’s Liens), and such coinsurance and direct access reinsurance (if
required), as the Collateral Agent may deem necessary or desirable,




     (C) American Land Title Association/American Congress on Surveying and
Mapping form surveys for which all necessary fees have been paid, dated no
more than 45 days before the date of their delivery to the Collateral Agent,
certified to the Administrative Agent, the Collateral Agent and the issuer
of the Mortgage Policies in a manner satisfactory to the Collateral Agent by
a land surveyor duly registered and licensed in the States in which the
property described in such surveys is located and acceptable to the
Collateral Agent, showing all buildings and other improvements, any off-site
improvements, the location of any easements, parking spaces, rights of way,
building set-back lines and other dimensional regulations and the absence of
encroachments, either by such improvements or on to such property, and other
defects, other than encroachments and other defects acceptable to the
Collateral Agent,




     (D) engineering, soils, seismic, environmental and other similar
reports as to the Borrowing Base Assets as may be reasonably required by the
Collateral Agent, in form and substance and from professional firms
acceptable to the Administrative Agent, together with a letter from each
preparer thereof entitling the Administrative Agent and its successors and
assigns to rely upon such reports,




     (E) estoppel and consent agreements, in form and substance satisfactory
to the Administrative Agent, executed by each of the lessors of any
Borrowing Base Assets subject to a Qualifying Ground Lease,



60









 







along with (1) a memorandum of lease in recordable form (if not
previously recorded) with respect to such leasehold interest, executed and
acknowledged by the owner of the affected Borrowing Base Asset, as lessor,
or (2) evidence that the applicable lease with respect to such leasehold
interest or memorandum thereof has been recorded in all places necessary or
desirable, in the Administrative Agent’s reasonable judgment, to give
constructive notice to third-party purchasers of such leasehold interest or
(3) if such leasehold interest was acquired or subleased from the holder of
a recorded leasehold interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise
in form satisfactory to the Administrative Agent,




     (F) an Appraisal of each Borrowing Base Asset described in the
Mortgages,




     (G) copies of all material licenses, permits and approvals for each
Borrowing Base Asset, including, without limitation, a certificate of
occupancy,




     (H) a zoning report for each Borrowing Base Asset issued by Planning
and Zoning Resources Corp. or another professional firm acceptable to the
Administrative Agent, together with a letter from each preparer thereof
entitling the Administrative Agent and its successors and assigns to rely
upon such reports,




     (I) certified copies of each Management Agreement, and all amendments
thereto, entered into with respect to each of the Borrowing Base Assets,




     (J) certified copies of all Material Contracts relating to each of the
Borrowing Base Assets,




     (K) copies of all Liens on each of the Borrowing Base Assets,
including, without limitation, any reciprocal easement agreements, easements
and other items of record,




     (L) if requested by the Administrative Agent, estoppel certificates
from the counterparties to any reciprocal easement agreements affecting any
Borrowing Base Asset,




     (M) estoppel certificates and subordination, non-disturbance and
attornment agreements from retail tenants at each of the Borrowing Base
Assets where the annual rent under the applicable Tenancy Lease exceeds
$30,000 per annum,



61









 






     (N) a flood zone determination of each Borrowing Base Asset, and




     (O) such other consents, agreements and confirmations of lessors and
third parties as the Administrative Agent may deem necessary or desirable
and evidence that all other action that the Collateral Agent may deem
necessary or desirable in order to create valid first and subsisting Liens
on the property described in the Mortgages has been taken.




     (iv) This Agreement, duly executed by the Loan Parties and the other parties
thereto.




     (v) Certified copies of the resolutions of the Board of Directors of the Parent
Guarantor on its behalf and on behalf of each Loan Party for which it is the
ultimate signatory approving the transactions contemplated by the Loan Documents and
each Loan Document to which it or such Loan Party is or is to be a party, and of all
documents evidencing other necessary corporate action and governmental and other
third party approvals and consents, if any, with respect to the transactions under
the Loan Documents and each Loan Document to which it or such Loan Party is or is to
be a party.




     (vi) A copy of a certificate of the Secretary of State (or equivalent
authority) of the jurisdiction of incorporation, organization or formation of each
Loan Party and of each general partner, manager or managing member (if any) of each
Loan Party, dated reasonably near the Closing Date, certifying, if and to the extent
such certification is generally available for entities of the type of such Loan
Party, (A) as to a true and correct copy of the charter, certificate of limited
partnership, limited liability company agreement or other organizational document of
such Loan Party, general partner, manager or managing member, as the case may be,
and each amendment thereto on file in such Secretary’s office, (B) that (1) such
amendments are the only amendments to the charter, certificate of limited
partnership, limited liability company agreement or other organizational document,
as applicable, of such Loan Party, general partner, manager or managing member, as
the case may be, on file in such Secretary’s office, (2) such Loan Party, general
partner, manager or managing member, as the case may be, has paid all franchise
taxes to the date of such certificate and (C) such Loan Party, general partner,
manager or managing member, as the case may be, is duly incorporated, organized or
formed and in good standing or presently subsisting under the laws of the
jurisdiction of its incorporation, organization or formation.




     (vii) A copy of a certificate of the Secretary of State (or equivalent
authority) of each jurisdiction in which any Loan Party or any general partner,
manager or managing member of a Loan Party owns or leases property or in which the
conduct of its business requires it to qualify or be licensed as a foreign
corporation except where the failure to so qualify or be licensed could not



62









 







reasonably be expected to result in a Material Adverse Effect, dated reasonably
near (but prior to) the Closing Date, stating, with respect to each such Loan Party,
general partner, manager or managing member, that such Loan Party, general partner,
manager or managing member, as the case may be, is duly qualified and in good
standing as a foreign corporation, limited partnership or limited liability company
in such State and has filed all annual reports required to be filed to the date of
such certificate.




     (viii) A certificate of each Loan Party and of each general partner, manager or
managing member (if any) of each Loan Party, signed on behalf of such Loan Party,
general partner, manager or managing member, as applicable, by its President or a
Vice President and its Secretary or any Assistant Secretary (or those of its general
partner or managing member, if applicable), dated the Closing Date (the statements
made in which certificate shall be true on and as of the Closing Date), certifying
as to (A) the absence of any amendments to the constitutive documents of such Loan
Party, general partner, manager or managing member, as applicable, since the date of
the certificate referred to in Section 3.01(a)(vi), (B) a true and correct copy of
the bylaws, operating agreement, partnership agreement or other governing document
of such Loan Party, general partner, manager or managing member, as applicable, as
in effect on the date on which the resolutions referred to in Section 3.01(a)(v)
were adopted and on the Closing Date, (C) the due incorporation, organization or
formation and good standing or valid existence of such Loan Party, general partner,
manager or managing member, as applicable, as a corporation, limited liability
company or partnership organized under the laws of the jurisdiction of its
incorporation, organization or formation and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, general partner, manager or managing
member, as applicable, (D) the truth of the representations and warranties contained
in the Loan Documents and (E) the absence of any event occurring and continuing, or
resulting from the closing hereunder or the Advance made on the Closing Date, that
constitutes a Default.




     (ix) A certificate of the Secretary or an Assistant Secretary of each Loan
Party (or Responsible Officer of the general partner, manager or managing member of
any Loan Party) and of each general partner, manager or managing member (if any) of
each Loan Party certifying the names and true signatures of the officers of such
Loan Party, or of the general partner, manager or managing member of such Loan
Party, authorized to sign each Loan Document to which it is or is to be a party and
the other documents to be delivered hereunder and thereunder.




     (x) Such financial, business and other information regarding each Loan Party
and its Subsidiaries as the Lender Parties shall have requested, including, without
limitation, information as to possible contingent liabilities, tax matters,
environmental matters, obligations under Plans, Multiemployer Plans and Welfare
Plans, collective bargaining agreements and other arrangements with employees,
historical operating statements (if any), audited annual financial



63









 







statements for the year ending December 31, 2009, interim financial statements
dated the end of the most recent fiscal quarter for which financial statements are
available (or, in the event the Lender Parties’ due diligence review reveals
material changes since such financial statements, as of a later date within 45 days
of the Closing Date) and financial projections for the Parent Guarantor’s
consolidated operations.




     (xi) Evidence of insurance (which may consist of binders or certificates of
insurance) naming the Administrative Agent as loss payee and/or additional insured,
as applicable, with such responsible and reputable insurance companies or
associations, and in such amounts and covering such risks, as is satisfactory to the
Lender Parties, including, without limitation, the insurance required by the terms
of the Security Agreement and the Mortgages.




     (xii) An opinion of Greenberg Traurig LLP, New York counsel for the Loan
Parties, with respect to the matters (and in substantially the form) set forth in
Exhibit E-1 hereto and as to such other matters as any Lender Party through the
Administrative Agent may reasonably request.




     (xiii) An opinion of Bradley Arant Boult Cummings LLP, Delaware counsel for the
Loan Parties, with respect to the matters (and in substantially the form) set forth
in Exhibit E-2 hereto and as to such other matters as any Lender Party through the
Administrative Agent may reasonably request.




     (xiv) An opinion of Saul Ewing LLP, Maryland counsel for the Loan Parties, with
respect to the matters (and in substantially the form) set forth in Exhibit E-3
hereto and as to such other matters as any Lender Party through the Administrative
Agent may reasonably request.




     (xv) An opinion of local counsel for the Loan Parties (A) in the states in
which the Borrowing Base Assets are located, in substantially the form of Exhibit
E-4 hereto, and (B) in the states in which the Loan Parties are organized or formed,
in substantially the form of Exhibit E-4 hereto, in each case covering such other
matters as any Lender Party through the Administrative Agent may reasonably request.




     (xvi) An opinion of Sidley Austin llp, counsel for the Administrative
Agent, in form and substance satisfactory to the Administrative Agent.




     (xvii) A Notice of Borrowing or Notice of Issuance, as applicable, relating to
the Initial Extension of Credit.




     (xviii) A certificate signed by a Responsible Officer of the Borrower, dated
the Closing Date, stating that after giving effect to the Initial Extension of
Credit and the Formation Transactions, the Parent Guarantor shall be in compliance
with the covenants contained in Section 5.04 on a proforma basis as of the most
recent fiscal quarter end, together with supporting information in form



64









 







satisfactory to the Administrative Agent showing the computations used in
determining compliance with such covenants.




     (b) The Lender Parties shall be satisfied with the corporate and legal structure and
capitalization of each Loan Party and its Subsidiaries, including the terms and conditions
of the charter and bylaws, operating agreement, partnership agreement or other governing
document of each of them.




     (c) The Lender Parties shall be satisfied that all Existing Debt, other than Surviving
Debt, has been (or will be at the time of the Initial Extension of Credit) prepaid, redeemed
or defeased in full or otherwise satisfied and extinguished and that all Surviving Debt
shall be on terms and conditions satisfactory to the Lender Parties.




     (d) (i) The Administrative Agent shall have determined that the Formation Transactions
and the IPO shall have been, substantially concurrently with the execution of this
Agreement, consummated in accordance with the Registration Statement, (ii) the Parent
Guarantor shall have received gross cash proceeds from the IPO in an amount not less than
$300,000,000, and (iii) the common shares of the Parent Guarantor shall have been listed on
the New York Stock Exchange.




     (e) Before and after giving effect to the transactions contemplated by the Loan
Documents, there shall have occurred no material adverse change in the business, condition
(financial or otherwise), results of operations or prospects of the Loan Parties or any of
the Borrowing Base Assets included in the Collateral on the Closing Date since December 31,
2009.




     (f) There shall exist no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries pending or threatened before any court,
governmental agency or arbitrator that (i) could reasonably be expected to result in a
Material Adverse Effect other than the matters described on Schedule 4.01(f) hereto (the
“Material Litigation”) or (ii) purports to affect the legality, validity or enforceability
of any Loan Document or the consummation of the transactions contemplated thereby, and there
shall have been no adverse change in the status, or financial effect on any Loan Party or
any of its Subsidiaries, of the Material Litigation from that described on Schedule 4.01(f)
hereto.




     (g) All governmental and third party consents and approvals necessary in connection
with the transactions contemplated by the Loan Documents shall have been obtained (without
the imposition of any conditions that are not acceptable to the Lender Parties) and shall
remain in effect, and no law or regulation shall be applicable in the reasonable judgment of
the Lender Parties that restrains, prevents or imposes materially adverse conditions upon
the transactions contemplated by the Loan Documents.




     (h) The Borrower shall have entered into the Hedge Agreements required under Section
5.01(o) to the extent any are required by such Section, and shall have provided satisfactory
evidence of the same to the Administrative Agent.



65









 






     (i) The Borrower shall have paid all accrued fees of the Agents and the Lender Parties
required under this Agreement and all reasonable, out-of-pocket expenses of the Agents
(including the reasonable fees and expenses of counsel to the Administrative Agent).



          SECTION 3.02. Conditions Precedent to Each Borrowing, Issuance, Renewal, Extension and
Increase. The obligation of each Lender to make an Advance (other than a Letter of Credit
Advance made by an Issuing Bank or a Lender pursuant to Section 2.03(c) and a Swing Line Advance
made by a Lender pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the
initial Borrowing) and the obligation of each Issuing Bank to issue a Letter of Credit (including
the initial issuance) or renew a Letter of Credit, the extension of Commitments pursuant to Section
2.16 and the right of the Borrower to request a Swing Line Borrowing or a Commitment Increase shall
be subject to the satisfaction of the conditions set forth in Section 3.01 (to the extent not
previously satisfied pursuant to that Section) and such further conditions precedent that on the
date of such Borrowing, issuance, renewal, extension or increase (a) the following statements shall
be true and the Administrative Agent shall have received for the account of such Lender, the Swing
Line Bank or such Issuing Bank (w) a Notice of Borrowing or Notice of Issuance, as applicable, and
a Borrowing Base Certificate, in each case dated the date of such Borrowing, issuance, renewal,
extension or increase and, in the case of the Borrowing Base Certificate, demonstrating that the
Facility Exposure that will be outstanding after giving effect to such Advance, issuance or
renewal, respectively, will not exceed the lesser of (i) the Total Borrowing Base Value as of such
date and (ii) the amount that would have a Borrowing Base Debt Service Coverage Ratio of not less
than 1.50:1.00 (in each case calculated on a pro forma basis after giving effect to such Borrowing
or issuance), (x) all Collateral Deliverables and all items described in the definition of “BBA
Proposal Package” herein (to the extent not previously delivered with respect to each Borrowing
Base Asset pursuant to Section 5.01(k) or this Section 3.02), (y) in the case of an addition of any
Person as an Additional Guarantor, all Guarantor Deliverables (to the extent not previously
delivered pursuant to Section 5.01(k) or this Section 3.02), and (z) a certificate signed by a
Responsible Officer of the Borrower, dated the date of such Borrowing, issuance, renewal, extension
or increase, stating that:





     (i) the representations and warranties contained in each Loan Document are true and
correct in all material respects on and as of such date (except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date), before and after giving effect to (A) such
Borrowing, issuance, renewal, extension or increase, and (B) in the case of any Borrowing or
issuance or renewal, the application of the proceeds therefrom, as though made on and as of
such date;




     (ii) no Default or Event of Default has occurred and is continuing, or would result
from (A) such Borrowing, issuance, renewal, extension or increase or (B) in the case of any
Borrowing or issuance or renewal, from the application of the proceeds therefrom; and




     (iii) for each Revolving Credit Advance, or Swing Line Advance made by the Swing Line
Bank or issuance or renewal of any Letter of Credit, (A) the Facility



66









 







Exposure that will be
outstanding after giving effect to such Advance, issuance or
renewal, respectively, will not exceed the lesser of (i) the Total Borrowing Base Value
as of such date and (ii) the amount that would have a Borrowing Base Debt Service Coverage
Ratio of not less than 1.50:1.00 and (B) before and after giving effect to such Advance,
issuance or renewal, the Parent Guarantor shall be in compliance with the covenants
contained in Section 5.04, together with supporting information in form satisfactory to the
Administrative Agent showing the computations used in determining compliance with such
covenants;


and (b) the Administrative Agent shall have received such other approvals, opinions or documents as
any Lender Party through the Administrative Agent may reasonably request.




          SECTION 3.03. Determinations Under Section 3.01 and 3.02. For purposes of determining
compliance with the conditions specified in Sections 3.01 and 3.02, each Lender Party shall be
deemed to have consented to, approved or accepted or to be satisfied with each document or other
matter required thereunder to be consented to or approved by or acceptable or satisfactory to the
Lender Parties unless an officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender Party prior to the
Initial Extension of Credit, Borrowing, issuance, renewal, extension or increase, as applicable,
specifying its objection thereto and, if the requested action consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender Party’s ratable portion
of such Borrowing.




ARTICLE IV

REPRESENTATIONS AND WARRANTIES




          SECTION 4.01. Representations and Warranties of the Loan Parties. Each Loan Party
represents and warrants as follows:





     (a) Organization and Powers; Qualifications and Good Standing. Each Loan Party
and each of its Subsidiaries and each general partner, manager or managing member, if any,
of each Loan Party (i) is a corporation, limited liability company or partnership duly
incorporated, organized or formed, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, organization or formation, (ii) is duly qualified and
in good standing as a foreign corporation, limited liability company or partnership in each
other jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so qualify or
be licensed could not reasonably be expected to result in a Material Adverse Effect and
(iii) has all requisite corporate, limited liability company or partnership power and
authority (including, without limitation, all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted. All of the outstanding Equity Interests in the
Borrower have been validly issued, are fully paid and non-assessable. The Parent Guarantor
directly or indirectly owns all of the general partnership interests in the Borrower. All
Equity Interests in the Borrower that are directly or indirectly owned by the Parent
Guarantor are owned free and clear of all Liens. The Parent Guarantor is organized in
conformity with the requirements for qualification as a REIT under the



67









 







Internal Revenue Code, and its proposed method of operation enables it to meet the
requirements for qualification and taxation as a REIT under the Internal Revenue Code.




     (b) Subsidiaries. Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the date hereof (as to
each such Subsidiary) the jurisdiction of its incorporation, organization or formation, the
number of shares (or the equivalent thereof) of each class of its Equity Interests
authorized, and the number outstanding, on the date hereof and the percentage of each such
class of its Equity Interests owned (directly or indirectly) by such Loan Party and the
number of shares (or the equivalent thereof) covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the date hereof. All of the
outstanding Equity Interests in each Loan Party’s Subsidiaries has been validly issued, are
fully paid and non-assessable and to the extent owned by such Loan Party or one or more of
its Subsidiaries, are owned by such Loan Party or Subsidiaries free and clear of all Liens
(except as created by the Loan Documents).




     (c) Due Authorization; No Conflict. The execution and delivery by each Loan
Party and each general partner, manager or managing member (if any) of each Loan Party of
each Loan Document to which it is or is to be a party, and the performance of its
obligations thereunder, and the consummation of the IPO, the Formation Transactions and the
other transactions contemplated by the Loan Documents, are within the corporate, limited
liability company or partnership powers of such Loan Party, general partner, manager or
managing member, have been duly authorized by all necessary corporate, limited liability
company or partnership action, and do not (i) contravene the charter or bylaws, operating
agreement, partnership agreement or other governing document of such Loan Party, general
partner, manager or managing member, (ii) violate any law, rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or
result in the breach of, or constitute a default or require any payment (except for payments
that will be made at the time of consummation of the IPO and the Formation Transactions) to
be made under, any Material Contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or
any of their properties, or any general partner, manager or managing member of any Loan
Party or (iv) except for the Liens created under the Loan Documents, result in or require
the creation or imposition of any Lien upon or with respect to any of the properties of any
Loan Party or any of its Subsidiaries. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation or breach of which could
reasonably be expected to result in a Material Adverse Effect.




     (d) Authorizations and Consents. No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution, delivery, recordation, filing or
performance by any Loan Party or any general partner, manager or managing member of any Loan
Party of any Loan Document to which it is or is to be a party or for the



68









 







consummation of the IPO, the Formation Transactions or the other transactions
contemplated by the Loan Documents, (ii) the grant by any Loan Party (or the general partner
or managing member of such Loan Party) of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created under the Collateral
Documents (including the first priority nature thereof) or (iv) the exercise by any Agent,
the Collateral Agent or any Lender Party of its rights under the Loan Documents or the
remedies in respect of the Collateral pursuant to the Collateral Documents, except, in each
case, for authorizations, approvals, actions, notices and filings which have been duly
obtained, taken, given or made and are in full force and effect.




     (e) Binding Obligation. This Agreement has been, and each other Loan Document
when delivered hereunder will have been, duly executed and delivered by each Loan Party and
general partner, manager or managing member (if any) of each Loan Party party thereto. This
Agreement is, and each other Loan Document when delivered hereunder will be, the legal,
valid and binding obligation of each Loan Party and general partner, manager or managing
member (if any) of each Loan Party party thereto, enforceable against such Loan Party,
general partner, manager or managing member, as the case may be, in accordance with its
terms.




     (f) Litigation. There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries or any general partner,
manager or managing member (if any) of any Loan Party, including any Environmental Action,
pending or threatened before any court, governmental agency or arbitrator that (i) could
reasonably be expected to result in a Material Adverse Effect (other than the Material
Litigation) or (ii) purports to affect the legality, validity or enforceability of any Loan
Document or the consummation of the IPO, the Formation Transactions or the other
transactions contemplated by the Loan Documents, and there has been no adverse change in the
status, or financial effect on any Loan Party or any of its Subsidiaries or any general
partner, manager or managing member (if any) of any Loan Party, of the Material Litigation
from that described on Schedule 4.01(f) hereto.




     (g) Financial Condition. The Consolidated balance sheets of the Parent
Guarantor and its Subsidiaries as of December 31, 2009 and the related Consolidated
statements of income and Consolidated statements of cash flows of the Parent Guarantor and
its Subsidiaries for the fiscal year then ended, accompanied by unqualified opinions of KPMG
LLP, independent public accountants and the Consolidated balance sheets of the Parent
Guarantor and its Subsidiaries as at June 30, 2010, and the related Consolidated statements
of income and Consolidated statements of cash flows of the Parent Guarantor and its
Subsidiaries for the six (6) months then ended, copies of which have been furnished to each
Lender Party, fairly present, subject, in the case of such balance sheets as at June 30,
2010, and such statements of income and cash flows for the six (6) months then ended, to
year end audit adjustments, the Consolidated financial condition of the Parent Guarantor and
its Subsidiaries as at such dates and the Consolidated results of operations of the Parent
Guarantor and its Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis. Since December 31,
2009, there has been



69









 







(i) with respect to the period prior to the Closing Date, no material adverse change in the
business, condition (financial or otherwise), results of operations or prospects of the
Parent Guarantor and its Subsidiaries or any of the Borrowing Base Assets included in the
Collateral on the Closing Date, and (ii) with respect to any period after the Closing Date,
no Material Adverse Change.




     (h) Forecasts. The Consolidated forecasted balance sheets, statements of
income and statements of cash flows of the Parent Guarantor and its Subsidiaries delivered
to the Lender Parties pursuant to Section 3.01(a)(x) and 5.03 were prepared in good faith on
the basis of the assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and represented, at the time
of delivery, the Parent Guarantor’s best estimate of its future financial performance.




     (i) Full Disclosure. No information, exhibit or report furnished by or on
behalf of any Loan Party to any Agent or any Lender Party in connection with the negotiation
and syndication of the Loan Documents or pursuant to the terms of the Loan Documents
contained any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading. The Loan Parties have
disclosed to the Administrative Agent, in writing, any and all existing facts known to the
Loan Parties that have or may have (to the extent any of the Loan Parties can now reasonably
foresee) a Material Adverse Effect.




     (j) Margin Regulations. No Loan Party owns any Margin Stock or is engaged in
the business of extending credit for the purpose of purchasing or carrying Margin Stock, and
no proceeds of any Advance or drawings under any Letter of Credit will be used to purchase
or carry any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock.




     (k) Certain Governmental Regulations. Neither any Loan Party nor any of its
Subsidiaries nor any general partner, manager or managing member of any Loan Party, as
applicable, is an “investment company”, or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company”, as such terms are defined in the
Investment Company Act of 1940, as amended. Without limiting the generality of the
foregoing, each Loan Party and each of its Subsidiaries and each general partner, manager or
managing member of any Loan Party, as applicable: (i) is primarily engaged, directly or
through a wholly-owned subsidiary or subsidiaries, in a business or businesses other than
that of (A) investing, reinvesting, owning, holding or trading in securities or (B) issuing
face-amount certificates of the installment type; (ii) is not engaged in, does not propose
to engage in and does not hold itself out as being engaged in the business of (A) investing,
reinvesting, owning, holding or trading in securities or (B) issuing face-amount
certificates of the installment type; (iii) does not own or propose to acquire investment
securities (as defined in the Investment Company Act of 1940, as amended) having a value
exceeding forty percent (40%) of the value of such company’s total assets (exclusive of
government securities and cash items) on an unconsolidated basis; (iv) has not in the past
been engaged in the business of issuing face-amount certificates of the installment type;
and (v) does not have any outstanding face-amount certificates of the



70









 







installment type. Neither the making of any Advances, nor the issuance of any Letters
of Credit, nor the application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated by the Loan Documents, will violate any
provision of any such Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.




     (l) Materially Adverse Agreements. Neither any Loan Party nor any of its
Subsidiaries is a party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter, corporate, partnership, membership or
other governing restriction that could reasonably be expected to result in a Material
Adverse Effect.




     (m) Perfection and Priority of Security Interests. All filings and other
actions necessary to perfect and protect the security interest in the Collateral created
under the Collateral Documents have been duly made or taken and are in full force and
effect, and the Collateral Documents create in favor of the Administrative Agent for the
benefit of the Secured Parties a valid and, together with such filings and other actions,
perfected first priority security interest in the Collateral (subject only to the Permitted
Liens), securing the payment of the Secured Obligations, and all filings and other actions
necessary or desirable to perfect and protect such security interest have been duly taken.
The Loan Parties are the legal and beneficial owners of the Collateral free and clear of any
Lien, except for Permitted Liens.




     (n) Existing Debt. Set forth on Schedule 4.01(n) hereto is a complete and
accurate list of all Existing Debt (other than Surviving Debt), showing as of the date
hereof the obligor and the principal amount outstanding thereunder immediately prior to the
Closing Date.




     (o) Surviving Debt. Set forth on Schedule 4.01(o) hereto is a complete and
accurate list of all Surviving Debt, showing as of the date hereof the obligor and the
principal amount outstanding thereunder, the maturity date thereof and the amortization
schedule therefor.




     (p) Liens. Set forth on Schedule 4.01(p) hereto is a complete and accurate
list of (i) all Liens on the property or assets of any Loan Party or any of its Subsidiaries
that directly or indirectly own any Borrowing Base Asset (other than Permitted Liens), and
(ii) all Liens on the property or assets of any Loan Party or any of its Subsidiaries
securing Debt for Borrowed Money (other than Permitted Liens); in each case showing as of
the date hereof the lienholder thereof, the principal amount of the obligations secured
thereby and the property or assets of such Loan Party or such Subsidiary subject thereto.




     (q) Real Property; Tenancy Leases. (i) Set forth on Part I of Schedule 4.01(q)
hereto is a complete and accurate list of all Real Property owned in fee or as a leasehold
estate by any Loan Party or any of its Subsidiaries, showing as of the date hereof, and as
of each other date such Schedule 4.01(q) is required to be supplemented hereunder, the
street address, state, record owner and book value thereof. Each such Loan Party or



71









 







Subsidiary has good, marketable and insurable fee simple or leasehold title to such
Real Property, free and clear of all Liens, other than Permitted Liens.




     (ii) The Borrower has delivered to the Administrative Agent a true, correct and
complete copy of the current form of residential Tenancy Lease for each Borrowing
Base Asset, and true, correct and complete copies of any non-residential Tenancy
Leases and any amendments thereto relating to each Borrowing Base Asset as of the
date hereof. An accurate and complete rent roll as of the date of inclusion of each
Borrowing Base Asset in the Collateral with respect to all Tenancy Leases of any
portion of the Borrowing Base Asset has been provided to the Administrative Agent.
The Tenancy Leases described in the preceding sentence constitute as of the date
thereof the sole agreements relating to leasing or licensing of space at such
Borrowing Base Asset and in the buildings relating thereto. No tenant under any
Tenancy Lease is entitled to any free rent, partial rent, rebate of rent payments,
credit, offset or deduction in rent, including, without limitation, lease support
payments or lease buy-outs, except as reflected in such Tenancy Leases or as
disclosed to the Administrative Agent in writing by the Borrower. The Tenancy
Leases reflected on the rent rolls delivered to the Administrative Agent are, as of
the date of inclusion of the applicable Borrowing Base Asset in the Collateral, in
full force and effect in accordance with their respective terms. There is no
payment default or any other material default under such Tenancy Leases, nor, to
Borrower’s knowledge, are there any defenses, counterclaims or offsets available to
any tenant thereunder which in either case is reasonably likely to have a Material
Adverse Effect. No property other than the Borrowing Base Asset which is the
subject of the applicable Tenancy Lease (and any adjacent property burdened by
insurable, permanent easements which may benefit the Borrowing Base Asset and are in
full force and effect) is necessary to comply with the requirements (including,
without limitation, parking requirements) contained in such Tenancy Lease.




     (iii) Each Borrowing Base Asset is operated and managed by an Approved Manager
pursuant to a Management Agreement listed on Part II of Schedule 4.01(q).




     (iv) Each Borrowing Base Asset satisfies all Borrowing Base Conditions.




     (r) Environmental Matters. (i) Except as otherwise set forth on Part I of
Schedule 4.01(r) hereto, the operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable Environmental Laws and
Environmental Permits, all past material non-compliance with such Environmental Laws and
Environmental Permits has been resolved without ongoing material obligations or costs, and,
to the knowledge of each Loan Party and its Subsidiaries, no circumstances exist that could
be reasonably likely to (A) form the basis of an Environmental Action against any Loan Party
or any of its Subsidiaries or any of their properties that could have a Material Adverse
Effect or (B) cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.



72









 






     (ii) Except as otherwise set forth on Part II of Schedule 4.01(r) hereto, none
of the properties currently or formerly owned or operated by any Loan Party or any
of its Subsidiaries is listed or, to the knowledge of each Loan Party and its
Subsidiaries, proposed for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list or is adjacent to any such listed property; there are
no underground or above ground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been
treated, stored or disposed on any property currently owned or operated by any Loan
Party or any of its Subsidiaries; there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan Party or any of its
Subsidiaries except for any non-friable asbestos-containing material that is being
managed pursuant to, and in compliance with, an operations and maintenance plan and
that does not currently require removal, remediation, abatement or encapsulation
under Environmental Law; and, to the knowledge of each Loan Party and its
Subsidiaries, Hazardous Materials have not been released, discharged or disposed of
in any material amount or in violation of any Environmental Law or Environmental
Permit on any property currently owned or operated by any Loan Party or any of its
Subsidiaries or, to the knowledge of each Loan Party and its Subsidiaries, during
the period of their ownership or operation thereof, on any property formerly owned
or operated by any Loan Party or any of its Subsidiaries.




     (iii) Except as otherwise set forth on Part III of Schedule 4.01(r) hereto,
neither any Loan Party nor any of its Subsidiaries is undertaking, nor has any Loan
Party or any of its Subsidiaries completed, either individually or together with
other potentially responsible parties, any investigation or assessment or remedial
or response action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or regulatory authority or
the requirements of any Environmental Law; all Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any property currently or
formerly owned or operated by any Loan Party or any of its Subsidiaries have been
disposed of in a manner not reasonably expected to result in a Material Adverse
Effect; and, with respect to any property formerly owned or operated by any Loan
Party or any of its Subsidiaries, all Hazardous Materials generated, used, treated,
handled, stored or transported by or, to the knowledge of each Loan Party and its
Subsidiaries, on behalf of any Loan Party or any of its Subsidiaries have been
disposed of in a manner that could not reasonably be expected to result in a
Material Adverse Effect.




     (iv) Except as set forth on Part IV of Schedule 4.01(r),
neither any Loan Party nor any of its Subsidiaries nor the Real Property is subject
to any applicable Environmental Law requiring the performance of Hazardous Materials
site assessments, or the removal or remediation of Hazardous Materials, or the
giving of notice to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement in each case by virtue
of the transactions set forth herein and contemplated hereby, or as a



73









 







condition to the recording of the Mortgages or to the effectiveness of any
other transactions contemplated hereby except for such matters that shall be
complied with as of the Closing Date.




     (s) Compliance with Laws. Each Loan Party and each Subsidiary is in compliance
with the requirements of all laws, rules and regulations (including, without limitation, the
Securities Act and the Securities Exchange Act, and the applicable rules and regulations
thereunder, state securities law and “Blue Sky” laws) applicable to it and its business,
where the failure to so comply could reasonably be expected to result in a Material Adverse
Effect.




     (t) Force Majeure. Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are currently affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (whether or not covered by insurance) that could
reasonably be expected to result in a Material Adverse Effect.




     (u) Loan Parties’ Credit Decisions. Each Loan Party has, independently and
without reliance upon the Administrative Agent or any other Lender Party and based on such
documents and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement (and in the case of the Guarantors, to give the
guaranty under this Agreement) and each other Loan Document to which it is or is to be a
party, and each Loan Party has established adequate means of obtaining from each other Loan
Party on a continuing basis information pertaining to, and is now and on a continuing basis
will be completely familiar with, the business, condition (financial or otherwise),
operations, performance, properties and prospects of such other Loan Party.




     (v) Solvency. Each Loan Party is, individually and together with its
Subsidiaries, Solvent.




     (w) Sarbanes-Oxley. No Loan Party has made any extension of credit to any of
its directors or executive officers in contravention of any applicable restrictions set
forth in Section 402(a) of Sarbanes-Oxley.




     (x) ERISA Matters. (i) Set forth on Schedule 4.01(x) hereto is a complete and
accurate list of all Plans and Welfare Plans.




     (ii) No ERISA Event has occurred within the preceding five plan years or is
reasonably expected to occur with respect to any Plan that has resulted in or is
reasonably expected to result in a material liability of any Loan Party or any ERISA
Affiliate.




     (iii) Any Schedule B (Actuarial Information) to the most recent annual report
(Form 5500 Series) for each Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Lender Parties, is complete and accurate and
fairly presents the funding status of such Plan as of the date of such Schedule B,
and since the date of any such Schedule B there has been no material adverse change
in such funding status.



74









 






     (iv) Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan.




     (v) Neither any Loan Party nor any ERISA Affiliate has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA, and no such
Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA.




     (y) Borrowing Base Assets.




     (i) Each of the Mortgages, when properly recorded in the appropriate records,
creates a valid, perfected first lien on the respective Borrowing Base Asset,
subject only to Permitted Liens. The Loan Parties are the legal and beneficial
owners of the Borrowing Base Assets, free and clear of any Lien, except for
Permitted Liens described in clauses (a), (b), (d), (e) and (f) of the definition of
“Permitted Liens”. Each of the Borrowing Base Assets satisfies the requirements in
this Agreement to being a Borrowing Base Asset. There are no proceedings in
condemnation or eminent domain affecting any of the Borrowing Base Assets and, to
the knowledge of each Loan Party, none is threatened. No Person has any option or
other right to purchase all or any portion of any of the Borrowing Base Assets or
any interest therein.




     (ii) To the knowledge of each Loan Party and except as may be disclosed in the
zoning reports and property condition reports delivered to the Administrative Agent,
(i) the Borrowing Base Assets and the use thereof comply in all material respects
with all applicable zoning, subdivision and land use laws, regulations and
ordinances, all applicable health, fire, building codes, parking laws and all other
laws, statutes, codes, ordinances, rules and regulations applicable to the Borrowing
Base Assets, or any of them, including without limitation the Americans with
Disabilities Act; (ii) all permits, licenses and certificates for the lawful use,
occupancy and operation of each component of each of the Borrowing Base Assets in
the manner in which it is currently being used, occupied and operated, including,
but not limited to certificates of occupancy, or the equivalent, have been obtained
and are current and in full force and effect; (iii) no legal proceedings are pending
or, to the knowledge of each Loan Party, threatened with respect to the zoning of
any Borrowing Base Asset; and (iv) neither the zoning nor any other right to
construct, use or operate any Borrowing Base Asset is in any way dependent upon or
related to any real estate other than such Borrowing Base Asset in any way that has
had or is reasonably likely to give rise to a materially adverse effect as to the
value, use of or ability to sell or finance such Borrowing Base Asset.




     (iii) The Loan Parties have delivered to the Administrative Agent a true and
complete copy of each of the Management Agreements and Material Contracts to which
they are a party that will be in effect on the Closing Date, and



75









 







such Management Agreements and Material Contracts have not been modified or
amended except pursuant to amendments or modifications delivered to Administrative
Agent. Such Management Agreements and Material Contracts are in full force and
effect and no default by any of the Loan Parties or Approved Managers exists
thereunder. Except for the rights of (x) each of the Approved Managers pursuant to
any Management Agreements and (y) third-party vendors (including, without
limitation, landscapers, ATM lessors, vending machine lessors and the like), no
Person has any right or obligation to manage any of the Borrowing Base Assets or to
receive compensation in connection with such management. Except for the parties to
any leasing brokerage agreement that has been delivered to the Administrative Agent
and community assistants who are paid a minimal referral fee for residential Tenancy
Leases they obtain, no Person has any right or obligation to lease or solicit
tenants for any of the Borrowing Base Assets, or (except for cooperating outside
brokers) to receive compensation in connection with such leasing.




     (iv) To each Loan Party’s knowledge, all improvements on any Borrowing Base
Asset, including without limitation the roof and all structural components, plumbing
systems, HVAC systems, fire protection systems, electrical systems, equipment,
elevators, exterior doors, parking facilities, sidewalks and landscaping, are in
good condition and repair, subject to normal wear and tear and necessary repairs in
the ordinary course of business. The Loan Parties are not aware of any latent or
patent structural or other material defect in any of the Borrowing Base Assets and,
to the Loan Parties’ knowledge, city water supply, storm and sanitary sewers, and
electrical, gas (if applicable) and telephone facilities are available to each of
the Borrowing Base Assets within the boundary lines of each of the Borrowing Base
Assets (except in any way that has not had and is reasonably likely to not give rise
to a materially adverse effect as to the value, use of or ability to sell or finance
such Borrowing Base Asset), are fully connected to the improvements and are fully
operational, are sufficient to meet the reasonable needs of each of the Borrowing
Base Assets as now used or presently contemplated to be used, and no other utility
facilities are necessary to meet the reasonable needs of any of the Borrowing Base
Assets as now used or presently contemplated. Except in any way that has not had
and is reasonably likely to not give rise to a materially adverse effect as to the
value, use of or ability to sell or finance such Borrowing Base Asset, no part of
any of the Borrowing Base Assets is within a flood plain and none of the
improvements thereon create encroachments over, across or upon any of the Borrowing
Base Assets’ boundary lines, rights of way or easements, and no building or other
improvements on adjoining land create such an encroachment which could reasonably be
expected to have a Material Adverse Effect. All public roads and streets necessary
for service of and access to each of the Borrowing Base Assets for the current and
contemplated uses thereof have been completed and are serviceable and are physically
and legally open for use by the public. To the Loan Parties’ knowledge after due
inquiry, any septic system located at any of the Borrowing Base Assets is in good
and safe condition and repair and in compliance with all applicable law in all
material respects.




76












 






     (v) Each of the Borrowing Base Assets is comprised of one (1) or more
parcels which constitute separate tax lots. No part of any of the Borrowing Base
Assets is included or assessed under or as part of another tax lot or parcel, and no
part of any other property is included or assessed under or as part of the tax lots
or parcels comprising any of the Borrowing Base Assets.




     (vi) Neither the Borrower nor any of the Guarantors has received any
outstanding notice from any insurer or its agent requiring performance of any work
with respect to any of the Borrowing Base Assets or canceling or threatening to
cancel any policy of insurance, and each of the Borrowing Base Assets complies with
the material requirements of all of the Borrower’s and the Guarantor’s insurance
carriers.




     (z) Ground Lease (Mobile). (i) The Ground Lease (Mobile) contains the entire
agreement of the Ground Lessor (Mobile) and the applicable Loan Party pertaining to the
Ground Leased Property (Mobile) covered thereby. The Loan Parties have no estate, right,
title or interest in or to the Ground Leased Property (Mobile) except under and pursuant to
the Ground Lease (Mobile). The Loan Parties have delivered a true and correct copy of the
Ground Lease (Mobile) to the Administrative Agent and the Ground Lease (Mobile) has not been
modified, amended or assigned (except as referenced in the definition of Ground Lease
(Mobile)) and except as assigned as collateral for the Existing Debt secured by the Ground
Leased Property (Mobile) which is being repaid.




     (ii) To the knowledge of each Loan Party, the party identified as the master
lessor and landlord in the definition of Ground Lessor (Mobile) is the exclusive fee
simple owner of the Ground Leased Property (Mobile), subject only to the Ground
Lease (Mobile) and Liens and other matters disclosed in the applicable Mortgage
Policy for the Campus Housing Asset subject to the Ground Lease (Mobile). To the
knowledge of each Loan Party, the party identified as the master lessor and landlord
in the definition of Ground Lessor (Mobile) is the sole owner of the master lessor’s
interest in the Ground Lease (Mobile) and the party identified as sub-ground lessor
in the definition of Ground Lease (Mobile) is the sole owner of the sub-ground
lessor’s interest in the Ground Lease (Mobile).




     (iii) There are no rights to terminate the Ground Lease (Mobile) other than the
rights expressly set forth in the Ground Lease (Mobile).




     (iv) The Ground Lease (Mobile) is in full force and effect and, to the
knowledge of each Loan Party, no breach or default or event that with the giving of
notice or passage of time would constitute a breach or default under the Ground
Lease (Mobile) (a “Ground Lease (Mobile) Default”) exists on the part of the Loan
Parties or on the part of the Ground Lessor (Mobile) under the Ground Lease
(Mobile). All base rent and additional rent due and payable under the Ground Lease
(Mobile) has been paid through the date hereof and the Loan Parties are not required
to pay any deferred or accrued rent after the date hereof under the Ground Lease
(Mobile). The Loan Parties have not received any written notice that a Ground Lease
Default (Mobile) has occurred or exists



77









 







(except for matters which have been resolved to the mutual satisfaction of the
parties to the Ground Lease (Mobile)).




     (v) Campus Crest at Mobile Phase II, LLC is the exclusive owner of the
sub-ground lessee’s interest under and pursuant to the Ground Lease (Mobile) and has
not assigned, transferred or encumbered its interest in, to, or under the Ground
Lease (Mobile) (except as collateral for the Existing Debt secured by the Ground
Leased Property (Mobile) which has been repaid).




     (aa) No Prohibited Persons. Neither any Loan Party nor any of their respective
officers, directors, partners, members, Affiliates or, to the knowledge of the Loan Parties,
shareholders is an entity or person: (i) that is listed in the Annex to, or is otherwise
subject to the provisions of Executive Order 13224 issued on September 24, 2001 (“EO13224”);
(ii) whose name appears on the United States Treasury Department’s Office of Foreign Assets
Control (“OFAC”) most current list of “Specifically Designated National and Blocked Persons”
(which list may be published from time to time in various mediums including, but not limited
to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); (iii) who commits, threatens to
commit or supports “terrorism”, as that term is defined in EO 13224; or (iv) who is
otherwise affiliated with any entity or person listed above (any and all parties or persons
described in clauses (i) through (iv) above are herein referred to as a “Prohibited
Person”).




     (bb) Setoff, Etc. The Collateral and the rights of the Administrative Agent
and the Lenders with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses by the Guarantors, Borrower or any of its Subsidiaries or
Affiliates or, to the best knowledge of Borrower, any other Person other than Permitted
Liens.




     (cc) Franchises, Patents, Copyrights, Etc. The Borrower, the Guarantors and
their respective Subsidiaries possess all franchises, patents, copyrights, trademarks, trade
names, service marks, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of their business substantially as now conducted without known conflict with
any rights of others except with respect to Subsidiaries of Borrower that are not the owners
of the Borrowing Base Assets where such failure individually or in the aggregate has not had
and could not reasonably be expected to have a Material Adverse Effect.




     (dd) Affiliate Ground Leases. With respect to each Affiliate Ground Lease,
(a) the Affiliate Ground Lease or a memorandum thereof has been duly recorded, the Affiliate
Ground Lease permits the interest of the lessee thereunder to be encumbered by the Mortgage,
there has not been a change in the terms of the Affiliate Ground Lease since its
recordation, except for written modifications delivered to Administrative Agent, and
Borrower has delivered to Administrative Agent a true, accurate and complete copy of the
Affiliate Ground Lease; (b) except for the Permitted Encumbrances (as defined in the
Mortgage) and Permitted Liens, the Subsidiary Guarantor’s interest in the Affiliate Ground
Lease is not subject to any Liens superior to, or of equal priority with, the Mortgage; (c)
there are no outstanding options to purchase or rights of first refusal with



78









 







respect to the Real Property except those granted to the Subsidiary Guarantor under the
express terms of the Affiliate Ground Lease; (d) the Subsidiary Guarantor’s interest in the
Affiliate Ground Lease is assignable to Administrative Agent upon notice to, but without the
consent of, the ground lessor thereunder (or if such consent is required, it has been
obtained prior to or concurrently herewith); (e) the Affiliate Ground Lease is in full force
and effect, no default exists under the Affiliate Ground Lease, and there is no existing
condition which, but for the passage of time or the giving of notice (or both), would result
in a default under the terms of the Affiliate Ground Lease; (f) the Affiliate Ground Lease
requires the ground lessor thereunder to give notice of any default by the Subsidiary
Guarantor to any mortgagee, and it provides that any notice of termination given under the
Affiliate Ground Lease is not effective against such mortgagee unless a copy of the notice
has been delivered to the mortgagee in the manner described in the Affiliate Ground Lease;
(g) Administrative Agent is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the Subsidiary Guarantor’s interest under the
Affiliate Ground Lease) to cure any default under the Affiliate Ground Lease, which is
curable after the receipt of notice of the default before the ground lessor thereunder may
terminate the Affiliate Ground Lease; (h) the Affiliate Ground Lease has a term which
extends not less than twenty (20) years beyond the Termination Date (including the exercise
of all extension options); (i) the Affiliate Ground Lease requires the ground lessor
thereunder to enter into a new lease upon termination of the Affiliate Ground Lease for any
reason, including rejection of the Affiliate Ground Lease in a bankruptcy proceeding,
provided that Administrative Agent cures any defaults that are susceptible to being cured;
(j) the Affiliate Ground Lease permits the use of the proceeds of any casualty or
condemnation at the Real Property for either (A) the restoration of the Real Property (and
in such case permits such restoration proceeds to be held and disbursed by Administrative
Agent or its designee), or (B) the repayment of the Advances; (k) the Affiliate Ground Lease
permits subleasing of the Real Property by a mortgagee, subject only to the reasonable
approval of the ground lessor; (l) the Affiliate Ground Lease provides that no amendments,
cancellations, alterations, surrender, or modifications thereof may become effective without
the consent of Administrative Agent; and (m) the Advances are also secured by the related
fee interest in the Real Property and upon the occurrence of an Event of Default,
Administrative Agent, as mortgagee, has the right to foreclose or otherwise exercise its
rights with respect to the fee interest within a commercially reasonable time.



ARTICLE V

COVENANTS OF THE LOAN PARTIES




          SECTION 5.01. Affirmative Covenants. So long as any Advance or any other Obligation
of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, each Loan Party will:





     (a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects, with all applicable laws, rules, regulations and orders
(such compliance to include, without limitation, compliance with ERISA and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime Control



79









 







Act of 1970); provided, however, that the failure to comply with the
provisions of this Section 5.01(a) shall not constitute a default hereunder so long as such
noncompliance is the subject of a Good Faith Contest.




     (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its property and (ii)
all lawful claims that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither the Loan Parties nor any of their Subsidiaries shall be required to
pay or discharge any such tax, assessment, charge or claim that is the subject of a Good
Faith Contest, unless and until any Lien resulting therefrom attaches to its property and
becomes enforceable against its other creditors.




     (c) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its properties to
comply, in all material respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew and cause each of its Subsidiaries to obtain and renew all
Environmental Permits necessary for its operations and properties; and conduct, and cause
each of its Subsidiaries to conduct, any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove and clean up
all Hazardous Materials from any of its properties in material compliance with the
requirements of all Environmental Laws; provided, however, that neither the Loan Parties nor
any of their Subsidiaries shall be required to undertake any such cleanup, removal, remedial
or other action to the extent that its obligation to do so is the subject of a Good Faith
Contest.




     (d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance (including, with respect to the Borrowing Base Assets, the insurance
required by the terms of the Mortgages) with responsible and reputable insurance companies
or associations in such amounts and covering such risks as is usually carried by companies
engaged in similar businesses and owning similar properties in the same general areas in
which such Loan Party or such Subsidiaries operate, but in no event shall such amounts be
lower or coverages be less comprehensive than the respective insurance amounts and coverages
maintained by the Borrower and its Subsidiaries on the Closing Date approved by the
Administrative Agent.




     (e) Preservation of Partnership or Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its existence
(corporate or otherwise), legal structure, legal name, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises, unless, in the case of Subsidiaries
of the Borrower only, in the reasonable business judgment of such Subsidiary, such
Subsidiary determines that it is in its best economic interest not to preserve and maintain
such rights or franchises and such failure to preserve and maintain such rights or
franchises is not reasonably likely to result in a Material Adverse Effect (it being
understood that the foregoing shall not prohibit, or be violated as a result of any
transaction by or involving any Loan Party or Subsidiary thereof otherwise permitted under
Section 5.02(d) or (e) below).



80









 






     (f) Visitation Rights. At any reasonable time and from time to time, after
reasonable advance notice to the Borrower, permit any of the Agents or Lender Parties, or
any agent or representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, any Loan Party and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of any Loan Party and any of
its Subsidiaries with any of their general partners, managers, managing members, officers or
directors and with their independent certified public accountants; provided, that,
notwithstanding anything herein to the contrary, the Borrower shall be obligated to
reimburse the Administrative Agent and the Lenders for their costs and expenses incurred in
connection with the exercise of their rights under this Section 5.01(f) only if such
exercise occurs after the occurrence and during the continuance of a Default or an Event of
Default.




     (g) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of such Loan Party and each such
Subsidiary in accordance with GAAP.




     (h) Maintenance of Properties, Etc. Maintain and preserve, and cause each of
its Subsidiaries to maintain and preserve, all of its properties that are used or useful in
the conduct of its business in good working order and condition, ordinary wear and tear
excepted, and will from time to time make or cause to be made all appropriate repairs,
renewals and replacement thereof except where failure to do so could not reasonably be
expected to result in a Material Adverse Effect.




     (i) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries
to conduct, all transactions otherwise permitted under the Loan Documents with any of their
Affiliates (other than transactions exclusively among or between the Borrower and/or one or
more of the Guarantors) on terms that are fair and reasonable and no less favorable to such
Loan Party or such Subsidiary than it would obtain in a comparable arm’s length transaction
with a Person not an Affiliate.




     (j) Covenants to Guarantee Obligations and Give Additional Security. (A)
Concurrently with the delivery of Collateral Deliverables pursuant to Section 5.01(k) with
respect to a Proposed Borrowing Base Asset owned or leased by a Subsidiary of a Loan Party
or (B) within 10 days after the formation or acquisition of any new direct or indirect
Subsidiary of a Loan Party that directly owns or leases a Borrowing Base Asset, cause (i)
each such Subsidiary (if it has not already done so), to duly execute and deliver to the
Administrative Agent a Guaranty Supplement in substantially the form of Exhibit C hereto, or
such other guaranty supplement in form and substance reasonably satisfactory to the
Administrative Agent, guaranteeing the other Loan Parties’ Obligations under the Loan
Documents and (ii) each direct and, if applicable, indirect parent of such Subsidiary (if it
has not already done so), to duly execute and deliver to the Administrative Agent (or, in
the case of clause (2) below, the Collateral Agent), (1) a security agreement supplement and
a pledge agreement supplement in form and substance reasonably satisfactory to the
Administrative Agent, and (2) 100% of the certificated Equity Interests in each such
Subsidiary and each direct and indirect parent of



81









 







such Subsidiary (other than the Parent Guarantor and the Borrower), but solely to the
extent such direct and indirect parents of such Subsidiary do not own any assets other than
Equity Interests in Subsidiaries that directly or indirectly own Borrowing Base Assets, and
stock powers and membership interest powers with respect thereto executed in blank, all in
form and substance reasonably acceptable to the Administrative Agent.




     (k) Borrowing Base Additions. With the Borrower’s written request to the
Administrative Agent that any Campus Housing Asset (a “Proposed Borrowing Base Asset”) be
added as a Borrowing Base Asset, deliver (or cause to be delivered) to the Administrative
Agent, at the Borrower’s expense, a BBA Proposal Package with respect to such Proposed
Borrowing Base Asset. Within fifteen (15) Business Days after receipt of a complete BBA
Proposal Package, the Administrative Agent shall give notice to the Borrower of whether the
Administrative Agent and the Required Lenders have approved such Proposed Borrowing Base
Asset as a Borrowing Base Asset subject to the delivery of all applicable Collateral
Deliverables and Guarantor Deliverables pursuant to the following sentence (any such notice
comprising an approval, a “Conditional Approval Notice”). Within 45 days after receipt by
the Borrower of a Conditional Approval Notice (which period may be extended in the
discretion of the Administrative Agent, at the Borrower’s request, for an additional 30 days
without the approval of the Required Lenders), the Borrower shall, at its expense, deliver
(or cause to be delivered) to the Administrative Agent all applicable Collateral
Deliverables and Guarantor Deliverables. Notwithstanding the foregoing, the failure of any
Proposed Borrowing Base Asset to comply with one or more of the Borrowing Base Conditions
shall not preclude the addition of such Proposed Borrowing Base Asset as a Borrowing Base
Asset so long as the Administrative Agent and the Required Lenders shall have expressly
consented to the addition of such Proposed Borrowing Base Asset as a Borrowing Base Asset
notwithstanding the failure to satisfy such conditions.




     (l) Further Assurances. (i) Promptly upon request by Administrative Agent, or
any Lender Party through the Administrative Agent, correct, and cause each Loan Party to
promptly correct, any material defect or error that may be discovered in any Loan Document
or in the execution, acknowledgment, filing or recordation thereof.




     (ii) Promptly upon request by any Agent, or any Lender Party through the
Administrative Agent, do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register any and all such further acts, deeds, conveyances,
pledge agreements, account control agreements, mortgages, deeds of trust, trust
deeds, assignments of leases and rents, assignments, financing statements and
continuations thereof, termination statements, notices of assignment, transfers,
certificates, assurances and other instruments as any Agent, or any Lender Party
through the Administrative Agent, may reasonably require from time to time in order
(A) to carry out more effectively the purposes of the Loan Documents and the intent
of the parties hereto, (B) to the fullest extent permitted by applicable law, to
subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or
interests to the Liens now or hereafter intended to be covered by any of the
Collateral Documents, (C) to perfect and maintain the validity, effectiveness and
priority of any of the Collateral



82









 







Documents and any of the Liens intended to be created thereunder and (D) to
assure, convey, grant, assign, transfer, preserve, protect and confirm more
effectively unto the Secured Parties the rights granted or now or hereafter intended
to be granted to the Secured Parties under any Loan Document or under any other
instrument executed in connection with any Loan Document to which any Loan Party or
any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries
to do so.




     (iii) Cooperate in a commercially reasonable manner with the relevant appraiser
in connection with any Appraisal of a Borrowing Base Asset (including any proposed
additional Borrowing Base Asset), such cooperation to include, without limitation,
providing such appraiser with access to such information relating to such Borrowing
Base Asset as such appraiser may reasonably request.




     (iv) No tract map, parcel map, condominium plan, condominium declaration, or
plat of subdivision will be recorded by any Loan Party with respect to any Borrowing
Base Asset without the Administrative Agent’s prior written consent, which consent
shall not be unreasonably withheld, delayed or conditioned.




     (m) Performance of Material Contracts. Perform and observe, and cause each of
its Subsidiaries to perform and observe, all the terms and provisions of each Material
Contract to be performed or observed by it, maintain each such Material Contract in full
force and effect, enforce each such Material Contract in accordance with its terms, take all
such action to such end as may be from time to time reasonably requested by the
Administrative Agent, and, upon the reasonable request of the Administrative Agent, make to
each other party to each such Material Contract such demands and requests for information
and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make
under such Material Contract, and cause each of its Subsidiaries to do so; provided,
that the foregoing shall not prohibit, or be violated as a result of, any transactions or
determinations by or involving any Loan Party or Subsidiary thereof otherwise permitted
under Section 5.02(l).




     (n) Leases. (i) Make all payments and otherwise perform in all material
respects all obligations in respect of all leases of real property to which the Borrower or
any of its Subsidiaries is a party, keep such leases in full force and effect and not allow
such leases to lapse or be terminated or any rights to renew such leases to be forfeited or
cancelled (except, in the case of Subsidiaries of the Borrower only, if in the reasonable
business judgment of such Subsidiary it is in its best economic interest not to maintain
such lease or prevent such lapse, termination, forfeiture or cancellation and such failure
to maintain such lease or prevent such lapse, termination, forfeiture or cancellation is not
in respect of a Qualifying Ground Lease of a Borrowing Base Asset and could not otherwise
reasonably be expected to result in a Material Adverse Effect), notify the Administrative
Agent of any default by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and cause each of its
Subsidiaries to do so.



83









 






     (ii) Without the prior written consent of Administrative Agent, such approval
not to be unreasonably withheld, conditioned or delayed, none of Borrower, any
Subsidiary Guarantor, nor their respective agents shall (A) enter into any
non-residential Tenancy Leases where the annual rent under the applicable Tenancy
Lease exceeds $30,000 per annum, or (B) modify, amend or terminate any such
non-residential Tenancy Lease (except as expressly permitted or contemplated
hereunder). Borrower shall provide Administrative Agent with a copy of all
non-residential Tenancy Leases where the annual rent under the applicable Tenancy
Lease exceeds $30,000 per annum no less than ten (10) days prior to execution of
such Tenancy Leases. Borrower shall provide Administrative Agent with a copy of the
fully executed original of all non-residential Tenancy Leases promptly following
their execution. At Administrative Agent’s request, Borrower or Subsidiary
Guarantors shall use best efforts to cause all non-residential tenants where the
annual rent under the applicable Tenancy Lease exceeds $30,000 per annum to execute
subordination, non-disturbance and attornment agreements reasonably satisfactory to
Administrative Agent. Administrative Agent reserves the right to subordinate the
Mortgages to any Tenancy Lease.




     (o) Interest Rate Hedging. Enter into prior to the Closing Date, and maintain
at all times thereafter, interest rate Hedge Agreements (i) with Persons acceptable to the
Administrative Agent (it being understood and agreed that such Persons shall be deemed
acceptable to the Administrative Agent if and for so long as they have a long term unsecured
debt rating of not less than “A-” from S&P and not less than “A3” from Moody’s, provided
that if at any time the long term unsecured debt rating of such Persons falls below such
required ratings or if any such required credit ratings is placed on watch for downgrade by
S&P or Moody’s, then Administrative Agent shall have the right to reasonably require that
such Loan Party, at such Loan Party’s expense, provide replacement Hedge Agreements from
different Persons which satisfy the required credit ratings), (ii) providing either an
interest-rate swap for a fixed rate of interest acceptable to the Administrative Agent or an
interest-rate cap at an interest rate acceptable to the Administrative Agent, (iii) covering
a notional amount equal to the amount, if any, by which
(A) 662/3% of Debt for Borrowed Money
of the Parent Guarantor and its Subsidiaries exceeds (B) all Debt for Borrowed Money of the
Parent Guarantor and its Subsidiaries then accruing interest at a fixed rate acceptable to
the Administrative Agent and (iv) otherwise on terms and conditions reasonably acceptable to
the Administrative Agent.




     (p) Management Agreements. At all times cause each Borrowing Base Asset to be
managed and operated by an Approved Manager that has (i) entered into a management agreement
with respect to such Asset in form and substance satisfactory to the Administrative Agent,
and (ii) executed and delivered a management agreement subordination agreement in form and
substance satisfactory to the Administrative Agent.




     (q) Maintenance of REIT Status. In the case of the Parent Guarantor,
commencing with its taxable year, ending December 31, 2010, be organized in conformity with
the requirements for qualification as a REIT under the Internal Revenue



84









 







Code, and at all times thereafter, conduct its affairs and the affairs of its
Subsidiaries in a manner so as to continue to qualify as a REIT and elect to be treated as a
REIT under all applicable laws, rules and regulations.




     (r) Exchange Listing. In the case of the Parent Guarantor, at all times (i)
cause its common shares to be duly listed on the New York Stock Exchange, the American Stock
Exchange or NASDAQ and (ii) timely file all reports required to be filed by it in connection
therewith.




     (s) Sarbanes-Oxley. Comply at all times with all applicable provisions of
Section 402(a) of Sarbanes-Oxley.



          SECTION 5.02. Negative Covenants. So long as any Advance or any other Obligation of
any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, no Loan Party will, at any
time:





     (a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any
of its assets of any character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit any of its Subsidiaries
to sign or file or suffer to exist, under the Uniform Commercial Code of any jurisdiction, a
financing statement that names such Loan Party or any of its Subsidiaries as debtor, or sign
or suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist, any
security agreement authorizing any secured party thereunder to file such financing
statement, or assign, or permit any of its Subsidiaries to assign, any accounts or other
right to receive income, except, in the case of the Loan Parties (other than the Parent
Guarantor) and their respective Subsidiaries:




     (i) Liens created under the Loan Documents;




     (ii) Permitted Liens;




     (iii) Liens described on Schedule 4.01(p) hereto;




     (iv) purchase money Liens upon or in equipment acquired or held by such Loan
Party or any of its Subsidiaries in the ordinary course of business to secure the
purchase price of such equipment or to secure Debt incurred solely for the purpose
of financing the acquisition of any such equipment to be subject to such Liens, or
Liens existing on any such equipment at the time of acquisition (other than any such
Liens created in contemplation of such acquisition that do not secure the purchase
price), or extensions, renewals or replacements of any of the foregoing for the same
or a lesser amount; provided, however, that no such Lien shall extend to or cover
any property other than the equipment being acquired, and no such extension, renewal
or replacement shall extend to or cover any property not theretofore subject to the
Lien being extended, renewed or replaced; provided further that the aggregate
principal amount of the Debt secured



85









 







by Liens permitted by this clause (iv) shall not exceed the amount permitted
under Section 5.02(b)(iii)(A);




     (v) Liens arising in connection with Capitalized Leases permitted under Section
5.02(b)(iii)(B), provided that no such Lien shall extend to or cover any Collateral
or assets other than the assets subject to such Capitalized Leases;




     (vi) Liens on property of a Person existing at the time such Person is acquired
by, merged into or consolidated with any Loan Party or any Subsidiary of any Loan
Party or becomes a Subsidiary of any Loan Party, provided that such Liens were not
created in contemplation of such merger, consolidation or acquisition and do not
extend to any assets other than those of the Person so merged into or consolidated
with such Loan Party or such Subsidiary or so acquired by such Loan Party or such
Subsidiary;




     (vii) Liens securing Non-Recourse Debt permitted under Section 5.02(b)(iii)(E),
Recourse Debt permitted under Section 5.02(b)(iv) or Debt permitted under Section
5.02(b)(vii), provided, in each case, that no such Lien shall extend to or cover any
Borrowing Base Asset or other Collateral;




     (viii) the replacement, extension or renewal of any Lien permitted by clause
(iii) above upon or in the same property theretofore subject thereto in connection
with any Refinancing Debt permitted under Section 5.02(b)(iii)(C);




     (ix) Liens arising in connection with any Secured Hedge Agreement; and




     (x) Liens arising in connection with Debt in respect of Hedge Agreements
permitted under Section 5.02(b)(iii)(D) (other than Secured Hedge Agreements),
provided that no such lien shall extend to or cover any Borrowing Base Asset or
other Collateral.




     (b) Debt. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Debt, except:




     (i) Debt under the Loan Documents;




     (ii) in the case of any Loan Party or any Subsidiary of a Loan Party, Debt owed
to any Loan Party, provided that, in each case, such Debt (y) shall be on terms
acceptable to the Administrative Agent and (z) shall be evidenced by promissory
notes in form and substance satisfactory to the Administrative Agent, which
promissory notes shall (unless payable to the Borrower) by their terms be
subordinated to the Obligations of the Loan Parties under the Loan Documents;




     (iii) in the case of each Loan Party (other than the Parent Guarantor) and its
Subsidiaries,



86









 






     (A) Debt secured by Liens permitted by Section 5.02(a)(iv) not to
exceed in the aggregate $5,000,000 at any time outstanding,




     (B) (1) Capitalized Leases not to exceed in the aggregate $5,000,000 at
any time outstanding, and (2) in the case of any Capitalized Lease to which
any Subsidiary of a Loan Party is a party, any Contingent Obligation of such
Loan Party guaranteeing the Obligations of such Subsidiary under such
Capitalized Lease,




     (C) the Surviving Debt described on Schedule 4.01(o) hereto and any
Refinancing Debt extending, refunding or refinancing such Surviving Debt,




     (D) Debt in respect of Hedge Agreements entered into by the Borrower
and designed to hedge against fluctuations in interest rates or foreign
exchange rates incurred as required by this Agreement or incurred in the
ordinary course of business and consistent with prudent business practices,




     (E) Non-Recourse Debt (including, without limitation, the JV Pro Rata
Share of Non-Recourse Debt of any Joint Venture) in respect of Assets other
than Borrowing Base Assets, the incurrence of which would not result in a
Default under Section 5.04 or any other provision of this Agreement, and




     (F) Recourse Debt not secured by any Lien in an amount not to exceed 5%
of Total Asset Value at any one time outstanding;




     (iv) Recourse Debt of the Borrower and/or Property-Level Subsidiaries of the
Borrower and the JV Pro Rata Share of Recourse Debt of any Joint Venture, in each
case as such Recourse Debt may be secured by Liens permitted by Section
5.02(a)(vii), in respect of which the Borrower or the Parent Guarantor has
guaranteed the obligations of the Borrower and/or such Property-Level Subsidiary or
Joint Venture under such Recourse Debt and the incurrence of which would not result
in a Default under Section 5.04 or any other provision of this Agreement;




     (v) in the case of the Parent Guarantor and the Borrower, Debt under Customary
Carve-Out Agreements;




     (vi) endorsements of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and




     (vii) any other Debt not to exceed $5,000,000 in the aggregate at any time
outstanding in respect of all Loan Parties and which is not secured by any Lien on
any Borrowing Base Asset.



87









 






     (c) Change in Nature of Business. Make, or permit any of its Subsidiaries to
make, any material change in the nature of its business as carried at the Closing Date
(after giving effect to the Formation Transactions, the IPO and the other transactions
contemplated by the Loan Documents); or engage in, or permit any of its Subsidiaries to
engage in, any business other than ownership, development, licensing and management of
Campus Housing Assets in the United States consistent with the business plan described in
the Registration Statement and the requirements of the Loan Documents, and other business
activities incidental thereto.




     (d) Mergers, Etc. Merge or consolidate with or into, or convey, transfer
(except as permitted by Section 5.02(e)), lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to, any Person, or permit any of its Subsidiaries to do so;
provided, however, that (i) any Subsidiary of a Loan Party may merge or consolidate with or
into, or dispose of assets to, any other Subsidiary of such Loan Party (provided that if one
or more of such Subsidiaries is also a Loan Party, a Loan Party shall be the surviving
entity) or any other Loan Party other than the Parent Guarantor (provided that such Loan
Party or, in the case of any Loan Party other than the Borrower, another Loan Party shall be
the surviving entity), and (ii) any Loan Party may merge with any Person that is not a Loan
Party so long as such Loan Party is the surviving entity or (except in the case of a merger
with the Borrower, which shall always be the surviving entity) such other Person is the
surviving party and shall promptly become a Loan Party, provided, in each case, that no
Default shall have occurred and be continuing at the time of such proposed transaction or
would result therefrom. Notwithstanding any other provision of this Agreement, (y) any
Subsidiary of a Loan Party (other than the Borrower and any Subsidiary that is the direct
owner of a Borrowing Base Asset) may liquidate or dissolve if the Borrower determines in
good faith that such liquidation or dissolution is in the best interests of the Borrower and
the assets or proceeds from the liquidation or dissolution of such Subsidiary are
transferred to the Borrower or a Guarantor, provided that no Default or Event of Default
shall have occurred and be continuing at the time of such proposed transaction or would
result therefrom, and (z) any Loan Party or Subsidiary of a Loan Party shall be permitted to
effect any Transfer of Assets through the sale or transfer of direct or indirect Equity
Interests in the Person (other than the Borrower or the Parent Guarantor) that owns such
Assets so long as Section 5.02(e) would otherwise permit the Transfer of all Assets owned by
such Person at the time of such sale or transfer of such Equity Interests. Upon the sale or
transfer of Equity Interests in any Person that is a Guarantor permitted under clause (z)
above, provided that no Default or Event of Default shall have occurred and be continuing or
would result therefrom, the Administrative Agent shall, upon the request of the Borrower,
release such Guarantor from the Guaranty and the Collateral Documents.




     (e) Sales, Etc. of Assets. (i) In the case of the Parent Guarantor, sell,
lease, transfer or otherwise dispose of, or grant any option or other right to purchase,
lease or otherwise acquire any assets and (ii) in the case of the Loan Parties (other than
the Parent Guarantor), sell, lease (other than by entering into Tenancy Leases), transfer or
otherwise dispose of, or grant any option or other right to purchase, lease (other than any
option or other right to enter into Tenancy Leases) or otherwise acquire, or permit any of
its



88









 







Subsidiaries to sell, lease, transfer or otherwise dispose of, or grant any option or
other right to purchase, lease or otherwise acquire (each action described in clauses (i)
and (ii) of this subsection (e), including, without limitation, any Sale and Leaseback
Transaction, being a “Transfer”), any Asset or Assets (or any direct or indirect Equity
Interests in the owner thereof), or obtain a release of the Liens created under the Loan
Documents, in each case other than the following Transfers and releases, which shall be
permitted hereunder only so long as no Default or Event of Default shall exist or would
result therefrom:




     (A) the Transfer of any Asset or Assets that are not Borrowing Base
Assets from any Loan Party to another Loan Party (other than the Parent
Guarantor) or from a Subsidiary of a Loan Party to another Subsidiary of
such Loan Party or any other Loan Party (other than the Parent Guarantor),




     (B) the Transfer of any Asset or Assets that are not Borrowing Base
Assets to any Person that is not a Loan Party, provided that (1) the Loan
Parties shall be in compliance with the covenants contained in Section 5.04
both immediately prior to and on a pro forma basis immediately after giving
effect to such Transfer, and (2) in the case of any such Transfer which
shall result in the aggregate purchase price paid to the Loan Parties (or
any of them) to exceed $50,000,000 in any 12-month period and any such
Transfer thereafter consummated during such 12-month period, prior to the
date of such Transfer, the Borrower shall have delivered to the
Administrative Agent (x) a Borrowing Base Certificate demonstrating that the
Total Borrowing Base Value (calculated on a pro forma basis after giving
effect to such Transfer and to any repayment of Advances made at the time
thereof) will be greater than or equal to the Facility Exposure, and (y) a
certificate of the Chief Financial Officer (or other Responsible Officer
performing similar functions) of the Borrower demonstrating compliance with
the foregoing clause (1) and confirming that no Default or Event of Default
shall exist on the date of such Transfer or will result therefrom, together
with supporting information in detail reasonably satisfactory to the
Administrative Agent,




     (C) the Transfer of any Borrowing Base Asset or Borrowing Base Assets
to any Person, or obtaining a release of the Liens created under the Loan
Documents with respect to a Borrowing Base Asset or Borrowing Base Assets,
in each case with the intention that such Borrowing Base Asset or Borrowing
Base Assets, upon consummation of such Transfer or release, shall no longer
constitute a Borrowing Base Asset or Borrowing Base Assets, provided that:




     (1) immediately after giving effect to such Transfer or release,
as the case may be, the remaining Borrowing Base Assets shall
continue to satisfy the requirements set forth in clauses (a) through
(h) of the definition of Borrowing Base Conditions,



89









 






     (2) immediately after giving effect to such Transfer or release,
as the case may be, no Default or Event of Default shall exist or
result therefrom,




     (3) the Loan Parties shall be in compliance with the covenants
contained in Section 5.04 both immediately prior to and on a pro
forma basis immediately after giving effect to such Transfer or
release,




     (4) on or prior to the date of such Transfer or release, as the
case may be, the Borrower shall have delivered to the Administrative
Agent a certificate of the Chief Financial Officer (or other
Responsible Officer performing similar functions) of the Borrower
demonstrating compliance with the foregoing clauses (1) through (3),
together with supporting information in detail reasonably
satisfactory to the Administrative Agent, and




     (5) With respect to a release of the Liens created under the
Loan Documents only, which release is not executed as a result of a
Transfer or refinancing of such Borrowing Base Asset, Borrower shall
have received the prior written approval of the release from the
Administrative Agent and the Required Lenders, or




     (D) the Transfer of (1) obsolete or worn out personal property in the
ordinary course of business or (2) inventory in the ordinary course of
business, which personal property or inventory, as the case may be, is used
or held in connection with an Asset.




Following (x) a Transfer of all Borrowing Base Assets owned or leased by a
Subsidiary Guarantor in accordance with Section 5.02(e)(ii)(C) or (y) the release by
a Subsidiary Guarantor of all Borrowing Base Assets owned or leased by it such that
such Borrowing Base Assets become non-Borrowing Base Assets pursuant to Section
5.02(e)(ii)(C), the Administrative Agent shall, upon the request of the Borrower and
at the Borrower’s expense, promptly release such Subsidiary Guarantor from the
Guaranty and the Security Agreement.




     (f) Investments. Make or hold, or permit any of its Subsidiaries to make or
hold, any Investment other than:




     (i) Investments by the Loan Parties and their Subsidiaries in their
Subsidiaries outstanding on the date hereof and additional Investments in
wholly-owned Subsidiaries and, in the case of the Loan Parties (other than the
Parent Guarantor) and their Subsidiaries (and Joint Ventures in which such Loan
Parties and Subsidiaries hold any direct or indirect interest), Investments in
Assets (including by asset or Equity Interest acquisitions or investments in Joint



90









 







Ventures), in each case subject, where applicable, to the limitations set forth
in Section 5.02(f)(iv);




     (ii) Investments in Cash Equivalents;




     (iii) Investments consisting of intercompany Debt permitted under Section
5.02(b)(ii);




     (iv) Investments consisting of the following items so long as (y) the aggregate
amount outstanding, without duplication, of all Investments described in this
subsection does not exceed, (1) 35% of Total Asset Value during the period from the
Closing Date through the fiscal quarter of the Parent Guarantor ending on June 30,
2011, (2) 30% of Total Asset Value during the period thereafter ending with the
fiscal quarter of the Parent Guarantor ending on June 30, 2012 or (3) 25% of Total
Asset Value, at any time thereafter, and (z) the aggregate amount of each of the
following items of Investments does not exceed at any time the specified percentage
of Total Asset Value set forth below:




     (A) Investments in unimproved land and Development Assets (including
such assets that such Person has contracted to purchase for development with
or without options to terminate the purchase agreement but, in such
instances, limited solely to non-refundable deposits under such contracts
and, to the extent a Loan Party is obligated under any such contract, the
amount of such obligation), so long as the aggregate amount of such
Investments, calculated on the basis of the greater of actual cost or
budgeted cost, does not at any time exceed 10% and 20%, respectively, of
Total Asset Value at such time,




     (B) Investments in Joint Ventures of any Loan Party so long as the
aggregate amount outstanding, without duplication, of all such Investments
does not at any time exceed 15% of Total Asset Value at such time, and




     (C) Investments permitted under this Subsection, other than the items
of Investments referred to in clauses (A) and (B) above, so long as the
aggregate amount of all such Investments does not at any time exceed 10% of
Total Asset Value at such time;




     (v) Investments, if any, outstanding on the date hereof in Subsidiaries that
are not wholly-owned by any Loan Party;




     (vi) Investments by the Borrower in Hedge Agreements permitted under Section
5.02(b)(iii)(D);




     (vii) To the extent permitted by applicable law, loans or other extensions of
credit to officers, directors and employees of any Loan Party or any Subsidiary of
any Loan Party in the ordinary course of business, for travel, entertainment,
relocation and analogous ordinary business purposes, which



91









 







Investments shall not exceed at any time $1,000,000 in the aggregate for all
Loan Parties;




     (viii) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit extended in
the ordinary course of business in an aggregate amount for all Loan Parties not to
exceed at any time $5,000,000; and




     (ix) Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in order to
prevent or limit loss.




     (g) Restricted Payments. In the case of the Parent Guarantor, declare or pay
any dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its
Equity Interests now or hereafter outstanding, return any capital to its stockholders,
partners or members (or the equivalent Persons thereof) as such, make any distribution of
assets, Equity Interests, obligations or securities to its stockholders, partners or members
(or the equivalent Persons thereof) as such (collectively, “Restricted Payments”); provided,
however, that (i) the Parent Guarantor may take such actions only so long as (A) no Default
or Event of Default shall have occurred and be continuing or would result therefrom and (B)
as of the date of such action, the Loan Parties are in compliance with the covenants
contained in Section 5.04 (both immediately before and on a pro forma basis immediately
after giving effect to such action), (ii) the Parent Guarantor may declare and make dividend
payments or other distributions payable solely in the common stock or other common Equity
Interests of the Parent Guarantor and (iii) the Parent Guarantor may purchase, redeem, or
otherwise acquire shares of its common stock or other common Equity Interests or warrants or
options to acquire any such shares with the proceeds received from the substantially
concurrent issue of new shares of its common stock or other common Equity Interests, so long
as the aggregate amount of such purchases, redemptions and acquisitions of shares of common
stock or other common Equity Interests or warrants or options to acquire any such shares
does not at any time exceed 90% of the Funds From Operations for the consecutive four fiscal
quarters of the Parent Guarantor most recently ended for which financial statements are
required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the
case may be. Notwithstanding anything herein to the contrary, cash and stock dividends
payable by the Parent Guarantor on Equity Interests shall be permitted to the extent
necessary to maintain the Parent’s REIT status, provided that the cash component of such
dividends shall be the minimum amount required by law or regulation for such purpose.




     (h) Amendments of Constitutive Documents. Amend, or permit any of its
Subsidiaries to amend, in each case in any material respect, its limited liability company
agreement, partnership agreement, certificate of incorporation or bylaws or other
constitutive documents, provided that any amendment to any such constitutive document that
would be adverse to any of the Secured Parties shall be deemed “material” for purposes of
this Section; and provided further that any amendment to any such constitutive document that
would designate such Subsidiary as a “special purpose entity”



92









 







or otherwise confirm such Subsidiary’s status as a “special purpose entity” shall be
deemed “not material” for purposes of this Section.




     (i) Accounting Changes. Make or permit, or permit any of its Subsidiaries to
make or permit, any change in (i) accounting policies or reporting practices, except as
required or permitted by generally accepted accounting principles, or (ii) Fiscal Year.




     (j) Speculative Transactions. Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity options or futures contracts or any similar
speculative transactions or any other derivative transaction not entered into to hedge
against interest rate fluctuations in the ordinary course of business.




     (k) Payment Restrictions Affecting Subsidiaries. Directly or indirectly, enter
into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist,
any agreement or arrangement limiting the ability of any of its Subsidiaries to declare or
pay dividends or other distributions in respect of its Equity Interests or repay or prepay
any Debt owed to, make loans or advances to, or otherwise transfer assets to or invest in,
the Borrower or any Subsidiary of the Borrower (whether through a covenant restricting
dividends, loans, asset transfers or investments, a financial covenant or otherwise), except
(i) the Loan Documents, (ii) any agreement or instrument evidencing Surviving Debt, (iii)
any agreement or instrument evidencing Non-Recourse Debt, provided that the terms of such
Debt, and of such agreement or instrument, do not restrict distributions in respect of
Equity Interests in Subsidiaries directly or indirectly owning Borrowing Base Assets, (iv)
any agreement in effect at the time such Subsidiary becomes a Subsidiary of the Borrower, so
long as such agreement was not entered into solely in contemplation of such Person becoming
a Subsidiary of the Borrower or (v) with respect to agreements or instruments which limit
the ability of Subsidiaries to declare or pay dividends or pay distributions in respect of
its Equity Interests only, such agreements which impose any such restriction solely after
the occurrence of a default or event of default.




     (l) Amendment, Etc. of Material Contracts. Cancel or terminate any Material
Contract or consent to or accept any cancellation or termination thereof, amend or otherwise
modify any Material Contract or give any consent, waiver or approval thereunder, waive any
default under or breach of any Material Contract, agree in any manner to any other
amendment, modification or change of any term or condition of any Material Contract or take
any other action in connection with any Material Contract that would impair in any material
respect the value of the interest or rights of any Loan Party thereunder or that would
impair or otherwise adversely affect in any material respect the interest or rights, if any,
of any Agent or any Lender Party, or permit any of its Subsidiaries to do any of the
foregoing, in each case in a manner that could reasonably be expected to have a Material
Adverse Effect, in each case taking into account the effect of any agreements that
supplement or serve to substitute for, in whole or in part, such Material Contract.




     (m) Negative Pledge. Enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the
creation or assumption of any Lien upon any of its property or assets (including, without



93









 







limitation, any Borrowing Base Assets), except (i) pursuant to the Loan Documents or
(ii) with respect to any property or assets other than the Borrowing Base Assets in
connection with




     (A) any Non-Recourse Debt permitted by Section 5.02(b)(iii)(E), provided that
the terms of such Debt, and of any agreement entered into and of any instrument
issued in connection therewith, (1) do not provide for or prohibit or condition the
creation of any Lien on any Borrowing Base Assets and are otherwise permitted by the
Loan Documents and (2) solely prohibit Liens on the property of the Person incurring
such Non-Recourse Debt and the Equity Interests in such Person,




     (B) any purchase money Debt permitted under Section 5.02(b)(iii)(A) solely to
the extent that the agreement or instrument governing such Debt prohibits a Lien on
the property acquired with the proceeds of such Debt,




     (C) any Capitalized Lease permitted by Section 5.02(b)(iii)(B) solely to the
extent that such Capitalized Lease prohibits a Lien on the property subject thereto,
or




     (D) any Debt outstanding on the date any Subsidiary of the Borrower becomes
such a Subsidiary (so long as such agreement was not entered into solely in
contemplation of such Subsidiary becoming a Subsidiary of the Borrower),




     (E) any Surviving Debt and any Refinancing Debt extending, refunding, or
refinancing such Surviving Debt, so long as the prohibitions or conditions contained
in such Refinancing Debt are no more restrictive than the corresponding provisions
contained in the Debt which is extended, refunded or refinanced thereby,




     (F) any unsecured Recourse Debt permitted by Section 5.02(b)(iii)(F) or other
Debt permitted by Section 5.02(b)(vii); and




     (G) any Recourse Debt permitted by Section 5.02(b)(iv).




     (n) Parent Guarantor as Holding Company. In the case of the Parent Guarantor,
not enter into or conduct any business, or engage in any activity (including, without
limitation, any action or transaction that is required or restricted with respect to the
Borrower and its Subsidiaries under Sections 5.01 and 5.02 without regard to any of the
enumerated exceptions to such covenants), other than (i) the holding of the direct and
indirect Equity Interests of the Borrower; (ii) the performance of the duties of sole
general partner of the Borrower through the Parent Guarantor’s indirect ownership of all of
the membership interests in such general partner; (iii) the performance of its Obligations
(subject to the limitations set forth in the Loan Documents) under each Loan Document to
which it is a party; (iv) the making of equity or subordinate debt Investments in the
Borrower and its Subsidiaries, provided each such Investment shall be on terms acceptable to
the Administrative Agent; and (v) activities incidental to each of the foregoing.



94









 






     (o) Multiemployer Plans. Neither any Loan Party nor any ERISA Affiliate will
contribute to or be required to contribute to any Multiemployer Plan.




     (p) Management Agreements. The Borrower shall not and shall not permit any
Guarantor to enter into any Management Agreement with a third party manager after the date
hereof for any Borrowing Base Asset without the prior written consent of the Administrative
Agent (which shall not be unreasonably withheld), and after such approval, no such
Management Agreement shall be modified in any material respect or terminated without
Administrative Agent’s prior written approval, such approval not to be unreasonably
withheld. Administrative Agent may condition any approval of a new manager upon the
execution and delivery to Agent of a collateral assignment of such management agreement to
Agent and a subordination of the manager’s rights thereunder to the rights of the
Administrative Agent and the Lender Parties under the Loan Documents.



          SECTION 5.03. Reporting Requirements. So long as any Advance or any other Obligation
of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, the Borrower will furnish to
the Agents and the Lender Parties in accordance with Section 9.02(b):





     (a) Default Notice. As soon as possible and in any event within two Business
Days after the occurrence of each Default or any event, development or occurrence reasonably
expected to result in a Material Adverse Effect continuing on the date of such statement, a
statement of the Chief Financial Officer (or other Responsible Officer) of the Parent
Guarantor setting forth details of such Default or such event, development or occurrence and
the action that the Parent Guarantor has taken and proposes to take with respect thereto.




     (b) Annual Financials. As soon as available and in any event within 90 days
after the end of each Fiscal Year, a copy of the annual audit report for such year for the
Parent Guarantor and its Subsidiaries, including therein Consolidated balance sheets of the
Parent Guarantor and its Subsidiaries as of the end of such Fiscal Year and Consolidated
statements of income and a Consolidated statement of cash flows of the Parent Guarantor and
its Subsidiaries for such Fiscal Year (it being acknowledged that a copy of the annual audit
report filed by the Parent Guarantor with the Securities and Exchange Commission shall
satisfy the foregoing requirements), in each case accompanied by (x) an opinion acceptable
to the Administrative Agent of KPMG LLP or other independent public accountants of
recognized standing acceptable to the Required Lenders, and (y) if and as required by the
rules and regulations promulgated by the United States Securities and Exchange Commission, a
report of such independent public accountants as to the Borrower’s internal controls
required under Section 404 of the Sarbanes-Oxley Act of 2002, in each case certified in a
manner to which the Administrative Agent has not objected, together with (i) a certificate
of such accounting firm to the Lender Parties stating that in the course of the regular
audit of the business of the Parent Guarantor and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of non-compliance with any of the covenants
contained in



95









 







Section 5.04, or if, in the opinion of such accounting firm, any such non-compliance
has occurred, a statement as to the nature thereof, (ii) a schedule in form satisfactory to
the Administrative Agent of the computations used by such accountants in determining, as of
the end of such Fiscal Year, compliance with the covenants contained in Section 5.04,
provided that in the event of any change in GAAP used in the preparation of such financial
statements, the Parent Guarantor shall also provide, if necessary for the determination of
compliance with Section 5.04, a statement of reconciliation conforming such financial
statements to GAAP and (iii) a certificate of the Chief Financial Officer (or other
Responsible Officer) of the Parent Guarantor stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Parent Guarantor has taken and proposes to take with respect
thereto.




     (c) Quarterly Financials. As soon as available and in any event within 45 days
after the end of each of the first three quarters of each Fiscal Year, Consolidated balance
sheets of the Parent Guarantor and its Subsidiaries as of the end of such quarter and
Consolidated statements of income and a Consolidated statement of cash flows of the Parent
Guarantor and its Subsidiaries for the period commencing at the end of the previous fiscal
quarter and ending with the end of such fiscal quarter and Consolidated statements of income
and a Consolidated statement of cash flows of the Parent Guarantor and its Subsidiaries for
the period commencing at the end of the previous Fiscal Year and ending with the end of such
quarter, setting forth in each case in comparative form the corresponding figures for the
corresponding date or period of the preceding Fiscal Year, all in reasonable detail and duly
certified (subject to normal year-end audit adjustments) by the Chief Executive Officer,
Chief Financial Officer or Treasurer (or other Responsible Officer performing similar
functions) of the Parent Guarantor as having been prepared in accordance with GAAP (it being
acknowledged that a copy of the quarterly financials filed by the Parent Guarantor with the
Securities and Exchange Commission shall satisfy the foregoing requirements), together with
(i) a certificate of such officer stating that no Default has occurred and is continuing or,
if a Default has occurred and is continuing, a statement as to the nature thereof and the
action that the Parent Guarantor has taken and proposes to take with respect thereto and
(ii) a schedule in form satisfactory to the Administrative Agent of the computations used by
the Parent Guarantor in determining compliance with the covenants contained in Section 5.04,
provided that in the event of any change in GAAP used in the preparation of such financial
statements, the Parent Guarantor shall also provide, if necessary for the determination of
compliance with Section 5.04, a statement of reconciliation conforming such financial
statements to GAAP.




     (d) Borrowing Base Certificate. (i) As soon as available and in any event
within 45 days after the end of each calendar quarter, (ii) at the time any Proposed
Borrowing Base Asset is included in the definition of “Borrowing Base Asset,” (iii) at the
time any Borrowing Base Asset is the subject of a Transfer or a release of Liens such that
it no longer constitutes a Borrowing Base Asset or (iv) at any time a Borrowing Base Asset
fails to satisfy all of the Borrowing Base Conditions, a Borrowing Base Certificate, as at
the end of such quarter or as of the applicable date, certified by the Chief Financial



96









 







Officer (or other Responsible Officer performing similar functions) of the Parent
Guarantor.




     (e) Annual Budgets. As soon as available and in any event within 45 days after
the end of each Fiscal Year, forecasts prepared by management of the Parent Guarantor, in
form satisfactory to the Administrative Agent, of balance sheets, income statements and cash
flow statements on a quarterly basis for the then current Fiscal Year and on an annual basis
for each Fiscal Year thereafter until the Termination Date.




     (f) Reconciliation Statements. If, as a result of any change in accounting
principles and policies from those used in the preparation of the audited financial
statements referred to in Section 4.01(g), the Consolidated financial statements of the
Parent Guarantor and its Subsidiaries delivered pursuant to Section 5.03(b), (c) or (f) (i)
will differ in any material respect from the Consolidated financial statements that would
have been delivered pursuant to such Section had no such change in accounting principles and
policies been made, then (i) together with the first delivery of financial statements
pursuant to Section 5.03(b), (c) or (f) (i) following such change, Consolidated financial
statements of the Parent Guarantor and its Subsidiaries for the fiscal quarter immediately
preceding the fiscal quarter in which such change is made, prepared on a pro forma basis as
if such change had been in effect during such fiscal quarter, and (ii) together with each
delivery of financial statements pursuant to Section 5.03(b), (c) or (f) (i) following such
change, a written statement of the chief accounting officer or chief financial officer of
the Parent Guarantor setting forth the differences (including any differences that would
affect any calculations relating to the financial covenants set forth in Section 5.04) which
would have resulted if such financial statements had been prepared without giving effect to
such change.




     (g) Material Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any court or
governmental department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting any Loan Party or any of its Subsidiaries of the type described in
Section 4.01(f), and promptly after the occurrence thereof, notice of any adverse change in
the status or the financial effect on any Loan Party or any of its Subsidiaries of the
Material Litigation from that described on Schedule 4.01(f) hereto.




     (h) Securities Reports. Promptly after the sending or filing thereof, copies
of all proxy statements, financial statements and reports that any Loan Party or any of its
Subsidiaries sends to the holders of its Equity Interests, and copies of all regular,
periodic and special reports, and all registration statements, that any Loan Party or any of
its Subsidiaries files with the Securities and Exchange Commission or any governmental
authority that may be substituted therefor, or with any national securities exchange.




     (i) Real Property. As soon as available and in any event within 15 days after
the end of each fiscal quarter of each Fiscal Year, a report supplementing Schedule 4.01(q)
hereto, including an identification of all owned and leased real property acquired or
disposed of by any Loan Party or any of its Subsidiaries during such fiscal quarter, a list
and description (including the street address, county or other relevant



97









 







jurisdiction, state, record owner, book value thereof and, in the case of leases of property, lessor,
lessee, expiration date and annual rental cost thereof) of all real property acquired or
leased by any Loan Party or any of its Subsidiaries during such fiscal quarter and a
description of such other changes in the information included in such Schedules as may be
necessary for such Schedules to be accurate and complete.




     (j) Assets Reports. As soon as available and in any event within 45 days after
the end of each quarter of each Fiscal Year, a report listing and describing (in detail
reasonably satisfactory to the Administrative Agent) all Assets of the Parent Guarantor and
its Subsidiaries as of the end of such quarter in form and substance reasonably satisfactory
to the Administrative Agent.




     (k) Environmental Conditions. Notice to the Administrative Agent (i) promptly
upon obtaining knowledge of any material violation of any Environmental Law affecting any
Asset or the operations thereof or the operations of any of its Subsidiaries, (ii) promptly
upon obtaining knowledge of any known release, discharge or disposal of any Hazardous
Materials at, from, or into any Asset which it reports in writing or is legally required to
report in writing to any governmental authority and which is material in amount or nature or
which could reasonably be expected to materially adversely affect the value of such Asset,
(iii) promptly upon its receipt of any written notice of material violation of any
Environmental Laws or of any material release, discharge or disposal of Hazardous Materials
in violation of any Environmental Laws or any matter that could reasonably be expected to
result in an Environmental Action, including a notice or claim of liability or potential
responsibility from any third party (including without limitation any federal, state or
local governmental officials) and including notice of any formal inquiry, proceeding,
demand, investigation or other action with regard to (A) such Loan Party’s or any other
Person’s operation of any Asset in compliance with Environmental Laws, (B) Hazardous
Materials contamination on, from or into any Asset, or (C) investigation or remediation of
off-site locations at which such Loan Party or any of its predecessors are alleged to have
directly or indirectly disposed of Hazardous Materials, or (iv) upon such Loan Party’s
obtaining knowledge that any expense or loss has been incurred by such governmental
authority in connection with the assessment, containment, removal or remediation of any
Hazardous Materials with respect to which such Loan Party or any Joint Venture could
reasonably be expected to incur material liability or for which a Lien may be imposed on any
Asset, provided that notice is required only for any of the events described in clauses (i)
through (iv) above that could reasonably be expected to result in a Material Adverse Effect,
could reasonably be expected to result in a material Environmental Action with respect to
any Borrowing Base Asset or could reasonably be expected to result in a Lien against any
Borrowing Base Asset.




     (l) Borrowing Base Asset Value. Promptly after discovery of any setoff, claim,
withholding or defense asserted or effected against any Loan Party, or to which any
Borrowing Base Asset is subject, which could reasonably be expected to (i) have a material
adverse effect on the value of a Borrowing Base Asset, (ii) have a Material Adverse Effect
or (iii) result in the imposition or assertion of a Lien against any



98









 






Borrowing Base Asset
which is not a Permitted Lien, notice to the Administrative Agent thereof.




     (m) Compliance with Borrowing Base Asset Conditions. Promptly after obtaining
actual knowledge of any condition or event which causes any Borrowing Base Asset to fail to
satisfy any of the Borrowing Base Conditions (other than those Borrowing Base Conditions, if
any, that have theretofore been waived by the Administrative Agent and the Required Lenders
with respect to any particular Borrowing Base Asset, to the extent of such waiver), notice
to the Administrative Agent thereof.




     (n) Appraisals. Promptly upon the written request of the Administrative Agent
or the Required Lenders and at the expense of the Borrower, Appraisals of the Borrowing
Base Assets that are the subject of such request, provided, that so long as no Event of
Default then exists, the Borrower shall not be required to deliver an Appraisal of a
Borrowing Base Asset more frequently than once during the term of the Facility (other than
the Appraisal required in connection with the extension of the Termination Date).




     (o) Other Information. Promptly, such other information respecting the
business, condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries as the Administrative Agent, or any
Lender Party through the Administrative Agent, may from time to time reasonably request.




     (p) Management Agreements and Material Contracts. Promptly following execution
thereof by all parties thereto, a copy of any Management Agreement or Material Contract
entered into with respect to any Borrowing Base Asset after the date hereof.



          SECTION 5.04. Financial Covenants. So long as any Advance or any other Obligation of
any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have, at any time after the Initial Extension of Credit, any
Commitment hereunder, the Parent Guarantor will:





     (a) Parent Guarantor Financial Covenants.




     (i) Maximum Leverage Ratio. Maintain as of each Test Date, a Leverage
Ratio of not greater than 0.60:1.00.




     (ii) Maximum Secured Recourse Debt Ratio. Maintain as of each Test
Date, a Secured Recourse Debt Ratio of not greater than 20%.




     (iii) Minimum Tangible Net Worth. Maintain at all times tangible net
worth of the Parent Guarantor and its Subsidiaries, as determined in accordance with
GAAP (but excluding accumulated depreciation on all Real Property), of not less than
the sum of $217,514,250 plus an amount equal to 75% times the net cash proceeds of
all issuances and primary sales of Equity Interests of the Parent Guarantor or any
of its Subsidiaries consummated following the Closing Date.




99











 






     (iv) Minimum Ratio of Fixed Rate Debt for Borrowed Money and Debt for
Borrowed Money Subject to Hedge Agreements to Debt for Borrowed Money. Maintain
as of each Test Date, a ratio of fixed rate Debt for Borrowed Money and Debt for
Borrowed Money subject to Hedge Agreements to all Debt for Borrowed Money of not
less than 66.67%.




     (v) Maximum Dividend Payout Ratio. Maintain as of each Test Date, a
Dividend Payout Ratio of equal to or less than (A) 90% or (B) such greater amount as
may be required by applicable law to maintain status as a REIT for tax purposes.




     (vi) Minimum Fixed Charge Coverage Ratio. Maintain as of each Test
Date, a Fixed Charge Coverage Ratio of not less than 1.50:1.00.



          (b) Borrowing Base Covenants.





     (i) Maximum Facility Exposure to Borrowing Base Asset Value. Not
permit at any time the Facility Exposure at such time to exceed the Total Borrowing
Base Value at such time.




     (ii) Minimum Borrowing Base Debt Service Coverage Ratio. Maintain as
of each Test Date, a Borrowing Base Debt Service Coverage Ratio of not less than
1.50:1.00.




     (iii) Minimum Appraised Value. Not permit at any time the Appraised
Value of the Borrowing Base Assets in the aggregate to be less than $130,000,000.




     (iv) Minimum Number of Borrowing Base Assets. Not permit at any time
the number of Campus Housing Assets comprising the Borrowing Base Assets to be fewer
than ten.




     (v) Maximum Size of Individual Borrowing Base Asset. Not permit at any
time the Appraised Value of any individual Borrowing Base Asset to exceed 15% of the
Appraised Value of the Borrowing Base Assets in the aggregate.




     (vi) Minimum Weighted Average Occupancy of the Borrowing Base Assets.
Not permit at any time the average occupancy of the Borrowing Base Assets, weighted
based upon the number of beds comprising each Borrowing Base Asset, to equal less
than 80%.



     All calculations described above in Sections 5.04(a) and 5.04(b) that pertain to the fiscal
quarters of the Parent Guarantor ending on or prior to September 30, 2010 shall be made on a pro
forma basis, including to give effect to the IPO and the Formation Transactions. To the extent any
calculations described in Sections 5.04(a) or 5.04(b) are required to be made on any date of
determination other than the last day of a fiscal quarter of the Parent Guarantor, such
calculations shall be made on a pro forma basis to account for any acquisitions or dispositions of
Assets, and the incurrence or repayment of any Debt for Borrowed Money relating to such



100









 




Assets, that have occurred since the last day of the fiscal quarter of the Parent Guarantor
most recently ended. To the extent any calculations described in Sections 5.04(a) or 5.04(b) are
required to be made on a Test Date relating to an Advance, a merger permitted under Section
5.02(d), a Transfer permitted under Section 5.02(e)(ii)(C) or the release of a Borrowing Base
Asset, such calculations shall be made both before and on a pro forma basis after giving effect to
such Advance, merger, Transfer or such other event, as applicable. All such calculations shall be
reasonably acceptable to the Administrative Agent.




          SECTION 5.05. Ground Lease Covenants.





     (a) Each Loan Party shall (i) pay or cause to be paid on or before the due date thereof
all Ground Lease Payments, (ii) perform and observe every covenant to be performed or
observed by a Loan Party under the applicable Ground Lease; (iii) refrain from doing
anything and not do or permit any act, event or omission, as a result of which, there is
reasonably likely to occur a default or breach under any Ground Lease; (iv) promptly give
Administrative Agent notice of any default under any Ground Lease upon learning of such
default and promptly deliver to Administrative Agent a copy of each notice of default and
all responses to such notice of default and all other material instruments, notices or
demands received or delivered by a Loan Party under or in connection with the applicable
Ground Lease; (v) promptly notify Administrative Agent in writing in the event of the
initiation of any litigation or arbitration proceeding affecting a Loan Party or the Real
Property under or in connection with the applicable Ground Lease; (vi) not voluntarily or
involuntarily, directly or indirectly, surrender, terminate or cancel any Ground Lease nor,
without the prior written consent of Administrative Agent, fail to exercise in a timely
manner any purchase option(s) or renewal option(s) contained in any Ground Lease; and (vii)
not modify, alter or amend any Ground Lease, either orally or in writing without the prior
written consent of the Administrative Agent. Any assignment, transfer, conveyance,
surrender, termination, cancellation, modification, alteration or amendment of any Ground
Lease in contravention of the foregoing shall be void and of no force and effect.




     (b) Each Loan Party acknowledges and agrees that no release or forbearance of any of
its obligations under any Ground Lease or otherwise shall release such Loan Party from any
of its obligations under the Loan Documents, including without limitation the performance of
all of the terms, provisions, covenants, conditions and agreements contained in any
applicable Ground Lease, to be kept, performed and complied with by such Loan Party therein.




     (c) In the event of a default by any Loan Party under any Ground Lease, Administrative
Agent may (but shall not be obligated to), in its sole discretion and without notice to any
Loan Party, cause such default or defaults by such Loan Party to be remedied and otherwise
take or perform such other actions as Administrative Agent may reasonably deem necessary or
desirable as a result thereof or in connection therewith. Borrower shall reimburse
Administrative Agent for all advances reasonably made and expenses reasonably incurred by
Administrative Agent in curing any such default(s) (including, without limitation,
reasonable attorneys’ fees), together with interest thereon from the date incurred until the
same is paid in full to Administrative Agent and all such



101









 






sums so advanced shall be secured by the applicable Mortgage. The provisions of this
subsection are in addition to any other right or remedy given to or allowed Administrative
Agent under such Ground Lease or otherwise.




     (d) If any Ground Lease is cancelled or terminated and Administrative Agent or its
nominee shall acquire an interest in any new lease of the Real Property, each Loan Party
shall have no right, title or interest in or to the new lease or the leasehold estate
created by such new lease.




     (e) Each Loan Party shall from time to time within ten (10) Business Days of
Administrative Agent’s request to execute and deliver, use reasonable efforts to obtain from
the ground lessor, an estoppel certificate in a form reasonably acceptable to Administrative
Agent certifying to such matters as Administrative Agent may reasonably require, including
without limitation, the following: (a) the name of the tenant entitled to possession of the
leasehold estate under the applicable Ground Lease; (b) that the applicable Ground Lease is
in full force and effect and has not been modified or, if it has been modified, the date of
each such modification (together with copies of each modification); (c) the date to which
the fixed (or base) rent has been paid under the applicable Ground Lease; (d) the dates to
which all other fees or charges have been paid under the applicable Ground Lease; (e)
whether any notice of default has been sent to any Loan Party under the applicable Ground
Lease which has not been cured, and if such notice has been sent, the date it was sent and
the nature of the default; (f) to the best of the ground lessor’s knowledge, whether any
Loan Party is in default under such Ground Lease, and if so, the nature thereof in
reasonable detail.




     (f) Notwithstanding anything contained herein or otherwise to the contrary,
Administrative Agent shall not have any liability or obligation under any Ground Lease, by
virtue of its acceptance of the applicable Mortgage. Each Loan Party acknowledges and
agrees that Administrative Agent shall be liable for the obligations of a Loan Party arising
under any Ground Lease, as applicable, for only that period of time, if any, during which
Administrative Agent is in possession of the leasehold estate created thereby and has
acquired, by foreclosure, power of sale or otherwise, and is holding, all of such Loan
Party’s right, title and interest as tenant under the applicable Ground Lease.




     (g) Notwithstanding anything contained herein or otherwise to the contrary, each Loan
Party hereby assigns, transfers and sets over to Administrative Agent any and all rights and
interests that may arise in favor of such Loan Party in connection with or as a result of
the bankruptcy or insolvency of the ground lessor, as applicable, including, without
limitation, all of such Loan Party’s right, title and interest in, to and under §365 of the
Bankruptcy Code (11 U.S.C. §365), as the same may be amended, supplemented or modified from
time to time.




     (h) In the event that it is claimed by any governmental authority that any tax is due,
unpaid or payable by a Loan Party upon or in connection with any Ground Lease, such Loan
Party shall promptly either (a) pay such tax, charge or imposition when due and deliver to
Administrative Agent reasonably satisfactory proof of payment thereof or (b) contest such
tax in accordance with the applicable provisions of this Agreement. If



102









 






liability for such tax is asserted against Administrative Agent, Administrative Agent
will give to such Loan Party prompt notice of such claim, and such Loan Party, upon
complying with the provisions of this Agreement shall have full right and authority to
contest such claim.




     (i) It shall be an immediate Event of Default hereunder if: (a) a Loan Party shall
fail in the payment of any Ground Lease Payments as and when the same is payable under the
applicable Ground Lease (unless waived by the ground lessor under such Ground Lease); (b)
there shall occur any default by a Loan Party under the applicable Ground Lease in the
observance or performance of any term, covenant or condition on the part of such Loan Party
to be observed or performed thereunder (unless waived by the lessor under such Ground
Lease); (c) any one or more of the events referred to in the applicable Ground Lease shall
occur which would cause the applicable Ground Lease to terminate without notice or action by
the ground lessor under such Ground Lease or which would entitle the ground lessor to
terminate such Ground Lease by giving notice to a Loan Party (unless waived by the lessor
under such Ground Lease); (d) the leasehold estate created by any Ground Lease shall be
surrendered or such Ground Lease shall be terminated or canceled for any reason or under any
circumstances, or (e) any of the terms, covenants or conditions of any Ground Lease shall in
any manner be materially modified, changed, supplemented, altered, or amended without the
prior written consent of Administrative Agent.



ARTICLE VI

EVENTS OF DEFAULT




          SECTION 6.01. Events of Default. If any of the following events (“Events of Default”)
shall occur and be continuing:





     (a) Failure to Make Payments When Due. (i) The Borrower shall fail to pay any
principal of any Advance when the same shall become due and payable or (ii) the Borrower
shall fail to pay any interest on any Advance, or any Loan Party shall fail to make any
other payment under any Loan Document, in each case under this clause (ii) within three
Business Days after the same becomes due and payable; or




     (b) Breach of Representations and Warranties. Any representation or warranty
made by any Loan Party (or any of its officers or the officers of its general partner or
managing member, as applicable) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or




     (c) Breach of Certain Covenants. The Borrower shall fail to perform or observe
any term, covenant or agreement contained in Section 2.03(e), 2.14, 5.01(d), (e), (f), (i),
(j), (n), (o), (p), (q), (r) or (s), 5.02, 5.03 or 5.04; or




     (d) Other Defaults under Loan Documents. Any Loan Party shall fail to perform
or observe any other term, covenant or agreement contained in any Loan Document on its part
to be performed or observed if such failure shall remain unremedied for 30 days after the
earlier of the date on which (i) a Responsible Officer becomes aware



103









 






of such failure or (ii) written notice thereof shall have been given to the Borrower by
any Agent or any Lender Party; or




     (e) Cross Defaults. (i) Any Loan Party or any Subsidiary thereof shall fail to
pay any principal of, premium or interest on or any other amount payable in respect of any
Material Debt when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise and after the expiration of any cure period
thereunder); or (ii) any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Material Debt, if (A) the effect of such event
or condition is to permit the acceleration of the maturity of such Material Debt or
otherwise permit the holders thereof to cause such Material Debt to mature, and (B) such
event or condition shall remain unremedied or otherwise uncured for a period of 30 days; or
(iii) the maturity of any such Material Debt shall be accelerated or any such Material Debt
shall be declared to be due and payable or required to be prepaid or redeemed (other than by
a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer
to prepay, redeem, purchase or defease such Material Debt shall be required to be made, in
each case prior to the stated maturity thereof; or




     (f) Insolvency Events. Any Loan Party or any Subsidiary thereof shall
generally not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or any
Subsidiary thereof seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its property and,
in the case of any such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party or any Subsidiary thereof
shall take any corporate action to authorize any of the actions set forth above in this
subsection (f); or




     (g) Monetary Judgments. Any judgments or orders, either individually or in the
aggregate, for the payment of money in excess of $5,000,000 shall be rendered against any
Loan Party or any Subsidiary thereof and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or order, by reason
of a pending appeal or otherwise, shall not be in effect; provided, however, that any such
judgment or order shall not give rise to an Event of Default under this Section 6.01(g) if
and so long as (A) the amount of such judgment or order which remains unsatisfied is covered
by a valid and binding policy of insurance between the respective Loan Party or Subsidiary
and the insurer covering full payment of such unsatisfied amount and (B) such insurer, which
shall be rated at least “A” by



104









 






A.M. Best Company, has been notified, and has not disputed the claim made for payment, of
the amount of such judgment or order; or




     (h) Non-Monetary Judgments. Any non-monetary judgment or order shall be
rendered against any Loan Party or Subsidiary thereof that could reasonably be expected to
result in a Material Adverse Effect, and there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or




     (i) Unenforceability of Loan Documents. Any provision of any Loan Document
after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than
pursuant to the terms thereof) cease to be valid and binding on or enforceable against any
Loan Party which is party to it, or any such Loan Party shall so state in writing; or




     (j) Security Failure. Any Collateral Document or financing statement after
delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected first priority lien on
and security interest in the Collateral purported to be covered thereby; or




     (k) Change of Control. A Change of Control shall occur; or




     (l) ERISA Events. Any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to
which an ERISA Event shall have occurred and then exist (or the liability of the Loan
Parties and the ERISA Affiliates related to such ERISA Event) exceeds $5,000,000;


then, and in any such event, the Administrative Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Commitments of each Lender
Party and the obligation of each Lender Party to make Advances (other than Letter of Credit
Advances by an Issuing Bank or a Lender pursuant to Section 2.03(c) and Swing Line Advances by a
Lender pursuant to Section 2.02(b)) and of each Issuing Bank to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may
with the consent, of the Required Lenders, (A) by notice to the Borrower, declare the Advances, all
interest thereon and all other amounts payable under this Agreement and the other Loan Documents to
be forthwith due and payable, whereupon the Advances, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the Borrower, and (B) by notice to each party
required under the terms of any agreement in support of which a Letter of Credit is issued, request
that all Obligations under such agreement be declared to be due and payable; provided, however,
that in the event of an actual or deemed entry of an order for relief with respect to the Borrower
under any Bankruptcy Law, (y) the Commitments of each Lender Party and the obligation of each
Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Lender
pursuant to Section 2.03(c) and Swing Line Advances by a Lender pursuant to Section 2.02(b)) and of
each Issuing Bank to issue Letters of Credit shall automatically be terminated and (z) the
Advances,






105









 







all such interest and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.




          SECTION 6.02. Actions in Respect of the Letters of Credit upon Default. If any Event
of Default shall have occurred and be continuing, the Administrative Agent may, or shall at the
request of the Required Lenders, irrespective of whether it is taking any of the actions described
in Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such demand the
Borrower will, pay to the Administrative Agent on behalf of the Lender Parties in same day funds at
the Administrative Agent’s office designated in such demand, for deposit in the L/C Cash Collateral
Account, an amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent or the Issuing Bank determines that any funds
held in the L/C Cash Collateral Account are subject to any right or claim of any Person other than
the Agents and the Lender Parties with respect to the Obligations of the Loan Parties under the
Loan Documents, or that the total amount of such funds is less than the aggregate Available Amount
of all Letters of Credit, the Borrower will, forthwith upon demand by the Administrative Agent, pay
to the Administrative Agent, as additional funds to be deposited and held in the L/C Cash
Collateral Account, an amount equal to the excess of (a) such aggregate Available Amount over (b)
the total amount of funds, if any, then held in the L/C Cash Collateral Account that the
Administrative Agent, as the case may be, determines to be free and clear of any such right and
claim. Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash
Collateral Account, such funds shall be applied to reimburse the relevant Issuing Bank or Lenders,
as applicable, to the extent permitted by applicable law.




ARTICLE VII

GUARANTY




          SECTION 7.01. Guaranty; Limitation of Liability. (a) Each Guarantor hereby
absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at
scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise,
of all Obligations of each other Loan Party now or hereafter existing under or in respect of the
Loan Documents (including, without limitation, any extensions, modifications, substitutions,
amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect,
absolute or contingent, and whether for principal, interest, premiums, fees, indemnities, contract
causes of action, costs, expenses or otherwise (such Obligations being the “Guaranteed
Obligations”), and agrees to pay any and all expenses (including, without limitation, fees and
expenses of counsel) incurred by the Administrative Agent or any other Secured Party in enforcing
any rights under this Agreement or any other Loan Document. Without limiting the generality of the
foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any other Loan Party to any Secured Party under or in
respect of the Loan Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving such other Loan
Party. This Guaranty is and constitutes a guaranty of payment and not merely of collection.




          (b) Each Guarantor, the Administrative Agent and each other Lender Party and, by its
acceptance of the benefits of this Guaranty, each other Secured Party, hereby confirms






106









 







that it is the intention of all such Persons that this Guaranty and the Obligations of each
Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law to the extent applicable to this Guaranty and the Obligations of each
Guarantor hereunder. To effectuate the foregoing intention, the Guarantors, the Administrative
Agent, the other Lender Parties and, by their acceptance of the benefits of this Guaranty, the
other Secured Parties hereby irrevocably agree that the Obligations of each Guarantor under this
Guaranty at any time shall be limited to the maximum amount as will result in the Obligations of
such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.




          (c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment
shall be required to be made to any Secured Party under this Guaranty or any other guaranty, such
Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.




          SECTION 7.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of this Agreement and the other Loan
Documents, regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Administrative Agent or any other
Secured Party with respect thereto. The Obligations of each Guarantor under or in respect of this
Guaranty are independent of the Guaranteed Obligations or any other Obligations of any other Loan
Party under or in respect of this Agreement or the other Loan Documents, and a separate action or
actions may be brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective
of whether any action is brought against the Borrower or any other Loan Party or whether the
Borrower or any other Loan Party is joined in any such action or actions. The liability of each
Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and
each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any
way relating to, any or all of the following:





     (a) any lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;




     (b) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations or any other Obligations of any other Loan Party under
or in respect of the Loan Documents, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to the Borrower,
any other Loan Party or any of their Subsidiaries or otherwise;




     (c) any taking, exchange, release or non-perfection of any collateral, or any taking,
release or amendment or waiver of, or consent to departure from, any other guaranty, for all
or any of the Guaranteed Obligations;



107









 






     (d) any manner of application of collateral, or proceeds thereof, to all or any of the
Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all
or any of the Guaranteed Obligations or any other Obligations of any Loan Party under the
Loan Documents or any other assets of any Loan Party or any of its Subsidiaries;




     (e) any change, restructuring or termination of the corporate structure or existence of
any Loan Party or any of its Subsidiaries;




     (f) any failure of the Administrative Agent or any other Secured Party to disclose to
any Loan Party any information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party now or hereafter
known to the Administrative Agent or such other Secured Party (each Guarantor waiving any
duty on the part of the Administrative Agent and each other Secured Party to disclose such
information);




     (g) the failure of any other Person to execute or deliver this Agreement, any other
Loan Document, any Guaranty Supplement or any other guaranty or agreement or the release or
reduction of liability of any Guarantor or other guarantor or surety with respect to the
Guaranteed Obligations; or




     (h) any other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by the Administrative Agent or any
other Secured Party that might otherwise constitute a defense available to, or a discharge
of, any Loan Party or any other guarantor or surety.


This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any
Secured Party or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower
or any other Loan Party or otherwise, all as though such payment had not been made.




          SECTION 7.03. Waivers and Acknowledgments. (a) Each Guarantor hereby unconditionally
and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or dishonor and any other
notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that
the Administrative Agent or any other Secured Party protect, secure, perfect or insure any Lien or
any property subject thereto or exhaust any right or take any action against any Loan Party or any
other Person or any collateral.




          (b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this
Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future.




          (c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by
reason of any claim or defense based upon an election of remedies by the Administrative Agent or
any other Secured Party that in any manner impairs, reduces, releases or otherwise adversely
affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such
Guarantor or other rights of such Guarantor to proceed against any






108









 







of the other Loan Parties, any other guarantor or any other Person or any collateral and (ii)
any defense based on any right of set-off or counterclaim against or in respect of the Obligations
of such Guarantor hereunder.




          (d) Each Guarantor acknowledges that the Administrative Agent may, without notice to or demand
upon such Guarantor and without affecting the liability of such Guarantor under this Guaranty,
foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives any defense to
the recovery by the Administrative Agent and the other Secured Parties against such Guarantor of
any deficiency after such nonjudicial sale and any defense or benefits that may be afforded by
applicable law.




          (e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of the
Administrative Agent or any other Secured Party to disclose to such Guarantor any matter, fact or
thing relating to the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, any other Loan Party or any of their Subsidiaries now or
hereafter known by the Administrative Agent or such other Secured Party.




          (f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits
from the financing arrangements contemplated by this Agreement and the other Loan Documents and
that the waivers set forth in Section 7.02 and this Section 7.03 are knowingly made in
contemplation of such benefits.




          SECTION 7.04. Subrogation. Each Guarantor hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire against the Borrower,
any other Loan Party or any other insider guarantor that arise from the existence, payment,
performance or enforcement of such Guarantor’s Obligations under or in respect of this Guaranty,
this Agreement or any other Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to participate in any
claim or remedy of any Secured Party against the Borrower, any other Loan Party or any other
insider guarantor or any collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right to take or receive
from the Borrower, any other Loan Party or any other insider guarantor, directly or indirectly, in
cash or other property or by set-off or in any other manner, payment or security on account of such
claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, all Letters of Credit shall have
expired or been terminated, all Secured Hedge Agreements shall have expired or been terminated and
the Commitments shall have expired or been terminated. If any amount shall be paid to any
Guarantor in violation of the immediately preceding sentence at any time prior to the latest of (a)
the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this
Guaranty, (b) the termination in whole of the Commitments and (c) the latest date of expiration or
termination of all Letters of Credit and all Secured Hedge Agreements, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be segregated from other
property and funds of such Guarantor and shall forthwith be paid or delivered to the Administrative
Agent in the same form as so received (with any necessary endorsement or assignment) to be credited
and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan Documents. If (i) any
Guarantor shall






109









 







make payment to any Secured Party of all or any part of the Guaranteed Obligations, (ii) all
of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash, (iii) the termination in whole of the Commitments shall have occurred and
(iv) all Letters of Credit and all Secured Hedge Agreements shall have expired or been terminated,
the Administrative Agent and the other Secured Parties will, at such Guarantor’s request and
expense, execute and deliver to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of
an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor
pursuant to this Guaranty.




          SECTION 7.05. Guaranty Supplements. Upon the execution and delivery by any Person of
a Guaranty Supplement, (i) such Person shall be referred to as an “Additional Guarantor” and shall
become and be a Guarantor hereunder, and each reference in this Agreement to a “Guarantor” or a
“Loan Party” shall also mean and be a reference to such Additional Guarantor, and each reference in
any other Loan Document to a “Guarantor” shall also mean and be a reference to such Additional
Guarantor, and (ii) each reference herein to “this Agreement”, “this Guaranty”, “hereunder”,
“hereof” or words of like import referring to this Agreement and this Guaranty, and each reference
in any other Loan Document to the “Loan Agreement”, “Guaranty”, “thereunder”, “thereof” or words of
like import referring to this Agreement and this Guaranty, shall mean and be a reference to this
Agreement and this Guaranty as supplemented by such Guaranty Supplement.




          SECTION 7.06. Indemnification by Guarantors. (a) Without limitation on any other
Obligations of any Guarantor or remedies of the Administrative Agent or the Secured Parties under
this Agreement, this Guaranty or the other Loan Documents, each Guarantor shall, to the fullest
extent permitted by law, indemnify, defend and save and hold harmless the Administrative Agent,
each other Secured Party and each of their Affiliates and their respective officers, directors,
employees, agents, partners and advisors (each, an “Indemnified Party”) from and against, and shall
pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded
against any Indemnified Party in connection with or as a result of any failure of any Guaranteed
Obligations to be the legal, valid and binding obligations of any Loan Party enforceable against
such Loan Party in accordance with their terms.




          (b) Each Guarantor hereby also agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract, tort or otherwise) to any of the Guarantors or any of
their respective Affiliates or any of their respective officers, directors, employees, agents and
advisors, and each Guarantor hereby agrees not to assert any claim against any Indemnified Party on
any theory of liability, for special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Advances or
the Letters of Credit, the Loan Documents or any of the transactions contemplated by the Loan
Documents.




          SECTION 7.07. Subordination. Each Guarantor hereby subordinates any and all debts,
liabilities and other Obligations owed to such Guarantor by each other Loan Party (the
“Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner
hereinafter set forth in this Section 7.07.







110









 








          (a) Prohibited Payments, Etc. Except during the continuance of a Default (including
the commencement and continuation of any proceeding under any Bankruptcy Law relating to any other
Loan Party), each Guarantor may receive regularly scheduled payments or payments made in the
ordinary course of business from any other Loan Party on account of the Subordinated Obligations.
After the occurrence and during the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any other Loan Party), however,
unless the Administrative Agent otherwise agrees, no Guarantor shall demand, accept or take any
action to collect any payment on account of the Subordinated Obligations.




          (b) Prior Payment of Guaranteed Obligations. In any proceeding under any Bankruptcy
Law relating to any other Loan Party, each Guarantor agrees that the Secured Parties shall be
entitled to receive payment in full in cash of all Guaranteed Obligations (including all interest
and expenses accruing after the commencement of a proceeding under any Bankruptcy Law, whether or
not constituting an allowed claim in such proceeding (“Post Petition Interest”)) before such
Guarantor receives payment of any Subordinated Obligations.




          (c) Turn-Over. After the occurrence and during the continuance of any Default
(including the commencement and continuation of any proceeding under any Bankruptcy Law relating to
any other Loan Party), each Guarantor shall, if the Administrative Agent so requests, collect,
enforce and receive payments on account of the Subordinated Obligations as trustee for the Secured
Parties and deliver such payments to the Administrative Agent on account of the Guaranteed
Obligations (including all Post Petition Interest), together with any necessary endorsements or
other instruments of transfer, but without reducing or affecting in any manner the liability of
such Guarantor under the other provisions of this Guaranty.




          (d) Administrative Agent Authorization. After the occurrence and during the
continuance of any Default (including the commencement and continuation of any proceeding under any
Bankruptcy Law relating to any other Loan Party), the Administrative Agent is authorized and
empowered (but without any obligation to so do), in its discretion, (i) in the name of each
Guarantor, to collect and enforce, and to submit claims in respect of, Subordinated Obligations and
to apply any amounts received thereon to the Guaranteed Obligations (including any and all Post
Petition Interest), and (ii) to require each Guarantor (A) to collect and enforce, and to submit
claims in respect of, Subordinated Obligations and (B) to pay any amounts received on such
obligations to the Administrative Agent for application to the Guaranteed Obligations (including
any and all Post Petition Interest).




          SECTION 7.08. Continuing Guaranty. This Guaranty is a continuing guaranty and shall
(a) remain in full force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty, (ii) the termination in
whole of the Commitments and (iii) the latest date of expiration or termination of all Letters of
Credit and all Secured Hedge Agreements, (b) be binding upon the Guarantors, their successors and
assigns and (c) inure to the benefit of and be enforceable by the Administrative Agent and the
other Secured Parties and their successors, transferees and assigns.




ARTICLE VIII

THE AGENTS






111









 








          SECTION 8.01. Authorization and Action; Appointment of Supplemental Collateral Agents.
(a) Each Lender Party (in its capacities as a Lender, the Swing Line Bank (if applicable) and as
an Issuing Bank (if applicable) and on behalf of itself and its Affiliates as potential Hedge
Banks) hereby appoints and authorizes each Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement and the other Loan Documents as are
delegated to such Agent by the terms hereof and thereof, together with such powers and discretion
as are reasonably incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the Notes), no Agent shall
be required to exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; provided, however, that no Agent shall be required to take any
action that exposes such Agent to personal liability or that is contrary to this Agreement or
applicable law. Each Agent agrees to give to each Lender Party prompt notice of each notice given
to it by the Borrower pursuant to the terms of this Agreement. Notwithstanding anything to the
contrary in any Loan Document, no Person identified as a syndication agent, documentation agent,
senior manager, joint lead arranger or joint book running manager, in such Person’s capacity as
such, shall have any obligations or duties to any Loan Party, the Administrative Agent or any other
Secured Party under any of such Loan Documents. In its capacity as the Lender Parties’ contractual
representative, Agents are each a “representative” of the Lender Parties as used within the meaning
of “Secured Party” under Section 9-102 of the Uniform Commercial Code.




          (b) Anything contained herein or in the Collateral Documents to the contrary notwithstanding,
the Collateral Agent may from time to time, when the Collateral Agent deems it to be necessary,
appoint one or more trustees, co-trustees, collateral co-agents or collateral subagents (each, a
“Supplemental Collateral Agent”) with respect to all or any part of the Collateral. In the event
that the Collateral Agent so appoints any Supplemental Collateral Agent with respect to any
Collateral, (i) such Supplemental Collateral Agent shall automatically be vested, in addition to
the Collateral Agent, with all rights, powers, privileges, interests and remedies of the Collateral
Agent under the Collateral Documents with respect to such Collateral; (ii) such Supplemental
Collateral Agent shall be deemed to be an “Agent” for purposes of this Agreement and the other Loan
Documents, and the provisions of Section 21 of the Security Agreement, this Article and Section
9.04 hereof that refer to the Agents (or either of them) shall inure to the benefit of such
Supplemental Collateral Agent, and all references therein and in the other Loan Documents to the
Collateral Agent shall be deemed to be references to the Collateral Agent and/or such Supplemental
Collateral Agent, as the context may require; and (iii) the term “Collateral Agent”, when used
herein or in any applicable Collateral Document in relation to the Liens on or security interests
in such Collateral granted in favor of the Collateral Agent, and any rights, powers, privileges,
interests and remedies of the Collateral Agent with respect to such Collateral, shall be deemed to
include such Supplemental Collateral Agent; provided, however, that no such Supplemental Collateral
Agent shall be authorized to take any action with respect to any such Collateral unless and except
to the extent expressly authorized in writing by the Collateral Agent. Should any instrument in
writing from the Borrower or any other Loan Party be reasonably required by any Supplemental
Collateral Agent so appointed by the Collateral Agent to more fully or certainly vest in and
confirming to such Supplemental Collateral Agent such rights, powers, privileges and duties, the
Borrower shall, or shall cause such Loan Party to,






112









 







execute, acknowledge and deliver any and all such instruments promptly upon request by the
Collateral Agent. If any Supplemental Collateral Agent, or successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges and duties of such
Supplemental Collateral Agent, to the extent permitted by law, shall automatically vest in and be
exercised by the Collateral Agent until the appointment of a new Supplemental Collateral Agent.




          SECTION 8.02. Agents’ Reliance, Etc. Neither any Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with the Loan Documents, except for its or their own gross negligence
or willful misconduct. Without limitation of the generality of the foregoing, each Agent: (a) in
the case of the Administrative Agent, may treat the payee of any Note as the holder thereof until
the Administrative Agent receives and accepts an Accession Agreement entered into by an Acceding
Lender as provided in Section 2.17 or an Assignment and Acceptance entered into by the Lender that
is the payee of such Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of
any other Agent, such Agent has received notice from the Administrative Agent that it has received
and accepted such Accession Agreement or Assignment and Acceptance, as the case may be, in each
case as provided in Section 9.07; (b) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or representation to any
Lender Party and shall not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan Documents; (d)
shall not have any duty to ascertain or to inquire as to the performance, observance or
satisfaction of any of the terms, covenants or conditions of any Loan Document on the part of any
Loan Party or the existence at any time of any Default under the Loan Documents or to inspect the
property (including the books and records) of any Loan Party; (e) shall not be responsible to any
Lender Party for the due execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created or purported to be
created under or in connection with, any Loan Document or any other instrument or document
furnished pursuant thereto; and (f) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate or other instrument or writing (which may
be by telegram, telecopy or telex or other electronic communication) believed by it to be genuine
and signed or sent by the proper party or parties.




          SECTION 8.03. Citibank and Affiliates. With respect to its Commitments, the Advances
made by it and the Notes issued to it, Citibank shall have the same rights and powers under the
Loan Documents as any other Lender Party and may exercise the same as though it were not an Agent;
and the term “Lender Party” or “Lender Parties” shall, unless otherwise expressly indicated,
include Citibank in its individual capacity. Citibank and its Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any Loan Party, any Subsidiary of any Loan Party and
any Person that may do business with or own securities of any Loan Party or any such Subsidiary,
all as if Citibank were not the Administrative Agent or the Collateral Agent and without any duty
to account therefor to the Lender Parties.







113









 








          SECTION 8.04. Lender Party Credit Decision. Each Lender Party acknowledges that it
has, independently and without reliance upon any Agent or any other Lender Party and based on the
financial statements referred to in Section 4.01 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender Party also acknowledges that it will, independently and without reliance upon any Agent or
any other Lender Party and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking action under this
Agreement. Nothing in this Agreement or any other Loan Document shall require any Agent or any of
its respective directors, officers, agents or employees to carry out any “know your customer” or
other checks in relation to any Person on behalf of any Lender Party and each Lender Party confirms
to the Agents that it is solely responsible for any such checks it is required to carry out and
that it may not rely on any statement in relation to such checks made by any Agent or any of its
respective directors, officers, agents or employees.




          SECTION 8.05. Indemnification by Lender Parties. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the Borrower) from and
against such Lender Party’s ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of the Loan Documents or any action taken
or omitted by such Agent under the Loan Documents (collectively, the “Indemnified Costs”);
provided, however, that no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from any Agent’s gross negligence or willful misconduct as found in a
final, non-appealable judgment by a court of competent jurisdiction. Without limitation of the
foregoing, each Lender Party agrees to reimburse each Agent promptly upon demand for its ratable
share of any costs and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrower under Section 9.04, to the extent that such Agent is not promptly
reimbursed for such costs and expenses by the Borrower. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section 8.05 applies whether
any such investigation, litigation or proceeding is brought by any Lender Party or any other
Person.




          (b) Each Lender Party severally agrees to indemnify each Issuing Bank (to the extent not
promptly reimbursed by the Borrower) from and against such Lender Party’s ratable share (determined
as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Issuing Bank in any way relating to or arising
out of the Loan Documents or any action taken or omitted by such Issuing Bank under the Loan
Documents; provided, however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Issuing Bank’s gross negligence or willful misconduct as found in
a final, non-appealable judgment by a court of competent jurisdiction. Without limitation of the
foregoing, each Lender Party agrees to reimburse such Issuing Bank promptly upon demand for its
ratable share of any costs and expenses (including, without limitation, fees and expenses of
counsel) payable by the Borrower under Section 9.04, to






114









 







the extent that such Issuing Bank is not promptly reimbursed for such costs and expenses by
the Borrower.




          (c) For purposes of this Section 8.05, the Lender Parties’ respective ratable shares of any
amount shall be determined, at any time, according to their respective Revolving Credit Commitments
at such time. The failure of any Lender Party to reimburse any Agent or any Issuing Bank, as the
case may be, promptly upon demand for its ratable share of any amount required to be paid by the
Lender Parties to such Agent or such Issuing Bank, as the case may be, as provided herein shall not
relieve any other Lender Party of its obligation hereunder to reimburse such Agent or such Issuing
Bank, as the case may be, for its ratable share of such amount, but no Lender Party shall be
responsible for the failure of any other Lender Party to reimburse such Agent or such Issuing
Bank, as the case may be, for such other Lender Party’s ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 8.05 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under the other Loan Documents.




          SECTION 8.06. Successor Agents. Any Agent may resign at any time by giving 30 days’
prior written notice thereof to the Lender Parties and the Borrower and may be removed at any time
for cause by the Required Lenders; provided, however, that any removal of the Administrative Agent
will not be effective until it has been replaced as Collateral Agent and it (or its Affiliate) has
been replaced as an Issuing Bank and released from all obligations in respect thereof. Upon any
such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent
(which successor Agent shall be reasonably acceptable to the Borrower). If no successor Agent
shall have been so appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent’s giving of notice of resignation or the Required Lenders’
removal of the retiring Agent, then the retiring Agent may, on behalf of the Lender Parties,
appoint a successor Agent, which shall be a commercial bank organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of at least $250,000,000.
Upon the acceptance of any appointment as an Agent hereunder by a successor Agent, and, in the case
of a successor Collateral Agent, upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to the Mortgages and
Assignments of Leases, and such other instruments or notices, as may be necessary or desirable, or
as the Required Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor Agent shall succeed to and
become vested with all the rights, powers, discretion, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under the Loan
Documents. If within 45 days after written notice is given of the retiring Agent’s resignation or
removal under this Section 8.06 no successor Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (i) the retiring Agent’s resignation or removal
shall become effective, (ii) the retiring Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (iii) the Required Lenders shall thereafter perform all
duties of the retiring Agent under the Loan Documents until such time, if any, as the Required
Lenders appoint a successor Agent as provided above. After any retiring Agent’s resignation or
removal hereunder as an Agent shall have become effective, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.







115









 








          SECTION 8.07. Relationship of Agents and Lenders. The relationship between Agents (or
either of them) and the Lenders, and the relationship among the Lenders, is not intended by the
parties to create, and shall not create, any trust, joint venture or partnership relation between
them.




ARTICLE IX

MISCELLANEOUS




          SECTION 9.01. Amendments, Etc. (a) No amendment or waiver of any provision of this
Agreement or the Notes or any other Loan Document, nor consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing and signed (or, in
the case of the Collateral Documents, consented to) by the Required Lenders, and then such waiver
or consent shall be effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed
by all of the Lenders, do any of the following at any time:





     (i) modify the definition of Required Lenders or otherwise change the percentage vote
of the Lenders required to take any action under this Agreement or any other Loan Document,




     (ii) release the Borrower with respect to the Obligations or, except to the extent
expressly permitted under this Agreement, reduce or limit the obligations of any Guarantor
under Article VII or release such Guarantor or otherwise limit such Guarantor’s liability
with respect to the Guaranteed Obligations,




     (iii) release all or substantially all of the Collateral (other than pursuant to
Section 5.02(e) or 9.11) or permit the Loan Parties to encumber the Collateral, except as
expressly permitted in the Loan Documents prior to giving effect to such amendment,




     (iv) amend this Section 9.01,




     (v) increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, other than as provided by Section 2.17,




     (vi) forgive or reduce the principal of, or interest on, the Obligations of the Loan
Parties under the Loan Documents or any fees or other amounts payable thereunder,




     (vii) postpone or extend any date fixed for any payment of principal of, or interest
on, the Notes or any fees or other amounts payable hereunder, or




     (viii) extend the Termination Date, other than as provided by Section 2.16;




provided further that no amendment, waiver or consent shall, unless in writing and
signed by the Swing Line Bank or each Issuing Bank, as the case may be, in addition to the
Lenders required above to take such action, affect the rights or obligations of the Swing
Line Bank or of the Issuing Banks, as the case may be, under this Agreement; and provided
further that no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent or the Collateral Agent in addition to the Lenders required



116









 






above to take such action, affect the rights or duties of the Administrative Agent or the
Collateral Agent, as the case may be, under this Agreement or the other Loan Documents.



          (b) In the event that (1) any Lender shall refuse to consent to a waiver or amendment to, or a
departure from, the provisions of this Agreement which requires the consent of all Lenders and that
has been consented to by the Administrative Agent and the Required Lenders or (2) any Lender Party
makes a demand for payment pursuant to Section 2.10(a) or (b) or (3) any Loan Party is required to
pay additional amounts to a Lender Party pursuant to Section 2.12(a) or (b) or (c) or (4) any
Lender fails to make any Advance to be made by it as part of any Borrowing on a date when the other
Lenders make their Advances as contemplated under this Agreement (any such Lender, a “Potential
Assignor Lender”), then the Borrower shall have the right, upon written demand to such Potential
Assignor Lender and the Administrative Agent given within 30 days after the first date on which
such consent was solicited in writing from the Lenders by the Administrative Agent or the first
date on which the Lender Party made a demand for payment or failed to make the Advance (a
“Potential Assignment Event Date”), to cause such Potential Assignor Lender to assign its rights
and obligations under this Agreement at par (including, without limitation, its Commitment or
Commitments, the Advances owing to it and the Note or Notes, if any, held by it) to an Eligible
Assignee designated by the Borrower and approved by the Administrative Agent (such approval not to
be unreasonably withheld) (a “Replacement Lender”), provided that (i) as of such Potential
Assignment Event Date, no Default or Event of Default shall have occurred and be continuing, and
(ii) with respect to clause (1) above only, as of the date of the Borrower’s written demand to
replace such Potential Assignor Lender, no Default or Event of Default shall have occurred and be
continuing other than a Default or Event of Default that resulted solely from the subject matter of
the waiver or amendment for which such consent was being solicited from the Lenders by the
Administrative Agent. The Replacement Lender shall purchase such interests of the Potential
Assignor Lender and shall assume the rights and obligations of the Potential Assignor Lender under
this Agreement upon execution by the Replacement Lender of an Assignment and Acceptance delivered
pursuant to Section 9.07. Any Lender that becomes a Potential Assignor Lender agrees that, upon
receipt of notice from the Borrower given in accordance with this Section 9.01(b) it shall promptly
execute and deliver an Assignment and Acceptance with a Replacement Lender as contemplated by this
Section.




          SECTION 9.02. Notices, Etc. (a) All notices and other communications provided for
hereunder shall be either (x) in writing (including telecopier communication) and mailed,
telecopied or delivered by hand or by overnight courier service, (y) as and to the extent set forth
in Section 9.02(b) and in the proviso to this Section 9.02(a), in an electronic medium and
delivered as set forth in Section 9.02(b) or (z) as and to the extent expressly permitted in this
Agreement, transmitted by e-mail, provided that such e-mail shall in all cases include an
attachment (in PDF format or similar format) containing a legible signature of the person providing
such notice, if to the Borrower, at its address at 2100 Rexford Road, Suite 414, Charlotte, North
Carolina 28211, Attention: Donald L. Bobbitt, Jr., with a copy to Bradley Arant Boult Cummings LLP,
1819 Fifth Avenue North, Birmingham, Alabama 35203, Attention: Dawn Helms Sharff or, if applicable,
at donnie.bobbitt@campuscrest.com (with a copy to dsharff@babc.com) (and in the case of
transmission by e mail, with a copy by U.S. mail to 2100 Rexford Road, Suite 414, Charlotte, North
Carolina 28211, Attention: Donald L. Bobbitt, Jr., with a copy to Bradley Arant Boult Cummings LLP,
1819 Fifth Avenue North, Birmingham,






117









 







Alabama 35203, Attention: Dawn Helms Sharff); if to any Initial Lender, at its Domestic
Lending Office or, if applicable, at the telecopy number or e-mail address specified opposite its
name on Schedule I hereto (and in the case of a transmission by e-mail, with a copy by U.S. mail to
its Domestic Lending Office); if to any other Lender Party, at its Domestic Lending Office or, if
applicable, at the telecopy number or e-mail address specified in the Assignment and Acceptance
pursuant to which it became a Lender Party (and in the case of a transmission by e-mail, with a
copy by U.S. mail to its Domestic Lending Office); if to the Initial Issuing Bank, at its address
at 1615 Brett Road, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department, or,
if applicable, at GLAgentOfficeOps@citigroup.com (and in the case of a transmission by e-mail, with
a copy by U.S. mail to 1615 Brett Road, New Castle, Delaware 19720, Attention: Bank Loan
Syndications Department); and if to the Administrative Agent, the Collateral Agent or the Swing
Line Bank, at its address at 1615 Brett Road, New Castle, Delaware 19720, Attention: Bank Loan
Syndications Department, or, if applicable, at GLAgentOfficeOps @citigroup.com (and in the case of
a transmission by e-mail, with a copy by U.S. mail to 1615 Brett Road, New Castle, Delaware 19720,
Attention: Bank Loan Syndications Department) or, as to the Borrower or any Agent, at such other
address as shall be designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in a written notice to
the Borrower and the Administrative Agent. All notices, demands, requests, consents and other
communications described in this clause (a) shall be effective (i) if delivered by hand, including
any overnight courier service, upon personal delivery, (ii) if delivered by mail, three (3)
Business Days after the date such notice, demand, request, consent or other communication is
deposited in the mails, (iii) if delivered by posting to an Approved Electronic Platform, an
Internet website or a similar telecommunication device requiring that a user have prior access to
such Approved Electronic Platform, website or other device (to the extent permitted by Section
9.02(b) to be delivered thereunder), when such notice, demand, request, consent and other
communication shall have been made generally available on such Approved Electronic Platform,
Internet website or similar device to the class of Person being notified (regardless of whether any
such Person must accomplish, and whether or not any such Person shall have accomplished, any action
prior to obtaining access to such items, including registration, disclosure of contact information,
compliance with a standard user agreement or undertaking a duty of confidentiality) and such Person
has been notified in respect of such posting that a communication has been posted to the Approved
Electronic Platform, provided that if requested by any Lender Party, the Administrative Agent shall
deliver a copy of the Communications to such Lender Party by e-mail or telecopier and (iv) if
delivered by electronic mail or any other telecommunications device, when receipt is confirmed by
electronic mail as provided in this clause (a); provided, however, that notices and communications
to any Agent pursuant to Article II, III or VIII or to the Collateral Agent under the Collateral
Documents shall not be effective until received by such Agent or the Collateral Agent, as the case
may be. Delivery by telecopier of an executed counterpart of a signature page to any amendment or
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and
delivered hereunder shall be effective as delivery of an original executed counterpart thereof.
Each Lender Party agrees (i) to notify the Administrative Agent in writing of such Lender Party’s
e-mail address to which a notice may be sent by electronic transmission (including by electronic
communication) on or before the date such Lender Party becomes a party to this Agreement (and from
time to time thereafter to ensure






118









 







that the Administrative Agent has on record an effective e-mail address for such Lender Party)
and (ii) that any notice may be sent to such e-mail address.




          (b) Notwithstanding clause (a) (unless the Administrative Agent requests that the provisions
of clause (a) be followed) and any other provision in this Agreement or any other Loan Document
providing for the delivery of any Approved Electronic Communication by any other means, the Loan
Parties shall deliver all Approved Electronic Communications to the Administrative Agent by
properly transmitting such Approved Electronic Communications in an electronic/soft medium in a
format acceptable to the Administrative Agent to oploanswebadmin@citigroup.com or such other
electronic mail address (or similar means of electronic delivery) as the Administrative Agent may
notify to the Borrower. Nothing in this clause (b) shall prejudice the right of the Administrative
Agent or any Lender Party to deliver any Approved Electronic Communication to any Loan Party in any
manner authorized in this Agreement or to request that the Borrower effect delivery in such manner.




          (c) Each of the Lender Parties and each Loan Party agrees that the Administrative Agent may,
but shall not be obligated to, make the Approved Electronic Communications available to the Lender
Parties by posting such Approved Electronic Communications on IntraLinksTM or a substantially
similar electronic platform chosen by the Administrative Agent to be its electronic transmission
system (the “Approved Electronic Platform”). Although the Approved Electronic Platform and its
primary web portal are secured with generally-applicable security procedures and policies
implemented or modified by the Administrative Agent from time to time (including, as of the Closing
Date, a dual firewall and a User ID/Password Authorization System) and the Approved Electronic
Platform is secured through a single-user-per-deal authorization method whereby each user may
access the Approved Electronic Platform only on a deal-by-deal basis, each of the Lender Parties
and each Loan Party acknowledges and agrees that the distribution of material through an electronic
medium is not necessarily secure and that there are confidentiality and other risks associated with
such distribution. In consideration for the convenience and other benefits afforded by such
distribution and for the other consideration provided hereunder, the receipt and sufficiency of
which is hereby acknowledged, each of the Lender Parties and each Loan Party hereby approves
distribution of the Approved Electronic Communications through the Approved Electronic Platform and
understands and assumes the risks of such distribution




          (d) THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS ARE PROVIDED
“AS IS” AND “AS AVAILABLE”. NONE OF THE ADMINISTRATIVE AGENT NOR ANY OF ITS DIRECTORS, OFFICERS,
AGENTS OR EMPLOYEES WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED ELECTRONIC
COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS ANY LIABILITY FOR
ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM.
NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS
DIRECTORS, OFFICERS, AGENTS OR






119









 







EMPLOYEES IN CONNECTION WITH THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC
PLATFORM.




          (e) Each of the Lender Parties and each Loan Party agrees that the Administrative Agent may,
but (except as may be required by applicable law) shall not be obligated to, store the Approved
Electronic Communications on the Approved Electronic Platform in accordance with the Administrative
Agent’s generally-applicable document retention procedures and policies.




          SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender Party or any
Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.




          SECTION 9.04. Costs and Expenses. (a) Each Loan Party agrees jointly and severally
to pay on demand (i) all reasonable out-of-pocket costs and expenses of each Agent in connection
with the preparation, execution, delivery, administration, modification and amendment of the Loan
Documents (including, without limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses, (B) the reasonable fees and expenses of counsel for such Agent with
respect thereto (including, without limitation, with respect to reviewing and advising on any
matters required to be completed by the Loan Parties on a post-closing basis), with respect to
advising such Agent as to its rights and responsibilities, or the perfection, protection or
preservation of rights or interests, under the Loan Documents, with respect to negotiations with
any Loan Party or with other creditors of any Loan Party or any of its Subsidiaries arising out of
any Default or any events or circumstances that may give rise to a Default and with respect to
presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or
other similar proceeding involving creditors’ rights generally and any proceeding ancillary thereto
and (C) the reasonable fees and expenses of counsel for such Agent with respect to the preparation,
execution, delivery and review of any documents and instruments at any time delivered pursuant to
Sections 3.01, 3.02, 5.01(j) or 5.01(k) and (ii) all reasonable out-of-pocket costs and expenses of
each Agent and each Lender Party in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of the Loan Documents, whether in any action, suit or litigation,
or any bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally
(including, without limitation, the reasonable fees and expenses of counsel for such Agent and each
Lender Party with respect thereto).




          (b) Each Loan Party agrees to indemnify, defend and save and hold harmless each Indemnified
Party from and against, and shall pay on demand, any and all claims, damages, losses, liabilities
and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection with any
investigation, litigation or proceeding or preparation of a defense in connection therewith) (i)
the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of
Credit, the Loan Documents or any of the transactions contemplated






120









 







thereby or (ii) the actual or alleged presence of Hazardous Materials on any property of any
Loan Party or any of its Subsidiaries or any Environmental Action relating in any way to any Loan
Party or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this Section 9.04(b)
applies, such indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or creditors or an Indemnified
Party, whether or not any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated by the Loan Documents are consummated. Each Loan Party also agrees not
to assert any claim against any Agent, any Lender Party or any of their Affiliates, or any of their
respective officers, directors, employees, agents and advisors, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise relating to the
Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit,
the Loan Documents or any of the transactions contemplated by the Loan Documents.




          (c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by
the Borrower to or for the account of a Lender Party other than on the last day of the Interest
Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.06,
2.09(b)(i), 2.10(d) or 2.17(e), acceleration of the maturity of the Notes pursuant to Section 6.01
or for any other reason, or if the Borrower fails to make any payment or prepayment of an Advance
for which a notice of prepayment has been given or that is otherwise required to be made, whether
pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon demand by such Lender
Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of such payment or
Conversion or such failure to pay or prepay, as the case may be, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by any Lender Party to fund or maintain such Advance.




          (d) If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it
under any Loan Document, including, without limitation, fees and expenses of counsel and
indemnities, such amount may be paid on behalf of such Loan Party by any Agent or any Lender Party,
in its sole discretion.




          (e) Without prejudice to the survival of any other agreement of any Loan Party hereunder or
under any other Loan Document, the agreements and obligations of the Borrower and the other Loan
Parties contained in Sections 2.10 and 2.12, Section 7.06 and this Section 9.04 shall survive the
payment in full of principal, interest and all other amounts payable hereunder and under any of the
other Loan Documents.




          SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the continuance of
any Event of Default and (b) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Notes due and payable pursuant to
the provisions of Section 6.01, each Agent and each Lender Party and






121









 







each of their respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other indebtedness at any
time owing by such Agent, such Lender Party or such Affiliate to or for the credit or the account
of the Borrower or any other Loan Party against any and all of the Obligations of the Borrower or
such Loan Party now or hereafter existing under the Loan Documents, irrespective of whether such
Agent or such Lender Party shall have made any demand under this Agreement or such Note or Notes
and although such obligations may be unmatured.




          SECTION 9.06. Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower, each Guarantor named on the signature pages hereto and the
Administrative Agent shall have been notified by each Initial Lender and each Initial Issuing Bank
that such Initial Lender or such Initial Issuing Bank, as the case may be, has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the Guarantors named on
the signature pages hereto and each Agent and each Lender Party and their respective successors and
assigns, except that neither the Borrower nor any other Loan Party shall have the right to assign
its rights hereunder or any interest herein without the prior written consent of the Lender
Parties.




          SECTION 9.07. Assignments and Participations; Replacement Notes. (a) Each Lender may
(and, if demanded by the Borrower in accordance with Section 9.01(b) will) assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment or Commitments, the Advances owing to it and
the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a
uniform, and not a varying, percentage of all rights and obligations under and in respect of one or
more of the Facilities, (ii) except in the case of an assignment to a Person that, immediately
prior to such assignment, was a Lender, an Affiliate of any Lender or a Fund Affiliate of any
Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, the
aggregate amount of the Commitments being assigned to such Eligible Assignee pursuant to such
assignment (determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000 under each Facility or an integral multiple
of $1,000,000 in excess thereof (or such lesser amount as shall be approved by the Administrative
Agent and, so long as no Default shall have occurred and be continuing at the time of effectiveness
of such assignment, the Borrower), (iii) each such assignment shall be to an Eligible Assignee,
(iv) each such assignment made as a result of a demand by the Borrower pursuant to Section 9.01(b)
shall be an assignment of all rights and obligations of the assigning Lender under this Agreement,
(v) no such assignments shall be permitted (A) until the Administrative Agent shall have notified
the Lender Parties that syndication of the Commitments hereunder has been completed, without the
consent of the Administrative Agent, and (B) at any other time without the consent of the
Administrative Agent (which consent shall not be unreasonably withheld) and (vi) the parties to
each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note or Notes subject to
such assignment and, except if such assignment is being made by a Lender to an Affiliate or Fund
Affiliate of such Lender, a processing and recordation fee of $3,500; provided, however, that for
each such assignment made as a result of a demand by the Borrower pursuant to Section 9.01(b), the
Borrower shall pay to the Administrative Agent the $3,500 processing and recordation fee.







122









 








          (b) Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the case
may be, hereunder and (ii) the Lender or Issuing Bank assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than its rights under Sections 2.10, 2.12, 7.06, 8.05 and
9.04 to the extent any claim thereunder relates to an event arising prior to such assignment) and
be released from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Lender’s or Issuing Bank’s rights
and obligations under this Agreement, such Lender or Issuing Bank shall cease to be a party
hereto).




          (c) By executing and delivering an Assignment and Acceptance, each Lender Party assignor
thereunder and each assignee thereunder confirm to and agree with each other and the other parties
thereto and hereto as follows: (i) other than as provided in such Assignment and Acceptance, such
assigning Lender Party makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or purported to be
created under or in connection with, any Loan Document or any other instrument or document
furnished pursuant thereto; (ii) such assigning Lender Party makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any Loan Document or
any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it
has received a copy of this Agreement, together with copies of the financial statements referred to
in Section 4.01 and such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon any Agent, such assigning Lender Party or any other
Lender Party and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under this Agreement; (v)
such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes
each Agent to take such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms hereof and thereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender or Issuing Bank, as the case may
be.




          (d) The Administrative Agent shall maintain at its address referred to in Section 9.02 a copy
of each Assignment and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lender Parties and the Commitment under each Facility
of, and principal amount of the Advances owing under each Facility to, each Lender Party from time
to time (the “Register”). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agents and the Lender Parties may treat each
Person whose name is recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for






123









 







inspection by the Borrower or any Agent or any Lender Party at any reasonable time and from
time to time upon reasonable prior notice.




          (e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender Party and
an assignee, together with any Note or Notes subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in substantially the form of
Exhibit D hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower and each other Agent.
In the case of any assignment by a Lender, within five Business Days after receipt of a request
therefor, the Borrower, at its own expense, shall, if requested by the applicable Lender, execute
and deliver to the Administrative Agent in exchange for the surrendered Note or Notes a substitute
Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it
under each Facility pursuant to such Assignment and Acceptance and, if any assigning Lender has
retained a Commitment hereunder under such Facility, a substitute Note to the order of such
assigning Lender in an amount equal to the Commitment retained by it hereunder. Such substitute
Note or Notes, if any, shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A hereto.




          (f) Each Issuing Bank may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under the undrawn portion of its Letter of Credit Commitment at any time;
provided, however, that (i) except in the case of an assignment to a Person that immediately prior
to such assignment was an Issuing Bank or an assignment of all of an Issuing Bank’s rights and
obligations under this Agreement, the amount of the Letter of Credit Commitment of the assigning
Issuing Bank being assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be less than
$5,000,000 and shall be in an integral multiple of $1,000,000 in excess thereof, (ii) each such
assignment shall be to an Eligible Assignee and (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with a processing and recordation fee of $3,500, provided
that such fee shall not be payable if the assigning Issuing Bank is making such assignment
simultaneously with the assignment in its capacity as a Lender of all or a portion of its Revolving
Credit Commitment to the same Eligible Assignee.




          (g) Each Lender Party may sell participations to one or more Persons (other than any Loan
Party or any of its Affiliates) in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing
to it and the Note or Notes (if any) held by it); provided, however, that (i) such Lender Party’s
obligations under this Agreement (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender Party shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender Party shall remain the holder of any such
Note for all purposes of this Agreement, (iv) the Borrower, the Agents and the other Lender Parties
shall continue to deal solely and directly with such Lender Party in connection with such Lender
Party’s rights and obligations under this Agreement, (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan






124









 







Party therefrom, except to the extent that such amendment, waiver or consent would reduce the
principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or substantially all of the
Collateral and (vi) if, at the time of such sale, such Lender Party was entitled to payments under
Section 2.12(a) in respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to such participant on such date, provided that such
participant complies with the requirements of Section 2.12(e) as if it were a Lender hereunder.




          (h) Any Lender Party may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 9.07, disclose to the assignee or participant
or proposed assignee or participant any information relating to the Loan Parties (or any of them)
furnished to such Lender Party by or on behalf of any Loan Party; provided, however, that prior to
any such disclosure, the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Information received by it from such Lender Party on the same
terms as provided in Section 9.10.




          (i) Notwithstanding any other provision set forth in this Agreement, any Lender Party may at
any time create a security interest in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it and the Note or Notes held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.




          (j) Upon notice to the Borrower from the Administrative Agent or any Lender of the loss,
theft, destruction or mutilation of any Lender’s Note, the Borrower will execute and deliver, in
lieu of such original Note, a replacement promissory note, identical in form and substance to, and
dated as of the same date as, the Note so lost, stolen or mutilated, subject to delivery by such
Lender to the Borrower of an affidavit of lost note and indemnity in customary form. Upon the
execution and delivery of the replacement Note, all references herein or in any of the other Loan
Documents to the lost, stolen or mutilated Note shall be deemed references to the replacement Note.




          (k) If for any reason other than a good faith dispute any Lender shall fail or refuse to abide
by its obligations hereunder, and such Lender shall not have cured such failure or refusal within
five (5) Business Days of its occurrence (a “Lender Default”), then, in addition to the rights and
remedies that may be available to Administrative Agent, Lenders, or any Loan Party at law or in
equity, such Lender’s right to vote on matters related to this Agreement other than those matters
set forth in Section 9.01(a)(v), (vi), (vii) or (viii), and to participate in the administration of
the Advances and this Agreement, shall be suspended during the pendency of such failure or refusal;
provided, however, that during the existence of such Lender Default, if such defaulting Lender is
the only Lender to refuse to consent to a matter set forth in Section 9.01(a)(v), (vi), (vii) or
(viii), then the proviso in the first sentence of Section 9.01(b) shall not apply if such Lender
Default is continuing. Administrative Agent shall have the right, but not





125









 







the obligation, in its
sole discretion, to acquire at par all of such Lender’s Commitment,
including its Pro Rata Share in the Obligations under this Agreement. In the event that
Administrative Agent does not exercise its right to so acquire all of such Lender’s interests, then
each Lender for whom there does not exist a Lender Default (each, a “Current Party”) shall then,
thereupon, have the right, but not the obligation, in its sole discretion to acquire at par (or if
more than one Current Party exercises such right, each Current Party shall have the right to
acquire, pro rata) such Lender’s Commitment, including its Pro Rata Share in the outstanding
Obligations under this Agreement.




          SECTION 9.08. Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of this Agreement.




          SECTION 9.09. No Liability of the Issuing Banks. The Borrower assumes all risks of
the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its
use of such Letter of Credit. Neither any Issuing Bank nor any of its officers or directors shall
be liable or responsible for: (a) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by such Issuing
Bank against presentation of documents that do not comply with the terms of a Letter of Credit,
including failure of any documents to bear any reference or adequate reference to the Letter of
Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against such Issuing Bank, and such
Issuing Bank shall be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) such Issuing Bank’s
willful misconduct or gross negligence as determined in a final, non-appealable judgment by a court
of competent jurisdiction in determining whether documents presented under any Letter of Credit
comply with the terms of the Letter of Credit or (ii) such Issuing Bank’s willful failure to make
lawful payment under a Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not
in limitation of the foregoing, such Issuing Bank may accept documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any notice or
information to the contrary.




          SECTION 9.10. Confidentiality. (a) Each of the Agents, the Lender Parties and the
Issuing Bank agrees to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective
managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and
other representatives (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), (ii) to the extent requested by any regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (iii) to the extent required by applicable laws or




126









 







regulations or by any
subpoena or similar legal process, (iv) to any other party hereto, (v) in
connection with the exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (vi) subject to an agreement containing provisions at least as
restrictive as those of this Section, (vii) to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this Agreement,
(viii) to any actual or prospective party (or its managers, administrators, trustees, partners,
directors, officers, employees, agents, advisors and other representatives) to any swap, derivative
or other transaction under which payments are to be made by reference to the Borrower and its
obligations, this Agreement or payments hereunder, (ix) to any rating agency, (x) the CUSIP Service
Bureau or any similar organization, (xi) with the consent of the Borrower or (xii) to the extent
such Information (A) becomes publicly available other than as a result of a breach of this Section
or (B) becomes available to such Agent, such Lender Party, the Issuing Bank or any of their
respective Affiliates on a non-confidential basis from a source other than a Loan Party or any of
its Subsidiaries without such Agent, such Lender Party, the Issuing Bank or any of their respective
Affiliates having knowledge that a duty of confidentiality to the Loan Parties or any of their
Subsidiaries has been breached. For purposes of this Section, “Information” means all information
received from a Loan Party or any of its Subsidiaries (including the Fee Letter and any information
obtained based on a review of the books and records of the Parent Guarantor or any of its
Subsidiaries) relating to any Loan Party or any of their Subsidiaries or any of their respective
businesses. Any Person required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.




          (b) Certain of the Lender Parties may enter into this Agreement and take or not take action
hereunder or under the other Loan Documents on the basis of information that does not contain
material non-public information with respect to any of the Loan Parties, any of their Subsidiaries
or their respective securities (“Restricting Information”). Other Lender Parties may enter into
this Agreement and take or not take action hereunder or under the other Loan Documents on the basis
of information that may contain Restricting Information. Each Lender Party acknowledges that
United States federal and state securities laws prohibit any person from purchasing or selling
securities on the basis of material, non-public information concerning the issuer of such
securities or, subject to certain limited exceptions, from communicating such information to any
other Person. None of any Agent or any of its respective directors, officers, agents or employees
shall, by making any Communications (including Restricting Information) available to a Lender
Party, by participating in any conversations or other interactions with a Lender Party or
otherwise, make or be deemed to make any statement with regard to or otherwise warrant that any
such information or Communication does or does not contain Restricting Information nor shall any
Agent or any of its respective directors, officers, agents or employees be responsible or liable in
any way for any decision a Lender Party may make to limit or to not limit its access to Restricting
Information. In particular, none of any Agent or any of its respective directors, officers, agents
or employees (i) shall have, and each Agent, on behalf of itself and each of its directors,
officers, agents and employees, hereby disclaims, any duty to ascertain or inquire as to whether or
not a Lender Party has or has not limited its access to Restricting Information, such Lender
Party’s policies or



127









 




procedures regarding the safeguarding of material, nonpublic information or
such Lender Party’s
compliance with applicable laws related thereto or (ii) shall have, or incur, any liability to
any Loan Party, any Lender Party or any of their respective Affiliates, directors, officers, agents
or employees arising out of or relating to any Agent or any of its respective directors, officers,
agents or employees providing or not providing Restricting Information to any Lender Party, other
than as found by a court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of any Agent or any of its respective directors, officers, agents or employees.




          (c) Each Loan Party agrees that (i) all Communications it provides to any Agent intended for
delivery to the Lender Parties whether by posting to the Approved Electronic Platform or otherwise
shall be clearly and conspicuously marked “PUBLIC” if such Communications are determined by the
Loan Parties in good faith not to contain Restricting Information which, at a minimum, shall mean
that the word “PUBLIC” shall appear prominently on the first page thereof, (ii) by marking
Communications “PUBLIC,” each Loan Party shall be deemed to have authorized the Agents and the
Lender Parties to treat such Communications as either publicly available information or not
material information (although such Communications shall remain subject to the confidentiality
undertakings of Section 9.10(a)) with respect to such Loan Party or its securities for purposes of
United States Federal and state securities laws, (iii) all Communications marked “PUBLIC” may be
delivered to all Lender Parties and may be made available through a portion of the Approved
Electronic Platform designated “Public Side Information” and (iv) the Agents shall be entitled to
treat any Communications that are not marked “PUBLIC” as Restricting Information and may post such
Communications to a portion of the Approved Electronic Platform not designated “Public Side
Information” (and shall not post such Communications to a portion of the Approved Electronic
Platform designated “Public Side Information”). Neither Agent nor any of its respective Affiliates
shall be responsible for any statement or other designation by a Loan Party regarding whether a
Communication contains or does not contain material non-public information with respect to any of
the Loan Parties or their securities nor shall the Agents or any of their respective Affiliates
incur any liability to any Loan Party, any Lender Party or any other Person for any action taken by
any Agent or any of its respective Affiliates based upon such statement or designation, including
any action as a result of which Restricting Information is provided to a Lender Party that may
decide not to take access to Restricting Information. Nothing in this Section 9.10(c) shall modify
or limit a Person’s obligations under Section 9.10 with regard to Communications and the
maintenance of the confidentiality of or other treatment of Information.




          (d) Each Lender Party acknowledges that circumstances may arise that require it to refer to
Communications that might contain Restricting Information. Accordingly, each Lender Party agrees
that it will nominate at least one designee to receive Communications (including Restricting
Information) on its behalf and identify such designee (including such designee’s contact
information) in writing to the Administrative Agent. Each Lender Party agrees to notify the
Administrative Agent from time to time of such Lender Party’s designee’s e-mail address to which
notice of the availability of Restricting Information may be sent by electronic transmission.




          (e) Each Lender Party acknowledges that Communications delivered hereunder and under the other
Loan Documents may contain Restricting Information and that





128









 







such Communications are available to
all Lender Parties generally. Each Lender Party that
elects not to take access to Restricting Information does so voluntarily and, by such
election, acknowledges and agrees that the Agents and other Lender Parties may have access to
Restricting Information that is not available to such electing Lender Party. Each such electing
Lender Party acknowledges the possibility that, due to its election not to take access to
Restricting Information, it may not have access to any Communications (including, without being
limited to, the items required to be made available to the Administrative Agent in Section 5.03
unless or until such Communications (if any) have been filed or incorporated into documents which
have been filed with the Securities and Exchange Commission by the Parent). None of the Loan
Parties, Agents or any Lender Party with access to Restricting Information shall have any duty to
disclose such Restricting Information to such electing Lender Party or to use such Restricting
Information on behalf of such electing Lender Party, and shall not be liable for the failure to so
disclose or use, such Restricting Information.




          (f) Sections 9.10(b), (c), (d) and (e) are designed to assist the Agents, the Lender Parties
and the Loan Parties, in complying with their respective contractual obligations and applicable law
in circumstances where certain Lender Parties express a desire not to receive Restricting
Information notwithstanding that certain Communications hereunder or under the other Loan Documents
or other information provided to the Lender Parties hereunder or thereunder may contain Restricting
Information. None of any Agent or any of its respective directors, officers, agents or employees
warrants or makes any other statement with respect to the adequacy of such provisions to achieve
such purpose nor does any Agent or any of its respective directors, officers, agents or employees
warrant or make any other statement to the effect that a Loan Party’s or Lender Party’s adherence
to such provisions will be sufficient to ensure compliance by such Loan Party or Lender Party with
its contractual obligations or its duties under applicable law in respect of Restricting
Information and each of the Lender Parties and each Loan Party assumes the risks associated
therewith.




          SECTION 9.11. Release of Collateral. (a) Upon (i) the sale, lease, transfer or other
disposition of any item of Collateral of any Loan Party (including, without limitation, (x) as a
result of a sale of the Equity Interests in the Loan Party that owns such Collateral, and (y) any
Transfer pursuant to Section 5.02(e)(ii)(B) or (C)) that is permitted by the terms of the Loan
Documents or (ii) any designation of any Borrowing Base Asset as a non-Borrowing Base Asset that is
permitted by Section 5.02(e)(ii)(C), then, in either such event, the Collateral Agent will, at the
Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan
Party may reasonably request to evidence the release of such item of Collateral from the assignment
and security interest granted under the Collateral Document in accordance with the terms of the
Loan Documents.




          (b) Upon the latest to occur of (i) the payment in full in cash of the Secured Obligations,
(ii) the termination in whole of the Commitments and (iii) the termination or expiration of all
Letters of Credit and all Secured Hedge Agreements, the Liens granted by the Collateral Documents
shall terminate and all rights to the Collateral shall revert to the applicable Loan Party. Upon
any such termination, the Collateral Agent will, at the Borrower’s expense, execute and deliver to
the applicable Loan Parties such documents as such Loan Parties shall reasonably request to
evidence such termination.







129









 








          SECTION 9.12. Patriot Act Notification. Each Lender and each Agent (for itself and
not on behalf of any Lender) hereby notifies the Loan Parties that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that identifies each Loan Party,
which information includes the name and address of such Loan Party and other information that will
allow such Lender or such Agent, as applicable, to identify such Loan Party in accordance with the
Patriot Act. The Parent Guarantor and the Borrower shall, and shall cause each of their
Subsidiaries to, provide, to the extent commercially reasonable, such information and take such
actions as are reasonably requested by any Agents or any Lenders in order to assist the
Administrative Agent and the Lenders in maintaining compliance with the Patriot Act.




          SECTION 9.13. Jurisdiction, Etc. (a) With respect to all matters arising out of or
relating to this Agreement, any of the other Loan Documents, or any other letter agreement or other
undertaking concerning the financing contemplated therein, each of the parties hereto hereby
irrevocably and unconditionally, on behalf of itself, its properties, and to the extent it may
lawfully do so, its parent entities, present and future subsidiaries, affiliates, transferees,
assigns, acquirers, officers, directors, employees, partners, members, shareholders, and successors
in interest, (i) submits to the exclusive jurisdiction of the U.S. District Court for the Southern
District of New York State or, if that court does not have subject jurisdiction, in any State court
located in the City and County of New York; (ii) agrees that all such matters may be heard and
determined in such courts, (iii) waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum, (iv) agrees that a final judgment of such courts shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law, and (v) waives any immunity (sovereign or otherwise) from jurisdiction of
any court or from any legal process or setoff to which its or its properties or assets may be
entitled.




          (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of
the other Loan Documents to which it is a party in any New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any such court.




          SECTION 9.14. Governing Law. This Agreement and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.




          SECTION 9.15. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE OTHER LOAN PARTIES, THE
AGENTS AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES, THE LETTERS OF CREDIT OR THE ACTIONS OF ANY
AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.







130









 








[Balance of page intentionally left blank]





131











 





          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.




	 	 	 	 	 
	 	BORROWER:



CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, LP

 	 
	 	By:  	Campus Crest Communities GP, LLC,
 	 
	 	 	Its General Partner 	 



	 	 	 	 	 
	 	By:  	                  Campus Crest Communities, Inc.
 	 
	 	 	Its Sole Member 	 



	 	 	 	 	 
	 	By:  	/s/ Donald L. Bobbitt, Jr.
 	 
	 	 	Name:  	Donald L. Bobbitt, Jr. 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	PARENT GUARANTOR:



CAMPUS CREST COMMUNITIES, INC.

 	 
	 	By:  	/s/ Donald L. Bobbitt, Jr.                                        	 
	 	 	Name:  	Donald L. Bobbitt, Jr. 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	SUBSIDIARY GUARANTORS:



CAMPUS CREST AT STEPHENVILLE, LP

 	 
	 	By:  	Campus Crest GP II, LLC
 	 
	 	 	Its General Partner 	 
	 	 	 
	 	By:  	/s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CAMPUS CREST AT LUBBOCK, LP

 	 
	 	By:  	Campus Crest GP II, LLC
 	 
	 	 	Its General Partner 	 
	 
	 	By:  	/s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST AT WACO, LP

 	 
	 	By:  	Campus Crest GP II, LLC
 	 
	 	 	Its General Partner 	 
	 	 	 
	 	By:  	 /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST AT WICHITA FALLS, LP

 	 
	 	By:  	Campus Crest GP II, LLC
 	 
	 	 	Its General Partner 	 
	 	 	 
	 	By:  	/s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST AT SAN MARCOS, LP

 	 
	 	By:  	Campus Crest GP II, LLC
 	 
	 	 	Its General Partner 	 
	 	 	 
	 	By:  	/s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST AT JACKSONVILLE, AL, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	   /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 



 









 







	 	 	 	 	 
	 	CAMPUS CREST AT MOBILE PHASE II, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	 /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST AT CHENEY, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	 /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST AT JONESBORO, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	 /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST AT TROY, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	 /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST AT MURFREESBORO, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	  /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 



 









 







	 	 	 	 	 
	 	CAMPUS CREST AT WICHITA, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	 /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST STEPHENVILLE LESSOR, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	   /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST WACO LESSOR, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	  /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST WICHITA FALLS LESSOR, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 	 	 
	 	By:  	      /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 



 









 







	 	 	 	 	 
	 	CAMPUS CREST CHENEY LESSOR, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 
	 	By:  	  /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST JONESBORO LESSOR, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 
	 	 	 
	 	By:  	  /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST TROY LESSOR, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 
	 	 	 
	 	By:  	 /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 



	 	 	 	 	 
	 	CAMPUS CREST MURFREESBORO LESSOR, LLC

 	 
	 	By:  	Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 
	 	 	 
	 	By:  	    /s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 



 









 







	 	 	 	 	 
	 	CAMPUS CREST WICHITA LESSOR, LLC

 	 
	 	By:  	
Campus Crest Properties, LLC
 	 
	 	 	Its Manager 	 
	 
	 	 	 
	 	By:  	/s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 



	 	 	 	 	 
	 	CAMPUS CREST GP II, LLC

 	 
	 	By:  	/s/ Michael S. Hartnett                                 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	SWING LINE BANK:



CITIBANK, N.A.

 	 
	 	By:  	/s/ John Rowland	 
	 	 	Name:  	John Rowland	 
	 	 	Title:  	Director	 
	 
	 	INITIAL ISSUING BANK:



CITIBANK, N.A.

 	 
	 	By:  	/s/ John Rowland	 
	 	 	Name:  	John Rowland	 
	 	 	Title:  	Director	 
	 



	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:



CITIBANK, N.A.

 	 
	 	By:  	/s/ John Rowland	 
	 	 	Name:  	John Rowland	 
	 	 	Title:  	Director	 
	 
	 	COLLATERAL AGENT:



CITIBANK, N.A.

 	 
	 	By:  	/s/ John Rowland	 
	 	 	Name:  	John Rowland	 
	 	 	Title:  	Director	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	INITIAL LENDERS:



BARCLAYS BANK PLC

 	 
	 	By:  	/s/ Craig Malloy	 
	 	 	Name:  	Craig Malloy	 
	 	 	Title:  	Director	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CITIBANK, N.A.

 	 
	 	By:  	/s/
John Rowland	 
	 	 	Name:  	John Rowland	 
	 	 	Title:  	Director	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	GOLDMAN SACHS BANK USA

 	 
	 	By:  	/s/
Mark Walton	 
	 	 	Name:  	Mark Walton	 
	 	 	Title:  	Authorized Signatory	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	RAYMOND JAMES BANK, FSB

 	 
	 	By:  	/s/
James M. Armstrong	 
	 	 	Name:  	James M. Armstrong	 
	 	 	Title:  	Vice President	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	ROYAL BANK OF CANADA

 	 
	 	By:  	/s/
Dan LePage	 
	 	 	Name:  	Dan LePage	 
	 	 	Title:  	Authorized Signatory	 
	 




 











 





EXHIBIT A to the

CREDIT AGREEMENT




FORM OF NOTE




(See Attached)














 





PROMISSORY NOTE




			
	$[                    ]
	 	Dated: October
[__], 2010






               FOR VALUE RECEIVED, the undersigned, CAMPUS CREST COMMUNITIES
OPERATING PARTNERSHIP, LP, a Delaware limited partnership (the “Borrower”), HEREBY
PROMISES TO PAY [  ]  (the “Lender”) for the account of Lender’s
Applicable Lending Office (as defined in the Credit Agreement referred to below) the aggregate
principal amount of the Revolving Credit Advances, the Letter of Credit Advances and the Swing Line
Advances (each as defined below) owing to the Lender by the Borrower pursuant to the Credit
Agreement dated as
of October [  ], 2010 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”; terms defined therein, unless otherwise defined herein, being
used herein as therein defined) among the Borrower, the Lender and certain other lender parties
party thereto, Campus Crest Communities, Inc., as Parent Guarantor, the Subsidiary Guarantors party
thereto, Citibank, N.A., as Collateral Agent and as Administrative Agent for the Lender and such
other lender parties and the Arrangers party thereto, on the Termination Date.



               The Borrower promises to pay to the Lender, in the care of Citibank, N.A., as Administrative
Agent, interest on the unpaid principal amount of each Revolving Credit Advance, Letter of Credit
Advance and Swing Line Advance owing to the Lender from the date of such Revolving Credit Advance,
Letter of Credit Advance or Swing Line Advance, as the case may be, until such principal amount is
paid in full, at such interest rates, and payable at such times, as are specified in the Credit
Agreement.



               Both principal and interest are payable in lawful money of the United States of America to
Citibank, N.A., as Administrative Agent, at 1615 Brett Road, New Castle, Delaware 19720, in same
day funds. Each Revolving Credit Advance, Letter of Credit Advance and Swing Line Advance owing to
the Lender by the Borrower and the maturity thereof, and all payments made on account of principal
thereof, shall be recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto, which is part of this Promissory Note; provided, however, that the failure of the
Lender to make any such recordation or endorsement shall not affect the Obligations of the Borrower
under this Promissory Note.



               This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of,
the Credit Agreement. The Credit Agreement, among other things, (a) provides for the making of
advances (variously, the “Revolving Credit Advances”, “Letter of Credit Advances” or the “Swing
Line Advances”) by the Lender to or for the benefit of the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Revolving Credit Advance,
Letter of Credit Advance and Swing Line Advance being evidenced by this Promissory Note, and (b)
contains provisions for acceleration of the maturity hereof upon the happening of an Event of
Default and also for prepayments on account of principal hereof prior to the Termination Date upon
the terms and conditions therein specified.













 





               The obligations of the Borrower under this Promissory Note and the other Loan Documents, and
the obligations of the other Loan Parties under the Loan Documents, are secured by the Collateral
as provided in the Loan Documents.



               This Promissory Note shall be governed by, and construed in accordance with, the laws of the
State of New York.



	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST COMMUNITIES OPERATING
PARTNERSHIP, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest
Communities, Inc., 

a Maryland corporation, 

its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 






	 	 	 	 	 	 	 	 	 

	Acknowledged and Agreed:	 	 
	 
	 	 	 	 	 	 	 	 
	CAMPUS CREST COMMUNITIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Name: Donald L. Bobbitt	 	 
	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	CAMPUS CREST COMMUNITIES OPERATING
PARTNERSHIP, LP	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	Campus Crest Communities GP, LLC 
Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Communities, Inc.
 Its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Donald L. Bobbitt, Jr.
	 	 
	 

	 	 	 	 	 	Title: Chief Financial Officer	 	 
















 





	 	 	 	 	 	 	 

	CAMPUS CREST AT STEPHENVILLE, LP	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest GP II, LLC
Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST AT LUBBOCK, LP	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest GP II, LLC
Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST AT WACO, LP	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest GP II, LLC 
Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST AT WICHITA FALLS, LP	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest GP II, LLC 
Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST AT SAN MARCOS, LP	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest GP II, LLC 
Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
















 





	 	 	 	 	 	 	 

	CAMPUS CREST AT JACKSONVILLE, AL, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST AT MOBILE PHASE II, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST AT CHENEY, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST AT JONESBORO, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST AT TROY, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
















 





	 	 	 	 	 	 	 

	CAMPUS CREST AT MURFREESBORO, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S.  Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST AT WICHITA, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST STEPHENVILLE LESSOR, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST WACO LESSOR, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST WICHITA FALLS LESSOR, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
















 





	 	 	 	 	 	 	 

	CAMPUS CREST CHENEY LESSOR, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST JONESBORO LESSOR, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST TROY LESSOR, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST MURFREESBORO LESSOR, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	CAMPUS CREST WICHITA LESSOR, LLC	 	 
	 
	 	 	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
















 





ADVANCES AND

PAYMENTS OF PRINCIPAL




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Amount of	 	Unpaid	 	 
	 	 	 	 	Amount of	 	Principal Paid	 	Principal	 	Notation
	Date	 	Advance	 	or Prepaid	 	Balance	 	Made By















 





EXHIBIT B to the

CREDIT AGREEMENT




FORM OF NOTICE

OF BORROWING




NOTICE OF [SWING LINE] BORROWING




                        ,      




Citibank, N.A.,
 as
Administrative Agent
 under
the Credit Agreement
 referred
to below

Two Penns Way

New Castle, Delaware 19720

Attention: Bank Loan Syndications Department



Ladies and Gentlemen:




               The undersigned, CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, LP, refers to the Credit
Agreement dated as of October [_], 2010 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”; the terms defined therein being used
herein as therein defined), among the undersigned, Campus Crest Communities, Inc., the Subsidiary
Guarantors party thereto, the Lender Parties party thereto, Citibank, N.A., as Collateral Agent and
as Administrative Agent for the Lender Parties and the Arrangers party thereto, and hereby gives
you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned
hereby requests a Borrowing under the Credit Agreement, and in that connection sets forth below the
information relating to such Borrowing (the “Proposed
Borrowing”) as required by Section [2.02(a)]
[2.02(b)] of the Credit Agreement:




	 	(i)	 	The Business Day of the Proposed Borrowing is                         ,      
	 
	 	(ii)	 	The Facility under which the Proposed Borrowing is requested is the
[Revolving Credit][Swing Line] Facility.
	 
	 	(iii)	 	The Type of Advances comprising the Proposed Borrowing is [Base Rate Advances]
[Eurodollar Rate Advances].
	 
	 	(iv)	 	The aggregate amount of the Proposed Borrowing is [ $                    ].
	 
	 	(v)	 	[The initial Interest Period for each Eurodollar Rate Advance made as part of
the Proposed
Borrowing is                      month[s].] [The maturity of such Borrowing is                     .]





               The undersigned hereby certifies that the following statements are true on the date hereof,
and will be true on the date of the Proposed Borrowing:




	 	(A)	 	The representations and warranties contained in each Loan Document are
true and correct in all material respects on and as of the date of the Proposed
Borrowing (except















 











	 	 	 	to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date),
before and after giving effect to (1) such Proposed Borrowing and (2) the
application of the proceeds therefrom, as though made on and as of the date of the
Proposed Borrowing; and
	 
	 	(B)	 	No Default or Event of Default has occurred and is continuing, or would
result from (1) such Proposed Borrowing or (2) from the application of the proceeds
therefrom.





               Attached hereto is a Compliance Certificate for the Proposed Borrowing dated the date of such
Proposed Borrowing demonstrating compliance with the covenants contained in Section 5.04 of the
Credit Agreement before and after giving effect to such Proposed
Borrowing.



               Delivery of an executed counterpart of this Notice of Borrowing by telecopier or e-mail (which
e-mail shall include an attachment in PDF format or similar format containing the legible signature
of the undersigned) shall be effective as delivery of an original executed counterpart of this
Notice of Borrowing.




	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST COMMUNITIES OPERATING
 PARTNERSHIP, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Communities, GP, LLC,

a Delaware limited liability company, 

its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Communities, Inc.,

a Maryland corporation, 
its sole
member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 
















 





EXHIBIT C to the

CREDIT AGREEMENT




FORM OF

GUARANTY SUPPLEMENT




GUARANTY SUPPLEMENT




                        ,      




Citibank, N.A.,
 as
Administrative Agent
 under
the Credit Agreement
 referred
to below

Two Penns Way

New Castle, Delaware 19720

Attention: Bank Loan Syndications Department



Credit Agreement dated as of October [_], 2010 (as in effect on the date hereof and as it may
hereafter be amended, amended and restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among Campus Crest Communities Operating Partnership, LP, as Borrower,
Campus Crest Communities, Inc., the Subsidiary Guarantors party thereto, the Lender Parties party
thereto, Citibank, N.A., as Collateral Agent and as Administrative Agent for the Lender Parties
and the Arrangers party thereto.




Ladies and Gentlemen:




               Reference is made to the above-captioned Credit Agreement and to the Guaranty set forth in
Article VII thereof (such Guaranty, as in effect on the date hereof and as it may hereafter be
amended, supplemented or otherwise modified from time to time, together with this Guaranty
Supplement, being the “Guaranty”). The capitalized terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.



               Section 1.
Guaranty; Limitation of Liability. (a) The undersigned hereby
absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at
scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise,
of all Obligations of the Borrower and each other Loan Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct
or indirect, absolute or contingent, and whether for principal, interest, premiums, fees,
indemnities, contract causes of action, costs, expenses or otherwise (such Obligations being the
“Guaranteed Obligations”), and agrees to pay any and all expenses (including, without limitation,
fees and expenses of counsel) incurred by the Administrative Agent or any other Secured Party in
enforcing any rights under this Guaranty Supplement, the Guaranty, the Credit Agreement or any
other Loan Document. Without limiting the generality of the foregoing, the undersigned’s liability
shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party to any Secured Party under or in respect of the Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.













 





               (b) The undersigned, and by its acceptance of the benefits of this Guaranty Supplement, the
Administrative Agent and each other Secured Party, hereby confirms
that it is the intention of all
such Persons that this Guaranty Supplement, the Guaranty and the Obligations of the undersigned
hereunder and thereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar foreign, federal or state law to the extent applicable to this Guaranty Supplement, the
Guaranty and the Obligations of the undersigned hereunder and thereunder. To effectuate the
foregoing intention, the undersigned and, by their acceptance of the benefits of this Guaranty
Supplement, the Administrative Agent and the other Secured Parties hereby irrevocably agree that
the Obligations of the undersigned under this Guaranty Supplement and the Guaranty at any time
shall be limited to the maximum amount as will result in the Obligations of the undersigned under
this Guaranty Supplement and the Guaranty not constituting a fraudulent transfer or conveyance.



               (c) The undersigned hereby unconditionally and irrevocably agrees that in the event any
payment shall be required to be made to any Secured Party under this Guaranty Supplement, the
Guaranty or any other guaranty, the undersigned will contribute, to the maximum extent permitted by
law, such amounts to each other Subsidiary Guarantor and each other guarantor so as to maximize the
aggregate amount paid to the Secured Parties under or in respect of the Loan Documents.



               Section 2. Obligations Under the Guaranty. The undersigned hereby
agrees, as of
the date first above written, to be bound as a Subsidiary Guarantor by all of the terms and
conditions of the Credit Agreement and the Guaranty to the same extent as each of the other
Subsidiary Guarantors thereunder. The undersigned further agrees, as of the date first above
written, that each reference in the Credit Agreement to an “Additional Guarantor”, a “Loan Party”
or a “Subsidiary Guarantor” shall also mean and be a reference to the undersigned, and each
reference in any other Loan Document to a “Subsidiary Guarantor” or a “Loan Party” shall also mean
and be a reference to the undersigned.



               Section 3. Representations and Warranties. The undersigned hereby makes each
representation and warranty set forth in Section 4.01 of the Credit Agreement to the same extent as
each other Subsidiary Guarantor; provided, however, that, to the extent there have been any changes
in factual matters related to the addition of the undersigned as a Subsidiary Guarantor or the
addition of any Asset owned by the undersigned as a Borrowing Base Asset warranting updated
Schedules to the Credit Agreement (so long as such changes in factual matters shall in no event
comprise a Default or an Event of Default under the Credit Agreement), such updated Schedules are
attached as Exhibit A hereto.



               Section 4. Delivery by Telecopier. Delivery of an executed counterpart of a
signature page to this Guaranty Supplement by telecopier or e-mail (which e-mail shall include an
attachment in PDF format or similar format containing the legible signature of the undersigned)
shall be effective as delivery of an original executed counterpart of this Guaranty Supplement.



               Section 5. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. (a) This
Guaranty Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.



               (b) The undersigned hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or any federal court of the
United States of America sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Guaranty Supplement, the Guaranty, the
Credit Agreement or any of the other Loan Documents to which it is or is to be a party, or for
recognition or enforcement of any judgment, and the undersigned hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in any such New York













 




State court or, to the extent permitted by law, in such federal court. The undersigned agrees that
a final judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this
Guaranty Supplement or the Guaranty or the Credit Agreement or any other Loan Document shall affect
any right that any party may otherwise have to bring any action or proceeding relating to this
Guaranty Supplement, the Credit Agreement, the Guaranty thereunder or any of the other Loan
Documents to which it is or is to be a party in the courts of any other jurisdiction.




               (c) The undersigned irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Guaranty Supplement, the
Credit Agreement, the Guaranty or any of the other Loan Documents to which it is or is to be a
party in any New York State or federal court. The undersigned hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such
suit, action or proceeding in any such court.



               (d) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.



	 	 	 	 	 
	 	Very truly yours,


[NAME OF ADDITIONAL GUARANTOR]

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 














 





EXHIBIT D to the

CREDIT AGREEMENT




FORM OF

ASSIGNMENT AND ACCEPTANCE




ASSIGNMENT AND ACCEPTANCE




               Reference is made to the Credit Agreement dated as of October [_], 2010 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; the terms defined therein, unless otherwise defined herein, being used herein as
therein defined), among Campus Crest Communities Operating Partnership, LP, a Delaware limited
partnership, as Borrower, Campus Crest Communities, Inc., the Subsidiary Guarantors party
thereto, the Lender Parties thereto, Citibank, N.A., as Collateral Agent and as Administrative
Agent for the Lender and such other lender parties and the Arrangers party thereto.



               Each “Assignor” referred to on Schedule 1 hereto (each, an “Assignor”) and each “Assignee”
referred to on Schedule 1 hereto (each, an “Assignee”) agrees severally with respect to all
information relating to it and its assignment hereunder and on Schedule 1 hereto as follows:



               1. Such Assignor hereby sells and assigns, without recourse except as to the representations
and warranties made by it herein, to such Assignee, and such Assignee hereby purchases and assumes
from such Assignor, an interest in and to such Assignor’s rights and obligations under the Credit
Agreement as of the date hereof equal to the percentage interest specified on Schedule 1 hereto of
all outstanding rights and obligations under the Credit Agreement Facilities specified on Schedule
1 hereto. After giving effect to such sale and assignment, such Assignee’s Commitments and the
amount of the Advances owing to such Assignee will be as set forth on Schedule 1 hereto.



               2. Such Assignor (a) represents and warrants that its name set forth on Schedule 1 hereto is
its legal name, that it is the legal and beneficial owner of the interest or interests being
assigned by it hereunder and that such interest or interests are free and clear of any adverse
claim; (b) makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to be created under or
in connection with, any Loan Document or any other instrument or document furnished pursuant
thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document furnished pursuant
thereto; and (d) attaches the Note or Notes (if any) held by such Assignor and requests that the
Administrative Agent exchange such Note or Notes for a new Note or Notes payable to the order of
such Assignee in an amount equal to the Commitments assumed by such Assignee pursuant hereto or new
Notes payable to the order of such Assignee in an amount equal to the Commitments assumed by such
Assignee pursuant hereto and such Assignor in an amount equal to the Commitments retained by such
Assignor under the Credit Agreement, respectively, as specified on
Schedule 1 hereto.



               3. Such Assignee (a) represents and warrants that it is legally authorized to enter into
this Assignment and Acceptance; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in Section 4.01 thereof
and such other













 




documents and information as it has deemed appropriate to make its own credit analysis and decision
to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without
reliance upon any Agent, any Assignor or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (d) represents and warrants that its name
set forth on Schedule 1 hereto is its legal name; (e) confirms that it is an Eligible Assignee; (f)
appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Loan Documents as are delegated to such Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto; (g) agrees that it
will perform in accordance with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender Party; and (h) attaches any U.S. Internal
Revenue Service forms required under Section 2.12 of the Credit Agreement.




               4. Following the execution of this Assignment and Acceptance, it will be delivered to the
Administrative Agent for acceptance and recording by the Administrative Agent. The effective date
for this Assignment and Acceptance (the “Effective Date”) shall be the date of acceptance hereof by
the Administrative Agent, unless otherwise specified on Schedule 1 hereto.



               5. Upon such acceptance by the Administrative Agent and, if applicable, the Borrower and
recording by the Administrative Agent, as of the Effective Date, (a) such Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the
rights and obligations of a Lender Party thereunder and (b) such Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement (other than its rights and obligations under the Loan
Documents that are specified under the terms of such Loan Documents to survive the payment in full
of the Obligations of the Loan Parties under the Loan Documents to the extent any claim thereunder
relates to an event arising prior to the Effective Date of this Assignment and Acceptance) and, if
this Assignment and Acceptance covers all of the remaining portion of the rights and obligations of
such Assignor under the Credit Agreement, such Assignor shall cease to be a party thereto.



               6. Upon such acceptance by the Administrative Agent and, if applicable, the Borrower and
recording by the Administrative Agent, from and after the Effective Date, the Administrative Agent
shall make all payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal, interest and commitment
fees with respect thereto) to such Assignee. Such Assignor and such Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes for periods prior to
the Effective Date directly between themselves.



               7.
This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.



               8. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier or e-mail (which e-mail shall include an attachment in PDF format or similar format
containing the legible signature of the person executing this Assignment and Acceptance) shall be
effective as delivery of an original executed counterpart of this Assignment and Acceptance.













 





               IN WITNESS WHEREOF, each Assignor and each Assignee have caused Schedule 1 to this Assignment
and Acceptance to be executed by their officers thereunto duly authorized as of the date specified
thereon.

















 








SCHEDULE 1

to

ASSIGNMENT AND ACCEPTANCE




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ASSIGNORS:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revolving Credit Facility
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Percentage interest assigned
	 	 	%	 	 	 	%	 	 	 	%	 	 	 	%	 	 	 	%	 
	Revolving Credit Commitment assigned
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Aggregate outstanding principal amount of
Revolving Credit Advances assigned
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Principal amount of Note payable to
Assignor
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Letter of Credit Facility
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Letter of Credit Commitment assigned
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Letter
of Credit Commitment retained
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	ASSIGNEES:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revolving Credit Facility
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Percentage interest assumed
	 	 	%	 	 	 	%	 	 	 	%	 	 	 	%	 	 	 	%	 
	Revolving Credit Commitment assumed
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Aggregate outstanding principal amount of
Revolving Credit Advances assumed
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Principal amount of Note payable to Assignee
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Letter of Credit Facility
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Letter of Credit Commitment assumed
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 




















 









Effective Date (if other than date of acceptance by Administrative Agent):



1                         ,      










	 	 	 	 	 	 	 	 	 

	 	 	Assignors	 	 	 	 
	 

	 	 	 	 
	, as Assignor	 	 
	 	 	 	 	 	 	 
	 	 	[Type or print legal name of Assignor]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	   	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Dated:                         ,      	 	 	 	 
	 

	 

	 	 	 	 
	, as Assignor	 	 
	 	 	 	 	 	 	 
	 	 	[Type or print legal name of Assignor]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	   	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Dated:                         ,      	 	 	 	 
	 

	 

	 	 	 	 
	, as Assignor	 	 
	 	 	 	 	 	 	 
	 	 	[Type or print legal name of Assignor]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	   	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Dated:                         ,      	 	 	 	 
	 

	 

	 	 	 	 
	, as Assignor	 	 
	 	 	 	 	 	 	 
	 	 	[Type or print legal name of Assignor]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	   	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Dated:                         ,      	 	 	 	 








 




			
	1	 	This date should be no earlier than five Business Days after the delivery of this
Assignment and Acceptance to the Administrative Agent and, if applicable, the Borrower.















 








	 	 	 	 	 	 	 	 	 

	 	 	Assignees	 	 	 	 
	 

	 	 	 	 
	, as Assignee	 	 
	 	 	 	 	 	 	 
	 	 	[Type or print legal name of Assignee]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	   	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	E-mail address for notices:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Dated:                         ,      	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Domestic Lending Office:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Eurodollar Lending Office:	 	 	 	 
	 

	 

	 	 	 	 
	, as Assignee	 	 
	 	 	 	 	 	 	 
	 	 	[Type or print legal name of Assignee]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	   	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	E-mail address for notices:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Dated:                         ,      	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Domestic Lending Office:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Eurodollar Lending Office:	 	 	 	 
	 

	 

	 	 	 	 
	, as Assignee	 	 
	 	 	 	 	 	 	 
	 	 	[Type or print legal name of Assignee]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	   	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	E-mail address for notices:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Dated:                         ,      	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Domestic Lending Office:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Eurodollar Lending Office:	 	 	 	 




















 








	 	 	 	 	 	 	 	 	 

	 
	 

	 	 	 	 
	,	  as Assignee	 	 
	 	 	 	 	 	 	 
	 	 	[Type or print legal name of Assignee]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	   	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	E-mail address for notices:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Dated:                         ,      	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Domestic Lending Office:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Eurodollar Lending Office:	 	 	 	 



















 





Accepted [and Approved] this              

day of                     ,      




CITIBANK, N.A.,

as Administrative Agent




	 	 	 	 	 

	By
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 






[Approved this       day

of                     ,      







CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, LP




	 	 	 	 	 	 	 

	By:	 	CAMPUS CREST COMMUNITIES, GP, LLC,
	 	 	a Delaware limited liability company,
	 	 	its general partner
	 
	 	 	 	 	 	 
	By:	 	CAMPUS CREST COMMUNITIES, INC.,
	 	 	a Maryland corporation,
	 	 	its sole member
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:]	 	 











 









 











EXHIBIT E-1 to the

CREDIT AGREEMENT




FORM OF OPINION OF

GREENBERG TRAURIG LLP




(See Attached)









 









 











October _, 2010




Citibank, N.A., as Administrative Agent

1615 Brett Road

New Castle, Delaware 19720





				
	 	RE:	 	$125,000,000.00 revolving credit facility (the “Credit Facility”) in favor of
Campus Crest Communities Operating Partnership, LP, a Delaware limited partnership (“Borrower”)





Ladies and Gentlemen:




     We have acted as special counsel to Borrower, Campus Crest Communities, Inc., a Maryland
corporation (the “Parent Guarantor”), the entities listed on Schedule 1 attached hereto
(the “Owners” and together with the Parent Guarantor, the “Guarantors”), Campus Crest Properties,
LLC, a North Carolina limited liability company (“CCP LLC”), Campus Crest Group, LLC, a North
Carolina limited liability company (CCG LLC”), and Campus Crest GP II, LLC, a Delaware limited
liability company (“CCG II LLC”; and together with CCP LLC and CCG LLC, collectively, the “Initial
Pledgors”). Borrower, the Guarantors and the Initial Pledgers are referred to herein as the
“Borrower Parties” and each a “Borrower Party.” Except as otherwise indicated, capitalized terms
used herein are defined as set forth in the Credit Agreement, as defined below.



     In such capacity, we have reviewed the following documents dated as of the date hereof, as
executed in connection with the Credit Facility:




(a) Promissory Notes (collectively, the “Notes”) made by Borrower in the aggregate
principal amount of $125,000,000.00.




(b) Credit Agreement (the “Credit Agreement”) made by and among Borrower, the Guarantors,
Citibank, N.A., as administrative agent and collateral agent (“Agent”) and certain other
Lender Parties (each as defined in the Credit Agreement);




(c) The mortgages, deeds of trust, deeds to secure debt, indemnity deed of trust or similar
security instruments, made by each of the Owners (collectively, the “Mortgages”)
encumbering the real property described therein (individually and collectively, as the
context may require, the “Property”);




(d) The Assignments of Leases and Rents made by each of the Owners to Agent for the benefit
of the Lender Parties (the “ALRs”).



 









 





Citibank, N.A.

October      , 2010

Page 2





(e) Environmental Indemnity Agreement (the “Environmental Agreement”) made by Borrower and
the Guarantors, in favor of Agent for the benefit of the Lender Parties;




(f) Manager Consent and Subordination of Management Agreement (the “Subordination
Agreement”) between and among Borrower, the Owners, Agent and The Grove Student Properties,
LLC, a North Carolina limited liability company (“Manager”);




(g) Security Agreement (the “Security Agreement”) from Borrower and the Owners to Agent
for the benefit of the Lender Parties;




(h) Pledge Agreement (the “Pledge Agreement”) from Initial Pledgors to Agent for the benefit
of the Lender Parties; and




(i) That certain letter agreement (the “Fee Letter”) dated as of July [no date], 2010
between and among Citigroup Global Markets Inc., Borrower, the Parent Guarantor and the
Owners.



     The Notes, the Credit Agreement, the Mortgages, the ALRs, the Environmental Agreement, the
Subordination Agreement, the Security Agreement, the Pledge Agreement and the Fee Letter are
hereinafter collectively referred to as the “Loan Documents.” The Mortgages and the ALRs are
hereinafter collectively referred to as the “Local Loan Documents.”



     We express no opinion with respect to the effect of any law other than the law of the State
of New York and the federal law of the United States (collectively, “Applicable Law”). In
addition, we express no opinion herein concerning any statutes, ordinances, administrative
decisions, rules or regulations of any county, town, municipality or special political subdivision
(whether created or enabled through legislative action at the federal, state or regional level).
In addition, this opinion is being delivered simultaneously and in conjunction with certain
additional opinion letters from various local counsel opining as to, among other things, the
validity and enforceability of certain Local Loan Documents and certain other Loan Documents given
by an individual Borrower Party with respect to specific real property locations in connection
with the Loan (the “Local Opinions”). This opinion covers only the matters expressly set forth
herein.



     In connection with this opinion, we have assumed the accuracy and completeness of all
documents and records that we have reviewed, the genuineness of all signatures other than those on
behalf of the Borrower Parties, the authenticity of the documents submitted to us as originals,
the conformity to authentic original documents of all documents submitted to us as certified,
conformed or reproduced copies and that all public records reviewed are current, accurate and
complete. We have further assumed:



          (i) The legal capacity of all natural persons executing the Loan Documents;









 









 











Citibank, N.A.

October      , 2010

Page 3




          (ii) That all material terms and conditions of the relationship between
Borrower Parties, on the one hand, and Agent and the Lender Parties, on the other hand, are
correctly and completely reflected in the Loan Documents;




          (iii) All relevant factual certifications (including but not limited to those, if
any, contained in the Loan Documents) are truthful and accurate;




          (iv) That each party to the Loan Documents other than the Borrower Parties
(collectively, the “Other Parties”) has satisfied all legal requirements that are applicable to it
to the extent necessary to make the Loan Documents enforceable against it;




          (v) That each of the Other Parties has complied with all legal requirements
pertaining to its status as such status relates to its rights to enforce the Loan Documents
against the Borrower Parties;




          (vi) That each of the Other Parties and each of the Borrower Parties has duly
accepted, executed and delivered each Loan Document to which it is a signatory;




          (vii) The conduct of the parties to the Loan Documents complies with any
requirement of good faith, fair dealing and conscionability;



          (viii) That there has not been any mutual mistake of fact or fraud, duress or
undue influence;




          (ix) The Borrower Parties hold the requisite title and rights to any property
involved in the Credit Facility;




          (x) That all necessary filings and recordations and payments of fees, charges
and taxes in connection with the Loan Documents required under the laws of the jurisdictions in
which the real or personal property to be encumbered by the Loan Documents is located will have
been timely and properly made;




          (xi) That the Loan Documents will be administered in accordance with their
terms;




          (xii) That Agent and the Lender Parties will not act in such manner as to violate
implied covenants of good faith, fair dealing and commercially reasonable conduct in connection
with the Loan Documents;




          (xiii) Each Borrower Party is a limited partnership, limited liability company or
corporation, as applicable, existing and in good standing under the laws of the state of its
formation, and has the requisite corporate, limited partnership or limited liability company
power, as applicable, to execute and deliver the Loan Documents to which it is a party and to
carry out the transactions contemplated thereby and the covenants and agreements contained
therein; and









 









 











Citibank, N.A.

October      , 2010

Page 4




          (xiv) Manager is a limited liability company, existing and in good standing
under the laws of the State of North Carolina, and has the requisite limited liability company
power to execute and deliver the Loan Documents to which it is a party and to carry out the
transactions contemplated thereby and the covenants and agreements contained therein.




     In rendering this opinion, as to questions of fact material to this opinion, we have relied
to the extent we have deemed such reliance appropriate, without investigation, on certificates and
other communications from public officials and from officers of Borrower and on representations
and warranties of the Borrower Parties set forth in the Loan Documents as to factual matters and
not as to legal conclusions.



     Wherever we indicate that our opinion with respect to the existence or absence of facts is
based on our knowledge, our opinion is based solely on the current actual knowledge of the
attorneys in this firm who are representing the Borrower Parties in connection with the Credit
Facility, and we have conducted no special investigation of factual matters in connection with
this opinion.



     Based on the foregoing and upon such investigation as we have deemed necessary, and subject to
the assumptions, qualifications, limitations and exceptions herein contained, we are of the opinion that:



     1. The Loan Documents constitute the legal, valid and binding obligations of the Borrower
Parties, as the case may be, and are enforceable against such parties in accordance with their
respective terms. The aforesaid opinion as to enforceability of the Local Loan Documents is subject
to the qualification that certain provisions contained in the Local Loan Documents, particularly,
but not limited to, those with respect to the creation, perfection and enforcement of the liens
created under the Mortgages and the ALRs, may be governed by the laws of states other than New
York, and, as to such matters, we express no opinion and refer you to the Local Opinions.



     2. Section 5-1401 of the New York General Obligations Law (“GOL 5-1401”) permits parties to
transactions covering not less than $250,000.00 to agree that New York law shall govern their
rights and duties, in whole or in part. Accordingly, it is our opinion that a court of the State
of New York (or a federal court sitting in the State of New York and applying GOL 5-1401) in a
case properly pleaded and filed within the applicable statute of limitations should give effect to
the choice of law provisions of the Loan Documents, except to the extent that any right or remedy
sought to be enforced in any such case regards: (i) the creation, validity, perfection, priority
and enforceability of liens or interests in real or personal property, which, by the nature of such
real or personal property and New York choice of law rules, may be governed by the law of a
jurisdiction other than New York; (ii) the realization upon the security covered by the Mortgages
and the ALRs; and (iii) matters affecting real property or improvements on real property that are
or may be governed by the law of the state where real property is located, and, as to such
matters, we express no opinion and refer you to the Local Opinions.



     3. The execution and delivery of the Loan Documents and the performance by the Borrower
Parties of their respective obligations thereunder do not: (a) result in a breach of any of








 









 











Citibank, N.A.

October      , 2010

Page 5



the terms or conditions of or constitute a violation under any Applicable Law that we, in the
exercise of customary professional diligence would reasonably recognize as being directly
applicable to the Borrower Parties or the Credit Facility or generally applicable to transactions
similar to the Credit Facility, (b) to our knowledge, result in the breach of the terms or
conditions of, or constitute a default under, any written indenture, contract, instrument,
agreement, lease or license to which the Borrower Parties are a party or by which the Borrower
Parties are bound, and (c) to our knowledge, violate or conflict with any judgment, order,
injunction or decree of any court or governmental authority known to us which would restrict or
interfere with the performance by the Borrower Parties of their respective obligations under the
Loan Documents.




     4. The Credit Facility, including the interest payable under the Notes and all fees and
charges paid or payable by or on behalf of Borrower or received or receivable by the Lender
Parties, is not usurious or violative of any law, rule or regulation of the State of New York
governing the payment or receipt of interest.



     5. Under the New York UCC, the internal laws of the state of a debtor’s
organization govern the perfection by the filing of financing statements of the security interest
of Agent in any collateral other than real property and fixtures.



     6. Except for the filing of the Mortgages and the ALRs in the applicable recording office for
each such instrument, no authorization, consent, order, or approval of, or registration with, any
court or governmental department, commission, board, bureau, agency or instrumentality of the
State of New York, or any specifically granted exemption from any of the foregoing, is required in
connection with the execution (if applicable) and delivery by the Borrower Parties of the Loan
Documents and the performance by the Borrower Parties of their respective obligations thereunder.



     7. The provisions of the Loan Documents are effective to create a security interest in favor
of Agent in the Borrower Parties’ rights, if any, in the collateral described in the Security
Agreement and the Pledge Agreement, provided, however, except as expressly set forth in opinion
paragraph 8, no opinion is expressed as to the perfection of any such security interest.



     8. If and to the extent the Pledged Interests (as such term is defined in the Pledge
Agreement) constitute certificated securities within the meaning of the New York UCC (the
“Certificated Equity Collateral”), then upon delivery by Initial Pledgors to Agent of the
certificates representing the Certificated Equity Collateral (the “Certificates”) along with duly
executed Powers (as such term is defined in the Pledge Agreement) in blank with respect thereto,
for so long as Agent has or retains continuous and exclusive control of such Certificates and
Powers in the State of New York in the manner required by Section 8-106 of the New York UCC, and
no other person or entity obtains control thereof, the Agent’s security interest in the
Certificates will be perfected under Article 9 of the New York UCC by control and without the
filing of a Financing Statement. Pursuant to Section 9-305(a)(1) of the New York UCC, in the event
the Certificates are located in a state other than New York, the law of that jurisdiction will
govern perfection of a security interest in those Certificates.








 









 











Citibank, N.A.

October      , 2010

Page 6




     The opinions set forth above are subject to each of the following qualifications and
limitations:



     A. No opinion is expressed with respect to the status of title to any real or personal
property and, to the extent not expressly set forth herein, no opinion is expressed as to the
absence or presence of claims which are adverse to that of Borrower or Agent in and to any
real
or personal property or, to the creation, attachment, priority or perfection of liens or
security
interests with regard to real and personal property, it being expressly understood and agreed that
Agent is relying upon (i) title insurance commitments and policies, and (ii) any Uniform
Commercial Code and other searches, all as obtained on behalf of Agent as Agent deems
adequate. We express no opinion as to the sufficiency of any description of collateral to
provide
notice to third parties of the lien or security interest intended to be provided for in the
Loan
Documents. In addition, no opinion is expressed as to whether any such real property or
personal property (or any other property intended to be encumbered by the Loan Documents) is
in compliance with any federal, state or local law, rule or regulation, or what effect, if
any,
noncompliance therewith would have on the enforceability of the Loan Documents.



     B. No opinion is expressed with respect to the title to any property or fixtures or
ownership thereof or as to the correctness or accuracy of the legal description contained in
the
Loan Documents, the correctness and accuracy of all of which is assumed for purposes of the
opinions expressed herein. We express no opinion as to the characterization of any property
as
real property or personal property or as to the enforcement of a security interest in
personal
property collateral separately from the enforcement of a lien or real estate collateral as
contemplated by Section 9-604 of the New York UCC.



     C. No opinion is expressed as to any provision of any Loan Document that purports
to characterize any or all of the provisions of such Loan Document as being reasonable,
commercially reasonable or not manifestly unreasonable.



     D. No opinion is expressed on the enforceability of any provisions contained in the
Loan Documents that (i) purport to excuse a party for liability for its own acts, (ii)
purport to
make void any act done in contravention thereof, (iii) purport to authorize a party to act in
its
sole discretion, (iv) require waivers or amendments to be made only in writing, (v) purport
to
effect waivers of constitutional, statutory or equitable rights or the effect of applicable
laws, or
(vi) impose liquidated damages, penalties or forfeiture.



     E. No opinion is expressed as to provisions of the Loan Documents purporting to
require a party thereto to pay or reimburse attorneys’ fees incurred by another party, or to
indemnify another party therefor, which provisions may be limited by applicable statutes and
decisions relating to the collection and award of attorneys’ fees.



     F. No opinion is expressed as the legality, validity or enforceability of the provisions
of the Loan Documents that purport to empower the Agent to exercise rights thereunder without
notice to adverse parties or without a proper judicial hearing.








 









 











Citibank, N.A.

October      , 2010

Page 7




     G. No opinion is expressed on any provisions of the Loan Documents wherein a Borrower Party
appoints the Agent or others as its agent or attorney-in-fact.



     H. No opinion is expressed as to the enforceability of any provision of the Loan Documents
imposing increased interest rates or other fees upon delinquency in payment or default, or
providing for premiums on prepayment, acceleration, redemption, cancellation, or termination, to
the extent any such provision is deemed to be a penalty or forfeiture or contrary to statutory
provisions.



     I. No opinion is expressed as to the enforceability of provisions relating to
evidentiary standards or other standards by which the Loan Documents are to be construed.



     J. No opinion as to the effect on the opinions expressed herein of (i) the compliance
or non-compliance of Agent or the Lender Parties with any federal, state or local laws applicable
to Agent or the Lender Parties, or (ii) the legal or regulatory status or nature of the business of
Agent or the Lender Parties.



     K. The provisions regarding the remedies available to Agent in the case of a default or
otherwise, as set forth in the Loan Documents, are subject to any available defenses and to
procedural requirements which are not necessarily reflected therein and which may affect and/or
restrict the rights and remedies stated to be available to Agent, but will not materially interfere
with, or make the available remedies in respect thereof inadequate for, the practical realization
of the benefits provided by the Loan Documents.



     L. Certain rights, remedies, waivers and other provisions of the Loan Documents may not be
enforceable; nevertheless, subject to the assumptions and other qualifications set forth in this
opinion letter and to the last paragraph of this opinion letter, such unenforceability will not
render the Loan Documents invalid as a whole or preclude (i) the judicial enforcement of the
obligation of the Borrower to repay the principal, together with interest thereon, as provided in
the Notes (to the extent not deemed a penalty) and (ii) the acceleration of the obligation of the
Borrower to repay such principal, together with such interest, upon a material default by Borrower
in the payment of such principal or interest or upon a material default in any other material
provision of Loan Documents, subject in each case under parts (i) and (ii) of this paragraph to
the economic consequences of delay and increased costs which may be occasioned by the
unenforceability of such rights, remedies, waivers and other provisions.



     M. The enforceability of the Loan Documents is subject to the effects of general principles
of equity (regardless of whether considered in a proceeding in equity or at law, including,
without limitation, specific performance). Such principles applied by a court might include a
requirement that a creditor act with reasonableness and in good faith.



     N. The enforceability of the Loan Documents is subject to the effects of bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance or transfer and other
similar laws affecting the rights and remedies of creditors generally.








 









 











Citibank, N.A.

October      , 2010

Page 8




     O. No opinion is expressed as to the waivers or remedies contained in the Loan Documents,
whether or not a Loan Document deems any waiver or remedy commercially reasonable, if such waivers
or remedies are determined (i) not to be commercially reasonable within the meaning of the New York
UCC, (ii) to conflict with any mandatory provision under the New York UCC or other applicable law,
or (iii) to be taken in a manner determined to be unreasonable or not performed in good faith or
with fair dealing.



     P. This opinion letter does not address any opinion not expressly set forth herein. In this
connection, this opinion letter does not address any of the following legal issues: (i) federal and
state (or “blue sky”) securities laws and regulations; (ii) Federal Reserve Board margin
regulations; (iii) pension and employee benefit laws and regulations e.g., ERISA, (iv) federal and
state antitrust and unfair competition laws and regulations; (v) federal and state laws and
regulations concerning filing and notice requirements, e.g., Hart-Scott-Rodino and Exon-Florio;
(vi) compliance with fiduciary duty requirements; (vii) the statutes, ordinances, administrative
decisions and rules and regulations of counties, towns, municipalities and special political
subdivisions (whether created or enabled through legislative action at the federal, state or
regional level) and judicial decisions to the extent they deal with any of the foregoing; (viii)
intentionally omitted; (ix) fraudulent transfer and fraudulent conveyance laws; (x) federal and
state environmental laws and regulations; (xi) federal and state zoning, land use, building,
landmark, archeological preservation, mobile home and subdivision laws and regulations; (xii)
federal and state tax laws and regulations; (xiii) federal patent, copyright and trademark, state
trademark and other federal and state intellectual property laws and regulations; (xiv) federal and
state racketeering laws and regulations, e.g., RICO; (xv) federal and state health and safety laws
and regulations, e.g., OSHA; (xvi) federal and state labor laws and regulations; (xvii) federal and
state laws, regulations and policies concerning (1) national and local emergency, (2) possible
judicial deference to acts of sovereign states, and (3) criminal and civil forfeiture laws; (xviii)
other federal and state statutes of general application to the extent they provide for criminal
prosecution, (e.g., mail fraud and wire fraud statutes); (xix) federal and state public utility
laws or regulations; (xx) federal and state labor laws or regulations; (xxi) federal and state laws
or regulations relating to terrorism, embargoes and money laundering; (xxii) federal and state
anti-discrimination laws and regulations; (xxiii) federal and state trust, banking, insurance,
unfair competition and bulk sale laws and regulations; and (xxiv) federal and state criminal laws,
rules and regulations.



     Q. No opinion is expressed as to the enforceability of any section of any of the Loan
Documents to the extent it purports to waive any objection a person may have that a suit, action
or proceeding has been brought in an inconvenient forum.



     R. No opinion is expressed as to the enforceability of any rights to contribution or
indemnification provided for in the Loan Documents which are violative of the public policy
underlying any law, rule or regulation.



     S. No opinion is expressed as to the validity or the enforceability of any provision of any of
the Loan Documents that is affected by the law of New York respecting enforceability of an
after-default interest rate provision to the extent that such provision may be deemed or construed
to be a penalty or against public policy.







 









 







Citibank, N.A.

October      , 2010

Page 9




     T. In addition, the enforceability of the choice of law and submission to jurisdiction
provisions of the Loan Documents is rendered in reliance upon and may be subject to certain
limitations under the law of the State of New York and Federal law, and our opinion in
Paragraph (2) above is qualified by the following:




GOL 5-1401 provides, in pertinent part, that “the parties to any contract. . . may
agree that the law of this state shall govern their rights and duties in whole or
in part, whether or not such contract, agreement or undertaking bears a reasonable
relation to this state.” We draw your attention to the fact that certain federal
courts have, notwithstanding the terms of GOL 5-1401, required that a reasonable
relationship exist between an agreement and the State of New York before honoring a
choice of New York law to govern the agreement, and have in dictum noted possible
constitutional limitations upon GOL 5-1401, in both domestic and international
transactions. See e.g., Lehman Brothers Commercial Corp. v. Minmelals Non-Ferrous
Metals Trading Co., No. 94 Civ. 8301, 2000 WL 1702039 S.D.N.Y. Nov. 13, 2000.
Accordingly, for purposes of our opinion in Paragraph (2) above, we have
assumed that, should a court considering the choice of law provisions of the Loan
Documents and applying New York law elect to apply principles beyond the express
language of GOL 5-1401, such court would find that a reasonable relationship exists
between the Loan Documents and the State of New York.



     U. Additionally, any security interest opinions are qualified as follows, and we call your
attention to the following:




     (1) Our security interest opinions are limited to Article 9 of the New York UCC, and
therefore such opinions do not address (1) laws of jurisdictions other than New York, or
(2) collateral of a type not subject to Article 9 of the New York UCC.




     (2) Under the New York UCC, events occurring subsequent to the date hereof may affect
any security interest subject to the New York UCC including, but not limited to, factors of
the type identified in Section 9-315 with respect to proceeds; Sections 9-503 and 9-507 with
respect to changes in name, structure and corporate identity; Section 9-301 with respect to
changes in the location of the collateral and location of a debtor; and Section 9-510 with
respect to continuation statements. In addition, actions taken by a secured party (e.g.,
releasing or assigning the security interest, delivering possession of the collateral to a
debtor or another person and voluntarily subordinating a security interest) may affect any
security interest subject to the New York UCC.




     (3) The security interest of Agent may be subject to the rights of account debtors,
claims and defenses of account debtors and the terms of agreements with account debtors.




     (4) We express no opinion regarding any security interest or the perfection thereof in
any items of collateral which are subject to a statute, regulation or treaty of the United
States of America (including any state, municipality or other political subdivision



 









 





Citibank, N.A.

October      , 2010

Page 10





thereof) which provides for a national (including any state, municipality or other
political subdivision thereof) or international registration or a national or international
certificate of title for the perfection of a security interest therein or which specifies a
place of filing different from the place specified in the New York UCC for filing to
perfect such security interest.




     (5) We express no opinion regarding the security interest of Agent in any of the
collateral consisting of claims against any government or governmental agency (including
without limitation the United States of America or any state thereof or any agency or
department of the United States of America of any state thereof).




     (6) Section 552 of the United States Bankruptcy Code (11 U.S.C. § 101 et seq., as
amended from time to time) (the “Bankruptcy Code”), limits the extent to which property
acquired by a debtor after the commencement of a case under the Bankruptcy Code may be
subject to a security interest arising from a security agreement entered into by such
debtor before the commencement of such case.



     The foregoing opinions are based upon and rely upon the current status of statutory and case
law as of the date hereof. Such opinions are based solely upon applicable laws, statutes, rules
and regulations and facts, all as in existence on the date hereof, and we express no opinions as
to the effect which any future amendments, changes, additions or modifications thereof may have
upon the future performance or enforceability of the Loan Documents, and we assume no obligation
to update or supplement such opinions to reflect any facts or circumstances which may hereafter
come to our attention or any changes in law which may hereafter occur.



     The opinions expressed in this letter are given solely for the benefit of Agent and the
Lender Parties, their respective successors and assigns (including any purchaser of the Credit
Facility and any purchaser of certificates evidencing an interest in the Credit Facility), each in
connection with the transactions contemplated by the Loan Documents. The opinions expressed in
this letter may not be relied upon, in whole or in part, by Agent, the Lender Parties or their
respective successors or assigns or counsel for any other purpose or relied upon by any other
person, firm or corporation for any purpose, without our prior written consent. The opinions
expressed in this letter are rendered as of the date hereof and we express no opinion as to
circumstances or events that may occur subsequent to such date.



Very Truly Yours,




GREENBERG TRAURIG, LLP









 









 











Citibank, N.A.

October      , 2010

Page 11




SCHEDULE 1




TO GREENBERG TRAURIG, LLP OPINION



Owners




	1.	 	Campus Crest at Jacksonville, AL, LLC, a Delaware limited liability company;
	 
	2.	 	Campus Crest at Mobile Phase II, LLC, a Delaware limited liability company;
	 
	3.	 	Campus Crest at Cheney, LLC, a Delaware limited liability company;
	 
	4.	 	Campus Crest at Jonesboro, LLC, a Delaware limited liability company;
	 
	5.	 	Campus Crest at Troy, LLC, an Delaware limited liability company;
	 
	6.	 	Campus Crest at Murfreesboro, LLC, a Delaware limited liability company;
	 
	7.	 	Campus Crest at Wichita, LLC, a Delaware limited liability company;
	 
	8.	 	Campus Crest at Stephenville, LP, a Delaware limited partnership;
	 
	9.	 	Campus Crest at Lubbock, LP, a Delaware limited partnership;
	 
	10.	 	Campus Crest at Waco, LP, a Delaware limited partnership;
	 
	11.	 	Campus Crest at Wichita Falls, LP, a Delaware limited partnership;
	 
	12.	 	Campus Crest at San Marcos, LP, a Delaware limited partnership;
	 
	13.	 	Campus Crest Stephenville Lessor, LLC;
	 
	14.	 	Campus Crest Waco Lessor, LLC;
	 
	15.	 	Campus Crest Wichita Falls Lessor, LLC;
	 
	16.	 	Campus Crest Cheney Lessor, LLC;
	 
	17.	 	Campus Crest Jonesboro Lessor, LLC;
	 
	18.	 	Campus Crest Troy Lessor, LLC;
	 
	19.	 	Campus Crest Murfreesboro Lessor, LLC; and
	 
	20.	 	Campus Crest Wichita Lessor, LLC.






 











 





EXHIBIT E-2 to the

CREDIT AGREEMENT




FORM OF OPINION OF

BRADLEY ARANT BOULT CUMMINGS LLP




(See Attached)








 









 








DRAFT OF OCTOBER 4, 2010




October      , 2010




Citibank, N.A.,

     as Administrative Agent

1615 Brett Road

New Castle, Delaware 19720





				
	 	Re:	 	Revolving Credit Facility in the principal amount of up to $125,000,000 (the
“Loan”) to Campus Crest Communities Operating Partnership, LP pursuant to
that certain Credit Agreement dated as of October     , 2010 (the “Credit
Agreement”), by and among Campus Crest Communities Operating Partnership, LP,
Campus Crest Communities, Inc., the Guarantors, the Initial Lenders and Citibank,
N.A. as Administrative Agent, Collateral Agent, Initial Issuing Bank and Swing Line
Bank (the “Agent”)





Ladies and Gentlemen:




     We have acted as counsel to the entities listed on Schedule A attached hereto (individually, a
“Transaction Party” and together, the “Transaction Parties”) in connection with the Loan.



     As such counsel, we have examined (a) originals or copies of the documents listed in Part I
of Schedule B attached hereto (the “Loan Documents”) and (b) unfiled copies of the Uniform
Commercial Code Financing Statements listed in Part II of Schedule B attached hereto (the
“Delaware Financing Statements”). We have also examined such other documents and information as we
have deemed relevant and necessary as a basis for the opinions hereinafter expressed. Capitalized
terms used but not defined herein shall have the meanings given to such terms in the Credit
Agreement.



ASSUMPTIONS




     In rendering the opinions hereinafter expressed, we have with your consent made the following
assumptions without independent investigation:



     1. All information furnished to us is accurate and complete, and the representations
and warranties (as to factual matters as opposed to conclusions of law) of the parties contained in
the Loan Documents are truthful and accurate. All original signatures are genuine; the



 









 





Citibank, N.A.

October      , 2010

Page 2



documents submitted to us as originals are authentic; and the documents submitted to us as copies
conform to the original documents.




     2. All parties to the Loan Documents other than the Transaction Parties are validly existing,
and all parties to the Loan Documents other than the Transaction Parties have the power and
authority (corporate and otherwise) to execute, deliver and perform their obligations under such
documents.



     3. The Loan Documents have been duly authorized, executed and delivered by all parties
thereto other than the Transaction Parties, and constitute the legal, valid and binding
obligations of all the parties thereto.



     4. The terms and conditions of the Loan Documents have not been amended, modified or
supplemented by any other agreement, action or understanding of the parties and there has been no
waiver of any of the material provisions of any of the Loan Documents.



     5. There has not been any mutual mistake of fact or misunderstanding on the part of any party
to or beneficiary of any of the Loan Documents with respect to the transactions contemplated
thereby, or any fraud, duress or undue influence on the part of the Agent with respect to any of
the Loan Documents or the transactions contemplated thereby.



     6. Each party to and beneficiary of the Loan Documents (i) has and will comply with all terms
and conditions of the Loan Documents, and (ii) has complied and will comply with requirements of
good faith, fair dealing and conscionability.



     The opinions hereinafter expressed and the statements hereinafter made are based solely upon
our examination of the aforesaid documents, the various representations, warranties and
certificates described herein, the assumptions hereinabove recited, the comments and
qualifications set forth below and such matters of law as we have deemed relevant and necessary to
enable us to render the opinions hereinafter expressed.



OPINION




     Based solely upon and subject to the foregoing, we are of the following opinion:



     1. Campus Crest Communities Operating Partnership, LP is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of Delaware. In
giving the aforesaid opinion as to the existence and good standing of Campus Crest
Communities Operating Partnership, LP, we have relied solely on a certificate of the
Delaware Secretary of State dated September 22, 2010.



 









 





Citibank, N.A.

October      , 2010

Page 3




     2. Campus Crest GP II, LLC is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Delaware. In giving the aforesaid opinion as to the
existence and good standing of Campus Crest GP II, LLC, we have relied solely on a certificate of
the Delaware Secretary of State dated September 28, 2010.



     3. Campus Crest at Stephenville, LP is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Delaware. In giving the aforesaid opinion as to
the existence and good standing of Campus Crest at Stephenville, LP, we have relied solely on a
certificate of the Delaware Secretary of State dated September 22, 2010.



     4. Campus Crest at Lubbock, LP is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Delaware. In giving the aforesaid opinion as to
the existence and good standing of Campus Crest at Lubbock, LP, we have relied solely on a
certificate of the Delaware Secretary of State dated September 22, 2010.



     5. Campus Crest at Waco, LP is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware, In giving the aforesaid opinion as to the
existence and good standing of Campus Crest at Waco, LP, we have relied solely on a certificate of
the Delaware Secretary of State dated September 22, 2010.



     6. Campus Crest at Wichita Falls, LP is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest at Wichita Falls, LP, we have relied
solely on a certificate of the Delaware Secretary of State dated September 22, 2010.



     7. Campus Crest at San Marcos, LP is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Delaware. In giving the aforesaid opinion as
to the existence and good standing of Campus Crest at San Marcos, LP, we have relied solely on a
certificate of the Delaware Secretary of State dated September 22, 2010.



     8. Campus Crest at Jacksonville, AL, LLC is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware. In giving the
aforesaid opinion as to the existence and good standing of Campus Crest at Jacksonville, AL, LLC,
we have relied solely on a certificate of the Delaware Secretary of State dated September 16,
2010.



     9. Campus Crest at Mobile Phase II, LLC is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware. In giving the
aforesaid opinion as to the existence and good standing of Campus Crest at Mobile Phase II, LLC,
we have relied solely on a certificate of the Delaware Secretary of State dated September 22,
2010.



 









 





Citibank, N.A.

October      , 2010

Page 4




     10. Campus Crest at Cheney, LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest at Cheney, LLC, we have relied solely
on a certificate of the Delaware Secretary of State dated September 22, 2010.



     11. Campus Crest at Jonesboro, LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest at Jonesboro, LLC, we have relied
solely on a certificate of the Delaware Secretary of State dated September 22, 2010.



     12. Campus Crest at Troy, LLC is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware. In giving the aforesaid opinion as to
the existence and good standing of Campus Crest at Troy, LLC, we have relied solely on a
certificate of the Delaware Secretary of State dated September 22, 2010.



     13. Campus Crest at Murfreesboro, LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest at Murfreesboro, LLC, we have relied
solely on a certificate of the Delaware Secretary of State dated September 22, 2010.



     14. Campus Crest at Wichita, LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest at Wichita, LLC, we have relied
solely on a certificate of the Delaware Secretary of State dated September 22, 2010.



     15. Campus Crest Stephenville Lessor, LLC is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware. In giving the
aforesaid opinion as to the existence and good standing of Campus Crest Stephenville Lessor, LLC,
we have relied solely on a certificate of the Delaware Secretary of State dated September 16, 2010.



     16. Campus Crest Waco Lessor, LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest Waco Lessor, LLC, we have relied
solely on a certificate of the Delaware Secretary of State dated September 16, 2010.



     17. Campus Crest Wichita Falls Lessor, LLC is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware. In giving the
aforesaid opinion as to the existence and good standing of Campus Crest Wichita Falls Lessor, LLC,
we have relied solely on a certificate of the Delaware Secretary of State dated September 16,
2010.



 









 





Citibank, N.A.

October      , 2010

Page 5




     18. Campus Crest Cheney Lessor, LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest Cheney Lessor, LLC, we have relied
solely on a certificate of the Delaware Secretary of State dated September 16, 2010.



     19. Campus Crest Jonesboro Lessor, LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest Jonesboro Lessor, LLC, we have
relied solely on a certificate of the Delaware Secretary of State dated September 16, 2010.



     20. Campus Crest Troy Lessor, LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest Troy Lessor, LLC, we have relied
solely on a certificate of the Delaware Secretary of State dated September 16, 2010.



     21. Campus Crest Murfreesboro Lessor, LLC is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware. In giving the
aforesaid opinion as to the existence and good standing of Campus Crest Murfreesboro Lessor, LLC,
we have relied solely on a certificate of the Delaware Secretary of State dated September 16, 2010.



     22. Campus Crest Wichita Lessor, LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. In giving the aforesaid
opinion as to the existence and good standing of Campus Crest Wichita Lessor, LLC, we have relied
solely on a certificate of the Delaware Secretary of State dated September 16, 2010.



     23. Each of the Transaction Parties has full right, power and authority to own its
properties, to carry on its business, to execute and deliver the Loan Documents to which it is a
party and to perform all its obligations thereunder.



     24. The Loan Documents to which each of the Transaction Parties is a party have been duly
authorized, executed and delivered by such Transaction Party.



     25. The Delaware Financing Statements are in proper form for filing in the office of the
Delaware Secretary of State (the “Delaware Filing Office”). Upon the effective filing and proper
indexing of the Delaware Financing Statements in the Delaware Filing Office, the Agent will have a
perfected security interest in that part of the Collateral as defined in the Security Agreement
described in Part I of Schedule B attached hereto (the “Security Agreement”) that consists of
personal property in which a security interest may be perfected by the filing of a financing
statement in the Delaware Filing Office.



 









 





Citibank, N.A.

October      , 2010

Page 6




     26. The execution and delivery of the Loan Documents do not, and the performance by the
Transaction Parties of their obligations under the Loan Documents will not, violate, conflict with
or constitute a default under the organizational documents of the Transaction Parties or any
provision of the Delaware Limited Liability Company Act and the Delaware Revised Uniform Limited
Partnership Act (the “Acts”).



     27. The execution, delivery and performance by the Transaction Parties of their obligations
under the Loan Documents do not require any governmental consent, approval, order, authorization,
permit, license, registration, declaration or filing under the Acts.



COMMENTS AND QUALIFICATIONS




     The foregoing opinions are subject to the following limitations, qualifications, comments and
exceptions:



     1. In giving the opinions set forth herein we have relied, as to factual matters relevant to
such opinions (as opposed to conclusions of law), solely on certain representations made to us on
behalf of the Transaction Parties and on the representations and warranties of the Transaction
Parties contained in the Loan Documents, and we have made no independent investigation whatsoever
with respect to such matters. In addition, we have not examined the files and records of the
Transaction Parties, and we have not conducted any independent review or investigation of any of
the transactions or contractual arrangements of the Transaction Parties.



     2. We neither express nor imply any opinion with respect to the enforceability of the Loan
Documents or with respect to the transactions contemplated by the Loan Documents or any aspect of
such transactions other than the opinions expressed herein.



     3. No opinion is expressed herein as to the effect of using an “all assets” or a similarly
broad description of collateral in the Delaware Financing Statements to the extent such
description is broader than the description of the Collateral contained in the Security Agreement.



     4. The opinions expressed herein are limited to the Acts, and we express no opinion with
respect to federal law or the laws of any other state or jurisdiction. With respect to the Acts,
we have relied solely on the published acts and have not reviewed any case law, legislative
history or other supplementary material of such jurisdiction. The opinions expressed herein are
based on the Acts as in effect on the date hereof and are subject to future changes in applicable
law.



     5. This opinion is being delivered to and accepted by you with the understanding that it is
an opinion only and that it is not a guaranty or insuring agreement of any kind



 









 





Citibank, N.A.

October      , 2010

Page 7



whatsoever or an assurance of future events or of any particular result under any particular set of
facts or circumstances.




     6. The opinions expressed herein are effective only as of the date of this opinion, and we
assume no obligation to advise you of any matters which come to our attention thereafter.



     7. This opinion may be relied upon only by the addressee hereof and the Lenders and their
successors and assigns and may not be relied upon by any other person or entity or used for any
other purpose.



Yours very truly,







 









 








SCHEDULE A




Campus Crest Communities Operating Partnership, LP




Campus Crest GP II, LLC




Campus Crest at Stephenville, LP




Campus Crest at Lubbock, LP




Campus Crest at Waco, LP




Campus Crest at Wichita Falls, LP




Campus Crest at San Marcos, LP




Campus Crest at Jacksonville, AL, LLC




Campus Crest at Mobile Phase II, LLC




Campus Crest at Cheney, LLC




Campus Crest at Jonesboro, LLC




Campus Crest at Troy, LLC




Campus Crest at Murfreesboro, LLC




Campus Crest at Wichita, LLC




Campus Crest at Stephenville Lessor, LLC




Campus Crest at Waco Lessor, LP




Campus Crest at Wichita Falls Lessor, LP




Campus Crest at Cheney Lessor, LLC




Campus Crest at Jonesboro Lessor, LLC




Campus Crest at Troy Lessor, LLC




Campus Crest at Murfreesboro Lessor, LLC




Campus Crest at Wichita Lessor, LLC




 









 





SCHEDULE B




PART I



Credit Agreement among Campus Crest Communities Operating Partnership, LP, Campus Crest
Communities, Inc., the Subsidiary Guarantors named therein, the Initial Lenders named therein and
Citibank, N.A., as Administrative Agent, Collateral Agent, Initial Issuing Bank and Swing Line Bank
(the “Agent”)



Promissory Notes executed by Campus Crest Communities Operating Partnership, LP payable to the
order of the Initial Lenders and the Swing Line Bank



Security Agreement among the Transaction Parties that are parties thereto and the Agent



Pledge Agreement from Campus Crest Properties, LLC and Campus Crest GP II, LLC in favor of the
Agent



Environmental Indemnity Agreement among the Transaction Parties that are parties thereto in favor
of the Agent



Manager’s Consent and Subordination of Management Agreement among The Grove Student Properties,
LLC, Campus Crest Communities Operating Partnership, LP and the Agent



Letter Agreement dated as of July [no date], 2010 from Citigroup Global Markets, Inc. to Campus
Crest Communities Operating Partnership, LP and Campus Crest Communities, Inc.



Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing (Leasehold Estate)
from Campus Crest at Mobile Phase II, LLC in favor of the Agent



Assignment of Leases and Rents from Campus Crest at Mobile Phase II, LLC in favor of the Agent



Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing (Fee and Leasehold
Estates) from Campus Crest Troy Lessor, LLC and Campus Crest at Troy, LLC in favor of the Agent



Assignment of Leases and Rents from Campus Crest Troy Lessor, LLC and Campus Crest at Troy, LLC in
favor of the Agent



Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing from Campus Crest
at Jacksonville, AL, LLC in favor of the Agent



Assignment of Leases and Rents from Campus Crest at Jacksonville, AL, LLC in favor of the Agent








 









 







Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing (Fee and Leasehold
Estates) from Campus Crest Wichita Lessor, LLC and Campus Crest at Wichita, LLC in favor of the
Agent



Assignment of Leases and Rents from Campus Crest Wichita Lessor, LLC and Campus Crest at Wichita,
LLC in favor of the Agent



Deed of Trust, Security Agreement, Assignments of Rents and Leases and Fixture Filing (Fee and
Leasehold Estates) from Campus Crest Cheney Lessor, LLC and Campus Crest at Cheney, LLC in favor
of the Agent



Assignment of Leases and Rents from Campus Crest Cheney Lessor, LLC and Campus Crest at Cheney, LLC
in favor of the Agent



Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing (Fee and Leasehold
Estates) from Campus Crest Jonesboro Lessor, LLC and Campus Crest at Jonesboro, LLC in favor of
the Agent



Assignment of Leases and Rents from Campus Crest Jonesboro Lessor, LLC and Campus Crest at
Jonesboro, LLC in favor of the Agent



Deed of Trust, Security Agreement, Assignments of Rents and Leases and Fixture Filing (Fee and
Leasehold Estates) from Campus Crest Murfreesboro Lessor, LLC and Campus Crest at Murfreesboro, LLC
in favor of the Agent



Assignment of Leases and Rents from Campus Crest Murfreesboro Lessor, LLC and Campus Crest at
Murfreesboro, LLC in favor of the Agent



Deed of Trust, Security Agreement, Assignments of Rents and Leases and Fixture Filing (Fee and
Leasehold Estates) from Campus Crest Wichita Falls Lessor, LLC and Campus Crest at Wichita Falls,
LP in favor of the Agent



Assignment of Leases and Rents from Campus Crest Wichita Falls Lessor, LLC and Campus Crest at
Wichita Falls, LLC in favor of the Agent



Deed of Trust, Security Agreement, Assignments of Rents and Leases and Fixture Filing (Fee and
Leasehold Estates) from Campus Crest Waco Lessor, LLC and Campus Crest at Waco, LP in favor of the
Agent



Assignment of Leases and Rents from Campus Crest Waco Lessor, LLC and Campus Crest at Waco, LLC in
favor of the Agent



Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing from Campus
Crest at San Marcos, LP in favor of the Agent



Assignment of Leases and Rents from Campus Crest at San Marcos, LLC in favor of the Agent







 









 







Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing from Campus
Crest at Lubbock, LP in favor of the Agent



Assignment of Leases and Rents from Campus Crest at Lubbock, LLC in favor of the Agent



Deed of Trust, Security Agreement, Assignments of Rents and Leases and Fixture Filing (Fee and
Leasehold Estates) from Campus Crest Stephenville Lessor, LLC and Campus Crest at Stephenville, LP
in favor of the Agent



Assignment of Leases and Rents from Campus Crest Stephenville Lessor, LLC and Campus Crest at
Stephenville, LLC in favor of the Agent




PART II



Uniform Commercial Code Financing Statement listing Campus Crest Wichita Lessor, LLC and Campus
Crest at Wichita, LLC as debtors and the Agent as secured party for filing with the Delaware
Secretary of State



Uniform Commercial Code Financing Statement listing Campus Crest Wichita Falls Lessor, LLC and
Campus Crest at Wichita Falls, LP as debtors and the Agent as secured party for filing with the
Delaware Secretary of State



Uniform Commercial Code Financing Statement listing Campus Crest Waco Lessor, LLC and Campus Crest
at Waco, LP as debtors and the Agent as secured party for filing with the Delaware Secretary of
State



Uniform Commercial Code Financing Statement listing the Campus Crest Troy Lessor, LLC and Campus
Crest at Troy, LLC as debtors and the Agent as secured party for filing with the Delaware
Secretary of State



Uniform Commercial Code Financing Statement listing Campus Crest Stephenville Lessor, LLC and
Campus Crest at Stephenville, LLC as debtors and the Agent as secured party for filing with the
Delaware Secretary of State



Uniform Commercial Code Financing Statement listing Campus Crest at San Marcos, LP as debtor and
the Agent as secured party for filing with the Delaware Secretary of State



Uniform Commercial Code Financing Statement listing Campus Crest Murfreesboro Lessor, LLC and
Campus Crest at Murfreesboro, LLC as debtors and the Agent as secured party for filing with the
Delaware Secretary of State








 









 







Uniform Commercial Code Financing Statement listing Campus Crest at Mobile Phase II, LLC as debtor
and the Agent as secured party for filing with the Delaware Secretary of State



Uniform Commercial Code Financing Statement listing Campus Crest at Lubbock, LP as debtor and the
Agent as secured party for filing with the Delaware Secretary of State



Uniform Commercial Code Financing Statement listing Campus Crest Jonesboro Lessor, LLC and Campus
Crest at Jonesboro, LLC as debtors and the Agent as secured party for filing with the Delaware
Secretary of State



Uniform Commercial Code Financing Statement listing Campus Crest at Jacksonville, AL, LLC as
debtor and the Agent as secured party for filing with the Delaware Secretary of State



Uniform Commercial Code Financing Statement listing Campus Crest Cheney Lessor, LLC and Campus
Crest at Cheney, LLC as debtors and the Agent as secured party for filing with the Delaware
Secretary of State








 









 








EXHIBIT E-3 to the

CREDIT AGREEMENT




FORM OF OPINION OF

SAUL EWING LLP




(See Attached)





 












 





			
	 	 	 
	
	 	lawyers@saul.com
www.saul.com
	 
	 	






October ____, 2010




Citibank, N.A.

As Administrative Agent

1615 Brett Road

New Castle, Delaware 19720





	 	 	 	Re: Credit Agreement dated October ____, 2010





Ladies and Gentlemen:




          We have acted as Maryland counsel to Campus Crest Communities, Inc., a Maryland corporation
(the “Company”) in connection with the execution and delivery by the
Company of a Credit Agreement dated October           , 2010 (the “Agreement”) among Campus
Crest Communities Operating Partnership, LP, the Company, the other affiliates of the Borrower
named in the Agreement, and Barclay’s Bank PLC, Citibank, N.A., Goldman Sachs Bank, USA, Raymond
James Bank, FSB and Royal Bank of Canada (collectively, the “Lender”) and the consummation of the
transactions contemplated in the Agreement (the “Transactions”). Capitalized terms used in this
letter that are not otherwise defined in this letter shall have the meanings ascribed to them in
the Agreement. These opinions are being delivered to you to satisfy the condition set forth in
Section 3.01(a)(xiv) of the Agreement.




          As a basis for our opinions, we have examined the following documents (collectively,
the “Transaction Documents”):




          (i) a copy of the executed Agreement; and




          (ii) a copy of the executed Environmental Indemnity Agreement dated
October ____, 2010.




          Also, as a basis for our opinions, we have examined the originals or certified
copies of the following:




          (iii) a Certificate of Status for the Company issued by the Department of
Assessments and Taxation of the State of Maryland;




          (iv) a copy of the charter of the Company;




Saul Ewing LLP


500 East Pratt Street • Baltimore, MD 21202-3133 • Phone (410) 332-8600 • Fax: (410) 332-8862



 




DELAWARE     MARYLAND     NEW JERSEY     NEW YORK     PENNSYLVANIA     WASHINGTON DC




A DELAWARE LIMITED LIABILITY PARTNERSHIP







 









 








October ____, 2010

Page 2




          (v) a copy of the bylaws of the Company;




          (vi) a certificate of the secretary of the Company as to the authenticity of the charter
and bylaws of the Company, the incumbency of the officers of the Company, the resolutions of the
Company’s directors approving the consummation of the transactions contemplated by the Agreement,
and other matters that we have deemed necessary and appropriate; and




          (vii) such other documents as we have deemed necessary and appropriate to express the
opinions set forth in this letter, subject to the limitations and assumptions and qualifications
noted below.




          In reaching the opinions set forth below, we have assumed:




          (a) that all signatures on all Transaction Documents and any other documents submitted to us
for examination are genuine;




          (b) the authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as certified or photographic copies, and the accuracy
and completeness of all documents;




          (c) that the form and content of all Transaction Documents submitted to us as unexecuted
drafts do not differ in any respect relevant to this opinion from the form and content of such
Transaction Documents as executed and delivered;




          (d) the legal capacity of all natural persons executing any documents, whether on behalf of
themselves or other persons;




          (e) that all persons executing Transaction Documents on behalf of any party (other than the
Company) are duly authorized, and




          (f) that each of the parties has duly and validly executed and delivered the Transaction
Documents to which that party is a signatory and the party’s obligations are valid and legally
binding obligations enforceable in accordance with the terms of the respective Transaction
Documents.




          As to various questions of fact material to our opinions, we have relied upon a certificate
and representations of Donald L. Bobbitt, Jr., as Secretary of the Company, and have assumed that
such certificate and representations continue to remain true and complete as of the date of this
letter. We have not examined any court records, dockets, or other public records, nor have we
investigated the Company’s history or other transactions, except as specifically set forth in this
letter.









 









 








October ____, 2010

Page 3




          The phrases “to our knowledge” or “known to us,” as used in this letter, mean current
conscious actual knowledge of lawyers at our firm who have been engaged in the performance of legal
services for the Company, and signify that in the course of performance of legal services, no
information has come to our attention that would give us actual notice or actual knowledge that any
opinions are inaccurate or that any of the Transaction Documents or other information upon which we
have relied are not accurate and complete. The words “to our knowledge” and “known to us,” are
limited to the knowledge of the lawyers within our firm who are involved in the Transaction and are
presently at the firm.




          Based on our review of the foregoing and subject to the assumptions and qualifications
set forth in this letter, it is our opinion, as of the date of this letter, that:




          1. The Company is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Maryland.




          2. The Company has the corporate power to execute and deliver the Transaction Documents
and to perform its obligations thereunder.




          3. All necessary corporate action has been taken to authorize the execution, delivery and
performance of the Transaction Documents by the Company.




          4. The execution and delivery of the Transaction Documents, and the performance by the
Company of their terms will not conflict with the Company’s charter or bylaws.




          5. The execution and delivery of the Transaction Documents and the performance by the
Company of their terms will not violate any provision of the Maryland General Corporation
Law.




          6. No consent, approval, authorization or other action by or filing with, any governmental
authority of the State of Maryland is required to be obtained or made by the Company for the
execution, delivery and performance of the Transaction Documents by the Company.




          In addition to the qualifications set forth above, the opinions set forth in this letter are
also subject to the following qualifications:




          (i) We express no opinion as to the laws of any jurisdiction other than the laws of the
State of Maryland. We express no opinion as to the principles of conflict of laws of any
jurisdiction, including the laws of the State of Maryland.




          (ii) We assume no obligation to supplement our opinions if any applicable law changes
after the date of this letter or if we become aware of any facts that might alter the opinions
expressed in this letter after the date of this letter.









 









 








October ____, 2010

Page 4




          (iii) We express no opinion with respect to title to any property, nor do we express
any opinion with respect to the existence of encumbrances upon any property or the attachment,
validity, perfection, or priority of any security interests or liens purported to be created
under the Transaction Documents.




          (iv) We express no opinion as to the laws, ordinances, zoning restrictions, rules or
regulations of any city, county or other municipality or any other local governmental agency.




          (v) We express no opinion as to any consent, approval, authorization, or other action
by, or filing with, any governmental authority necessary or required for the ongoing operation of
the Company’s business.




          (vi) We express no opinion as to the consents, approvals, authorizations, or other
actions by, or filings with any city, county or other municipality or any other local government
agency.




          (vii) We express no opinion on the enforceability of the Transaction Documents.




          (viii) We express no opinion with respect to the anti-trust laws or securities laws of the
State of Maryland.




          (ix) Our opinion in Paragraph 6 regarding consents and approvals is based upon our
consideration of only those consents, approvals, authorizations, orders, registrations,
declarations or filings required under those statutes, rules or regulations of the State of
Maryland, if any, that, in our experience, are reasonably applicable to transactions of the type
contemplated under the Transaction Documents.




          The opinions expressed in this letter are solely for the benefit of the Lender and its counsel
and are furnished only with respect to the transactions contemplated by the Transaction Documents.
Accordingly, these opinions may not be relied upon by or quoted to any other person or entity
without, in each instance, our prior written consent. The opinions expressed in this letter are
limited to the matters set forth in this letter, and no other opinions shall be implied or inferred
beyond the matters expressly stated.




Very truly yours,




SAUL EWING LLP








 









 








EXHIBIT E-4 to the

CREDIT AGREEMENT




FORM OF OPINION OF

LOCAL COUNSEL FOR

THE LOAN PARTIES




Form reasonably acceptable to Administrative Agent




 









 








EXHIBIT F to the

CREDIT AGREEMENT




FORM OF

SECURITY AGREEMENT




(See Attached)









 









 








SECURITY AGREEMENT




Dated October 19, 2010



from



THE GRANTORS REFERRED TO HEREIN



to



CITIBANK, N.A.,



as Collateral Agent







 









 








T A B L E O F C O N T E N T S




	 	 	 	 	 
	Section	 	Page
	Section 1.  Grant of Security
	 	 	2	 
	 
	 	 	 	 
	Section 2. Security for Obligations
	 	 	6	 
	 
	 	 	 	 
	Section 3. Grantors Remain Liable
	 	 	6	 
	 
	 	 	 	 
	Section 4. Delivery and Control of Security Collateral
	 	 	6	 
	 
	 	 	 	 
	Section 5. Maintaining the Account Collateral
	 	 	7	 
	 
	 	 	 	 
	Section 6. Investing of Amounts in the L/C Cash Collateral Account
	 	 	7	 
	 
	 	 	 	 
	Section 7. Release of Amounts
	 	 	8	 
	 
	 	 	 	 
	Section 8. Maintaining Electronic Chattel Paper and Transferable Records
	 	 	8	 
	 
	 	 	 	 
	Section 9. Representations and Warranties
	 	 	8	 
	 
	 	 	 	 
	Section 10. Further Assurances
	 	 	10	 
	 
	 	 	 	 
	Section 11. As to FF&E and Inventory
	 	 	11	 
	 
	 	 	 	 
	Section 12. Insurance
	 	 	12	 
	 
	 	 	 	 
	Section 13. Post-Closing Changes; Bailees; Collections on Assigned Agreements, Receivables and Related Contracts
	 	 	12	 
	 
	 	 	 	 
	Section 14. Voting Rights; Distributions; Etc.
	 	 	14	 
	 
	 	 	 	 
	Section 15. As to the Assigned Agreements
	 	 	15	 
	 
	 	 	 	 
	Section 16. Payments Under the Assigned Agreements
	 	 	16	 
	 
	 	 	 	 
	Section 17. Transfers and Other Liens; Additional Equity Interests
	 	 	16	 
	 
	 	 	 	 
	Section 18. Collateral Agent Appointed Attorney in Fact
	 	 	16	 
	 
	 	 	 	 
	Section 19. Collateral Agent May Perform
	 	 	17	 
	 
	 	 	 	 
	Section 20. The Collateral Agent’s Duties
	 	 	17	 
	 
	 	 	 	 
	Section 21. Remedies
	 	 	18	 
	 
	 	 	 	 
	Section 22. Indemnity and Expenses
	 	 	19	 
	 
	 	 	 	 
	Section 23. Amendments; Waivers; Additional Grantors, Etc.
	 	 	20	 
	 
	 	 	 	 





i









 






	 	 	 	 	 
	Section	 	Page
	Section 24. Notices, Etc.
	 	 	20	 
	 
	 	 	 	 
	Section 25. Continuing Security Interest; Assignments under the Credit Agreement
	 	 	20	 
	 
	 	 	 	 
	Section 26. Release; Termination
	 	 	21	 
	 
	 	 	 	 
	Section 27. Security Interest Absolute
	 	 	21	 
	 
	 	 	 	 
	Section 28. Third Party Waivers
	 	 	23	 
	 
	 	 	 	 
	Section 29. Execution in Counterparts
	 	 	25	 
	 
	 	 	 	 
	Section 30. The Credit Agreement and the Mortgages
	 	 	25	 
	 
	 	 	 	 
	Section 31. Governing Law
	 	 	25	 






	 	 	 	 	 

	Schedules
	 	 	 	 
	 
	 	 	 	 
	Schedule I

	 	-
	 	Location, Chief Executive Office, Type of Organization, Jurisdiction
of Organization and Organizational Identification Number
	Schedule II

	 	-
	 	Assigned Agreements
	Schedule III

	 	-
	 	Properties and Locations of FF&E and Inventory
	Schedule IV

	 	-
	 	Changes in Name, Location, Etc.
	Schedule V

	 	-
	 	Pledged Equity
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	-
	 	Form of Security Agreement Supplement
	Exhibit B

	 	-
	 	Form of Consent and Agreement
	Exhibit C

	 	-
	 	Form of Authorization Statement
	Exhibit D

	 	-
	 	Form of Acknowledgement and Consent
	Exhibit E

	 	-
	 	Form of Transaction Statement










ii









 








SECURITY AGREEMENT




          SECURITY AGREEMENT dated October 19, 2010 (this “Agreement”) among CAMPUS CREST COMMUNITIES
OPERATING PARTNERSHIP, LP, a Delaware limited partnership (the “Borrower”), CAMPUS CREST AT
JACKSONVILLE, AL, LLC, a Delaware limited liability company, CAMPUS CREST AT MOBILE PHASE II, LLC,
a Delaware limited liability company, CAMPUS CREST AT CHENEY, LLC, a Delaware limited liability
company, CAMPUS CREST AT JONESBORO, LLC, a Delaware limited liability company, CAMPUS CREST AT
TROY, LLC, a Delaware limited liability company, CAMPUS CREST AT MURFREESBORO, LLC, a Delaware
limited liability company, CAMPUS CREST AT WICHITA, LLC, a Delaware limited liability company,
CAMPUS CREST AT STEPHENVILLE, LP, a Delaware limited partnership, CAMPUS CREST AT LUBBOCK, LP, a
Delaware limited partnership, CAMPUS CREST AT WACO, LP, a Delaware limited partnership, CAMPUS
CREST AT WICHITA FALLS, LP, a Delaware limited partnership, CAMPUS CREST AT SAN MARCOS, LP, a
Delaware limited partnership, CAMPUS CREST STEPHENVILLE LESSOR, LLC, a Delaware limited liability
company, CAMPUS CREST WACO LESSOR, LLC, a Delaware limited liability company, CAMPUS CREST WICHITA
FALLS LESSOR, LLC, a Delaware limited liability company, CAMPUS CREST CHENEY LESSOR, LLC, a
Delaware limited liability company, CAMPUS CREST JONESBORO LESSOR, LLC, a Delaware limited
liability company, CAMPUS CREST TROY LESSOR, LLC, a Delaware limited liability company, CAMPUS
CREST MURFREESBORO LESSOR, LLC, a Delaware limited liability company, CAMPUS CREST WICHITA LESSOR,
LLC, a Delaware limited liability company, and the ADDITIONAL GRANTORS (as defined in Section
23) (all of the aforementioned parties, collectively, the “Grantors”), and CITIBANK, N.A., as
collateral agent (in such capacity, together with any successor collateral agent appointed pursuant
to Article VIII of the Credit Agreement (as hereinafter defined), the “Collateral Agent”) for the
Secured Parties (as defined in the Credit Agreement).




          PRELIMINARY STATEMENTS.




          (1) The Grantors and certain other Loan Parties have entered into a Credit Agreement dated as
of October 19, 2010 (such Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”) with the Lender
Parties, the Agents, and the Arrangers (each as defined therein).




          (2) Pursuant to the Credit Agreement, the Grantors are entering into this Agreement in order
to grant to the Collateral Agent for the ratable benefit of the Secured Parties a security interest
in the Collateral (as hereinafter defined).




          (3) Upon the request of the Collateral Agent, the Borrower shall open a letter of credit cash
collateral deposit account (the “L/C Cash Collateral Account”), with Citibank, N.A. in New York, New
York, in the name of the Collateral Agent and under the sole control and dominion of the Collateral
Agent and subject to the terms of this Agreement.




          (4) Certain of the Grantors identified on Schedule V hereto are the owners of the
shares of stock or other Equity Interests to be pledged hereunder (the “Initial Pledged Equity”)
set forth opposite such Grantor’s name on and as otherwise described in Schedule V






 









 







and issued by the Persons named therein; and the pledge of any Equity Interests in connection
with the Credit Agreement other than those listed on Schedule V shall be effected pursuant to
that certain Pledge Agreement dated as of the date hereof made by the pledgors party thereto.




          (5) It is a condition precedent to the making of Advances and the issuance of Letters of
Credit by the Lender Parties under the Credit Agreement from time to time that the Grantors shall
have executed and delivered this Agreement to the Administrative Agent.




          (6) Each Grantor will derive substantial direct and indirect benefit from the transactions
contemplated by the Loan Documents.




          (7) Terms defined in the Credit Agreement and not otherwise defined in this Agreement are used
in this Agreement as defined in the Credit Agreement. Further, unless otherwise defined in this
Agreement or in the Credit Agreement, terms defined in Article 8 or 9 of the UCC (as defined below)
are used in this Agreement as such terms are defined in such Article 8 or 9. “UCC” means the Uniform
Commercial Code as in effect, from time to time, in the State of New York, provided, however, that,
if perfection or the effect of perfection or non perfection or the priority of any security
interest in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non perfection or priority.




          NOW, THEREFORE, in consideration of the premises, in order to induce the Lender Parties to
make Advances and issue Letters of Credit under the Credit Agreement from time to time, and to
induce the Hedge Banks to enter into Secured Hedge Agreements from time to time, and for good and
valuable other consideration, the receipt and sufficiency of which is hereby conclusively
acknowledged, each Grantor hereby agrees with the Collateral Agent for the ratable benefit of the
Secured Parties as follows:




          Section 1. Grant of Security. Each Grantor hereby grants to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in, such Grantor’s
right, title and interest in and to the following, in each case, as to each type of property
described below, whether now owned or hereafter acquired by such Grantor, wherever located, and
whether now or hereafter existing or arising (collectively, the “Collaterary”):





     (a) all fixtures, furnishings and equipment and all appurtenances and additions
thereto and substitutions or replacements thereof owned by such Grantor and now or hereafter
attached to, contained in or used in connection with the use, occupancy, operation or
maintenance of the property set forth opposite such Grantor’s name in Schedule III
hereto (each, a “Property”), including, without limitation, any and all fixtures,
furnishings, equipment, furniture, and other items of tangible personal property,
appliances, machinery, equipment, signs, artwork (including paintings, prints, sculpture and
other fine art), office furnishings and equipment, and specialized equipment for kitchens,
laundries, drying, bars, restaurants, spas, public rooms, health and recreational
facilities, linens, dishware, two-way radios, all partitions, screens, awnings, shades,
blinds, rugs, carpets, hall and lobby equipment, heating, lighting, plumbing, ventilating,



2









 







refrigerating, incinerating, elevators, escalators, air conditioning and communication plants or
systems with appurtenant fixtures, vacuum cleaning systems, call or beeper systems, security
systems, sprinkler systems and other fire prevention and extinguishing apparatus and materials;
generators, boilers, compressors and engines; gas and electric machinery and equipment; facilities
used to provide utility services; garbage disposal machinery or equipment; communication apparatus,
including television, radio, music, and cable antennae and systems; attached floor coverings,
window coverings, curtains, drapes and rods, storm doors and windows; stoves, refrigerators,
dishwashers and other installed appliances; attached cabinets; trees, plants and other items of
landscaping; visual and electronic surveillance systems; and swimming pool heaters and equipment
fuel, water and other pumps and tanks; irrigation equipment; computer and related equipment; all
equipment, manual, mechanical or motorized, for the construction, maintenance, repair and cleaning
of, parking areas, walks, underground ways, truck ways, driveways, common areas, roadways, highways
and streets and all equipment, fixtures, furnishings, and articles of personal property now or
hereafter attached to or used in or about any such Property which is or may be used in or related
to the planning, development, financing or operation thereof and all renewals of or replacements or
substitutions for any of the foregoing (the “FF&E”);




     (b) all inventory in all of its forms, including, without limitation, (i) all provisions in
storerooms, other merchandise intended for sale, fuel, mechanical supplies, stationery and other
expenses, supplies and similar items and raw materials and work in process therefor, finished goods
thereof and materials used or consumed in the manufacture, production, preparation or shipping
thereof, (ii) goods in which such Grantor has an interest in mass or a joint or other interest or
right of any kind (including, without limitation, goods in which such Grantor has an interest or
right as consignee) and (iii) goods that are returned to or repossessed or stopped in transit by
such Grantor), and all accessions thereto and products thereof and documents therefor, and all
software related thereto, including, without limitation, software that is embedded in and is part
of the inventory (any and all such property being the “Inventory”);




     (c) all fees, charges, accounts (including, without limitation, insurance receivables),
chattel paper (including, without limitation, tangible chattel paper and electronic chattel paper),
instruments (including, without limitation, promissory notes), deposit accounts, letter-of-credit
rights, general intangibles (including, without limitation, payment intangibles) and other
obligations and/or other payments (with respect to the Borrower only, to the extent related to the
Property), including, without limitation, payments for the use or occupancy of rooms, suites, or
other facilities of any kind and/or public facilities in or at any such Property or for the
provision of any food and beverages or other services at any such Property, including fees,
charges, accounts and/or other payments arising from the following: (i) sale of food and beverages,
whether in a restaurant, or through banquets, catering facilities and services; (ii) laundry,
vending machine and telecommunications receipts, whether billed to guests of any such Property or
collected in cash; (iii) operation of health club, spa, personal care, and other facilities located
in, on or at any such Property; (iv) incidental charges to tenants other users or customers; (v)
any other charges of any kind that appear on any bill or statement rendered to any tenant of any
such Property or other user or customer of any such Property; and



3









 







(vi) any payments (and the right to receive payments) from any consumer credit/charge card
organization or entity (such as, or similar to, the organizations or entities that sponsor and
administer the American Express Card, the Visa Card, the MasterCard, the Carte Blanche Card or the
Discover Card), whether now existing or hereafter created, substitutions therefor, proceeds
(whether cash or non-cash, movable or immovable, tangible or intangible) received upon the sale,
exchange, transfer, collection or other disposition or substitution thereof and any and all of the
foregoing and proceeds therefrom, all rights now or hereafter existing in and to all supporting
obligations and in and to all security agreements, mortgages, Liens, leases, letters of credit and
other contracts securing or otherwise relating to the foregoing property, in each case excluding
the revenues or other income earned by third party licensees and lessees (other than Affiliates of
Grantor) of any portion of any Property (but including such revenues or other income payable by
such third party licensee or lessee to any Grantor) (any and all of such fees, charges, accounts
and/or other payments, instruments, deposit accounts, letter-of-credit rights, general intangibles
and other obligations, to the extent not referred to in clause (f) or (g) below, being the
“Receivables”, and any and all such supporting obligations, security agreements, mortgages, Liens,
leases, letters of credit and other contracts being the “Related Contracts”);




     (d) each of the Material Contracts listed on Schedule II hereto, each Management
Agreement, and each Hedge Agreement to which such Grantor is now or may hereafter become a party,
in each case as such agreements may be amended, amended and restated, supplemented or otherwise
modified from time to time (collectively, the “Assigned Agreements”), including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become due under or
pursuant to the Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned Agreements, (iii) claims of
such Grantor for damages arising out of or for breach of or default under the Assigned Agreements
and (iv) the right of such Grantor to terminate the Assigned Agreements, to perform thereunder and
to compel performance and otherwise exercise all remedies thereunder (all such Collateral being the
“Agreement Collateral”);




     (e) all agreements, permits, consents, orders and franchises relating to the
construction, use or operation of any of the Properties to which such Grantor, now or
hereafter, is a party or a beneficiary;




     (1) the following (collectively, the “Account Collateral”):




     (i) the L/C Cash Collateral Account and all funds and financial assets from
time to time credited thereto (including, without limitation, all Cash Equivalents), all
interest, dividends, distributions, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for any or all
of such funds and financial assets, and all certificates and instruments, if any, from time
to time representing or evidencing the L/C Cash Collateral Account;



4









 






     (ii) all promissory notes, certificates of deposit, deposit accounts, checks and
other instruments from time to time delivered to or otherwise possessed by the Collateral
Agent for or on behalf of such Grantor, including, without limitation, those delivered or
possessed in substitution for or in addition to any or all of the then existing Account
Collateral; and




     (iii) all interest, dividends, distributions, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing collateral described in subsections 1(f)(i)
and (ii);




     (g) the following (the “Security Collateral”):




     (i) the Initial Pledged Equity and the certificates, if any, representing the
Initial Pledged Equity, and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Initial Pledged Equity and
all subscription warrants, rights or options issued thereon or with respect thereto; and




     (ii) all additional shares of stock and other Equity Interests of or in any
issuer of the Initial Pledged Equity or any successor entity from time to time acquired by
such Grantor in any manner and all shares of stock and other Equity Interests of or in any
fee or leasehold owner or lessee of Borrowing Base Assets (such shares and other Equity
Interests, together with the Initial Pledged Equity, being the “Pledged Equity”), and the
certificates, if any, representing such additional shares or other Equity Interests, and
all dividends, distributions, return of capital, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in exchange for
any or all of such shares or other Equity Interests and all subscription warrants, rights
or options issued thereon or with respect thereto;




     (h) all books and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of such Grantor pertaining to any of the
Collateral; and




     (i) all proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to, and supporting obligations relating to, any and all of
the Collateral (including, without limitation, proceeds, collateral and supporting obligations that
constitute property of the types described in clauses (a) through (h) of this Section 1 and
this clause (i)) and, to the extent not otherwise included, all (A) payments under insurance
(whether or not the Collateral Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral, (B) tort claims, including, without limitation, all commercial tort claims and (C)
cash.








5









 








          Notwithstanding anything herein to the contrary, in no event shall the Collateral include or
the security interest granted under this Section 1 attach to (A) any agreement, permit,
consent, order or franchise covering real or personal property of any Grantor, and any of its
rights or interest thereunder, if and to the extent that the grant of a security interest or lien
is prohibited by or in violation of (y) any law, rule, regulation or order, or (z) a term,
provision or condition of any such agreement, permit, consent, order or franchise (unless such law,
rule, regulation, term, provision or condition would be rendered ineffective with respect to the
creation of the security interest hereunder pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of
the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other
applicable law (including any Bankruptcy Law) or principles of equity) and such provision or
condition has not been waived or the consent of the other party to such agreement, permit, consent,
order or franchise has not been obtained; provided however that the Collateral shall include (and
such security interest shall attach) immediately at such time as the contractual or legal
prohibition shall no longer be applicable and to the extent severable, shall attach immediately to
any portion of such agreement, permit, consent, order or franchise not subject to the prohibitions
specified in (y) or (z) above; provided further that the exclusions referred to in this paragraph
shall not include any proceeds of any such agreement, permit, consent, order or franchise, or (B)
any rights or interests of any Grantor in the names “Campus Crest,” “The Grove” or any other name
which incorporates such words or any logos or other intellectual property rights in respect or
regard thereto.




          Section 2. Security for Obligations. This Agreement secures the payment of all
Obligations of such Grantor now or hereafter existing under the Loan Documents, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest,
fees, premiums, penalties, indemnifications, contract causes of action, costs, expenses or
otherwise (all such Obligations being the “Secured Obligations”). Without limiting the generality
of the foregoing, this Agreement secures, as to each Grantor, the payment of all amounts that
constitute part of the Secured Obligations and would be owed by such Grantor to any Secured Party
under the Loan Documents but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving a Loan Party.




          Section 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and agreements included
in such Grantor’s Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been executed, (b) the
exercise by the Collateral Agent of any of the rights hereunder shall not release any Grantor from
any of its duties or obligations under the contracts and agreements included in the Collateral and
(c) no Secured Party shall have any obligation or liability under the contracts and agreements
included in the Collateral solely by reason of this Agreement or any other Loan Document, nor shall
any Secured Party be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.




          Section 4. Delivery and Control of Security Collateral. (a) All certificates or
instruments representing or evidencing Security Collateral shall be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or assignment in









6









 







blank, all in form and substance satisfactory to the Collateral Agent. Upon the occurrence and
during the continuance of an Event of Default and the exercise of remedies pursuant to Section
21 hereof, the Collateral Agent shall have the right, at any time in its discretion and without
notice to any Grantor, to transfer to or to register in the name of the Collateral Agent or any of
its nominees any or all of the Security Collateral. In addition, upon the occurrence and during the
continuance of an Event of Default and the exercise of remedies pursuant to Section 21 hereof, the
Collateral Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Security Collateral for certificates or instruments of smaller or larger
denominations.




          (b) With respect to any Security Collateral in which any Grantor has any right, title or
interest and that constitutes or may constitute an uncertificated security, such Grantor will
either: (1) cause the issuer thereof to register the Collateral Agent as the registered owner of
such security and provide evidence of same to the Collateral Agent that is satisfactory to the
Collateral Agent in its reasonable discretion, or (2) (A) send to the issuer thereof an
Authorization Statement substantially in the form of Exhibit C hereto and (B) cause the
issuer thereof to deliver to the Collateral Agent (I) an Acknowledgement and Consent substantially
in the form of Exhibit D hereto and (II) a Transaction Statement substantially in the form
of Exhibit E hereto, confirming that such issuer will comply with instructions with respect
to such security originated by the Collateral Agent without further consent or approval of such
Grantor.




          (c) With respect to any Security Collateral in which any Grantor has any right, title or
interest and that is not an uncertificated security, upon the request of the Collateral Agent, such
Grantor will notify each such issuer of Pledged Equity that such Pledged Equity is subject to the
security interest granted hereunder.




          Section 5. Maintaining the Account Collateral. So long as any Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of
Credit shall be outstanding, any Secured Hedge Agreement shall be in effect, or any Lender Party
shall have any Commitment:





     (a) The Borrower will maintain the L/C Cash Collateral Account only with the Collateral
Agent.




     (b) The Collateral Agent may, at any time and without notice to, or consent from, the
Borrower or any Grantor, transfer, or direct the transfer of, funds from the Account
Collateral to satisfy the Borrower’s or such Grantor’s obligations under the Loan Documents
if an Event of Default shall have occurred and be continuing.



          Section 6. Investing of Amounts in the L/C Cash Collateral Account. The
Collateral Agent will, subject to the provisions of Sections 5, 7 and 21_, from time to
time (a) (i) invest amounts received with respect to the L/C Cash Collateral Account in such Cash
Equivalents credited to the L/C Cash Collateral Account as such Grantor may select and the
Collateral Agent may approve in its reasonable discretion, and (ii) invest interest paid on the
Cash Equivalents referred to in clause (a)(i) above, and (b) reinvest other proceeds of any such
Cash Equivalents that may mature or be sold, in each case in such Cash Equivalents credited in the
same manner. Interest and proceeds that are not invested or reinvested in Cash Equivalents









7









 







as provided above shall be deposited and held in the L/C Cash Collateral Account. In addition, the
Collateral Agent shall have the right at any time to exchange such Cash Equivalents for similar
Cash Equivalents of smaller or larger determinations, or for other Cash Equivalents, credited to
the L/C Cash Collateral Account.




          Section 7. Release of Amounts. So long as no Event of Default shall have
occurred and be continuing, the Collateral Agent will pay and release to the Borrower or the
relevant Grantor or at the Borrower’s order or, at the request of the Borrower, to the Collateral
Agent to be applied to the Obligations of the Borrower under the Loan Documents, such amount, if
any, as is then on deposit in the L/C Cash Collateral Account, in each case to the extent permitted
to be released under the terms of the Credit Agreement.




          Section 8. Maintaining Electronic Chattel Paper and Transferable Records. So long
as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be in
effect, or any Lender Party shall have any Commitment:





     (a) Each Grantor will maintain all (i) electronic chattel paper so that the Collateral
Agent has control of the electronic chattel paper in the manner specified in Section 9-105
of the UCC and (ii) transferable records so that the Collateral Agent has control of the
transferable records in the manner specified in Section 16 of the Uniform Electronic
Transactions Act, as in effect in the jurisdiction governing such transferable record
(“UETA”); and




     (b) Each Grantor will as soon as reasonably practicable give notice to the
Collateral Agent of any material commercial tort claim against any Grantor and will
promptly execute or otherwise authenticate a supplement to this Agreement, and
otherwise take all necessary action, to subject such commercial tort claim to the
first priority security interest created under this Agreement.



          Section 9. Representations and Warranties. Each Grantor represents and
warrants as follows:





     (a) Such Grantor’s exact legal name is correctly set forth in Schedule I
hereto. Such Grantor is located (within the meaning of Section 9-307 of the UCC) and has its
chief executive office, all original copies of each Assigned Agreement and Related Contract
to which such Grantor is a party, and all originals of all chattel paper that evidence
Receivables of such Grantor, in the state or jurisdiction set forth in Schedule I
hereto. The information set forth in Schedule I hereto with respect to such
Grantor is true and accurate in all respects. Such Grantor has not previously changed its
name, location, chief executive office, type of organization, jurisdiction of organization
or organizational identification number from those set forth in Schedule I hereto except as
disclosed in Schedule IV hereto.




     (b) All of the FF&E and Inventory of such Grantor are located at the places specified
therefor in Schedule III hereto, Within the five years preceding the execution of
this Agreement, such Grantor has not previously changed the location of its FF&E and



8









 







Inventory except as set forth in Schedule IV hereto. All Collateral consisting of
certificated securities and instruments has been delivered to the Collateral Agent. None of the
Receivables or Agreement Collateral is evidenced by a promissory note, or by any other instrument
that has not been delivered to the Collateral Agent.




     (c) Such Grantor is the legal and beneficial owner of the Collateral of such Grantor free and
clear of any Lien, claim, option or right of others, except for Permitted Liens. No effective
financing statement or other instrument similar in effect covering all or any part of such
Collateral or listing Grantor or any trade name of Grantor as debtor is on file in any recording
office, except (i) such as may have been filed in favor of the Collateral Agent relating to the
Loan Documents, (ii) as set forth on Schedule 4.01(p) of the Credit Agreement and (iii) to the
extent that such financing statement or other instrument similar in effect does not relate to such
Grantor’s interest in the Collateral.




     (d) The Pledged Equity pledged by such Grantor hereunder has been duly authorized and validly
issued and is fully paid and non assessable. With respect to the Pledged Equity that is an
uncertificated security, if any, such Grantor has caused the issuer thereof either (i) to register
the Collateral Agent as the registered owner of such security or (ii) to agree in an authenticated
record with such Grantor and the Collateral Agent that such issuer will comply with instructions
with respect to such security originated by the Collateral Agent without further consent of such
Grantor (it being understood that delivery of documents substantially in the form of Exhibits C, D
and E will satisfy this requirement). If such Grantor is an issuer of Pledged Equity, such Grantor
confirms, by virtue of its execution of this Agreement, that it has received notice of such
security interest.




     (e) The Initial Pledged Equity pledged by such Grantor constitutes the percentage of the
issued and outstanding Equity Interests of the issuers thereof indicated on Schedule V
hereto.




     (f) Such Grantor has exclusive possession and control of its FF&E and Inventory.




     (g) The Assigned Agreements to which such Grantor is a party, true and complete copies of
which have been furnished to the Administrative Agent, have been duly authorized, executed and
delivered by such Grantor, have not been amended, amended and restated, supplemented or otherwise
modified except as provided to the Administrative Agent prior to the date of this Agreement, are in
full force and effect and are binding upon and enforceable against all parties thereto in
accordance with their terms (subject to Bankruptcy Law and principles of equity). There exists no
material default under any Assigned Agreement to which such Grantor is a party by any party
thereto.




     (h) Such Grantor is not a beneficiary or assignee under any letter of credit.




     (i) All filings and other actions (including, without limitation, (A) actions necessary
to obtain control of Collateral as provided in Sections 9-104, 9-105, 9-106 and



9









 







9-107 of the UCC and Section 16 of UETA and (B) actions necessary to perfect the Collateral
Agent’s security interest with respect to Collateral evidenced by a certificate of
ownership) necessary to perfect the security interest in the Collateral of such Grantor
created under this Agreement have been duly made or taken and are in full force and effect,
and this Agreement creates in favor of the Collateral Agent for the benefit of the Secured
Parties a valid and, together with such filings and other actions, perfected first priority
security interest in the Collateral of such Grantor (subject to any Permitted Liens),
securing the payment of the Secured Obligations.




     (j) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third party is required for
(i) the grant by such Grantor of the security interest granted hereunder or for the
execution, delivery or performance of this Agreement by such Grantor, (ii) the perfection or
maintenance of the security interest created hereunder (including the first priority nature
of such security interest, subject to any Permitted Liens), except for the filing of
financing and continuation statements under the UCC, which financing statements have been or
will be duly filed, and the actions described in Section 4 with respect to the
Security Collateral, which actions have been taken and are in full force and effect or (iii)
the exercise by the Collateral Agent of its rights provided for in this Agreement or the
remedies in respect of the Collateral pursuant to this Agreement, except as may be required
in connection with the disposition of any portion of the Collateral consisting of
securities, security entitlements or pledged financial assets by laws affecting the offering
and sale of securities generally.




     (k) The Inventory that has been produced or distributed by such Grantor has been
produced in compliance with all requirements of applicable law, including, without
limitation, the Fair Labor Standards Act.




     (l) Such Grantor has no commercial tort claims (as defined in Section 9-102(13)
of the UCC), except for claims or counterclaims against certain subcontractors in the
ordinary course of business.



          Section 10. Further Assurances. (a) Each Grantor agrees that from time to time,
at its own expense, such Grantor will promptly execute and deliver, or otherwise authenticate, all
further instruments and documents, and take all further action that the Collateral Agent may
reasonably request, in order to perfect and protect any pledge or security interest granted or
purported to be granted by such Grantor hereunder or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral of such Grantor. Without
limiting the generality of the foregoing, each Grantor will, upon the reasonable request of the
Collateral Agent, promptly with respect to Collateral of such Grantor: (i) mark conspicuously each
document included in Inventory, each chattel paper included in Receivables, each Related Contract,
each Assigned Agreement and each of its records pertaining to such Collateral with a legend, in
form and substance satisfactory to the Collateral Agent, indicating that such document, chattel
paper, Related Contract, Assigned Agreement or Collateral is subject to the security interest
granted hereby; (ii) if any such Collateral shall be evidenced by a promissory note or other
instrument, deliver and pledge to the Collateral Agent hereunder such note or instrument duly
indorsed in blank and accompanied by duly executed instruments of









10









 







transfer or assignment, all in form and substance satisfactory to the Collateral Agent; (iii)
execute or authenticate and file such financing or continuation statements, or amendments thereto,
and such other instruments or notices, as the Collateral Agent may reasonably request, in order to
perfect and preserve the security interest granted or purported to be granted by Grantor hereunder;
(iv) deliver and pledge to the Collateral Agent for benefit of the Secured Parties certificates
representing any Collateral consisting of certificated securities, accompanied by undated stock or
bond powers executed in blank; (v) take all action necessary to ensure that the Collateral Agent
has control of the Account Collateral, electronic chattel paper, investment property (upon the
occurrence and during the continuance of any Event of Default) and transferable records as provided
in Sections 9-104, 9-105 and 9-106 of the UCC and Section 16 of UETA; (vi) take all action to
ensure that the Collateral Agent’s security interest is noted on any certificate of ownership
related to any Collateral evidenced by a certificate of ownership; (vii) use best efforts to
deliver a consent, in substantially the form of Exhibit B hereto or otherwise in form and
substance satisfactory to the Collateral Agent, to the assignment of any Assigned Agreement to the
Collateral Agent pursuant to this Agreement and (viii) deliver to the Collateral Agent evidence
that all other action that the Collateral Agent may reasonably deem necessary or desirable in order
to perfect and protect the security interest created by Grantor under this Agreement has been
taken.




          (b) Each Grantor hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, including, without limitation, one or more
financing statements indicating that such financing statements cover all assets or all personal
property (or words of similar effect) of such Grantor (exclusive of agreements that by their terms
prohibit the creation of a Lien thereon, but only to the extent, and for so long as, such
prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC
or any other applicable law), in each case without the signature of such Grantor, and regardless of
whether any particular asset described in such financing statements falls within the scope of the
UCC or the granting clause of this Agreement. A photocopy or other reproduction of this Agreement
or any financing statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law. Each Grantor ratifies its authorization for the
Collateral Agent to have filed such financing statements, continuation statements or amendments
filed prior to the date hereof.




          (c) Each Grantor will furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral of such Grantor and such other reports
in connection with such Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.




          Section 11. As to FF&E and Inventory. (a) Each Grantor will keep the FF&E and
Inventory of such Grantor (other than any FF&E or Inventory transferred in accordance with Section
5.02(e)(D) of the Credit Agreement) at the places therefor specified in Section 9(b).




          (b) Each Grantor will cause the FF&E of such Grantor to be maintained and preserved in
the same condition, repair and working order as when new, ordinary wear and tear excepted, and will
forthwith, or in the case of any loss or damage to any of such FF&E as soon as practicable after
the occurrence thereof, make or cause to be made all repairs, replacements and other improvements
in connection therewith that are necessary or desirable to such end.









11









 







Each Grantor will promptly furnish to the Collateral Agent a statement respecting any loss or
damage exceeding $250,000 to any of the FF&E or Inventory of such Grantor.




          (c) Each Grantor will pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including, without limitation,
claims for labor, materials and supplies) against, the FF&E and Inventory of such Grantor, except
to the extent payment thereof is not required by Section 5.01(b) of the Credit Agreement. In
producing its Inventory, each Grantor will comply with all requirements of applicable law,
including, without limitation, the Fair Labor Standards Act.




          Section 12. Insurance. (a) Each Grantor will, at its own expense, maintain or
cause to be maintained insurance with respect to the FF&E and Inventory of such Grantor in such
amounts, against such risks, in such form and with such insurers, as required under Schedule I of
the Mortgages.




          (b) Reimbursement under any liability insurance maintained by any Grantor pursuant to this
Section 12 and Schedule I of the Mortgages may be paid directly to the Person who shall
have incurred liability covered by such insurance. In case of any loss involving damage to FF&E or
Inventory when subsection (c) of this Section 12 is not applicable, the applicable Grantor
will make or cause to be made the necessary repairs to or replacements of such Equipment or
Inventory, and any proceeds of insurance properly received by or released to such Grantor shall be
used by such Grantor, except as otherwise required hereunder or by the Credit Agreement, to pay or
as reimbursement for the costs of such repairs or replacements.




          (c) So long as no Event of Default shall have occurred and be continuing, all insurance
payments received by the Collateral Agent in connection with any loss, damage or destruction of any
Inventory or FF&E will be released by the Collateral Agent for the benefit of the applicable
Grantor for the repair, replacement or restoration thereof, subject to such terms and conditions
with respect to the release thereof as the Collateral Agent may reasonably require, including,
without limitation, that such payments be made directly by the Collateral Agent to the applicable
contractors performing the repair, replacement and restoration work. Upon the occurrence and during
the continuance of any Event of Default or the actual or constructive total loss (in excess of
$500,000 per occurrence) of any FF&E or Inventory, all insurance payments in respect of such
Equipment or Inventory shall be paid to the Collateral Agent and shall be, in the Collateral
Agent’s sole discretion, (i) released to the applicable Grantor to be applied as set forth in the
first sentence of this subsection (c) or (ii) applied as specified in Section 21(b).




          Section 13. Post-Closing Changes; Bailees; Collections on Assigned Agreements,
Receivables and Related Contracts. (a) No Grantor will change its name, type of organization,
jurisdiction of organization, organizational identification number or location from those set forth
in Section 9(a) of this Agreement without first giving at least 30 days’ prior written notice to
the Collateral Agent and taking all action required by the Collateral Agent for the purpose of
perfecting or protecting the security interest granted by this Agreement. No Grantor will change
the location of its FF&E and Inventory (other than Inventory sold in the ordinary course of
business) or the place where it keeps the originals of the Assigned Agreements and Related
Contracts to which such Grantor is a party and the originals of all chattel paper that evidence
Receivables of such Grantor from the locations therefor specified in









12









 







Sections 9(a) and 9(b) without first giving the Collateral Agent 30 days’ prior
written notice of such change. Except as not otherwise prohibited by the Credit Agreement, no
Grantor will become bound by a security agreement authenticated by another Person (determined as
provided  in Section 9-203(d) of the UCC) without giving the Collateral Agent 30 days’ prior
written notice thereof and taking all action required by the Collateral Agent to ensure that the
perfection and first priority nature of the Collateral Agent’s security interest in the Collateral
will be maintained. Each Grantor will hold and preserve its records relating to the Collateral,
including, without limitation, the Assigned Agreements and Related Contracts, and will, upon
reasonable notice, permit representatives of the Collateral Agent at any time during normal
business hours to inspect and make abstracts from such records and other documents. If the Grantor
does not have an organizational identification number and later obtains one, it will forthwith
notify the Collateral Agent of such organizational identification number.




          (b) If any Collateral of any Grantor is at any time in the possession or control of a
warehouseman, bailee or agent, such Grantor will, upon the request of the Collateral Agent (i)
notify such warehouseman, bailee or agent of the security interest created hereunder, (ii) instruct
such warehouseman, bailee or agent to hold all such Collateral solely for the Collateral Agent’s
account subject only to the Collateral Agent’s instructions (which shall permit such Collateral to
be removed by such Grantor in the ordinary course of business until the Collateral Agent notifies
such warehouseman, bailee or agent that an Event of Default has occurred and is continuing), (iii)
use commercially reasonable efforts, to cause such warehouseman, bailee or agent to authenticate a
record acknowledging that it holds possession of such Collateral for the Collateral Agent’s benefit
and shall act solely on the instructions of the Collateral Agent without the further consent of the
Grantor or any other Person, and (iv) make such authenticated record available to the Collateral
Agent.




          (c) Except as otherwise provided in this subsection (c), each Grantor will continue to
collect, at its own expense, all amounts due or to become due such Grantor under the Assigned
Agreements, Receivables and Related Contracts. In connection with such collections, such Grantor
may take (and at the Collateral Agent’s direction will take) such action as such Grantor or
Collateral Agent may deem necessary or advisable to enforce collection of the Assigned Agreements,
Receivables and Related Contracts; provided, however, that the Collateral Agent shall have the
right at any time upon the occurrence and during the continuance of an Event of Default under the
Credit Agreement, and upon written notice to such Grantor of its intention to do so, to notify the
obligors under any Assigned Agreements, Receivables and Related Contracts of the assignment of such
Assigned Agreements, Receivables and Related Contracts to the Collateral Agent and to direct such
obligors to make payment of all amounts due or to become due to such Grantor thereunder directly to
the Collateral Agent and, upon such notification and at the expense of such Grantor, to enforce
collection of any such Assigned Agreements, Receivables and Related Contracts, to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor
might have done, and to otherwise exercise all rights with respect to such Assigned Agreements,
Receivables and Related Contracts, including, without limitation, those set forth set forth in
Section 9-607 of the UCC. After receipt by any Grantor of the notice from the Collateral Agent
referred to in the proviso to the preceding sentence, (i) all amounts and proceeds (including,
without limitation, instruments) received by such Grantor in respect of the Assigned Agreements,
Receivables and Related Contracts of such Grantor shall be received in trust for the benefit of the
Collateral





13









 







Agent hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid
over to the Collateral Agent in the same form as so received (with any necessary indorsement) and
applied as provided in Section 21(b) and (ii) such Grantor will not adjust, settle or
compromise the amount or payment of any Receivable or amount due on any Assigned Agreement or
Related Contract, release wholly or partly any Obligor thereof, or allow any credit or discount
thereon. No Grantor will permit or consent to the subordination of its right to payment under any
of the Assigned Agreements, Receivables and Related Contracts to any other indebtedness or
obligations of the Obligor thereof.




          Section 14. Voting Rights; Distributions; Etc. (a) So long as no Event of
Default shall have occurred and be continuing:





     (i) Each Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Security Collateral of each Grantor or any
part thereof for any purpose; provided, however, that such Grantor will not exercise
or refrain from exercising any such right if such action would have a material
adverse effect on the value of the Security Collateral taken as a whole.




     (ii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the Security
Collateral of such Grantor if and to the extent that the payment thereof is not
otherwise prohibited by the terms of the Loan Documents; provided, however, that any
and all




     (A) dividends, interest and other distributions paid or payable other
than in cash in respect of, and instruments and other non-cash property
received, receivable or otherwise distributed in respect of, or in exchange
for, any Security Collateral,




     (B) dividends and other distributions paid or payable in cash in respect
of any Security Collateral in connection with a partial or total liquidation
or dissolution or in connection with a reduction of capital, capital surplus
or paid in surplus, and




     (C) cash paid, payable or otherwise distributed in respect of principal
of, or in redemption of, or in exchange for, any Pledged Equity, except to
the extent paid, payable or otherwise distributed in connection with a sale,
lease, transfer or other disposition permitted under Section 5.02(e) of the
Credit Agreement,




shall be, and shall be forthwith delivered to the Collateral Agent to hold as,
Security Collateral and shall, if received by such Grantor, be received in trust for
the benefit of the Collateral Agent, be segregated from the other property or funds
of such Grantor and be forthwith delivered to the Collateral Agent as Security
Collateral in the same form as so received (with any necessary indorsement).




(iii) The Collateral Agent will execute and deliver (or cause to be
executed and delivered) to each Grantor all such proxies and other instruments as



14









 







such Grantor may reasonably request for the purpose of enabling such Grantor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends or interest payments that it is
authorized to receive and retain pursuant to paragraph (ii) above.



          (b) Upon the occurrence and during the continuance of an Event of Default:





     (i) All rights of each Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 14(a)(i) shall, upon notice to such
Grantor by the Collateral Agent, cease and (y) to receive the dividends, interest
and other distributions that it would otherwise be authorized to receive and retain
pursuant to Section 14(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall thereupon have
the sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such dividends,
interest and other distributions.




     (ii) All dividends, interest and other distributions that are received by
any Grantor contrary to the provisions of paragraph (i) of this Section
14(b) shall be received in trust for the benefit of the Collateral Agent, shall
be segregated from other funds of such Grantor and shall be forthwith paid over to
the Collateral Agent as Security Collateral in the same form as so received (with
any necessary indorsement).



          Section 15. As to the Assigned Agreements. (a) Each Grantor will at its expense
(i) perform and observe in all material respects all terms and provisions of the Assigned
Agreements to be performed or observed by it, enforce the Assigned Agreements to which it is a
party in the best interests of the applicable Property in accordance with the terms thereof and in
accordance with sound business judgment and take all such action to such end as may be requested
from time to time by the Collateral Agent, and (ii) furnish to the Collateral Agent promptly upon
receipt thereof copies of all material notices, requests and other documents received by such
Grantor under or pursuant to the Assigned Agreements to which it is a party, and from time to time
(A) furnish to the Collateral Agent such information and reports regarding the Assigned Agreements
and such other Collateral of such Grantor as the Collateral Agent may reasonably request and (B)
upon request of the Collateral Agent make to each other party to any Assigned Agreement to which it
is a party such demands and requests for information and reports or for action as such Grantor is
entitled to make thereunder.




          (b) Each Grantor agrees that it will not, except to the extent otherwise permitted
under the Credit Agreement.





     (i) cancel or terminate any Assigned Agreement to which it is a party or
consent to or accept any cancellation or termination thereof;




     (ii) amend, amend and restate, supplement or otherwise modify any such
Assigned Agreement or give any consent, waiver or approval thereunder that



15









 







would impair the value of the interests or rights of Grantor thereunder or that
would impair the interests or rights of any Secured Party in any material respect;




     (iii) waive any default under or breach of any such Assigned
Agreement; or




     (iv) take any other action in connection with any such Assigned Agreement
that would impair the value of the interests or rights of such Grantor thereunder or
that would impair the interests or rights of any Secured Party in any material
respect.



          (c) Each Grantor hereby consents on its behalf and on behalf of its Subsidiaries
to the assignment and pledge to the Collateral Agent for benefit of the Secured Parties of
each Assigned Agreement to which it is a party by any other Grantor hereunder.




          Section 16. Payments Under the Assigned Agreements. (a) Each Grantor agrees, and
has effectively so instructed each other party to each Assigned Agreement to which it is a party,
that, upon the occurrence and during the continuance of any Event of Default, all payments due or
to become due to such Grantor under or in connection with such Assigned Agreement will be made in
accordance with the instructions of the Collateral Agent.




          (b) All moneys received or collected pursuant to subsection (a) above shall be applied
as provided in Section 21(b).




          Section 17. Transfers and Other Liens; Additional Equity Interests. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or grant any option with
respect to, any of the Collateral, other than sales, assignments and other dispositions of
Collateral, and options relating to Collateral, permitted under the terms of the Credit Agreement,
or (ii) create or suffer to exist any Lien upon or with respect to any of the Collateral except for
the pledge, assignment and security interest created under this Agreement and Permitted Liens.




          (b) Each Grantor agrees that it shall (i) cause each issuer of the Pledged Equity
pledged by such Grantor not to issue any Equity Interests or other securities in addition to or in
substitution for the Pledged Equity issued by such issuer, except to such Grantor, and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all
additional Equity Interests or other securities held by such Grantor, subject to the terms of the
Credit Agreement.




          Section 18. Collateral Agent Appointed Attorney in Fact. To the extent permitted
by applicable law, each Grantor hereby irrevocably appoints the Collateral Agent such Grantor’s
attorney in fact, with full authority in the place and stead of such Grantor and in the name of
such Grantor or otherwise, from time to time upon the occurrence and during the continuance of an
Event of Default in the Collateral Agent’s discretion, to take any action and to execute any
instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation:





     (a) to obtain and adjust insurance required to be paid to the Collateral Agent
pursuant to Section 12,



16









 






     (b) to ask for, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of any of the
Collateral,




     (c) to receive, indorse and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a) or (b) above, and




     (d) to file any claims or take any action or institute any proceedings that the
Collateral Agent may deem necessary or desirable for the collection of any of the Collateral
or otherwise to enforce compliance with the terms and conditions of any Assigned Agreement
or the rights of the Collateral Agent with respect to any of the Collateral.



          Section 19. Collateral Agent May Perform. If any Grantor fails to perform any
agreement contained herein, the Collateral Agent may, upon the occurrence and during the
continuance of an Event of Default, but without any obligation to do so and without notice, itself
perform, or cause performance of, such agreement, and the expenses of the Collateral Agent incurred
in connection therewith shall be payable by such Grantor under Section 22.




          Section 20. The Collateral Agent’s Duties. (a) The powers conferred on the
Collateral Agent hereunder are solely to protect the Secured Parties’ interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for (i) the exercise of
reasonable care with respect to, and the safe custody of, any Collateral in its possession and the
accounting for moneys actually received by it hereunder, and (ii) the gross negligence or willful
misconduct of any of the Collateral Agent’s officers, directors, agents or employees, the
Collateral Agent shall have no duty as to any Collateral, as to ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not any Secured Party has or is deemed to have knowledge of such matters, or
as to the taking of any necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which it accords its own property.




          (b) Anything contained herein to the contrary notwithstanding, the Collateral Agent may
from time to time, when the Collateral Agent deems it to be necessary, appoint one or more
subagents (each, a “Subagent”) for the Collateral Agent hereunder with respect to all or any part
of the Collateral. In the event that the Collateral Agent so appoints any Subagent with respect to
any Collateral, (i) the assignment and pledge of such Collateral and the security interest granted
in such Collateral by each Grantor hereunder shall be deemed for purposes of this Security
Agreement to have been made to such Subagent, in addition to the Collateral Agent, for the ratable
benefit of the Secured Parties, as security for the Secured Obligations of such Grantor, (ii) such
Subagent shall automatically be vested, in addition to the Collateral Agent, with all rights,
powers, privileges, interests and remedies of the Collateral Agent hereunder with respect to such
Collateral, and (iii) the term “Collateral Agent,” when used herein in relation to any rights,
powers, privileges, interests and remedies of the Collateral Agent with respect to such Collateral,
shall include such Subagent; provided, however, that no such Subagent shall be








17









 







authorized to take any action with respect to any such Collateral unless and except to the extent
expressly authorized in writing by the Collateral Agent.




          Section 21. Remedies. If any Event of Default shall have occurred and be
continuing:





     (a) The Collateral Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party upon default under the UCC (whether or not the UCC applies
to the affected Collateral) and also may: (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of the Collateral Agent
forthwith, assemble all or part of the Collateral as directed in writing by the Collateral
Agent and make it available to the Collateral Agent at a place and time to be designated by
the Collateral Agent that is reasonably convenient to both parties; (ii) without notice
except as specified below, sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Collateral Agent’s offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable; (iii) occupy any premises owned or leased by any of the Grantors
where the Collateral or any part thereof is assembled or located for a reasonable period in
order to effectuate its rights and remedies hereunder or under law, without obligation to
such Grantor in respect of such occupation; and (iv) exercise any and all rights and
remedies of any of the Grantors under or in connection with the Collateral, or otherwise in
respect of the Collateral, including, without limitation, (A) any and all rights of such
Grantor to demand or otherwise require payment of any amount under, or performance of any
provision of, the Assigned Agreements, the Receivables, the Related Contracts and the other
Collateral, (B) withdraw, or cause or direct the withdrawal, of all funds with respect to
the Account Collateral, (C) without notice to the Borrower or any other Loan Party, except
as required by law and at any time or from time to time, charge, set-off and otherwise apply
all or any part of the Secured Obligations against any funds held with respect to the
Collateral in any deposit account and (D) exercise all other rights and remedies with
respect to the Assigned Agreements, the Receivables, the Related Contracts and the other
Collateral, including, without limitation, those set forth in Section 9-607 of the UCC. Each
Grantor agrees that, to the extent notice of sale shall be required by law, at least ten
days’ notice to such Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so adjourned.




     (b) Any cash held by or on behalf of the Collateral Agent and all cash proceeds
received by or on behalf of the Collateral Agent in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral will be applied (after payment
of any amounts payable to the Collateral Agent pursuant to Section 22) by the Collateral
Agent for the ratable benefit of the Secured Parties against the Secured Obligations, in the
following manner:





18









 









     (i) first, paid to the Agents for any amounts then owing to the Agents
pursuant to Section 9.04 of the Credit Agreement or otherwise under the Loan
Documents, ratably in accordance with such respective amounts then owing to the
Agents; and




     (ii) second, ratably (A) paid to the Lender Parties for any amounts then
owing to them under the Loan Documents ratably in accordance with such respective
amounts then owing to such Lender Parties and (B) deposited as Collateral in the L/C
Cash Collateral Account up to an amount equal to 100% of the aggregate Available
Amount of all outstanding Letters of Credit, provided that in the event that any
such Letter of Credit is drawn, the Collateral Agent shall pay to the Issuing Bank
that issued such Letter of Credit the amount held in the L/C Cash Collateral Account
in respect of such Letter of Credit, provided further that, to the extent that any
such Letter of Credit shall expire or terminate undrawn and as a result thereof the
amount of the Collateral in the L/C Cash Collateral Account shall exceed 100% of the
aggregate Available Amount of all then outstanding Letters of Credit, such excess
amount of such Collateral shall be applied in accordance with the remaining order of
priority set out in this Section 21(b).




Any surplus of such cash or cash proceeds held by or on the behalf of the Collateral Agent
and remaining after payment in full of all the Secured Obligations shall be paid over to the
applicable Grantor or to whomsoever may be lawfully entitled to receive such surplus.




     (c) All payments received by any Grantor under or in connection with any Assigned
Agreement or otherwise in respect of the Collateral shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other funds of such Grantor and
shall be forthwith paid over to the Collateral Agent in the same form as so received (with
any necessary indorsement).




     (d) The Collateral Agent may, without notice to any Grantor except as required by law
and at any time or from time to time, charge, set off and otherwise apply all or any part of
the Secured Obligations against any funds held with respect to the Account Collateral or in
any other deposit account.



          Section 22. Indemnity and Expenses. (a) Each Grantor agrees to indemnify, defend
and save and hold harmless each Secured Party and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and
against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of or in connection
with or resulting from this Agreement (including, without limitation, enforcement of this
Agreement), except to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party’s gross negligence or willful misconduct.









19









 








          (b) Each Grantor will upon demand pay to the Collateral Agent the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and expenses of its counsel
and of any experts and agents, that the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral of such Grantor, (iii) the
exercise or enforcement of any of the rights of the Collateral Agent or the other Secured Parties
hereunder or (iv) the failure by such Grantor to perform or observe any of the provisions hereof.




          Section 23. Amendments; Waivers; Additional Grantors, Etc. (a) No amendment shall
in any event be effective unless the same shall be in writing and signed by the parties hereto. No
waiver of any provision of this Agreement, and no consent to any departure by any Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed by the Collateral
Agent, and then such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Collateral Agent or any other
Secured Party to exercise, and no delay in exercising any right hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.




          (b) Upon the execution and delivery, or authentication, by any Person of a security
agreement supplement in substantially the form of Exhibit A hereto (each, a “Security
Agreement Supplement”), (i) such Person shall be referred to as an “Additional Grantor” and shall
be and become a Grantor hereunder, and each reference in this Agreement and the other Loan
Documents to “Grantor” shall also mean and be a reference to such Additional Grantor, and each
reference in this Agreement and the other Loan Documents to “Collateral” shall also mean and be a
reference to the Collateral of such Additional Grantor, and (ii) the supplemental schedules I-V
attached to each Security Agreement Supplement shall be incorporated into and become a part of and
supplement Schedules I-V, respectively, hereto, and the Collateral Agent may attach such
supplemental schedules to such Schedules; and each reference to such Schedules shall mean and be a
reference to such Schedules as supplemented pursuant to each Security Agreement Supplement.




          Section 24. Notices, Etc. All notices and other communications provided for
hereunder shall be given in accordance with Section 9.02 of the Credit Agreement. Delivery by
telecopier or email (in pdf format) of an executed counterpart of any amendment or waiver of any
provision of this Agreement or of any Security Agreement Supplement or Schedule hereto shall be
effective as delivery of an original executed counterpart thereof.





	 	 	Section 25. Continuing Security Interest; Assignments under the Credit Agreement.
This Agreement shall create a continuing security interest in the Collateral and shall (a) remain
in full force and effect until the latest of (i) the payment in full in cash of the Secured
Obligations, (ii) the Termination Date and (iii) the termination or expiration of all Letters of
Credit and Secured Hedge Agreements, (b) be binding upon each Grantor, its successors and assigns
and (c) inure, together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Secured Parties and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender Party may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit Agreement in




20









 










accordance with the terms thereof (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender Party herein or otherwise, in each case as provided in Section 9.07
of the Credit Agreement.




          Section 26. Release; Termination. (a) Upon any sale, lease, transfer or other
disposition of any item of Collateral of any Grantor in accordance with the terms of the Loan
Documents (other than sales of Inventory in the ordinary course of business), the Collateral Agent
will, at such Grantor’s expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence the release of such item of Collateral from the assignment and
security interest granted hereby; provided, however, that (i) at the time of such request and such
release no Default shall have occurred and be continuing and (ii) such Grantor shall have delivered
to the Collateral Agent, at least seven Business Days prior to the date of the proposed release, a
written request for release describing the item of Collateral and the terms of the sale, lease,
transfer or other disposition in reasonable detail, including, without limitation, a form of
release for execution by the Collateral Agent and a certificate of Grantor to the effect that the
transaction is in compliance with the Loan Documents and as to such other matters as the Collateral
Agent may request.




          (b) Upon any permitted Transfer or release of a Borrowing Base Asset in accordance with
Section 5.02(e)(ii)(C) of the Credit Agreement, the Collateral Agent will, at such Grantor’s
expense, execute and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence the release of any item of Collateral related to such Borrowing Base Asset from
the assignment and security interest granted hereby; provided, however, that (i) at the time of
such request and such release no Default or Event of Default shall have occurred and be continuing
or shall result from such Transfer and (ii) such Grantor shall have delivered to the Collateral
Agent, at least seven Business Days prior to the date of the proposed release, a written request
for release describing the item of Collateral, including a form of release for execution by the
Collateral Agent.




          (c) Upon the latest of (i) the payment in full in cash of the Secured Obligations, (ii) the
Termination Date and (iii) the termination or expiration of all Letters of Credit and Secured Hedge
Agreements, the pledge and security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantor. Upon any such termination, the Collateral Agent
will, at the applicable Grantor’s expense, execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence such termination.




          Section 27. Security Interest Absolute. The obligations of each Grantor under
this Agreement are independent of the Secured Obligations or any other Obligations of any other
Loan Party under or in respect of the Loan Documents, and a separate action or actions may be
brought and prosecuted against each Grantor to enforce this Agreement, irrespective of whether any
action is brought against such Grantor or any other Loan Party or whether such Grantor or any other
Loan Party is joined in any such action or actions. All rights of the Collateral Agent and the
other Secured Parties and the pledge, assignment and security interest hereunder, and all
obligations of each Grantor hereunder, shall be irrevocable, absolute and unconditional









21









 







irrespective of, and each Grantor hereby irrevocably waives (to the maximum extent permitted by
applicable law) any defenses it may now have or may hereafter acquire in any way relating to, any
or all of the following:





     (a) any lack of validity or enforceability of any Loan Document or any other agreement
or instrument relating thereto;




     (b) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Secured Obligations or any other Obligations of any other Loan Party under or
in respect of the Loan Documents or any other amendment or waiver of or any consent to any
departure from any Loan Document, including, without limitation, any increase in the Secured
Obligations resulting from the extension of additional credit to any Loan Party or any of
its Subsidiaries or otherwise;




     (c) any taking, exchange, release or non perfection of any Collateral or any other
collateral, or any taking, release or amendment or waiver of or consent to departure from
any guaranty, for all or any of the Secured Obligations;




     (d) any manner of application of any Collateral or any other collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of sale or other
disposition of any Collateral or any other collateral for all or any of the Secured
Obligations or any other Obligations of any other Loan Party under or in respect of the Loan
Documents or any other assets of any Loan Party or any of its Subsidiaries;




     (e) any change, restructuring or termination of the corporate structure or
existence of any Loan Party or any of its Subsidiaries;




     (f) any failure of any Secured Party to disclose to any Loan Party any information
relating to the business, condition (financial or otherwise), operations, performance,
assets, nature of assets, liabilities or prospects of any other Loan Party now or hereafter
known to such Secured Party (each Grantor waiving any duty on the part of the Secured
Parties to disclose such information);




     (g) the failure of any other Person to execute this Agreement or any other Collateral
Document, guaranty or agreement or the release or reduction of liability of any Grantor or
other grantor or surety with respect to the Secured Obligations; or




     (h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any Secured Party that
might otherwise constitute a defense available to, or a discharge of, such Grantor or any
other Grantor or a third party grantor of a security interest.


This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Secured Obligations is rescinded or must otherwise be returned by any
Secured Party or by any other Person upon the insolvency, bankruptcy or reorganization of any Loan
Party or otherwise, all as though such payment had not been made.




22









 





          Section 28. Third Party Waivers. (a) Each Grantor authorizes the Collateral Agent
to perform any or all of the following acts at any time in its sole discretion, all without notice
to any Grantor, without affecting such Grantor’s obligations under this Agreement or any other Loan
Documents and without affecting the liens and encumbrances against the Collateral in favor of the
Collateral Agent:





     (i) Subject to Section 9.01 of the Credit Agreement, the Collateral
Agent may alter any terms of the Obligations or any part thereof, including
renewing, compromising, extending or accelerating, or otherwise changing the time
for payment of, or increasing or decreasing the rate of interest on, the Obligations
or any part thereof.




     (ii) The Collateral Agent may take and hold security for the Obligations,
accept additional or substituted security, and subordinate, exchange, enforce,
waive, release, compromise, fail to perfect and sell or otherwise dispose of any
such security.




     (iii) The Collateral Agent may direct the order and manner of any sale of
all or any part of any security now or later to be held for the Obligations, and the
Collateral Agent (or its nominees or designees) may also bid at any such sale.




     (iv) The Collateral Agent may apply any payments or recoveries from the
any Borrower, any Grantor or any other source, and any proceeds of any security, to
the obligations under the Loan Documents in such manner, order and priority as the
Collateral Agent may elect.




     (v) The Collateral Agent may release any Borrower or any other
person or entity of its liability for the Obligations or any part thereof.




     (vi) The Collateral Agent may substitute, add or release any one or
more guarantors or endorsers.




     (vii) In addition to the Obligations, the Collateral Agent may extend other
credit to any Borrower, and may take and hold security for the credit so extended.



          (b) Each Grantor waives:





     (i) Any right it may have to require the Collateral Agent to proceed
against any Borrower, any Grantor or any other person or entity, proceed against or
exhaust any security held from any Borrower, any Grantor or any person or entity, or
pursue any other remedy in the Collateral Agent’s power to pursue;




     (ii) Any defense based on any claim that any Grantor’s obligations exceed
or are more burdensome than those of any Borrower, any Grantor or any other Person;



23









 






     (iii) Any defense: (A) based on any legal disability of any other Person,
(B) based on any release, discharge, modification, impairment or limitation of the
liability of any other person or entity to the Collateral Agent from any cause,
whether consented to by the Collateral Agent or arising by operation of law, (C)
arising out of or able to be asserted as a result of any case, action or proceeding
before any court or other governmental authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up or
relief of any other person or entity or any of their respective affiliates, or any
general assignment for the benefit of creditors, composition, marshaling of assets
for creditors or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; in each case as undertaken under any U.S.
Federal or State law (each of the foregoing described in this clause (C) being
referred to herein as an “Insolvency Proceeding”); or (D) arising from any rejection
or disaffirmance of the Obligations, or any part thereof, or any security held
therefor, in any such Insolvency Proceeding;




     (iv) Any defense based on any action taken or omitted by the Collateral
Agent in any Insolvency Proceeding involving any other Person, including any
election to have the Collateral Agent’s claim allowed as being secured, partially
secured or unsecured, any extension of credit by the Collateral Agent to any other
Person in any Insolvency Proceeding, and the taking and holding by the Collateral
Agent of any security for any such extension of credit;




     (v) All presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of intention to
accelerate, notices of acceleration, notices of acceptance of this Agreement or any
other Loan Document and of the existence, creation, or incurring of new or
additional indebtedness, and demands and notices of every kind (except or expressly
required by the Credit Agreement); and




     (vi) Except for such notices as required by the Loan Documents, any
defense based on or arising out of any defense that the Borrower or any of its
affiliates may have to the payment or performance of the Obligations (other than the
defense that the Obligations have been paid in full).



          (c) (i) After the occurrence and during the continuance of any Event of Default, in its
sole discretion, without prior notice (except as required by applicable law) to or consent of any
Grantor or any Borrower, the Collateral Agent may elect to: (A) foreclose against any collateral
for the Secured Obligations, (B) accept any offer to transfer any such collateral for the Secured
Obligations in lieu of foreclosure, (C) compromise or adjust the Secured Obligations or any part
thereof or make any other accommodation with any Borrower or any Person, or (D) exercise any other
remedy against any Borrower or any person or entity or any collateral for the Secured Obligations.
No such action by the Collateral Agent shall release or limit the Collateral Agent’s rights
hereunder or under the other Loan Documents, even if the effect of the action is to deprive Grantor
of any subrogation rights, rights of indemnity, or other rights to collect reimbursement from any
Borrower or any other Person for any sums paid to the Collateral Agent, whether contractual or
arising by operation of law or otherwise. Each Grantor expressly









24









 







agrees that under no circumstances shall such Grantor be deemed to have any right, title, interest
or claim in or to any real or personal property to be held by the Collateral Agent or any third
party after any foreclosure or transfer in lieu of foreclosure of any security for the Secured
Obligations.




          (ii) Subject to the prior full, final and indefeasible payment of all Secured Obligations
to the Collateral Agent, each Grantor shall retain its rights to seek contribution and
reimbursement from, and rights of subrogation with respect to, any other Grantor. Such rights of
subrogation, contribution and reimbursement shall be subordinate to the Secured Obligations, and no
Grantor shall enforce any such rights until the Secured Obligations shall have been finally paid in
full.




          Section 29. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier or email (in pdf format) shall be
effective as delivery of an original executed counterpart of this Agreement.




          Section 30. The Credit Agreement and the Mortgages. If any conflict or
inconsistency exists between this Agreement and the Credit Agreement, the Credit Agreement shall
control and govern to the extent of such inconsistency. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of any Mortgage and the
terms of such Mortgage are inconsistent with the terms of this Agreement, then with respect to such
Collateral, the terms of such Mortgage shall be controlling in the case of fixtures and real
estate leases, letting and licenses of, and contracts and agreements relating to the lease of, real
property, and the terms of this Agreement shall be controlling in the case of all other Collateral.




          Section 31. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.




[Signatures on following pages]





25











 





     IN WITNESS WHEREOF, each Grantor and the Collateral Agent have caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of the date first above
written.



	 	 	 	 	 
	 	CITIBANK, N.A.,

as Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Signatures continue on following pages]





S-1









 








	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, LP
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Communities GP, LLC
	 	 	 	 	Its General Partner
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Campus Crest Communities, Inc.
	 	 	 	 	 	 	Its Sole Member
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name: Donald L. Bobbitt, Jr.
	 

	 	 	 	 	 	 	 	Title: Chief Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT STEPHENVILLE, LP
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC
	 	 	 	 	Its General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Michael S. Hartnett
	 	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT LUBBOCK, LP
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC
	 	 	 	 	Its General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Michael S. Hartnett
	 	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT WACO, LP
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC
	 	 	 	 	Its General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Michael S. Hartnett
	 	 	 	 	 	 	Title: Manager






S-2









 






	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT WICHITA FALLS, LP
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC
	 	 	 	 	Its General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST AT SAN MARCOS, LP
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC
	 	 	 	 	Its General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST AT JACKSONVILLE, AL, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST AT MOBILE PHASE II, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST AT CHENEY, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager






S-3









 






	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT JONESBORO, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST AT TROY, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST AT MURFREESBORO, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST AT WICHITA, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST STEPHENVILLE LESSOR, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager






S-4









 






	 	 	 	 	 	 	 

	 	 	CAMPUS CREST WACO LESSOR, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST WICHITA FALLS LESSOR, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST CHENEY LESSOR, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST JONESBORO LESSOR, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST TROY LESSOR, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager






S-5









 






	 	 	 	 	 	 	 

	 	 	CAMPUS CREST MURFREESBORO LESSOR, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST WICHITA LESSOR, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	 	 	Title: Manager






S-6









 






Schedule I to the

Security Agreement




LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION,

JURISDICTION OF ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION

NUMBER




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Chief	 	 	 	Jurisdiction	 	 
	 	 	 	 	Executive	 	Type of	 	of	 	Organizational
	Grantor	 	Location	 	Office	 	Organization	 	Organization	 	I.D. No.
	Campus Crest Communities 

Operating Partnership, LP

	 	Delaware
	 	North Carolina
	 	limited partnership
	 	Delaware
	 	 	4756387	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Jacksonville, AL, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4872347	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Mobile Phase II, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4452384	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Cheney, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4354026	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Jonesboro, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4353885	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Troy, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4336234	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Murfreesboro, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4353883	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Wichita, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4353897	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Stephenville, LP

	 	Delaware
	 	North Carolina
	 	limited partnership
	 	Delaware
	 	 	4353882	 






 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Chief	 	 	 	Jurisdiction	 	 
	 	 	 	 	Executive	 		 	of	 	Organizational
	Grantor	 	Location	 	Office	 	Type of Organization	 	Organization	 	I.D. No.
	Campus Crest at Lubbock, LP

	 	Delaware
	 	North Carolina
	 	limited partnership
	 	Delaware
	 	 	4353884	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Waco, LP

	 	Delaware
	 	North Carolina
	 	limited partnership
	 	Delaware
	 	 	4353880	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at Wichita Falls, LP

	 	Delaware
	 	North Carolina
	 	limited partnership
	 	Delaware
	 	 	4354012	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest at San Marcos, LP

	 	Delaware
	 	North Carolina
	 	limited partnership
	 	Delaware
	 	 	4547797	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest Stephenville Lessor, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4872361	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest Wichita Falls Lessor, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4872367	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest Cheney Lessor, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4872351	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest Jonesboro Lessor, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4872358	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest Troy Lessor, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4872365	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest Waco Lessor, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4872366	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest Murfreesboro Lessor, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4872360	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Crest Wichita Lessor, LLC

	 	Delaware
	 	North Carolina
	 	limited liability company
	 	Delaware
	 	 	4872369	 






 









 





Schedule II to the

Security Agreement




ASSIGNED AGREEMENTS




None




 











 




Schedule III to the

Security Agreement




PROPERTIES AND LOCATION OF FF&E AND INVENTORY





	 	 	 	 	 	 	 
	 	 	 	 	Locations of	 	Locations of
	Grantor	 	Property	 	FF&E	 	Inventory
	Campus Crest Communities Operating
Partnership, LP

	 	N/A
	 	N/A
	 	N/A
	 
	 	 	 	 	 	 
	Campus Crest at Jacksonville, AL, LLC

	 	The Grove at Jacksonville
	 	351 Nisbet Street NW

Jacksonville, AL 36265
	 	351 Nisbet Street NW

Jacksonville, AL 36265
	 
	 	 	 	 	 	 
	Campus Crest at Mobile Phase II, LLC

	 	The Grove at Mobile Phase II
	 	375 Cleverdon Parkway

Mobile, AL 36688
	 	375 Cleverdon Parkway 

Mobile, AL 36688
	 
	 	 	 	 	 	 
	Campus Crest at Cheney, LLC

	 	The Grove at Cheney
	 	240 S. Cheney-Spangle Rd

Cheney, WA 99004
	 	240 S. Cheney-Spangle Rd 

Cheney, WA 99004
	 
	 	 	 	 	 	 
	Campus Crest at Jonesboro, LLC

	 	The Grove at Jonesboro
	 	500 N. Caraway Road

Jonesboro, AR 72401
	 	500 N. Caraway Road 

Jonesboro, AR 72401
	 
	 	 	 	 	 	 
	Campus Crest at Troy, LLC

	 	The Grove at Troy
	 	920 E. Academy Street

Troy, AL 36081
	 	920 E. Academy Street 

Troy, AL 36081
	 
	 	 	 	 	 	 
	Campus Crest at Murfreesboro, LLC

	 	The Grove at Murfreesboro
	 	1320 Journey Drive

Murfreesboro, TN 37130
	 	1320 Journey Drive 

Murfreesboro, TN 37130
	 
	 	 	 	 	 	 
	Campus Crest at Wichita, LLC

	 	The Grove at Wichita
	 	2909 N. Oliver Street

Wichita, KS 67220
	 	2909 N. Oliver Street 

Wichita, KS 67220
	 
	 	 	 	 	 	 
	Campus Crest at Stephenville, LP

	 	The Grove at Stephenville
	 	2825 W. Frey Street

Stephenville, TX 76401
	 	2825 W. Frey Street 

Stephenville, TX 76401
	 
	Campus Crest at Lubbock, LP

	 	The Grove at Lubbock
	 	315 N. Utica Drive

Lubbock, TX 794 16
	 	315 N. Utica Drive 

Lubbock, TX 79416
	 
	 	 	 	 	 	 
	Campus Crest at Waco, LP

	 	The Grove at Waco
	 	2826 S. University Parks Dr.

Waco, TX 76706
	 	2826 S. University Parks Dr.

Waco, TX 76706






1









 






	 	 	 	 	 	 	 
	 	 	 	 	Locations of	 	Locations of
	Grantor	 	Property	 	FF&E	 	Inventory
	Campus Crest at Wichita Falls, LP

	 	The Grove at Wichita Falls
	 	5005 Lake Park Drive

Wichita Falls, TX 76302
	 	5005 Lake Park Drive

Wichita Falls, TX 76302
	 
	 	 	 	 	 	 
	Campus Crest at San Marcos, LP

	 	The Grove at San Marcos
	 	1200 East River Ridge Parkway

San Marcos, TX 78666
	 	1200 East River Ridge Parkway

San Marcos, TX 78666
	 
	 	 	 	 	 	 
	Campus Crest Stephenville Lessor, LLC

	 	N/A
	 	N/A
	 	N/A
	 
	 	 	 	 	 	 
	Campus Crest Wichita Falls Lessor, LLC

	 	N/A
	 	N/A
	 	N/A
	 
	 	 	 	 	 	 
	Campus Crest Cheney Lessor, LLC

	 	N/A
	 	N/A
	 	N/A
	 
	 	 	 	 	 	 
	Campus Crest Jonesboro Lessor, LLC

	 	N/A
	 	N/A
	 	N/A
	 
	 	 	 	 	 	 
	Campus Crest Troy Lessor, LLC

	 	N/A
	 	N/A
	 	N/A
	 
	 	 	 	 	 	 
	Campus Crest Waco Lessor, LLC

	 	N/A
	 	N/A
	 	N/A
	 
	 	 	 	 	 	 
	Campus Crest Murfreesboro, LLC

	 	N/A
	 	N/A
	 	N/A
	 
	 	 	 	 	 	 
	Campus Crest Wichita Lessor, LLC

	 	N/A
	 	N/A
	 	N/A






2









 





Schedule IV to the

Security Agreement




CHANGES IN NAME, LOCATION, ETC.





	1.	 	Campus Crest at Jacksonville, AL, LLC, a Delaware limited liability company, is the surviving
entity of a merger with Campus Crest at Jacksonville, AL, LLC, an Alabama limited liability
company.
	 
	2.	 	The location and chief executive office of the predecessor to Campus Crest Communities
Operating Partnership, LP and its subsidiaries was 3 Centerview Drive, Suite 200, Greensboro,
North Carolina 27407 before its relocation to the current location of 2100 Rexford Road, Suite
414, Charlotte, NC 28211.
	 
	3.	 	Campus Crest at Edmond, LLC filed a Certificate of Conversion to its Certificate of Formation
on October 29, 2007 and a Certificate of Limited Partnership on October 29, 2007.
	 
	4.	 	Campus Crest at San Marcos, LP amended its Certificate of Limited Partnership on
November 18, 2008.





 









 





Schedule V to the

Security Agreement




PLEDGED EQUITY




NONE.



Sched. V-1





 









 








Exhibit A to the

Security Agreement




FORM OF SECURITY AGREEMENT SUPPLEMENT




[Date of Security Agreement Supplement]




	 	 	 

	To:

	 	CITIBANK, N.A.., as Collateral Agent

1615 Brett Road

New Castle, Delaware 19720






[Name of Grantor]




Ladies and Gentlemen:




          Reference is made to (i) the Credit Agreement dated as of October [_], 2010 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Campus Crest Communities Operating Partnership, LP, a Delaware limited
partnership, as the Borrower, the Guarantors named therein, the Lender Parties party thereto,
Citibank, N.A., as collateral agent (together with any successor collateral agent appointed
pursuant to Article VIII of the Credit Agreement, the “Collateral Agent”), and Citibank, N.A., as
administrative agent for the Lender Parties, and (ii) the Security Agreement dated October [_],
2010 (as amended, amended and restated, supplemented or otherwise modified from time to time, the
“Security Agreement”) made by the Grantors from time to time party thereto in favor of the
Collateral Agent for the Secured Parties. Terms defined in the Credit Agreement or the Security
Agreement and not otherwise defined herein are used herein as defined in the Credit Agreement or
the Security Agreement.




          SECTION 1. Grant of Security. The undersigned hereby grants to the Collateral Agent,
for the ratable benefit of the Secured Parties, a security interest in, all of its right, title and
interest in and to all of the Collateral of the undersigned, whether now owned or hereafter
acquired by the undersigned, wherever located and whether now or hereafter existing or arising,
including, without limitation, the property and assets of the undersigned set forth on the attached
supplemental schedules to the Schedules to the Security Agreement.




          SECTION 2. Security for Obligations. The grant of a security interest in the
Collateral by the undersigned under this Security Agreement Supplement and the Security Agreement
secures the payment of all Obligations of the undersigned now or hereafter existing under or in
respect of the Loan Documents, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, premiums, penalties, fees, indemnifications,
contract causes of action, costs, expenses or otherwise. Without limiting the generality of the
foregoing, this Security Agreement Supplement and the Security Agreement secure the payment of all
amounts that constitute part of the Secured Obligations and that would be owed by the undersigned
to any Secured Party under the Loan Documents but for the fact that such Secured Obligations are
unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving a Loan Party.




Exhibit A-1





 









 








          SECTION 3. Supplements to Security Agreement Schedules. The undersigned has attached
hereto supplemental Schedules I through V to Schedules I through V respectively, to the Security
Agreement, and the undersigned hereby certifies, as of the date first above written, that such
supplemental schedules have been prepared by the undersigned in substantially the form of the
equivalent Schedules to the Security Agreement and are complete and correct.




          SECTION 4. Representations and Warranties. The undersigned hereby makes each
representation and warranty set forth in Section 9 of the Security Agreement (as supplemented by
the attached supplemental schedules) to the same extent as each other Grantor.




          SECTION 5. Obligations Under the Security Agreement. The undersigned hereby agrees,
as of the date first above written, to be bound as a Grantor by all of the terms and provisions of
the Security Agreement to the same extent as each of the other Grantors. The undersigned further
agrees, as of the date first above written, that each reference in the Security Agreement to an
“Additional Grantor” or a “Grantor” shall also mean and be a reference to the undersigned.




          SECTION 6. Governing Law. This Security Agreement Supplement shall be governed by,
and construed in accordance with, the laws of the State of New York.




	 	 	 	 	 	 	 

	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF ADDITIONAL GRANTOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Title:
	 	 






	 	 	 	 	 	 	 

	 	 	Address for notices:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 






Exhibit A-2







 









 








Exhibit B to the

Security Agreement




FORM OF CONSENT AND AGREEMENT




          The undersigned hereby (a) acknowledges notice of, and consents to the terms and
provisions of, the Security Agreement dated October [_], 2010 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”, the terms defined
therein being used herein as therein defined) from the grantors from time to time party thereto
(collectively, “Grantor”) to CITIBANK, N.A., as Collateral Agent (the “Collateral Agent”) for the
Secured Parties referred to therein, (b) consents in all respects to the pledge and assignment to
the Collateral Agent of all of the Grantor’s right, title and interest in, to and under the
Assigned Agreement (as defined below) pursuant to the Security Agreement, (c) acknowledges that the
Grantor has provided it with notice of the right of the Collateral Agent in the exercise of its
rights and remedies under the Security Agreement to make all demands, give all notices, take all
actions and exercise all rights of the Grantor under the Assigned Agreement, and (d) agrees with
the Collateral Agent that:





     (1) A true copy of the agreement between the undersigned and the Grantor
dated                     ,           (the “Assigned Agreement”), including, without limitation,
all amendments, modifications, restatements and supplements is attached hereto as Schedule
1. The Assigned Agreement is in full force and effect, and the undersigned is not aware of
any default under the Assigned Agreement or any event that would give any party the right to
terminate or rescind the Assigned Agreement. No prepayments have been made of any amounts to
become due under the Assigned Agreement.




     (2) Upon notice from the Collateral Agent that an Event of Default under the Credit
Agreement, dated as of October [__], 2010 among Campus Crest Communities Operating
Partnership, LP, as borrower, the other Loan Parties party thereto, the Lender Parties party
thereto and the Collateral Agent, in its capacity as collateral agent and as administrative
agent, has occurred and is continuing, the undersigned will make all payments to be made by
it to the Grantor under or in connection with the Assigned Agreement in accordance with the
instructions of the Collateral Agent.




     (3) The undersigned will not seek to recover from any Secured Party for any reason any
payment referred to in paragraph 2 above once made.




     (4) The Collateral Agent or its designee shall be entitled to exercise any and all
rights and remedies of the Grantor under the Assigned Agreement in accordance with the terms
of the Security Agreement, and the undersigned shall comply in all respects with such
exercise; provided, however, that nothing contained in this Consent and Agreement or the
Security Agreement shall in any way limit, reduce or modify any of the undersigned’s rights
or remedies contained in the Assigned Agreement against Grantor for a breach of the Assigned
Agreement.




     (5) The undersigned will not, without the prior written consent of the Collateral
Agent, amend, amend and restate, supplement or otherwise modify the



Exhibit B-l






 









 









Assigned Agreement, except, in each case, to the extent otherwise permitted under
the Credit Agreement referred to in the Security Agreement; provided, however, that nothing
contained in this Consent and Agreement or the Security Agreement shall in any way limit or
modify the undersigned’s rights to terminate the Assigned Agreement in accordance with the
terms thereof.




     (6) In the event of a default by the Grantor in the performance of any of its
obligations under the Assigned Agreement, or upon the occurrence or non-occurrence of any
event or condition under the Assigned Agreement which would immediately or with the passage
of any applicable grace period or the giving of notice, or both, enable the undersigned to
terminate or suspend its obligations under the Assigned Agreement, the undersigned shall not
terminate the Assigned Agreement until it first gives the Collateral Agent written notice of
the default and permits the Collateral Agent to cure the default within a period of 15 days
(in the case of monetary defaults) and 30 days (in the case of non-monetary defaults) after
the later of (i) notice of default has been given to the Collateral Agent by the undersigned
and (ii) the expiration of the applicable cure period provided in the Assigned Agreement for
the Grantor to cure the default.




     (7) The undersigned shall deliver to the Collateral Agent, concurrently with the
delivery thereof to the Grantor, a copy of each notice of default given by the undersigned
pursuant to the Assigned Agreement.




     (8) Except as specifically provided in this Consent and Agreement or as expressly
assumed by the Collateral Agent or a Secured Party, neither the Collateral Agent nor any
other Secured Party shall have any liability or obligation under the Assigned Agreement as a
result of this Consent and Agreement, the Security Agreement or otherwise.




     (9) Upon the enforcement of the Security Agreement by the Collateral Agent and the
transfer of the Assigned Agreement to a transferee (and the assumption of the Assigned
Agreement by such transferee), the undersigned will recognize the transferee as the
counterparty to the Assigned Agreement in the place and stead of the Grantor; provided,
however, that nothing contained in this Consent and Agreement or the Security Agreement
shall in any way limit or modify the undersigned’s rights to terminate the Assigned
Agreement in accordance with the terms thereof.



     In order to induce the Lender Parties to make Advances and issue Letters of Credit under
the Credit Agreement and the Hedge Banks to enter into Secured Hedge Agreements from time to
time, the undersigned repeats and reaffirms for the benefit of the Secured Parties the
representations and warranties made by it in the Assigned Agreement.



     This Consent and Agreement shall be binding upon the undersigned and its successors and
assigns, and shall inure, together with the rights and remedies of the Collateral Agent hereunder,
to the benefit of the Secured Parties and their successors, transferees and assigns. This Consent
and Agreement shall be governed by and construed in accordance with the laws of the State of New
York.



Exhibit B-2






 









 








          IN WITNESS WHEREOF, the undersigned has duly executed this Consent and Agreement as of
the date set opposite its name below.




	 	 	 	 	 	 	 

	Dated:                     , __	 	[NAME OF OBLIGOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






Exhibit B-3







 









 








Exhibit C to the

Security Agreement




FORM OF AUTHORIZATION STATEMENT




[_______] [___] , 20 [__]


To:     [Name and Address of Issuer]




          Reference is made to the Security Agreement, dated October [_], 2010 (the “Security
Agreement”, capitalized terms used herein without definition shall have the respective meanings
ascribed to them in the Security Agreement), made by the undersigned and certain other Loan Parties
to Citibank, N.A., as Collateral Agent, a copy of which is attached hereto. Pursuant to the
Security Agreement, the undersigned hereby notifies [Name of Issuer] that the undersigned has
granted to the Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest (the “Security Interest”) in all of the undersigned’s right, title and interest in and to
all of the Pledged Equity (including all of the Equity Interests of the undersigned in [Name of
Issuer]), and hereby instructs [Name of Issuer] to register the Security Interest in favor of:



Citibank, N.A., as Collateral Agent

1615 Brett Road

New Castle, Delaware 19720

Attn: Bank Loan Syndications Department




	 	 	 	 	 	 	 

	 	 	Very Truly Yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF PLEDGOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






Exhibit C-l





 









 








Exhibit D to the

Security Agreement




FORM OF ACKNOWLEDGEMENT AND CONSENT




          The undersigned hereby acknowledges receipt of a copy of the Authorization
Statement, dated as of [_____] [__], [20__] and the Security Agreement referred to therein.
[Name of Issuer] agrees to notify the Collateral Agent in writing of any issuance to [Name of
Grantor] of any Equity Interests of the undersigned in [Name of Issuer] or other securities in
addition to or in substitution for the Equity Interests of the undersigned in [Name of Issuer]
currently issued to [Name of Grantor].



	 	 	 	 	 
	 	[NAME OF ISSUER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Exhibit D-l





 











 






Exhibit E to the

Security Agreement




FORM OF TRANSACTION STATEMENT




[                    ] [                    ], 20[                    ]




			
	To:	 	[NAME OF PLEDGOR]






			
		 	and






			
		 	CITIBANK, N.A., as Collateral Agent

1615 Brett Road

New Castle, Delaware 19720

Attn.: Bank Loan Syndications Department





          This Transaction Statement is to advise you that the pledge of [describe Pledged Equity]
(“Pledged Equity”) has been registered in favor of Citibank, NA.., as Collateral Agent
(“Lienholder”), as follows:



Citibank, N.A., as Collateral Agent

1615 Brett Road

New Castle, Delaware 19720

Attn.: Bank Loan Syndications Department



Taxpayer identification number: [                    ].




          Except for the pledge referred to herein, there are no liens or other encumbrances on the
interest of [Name of Grantor] in the undersigned, and no adverse claims to which the Pledged Equity
is or may be subject are known to the undersigned.




          The pledge was registered on [INSERT DATE OF REGISTRATION].




          To the extent the Pledged Equity shall at any time be deemed “uncertificated securities” under
Article 8 of the Uniform Commercial Code as in effect from time to time in the jurisdiction of the
undersigned, the undersigned agrees that it will comply with instructions originated by the
Lienholder with respect to the Pledged Equity without further consent by [Name of Grantor].




Exhibit E-l




 









 





          This Transaction Statement is merely a record of the rights of the addressees as of the time
of its issuance. Delivery of this Transaction Statement, of itself, confers no rights on the
recipients. This Transaction Statement is neither a negotiable instrument nor a security.




	 	 	 	 	 	 	 

	 	 	Very Truly Yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF ISSUER]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






Exhibit E-2




 









 





EXHIBIT G to the

CREDIT AGREEMENT




FORM OF

MORTGAGE




(See Attached)




 









 





Form of Mortgage




MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND LEASES AND FIXTURE FILING [(LEASEHOLD ESTATE)] ([                    ])




by and from



[                              ], “Grantor”



to and for the benefit of



CITIBANK, N.A., in its capacity as Agent, “Beneficiary”



Dated as of [                    ], 2010



	 	 	 

	Location:

	 	[                    ]
	Municipality:

	 	[                    ]
	County:

	 	[                    ]
	State:

	 	[                    ]






THE SECURED PARTY (BENEFICIARY) DESIRES THIS FIXTURE FILING

TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE

DESCRIBED HEREIN.




PREPARED BY, RECORDING REQUESTED BY,

AND WHEN RECORDED MAIL TO:



Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Attn: Brian Krisberg, Esq.



 









 





MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND LEASES AND FIXTURE FILING [(LEASEHOLD ESTATE)] ([                    ])




          THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF
RENTS AND LEASES AND FIXTURE FILING [(LEASEHOLD ESTATE)] ([                    ])
(this “Mortgage”) is dated as of [                    ], 2010 by and from [                    ], a
Delaware [limited liability company][limited partnership] (“Grantor”), whose address is c/o Campus
Crest Communities Operating Partnership, LP, 2100 Rexford Road, Suite 414, Charlotte, North
Carolina 28211, Attention: Donald L. Bobbitt, Jr., to and for the benefit of CITIBANK, N.A., a
national banking association, as collateral agent (in such capacity, “Agent”) for the Secured
Parties as defined in the Credit Agreement (defined below), having an address at Two Penns Way, New
Castle, Delaware 19720 (Agent, together with its successors and assigns, “Beneficiary”).




ARTICLE 1

DEFINITIONS




          Section 1.1 Definitions. All capitalized terms used herein without definition shall
have the respective meanings ascribed to them in that certain Credit Agreement dated as of even
date herewith, as the same may be amended, amended and restated, supplemented or otherwise modified
from time to time (the “Credit Agreement”), among Campus Crest Communities Operating Partnership,
LP, a Delaware limited partnership, as borrower (“Borrower”), the guarantors listed therein, Agent
and the other Secured Parties identified therein. As used herein, the following terms shall have
the following meanings “Event of  Default” : An Event of Default under and as defined in the Credit
Agreement.




          (b) “Guaranty”: That certain guaranty provided pursuant to Article VII of the Credit
Agreement and any Guaranty Supplement by and from Grantor and the other Guarantors referred to
therein for the benefit of the Secured Parties dated as of even date herewith, as the same may
hereafter be amended, amended and restated, supplemented or otherwise modified from time to time.




          (c) “Indebtedness”: (1) All indebtedness of Grantor to Beneficiary or any of the other
Secured Parties under the Credit Agreement or any other Loan Document to which Grantor is a party,
including, without limitation (except as otherwise set forth in Section 7.01(b) of the Credit
Agreement), the sum of all (a) principal, interest and other amounts owing under or evidenced or
secured by the Loan Documents, (b) principal, interest and other amounts which may hereafter be
lent by Beneficiary or any of the other Secured Parties under or in connection with the Credit
Agreement or any of the other Loan Documents, whether evidenced by a promissory note or other
instrument which, by its terms, is secured hereby, and (c) obligations and liabilities of any
nature now or hereafter existing under or arising in connection with Letters of Credit and other
extensions of credit under the Credit Agreement or any of the other Loan Documents and
reimbursement obligations in respect thereof, together with interest and other amounts payable
with respect thereto, and (2) all other indebtedness, obligations and liabilities now or hereafter
existing of any kind of Grantor to Beneficiary or any of the other Secured Parties under documents
which recite that they are intended to be secured by this Mortgage. The Indebtedness secured
hereby includes, without limitation, all interest and expenses accruing after




 









 







the commencement by or against Grantor or any of its affiliates of a proceeding under the
Bankruptcy Code (defined below) or any similar law for the relief of debtors. The Credit Agreement
contains a revolving credit facility which permits Borrower to borrow certain principal amounts,
repay all or a portion of such principal amounts, and reborrow the amounts previously paid to the
Secured Parties, all upon satisfaction of certain conditions stated in the Credit Agreement. This
Mortgage secures all advances and re-advances under the Credit Agreement, including, without
limitation, those under the revolving credit facility contained therein.




          (d)
“Mortgaged Property”: [The fee interest in the real property described in Exhibit
A attached hereto and incorporated herein by this reference, together with any greater estate
therein as hereafter may be acquired by Grantor (the “Land”),]  [The leasehold interest in the real
property described in Exhibit A created by the Subject Lease (defined below), together
with all rights and interests of Grantor in and to the Subject Lease and any greater estate
therein as hereafter may be acquired by Grantor (the “Land”),] and all of Grantor’s right, title
and interest in and to (1) all improvements now owned or hereafter acquired by Grantor, now or at
any time situated, placed or constructed upon the Land (the
“Improvements ”; the Land and
Improvements are collectively referred to as the “Premises”), (2) (A) all materials, supplies,
equipment, apparatus, appliances, machinery and other items of personal property now owned or
hereafter acquired by Grantor and now or hereafter attached to, installed in or used in connection
with any of the Improvements or the Land, and water, gas, electrical, telephone, storm and
sanitary sewer facilities and all other utilities whether or not situated in easements, (B) all
wall-beds, wall-safes, built-in furniture and installations, shelving, lockers, attached cabinets,
partitions, doorstops, vaults, motors, elevators, dumb-waiters, storm doors and windows, awnings,
window coverings, curtains, window shades, venetian blinds, drapes, drapery rods and brackets,
light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm,
communication, surveillance and security systems and apparatus, television, radio, music and cable
antennae and systems, computers, computer reservation systems and related equipment, mirrors,
mantels, screens, attached floor covering, linoleum, carpets and carpeting, signs, decorations,
artwork (including painting, prints, sculpture and other fine art), plumbing, bathtubs, sinks,
basins, pipes, faucets, water closets, fuel, water and other pumps and tanks, laundry equipment,
washers, dryers, mini-bars, ice-boxes and heating units, kitchen and restaurant equipment and
appliances (including stoves, refrigerators, ovens, ranges, dishwashers, disposals, water heaters
and incinerators), hall and lobby equipment, ventilating, refrigerating, incinerating, escalator
and air conditioning plants or systems with appurtenant fixtures, vacuum cleaning systems, call
and/or beeper systems, generators, boilers, compressors and engines; garbage disposal machinery or
equipment, trees, plants and other items of landscaping, and irrigation equipment now owned or
hereafter acquired by Grantor and now or hereafter attached to, installed in or used in connection
with any of the Premises, (C) all furniture and furnishings of every nature whatsoever now or
hereafter owned or leased by Grantor or in which Grantor has any rights or interest and located in
or on, or attached to, or used or intended to be used or which are now or may hereafter be
appropriated for use on or in connection with the operation of the Premises, and all extensions,
additions, accessions, improvements, betterments, renewals, substitutions, and replacements to any
of the foregoing, which, to the fullest extent permitted by law, shall be conclusively deemed
fixtures and improvements and a part of the real property hereby encumbered (all items described
in the foregoing clauses (A) through (C), collectively, the “Fixtures”), (3) (A) all cocktail
lounge supplies, including bars, glassware, bottles and tables




2









 







used in connection with the Premises, (B) all chaise lounges, hot tubs, swimming pool heaters and
equipment and all other health and recreational equipment and beauty and barber equipment used in
connection with the Premises, (C) all goods, inventory, equipment and supplies used in connection
with any commercial operations on the Premises, including communication systems, visual and
electronic surveillance systems and transportation systems, (D) all tools, utensils, food and
beverage, liquor, silverware, dishes, uniforms, linens, rugs, housekeeping and maintenance
supplies, vehicles and fuel relating to the Premises, (E) all equipment, manual, mechanical or
motorized, for the construction, maintenance, repair and cleaning of parking areas, walks,
underground ways, truck ways, driveways, common areas, roadways, highways and streets related to
the Premises, and (F) all goods, accounts, inventory, general intangibles, instruments, documents,
contract rights and chattel paper, including all such items as defined in the UCC (defined below),
now owned or hereafter acquired by Grantor and now or hereafter affixed to, placed upon, used in
connection with, arising from or otherwise related to the Premises (all items described in the
foregoing clauses (A) through (F), collectively, the “Personalty”), (4) all reserves, escrows or
impounds required under the Credit Agreement or any of the other Loan Documents and all deposit
accounts maintained by Grantor with respect to the Mortgaged Property (the “Deposit Accounts”), (5)
all leases, licenses, concessions, occupancy agreements or other agreements (written or oral, now
or at any time in effect) which grant to any Person [, other than Grantor,] a possessory interest
in, or the right to use, all or any part of the Mortgaged Property, including, without limitation,
all licenses, leases or agreements for transient use of facilities, together with all related
security and other deposits (the “Leases”), (6) all of the rents, revenues, royalties, income,
proceeds, profits, accounts receivable, security and other types of deposits, and other benefits
paid or payable by parties to the Leases for using, leasing, licensing, possessing, operating from,
residing in, selling or otherwise enjoying the Mortgaged Property (the foregoing, together with the
Service Revenues, defined below, collectively, the “Rents”), (7) all other agreements, such as
construction contracts, architects’ agreements, engineers’ contracts, utility contracts,
maintenance agreements, management agreements, service contracts, listing agreements, guaranties,
warranties, permits, licenses, certificates and entitlements in any way relating to the
construction, use, occupancy, operation, maintenance, enjoyment or ownership of the Mortgaged
Property (the “Property Agreements”), (8) (A) all books, records, customer lists, concession
agreements, supply or service contracts, supplier lists, licenses, permits, governmental approvals,
signs, goodwill, checking accounts, safe deposit boxes (excluding the contents of such deposit
boxes owned by persons other than Grantor and its Affiliates), (B) all right to use agreements for
the Premises, including all rents, issues, profits, income and maintenance fees resulting
therefrom, and (C) all advertising and promotional materials, blueprints, surveys, plans and other
documents used in the construction or operation of the Premises, whether any of the foregoing is
now owned or hereafter acquired (all items described in the foregoing clauses (A) through (C),
collectively, the “Intangible Property”), (9) all fees, charges, accounts and/or other payments for
the use or occupancy of rooms, suites, or other lodging facilities of any kind and/or public
facilities in or at
the Premises, or for the provision of any food and/or beverages or other
services at the Premises, including fees, charges, accounts and/or other payments arising from (A)
sale of food and beverages at the Premises, whether in a restaurant, through “room service” dining,
or though banquet and catering facilities and services, (B) laundry, vending machine and
telecommunications receipts, whether billed to residents of the Premises or collected in cash, (C)
rental of conference rooms and meeting rooms and recreational rooms, (D) operation of health club,
spa, personal care, and other facilities located




3









 




in, on or at the Premises, (E) incidental charges to residents of the Premises or other users or
customers, (F) any other charges of any kind, for the direct or indirect benefit of Grantor, and
(G) any payments (and accounts receivable or other rights to receive payments) from any consumer
credit/charge card organization or entity (such as, or similar to, the organizations or entities
that sponsor and administer the American Express Card, the Visa Card, the Mastercard, the Carte
Blanche Card, or the Discover Card), whether now existing or hereafter created, substitution
thereof and any and all of the foregoing and proceeds therefrom, (all such accounts and/or other
payments or accounts receivable, collectively, the “Service Revenues”), (10) all rights,
privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances
appertaining to the foregoing, (11) all property tax refunds payable with respect to the Mortgaged
Property (the “Tax Refunds”), (12) all accessions, replacements and substitutions for any of the
foregoing and all proceeds thereof (the “Proceeds”), (13) all insurance policies, unearned premiums
therefor and proceeds from such policies covering any of the above property now or hereafter
acquired by Grantor but subject to the terms and conditions of this Mortgage (the “Insurance”), and
(14) all awards, damages, remunerations, reimbursements, settlements or compensation heretofore
made or hereafter to be made by any governmental authority pertaining to any condemnation or other
taking (or any purchase in lieu thereof) of all or any portion of the Land, Improvements, Fixtures
or Personalty but subject to the terms and conditions of this Mortgage (the “Condemnation Awards”).
As used in this Mortgage, the term “Mortgaged Property”  shall mean all or, where the context
permits or requires, any portion of the above or any interest therein. Notwithstanding the
foregoing or any contrary provisions herein or in any of the other Loan Documents, in no event
shall the “Intangible Property” or the “Mortgaged Property” ever include any rights or interests in
the names “Campus Crest,” “The Grove” or any other name which incorporates such words or any logos
or other intellectual property rights in respect or regard thereto.




          (e) “Obligations”: All of the agreements, covenants, conditions, warranties, representations
and other obligations of Grantor under the Credit Agreement and the other Loan Documents to which
it is a party.




          (f) “Security Agreement”: That certain Security Agreement by and from Grantor and the other
grantors referred to therein to Agent and the other Secured Parties dated as of even date
herewith, as the same may hereafter be amended, amended and restated, supplemented or otherwise
modified from time to time.




          (g) [“Subject Lease”: Shall have the meaning set forth in Exhibit B attached hereto.]




          (h) “UCC”: The Uniform Commercial Code of [                    ] or, if the creation,
perfection and enforcement of any security interest herein granted is governed by the laws of a
state other than [ ___ ], then, as to the matter in question, the Uniform Commercial Code in
effect in that state.




4









 





ARTICLE 2

GRANT




          Section 2.1 Grant. To secure the full and timely payment of the Indebtedness and the
full and timely performance of the Obligations, Grantor GRANTS, BARGAINS, ASSIGNS, SELLS, CONVEYS
and CONFIRMS, to Beneficiary the Mortgaged Property, subject, however, only to the matters that are
set forth on Exhibit [B] [C] attached hereto (the “Permitted Encumbrances”) and to Permitted Liens,
TO HAVE AND TO HOLD the Mortgaged Property, and Grantor does hereby bind itself, its successors and
assigns to WARRANT AND FOREVER DEFEND the title to the Mortgaged Property unto Beneficiary.




ARTICLE 3

WARRANTIES, REPRESENTATIONS AND COVENANTS




          Grantor warrants, represents and covenants to Beneficiary as follows:




          Section 3.1 Title to Mortgaged Property and Lien of this Instrument.




          Grantor owns the Mortgaged Property free and clear of any liens, claims or interests, except the
Permitted Encumbrances and the Permitted Liens. This Mortgage creates valid, enforceable first
priority liens and security interests against the Mortgaged Property, except for the Permitted
Encumbrances and the Permitted Liens.




          Section 3.2 First Lien Status. Grantor shall preserve and protect the first lien and
security interest status of this Mortgage and the other Loan Documents. If any lien or security
interest other than a Permitted Lien is asserted against the Mortgaged Property, Grantor shall
promptly, and at its expense, (a) give Beneficiary a detailed written notice of such lien or
security interest (including origin, amount and other terms), and (b) pay the underlying claim in
full or take such other action so as to cause it to be released or contest the same in compliance
with the requirements of the Credit Agreement (including the requirement of providing a bond or
other security satisfactory to Beneficiary).




          Section 3.3 Payment and Performance. Grantor shall pay or cause to be paid the
Indebtedness when due under the Credit Agreement and the other Loan Documents and shall perform or
cause to be performed the Obligations in full when they are required to be performed (subject to
all applicable notice and cure periods set forth in the Loan Documents).




          Section 3.4 Replacement of Fixtures and Personalty. Grantor shall not, without the
prior written consent of Beneficiary, permit any of the Fixtures or Personalty owned or leased by
Grantor (other than food, liquor and other consumables which shall be replaced in the ordinary
course) to be removed at any time from the Land or Improvements, unless the removed item is
removed temporarily for maintenance and repair or is permitted to be removed by the Credit
Agreement.




          Section 3.5 Inspection. Grantor shall permit Beneficiary and the other Secured
Parties and their respective agents, representatives and employees, upon reasonable prior notice
to Grantor, [and in compliance with the Subject Lease,] to inspect the Mortgaged Property and all
books and records of Grantor located thereon, and to conduct such environmental and engineering
studies as Beneficiary or the other Secured Parties may








5









 







reasonably require, provided that such inspections and studies shall not materially interfere with
the use and operation of the Mortgaged Property; provided, that, notwithstanding anything
herein to the contrary, Grantor shall be obligated to reimburse Beneficiary for its costs and
expenses incurred in connection with the exercise of Beneficiary’s rights under this Section
3.5 only if such exercise occurs after the occurrence and during the continuance of a Default
or an Event of Default.




          Section 3.6 Other Covenants. All of the covenants in the Credit Agreement are
incorporated herein by reference and, together with covenants in this Article 3, shall be
covenants running with the Land.




          Section 3.7 Insurance; Condemnation Awards and Insurance Proceeds.




          (a) Insurance. Grantor shall maintain or cause to be maintained, with financially
sound and reputable insurers, insurance with respect to the Mortgaged Property in substantial
compliance with the requirements set forth on Schedule I attached hereto.




          (b) Condemnation Awards. [Subject to the terms of the Subject Lease,] Grantor assigns
all Condemnation Awards to Beneficiary and authorizes Beneficiary to collect and receive such
Condemnation Awards [(to the extent Grantor is entitled thereto under the Subject Lease)] and to
give proper receipts and acquittances therefor, subject to the terms of the Credit Agreement and
the applicable provisions of Schedule I attached hereto.




          (c) Insurance Proceeds. [Subject to the terms of the Subject Lease,]
Grantor
assigns to Beneficiary all proceeds of any insurance policies insuring against loss or damage
to
the Mortgaged Property. Subject to the terms of the Credit Agreement and the applicable
provisions of Schedule I attached hereto, Grantor authorizes Beneficiary to collect
and receive
such proceeds [(to the extent Grantor is entitled thereto under the Subject Lease)] and
authorizes
and directs the issuer of each of such insurance policies to make payment for all such losses
[(to
the extent Grantor is entitled thereto under the Subject Lease)] directly to Beneficiary,
instead of
to Grantor and Beneficiary jointly.




ARTICLE 4

[LEASEHOLD MORTGAGE PROVISIONS




          Section 4.1 Representations; Warranties; Covenants. Grantor hereby represents, warrants and
covenants that:




          (a) (1) Except as set forth in Exhibit B hereof, the Subject Lease is unmodified and
in full force and effect, (2) all rent and other charges therein have been paid to the extent
they are payable to the date hereof, (3) Grantor enjoys the quiet and peaceful possession of the
Premises, (4) to the best of its knowledge, Grantor is not in default under any of the material
terms thereof and there are no circumstances which, with the passage of time or the giving of
notice or both, would constitute an event of default thereunder, (5) to the best of Grantor’s
knowledge, the lessor thereunder is not in default under any of the material terms or provisions
thereof on the part of the lessor to be observed or performed, and (6) [except as contemplated in




6









 




Section 21 (for Mobile Phase II) of the Subject Lease,] Grantor has not previously subordinated
or agreed to subordinate its interest in the Mortgaged Property to the Lien or interests of any
mortgagee of the lessor’s fee interest in the Premises;




          (b) Grantor shall promptly pay, when due and payable, the rent and other charges payable
pursuant to the Subject Lease, taking into account any applicable grace or cure periods, and will
timely perform and observe all of the other terms, covenants and conditions required to be
performed and observed by Grantor as lessee under the Subject Lease;




          (c) Grantor shall notify Beneficiary in writing of any default by Grantor in the performance
or observance of any terms, covenants or conditions on the part of Grantor to be performed or
observed under the Subject Lease within three (3) days after Grantor obtains knowledge of such
default;




          (d) Grantor shall, promptly upon receipt thereof, deliver a copy of each material notice
given to Grantor by the lessor pursuant to the Subject Lease and promptly notify Beneficiary in
writing of any default by the lessor in the performance or observance of any of the terms,
covenants or conditions on the part of the lessor to be performed or observed thereunder;




          (e) Unless required under the terms of the Subject Lease, Grantor shall not terminate, modify
or surrender the Subject Lease without the prior written consent of Beneficiary (which, in the
case of any proposed termination or surrender, may be granted or withheld in Beneficiary’s sole
and absolute discretion and, in the case of any other modification, may be granted or withheld in
Beneficiary’s reasonable discretion), and any such attempted termination, modification or
surrender without Beneficiary’s written consent shall be void;




          (f) If the Subject Lease shall be rejected or disaffirmed by the lessor thereunder (or by any
receiver, trustee, custodian or other party who succeeds to the rights of such lessor) pursuant to
the Bankruptcy Code or similar or successor law or right, Grantor covenants that it will not elect
to treat the Subject Lease as terminated under 11 U.S.C. § 365(h) or any similar or successor law
or right. Upon the occurrence and during the continuance of an Event of Default, Beneficiary shall
have the sole and exclusive right to make or refrain from making any such election, and Grantor
agrees that any such election, if made by Grantor other than in accordance with this subsection,
shall be void and of no force or effect;




          (g) Grantor shall, within thirty (30) days after written request from Beneficiary, use
commercially reasonable efforts to obtain from the lessor and deliver to Beneficiary a certificate
setting forth the name of the tenant under the Subject Lease and stating that the Subject Lease is
in full force and effect, is unmodified or, if the Subject Lease has been modified, the date of
each modification (together with copies of each such modification), that no notice of termination
thereof has been served on Grantor, stating that no default or event which with notice or lapse of
time (or both) would become a default is existing under the Subject Lease (or if any such default
or event is existing, specifying the nature of such default or event), stating the date to which
rent has been paid, and containing such other statements and representations as may be reasonably
requested by Beneficiary; provided, however, that so long as no Event of Default shall have
occurred and be continuing, no more than one (1) such certificate shall be requested during any
twelve (12) month period; and




7









 





          (h) Grantor shall not at any time subordinate its interest in the Mortgaged Property or any
portion thereof to the Lien or interests of any mortgagee of the lessor’s fee interest in the
Premises [except in accordance with Section 21 of the Subject Lease].




          Section 4.2 No Merger. So long as any portion of the Indebtedness or the Obligations
remain unpaid or unperformed and the Commitments have not expired or been terminated, the fee title
to and the leasehold estate in the Premises subject to the Subject Lease shall not merge but shall
always be kept separate and distinct notwithstanding the union of such estates in the lessor or
Grantor, or in a third party, by purchase or otherwise. If Grantor acquires the fee title or any
other estate, title or interest in the Premises, or any part thereof, the lien of this Mortgage
shall attach to, cover and be a lien upon such acquired estate, title or interest and the same
shall thereupon be and become a part of the Mortgaged Property with the same force and effect as if
specifically encumbered herein. Grantor agrees to execute all instruments and documents that
Beneficiary may reasonably require to ratify, confirm and further evidence the lien of this
Mortgage on the acquired estate, title or interest. Furthermore, Grantor hereby appoints
Beneficiary as its true and lawful attorney-in-fact to execute and deliver, following the
occurrence and during the continuance of an Event of Default, all such instruments and documents in
the name and on behalf of Grantor. This power, being coupled with an interest, shall be irrevocable
as long as any portion of the Indebtedness or the Obligations remains unpaid or unperformed and the
Commitments have not expired or been terminated.




          Section 4.3 Beneficiary as Lessee. If the Subject Lease shall be terminated prior to
the natural expiration of its term due to default by Grantor or any tenant thereunder, and if,
pursuant to the provisions of the Subject Lease, Beneficiary or its designee shall acquire from
the lessor a new lease of the Premises, Grantor shall have no right, title or interest in or to
such new lease or the leasehold estate created thereby, or renewal privileges therein contained.




          Section 4.4 No Assignment. Notwithstanding anything to the contrary contained herein,
this Mortgage shall not constitute an assignment of the Subject Lease within the meaning of any
provision thereof prohibiting its assignment and Beneficiary shall have no liability or obligation
thereunder by reason of its acceptance of this Mortgage. Beneficiary shall be liable for the
obligations of the tenant arising out of the Subject Lease for only that period of time for which
Beneficiary is in possession of the Premises or has acquired, by foreclosure or otherwise, and is
holding all of Grantor’s right, title and interest therein.




ARTICLE 5

DEFAULT AND FORECLOSURE




          Section 5.1 Remedies. Upon the occurrence and during the continuance of an Event of
Default, Beneficiary may, at Beneficiary’s election, exercise any or all of the following rights,
remedies and recourses:




          (a) Acceleration. Subject to any provisions of the Loan Documents providing for the
automatic acceleration of the Indebtedness upon the occurrence of certain Events of Default,
declare the Indebtedness to be immediately due and payable, without further notice, presentment,
protest, notice of intent to accelerate, notice of acceleration, demand or action of any nature




8









 




whatsoever (each of which hereby is expressly waived by Grantor), whereupon the same shall become
immediately due and payable.




          (b) Entry on Mortgaged Property. [Enter] [Subject to the terms of the Subject Lease
and applicable law, enter] the Mortgaged Property and take exclusive possession thereof and of all
books, records and accounts relating thereto or located thereon. If Grantor remains in possession
of the Mortgaged Property following the occurrence and during the continuance of an Event of
Default and without Beneficiary’s prior written consent, [subject to the terms of the Subject Lease
and applicable law,] Beneficiary may invoke any legal remedies to dispossess Grantor.




          (c) Operation of Mortgaged Property. Hold, lease, develop, manage, operate or
otherwise use the Mortgaged Property upon such terms and conditions as Beneficiary may deem
reasonable under the circumstances (including making such repairs, alterations, additions and
improvements and taking other actions, from time to time, as Beneficiary deems necessary or
desirable), [all in a manner consistent with the terms of the Subject Lease,] and apply all Rents
and other amounts collected by Beneficiary in connection therewith in accordance with the
provisions of Section 5.7.




          (d) Foreclosure and Sale. Institute proceedings for the complete foreclosure of this
Mortgage by judicial action or by power of sale, in which case the Mortgaged Property may be sold
for cash or credit in one or more parcels as Beneficiary may determine [subject to the terms of
the Subject Lease]. With respect to any notices required or permitted under the UCC, Grantor
agrees that ten (10) days’ prior written notice shall be deemed commercially reasonable. At any
such sale by virtue of any judicial proceedings, power of sale, or any other legal right, remedy
or recourse, the title to and right of possession of any such property shall pass to the purchaser
thereof, and to the fullest extent permitted by law, Grantor shall be completely and irrevocably
divested of all of its right, title, interest, claim, equity, equity of redemption, and demand
whatsoever, either at law or in equity, in and to the property sold, and such sale shall be a
perpetual bar both at law and in equity against Grantor, and against all other Persons claiming or
to claim the property sold or any part thereof, by, through or under Grantor. Beneficiary or any
of the other Secured Parties may be a purchaser at such sale. If Beneficiary or such other Secured
Party is the highest bidder, Beneficiary or such other Secured Party may credit the portion of the
purchase price that would be distributed to Beneficiary or such other Secured Party against the
Indebtedness in lieu of paying cash. In the event this Mortgage is foreclosed by judicial action,
appraisement of the Mortgaged Property is waived.




          (e) Receiver. Make application to a court of competent jurisdiction for, and obtain
from such court as a matter of strict right and without notice to Grantor or regard to the
adequacy of the Mortgaged Property for the repayment of the Indebtedness, the appointment of a
receiver of the Mortgaged Property, and Grantor irrevocably consents to such appointment. Any such
receiver shall have all the usual powers and duties of receivers in similar cases, including the
full power to rent, maintain and otherwise operate the Mortgaged Property upon such terms as may
be approved by the court, [and in a manner consistent with the terms of the Subject Lease,] and
shall apply such Rents in accordance with the provisions of Section 5.7.




9









 








          (f) Other. [Exercise] [Subject to the terms of the Subject lease, exercise] all other
rights, remedies and recourses granted under the Loan Documents or otherwise available at law or
in equity.




          Section 5.2 Separate Sales. [The] [To the extent not prohibited under the Subject
Lease, the] Mortgaged Property may be sold in one or more parcels and in such manner and order as
Beneficiary in its sole discretion may elect. The right of sale arising out of any Event of
Default shall not be exhausted by any one or more sales.




          Section 5.3 Remedies Cumulative, Concurrent and Nonexclusive.
Beneficiary and the other Secured Parties shall have all rights, remedies and recourses granted in
the Loan Documents and available at law or equity (including the UCC), which rights (a) shall be
cumulative and concurrent, (b) may be pursued separately, successively or concurrently against
Grantor or others obligated under the Loan Documents, or against the Mortgaged Property, or
against any one or more of them, at the sole discretion of Beneficiary or such other Secured
Party, as the case may be, (c) may be exercised as often as occasion therefor shall arise, and the
exercise or failure to exercise any of them shall not be construed as a waiver or release thereof
or of any other right, remedy or recourse, and (d) are intended to be, and shall be, nonexclusive.
No action by Beneficiary or any other Secured Party in the enforcement of any rights, remedies or
recourses under the Loan Documents or otherwise at law or equity shall be deemed to cure any Event
of Default.




          Section 5.4 Release of and Resort to Collateral. Beneficiary may release, regardless
of consideration and without the necessity for any notice to or consent by the holder of any
subordinate lien on the Mortgaged Property, any part of the Mortgaged Property without, as to the
remainder, in any way impairing, affecting, subordinating or releasing the lien or security
interest created in or evidenced by the Loan Documents or their status as a first and prior lien
and security interest in and to the Mortgaged Property. For payment of the Indebtedness,
Beneficiary may resort to any other security in such order and manner as Beneficiary may elect.




          Section 5.5 Waiver of Redemption, Notice and Marshalling of Assets. To the fullest
extent permitted by law, Grantor hereby irrevocably and unconditionally waives and releases (a)
all benefit that might accrue to Grantor by virtue of any present or future statute of limitations
or law or judicial decision exempting the Mortgaged Property from attachment, levy or sale on
execution or providing for any stay of execution, exemption from civil process, redemption or
extension of time for payment, (b) all notices of any Event of Default or of any election by
Beneficiary to exercise or the actual exercise of any right, remedy or recourse provided for under
the Loan Documents (except with respect to matters for which the Loan Documents specifically
provide for the giving of notice to the Grantor and except with respect to any matter for which
Beneficiary is required by applicable law to give notice), and (c) any right to a marshalling of
assets or a sale in inverse order of alienation.




          Section 5.6 Discontinuance of Proceedings. If Beneficiary or any other Secured Party
shall have proceeded to invoke any right, remedy or recourse permitted under the Loan Documents
and shall thereafter elect to discontinue or abandon it for any reason, Beneficiary or such other
Secured Party, as the case may be, shall have the unqualified right to do so and, in such an
event, Grantor, Beneficiary and the other Secured Parties shall be restored




10









 




to their former positions with respect to the Indebtedness, the Obligations, the Loan Documents,
the Mortgaged Property and otherwise, and the rights, remedies, recourses and powers of Beneficiary
and the other Secured Parties shall continue as if the right, remedy or recourse had never been
invoked, but no such discontinuance or abandonment shall waive any Event of Default which may then
exist or the right of Beneficiary or any other Secured Party thereafter to exercise any right,
remedy or recourse under the Loan Documents for such Event of Default.




          Section 5.7 Application of Proceeds. The proceeds of any sale of, and the Rents and
other amounts generated by the holding, leasing, management, operation or other use of the
Mortgaged Property, shall be applied by Beneficiary (or a receiver, if one is appointed) in the
following order unless otherwise required by applicable law:




          (a) to the payment of the costs and expenses of taking possession of the Mortgaged Property
and of holding, using, leasing, repairing, improving and selling the same, including, without
limitation (1) trustee’s and receiver’s fees and expenses, including the repayment of the amounts
evidenced by any receiver’s certificates, (2) court costs, (3) attorneys’ and accountants’ fees
and expenses, [and] (4) costs of advertisement [and (5) the payment of all rent and other charges
under the Subject Lease];




          (b) to the payment of the Indebtedness and performance of the Obligations in such manner and
order of preference as Beneficiary in its sole discretion may determine; and




          (c) the balance, if any, to the Persons legally entitled thereto.




          Section 5.8 Occupancy After Foreclosure. Any sale of the Mortgaged Property or any
part thereof in accordance with Section 5.1(d) will divest all right, title and interest
of Grantor in and to the property sold. Subject to applicable law [and the Subject Lease], any
purchaser at a foreclosure sale will receive immediate possession of the property purchased. If
Grantor retains possession of such property or any part thereof subsequent to such sale, Grantor
will be considered a tenant at sufferance of the purchaser, and will, if Grantor remains in
possession after demand to remove, be subject to eviction and removal, forcible or otherwise, with
or without process of law.




          Section 5.9 Additional Advances and Disbursements; Costs of Enforcement.




          (a) [Upon] [To the extent not prohibited under the terms of the Subject Lease, upon] the
occurrence and during the continuance of any Event of Default, Beneficiary and each of the other
Secured Parties shall have the right, but not the obligation, to cure such Event of Default in the
name and on behalf of Grantor. All sums advanced and expenses incurred at any time by Beneficiary
or any other Secured Party under this Section 5.9, or otherwise under this Mortgage or any
of the other Loan Documents or applicable law during the continuance of an Event of Default, shall
bear interest from the date that such sum is advanced or expense incurred, to and including the
date of reimbursement, computed at the default rate applicable to Base Rate Advances pursuant to
Section 2.07(b) of the Credit Agreement, and all such sums, together with interest thereon, shall
be secured by this Mortgage.




11









 





          (b) Grantor shall pay all expenses (including reasonable attorneys’ fees and expenses) of or
incidental to the perfection and enforcement of this Mortgage and the other Loan Documents, or the
enforcement, compromise or settlement of the Indebtedness or any claim under this Mortgage and the
other Loan Documents, and for the curing thereof, or for defending or asserting the rights and
claims of Beneficiary in respect thereof, by litigation or otherwise.




          Section 5.10 No Mortgagee in Possession. Neither the enforcement of any of the
remedies under this Article 5, the assignment of the Rents and Leases under Article
6, the security interests under Article 7, nor any other remedies afforded to
Beneficiary under the Loan Documents, at law or in equity, shall cause Beneficiary or any other
Secured Party to be deemed or construed to be a mortgagee in possession of the Mortgaged Property,
to obligate Beneficiary or any other Secured Party to lease the Mortgaged Property or attempt to do
so, or to take any action, incur any expense, or perform or discharge any obligation, duty or
liability whatsoever under any of the Leases or otherwise.




ARTICLE 6

ASSIGNMENT OF RENTS AND LEASES




          Section 6.1 Assignment. In furtherance of and in addition to the assignment made by
Grantor in Section 2.1 of this Mortgage, Grantor hereby absolutely and unconditionally
assigns, sells, transfers and conveys to Beneficiary all of Grantor’s right, title and interest in
and to all Leases, whether now existing or hereafter entered into, and all of Grantor’s right,
title and interest in and to all Rents. This assignment is an absolute assignment and not an
assignment for additional security only. So long as no Event of Default shall have occurred and be
continuing, Grantor shall have a revocable license from Beneficiary to exercise all rights
extended to the landlord under the Leases, including the right to receive and collect all Rents
and to hold the Rents in trust for use in the payment and performance of the Obligations and to
otherwise use the same. The foregoing license is granted subject to the conditional limitation
that no Event of Default shall have occurred and be continuing. Upon the occurrence and during the
continuance of an Event of Default, whether or not legal proceedings have commenced, and without
regard to waste, adequacy of security for the Obligations or solvency of Grantor, the license
herein granted shall expire and terminate, without notice to Grantor by Beneficiary (any such
notice being hereby expressly waived by Grantor to the extent permitted by applicable law), but
said license shall be deemed reinstated upon Beneficiary’s acceptance of any cure of such Event of
Default.




          Section 6.2 Perfection Upon Recordation. Grantor acknowledges that Beneficiary has
taken all actions necessary to obtain, and that upon recordation of this Mortgage Beneficiary
shall have, to the extent permitted under applicable law, a valid and fully perfected, first
priority, present assignment of the Rents arising out of the Leases and all security for such
Leases. Grantor acknowledges and agrees that upon recordation of this Mortgage, Beneficiary’s
interest in the Rents shall be deemed to be fully perfected, “choate” and enforced as to Grantor
and to the extent permitted under applicable law, all third parties, including, without
limitation, any subsequently appointed trustee in any case under Title 11 of the United States
Code (the “Bankruptcy Code”), without the necessity of commencing a foreclosure action with
respect to this Mortgage, making formal demand for the Rents, obtaining the appointment of a
receiver or taking any other affirmative action.




12









 





          Section 6.3 Bankruptcy Provisions. Without limitation of the absolute nature of the
assignment of the Rents hereunder, Grantor and Beneficiary agree that (a) this Mortgage shall
constitute a “security agreement” for purposes of Section 552(b) of the Bankruptcy Code, (b) the
security interest created by this Mortgage extends to property of Grantor acquired before the
commencement of a case in bankruptcy and to all amounts paid as Rents and (c) such security
interest shall extend to all Rents acquired by the estate after the commencement of any case in
bankruptcy.




          Section 6.4 [FEE ONLY: No Merger of Estates. So long as any portion of the
Indebtedness and the Obligations secured hereby remain unpaid and undischarged and the Commitments
have not expired or been terminated, the fee and leasehold estates to the Mortgaged Property shall
not merge, but shall remain separate and distinct, notwithstanding the union of such estates either
in Grantor, Beneficiary, any tenant or any third party by purchase or otherwise.]




ARTICLE 7

SECURITY AGREEMENT




          Section 7.1 Security Interest. This Mortgage constitutes a “security agreement” on
personal property within the meaning of the UCC and other applicable law and with respect to the
Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Intangible Property,
Service Revenues, Tax Refunds, Proceeds, Insurance and Condemnation Awards. To this end, Grantor
grants to Beneficiary a first and prior security interest in the Personalty, Fixtures, Leases,
Rents, Deposit Accounts, Property Agreements, Intangible Property, Service Revenues, Tax Refunds,
Proceeds, Insurance, Condemnation Awards and all other Mortgaged Property which is personal
property to secure the payment of the Indebtedness and performance of the Obligations, and agrees
that Beneficiary shall have all the rights and remedies of a secured party under the UCC with
respect to such property. Any notice of sale, disposition or other intended action by Beneficiary
with respect to the Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property Agreements,
Intangible Property, Service Revenues, Tax Refunds, Proceeds, Insurance and Condemnation Awards
sent to Grantor at least ten (10) days prior to any action under the UCC shall constitute
reasonable notice to Grantor. In the event of any conflict or inconsistency between the terms of
this Mortgage and the terms of the Security Agreement with respect to the collateral covered both
therein and herein, the Security Agreement shall control and govern to the extent of any such
conflict or inconsistency.




          Section 7.2 Financing Statements. Grantor shall prepare and deliver to Beneficiary
such financing statements, and shall execute and deliver to Beneficiary such other documents,
instruments and further assurances, in each case in form and substance reasonably satisfactory to
Beneficiary, as Beneficiary may, from time to time, reasonably consider necessary to create,
perfect and preserve Beneficiary’s security interest hereunder. Grantor hereby irrevocably
authorizes Beneficiary to cause financing statements (and amendments thereto and continuations
thereof) and any such documents, instruments and assurances to be recorded and filed, at such
times and places as may be required or permitted by law to so create, perfect and preserve such
security interest. Grantor represents and warrants to Beneficiary that Grantor’s jurisdiction of
organization is the State of Delaware. After the date of this Mortgage, Grantor shall not change
its name, type of organization, organizational identification number (if any),




13









 




jurisdiction of organization or location (within the meaning of the UCC) without giving at least
thirty (30) days’ prior written notice to Beneficiary.




          Section 7.3 Fixture Filing. This Mortgage shall also constitute a “fixture filing” for
the purposes of the UCC against all of the Mortgaged Property which is or is to become fixtures (as
defined under the UCC). The information provided in this Section 7.3 is provided so that
this Mortgage shall comply with the requirements of the UCC for a mortgage instrument to be filed
as a financing statement. Grantor is the “Debtor” and its name and mailing address are set forth in
the preamble of this Mortgage immediately preceding Article 1. Beneficiary is the “Secured
Party” and its name and mailing address from which information concerning the security interest
granted herein may be obtained are also set forth in the preamble of this Mortgage immediately
preceding Article 1. A statement describing the portion of the Mortgaged Property
comprising the fixtures hereby secured is set forth in Section 1.1(d) of this Mortgage.
Grantor represents and warrants to Beneficiary that Grantor is the record owner of the
Mortgaged Property, the employer identification number of Grantor is [                    ] and the
organizational identification number of Grantor is [                    ].




ARTICLE 8

INTENTIONALLY OMITTED




ARTICLE 9

MISCELLANEOUS



          Section 9.1 Notices. Any notice required or permitted to be given under this Mortgage
shall be given in accordance with Section 9.02 of the Credit Agreement.




          Section 9.2 Covenants Running with the Land. All Obligations contained in this
Mortgage are intended by Grantor and Beneficiary to be, and shall be construed as, covenants
running with the Land. As used herein, “Grantor” shall refer to the party named in the first
paragraph of this Mortgage and to any subsequent owner of all or any portion of the Mortgaged
Property. All Persons who may have or acquire an interest in the Mortgaged Property shall be
deemed to have notice of, and be bound by, the terms of the Credit Agreement and the other Loan
Documents; provided, however, that no such party shall be entitled to any rights thereunder
without the prior written consent of Beneficiary.




          Section 9.3 Attorney-in-Fact. Grantor hereby irrevocably appoints
Beneficiary as its attorney-in-fact, which agency is coupled with an interest and with full power
of substitution, with full authority in the place and stead of Grantor and in the name of Grantor
or otherwise (a) upon the issuance of a deed pursuant to the foreclosure of this Mortgage or the
delivery of a deed in lieu of foreclosure, to execute all instruments of assignment, conveyance or
further assurance with respect to the Leases, Rents (including, without limitation, all Service
Revenues), Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed and as may be necessary or desirable
for such purpose, (b) to prepare and file or record financing statements and continuation
statements, and to prepare, execute and file or record applications for registration and like
papers necessary to create, perfect or preserve Beneficiary’s security interests and rights in or
to any of the Mortgaged Property as contemplated herein, and (c) after the occurrence and




14









 




during the continuance of any Event of Default, to perform any obligation of Grantor hereunder;
provided, however, that (1) Beneficiary shall not under any circumstances be obligated to perform
any obligation of Grantor; (2) any sums advanced by Beneficiary in such performance shall be added
to and included in the Indebtedness and shall bear interest at the highest rate at which interest
is then computed on any portion of the Indebtedness; (3) Beneficiary as such attorney-in-fact shall
only be accountable for such funds as are actually received by Beneficiary; and (4) Beneficiary
shall not be liable to Grantor or any other person or entity for any failure to take any action
which it is empowered to take under this Section 9.3.




          Section 9.4 Successors and Assigns. This Mortgage shall be binding upon and inure to
the benefit of Beneficiary, the other Secured Parties and Grantor and their respective successors
and assigns. Grantor shall not, without the prior written consent of Beneficiary, assign any
rights, duties or obligations hereunder.




          Section 9.5 No Waiver. Any failure by Beneficiary or the other Secured Parties to
insist upon strict performance of any of the terms, provisions or conditions of the Loan Documents
shall not be deemed to be a waiver of same, and Beneficiary and the other Secured Parties shall
have the right at any time to insist upon strict performance of all of such terms, provisions and
conditions.




          Section 9.6 Credit Agreement. If any conflict or inconsistency exists between this
Mortgage and the Credit Agreement, the Credit Agreement shall control and govern to the extent of
any such conflict or inconsistency.




          Section 9.7 Release or Reconveyance. Beneficiary, at Grantor’s request and expense,
shall release the liens and security interests created by this Mortgage or reconvey the Mortgaged
Property to Grantor, in the event of any of the following: (i) payment in full of the
Indebtedness, performance in full of the Obligations, and termination or expiration of the
Commitments, (ii) a sale or other disposition of the Mortgaged Property permitted by the Credit
Agreement or (iii) as otherwise expressly provided in the Credit Agreement.




          Section 9.8 Waiver of Stay, Moratorium and Similar Rights. Grantor agrees, to the
full extent that it may lawfully do so, that it will not at any time insist upon or plead or in
any way take advantage of any stay, marshalling of assets, extension, redemption or moratorium law
now or hereafter in force and effect so as to prevent or hinder the enforcement of the provisions
of this Mortgage or the Indebtedness or Obligations secured hereby, or any agreement between
Grantor and Beneficiary or any rights or remedies of Beneficiary or any other Secured Party.




          Section 9.9 Applicable Law. The provisions of this Mortgage regarding the creation,
perfection and enforcement of the hens and security interests herein granted shall be governed by
and construed under the laws of the state in which the Mortgaged Property is located. All other
provisions of this Mortgage shall be governed by the laws of the State of New York (including,
without limitation, Section 5-1401 of the General Obligations Law of the State of New York).




15









 





          Section 9.10 Headings. The Article, Section and Subsection titles hereof are inserted
for convenience of reference only and shall in no way alter, modify or define, or be used in
construing, the text of such Articles, Sections or Subsections.




          Section 9.11 Severability. If any provision of this Mortgage shall be held by any
court of competent jurisdiction to be unlawful, void or unenforceable for any reason, such
provision shall be deemed severable from and shall in no way affect the enforceability and
validity of the remaining provisions of this Mortgage.




          Section 9.12 Entire Agreement. This Mortgage and the other Loan Documents embody the
entire agreement and understanding between Grantor and Beneficiary relating to the subject matter
hereof and thereof and supersede all prior agreements and understandings between such parties
relating to the subject matter hereof and thereof. Accordingly, the Loan Documents may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.




          Section 9.13 Beneficiary as Agent; Successor Agents.




          (a) Agent has been appointed to act as Agent hereunder by the other Secured Parties. Agent
shall have the right hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including, without
limitation, the release or substitution of the Mortgaged Property) in accordance with the terms of
the Credit Agreement, any related agency agreement among Agent and the other Secured Parties
(collectively, as amended, amended and restated, supplemented or otherwise modified or replaced
from time to time, the “Agency Documents”) and this Mortgage. Grantor and all other Persons shall
be entitled to rely on releases, waivers, consents, approvals, notifications and other acts of
Agent, without inquiry into the existence of required consents or approvals of the Secured Parties
therefor.




          (b) Beneficiary shall at all times be the same Person that is Agent under the Agency
Documents. Written notice of resignation by Agent pursuant to the Agency Documents shall also
constitute notice of resignation as Agent under this Mortgage. Removal of Agent pursuant to any
provision of the Agency Documents shall also constitute removal as Agent under this Mortgage.
Appointment of a successor Agent pursuant to the Agency Documents shall also constitute
appointment of a successor Agent under this Mortgage. Upon the acceptance of any appointment as
Agent by a successor Agent under the Agency Documents, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties of the retiring or
removed Agent as the Beneficiary under this Mortgage, and the retiring or removed Agent shall
promptly (i) assign and transfer to such successor Agent all of the retiring or removed Agent’s
right, title and interest in and to this Mortgage and the Mortgaged Property, and (ii) execute and
deliver to such successor Agent such assignments and amendments and take such other actions, as
may be necessary or appropriate in connection with the assignment to such successor Agent of the
liens and security interests created hereunder, whereupon such retiring or removed Agent shall be
discharged from its duties and obligations under this Mortgage. After any retiring or removed
Agent’s resignation or removal hereunder as Agent, the provisions of this Mortgage and the Agency
Documents shall inure to its benefit as to any actions taken or omitted to be taken by it under
this Mortgage while it was Agent hereunder.




16









 





ARTICLE 10

LOCAL LAW PROVISIONS




[To Come]



[The remainder of this page has been intentionally left blank]



17









 





          IN WITNESS WHEREOF, Grantor has on the date set forth in the acknowledgement hereto,
effective as of the date first above written, caused this instrument to be duly EXECUTED AND
DELIVERED by authority duly given.




	 	 	 	 	 	 	 

	GRANTOR:	 	[                              ],	 	 
	 	 	a Delaware [limited liability company][limited partnership]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






S-1









 




[Insert state specific form of notary acknowledgement]





N-1











 





EXHIBIT A




LEGAL DESCRIPTION



Legal Description of premises located at [______________]:




[See Attached Page(s) For Legal Description]




Exh. A-l




 









 





EXHIBIT B




SUBJECT LEASE



The term “Subject Lease” shall mean the agreement of lease described in this Exhibit B. If
more than one agreement of lease is described, the “Subject Lease” shall mean (a) each lease
individually and (b) all such leases collectively.




That certain [Title of Lease] dated [Date of Lease], [as amended by                     ,] pursuant to which
Grantor leases all or a portion of the Land from [Full Name of Lessor], a memorandum of which was
recorded with the County Clerk of [County] County, [State], in [Book/Liber/Reel] [___], Page [___].]




Exh. B-l




 









 





EXHIBIT [B] [C]




PERMITTED ENCUMBRANCES



Those exceptions set forth in Schedule B of that certain policy of title insurance issued to
Beneficiary by Chicago Title Insurance Company on or about the date hereof pursuant to commitment
number [_______]




Exh. C-l




 









 





SCHEDULE I 




INSURANCE, CASUALTY AND CONDEMNATION REQUIREMENTS


          1.1 Insurance.


          1.1.1 Insurance Policies. (a) Grantor shall obtain and maintain, or cause to be
maintained, insurance for Grantor and the Mortgaged Property providing at least the following
coverages;




          (i) insurance with respect to the Improvements and the personal property at the
Mortgaged Property insuring against any peril now or hereafter included within the
classification “All Risk” or “Special Perils” (including, without limitation, fire,
lightning, windstorm, hail, terrorism and similar acts of sabotage, explosion, riot, riot
attending a strike, civil commotion, vandalism, aircraft, vehicles and smoke), in each case
(A) in an amount equal to 100% of the “Full Replacement Cost,” which for purposes of this
Mortgage shall mean actual replacement value exclusive of costs of excavations, foundations,
underground utilities and footings, with a waiver of depreciation; (B) in an amount
sufficient so that no co-insurance penalties shall apply; (C) providing for no deductible in
excess of $250,000 (except in the case of flood, earthquake and named windstorm coverages
where the deductibles may be higher, but no higher than five percent (5%) of the Mortgaged
Property’s total insurable value per loss); (D) at all times insuring against at least those
hazards that are commonly insured against under a “special causes of loss” form of policy,
as the same shall exist on the date hereof, and together with any increase in the scope of
coverage provided under such form after the date hereof; and (E) providing coverage for
contingent liability from “Operation of Building Laws,” “Demolition Costs,” and “Increased
Cost of Construction Endorsements” together with an “Ordinance or Law Coverage” endorsement.
Industry standard sublimits may be applied to coverages afforded under clause (E) above
subject to Agent’s approval in its sole discretion. The “Full Replacement Cost” shall be
re-determined from time to time (but not more frequently than once in any twenty-four (24)
calendar months) at the request of Agent by an appraiser or contractor designated and paid
by Grantor and approved by Agent, or by an engineer or appraiser in the regular employ of
the insurer. After the first appraisal, additional appraisals may be based on construction
cost indices customarily employed in the trade. No omission on the part of Agent to request
any such ascertainment shall relieve Grantor of any of its obligations under this
subsection;




          (ii) commercial general liability insurance against all claims for personal injury,
bodily injury, death or property damage occurring upon, in or about the Mortgaged Property,
including “Dram Shop” or other liquor liability coverage if alcoholic beverages are sold,
manufactured or distributed from the Mortgaged Property, 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, providing for no deductible or self
insured retention in excess of $100,000; and (B) to cover at least the following hazards:
(1) premises and operations; (2) products and



Sch. I-1









 






completed operations on an “if any” basis; (3) independent contractors; (4) blanket contractual
liability for all written and oral contracts; and (5) acts of terrorism and similar acts of
sabotage;




          (iii) business income insurance (A) with loss payable to Agent; (B) covering all risks
required to be covered by the insurance provided for in subsection (i) above; (C) containing 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 ninety (90) days from the date that the Mortgaged 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; and (D) in an amount equal to one hundred percent (100%) of the
gross income (at the time of the loss) from the Mortgaged Property for a period of fifteen (15)
months from the date of loss. The amount of such business income insurance shall be determined
prior to the date hereof and at least once each year thereafter based on Grantor’s reasonable
estimate of the gross income from the Mortgaged Property for the succeeding fifteen (15) month
period;




          (iv) at all times during which structural construction, repairs or alterations are being made
with respect to the Improvements (A) general liability insurance maintained either by Grantor or a
general contractor addressing liabilities that may arise from structural construction, repairs or
alterations to the Improvements; and (B) the insurance provided for in subsection 1.1.1(a)(i)
written in a so-called builder’s risk completed value form (1) on a non-reporting basis, (2)
against all risks insured against pursuant to subsection 1.1.1(a)(i), (3) including permission to
occupy the Mortgaged Property, and (4) with an agreed amount endorsement waiving co-insurance
provisions,




          (v) workers’ compensation, subject to the statutory limits of the state in which the Mortgaged
Property is located, and employer’s liability insurance with a limit of at least $1,000,000 per
accident and per disease per employee, and $1,000,000 for disease aggregate in respect of any work
or operations on or about the Mortgaged Property, or in connection with the Mortgaged Property or
its operation (if applicable);




          (vi) comprehensive boiler and machinery insurance covering all mechanical and electrical
equipment and pressure vessels and boilers in an amount not less than their replacement cost or in
such other amount as shall be reasonably required by Agent;




          (vii) if there is a reasonable expectation by Agent that the operations and/or conditions at
the Mortgaged Property are such that an environmental condition exists or may be caused to exist,
coverage for pollution legal liability and clean-up protection in an amount of not less than
$2,000,000, including coverage for mold;




          (viii) if any portion of the Improvements is at any time located in an area identified by the
Secretary of Housing and Urban Development or any successor thereto



Sch. I-2









 







as an area having special flood hazards pursuant to 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, or any successor law (the “Flood Insurance Acts”), flood
hazard insurance in an amount equal to the maximum limit of coverage available for the
Mortgaged Property under the Flood Insurance Acts (or such higher amount as Agent may
reasonably determine based on the then current industry standards and what other lenders
then require for properties similar to the Mortgaged Property located in the same flood zone
as the Mortgaged Property);




          (ix) earthquake, sinkhole and mine subsidence insurance, if required, in amounts equal
to the probable maximum loss (net of applicable deductibles) of the Mortgaged Property as
determined by Agent in its reasonable discretion and in form and substance reasonably
satisfactory to Agent, provided that the insurance pursuant to this subsection (ix) shall
be on terms consistent with the all risk insurance policy required under subsection
1.1.1(a)(i);




          (x) umbrella liability insurance in an amount not less than $25,000,000 per occurrence
on terms consistent with the commercial general liability insurance policy required under
subsection (ii) above,




          (xi) insurance against employee dishonesty in an amount not less than $1 million per
loss and with a deductible not greater than Fifteen Thousand and No/100 Dollars ($15,000);




          (xii) motor vehicle liability coverage for all owned and non-owned vehicles, including
rented and leased vehicles containing minimum limits per occurrence, including umbrella
coverage, of One Million and No/100 Dollars ($1,000,000); and




          (xiii) such other insurance and in such amounts as Agent from time to time may
reasonably request against such other insurable hazards which at the time are commonly
insured against for property similar to the Mortgaged Property located in or around the
region in which the Mortgaged Property is located.


          (b) All insurance provided for in subsection 1.1 1 (a) hereof shall be obtained under valid
and enforceable policies (the “Policies” or in the singular, the “Policy”), in such forms and,
from time to time after the date hereof, in such amounts as may be reasonably satisfactory to
Agent, issued by financially sound and responsible insurance companies authorized and admitted to
do business in the state in which the Mortgaged Property is located and approved by Agent (which
approval will not be unreasonably withheld). In the event the Borrower utilizes a “layered”
insurance placement and five (5) or more insurers participate, sixty percent (60%) of the total
limits will be provided by insurers that have a claims paying ability/financial strength rating of
“A-” (or its equivalent) by Standard & Poor’s Ratings Services. The insurance companies must have
a general policy rating of A- or better and a financial class of VII or better by A.M. Best
Company, Inc. (each such insurer shall be referred to below as a “Qualified Insurer”). On the
expiration dates of the Policies theretofore furnished to Agent pursuant to subsection 1 1.1 (a),
Grantor shall furnish Agent with binders and Acord Form 28 Certificates for renewal Policies, and
within ninety (90) days after renewal, Grantor



Sch. I-3









 








shall deliver certified copies of the Policies accompanied by evidence reasonably satisfactory to
Agent that the premiums have been paid in a timely manner in accordance with the terms agreed to
by either the insurance carrier or the premium finance company (the “Insurance Premiums”).



          (c) Any blanket insurance Policy shall provide the same protection as would a separate Policy
insuring only the Mortgaged Property in compliance with the provisions of subsection 1.1 1 (a)
above.


          (d) All Policies of insurance provided for or contemplated by subsection 1.1.1(a), except for
the Policy referenced in subsection 1.1.1(a)(v), shall name Agent and Grantor as the mortgagee/loss
payee or additional insured, as applicable, and as their respective interests may appear, and in
the case of any property damage, rent loss, business interruption, boiler and machinery, earthquake
and flood insurance, shall contain a loss payable or mortgagee endorsement in favor of Agent and in
a form reasonably acceptable to Agent providing that the loss thereunder shall be payable to Agent.


          (e) All Policies of insurance provided for in subsection 1.1.1(a) shall contain clauses or
endorsements to the effect that:




          (i) no act or negligence of Grantor, or anyone acting for Grantor, or of any tenant
under any lease 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 Agent is
concerned;




          (ii) the Policy shall not be materially changed (other than to increase the coverage
provided thereby), terminated or cancelled without at least 30 days’ written notice to
Agent and any other party named therein as an insured; and




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


          (f) Grantor shall promptly furnish to Agent, if requested by Agent, a statement certified by
Grantor or a Responsible Officer of Grantor of the amounts of insurance maintained in compliance
herewith, of the risks covered by such insurance and of the insurance company or companies which
carry such insurance and, if requested by Agent, verification of the adequacy of such insurance by
an independent insurance broker or appraiser acceptable to Agent.


          (g) If at any time Agent is not in receipt of written evidence that all insurance required
hereunder is in full force and effect, Agent, after providing to Grantor written notice and three
(3) Business Days to cure, shall have the right, without further notice to Grantor to take such
action as Agent deems necessary to protect its interest in the Mortgaged Property, including,
without limitation, the obtaining of such insurance coverage as Agent in its sole discretion deems
appropriate, and all expenses incurred by Agent in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Grantor to Agent upon demand and until paid
shall be secured by this Mortgage and shall bear interest at the default rate specified in the
Credit Agreement.



Sch. I-4









 







          (h) In the event of a foreclosure of this Mortgage or other transfer of title to the
Mortgaged Property in extinguishment in whole or in part of the Obligations, all right, title and
interest of Grantor in and to the Policies then in force concerning the Mortgaged Property and all
proceeds payable thereunder shall thereupon vest exclusively in Agent or the purchaser at such
foreclosure or other transferee in the event of such other transfer of title.


          As an alternative to the Policies required to be maintained pursuant to the preceding
provisions of this Section 1.1, Grantor will not be in default under this Section
1.1 if Grantor maintains (or causes to be maintained) Policies which (i) have coverages,
deductibles and/or other related provisions other than those specified above and/or (ii) are
provided by insurance companies not meeting the credit ratings requirements set forth above (any
such Policy a “Non-Conforming Policy”), provided, that, prior to obtaining such Non-Conforming
Policies (or permitting such Non-Conforming Policies to be obtained), Grantor shall have received
Agent’s prior written consent thereto.


          Section 1.2 Casualty and Condemnation.


          1.2.1 Casualty. If the Mortgaged Property shall sustain the occurrence of damage or
destruction to the Mortgaged Property, or any part thereof, by fire, flood, vandalism, windstorm,
hurricane, earthquake, acts of terrorism or any other casualty (a “Casualty”) the cost of which to
repair is reasonably expected to exceed $250,000, Grantor shall give prompt notice of such Casualty
to Agent and, provided Agent makes or will make the Net Proceeds (hereinafter defined) available
therefor (but irrespective of the sufficiency of the amount of such Net Proceeds for Restoration
(as hereinafter defined)), shall promptly commence and diligently prosecute to completion the
repair and restoration of the Mortgaged Property as nearly as reasonably possible to the condition
the Mortgaged Property was in immediately prior to such Casualty (a “Restoration”) and otherwise in
accordance with Section 1.3 below, it being understood, however, that Grantor shall not be
obligated to restore the Mortgaged Property to the precise condition of the Mortgaged Property
prior to such Casualty provided the Mortgaged Property is restored, to the extent practicable, to
be of at least equal value and of substantially the same character as prior to the Casualty. For
purposes herein, the term “Net Proceeds” when used with respect to any Condemnation Awards or
Insurance proceeds, means the gross cash and non-cash proceeds from any Condemnation or Casualty
remaining after payment of all reasonable out-of-pocket costs and expenses, including reasonable
attorneys’ fees of outside counsel, incurred in the collection of such gross proceeds. Grantor
shall pay all costs of such Restoration whether or not such costs are covered by insurance, so long
as Agent has made all Net Proceeds available to Grantor. Agent may, but shall not be obligated to,
make proof of loss if not made promptly by Grantor and, subject to the terms hereof, participate in
any claim recovery. Grantor shall provide Agent with a copy of any and all claims for which the
proceeds are expected to exceed the Restoration Threshold (as defined below), and diligently and
continuously pursue such claim with the insurer in a manner which shall maximize the amount and
expedite the timing of such claim. Grantor shall provide Agent with a copy of all such documents
related to the processing of such claim. Grantor shall continue to inform Agent as to the status of
recovery of the Net Proceeds and shall provide Agent with all information reasonably requested by
Agent in connection therewith. Notwithstanding anything to the contrary implied herein, in the
event of a Casualty where the loss does not exceed five percent (5%) of the Asset Value for the
applicable Mortgaged Property (the “Restoration Threshold”),



Sch. I-5









 





Grantor may settle and adjust such claim; provided that (a) no Event of Default has occurred and is
continuing and (b) such adjustment is carried out in a commercially reasonable manner. In the event
of a Casualty where the loss exceeds the Restoration Threshold or if an Event of Default has
occurred and is continuing, Grantor may settle and adjust such claim only with the consent of Agent
(which consent will not be unreasonably withheld, conditioned or delayed) and Agent shall have the
opportunity to participate, at Grantor’s cost, in any such adjustments. Agent is hereby authorized
and irrevocably appointed as attorney-in-fact, for Grantor coupled with an interest, to adjust or
settle any claim(s) (i) if not adjusted or settled promptly by Grantor or (ii) if there has
occurred and is continuing an Event of Default. Notwithstanding any Casualty, Grantor shall
continue to repay the aggregate outstanding principal amount of the Advances at the time and in the
manner provided for its payment in the Credit Agreement and in this Mortgage.



          1.2.2 Condemnation. Grantor shall give Agent prompt notice of any actual taking or
any taking threatened in writing by any nation or government, any state or other political
subdivision thereof, and any Person exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to such government (“Governmental Authority”) of the
Mortgaged Property or any part thereof through eminent domain or otherwise (including, without
limitation, any transfer made in lieu of or in anticipation of the exercise of such taking) (a
“Condemnation”) and shall deliver to Agent a copy of any and all papers served on or served by
Grantor in connection with such proceedings. Notwithstanding anything to the contrary implied
herein, provided no Event of Default has occurred and is continuing, in the event of a
Condemnation where the amount of the taking does not exceed the Restoration Threshold, Grantor may
settle and compromise such Condemnation; provided that the same is effected in a commercially
reasonable manner. In the event of a Condemnation where the amount of the taking exceeds the
Restoration Threshold or if an Event of Default has occurred and is continuing, Grantor may settle
and compromise the Condemnation only with the consent of Agent (which consent will not be
unreasonably withheld, conditioned or delayed) and Agent shall have the opportunity to
participate, at Grantor’s cost, in any litigation and settlement discussions in respect thereof
and Grantor shall from time to time deliver to Agent all instruments reasonably requested by Agent
to permit such participation. Agent is hereby authorized and irrevocably appointed as
attorney-in-fact for Grantor coupled with an interest to sell or compromise or litigate if an
Event of Default has occurred and is continuing. Grantor shall, at its expense, diligently
prosecute any such proceedings, and shall consult with Agent, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding any
Condemnation, Grantor shall continue to repay the aggregate outstanding principal amount of the
Advances at the time and in the manner provided for its payment in the Credit Agreement. If the
Mortgaged Property or any portion thereof is taken by Governmental Authority, Grantor shall
promptly commence and diligently prosecute the Restoration of the Mortgaged Property and otherwise
comply with the provisions of Section 1.3 below. If the Mortgaged Property is sold,
through foreclosure or otherwise, prior to the receipt by Agent of the Condemnation Award, Agent
shall have the right, whether or not a deficiency judgment on the Notes shall have been sought,
recovered or denied, to receive the Condemnation Award, or a portion thereof sufficient to repay
the aggregate outstanding principal amount of the Advances.



Sch. I-6









 







          1.2.3 Casualty Proceeds. Notwithstanding anything to the contrary herein, provided no
Event of Default has occurred and is continuing, Grantor has the right to make, settle and collect
upon claims with respect to business interruption and rental loss insurance, and Grantor may
utilize any proceeds received with respect thereto as it determines is appropriate in the operation
of its business. Provided no Event of Default has occurred and is continuing, if Agent shall
receive any such proceeds, Agent shall remit such proceeds to Grantor within five (5) Business Days
of Agent’s receipt thereof.


          Section 1.3 Delivery of Net Proceeds.


          1.3.1 Minor Casualty or Condemnation. Notwithstanding anything to the contrary
herein, provided no Event of Default has occurred and is continuing, if a Casualty or Condemnation
has occurred to the Mortgaged Property and the costs of completing the Restoration shall be less
than the Restoration Threshold, the Net Proceeds will be disbursed directly to Grantor to be used
for the Restoration of the Mortgaged Property. Promptly after receipt of the Net Proceeds, Grantor
shall commence and satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Mortgage. If any Net Proceeds are received by Grantor and may be retained by
Grantor pursuant to the terms hereof, such Net Proceeds shall, until completion of the
Restoration, be held in trust for Agent and shall be segregated from other funds of Grantor to be
used to pay for the cost of Restoration in accordance with the terms hereof. To the extent that a
Restoration is undertaken, Grantor shall have (A) commenced with such Restoration within one
hundred and twenty (120) days of the date of the Casualty (or promptly after the applicable claim
has been settled with the insurer(s) if such claim has not been settled within ninety (90) days
after the date of the Casualty or Condemnation), (B) thereafter proceeded continuously and
diligently with the Restoration and (C) completed such Restoration on or before the earliest to
occur of (i) the date which is three (3) months prior to the Termination Date (as the same may be
extended), (ii) a date which is eighteen (18) months after such Casualty or Condemnation, and
(iii) such time as may be required under applicable law in order to repair and restore the
Mortgaged Property as required hereby.


          1.3.2 Major Casualty or Condemnation. (a) If a Casualty or Condemnation has occurred
to the Mortgaged Property and the costs of completing the Restoration is equal to or greater than
the Restoration Threshold, Agent shall make the Net Proceeds available for the Restoration,
provided that each of the following conditions are met:




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




          (ii) (A) in the event the Net Proceeds are insurance Proceeds, less than twenty-five
percent (25%) of the total floor area of the Improvements at the Mortgaged Property has
been damaged, destroyed or rendered unusable as a result of such Casualty or (B) in the
event the Net Proceeds are Condemnation Awards, less than ten percent (10%) of the land
constituting the Mortgaged Property is taken, and access to the Improvements is not
materially impaired;




          (iii) Grantor shall commence the Restoration as soon as reasonably practicable (but in
no event later than one hundred and twenty (120) days after such



Sch. I-7









 







Casualty or Condemnation, whichever the case may be, occurs) and shall diligently pursue
the same to satisfactory completion;




          (iv) Agent shall be satisfied that all payments of principal and interest under the
Notes will be paid during the period required for Restoration from (A) the Net Proceeds, or
(B) other funds of Grantor (including business interruption proceeds);




          (v) Agent shall be satisfied that the Restoration will be completed on or before the
earliest to occur of (A) the date three (3) months prior to the Termination Date (as the
same may be extended), (B) such time as may be required under applicable law in order to
repair and restore the Mortgaged Property to the condition it was in immediately prior to
such Casualty or to as nearly as possible the condition it was in immediately prior to
such Condemnation, as applicable or (C) the expiration of the insurance coverage referred
to in Section 1.1.1 (a)(iii) above;




          (vi) the Mortgaged Property and the use thereof after the Restoration will be in
compliance with and permitted under all applicable law;




          (vii) the Restoration shall be done and completed by Grantor in an expeditious and
diligent fashion and in compliance with all applicable law; and




          (viii) such Casualty or Condemnation, as applicable, does not result in the loss of
access to the Mortgaged Property or the related Improvements.


          (b) Except as otherwise provided herein (including pursuant to Section 1.3.1), the Net
Proceeds shall be paid directly to Agent and held by Agent in an interest-bearing account and,
until disbursed in accordance with the provisions of this Section 1.3.2, shall constitute
additional security for the Obligations. The Net Proceeds shall be disbursed by Agent to, or as
directed by, Grantor from time to time during the course of the Restoration, upon receipt of
evidence reasonably satisfactory to Agent that (A) all requirements set forth in Section
1.3.2(a) 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
that portion of the Restoration for which such disbursement was requested have been paid for in
full or will be paid for in full upon receipt of such funds, and (C) there exist no notices of
pendency, stop orders, mechanic’s or material man’s liens or notices of intention to file same, or
any other liens or encumbrances of any nature whatsoever on the Mortgaged Property arising out of
the Restoration which have not either been fully bonded to the reasonable satisfaction of Agent and
discharged of record or in the alternative fully insured to the satisfaction of Agent by the title
company issuing the Mortgage Policy. Notwithstanding the foregoing or anything to the contrary
herein or in any Loan Document, provided no Event of Default has occurred and is continuing, if any
reciprocal easement agreement or ground lease requires Grantor to restore any portion of the
Mortgaged Property or to make available to the counterparty insurance Proceeds or Condemnation
Awards, then Agent shall release to Grantor any such insurance Proceeds or Condemnation Awards
received by it for Grantor’s application to such use.


          (c) All plans and specifications required in connection with any Restoration where the cost of
which is reasonably expected to exceed the Restoration Threshold shall be



Sch. I-8









 








subject to prior approval of Agent and an independent architect selected by Agent (the “Casualty
Consultant”), such approval not to be unreasonably withheld or delayed. The plans and
specifications shall require that the Restoration be completed in a first-class workmanlike manner
at least equivalent to the quality and character of the original work in the Improvements
(provided, however, that in the case of a partial Condemnation, the Restoration shall be done to
the extent reasonably practicable after taking into account the consequences of such partial
Condemnation), so that upon completion thereof, the Mortgaged Property shall be at least equal in
value and general utility to the Mortgaged Property prior to the damage or destruction, it being
understood, however, that Grantor shall not be obligated to restore the Mortgaged Property to the
precise condition of the Mortgaged Property prior to such Casualty provided the Mortgaged Property
is restored, to the extent practicable, to be of at least equal value and of substantially the same
character as prior to the Casualty. Provided Agent makes or will make the Net Proceeds available
therefor, Grantor shall restore all Improvements such that when they are fully restored and/or
repaired, such Improvements and their contemplated use fully comply with all applicable material
law. The identity of the contractors, subcontractors and material men engaged in any Restoration
the cost of which is reasonably expected to exceed the Restoration Threshold, as well as the
contracts under which they have been engaged, shall be subject to approval of Agent and the
Casualty Consultant, such approval not to be unreasonably withheld or delayed. All reasonable costs
and expenses incurred by Agent in connection with recovering, holding and advancing the Net
Proceeds for the Restoration including, without limitation, reasonable attorneys’ fees and
disbursements and the Casualty Consultant’s fees and disbursements, shall be paid by Grantor.



          (d) Except as set forth in Section 1.3.1, in no event shall Agent 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 Casualty
Consultant, less the Casualty Retainage. The term “Casualty Retainage” shall mean, as to each
contractor, subcontractor or material man engaged in the Restoration, an amount equal to ten
percent (10%) of the costs actually incurred for work in place as part of the Restoration, as
certified by the Casualty Consultant, until the Restoration has been fifty percent (50%)
completed, such fifty percent (50%) completion to be certified by the Casualty Consultant, it
being understood that upon such 50% completion of such Restoration, such Casualty Retainage would
be reduced to an amount equal to five percent (5%) of the costs actually incurred for work in
place as part of such Restoration. The Casualty Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Section 1.3.2(d), be less than the amount
actually held back by Grantor from contractors, subcontractors and material men engaged in the
Restoration. The Casualty Retainage shall not be released until the Casualty Consultant certifies
to Agent that the Restoration has been completed in accordance with the provisions of this
Section 1.3.2(d) and that all material approvals necessary for the re-occupancy and use of
the Mortgaged Property have been obtained from all appropriate Governmental Authorities, and Agent
receives evidence reasonably satisfactory to Agent that the costs of the Restoration have been
paid in full or will be paid in full out of the Casualty Retainage; provided, however, that Agent
will release the portion of the Casualty Retainage being held with respect to any contractor,
subcontractor or material man engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Agent that the contractor, subcontractor or material man has
satisfactorily completed all work and has supplied all materials in accordance with the provisions
of the contractor’s, subcontractor’s or material man’s contract, the contractor,



Sch. I-9









 








subcontractor or material man delivers the lien waivers and evidence of payment in full of all
sums due to the contractor, subcontractor or material man as may be reasonably requested by Agent
or by the title company issuing the Mortgage Policy, and, if reasonably required by Agent, Agent
receives an endorsement to the Mortgage 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
Agent, the release of any such portion of the Casualty 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 material man. This clause (d) shall only apply to Casualties or Condemnations
where the cost of the Restoration is reasonably expected to exceed the Restoration Threshold.



          (e) Agent shall not be obligated to make disbursements of the Net Proceeds more frequently
than twice every calendar month.


          (f) If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the
reasonable opinion of Agent in consultation with the Casualty Consultant, be sufficient to pay in
full the balance of the costs which are estimated by the Casualty Consultant to be incurred in
connection with the completion of the Restoration, Grantor shall either (1) pay the deficiency (the
“Net Proceeds Deficiency”) or (2) deposit the Net Proceeds Deficiency with Agent before any further
disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Agent
shall be held by Agent in the interest-bearing account described in Section 1.3.2(b) above
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 1.3.2 shall constitute additional security for the Obligations.


          (g) The excess, if any, of the Net Proceeds and the remaining balance, if any, of the Net
Proceeds Deficiency deposited with Agent after the Casualty Consultant certifies to Agent that the
Restoration has been completed in accordance with the provisions of this Section 1.3.2, and
the receipt by Agent of evidence reasonably satisfactory to Agent that all costs incurred in
connection with the Restoration have been paid in full, shall be remitted by Agent to Grantor,
provided no Event of Default shall have occurred and shall be continuing under any of the Loan
Documents.


          (h) All Net Proceeds not required (i) to be made available for the Restoration or (ii) to be
returned to Grantor as excess Net Proceeds pursuant to Section 1.3.2(g), other than those
which Grantor is entitled to receive and/or collect directly in accordance herewith, may be
retained and applied by Agent toward the payment of the aggregate outstanding principal amount of
the Advances, whether or not then due and payable, in such order, priority and proportions as
Agent in its sole discretion shall deem proper, or, at the discretion of Agent, the same may be
paid, either in whole or in part, to Grantor for such purposes as Agent shall designate.




Sch. I-10











 





EXHIBIT H to the

CREDIT AGREEMENT




FORM OF

ASSIGNMENT OF LEASES




(See Attached)




 









 





[                                                            ], as Assignor




(Assignor)




to



CITIBANK, N.A., as Assignee



(Assignee)




 





ASSIGNMENT OF LEASES AND RENTS



 





Dated:            As of [                     ], 2010




Location:       [                                         ]




County:         [                                         ]




PREPARED BY AND UPON

RECORDATION RETURN TO:




Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Attention: Brian Krisberg, Esq.







Campus
Crest\[Property Name]
ALR








 









 





ASSIGNMENT OF LEASES AND RENTS




          THIS ASSIGNMENT OF LEASES AND RENTS (this “Assignment”) made
as of the [___] day of [___], 2010, by [                                         ] a [                     
   
                ], as assignor, having its principal place of business
at c/o Campus Crest Communities Operating Partnership, LP
(“Assignor”) to CITIBANK, N.A., a
national banking association, having an address at Two Penns Way, New Castle, Delaware 19720, as
collateral agent (in such capacity, together with its successors and
assigns, “Assignee”) for the
Secured Parties (as defined in the Credit Agreement (as defined herein)) party to that certain
Credit Agreement dated as of the date hereof among Campus Crest Communities Operating Partnership,
LP, (the “Borrower”), the Assignor and certain other guarantors named therein (collectively, the
“Guarantors”) the institutions from time to time party thereto as Lender Parties (the “Lender
Parties”), Citibank, N.A., as Collateral Agent, Citigroup Global Markets Inc., as Lead Arranger and
Book Running Manager, and the Administrative Agent (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”). Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit
Agreement.




W I T N E S S E T H :




          WHEREAS, pursuant to the terms of the Credit Agreement, the Secured Parties, including
Assignee, have agreed to make a loans and extend credit
(collectively, the “Loan”) to Borrower, and
the other Loan Parties, including Assignor, have agreed to guaranty payment of the Loan;




          WHEREAS, Assignor desires to secure the payment and performance of the Loan Parties’
Obligations under the Credit Agreement and the other Loan Documents; and




          WHEREAS, this Assignment is given pursuant to the Credit Agreement, and payment, fulfillment,
and performance by the Loan Parties of the obligations thereunder and under the other Loan
Documents is secured hereby, and each and every term and provision of the Credit Agreement and the
other Loan Documents, including the rights, remedies, obligations, covenants, conditions,
agreements, indemnities, representations and warranties therein, are hereby incorporated by
reference herein as though set forth in full and shall be considered a part of this Assignment.




          NOW THEREFORE, in consideration of the making of the Loan by the Secured Parties and the
covenants, agreements, representations and warranties set forth in this Assignment:




ARTICLE 1 — ASSIGNMENT




     Section 1.1 Property Assigned. Assignor hereby absolutely and unconditionally assigns
and grants to Assignee Assignor’s rights, interests and estates, now owned or hereafter acquired,
in the following property:





Campus
Crest\[Property Name]
ALR





2









 





          (a) Leases. All leases, subleases or subsubleases, lettings, licenses, concessions or
other agreements made a part hereof (whether written or oral and whether now or hereafter in
effect), pursuant to which any Person is granted a possessory interest in, or a right to use or
occupy, all or any portion of any space in that certain lot or piece of land, more particularly
described in Exhibit A annexed hereto and made a part hereof, together with the buildings,
structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter located thereon (collectively, the “Property”) and every
modification, amendment or other agreement relating to such leases, subleases, subsubleases, or
other agreements entered into in connection with such leases, subleases, subsubleases, or other
agreements and every guarantee of the performance and observance of the covenants, conditions and
agreements to be performed and observed by the other party thereto, and the right, title and
interest of Assignor, its successors and assigns, therein and thereunder.




          (b) Other Leases and Agreements. All other leases and other agreements, whether or
not in writing, affecting the use, enjoyment or occupancy of the Property or any portion thereof
now or hereafter made, whether made before or after the filing by or against Assignor of any
petition for relief under 11 U.S.C. §101 et seq., as the same may be amended from time to time
(the “Bankruptcy Code”) together with any extension, renewal or replacement of the same.
This Assignment of other present and future leases and present and future agreements being
effective without further or supplemental assignment. The “leases” described in Subsection
1.1(a) and the leases and other agreements described in this Subsection 1.1(b) are collectively referred to as the “Leases.”




          (c) Rents. All rents, rent equivalents, income, receivables, revenues, receipts,
insurance proceeds, deposits and profits arising from the Leases and renewals thereof together with
all rents, rent equivalents, income, fees, receivables, accounts, profits (including, but not
limited to, all oil and gas or other mineral royalties and bonuses), charges for services rendered
and any and all payment and consideration of whatever form or nature received by Assignor or its
agents or employees from any and all sources relating to the use, enjoyment and occupancy of the
Property whether paid or accruing before or after the filing by or against Assignor of any petition
for relief under the Bankruptcy Code (collectively, the “Rents”); provided that Rent for the
purposes of this Assignment and the other Loan Documents shall not include any of the foregoing if
and to the extent that the lessee or tenant under any Lease of space at the Property is entitled to
receive and retain the same pursuant to the terms of the applicable Lease.




          (d) Bankruptcy Claims. All of Assignor’s claims and rights (the “Bankruptcy Claims”)
to the payment of damages arising from any rejection by a lessee of any Lease under the Bankruptcy
Code.




          (e) Lease Guaranties. All of Assignor’s right, title and interest in and claims
under any and all lease guaranties, letters of credit and any other credit support (individually, a
“Lease Guaranty”, collectively, the “Lease Guaranties”) given by any guarantor in connection with
any of the Leases or leasing commissions (individually, a “Lease Guarantor,” collectively, the
“Lease Guarantors”) to Assignor.




          (f) Proceeds. All proceeds from the sale or other disposition of the Leases, the
Rents, the Lease Guaranties and the Bankruptcy Claims.



Campus
Crest\[Property Name]
ALR






3









 








          (g) Other. All rights, powers, privileges, options and other benefits of Assignor
as lessor under the Leases and beneficiary under the Lease Guaranties, including without limitation
the immediate and continuing right to make claim for, receive and collect all Rents payable or
receivable under the Leases and all sums payable under the Lease Guaranties or pursuant thereto
(and to apply the same to the payment of the Loan Parties’ Obligations under the Credit Agreement),
and to do all other things which Assignor or any lessor is or may become entitled to do under the
Leases or the Lease Guaranties.




          (h) Entry. The right, at Assignee’s option, upon revocation of the license granted
herein, to enter upon the Property in person, by agent or by court-appointed receiver, to collect
the Rents.




          (i) Power of Attorney. Assignor’s irrevocable power of attorney, coupled with an
interest, to take any and all of the actions set forth in Section 3.1 of this Assignment.




          (j) Other Rights and Agreements. Any and all other rights of Assignor in and to the
items set forth in subsections (a) through (i) above, and all amendments, modifications,
replacements, renewals and substitutions thereof.




ARTICLE 2 — TERMS OF ASSIGNMENT




     Section 2.1 Present Assignment And License Back. It is intended by Assignor that this
Assignment constitute a present, absolute assignment of the Leases, Rents, Lease Guaranties and
Bankruptcy Claims, and not an assignment for additional security only. Nevertheless, subject to
the terms of this Section 2.1 and the Credit Agreement and the other Loan Documents,
Assignee grants to Assignor a revocable license to collect, receive, use and enjoy the Rents and
other sums due under the Lease Guaranties and Assignor shall hold such Rents and all sums received
pursuant to any Lease Guaranty, or a portion thereof sufficient to discharge all current sums due
under the Credit Agreement, in trust for the benefit of Assignee for use in the payment of such
sums.



     Section 2.2 Notice To Lessees. Assignor hereby authorizes and directs the lessees
named in the Leases or any other future lessees or occupants of the Property and all Lease
Guarantors to pay over to Assignee or to such other party as Assignee directs all Rents and all
sums due under any Lease Guaranties upon receipt from Assignee of written notice to the effect
that Assignee is then the holder of this Assignment and that an Event of Default (as defined in
the Credit Agreement) exists, and to continue so to do until otherwise notified by Assignee.



     Section 2.3 Incorporation By Reference. All representations, warranties, covenants,
conditions and agreements contained in the Credit Agreement and the other Loan Documents as same
may be modified, renewed, substituted or extended are hereby made a part of this Assignment to the
same extent and with the same force as if fully set forth herein.



ARTICLE
3 — REMEDIES




     Section 3.1 Remedies of Assignee. Upon the occurrence and during the continuance
of an Event of Default, the license granted to Assignor in Section 2.1 of this Assignment shall




Campus
Crest\[Property Name]
ALR







4









 







automatically be revoked, and Assignee shall immediately be entitled to possession of all
Rents and sums due under any Lease Guaranties, whether or not Assignee enters upon or takes
control of the Property. In addition, so long as an Event of Default exists, Assignee may, at its
option, and to the extent permitted by applicable law, without waiving such Event of Default,
without regard to the adequacy of the security for the Loan Parties’ Obligations under the Credit
Agreement, either in person or by agent, nominee or attorney, with or without bringing any action
or proceeding, or by a receiver appointed by a court, dispossess Assignor and its agents and
servants from the Property, without liability for trespass, damages or otherwise and exclude
Assignor and its agents or servants wholly therefrom and take possession of the Property and all
books, records and accounts relating thereto and have, hold, manage, lease and operate the
Property on such terms and for such period of time as Assignee may deem proper and either with or
without taking possession of the Property in its own name, demand, sue for or otherwise collect
and receive all Rents and sums due under all Lease Guaranties, including those past due and unpaid
with full power to make from time to time all alterations, renovations, repairs or replacements
thereto or thereof as Assignee may deem proper and may apply the Rents and sums received pursuant
to any Lease Guaranties to the payment of the following in such order and proportion as Assignee
in its reasonable discretion may determine, any law, custom or use to the contrary
notwithstanding: (a) all reasonable expenses of managing and securing the Property, including,
without being limited thereto, the salaries, fees and wages of a managing agent and such other
employees or agents as Assignee may deem necessary or desirable and all expenses of operating and
maintaining the Property, including, without being limited thereto, all taxes, charges, claims,
assessments, water charges, sewer rents and any other liens, and premiums for all insurance which
Assignee may deem necessary or desirable, and the cost of all alterations, renovations, repairs or
replacements, and all expenses incident to taking and retaining possession of the Property; and
(b) the Loan Parties’ Obligations under the Credit Agreement, together with all costs and
reasonable attorneys’ fees. In addition, upon the occurrence and during the continuance of an
Event of Default, Assignee, at its option, may (i) complete any construction on the Property in
such manner and form as Assignee deems advisable, (ii) exercise all rights and powers of Assignor,
including, without limitation, the right to negotiate, execute, cancel, enforce or modify any
Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents from the
Property and all sums due under any Lease Guaranties, (iii) require Assignor to pay monthly in
advance to Assignee, or any receiver appointed to collect the Rents, the fair and reasonable
rental value for the use and occupancy of such part of the Property as may be in possession of
Assignor or (iv) require Assignor to vacate and surrender possession of the Property to Assignee
or to such receiver and, in default thereof, Assignor may be evicted by summary proceedings or
otherwise.



     Section 3.2 Other Remedies. Nothing contained in this Assignment and no act done or
omitted by Assignee pursuant to the power and rights granted to Assignee hereunder shall be deemed
to be a waiver by Assignee of its rights and remedies under the Credit Agreement or the other Loan
Documents, and this Assignment is made and accepted without prejudice to any of the rights and
remedies possessed by Assignee under the terms thereof. The right of Assignee to collect the Loan
Parties’ Obligations under the Credit Agreement and to enforce any other security therefor held by
it may be exercised by Assignee either prior to, simultaneously with, or subsequent to any action
taken by it hereunder. Assignor hereby absolutely, unconditionally and irrevocably waives any and
all rights to assert any setoff, counterclaim or crossclaim of any




Campus
Crest\[Property Name]
ALR






5









 






nature whatsoever with respect to the obligations of Assignor under this Assignment, the Credit
Agreement, the other Loan Documents or otherwise with respect to the Loan in any action or
proceeding brought by Assignee to collect same, or any portion thereof, or to enforce and realize
upon the lien and security interest created by this Assignment, the Credit Agreement, or any of the
other Loan Documents (provided, however, that the foregoing shall not be deemed a waiver of
Assignor’s right to assert any compulsory counterclaim if such counterclaim is compelled under
local law or rule of procedure, nor shall the foregoing be deemed a waiver of Assignor’s right to
assert any claim which would constitute a defense, setoff, counterclaim or crossclaim of any nature
whatsoever against Assignee in any separate action or proceeding).




     Section 3.3 Other Security. Assignee may take or release other security for the
payment of the Loan Parties’ Obligations under the Credit Agreement, may release any party
primarily or secondarily liable therefor and may apply any other security held by it to the
reduction or satisfaction of the Loan Parties’ Obligations under the Credit Agreement without
prejudice to any of its rights under this Assignment.



     Section 3.4 Non-Waiver. The exercise by Assignee of the option granted it in
Section 3.1 of this Assignment and the collection of the Rents and sums due under the
Lease Guaranties and the application thereof as herein provided shall not be considered a waiver
of any default by Assignor under the Credit Agreement, the Leases, this Assignment or the other
Loan Documents. The failure of Assignee to insist upon strict performance of any term hereof shall
not be deemed to be a waiver of any term of this Assignment. Assignor shall not be relieved of
Assignor’s obligations hereunder by reason of (a) the failure of Assignee to comply with any
request of Assignor or any other party to take any action to enforce any of the provisions hereof
or of the Credit Agreement or the other Loan Documents, (b) the release, regardless of
consideration, of the whole or any part of the Property, or (c) any agreement or stipulation by
Assignee extending the time of payment or otherwise modifying or supplementing the terms of this
Assignment, the Credit Agreement or the other Loan Documents. Assignee may resort for the payment
of the Loan Parties’ Obligations under the Credit Agreement to any other security held by Assignee
in such order and manner as Assignee, in its discretion, may elect. Assignee may take any action
to recover the Loan Parties’ Obligations under the Credit Agreement, or any portion thereof or to
enforce any covenant hereof without prejudice to the right of Assignee thereafter to enforce its
rights under this Assignment. The rights of Assignee under this Assignment shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the others. No act of
Assignee shall be construed as an election to proceed under any one provision herein to the
exclusion of any other provision.



     Section 3.5 Bankruptcy. (a) Upon or at any time after the occurrence of an Event of
Default, Assignee shall have the right to proceed in its own name or in the name of Assignor in
respect of any claim, suit, action or proceeding relating to the rejection of any Lease,
including, without limitation, the right to file and prosecute, to the exclusion of Assignor, any
proofs of claim, complaints, motions, applications, notices and other documents, in any case in
respect of the lessee under such Lease under the Bankruptcy Code.



          (b) If there shall be filed by or against Assignor a petition under the Bankruptcy Code, and
Assignor, as lessor under any Lease, shall determine to reject such Lease pursuant to Section
365(a) of the Bankruptcy Code, then Assignor shall give Assignee not less than ten (10)




Campus
Crest\[Property Name]
ALR







6









 




days’ prior notice of the date on which Assignor shall apply to the bankruptcy court for authority
to reject the Lease. Assignee shall have the right, but not the obligation, to serve upon Assignor
within such ten-day period a notice stating that (i) Assignee demands that Assignor assume and
assign the Lease to Assignee pursuant to Section 365 of the Bankruptcy Code and (ii) Assignee
covenants to cure or provide adequate assurance of future performance under the Lease. If Assignee
serves upon Assignor the notice described in the preceding sentence, Assignor shall not seek to
reject the Lease and shall comply with the demand provided for in clause (i) of the preceding
sentence within thirty (30) days after the notice shall have been given, subject to the performance
by Assignee of the covenant provided for in clause (ii) of the
preceding sentence.




ARTICLE 4 — NO LIABILITY, FURTHER ASSURANCES




     Section 4.1 No Liability of Assignee. This Assignment shall not be construed to bind
Assignee to the performance of any of the covenants, conditions or provisions contained in any
Lease or Lease Guaranty or otherwise impose any obligation upon Assignee. Assignee shall not be
liable for any loss sustained by Assignor resulting from Assignee’s failure to let the Property
after an Event of Default or from any other act or omission of Assignee in managing the Property
after an Event of Default unless such loss is caused by the willful misconduct and bad faith of
Assignee or its agents. Assignee shall not be obligated to perform or discharge any obligation,
duty or liability under the Leases or any Lease Guaranties or under or by reason of this
Assignment and Assignor shall, and hereby agrees to, indemnify Assignee for, and to hold Assignee
harmless prior to the time that Assignee or any Affiliate, nominee or designee of Assignee becomes
the owner of the Property or otherwise takes possession of the Property, following an Event of
Default, from, any and all liability, loss or damage which may or might be incurred under the
Leases, any Lease Guaranties or under or by reason of this Assignment and from any and all claims
and demands whatsoever, including the defense of any such claims or demands which may be asserted
against Assignee by reason of any alleged obligations and undertakings on its part to perform or
discharge any of the terms, covenants or agreements contained in the Leases or any Lease
Guaranties. Should Assignee incur any such liability, the amount thereof, including costs,
expenses and reasonable attorneys’ fees, shall be secured by this Assignment and the other Loan
Documents and Assignor shall reimburse Assignee therefor within ten (10) Business Days of written
request by Assignee and upon the failure of Assignor so to do Assignee may, at its option, declare
all sums secured by this Assignment and the other Loan Documents immediately due and payable. This
Assignment shall not operate to place any obligation or liability for the control, care,
management or repair of the Property upon Assignee, nor for the carrying out of any of the terms
and conditions of the Leases or any Lease Guaranties; nor shall it operate to make Assignee
responsible or liable for any waste committed on the Property by the tenants or any other parties,
or for any dangerous or defective condition of the Property including, without limitation, the
presence of any Hazardous Materials, or for any negligence in the management, upkeep, repair or
control of the Property resulting in loss or injury or death to any tenant, licensee, employee or
stranger other than any of the foregoing arising from the gross negligence or willful misconduct
of Assignee or its agents.



     Section 4.2 No Mortgagee in Possession. Nothing herein contained shall be construed
as constituting Assignee a “mortgagee in possession” in the absence of the taking of actual
possession of the Property by Assignee. In the exercise of the powers herein granted to




Campus
Crest\[Property Name]
ALR






7









 




Assignee, no liability shall be asserted or enforced against Assignee, all such liability being
expressly waived and released by Assignor.




     Section 4.3 Further Assurances. Assignor will, at the cost of Assignor, and without
expense to Assignee, do, execute, acknowledge and deliver all further acts, conveyances,
assignments, notices of assignments, transfers and assurances as Assignee shall, from time to
time, reasonably require for the better assuring, conveying, assigning, transferring and
confirming unto Assignee the property and rights hereby assigned or intended now or hereafter so
to be, or which Assignor may be or may hereafter become bound to convey or assign to Assignee, or
for carrying out the intention or facilitating the performance of the terms of this Assignment or
for filing, registering or recording this Assignment and, within five (5) Business Days after
written notice, will execute and deliver, and in the event it shall fail to so execute and
deliver, hereby authorizes Assignee to execute in the name of Assignor to the extent Assignee may
lawfully do so after the expiration of such five (5) Business Day notice period, one (1) or more
financing statements, chattel mortgages or comparable security instruments, to evidence more
effectively the lien and security interest hereof in and upon the Leases.



ARTICLE 5 — MISCELLANEOUS PROVISIONS




     Section 5.1 Conflict of Terms. In case of any conflict between the terms of
this Assignment and the terms of the Credit Agreement, the terms of the Credit Agreement shall
prevail.



     Section 5.2 No Oral Change. This Assignment and any provisions hereof may not be
modified, amended, waived, extended, changed, discharged or terminated orally, or by any act or
failure to act on the part of Assignor or Assignee, but only by an agreement in writing signed by
the party against whom the enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought.



     Section 5.3 General Definitions. All capitalized terms not defined herein shall have
the respective meanings set forth in the Credit Agreement. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in this Assignment may
be used interchangeably in singular or plural form and the word “Assignor” shall mean “each
Assignor and any subsequent owner or owners of the Property or any part thereof or interest
therein,” the word “Assignee” shall mean “Assignee and any successor or assign of Assignee, the
word “Property” shall include any portion of the Property and any interest therein, the phrases
“attorneys’ fees”, “legal fees” and “counsel fees” shall include any and all attorney’s, paralegal
and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the
pre-trial, trial and appellate levels incurred or paid by Assignee in protecting its interest in
the Property, the Leases and the Rents and enforcing its rights hereunder; whenever the context may
require, any pronouns used herein shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.



     Section 5.4 Inapplicable Provisions. If any term, covenant or condition of this
Assignment is held to be invalid, illegal or unenforceable in any respect, this Assignment shall
be construed without such provision.




Campus
Crest\[Property Name]
ALR





8









 





     Section 5.5 Governing Law. The provisions of this Assignment regarding the creation,
perfection and enforcement of the liens and security interests herein granted shall be governed by
and construed under the laws of the state in which the Property is located. All other provisions of
this Assignment shall be governed by the laws of the State of New York (including, without
limitation, Section 5-1401 of the General Obligations Law of the State of New York).



     Section 5.6 Termination of Assignment. Upon payment in full of the Loan Parties’
Obligations under the Credit Agreement, this Assignment shall become and be void and of no effect.
Assignee shall execute any documents reasonably requested by Assignor to effectuate such
termination provided that Assignor prepares such documents and pays all costs and expenses
(including reasonable attorneys’ fees of Assignee in connection therewith).



     Section 5.7 Notices. All notices or other written communications hereunder shall be
delivered in accordance with Section 9.02 of the Credit Agreement.



     Section 5.8 WAIVER OF TRIAL BY JURY. ASSIGNOR HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN
CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THIS ASSIGNMENT, THE CREDIT
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,
DIRECTORS OR AGENTS IN CONNECTION THEREWITH.



     Section 5.9
Successors and Assigns. This Assignment shall be binding upon and inure
to the benefit of Assignor and Assignee and their respective successors and assigns forever.



     Section 5.10 Headings, Etc. The headings and captions of various paragraphs of this
Assignment are for convenience of reference only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.



ARTICLE 6 — STATE SPECIFIC PROVISIONS




     Section 6.1
[             
                           
                    ]



[REMAINDER OF PAGE INTENTIONALLY BLANK]



Campus
Crest\[Property Name]
ALR






9









 








          IN WITNESS WHEREOF, Assignor has executed this instrument the day and year first above
written.




	 	 	 	 	 
	 	ASSIGNOR:



[                                        ],

a [                                        ]

 	 
	 	By:  	 	 
	 	 	Name:  	[                    ] 	 
	 	 	Title:  	[                    ] 	 
	 



Campus Crest\[Property Name]
ALR



10









 





ACKNOWLEDGMENT



[Insert state specific form of notary acknowledgement]




Campus Crest\[Property Name]
ALR



11









 





EXHIBIT A




(Legal Description of Property)





Campus Crest\[Property Name]
ALR



A-1









 





EXHIBIT I to the CREDIT AGREEMENT




Form of Borrowing Base Certificate



Campus Crest Communities, Inc.



Form of Borrowing Base Certificate 



Dated ___/___/___



Citibank, N. A., as Administrative Agent under the Credit Agreement referred to below

1615 Brett Road

New Castle, Delaware 19720




Attention: Bank Loan Syndications Department



Pursuant to provisions of the Credit Agreement dated as of                                                              , 2010 (as
amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; the terms defined therein, unless otherwise defined herein, being used herein as therein
defined), among Campus Crest Communities Operating Partnership, LP, a Delaware limited partnership
(the “Borrower”), Campus Crest Communities, Inc. (the “Parent Guarantor”), the Subsidiary
Guarantors party thereto, the Lender Parties thereto, Citibank, N.A., as Collateral Agent and as
Administrative Agent for the Lenders and such other lender parties and the Arrangers party thereto,
the undersigned, the Chief Financial Officer of the Parent Guarantor, hereby certifies and
represents and warrants on behalf of the Borrower as follows:





	1.	 	The information contained in this certificate and the information set forth on Schedule 1
[and Schedule 2] supporting the calculation of the financial covenants is true, complete and
correct as
of the close of business on              
       , 201 ___ (the “Calculation Date”) and has been
prepared in accordance with the provisions of the Credit Agreement. [The pro forma
calculations below give effect to [            
        ] ([collectively,] the “Transaction”).]
	 
	 	 	2. As of the Calculation Date:






	 	(a)	 	Parent Guarantor Financial Covenants:






	 	(i)	 	Maximum Leverage Ratio. The Leverage Ratio is
                    : 1.00 [and immediately
following the Transaction, will be
                    : 1.00], which is not greater than the maximum Leverage
Ratio of 0.60:1.00 required by Section 5.04(a) (i) of the Credit Agreement.




1









 












	 	(ii)	 	Maximum Secured Recourse Debt Ratio. The Secured Recourse Debt Ratio is
___% [and immediately following the Transaction will be ___%], which is not greater than the
maximum Secured Recourse Debt Ratio of 20% required by Section 5.04(a)(ii) of the Credit
Agreement.
	 
	 	(iii)	 	Minimum Tangible Net Worth. The tangible net worth of the Parent
Guarantor and its Subsidiaries is $                     [and immediately following the Transaction, will be
$                    ], which is not less than the applicable minimum tangible net worth required by
Section 5.04(a)(iii) of the Credit Agreement.
	 
	 	(iv)	 	Minimum Ratio of Fixed Rate Debt for Borrowed Money and Debt for Borrowed
Money Subject to Hedge Agreements to Debt for Borrowed Money. The ratio of fixed
rate Debt for Borrowed Money and Debt for Borrowed Money subject to Hedge Agreements
to all Debt for Borrowed Money is ___% [and immediately following the Transaction will be
___%], which is not less than 66.67% as required by
Section 5.04(a)(iv) of the Credit
Agreement.
	 
	 	(v)	 	Maximum Dividend Payout Ratio. The Dividend Payout Ratio is ___% [and
immediately following the Transaction, will be ___%], which is equal to or less
than the applicable maximum Dividend Payout Ratio required by Section 5.04(a)(v) of the
Credit Agreement.
	 
	 	(vi)	 	Minimum Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio is
                    :1.00
[and immediately following the Transaction, will be                     :1.00], which is
not less than the minimum Fixed Charge Coverage Ratio of 1.50:1.00 as required by Section
5.04(a)(vi) of the Credit Agreement.






	 	(b)	 	Borrowing Base Covenants






	 	(i)	 	Maximum Facility Exposure to Borrowing Base Asset Value. The Facility
Exposure of $                     [or of $                    , immediately following the Transaction] does not exceed the
Total Borrowing Base Value of $                     [or of $                    , immediately following the Transaction], as
required by Section 5.04(b)(i) of the Credit Agreement.
	 
	 	(ii)	 	Minimum Borrowing Base Debt Service Coverage Ratio. The
Borrowing Base Debt Service Coverage Ratio is                     : 1.00 [and immediately following
the Transaction, will be
                    :1.00], which is not less than the minimum Borrowing
Base Debt Service Coverage Ratio of 1.50:1.00 as required by Section 5.04(b)(ii) of the
Credit Agreement.





2









 






	 	(iii)	 	Minimum Appraised Value. The Appraised Value of the Borrowing Base Assets
is $                     [and immediately following the Transaction will be $                    ], which is not less than
$130,000,000 as required by Section 5.04(b)(iii) of the Credit Agreement.
	 
	 	(iv)	 	Minimum Number of Borrowing Base Assets. The number of Campus Housing Assets
comprising the Borrowing Base Assets is                      [and will be                      immediately following the Transaction], which
is not fewer than 10 as required by Section 5.04(b)(iv) of the Credit Agreement.
	 
	 	(v)	 	Maximum Size of Individual Borrowing Base Asset. The individual Borrowing
Base Asset with the highest Appraised Value (which is                     , whose Appraised Value of $                    )
represents ___% of the Appraised Value of the Borrowing Base Assets in the aggregate [and
immediately following the Transaction, the individual Borrowing Base Asset with the highest
Appraised Value will be                     , whose Appraised Value of $                     will represent                     % of the Appraised Value
of the Borrowing Base Assets in the aggregate], which does not exceed 15% as required by
Section 5.04(b)(v) of the Credit Agreement.
	 
	 	(vi)	 	Minimum Weighted Average Occupancy of Borrowing Base Assets.
The average occupancy of the Borrowing Base Assets, weighted based upon the number
of beds comprising each Borrowing Base Asset, is ___% [and immediately following the
Transaction will be                     %], which is equal to or greater than 80% as required by
Section 5.04(b)(vi) of the Credit Agreement.






	 	(c)	 	Maximum Permitted Investments






	 	(i)	 	The aggregate amount of Investments in unimproved land and Development
Assets (including such assets that such Person has contracted to purchase for
development with or without options to terminate the purchase agreement but, in such
instances, limited solely to non-refundable deposits under such contracts and, to the
extent a Loan Party is obligated under any such contract, the amount of such
obligation), calculated on the basis of the greater of actual cost or budgeted cost is                     % and                     % of Total Asset Value, respectively, and does not exceed 10% and 20%,
respectively, of Total Asset Value as required by Section 5.02(f)(iv)(A) of the Credit
Agreement.
	 
	 	(ii)	 	The aggregate amount outstanding, without duplication, of Investments in
Joint Ventures of any Loan Party is                     % of Total Asset Value and does not




3









 






	 	 	 	exceed 15% of Total Asset Value as required by Section 5.02(f)(iv)(B) of the
Credit Agreement.
	 
	 	(iii)	 	The aggregate amount of Investments permitted under 5.02(f) of the
Credit Agreement, other than the items of Investments referred to in clauses (i) and
(ii) above is                     % of Total Asset Value and does not exceed 10% of Total Asset Value as
required by Section 5.02(f)(iv)(C) of the Credit Agreement.
	 
	 	(iv)	 	The aggregate amount, without duplication, of Investments consisting of
the above items (i), (ii), and (iii) is                     % of Total Asset Value and does not exceed:
(1) 35% of Total Asset Value during the period from the Closing Date through the
fiscal quarter of the Parent Guarantor ending on June 30, 2011, (2) 30% of Total
Asset Value during the period thereafter ending with the fiscal quarter of the
Parent Guarantor ending on June 30, 2012 or (3) 25% of Total Asset Value, at any
time thereafter, as applicable and as required by Section 5.02(f)(iv) of the Credit
Agreement.






	 	 	In each case, with supporting information showing the computations used in determining
compliance with such covenants set forth on Schedule I [and Schedule II] attached
hereto.
	 
	3	 	The Borrowing Base Assets comply with all Borrowing Base Conditions (other than those previously
waived in writing by the Required Lenders).





	 	 	 	 	 
	 	CAMPUS CREST COMMUNITIES, INC.

 	 
	 	By  	 	 
	 	 	Name:  	Donald L. Bobbitt, Jr. 	 
	 	 	Title:  	Chief Financial Officer 	 
	 




4









 





Schedule I — Financial Covenant Computations [TEMPLATE]




	 	 	 	 	 

	Maximum Leverage Ratio — 5.04(a)(i)

	(a) Total Debt (see table below) but excluding, in all cases, any Contingent Obligations associated with the Excluded Recourse
Properties
	 	$	                    	 
	(b) Total Asset Value (see table below)
	 	$	                    	 
	Leverage Ratio (must be not greater than .60:1.00): 
Quotient of (a) divided by (b)

	 	 	            :1.00	 
	 
	 	 	 	 
	Debt of the Parent Guarantor and its Consolidated Subsidiaries

	(a) Debt for Borrowed Money
	 	$	                    	 
	(b) Obligations for the deferred purchase price of property or services
	 	$	                    	 
	(c) Obligations evidenced by notes, bonds, debentures or other similar instruments
	 	$	                    	 
	(d) Obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired
by such Person
	 	$	                    	 
	(e) Obligations as lessee under Capitalized Leases
	 	$	                    	 
	(f) Obligations under acceptance, letter of credit or similar facilities
	 	$	                    	 
	(g) Obligations to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests or any
warrants, rights or options to acquire such Equity Interests
	 	$	                    	 
	(h) Obligations in respect of Hedge Agreements, valued at the Agreement Value
	 	$	                    	 
	(i) Contingent Obligations
	 	$	                    	 
	(j) All indebtedness and other payment Obligations referred to in clauses (a) through (i) above of another Person secured by (or
for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by the Parent Guarantor or any of its Consolidated
Subsidiaries, even though such entities have not assumed or become liable for the payment of such indebtedness or other payment
Obligations
	 	$	                    	 
	(k) JV Pro Rata Share of Debt for each Joint Venture (without duplication)
	 	$	                    	 
	Total Debt: Sum of (a) through (k)

	 	$	                    	 






5









 





	 	 	 	 	 

	Total Asset Value

	(a) For each Campus Housing Asset where the related certificate of
occupancy was issued twelve or more months prior to such date
of determination, (i) the Net Operating Income attributable to
such Asset less the Management Fee Adjustment for such Asset,
in each case for the consecutive four fiscal quarters most
recently ended for which financial statements are required to
be delivered to the Lender Parties pursuant to Section 5.03(b)
or (c) of the Credit Agreement, as the case may be, divided by
(ii) 8.25%
	 	$	                         	 
	(b) For each Development Asset and any Campus Housing Asset where
the related certificate of occupancy was issued less than
twelve months prior to such date of determination, the book
value of such Development Asset or such Campus Housing Asset as
determined in accordance with GAAP (but excluding any deduction
for accumulated depreciation on such Assets)
	 	$	                         	 
	(c) For each Joint Venture Asset that, but for such Asset being
owned by a Joint Venture, would qualify as a Campus Housing
Asset under the definition thereof where the related
certificate of occupancy was issued twelve or more months prior
to such date of determination, the JV Pro Rata Share of (i) the
Net Operating Income attributable to such Asset less the
Management Fee Adjustment for such Asset, in each case for the
consecutive four fiscal quarters most recently ended for which
financial statements are required to be delivered to the Lender
Parties pursuant to Section 5.03(b) or (c) of the Credit
Agreement, as the case may be, divided by (ii) 8.25%
	 	$	                         	 
	(d) For any other Joint Venture Asset, the JV Pro Rata Share of the
book value of such Joint Venture Asset as determined in
accordance with GAAP (but excluding any deduction for
accumulated depreciation on such Assets)
	 	$	                         	 
	Total Asset Value: 
Sum of (a) through (d)

	 	$	                         	 
	 
	 	 	 	 
	Secured Recourse Debt Ratio — 5.04(a)(ii)

	(a) Debt for which the Borrower and the Guarantors have personal or
recourse liability in whole or in part (exclusive of any such
Debt for which such personal or recourse liability is limited
to obligations under Customary Carve-Out Agreements)
	 	$	                         	 
	(b) Contingent Obligations of the Borrower and the Guarantors, but
excluding, in all cases, any such Debt and Contingent
Obligations associated with the Excluded Recourse Properties
	 	$	                         	 
	(c) Total Asset Value (see table above)
	 	$	                         	 
	Secured Recourse Debt Ratio 

(must be not greater than 20%): Quotient of (a) plus (b) divided by (c)

	 	 	                   :1.00	 






6









 





	 	 	 	 	 

	Minimum Tangible Net Worth — 5.04(a)(iii)

	(a) Minimum TNW Amount (see table below)
	 	$	                    	 
	Tangible net worth of the Parent Guarantor 
and its Subsidiaries, as determined in accordance
with GAAP but excluding accumulated depreciation
On all Real Property (must be not less than (a) above)
	 	$	                    	 
	 
	Minimum Tangible Net Worth Amount

	(a) Tangible net worth of the Parent Guarantor and its Subsidiaries, as determined in accordance
with GAAP (but excluding accumulated depreciation on all Real Property) on the Closing Date of:
	 	$	                    	 
	(b) Net cash proceeds of all issuances and primary sales of Equity Interests of the Parent
Guarantor or any of its Subsidiaries consummated following the Closing Date
	 	$	                    	 
	(c) (b) multiplied by 0.75
	 	$	                    	 
	Minimum Tangible Net Worth Amount
Sum of (a) and (c)

	 	$	                    	 
	 
	 	 	 	 
	Minimum Ratio of Fixed Rate Debt for Borrowed Money and Debt for Borrowed

Money Subject to Hedge Agreements to Debt for Borrowed Money — 5.04(a)(iv)

	 
	 	 	 	 
	(a) Debt for Borrowed Money and Debt for Borrowed Money subject to Hedge Agreements
	 	$	                    	 
	(b) Debt for Borrowed Money
	 	$	                    	 
	Minimum Ratio of Fixed Rate Debt for Borrowed Money and Debt for Borrowed Money Subject to Hedge
Agreements to Debt for Borrowed Money 
Quotient of (a) divided by (b)

	 	 	                    	%
	 
	 	 	 	 
	Maximum Dividend Payout Ratio — 5.04(a)(v)

	(a) Dividends paid by the Parent Guarantor on account of any common stock or preferred stock of
Parent Guarantor, except dividends payable solely in additional Equity Interests of the same class
	 	$	                    	 
	(b) Funds From Operations
	 	$	                    	 
	Dividend Payout Ratio 
(must be equal to or less than 90% or such greater amount Required to maintain reit status): 
	 	 	 	 
	Quotient of (a) divided by (b)
	 	 	                    	%







7











 





	 	 	 	 	 

	Minimum Fixed Charge Coverage Ratio — 5.04(a)(vi)

	(a) Adjusted EBITDA (see table below)
	 	$	                    	 
	(b) Fixed Charges (see table below)
	 	$	                    	 
	Fixed Charge Coverage Ratio 

(must be at least 1.50:1.00): Quotient of (a) divided by (b)

	 	 	               :1.00	 
	 
	 	 	 	 
	EBITDA

	(c) Net income (or net loss) (excluding gains (or losses) from extraordinary, infrequent, and unusual items)
	 	$	                    	 
	(d) Interest expense
	 	$	                    	 
	(e) Income tax expense
	 	$	                    	 
	(f) Depreciation expense
	 	$	                    	 
	(g) Amortization expense
	 	$	                    	 
	(h) Expenses incurred in connection with the Formation Transactions and the IPO and other nonrecurring items to the extent subtracted in computing net income
	 	$	                    	 
	(i) The
JV Pro Rata Share of the sum of (a) through (h) for each Joint Venture
	 	$	                    	 
	EBITDA: 
Sum of (a) through (g)

	 	$	                    	 
	 
	 	 	 	 
	Adjusted EBITDA

	(a) EBITDA (see table above)
	 	$	                    	 
	(b) Capital Expenditure Reserve for all Assets
	 	$	                    	 
	Adjusted EBITDA:
Result of (a) less (b)

	 	$	                    	 






8









 





	 	 	 	 	 

	Fixed Charges

	(a) Interest including capitalized interest (but excluding capitalized interest with respect to construction
financing of Real Property prior to the issuance of the related certificate of occupancy) payable on,
and amortization of debt discount in respect of, all Debt for Borrowed Money
	 	$	                    	 
	(b) Scheduled amortization of principal amounts of all Debt for Borrowed Money payable (excluding maturities)
	 	$	                    	 
	(c) Cash dividends payable on any Preferred Interests
	 	$	                    	 
	Fixed Charges: 
Sum of (a) through (c)

	 	$	                    	 






Borrowing Base Covenants — 5.04(b)




	 	 	 	 	 

	Maximum Facility Exposure to Borrowing Base Asset Value — 5.04(b)(i)

	(a) Total Borrowing Base Value (see table below)
	 	$	                    	 
	(b) Facility Exposure (must not exceed (a) above)
	 	$	                    	 
	 
	 	 	 	 
	Borrowing Base Value

	(a) Borrowing Base Value
	 	 	 	 
	(i) Appraised Value (see table below)
	 	$	                    	 
	Borrowing Base Value 
(i) times 0.60

	 	$	                    	 
	 
	 	 	 	 
	Total Borrowing Base Value
	 	 	 	 
	Borrowing Base Value for all Borrowing Base Assets
	 	 	 	 
	(i) Cheney Borrowing Base Value
	 	$	                    	 
	(ii) Jonesboro Borrowing Base Value
	 	$	                    	 
	(iii) Murfreesboro Borrowing Base Value
	 	$	                    	 
	(iv)Troy Borrowing Base Value
	 	$	                    	 
	(v) Wichita Borrowing Base Value
	 	$	                    	 
	(vi) Mobile Phase II Borrowing Base Value
	 	$	                    	 
	(vii) Jacksonville Borrowing Base Value
	 	$	                    	 
	(viii) Lubbock Borrowing Base Value
	 	$	                    	 






9









 






	 	 	 	 	 
	(ix) Stephenville Borrowing Base Value
	 	$	                    	 
	(x) San Marcos Borrowing Base Value
	 	$	                    	 
	(xi) Waco Borrowing Base Value
	 	$	                    	 
	(xii) Wichita Falls Borrowing Base Value
	 	$	                    	 
	Total Borrowing Base Value 
Sum of (i) through (xii)

	 	$	                    	 
	 
	 	 	 	 
	Minimum Borrowing Base Debt Service Coverage Ratio — 5.04(b)(ii)

	(a) Total Adjusted Net Operating Income (see table below)
	 	$	                    	 
	(b) Payments that would be required to be made over a twelve month period on an
assumed Debt in an aggregate principal amount equal to the Facility Exposure
at such date, assuming a thirty year amortization schedule, level payments of
interest and applying an interest rate equal to the greater of (i) 7.50% per
annum and (ii) the rate per annum at such date for 10-year United States
Treasury Securities plus the Applicable Margin in respect of Eurodollar Rate
Advances
	 	$	                    	 
	Borrowing Base Debt Service Coverage Ratio 

(must be at least 1.50:1.00): 
Quotient of (a) divided by (b)

	 	 	               :1.00	 
	 
	 	 	 	 
	Adjusted Net Operating Income

	(a) Total rental and other revenue from the operation of all Borrowing Base Assets
	 	$	                    	 
	(b) Expenses and other proper charges incurred in connection with the operation
and maintenance of all Borrowing Base Assets for such period (including,
without limitation, management fees, repairs, real estate and chattel taxes,
bad debt expenses and all rentals payable under leases of real or personal
(or mixed) property, in each case, with respect to all Borrowing Base Assets
for such period), but before payment or provision for debt service charges,
income taxes and depreciation, amortization and other non-cash expenses, all
as determined in accordance with GAAP
	 	$	                    	 
	(c) Capital Expenditure Reserve for all Borrowing Base Assets
	 	$	                    	 
	(d) Management Fee Adjustment for all Borrowing Base Assets
	 	$	                    	 
	Total Adjusted Net Operating Income 
Result of (a) less (b) less (c) less (d)

	 	$	                    	 
	 
	 	 	 	 
	Minimum Appraised Value — 5.04(b)(iii)

	(i) Total Appraised Value (see table below)
	 	 	 	 
	Appraised Value (to be not less than $130,000,000)
	 	$	                    	 






10









 





	 	 	 	 	 

	Minimum Number of Borrowing Base Assets — 5.04(b)(iv)

	(i) Number of Borrowing Base Assets
	 	$	                    	 
	Number of Borrowing Base Assets (to be not less than 10)
	 	$	                    	 
	 
	 	 	 	 
	Maximum Size of Individual Borrowing Base Asset — 5.04(b)(v)

	(i) Maximum Borrowing Base Asset — Appraised Value
	 	$	                    	 
	(ii) Appraised Value (see table below)
	 	$	                    	 
	Maximum size of individual borrowing base asset (not to exceed 15% of the Appraised Value of the Borrowing Base Assets in the aggregate) 
Quotient of (a) divided by (b)

	 	 	                    	%
	 
	 	 	 	 
	Minimum Weighted Average Occupancy of The Borrowing Base Assets — 5.04(b)(vi)

	Minimum Weighted Average Occupancy of The Borrowing Base Assets (Not less than 80%) (see table below)
	 	 	                    	%
	 
	 	 	 	 
	Total Appraised Value

	Borrowing Base Assets
	 	 	 	 
	(i) Cheney Appraised Value
	 	$	                    	 
	(ii) Jonesboro Appraised Value
	 	$	                    	 
	(iii) Murfreesboro Appraised Value
	 	$	                    	 
	(iv) Troy Appraised Value
	 	$	                    	 
	(v) Wichita Appraised Value
	 	$	                    	 
	(vi) Mobile Phase II Appraised Value
	 	$	                    	 
	(vii) Jacksonville Appraised Value
	 	$	                    	 
	(viii) Lubbock Appraised Value
	 	$	                    	 
	(ix) Stephenville Appraised Value
	 	$	                    	 
	(x) San Marcos Appraised Value
	 	$	                    	 
	(xi) Waco Appraised Value
	 	$	                    	 
	(xii) Wichita Falls Appraised Value
	 	$	                    	 
	Total Appraised Value 
Sum of (i) through (xii)

	 	$	                    	 






11









 





Weighted Average Occupancy




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Occupied	 	 	 	 
	Borrowing Base Assets	 	Beds (a)	 	 	(b)	 	 	Occupancy	 
	(i) Cheney Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(ii) Jonesboro Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(iii) Murfreesboro Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(iv)Troy Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(v) Wichita Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(vi) Mobile Phase Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(vii) Jacksonville Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(viii) Lubbock Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(ix) Stephenville Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(x) San Marcos Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(xi) Waco Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	(xii) Wichita Falls Occupancy
	 	 	                    	 	 	 	                    	 	 	 	                    	%
	Weighted Average Occupancy 
Quotient of (b) divided by (a)

	 	 	                    	 	 	 	                    	 	 	 	                    	%






Negative Covenants 5.02




	 	 	 	 	 

	Investments  — 5.02(f)(iv)

	(a) Investments in unimproved land
	 	$	                    	 
	(b) Total Asset Value (see table above)
	 	$	                    	 
	Maximum Permitted Investments in Unimproved Land (not to exceed 10%)
Quotient of (a) divided by (b)

	 	 	                    	%






12









 





	 	 	 	 	 

	(c) Investments in Development Assets (including such assets that such Person has contracted to purchase for development with
or without options to terminate the purchase agreement but, in such instances, limited solely to non-refundable deposits under such
contracts and, to the extent a Loan Party is obligated under any such contract, the amount of such obligation), calculated on the basis of
the greater of actual cost or budgeted cost
	 	$	                    	 
	(d) Total Asset Value (see table above)
	 	$	                    	 
	Maximum Permitted Investments in Development Assets (not to exceed 20%) 
Quotient of (c) divided by (d)

	 	 	                    	%
	(e) Investments in Joint Ventures
	 	$	                    	 
	(f) Total Asset Value (see table above)
	 	$	                    	 
	Maximum Permitted Investments in Joint Ventures (not to exceed 15%)
Quotient of (e) divided by (f)

	 	 	                    	%
	(g) Investments permitted under 5.02(f), other than the items of Investments referred to in clauses (a), (c) and (e) above
	 	$	                    	 
	(h) Total Asset Value (see table above)
	 	$	                    	 
	Maximum Permitted Investments in Other Assets (not to exceed 10%)
Quotient of (g) divided by (h)

	 	 	                    	%
	(i) Total Permitted Investments
Result of (a) plus (c) plus (e) plus (g)

	 	$	                    	 
	(j) Total Asset Value (see table above)
	 	$	                    	 
	Maximum Permitted Investments in (a), (c), (e), and (g)
(not to exceed 35% through June 30, 2011, 30%
through June 30, 2012, and 25% thereafter)
Quotient of (i) divided by (j)

	 	 	                    	%










13









 








Schedule II — Pro Forma Financial Covenant Computations




[Consistent with Schedule I after accounting for the Transaction.]




14











 





EXHIBIT J to the

CREDIT AGREEMENT




FORM OF HAZARDOUS

INDEMNITY AGREEMENT




(See Attached)




 









 








ENVIRONMENTAL INDEMNITY AGREEMENT




          THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”), dated as of October 19, 2010, is
made by CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, LP, a Delaware limited partnership (the
“Borrower”), CAMPUS CREST COMMUNITIES, INC., a Maryland corporation (“Parent Guarantor”), CAMPUS
CREST AT JACKSONVILLE, AL, LLC, a Delaware limited liability company, CAMPUS CREST AT MOBILE PHASE
II, LLC, a Delaware limited liability company, CAMPUS CREST AT CHENEY, LLC, a Delaware limited
liability company, CAMPUS CREST AT JONESBORO, LLC, a Delaware limited liability company, CAMPUS
CREST AT TROY, LLC, an Delaware limited liability company, CAMPUS CREST AT MURFREESBORO, LLC, a
Delaware limited liability company, CAMPUS CREST AT WICHITA, LLC, a Delaware limited liability
company, CAMPUS CREST AT STEPHENVILLE, LP, a Delaware limited partnership, CAMPUS CREST AT LUBBOCK,
LP, a Delaware limited partnership, CAMPUS CREST AT WACO, LP, a Delaware limited partnership,
CAMPUS CREST AT WICHITA FALLS, LP, a Delaware limited partnership, CAMPUS CREST AT SAN MARCOS, LP,
a Delaware limited partnership, CAMPUS CREST STEPHENVILLE LESSOR, LLC, a Delaware limited liability
company, CAMPUS CREST WACO LESSOR, LLC, a Delaware limited liability company, CAMPUS CREST WICHITA
FALLS LESSOR, LLC, a Delaware limited liability company, CAMPUS CREST CHENEY LESSOR, LLC, a
Delaware limited liability company, CAMPUS CREST JONESBORO LESSOR, LLC, a Delaware limited
liability company, CAMPUS CREST TROY LESSOR, LLC, a Delaware limited liability company, CAMPUS
CREST MURFREESBORO LESSOR, LLC, a Delaware limited liability company, CAMPUS CREST WICHITA LESSOR,
LLC, a Delaware limited liability company (collectively, “Guarantors,” and together with Borrower
and Parent Guarantor, individually and collectively, as the context may require, “Indemnitor”),
having an address at 2100 Rexford Rd, Suite 414, Charlotte, North Carolina 28211, Attn: Chief
Financial Officer, in favor of CITIBANK, N.A., a national banking association (“Agent”), as
Collateral Agent for the benefit of the Secured Parties (as defined in the Credit Agreement (as
defined herein)) (collectively with its successors and assigns, “Indemnitee”) and the other
Indemnified Parties (as defined herein).




RECITALS:




          A. Borrower, Parent Guarantor and Guarantors and certain other Loan Parties (as defined in the
Credit Agreement), and Agent, Arranger and certain other Lender Parties (each as defined in the
Credit Agreement) have entered into that certain Credit Agreement dated as of the date hereof (as
the same may be amended, restated, replaced, supplemented or otherwise modified from time to time,
the “Credit Agreement”).




          B. Under the terms of the Credit Agreement, the Lenders have agreed to make a loan to and for
the account of Borrower (whether one or more, collectively, the “Loan”), which Loan is evidenced
by, among other things, certain promissory notes executed in connection with the Credit Agreement
(such promissory note or promissory notes, together with all extensions, renewals, replacements,
restatements or other modifications thereof, whether one or more being hereinafter collectively
referred to as the “Notes”). The Credit Agreement, the Notes and the other documents now or
hereafter executed in connection with, or to guaranty,




 









 




evidence or secure, in whole or in part, the indebtedness and obligations evidenced thereby, as
they may from time to time be amended, restated, replaced or otherwise modified from time to time,
to be referred to herein as the “Loan Documents”)




          C. Guarantors are the owners of the Borrowing Base Assets (as defined in the Credit
Agreement) subject to the Permitted Liens (as defined in the Credit Agreement) including, without
limitation, the real property more particularly described on Exhibit A attached hereto (said real
properties being referred to as the “Land”; the Land, together with all structures, buildings and
improvements now or hereafter located on the Land, being collectively, and with respect to all or
any portion thereof, referred to as the “Properties”)




          D. Lenders are unwilling to make the Loan unless Indemnitor agrees to provide the
indemnification, representations, warranties, covenants and other matters described in this
Agreement for the benefit of the Indemnified Parties (as hereinafter defined).




          E. Indemnitor is entering into this Agreement to induce Indemnitee to make the Loan.




AGREEMENT:




          NOW THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Indemnitor hereby represents,
warrants, covenants and agrees for the benefit of the Indemnified Parties as follows:




          1. Environmental Representations and Warranties. Except as otherwise
disclosed by that certain Phase I environmental report (or Phase II environmental report, if
required by Indemnitee) with respect to the Properties delivered to Indemnitee by Indemnitor in
connection with the origination of the Loan (hereinafter referred to as the “Environmental Report”)
(a) to the best of Indernnitor’s knowledge, there are no Hazardous Materials or underground storage
tanks in, on, or under the Properties, except those that are both (i) in compliance with all
Environmental Laws (defined below) and with permits issued pursuant thereto as may be required by
Environmental Laws and (ii) fully disclosed to Indemnitee in writing pursuant to the Environmental
Report; (b) to the best of Indernnitor’s knowledge, there are no past or present Releases (defined
below) of Hazardous Materials in, on, under or from the Properties which have not been fully
remediated in accordance with Environmental Law; (c) Indemnitor does not know of, and has not
received, any written or oral notice or other communication from any Person (including but not
limited to a Governmental Authority) relating to the threat of any Release of Hazardous Materials
migrating to the Properties; (d) to the best of Indernnitor’s knowledge, there is no past or
present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in
connection with the Properties which has not been fully remediated in accordance with Environmental
Law; (e) Indemnitor does not know of, and has not received, any written or oral notice or other
communication from any Person (including but not limited to a Governmental Authority) relating to
Hazardous Materials or Remediation (defined below) thereof, of possible liability of any Person
pursuant to any Environmental Law, any other environmental conditions in connection with the
Properties, or any actual or potential administrative or judicial proceedings in connection with
any of the









2









 







foregoing; and (f) Indemnitor has truthfully and fully delivered to Indemnitee, in writing, the
most recent Phase I environmental reports for the Properties and any and all information relating
to conditions in, on, under or from the Properties that relates to any potential violation of
Environmental Laws or any pending claim regarding an environmental condition.




          2. Environmental Covenants. Indemnitor covenants and agrees that: (a) all
uses and operations on or of the Properties, whether by Indemnitor or any other Person, shall be
in compliance with all Environmental Laws and permits issued pursuant thereto; (b) there shall be
no Releases of Hazardous Materials in, on, under or from the Properties, except those that are
both (i) in compliance with all Environmental Laws and with permits issued pursuant thereto and
(ii) fully disclosed to Indemnitee in writing; (c) there shall be no Hazardous Materials in, on,
or under the Properties, except those that are both (i) in compliance with all Environmental Laws
and with permits issued pursuant thereto as may be required by Environmental Laws and (ii) fully
disclosed to Indemnitee in writing; (d) Indemnitor shall keep the Properties free and clear of all
liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or
omission of Indemnitor or any other Person (the “Environmental Liens”); (e) Indemnitor shall, at
its sole cost and expense, fully and expeditiously cooperate in all activities pursuant to
Paragraph 3 of this Agreement, including, but not limited to, providing all relevant
information and making knowledgeable persons available for interviews; (f) Indemnitor shall, at
its sole cost and expense, perform or cause to be performed any environmental site assessment or
other investigation of environmental conditions in connection with the Properties, pursuant to any
reasonable written request of Indemnitee (including, but not limited to, sampling, testing and
analysis of soil, water, air, building materials, and other materials and substances whether
solid, liquid or gas), and share with Indemnitee the reports and other results thereof, and
Indemnitee and the other Indemnified Parties shall be entitled to rely on such reports and other
results thereof, it being understood that it shall not be reasonable for Indemnitee to request an
environmental site assessment or other investigation pursuant to this subsection unless Indemnitee
has reason to believe that there is or has been a potential Release of Hazardous Materials or a
breach of Environmental Law; (g) Indemnitor shall, at its sole cost and expense, comply with all
reasonable written requests of Indemnitee to (i) effectuate Remediation of any condition
(including, but not limited to, a Release of a Hazardous Material) in, on, under or from the
Properties; (ii) comply with any Environmental Law; (iii) comply with any directive from any
Governmental Authority; and (iv) take any other reasonable action necessary or appropriate for
protection of human health or the environment; (h) Indemnitor shall not do, or allow any tenant or
other user of the Properties to do, any act that materially increases the dangers to human health
or the environment, poses an unreasonable risk of harm to any Person at the Properties, impairs or
may impair the value of the Properties, is contrary to any requirement of any insurer, constitutes
a public or private nuisance, constitutes waste, or violates any covenant, condition, agreement or
easement applicable to the Properties; and (i) Indemnitor shall promptly notify Indemnitee in
writing of (i) any presence or Releases or threatened Releases of Hazardous Materials in, on,
under, from or migrating towards the Properties; (ii) any non-compliance with any Environmental
Laws related in any way to the Properties; (iii) any actual or potential Environmental Lien; (iv)
any required or proposed Remediation of environmental conditions relating to the Properties; and
(v) any written or oral notice or other communication of which any Indemnitor becomes aware from
any source whatsoever (including, but not limited
to, a Governmental Authority) relating in any
way to Hazardous Materials or Remediation thereof at any of the Properties, possible liability of
any Person in connection with any of the Properties









3









 







pursuant to any Environmental Law, other environmental conditions in connection with the
Properties, or any actual or potential administrative or judicial proceedings in connection with
anything referred to in this Agreement.




          3. Indemnified Rights/Cooperation and Access. In the event the Indemnified Parties
have reason to believe that an environmental hazard exists on the Properties that does not, in the
sole discretion of the Indemnified Parties, endanger any tenants or other occupants of the
Properties or their guests or the general public or materially and adversely affect the value of
the Properties, upon reasonable notice from the Indemnitee, Indemnitor shall, at Indemnitor’s
expense, promptly cause an engineer or consultant reasonably satisfactory to the Indemnified
Parties to conduct an environmental assessment or audit (the scope of which shall be determined in
the sole and absolute discretion of the Indemnified Parties) and take any samples of soil,
groundwater or other water, air, or building materials or any other invasive testing requested by
Indemnitee and promptly deliver to Indemnitee the results of any such assessment, audit, sampling
or other testing; provided, however, if such results are not delivered to the Indemnified Parties
within a reasonable period or if the Indemnified Parties have reason to believe that an
environmental hazard exists on the Properties that, in the sole judgment of the Indemnified
Parties, endangers any tenant or other occupant of the Properties or their guests or the general
public or may materially and adversely affect the value of the Properties, upon reasonable notice
to Borrower, the Indemnified Parties and any other Person designated by the Indemnified Parties,
including, but not limited to, any receiver, any representative of a governmental entity, and any
environmental consultant, shall have the right, but not the obligation, to enter upon the
Properties at all reasonable times to assess any and all aspects of the environmental condition of
the Properties and their use, including but not limited to, conducting any environmental assessment
or audit (the scope of which shall be determined in the sole and absolute discretion of the
Indemnified Parties) and taking samples of soil, groundwater or other water, air, or building
materials, and reasonably conducting other invasive testing. Indemnitor shall cooperate with and
provide the Indemnified Parties and any such Person designated by the Indemnified Parties with
access to the Properties.




          4. Indemnification. Indemnitor covenants and agrees, at its sole cost and expense, to
protect, defend, indemnify, release and hold Indemnified Parties harmless from and against any and
all Losses (defined below) 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) the actual or alleged presence of Hazardous Materials in, on, above, or under the
Properties; (b) any past, present or threatened Release of Hazardous Materials in, on, above,
under or from the Properties; (c) any activity by Indemnitor, any Person affiliated with
Indemnitor, and any tenant or other user of the Properties in connection with any actual, proposed
or threatened use, treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control, management, abatement,
removal, handling, transfer or transportation to or from the Properties of any Hazardous Materials
at any time located in, under, on or above the Properties; (d) any activity by Indemnitor, any
Person affiliated with Indemnitor, and any tenant or other user of the Properties in connection
with any actual or proposed Remediation of any Hazardous Materials at any time located in, under,
on or above the Properties, whether or not such Remediation is voluntary or pursuant to court or
administrative order, including, but not limited to, any removal, remedial or corrective action;
(e) any past, present or threatened non-compliance with, or violations of, any




4









 







Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with the
Properties or operations thereon, including, but not limited to, any failure by Indemnitor, any
Person affiliated with Indemnitor, and any tenant or other user of the Properties to comply with
any order of any Governmental Authority in connection with any Environmental Laws; (f) the
imposition, recording or filing or the threatened imposition, recording or filing of any
Environmental Lien encumbering the Properties; (g) any administrative processes or proceedings or
judicial proceedings in any way connected with any matter addressed in this Agreement; (h) any
past, present or threatened injury to, destruction of or loss of natural resources in any way
connected with the Properties, including, but not limited to, costs to investigate and assess such
injury, destruction or loss; (i) any acts of Indemnitor, any Person affiliated with Indemnitor, and
any tenant or other user of the Properties in arranging for disposal or treatment, or arranging
with a transporter for transport for disposal or treatment, of Hazardous Materials at any facility
or incineration vessel containing Hazardous Materials; (j) any acts of Indemnitor, any Person
affiliated with any Indemnitor, and any tenant or other user of the Properties in accepting any
Hazardous Materials for transport to disposal or treatment facilities, incineration vessels or
sites from which there is a Release, or a threatened Release of any Hazardous Material which causes
the incurrence of costs for Remediation; (k) any personal injury, wrongful death, or property or
other damage arising under any statutory or common law or tort law theory, including, but not
limited to, damages assessed for private or public nuisance or for the conducting of an abnormally
dangerous activity on or near the Properties; and (1) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to perform any covenants or other
obligations pursuant to this Agreement, the Credit Agreement or the Mortgages. Notwithstanding
anything to the contrary contained herein, the indemnity set forth in this Paragraph 4
shall not apply to a particular Indemnified Party to the extent such claim, damage, loss, liability
or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party’s gross negligence or willful misconduct. Indemnitor also
agrees not to assert any claim against any Indemnified Party, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise relating to the
Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit,
the Loan Documents or any of the transactions contemplated by the Loan Documents.




          5. Duty to Defend and Attorneys and Other Fees and Expenses. Upon
written request by any Indemnified Party, Indemnitor shall defend such Indemnified Party (if
requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other
professionals reasonably approved by the Indemnified Parties. Notwithstanding the foregoing, any
Indemnified Parties may, in their sole and absolute discretion, engage their own attorneys and
other professionals to defend or assist them, and, at the option of Indemnified Parties, their
attorneys shall control the resolution of any claim or proceeding, providing that no compromise or
settlement shall be entered without Indemnitor’s consent, which consent shall not be unreasonably
withheld. Upon demand, Indemnitor shall pay or, in the sole and absolute discretion of the
Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and
disbursements of attorneys, engineers, environmental consultants, laboratories and other
professionals in connection therewith.





5









 








          6. Definitions. Capitalized terms used herein and not specifically defined herein
shall have the respective meanings ascribed to such terms in the Credit Agreement. As used in this
Agreement, the following terms shall have the following meanings:




          The term “Environmental Law” means any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law, relating to
protection of human health or the environment, relating to Hazardous Materials, relating to
liability for or costs of other actual or threatened danger to human health or the environment. The
term “Environmental Law” includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations promulgated pursuant thereto, and any state or local
statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Materials Transportation Act; the Resource Conservation and
Recovery Act (including but not limited to Subtitle I relating to underground storage tanks); the
Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act;
the Safe Drinking Water Act, the Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act;
the National Environmental Policy Act; and the River and Harbors Appropriation Act. The term
“Environmental Law” also includes, but is not limited to, any present and future federal, state and
local laws, statutes ordinances, rules, regulations, permits or authorizations and the like, as
well as common law, that (a) condition transfer of property upon a negative declaration or other
approval of a Governmental Authority of the environmental condition of the Properties; (b) require
notification or disclosure of Releases of Hazardous Materials or other environmental condition of
the Properties to any Governmental Authority or other Person, whether or not in connection with
transfer of title to or interest in property; (c) impose conditions or requirements in connection
with permits or other authorization for lawful activity related to environmental matters; (d)
relate to nuisance, trespass or other causes of action related to the Properties; or (e) relate to
wrongful death, personal injury, or property or other damage in connection with any physical
condition or use of the Properties.




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




          The term “Indemnified Parties” includes Indemnitee, any Person who is or will have been
involved in the origination of the Loan, any Person who is or will have been involved with the
servicing of the Loan, any Person in whose name the encumbrance created by the Mortgages is or
will have been recorded, any Person who may hold or acquire or will have held a full or partial
interest in the Loan (including, but not limited to, Investors (defined below), as well as
custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the
Loan for the benefit of third parties) as well as the respective directors, officers,
shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors,
affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing
(including, but not limited to, any other Person who holds or acquires, or will have held, a
participation or other full or partial interest in the Loan or the Properties, whether during the
term of the Loan or as a part of, or following, a foreclosure of the Loan and including, but not
limited to, any successors









6









 







by merger, consolidation or acquisition of all or a substantial portion of Indemnitee’s assets and
business).




          The term “Investors” means collectively, any purchaser, transferee, assignee, servicer,
participant or investor of, or in, the Loan.




          The term “Losses” includes any losses, damages, costs, fees, expenses, claims, suits,
judgments, awards, liabilities (including, but not limited to, strict liabilities), obligations,
debts, diminutions in value, fines, penalties, charges, costs of Remediation (whether or not
performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential
damages, litigation costs, attorneys’ fees, engineers’ fees, environmental consultants’ fees, and
investigation costs (including, but not limited to, costs for sampling, testing and analysis of
soil, water, air, building materials, and other materials and substances whether solid, liquid or
gas), of whatever kind or nature, whether or not incurred in connection with any judicial or
administrative proceedings, actions, claims, suits, judgments or awards, and whether or not
incurred in connection with any judicial or administrative proceedings, actions, claims, suits,
judgments or awards (including, without limitation, any investigation of, preparation for, or
defense of any pending or threatened instance of any of the foregoing), whether or not any of the
foregoing are brought by any Indemnitor, its directors, shareholders or creditors or an Indemnified
Party, whether or not any Indemnifed Party is otherwise a party thereto and whether or not the
transactions contemplated by the Loan Documents are consummated.




          The term “Release” includes, but is not limited to, any release, deposit, discharge,
emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Materials.




          The term “Remediation” includes, but is not limited to, any response, remedial, removal, or
corrective action; any activity to clean up, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Material; any actions to prevent, cure or mitigate any Release of any
Hazardous Material; any action to comply with any Environmental Laws or with any permits issued
pursuant thereto; any inspection, investigation, study, monitoring, assessment, audit, sampling
and testing, laboratory or other analysis, or evaluation relating to any Hazardous Materials or to
anything referred to herein.




          7. Unimpaired Liability. The liability of Indemnitor under this Agreement shall in no
way be limited or impaired by, and Indemnitor hereby consents to and agrees to be bound by, any
amendment or modification of the provisions of the Notes, the Credit Agreement, the Mortgages or
any other Loan Document to or with Indemnitee by Indemnitor or any Person who succeeds Indemnitor
or any Person as owner of the Properties. In addition, the liability of Indemnitor under this
Agreement shall in no way be limited or impaired by (a) any extensions of time for performance
required by the Notes, the Credit Agreement, the Mortgages or any of the other Loan Documents, (b)
any sale or transfer of all or part of the Properties, (c) except as provided herein, any
exculpatory provision in the Notes, the Credit Agreement, the Mortgages, or any of the other Loan
Documents limiting Indemnitee’s recourse to the Properties or to any other security for the Notes,
or limiting Indemnitee’s rights to a deficiency judgment against Indemnitor, (d) the accuracy or
inaccuracy of the representations and warranties made by Indemnitor under the Notes, the Credit
Agreement, the Mortgages or any of the other Loan









7









 







Documents or herein, (e) the release of Indemnitor or any other Person from performance or
observance of any of the agreements, covenants, terms or condition contained in any of the other
Loan Documents by operation of law, Indemnitee’s voluntary act, or otherwise, (f) the release or
substitution in whole or in part of any security for the Notes, or (g) Indemnitee’s failure to
record the Mortgages or file any UCC financing statements (or Indemnitee’s improper recording or
filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or
lien given as security for the Notes; and, in any such case, whether with or without notice to
Indemnitor and with or without consideration.




          8. Enforcement. Indemnified Parties may enforce the obligations of Indemnitor without
first resorting to, or exhausting any security or collateral under, or without first having
recourse pursuant to, the Notes, the Credit Agreement, the Mortgages, or any other Loan Documents
or any of the Properties, through foreclosure proceedings or otherwise, provided, however, that
nothing herein shall inhibit or prevent Indemnitee from suing on the Notes, foreclosing, or
exercising any power of sale under, the Mortgages, or exercising any other rights and remedies
thereunder. This Agreement is not collateral or security for the debt of Indemnitor pursuant to the
Loan, unless Indemnitee expressly elects in writing to make this Agreement additional collateral or
security for the debt of Indemnitor pursuant to the Loan, which Indemnitee is entitled to do in its
sole and absolute discretion. It is not necessary for an Event of Default to have occurred for
Indemnified Parties to exercise their rights pursuant to this Agreement. Notwithstanding any
provision of the Credit Agreement, the obligations pursuant to this Agreement are exceptions to any
non-recourse or exculpation provision of the Credit Agreement and Indemnitor is fully and
personally liable for such obligations, and such liability is not limited to the original or
amortized principal balance of the Loan or the value of the Properties.




          9. Survival. The obligations and liabilities of Indemnitor under this Agreement 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 Mortgages. Notwithstanding the provisions of this Agreement to the contrary, the
liabilities and obligations of Indemnitor hereunder shall not apply to the extent that Indemnitor
can prove that such liabilities and obligations arose from Hazardous Materials that. (a) were not
present on or a threat to the Properties prior to the date that a party other than Indemnitor
acquires title to and possession of the Property(ies) pursuant to a sale of the Property(ies)
permitted under the Loan Documents or, if sooner, the date on which Indemnitee or its nominee
acquires title to and possession of the Property(ies) as a result of the exercise of remedies under
the Loan Documents and (b) were not the result of any act or negligence of Indemnitor or any of
Indemnitor’s affiliates, agents or contractors.




          10. Interest. Any amounts payable to any Indemnified Parties under this Agreement
shall become immediately due and payable on demand and, if not paid within thirty (30) days of
such demand therefor, shall bear interest at the lesser of (a) the Default Rate or (b) the maximum
interest rate which Indemnitor may by law pay or Indemnified Parties may charge and collect, from
the date payment was due and otherwise in accordance with the terms of the Loan Documents.




8









 








          11. Waivers. (a) Indemnitor hereby waives (i) any right or claim of right to cause a
marshaling of Indemnitor’s assets or to cause Indemnitee or other Indemnified Parties to proceed
against any of the security for the Loan before proceeding under this Agreement against Indemnitor;
(ii) and relinquishes all rights and remedies accorded by applicable law to indemnitors or
guarantors, except any rights of subrogation which Indemnitor may have, provided that the indemnity
provided for hereunder shall neither be contingent upon the existence of any such rights of
subrogation nor subject to any claims or defenses whatsoever which may be asserted in connection
with the enforcement or attempted enforcement of such subrogation rights including, without
limitation, any claim that such subrogation rights were abrogated by any acts of Indemnitee or
other Indemnified Parties; (iii) notice of acceptance hereof and of any action taken or omitted in
reliance hereon; (iv) presentment for payment, demand of payment, protest or notice of nonpayment
or failure to perform or observe, or other proof, or notice or demand; and (v) all homestead
exemption rights against the obligations hereunder and the benefits of any statutes of limitations
or repose. Notwithstanding anything to the contrary contained herein, Indemnitor hereby agrees to
postpone the exercise of any rights of subrogation with respect to any collateral securing the Loan
until the Loan shall have been paid in full.




          (b) INDEMNITOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES
IN CONNECTION THEREWITH.




          12. Subrogation. Indemnitor shall take any and all reasonable actions, including
institution of legal action against third parties, necessary or appropriate to obtain
reimbursement, payment or compensation from such persons responsible for the presence of any
Hazardous Materials at, in, on, under or near the Properties or otherwise obligated by law to bear
the cost. Indemnified Parties shall be and hereby are subrogated to all of Indemnitor’s rights now
or hereafter in such claims.




          13. Indemnitor’s Representations and Warranties. Indemnitor represents and warrants
that:




          (a) it has the full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder; the execution, delivery and performance of this Agreement by Indemnitor
has been duly and validly authorized; and all requisite action has been taken by Indemnitor to
make this Agreement valid and binding upon Indemnitor, enforceable in accordance with its terms;




          (b) its execution of, and compliance with, this Agreement is in the ordinary course of
business of Indemnitor and will not result in the breach of any term or provision of the charter,
by-laws, partnership or trust agreement, or other governing instrument of Indemnitor or result in
the breach of any term or provision of, or conflict with or constitute a default under, or result
in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement
or other instrument to which Indemnitor or the Properties is subject, or result in the




9









 




violation of any law, rule, regulation, order, judgment or decree to which Indemnitor or the
Properties is subject;




          (c) to the best of Indemnitor’s knowledge, there is no action, suit, proceeding or
investigation pending or threatened against it which, either in any one instance or in the
aggregate, may result in any material adverse change in the business, operations, financial
condition, properties or assets of Indemnitor, or in any material impairment of the right or
ability of Indemnitor to carry on its business substantially as now conducted, or in any material
liability on the part of Indemnitor, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the obligations of Indemnitor
contemplated herein, or which would be likely to impair materially the ability of Indemnitor to
perform under the terms of this Agreement;




          (d) it does not believe, nor does it have any reason or cause to believe, that it cannot
perform each and every covenant contained in this Agreement;




          (e) to the best of Indemnitor’s knowledge, no approval, authorization, order, license or
consent of, or registration or filing with, any governmental authority or other person, and no
approval, authorization or consent of any other party is required in connection with this
Agreement; and




          (f) this Agreement constitutes a valid, legal and binding obligation of Indemnitor,
enforceable against it in accordance with the terms hereof.




          14. No Waiver. No delay by any Indemnified Party in exercising any right, power or
privilege under this Agreement shall operate as a waiver of any such privilege, power or right.




          15. Notice of Environmental Actions. Each party hereto shall, within ten (10)
business days of receipt thereof, give written notice to the other party hereto of (a) any notice,
advice or other communication from any Governmental Authority or any source whatsoever with
respect to Hazardous Materials on, from or affecting the Properties, and (b) any Environmental
Action brought against such party or related to the Properties, with respect to which Indemnitor
may have liability under this Agreement; provided, however, that the failure of a party to
provide such notice shall not relieve Indemnitor of its obligations under Paragraph 4, except to
the extent Indemnitor is actually prejudiced by such failure to give notice. Such notice shall
comply with the provisions of Section 19 hereof.




          16. Intentionally Omitted.




          17. Transfer of Loan. Indemnitee may, at any time, sell, transfer or assign the
Notes, the Credit Agreement, the Mortgages, this Agreement and the other Loan Documents, and any
or all servicing rights with respect thereto, or grant participations therein or issue Mortgages
pass-through certificates. Indemnitee may forward to each purchaser, transferee, assignee,
servicer or participant (the foregoing entities hereinafter collectively referred to as the
“Investor”) and each prospective Investor, all documents and information which Indemnitee now has
or may hereafter acquire relating to Indemnitor and the Properties, whether furnished by
Indemnitor, any guarantor or otherwise, as Indemnitee determines necessary or desirable.





10









 







Indemnitor and any guarantor agree to cooperate with Indemnitee in connection with any transfer
made pursuant to this Section, including, without limitation, the delivery of an estoppel
certificate and such other documents as may be reasonably requested by Indemnitee. Indemnitor
shall also furnish, and Indemnitor hereby consents to Indemnitee furnishing to such Investors or
such prospective Investors, any and all information concerning the financial condition of the
Indemnitor and any and all information concerning the Properties as may be requested by
Indemnitee, any Investor or any prospective Investor in connection with any sale, transfer or
participation interest.




          18. Intentionally Omitted.




          19. Notices. All notices or other written communications hereunder shall be made in
accordance with Section 9.02 of the Credit Agreement.




          20. Duplicate Originals; Counterparts. This Agreement may be executed in any number
of duplicate originals and each duplicate original shall be deemed to be an original. This
Agreement may be executed in several counterparts, each of which counterparts shall be deemed an
original instrument and all of which together shall constitute a single Agreement. The failure of
any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.




          21. No Oral Change. This Agreement, and any provisions hereof, may not be modified,
amended, waived, extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Indemnitor or any Indemnified Party, 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.




          22. Headings, Etc. The headings and captions of various paragraphs of this Agreement
are for convenience of reference only and are not to be construed as defining or limiting, in any
way, the scope or intent of the provisions hereof.




          23. Number and Gender/Successors and Assigns. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of
the person or persons referred to may require. Without limiting the effect of specific references
in any provision of this Agreement, the term “Indemnitor” shall be deemed to refer to each and
every Person comprising an Indemnitor from time to time, as the sense of a particular provision may
require, and to include the heirs, executors, administrators, legal representatives, successors and
assigns of Indemnitor, all of whom shall be bound by the provisions of this Agreement, provided
that no obligation of Indemnitor may be assigned except with the written consent of Indemnitee.
Each reference herein to Indemnitee shall be deemed to include its successors and assigns. This
Agreement shall inure to the benefit of Indemnified Parties and their respective successors and
assigns forever.




          24. Release of Liability. Any one or more parties liable upon or in respect of this
Agreement may be released without affecting the liability of any party not so released.




          25. Rights Cumulative. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies which Indemnitee has under the Notes,




11









 




the Mortgages, the Credit Agreement or the other Loan Documents or would otherwise have at law or
in equity.




          26. Inapplicable Provisions. If any term, condition or covenant of this Agreement
shall be held to be invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.




          27. Governing Law. This Agreement and the Notes shall be governed by, and construed
in accordance with, the laws of the State of New York.




          28. Miscellaneous. (a) Wherever pursuant to this Agreement (i) Indemnitee exercises
any right given to it approve or disapprove, (ii) any arrangement or term is to be satisfactory to
Indemnitee, or (iii) any other decision or determination is to be made by Indemnitee, the decision
of Indemnitee to approve or disapprove, all decisions that arrangements or terms are satisfactory
or not satisfactory and all other decisions and determinations made by Indemnitee, shall be in the
sole and absolute discretion of Indemnitee and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.




          (b) Wherever pursuant to this Agreement it is provided that Indemnitor pay any costs and
expenses, such costs and expenses shall include, but not be limited to, reasonable legal fees and
disbursements of Indemnitee, whether retained firms, the reimbursements for the expenses of the
in-house staff or otherwise.




[NO FURTHER TEXT ON THIS PAGE]





12









 








          IN WITNESS WHEREOF, this Agreement has been executed by Indemnitor and is effective as of the
day and year first above written.




	 	 	 	 	 	 	 	 	 	 	 

	 	 	INDEMNITOR:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST COMMUNITIES

OPERATING PARTNERSHIP, LP	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Communities GP, LLC

Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Campus Crest Communities, Inc.

Its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name: Donald L. Bobbitt, Jr.	 	 
	 

	 	 	 	 	 	 	 	Title:   Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST COMMUNITIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Donald L. Bobbitt, Jr.	 	 
	 	 	 	 	Title:   Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT STEPHENVILLE, LP	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC

Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Michael S. Hartnett	 	 
	 	 	 	 	 	 	Title:   Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT LUBBOCK, LP	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC

Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Michael S. Hartnett	 	 
	 	 	 	 	 	 	Title:   Manager	 	 






 









 





	 	 	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT WACO, LP	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC

Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Michael S. Hartnett	 	 
	 	 	 	 	 	 	Title:   Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT WICHITA FALLS, LP	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC

Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Michael S. Hartnett	 	 
	 	 	 	 	 	 	Title:   Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT SAN MARCOS, LP	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC

Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Michael S. Hartnett	 	 
	 	 	 	 	 	 	Title:   Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT JACKSONVILLE, AL, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC

Its Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Michael S. Hartnett	 	 
	 	 	 	 	 	 	Title:   Manager	 	 







 











 





	 	 	 	 	 

	CAMPUS CREST AT MOBILE PHASE II, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST AT CHENEY, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST AT JONESBORO, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC
Its Manager
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST AT TROY, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST AT MURFREESBORO, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager






 









 





	 	 	 	 	 

	CAMPUS CREST AT WICHITA, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST STEPHENVILLE LESSOR, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST WACO LESSOR, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST WICHITA FALLS LESSOR, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager






 









 





	 	 	 	 	 

	CAMPUS CREST CHENEY LESSOR, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST JONESBORO LESSOR, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST TROY LESSOR, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager
	 
	 	 	 	 
	CAMPUS CREST MURFREESBORO LESSOR, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager






 









 






	 	 	 	 	 

	CAMPUS CREST WICHITA LESSOR, LLC
	 
	 	 	 	 
	By:	 	Campus Crest Properties, LLC 
Its Manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Michael S. Hartnett
	 

	 	 	 	Title: Manager






 









 





Exhibit A




Legal Descriptions



(see attached)



 









 





EXHIBIT K to the

CREDIT AGREEMENT




FORM OF MANAGER’S

SUBORDINATION




(See Attached)




 









 





MANAGER’S CONSENT AND SUBORDINATION

OF MANAGEMENT AGREEMENT




          THIS MANAGER’S CONSENT AND SUBORDINATION OF MANAGEMENT AGREEMENT (this “Agreement”) is dated
as of October 19, 2010, by and among THE GROVE STUDENT PROPERTIES, LLC, a North Carolina limited
liability company (“Manager”), having an address at 2100 Rexford Rd, Suite 414, Charlotte, North
Carolina 28211, Attn: Chief Financial Officer, CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, LP,
a Delaware limited partnership (“Borrower”), having an address at 2100 Rexford Rd, Suite 414,
Charlotte, North Carolina 28211, Attn: Chief Financial Officer, the Owners (defined below), and
CITIBANK, N.A., a national banking association, as collateral agent (in such capacity, “Agent”) for
the Secured Parties as defined in the Credit Agreement (defined below), having an address at 1615
Brett Road, New Castle, Delaware 19720 (Agent, together with its successors and assigns, “Lender”).




W i t n e s s e t h:




          Whereas, Campus Crest at Lubbock, LP, Campus Crest at Stephenville, LP, Campus Crest at San
Marcos, LP, Campus Crest at Waco, LP, Campus Crest at Wichita Falls, LP, each a Delaware limited
partnership, Campus Crest at Cheney, LLC, Campus Crest at Jonesboro, LLC, Campus Crest at
Murfreesboro, LLC, Campus Crest at Troy, LLC, Campus Crest at Wichita, LLC, Campus Crest at Mobile
Phase II, LLC, and Campus Crest at Jacksonville, AL, LLC, each a Delaware limited liability
company (each an “Owner,” and collectively, the “Owners”) hold title to a fee simple or a
leasehold interest, as applicable, in and to the Borrowing Base Assets (as defined in the Credit
Agreement with Agent and others dated as of even date herewith, as the same may be amended,
amended and restated, supplemented or otherwise modified from time to time (the “Credit
Agreement”), among Borrower, the guarantors listed therein, Agent and the other Secured Parties
identified therein) more particularly described on Exhibit A hereof (together with all
easements, rights of way and other property rights appurtenant thereto, all equipment, fixtures,
furniture and other personal property attached to, located at or otherwise used in connection with
the foregoing and owned by the Owners, each a “Facility,” and, collectively, the “Facilities”);




          Whereas, pursuant to the terms of the Credit Agreement, the Secured Parties have agreed to
make loans and extend credit (collectively, the “Loan”) to Borrower, and the other Loan Parties
have agreed to guaranty payment of the Loan.




          Whereas, each Owner is a Subsidiary Guarantor under the Credit Agreement;




          Whereas, Manager has agreed to manage the Facilities on behalf of each respective
Owner pursuant to a Management Agreement, between Manager and such Owner (as amended, modified or
supplemented and in effect from time to time, each a “Management Agreement” and, collectively, the
“Management Agreements”); and




          Whereas, capitalized terms used but not otherwise defined herein shall have the meanings set
forth in the Credit Agreement.




          NOW, THEREFORE, to induce the Secured Parties to make the Loan and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:




 









 





          1. Representations of Manager. Manager warrants and represents to Lender
the
following:





          (a) None of the Management Agreements have been assigned, modified, amended or
supplemented. Each Management Agreement is in full force and effect, and constitutes the
entire agreement between Manager and each Owner with respect to the management of the
applicable Facility. A true, correct and complete copy of each of the Management Agreements
together with any submanagement agreements (and any amendments, modifications or supplements
thereto) is attached hereto as Exhibit B.




          (b) Each Management Agreement constitutes the legal, valid and binding obligation of
Manager, enforceable against Manager in accordance with its respective terms, subject to
general principles of equity and laws affecting the rights and remedies of debtors and
creditors generally.




          (c) To Manager’s knowledge, the Owners are not in default in the performance of the
terms and provisions of their respective Management Agreement, nor is there now any
condition which, with the giving of notice or lapse of time, or both, will become a
default.




          (d) There are no contracts, agreements or commitments between Borrower, or the Owners
and Manager in respect of the Credit Agreement, the other Loan Documents, or the management
of the Facilities, except as provided in the Management Agreements.




          (e) Manager is not in default under the terms and provisions of any of the Management
Agreements, nor is there now any condition which, with the giving of notice or lapse of
time, or both, will become a default. No claim or dispute exists between Borrower or the
Owners and Manager with respect to any of the Management Agreements.




          (f) There is no current assignment of, or encumbrance on, Manager’s interest under
any of the Management Agreements.




          (g) Manager does not have any option or preferential right to purchase all or any part
of, and does not have any rights, title or interest with respect to any of the Facilities
other than as manager under the applicable Management Agreement.




          (h) As of the date hereof, all fees, sums, charges, costs, expenses and other amounts
due under the Management Agreements have been currently paid in accordance with the terms
thereof and no such amounts remain due and payable as of the date hereof (except that the
foregoing shall not apply to reimbursements required to be paid to the Manager under the
Management Agreements which are not delinquent as of the date hereof).



          2. Manager’s Covenants.




          A. Manager hereby consents and agrees to each and every one of the following covenants
and agreements for the benefit of Lender:





          (a) Performance and Notice of Default. Manager agrees that it will (i)
promptly perform and observe in all material respects all of the covenants and agreements
required to be performed and observed by it under each of the Management Agreements in



2









 







accordance with the terms of each such Management Agreement and (ii) promptly notify Lender of any
material default under any of the Management Agreements of which Manager becomes aware.




          (b) No Termination of Management Agreements. Manager will not terminate its
management of any of the Facilities without first providing Lender with at least thirty (30) days’
prior written notice of such intention.




          (c) Subordination of the Management Agreements to Liens of Mortgages. Any and all
liens, rights and interests, including, without limitation, all fees payable and all costs and
expenses reimbursable to Manager or any submanager (whether choate or inchoate and including,
without limitation, all mechanic’s and materialman’s liens under applicable law) owned, claimed or
held, or to be owned, claimed or held, by Manager in and to any of the Facilities (collectively,
the “Subordinated Obligations”), are and shall be in all respects subordinate and inferior to the
liens and security interests (i) created or to be created for the benefit of the Secured Parties
and securing the repayment of the Obligations of the Loan Parties under the Loan Documents and
including, without limitation, those created under and by virtue of the Mortgages, covering, among
other things, the Facilities, and (ii) filed or to be filed of record in the public records
maintained for the recording of mortgages or deeds of trust in the county and State in which each
of the Facilities is located, and all renewals and extensions thereof (collectively, the “Senior
Obligations”). Notwithstanding anything contained in this Agreement to the contrary, the foregoing
subordination shall not affect the right of Manager to receive and use all fees and reimbursements
paid or payable to it under the Management Agreements or to receive in full all accrued and unpaid
management or submanagement fees, leasing commissions or other amounts due Manager or any
submanager by the Owners pursuant to the Management Agreements.




          (d) Insurance. Manager shall maintain, or cause to be maintained, insurance for the
Facilities to the extent required under, but subject to the terms of the applicable Management
Agreements. The foregoing shall not be construed to limit or modify any of the insurance
requirements set forth in the Loan Documents.




          (e) Condemnation Awards and Insurance Proceeds. Notwithstanding anything contained in
the Management Agreements to the contrary, any proceeds of insurance and condemnation awards
received by Manager shall be applied in accordance with the provisions of the Loan Documents.




          (f) Lender’s Right to Terminate. Upon (1) the acceleration of the Debt evidenced by
the Notes or the termination of the Commitments or the commencement of any action by Lender to
enforce any of its rights or remedies to realize upon any of the collateral encumbered by the
Mortgages in accordance with the terms of the Loan Documents (including, without being limited to,
the commencement of any foreclosure action (by judicial action or power of sale), the making of
any application for the appointment of a receiver or Lender exercising any right to take
possession or control of any of the Facilities) or (2) the occurrence and continuation of the
commission by Manager of any material act which would permit termination of any of the Management
Agreements in accordance with Section 5.01 thereof (subject to any applicable notice, grace and
cure periods provided in the Management Agreements), Lender shall have the right to terminate any
or all of the Management Agreements by giving the Owners and Manager at least thirty (30) days’
prior written notice; provided, however, that if Lender succeeds to ownership of the Facilities,
Lender’s right to terminate the Management Agreements shall expire ninety (90) days after the date
on which Lender takes



3









 







ownership of the Facilities. The Owners may, to the extent permitted under the Management
Agreements, from time to time appoint a successor manager to manage the Facilities in accordance
with the provisions of the Management Agreements with Lender’s prior written consent, such consent
not to be unreasonably withheld or delayed. Manager agrees not to look to Lender for payment of any
accrued but unpaid fees or other amounts due to Manager under the Management Agreements, or any
fees or other amounts due to Manager under the Management Agreements for the period from and after
the effective date of such termination. Upon any termination of the Management Agreements, Manager
shall take such measures as set forth in the Management Agreements to achieve an orderly transition
of operations to the new manager of the Facilities, including delivery of all books, records, and
documents relating to the Facilities and its management. Except as expressly provided herein,
nothing contained in this Agreement shall in any way limit the rights or remedies of Manager
against the Owners or Borrower as a result of any termination of any of the Management Agreements.




          (g) No Amendments to the Management Agreements. Manager will not amend or modify any
of the Management Agreements in any material respect without the prior written consent of Lender,
which consent shall not be unreasonably withheld. In the event Manager fails to secure such
approval, the Management Agreements shall, for the purposes of Manager’s obligations to Lender
pursuant to this Agreement, be deemed not to have been modified by such amendment.




          (h) Limitation of Liens. Any Lien upon any of the Facilities, except Permitted Liens
or as otherwise agreed to in writing by Lender, by Manager shall be expressly subordinate and
subject to the Senior Obligations.




          (i) Delivery of Notices, Information, etc. Manager shall promptly deliver to Lender
all material written notices received by Manager from any governmental authority, regulator,
citizens’ groups or private litigant relating to any of the Facilities.




          (j) Further Assurances. Manager shall (i) execute such affidavits and certificates as
Lender shall reasonably require to further evidence the agreements herein contained, (ii) upon
Lender’s request and at the Owners’ expense, deliver to Lender copies of all information that the
Owners are entitled to receive under the Management Agreements, and (iii) cooperate with Lender’s
representatives in any inspection of the Facilities to the extent Lender is permitted to enter and
inspect the Facilities in accordance with the Mortgages and/or the Credit Agreement.




          (k) Assignment of Rents and Leases. Manager acknowledges that, in connection with the
Loan, each Owner is executing and delivering to Lender an Assignment of Leases and Rents (as the
same may be amended, amended and restated, supplemented or otherwise modified from time to time,
each, an “Assignment of Leases” and collectively, the “Assignments of Leases”) dated as of the
date hereof, collaterally assigning to Lender, among other things, all of such Owner’s right,
title and interest in and to the Leases and the Rents (as such terms are defined in the Assignment
of Leases) from its respective Facility (including, without limitation, any of such Owner’s rights
in the security deposits thereunder (to the extent permitted by applicable law)). Manager further
agrees that it will not be entitled to receive any fees from security deposits or be entitled in
any way to any security deposits with respect to any portion of any of the Facilities or be
permitted to sue for any security deposits for any purpose, subject to the provisions of the Loan
Documents. Manager further agrees that it will deposit all of the Rents, Service Revenues, Tax
Refunds and the Insurance and Condemnation Awards (as



4









 







such terms are defined in the Mortgages) in accordance with the Loan Documents. A copy of
the relevant provisions of the Loan Documents is attached hereto as Exhibit C.




          (l) No Joint Venture. The relationship of Lender to Borrower is one of a
creditor to a debtor, and Lender is not a joint venturer or partner of Borrower or any
Owner.




          (m) Lender Not Obligated Under Management Agreements. Manager further agrees
that nothing herein shall impose upon Lender any obligation for payment or performance in
favor of Manager, unless Lender has elected to assert the Owners’ rights under the
Management Agreements with respect the Facilities in which case Lender agrees to pay Manager
the management fees and all other sums due Manager under the terms of the Management
Agreements from and after the effective date of Lender’s notice of such election to Manager,
and Manager shall continue performance on Lender’s behalf in accordance with the terms of
the Management Agreements with respect to the Facilities as designated by Lender; provided,
however, except as expressly provided herein, nothing contained in this Agreement shall in
any way modify the rights or remedies of Manager against the Owners or Borrower under the
terms of the Management Agreements.




          (n) Secured Parties’ Reliance on Representations. Manager has executed this
Agreement for the purpose of inducing the Secured Parties to make the Loan and with full
knowledge that the Secured Parties shall rely upon the representations, warranties,
covenants and agreements herein contained when making the Loan and that but for this
instrument and the representations, warranties, covenants and agreements herein contained,
the Secured Parties would not take such actions.



          Subject to the subordination provision of Section 2(c), the termination of the Management
Agreements by Manager upon its failure to receive any compensation or reimbursement provided for
in the Management Agreements shall not result in any termination of Manager’s right to receive any
accrued but unpaid leasing commissions, management fees, reimbursable expenses or other amounts
payable by the Owners to Manager under the Management Agreements (including any applicable
termination fees).




          B. If any payment or distribution or security or proceeds thereof are received by Manager
upon or with respect to any of the Subordinated Obligations contrary to the provisions of this
Agreement, Manager will promptly deliver the same to Lender in precisely the form received (except
for the endorsement or assignment of Manager where necessary) for application to the Senior
Obligations (including, without limitation, Post Petition Interest), and, until so delivered, the
same shall be held in trust by Manager as property of Lender. In the event of the failure of
Manager to make any such endorsement or assignment, Manager, or any of its officers or employees,
is hereby irrevocably authorized to make the same.




          C. Manager will not assign or transfer to others any claim which it has or may hereafter have
against Borrower or any Owner in respect of any of the Subordinated Obligations while any of the
Senior Obligations remain unpaid, unless such assignment or transfer is made expressly subject to
the terms and conditions hereof.




          D. Lender, at any time and from time to time, may enter into such agreement or agreements
with Borrower and/or the Owners as Lender may deem proper extending the time of payment of or
renewing or otherwise altering the terms of all or any of the Senior Obligations without notice to
Manager and without in any way impairing or affecting the obligations of Manager hereunder.




5









 





          E. Lender shall not be prejudiced in its right to enforce this Agreement in respect of any of
the Subordinated Obligations owing to Manager by any act or failure to act on the part of any Owner
or anyone in custody of any Owner’s assets or property.




          3. No Assignment. Notwithstanding anything to the contrary in any of the Management
Agreements, (i) the Owners may not assign any of the Management Agreements without the prior
written consent of Lender except to the extent permitted by such Management Agreement and the Loan
Documents and (ii) Manager may not assign any of the Management Agreements without the prior
written consent of Lender.




          4. [Intentionally Omitted].




          5. No Waiver. No failure to exercise, and no delay in exercising, and no course of
dealing with respect to, any power, remedy or right under this Agreement by Lender shall operate
as a waiver thereof, nor shall any single or partial exercise thereof by Lender preclude any other
or further exercise thereof or the exercise of any other power, remedy or right. The remedies
provided herein are cumulative and not exclusive of any remedies provided by applicable law and/or
any of the other Loan Documents.




          6. Notice. All notices, consents, approvals and requests required or permitted
hereunder shall be mailed, or delivered by hand or by overnight courier service to the respective
parties hereto at the following addresses:



Manager:



The Grove Student Properties, LLC

2100 Rexford Rd, Suite 414

Charlotte, NC 28211

Attention: Donald L. Bobbitt, Jr.



Borrower:



Campus Crest Communities Operating Partnership, LP

2100 Rexford Rd, Suite 414

Charlotte, NC 28211

Attention: Donald L. Bobbitt, Jr.



with a copy to:



Bradley Arant Boult Cummings LLP

1819 Fifth Avenue North

Birmingham, Alabama 35203

Attention: Dawn Helms Sharff, Esq.



Owners:



c/o Campus Crest Communities Operating Partnership, LP

2100 Rexford Rd, Suite 414

Charlotte, NC 28211

Attention: Donald L. Bobbitt, Jr.




6









 




with a copy to:



Bradley Arant Boult Cummings LLP

1819 Fifth Avenue North

Birmingham, Alabama 35203

Attention: Dawn Helms Sharff, Esq.



Agent:



Citibank, N.A.

1615 Brett Road

New Castle, Delaware 19720

Attention: Bank Loan Syndications Department/Campus

Crest Credit Facility



with a copy to:



Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Attention: Brian Krisberg, Esq.




          7. Indemnity. Subject to the provisions of the Credit Agreement, the Owners shall
indemnify, defend and hold Lender harmless against and from all liability, loss, damage and expense
(including, without limitation, reasonable attorney’s fees and disbursements), which Lender may or
shall incur or be subject to by reason of this Agreement, or by reason of any action taken in good
faith by Lender hereunder, and against and from any and all claims and demands whatsoever which may
be asserted against Lender by reason of any alleged obligation or undertaking on its part to
perform or discharge any of the terms, covenants and conditions contained in the Management
Agreements except to the extent arising from the bad faith, fraud, gross negligence or willful
misconduct by Lender. In the event Lender incurs any such liability, loss, damage or expense, the
amount thereof, together with interest thereon at the rate of interest applicable from time to time
under the Notes, shall be payable by the Owners to Lender within five (5) Business Days after
written demand.




          8. Amendments, Etc. This Agreement cannot be amended except by an agreement in
writing, signed by Lender, each Owner and Manager, and no provision hereof may be waived except by
an instrument in writing signed by Lender.




          9. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.




          10. Severability. If any provision of this Agreement or the application thereof to
any person or entity or circumstance shall, to any extent, be illegal, invalid and/or
unenforceable, the remainder of this Agreement or the application of such provision to persons or
entities or circumstances other than those as to which it is illegal, invalid and/or
unenforceable, as the case may be, shall not be affected, and each provision of this Agreement
shall be legal, valid and enforceable to the extent permitted by law. The illegality, invalidity
and/or unenforceability of any provision of this Agreement in any jurisdiction shall not affect
the legality, validity and/or enforceability thereof in any other jurisdiction.




          11. Expenses. If any suit or other proceeding is instituted by Lender to
enforce this
Agreement (or any portion hereof), Borrower shall pay, within five (5) Business Days after written




7









 




demand all of the reasonable out-of-pocket costs and expenses (including, without limitation,
reasonable attorneys’ fees and disbursements) incurred by Lender in connection therewith, together
with interest at the interest rate applicable to Base Rate Advances under Section 2.07(a) of the
Credit Agreement. The obligations of Borrower under this Section 11 shall survive the expiration or
termination of this Agreement.




          12. Heading. Headings used in this Agreement are for convenience of reference only
and do not constitute part of this Agreement for any purpose.




          13. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING BROUGHT BY ANY PARTY
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR IN
CONNECTION WITH THIS AGREEMENT.




          14. Cumulative Remedies. All rights and remedies set forth in this Agreement are
cumulative, and Lender may recover judgment thereon, issue execution therefor, and resort to every
other right or remedy available at law or in equity, without first exhausting and without
affecting or impairing the security of any right or remedy afforded hereby; and no such right or
remedy set forth in this Agreement shall be deemed exclusive of any of the remedies or rights
granted to Lender in the Loan Documents. Nothing contained in this Agreement shall be deemed to
limit or restrict the rights and remedies of Lender under any of the other documents related to
the Senior Obligations.




          15. Borrower’s Consent. Borrower has joined herein to evidence its consent to all the
agreements of the Owners and Manager set forth in this Agreement.




          16. Successors. This Agreement shall be binding upon and shall inure to the benefit
of each party hereto and their respective successors and assigns.




          17. Counterparts. This Agreement may be executed in any number of counterparts each
of which, taken together, shall constitute one and the same original.




[SIGNATURE PAGE FOLLOWS]





8











 





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




	 	 	 	 	 

	 	 	BORROWER:
	 
	 	 	 	 
	 	 	CAMPUS CREST COMMUNITIES OPERATING
	 	 	PARTNERSHIP, LP
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest Communities GP, LLC
	 

	 	 	 	Its General Partner






	 	 	 	 	 

	 

	 	By:
	 	Campus Crest Communities, Inc.
	 

	 	 	 	Its Sole Member






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Donald L. Bobbitt, Jr.
	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 





	 	 	 	 	 

	`
	 	 	 	 
	 	 	CAMPUS CREST AT STEPHENVILLE, LP
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest GP II, LLC
	 

	 	 	 	Its General Partner






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 





	 	 	 	 	 

	 	 	CAMPUS CREST AT LUBBOCK, LP
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest GP II, LLC
	 

	 	 	 	Its General Partner






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 





	 	 	 	 	 

	 	 	CAMPUS CREST AT WACO, LP
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest GP II, LLC
	 

	 	 	 	Its General Partner






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






S-1









 






	 	 	 	 	 

	 	 	CAMPUS CREST AT WICHITA FALLS, LP
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest GP II, LLC

Its General Partner






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






	 	 	 	 	 

	 	 	CAMPUS CREST AT SAN MARCOS, LP
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest GP II, LLC
	 

	 	 	 	Its General Partner






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






	 	 	 	 	 

	 	 	CAMPUS CREST AT JACKSONVILLE, AL, LLC
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest Properties, LLC
	 

	 	 	 	Its Manager






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






	 	 	 	 	 

	 	 	CAMPUS CREST AT MOBILE PHASE II, LLC
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest Properties, LLC
	 

	 	 	 	Its Manager






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






	 	 	 	 	 

	 	 	CAMPUS CREST AT CHENEY, LLC
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest Properties, LLC
	 

	 	 	 	Its Manager






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






S-2









 






	 	 	 	 	 

	 	 	CAMPUS CREST AT JONESBORO, LLC
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest Properties, LLC
	 

	 	 	 	Its Manager






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






	 	 	 	 	 

	 	 	CAMPUS CREST AT TROY, LLC
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest Properties, LLC
	 

	 	 	 	Its Manager






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






	 	 	 	 	 

	 	 	CAMPUS CREST AT MURFREESBORO, LLC
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest Properties, LLC
	 

	 	 	 	Its Manager






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






	 	 	 	 	 

	 	 	CAMPUS CREST AT WICHITA, LLC
	 
	 	 	 	 
	 

	 	By:
	 	Campus Crest Properties, LLC
	 

	 	 	 	Its Manager






	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






	 	 	 	 	 	 	 

	 	 	LENDER:
	 
	 	 	 	 	 	 
	 	 	CITIBANK, N.A.,
	 	 	a national banking association, as agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






S-3









 






	 	 	 	 	 	 	 

	 	 	MANAGER:
	 
	 	 	THE GROVE STUDENT PROPERTIES, LLC,
	 	 	a North Carolina limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Donald L. Bobbitt, Jr.
	 	 
	 

	 	 	 	Title: Manager	 	 






S-4









 






EXHIBIT A




SCHEDULE OF FACILITIES



	 	 	 	 	 
	Owner	 	Facility Address	 	Property Interest
	Campus Crest at Lubbock, LP

	 	315 N. Utica Drive
	 	Leasehold
	 

	 	Lubbock, TX 79416	 	 
	 
	 	 	 	 
	Campus Crest at Stephenville, LP

	 	2825 W. Frey Street
	 	Leasehold
	 

	 	Stephenville, TX 76401	 	 
	 
	 	 	 	 
	Campus Crest at San Marcos, LP

	 	1200 East River Ridge Parkway
	 	Fee
	 

	 	San Marcos, TX 78666	 	 
	 
	 	 	 	 
	Campus Crest at Waco, LP

	 	2826 S. University Parks Drive
	 	Leasehold
	 

	 	Waco, TX 76706	 	 
	 
	 	 	 	 
	Campus Crest at Wichita Falls, LP

	 	5005 Lake Park Drive
	 	Leasehold
	

	 	Wichita Falls, TX 76302	 	 
	 
	 	 	 	 
	Campus Crest at Cheney, LLC

	 	240 S. Cheney-Spangle Road
	 	Leasehold
	 

	 	Cheney, WA 99004	 	 
	 
	 	 	 	 
	Campus Crest at Jonesboro, LLC

	 	500 N. Caraway Road
	 	Leasehold
	 

	 	Jonesboro, AR 72401	 	 
	 
	 	 	 	 
	Campus Crest at Murfreesboro, LLC

	 	1320 Journey Drive
	 	Fee
	

	 	Murfreesboro, TN 37130	 	 
	 
	 	 	 	 
	Campus Crest at Troy, LLC

	 	920 E. Academy Street
	 	Leasehold
	 

	 	Troy, AL 36081	 	 
	 
	 	 	 	 
	Campus Crest at Wichita, LLC

	 	2909 N. Oliver Street
	 	Leasehold
	 

	 	Wichita, KS 67220	 	 
	 
	 	 	 	 
	Campus Crest at Mobile Phase II, LLC

	 	375 Cleverdon Parkway
	 	Leasehold
	

	 	Mobile, AL 36688	 	 
	 
	 	 	 	 
	Campus Crest at Jacksonville,

	 	351 Nisbet Street NW
	 	Fee
	AL, LLC

	 	Jacksonville, AL 36265	 	 






Exh. A-1



 









 





EXHIBIT B




MANAGEMENT AGREEMENTS



[See attached pages.]



Exh. B-1




 









 








EXHIBIT C




CASH MANAGEMENT PROVISIONS



None



Exh. C-1





 











 





EXHIBIT L to the

CREDIT AGREEMENT




FORM OF

PLEDGE AGREEMENT




(See Attached)








 









 








PLEDGE AGREEMENT




          THIS PLEDGE AGREEMENT (as the same may be amended, restated, supplemented or otherwise
modified from time to time, this “Pledge Agreement”), dated as of October 19, 2010, is by
and between the “Pledgor” parties set forth on the signature pages hereto (collectively, the
“Initial Pledgors”, and together with any domestic Subsidiaries of any Initial Pledgor
which become parties to this Pledge Agreement by executing a Supplement hereto in substantially the
form of Exhibit D hereto, the “Pledgors”) and Citibank, N.A., in its capacity as
Administrative Agent (with its successors and permitted assigns in such capacity, the
“Administrative Agent”) for the “Lender Parties” (as defined below) party to that certain
Credit Agreement dated as of the date hereof among Campus Crest Communities Operating Partnership,
LP (the “Borrower”), the guarantors named therein (the “Guarantors”) the
institutions from time to time party thereto as Lender Parties (the “Lender Parties”), the
Swing Line Bank (as defined therein), Citibank, N.A., as Collateral Agent, the initial issuer of
letters of credit and the Administrative Agent (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”). Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit
Agreement.




WITNESSETH:




          WHEREAS, (a) the Borrower and Guarantors are party to the Credit Agreement, pursuant to which
the Lender Parties have agreed, subject to certain conditions precedent, to make Loans and extend
other financial accommodations to the Borrower from time to time, and (b) each Pledgor is directly
or indirectly wholly owned by Borrower;




          WHEREAS, as of the date hereof, each Pledgor owns (a) the limited liability company
interests, general partner interests and/or limited partner interests described under such
Pledgor’s name on Exhibit A hereto and issued by the issuers named therein and (b) the
Indebtedness described under such Pledgor’s name on Exhibit C hereto and issued by the
obligors named therein; and




          WHEREAS, in order to secure the prompt and complete payment, observance and performance of
(a) all of each of the Loan Parties’ respective Obligations under the Loan Documents and (b) all
of each Pledgor’s obligations and liabilities hereunder and in connection herewith (all such
Obligations and such obligations and liabilities hereunder of such Pledgor being hereinafter
referred to collectively as the “Liabilities”), the Administrative Agent, the Lender
Parties and the other holders (each individually a “Secured Party”, and collectively, the
“Secured Parties”) have required, as a condition, among others, to entering into the
Credit Agreement, that each Pledgor execute and deliver this Pledge Agreement;




          NOW, THEREFORE, for and in consideration of the foregoing and of any financial accommodations
or extensions of credit (including, without limitation, any loan or advance by renewal,
refinancing or extension of the agreements described hereinabove or otherwise) heretofore, now or
hereafter made to or for the benefit of each Pledgor pursuant to the Credit Agreement or any other
agreement, instrument or document executed pursuant to or in connection therewith, and for other
good and valuable consideration, the receipt and sufficiency




Pledge Agreement









 









 







of which are hereby acknowledged, each Pledgor and the Administrative Agent hereby agree as follows:




          1. Defined Terms.




          (a) Unless otherwise defined herein, all terms defined in Article 8 and Article 9 of the
Uniform Commercial Code from time to time in effect in the State of New York (the “Uniform
Commercial Code”) are used herein as defined therein.




          (b) The words “hereby,” “hereof,” “herein” and “hereunder” and words of like import when used
in this Pledge Agreement shall refer to this Pledge Agreement as a whole and not to any particular
provision of this Pledge Agreement. Section references herein are to this Pledge Agreement unless
otherwise specified.




          (c) All terms defined in this Pledge Agreement in the singular shall have comparable meanings
when used in the plural, and vice versa, unless otherwise specified.




          2. Pledge. Each Pledgor pledges to the Administrative Agent for the benefit of the
Secured Parties and each Pledgor grants, for the benefit of the Secured Parties, a security
interest in the following (collectively, the “Pledged Collateral”):




          (a) The Equity Interests described in Exhibit A hereto, and the certificates
representing such Equity Interests, all options and warrants for the purchase of shares of such
Equity Interests held in the name of such Pledgor (all of said Equity Interests, options and
warrants, and all Equity Interests held in the name of such Pledgor as a result of the exercise of
such options or warrants, being hereinafter collectively referred to as the “Pledged
Interests”), herewith delivered to the Administrative Agent accompanied by powers (with respect
to all certificated Pledged Interests) in the form of Exhibit B hereto and made a part
hereof (the “Powers”) duly executed in blank, and all dividends, distribution, cash,
instruments and other property from time to time received, receivable or otherwise distributed in
respect of, or in exchange for, any or all of the Pledged Interests;




          (b) All right, title and interest of any Pledgor as a member of any limited liability company
(“LLC”) or a partner in any limited partnership (“LP”) and all right, title and
interest of any Pledgor in, to and under an LLC or LP operating or partnership agreement to which
it is a party, each described in Exhibit A hereto (the “Pledged LLC/LP Interests”);




          (c) All additional Equity Interests related to the Pledged Interests and from time to time
acquired by such Pledgor in any manner (any such additional Equity Interests shall constitute part
of the Pledged Interests and the Administrative Agent is irrevocably authorized to amend
Exhibit A from time to time to reflect such additional shares), and all options, warrants,
dividends, distributions, cash, instruments and other rights and options from time to time
received, receivable or otherwise distributed in respect of or in exchange for any or all of such
shares;




          (d) The indebtedness of each issuer of the Pledged LLC/LP Interests to such Pledgor referred
to in Exhibit C attached hereto (the “Pledged Debt”) and the instruments evidencing
such Pledged Debt (if any), duly endorsed and in transferable form, all payments of




Pledge Agreement




-2-









 




principal thereof and interest thereon, due and to become due thereunder, and all books and
records applicable thereto;




          (e) Intentionally Deleted;




          (f) The property and interests in property described in Section 4 below with respect
to such Pledgor; and




          (g) All proceeds of the foregoing.




          3. Security for Obligations. The Pledged Collateral of each Pledgor secures the
prompt payment, performance and observance of the Liabilities of such Pledgor.




          4. Pledged Collateral Adjustments. If, during the term of this Pledge
Agreement:




          (a) Any stock or other equity dividend, distribution, reclassification,
readjustment or other change is declared or made in the capital structure of any issuer of Pledged
Interests, or any option included within the Pledged Collateral is exercised, or both, or




          (b) Any subscription warrants or any other rights or options shall be issued to any Pledgor in
connection with the Pledged Collateral, or




          (c) Any additional indebtedness owing to any Pledgor is incurred by any issuer of the Pledged
Debt,



then all new, substituted and additional shares, warrants, rights, options, notes or other
securities, issued by reason of any of the foregoing, shall be promptly delivered to and held by
the Administrative Agent under the terms of this Pledge Agreement and shall constitute Pledged
Collateral hereunder (provided that any Pledged Debt shall only be required to be delivered to the
Administrative Agent upon its request therefor); provided, however, that nothing contained
in this Section 4 shall be deemed to permit any stock or other equity dividend or
distribution, issuance of additional stock, interests, warrants, rights or options,
reclassification, readjustment or other change in the capital structure of any issuer of Pledged
Interests which is prohibited in the Credit Agreement.




          5. Subsequent Changes Affecting Pledged Collateral.




          (a) Each Pledgor represents and warrants that it has made its own arrangements for keeping
informed of changes or potential changes affecting the Pledged Collateral (including, but not
limited to, rights to convert, rights to subscribe, payment of dividends, distributions,
reorganization or other exchanges, tender offers and voting rights), and each Pledgor agrees that,
subject to Section 22, none of the Secured Parties shall have any obligation to inform
such Pledgor of any such changes or potential changes or to take any action or omit to take any
action with respect thereto. The Administrative Agent may, upon the occurrence and during the
continuation of an Event of Default, without notice and at its option, transfer or register the
Pledged Collateral or any part thereof into its or its nominee’s name with or without any
indication that such Pledged Collateral is subject to the security interest




Pledge Agreement




-3-









 




hereunder, and each Pledgor will cause each issuer of Pledged Interests and each obligor with
respect to Pledged Debt to cooperate with the Administrative Agent in effecting any such transfer
or registration. In addition, the Administrative Agent may at any time exchange certificates or
instruments representing or evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations and such Pledgor will cause each issuer of Pledged Interests and
each obligor with respect to Pledged Debt to cooperate with the Administrative Agent in effecting
any such exchange.




          (b) In the case of each Pledgor member of an LLC or partner of an LP, such Pledgor hereby
consents to the extent required by the applicable LLC or LP operating or partnership agreement to
the pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged Interests in such
LLC or LP and to the transfer of such Pledged Interests to the Administrative Agent or its nominee
and to the substitution of the Administrative Agent or its nominee as a substituted member of the
LLC or partner of the LP with all the rights, powers and duties of a member of the LLC or partner
of the LP in question.




          (c) No Pledgor shall agree to any amendment of an LLC or LP operating agreement that in any
way adversely affects the perfection of the security interest of the Administrative Agent in the
Pledged Interests pledged by such Pledgor hereunder, including any amendment electing to treat the
membership interest or partnership interest of such Pledgor as other than a security under Section
8- 103 of the UCC.




          6. Representations and Warranties. Each Pledgor represents and warrants as
follows:




          (a) Such Pledgor is the sole legal and beneficial owner of the percentage of the issued and
outstanding Equity Interest of the respective issuers thereof listed with respect to such Pledgor
on Exhibit A hereto, free and clear of any Lien except for the (i) security interest
created by this Pledge Agreement and (ii) Liens permitted under the Credit Agreement, and the
Pledged Interests constitute that percentage of the issued and outstanding shares or interest of
Equity Interest of the respective issuers thereof set forth in Exhibit A hereto;




          (b) Such Pledgor is the sole legal and beneficial owner of the Pledged Debt set forth on
Exhibit C with respect to such Pledgor, free and clear of any Lien except for (i) the
security interest created by this Pledge Agreement and (ii) Liens permitted under the Credit
Agreement, and such Pledged Debt (i) as of the date hereof, constitutes all of the outstanding
Indebtedness for money borrowed or for any deferred purchase price of property of the respective
obligors thereof owing to such Pledgor and (ii) are each a valid and binding obligation of its
respective obligor, enforceable in accordance with its terms, except as such enforceability may be
limited by (x) bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally and (y) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);




          (c) Such Pledgor has, as applicable, full corporate, partnership or limited liability company
power and authority to execute, deliver and perform this Pledge Agreement except as set forth on
Schedule I hereto;




Pledge Agreement




-4-









 





          (d) There are no restrictions upon the voting rights associated with, or upon the transfer of,
any of the Pledged Collateral, other than pursuant to this Pledge Agreement or any of the other
Loan Documents except as set forth in the organizational documents of the issuer of such Pledged
Collateral;




          (e) Such Pledgor has the right to vote, pledge and grant a security interest in or otherwise
transfer such Pledged Collateral free of any Liens;




          (f) No authorization, approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either (i) for the pledge of the Pledged
Collateral pursuant to this Pledge Agreement or for the execution, delivery or performance of this
Pledge Agreement by such Pledgor or (ii) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Pledge Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Pledge Agreement (except as may be required in connection with such
disposition by laws affecting the offering and sale of securities generally);




          (g) The pledge of the Pledged Collateral pursuant to this Pledge Agreement creates a valid,
perfected and, following delivery of the certificates representing any certificated Pledged
Interest and blank powers to the Administrative Agent, first priority security interest in the
Pledged Collateral, in favor of the Administrative Agent for the benefit of the Secured Parties
securing the payment and performance of the Liabilities;




          (h) The Powers are duly executed and give the Administrative Agent the authority they purport
to confer;




          (i) Other than the Pledged Interests consisting of pledged partnership or limited liability
company interests that constitute general intangibles, there are no Pledged Interests or Pledged
Debt other than that represented by certificated securities or instruments delivered to the
Administrative Agent; and




          (j) The grant and perfection of the security interests in the Pledged Collateral for the
benefit of the Secured Parties, in accordance with the terms herein, are not made in violation of
the registration of the Securities Act of 1933 and the rules and regulations promulgated
thereunder (the “Securities Act”), any applicable provisions of other federal securities
laws, state securities or “Blue Sky” law, foreign securities law, or applicable general
corporation law or any other applicable law.




          7. Voting Rights. During the term of this Pledge Agreement, and except as provided in
this Section 7 below, each Pledgor shall have the right to vote the Pledged Interests on
all corporate, partnership or LLC questions in a manner not inconsistent with the terms of this
Pledge Agreement, the Credit Agreement and any other agreement, instrument or document executed
pursuant thereto or in connection therewith. Upon the occurrence and during the continuance of an
Event of Default, the Administrative Agent may, at the Administrative Agent’s option and following
written notice from the Administrative Agent to any Pledgor, exercise all voting powers pertaining
to the Pledged Collateral with respect to such Pledgor, including the right to take action by
shareholder consent.




Pledge Agreement









-5-









 








          8. Dividends and Other Distributions. (a) So long as no Event of
Default shall have occurred and is continuing, and to the extent permitted by the Credit Agreement:




          (i) Each Pledgor shall be entitled to receive and retain any and all dividends,
distributions and interest paid in respect of the Pledged Collateral, provided,
however, that any and all




               (A) dividends, distribution and interest paid or payable other than in cash with respect to,
and instruments and other non-cash property received, receivable or otherwise distributed with
respect to, or in exchange for, any of the Pledged Collateral;



               (B) dividends and other distributions paid or payable in cash with respect to any of the
Pledged Collateral on account of a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in surplus; and



               (C) cash paid, payable or otherwise distributed with respect to principal of, or in
redemption of, or in exchange for, any of the Pledged Collateral, except to the extent paid,
payable or otherwise distributed in connection with a sale, lease, transfer or other disposition
permitted under Section 5.02(e) of the Credit Agreement;



shall be Pledged Collateral, and shall be forthwith delivered to the Administrative Agent to hold,
for the benefit of the Secured Parties, as Pledged Collateral and shall, if received by any
Pledgor, be received in trust for the Administrative Agent, for the benefit of the Secured
Parties, and, during the continuance of an Event of Default, shall be segregated from the other
property or funds of such Pledgor. Except for the distributions or dividends which may be retained
by any Pledgor in accordance with the applicable terms of the Loan Documents, Pledged Collateral
so received in the form of monies, checks, notes, drafts or funds shall be delivered promptly to
the Administrative Agent (with any necessary endorsement) as proceeds of Collateral in accordance
with the applicable provisions of the Credit Agreement; and




               (D) The Administrative Agent shall execute and deliver (or cause to be executed and delivered)
to each Pledgor all such proxies and other instruments as each Pledgor may reasonably request for
the purpose of enabling such Pledgor to receive the dividends, distributions or interest payments
which such Pledgor is authorized to receive and retain pursuant to clause (i) above and to
exercise the voting rights that Pledgor is entitled to exercise pursuant to Section 7 above.



          (b) Upon the occurrence and during the continuance of an Event of Default.




               (i) All rights of each Pledgor to receive the dividends, distributions and interest payments
which it would otherwise be authorized to receive and retain pursuant to Section 8(a)(i)
hereof shall cease, and all such rights shall thereupon become vested in the Administrative Agent,
for the benefit of the Administrative Agent, the Lender Parties and the other Secured Parties,
which shall thereupon have the sole right to receive and hold as Pledged Collateral such
dividends, distributions and interest payments; and



               (ii) All dividends, distributions and interest payments which are received by any Pledgor
contrary to the provisions of clause (i) of this Section 8(b) shall be



Pledge Agreement




-6-









 




received in trust for the Administrative Agent, for the benefit of the Secured Parties, shall be
segregated from other funds of such Pledgor and shall be paid over immediately to the
Administrative Agent as Pledged Collateral in the same form as so received (with any necessary
endorsements).




          9. Transfers and Other Liens. Each Pledgor agrees that it will not (a) sell or
otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral without
the prior written consent of the Administrative Agent, other than as permitted by the Credit
Agreement, or (b) create or permit to exist any Lien upon or with respect to any of the Pledged
Collateral, except for the security interest under this Pledge Agreement.




          10. Remedies; Application of Proceeds.




          (a) The Administrative Agent shall have, in addition to any other rights given under this
Pledge Agreement or by law, all of the rights and remedies with respect to the Pledged Collateral
of a secured party under the Uniform Commercial Code. In addition, upon the occurrence and
during the continuance of an Event of Default, the Administrative Agent shall have such powers of
sale and other powers as may be conferred by applicable law. With respect to the Pledged Collateral
or any part thereof which shall then be in or shall thereafter come into the possession or custody
of the Administrative Agent or which the Administrative Agent shall otherwise have the ability to
transfer under applicable law, the Administrative Agent may, in its sole discretion, without notice
except as specified below, after the occurrence and during the continuance of an Event of Default,
sell or cause the same to be sold at any exchange, broker’s board or at public or private sale, in
one or more sales or lots, at such price as the Administrative Agent may reasonably deem best, for
cash or on credit or for future delivery, without assumption of any credit risk, and the purchaser
of any or all of the Pledged Collateral so sold shall thereafter own the same, absolutely free from
any claim, encumbrance or right of any kind whatsoever. Any Secured Party may, in its own name, or
in the name of a designee or nominee, buy the Pledged Collateral at any public sale and, if
permitted by applicable law, buy the Pledged Collateral at any private sale. In the event of a
sale of any Pledged Collateral, or any part thereof, to a Secured Party upon the occurrence and
during the continuance of an Event of Default, such Secured Party shall not deduct or offset from
any part of the purchase price to be paid therefor any indebtedness owing to it by such Pledgor.
Such Pledgor will pay to the Administrative Agent all reasonable expenses (including, without
limitation, court costs and reasonable attorneys’ and paralegals’ fees and expenses) of, or
incidental to, the enforcement of any of the provisions hereof. The Administrative Agent agrees to
distribute any proceeds of the sale of the Pledged Collateral in accordance with the Credit
Agreement.




          (b) Upon the occurrence and during the continuance of an Event of Default, each Pledgor shall,
upon the request of the Administrative Agent, at such Pledgor’s expense, execute and deliver all
such instruments and documents, and do or cause to be done all such other acts and things, as may
be reasonably necessary or, in the opinion of the Administrative Agent, such Pledgor or either of
their counsel, reasonably advisable to register the applicable Pledged Collateral under the
provisions of the Securities Act in order to sell the same, and to exercise its best efforts to
cause the registration statement relating thereto to become effective and to remain effective for
such period as prospectuses are required by law to be furnished, and to make all amendments and
supplements thereto and to the related prospectus which, in the




Pledge Agreement







-7-









 







opinion of the Administrative Agent, such Pledgor or either of their counsel, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto.




          (c) Upon the occurrence and during the continuance of an Event of Default, each Pledgor shall,
upon the reasonable request of the Administrative Agent, at such Pledgor’s expense, use its best
efforts to qualify the Pledged Collateral under state securities or “Blue Sky” laws and to obtain
all necessary governmental approvals for the sale of the Pledged Collateral, as requested by the
Administrative Agent.




          (d) Unless any of the Pledged Collateral threatens to decline speedily in value or is or
becomes of a type sold on a recognized market, the Administrative Agent will give each Pledgor
reasonable notice of the time and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of the Pledged Collateral
conducted in conformity with reasonable commercial practices of banks, commercial finance
companies, insurance companies or other financial institutions disposing of property similar to
the Pledged Collateral shall be deemed to be commercially reasonable.
Notwithstanding any provision to the contrary contained herein, each Pledgor agrees that any
requirements of reasonable notice shall be met if such notice is received by each Pledgor as
provided in Section 23 below at least ten (10) Business Days before the time of the sale or
disposition; provided, however, that the Administrative Agent may give any shorter
notice that is commercially reasonable under the circumstances. Any other requirement of notice,
demand or advertisement for sale is waived, to the extent permitted by law.




          (e) In view of the fact that federal and state securities laws may impose certain restrictions
on the method by which a sale of the Pledged Collateral may be effected after an Event of Default,
each Pledgor agrees that upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, from time to time, attempt to sell all or any part of the Pledged
Collateral by means of a private placement restricting the bidders and prospective purchasers to
those who are qualified and will represent and agree that they are purchasing for investment only
and not for distribution. In so doing, the Administrative Agent may solicit offers to buy the
Pledged Collateral, or any part of it, from a limited number of investors deemed by the
Administrative Agent, in its reasonable judgment, to be financially responsible parties who might
be interested in purchasing the Pledged Collateral. Each Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of Pledged Collateral for the period of time necessary to
permit the issuer thereof to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if such issuer would agree to do so.




          (f) Each Pledgor further agrees that a breach of any covenant contained in this
Section 10 or Section 8 will cause irreparable injury to the Administrative Agent
and the other Secured Parties, that the Administrative Agent and the other Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 10 and Section 8 shall be specifically
enforceable against such Pledgor,




Pledge Agreement









-8-









 







and such Pledgor hereby waives and agrees not to assert any defense against an action for specific
performance of such covenants except for a defense that no Event of Default has occurred and is
continuing under the Credit Agreement.




          (g) Each Pledgor will reimburse the Administrative Agent for all reasonable expenses incurred
by the Administrative Agent, including, without limitation, reasonable attorneys’ and accountants’
fees and expenses, in connection with the foregoing.




          (h) To the extent that applicable law imposes duties on the Administrative Agent to exercise
remedies in a commercially reasonable manner, each Pledgor acknowledges and agrees that it is not
commercially unreasonable for the Administrative Agent (i) to fail to incur expenses reasonably
deemed significant by the Administrative Agent to prepare Pledged Collateral for disposition, (ii)
to fail to obtain third party consents for access to Pledged Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Pledged Collateral to be collected or disposed of, (iii) to
advertise dispositions of Pledged Collateral through publications or media of general circulation,
(iv) to contact other Persons, whether or not in the same business as the Pledgor, for expressions
of interest in acquiring all or any portion of such Pledged Collateral, (v) to hire one or more
professional auctioneers to assist in the disposition of Pledged Collateral, (vi) to dispose of
Pledged Collateral by utilizing internet sites that provide for the auction of assets of the types
included in the Pledged Collateral or that have the reasonable capacity of doing so, (viii) to
disclaim disposition warranties, such as title, possession or quiet enjoyment, (ix) to purchase
insurance or credit enhancements to insure the Administrative Agent against risks of loss,
collection or disposition of Pledged Collateral or to provide to the Administrative Agent a
guaranteed return from the collection or disposition of Pledged Collateral, or (x) to the extent
deemed appropriate by the Administrative Agent, to obtain the services of brokers, investment
bankers, consultants and other professionals to assist the Administrative Agent in the collection
or disposition of any of the Pledged Collateral. Each Pledgor acknowledges that the purpose of
this Section 10(h) is to provide non-exhaustive indications of what actions or omissions
by the Administrative Agent would not be commercially unreasonable in the Administrative Agent’s
exercise of remedies against the Pledged Collateral and that other actions or omissions by the
Administrative Agent shall not be deemed commercially unreasonable solely on account of not being
indicated in this Section 10(h). Without limitation upon the foregoing, nothing contained
in this Section 10(h) shall be construed to grant any rights to any Pledgor or to impose
any duties on the Administrative Agent that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this Section 10(h).




          11. Administrative Agent Appointed Attorney-in-Fact. Each Pledgor hereby appoints
the Administrative Agent its attorney-in-fact, with full authority, in the name of each Pledgor or
otherwise, upon the occurrence and during the continuance of an Event of Default, from time to
time in the Administrative Agent’s sole discretion, to take any action and to execute any
instrument which the Administrative Agent may deem reasonably necessary or reasonably advisable to
accomplish the purposes of this Pledge Agreement, including, without limitation (subject to
Section 8 hereof), to receive, endorse and collect all instruments made payable to such
Pledgor representing any dividend, distribution, interest payment or other distribution in respect
of the Pledged Collateral or any part thereof and to give full discharge for the same and




Pledge Agreement









-9-









 







to arrange for the transfer of all or any part of the Pledged Collateral on the books of each of
the issuers of such Pledged Interests or obligors of such Pledged Debt to the name of the
Administrative Agent or the Administrative Agent’s nominee.




          12. Waivers. Each Pledgor waives presentment and demand for payment of any of the
Liabilities, protest and notice of dishonor or Event of Default with respect to any of the
Obligations and all other notices to which such Pledgor might otherwise be entitled except as
otherwise expressly provided herein or in the Credit Agreement.




          13. Termination of this Pledge Agreement; Release of Pledged Collateral.




          (a) The pledge made and the security interest granted by each Pledgor under this Pledge
Agreement shall terminate against all the Pledged Collateral upon the satisfaction of the
conditions specified in the Credit Agreement. Upon such termination (other than as a result of the
sale of the Pledged Collateral) and at the written request of each Pledgor or its successors or
assigns, and at the cost and expense of any Pledgor or its successors or assigns, the
Administrative Agent shall execute in a timely manner such instruments, documents or agreements
as are reasonably necessary or reasonably desirable to terminate the Administrative Agent’s
security interest in the Pledged Collateral and deliver to Pledgors the certificate(s) representing
the Pledged Interests, the notes evidencing the Pledged Debt (if any) and the Powers, provided that
such instruments evidencing the Pledged Collateral are in the possession of the Administrative
Agent, subject to any disposition made by the Administrative Agent pursuant to this Pledge
Agreement.




          (b) Notwithstanding anything in this Pledge Agreement to the contrary, each Pledgor may, to
the extent permitted by the Credit Agreement, sell, assign, transfer or otherwise dispose of any
Pledged Collateral. In addition, the Pledged Collateral shall be subject to release from time to
time (with the Pledged Collateral referred to in the immediately preceding sentence, the
“Released Collateral”) in accordance with the Credit Agreement. The Liens under this
Pledge Agreement shall terminate with respect to the Released Collateral upon such sale, transfer,
assignment, disposition or release, and, upon the request of and at the sole cost and expense of,
the applicable Pledgor, the Administrative Agent shall execute and deliver such instruments or
documents as may be necessary to release the Liens granted hereunder; provided,
however, that (i) the Administrative Agent shall not be required to execute any such
documents on terms which, in the Administrative Agent’s reasonable opinion, would expose
the Administrative Agent to liability or create any obligation other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect
or impair the Liabilities or any Liens on (or obligations of any Pledgor in respect of) assets
which continue to constitute Pledged Collateral, including, without limitation, all reversionary
rights of any Pledgor with respect to the Released Collateral and the proceeds of any sale, all of
which shall continue to constitute part of the Pledged Collateral.




          (c) Each Pledgor acknowledges that it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement without the prior
written consent of the Administrative Agent and agrees that it will not do so without the prior
written consent of the Administrative Agent, subject to such Pledgor’s rights under Section
9-509(d)(2) of the Uniform Commercial Code.




Pledge Agreement





-10-









 








          14. Successors and Assigns. This Pledge Agreement shall be binding upon each Pledgor
and its successors, and upon any assign(s) of any Pledgor in accordance with the Credit Agreement
and shall inure to the benefit of the Secured Parties and their respective successors and assigns.
Nothing set forth herein or in any other Loan Document is intended or shall be construed to give
any other Person any right, remedy or claim under, to or in respect of this Pledge Agreement, the
Credit Agreement or any other Loan Document or any Pledged Collateral. Each Pledgor’s successors
shall include, without limitation, a receiver, trustee or debtor-in-possession of or for such
Pledgor.




          15. GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK.




          16. Consent to Jurisdiction and Service of Process. Each Pledgor agrees that
the terms of Section 9.13 of the Credit Agreement with respect to consent to jurisdiction and
service of process shall apply equally to this Pledge Agreement.




          17. WAIVER OF JURY TRIAL. EACH OF THE PLEDGORS AND THE ADMINISTRATIVE AGENT
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, BETWEEN THE ADMINISTRATIVE AGENT AND ANY PLEDGOR ARISING OUT OF OR RELATED TO THE
TRANSACTIONS CONTEMPLATED BY THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT. ANY SUCH PERSON
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS PLEDGE AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.




          18. Waiver of Bond. Each Pledgor waives the posting of any bond otherwise
required of the Administrative Agent in connection with any judicial process or proceeding to
realize on the Pledged Collateral or any other security for the Liabilities, to enforce any
judgment or other court order entered in favor of the Administrative Agent, or to enforce by
specific performance, temporary restraining order, or preliminary or permanent injunction, this
Pledge Agreement or any other agreement or document between the Administrative Agent and such
Pledgor.




          19. Advice of Counsel. Each Pledgor represents and warrants to the Secured Parties
that it has discussed this Pledge Agreement and, specifically, the provisions of Sections
15 through 18 hereof, with such Pledgor’s attorneys.




          20. Severability. Whenever possible, each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under applicable law,
but, if any provision of this Pledge Agreement shall be held to be prohibited or invalid under
applicable law, such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the remaining provisions of
this Pledge Agreement.




Pledge Agreement






-11-









 








          21. Further Assurances. Each Pledgor agrees that it will cooperate with the
Administrative Agent and will execute and deliver, or cause to be executed and delivered, all such
other powers, proxies, instruments and documents, and will take all such other actions, including,
without limitation, the execution and filing of financing statements, as the
Administrative Agent may reasonably request from time to time in order to carry out the provisions
and purposes of this Pledge Agreement.




          22. The Administrative Agent’s Duty of Care. The Administrative Agent shall not be
liable for any acts, omissions, errors of judgment or mistakes of fact or law including, without
limitation, acts, omissions, errors or mistakes with respect to the Pledged Collateral, except for
those arising out of or in connection with the Administrative Agent’s (a) gross negligence or
willful misconduct, (b) material breach of a material provision of this Pledge Agreement, or (c)
failure to use reasonable care with respect to the safe custody of the Pledged Collateral in the
Administrative Agent’s possession, and the parties hereto agree that such care shall be reasonable,
under Section 9-207 of the Uniform Commercial Code or otherwise, if the Administrative Agent deals
with the Pledged Collateral in the same manner as it deals with similar property for its own
account. Without limiting the generality of the foregoing, the Administrative Agent shall be
under no obligation to take any steps necessary to preserve rights in the Pledged Collateral
against any other parties but may do so at its option. All reasonable expenses incurred in
connection therewith shall be for the sole account of the Pledgors, and shall constitute part of
the Liabilities secured hereby.




          23. Notices. All notices and other communications required or desired to be served,
given or delivered hereunder shall be in writing and shall be served, given or delivered as
provided in Section 9.02 of the Credit Agreement.




          24. Amendments, Waivers and Consents. None of the terms or provisions of this Pledge
Agreement may be waived, altered, modified or amended, and no consent to any departure by any
Pledgor herefrom shall be effective, except by or pursuant to an instrument in writing which (a) is
duly executed by each Pledgor and the Administrative Agent and (b) complies with the requirements
of the Credit Agreement. Any such waiver shall be valid only to the extent set forth therein. A
waiver by the Administrative Agent of any right or remedy under this Pledge Agreement on any one
occasion shall not be construed as a waiver of any right or remedy which the Administrative Agent
would otherwise have on any future occasion. No failure to exercise or delay in exercising any
right, power or privilege under this Pledge Agreement on the part of the Administrative Agent shall
operate as a waiver thereof; and no single or partial exercise of any right, power or privilege
under this Pledge Agreement shall preclude any other or further exercise thereof or the exercise of
any other right, power or privilege.




          25. Section Titles. The section titles herein are for convenience of reference only,
and shall not affect in any way the interpretation of any of the provisions hereof.




          26. Acknowledgment of Pledged Interests. Pledgor shall cause each entity representing
Pledged Interests to make the appropriate notation in such entity’s books and records indicating
that the Pledged Interests are subject to the security interest granted pursuant to this Pledge
Agreement. By execution of its acknowledgment in the form included at the end




Pledge Agreement









-12-









 







of this Pledge Agreement, each such entity shall consent to the security interest in the
applicable Pledged Interests granted to Secured Parties pursuant to this Pledge Agreement and
shall agree to comply with any “instructions” (as defined in Section 8-102(a)(12) of the UCC) with
respect to the Pledged Interests originated by the Administrative Agent on behalf of the Secured
Parties without further consent of Pledgor, including, without limitation, instructions regarding
the transfer, redemption or other disposition of such Pledged Interest and other Pledged
Collateral, the proceeds of such Pledged Collateral, including any distributions with respect
thereto, and all of the rights, powers and duties of a member, partner or shareholder, as
applicable, of such Person in question, in each case to the extent in accordance with the Pledge
Agreement.




          27. Execution in Counterparts. This Pledge Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement.




          28. Additional Pledgors. Each Person that becomes a holder of Equity Interests in a
Subsidiary Guarantor after the date hereof is required to become, and each Pledgor will promptly
cause such Subsidiary to become, a Pledgor and be made a party to this Pledge Agreement pursuant to
this Section 28 by execution and delivery to the Administrative Agent by such Subsidiary of
a Supplement to this Pledge Agreement in the form of Exhibit D hereto, with the same force and
effect as if originally named as a Pledgor hereunder. The execution and delivery of any such
instrument shall not require the consent of any Pledgor hereunder. The rights and obligations
of each Pledgor hereunder shall remain in full force and effect notwithstanding the addition of
any new Pledgor as a party to this Pledge Agreement.




[signature pages follow]




Pledge Agreement








-13-









 








          IN WITNESS WHEREOF, each Pledgor has executed this Pledge Agreement as of the date set
forth above.




	 	 	 	 	 	 	 

	 	 	CAMPUS CREST PROPERTIES, LLC, 

a North Carolina limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST GROUP, LLC,

a North Carolina limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	 	 	CAMPUS CREST GP II, LLC,

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	Title: Manager	 	 






Pledge Agreement








 









 







Acknowledged and agreed to as of the day and year first set forth above.



CITIBANK, N.A., as Administrative Agent




	 	 	 	 	 

	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 






Pledge Agreement








 









 








ACKNOWLEDGMENT




          Each of the undersigned hereby acknowledges receipt of a copy of the foregoing Pledge
Agreement, agrees promptly to note on its books the security interests granted under such Pledge
Agreement, and waives any rights or requirement at any time hereafter to receive a copy of such
Pledge Agreement in connection with the registration of any Pledged Collateral in the name of the
Administrative Agent or its nominee or the exercise of voting rights by the Administrative Agent.




          Each of the undersigned hereby consents to the extent required by the applicable limited
liability company agreement, operating agreement, by-laws, articles of incorporation, partnership
agreement or equivalent thereof, as applicable, to the pledge of the Pledged Collateral and to the
transfer of any Pledged Collateral to the Administrative Agent or its nominee and to the
substitution of the Administrative Agent or its nominee as a substituted member, partner or
shareholder, as applicable, of any Person whose Equity Interests have been pledged as Pledged
Collateral under the Pledge Agreement with all the rights, powers and duties of a member, partner
or shareholder, as applicable, of such Person in question, in each case to the extent in
accordance with the Pledge Agreement.




	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT STEPHENVILLE, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC	 	 
	 	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT LUBBOCK, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC	 	 
	 	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title: Manager	 	 






[Signatures continued on following pages]




Pledge Agreement





 












 





	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT WACO, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC	 	 
	 	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT WICHITA FALLS, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC	 	 
	 	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT SAN MARCOS, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest GP II, LLC	 	 
	 	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST AT JACKSONVILLE, AL, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC	 	 
	 	 	 	 	Its Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






Pledge Agreement




 









 





	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT MOBILE PHASE II, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
 Its Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT CHENEY, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC 
Its Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT JONESBORO, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC

Its Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT TROY, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT MURFREESBORO, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC	 	 
	 	 	 	 	Its Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






Pledge Agreement




 









 





	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST AT WICHITA, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST STEPHENVILLE LESSOR, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST WACO LESSOR, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST WICHITA FALLS LESSOR, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






Pledge Agreement




 









 





	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST CHENEY LESSOR, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST JONESBORO LESSOR, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST TROY LESSOR, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST MURFREESBORO LESSOR, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






Pledge Agreement




 









 





	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST WICHITA LESSOR, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Campus Crest Properties, LLC
	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name: Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Title:   Manager	 	 






	 	 	 	 	 	 	 	 	 

	 	 	CAMPUS CREST GP II, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Michael S. Hartnett
	 	 	 	 	Title:   Manager






Pledge Agreement





 











 





EXHIBIT A

to

PLEDGE AGREEMENT




	 	 	 	 	 
	 	 	 	 	Percentage of Pledged
	Pledgor	 	Pledged Entity	 	Entity Pledged
	Campus Crest
Properties, LLC

	 	Campus Crest at Jacksonville, AL, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at Mobile Phase II, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at Cheney, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at Jonesboro, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest Properties, LLC

	 	Campus Crest at Troy, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at Murfreesboro, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at Wichita, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at Stephenville, LP
	 	100% of limited
partner interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at Lubbock, LP
	 	100% of limited
partner interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at Waco, LP
	 	100% of limited
partner interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at Wichita Falls, LP
	 	100% of limited
partner interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest at San Marcos, LP
	 	100% of limited
partner interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest Stephenville Lessor, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest Waco Lessor, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest
Properties, LLC

	 	Campus Crest Wichita Falls Lessor, LLC
	 	100% of membership interests






 









 






	 	 	 	 	 
	 	 	 	 	Percentage of Pledged
	Pledgor	 	Pledged Entity	 	Entity Pledged
	Campus Crest Properties, LLC

	 	Campus Crest Cheney Lessor, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest Properties, LLC

	 	Campus Crest Jonesboro Lessor, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest Properties, LLC

	 	Campus Crest Troy Lessor, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest Properties, LLC

	 	Campus Crest Murfreesboro Lessor, LLC
	 	100% of membership
interests
	 
	 	 	 	 
	Campus Crest Properties, LLC

	 	Campus Crest Wichita Lessor, LLC
	 	100% of membership
interests






	 	 	 	 	 
	 	 	 	 	Percentage of Pledged
	Pledgor	 	Pledged Entity	 	Entity Pledged
	Campus Crest Group, LLC

	 	Campus Crest GP II, LLC
	 	100% of membership
interests






	 	 	 	 	 
	 	 	 	 	Percentage of Pledged
	Pledgor	 	Pledged Entity	 	Entity Pledged
	Campus Crest GP II, LLC

	 	Campus Crest at Stephenville, LP
	 	100% of general
partner interests
	 
	 	 	 	 
	Campus Crest GP II, LLC

	 	Campus Crest at Lubbock, LP
	 	100% of general
partner interests
	 
	 	 	 	 
	Campus Crest GP II, LLC

	 	Campus Crest at Waco, LP
	 	100% of general
partner interests
	 
	 	 	 	 
	Campus Crest GP II, LLC

	 	Campus Crest at Wichita Falls, LP
	 	100% of general
partner interests
	 
	 	 	 	 
	Campus Crest GP II, LLC

	 	Campus Crest at San Marcos, LP
	 	100% of general
partner interests










 









 








EXHIBIT B

to

PLEDGE AGREEMENT




Form of Power



POWER



     FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer
to                     
                    
                    
                    
                    
       Shares or interests of
                    
                    
                    
represented by Certificate[s] No.                      [and           ] (the “Interest”), standing in the name of
the
undersigned on the books of said limited liability company/limited partnership and does hereby
irrevocably constitute and appoint 
           as the undersigned’s true

and lawful attorney, for and in name and stead, to sell, assign and transfer all or any of the
Interest, and for that purpose to make and execute all necessary acts of assignment and transfer
thereof; and to substitute one or more persons with like full power, hereby ratifying and
confirming all that said attorney or substitute or substitutes shall lawfully do by virtue hereof.



Dated:                                         




[                                                            ]




	 	 	 	 	 
	 	 	 
	 	 By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 







 









 








EXHIBIT C

to

PLEDGE AGREEMENT




None.







 









 








EXHIBIT D

to

PLEDGE AGREEMENT





     Reference is hereby made to the Pledge Agreement (the “Agreement”), dated as
of [                     , 2010], made by each of entities listed on the signature pages thereto (each an
“Initial Pledgor”, and together with any additional pledgors, including the undersigned,
which become parties thereto by executing a Supplement in substantially the form hereof, the
“Pledgors”), in favor of the Administrative Agent. Capitalized terms used herein and not defined
herein shall have the meanings given to them in the Agreement. By its execution below, the
undersigned, [NAME OF NEW PLEDGOR], a [
               
     
                   
                     
]
[corporation/limited liability company/limited partnership] agrees to become, and does hereby
become, a Pledgor under the Agreement and agrees to be bound by such Agreement as if originally a
party thereto. By its execution below, the undersigned represents and warrants as to itself that
all of the representations and warranties, as to such Pledgor, contained in the Agreement are true
and correct in all respects as of the date hereof. [NAME OF NEW PLEDGOR] represents and warrants
that the supplements to the Exhibits to the Agreement attached hereto are true and correct in all
respects and such supplements set forth all information required to be scheduled under the
Agreement. [NAME OF NEW PLEDGOR] shall take all steps necessary to certificate and perfect, in
favor of the Administrative Agent, a first-priority security interest in and lien against [NAME OF
NEW PLEDGOR]’s Pledged Collateral including, without limitation, delivering all certificated Equity
Interests the Administrative Agent, and, at Administrative Agent’s election, taking all steps
necessary to properly perfect the Administrative Agent’s interest in any uncertificated equity or
membership interests.



     IN WITNESS WHEREOF, [NAME OF NEW PLEDGOR], a
[                                        ] [corporation/limited liability company/limited partnership] has executed
and delivered this Exhibit D counterpart to the Agreement as of this                                          day of
                                        ,      .



	 	 	 	 	 	 	 

	 	 	[NAME OF NEW PLEDGOR]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 










 









 








SCHEDULE I

to

PLEDGE AGREEMENT




No exceptions.