Document:

exv10w40

Exhibit 10.40

GROUND LEASE AGREEMENT

          THIS GROUND LEASE AGREEMENT (this “Lease”) is made and entered into
as of this 20th day of March, 2008, by and between  Indian Hills Trading
Company, LLC, an Idaho limited liability company (the “Landlord”), and Campus Crest Development,
LLC, a North Carolina limited liability company (the “Tenant”), as follows:

WITNESSETH:

          1. Premises. Landlord does hereby demise and lease unto Tenant that certain real
property, consisting of approximately 14.1 acres, located in Moscow, Latah County, Idaho, which is
more particularly described or depicted on Exhibit A attached hereto and made a part hereof
(the “Land”), together with (i) all easements and other appurtenances to the Land; and (ii) all
permits, approvals and other development rights relating to the Land, including sanitary sewer
capacities and pressures, drainage, water and other utility facilities benefiting the Land
(collectively, the “Premises”). The final legal description of the Land shall be determined by the
Survey (as defined in Section 3(b) below).

          2. Term. TO HAVE AND TO HOLD the Premises exclusively for an initial term of
ninety-nine (99) years (the “Initial Term”), commencing on the Effective Date (as defined below),
as it may be extended pursuant to Section 4 below.

          3. Inspections.

          (a) Inspection Period. Tenant shall have one hundred twenty (120) days from the date
Tenant receives a fully executed original of this Lease (the “Inspection Period”) as a due
diligence period, during which time Tenant shall be permitted to conduct all inspections and
investigations necessary in order to determine if the Premises are acceptable to Tenant. Tenant,
its employees, agents or designees shall further have the right of ingress and egress over and
through the Premises for the purpose of inspection, appraising, soil and environmental testing,
testing for the drainage, surveying, preparing engineering or architectural drawings, and any
other activities reasonably necessary to assess the Premises, including the review of the Title
Commitment, as hereafter defined, and the satisfactory completion of the governmental permitting
process (collectively, the “Inspections”). Within five (5) business days following the date Tenant
receives a fully executed original of this Lease (the “Document Delivery Date”), Landlord shall
make available to Tenant copies of those items listed on Exhibit B attached hereto and made
a part hereof, which Landlord has in its possession or which it may be able to reasonably obtain
(collectively, the “Landlord Deliverables”). Landlord acknowledges that the Landlord Deliverables
are critical to Tenant’s Inspections, and as a result, the Inspection Period will be extended
automatically one day for each day that the delivery of the Landlord Deliverables is delayed past
the Document Delivery Date. Landlord shall cooperate with Tenant during the Inspection Period by
responding, to the best of its knowledge, to all questions and inquiries made by Tenant relating to
the Premises. In the event Tenant determines, for any reason whatsoever or for no reason at all,
that the Premises are not acceptable to Tenant, Tenant may terminate this Lease prior to the end of
the Inspection Period, by providing written notice of such termination to Landlord. If Tenant so
terminates this Lease, all obligations of Landlord and

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Tenant hereunder shall immediately cease. Tenant shall have the right to extend the Inspection
Period for two thirty (30)-day periods, if necessary, to enable Tenant to complete its Inspections.
All issues and contingencies shall be deemed waived at the end of the Inspection Period, as may be
extended. If Tenant does not terminate this Lease on or before the end of the Inspection Period, as
extended, then this Lease shall become fully effective. The “Effective Date,” as used herein, shall
be the day immediately following the last day of the Inspection Period.

          (b) Title Commitment and Survey.

               (i) Tenant shall obtain (a) a title insurance commitment for the Premises (the “Title
Commitment”) issued by Chicago Title Insurance Company (the “Title Company”) in the amount of the
leasehold interest in the Premises, committing to insure Tenant against loss on account of any
defect or encumbrance in the title, unless herein excepted and (b) an ALTA survey of the Premises,
certified to Tenant, the Title Company and Tenant’s lender (the “Lender”) in accordance with the
Lender’s survey requirements (the “Survey”). Landlord shall be responsible for the payment of the
title insurance premium for Tenant’s leasehold title insurance policy in an insured amount up to
$1,000,000 with Tenant being responsible for any premium due on any title insurance coverage
obtained in excess of $1,000,000 and the title search and abstract fees associated with said title
insurance policy.

               (ii) If a search of the title discloses judgments, bankruptcies or other liens against other
persons having names the same as or similar to that of Landlord, Landlord, on request, shall
deliver to Tenant and the Title Company affidavits showing that such judgments, bankruptcies or
other liens are not against Landlord.

               (iii) On the Effective Date, Landlord shall deliver to Tenant, with a copy thereof to the
Title Company, an affidavit with respect to (i) mechanic’s liens, certifying that as of the
Effective Date there are no known unpaid bills rendered or to be rendered for services performed or
materials furnished to the Premises and (ii) parties in possession, certifying that on the
Effective Date, there are no parties other than Landlord in possession of the Premises.

               (iv) If the Premises are subject to a mortgage, Landlord, no later than the Effective Date,
shall either cause the mortgage to be released as to the Premises or shall deliver to Tenant a
subordination, non-disturbance and attornment agreement in recordable form, satisfactory to Tenant
and executed by the mortgagee, acknowledging and agreeing that the foreclosure of the mortgage
shall not eliminate or affect this Lease.

               (v) The Premises are being leased subject to any specific matters set forth in the Title
Commitment and the Survey unless written objections of the same (the “Title Objections”) are
delivered to Landlord during the Inspection Period. Landlord shall have until the end of the
Inspection Period to either cure the Title Objections or notify Tenant of which Title Objections it
will not cure. Should Landlord notify Tenant that it will not cure any timely made Title Objections
or should Landlord fail to timely cure any timely made Title Objections, Tenant shall have the
right to (i) accept said uncured Title Objections and continue with this Lease or (ii) terminate
this Lease upon written notice to Landlord prior to the end of the Inspection Period.

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          (c) Regulatory Approval. Tenant’s obligation to lease the Premises is subject to
Tenant having received, prior to the expiration of the Inspection Period, all necessary approvals
and permits, including site plan approvals, from all applicable governmental authorities to operate
a student housing apartment complex on the Premises.

          (d) Zoning. Tenant’s obligation to lease the Premises is subject to Tenant having
received, prior to the expiration of the Inspection Period, all necessary approvals and permits,
including site plan approvals, from all applicable governmental authorities to operate a student
housing apartment complex on the Premises and adequate evidence (as determined by Tenant in its
sole and absolute discretion) that the Premises are zoned in such a manner that the operation of a
student housing apartment complex on the Premises will comply with any and all applicable use
restrictions affecting the Premises. Landlord agrees to cooperate with Tenant in applying for any
necessary rezoning of the Premises such that the operation of a student housing apartment complex
on the Premises will comply with any and all applicable use restrictions affecting the Premises.

          (e) Site Inspection Report. Tenant’s obligation to lease the Premises is subject to
Tenant having received, prior to the expiration of the Inspection Period, a satisfactory site
inspection report, as determined by Tenant in its sole discretion, from its architect/engineer.

          (f) Permitting. Tenant’s obligation to lease the Premises is subject to Tenant having
received, prior to the end of the Inspection Period, evidence satisfactory to Tenant that all
grading, building, traffic and other permits and licenses that are necessary for Tenant’s intended
use have been, or will be, granted by the applicable governmental entity.

          The above described additional inspections shall be deemed Inspections, and shall be subject
to review and approval as provided in Section 3(a) above.

          4. Lease Extension Option.

          (a) Tenant, being not in default in the keeping and performing of any of the conditions and
covenants of this Lease, shall have the option and privilege of an extended term hereof for an
additional twenty-five (25) years (the “Extended Term”), commencing at midnight on the day on which
the Initial Term of this Lease terminates.

          (b) Tenant shall provide Landlord with notice of its intent to extend the term of this Lease
no less than ninety (90) days prior to the end of the Initial Term. As used herein “Term” shall
mean individually, the Initial Term and the Extended Term, and collectively, both of such terms.

          5. Rental. Tenant hereby covenants and agrees to pay to Landlord as rent for the
Premises, the following:

          (a) Commencing on the earlier of (i) the Rent Commencement Date or (ii) the date on which
Tenant begins grading the Land in preparation for the construction of the intended improvements
thereon, the sum of Seventy-Eight Thousand and 00/100 Dollars ($78,000.00) per annum, payable at
the rate of Six Thousand Five Hundred and 00/100 Dollars ($6,500.00) per month, for the first two
(2) years of the Initial Term (the “Base Rent”). As used herein, “Rent

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Commencement Date” shall mean the first day of the first full month following the end of the
Inspection Period.

          (b) Commencing on the second anniversary of the Rent Commencement Date, the annual Base Rent
will be adjusted to an amount equal to One Hundred Forty-Four Thousand and 00/100 Dollars
($144,000.00) per annum, payable at the rate of Twelve Thousand and 00/100 Dollars ($12,000.00) per
month.

          (c) It is agreed by Landlord and Tenant that the aforesaid rents shall be paid in equal
monthly installments, in advance, on the first day of each and every month during the Term of this
Lease. Any Base Rent due for a partial calendar month shall be prorated based on the number of days
in the month.

          6. Taxes and Assessments.

          (a) Landlord agrees to pay and discharge all taxes, assessments, rates, charges for revenue,
imposts, and all levies general and special, ordinary and extraordinary, of any name, nature and
kind whatsoever, which may be fixed, charged, levied, assessed or otherwise imposed upon the
Premises or upon any or all buildings or improvements thereon (the “Taxes”), before same become
delinquent, and upon demand of Tenant, Landlord shall provide evidence showing the payment thereof.

          (b) In addition to the rental hereinbefore provided to be paid, Tenant agrees to reimburse
Landlord for the difference between the Taxes paid by Landlord from time to time as provided in
Section 6(a) above and the amount which Landlord paid for such Taxes immediately prior to
the Effective Date within ten (10) business days of receipt of evidence that Landlord has paid the
Taxes in full. Tenant shall not be required to reimburse Landlord for any income, inheritance,
estate, or succession tax, or any other tax in the nature of such described taxes, or any other tax
which may be levied or assessed against Landlord with respect to or because of the income derived
from this Lease; nor shall Tenant be required to reimburse Landlord for any corporate franchise or
excise tax which may be levied or assessed against any corporate successor or successors in the
interest of Landlord, or any tax which may at any time during the Term of this Lease be required to
be paid upon any gift, devise, deed, mortgage, descent, or other alienation of any part or all of
the Premises or property by Landlord

          (c) In the event any taxes or assessments fixed, charged, levied, assessed, or otherwise
imposed upon the Premises, or on the buildings or improvements erected thereon, are permitted to be
paid in installments, then Landlord shall have the right to pay same in installments, as the same
shall fall due.

          (d) It is understood and agreed, however, that either party may, if in good faith it believes
any such tax, assessment, lien or charge which it is obligated by the terms of this Lease to pay is
invalid, excessive, or unenforceable, in whole or in part, protest against and contest the
validity, amount and enforceability thereof. In such case such objecting party may, before the date
of delinquency of any such tax, assessment, lien or charge, take appropriate action to protest and
object thereto, and if such protest and objection be overruled or denied, such objecting party may
contest or review such denial or ruling by legal proceedings or in such other

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manner as such objecting party deems suitable, which proceeding if instituted shall be conducted
solely at such objecting party’s own expense and free of expense to the non-objecting party. If any
such taxes, assessments or charges shall, as a result of such proceedings or otherwise, be reduced,
cancelled, set aside or to any extent discharged, Landlord shall pay the amount that shall be
finally assessed or imposed against the Premises, or be adjudicated to be due and payable on any
such disputed or contested items, and Tenant shall reimburse Landlord in the manner provided in
Section 6(b) above. In respect to any such tax, assessment or charge which shall be the
subject of a contest under and pursuant to this Section, the non-payment thereof shall not be
regarded as a breach of any covenant of this Lease so long as both parties shall comply with the
terms of this Section. Landlord, in all events, however, shall pay any such charges if payment be
required in order to prevent the divesting of Landlord’s and/or Tenant’s title or other interest in
the Premises.

          (e) Taxes assessed prior to the Rent Commencement Date, but payable in whole or in
installments after the Rent Commencement Date, and assessments which are covered by bond, shall be
adjusted and prorated. Landlord shall pay the prorated share thereof for the period prior to the
Rent Commencement Date, and such Taxes shall not be subject to reimbursement. Following the Rent
Commencement Date, Landlord shall pay the prorated share thereof for the Term of this Lease subject
to reimbursement as provided in Section 6(b) above.

          (f) Taxes assessed during the Term of this Lease, but payable in whole or in installments
after the termination of this Lease, and assessments which are covered by bond, shall be adjusted
and prorated. Landlord shall pay the prorated share thereof for the period subsequent to the Term,
and such Taxes shall not be subject to reimbursement. During the Term of this Lease, Landlord shall
pay the prorated share thereof subject to reimbursement as provided in Section 6(b) above.

          (g) In the event Landlord fails to pay taxes, assessments, rates, charges for revenue, imposts
and levies as provided hereinabove, Tenant shall have the option to pay such taxes, and any sums so
expended shall become due as additional rental with interest on said sum at the rate of six percent
(6%) per annum until paid.

          7. Covenants by Landlord. Landlord hereby covenants and agrees with
Tenant that:

          (a) Peaceful Possession: Tenant, as long as it pays the rents and performs the
covenants herein contained on its part to be paid and performed, may lawfully, quietly and
peaceably occupy and enjoy the Premises during the term herein and hereby specified, without any
let, hindrance, or molestation by or on the part of Landlord or anyone claiming through Landlord.

          (b) Warranty of Title: Landlord warrants and represents that it is the owner in fee
simple of the Premises, that it has good, marketable and insurable title thereto, and has the right
to make this Lease for the term and on the conditions herein set forth, and that the Premises are
free and clear of all mortgages, liens and encumbrances of every kind and nature except current
taxes not yet due and payable.

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          (c) Warranty Against Encumbrances: Landlord further covenants and warrants that this
Lease is not subject and subordinate to any liens or encumbrances whatsoever except current taxes,
not yet due and payable.

          (d) Intentionally Deleted.

          (e) Mechanic’s Liens. No act or omission has occurred with respect to the Premises and
no materials or services have been furnished or delivered on or to the Premises which would create
or otherwise encumber the Premises with any mechanics, materialmen, laborer, or other similar type
of lien after the date hereof.

          (f) Litigation. There is no pending claim, litigation or other proceeding whether in a
court of law or other venue that currently affects or potentially could affect the Premises.

          (g) Intentionally Deleted.

          (h) Intentionally Deleted.

          (i) Intentionally Deleted.

          8. Covenants By Tenant. Tenant hereby covenants and agrees with Landlord
that:

          (a) Rent: It will pay all sums of money agreed to be paid to Landlord as rent or
otherwise at the times and in the amount and in the manner as hereinabove provided, and will
faithfully and promptly perform each and every one of the covenants herein contained and provided
to be kept and performed by it.

          (b) Utilities: Tenant shall pay all utility charges used on or arising from the
operation of the Premises, including, but not limited to, all charges for gas, electricity, water,
garbage and trash collection, and sewerage, during the Term of this Lease.

          (c) Upkeep: Tenant will keep the interior and exterior of all buildings erected on the
Premises in good, clean and sanitary condition, and shall make all repairs, ordinary as well as
extraordinary, structural or otherwise, necessary to keep same in good condition, reasonable wear
and tear and damage by fire or other unavoidable casualty only excepted, and at the termination of
this Lease, by expiration of time or otherwise, will deliver the Premises and the improvements
thereon to Landlord in good condition, reasonable wear and tear and damage by fire or other
unavoidable casualties excepted.

          (d) Waste: Tenant will not commit or suffer any waste of the Premises and will not
use, or permit any part of the Premises to be used, for any illegal or immoral purpose, or in such
way as to constitute a public nuisance, and it will, at its own expense, observe and comply with
all laws, ordinances, and regulations of all duly constituted governmental authorities relating to
the Premises or any improvements thereon.

          9. Personal Property, Subordination of Landlord’s Lien.

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          (a) Any personal property, furniture and furnishings installed by Tenant or its subtenants on
the Premises during the Term shall remain Tenant’s or the subtenant’s property and may be removed
by Tenant or the subtenants, provided that Tenant repairs, at its sole cost and expense, any damage
to the Premises caused by such removal and provided that such removal does not diminish the value
or usefulness of the Premises as student housing.

          (b) Intentionally Deleted.

          10. Insurance.

          (a) Prior to the commencement of any construction of the initial improvements, Tenant or its
general contractor shall obtain public liability insurance, all risk builder’s risk insurance and
workmen’s compensation insurance to cover every contractor to be employed and shall deliver
certificates of such to Landlord naming Landlord as additional insured on the public liability and
builder’s risk insurance coverages. Tenant, at all times during the Term, and at its expense, will
procure, maintain and keep in force, comprehensive, general liability insurance for claims for
bodily or personal injury, death or property damage, occurring in or about the Premises, with
limits of not less than $2,000,000 combined single limit, which may be a combination of primary and
umbrella liability coverage. Tenant will have Landlord named as an additional insured thereunder.
Tenant shall at all times during the Term, at its own expense, keep in full force and effect all
risk, fire and extended coverage insurance in amounts equal to the full insurable value of the
buildings including all alterations, additions and improvements. Certificates of such insurance
will be delivered to Landlord. The policy or policies of insurance will be issued by a company or
companies licensed in the State wherein the Premises are situated.

          (b) In the event of a loss, the proceeds from said insurance policies shall be payable
directly to Tenant, and, as soon as is reasonably possible after receipt of such insurance
proceeds, Tenant shall, in its sole discretion, either restore the improvements on the Premises or
raze the damaged improvements and clear the portion of the Premises on which the damaged
improvements are located.

          (c) Tenant shall have the exclusive right to adjust any loss occurring to the building or
improvements on the Premises with the insurance companies insuring the buildings and improvements
at such time.

          11. Indemnity. Tenant shall indemnify and save harmless Landlord against and from any
and all claims made or actions brought by any person arising from conduct or management of any
work, or from any accident, injury, death or damage in or about the Premises, provided that
Landlord, if such claim is made upon Landlord, shall give Tenant prompt notice of any such claim
and opportunity to defend the same for Landlord, if such claim is made against Landlord, and in
such case Landlord agrees to cooperate with Tenant in such defense, and if any action or
proceedings be brought against Landlord by reason of any such claims, Landlord agrees to give
Tenant and any Mortgagee (as hereafter defined) notice of the same forthwith, and Tenant shall have
the responsibility of resisting or defending such action or proceeding at Tenant’s expense.
Notwithstanding anything herein to the contrary, Tenant shall

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not indemnify Landlord from any claims and/or actions arising out of Landlord’s gross negligence or
willful misconduct.

          12. Assignment, Subletting, Licensing, Reorganization, Merger or Consolidation.

          (a) Tenant shall have the right to assign this Lease (including all improvements) or sublet
the Premises (including all improvements) during the Term of this Lease, PROVIDED, HOWEVER, that
Tenant shall continue to be liable under this Lease in the event of the default on the part of the
assignee or subtenant in performing the terms and obligations of this Lease up to the date of such
assignment to such subtenant.

          (b) It is understood and agreed that during the Term hereof, Tenant shall have the right to
sublet portions of the Premises (including all improvements) to sublessees and/or to grant
concessions in the Premises to concessionaires and/or to license departments in the Premises to
licensees; it being understood, however, that by reason of such subletting, concessions and/or
licensing, Tenant herein shall not be relieved of liability hereunder.

          (c) In the event the Tenant is reorganized, merged or consolidated with any other corporation
or legal entity, the resulting or surviving corporation or legal entity, which as the result of
such reorganization, merger or consolidation succeeds to substantially all of the assets or
business of the Tenant, shall automatically and without the necessity of a further assignment
become the Tenant of this Lease in accordance with and subject to all of its terms, provisions and
conditions.

          13. Mortgage of Leasehold. In addition to any other right herein granted, Tenant shall
at all times have the right, without any consent on the part of Landlord being required, to convey
or encumber by mortgage, deed of trust, assignment or other security instrument its leasehold
interest in and to the Premises or any part thereof, together with its right and interest in and to
all buildings and improvements whether now existing or hereafter constructed or placed thereon, and
to assign this Lease or any interest therein as collateral for any such mortgage; but any and all
such conveyances, mortgages, or assignments shall be subject to this Lease and the right, title and
interest of Landlord in the Premises. Landlord hereby consents to a mortgage, deed of trust,
assignment or other security instrument in order for Tenant to obtain funds for the construction or
remodeling of improvements on the Premises. If any such leasehold mortgage, deed of trust,
assignment or other security instrument shall be foreclosed or the leasehold estate sold under any
power contained therein, the leasehold mortgagee or other purchaser at such sale shall immediately
succeed to all rights of Tenant hereunder. Such mortgagee may at its option at any time before the
rights of Tenant shall have been forfeited to Landlord, or within the time permitted for curing or
commencing to cure defaults as herein provided, pay any of the rents due, pay any other
governmental charges, or insurance premiums, make any deposits, or do any other act or thing
required of Tenant by the terms of this Lease to prevent the forfeiture hereof. A leasehold
mortgagee shall not become personally liable for any of Tenant’s obligations under this Lease
unless and until such mortgagee becomes the owner of the leasehold estate by foreclosure,
assignment in lieu of foreclosure or otherwise, and thereafter such mortgagee shall remain liable
for such obligations only so long as it remains the owner of the leasehold estate. If the holder of
the indebtedness secured by this Lease (“Mortgagee”)

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notifies Landlord of the execution of such a leasehold mortgage, deed of trust, assignment or other
security instrument and the name and place for service of notices upon such Mortgagee, then and in
such event Landlord hereby agrees for the benefit of Tenant and such Mortgagee from time to time
that:

          (a) Landlord will give to any Mortgagee simultaneously with service on Tenant a duplicate of
any and all notices or demands given by Landlord to Tenant;

          (b) Mortgagee shall have the privilege but not the obligation of performing any of Tenant’s
covenants or of curing any defaults by Tenant or of exercising any election, option or privilege
conferred upon Tenant by the terms of this Lease;

          (c) Landlord shall not terminate this Lease or Tenant’s right of possession for any default of
Tenant if, within the period of time within which Tenant might cure such default, but in no event
less than thirty (30) days after Mortgagee receives written notice of such default, such default is
cured or caused to be cured by Mortgagee; and

          (d) No liability for the payment of Base Rent, additional rent, or the performance of any of
Tenant’s covenants and obligations of this Lease shall attach to or be imposed upon any Mortgagee
while not in possession of the Premises.

          (e) Landlord shall not exercise Landlord’s right to terminate this Lease or exercise any other
remedies hereunder during the time that any Mortgagee shall be allowed to exercise its rights under
its mortgage, provided that (a) the Mortgagee proceeds within thirty (30) days to exercise its
rights and remedies under its Mortgage and thereafter prosecutes the same with diligence to
completion (subject to such stays and other delays as may be imposed in bankruptcy or other
proceedings), and (b) the Mortgagee shall within ten (10) days (i) pay when due to Landlord and
other persons all payments required to be paid by Tenant hereunder which have accrued and, as they
accrue, all payments required to be paid by Tenant hereunder which shall become due and payable
during such period of time, and (ii) perform when required all other obligations of Tenant
hereunder during such period of time which are reasonably susceptible of being performed by the
Mortgagee, it being acknowledged that some obligations cannot be performed by the Mortgagee until
possession or legal title is acquired and other obligations cannot ever be performed or cured by
the Mortgagee. The obligations of the Mortgagee under this Section 13(e) shall not deprive
the Mortgagee of its various rights to notice and cure as provided above.

          (f) Should Landlord exercise Landlord’s right to terminate this Lease as provided in
Section 16 after giving a Mortgagee the protections provided above, Landlord shall give
notice thereof to the Mortgagee and offer to the Mortgagee the right to lease the Premises from the
date of such termination of this Lease for the remainder of the scheduled Term of this Lease, at
the Base Rent and otherwise upon the same terms, covenants, and conditions, as are herein set
forth, with the same relative priority as this Lease and having the benefit of vesting in the
Mortgagee or its designee or nominee thereof all the rights, title, interest, powers and privileges
of Tenant hereunder. The Mortgagee must give notice to Landlord of its election to accept the new
lease within thirty (30) days after receipt of the notice from Landlord offering the new lease. If
the Mortgagee accepts the new lease, the Mortgagee shall be obligated, within

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 thirty (30) days after
delivery to Landlord of notice of such election (subject to automatic extension for the period of
any stays or other delays as may be imposed in bankruptcy or other proceedings), to: (i) cure the
Event of Default on which such termination was based or, in respect of any Event of Default not
capable of cure within such thirty (30) days or which cannot be cured without entry into
possession, to proceed to effect cure with due diligence following delivery of such possession;
(ii) pay to Landlord all Base Rent due under this Lease up to and including the date of
commencement of the term of such new lease; and (iii) pay to Landlord all expenses and reasonable
attorney’s fees incurred by Landlord in connection with any such Event of Default and termination
and with the preparation, execution and delivery of such new lease. Upon such performance by the
Mortgagee (or the designee or nominee thereof) within such time, Landlord shall thereupon execute
and deliver such new lease to the Mortgagee or the designee or nominee thereof, having the same
relative priority as this Lease and having the benefit of all right, title, interest, powers and
privileges of Tenant hereunder until the expiration of the scheduled Term of this Lease, unless the
new lease shall thereafter be sooner terminated. Notwithstanding anything contained herein,
Landlord shall have the right to manage the Premises during any interval in which transfer of
interest from Tenant or Mortgagee or its designee or nominee, pursuant to the terms of this Lease,
is being made.

          (g) Anything else herein contained to the contrary notwithstanding, Landlord and Tenant
mutually covenant and agree that so long as there exists any unpaid leasehold mortgage, this Lease
shall not be modified, amended or altered (unless such change is mandated by law) and that Landlord
shall not accept a surrender of the Premises or a termination, cancellation or release of this
Lease from Tenant (except pursuant to the exercise of Landlord’s remedies should an Event of
Default occur after first complying with the requirements of this Section 13 and after
thirty (30) days’ written notice to Mortgagee and opportunity to cure) prior to the expiration of
the Term, without the prior written consent of the Mortgagee.

          (h) The Mortgagee, or its designee or nominee acquiring the leasehold estate under this Lease
or a new lease shall be obligated under this Lease or the new lease only so long as it shall be
vested (other than as security for a debt) with title to all, or any estate or interest in, the
leasehold estate under this Lease or the new lease.

          (i) A Mortgagee may be a syndicate of lenders represented by an administrative agent.

          (j) Tenant and Landlord agree that, during the Term of this Lease, Landlord shall have the
right to mortgage the fee interest in the Land, provided that (i) Landlord shall have no right or
power to mortgage or otherwise create any security or other liens or encumbrances upon or affecting
any improvements, fixtures, equipment or other property constructed by Tenant or located thereon,
or any part thereof, which will in any way adversely affect or impair the right granted to Tenant
hereunder, (ii) Landlord will execute a waiver of lien on the personal property of Tenant, (iii)
Landlord shall not have the right or power to mortgage or to modify, extend, renew, replace,
refinance or otherwise change or affect any mortgage or deed of trust, at any time or from time to
time, created by Tenant pursuant to this Lease, and that all such rights and powers are hereby
exclusively and irrevocably vested in and granted to the Tenant, subject to the terms and
conditions of this Lease and (iv) any such mortgagee of Landlord shall execute any

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nondisturbance
and estoppel agreements reasonably required by any mortgagee of Tenant. Upon Tenant’s failure to
make mortgage payments to any Mortgagee, Landlord shall have the option to make such mortgage
payments, and any sum so expended shall become due as additional rent hereunder.

          14. Net Lease. In addition to payment of rents, taxes, assessments and governmental
impositions, as herein provided, Tenant shall pay all operating costs and expenses except as
otherwise provided in Sections 6 and 16(b), it being the intent of this Lease that
Landlord is to receive the rental above specified as net and clear of all costs and
charges arising from or relating to the Premises and that Tenant is to pay all charges and
expenses of every nature that may be imposed or incurred through the operation of the Premises and
its appurtenances in any manner during the Term of this Lease.

          15. Signs. Tenant shall have the right to place signs on the Premises so long as such
signs comply with all rules, regulations, laws and ordinances, governmental and otherwise,
applicable to the Premises. Such permitted signage shall specifically include a pylon or monument
sign at the Premises to the extent permitted by governmental authorities. Tenant shall also be
permitted to erect a sign at the Premises prior to the Effective Date, which sign shall advertise
the Premises as a future student housing apartment complex of Tenant.

          16. Default or Breach.

          (a) It is agreed by and between the parties hereto that; (i) if Tenant shall fail to make any
payment of rents or taxes, assessments, insurance premiums, water rates, or any other sum herein
stipulated and agreed to be paid or kept, at the time same is required to be paid under the
provisions of this Lease and such failure shall continue for a period of ten (10) days after Tenant
receives from Landlord written notice of such delinquent payment, or (ii) if Tenant shall fail to
keep and perform any other covenant, condition or agreement herein provided on the part of Tenant
to be performed; then, and in such case, Landlord may serve upon Tenant written notice of such
default; and if such default shall then continue without being wholly remedied for a period of
thirty (30) days after the service of such notice, or in the event of a breach other than the
payment of money, Tenant shall not have commenced the remedying of such default within the thirty
(30)-day period subsequent to written notice and shall not diligently prosecute compliance to final
termination, then it shall and may be lawful for Landlord, without further notice, to declare said
Term ended, and to re-enter and re-possess the Premises, and the building and improvements situated
thereon, or any part thereof, either with or without process of law, and Tenant does in such event,
hereby waive any demand for possession of the Premises, and any and all buildings and improvements
then situated thereon, and Tenant covenants and agrees, upon the termination of the Term at the
election of Landlord, or in any other way, to immediately surrender and deliver up the Premises and
property peaceably to Landlord, or the agents or attorneys of Landlord, immediately upon the
termination of the Term, and this Lease shall become void and of no further effect, and Landlord
may hold and retain the Premises and all buildings and improvements thereon as of its first or
former estate, subject to any mortgage executed pursuant to the terms hereof, and this Lease shall
be forfeited to Landlord, and Landlord may bring suit for and collect all of the past-due rents,
taxes and assessments. All costs (including attorneys’ fees) occasioned by default of Tenant shall
be an expense of Tenant, and shall be due as rental hereunder.

11

 

          (b) It is agreed between the parties that if any default shall be made by Landlord in the
performance of any covenant or agreement herein contained, and such default shall continue for
thirty (30) days after receipt by Landlord of written notice thereof given by Tenant, then no rent
shall be paid or become payable under this Lease or any extension thereof for such time as such
default shall continue after the expiration of said thirty (30)-day period, and Tenant, at its
option, may (i) declare the Term or any extension thereof ended and vacate the Premises and be
relieved from all further obligations under this Lease, or (ii) pay any sum necessary to perform
any obligations of Landlord hereunder, and deduct the cost thereof, with interest, from any rents
thereafter to come due hereunder, or (iii) exercise any other remedies available to Tenant at law
or in equity. The performance of each and every agreement herein contained on the part of Landlord
shall be a condition precedent to the right of Landlord to collect rent hereunder or to enforce
this Lease against Tenant.

          17. Waiver. No waiver by Landlord or Tenant of any default or breach of any covenant,
condition, or stipulation herein contained shall be treated as a waiver of any subsequent default
or breach of the same or any other covenant, condition or stipulation hereof.

          18. Successors and Assigns. The words “Landlord” and “Tenant” as hereinabove used in
this Lease shall mean Landlord and Tenant as mentioned herein, and also, where not inhibited by the
context of this Lease, shall mean their respective successors and assigns.

          19. Bankruptcy or Insolvency. Landlord reserves the right to cancel this Lease upon
the occurrence of any one or more of the following contingencies: (a) the filing of a petition by
or against the then Tenant or its assignee for adjudication as a bankrupt under the United States
Bankruptcy Act, as now or hereafter amended or supplemented, or for arrangement within the meaning
of Chapter XI of said Bankruptcy Act, or the filing of any petition by or against the then Tenant
under any future bankruptcy act for the same or similar relief; (b) the commencement of any action
or proceeding for the appointment of a receiver or trustee of the property of the then Tenant; (c)
the taking possession of the property of the then Tenant or its assignee by any governmental
officer or agency pursuant to statutory authority; (d) the making by the then Tenant of an
assignment for the benefit of creditors; (e) the taking from the then Tenant of the term hereby
leased, or the seizure or levy thereon under judgment, decree, attachment, execution or other
judicial proceedings; provided, that if either (a), (b), (c) or (e) shall be involuntary on the
part of the then Tenant, the event in question shall not give Landlord any right to cancel this
Lease if the event is removed by Tenant within sixty (60) days.

          20. Notice. All notices, requests, demands or other communications required or
permitted under this Lease shall be in writing and delivered either: (i) by certified or registered
mail, return receipt requested, postage prepaid; (ii) by a recognized overnight courier service
(such as Fed Ex); or (iii) by facsimile transmission made during normal business hours with a copy
to follow by registered or certified mail, return receipt requested, postage prepaid or by
overnight courier service, addressed as follows:

	 	 	 	 	 	 	 

	 

	 	If to Landlord:
	 	Indian Hills Trading Company, LLC	 	 
	 

	 	 	 	1179 N. Baver Road	 	 
	 

	 	 	 	Ritzville, WA 99169	 	 
	 

	 	 	 	P.O. Box 106	 	 
	 

	 	 	 	Ritzville, WA 99169	 	 

12

 

	 	 	 	 	 	 	 

	 

	 	 	 	Attention: Dave & Sally  Powers	 	 
	 

	 	 	 	Facsimile:                                                             	 	 
	 
	 	 	 	 	 	 
	 

	 	With a copy to:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Attention:                                                            	 	 
	 

	 	 	 	Facsimile:                                                            	 	 
	 
	 	 	 	 	 	 
	 

	 	If to Tenant:
	 	Campus Crest Development, LLC	 	 
	 

	 	 	 	2100 Rexford Road, Suite 414	 	 
	 

	 	 	 	Charlotte, NC 28211	 	 
	 

	 	 	 	Attention: F. Brian Schneiderman	 	 
	 

	 	 	 	Facsimile: (704) 496-2598	 	 
	 
	 	 	 	 	 	 
	 

	 	With a copy to:
	 	Dawn Helms Sharff	 	 
	 

	 	 	 	Bradley Arant Rose & White LLP	 	 
	 

	 	 	 	One Federal Place	 	 
	 

	 	 	 	1819 Fifth Avenue North	 	 
	 

	 	 	 	Birmingham, Alabama 35203	 	 
	 

	 	 	 	Facsimile: (205) 488-6200	 	 
	 
	 	 	 	 	 	 
	 

	 	If to Title Company:
	 	Chicago Title Insurance Company	 	 
	 

	 	 	 	830 East Main Street	 	 
	 

	 	 	 	Richmond, Virginia 23219	 	 
	 

	 	 	 	Attention: Michelle S. McQueen	 	 
	 

	 	 	 	Facsimile: (804) 521-5756	 	 

          All notices given in accordance with the terms hereof shall be deemed received on the next
business day if sent by overnight courier, on the same day if sent by facsimile before 5 P.M.
(Eastern Standard Time) on a business day, or on the fifth (5th) business day following deposit
with the United States Mail as a registered or certified matter with postage prepaid. Either party
hereto may change the address for receiving notices, requests, demands or other communication by
notice sent in accordance with the terms of this Section 20.

          21. Waiver of Subrogation. All insurance policies carried by either party covering the
Premises, including but not limited to contents, fire and casualty insurance, shall expressly waive
any right on the part of the insurer against the other party. The parties agree that their policies
will include such waiver clause or endorsement so long as the same shall be obtainable without
extra cost, or if extra cost shall be charged therefor, so long as the other party pays such extra
cost. If extra cost shall be chargeable therefor, each party shall advise the other thereof and of
the amount of the extra cost, and the other party, at its election, may pay the same, but shall not
be obligated so to do.

          22. Eminent Domain.

          (a) If the whole of the Premises (or if less than all, but, in the reasonable

13

 

judgment of Tenant, the remaining portion cannot be feasibly operated as then used or intended to
be used) shall be taken for any public or quasi-public use under any statute or by right of eminent
domain or by private purchase in lieu thereof, then this Lease shall automatically terminate as of
the date that possession has been taken.

          (b) In the event of a partial taking or condemnation which takes less than all of the Premises
and the Lease is not terminated as set forth in Section 22(a) above, then Tenant, subject
to the exceptions provided below, shall promptly restore the Premises to an architectural whole,
and this Lease shall continue in full force and effect; provided, however, that the
Base Rent shall thereafter be decreased in proportion to the amount of the Premises taken.

          (c) Landlord and Tenant each covenant and agree to seek separate awards in any condemnation
proceedings and to use their respective best efforts to see that such separate awards are made at
all stages of all proceedings. If the order or decree in any condemnation or similar proceeding
shall fail to separately state the amount to be awarded to Landlord and Tenant by way of
compensation, damages, rent, the costs of demolition, removal or restoration, or otherwise, then
the award should be divided as follows:

               (i) First, to the payment of all demolition and construction costs associated with restoration
if the improvements are to be restored by Tenant and/or all costs of removal of rubble and debris
if Tenant is obligated to remove the same; and then

               (ii) The remaining proceeds shall be applied as follows: (1) Landlord shall receive the fair
market value of the Land; and (2) Tenant shall be entitled to all remaining proceeds.

          23. Covenants To Run with Land. It is hereby covenanted and agreed between the parties
hereto that all covenants, conditions, agreements and undertakings in this Lease contained shall
extend and inure to the benefit of and be binding upon the successors and assigns of the parties
hereto, the same as if they were in every case named and expressed and the same shall be construed
as covenants running with the land. All terms and words used in this Lease, regardless of the
number and gender in which they are used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter, as the context or
sense of this Lease or any Section or clause herein may require, the same as if such words had been
fully and properly written in the required number and gender.

          24. Construction; Title to Buildings. Tenant may from time to time construct, repair,
remodel, remove or replace improvements on the Land in accordance with applicable laws. Title to
any building erected on the Land at any time by Tenant, until the expiration or sooner termination
of this Lease, or any extensions hereof, shall remain in Tenant, and Tenant alone shall be entitled
to claim any and all depreciation in connection with its federal or state income tax returns.

          25. Intentionally Deleted.

14

 

          26. All Inclusive Nature of Lease. This Lease embodies the entire contract of the
parties hereto with respect to the demise of the Premises, and this Lease shall not be altered,
changed or modified in any respect, except by an instrument of equal dignity to this instrument.

          27. Recording. On the Effective Date, Landlord and Tenant shall execute and record a
memorandum of lease in substantially the form attached hereto and incorporated herein by reference
as Exhibit C. Landlord shall bear the expense of all recording tax and fees associated with
the recordation of any such short form lease, and after recording, a copy of the recorded document
shall be delivered to both parties.

          28. Brokers. Each party represents and warrants to the other that there are no real
estate brokers or finders in any way entitled to compensation as a consequence of this Lease. Each
party hereby indemnifies, defends and holds the other party harmless from any loss, cost (including
reasonable attorney’s fees and court costs at trial and all appellate levels), damage, claim,
demand or liability for any damages or fees incurred by the indemnified party arising out of breach
of the foregoing representation and warranty by the other party. The provisions of this Section
shall survive the Effective Date and any subsequent cancellation or termination of this Lease.

          29. Attorneys’ Fees. In the event of any action or proceeding brought for the
enforcement or interpretation of this Lease, or the exercise of any rights of Landlord or Tenant
hereunder, the prevailing party in such action or proceeding shall be entitled to recover
reasonably attorneys’ fees and costs from the non-prevailing party.

          30. Business Days. In the event any period of time provided for in this Lease ends on
a day other than a business day on which banks are generally open for a full day for business, such
ending date shall automatically be extended to the next business day.

          31. Governing Law. This Lease is governed by, and must be interpreted under, the laws
of the State in which the Premises is located.

          32. Estoppel Certificates. Within ten (10) days after request by either party, the
notified party shall execute and deliver to the requesting party a sworn statement in recordable
form certifying to the requesting party or any Mortgagee any facts that are true with respect to
the Premises or this Lease, including (if true) that this Lease is in full force and effect, Tenant
is lawfully in possession of the Premises and is not in default, and there are no defenses or
offsets under this Lease claimed by the notified party.

          33. Landlord’s Adjacent Property;
Use Restriction and Right of First Refusal.
Landlord
owns certain other property that is adjacent to or near the Premises and is described on
Exhibit D attached hereto and made a part hereof (the “Landlord’s Additional Property”), a
portion of which is depicted on Exhibit E (the “ROFR Property”). Commencing on the date of
this Lease and for a period of two (2) years from the Effective Date, if (a) Landlord receives a
good faith, bonafide written offer (an “Offer”) for the purchase of all or any part of the ROFR
Property, or (b) if Landlord intends to use any part of the ROFR Property for multifamily or
student housing purposes, Landlord shall deliver to Tenant a written notice (an “Offer Notice”)
containing an offer to sell such part of the ROFR Property to Tenant on the same terms and

15

 

conditions as contained in the Offer and having attached thereto a copy of the Offer or on such
other terms and conditions as offered by Landlord if there is no Offer. For a period of sixty (60)
days after the receipt of an Offer Notice, Tenant shall have the right to purchase such part of the
ROFR Property on the terms and conditions set forth in the Offer Notice or on such terms and
conditions as may be agreed to between Tenant and Landlord. The parties agree that the terms of
this Section 33 shall be memorialized in an agreement on the Effective Date, that said
agreement will acknowledge Tenant’s right to seek injunctive relief or any other remedy available
at law or in equity in the event of a breach by Landlord, and that said agreement shall be recorded
on or before the Rent Commencement Date in the county and state in which the ROFR Property is
located. The form of such document shall be reasonably agreed upon by Landlord and Tenant during
the Inspection Period.

          34. Infrastructure Improvements. Following the Rent Commencement Date, Tenant agrees
to (i) construct (or further improve, as applicable) on a portion of the Premises and Landlord’s
Additional Property and dedicate those certain roadways depicted on Exhibit F attached
hereto and made a part hereof, as may be required by the applicable governmental authorities
(collectively, the “Roadways”) and (ii) construct and install, to the extent necessary, on and
under the Premises and Landlord’s Additional Property, the utilities necessary for the Tenant’s
intended development of the Premises, including sanitary sewer and storm sewer (together with the
Roadways, the “Infrastructure Improvements). Tenant and Landlord estimate the reasonable cost (i)
to construct (or with regard to Roadway “D,” install frontage improvements) and dedicate the
Roadway labeled “A” on Exhibit F to be $280,000, the Roadway labeled “B” on Exhibit
F to be $385,000, the Roadway labeled “C” on Exhibit F to be $360,000 and the Roadway
labeled “D” on Exhibit F to be $100,000 and (ii) to construct the Infrastructure
Improvements to be $125,000. Landlord agrees to grant to Tenant on or prior to the Rent
Commencement Date a temporary construction easement over a portion of Landlord’s Additional
Property for the construction of the Infrastructure Improvements and an access easement over any
portion of the Roadways until such time as said Roadways have been dedicated for public use. Such
easement agreement shall be recorded on or prior to the Rent Commencement Date in the real property
records of the county in which Landlord’s Additional Property is located. The form of said easement
agreement and the location of said easement areas shall be reasonably agreed upon by Landlord and
Tenant during the Inspection Period.

          35. Monument Sign Easement. Landlord agrees to grant to Tenant on or prior to the Rent
Commencement Date a temporary construction easement and permanent
signage and access easement over a portion of Landlord’s Additional Property adjacent to
Highway 95 and depicted on Exhibit G for the construction and maintenance of a monument
sign of no greater size than provided on Exhibit G (the “Monument Sign”). Such easement
agreement shall be recorded on or prior to the Rent Commencement Date in the real property records
of the county in which Landlord’s Additional Property is located and shall provide that, following
two (2) years from the Effective Date, if requested by the Landlord, Tenant shall remove the
Monument Sign from said portion of Landlord’s Additional Property at Tenant’s sole cost and
expense. The form of said easement agreement and the location of said easement area shall be
reasonably agreed upon by Landlord and Tenant during the Inspection Period.

          36. Existing Tenant. Landlord hereby represents and warrants that Thompson, et al,
Inc. (the “Existing Tenant”) currently has certain wheat farming rights at the Premises

16

 

pursuant to
that certain oral lease agreement currently in effect (the “Existing Tenant Lease”). At or prior to
Rent Commencement Date, the Existing Tenant Lease shall be terminated and the Existing Tenant shall
have no further rights related to the Premises. On or prior to the Rent Commencement Date, Tenant
agrees to compensate the Existing Tenant for the fair market value of any wheat that Existing
Tenant was unable to harvest in late summer 2008 as a result of Tenant’s leasing of the Premises
less any expenses that Existing Tenant did not incur as a result of not harvesting such wheat;
provided, however, that in no event will such payment by Tenant to the Existing Tenant exceed $15,000.

          37. Letter of Credit. Prior to the date on which Tenant commences grading the Land in
preparation for the construction of the intended improvements thereon, Tenant shall deliver a
letter of credit naming the Title Company as the beneficiary in the amount of One Hundred Thousand
and No/100 Dollars ($100,000). The letter of credit will have an expiration date sufficient for the
Title Company to satisfy all obligations created under this Lease. At such time as Tenant commences
vertical construction on said improvements, said letter of credit shall be released to Tenant and
terminated. In the event that Tenant defaults under this Lease beyond any applicable notice and
cure periods and this Lease is terminated as provided in Section 16(a), Tenant authorizes
the Title Company to disburse the proceeds of said letter of credit to Landlord, subject to the
demand provisions thereof.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

17

 

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

	 	 	 	 	 
	 	LANDLORD:

INDIAN HILLS TRADING COMPANY, LLC

 	 
	 	By:  	/s/ Sally N. Powers
 	 
	 	 	Name:  	Sally N. Powers 	 
	 	 	Its: Manager, IHTC LLC 	 
	 

	 	 	 	 	 
	 	TENANT:

CAMPUS CREST DEVELOPMENT, LLC

 	 
	 	By:  	/s/ F. Brian Schneiderman	 
	 	 	Name: 	F. Brian Schneiderman  	 
	 	 	Its: General Counsel 	 
	 

18

 

	 	 	 	 	 

	STATE OF WASHINGTON

	 	) 	 	 
	 

	 	) 
	 	ss. 
	County of Adams

	 	) 	 	 

          I certify that I know or have satisfactory evidence that SALLY N. POWERS signed this
Ground Lease Agreement, on oath stated that she was authorized to execute the instrument, and
acknowledged it as the Manager of INDIAN HILLS TRADING COMPANY, LLC, to be the free and voluntary
act of such party for the uses and purposes mentioned in the instrument.

          DATED this 28th day of February, 2008.

	 	 	 	 	 
	 	 	 
	 	                                          /s/ Kenneth D. Carpenter
 	 
	 	NOTARY PUBLIC (Signature)             	 
	 	 	 
	 
	 	 	 
	 	                                          /s/ Kenneth D. Carpenter
 	 
	 	(Printed Name)   	 
	 	My commission expires 9/29/2009 	 
	 

 

	 	 	 	 	 	 	 

	STATE OF SOUTH CAROLINA

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	County of Randolph

	 	 	)	 	 	 

     I certify that I know or have satisfactory evidence that F. Brian Schniederman signed this Ground
Lease Agreement, on oath stated that he/she was authorized to execute the instrument, and
acknowledged it as the                                          of CAMPUS CREST DEVELOPMENT, LLC, to be the free and
voluntary act of such party for the uses and purposes mentioned in the instrument.

     DATED this 20th day of March, 2008.

	 	 	 	 	 
	 	 	 
	 	                                                            /s/ Kimberly Mehall
 	 
	 	NOTARY PUBLIC (Signature) 	 
	 	                                                            Kimberly Mehall
 	 
	 	(Printed Name) 	 
	(Seal or Stamp)  	                                             My commission expires 08-19-2009	 
	 

 

EXHIBIT A

[Description of Premises]

19

 

EXHIBIT
“A”

 

 

EXHIBIT B

[Landlord Deliverables]

	(a)	 	Copy of the most recent real estate tax bills for the Premises; and
	 
	(b)	 	Copy of Landlord’s vesting deed and any existing title insurance commitment,
title report or title policy for the Premises.

20

 

EXHIBIT C

[Form of Memorandum of Lease]

MEMORANDUM OF GROUND LEASE

     This Memorandum of Ground Lease (this “Memorandum”) is made and entered into
effective the                 day of                                               , 2008, by and between Indian Hills
Trading Company, LLC, an Idaho limited liability company (“Landlord”), whose address for
purposes hereof is                                                        , and Campus Crest Development, LLC, a North Carolina limited
liability company (“Tenant”), whose address for purposes hereof is 2100 Rexford Road,
Suite 414, Charlotte, NC 28211, Attention: F. Brian Schneiderman.

Recitals

     A. Landlord has leased certain real property located in Moscow, Latah
County, Idaho, as further described on Exhibit “A” attached hereto and
made a part hereof (the “Premises”), to Tenant pursuant to a Ground Lease
Agreement dated effective                                         , 2008, which is incorporated
herein by reference as if appearing in full (the “Lease”).

     B. The parties wish to provide record notice of certain of the terms and
conditions of the Lease.

Agreement

     NOW, THEREFORE, Landlord and Tenant do hereby state the following:

     1. Lease of the Premises. Landlord does hereby lease the Premises
to Tenant, and Tenant hereby leases the Premises from Landlord, upon the terms and
conditions stipulated in the Lease.

     2. Term. The initial term of this Lease shall be for a period of
ninety-nine (99) years, commencing                                         , and ending                               
       , unless
extended or sooner terminated as provided by the Lease.

     3. Option to Extend. The terms of the Lease provide Tenant with
one (1) option to renew the term of the Lease for a twenty-five
(25)-year term.

     4. Landlord’s
Adjacent Property; Right of First Refusal. Landlord owns
certain other property that is adjacent to or near the Premises and is described on
Exhibit “B” attached hereto and made a part hereof (the “ROFR Property”). Section
33 of the Lease provides that if (a) Landlord receives a good faith, bonafide written
offer (an “Offer”) for the purchase of all or any part of the ROFR Property, or (b) if
Landlord intends to use any part of the ROFR Property for multifamily or student housing
purposes, Landlord shall deliver to Tenant a written notice (an

21

 

“Offer Notice”) containing an offer to sell such part of the ROFR
Property to Tenant on the same terms and conditions as contained in the Offer and having
attached thereto a copy of the Offer or on such other terms and conditions as offered by
Landlord if there is no Offer. For a period of sixty (60) days after the receipt of an
Offer Notice, Tenant shall have the right to purchase such part of the ROFR Property on
the terms and conditions set forth in the Offer Notice or on such terms and conditions as
may be agreed to between Tenant and Landlord. It is agreed that Tenant shall
have the right to seek injunctive relief or any other remedy available at law or in
equity in the event of a breach by Landlord of this terms hereof.

     5. Conflict. In the event of a conflict between the
terms and provisions of this Memorandum and the Lease, the Lease shall govern
and control. Copies of the Lease are held by both Landlord and Tenant at the
respective addresses first set forth above.

[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]

22

 

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum
as of the date and year first above written.

	 	 	 	 	 
	 	LANDLORD:

INDIAN HILLS TRADING COMPANY, LLC

 	 
	 	By:  	/s/ Sally N. Powers
 	 
	 	 	Name:  	Sally N. Powers 	 
	 	 	Title:  	Manager, IHTC LLC 	 
	 

	 	 	 	 	 
	 	TENANT:

CAMPUS CREST DEVELOPMENT, LLC

 	 
	 	By:  	/s/
F. Brian Schneiderman
 	 
	 	 	Name:  	F. Brian Schneiderman	 
	 	 	Title:  	General Counsel	 
	 

23

 

	 	 	 	 	 

	STATE OF WASHINGTON
	 	)	 	 
	 
	 	)  ss.	 	 
	County of Adams
	 	)	 	 

     I certify that I know or have satisfactory evidence that SALLY N. POWERS signed this
Memorandum of Ground Lease, on oath stated that she was authorized to execute the
instrument, and acknowledged it as the Manager of INDIAN HILLS TRADING COMPANY,
LLC, to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.

     DATED this 28th day of February, 2008.

	 	 	 	 	 
	 	 	 
	 	 	 /s/ KENNETH D. CARPENTER
 	 
	 	 	NOTARY  PUBLIC  (Signature) 	 
	 	 	KENNETH D. CARPENTER	 
	 	 	(Printed  Name)	 
	(Seal or Stamp)	 	
My commission expires 9/29/2009 	 

 

 

	 	 	 	 	 

	STATE OF NORTH CAROLINA
	 	)	 	 
	 
	 	) ss,	 	 
	County of Randolph
	 	)	 	 

     I
certify that I know or have satisfactory evidence that F. Brian
Schneiderman
signed this Memorandum of Ground Lease, on oath stated that he/she was authorized to execute the
instrument, and acknowledged it as the                                                              of CAMPUS CREST
DEVELOPMENT, LLC, to be the free and voluntary act of such party for the uses and
purposes mentioned in the instrument.

     DATED this 20th day of March, 2008.

	 	 	 	 	 
	 	 	 
	 	 	 /s/ Kimberly Mehall
 	 
	 	 	NOTARY  PUBLIC  (Signature) 	 
	 	 	Kimberly Mehall	 
	 	 	(Printed  Name)	 
	(Seal or Stamp)	 	
My commission expires 08/19/2009 	 

 

 

Exhibit “A”

To the Memorandum of Ground Lease

[Description of Premises]

24

 

Exhibit “B”

To the Memorandum of Ground Lease

[Landlord’s ROFR Property)

25

 

EXHIBIT D

[Landlord ‘s Additional Property]

26

 

EXHIBIT “A”

     

 

 

EXHIBIT E

[ROFR Property]

27

 

EXHIBIT “E”

     

 

 

EXHIBIT F

[Depiction of Roadways]

28

 

EXHIBIT “F”

     

 

 

EXHIBIT G

[Depiction of Monument Sign Area and Size]

29

 

EXHIBIT “G”exv10w43

Exhibit
10.43

 

 

GENERAL ELECTRIC CAPITAL CORPORATION

(Lender)

to

CAMPUS CREST AT MILLEDGEVILLE, LLC

(Borrower)

 

LOAN AGREEMENT

 

Dated as of: September 7, 2006

Property Location: Milledgeville, Georgia

DOCUMENT PREPARED BY:

Greenberg Traurig LLP

1750 Tysons Boulevard, 12th Floor

McLean, Virginia 22102

Attention: Marvin W. Ehrlich, Esquire

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1 DEFINITIONS 
	 	 	1	 
	Section 1.1 Certain Definitions 
	 	 	1	 
	 
	 	 	 	 
	Article 2 LOAN TERMS 
	 	 	4	 
	Section 2.1 The Loan 
	 	 	4	 
	Section 2.2 Interest Rate; Late Charge 
	 	 	5	 
	Section 2.3 Terms of Payment 
	 	 	5	 
	Section 2.4 Security; Establishment Of Funds 
	 	 	6	 
	 
	 	 	 	 
	Article 3 INSURANCE, CONDEMNATION, AND IMPOUNDS 
	 	 	7	 
	Section 3.1 Insurance 
	 	 	7	 
	Section 3.2 Use And Application Of Insurance Proceeds 
	 	 	8	 
	Section 3.3 Condemnation Awards 
	 	 	9	 
	Section 3.4 Impounds 
	 	 	10	 
	 
	 	 	 	 
	Article 4 ENVIRONMENTAL MATTERS 
	 	 	11	 
	Section 4.1 Certain Definitions 
	 	 	11	 
	Section 4.2 Representations And Warranties On Environmental Matters 
	 	 	11	 
	Section 4.3 Covenants On Environmental Matters 
	 	 	11	 
	Section 4.4 Allocation Of Risks And Indemnity 
	 	 	12	 
	Section 4.5 No Waiver 
	 	 	13	 
	 
	 	 	 	 
	Article 5 LEASING MATTERS 
	 	 	13	 
	Section 5.1 Representations And Warranties On Leases 
	 	 	13	 
	Section 5.2 Standard Lease Form; Approval Rights 
	 	 	14	 
	Section 5.3 Covenants 
	 	 	14	 
	 
	 	 	 	 
	Article 6 REPRESENTATIONS AND WARRANTIES 
	 	 	14	 
	Section 6.1 Organization, Power And Authority 
	 	 	14	 
	Section 6.2 Validity Of Loan Documents 
	 	 	15	 
	Section 6.3 Liabilities; Litigation 
	 	 	15	 
	Section 6.4 Taxes And Assessments 
	 	 	15	 
	Section 6.5 Other Agreements; Defaults 
	 	 	15	 
	Section 6.6 Compliance With Law 
	 	 	15	 
	Section 6.7 Location Of Borrower 
	 	 	16	 
	Section 6.8 ERISA 
	 	 	16	 
	Section 6.9 Forfeiture 
	 	 	16	 
	Section 6.10 Tax Filings 
	 	 	16	 
	Section 6.11 Solvency 
	 	 	17	 
	Section 6.12 Full And Accurate Disclosure 
	 	 	17	 
	Section 6.13 Flood Zone 
	 	 	17	 
	Section 6.14 Single Purpose Entity/Separateness 
	 	 	17	 
	Section 6.15 Anti-Terrorism And Anti-Laundering Money Laws 
	 	 	19	 

 

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Article 7 FINANCIAL REPORTING 
	 	 	21	 
	Section 7.1 Financial Statements 
	 	 	21	 
	Section 7.2 Accounting Principles 
	 	 	22	 
	Section 7.3 Other Information; Access 
	 	 	22	 
	Section 7.4 Annual Budget 
	 	 	22	 
	 
	 	 	 	 
	Article 8 COVENANTS 
	 	 	22	 
	Section 8.1 Due On Sale And Encumbrance; Transfers Of Interests 
	 	 	22	 
	Section 8.2 Taxes; Utility Charges 
	 	 	22	 
	Section 8.3 Control; Management 
	 	 	22	 
	Section 8.4 Operation; Maintenance; Inspection 
	 	 	23	 
	Section 8.5 Taxes On Security 
	 	 	23	 
	Section 8.6 Legal Existence; Name, Etc. 
	 	 	23	 
	Section 8.7 Further Assurances 
	 	 	24	 
	Section 8.8 Estoppel Certificates 
	 	 	24	 
	Section 8.9 Notice Of Certain Events 
	 	 	24	 
	Section 8.10 Indemnification 
	 	 	24	 
	Section 8.11 Cooperation 
	 	 	25	 
	Section 8.12 Payment For Labor And Materials 
	 	 	25	 
	Section 8.13 Required Repairs 
	 	 	25	 
	 
	 	 	 	 
	Article 9 EVENTS OF DEFAULT 
	 	 	26	 
	Section 9.1 Payments 
	 	 	26	 
	Section 9.2 Insurance 
	 	 	26	 
	Section 9.3 Sale, Encumbrance, Etc. 
	 	 	26	 
	Section 9.4 Covenants 
	 	 	26	 
	Section 9.5 Representations And Warranties
	 	 	26	 
	Section 9.6 Other Encumbrances 
	 	 	26	 
	Section 9.7 Involuntary Bankruptcy Or Other Proceeding 
	 	 	26	 
	Section 9.8 Voluntary Petitions, Etc. 
	 	 	27	 
	Section 9.9 Anti-Terrorism 
	 	 	27	 
	 
	 	 	 	 
	Article 10 REMEDIES 
	 	 	27	 
	Section 10.1 Remedies 
	 	 	27	 
	Section 10.2 Remedies 
	 	 	27	 
	Section 10.3 Lender’s Right To Perform The Obligations 
	 	 	27	 
	 
	 	 	 	 
	Article 11 MISCELLANEOUS 
	 	 	28	 
	Section 11.1 Notices 
	 	 	28	 
	Section 11.2 Amendments And Waivers 
	 	 	29	 
	Section 11.3 Limitation On Interest 
	 	 	29	 
	Section 11.4 Invalid Provisions 
	 	 	30	 
	Section 11.5 Reimbursement Of Expenses 
	 	 	30	 
	Section 11.6 Approvals; Third Parties; Conditions 
	 	 	30	 
	Section 11.7 Lender Not In Control; No Partnership 
	 	 	31	 
	Section 11.8 Contest Of Certain Claims 
	 	 	31	 
	Section 11.9 Time Of The Essence 
	 	 	32	 

 

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 11.10 Successors And Assigns 
	 	 	32	 
	Section 11.11 Renewal, Extension or Rearrangement 
	 	 	32	 
	Section 11.12 Waivers 
	 	 	32	 
	Section 11.13 Cumulative Rights; Joint and Several Liability 
	 	 	32	 
	Section 11.14 Singular and Plural 
	 	 	32	 
	Section 11.15 Phrases 
	 	 	32	 
	Section 11.16 Exhibits And Schedules 
	 	 	32	 
	Section 11.17 Titles of Articles, Sections and Sub Sections 
	 	 	33	 
	Section 11.18 Promotional Material 
	 	 	33	 
	Section 11.19 Survival 
	 	 	33	 
	Section 11.20 Waiver Of Jury Trial 
	 	 	33	 
	Section 11.21 Waiver of Punitive or Consequential Damages 
	 	 	33	 
	Section 11.22 Governing Law 
	 	 	33	 
	Section 11.23 Entire Agreement 
	 	 	33	 
	Section 11.24 Counterparts 
	 	 	34	 
	Section 11.25 Attorney’s Fees 
	 	 	34	 
	 
	 	 	 	 
	Article 12 LIMITATIONS ON LIABILITY 
	 	 	34	 
	Section 12.1 Limitation on Liability 
	 	 	34	 
	Section 12.2 Limitation On Liability Of Lender’s Officers, Employees, Etc. 
	 	 	35	 

LIST OF EXHIBITS AND SCHEDULES

	 	 	 

	JOINDER
	 	 
	EXHIBIT A
	 	LEGAL DESCRIPTION OF PROJECT
	SCHEDULE I
	 	DEFEASANCE
	SCHEDULE II
	 	REQUIRED REPAIRS
	SCHEDULE II
	 	CERTIFICATE OF OCCUPANCY ISSUES

 

 

LOAN AGREEMENT

     This Loan Agreement (this “Agreement”) is entered into as of September 7, 2006, between
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (“Lender”), and CAMPUS CREST
AT MILLEDGEVILLE, LLC, a Delaware limited liability company (“Borrower”).

ARTICLE 1

DEFINITIONS

     Section 1.1 Certain Definitions. As used herein, the following terms have the
meanings indicated:

     “Affiliate” means (a) any corporation in which Borrower or any partner, shareholder,
director, officer, member, or manager of Borrower directly or indirectly owns or controls more
than ten percent (10%) of the beneficial interest, (b) any partnership, joint venture or limited
liability company in which Borrower or any partner, shareholder, director, officer, member, or
manager of Borrower is a partner, joint venturer or member, (c) any trust in which Borrower or any
partner, shareholder, director, officer, member or manager of Borrower is a trustee or
beneficiary, (d) any entity of any type which is directly or indirectly owned or controlled by
Borrower or any partner, shareholder, director, officer, member or manager of Borrower, (e) any
partner, shareholder, director, officer, member, manager or employee of Borrower, (f) any Person
related by birth, adoption or marriage to any partner, shareholder, director, officer, member,
manager, or employee of Borrower, or (g) any Borrower Party.

     “Agreement” means this Loan Agreement, as amended from time to time.

     “Assignment of Leases and Rents” means the Assignment of Leases and Rents, executed
by Borrower for the benefit of Lender, and pertaining to leases of space in the Project.

     “Award” has the meaning assigned in Section 3.3.

     “Bankruptcy Party” has the meaning assigned in Section 9.7.

     “Borrower Party” means any Joinder Party, any general partner of Borrower, and any
general partner in any partnership that is a general partner of Borrower, any managing member of
Borrower, and any managing member in any limited liability company that is a managing member of
Borrower, at any level.

     “Business Day” means a day other than a Saturday, a Sunday, or a legal holiday on
which national banks located in the State of New York are not open for general banking business.

     “Casualty” has the meaning assigned in Section 3.2.

     “Certificate of Occupancy Reserve Fund” has the meaning assigned in Section 2.4.

 

 

     “Closing Date” means the date the Loan is funded by Lender.

     “Commitment” means the commitment letter, dated August 21, 2006, issued by Lender and
accepted by Borrower on August 30, 2006.

     “Condemnation” has the meaning assigned in Section 3.3.

     “Contract Rate” has the meaning assigned in Section 2.2.

     “Debt” means, for any Person, without duplication: (a) all indebtedness of such Person
for borrowed money, for amounts drawn under a letter of credit, or for the deferred purchase price
of property for which such Person or its assets is liable, (b) all unfunded amounts under a loan
agreement, letter of credit, or other credit facility for which such Person would be liable, if
such amounts were advanced under the credit facility, (c) all amounts required to be paid by such
Person as a guaranteed payment to partners or a preferred or special dividend, including any
mandatory redemption of shares or interests, (d) all indebtedness guaranteed by such Person,
directly or indirectly, (e) all obligations under leases that constitute capital leases for which
such Person is liable, and (f) all obligations of such Person under swaps, caps, floors, collars
and other hedge agreements, in each case whether such Person is liable contingently or otherwise,
as obligor, guarantor or otherwise, or in respect of which obligations such Person otherwise
assures a creditor against loss.

     “Debt Service” means the aggregate interest, fixed principal, and other payments due
under the Loan, and on any other outstanding permitted Debt relating to the Project approved by
Lender for the period of time for which calculated.

     “Default Rate” means the lesser of (a) the maximum rate of interest allowed by
applicable law, and (b) five percent (5%) per annum in excess of the Contract Rate.

     “Defeasance Option” has the meaning assigned in Section 2.3(c).

     “Environmental Laws” has the meaning assigned in Section 4.1(a).

     “ERISA” has the meaning assigned in Section 6.8.

     “Event of Default” has the meaning assigned in Article 9.

     “Funds” means the Replacement Escrow Fund and the Certificate of Occupancy Reserve
Fund.

     “Hazardous Materials” has the meaning assigned in Section 4.1(b).

     “Insurance Premiums” has the meaning assigned in Section 3.1(c).

     “Joinder Party” means the Persons, if any, executing the Joinder hereto.

Page 2

 

     “Lien” means any interest, or claim thereof, in the Project securing an
obligation owed to, or a claim by, any Person other than the owner of the Project, whether such
interest is based on common law, statute or contract, including the lien, security title or
security interest arising from a deed to secure debt, deed of trust, mortgage, assignment,
encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term “Lien” shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting the Project.

     “Loan” means the loan made by Lender to Borrower under this Agreement and all other
amounts secured by the Loan Documents.

     “Loan Documents” means: (a) this Agreement, (b) the Note, (c) the Mortgage, (d) the
Assignment of Leases and Rents, (e) Uniform Commercial Code financing statements, (f) such
assignments of management agreements, contracts and other rights as may be required under the
Commitment or otherwise requested by Lender, (g) all other documents evidencing, securing,
governing or otherwise pertaining to the Loan, and (h) all amendments, modifications, renewals,
substitutions and replacements of any of the foregoing; provided however, in no event shall the
term “Loan Documents” include that certain Hazardous Materials Indemnity Agreement (the
“Environmental Indemnity Agreement”) dated the date hereof in favor of Lender.

     “Loan Year” means (a) for the first Loan Year, the period between the date hereof and
one calendar year from the last day of the month in which the Closing Date occurs (unless the
Closing Date is on the first day of a month, in which case the first Loan Year shall commence on
such Closing Date and end one calendar year from the last day of the month immediately preceding
the Closing Date) and (b) each consecutive twelve month calendar period after the first Loan Year
until the Maturity Date.

     “Maturity Date” means, as applicable, the earlier of (a) October 1, 2016, or (b) any
earlier date on which the entire Loan is required to be paid in full, by acceleration or
otherwise, under this Agreement or any of the other Loan Documents.

     “Mortgage” means the Deed to Secure Debt, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, executed by Borrower in favor of Lender and granting to Lender
security title in and to, the Project.

     “Note” means the Promissory Note of even date, in the stated principal amount of
$16,250,000.00, executed by Borrower, and payable to the order of Lender in evidence of the Loan.

     “Person” means any individual, corporation, partnership, joint venture, association,
joint stock company, trust, trustee, estate, limited liability company, unincorporated
organization, real estate investment trust, government or any agency or political subdivision
thereof, or any other form of entity.

Page 3

 

     “Potential Default” means the occurrence of any event or condition which, with
the giving of notice, the passage of time, or both, would constitute an Event of Default.

     “Project” means The Grove at Milledgeville in Milledgeville, Georgia, and all related
facilities, amenities, fixtures, and personal property owned by Borrower and any improvements now
or hereafter located on the real property described in Exhibit A.

     “Rating Agencies” means each of Standard & Poor’s Ratings Group, a division of
McGraw-Hill, Inc., Moody’s Investors Service, Inc., and Fitch, Inc., or any other
nationally-recognized statistical rating agency which has been approved by Lender.

     “Replacement Escrow Fund” has the meaning assigned in Section 2.4.

     “Required Repairs” has the meaning assigned in Section 8.13.

     “Secondary Market Transaction” has the meaning assigned in Section 8.11.

     “Single Purpose Entity” shall mean a Person (other than an individual, a government
or any agency or political subdivision thereof), which exists solely for the purpose of owning the
Project, observes corporate, company or partnership formalities, as applicable, independent of any
other entity, and which otherwise complies with the covenants set forth in Section 6.14 hereof.

     “Site Assessment” means an environmental engineering report for the Project prepared
at Borrower’s expense by an engineer engaged by Borrower, or Lender on behalf of Borrower, and
approved by Lender, and in a manner reasonably satisfactory to Lender, based upon an investigation
relating to and making appropriate inquiries concerning the existence of Hazardous Materials on or
about the Project, and the past or present discharge, disposal, release or escape of any such
substances, all consistent with ASTM Standard E1527-93 (or any successor thereto published by ASTM)
and good customary and commercial practice.

     “SPC Party” has the meaning assigned in Section 6.14(o).

     “State” means the State of Georgia.

     “Tax and Insurance Escrow Fund” has the meaning assigned in Section 3.4.

     “Taxes” has the meaning assigned in Section 8.2.

     “Yield Maintenance Amount” has the meaning assigned in Schedule 1.

ARTICLE 2

LOAN TERMS

     Section 2.1 The Loan. Upon satisfaction of all the terms and conditions set forth in
the Commitment, Lender agrees to make a Loan of SIXTEEN MILLION TWO HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($16,250,000.00) to the Borrower, which shall

Page 4

 

be funded in one advance and repaid in accordance with the terms of this Agreement and the
Note. Borrower hereby agrees to accept the Loan on the Closing Date, subject to and upon the terms
and conditions set forth herein.

     Section 2.2 Interest Rate; Late Charge. The outstanding principal balance of the Loan
shall bear interest at a rate of interest equal to six and twelve one-hundreths percent (6.12%) per
annum (the “Contract Rate”). Interest at the Contract Rate shall be computed on the basis of a
fraction, the denominator of which is three hundred sixty (360) days and the numerator of which is
the actual number of days elapsed from the date of the initial disbursement under the Loan or the
date of the preceding interest installment due date, as the case may be, to the date of the next
interest installment due date or the Maturity Date. If Borrower fails to pay any installment of
interest or principal within five (5) days of (and including) the date on which the same is due,
Borrower shall pay to Lender a late charge on such past due amount, as liquidated damages and not
as a penalty, equal to five percent (5%) of such amount, but not in excess of the maximum amount of
interest allowed by applicable law. While any Event of Default exists, the Loan shall bear interest
at the Default Rate.

     Section 2.3 Terms of Payment. The Loan shall be payable as follows:

          (a) Interest and Principal. A payment of interest only on the date hereof for the
period from the date hereof through the last day of the current month. A constant payment of
interest only in arrears shall be made on the first day of November, 2006, and on the first day of
each calendar month up to and including October 1, 2011. Thereafter, a constant payment of
$98,684.18, on the first day of November, 2011 and on the first day of each calendar month
thereafter; each of such payments, to be applied (i) to the payment of interest computed at the
Contract Rate and (ii) the balance applied toward reduction of the principal sum. The constant
payment required hereunder is based on a thirty (30) year amortization schedule.

          (b) Maturity. On the Maturity Date, Borrower shall pay to Lender all outstanding
principal, accrued and unpaid interest, default interest, late charges and any and all other
amounts due under the Loan Documents.

          (c) Prepayment. Except as set forth herein, the Loan is closed to prepayment in whole
or in part. Notwithstanding the foregoing, (i) the Loan may be prepaid in whole, but not in part,
on or after the scheduled monthly payment date for the one hundred eighteenth (118th)
payment of interest only or principal and interest and (ii) from the earlier to occur of (x) two
(2) years after the sale of the Loan in a Secondary Market Transaction or (y) the fourth (4th)
anniversary of the Closing Date, provided no Event of Default exists, Borrower may obtain the
release of the Project from the lien of the Mortgage in accordance with the terms and provisions
of Schedule I attached hereto (the “Defeasance Option”).

          If the Loan is accelerated for any reason other than casualty or condemnation, and the Loan
is otherwise closed to prepayment, Borrower shall pay, in addition to all other amounts
outstanding under the Loan Documents, a prepayment premium equal to the sum of (i) the Yield
Maintenance Amount, if any, that would be required under the Defeasance Option and (ii) five
percent (5%) of the outstanding balance of the Loan. If for any reason the Loan is prepaid on a

Page 5

 

day other than a scheduled monthly payment date, the Borrower shall pay, in addition to the
principal, interest and premium, if any, required under this Section, an amount equal to the
interest that would have accrued on the Loan from the date of prepayment to the next scheduled
monthly payment date. In the event of a prepayment resulting from Lender’s application of
insurance or condemnation proceeds pursuant to Article 3 hereof, no prepayment penalty or premium
shall be imposed.

     Section 2.4 Security; Establishment Of Funds.

          (a) The Loan shall be secured by the Mortgage creating a first lien on the
Project, the Assignment of Leases and Rents and the other Loan Documents. Borrower agrees to
establish the following reserves with Lender, to be held by Lender as further security for
the
Loan:

	 	(i)	 	Borrower shall deposit with Lender on the first day of each
calendar month a scheduled payment is due the amount of $5,125.00 which shall
be held by Lender for replacements and repairs required to be made to the
Project during the calendar year (the “Replacement Escrow Fund”); and
	 
	 	(ii)	 	On the Closing Date, Borrower shall deposit with Lender the
amount of $10,600.00 (the “Certificate of Occupancy Reserve Fund”)
which shall be held by Lender for the completion of the work in connection
with the open issues set forth in Schedule III annexed hereto which
must be satisfied in order for permanent certificates of occupancy to be
issued for the Project.

          (b) Pledge and Disbursement of Funds. Borrower hereby pledges to
Lender, and grants a security interest in, any and all monies now or hereafter deposited in
the
Funds as additional security for the payment of the Loan. Lender may reasonably reassess its
estimate of the amount necessary for the Funds from time to time and may adjust the monthly
amounts required to be deposited into the Funds upon thirty (30) days notice to Borrower.
Lender shall make disbursements from the Funds as requested by Borrower, and approved by
Lender in its reasonable discretion, on a quarterly basis in increments of no less than
$5,000.00
upon delivery by Borrower of Lender’s standard form of draw request accompanied by copies of
paid invoices for the amounts requested and, if required by Lender, lien waivers and releases
from all parties furnishing materials and/or services in connection with the requested
payment.
Lender may require an inspection of the Project at Borrower’s expense prior to making a
quarterly disbursement in order to verify completion of replacements and repairs for which
reimbursement is sought. The Funds shall be held without interest in Lender’s name and may be
commingled with Lender’s own funds at financial institutions selected by Lender in its
reasonable discretion. Upon the occurrence of an Event of Default, Lender may apply any sums
then present in the Funds to the payment of the Loan in any order in its reasonable
discretion.
Until expended or applied as above provided, the Funds shall constitute additional security
for
the Loan. Lender shall have no obligation to release any of the Funds while any Event of
Default or Potential Default exists or any material adverse change has occurred in Borrower or
any Joinder Party, the Project, or any major or anchor tenant. All costs and expenses incurred
by

Page 6

 

Lender in the disbursement of any of the Funds shall be paid by Borrower promptly upon demand
or, at Lender’s sole discretion, deducted from the Funds. Notwithstanding anything to the contrary
contained in this Agreement, no Funds shall be released until Borrower has provided evidence
satisfactory to Lender that it has obtained all permanent certificates of occupancy required for
the Project.

ARTICLE 3

INSURANCE, CONDEMNATION, AND IMPOUNDS

     Section 3.1 Insurance.

Borrower shall maintain insurance as follows:

          (a) Casualty; Business Interruption. Borrower shall keep the Project insured against
damage by fire and the other hazards covered by a standard extended coverage and special form
insurance policy for the full insurable value thereof on a replacement cost claim recovery basis
(without reduction for depreciation or co-insurance), and shall maintain such other casualty
insurance as reasonably required by Lender. Such insurance shall include property coverage against
acts of terrorism. Lender reserves the right to require from time to time the following additional
insurance: boiler and machinery; flood; earthquake/sinkhole; worker’s compensation; and/or
building law or ordinance. Borrower shall keep the Project insured against loss by flood if the
Project is located currently or at any time in the future in an area identified by the Federal
Emergency Management Agency as an area having special flood hazards and in which flood insurance
has been made available under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act of 1994 (as such acts may from
time to time be amended) in an amount at least equal to the lesser of (i) the maximum amount of
the Loan or (ii) the maximum limit of coverage available under said acts. Any such flood insurance
policy shall be issued in accordance with the requirements and current guidelines of the Federal
Insurance Administration. Borrower shall maintain use and occupancy insurance covering, as
applicable, rental income or business interruption, with coverage in an amount not less than
twelve (12) months anticipated gross rental income or gross business earnings, as applicable in
each case, attributable to the Project. Borrower shall not maintain any separate or additional
insurance which is contributing in the event of loss unless it is properly endorsed and otherwise
reasonably satisfactory to Lender in all respects. The proceeds of insurance paid on account of
any damage or destruction to the Project shall be paid to Lender to be applied as provided in
Section 3.2.

          (b) Liability. Borrower shall maintain (i) commercial general liability insurance with
respect to the Project providing for limits of liability of not less than $5,000,000 for both
injury to or death of a person and for property damage per occurrence, and (ii) other liability
insurance as reasonably required by Lender.

          (c) Form and Quality. All insurance policies shall be endorsed in form and substance
acceptable to Lender to name Lender as an additional insured, loss payee or mortgagee thereunder,
as its interest may appear, with loss payable to Lender, without contribution, under a standard
New York (or local equivalent) mortgagee clause. All such insurance policies and

Page 7

 

endorsements shall be fully paid for and contain such provisions and expiration dates and be
in such form and issued by such insurance companies licensed to do business in the State, with a
general company and financial size rating of “A IX” or better as established by Best’s Rating
Guide and “AA” or better by Standard & Poor’s Ratings Group. Each policy shall provide that such
policy may not be canceled or materially changed except upon thirty (30) days’ prior written
notice of intention of non-renewal, cancellation or material change to Lender and that no act or
thing done by Borrower shall invalidate any policy as against Lender. Blanket policies shall be
permitted only if (i) Lender receives appropriate endorsements and/or duplicate policies
containing Lender’s right to continue coverage on a pro rata pass-through basis and that coverage
will not be affected by any loss on other properties covered by the policies and (ii) the policy
contains a sublimit equal to the replacement cost of the Project in an amount approved by Lender
which is expressly allocated for the Project, and any such policy shall in all other respects
comply with the requirements of this Section. Borrower authorizes Lender to pay the premiums for
such policies (the “Insurance Premiums”) from the Tax and Insurance Escrow Fund as the
same become due and payable annually in advance. If Borrower fails to deposit funds into the Tax
and Insurance Escrow Fund sufficient to permit Lender to pay the premiums when due, Lender may
obtain such insurance and pay the premium therefor and Borrower shall, on demand, reimburse Lender
for all expenses incurred in connection therewith. Borrower shall assign the policies or proofs of
insurance to Lender, in such manner and form that Lender and its successors and assigns shall at
all times have and hold the same as security for the payment of the Loan. Borrower shall deliver
copies of all original policies certified to Lender by the insurance company or authorized agent
as being true copies, together with the endorsements required hereunder. The proceeds of insurance
policies coming into the possession of Lender shall not be deemed trust funds, and Lender shall be
entitled to apply such proceeds as herein provided.

          (d) Adjustments. Borrower shall give prompt written notice of any material loss to the
insurance carrier and to Lender. Borrower hereby irrevocably authorizes and empowers Lender, as
attorney in fact for Borrower coupled with an interest, to make proof of loss, to adjust and
compromise any claim under insurance policies, to appear in and prosecute any action arising from
such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom
Lender’s reasonable expenses incurred in the collection of such proceeds. Nothing contained in this
Section 3.1(d), however, shall require Lender to incur any expense or take any action hereunder.

     Section 3.2 Use And Application Of Insurance Proceeds.

          (a) If the Project shall be damaged or destroyed, in whole or in part, by fire or other
casualty (a “Casualty”), Borrower shall give prompt notice thereof to Lender. Following
the occurrence of a Casualty, Borrower, regardless of whether insurance proceeds are available,
shall promptly proceed to restore, repair, replace or rebuild the same to be of at least equal
value and of substantially the same character as prior to such damage or destruction, all to be
effected in accordance with applicable law.

          (b) Lender shall apply insurance proceeds to costs of restoring the Project or to the payment
of the Loan as follows:

Page 8

 

	 	(i)	 	if the loss is less than or equal to $250,000, Lender shall
apply the insurance proceeds to restoration provided (A) no Event of
Default or Potential Default exists, and (B) Borrower promptly
commences and is diligently pursuing restoration of the Project;
	 
	 	(ii)	 	if the loss exceeds $250,000, Lender shall apply
the insurance proceeds to restoration provided that (A) at all times
during such restoration no Event of Default or Potential Default
exists; (B) Lender determines throughout the restoration that there are
sufficient funds available to restore and repair the Project to a
condition approved by Lender; (C) Lender determines that the net
operating income of the Project during restoration, taking into account
rent loss or business interruption insurance, will be sufficient to pay
Debt Service; (D) Lender determines (based on leases which will remain
in effect after restoration is complete if the Project is not a
multi-family project) that after restoration the ratio of net operating
income to Debt Service will equal at least the ratio that existed on
the Closing Date; (E) Lender determines that the ratio of the
outstanding principal balance of the Loan to appraised value of the
project after restoration will not exceed the loan-to-value ratio that
existed on the Closing Date; (F) Lender determines that restoration and
repair of the Project to a condition approved by Lender will be
completed within six months after the date of loss or casualty and in
any event ninety (90) days prior to the Maturity Date; (G) Borrower
promptly commences and is diligently pursuing restoration of the
Project; and (H) the Project after the restoration will be in
compliance with and permitted under all applicable zoning, building and
land use laws, rules, regulations and ordinances; and
	 
	 	(iii)	 	if the conditions set forth in (i) and (ii)
above are not satisfied in Lender’s reasonable discretion, Lender may
apply any insurance proceeds it may receive to the payment of the Loan
or allow all or a portion of such proceeds to be used for the
restoration of the Project.

          (c) Insurance proceeds applied to restoration will be disbursed on receipt of reasonably
satisfactory plans and specifications, contracts and subcontracts, schedules, budgets, lien waivers
and architects’ certificates, and otherwise in accordance with prudent commercial construction
lending practices for construction loan advances (including appropriate retainages to ensure that
all work is completed in a workmanlike manner).

     Section 3.3 Condemnation Awards. Borrower shall promptly give Lender written notice
of the actual or threatened commencement of any condemnation or eminent domain proceeding (a
“Condemnation”) and shall deliver to Lender copies of any and all papers served in
connection with such Condemnation. Following the occurrence of a Condemnation,

Page 9

 

Borrower, provided any award or compensation (an “Award”) is made available to
Borrower, shall promptly proceed to restore, repair, replace or rebuild the same to the extent
practicable to be of at least equal value and of substantially the same character as prior to such
Condemnation, all to be effected in accordance with applicable law. Lender may participate in any
such proceeding and Borrower will deliver to Lender all instruments necessary or required by
Lender to permit such participation. Without Lender’s prior consent, Borrower (a) shall not agree
to any Award, and shall not take any action or (b) fail to take any action which would cause the
Award to be determined. All Awards for the taking or purchase in lieu of condemnation of the
Project or any part thereof are hereby assigned to and shall be paid to Lender. Borrower
authorizes Lender to collect and receive such Awards, to give proper receipts and acquittances
therefor, and, in Lender’s reasonable discretion, to apply the same toward the payment of the
Loan, notwithstanding that the Loan may not then be due and payable, or to the restoration of the
Project; provided, however, if the Award is less than or equal to $100,000 and Borrower requests
that such proceeds be used for non structural site improvements (such as landscape, driveway,
walkway and parking area repairs) required to be made as a result of such condemnation, Lender
will apply the Award to such restoration in accordance with disbursement procedures applicable to
insurance proceeds provided there exists no Potential Default or Event of Default. Borrower, upon
request by Lender, shall execute all instruments requested to confirm the assignment of the Awards
to Lender, free and clear of all liens, charges or encumbrances.

     Section 3.4 Impounds. Borrower shall deposit with Lender, monthly, (a) one twelfth
(1/12th) of the Taxes that Lender estimates will be payable during the next ensuing twelve (12)
months in order to accumulate with Lender sufficient funds to pay all such Taxes at least thirty
(30) days prior to their respective due dates, and (b) one-twelfth (l/12th) of the Insurance
Premiums that Lender estimates will be payable for the renewal of the coverage afforded by the
insurance policies required by Lender upon the expiration thereof in order to accumulate with
Lender sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to
expiration (said amounts in (a) and (b) above hereinafter called the “Tax and Insurance Escrow
Fund”). At or before the advance of the Loan, Borrower shall deposit with Lender a sum of money
which together with the monthly installments will be sufficient to make each of such payments
thirty (30) days prior to the date any delinquency or penalty becomes due with respect to such
payments. Deposits shall be made on the basis of Lender’s estimate from time to time of the charges
for the current year (after giving effect to any reassessment or, at Lender’s election, on the
basis of the charges for the prior year, with adjustments when the charges are fixed for the then
current year). All funds so deposited shall be held by Lender, without interest, and may be
commingled with Lender’s general funds. Borrower hereby grants to Lender a security interest in all
funds so deposited with Lender for the purpose of securing the Loan. While an Event of Default
exists, the funds deposited may be applied in payment of the charges for which such funds have been
deposited, or to the payment of the Loan or any other charges affecting the security of Lender, as
Lender may elect, but no such application shall be deemed to have been made by operation of law or
otherwise until actually made by Lender. Borrower shall furnish Lender with bills for the charges
for which such deposits are required at least thirty (30) days prior to the date on which the
charges first become payable. If at any time the amount on deposit with Lender, together with
amounts to be deposited by Borrower before such charges are payable, is insufficient to pay such
charges, Borrower shall deposit any deficiency with Lender

Page 10

 

immediately upon demand. Lender shall pay such charges when the amount on deposit with Lender
is sufficient to pay such charges and Lender has received a bill for such charges.

ARTICLE 4

ENVIRONMENTAL MATTERS

     Section 4.1 Certain Definitions. As used herein, the following terms have the
meanings indicated:

          (a) “Environmental Laws” means any federal, state or local law (whether imposed by statute,
ordinance, rule, regulation, administrative or judicial order, or common law), now or hereafter
enacted, governing health, safety, industrial hygiene, the environment or natural resources, or
Hazardous Materials, including, without limitation, such laws governing or regulating (i) the use,
generation, storage, removal, recovery, treatment, handling, transport, disposal, control,
release, discharge of, or exposure to, Hazardous Materials, (ii) the transfer of property upon a
negative declaration or other approval of a governmental authority of the environmental condition
of such property, or (iii) requiring notification or disclosure of releases of Hazardous Materials
or other environmental conditions whether or not in connection with a transfer of title to or
interest in property.

          (b) “Hazardous Materials” means (i) petroleum or chemical products, whether in liquid, solid,
or gaseous form, or any fraction or by product thereof, (ii) asbestos or asbestos containing
materials, (iii) polychlorinated biphenyls (pcbs), (iv) radon gas, (v) underground storage tanks,
(vi) any explosive or radioactive substances, (vii) lead or lead-based paint, or (viii) any other
substance, material, waste or mixture which is or shall be listed, defined, or otherwise
determined by any applicable governmental authority to be hazardous, toxic, dangerous or otherwise
regulated, controlled or giving rise to liability under any Environmental Laws.

     Section 4.2 Representations And Warranties On Environmental Matters.

          To Borrower’s knowledge, except as set forth in the Site Assessment, (a) no Hazardous Material
is now or was formerly used, stored, generated, manufactured, installed, treated, discharged,
disposed of or otherwise present at or about the Project or any property adjacent to the Project
(except for cleaning and other products currently used in connection with the routine maintenance
or repair of the Project in full compliance with Environmental Laws) and no Hazardous Material was
removed or transported from the Project, (b) all permits, licenses, approvals and filings required
by Environmental Laws have been obtained, and the use, operation and condition of the Project does
not, and did not previously, violate any Environmental Laws, (c) no civil, criminal or
administrative action, suit, claim, hearing, investigation or proceeding has been brought or been
threatened with respect to the Project, nor have any settlements been reached by or with any
parties or any liens imposed in connection with the Project concerning Hazardous Materials or
Environmental Laws; and (d) no underground storage tanks exist on any part of the Project.

     Section 4.3 Covenants On Environmental Matters.

Page 11

 

          (a) Borrower shall (i) comply strictly and in all respects with applicable Environmental
Laws; (ii) notify Lender promptly upon Borrower’s discovery of any spill, discharge, release or
presence of any Hazardous Material at, upon, under, within, contiguous to or otherwise affecting
the Project in violation of Environmental Laws; (iii) promptly remove such Hazardous Materials and
remediate the Project in full compliance with Environmental Laws or as reasonably required by
Lender based upon the recommendations and specifications of an independent environmental
consultant approved by Lender; and (iv) promptly forward to Lender copies of all orders, notices,
permits, applications or other communications and reports in connection with any spill, discharge,
release or the presence of any Hazardous Material in violation of Environmental Laws or any other
matters relating to the Environmental Laws or any similar laws or regulations, as they may affect
the Project or Borrower.

          (b) Borrower shall not cause, shall prohibit any other Person within the control of Borrower
from causing, and shall use prudent, commercially reasonable efforts to prohibit other Persons
(including tenants) from (i) causing any spill, discharge or release, or the use, storage,
generation, manufacture, installation, or disposal, of any Hazardous Materials at, upon, under,
within or about the Project or the transportation of any Hazardous Materials to or from the
Project (except for cleaning and other products used in connection with routine maintenance or
repair of the Project in full compliance with Environmental Laws), (ii) installing any underground
storage tanks at the Project, or (iii) conducting any activity that requires a permit or other
authorization under Environmental Laws.

          (c) Borrower shall provide to Lender, at Borrower’s expense promptly upon the written request
of Lender from time to time, a Site Assessment or, if required by Lender, an update to any
existing Site Assessment, to assess the presence or absence of any Hazardous Materials and the
potential costs in connection with abatement, cleanup or removal of any Hazardous Materials found
on, under, at or within the Project. Borrower shall pay the cost of no more than one such Site
Assessment or update in any twelve (12) month period, unless Lender’s request for a Site
Assessment is based on information provided under Section 4.3(a), a reasonable suspicion of
Hazardous Materials at or near the Project in violation of Environmental Laws, a breach of
representations under Section 4.2, or an Event of Default, in which case any such Site Assessment
or update shall be at Borrower’s expense.

     Section 4.4 Allocation Of Risks And Indemnity. As between Borrower and Lender, all
risk of loss associated with non-compliance with Environmental Laws, or with the presence of any
Hazardous Material at, upon, within, contiguous to or otherwise affecting the Project, shall lie
solely with Borrower. Accordingly, Borrower shall bear all risks and costs associated with any
loss (including any loss in value attributable to Hazardous Materials), damage or liability
therefrom, including all costs of removal of Hazardous Materials or other remediation required by
Lender or by law. Borrower shall indemnify, defend and hold Lender and its shareholders,
directors, officers, employees and agents harmless from and against all loss, liabilities,
damages, claims, costs and expenses (including reasonable costs of defense and consultant fees,
investigation and laboratory fees, court costs, and other litigation expenses) arising out of or
associated, in any way, with (a) the non-compliance with Environmental Laws, or (b) the existence
of Hazardous Materials in, on, or about the Project, (c) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to

Page 12

 

Hazardous Materials; (d) any lawsuit brought or threatened, settlement reached, or government
order relating to such Hazardous Materials, (e) a breach of any representation, warranty or
covenant contained in this Article 4, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute or common law, or (f) the imposition of any
environmental lien encumbering the Project; provided, however, Borrower shall not be liable under
such indemnification if such loss, liability, damage, claim, cost or expense results solely from
Lender’s gross negligence or willful misconduct. Borrower’s obligations under this Section 4.4
shall arise whether or not any governmental authority has taken or threatened any action in
connection with the presence of any Hazardous Material, and whether or not the existence of any
such Hazardous Material or potential liability on account thereof is disclosed in the Site
Assessment and shall continue notwithstanding the repayment of the Loan or any transfer or sale of
any right, title and interest in the Project (by foreclosure, deed in lieu of foreclosure or
otherwise). Additionally, if any Hazardous Materials affect or threaten to affect the Project,
Lender may (but shall not be obligated to) give such notices and take such actions as it deems
necessary or advisable at the expense of the Borrower in order to abate the discharge of any
Hazardous Materials or remove the Hazardous Materials. Any amounts payable to Lender by reason of
the application of this Section 4.4 shall become immediately due and payable and shall bear
interest at the Default Rate from the date loss or damage is sustained by Lender until paid. The
obligations and liabilities of Borrower under this Section 4.4 shall survive any termination,
satisfaction, assignment, entry of a judgment of foreclosure or delivery of a deed in lieu of
foreclosure.

     Section 4.5 No Waiver. Notwithstanding any provision in this Article 4 or elsewhere
in the Loan Documents, or any rights or remedies granted by the Environmental Indemnity Agreement
or the Loan Documents, Lender does not waive and expressly reserves all rights and benefits now or
hereafter accruing to Lender under the “security interest” or “secured creditor” exception under
applicable Environmental Laws, as the same may be amended. No action taken by Lender pursuant to
the Environmental Indemnity Agreement or the Loan Documents shall be deemed or construed to be a
waiver or relinquishment of any such rights or benefits under the “security interest exception.”

ARTICLE 5

LEASING MATTERS

     Section 5.1 Representations And Warranties On Leases. Borrower represents and
warrants to Lender with respect to leases of the Project that: (a) the rent roll delivered to
Lender is true and correct in all material respects, and the leases are valid and in and full force
and effect; (b) the leases (including amendments) are in writing, and there are no oral agreements
with respect thereto; (c) the landlord is not in default under any of the leases; (d) Borrower has
no knowledge of any notice of termination or default with respect to any lease except as disclosed
to Lender in writing; (e) Borrower has not assigned or pledged any of the leases, the rents or any
interests therein except to Lender; (f) no tenant or other party has an option to purchase all or
any portion of the Project; (g) no tenant has the right to terminate its lease prior to expiration
of the stated term of such lease; and (h) all existing leases are subordinate to the Mortgage
either pursuant to their terms or a recorded subordination agreement.

Page 13

 

     
Section 5.2  Standard Lease Form; Approval Rights.  All leases and other rental
arrangements shall in all respects be approved by Lender and shall be on a standard lease form
approved by Lender with no material modifications (except as approved by Lender, which approval
will not be unreasonably withheld or delayed). Borrower shall hold, in trust, all tenant security
deposits and, to the extent required by applicable law, shall not commingle any such funds with
any other funds of Borrower. Upon Lender’s request, Borrower shall furnish Lender with certified
copies of all leases and a statement of all tenant security deposits. Notwithstanding anything
contained in the Loan Documents, Lender’s approval shall not be required for future leases or
lease extensions if the following conditions are satisfied: (i) there exists no Potential Default
or Event of Default; (ii) the lease is on the standard lease form approved by Lender with no
material modifications (except as approved by Lender, which approval will not be unreasonably
withheld or delayed); (iii) the lease does not conflict with any restrictive covenant affecting
the Project or any other lease for space in the Project; and (iv) the effective rental rate of the
lease is the market rate.

     Section 5.3  Covenants.  Borrower (a) shall perform the obligations which Borrower is required
to perform under the leases; (b) shall enforce the obligations to be performed by the tenants; (c)
shall not collect any rents for more than thirty (30) days in advance of the time when the same
shall become due except in the ordinary course of business and prudent property management
practices and for bona fide security deposits not in excess of an amount equal to two months rent;
(d) shall not enter into any ground lease or master lease of any part of the Project; (e) shall not
further assign or encumber any lease; (f) shall not, except with Lender’s prior written consent,
which consent will not be unreasonably withheld or delayed, or except for tenant defaults in the
ordinary course of business of prudent property management, cancel or accept surrender or
termination of any lease; and (g) shall not, except with Lender’s prior written consent, which
consent will not be unreasonably withheld or delayed, modify or amend any lease (except for minor
modifications and amendments entered into in the ordinary course of business, consistent with
prudent property management practices, not affecting the economic terms of the lease). Any action
in violation of clauses (d), (e), (f), and (g) of this Section 5.3 shall be void at the election of
Lender.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

Borrower represents, warrants and covenants to Lender that:

     Section 6.1  Organization, Power And Authority. Borrower and each Borrower Party (a)
is duly organized, validly existing and in good standing under the laws of the state of its
formation or existence, (b) is in compliance with all legal requirements applicable to doing
business in the State, and (c) has the necessary governmental approvals to own and operate the
Project and conduct the business now conducted or to be conducted thereon. Borrower has the full
power, authority and right to execute, deliver and perform its obligations pursuant to this Loan
Agreement and the other Loan Documents, and to mortgage the Project pursuant to the terms of the
Mortgage and to keep and observe all of the terms of this Loan Agreement and the other Loan
Documents on Borrower’s part to be performed. Borrower is not a “foreign person” within the meaning
of § 1445(f)(3) of the Internal Revenue Code.

Page 14

 

     Section 6.2  Validity Of Loan Documents.  The execution, delivery and performance
by Borrower and each Borrower Party of the Loan Documents to which each is a party: (a) are duly
authorized and do not require the consent or approval of any other party or governmental authority
which has not been obtained; and (b) will not violate any law or result in the imposition of any
lien, charge or encumbrance upon the assets of any such party, except as contemplated by the Loan
Documents. The Loan Documents constitute the legal, valid and binding obligations of Borrower and
each Borrower Party, as applicable, enforceable in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, or similar laws generally affecting the enforcement of
creditors’ rights.

     Section 6.3  Liabilities; Litigation.  The financial statements delivered by Borrower
and each Borrower Party are true and correct with no significant change since the date of
preparation. Except as disclosed in such financial statements, there are no liabilities (fixed or
contingent) affecting the Project, Borrower or any Borrower Party. Except as disclosed in such
financial statements, there is no litigation, administrative proceeding, investigation or other
legal action (including any proceeding under any state or federal bankruptcy or insolvency law)
pending or, to the knowledge of Borrower, threatened, against the Project, Borrower or any
Borrower Party which if adversely determined could have a material adverse effect on such party,
the Project or the Loan.

          (a) Neither Borrower nor any Borrower Party is contemplating either the filing of a petition
by it under state or federal bankruptcy or insolvency laws or the liquidation of all or a major
portion of its assets or property, and neither Borrower nor any Borrower Party has knowledge of
any Person contemplating the filing of any such petition against it.

     Section 6.4  Taxes And Assessments.  The Project is comprised of one or more parcels,
each of which constitutes a separate tax lot and none of which constitutes a portion of any other
tax lot. There are no pending or, to Borrower’s best knowledge, proposed, special or other
assessments for public improvements or otherwise affecting the Project, nor are there any
contemplated improvements to the Project that may result in such special or other assessments.

     Section 6.5  Other Agreements; Defaults.  Neither Borrower nor any Borrower Party is a
party to any agreement or instrument or subject to any court order, injunction, permit, or
restriction which might adversely affect the Project or the business, operations, or condition
(financial or otherwise) of Borrower or any Borrower Party. Neither Borrower nor any Borrower
Party is in violation of any agreement which violation would have an adverse effect on the
Project, Borrower, or any Borrower Party or Borrower’s or any Borrower Party’s business,
properties, or assets, operations or condition, financial or otherwise.

     Section 6.6  Compliance With Law.

          (a) Borrower and each Borrower Party have all requisite licenses, permits, franchises,
qualifications, certificates of occupancy or other governmental authorizations to own, lease and
operate the Project and carry on its business, and the Project is in compliance with all applicable
legal requirements and is free of structural defects, and all building systems contained

Page 15

 

therein are in good working order, subject to ordinary wear and tear. The Project does not
constitute, in whole or in part, a legally non conforming use under applicable legal requirements;

          (b) No condemnation has been commenced or, to Borrower’s knowledge, is contemplated with
respect to all or any portion of the Project or for the relocation of roadways providing access to
the Project; and

          (c) The Project has adequate rights of access to public ways and is served by adequate water,
sewer, sanitary sewer and storm drain facilities. All public utilities necessary or convenient to
the full use and enjoyment of the Project are located in the public right-of-way abutting the
Project, and all such utilities are connected so as to serve the Project without passing over
other property, except to the extent such other property is subject to a perpetual easement for
such utility benefiting the Project. All roads necessary for the full utilization of the Project
for its current purpose have been completed and dedicated to public use and accepted by all
governmental authorities.

     Section 6.7 Location Of Borrower. Borrower’s principal place of business and chief
executive offices are located at the address stated in Section 11.1.

     Section 6.8 ERISA.

          (a) As of the date hereof and throughout the term of the Loan, (i) Borrower is not and will
not be an “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), which is subject to Title I of ERISA, and (ii) the
assets of Borrower do not and will not constitute “plan assets” of one or more such plans for
purposes of Title I of ERISA; and

          (b) As of the date hereof and throughout the term of the Loan (i) Borrower is not and will
not be a “governmental plan” within the meaning of Section 3(3) of ERISA and (ii) transactions by
or with Borrower are not and will not be subject to state statutes applicable to Borrower
regulating investments of and fiduciary obligations with respect to governmental plans.

     Section 6.9 Forfeiture. There has not been and shall never be committed by Borrower
or any other person in occupancy of or involved with the operation or use of the Project any act
or omission affording the federal government or any state or local government the right of
forfeiture as against the Project or any part thereof or any monies paid in performance of
Borrower’s obligations under any of the Loan Documents. Borrower hereby covenants and agrees not
to commit, permit or suffer to exist any act or omission affording such right of forfeiture.

     Section 6.10 Tax Filings. Borrower and each Borrower Party have filed (or have
obtained effective extensions for filing) all federal, state and local tax returns required to be
filed and have paid or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments payable by Borrower and each Borrower Party, respectively. Borrower
and each Borrower Party believe that their respective tax returns properly reflect the income and
taxes of Borrower and each Borrower Party, respectively, for the periods covered thereby,

Page 16

 

subject only to reasonable adjustments required by the Internal Revenue Service or other
applicable tax authority upon audit.

     Section 6.11 Solvency. Giving effect to the Loan, the fair saleable value of
Borrower’s assets exceeds and will, immediately following the making of the Loan, exceed
Borrower’s total liabilities, including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities. The fair saleable value of Borrower’s assets is and will, immediately
following the making of the Loan, be greater than Borrower’s probable liabilities, including the
maximum amount of its contingent liabilities on its Debts as such Debts become absolute and
matured, Borrower’s assets do not and, immediately following the making of the Loan will not,
constitute unreasonably small capital to carry out its business as conducted or as proposed to be
conducted. Borrower does not intend to, and does not believe that it will, incur Debts and
liabilities (including contingent liabilities and other commitments) beyond its ability to pay
such Debts as they mature (taking into account the timing and amounts of cash to be received by
Borrower and the amounts to be payable on or in respect of obligations of Borrower). Except as
expressly disclosed to Lender in writing, no petition in bankruptcy has been filed against
Borrower or any Borrower Party in the last seven (7) years, and neither Borrower or any Borrower
Party in the last seven (7) years has ever made an assignment for the benefit of creditors or
taken advantage of any insolvency act for the benefit of debtors.

     Section 6.12 Full And Accurate Disclosure. No statement of fact made by or on behalf
of Borrower or any Borrower Party in this Agreement or in any of the other Loan Documents contains
any untrue statement of a material fact or omits to state any material fact necessary to make
statements contained herein or therein not misleading. There is no fact presently known to
Borrower which has not been disclosed to Lender which adversely affects, nor as far as Borrower
can foresee, might adversely affect, the Project or the business, operations or condition
(financial or otherwise) of Borrower or any Borrower Party.

     Section 6.13 Flood Zone. No portion of the improvements comprising the Project is located in
an area identified by the Secretary of Housing and Urban Development or any successor thereto 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 Act of 1994, as amended, or
any successor law, or, if located within any such area, Borrower has obtained and will maintain
the insurance prescribed in Section 3.1 hereof.

     Section 6.14 Single Purpose Entity/Separateness

Borrower represents, warrants and covenants as follows:

          (a) Borrower has not owned, does not own, and will not own any asset or property other than
(i) the Project, and (ii) incidental personal property necessary for the ownership or operation of
the Project.

          (b) Borrower has not engaged in and will not engage in any business other than the ownership,
management and operation of the Project.

Page 17

 

          (c) Borrower has not entered into and will not enter into any contract or agreement with
any Affiliate of the Borrower, any constituent party of Borrower, or any Affiliate of any
constituent party, except upon terms and conditions that have been, are and shall be intrinsically
fair and substantially similar to those that would be available on an arms-length basis with third
parties other than any such party.

          (d) Borrower has not incurred and will not incur any Debt other than (i) the Loan, (ii) trade
and operational debt incurred in the ordinary course of business with trade creditors and in
amounts as are normal and reasonable under the circumstances, provided such debt is not evidenced
by a note and is paid when due, and (iii) Debt incurred in purchase-money financing of equipment
and other personal property used on the Project. No indebtedness other than the Loan may be
secured (subordinate or pari passu) by the Project; provided, that, debt incurred pursuant to
(iii) above may be secured by the equipment and other personal property being purchased.

          (e) Borrower has not made and will not make any loans or advances to any third party
(including any affiliate or constituent party or any affiliate of any constituent party), and has
not and shall not acquire obligations or securities of its affiliates or any constituent party.

          (f) Borrower has been, is and will remain solvent and Borrower has paid, and will pay, its
debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its
own funds and assets as the same have become due and as same shall become due.

          (g) Borrower has done or caused to be done and will do all things necessary to observe
organizational formalities and preserve its existence, and Borrower will not, nor will Borrower
permit any manager or other Person in control of Borrower to amend, modify or otherwise change any
provision of the partnership certificate, partnership agreement, articles of incorporation and
bylaws, operating agreement, trust or other organizational documents of Borrower or any manager or
other Person in control of Borrower in a manner which adversely affects Borrower’s or such
manager’s or other Person’s existence as a single purpose entity without the prior written consent
of Lender.

          (h) Borrower has maintained, and will maintain, all of its books, records, financial
statements and bank accounts separate from those of its Affiliates and any constituent party and
Borrower will file its own tax returns. Borrower shall maintain its books, records, resolutions
and agreements as official records.

          (i) Borrower has been and will be, and at all times has held itself out and will hold itself
out to the public as, a legal entity separate and distinct from any other entity (including any
Affiliate of Borrower, any constituent party of Borrower, or any Affiliate of any constituent
party), shall correct any known misunderstanding regarding its status as a separate entity, shall
conduct business in its own name, shall not identify itself or any of its Affiliates as a division
or part of the other provided, that, Borrower may contract with any property manager for the
Project for (i) the rights under a nonexclusive license authorizing Borrower to use various service
marks, trademarks, and trade names (e.g. “The Grove,” “Go Grove,” and “Campus

Page 18

 

Crest”) for purposes of marketing the Project to prospective tenants, (ii) the use by such
property manager of such licensed service marks, trademarks and trade names on behalf of Borrower
for purposes of marketing the Project to potential tenants, and (iii) space on a nonexclusive
website which advertises the Project to potential tenants along with other properties managed by
such property manager that are also licensed to use such service marks, trademarks and trade
names, and shall maintain and utilize a separate telephone number, if any, and separate
stationery, invoices and checks provided, that, the foregoing shall not limit the ability of any
property manager under a management agreement acting on behalf of Borrower to use such manager’s
own stationery and invoices so long as, in matters affecting legal rights and obligations of
Borrower or the Project, such manager shall identify its representative capacity of Borrower
and/or the Project so as to avoid any misunderstanding of Borrower’s separate identity.

          (j) Borrower has maintained, and will maintain, adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of its contemplated
business operations.

          (k) Neither Borrower nor any constituent party will seek the dissolution, winding up,
liquidation, consolidation or merger in whole or in part, of the Borrower.

          (l) Borrower has not commingled and will not commingle the funds and other assets of Borrower
with those of any Affiliate or constituent party, or any Affiliate of any constituent party, or
any other person.

          (m) Borrower has and will maintain its assets in such a manner that it will not be costly or
difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or
constituent party, or any Affiliate of any constituent party, or any other person.

          (n) Borrower has not, and Borrower does not and will not hold itself out to be responsible
for the debts or obligations of any other person.

          (o) If Borrower is a limited partnership or a limited liability company, each general partner
or managing member (each, an “SPC Party”) shall be a corporation or limited liability
company whose sole asset is its interest in Borrower and each such SPC Party will at all times
comply, and will cause Borrower to comply, with each of the representations, warranties, and
covenants contained in this Section 6.14 as if such representation, warranty or covenant was made
directly by such SPC Party.

     Section 6.15 Anti-Terrorism And Anti-Money Laundering Laws.

          (a) Borrower and each partner, member or stockholder in Borrower, and all beneficial owners of
Borrower and any such partner, member or stockholder, are in compliance with the requirements of
the Anti-Money Laundering Laws (as defined below). Borrower agrees to make its policies, procedures
and practices regarding compliance with the Anti-Money Laundering Laws of any Persons who, pursuant
to transfers permitted by the Mortgage, become stockholders, members, partners or other investors
of Borrower, if any, available to Lender for its review and inspection during normal business hours
and upon reasonable prior notice.

Page 19

 

          (b) Neither Borrower, any partner, member or stockholder in Borrower nor
the beneficial owner of Borrower or any such partner, member or stockholder:

	 	(i)	 	is listed on the Lists (as defined below);
	 
	 	(ii)	 	is a Person who has been determined by
competent authority to be subject to the prohibitions contained in the
Anti-Money Laundering Laws;
	 
	 	(iii)	 	is owned or controlled by, nor acts for or on
behalf of, any Person on the Lists or any other Person who has been
determined by competent authority to be subject to the prohibitions
contained in the Anti-Money Laundering Laws;
	 
	 	(iv)	 	shall transfer or permit the transfer of any
interest in Borrower or any Borrower Party to any Person who is or
whose beneficial owners are listed on the Lists; or
	 
	 	(v)	 	shall knowingly lease space in the Project to
any Person who is listed on the Lists or who is engaged in illegal
activities.

          (c) If Borrower obtains knowledge that Borrower or any of its partners, members or
stockholders or their beneficial owners become listed on the Lists or are indicted, arraigned, or
custodially detained on charges involving money laundering or predicate crimes to money
laundering, Borrower shall immediately notify Lender.

          (d) If Borrower obtains knowledge that any tenant in the Project has become listed on the
Lists or is convicted, pleads nolo contendere, indicted, arraigned, or custodially detained on
charges involving money laundering or predicate crimes to money laundering, Borrower shall
immediately notify Lender.

          (e) If Borrower obtains knowledge that a tenant at the Project is listed on the Lists or is
convicted or pleads nolo contendere to charges related to activity prohibited in the Anti-Money
Laundering Laws, then proceeds from the rents of such tenant shall not be used to pay Debt Service
and Borrower shall provide Lender such representations and verifications as Lender shall
reasonably request that such rents are not being so used.

          (f) If Borrower obtains knowledge that a tenant at the Project is arrested on such charges,
and such charge is not dismissed within thirty (30) days thereafter, Lender may at its option
notify Borrower to exclude such rents from the Debt Service payments.

          (g) If Borrower or any Borrower Party is listed on the Lists, no earn-out disbursements,
escrow disbursements, or other disbursements under the Loan Documents shall be made and all of such
funds shall be paid in accordance with the direction of a court of competent jurisdiction.

     As used herein, the following terms have the meanings indicated:

Page 20

 

     “Anti-Money Laundering Laws” means those laws, regulations and sanctions, state
and federal, criminal and civil, that (a) limit the use of and/or seek the forfeiture of proceeds
from illegal transactions; (b) limit commercial transactions with designated countries or
individuals believed to be terrorists, narcotics dealers or otherwise engaged in activities
contrary to the interests of the United States; (c) require identification and documentation of
the parties with whom a financial institution conducts business; or (d) are designed to disrupt
the flow of funds to terrorist organizations. Such laws, regulations and sanctions shall be deemed
to include the USA PATRIOT ACT of 2001, Publ. L. No. 107-56, the Bank Secrecy Act, 31 U.S.C.
Section 5311, et seq., the Trading with the Enemy Act, 50 U.S.C. App. Section 1, et seq., the
International Emergency Economic Powers Act, 50 U.S.C. Section 1701, et seq., and the sanction
regulations promulgated pursuant thereto by OFAC (as defined below), as well as laws relating to
prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957, and executive
orders promulgated pursuant to any of the foregoing.

     “Lists” means the Specially Designated National and Blocked Persons List maintained
by OFAC pursuant to the Anti-Money Laundering Laws and/or on any other list of terrorists or
terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or
pursuant to any of the Anti-Money Laundering Laws.

     “OFAC” means the Office of Foreign Assets Control, Department of the Treasury.

ARTICLE 7

FINANCIAL REPORTING

     Section 7.1 Financial Statements.

          (a) Monthly Reports. Until the Loan is sold in a Secondary Market Transaction,
Borrower shall furnish to Lender within twenty (20) days after the end of each calendar month, a
current rent roll and a detailed operating statement (showing monthly activity and year to date)
stating operating revenues, operating expenses, operating income and net cash flow for the
calendar month just ended.

          (b) Quarterly Reports. Within forty five (45) days after the end of each calendar
quarter, Borrower shall furnish to Lender a current rent roll and a detailed operating statement
(showing quarterly activity and year to date) stating operating revenues, operating expenses,
operating income and net cash flow for the calendar quarter just ended.

          (c) Annual Reports. Within ninety (90) days after the end of each fiscal year of
Borrower’s operation of the Project, Borrower shall furnish to Lender a current (as of the end of
such fiscal year) balance sheet, a detailed operating statement stating operating revenues,
operating expenses, operating income and net cash flow for each of Borrower and the Project.

          (d) Certification; Supporting Documentation. Each such financial statement shall be in
scope and detail reasonably satisfactory to Lender and certified by the chief financial
representative of Borrower.

Page 21

 

     Section 7.2 Accounting Principles. All financial statements shall be prepared in
accordance with generally accepted accounting principles in the United States of America in effect
on the date so indicated and consistently applied (or such other accounting basis reasonably
acceptable for Lender).

     Section 7.3 Other Information; Access. Borrower shall deliver to Lender such
additional information regarding Borrower, its subsidiaries, its business, any Borrower Party, and
the Project within 30 days after Lender’s request therefor. Borrower shall permit Lender to
examine such records, books and papers of Borrower which reflect upon its financial condition and
the income and expenses of the Project. In the event that Borrower fails to forward the financial
statements required in this Article 7 within thirty (30) days after written request, Lender shall
have the right to audit such records, books and papers at Borrower’s expense.

     Section 7.4 Annual Budget. At least thirty (30) days prior to the commencement of
each fiscal year, Borrower will provide to Lender its proposed annual operating and capital
improvements budget for such fiscal year for review and approval by Lender.

ARTICLE 8

COVENANTS

     Borrower covenants and agrees with Lender as follows:

     Section 8.1 Due On Sale And Encumbrance; Transfers Of Interests. Without the prior
written consent of Lender, neither Borrower nor any other Person having an ownership or
beneficial interest in Borrower shall sell, transfer, convey, mortgage, pledge, or assign
any interest in the Project or any part thereof or further encumber, alienate, grant a Lien
or grant any other interest in the Project or any part thereof, whether voluntarily or
involuntarily, in violation of the covenants and conditions set forth herein and in the
Mortgage.

     Section 8.2 Taxes; Utility Charges. Except to the extent sums sufficient to pay all
Taxes (defined herein) have been previously deposited with Lender as part of the Tax and Insurance
Escrow Fund and subject to Borrower’s right to contest in accordance with Section 11.8 hereof,
Borrower shall pay before any fine, penalty, interest or cost may be added thereto, and shall not
enter into any agreement to defer, any real estate taxes and assessments, franchise taxes and
charges, and other governmental charges (the “Taxes”) that may become a Lien upon the
Project or become payable during the term of the Loan. Borrower’s compliance with Section 3.4 of
this Agreement relating to impounds for Taxes shall, with respect to payment of such Taxes, be
deemed compliance with this Section 8.2. Borrower shall not suffer or permit the joint assessment
of the Project with any other real property constituting a separate tax lot or with any other real
or personal property. Borrower shall promptly pay for, or cause to be paid, all utility services
provided to the Project.

     Section 8.3 Control; Management. There shall be no change in the day-to-day control
and management of Borrower or Borrower’s general partner or managing member without the prior
written consent of Lender. Borrower shall not terminate, replace or appoint any manager or
terminate or amend the management agreement for the Project without Lender’s

Page 22

 

prior written approval, which approval shall not be unreasonably withheld. Any change in ownership
or control of the manager shall be cause for Lender to re-approve such manager and management
agreement. Each manager shall hold and maintain all necessary licenses, certifications and permits
required by law. Borrower shall fully perform all of its covenants, agreements and obligations
under the management agreement. The property management fee payable under the management agreement
shall not exceed three and one-half percent (3.5%) of rental collections; provided, however, that
an additional asset management fee not to exceed two and one-half percent (2.5%) of rental
collections may be paid so long as all Debt Service payments and all property management fees and
expenses have been paid when due, and further provided that payment of any property management fee
or asset management fee shall in all events be subordinate to the payment of the Loan, and no
accrual or deferral of my asset management fee shall be permitted.

     Section 8.4 Operation; Maintenance; Inspection. Borrower shall observe and comply
with all legal requirements applicable to the ownership, use and operation of the Project.
Borrower shall maintain the Project in good condition and promptly repair any damage or casualty.
Borrower shall permit Lender and its agents, representatives and employees, upon reasonable prior
notice to Borrower, to inspect the Project and conduct such environmental and engineering studies
as Lender may require, provided such inspections and studies do not materially interfere with the
use and operation of the Project.

     Section 8.5 Taxes On Security. Borrower shall pay all taxes, charges, filing,
registration and recording fees, excises and levies payable with respect to the Note or the Liens
created or secured by the Loan Documents, other than income, franchise and doing business taxes
imposed on Lender. If there shall be enacted any law (a) deducting the Loan from the value of the
Project for the purpose of taxation, (b) affecting any Lien on the Project, or (c) changing
existing laws of taxation of mortgages, deeds of trust, security deeds, or debts secured by real
property, or changing the manner of collecting any such taxes, Borrower shall promptly pay to
Lender, on demand, all taxes, costs and charges for which Lender is or may be liable as a result
thereof; however, if such payment would be prohibited by law or would render the Loan usurious,
then instead of collecting such payment, Lender may declare all amounts owing under the Loan
Documents to be immediately due and payable.

     Section 8.6 Legal Existence; Name, Etc. Borrower and each SPC Party shall preserve
and keep in full force and effect its entity status, franchises, rights and privileges under the
laws of the state of its formation, and all qualifications, licenses and permits applicable to the
ownership, use and operation of the Project. Neither Borrower nor any general partner or managing
member of Borrower shall wind up, liquidate, dissolve, reorganize, merge, or consolidate with or
into, or convey, sell, assign, transfer, lease, or otherwise dispose of all or substantially all of
its assets, or acquire all or substantially all of the assets of the business of any Person, or
permit any subsidiary or Affiliate of Borrower to do so. Borrower shall not change its name,
identity, state of formation, or organizational structure, or the location of its chief executive
office or principal place of business unless Borrower (a) shall have obtained the prior written
consent of Lender to such change, and (b) shall have taken all actions necessary or requested by
Lender to file or amend any financing statement or continuation statement to assure perfection and
continuation of perfection of security interests under the Loan Documents. The

Page 23

 

name of Borrower, type of entity, organization number, and state of formation set forth in this
Agreement accurately reflect such information as shown on the public record of Borrower’s
jurisdiction of organization.

     Section 8.7 Further Assurances. Borrower shall promptly (a) cure any defects in the
execution and delivery of the Loan Documents and the Environmental Indemnity Agreement, and (b)
execute and deliver, or cause to be executed and delivered, all such other documents, agreements
and instruments as Lender may reasonably request to further evidence and more fully describe the
collateral for the Loan, to correct any omissions in the Loan Documents, to perfect, protect or
preserve any liens created under any of the Loan Documents and the Environmental Indemnity
Agreement, or to make any recordings, file any notices, or obtain any consents, as may be
necessary or appropriate in connection therewith. Borrower grants Lender an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting any and all rights
and remedies available to Lender under the Loan Documents and the Environmental Indemnity
Agreement, at law and in equity, including without limitation such rights and remedies available
to Lender pursuant to this Section 8.7.

     Section 8.8 Estoppel Certificates. Borrower, within ten (10) days after request,
shall furnish to Lender a written statement, duly acknowledged, setting forth the amount due on
the Loan, the terms of payment of the Loan, the date to which interest has been paid, whether any
offsets or defenses exist against the Loan and, if any are alleged to exist, the nature thereof in
detail, and such other matters as Lender reasonably may request.

     Section 8.9 Notice Of Certain Events. Borrower shall promptly notify Lender of (a)
any Potential Default or Event of Default, together with a detailed statement of the steps being
taken to cure such Potential Default or Event of Default; (b) any notice of default received by
Borrower under other obligations relating to the Project or otherwise material to Borrower’s
business; and (c) any threatened or pending legal, judicial or regulatory proceedings, including
any dispute between Borrower and any governmental authority, affecting Borrower or the Project
other than collection actions initiated by Borrower in the ordinary course of business.

     Section 8.10 Indemnification. Borrower shall protect, defend, indemnify and save
harmless Lender its shareholders, directors, officers, employees and agents from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses
(including without limitation reasonable attorneys’ fees and expenses), imposed upon or incurred
by or asserted against Lender by reason of (a) ownership of the Mortgage, the Project or any
interest therein or receipt of any rents; (b) any accident, injury to or death of persons or loss
of or damage to property occurring in, on or about the Project or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (c) any
use, nonuse or condition in, on or about the Project or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (d) performance of
any labor or services or the furnishing of any materials or other property in respect of the
Project or any part thereof; and (e) the failure of any Person to file timely with the Internal
Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate,
Broker and Barter Exchange Transactions, which may be required in connection with this Agreement,
or to supply a copy thereof in a timely fashion to the recipient of the proceeds of the
transaction in

Page 24

 

connection with which this Agreement is made. Any amounts payable to Lender by reason of the
application of this Section shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Lender until paid.

     Section 8.11 Cooperation. Borrower acknowledges that Lender and its successors and
assigns may (a) sell this Agreement, the Mortgage, the Note, the other Loan Documents, and the
Environmental Indemnity Agreement, and any and all servicing rights thereto to one or more
investors as a whole loan, (b) participate the Loan to one or more investors, (c) deposit this
Agreement, the Note, other Loan Documents, and the Environmental Indemnity Agreement with a trust,
which trust may sell certificates to investors evidencing an ownership interest in the trust
assets, or (d) otherwise sell the Loan or interest therein to investors (the transactions referred
to in clauses (a) through (d) are hereinafter each referred to as “Secondary Market
Transaction”). Borrower shall cooperate with Lender in effecting any such Secondary Market
Transaction and shall cooperate to implement all requirements imposed by any Rating Agency involved
in any Secondary Market Transaction. Borrower shall provide such information, legal opinions and
documents relating to the Borrower, the Project and any tenants of the Project as Lender may
reasonably request in connection with such Secondary Market Transaction at no third party
professional expense unless otherwise required by the Loan Documents. In addition, Borrower shall
make available to Lender all information concerning its business and operations that Lender may
reasonably request. Lender shall be permitted to share all such information with the investment
banking firms, Rating Agencies, accounting firms, law firms and other third-party advisory firms
involved with the Loan and the Loan Documents or the applicable Secondary Market Transaction. It is
understood that the information provided by Borrower to Lender may ultimately be incorporated into
the offering documents for the Secondary Market Transaction and thus various investors may also see
some or all of the information. Lender and all of the aforesaid third-party advisors and
professional firms shall be entitled to rely on the information supplied by, or on behalf of,
Borrower and Borrower indemnifies Lender as to any losses, claims, damages or liabilities that
arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact contained in such information or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated in such information or necessary in
order to make the statements in such information, or in light of the circumstances under which they
were made, not misleading.

     Section 8.12 Payment For Labor And Materials. Subject to Borrower’s right
to contest in accordance with Section 11.8 hereof, Borrower will promptly pay when due all bills
and costs for labor, materials, and specifically fabricated materials incurred in connection with
the Project and never permit to exist beyond the due date thereof in respect of the Project or any
part thereof any Lien, even though inferior to the Liens hereof, and in any event never permit to
be created or exist in respect of the Project or any part thereof any other or additional Lien
other than the Liens hereof, except for the Permitted Encumbrances (defined in the Mortgage).

     Section 8.13 Required Repairs. Within ninety (90) days after the Closing Date,
Borrower shall cause to be completed all repairs and improvements to the Project as set forth on
Schedule II annexed hereto (“Required Repairs”). Borrower shall deliver to Lender
promptly when available, evidence satisfactory to Lender that the Required Repairs have been
completed

Page 25

 

and that all required inspections, if any, have been conducted and all required approvals, if any,
have been obtained.

ARTICLE 9

EVENTS OF DEFAULT

          Each of the following shall constitute an Event of Default under the Loan:

     Section 9.1 Payments. Borrower’s failure to pay any regularly scheduled installment of
principal, interest or other amount due under the Loan Documents within five (5) days of (and
including) the date when due, or Borrower’s failure to pay the Loan at the Maturity Date, whether
by acceleration or otherwise.

     Section 9.2 Insurance. Borrower’s failure to maintain insurance as required under Section 3.1
of this Agreement.

     Section 9.3 Sale, Encumbrance, Etc. The sale, transfer, conveyance, pledge, mortgage
or assignment of any part or all of the Project, or any interest therein, or of any interest in
Borrower, in violation of the Mortgage.

     Section 9.4 Covenants. Borrower’s failure to perform or observe any of the agreements
and covenants contained in this Agreement or in any of the other Loan Documents (other than
payments under Section 9.1, insurance requirements under Section 9.2, transfers and encumbrances
under Section 9.3, and the Events of Default described in Sections 9.7 and 9.8 below), and the
continuance of such failure for ten (10) days after notice by Lender to Borrower; however, subject
to any shorter period for curing any failure by Borrower as specified in any of the other Loan
Documents, Borrower shall have an additional sixty (60) days to cure such failure if (a) such
failure does not involve the failure to make payments on a monetary obligation; (b) such failure
cannot reasonably be cured within ten (10) days; (c) Borrower is diligently undertaking to cure
such default; and (d) Borrower has provided Lender with security reasonably satisfactory to Lender
against any interruption of payment or impairment of collateral as a result of such continuing
failure.

     Section 9.5 Representations And Warranties. Any representation or warranty made in
any Loan Document proves to be untrue in any material respect when made or deemed made.

     Section 9.6 Other Encumbrances. Any default under any document or instrument, other
than the Loan Documents, evidencing or creating a Lien on the Project or any part thereof, not
cured within any applicable grace or cure period therein.

     Section 9.7 Involuntary Bankruptcy Or Other Proceeding. Commencement of an
involuntary case or other proceeding against Borrower, any Borrower Party or any other Person
having an ownership or security interest in the Project to the extent such case or proceeding
involves or affects the Project (each, a “Bankruptcy Party”) which seeks liquidation,
reorganization or other relief with respect to it or its debts or other liabilities under

Page 26

 

any bankruptcy, insolvency or other similar law now or hereafter in effect or seeks the
appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any
of its property, and such involuntary case or other proceeding shall remain undismissed or
unstayed for a period of 60 days; or an order for relief against a Bankruptcy Party shall be
entered in any such case under the Federal Bankruptcy Code.

     Section 9.8 Voluntary Petitions, Etc. Commencement by a Bankruptcy Party of a
voluntary case or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its Debts or other liabilities under any bankruptcy, insolvency or other
similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official for it or any of its property, or consent by a Bankruptcy Party to any such
relief or to the appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or the making by a Bankruptcy Party of a general
assignment for the benefit of creditors, or the failure by a Bankruptcy Party, or the admission by
a Bankruptcy Party in writing of its inability, to pay its debts generally as they become due, or
any action by a Bankruptcy Party to authorize or effect any of the foregoing.

     Section 9.9 Anti-Terrorism. If Borrower or any Borrower Party is listed on the Lists
or is convicted or pleads nolo contendere to charges related to activity prohibited in the
Anti-Money Laundering Laws, or if Borrower or any Borrower Party is arrested on charges related to
activity prohibited in the Anti-Money Laundering Laws and such charge is not dismissed within
thirty (30) days thereafter.

ARTICLE 10

REMEDIES

     Section 10.1 Remedies — Insolvency Events. Upon the occurrence of any Event of
Default described in Section 9.7 or 9.8, all amounts due under the Loan Documents immediately
shall become due and payable, all without written notice and without presentment, demand, protest,
notice of protest or dishonor, notice of intent to accelerate the maturity thereof, notice of
acceleration of the maturity thereof, or any other notice of default of any kind, all of which are
hereby expressly waived by Borrower; however, if the Bankruptcy Party under Section 9.7 or 9.8 is
other than Borrower, then all amounts due under the Loan Documents shall become immediately due
and payable at Lender’s election, in Lender’s sole discretion.

     Section 10.2 Remedies — Other Events. Except as set forth in Section 10.1
above, while any Event of Default exists, Lender may (a) declare the entire Loan to be immediately
due and payable without presentment, demand, protest, notice of protest or dishonor, notice of
intent to accelerate the maturity thereof, notice of acceleration of the maturity thereof, or
other notice of default of any kind, all of which are hereby expressly waived by Borrower, and (b)
exercise all rights and remedies therefor under the Loan Documents and at law or in equity.

     Section 10.3 Lender’s Right To Perform The Obligations. If Borrower shall
fail, refuse or neglect to make any payment or perform any act required by the Loan Documents,
then while any Event of Default exists, and without notice to or demand upon Borrower and without
waiving or releasing any other right, remedy or recourse Lender may have because of

Page 27

 

such Event of Default, Lender may (but shall not be obligated to) make such payment or perform
such act for the account of and at the expense of Borrower, and shall have the right to enter upon
the Project for such purpose and to take all such action thereon and with respect to the Project
as it may deem necessary or appropriate. If Lender shall elect to pay any sum due with reference
to the Project, Lender may do so in reliance on any bill, statement or assessment procured from
the appropriate governmental authority or other issuer thereof without inquiring into the accuracy
or validity thereof. Similarly, in making any payments to protect the security intended to be
created by the Loan Documents, Lender shall not be bound to inquire into the validity of any
apparent or threatened adverse title, lien, encumbrance, claim or charge before making an advance
for the purpose of preventing or removing the same. Borrower shall indemnify Lender for all
losses, expenses, damages, claims and causes of action, including reasonable attorneys’ fees,
incurred or accruing by reason of any acts performed by Lender pursuant to the provisions of this
Section 10.3. All sums paid by Lender pursuant to this Section 10.3, and all other sums expended
by Lender to which it shall be entitled to be indemnified, together with interest thereon at the
Default Rate from the date of such payment or expenditure until paid, shall constitute additions
to the Loan, shall be secured by the Loan Documents and shall be paid by Borrower to Lender upon
demand.

ARTICLE 11 
MISCELLANEOUS

     Section 11.1 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and either shall be mailed by certified mail, postage prepaid,
return receipt requested, or sent by overnight air courier service, or personally delivered to a
representative of the receiving party, or sent by telecopy (provided an identical notice is also
sent simultaneously by mail, overnight courier, or personal delivery as otherwise provided in this
Section 11.1). All such communications shall be mailed, sent or delivered, addressed to the party
for whom it is intended at its address set forth below.

	 	If to Borrower: 	 	 Campus Crest at Milledgeville, LLC

3 Centerview Drive, Suite 200

Greensboro, NC 27407

Attention: Jim McCaughan

Telecopy: (336) 510-3807
	 
	 	with a copy to:  	 	Bradley Arant Rose & White LLP

One Federal Place

1819 5th Avenue North

Birmingham, AL 35203

Attention: DawnSharff

Telecopy: (205) 488-6200
	 
	 	If to Lender: 	 	 General Electric Capital Corporation

c/o GEMSA Loan Services, L.P.

1500 City West Blvd., Suite 200

Houston, Texas 77042-2300

Page 28

 

	 	 	 	Attention: Portfolio Manager/Access Program

Telecopy: (713) 458-7500
	 
	 	with a copy to: 	 	 General Electric Capital Corporation

16479 Dallas Parkway, Suite 500

Two Bent Tree Tower

Addison, Texas 75001-2512

Attention: David R. Martindale

Telecopy: (972) 728-7650

Any communication so addressed and mailed shall be deemed to be given on the earliest of (a) when
actually delivered, (b) on the first Business Day after deposit with an overnight air courier
service, or (c) on the third Business Day after deposit in the United States mail, postage
prepaid, in each case to the address of the intended addressee, and any communication so delivered
in person shall be deemed to be given when receipted for by, or actually received by Lender or
Borrower, as the case may be. If given by telecopy, a notice shall be deemed given and received
when the telecopy is transmitted to the party’s telecopy number specified above and confirmation
of complete receipt is received by the transmitting party during normal business hours or on the
next Business Day if not confirmed during normal business hours. Either party may designate a
change of address by written notice to the other by giving at least ten (10) days prior written
notice of such change of address.

     Section 11.2 Amendments And Waivers. No amendment or waiver of any provision of the
Environmental Indemnity Agreement and the Loan Documents shall be effective unless in writing and
signed by the party against whom enforcement is sought.

     Section 11.3 Limitation On Interest. It is the intention of the parties hereto to
conform strictly to applicable usury laws. Accordingly, all agreements between Borrower and Lender
with respect to the Loan are hereby expressly limited so that in no event, whether by reason of
acceleration of maturity or otherwise, shall the amount paid or agreed to be paid to Lender or
charged by Lender for the use, forbearance or detention of the money to be lent hereunder or
otherwise, exceed the maximum amount allowed by law. If the Loan would be usurious under applicable
law (including the laws of the State and the laws of the United States of America), then,
notwithstanding anything to the contrary in the Loan Documents: (a) the aggregate of all
consideration which constitutes interest under applicable law that is contracted for, taken,
reserved, charged or received under the Loan Documents shall under no circumstances exceed the
maximum amount of interest allowed by applicable law, and any excess shall be credited on the Note
by the holder thereof; and (b) if maturity is accelerated by reason of an election by Lender, or in
the event of any prepayment, then any consideration which constitutes interest may never include
more than the maximum amount allowed by applicable law. In such case, excess interest, if any,
provided for in the Loan Documents or otherwise, to the extent permitted by applicable law, shall
be amortized, prorated, allocated and spread from the date of advance until payment in full so that
the actual rate of interest is uniform through the term hereof. If such amortization, proration,
allocation and spreading is not permitted under applicable law, then such excess interest shall be
canceled automatically as of the date of such acceleration or prepayment and, if theretofore paid,
shall be credited on the Note. The terms and

Page 29

 

provisions of this Section 11.3 shall control and supersede every other provision of the Loan
Documents. The Loan Documents are contracts made under and shall be construed in accordance with
and governed by the laws of the State, except that if at any time the laws of the United States of
America permit Lender to contract for, take, reserve, charge or receive a higher rate of interest
than is allowed by the laws of the State (whether such federal laws directly so provide or refer
to the law of any state), then such federal laws shall to such extent govern as to the rate of
interest which Lender may contract for, take, reserve, charge or receive under the Loan Documents.

     Section 11.4 Invalid Provisions. If any provision of any Loan Document or the Environmental
Indemnity Agreement is held to be illegal, invalid or unenforceable, such provision shall be fully
severable; the Environmental Indemnity Agreement and the Loan Documents shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never comprised a part
thereof; the remaining provisions thereof shall remain in full effect and shall not be affected by
the illegal, invalid, or unenforceable provision or by its severance therefrom; and in lieu of
such illegal, invalid or unenforceable provision there shall be added automatically as a part of
such Environmental Indemnity Agreement and such Loan Document a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible to be legal, valid and
enforceable.

     Section 11.5 Reimbursement Of Expenses. Borrower shall pay all reasonable expenses
incurred by Lender in connection with the Loan, including reasonable fees and expenses of Lender’s
attorneys, environmental, engineering and other consultants, and fees, charges or taxes for the
recording or filing of Loan Documents. Borrower shall pay all expenses of Lender in connection with
the administration of the Loan, including audit costs, inspection fees, settlement of condemnation
and casualty awards, premiums for title insurance and endorsements thereto, and Rating Agency fees
and expenses in connection with confirmation letters, if required. Borrower shall, upon request,
promptly reimburse Lender for all amounts expended, advanced or incurred by Lender to collect the
Note, or to enforce the rights of Lender under this Agreement, the Environmental Indemnity
Agreement, or any Loan Document, or to defend or assert the rights and claims of Lender under the
Environmental Indemnity Agreement or the Loan Documents or with respect to the Project (by
litigation or other proceedings), which amounts will include all court costs, reasonable attorneys’
fees and expenses, fees of auditors and accountants, and investigation expenses as may be incurred
by Lender in connection with any such matters (whether or not litigation is instituted), together
with interest at the Default Rate on each such amount from the date of disbursement until the date
of reimbursement to Lender, all of which shall constitute part of the Loan and shall be secured by
the Loan Documents.

     Section 11.6 Approvals; Third Parties; Conditions. All approval rights retained or
exercised by Lender with respect to leases, contracts, plans, studies and other matters are solely
to facilitate Lender’s credit underwriting, and shall not be deemed or construed as a
determination that Lender has passed on the adequacy thereof for any other purpose and may not be
relied upon by Borrower or any other Person. This Agreement is for the sole and exclusive use of
Lender and Borrower and may not be enforced, nor relied upon, by any Person other than Lender and
Borrower. All conditions of the obligations of Lender hereunder, including the obligation to make
advances, are imposed solely and exclusively for the benefit of Lender, its

Page 30

 

successors and assigns, and no other Person shall have standing to require satisfaction of such
conditions or be entitled to assume that Lender will refuse to make advances in the absence of
strict compliance with any or all of such conditions, and no other Person shall, under any
circumstances, be deemed to be a beneficiary of such conditions, any and all of which may be
freely waived in whole or in part by Lender at any time in Lender’s sole discretion.

     Section 11.7 Lender Not In Control; No Partnership. None of the covenants or other
provisions contained in this Agreement shall, or shall be deemed to, give Lender the right or
power to exercise control over the affairs or management of Borrower, the power of Lender being
limited to the rights to exercise the remedies referred to in the Environmental Indemnity
Agreement or the Loan Documents. The relationship between Borrower and Lender is, and at all times
shall remain, solely that of debtor and creditor. No covenant or provision of the Environmental
Indemnity Agreement or the Loan Documents is intended, nor shall it be deemed or construed, to
create a partnership, joint venture, agency or common interest in profits or income between Lender
and Borrower or to create an equity in the Project in Lender. Lender neither undertakes nor
assumes any responsibility or duty to Borrower or to any other person with respect to the Project
or the Loan, except as expressly provided in the Environmental Indemnity Agreement and the Loan
Documents; and notwithstanding any other provision of the Environmental Indemnity Agreement or the
Loan Documents: (a) Lender is not, and shall not be construed as, a partner, joint venturer, alter
ego, manager, controlling person or other business associate or participant of any kind of
Borrower or its stockholders, members, or partners and Lender does not intend to ever assume such
status; (b) Lender shall in no event be liable for any Debts, expenses or losses incurred or
sustained by Borrower; and (c) Lender shall not be deemed responsible for or a participant in any
acts, omissions or decisions of Borrower or its stockholders, members, or partners. Lender and
Borrower disclaim any intention to create any partnership, joint venture, agency or common
interest in profits or income between Lender and Borrower, or to create an equity in the Project
in Lender, or any sharing of liabilities, losses, costs or expenses.

     Section 11.8 Contest Of Certain Claims. Borrower may contest the validity of Taxes or
any mechanic’s or materialman’s lien asserted against the Project so long as (a) Borrower notifies
Lender that it intends to contest such Taxes or liens, as applicable, (b) Borrower provides Lender
with an indemnity, bond or other security reasonably satisfactory to Lender assuring the discharge
of Borrower’s obligations for such Taxes or liens, as applicable, including interest and penalties,
(c) Borrower is diligently contesting the same by appropriate legal proceedings in good faith and
at its own expense and concludes such contest prior to the tenth (10th) day preceding the earlier
to occur of the Maturity Date or the date on which the Project is scheduled to be sold for
non-payment, (d) Borrower promptly upon final determination thereof pays the amount of any such
Taxes or liens, as applicable, together with all costs, interest and penalties which may be payable
in connection therewith, and (e) notwithstanding the foregoing, Borrower shall immediately upon
request of Lender pay any such Taxes or liens, as applicable, notwithstanding such contest if, in
the reasonable opinion of Lender, the Project or any part thereof or interest therein may be in
danger of being sold, forfeited, foreclosed, terminated, canceled or lost. Lender may pay over any
cash deposit or part thereof to the

Page 31

 

claimant entitled thereto at any time when, in the reasonable judgment of Lender, the entitlement
of such claimant is established.

     Section 11.9 Time Of The Essence. Time is of the essence with respect to this
Agreement.

     Section 11.10 Successors And Assigns. This Agreement shall be binding upon and inure
to the benefit of Lender and Borrower and their respective successors and assigns, provided that
neither Borrower nor any other Borrower Party shall, without the prior written consent of Lender,
assign any rights, duties or obligations hereunder.

     Section 11.11 Renewal, Extension or Rearrangement. All provisions of the
Environmental Indemnity Agreement and the Loan Documents shall apply with equal effect to each and
all promissory notes and amendments thereof hereinafter executed which in whole or in part
represent a renewal, extension, increase or rearrangement of the Loan.

     Section 11.12 WAIVERS. No course of dealing on the part of Lender, its officers, employees,
consultants or agents, nor any failure or delay by Lender with respect to exercising any right,
power or privilege of Lender under the Environmental Indemnity Agreement and any of the Loan
Documents, shall operate as a waiver thereof.

     Section 11.13 Cumulative Rights; Joint and Several Liability. Rights and remedies of
Lender under the Environmental Indemnity Agreement and the Loan Documents shall be cumulative, and
the exercise or partial exercise of any such right or remedy shall not preclude the exercise of
any other right or remedy. If more than one person or entity has executed this Agreement as
“Borrower,” the obligations of all such persons or entities hereunder shall be joint and several.

     Section 11.14 Singular and Plural. Words used in this Agreement, the other Loan
Documents, and the Environmental Indemnity Agreement in the singular, where the context so
permits, shall be deemed to include the plural and vice versa. The definitions of words in the
singular in this Agreement, the other Loan Documents, and the Environmental Indemnity Agreement
shall apply to such words when used in the plural where the context so permits and vice versa.

     Section 11.15 Phrases. Except as otherwise expressly provided herein, when used in
this Agreement, the other Loan Documents, and the Environmental Indemnity Agreement, the phrase
“including” shall mean “including, but not limited to,” the phrase “satisfactory to Lender” shall
mean “in form and substance satisfactory to Lender in all respects,” the phrase “with Lender’s
consent” or “with Lender’s approval” shall mean such consent or approval at Lender’s sole
discretion, and the phrase “acceptable to Lender” shall mean “acceptable to Lender at Lender’s sole
discretion.”

     Section 11.16 Exhibits And Schedules. The exhibits and schedules attached to this
Agreement are incorporated herein and shall be considered a part of this Agreement for the purposes
stated herein.

Page 32

 

     Section 11.17 Titles of Articles, Sections and Sub Sections. All titles or headings
to articles, Sections, sub Sections or other divisions of this Agreement, the other Loan
Documents, and the Environmental Indemnity Agreement or the exhibits hereto and thereto are only
for the convenience of the parties and shall not be construed to have any effect or meaning with
respect to the other content of such articles, Sections, sub Sections or other divisions, such
other content being controlling as to the agreement between the parties hereto.

     Section 11.18 Promotional Material. Borrower authorizes Lender to issue press
releases, advertisements and other promotional materials in connection with Lender’s own
promotional and marketing activities, including in connection with a Secondary Market Transaction,
and such materials may describe the Loan in general terms or in detail and Lender’s participation
therein in the Loan. All references to Lender contained in any press release, advertisement or
promotional material issued by Borrower shall be approved in writing by Lender in advance of
issuance.

     Section 11.19 Survival. All of the representations, warranties, covenants, and indemnities
hereunder (including environmental matters under Article 4), under the indemnification provisions
of the other Loan Documents and under the Environmental Indemnity Agreement, shall survive the
repayment in full of the Loan and the release of the liens evidencing or securing the Loan, and
shall survive the transfer (by sale, foreclosure, conveyance in lieu of foreclosure or otherwise)
of any or all right, title and interest in and to the Project to any party, whether or not an
Affiliate of Borrower.

     Section 11.20 Waiver Of Jury Trial. To the maximum extent permitted by law, Borrower
and Lender hereby knowingly, voluntarily and intentionally waive the right to a trial by jury in
respect of any litigation based hereon, arising out of, under or in connection with this
Agreement, any other Loan Document, or the Environmental Indemnity Agreement, or any course of
conduct, course of dealing, statement (whether verbal or written) or action of either party or any
exercise by any party of their respective rights under the Loan Documents and the Environmental
Indemnity Agreement or in any way relating to the Loan or the Project (including, without
limitation, any action to rescind or cancel this Agreement, and any claim or defense asserting
that this Agreement was fraudulently induced or is otherwise void or voidable). This waiver is a
material inducement for Lender to enter this Agreement.

     Section 11.21 Waiver of Punitive or Consequential Damages. Neither Lender nor
Borrower shall be responsible or liable to the other or to any other Person for any punitive,
exemplary or consequential damages which may be alleged as a result of the Loan or the transaction
contemplated hereby, including any breach or other default by any party hereto.

     Section 11.22 Governing Law. The Loan Documents and the Environmental Indemnity
Agreement shall be governed by and construed in accordance with the laws of the State and the
applicable laws of the United States of America.

     Section 11.23 Entire Agreement. This Agreement, the other Loan Documents and the
Environmental Indemnity Agreement embody the entire agreement and understanding between Lender and
Borrower and supersede all prior agreements and understandings between

Page 33

 

such parties relating to the subject matter hereof and thereof. Accordingly, the Loan Documents
and the Environmental Indemnity Agreement 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. If any conflict or inconsistency exists between the Commitment and
this Agreement, any of the other Loan Documents, or the Environmental Indemnity Agreement, the
terms of this Agreement, the other Loan Documents, and the Environmental Indemnity Agreement shall
control.

     Section 11.24 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, but all of which shall constitute one document.

     Section 11.25 Attorney’s Fees. Whenever the term “attorneys’ fees” or “reasonable
attorneys’ fees” is used in this Agreement or any other Loan Documents, said term(s) shall mean
reasonable attorneys’ fees actually incurred by Lender and not the statutory attorneys’ fees
specified in O.C.G.A. §13-1-11.

ARTICLE 12

LIMITATIONS ON LIABILITY

     Section 12.1 Limitation on Liability. Except as provided below, Borrower shall not
be personally liable for amounts due under the Loan Documents. Borrower shall be personally liable
to Lender for any deficiency, loss or damage suffered by Lender because of:

          (a) Borrower’s commission of a criminal act;

          (b) the failure to comply with provisions of the Loan Documents prohibiting the sale,
transfer or encumbrance of the Project, any other collateral, or any direct or indirect ownership
interest in Borrower in violation of the Mortgage;

          (c) the misapplication by Borrower or any Borrower Party of any funds derived from the
Project, including security deposits, insurance proceeds and condemnation awards in violation of
this Agreement or any of the other Loan Documents;

          (d) the fraud or misrepresentation by Borrower or any Borrower Party made in or in connection
with the Loan Documents or the Loan;

          (e) Borrower’s collection of rents more than one month in advance or entering into or
modifying leases, or receipt of monies by Borrower or any Borrower Party in connection with the
modification of any leases, except in the ordinary course of business and consistent with prudent
landlord practices, in violation of this Agreement or any of the other Loan Documents;

          (f) Borrower’s failure to apply proceeds of rents or any other payments in respect of the
leases and other income of the Project or any other collateral when received to the costs of
maintenance and operation of the Project and to the payment of taxes, lien claims, insurance
premiums, Debt Service, the Funds, and other amounts due under the Loan Documents to the extent
the Loan Documents require such proceeds to be then so applied;

Page 34

 

          (g) Borrower’s interference with Lender’s exercise of rights under the Assignment of Leases
and Rents;

          (h) Borrower’s failure to maintain insurance as required by this Agreement;

          (i) damage or destruction to the Project caused by the acts or omissions of Borrower, its
agents, employees, or contractors;

          (j) Borrower’s obligations with respect to environmental matters under Article 4;

          (k) Borrower’s failure to pay for any loss, liability or expense (including attorneys’ fees)
incurred by Lender arising out of any claim or allegation made by Borrower, its successors or
assigns, or any creditor of Borrower, that this Agreement or the transactions contemplated by the
Loan Documents and the Environmental Indemnity Agreement establishes a joint venture, partnership
or other similar arrangement between Borrower and Lender;

          (l) any brokerage commission or finder’s fees claimed in connection with the transactions
contemplated by the Loan Documents;

          (m) uninsured damage to the Project facilities resulting from acts of terrorism; or

          (n) the filing by Borrower or any Borrower Party or the filing against Borrower, of a
petition under the United States Bankruptcy Code or similar state insolvency laws.

     Borrower also shall be personally liable to Lender for any and all attorneys’ fees and
expenses and court costs incurred by Lender in enforcing this Section 12.1 or otherwise incurred
by Lender in connection with any of the foregoing matters, regardless whether such matters are
legal or equitable in nature or arise under tort or contract law. The limitation on the personal
liability of Borrower in the first sentence hereof shall not modify, diminish or discharge the
personal liability of any Joinder Party as provided in the Joinder. Nothing herein shall be deemed
to be a waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b) or any
other provision of the United States Bankruptcy Code, to file a claim for the full amount due to
Lender under the Loan Documents or to require that all collateral shall continue to secure the
amounts due under the Loan Documents.

     Section 12.2 Limitation On Liability Of Lender’s Officers, Employees, Etc. Any
obligation or liability whatsoever of Lender which may arise at any time under this
Agreement, any other Loan Document, or the Environmental Indemnity Agreement shall be
satisfied, if at all, out of the Lender’s assets only. No such obligation or liability
shall be personally binding upon, nor shall resort for the enforcement thereof be had to,
the property of any of Lender’s shareholders, directors, officers, employees or agents,
regardless of whether such obligation or liability is in the nature of contract, tort or
otherwise.

Page 35

 

     EXECUTED under seal as of the date first written above.

	 	 	 	 	 
	LENDER:  	GENERAL ELECTRIC CAPITAL

CORPORATION,

a Delaware corporation

 	 
	 	By:  	/s/ David R. Martindale
 	[SEAL] 
	 	 	David R. Martindale, Managing Director 	 
	 	 	 	 
	 
	BORROWER: 	 CAMPUS CREST AT MILLEDGEVILLE, LLC,

a Delaware limited liability company

 	 
	 	By:  	Campus Crest Milledgeville Manager, LLC, 
a Delaware limited liability company, 
its Manager
 	 
	 	 	 	 
	 	 	 	 
	 	By:  	/s/ M. S. Hartnett
 	[SEAL] 
	 	 	Name:  	M.S. Hartnett 	 
	 	 	Title:  	Director 	 
	 

Page 36

 

JOINDER

     By executing this Joinder (the “Joinder”), the undersigned (“Joinder Parties”)
jointly and severally guaranty the performance by Borrower of all obligations and
liabilities for which Borrower is personally liable under Section 12.1 of this Agreement.
This Joinder is a guaranty of full and complete payment and performance and not of
collectability.

          1. Waivers. To the fullest extent permitted by applicable law, each
Joinder Party waives all rights and defenses of sureties, guarantors, accommodation
parties and/or co-makers and agrees that its obligations under this Joinder shall be
primary, absolute and unconditional, and that its obligations under this Joinder shall be
unaffected by any of such rights or defenses, including:

               (a)  the unenforceability of any Loan Document against Borrower and/or any other
Joinder Party;

               (b)  any release or other action or inaction taken by Lender with respect to the
collateral, the Loan, Borrower and/or other Joinder Party, whether or not the same may
impair or destroy any subrogation rights of any Joinder Party, or constitute a legal or
equitable discharge of any surety or indemnitor;

               (c)  the existence of any collateral or other security for the Loan, and any
requirement that Lender pursue any of such collateral or other security, or pursue any
remedies it may have against Borrower and/or any other Joinder Party;

               (d)  any requirement that Lender provide notice to or obtain a Joinder Party’s consent
to any modification, increase, extension or other amendment of the Loan, including the
guaranteed obligations;

               (e)  any right of subrogation (until payment in full of the Loan, including the
guaranteed obligations, and the expiration of any applicable preference period and statute
of limitations for fraudulent conveyance claims);

               (f)  any defense based on any statute of limitations;

               (g)  any payment by Borrower to Lender if such payment is held to be a preference or
fraudulent conveyance under bankruptcy laws or Lender is otherwise required to refund such
payment to Borrower or any other party; and

               (h)  any voluntary or involuntary bankruptcy, receivership, insolvency,
reorganization or similar proceeding affecting Borrower or any of its assets.

          2. Agreements. Each Joinder Party further represents, warrants and agrees
that:

               (a)  The obligations under this Joinder are enforceable against each such party and
are not subject to any defenses, offsets or counterclaims;

LOAN AGREEMENT

Campus Crest - Milledgeville/28125.067800

Loan No. 76–0059967

TCO 356331421v3 9/3/2006

 

 

                (b)  The provisions of this Joinder are for the benefit of Lender and its
successors and assigns;

                (c)  Lender shall have the right to (i) renew, modify, extend or accelerate the Loan,
(ii) pursue some or all of its remedies against Borrower or any Joinder Party, (iii)  add,
release or substitute any collateral for the Loan or party obligated thereunder, and (iv)
release Borrower or any Joinder Party from liability, all without notice to or consent of
any Joinder Party (or other Joinder Party) and without affecting the obligations of any
Joinder Party (or other Joinder Party) hereunder;

                (d)  Each Joinder Party covenants and agrees to furnish to Lender, within ninety (90)
days after the end of each fiscal year of such Joinder Party, a current (as of the end of
such fiscal year) balance sheet of such Joinder Party, in scope and detail reasonably
satisfactory to Lender, certified by the chief financial representative of such Joinder
Party and, if required by Lender in the exercise of its reasonable discretion, prepared on
a review basis and certified by an independent public accountant reasonably satisfactory
to Lender, provided, that, Carl H. Ricker, Jr. shall be permitted to furnish his balance
sheet or financial statement when available so long as he provides Lender with a written
certification, within ninety (90) days after the end of his fiscal year, certifying that
there has been no material adverse change in his financial condition since the date of his
last financial statement delivered to Lender; and

                (e)  To the maximum extent permitted by law, each Joinder Party hereby knowingly,
voluntarily and intentionally waives the right to a trial by jury in respect of any
litigation based hereon. This waiver is a material inducement to Lender to enter into this
Agreement.

[Remainder of page intentionally left blank; signatures on following page]

LOAN AGREEMENT

Campus Crest - Milledgeville/28125.067800

Loan No. 76–0059967

TCO 356331421v3 9/3/2006

2

 

     This Joinder shall be governed by the laws of the State.

     Executed as of September 7, 2006.

	 	 	 	 	 

	JOINDER PARTIES:

	 	/s/ CARL RICKER
	 	(SEAL)
	 

	 	 	 	 
	 

	 	CARL RICKER	 	 
	 
	 	 	 	 
	 

	 	/s/ MICHAEL HARTNETT
	 	(SEAL)
	 

	 	 	 	 
	 

	 	MICHAEL HARTNETT	 	 
	 
	 	 	 	 
	 

	 	/s/ TED ROLLINS
	 	(SEAL)
	 

	 	 	 	 
	 

	 	TED ROLLINS	 	 

LOAN AGREEMENT

Campus Crest - Milledgeville/28125.067800

Loan No. 76–0059967

TCO 356331421v2 8/30/2006

3

 

EXHIBIT A

Legal Description

All that tract or parcel of land lying in a portion of City Squares 53, 78, 79 and 80 of the City of
Milledgeville, located in Land Lots 284 and 285 of the 1st Land District,
320th G.M. District, Baldwin County, Georgia, and being more particularly described as follows:

To reach the Point of Beginning commence at the intersection of the westerly right-of-way of
South Clark Street and the southerly right-of-way of West
Franklin Street; thence run in a southerly direction along said westerly right-of-way of South
Clark Street for a distance of 730 feet more or less to a point, said point being the Point of
Beginning; thence running North 78°39’23” East for a distance of 58.70 feet to a point; thence
running South 16°24’02” East for a distance of 181.88 feet to a point; thence running South 16°26’16”
East for a distance of 442.91 feet to a point; thence running South
16°26’16” East for a distance of 221.18 feet to a point; thence running South
16°26’16” East for a distance of 33.63 feet to a point
in the centerline of Fishing Creek; thence
running along the centerline of Fishing Creek the following bearings and distances; South 87°06’31”
West for a distance of 225.40 feet; thence South 89°51’44” West for a distance of 96.04 feet;
thence North 70°22’19” West for a distance of 72.82 feet; thence North 41°59’16” West for a
distance of 179.16 feet; thence North 11°07’02” West for a distance of 149.60 feet; thence North
12°12’01” West for a distance of 132.18 feet; thence North 31°43’09” West for a distance of 105.42
feet; thence North 57°59’39” West for a distance of 88.35 feet; thence North 75°25’38” West for a
distance of 52.73 feet; thence North 84°07’18” West for a distance of 172.69 feet; thence North
76°39’51” West for a distance of 163.35 feet; thence North 82°37’04” West for a distance of 56.72
feet; thence South 88°14’49” West for a distance of 67.57 feet; thence North 88°53’29” West for a
distance of 64.87 feet; thence departing said centerline of Fishing Creek running North 04°27’51”
West for a distance of 50.00 feet to a point; thence running North 04°27’51” West for a distance of
76.24 feet to a point; thence running north 07°10’37” West for a distance of 50.48 feet to a point;
thence running North 09°16’53” West for a distance of 72.27 feet to a point; thence running North
12°49’41” West for a distance of 47.35 feet to a point; thence running North 28°44’12” West for a
distance of 56.64 feet to a point; thence running North 10°48’49” West for a distance of 248.77
feet to a point; thence running North 00°54’31” West for a distance of 74.01 feet to a point on the
southerly right-of-way of West Franklin Street (100 foot right-of-way); thence running along the
southerly right-of-way of West Franklin Street North 74°42’23” East for a distance of 146.22 feet
to a point; thence continuing along said right-of-way North 74°42’23” East for a distance of 282.38
feet to a point, at the intersection of the southerly right-of-way of West Franklin Street of
westerly right-of-way of South Columbia Street (60 foot right-of-way); thence running along said
right-of-way of South Columbia Street South 15°16’50” East for a distance of 213.74 feet to a point;
thence running North 74°42’09” East for a distance of 60.02 feet to a point; thence departing said
right-of-way of South Columbia Street running North 73°35’12” East for a distance of 112.50 feet to
a point; thence running North 73°59’21” East for a
distance of 39.28 feet to a point; thence running South
15°28’33” East for a distance of 207.15 feet to a
point; thence running North
77°18’40” East for a distance of 58.61 feet to a point; thence running
South 17°17’59” East for a distance of 195.11 feet to a point; thence running South 17°22’25” East for a
distance of 81.59 feet to a point; thence running North
83°43’10” East for a distance for 207.25
feet to the Point of Beginning.

Said tract containing 19.83 acres.

ALSO BEING THE SAME PROPERTY DESCRIBED AS:

TRACT 1:

All that parcel of land in the City of Milledgeville, 320th GMD,

Baldwin County, Georgia, shown as parcel 1B, containing 17.59

Acres on a plat for Wachovia et al, dated September 15, 2005,

By Ogletree and Chivers recorded in Plat Book 29, Page 97-98,

Office of the Clerk of Superior Court of Baldwin County,

Georgia, which plat by reference is incorporated in this

Description

TRACT 2:

All that parcel of land in the City of Milledgeville, 320th GMD,

Baldwin County, Georgia, shown as parcel 1A, containing 2.24

Acres of a plat for Wachovia et al, dated September 15, 2005,

By Ogletree and Chivers recorded in Plat Book 29, Page 97-98, 
Office of the Clerk of Superior Court of Baldwin County,

Georgia, which plat by reference is incorporated in this

Description

LOAN AGREEMENT

Campus Crest — Milledgeville/28125.067800

Loan No. 76-0059967

TCO 356331421v3 9/3/2006

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SCHEDULE I 

DEFEASANCE

     1. In accordance with Section 2.3 of the Loan Agreement, Borrower
may obtain the release of the Project from the lien of the Mortgage upon the
satisfaction of the following conditions precedent:

          (a) not less than thirty (30) days prior written notice to Lender specifying a
regularly scheduled payment date (the “Release Date”) on which the Defeasance Deposit
(hereinafter defined) is to be made;

          (b) the payment to Lender of interest accrued and unpaid on the principal balance of
the Note to and including the Release Date;

          (c) the payment to Lender of all other sums, not including scheduled interest or
principal payments, due under the Note, the Mortgage, the Assignment of Leases and Rents,
and the other Loan Documents;

          (d) the payment to Lender of the Defeasance Deposit and a $5,000 non-refundable
processing fee;

          (e) the delivery by Borrower to Lender of:

	 	(i)	 	a security agreement in form and substance
satisfactory to Lender, creating a first priority lien on the
Defeasance Deposit and the U.S. Obligations (hereinafter defined)
purchased on behalf of Borrower with the Defeasance Deposit in
accordance with this Schedule I (the “Security
Agreement”);
	 
	 	(ii)	 	a release of the Project from the lien of the Mortgage (for
execution by Lender) in a form appropriate for the jurisdiction in
which the Project is located;
	 
	 	(iii)	 	an officer’s certificate of Borrower certifying
that the requirements set forth in this paragraph (e) have been
satisfied;
	 
	 	(iv)	 	an opinion of counsel in form and substance, and rendered by
counsel satisfactory to Lender at the expense of Borrower, stating,
among other things, that Lender has a perfected first priority
security interest in the Defeasance Deposit and the U.S. Obligations
purchased by or on behalf of Borrower and pledged to Lender and as to
enforceability of the Security Agreement and other documents
delivered in connection therewith;
	 
	 	(v)	 	if required by the Rating Agencies and/or pooling and servicing
agreement relating to the Secondary Market Transaction, evidence in
writing from the applicable Rating Agencies to the effect that

LOAN AGREEMENT

Campus Crest - Milledgeville/28125.067800

Loan No. 76-0059967 

TCO 356331421v3 9/3/2006

 

 

	 	 	 	such release will not result in a qualification,
downgrade or withdrawal of any rating in effect immediately
prior to such defeasance for any securities issued in
connection with a Secondary Market Transaction; and
	 
	 	(vi)	 	such other certificates, documents or instruments as Lender may
reasonably request.

          (f) if the Loan has been sold in a Secondary Market Transaction, Lender
shall have received an opinion of counsel acceptable to Lender in form satisfactory to
Lender stating, among other things, that the substitution of collateral shall not cause
the holder of the Loan to fail to maintain its status as a real estate mortgage investment
conduit (REMIC); and

          (g) Lender shall have received a certificate from a nationally recognized independent
certified public accountant acceptable to Lender, in form and substance satisfactory to
Lender, certifying that the U.S. Obligations purchased with the Defeasance Deposit will
generate sufficient sums to satisfy the obligations of Borrower under the Note and this
Schedule I as and when such obligations become due.

     In connection with the conditions set forth above, Borrower hereby appoints Lender as
its agent and attorney in fact for the purpose of using the Defeasance Deposit to purchase
or cause to be purchased U.S. Obligations which provide payments on or prior to, but as
close as possible to, all successive scheduled payment dates after the Release Date upon
which interest and principal payments are required under the Note including the amounts
due on the Maturity Date and in amounts equal to the scheduled payments due on such dates
under the Note plus Lender’s estimate of administrative expenses and applicable federal
income taxes associated with or to be incurred by the Successor Borrower during the
remaining term of, and applicable to, the Loan (the “Scheduled Defeasance Payments”).
Borrower, pursuant to the Security Agreement or other appropriate document, shall
authorize and direct that the payments received from the U.S. Obligations may be made
directly to Lender and applied to satisfy the obligations of Borrower under the Note and
this Schedule I.

     2. Upon compliance with the requirements of this Schedule I, the Project shall be released
from the lien of the Mortgage and the pledged U.S. Obligations shall be the sole source of
collateral securing the Note. Any portion of the Defeasance Deposit in excess of the amount
necessary to purchase the U.S. Obligations required by the preceding paragraph and to otherwise
satisfy the Borrower’s obligations under this Schedule I shall be remitted to Borrower with the
release of the Project from the lien of the Mortgage. In connection with such release, a successor
entity meeting Lender’s Single Purpose Entity criteria, adjusted, as applicable, for the
Defeasance contemplated by this Schedule (the “Successor Borrower”), shall be established by
Borrower subject to Lender’s approval (or at Lender’s option, by Lender) and Borrower shall
transfer and assign all obligations , rights and duties under and to the Note together with the
pledged U.S. Obligations to such Successor Borrower pursuant to an assignment and assumption
agreement in form and substance satisfactory to Lender (the “Assignment Agreement”). Such
Successor Borrower shall assume the obligations under the Note and the Security Agreement and
Borrower shall be relieved of its obligations thereunder, except that Borrower shall be required

LOAN AGREEMENT

Campus Crest - Milledgeville/28125.067800

Loan No. 76-0059967

TCO 356331421v3 9/3/2006

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to perform its obligations pursuant to this Schedule I, including maintenance
of the Successor Borrower, if applicable. Borrower shall pay $1,000.00 to any such
Successor Borrower as consideration for assuming the obligations under the Note and the
Security Agreement pursuant to the Assignment Agreement. Notwithstanding anything in the
Mortgage to the contrary, no other assumption fee shall be payable upon a transfer of the
Note in accordance with this paragraph, but Borrower shall pay all costs and expenses
incurred by Lender in connection with this Schedule I, including Lender’s reasonable
attorneys’ fees and expenses, cost and expenses in obtaining review and confirmation by
the applicable Rating Agencies as required herein, and any administrative and tax
expenses associated with or incurred by the Successor Borrower.

     3.  For purposes
of this Schedule I, the following terms shall have the following
meanings:

          (a) The term “Defeasance Deposit” shall mean an amount equal to the Yield
Maintenance Amount, any costs and expenses incurred or to be incurred in the purchase of
U.S. Obligations necessary to meet the Scheduled Defeasance Payments
(including Lender’s
estimate of administrative expenses and applicable federal income taxes associated with
or to be incurred by the Successor Borrower during the remaining term of, and applicable
to, the Loan) and any revenue, documentary stamp or intangible taxes or any other tax or
charge due in connection with the transfer of the Note or otherwise required to
accomplish the agreements of this Schedule I.

          (b) The term “Yield Maintenance Amount” shall mean the amount which will be
sufficient to purchase U.S. Obligations providing the required Scheduled Defeasance
Payments; and

          (c) The term “U.S. Obligations” shall mean “Government Securities” as defined in the
REMIC regulations, specifically, Treasury Regulation § 1.860G-2(a)(8)(i).

LOAN AGREEMENT

Campus Crest - Milledgeville/28125.067800

Loan No. 76-0059967

TCO 356331421v3 9/3/2006

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SCHEDULE II

REQUIRED REPAIRS

	1.	 	Install signage for handicapped parking
	 
	2.	 	Install signage for handicapped restrooms

LOAN AGREEMENT

Campus Crest – Milledgeville/28125.067800

Loan No. 76-0059967

TCO 356331421v3 9/3/2006

4

 

SCHEDULE III

CERTIFICATE OF OCCUPANCY ISSUES

	 	 	 	 	 
	Item	 	Cost	 
	Provide an enclosure for trash
compactor
	 	$	10,000.00	 
	 
	Installation of a fire suppression
system for the stove in the
Clubhouse
	 	$	600.00	 
	 
	 	 	 
	 
	Total
	 	$	10,600.00	 
	 
	 	 	 

LOAN AGREEMENT

Campus Crest - Milledgeville/28125.067800

Loan No. 76-0059967

TCO 356331421v3 9/3/2006

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