Document:

exv10w54

Exhibit
10.54

SECURED CONSTRUCTION

LOAN AGREEMENT

     THIS SECURED CONSTRUCTION LOAN AGREEMENT (“Loan Agreement”) is entered into as of the second
day of July, 2009, by and between CENTENNIAL BANK, F/K/A First State Bank (“Lender”), or its
assigns, and CAMPUS CREST AT CONWAY, LLC (“Borrower”).

     WHEREAS, Borrower, at closing, will be the owner of that certain real property located in
Faulkner County, Arkansas, upon which Borrower intends to construct ten (10) three (3) story
residential apartment buildings with a single story clubhouse/leasing office (the “Project”); and

     WHEREAS, Borrower desires to borrow from Lender certain funds which shall be used for the
purpose of constructing the Project; and

     WHEREAS, Borrower has made application to borrow from Lender amounts not exceeding Sixteen
Million and No/100 Dollars ($16,000,000.00) to finance the direct and indirect costs of
constructing the Project in accordance with the terms and conditions hereof;

     NOW, THEREFORE, in consideration of the premises herein set forth and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby acknowledged, each of the
parties, intending to be legally bound by the provisions hereof, agrees as follows:

ARTICLE I

DEFINITIONS

     For purposes of this Loan Agreement, the following terms shall have the respective meanings
assigned to them.

     1.01 Assignment of Rents. The term “Assignment of Rents” shall mean that Absolute
Assignment of Leases, Rents, Contracts, Permits and Agreements of even date herewith that has been
executed by Borrower to and in favor of Lender that provides for an assignment by Borrower to
Lender of Borrower’s interest in all leases, lease proceeds, and/or rents generated from the
operation of the Property.

     1.02 Advance. The term “Advance” shall mean a disbursement by Lender of any of the
proceeds of the Loan.

     1.03 Application for Advance. The term “Application for Advance” shall mean a written
request for an Advance by Borrower on that form which Lender may approve and accompanied by those
attachments that Lender may reasonably request.

     1.04 Appraisal. The term “Appraisal” shall mean an appraisal of the Property and New
Improvements prepared by an independent appraiser who shall be a member of the American Institute
of Real Estate Appraisers selected by or satisfactory to Lender, which shall be delivered and
acceptable to Lender in Lender’s sole discretion as required pursuant to Section 2.03(r) below.

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     1.05 Approved Budget. The term “Approved Budget” shall mean that construction budget
attached hereto as EXHIBIT A specifying the cost by item of (a) all labor, materials, and services
necessary for the construction of the New Improvements in accordance with the Plans and all
Governmental Requirements, and (b) all other expenses anticipated by Borrower incident to the
Loan, the Property, and the construction of New Improvements.

     1.06 Borrower. The term “Borrower” shall mean CAMPUS CREST AT CONWAY, LLC.

     1.07 Borrower’s Deposit. The term “Borrower’s Deposit” shall mean those sums of money
advanced by the Borrower, which in addition to funds advanced under the Loan, will be sufficient
in order to construct the New Improvements in accordance with the Plans, and any Governmental
Requirements.

     1.08 Code. The term “Code” shall mean the Uniform Commercial Code as currently in
force in the State, as it may be subsequently amended or superseded.

     1.09 Completion Date. The term “Completion Date” shall mean August 1, 2010 or such
other date as agreed to in writing by Lender and subject to Force Majeure Events.

     1.10 Construction Contract. The term “Construction Contract” shall mean all
construction contracts and all amendments thereto, executed by Borrower for the construction of the
New Improvements, including, without limitation, contracts between Borrower and the Contractor all
of which shall be approved in writing by Lender, which approval shall not be unreasonably withheld.

     1.11 [RESERVED].

     1.12 Contractor. The term “Contractor” shall mean that entity or individual who has
been retained by Borrower and approved by Lender who shall be responsible for the construction of
the New Improvements. Lender hereby expressly approves Campus Crest Construction, LLC as the
initial Contractor.

     1.13 Debtor Relief Laws. The term “Debtor Relief Laws” shall mean any applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement, insolvency, reorganization,
or similar laws affecting the rights or remedies of creditors generally, as in effect from time to
time.

     1.14 Disbursement Agreement. The term “Disbursement Agreement” shall mean that form
of Disbursement Agreement that is attached hereto as EXHIBIT B to be executed by and between
Borrower and Lender and which sets forth certain conditions that must be met in order to seek an
Advance of principal hereunder.

     1.15 Event of Default. The term “Event of Default” shall mean:

	 	(a)	 	A failure by Borrower to make any payment of principal or interest on
the Note when it is due and a continuance thereof for ten (10) days;

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	 	(b)	 	A failure by Borrower to comply with or perform any of the other material terms or
conditions specified herein or in any other Loan Document after (i) the expiration of any
grace period specific to that term or condition or, if none, (ii) delivery by Lender to
Borrower of written notice of said default and Borrower’s failure to cure same within
thirty (30) days unless such is not capable of cure within said period and Borrower
thereafter diligently pursues the cure and such cure is completed within sixty (60) days
thereafter;
	 
	 	(c)	 	The failure of an affiliate of Borrower, to pay or perform any financial or other obligation
of any nature owed to Lender in connection with the Loan and cure such failure within any
applicable grace period;
	 
	 	(d)	 	A failure by Borrower to perform, observe or comply with any of the material terms,
covenants, conditions, or provisions of the Construction Contract and cure such failure
within any applicable grace period;
	 
	 	(e)	 	The incorrectness in any material respect of any representation or warranty made by Borrower
to Lender in any of the Loan Documents which has a material and adverse effect on Lender and
which Borrower fails to cure within thirty (30) days of the date it knew or reasonably should
have known of such incorrectness;
	 
	 	(f)	 	The cessation of the construction of the New Improvements, other than for Force Majeure
Events (as that term is defined in Section 4.03), for more than thirty (30) consecutive days
or an aggregate of thirty (30) days out of any ninety (90) day period without the written
consent of Lender;
	 
	 	(g)	 	A failure of any of the materials incorporated into the New Improvements to substantially
comply with the Plans, any Governmental Requirements, or the requirements of any lessee, if
applicable and failure to cure within thirty (30) days after receipt of written notice from
Lender;
	 
	 	(h)	 	A survey or plat shall show that any material improvement to the Property is not entirely
within the boundary lines of the Property or encroaches upon any public road, waterway,
setback line (except as authorized by permit or competent Governmental Authority), easement,
right-of-way, street or any adjoining property (except as approved by the owner of such
easement or any Governmental Authority having jurisdiction), or that any material
Governmental Requirement has been breached or mat any adjoining structure encroaches upon the
Property and Borrower is unable to obtain an appropriate waiver or easement for such
encroachment;
	 
	 	(i)	 	[RESERVED];
	 
	 	(j)	 	[RESERVED];
	 
	 	(k)	 	The New Improvements shall not have been completed and a certificate of occupancy has not
been issued by the relevant governing entity (for any reason

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	 	 	 	whatever) or in the reasonable judgment of Lender the construction of the New
Improvements will not be completed on or before the Completion Date and are not expected
to be completed within thirty (30) days thereafter;

	 	(l)	 	The Project Inspector, if any, shall at anytime certify to Lender in writing that the
Improvements are not, at the date of such certificate, being constructed with reasonable
diligence in a good and workmanlike manner in accordance with the Plans and Borrower’s failure
to cure such default within thirty (30) days of receipt of written notice from Lender;
	 
	 	(m)	 	[RESERVED];
	 
	 	(n)	 	Borrower shall generally not pay its debts as they become due or shall admit in writing its
inability to pay its debts, or shall make a general assignment for the benefit of creditors;
	 
	 	(o)	 	Borrower shall commence any case, proceeding or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of Borrower or its debts
under any Debtor Relief Laws;
	 
	 	(p)	 	Any case, proceeding or other action is commenced against Borrower seeking to have an order
for relief entered against Borrower, as debtor, or seeking a reorganization, arrangement,
adjustment, liquidation, dissolution or composition of Borrower or its debts under Debtor
Relief Laws, or seeking an appointment of a receiver, trustee, custodian, conservator, or
liquidator or other similar official for Borrower or for all or any of the Premises, or any
other property of Borrower, and such case, proceeding or other action (i) results in the
entry of an order for relief against Borrower or (ii) remains undismissed for a period of
sixty (60) days;
	 
	 	(q)	 	Borrower shall have concealed, removed, or permitted to be concealed or removed, any part of
its property, with intent to hinder, delay or defraud its creditors or any of them, or made
or suffered a transfer of any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or shall have made any transfer of any part of its
property to or for the benefit of a creditor at a time when other creditors similarly
situated have not been paid; or shall have suffered or permitted, while insolvent, any
creditor to obtain a lien upon any of its property through legal proceedings or distraint
which is not vacated within sixty (60) days from the date thereof;
	 
	 	(r)	 	[RESERVED];
	 
	 	(s)	 	The liquidation, termination, dissolution of Borrower;
	 
	 	(t)	 	Borrower’s attempt to convey the Premises or any interest therein (except as expressly
permitted under the Loan Documents) outside the ordinary course of Borrower’s business,
including without limitation the granting of a Mortgage or

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	 	 	 	security interest subordinate to the Mortgage, without the prior written
consent of Lender; or

     1.16 Existing Improvements. The term “existing improvements” shall mean all buildings
and other improvements of whatever nature to the Property acquired by the Borrower in connection
with its acquisition of the Property.

     1.17 Financing Statements. The term “Financing Statements” shall mean and include all
such Uniform Commercial Code financing statements and continuation statements as Lender shall
require to give notice of and perfect or to continue perfection of Lender’s security interest in
all personal property and fixtures constituting a part of the Premises or otherwise constituting
security for the Loan.

     1.18 Governmental Authority. The term” Governmental Authority” shall mean the United
States, the State of Arkansas, Faulkner County, the City of Conway, or any other political
subdivision in which the Property is located, and any other political subdivision, agency,
department, commission, board, court or instrumentality which now or hereafter has jurisdiction
over Lender, Borrower, or the Premises.

     1.19 Governmental Permits. The term “Governmental Permits” shall mean all
certificates, licenses, permits, approvals and no-action letters from any Governmental Authority
required to evidence full compliance by Borrower and conformance of the Premises with all legal
requirements applicable to the Premises, construction of the New Improvements and the promotion of
the Premises.

     1.20 Governmental Requirements. The term “Governmental Requirements” shall mean all
laws, ordinances, rules, and regulations of any Governmental Authority applicable to Borrower or
the Premises.

     1.21 Hazardous Waste. The term “Hazardous Waste” for purposes of this Loan Agreement
shall mean any hazardous, radioactive, toxic, solid or special waste, substance, or component
thereof, or any other such substance as defined under any applicable federal, state or local law
or regulation.

     1.22 Project Inspector. The term “Project Inspector” shall mean that party so
identified by Borrower and approved by Lender who shall be responsible for providing construction
inspection services to the Lender in accordance with the Disbursement Agreement. The initial
Project Inspector approved by Lender is Porter Brownlee. Lender acknowledges that Campus Crest
Group, LLC shall provide construction management and inspection services to the Borrower and will
be a party to the Disbursement Agreement.

     1.23 [RESERVED].

     1.24 Insurance Policies. The term “Insurance Policies” shall mean those insurance
policies and coverage required by Lender under the Loan Documents.

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     1.25 Leases. The term “Leases” shall collectively mean those leases executed by
tenants of the Premises to and in favor of Borrower, if any. All of Borrower’s rights, title and
interest under the Leases are absolutely assigned by Borrower to Lender pursuant to the Assignment
of Rents.

     1.26 Lender. The term “Lender” shall mean Centennial Bank, f/k/a First State Bank,
its successors and assigns.

     1.27 Lender Expenses. The term “Lender Expenses” shall mean costs or expenses of
every nature which are incurred by Lender in connection with Lender’s administration and
servicing, defending or enforcing of the Loan, including, without limitation, all reasonable fees
and expenses incurred by both Lender and its legal counsel in advising, structuring, drafting,
reviewing, administering, amending, terminating, enforcing (including fees and expenses incurred
by Lender and its legal counsel in connection with a “workout,” a restructuring, or an insolvency
proceeding concerning Borrower or any guarantor of the Obligations), defending, or concerning the
Loan Agreement, irrespective of whether suit is brought. Provided, however, in all instances,
Lender Expenses shall be limited to reasonable expenses which are reasonably necessitated by
Lender’s transactions with Borrower or as may otherwise be required in order to protect Lender’s
rights in and to the collateral securing the Loan. Included in those expenses intended to be paid
by Borrower hereunder are the reasonable costs of Lender’s Project Inspector and any out of pocket
costs associated with the renewal, extension or modification of the Loan.

     1.28 Loan. The term “Loan” shall mean the Loan contemplated by this Agreement, in the
maximum principal amount of Sixteen Million No/100 Dollars ($16,000,000.00) or so much as may be
advanced by Lender to Borrower, not to exceed, in the aggregate, the payment of the costs of labor,
materials, and services supplied for the construction of the New Improvements and all other
expenses incident to the construction of the Premises, all as specified in the Approved Budget.

     1.29 Loan Documents. The term “Loan Documents” shall mean this Secured Construction
Loan Agreement; the Note; the Indemnification Agreement executed by Borrower in favor Lender as of
an even date herewith (the “Indemnification Agreement”), the Mortgage, the Pledge and Security
Agreement and the Assignment of Rents all executed by Borrower of even date herewith, and all
other documents executed by Borrower at the request of Lender pertaining to this transaction.

     1.30 Mortgage. The term “Mortgage” shall mean that Mortgage, Security Agreement and
Absolute Assignment of Leases and Rents of even date herewith, covering the Property, as
hereinafter defined, and securing the payment of the Note and the payment and performance of all
obligations specified in the Mortgage, the Loan Documents and this Loan Agreement, and evidencing
a valid and enforceable lien on the Property.

     1.31 New Improvements. The term “New Improvements” shall mean all buildings and other
improvements of whatever nature to the Property, the construction of which is required to properly
develop the Property as contemplated in the Plans, and any other improvements the parties
determine to erect.

     1.32 Note. The term “Note” shall mean the Secured Construction Promissory Note from
Borrower to Lender of even date herewith, in the maximum principal amount of Sixteen Million and

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No/100 Dollars ($16,000,000) the terms and conditions of which are incorporated herein by this
reference.

     1.33 Obligations. The term “Obligations” shall mean all advances of principal and all
interest, Lender Expenses, fees, costs, charges and other liabilities of every possible nature,
whether now existing or accruing hereafter, and whether vested or contingent in nature, and
whether monetary or non-monetary in nature, the payment or performance of which are owed by the
Borrower to the Lender pursuant to the Note, the Loan Documents, this Loan Agreement or any other
document executed by Borrower in favor of Lender.

     1.34 Plans. The term “Plans” shall mean the final drawings and specifications,
approved in writing by Lender and Borrower for the construction of the New Improvements. Lender
acknowledges that the Plans delivered to Lender have been so approved.

     1.35 Pledge and Security Agreement. The term “Pledge and Security Agreement” shall
mean the Pledge and Security Agreement of even date herewith in which Borrower grants to Lender a
security interest in certain personal property of Borrower pursuant to the Code.

     1.36 Premises. The term “Premises” shall mean the Property, the Existing Improvements, the
New Improvements, and all fixtures, equipment and other associated personal property, tangible or
intangible, including all property defined and set forth in the Mortgage.

     1.37 Property. The term “Property” shall mean the real property described in EXHIBIT
C attached hereto and incorporated herein by reference.

     1.38 State. The term “State,” unless expressly indicated otherwise herein, shall mean
the State of Arkansas.

     1.39 Survey. The term “Survey” shall mean a current certified survey of the Property
performed by a surveyor duly licensed as such in the State of Arkansas, acceptable to the Lender,
and satisfying the requirements for an ALTA/ACSM Land Title Survey and such other requirements as
may be requested by Lender, and/or a recorded plat or map of the Property, as required by Lender,
which such plat or map shall be approved and accepted by all Governmental Authorities having
jurisdiction of the Property, The Survey shall, in any event, be sufficient to remove the “survey
exception” to the Title Insurance Policy.

     1.40 Title Company. The term “Title Company” shall mean that title company identified
by Borrower and approved by Lender.

     1.41 Title Insurance. The term “Title Insurance” shall collectively mean a title
insurance commitment, binder, or policy, and applicable endorsements, as Lender may require, in the
amount of the Loan, insuring that the Mortgage constitutes a valid lien covering the Property
having the priority required by Lender and subject only to those exceptions and encumbrances which
Lender may approve, issued by the Title Company.

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     1.42 Title Insurance Policy. The term “Title Insurance Policy” shall
collectively mean an ALTA Loan Policy in the amount of the Loan insuring that the Mortgage
constitutes valid first and prior liens covering the Property and is subject to only those
exceptions and encumbrances which Lender may approve in writing, issued by the Title Company, such
Title Insurance Policy to provide Lender with gap, survey and lien coverage, and include such
endorsements and additional coverage (including, without limitation, comprehensive coverage and
zoning endorsements) as Lender shall reasonably request.

     1.43 Unconditional Guaranty. The Term “Unconditional Guaranty” shall mean that
guaranty agreement that has been executed by Ted W. Rollins, Holly M. Rollins, Michael S.
Hartnett, Terrye W. Hartnett, MXT Capital, LLC, Madeira Group, LLC and TXG, LLC, contemporaneously
herewith pursuant to which they guaranty repayment of the Obligations.

     1.44 Zoning Classification Letter. The term “Zoning Classification Letter” shall mean
a letter, in form acceptable to Lender, to be completed by an appropriate official of the city or
county in which the Premises are located, certifying the present zoning classification of the
Property.

ARTICLE II

ADVANCES OF THE LOAN

     2.01 Commitment of Lender. Subject to the conditions hereof, and provided that an
Event of Default does not exist, Lender will make Advances to Borrower in accordance with this
Loan Agreement. Borrower will not, under any circumstances, be entitled to request, and Lender
will not, under any circumstances, be obligated to advance funds in excess of (a) the principal
amount of the Loan or (b) a sum equal to eighty percent (80%) of the Appraisal value of the
Premises. It is expressly agreed and understood that Lender shall only make Advances to Borrower
in connection with the construction of New Improvements upon the Property that is more fully
described in the Mortgage.

     2.02 Interest on the Loan. Interest on the Loan, at the rates specified in the Note,
shall be computed on the unpaid principal balance that exists from time to time and shall be
computed with respect to each Advance only from the date of such Advance (as to the portion of
each Advance not constituting a portion of Borrower’s Deposit).

     2.03 Construction Advances. Provided that Borrower is otherwise not in violation of any
term or provision of the Loan Documents, Borrower shall be entitled to receive Advances for the
construction of the New Improvements, up to twice monthly, in accordance with the following
procedures and subject to the satisfaction of the following conditions:

	 	(a)	 	The Borrower shall deliver to Lender a fully executed Disbursement Agreement
and an Application for Advance that has been prepared in accordance with the
Disbursement Agreement. The Application for Advance shall have appended thereto all
mechanics and materialmen’s lien waivers and copies of all invoices for which payment
is being sought, all in accordance with the Disbursement Agreement;

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	 	(b)	 	The Application for Advance shall request an Advance that does not exceed ninety
percent (90%) of the total value of all invoices for which payment is being sought
(provided, however, that no retainage will be required or withheld for (i) materials, (ii)
payments to subcontractors whose work has been completed and who have furnished a final lien waiver and release, or (iii) fees and other amounts due and owing to (a) the
Contractor under the Construction Contract, (b) Campus Crest Group, LLC under that certain
Development Agreement by and between Borrower and Campus Crest Group, LLC, dated as of the
date hereof and (c) The Grove Student Properties, LLC under that certain Property
Management Agreement by and between Borrower and The Grove Student Properties, LLC, dated
as of the date hereof).
	 
	 	(c)	 	Lender shall have three (3) business days after receipt of an Application for Advance within
which to conduct inspections and/or have the Project Inspector to satisfy itself that the work
covered by the Application for Advance has been or is being accomplished in a satisfactory
manner. Lender shall deliver written objections to any Application for Advance within said
three (3) business day period or Lender shall be deemed to have approved such Application. If
all conditions precedent to the requested construction Advance have been complied with to the
reasonable satisfaction of Lender and the Title Company, Lender shall advance the amount set
forth in such Application for Advance, at its discretion, either directly to Borrower or
through the Title Company within said three (3) day period. Each construction Advance made
pursuant to an Application for Advance for payment of any other items set forth in the
Approved Budget shall be advanced to Borrower or through the Title Company, at Lender’s
discretion.
	 
	 	 	 	The payment by Lender and/or the Title Company of any Application for Advance shall not
constitute an approval or acceptance of the work or materials by the Lender, and Borrower
hereby agrees that Lender shall be relieved from any liability or responsibility relating
to: (1) the quality of the work, the quantity of the work, the rate of progress in
completion of the work, or the sufficiency of materials or labor being supplied in
connection therewith; and (2) any errors, omissions, inconsistencies or other defects of
any nature in the Plans.
	 
	 	 	 	So long as there exists no Event of Default or any other condition which could diminish or
otherwise jeopardize the coverage provided to Lender under the Title Insurance for the
full amount of the Loan, the Lender shall make Advances directly to the Borrower.
	 
	 	(d)	 	Any and each construction Advance of the proceeds of the Loan shall be made only in
accordance with the terms and conditions of the Approved Budget (subject to the provisions of
this Loan Agreement) and the Construction Contract, and subject to the terms and conditions
of this Agreement. All expenses of making any Advance through the Title Company shall be
borne by Borrower.
	 
	 	(e)	 	There shall then exist no Event of Default.

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	 	(f)	 	The representations and warranties made in this Loan Agreement shall be true and
correct in all material respects on and as of the date of each Advance, with the same
effect as if made on that date.
	 
	 	(g)	 	Borrower will procure and deliver to Lender releases or waivers of mechanic’s and
materialmen’s liens and receipted bills with respect to the preceding month’s disbursement
showing payment of all parties who have furnished materials or services or performed labor of
any kind in connection with the construction of any of the New Improvements.
	 
	 	(h)	 	The Title Insurance shall be endorsed and down-dated so as to extend title insurance
coverage in an amount equal to each subsequent Advance with no additional title exceptions
noted thereon which Lender might deem objectionable.
	 
	 	(i)	 	There shall be delivered to Lender evidence satisfactory to Lender that (i) prior to the
receipt of any Advance, Borrower shall have expended from its own funds not derived from the
proceeds of any loan, at least twenty (20%) percent of the cost to complete the Project and
(2) the unadvanced Loan proceeds will be sufficient to pay for the completion of all New
Improvements by the Completion Date in full accordance with the Plans. Such evidence may
include a certificate signed by the Project Inspector. To the extent that Loan proceeds are
inadequate, Lender must be satisfied that Borrower has otherwise arranged, by the funding of
a Borrower’s Deposit or otherwise, for the providing of funds necessary to complete the New
Improvements by the Completion Date in accordance with the Plans. The Loan must at all times
be “in balance,” meaning that the total amount of the Loan not yet advanced, plus retainage
and agreed reserves, shall equal or exceed the estimated cost of completion of construction
of the New Improvements.
	 
	 	(j)	 	The work covered by each Application for Advance and all work preliminary thereto, shall
have been performed to the reasonable satisfaction of Lender and the Project Inspector;
	 
	 	(k)	 	Lender shall have received a certified copy of Borrower’s Articles of Organization and
Operating Agreement, together with a certified copy of a resolution of Borrower authorizing a
loan transaction and the execution and delivery of the Loan Documents;
	 
	 	(l)	 	Lender shall have received the Note fully executed by Borrower;
	 
	 	(m)	 	Lender shall have received the Mortgage and Assignment of Rents, duly recorded in the real
property recorder’s office of the appropriate county or counties, with all filing fees
therefor paid, all prior to the commencement of any construction or site development on any
part of the Property or the placing of any equipment, supplies or material on the Property;

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	 	(n)	 	Lender shall have received a paid Title Insurance Policy, which shall be endorsed
and down-dated so as to extend title insurance coverage in an amount equal to each
subsequent Advance with no additional title exceptions noted thereon which Lender might
deem objectionable;
	 
	 	(o)	 	Lender shall have received the Survey;
	 
	 	(p)	 	Lender shall have received the fully executed Pledge and Security Agreement;
	 
	 	(q)	 	Lender shall have received a building permit or other land disturbance permit
issued by the City of Conway that is effective as of the date construction commences
on the New Improvements and that remains effective throughout the Premises’
construction and development process;
	 
	 	(r)	 	Lender shall have received the Appraisal which shall show the value of the
Premises to equal or exceed $2,200,000 “as is”, $21,700,00 “as completed” and
$23,200,000 “as stabilized”;
	 
	 	(s)	 	Lender shall have received the Approved Budget;
	 
	 	(t)	 	Lender shall have received the Zoning Classification Letter;
	 
	 	(u)	 	Lender shall have received the Plans;
	 
	 	(v)	 	Lender shall have received evidence that all utility connections necessary to
the construction of the New Improvements are (or will be) available at the boundaries
of the Property;
	 
	 	(w)	 	Lender shall have received a flood hazard letter, in form satisfactory to
Lender, completed by Borrower’s surveyor, certifying that no part of the Premises lies
within a flood hazard or flood prone area or, alternatively, a certificate of flood
insurance in accordance herewith;
	 
	 	(x)	 	Lender shall have received certificates of insurance evidencing the placement
of insurance and the coverages in the amounts described herein;
	 
	 	(y)	 	Lender shall have received title instruments evidencing the vesting of title
to the Property in Borrower;
	 
	 	(z)	 	Lender shall have received a completed Application for Advance;
	 
	 	(aa)	 	Lender shall have received Title Company affidavits and endorsements (as
reasonably required);
	 
	 	(bb)	 	Lender shall have received Financing Statements, in a form deemed acceptable
to Lender;

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	 	(cc)	 	Lender shall have received a guaranteed maximum price construction contract from
the Contractor in form and substance reasonably acceptable to Lender;
	 
	 	(dd)	 	Lender shall have received the fully executed Unconditional Guaranty;
	 
	 	(ee)	 	[RESERVED];
	 
	 	(ff)	 	Lender shall have received a $160,000 financing fee payable to Lender related
to the Loan;
	 
	 	(gg)	 	[RESERVED];
	 
	 	(hh)	 	[RESERVED];
	 
	 	(ii)	 	Lender shall have received a copy of a certificate evidencing a commercial
general liability policy in form and substance reasonably acceptable to Lender and
issued by an insurance company that is reasonably acceptable to Lender, that notes
Lender as an additional insured party thereunder;
	 
	 	(jj)	 	Lender shall have received a copy of a certificate evidencing builders’ risk
insurance policy in form and substance reasonably acceptable to Lender and issued by
an insurance company that is reasonably acceptable to Lender, that notes Lender as a
mortgagee and loss payee thereunder;
	 
	 	(kk)	 	[RESERVED];
	 
	 	(ll)	 	Lender shall have received any and all other documents that Lender may
reasonably require;

     2.04 Letter of Credit Advances. It is contemplated by Borrower and Lender that
Borrower, or one or more of its affiliates, may desire to apply for and obtain, assuming the
absence of a continuing Event of Default, one or more standby letters of credit issued by Lender
for the benefit of Borrower in favor of a Governmental Authority or other beneficiary to assure
completion of the development and furnishing of the Property (the “Letters of Credit”) in
accordance with the Plans and the Approved Budget. In the event that any such party obtains a
Letter of Credit from Lender, Lender may advance an amount of Loan proceeds equal to the principal
amount of the requested Letter of Credit and use such proceeds to purchase a certificate of deposit
at Lender’s then current rates on certificates of deposit with terms approximately equivalent to
the corresponding letter of credit, but not longer than the maturity date on the Note and excluding
any certificate of deposit fee. The Borrower grants Lender a first and prior security interest in
and to any such certificate of deposit to secure the obligations evidenced by this Loan Agreement.
In the event a Letter of Credit contemplated by the terms of this section is presented to Lender
and drafted upon, Borrower agrees that Lender shall, without the consent of Borrower, fund such
draft on the Letter of Credit and either (a) redeem any related certificate of deposit, or (b) if a
certificate of deposit was not purchased, advance Loan proceeds to repay the Lender for advances
under the Letter of Credit. The expiration

12

 

dates of any such Letters of Credit shall not extend past the Maturity Date “under the Note,
as may be extended from time to time. If the Note matures prior to expiration of the Letter of
Credit, then at the time of issuance of the Letter of Credit, the Borrower shall deposit with the
Lender in a controlled account the principal necessary to fund the Letter of Credit upon any draw
of the Letter of Credit; and

     2.05 [RESERVED].

     2.06 Direct Advance by Lender. During the existence of an Event of Default and at
Lender’s option, Lender may make any and each Advance directly to subcontractors or to the
Contractor; provided, Lender shall notify Borrower of any such direct Advance not more than
forty-eight (48) hours after same being made. For these purposes, Borrower does hereby irrevocably
constitute and appoint Lender to be its true and lawful agent and attorney-in-fact with full power
of substitution to make any and all advances directly to major subcontractors or to the Contractor,
as Lender may, in its sole discretion, deem necessary and proper to secure the continuance and
completion of the New Improvements according to the terms of this Loan Agreement, and to pay all
sums necessary for incidental expenses in connection therewith, all of which disbursements and sums
shall for all purposes be considered Advances made by Lender to Borrower under this Loan Agreement
and be secured by the Mortgage and Assignment of Rents. Said mandate or agency shall be an
irrevocable power of attorney, authorizing and empowering Lender to make such direct Advances
during the existence of an Event of Default, and all such Advances shall satisfy pro tanto the
obligations of Lender hereunder, and shall be secured by the Mortgage and Assignment of Rents as
fully as if made to Borrower, regardless of the disposition thereof by the Contractor or major
subcontractors.

     2.07 Final Advance. That portion of the Loan retained by the Lender and not otherwise
advanced during the course of construction shall, however, be advanced by the Lender to the
Borrower upon receipt by the Lender of the following:

	 	(a)	 	A written certification by the Project Inspector and the Contractor that the
New Improvements have been fully and completely constructed in material accordance
with the Plans and the Approved Budget and any deviations from the Plans have no
material negative impact upon the value of the Property, that direct connection has
been made to all appropriate utility facilities, and that the New Improvements are
ready for occupancy,
	 
	 	(b)	 	Evidence satisfactory to Lender and the Title Company that all laborer’s and
materialmen’s claims for labor or materials rendered or delivered in connection with
the construction of the New Improvements have been paid in full (with the exception of
any claims to be paid with the proceeds of the final Advance), including an affidavit
of Contractor to the effect that all amounts due under the Construction Contract and,
in addition, all amounts due under subcontracts, have been paid in full or will be
paid in full with the proceeds of the final Advance;
	 
	 	(c)	 	Proof satisfactory to Lender that completion of the New Improvements and the
readiness for occupancy of the New Improvements has been approved by every

13

 

	 	 	 	Governmental Authority having jurisdiction, and every Governmental Permit
(including, without limitation, a certificate of occupancy) necessary to such
occupancy has been issued; and

	 	(d)	 	A current as-built Survey showing that all of the Improvements are
properly in place and within the boundary lines of the Property.

     2.08 Reallocation of Approved Budget. Lender reserves the right to make Advances that
are allocated to any of the designated items in the Approved Budget for such other purposes or in
such different proportions as Lender may, in its reasonable discretion, deem necessary or
advisable. Borrower may not reallocate items of cost or change the Approved Budget (except in
conjunction with a permitted change order) without the prior written consent of Lender, which
consent shall not be unreasonably withheld or delayed, Lender agreeing to use its good faith
efforts to try and approve any reallocation within five (5) days of Borrower’s written request;
provided, however, that with written notice only, consent not being required, Borrower may
reallocate final savings in a particular line item of the Approved Budget upon completion of all
work represented by such line item.

     2.09 No Waiver. No Advance shall relieve the Borrower from satisfying all conditions
precedent to Lender’s obligation to fund subsequent Advances. Should Lender advance funds
hereunder absent Borrower’s satisfaction of all conditions precedent to said Advance, such shall
not constitute a waiver by Lender of any of its rights hereunder including, without limitation,
the rights to declare an Event of Default.

     2.10 Conditions Precedent for the Benefit of Lender. All conditions precedent to the
obligation of Lender to make any Advance are imposed hereby solely for the benefit of Lender, and
no other party may require satisfaction of any such condition precedent or be entitled to assume
that Lender will refuse to make any Advance in the absence of strict compliance with such
conditions precedent. All requirements of this Loan Agreement may be waived by Lender, in whole or
in part, at any time,

     2.11 Subordination. Lender shall not be obligated to make, nor shall Borrower be
entitled to request, any Advance until such time as Lender shall have received, to the extent
requested by Lender based on a reasonable belief that such party disputes or may dispute the
priority of the lien of the Mortgage over such party’s statutory lien rights, subordination
agreements from Contractor, and all other persons finishing labor, materials, or services for the
design or construction of the New Improvements, subordinating to the lien of the Mortgage any lien,
claim, or charge they may have against Borrower or the Property.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BORROWER

     Borrower hereby represents, warrants and covenants as follows:

     3.01 Financial Statements. Any financial statements of Borrower that maybe delivered
to Lender pursuant to this Loan Agreement will be true, correct, and complete in all material
respects

14

 

as of the dates specified therein and fully and accurately present the financial condition of
Borrower as of the dates specified.

     3.02 Organization. Borrower is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has authority to
transact business and is in good standing in the State of Arkansas and all other states where it
is necessary for the operation of its business. Borrower has the power and authority to carry on
its business and to enter into and perform its obligations under the Loan Documents.

     3.03 Authority to Execute Documents. The execution, delivery and performance by
Borrower of this Loan Agreement and the other Loan Documents to which Borrower is a party have
been duly authorized by Borrower, and such execution, delivery and performance has not and will
not contravene or violate Borrower’s Certificate of Formation or other constitutional or governing
documents.

     3.04 Suits, Actions, Etc. There are no actions, suits, or proceedings pending or threatened
in any court or before or by any Governmental Authority against or affecting Borrower
or the Property, or involving the validity, enforceability, or priority of any of the Loan
Documents, at law or in equity. The consummation of the transactions contemplated hereby, and the
performance of any of the terms and conditions hereof and of the other Loan Documents, will not
result in a breach of, or constitute a default in, any mortgage, lease, promissory note, loan
agreement, credit agreement, partnership agreement, or other agreement to which Borrower is a
party or by which Borrower may be bound or affected.

     3.05 Valid and Binding Obligation. All of the Loan Documents, and all other documents
referred to herein to which Borrower is a party, upon execution and delivery will constitute valid
and binding obligations of Borrower, enforceable in accordance with their terms, subject to Debtor
Relief Laws.

     3.06 Title to the Property. As of the date of closing, Borrower holds full legal and
equitable title to the Property, subject only to title exceptions set forth in the Title Insurance
accepted by Lender.

     3.07 Payment of Taxes. Borrower will pay (or cause to be paid) when due all taxes,
assessments, and other liabilities on its part to be paid, except those contested in good faith.
Provided, however, any such contest by Borrower of any tax or assessment shall not be made without
prior written notice thereof to Lender and, in connection with any such contest, Borrower shall
also post a bond or set aside adequate reserves therefor.

     3.08 Financial Reports. During the existence of an Event of Default, Borrower shall
regularly provide Lender with such current financial data relative to the financial worth of
Borrower and the construction and operation of the Premises as Lender may reasonably request.
Absent an Event of Default, Borrower shall provide such monthly, quarterly and annual financial
statements as prepared in the ordinary course of Borrower’s business. In addition and regardless
of the existence of an Event of Default, Borrower shall deliver to Lender annual financial
statements within ninety (90) days after the end of each calendar year which have been compiled by
a certified public

15

 

accountant reasonably acceptable to Lender. Lender hereby initially approves Easley, Endres,
Parkhill & Brackendorff, P.C. as an acceptable certified public accounting firm for purposes of
the Loan Documents. With regard to internally generated reports, all shall be certified by
Borrower’s members as being true and correct.

     3.09 Commencement of Construction. As of the date hereof, no work of any kind
(including the destruction or removal of any existing New Improvements, site work, clearing,
grubbing, draining, or fencing of the Property) shall have commenced or shall have been performed
on the Property, no equipment or material shall have been delivered to or upon the Property for any
purpose whatsoever, and no contract (or memorandum affidavit thereof) for the supplying of labor,
materials, or services for the construction of the New Improvements shall have been recorded in the
mechanic’s lien or other appropriate records in the county where the Property is located.

     3.10 Disclosure. There is no fact known to Borrower that Borrower has not disclosed
to Lender in writing that could materially adversely affect the property, business or financial
condition of Borrower or the Property.

     3.11 Inducement to Lender. The representations and warranties contained in the Loan
Documents are made by Borrower as an inducement to Lender to make the Loan and Borrower
understands that Lender is relying on such representations and warranties and that such
representations and warranties shall survive any bankruptcy proceedings involving Borrower or the
Premises.

     3.12 Current Survey. Borrower will furnish to Lender, if Lender reasonably believes
that any New Improvements encroach on the adjoining property, at any stage of construction, upon
reasonable request from Lender, an updated current Survey reflecting that the New Improvements and
all other New Improvements on the Property are entirely within the boundary lines of the Property
and do not encroach upon any public road, waterway, setback line (except only pursuant to a valid
permit or competent Governmental Authority) or breach or violate any material Governmental
Requirements or other legal requirements or that no adjoining structure encroaches upon the
Property and Borrower is unable to obtain an appropriate waiver or easement for such encroachment.

     3.13 Title Update. Borrower will furnish to Lender, as and when reasonably requested
by Lender, a certificate issued by the Title Company reflecting such changes in title to the
Premises as have occurred since the date of issuance of the Title Insurance Policy or binder.

     3.14 Subordination of Contractor’s Liens. Upon request of Lender, at any time and
from time to time, Borrower shall use its best efforts to cause any or all contractors or
subcontractors to execute, acknowledge and deliver to Lender an instrument subordinating any
present or future liens against all or any part of the Premises to all liens and security interest
securing payment of the Loan.

     3.15 Application for Other Advances. Borrower shall disburse all Advances for payment
of costs and expenses in the Approved Budget, as may be modified from time to time hereunder, and
for no other purpose.

16

 

     3.16 Environmental Matters. With respect to the operations of Borrower on the
Premises, Borrower hereby represents and warrants to Lender that, except as may be specifically
disclosed in that certain Phase IESA provided to Lender by Borrower:

	 	(a)	 	Such operations comply and will comply in all material respects with all
applicable environmental, health and safety statutes and regulations;
	 
	 	(b)	 	None of such operations is subject to any judicial or administrative
proceedings alleging the violation of any applicable environmental, health or safety
statute or regulation;
	 
	 	(c)	 	To the knowledge of Borrower, the Property is not the subject of investigation
by any governing authority regarding the improper transportation, storage, disposal,
generation or release into the environment of any Hazardous Waste, the results of
which may adversely affect Borrower’s business, operations, financial condition,
property, or adversely affect the value of the collateral security;
	 
	 	(d)	 	No notice or report under any applicable law or regulation indicating a past
or present spill or release into the environment of any Hazardous Waste has been filed
or, to the knowledge of Borrower, is required to be filed by Borrower;
	 
	 	(e)	 	Neither Borrower, nor to the knowledge of Borrower, any other person or entity
whatsoever, has at any time transported, stored, disposed of, generated or released
any Hazardous Waste into, upon, over of under the Property, except in compliance with
all applicable environmental, health and safety statutes and regulations; and
	 
	 	(f)	 	Borrower shall conduct its business operated on the Premises so as to comply in
all material respects with all environmental, health and safety laws and regulations of
any governing authority having jurisdiction of said properties, including, without
limitation, the Federal Resource Conservation and Recovery Act, the Federal
Comprehensive Environmental Response Compensation and Liability Act, the Federal Clean
Water Act, the Federal Clean Air Act and the Federal Occupational Safety and Health
Act; provided, however, that nothing herein contained shall prevent Borrower from
contesting in good faith, by appropriate legal proceedings, any such law, regulation,
interpretation thereof, or application thereof provided that Borrower shall comply with
the order of any court or other governmental body of competent jurisdiction relating to
such laws or regulations unless Borrower shall currently be prosecuting an appeal or
proceedings for review and shall have secured a stay of enforcement or execution or
other arrangement postponing enforcement or execution pending such appeal or
proceedings for review. Borrower shall take all actions necessary to comply with
existing law, clean up any Hazardous Waste and prevent any releases of contamination by
the same within or upon the Premises. If Borrower shall receive notice that any
violation of any Federal, state or local environmental, health or safety law or
regulation may have been committed or is about to be committed by any business operated
on the Premises, then Borrower shall

17

 

	 	 	 	promptly provide Lender with a copy of such notice, and in no event later
than within fifteen (15) days from Borrower’s receipt thereof.

     3.17 Merger or Consolidation. Borrower shall not merge into or consolidate with
any other entity or cause or permit any material change in the ownership of Borrower, except as
expressly permitted in the Loan Documents.

ARTICLE IV

COVENANTS AND AGREEMENTS OF BORROWER

     Borrower hereby covenants and agrees as follows:

     4.01 Compliance with Governmental Requirements. Borrower shall timely comply in all
material respects with all Governmental Requirements and deliver to Lender evidence thereof, if
reasonably requested by Lender, specifically including but not limited to all Americans with
Disabilities Act and Fair Housing Act requirements. Borrower assumes full responsibility for
the compliance of the Plans and the Premises with all Governmental Requirements and with sound
building and engineering practices, and, notwithstanding any approvals by Lender, Lender shall
have no obligation or responsibility whatsoever for the Plans or any other matter incident to
the Property or the construction of the New Improvements.

     4.02 Construction Contract. Borrower shall become a party to no contract, including
the Construction Contract, for the performance of any work on the Property or for the supplying
of any labor, materials, or services for the construction of the New Improvements except upon
such terms and with such parties as shall be approved in writing by Lender, such approval not
to be unreasonably withheld or delayed. Copies of all such contracts will be promptly delivered
by Borrower to Lender. Borrower agrees that it shall not request any single change order of an
amount greater than $50,000, nor aggregating change orders of amounts greater than $250,000
absent the express written consent of Lender, which consent will not be unreasonably withheld.

     4.03 Construction of the New Improvements. Borrower shall commence construction of
the New Improvements within thirty (30) days from the date hereof, and the construction of the
New Improvements shall be prosecuted with diligence and continuity, in a good and workmanlike
manner, and in accordance with sound building and engineering practices, all applicable
Governmental Requirements, the Plans, and the requirements of any lessee, if applicable.
Borrower shall not permit cessation of work for a period in excess of thirty (30) consecutive
days or an aggregate of thirty (30) days out of any ninety (90) day period without the prior
written consent of Lender and shall complete construction of the New Improvements on or before
the Completion Date, free and clear of all liens. Notwithstanding anything which may be
interpreted herein to the contrary, if any (a) strikes, lockouts or labor disputes; (b)
inability (other than financial inability) to obtain labor or materials or reasonable
substitutes therefor; or (c) acts of God, unusual weather conditions, governmental restrictions,
regulations or controls, enemy or hostile action, governmental action, civil commotion, fire or
other casualty, condemnation or other conditions similar to those enumerated in this item (c)
beyond the reasonable control of Borrower occur (such items in (a)-(c) hereof being collectively
called “Force Majeure Events”) and no Event of Default exists under any of the Loan Documents,
the occurrence of such Force Majeure Events shall not constitute an Event of

18

 

Default hereunder, provided Borrower gives Lender written notice of any such. Force Majeure
Event within ten (10) days after the occurrence thereof; provided, however, Borrower shall,
regardless of the occurrence of any Force Majeure Event, complete the New Improvements on or
before the Completion Date or within thirty (30) days thereof.

     4.04 Correction of Defects. Borrower shall correct or cause to be corrected (a) any
material defect in the New Improvements, (b) any material departure in the construction of the New
Improvements from the Plans, Governmental Requirements, or the requirements of any lessee, if
applicable, or (c) any encroachment by any part of the New Improvements, or any structure located
on the Property, on any easement, property line, or restricted area, or any encroachment by any
such structure on any building line, unless Borrower obtains permission for such encroachment.

     4.05 Storage of Materials. Borrower shall cause all materials supplied for, or intended
to be utilized in, the construction of the New Improvements, but not affixed to or incorporated
into the New Improvements or the Property, to be stored on the Property or at such other location
as may be approved by Lender in writing, with adequate safeguards, as required by Lender, to
prevent loss, theft, damage, or commingling with other materials or projects. Notwithstanding the
foregoing, Lender hereby expressly agrees that Borrower shall be permitted to store materials
off-site so long as (i) such materials are stored in a bonded warehouse or with a contractor,
materialman or fabricator that bears the risk of loss until delivery and installation of such
materials in the New Improvements as part of the work in place, (ii) such materials are insured
against casualty, loss and theft in a manner reasonably satisfactory to Lender, and (iii) Borrower
owns such materials free and clear of all liens and encumbrances of any nature whatsoever (other
than the lien of Lender).

     4.06 Inspection of the Property. Borrower shall permit Lender, and its agents and
representatives, to enter upon the Land and any location where materials intended to be utilized
in the construction of the Improvements are stored, for the purpose of inspection of the Land, the
Improvements and such materials at all reasonable times. The costs of all such inspections while
an Event of Default exists shall be borne by Borrower; otherwise, they shall be borne by Lender.

     4.07 Notices by Governmental Authority, Fire and Casualty Losses, Etc. Borrower shall
timely comply with and promptly furnish to Lender true and complete copies of any official notice
or claim by any Governmental Authority pertaining to the Property. Borrower shall promptly notify
Lender of any fire or other casualty or any notice of taking or eminent domain action or
proceeding affecting the Property.

     4.08 Special Account. Borrower shall maintain a special account with Lender, into
which all Advances and any Borrower’s Deposit required under Section 4.10 (but no other funds),
and excluding direct disbursements made by Lender pursuant to Section 4.11, hereof, shall be
deposited by Borrower, and against which checks shall be drawn only for the payment of or
reimbursement to Borrower of: (a) costs of labor, materials, and services supplied for the
construction of the New Improvements specified in the Approved Budget, and (b) other costs and
expenses incident to the Loan, the Property, and the construction of the New Improvements
specified in the Approved Budget.

19

 

     4.09 Application of Advances. Borrower shall disburse all Advances for payment of
costs and expenses specified in the Approved Budget, as may be modified from time to time
hereunder, and for no other purpose.

     4.10 Borrower’s Deposit. If Lender reasonably determines at any time that the
unadvanced portion of the Loan will be insufficient for payment in full of (a) costs of labor,
materials, and services required for the construction of the New Improvements, (b) other costs and
expenses specified in the Approved Budget, and (c) other costs and expenses required to be paid in
connection with the construction of the New Improvements in accordance with the Plans, any
Governmental Requirements, or the requirements of any lessee, if applicable, then Lender may
require Borrower to fund a Borrower’s Deposit into the special account provided for in Section
4.08 above in an amount reasonably deemed necessary by Lender to balance the Loan. Anything to the
contrary contained in this Section notwithstanding, in the event that Borrower is required to fund
a Borrower’s Deposit hereunder and the Premises are thereafter completed with subsequent savings
that, had they occurred prior to the requirement of the Borrower’s Deposit, would have rendered
all or a portion of such Borrower’s Deposit to be unnecessary, Borrower shall be entitled to a
reimbursement of the funds deposited equal to the lesser of (a) the amount of such subsequent
savings or (b) the amount of the Borrower’s Deposit.

     4.11 Direct Disbursement and Application by Lender. Upon the occurrence of an Event of
Default and during the continuance thereof, Lender shall have the right, but not the obligation, to
disburse and directly apply the proceeds of any Advance to the satisfaction of any of Borrower’s
obligations hereunder. Any Advance by Lender for such purpose shall be part of the Loan and shall
be secured by the Mortgage and Assignment of Rents. Borrower hereby authorizes Lender to hold, use,
disburse, and apply the Loan and the Borrower’s Deposit for payment of costs of construction of the
New Improvements, expenses incident to the Loan and the Property, and the payment or performance of
any obligation of Borrower hereunder. Borrower hereby assigns and pledges the proceeds of the Loan
and the Borrower’s Deposit to Lender for such purposes. During the existence of an Event of
Default, Lender may advance and incur such expenses as Lender reasonably deems necessary for the
completion of construction of the New Improvements in accordance with the Plans and the Approved
Budget and to preserve the Premises and any other security for the Loan, and such expenses, even
though in excess of the amount of the Loan, shall be secured by the Mortgage and Assignment of
Rents and payable to Lender upon demand. Lender may disburse any portion of any Advance to persons
other than Borrower for the purposes specified in this Section 4.11, and the amount of Advances to
which Borrower shall thereafter be entitled shall be correspondingly reduced.

     4.12 Costs and Expenses. Borrower shall pay when due all costs and expenses required
by this Loan Agreement, including, without limitation, (a) all taxes and assessments applicable to
the Premises, (b) all fees for filing or recording the Loan Documents, (c) all fees and
commissions lawfully due to brokers, salesmen, and agents in connection with the Loan or the
Premises, (d) all title insurance and title examination charges, including premiums for the Title
Insurance, (e) all survey costs and expenses, including the cost of the Survey, (f) all premiums
for the Insurance Policies, (g) after the occurrence of an Event of Default, the expenses and
charges of any independent engineer or professional appointed by Lender to make inspections of the
New Improvements in connection with draw requests, and (h) all other reasonable costs and
expenses, including attorney’s fees, payable to third parties incurred by Lender and which Lender
is herein

20

 

authorized or permitted to incur in connection with the consummation of the transactions
contemplated by this Loan Agreement.

     4.13 Additional Documents. Borrower shall execute and deliver to Lender, from time to
time as requested by Lender, such other documents as shall reasonably be necessary to provide the
rights and remedies to Lender granted or provided for by the Loan Documents.

     4.14 Inspection of Books and Records. Borrower shall permit Lender, at all reasonable
times, to examine and copy the books and records of Borrower pertaining to the Loan and the
Premises, and all contracts, statements, invoices, bills, and claims for labor, materials, and
services supplied for the construction of the New Improvements.

     4.15 No Liability of Lender. Lender shall have no liability, obligation, or
responsibility whatsoever with respect to the construction of the New Improvements except to
advance the Loan and, if applicable, the Borrower’s Deposit pursuant to this Loan Agreement.
Lender shall not be obligated to inspect the Property or the construction of the New Improvements,
nor be liable for the performance or default of Borrower, the Project Inspector, Contractor, or
any other party, or for any failure to construct, complete, protect, or insure the New
Improvements, or for the payment of costs of labor, materials, or services supplied for the
construction of the New Improvements, or for the performance of any obligation of Borrower
whatsoever. Nothing, including without limitation any Advance or acceptance of any document or
instrument, shall be construed as a representation or warranty, express or implied, to any party
by Lender.

     4.16 No Conditional Sale Contracts, Etc. With the exception of (i) leased
construction and leasing trailers, (ii) isolated leased office equipment in the ordinary course of
business, (iii) leased trash dumpster(s) and trash compactor(s) and (iv) possible leased van(s)
and/or golf cart(s) in future use at the Premises, no materials, equipment, or fixtures shall be
supplied, purchased, or installed for the construction or operation of the New Improvements
pursuant to security agreements, conditional sale contracts, lease agreements, or other
arrangements or understandings whereby a security interest or title is retained by any party or
the right is reserved or accrues to any party to remove or repossess any materials, equipment, or
fixtures intended to be utilized in the construction or operation of the New Improvements.

     4.17 Defense of Actions. Lender may (but shall not be obligated to) commence, appear
in, or defend any action or proceeding purporting to affect the Loan, the Premises, or the
respective rights and obligations of Lender and Borrower pursuant to this Loan Agreement. Lender
may (but shall not be obligated to) pay all necessary and reasonable expenses, including
reasonable attorneys’ fees and expenses incurred in connection with such proceedings or actions,
which Borrower agrees to repay to Lender upon demand.

     4.18 Assignment of Construction Contract. As additional security for the payment of
the Loan, Borrower hereby transfers and assigns to Lender all of Borrower’s rights and interest,
but not its obligations, in, under, and to the Construction Contract with the Contractor, upon the
following terms and conditions:

21

 

	 	(a)	 	Borrower represents and warrants that the copy of any Construction Contract it has
furnished to Lender is a true and complete copy thereof and that Borrower’s interest
therein is not subject to any claim, setoff, or encumbrance;
	 
	 	(b)	 	Neither this assignment nor any action by Lender shall constitute an
assumption by Lender of any obligation under the Construction Contract, and Borrower
shall continue to be liable for all obligations of Borrower thereunder, Borrower
hereby agreeing to perform all of its obligations under the Construction Contract so
long as Contractor is not in default thereunder; provided, however, that regardless of
whether Contractor is in default under the Construction Contract, Borrower is still
obligated to complete the New Improvements according to the Plans and this Loan
Agreement Borrower agrees to indemnify and hold Lender harmless against and from any
loss, cost, liability, or expense (including, but not limited to, reasonable
attorneys’ fees) resulting from any failure of Borrower to so perform;
	 
	 	(c)	 	During the existence of an Event of Default, Lender shall have the right (but
shall have no obligation) to take in its name or in the name of Borrower such action as
Lender may at any time determine to be necessary or advisable to cure any default under
the Construction Contract or to protect the rights of Borrower or Lender thereunder.
Lender shall incur no liability if any action so taken by it or in its behalf shall
prove to be inadequate or invalid, if such action does not constitute gross negligence
or willful misconduct on Lender’s part, and Borrower agrees to hold Lender free and
harmless against and from any loss, cost, liability or expense (including, but not
limited to, reasonable attorneys’ fees) incurred in connection with any such action;
	 
	 	(d)	 	Borrower hereby irrevocably constitutes and appoints Lender as Borrower’s
attorney-in-fact, in Borrower’s name or in Lender’s name, to enforce all rights of
Borrower under the Construction Contract, upon the occurrence and continuance of an
Event of Default;
	 
	 	(e)	 	Prior to an Event of Default, Borrower shall have the right to exercise its
rights as owner under the Construction Contract, provided that Borrower shall not
cancel or materially amend the Construction Contract or do or suffer to be done any
act which would impair the security constituted by this assignment without the prior
written consent of Lender which consent will not be unreasonably withheld; and
	 
	 	(f)	 	This assignment shall inure to the benefit of Lender, its successors and
assigns, including any purchaser upon foreclosure of the Mortgage, any receiver in
possession of the Property, and any corporation formed by or on behalf of Lender which
assumes Lender’s rights and obligations under this Loan Agreement.

     4.19 Assignment of Plans. As additional security for the payment of the Loan,
Borrower hereby transfers and assigns to Lender all of Borrower’s right, title, and interest in
and to the Plans and hereby represents and warrants to and agrees with Lender as follows:

22

 

	 	(a)	 	The schedule of the Plans delivered to Lender is a complete and accurate
description of the Plans;
	 
	 	(b)	 	The Plans are complete and adequate for the construction of the New
Improvements and there have been no modifications thereof except as described in such
schedule. Except in conjunction with a permitted change order, the Plans shall not be
modified without the prior written consent of Lender, which consent by Lender shall
not be unreasonably withheld;
	 
	 	(c)	 	Lender may use the Plans for any purpose relating to the New Improvements,
including but not limited to inspections of construction and the completion of the New
Improvements;
	 
	 	(d)	 	Lender’s acceptance of this assignment shall not constitute approval of the
Plans by Lender. Lender has no liability or obligation whatsoever in connection with
the Plans and no responsibility for the adequacy thereof or for the construction of
the New Improvements contemplated by the Plans. Lender has no duty to inspect the New
Improvements, and, if Lender should inspect the New Improvements, Lender shall have no
liability or obligation to Borrower arising out of such inspection. No such inspection
nor any failure by Lender to make objections after any such inspection shall
constitute a representation by Lender that the New Improvements are in accordance with
the Plans or constitute a waiver of Lender’s right thereafter to insist that the New
Improvements be constructed in accordance with the Plans; and
	 
	 	(e)	 	This assignment shall inure to the benefit of Lender, its successors and
assigns, including any purchaser upon foreclosure of the Mortgage, any receiver in
possession of the Property, and any corporation formed by or on behalf of Lender which
assumes Lender’s rights and obligations under this Loan Agreement.

     4.20 Prohibition on Assignment of Borrower’s Interest. Borrower shall not assign or
encumber any interest of Borrower hereunder without the prior written consent of Lender.

     4.21 Payment of Claims. Borrower shall promptly pay or cause to be paid when due all
costs and expenses incurred in connection with the Premises and the construction of the New
Improvements, and Borrower shall keep the Premises free and clear of any liens, charges, or claims
other than the lien of the Mortgage and other liens approved in writing by Lender. Notwithstanding
anything to the contrary contained in this Loan Agreement, Borrower (a) may contest the validity or
amount of any claim of any contractor, consultant, or other person providing labor, materials, or
services with respect to the Premises, (b) may contest any tax or special assessments levied by any
Governmental Authority, and (c) may contest the enforcement of or compliance with any Governmental
Requirements, and such contest on the part of Borrower shall not be a default hereunder and shall
not release Lender from its obligations to make Advances hereunder; provided, however, that during
the pendency of any such contest Borrower shall furnish to Lender and Title Company an indemnity
bond with corporate surety satisfactory to Lender and Title Company or other security acceptable to
them in an amount equal to the amount being contested plus a reasonable additional sum to cover
possible costs, interest, and penalties, and provided further that Borrower

23

 

shall pay any amount adjudged by a court of competent jurisdiction to be due, with all costs,
interest, and penalties thereon, before such judgment becomes a lien on the Premises.

     4.22 Restrictions Affecting the Property. Borrower shall not impose any restrictive
covenants or encumbrances upon the Premises (with the exception of customary, non-blanket utility
easements necessary for the efficient and proper development of the Property), or execute or file
any subdivision plat affecting the Premises absent the review and approval of Lender.

     4.23 [RESERVED].

     4.24 Tax Receipts. Borrower shall furnish Lender with receipts or tax statements
marked “Paid” to evidence the payment of all taxes levied on the Property on or before ten (10)
days prior to the date such taxes become delinquent.

     4.25 Insurance. Borrower will maintain or cause to be maintained with Lender
throughout the term of the Loan and furnish to Lender certificates evidencing the Insurance
Policies, with insurance companies authorized to provide insurance in the State, with an A.M. Best
Rating of no less than “A-VII and in such amounts as shall be reasonably required by Lender:

	 	(a)	 	Builder’s risk insurance, extended coverage insurance against loss or damage by
fire, lightning, windstorm, hail, explosion, riot, vandalism, malicious mischief, riot
attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from
time to time included under “extended coverage” policies (and, if applicable, upon the
completion of construction and expiration or termination of such insurance, such other
hazard or casualty insurance insuring against such perils), in an amount not less than
the then current replacement cost of the Premises but in no event less than the amount
required to avoid co-insurance, and including, to the extent possible, (i) an Agreed
Amount Endorsement, (ii) a Replacement Cost Endorsement, (ii) a Standard Mortgagee
Clause (Lender and any party designated by Lender to be named as mortgagee and loss
payee), and (iv) [RESERVED], Provided there does not then exist any Event of Default
hereunder or under the Mortgage, Lender shall make the proceeds of such policy or
policies available to Borrower for repair and restoration of the Premises in accordance
with the terms of the Mortgage.
	 
	 	(b)	 	Worker’s compensation insurance necessary to comply with the applicable laws
and regulations of the State.
	 
	 	(c)	 	Commercial general liability insurance to cover claims for bodily injury and
property damage to third parties arising out of the Premises or operation of the
Borrower at the Premises in amounts approved from by Lender in its reasonable
discretion as being appropriate for projects of similar size, scope and operation,
which insurance shall designate Lender as an additional insured.
	 
	 	(d)	 	Flood and mudslide insurance in an amount equal to the lesser of (i) the
outstanding principal balance of the Loan from time to time, or (ii) the maximum limit
of coverage made available with respect to the Premises under the Federal Flood

24

 

	 	 	 	Insurance Program; provided, that such flood and mudslide insurance shall not
be required if Borrower shall provide Lender with evidence satisfactory to Lender
that the Premises are not situated within an area identified by the Secretary of
Housing and Urban Development or by any other governmental department, agency,
bureau, board or instrumentality as an area having special flood or mudslide
hazards, and that no flood insurance is required on the building site by any
regulations under which Lender is governed. Lender acknowledges that as of the date
of this Loan Agreement, no such flood and mudslide insurance is required. All
Insurance Policies shall name Lender and parties designated by Lender as loss
payee, as their respective interests may appear, and shall contain an agreement to
notify Lender in writing at least thirty (30) days prior to cancellation of such
policy.

     4.26 Replacement Reserve Account. Within three (3) days of receiving its first
certificate of occupancy or equivalent governmental permit, Borrower shall deposit with Lender,
Four Thousand One Hundred and Sixty-six and 67/100 Dollars ($4,166.67) and an equivalent amount
each month thereafter up to One Hundred and Fifty Thousand and No/100 Dollars ($150,000) to be held
in an interest-bearing account (the “Replacement Reserve Account”) which meets the standards for
custodial accounts as required by Lender from time to time. If any amounts are drawn out of the
Replacement Reserve Account pursuant to the provisions hereof, the Borrower shall replenish the
Replacement Reserve Account by making additional consecutive monthly payments equal to one twelfth
(l/12th) of the amount so withdrawn. Lender or a designated representative of Lender
shall have the sole right to make withdrawals from such account. All interest earned on funds in
the Replacement Reserve Account shall be added to and become part of the Replacement Reserve
Account. Lender shall not be responsible for any losses resulting from the investment of the
Replacement Reserve Account or for obtaining any specific level or percentage of earnings on such
investment. Required Borrower deposits into the Replacement Reserve Account maybe funded out of
final cost savings on the Project as reflected in the Approved Budget. Upon full and final payment
of all amounts owed by Borrower to Lender, Lender shall remit the remaining balance of the
Replacement Reserve, or, alternatively, the Borrower may elect to have the balance of the
Replacement Reserve applied to satisfy the full and final payment of all amounts owed by Borrower
to Lender.

	 	(a)	 	Lender shall disburse funds from the Replacement Reserve
Account, in its sole discretion, as follows:

	 	(i)	 	Borrower’s Request. If Borrower
determines, at any time or from time to time, that a capital
replacement (including items such as carpet/vinyl flooring, window
treatments, roofs, furnaces/boilers, air conditioners, ovens/ranges,
refrigerators, dishwashers, water heaters, garbage disposals and other
similar items) (each a “Capital Replacement”) is necessary or
desirable, Borrower shall perform such Capital Replacement and request
from Lender, in writing, reimbursement for such Capital Replacement.
Borrower’s request for reimbursement shall include (A) a detailed
description of the Capital Replacement performed, together with
evidence, satisfactory to Lender, that the cost of such Capital
Replacement has been paid and

25

 

	 	 	 	(B) lien waivers from each contractor and material supplier
supplying labor or materials for such Capital Replacement.

	 	(ii)	 	Lender’s Request. If Lender shall
reasonably determine at any time or from time to time, that a Capital
Replacement is necessary for the proper maintenance of the Property, it
shall so notify Borrower, in writing, requesting that Borrower obtain
and submit to Lender bids for all labor and materials required in
connection with such Capital Replacement. Borrower shall submit such
bids and a time schedule for completing each Capital Replacement to
Lender within thirty (3 0) days after Borrower’s receipt of Lender’s
written notice. Borrower shall perform such Capital Replacement and
request from Lender, in writing, reimbursement for such Capital
Replacement. Borrower’s request for reimbursement shall include (A) a
detailed description of the Capital Replacement performed, together
with evidence, satisfactory to Lender, that the cost of such Capital
Replacement has been paid and (B) lien waivers from each contractor and
material supplier supplying labor or materials for such Capital
Replacement, if required by Lender.

	 	(b)	 	Conditions Precedent. Disbursements from the
Replacement Reserve Fund shall be made no more frequently than once every
month. Disbursements shall be made only if the following conditions precedent
have been satisfied, as reasonably determined by Lender:

	 	(i)	 	Payment for Capital Replacement The
Capital Replacement has been performed and/or installed on the Property
in a good and workmanlike manner with suitable materials (or in the case
of a partial disbursement, performed and/or installed on the Property to
an acceptable stage) and paid for by Borrower as evidenced by copies of
all applicable paid invoices or bills submitted to Lender by Borrower at
the time Borrower requests disbursement from the Replacement Reserve
Fund.
	 
	 	(ii)	 	No Default. There is no condition, event
or act that would constitute a default (with or without notice and/or
lapse of time) under this Agreement or any other Loan Document.
	 
	 	(iii)	 	Representations and Warranties. All
representations and warranties of Borrower set forth in this Agreement
and in the Loan Documents are true in all material respects.
	 
	 	(iv)	 	Continuing Compliance. Borrower is in
full compliance with the provisions of this Agreement, the other Loan
Documents and any request or demand by Lender permitted hereby.
	 
	 	(v)	 	No Lien Claim. No lien or claim based
on furnishing labor or materials has been filed or asserted against
the Premises, unless

26

 

	 	 	 	Borrower has properly provided bond or other security against loss in
accordance with applicable law.

	 	(vi)	 	Approvals. All Governmental Permits
required for the Capital Replacement as completed to the applicable
stage have been obtained.
	 
	 	(vii)	 	Legal Compliance. The Capital
Replacement as completed to the applicable stage does not violate any
applicable Governmental Requirements.

	 	(c)	 	Right to Complete Capital Replacements. If Borrower
abandons or fails to proceed diligently to undertake and/or complete any
Capital Replacement in a timely fashion or is otherwise in default under this
Agreement for 3 0 days after written notice of such failure by Lender to
Borrower, Lender shall have the right (but not the obligation) to enter upon
the Property and take over and cause the completion of such Capital
Replacement. However, no such notice or grace period shall apply in the case of
such failure which could, in Lender’s judgment, absent immediate exercise by
Lender of a right or remedy under this Agreement, result in harm to Lender or
impairment of the security given under the Mortgage or any other Loan Document.
Any contracts entered into or indebtedness incurred upon the exercise of such
right may be in the name of Borrower, and Lender is hereby irrevocably
appointed the attorney in fact of Borrower, such appointment being coupled with
an interest, to enter into such contracts, incur such obligations, enforce any
contracts or agreements made by or on behalf of Borrower (including the
prosecution and defense of all actions and proceedings in connection with the
Capital Replacement and the payment, settlement or compromise of all bills and
claims for materials and work performed in connection with the Capital
Replacement) and do any and all things necessary or proper to complete any
Capital Replacement including signing Borrower’s name to any contracts and
documents as may be deemed necessary by Lender. In no event shall Lender be
required to expend its own funds to complete any Capital Replacement, but
Lender may, in its sole discretion, advance such funds. Any funds advanced
shall be added to the outstanding balance of the Loan, secured by the Mortgage
and payable to Lender by Borrower in accordance with the provisions of the
Mortgage pertaining to the protection of Lender’s security and advances made by
Lender. Borrower waives any and all claims it may have against Lender for
materials used, work performed or resultant damage to the Property unless
arising due to Lender’s gross negligence or willful misconduct.
	 
	 	(d)	 	To secure Borrower’s obligations under this Agreement and to
further secure Borrower’s obligations under the Note, and other Loan Documents,
Borrower hereby conveys, pledges, transfers and grants to Lender a first and
prior security interest pursuant to the Uniform Commercial Code or any other
applicable law in and to all money in the Replacement Reserve Account, as

27

 

	 	 	 	same may increase or decrease from time to time, all interest and
dividends thereon and all proceeds thereof.

     4.27 Restrictions on Distributions. Borrower shall not make any distributions or
dividends to its members unless the following conditions have been satisfied (a) at least twelve
(12) months shall have elapsed since the first residential Lease shall have been executed and
become effective; (b) with respect to the twelve (12) month period immediately preceding the
proposed distribution or dividend, the Borrower shall have a debt service coverage ratio equal to
1.2% determined by dividing the net operating income of the Borrower by all principal, interest
and other payment obligations due to Lender; and (c) at least three (3) months shall have elapsed
since the last distribution or dividend. The foregoing debt service coverage ratios shall be
derived from the financial statements provided by Borrower pursuant to this Agreement and approved
by Lender in its reasonable discretion.

ARTICLE V

RIGHTS AND REMEDIES OF LENDER

     5.01 Rights of Lender. Upon the occurrence and continuation of an Event of Default,
Lender shall have the right, in addition to any other right or remedy of Lender set forth in the
Note, the Loan Documents, the Mortgage or in any other document associated with this transaction,
but not the obligation, in its own name or in the name of Borrower, to enter into possession of the
Premises; to perform all work necessary to complete the construction of the New Improvements
substantially in accordance with the Plans, Governmental Requirements, and the requirements of any
lessee, if applicable; and to employ watchmen and other safeguards to protect the Premises.
Borrower hereby appoints Lender as the attorney-in-fact of Borrower, with full power of
substitution, and in the name of Borrower, if Lender elects to do so, upon the occurrence and
continuation of an Event of Default, to (a) use such sums as are necessary, including any proceeds
of the Loan and the Borrower’s Deposit, make such changes or corrections in the Plans, and employ
such, engineers, and contractors as may be required for the purpose of completing the construction
of the New Improvements substantially in accordance with the Plans and Governmental Requirements,
(b) execute all applications and certificates in the name of Borrower which may be required for
completion of construction of the New Improvements, (c) endorse the name of Borrower on any checks
or drafts representing proceeds of the Insurance Policies, or other checks or instruments payable
to Borrower with respect to the Premises, (d) do every act with respect to the construction of the
New Improvements which Borrower may do, and (e) prosecute or defend any action or proceeding
incident to the Premises. The power of attorney granted hereby is a power coupled with an interest
and irrevocable. Lender shall have no obligation to undertake any of the foregoing actions, and, if
Lender should do so, it shall have no liability to Borrower for the sufficiency or adequacy of any
such actions taken by Lender, except if such actions are determined by a court of competent
jurisdiction to constitute willful misconduct or gross negligence on the part of Lender.

     5.02 Acceleration. Upon the occurrence of an Event of Default, Lender may, at its
option, declare the Loan immediately due and payable without notice of any kind.

28

 

     5.03 Cessation of Advances. Upon the occurrence of an Event of Default, the
obligation of Lender to disburse the Loan and the Borrower’s Deposit and all other obligations of
Lender hereunder shall, at Lender’s option, immediately terminate.

     5.04 Funds of Lender. Any funds of Lender used for any purpose referred to in this
Article V shall constitute Advances secured by the Loan Documents and shall bear interest at the
rate specified in the Note to be applicable after default thereunder.

     5.05 No Waiver or Exhaustion. No waiver by Lender of any of its rights or remedies
hereunder, in the other Loan Documents, or otherwise, shall be considered a waiver of any other or
subsequent right or remedy of Lender, no delay or omission in the exercise or enforcement by Lender
of any rights or remedies shall ever be construed as a waiver of any right or remedy of Lender; and
no exercise or enforcement of any such rights or remedies shall ever be held to exhaust any right
or remedy of Lender.

     5.06 Other Remedies. In addition to the foregoing, the Lender shall possess all other
rights and remedies available to it at either law or equity upon the occurrence of an Event of
Default including, without limitation, the right to foreclose the Mortgage and exert any and all
other rights and remedies available to it thereunder or under any other debt evidencing or debt
securing document executed by and between Lender and Borrower.

ARTICLE VI

GENERAL TERMS AND CONDITIONS

     6.01 Notices. All notices or other written communications hereunder shall be deemed
to have been properly given (a) upon delivery, if delivered in person or by facsimile transmission
with receipt acknowledged by the recipient thereof (and if the sending party also uses one of the
other delivery methods prescribed herein), (b) one (1) Business Day (defined below) after having
been deposited for overnight delivery with any reputable overnight courier service, or (c) three
(3) Business Days after having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:

If to Borrower:

Campus Crest at Conway, LLC

2100 Rexford Road, Suite 414

Charlotte, North Carolina 28211

Attn: Crystal A. Bowman

Facsimile: 704-943-4298

With a copy to:

Bradley Arant Boult Cummings LLP

1819 5th Avenue North

Birmingham, Alabama 35203

29

 

Attn: Dawn Helms Sharff

Facsimile: 205-488-6200

And with a copy to:

Harrison Street Real Estate Capital

71 South Wacker Drive, Suite 3585

Chicago, Illinois 60606

Attn: General Counsel

If to Lender:

CENTENNIAL BANK

Attn: Greg Sanson

620 Chestnut Street

Conway, Arkansas 72032

Facsimile: 501-328-4650

With a copy to:

GILL ELROD RAGON OWEN & SHERMAN, P.A.

Attn: Daniel Goodwin

425 West Capitol Avenue, Suite 3801

Little Rock, Arkansas 72201

Facsimile: 501-372-3359

or addressed as such party may from time to time designate by written notice to the other parties.

     Either party by notice to the other may designate additional or different addresses for
subsequent notices or communications.

     For purposes of this Subsection, “Business Day” shall mean a day on which commercial banks
are authorized to conduct business or Lender is open for business in the State of Arkansas.

     6.02 Entire Agreement and Modifications. The Loan Documents constitute the entire
understanding and agreement between the undersigned with respect to the transactions arising in
connection with the Loan and supersede all prior written or oral understandings and agreements
between the undersigned in connection therewith. No provision of this Loan Agreement or the other
Loan Documents may be modified, waived, or terminated except by instrument in writing executed by
the party against whom a modification, waiver, or termination is sought to be enforced.

     6.03 Election of Remedies. Lender shall have all of the rights and remedies granted in
the Loan Documents and available at law or in equity, and these same rights and remedies shall be
cumulative and maybe pursued separately, successively, or concurrently against Borrower or any
property covered under the Loan Documents, at the sole discretion of Lender. The exercise or

30

 

failure to exercise any of the same shall not constitute a waiver or release thereof or of any
other right or remedy, and the same shall be nonexclusive.

     6.04 Form and Substance. All documents, certificates, insurance policies, and other
items required under this Loan Agreement to be executed and/or delivered to Lender shall be in
form and substance reasonably satisfactory to Lender.

     6.05 Limitation on Interest. All agreements between Borrower and Lender, whether now
existing or hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any indebtedness governed hereby
or otherwise, shall the interest contracted for, charged or received by Lender exceed the maximum
amount permissible under applicable law. If, from any circumstance whatsoever, interest would
otherwise be payable to Lender in excess of the maximum lawful amount, the interest payable to
Lender shall be reduced to the maximum amount permitted under applicable law; and, if from any
circumstance the Lender shall ever receive anything of value deemed interest by applicable law in
excess of the maximum lawful amount, an amount equal to any excessive interest shall be applied to
the reduction of the principal of the Loan and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal of the Loan such excess shall be
refunded to Borrower. All interest paid or agreed to be paid to Lender shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full
period until payment in full of the principal of the Loan (including the period of any renewal or
extension thereof) so that interest thereon for such full period shall not exceed the maximum
amount permitted by applicable law. This paragraph shall control all agreements between the
Borrower and Lender.

     6.06 No Third Party Beneficiary. This Loan Agreement is for the sole benefit of Lender
and Borrower and is not for the benefit of any third party.

     6.07 Borrower in Control. In no event shall Lender’s rights and interests under the
Loan Documents be construed to give Lender the right to, or be deemed to indicate that Lender is
in control of the business, management or properties of Borrower or has power over the daily
management functions and operating decisions made by Borrower.

     6.08 Number and Gender. Whenever used herein, the singular number shall include the
plural and the plural the singular, and the use of any gender shall be applicable to all genders.
The duties, covenants, obligations, and warranties of Borrower in this Loan Agreement shall be
joint and several obligations of Borrower and of each Borrower if more than one.

     6.09 Captions. The captions, headings, and arrangements used in this Loan Agreement are
for convenience only and do not in any way affect, limit, amplify, or modify the terms and
provisions hereof.

     6.10 Applicable Law. This Loan Agreement and the other Loan Documents shall be
governed by and construed in accordance with the laws of the State and the laws of the United
States.

31

 

     6.11 Binding Effect. This Agreement shall extend to and be binding upon and inure to
the benefit of the successors and assigns of the parties; provided, however, that Borrower shall
not assign or transfer its rights or obligations hereunder without the prior written consent of
Lender.

     6.12 Participation. Lender shall have the exclusive option and privilege of selling
the Loan in its entirety or participating interests in the Loan to such persons or entities and on
such terms and conditions as Lender may determine and may disclose any and all information
relating to the Loan to such participants or any other purchaser of the Loan on a confidential
basis.

     6.13 Severability. In the event that any one or more of the provisions contained in
this Loan Agreement or in any other loan document executed in connection herewith shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Loan Agreement or any other Loan
Document executed in connection herewith, and in lieu of such invalid, illegal or unenforceable
provision there shall be added automatically as part of this Loan Agreement a provision as similar
in terms to such invalid, illegal or unenforceable provision as may be possible and be valid,
legal and unenforceable thereafter.

     6.14 Authorization. Borrower hereby covenants, warrants and represents that the
individual who is executing this Loan Agreement on behalf of Borrower has the full power,
authority and legal right to execute and deliver this Loan Agreement and all other documents
executed and delivered in connection herewith, that all requisite authority and action necessary
to bind the Borrower has previously been taken, and that this Loan Agreement and all documents
executed in connection herewith constitute legal, valid and binding obligations of the Borrower.

     6.15 No Joint Venture. The parties hereto covenant and agree that the relationship
between Lender and Borrower shall be strictly construed as a relationship between a debtor and a
secured party and never as a joint venture or similar relationship between Lender and Borrower.
Lender shall not be obligated to perform or discharge any obligation or duty of Borrower with
respect to (a) the operation of the mortgaged property or (b) the performance of any obligations
under any leases affecting the mortgaged property. Borrower covenants and agrees to hold harmless,
defend and indemnify the Lender from and against any liability arising with respect to (a)
Borrower’s operation of the mortgaged property or (b) Borrower’s performance of any of its
covenants or obligations under any of the leases pertaining to the mortgaged property.

     6.16 Construction Sign/Press Release. Borrower shall allow Lender, at Lender’s cost,
to erect at the Property a sign, subject to Borrower’s reasonable approval, evidencing Lender’s
advancement of the subject credit facility. Borrower shall also allow Lender to issue a press
release or other public announcement regarding Lender’s advancement of the subject credit
facility. Any reference on such sign or in such press release or public announcements to
Borrower’s sole member or the members of Borrower’s sole member shall be subject to Borrower’s
prior written approval, and Lender shall not disclose the specific terms of the Loan.

     6.17
JURY WAIVER. BORROWER HEREBY WAIVES BORROWER’S RIGHT TO A JURY TRIAL IN THE EVENT
OF ANY DISPUTE OR LITIGATION ARISING HEREUNDER OR UNDER ANY RELATED DOCUMENTS EXECUTED IN
CONNECTION HEREWITH.

32

 

BORROWER COVENANTS AND AGREES THAT THE SOLE AND EXCLUSIVE JURISDICTION AND VENUE FOR ALL
LITIGATION ARISING IN CONNECTION WITH THE ENFORCEMENT, COLLECTION OR ADMINISTRATION OF THIS
AGREEMENT SHALL REST EXCLUSIVELY IN THE COUNTY AND STATE WHEREIN THE SUBJECT REAL PROPERTY IS
LOCATED AND BORROWER WAIVES ALL RIGHTS TO ASSERT OTHERWISE.

     6.18. [RESERVED].

     6.19 USA Patriot Act Compliance. Borrower warrants and represents that neither
Borrower nor any principal, manager or majority member of Borrower appear on the list of Specially
Designated Nationals and Blocked Persons that is maintained by the United States Treasury
Department’s Office of Foreign Assets Control (“OFAC”) or any similar list maintained by any
governmental entity or agency (collectively, the “SDN List”). If Lender knows, has reason to know
or suspects or has reason to suspect that Borrower has, is, or will violate the warranty and
representation contained in the preceding sentence, Lender shall have the right to terminate this
Agreement and to take any and all action or to make any report or notification required by OFAC or
any other applicable governmental entity or agency or by the laws relating to the applicable SDN
List.

[The remainder of this page intentionally left blank;

signatures appear on next page.]

33

 

[Signatures to Secured Construction Loan Agreement]

     In WITNESS WHEREOF, this Secured Construction Loan Agreement is executed on the date set
forth in the preface.

	 	 	 	 	 
	 	LENDER:

CENTENNIAL BANK

 	 
	 	By:  	
 	 
	 	 	Title: Vice president 	 
	 	 	 	 
	 
	 	BORROWER:

CAMPUS CREST AT CONWAY, LLC,

a Delaware limited liability company

 	 
	 	By:  	HSRE Campus Crest I, LLC, a Delaware limited
liability company, its sole member
 	 
	 	 	 	 
	 	 	 
	 	By:  	                                                      Campus Crest Ventures III, LLC, a
Delaware limited liability company, a member 	 
	 	 	 	 
	 	 	 
	 	By:  	                                                             Campus Crest Properties,
LLC, a North Carolina limited liability company, its Manager 	 
	 	 	 	 
	 	 	 
	 	By:  	  /s/ Michael S. Hartnett

 	 
	 	 	Michael S. Hartnett 	 
	 	 	Its Manager 	 

 

 

	 	 	 	 	 

Loan
Number: 2757506477

EXHIBIT A

CONSTRUCTION BUDGET PREPARED BY BORROWER

(Specifying the cost by item of all labor, materials, and services

necessary for the construction of the New Improvements in accordance with the Plans and all

Governmental Requirements.)

A-1

 

	 	 	 

	
	 	DRAFT

	 
	 	CONWAY, AR

	 
	 	Sources and Uses Detail

	 	 	June 26, 2009

Project Unit Mix 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Unit Count	 	Type	 	 	Beds	 	 	Sq.Ft.	 	 	Total SF	 
	 
	48
	 	2BRs	 	 	 	 	96	 	 	 	 	 	839	 	 	 	40,272	 
	120
	 	3BRs	 	 	 	 	360	 	 	 	 	 	1,180	 	 	 	141,600	 
	12
	 	4BRs	 	 	 	 	48	 	 	 	 	 	1,701	 	 	 	20,412	 
	 
	180
	 	 	 	 	 	 	 	 	504	 	 	 	 	 	 	 	 	 	202,284	 
	 
	Total Buildings
	 	 	 	 	 	 	11	 	 	 	 	 	 	 	8,087	 	 	 	210,371	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total	 	 	Dollars	 	 	 	 	 	 	 
	SOURCES:	 	Dollars	 	 	Per Unit	 	 	Original	 	 	Variance	 
	Equity
	 	 	4.037,918	 	 	 	22,433	 	 	 	 	 	 	 	 	 
	Debt
	 	 	16,000,000	 	 	 	88,889	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Total
	 	 	20,037,918	 	 	 	111,322	 	 	 	20,043,810	 	 	 	(5,893	)
	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Unit	 	Cost	 	 	Total	 	 	Dollars	 	 	 	 	 	 	 	 	 
	 	 	USES:	 	Units	 	 	of Meas.	 	Per Unit	 	 	Dollars	 	 	Per Unit	 	 	 	 	 	 	 	 	 
	DEVELOPMENT	 	Land Cost
	 	 	13,79	 	 	acres	 	 	170,290	 	 	 	2,348,300	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Land Closing Costs
	 	 	1	 	 	ea	 	 	160,800	 	 	 	160,800	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	RDP Compensation
	 	 	1	 	 	ea	 	 	85,000	 	 	 	85,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Survey
	 	 	1	 	 	ea	 	 	50,000	 	 	 	50,000	 	 	 	 	 	 	 	25,000	 	 	 	25,000	 
	 	 	Real Estate Taxes/lnsurance
	 	 	1	 	 	ea	 	 	15,000	 	 	 	15,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Land Costs
	 	 	 	 	 	 	 	 	 	 	 	 	2,659,100	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	Architect
	 	 	1	 	 	ea	 	 	80,000	 	 	 	80,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Civil Engineer
	 	 	1	 	 	ea	 	 	92,000	 	 	 	92,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Landscape Architect
	 	 	1	 	 	ea	 	 	20,000	 	 	 	20,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Traffic Study
	 	 	1	 	 	ea	 	 	8,600	 	 	 	8,600	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Geotechnical Report
	 	 	1	 	 	ea	 	 	12,000	 	 	 	12,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Environmental
	 	 	1	 	 	ea	 	 	7,500	 	 	 	7,500	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Design/Engineering Coats
	 	 	 	 	 	 	 	 	 	 	 	 	220,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	Loan Origination Fees
	 	 	1	 	 	ea	 	 	160,000	 	 	 	160,000	 	 	 	 	 	 	 	100,350	 	 	 	(350	)
	 	 	Advisory Fees
	 	 	1	 	 	ea	 	 	75,000	 	 	 	75,000	 	 	 	 	 	 	 	20,000	 	 	 	65,000	 
	 	 	Appraisal Fees
	 	 	1	 	 	ea	 	 	7,500	 	 	 	7,500	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Market Study Fees
	 	 	1	 	 	ea	 	 	4,500	 	 	 	4,600	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Construction Interest
	 	 	1	 	 	ea	 	 	533,915	 	 	 	533,915	 	 	 	 	 	 	 	532,332	 	 	 	1,683	 
	 	 	Loan Closing Costs
	 	 	1	 	 	ea	 	 	50,000	 	 	 	50,000	 	 	 	 	 	 	 	35,000	 	 	 	15,000	 
	 	 	Lender Inspections
	 	 	10	 	 	Months	 	 	800	 	 	 	8,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Financing Costs
	 	 	 	 	 	 	 	 	 	 	 	 	838,915	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	Development Fee
	 	 	1	 	 	ea	 	 	637,891	 	 	 	637,891	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Legal Fees-Development
	 	 	1	 	 	ea	 	 	35,000	 	 	 	35,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Impact Fees
	 	 	180	 	 	unit	 	 	1,361	 	 	 	245,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Accounting Fees & Comp-Dep’n
	 	 	1	 	 	ea	 	 	8,000	 	 	 	8,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Municipality Fees
	 	 	1	 	 	ea	 	 	27,000	 	 	 	27,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Builders Risk Insurance
	 	 	10	 	 	Months	 	 	3,000	 	 	 	30,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Travel
	 	 	10	 	 	Months	 	 	5,000	 	 	 	50,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Development Fees, Permits & Costs
	 	 	 	 	 	 	 	 	 	 	 	 	1,032,891	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	Development Contingency
	 	 	1	 	 	ls	 	 	90,000	 	 	 	90,000	 	 	 	 	 	 	 	338,000	 	 	 	(246,000	)

 

	 	 	 
		 	DRAFT

	 	CONWAY, AR

	 	 	Sources and Uses Detail

June 26, 2009

Project Unit Mix 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Unit Count	 	Type	 	 	Beds	 	 	Sq. Ft.	 	 	Total SF	 
	 
	48
	 	      2BRs	 	 	      96         	 	 	 	      839         	 	 	 	      40,272         	 
	      120         
	 	      3BRs         	 	 	      380         	 	 	 	      1,160         	 	 	 	      141,600         	 
	      12         
	 	      4BRs         	 	 	      48         	 	 	 	      1.701         	 	 	 	      20,412         	 
	 
	      180         
	 	 	 	 	 	 	      504         	 	 	 	 	 	 	 	      202,284         	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	INITIAL OPS BUDGET	 	Corporate Marketing/Support
	 	 	1	 	 	ea	 	 	85,000	 	 	85,000	 	 	 	 	Original	 	 	Variance	 
	 	 	Site Operations
	 	 	1	 	 	ea	 	 	112,500	 	 	112,500	 	 	 	 	 	 	 	 	 	 	 
	 	 	Site Marketing
	 	 	1	 	 	ea	 	 	112,500	 	 	112,500	 	 	 	 	 	 	 	 	 	 	 
	 	 	Model/Trailer
	 	 	1	 	 	ea	 	 	76,000	 	 	76,000	 	 	 	 	 	50,000	 	 	 	25,000	 
	 	 	Shuffle Service
	 	 	1	 	 	ls	 	 	30.000	 	 	30,000	 	 	 	 	 	—	 	 	 	30,000	 
	 	 	Final Cleaning
	 	 	1	 	 	ls	 	 	21,000	 	 	21,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Marketing and Pre-opening
	 	 	 	 	 	 	 	 	 	 	 	436,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CONSTRUCTION	 	Payroll/Overhead
	 	 	11	 	 	months	 	 	23,000	 	 	253,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Construction Management Fee
	 	 	1	 	 	ea	 	 	777,490	 	 	777,490	 	 	 	 	 	255,000	 	 	 	522,490	 
	 	 	Bond Premiums
	 	 	1	 	 	ea	 	 	40,000	 	 	40,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Permits/Licensing
	 	 	11	 	 	Buildings	 	 	7,273	 	 	80,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Surveting/Engineer
	 	 	1	 	 	ea	 	 	30,000	 	 	30,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Plans/Blueprints
	 	 	1	 	 	ea	 	 	16,000	 	 	16,000	 	 	 	 	 	30,000	 	 	 	30,000	 
	 	 	Testing/Gootech
	 	 	1	 	 	ea	 	 	60,000	 	 	60,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Travel
	 	 	10	 	 	Months	 	 	6,000	 	 	60,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Construction Fees & Cost
	 	 	 	 	 	 	 	 	 	 	 	1,316,490	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Payroll + Load-Corperate Overhead
	 	 	 	 	 	 	 	 	 	 	 	83,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Construction Payroll + Load
	 	 	 	 	 	 	 	 	 	 	 	317,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	G&A Allocation-Corporate Overhead
	 	 	 	 	 	 	 	 	 	 	 	39,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	G&A Construction Direct
	 	 	 	 	 	 	 	 	 	 	 	60,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Travel-CCC Management & Oversight
	 	 	 	 	 	 	 	 	 	 	 	50,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Reimbursable Overhead Costs (Corp. & Construction)
	 	 	 	 	 	 	 	 	 	 	 	549,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Small Tools
	 	 	10	 	 	Months	 	 	850	 	 	8,500	 	 	 	 	 	 	 	 	 	 	 
	 	 	Temp. Water-Consumption
	 	 	11	 	 	Months	 	 	730	 	 	8,030	 	 	 	 	 	 	 	 	 	 	 
	 	 	Temp. Power-Consumption
	 	 	11	 	 	Months	 	 	2,727	 	 	30,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Temp. Tollels
	 	 	11	 	 	Months	 	 	550	 	 	6,050	 	 	 	 	 	 	 	 	 	 	 
	 	 	Temp. Telephones
	 	 	11	 	 	Months	 	 	545	 	 	6,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Safely
	 	 	11	 	 	Months	 	 	400	 	 	4,400	 	 	 	 	 	 	 	 	 	 	 
	 	 	Field Office
	 	 	11	 	 	Months	 	 	1,110	 	 	12,210	 	 	 	 	 	 	 	 	 	 	 
	 	 	FieldOffice Supplies
	 	 	11	 	 	Months	 	 	300	 	 	3,300	 	 	 	 	 	 	 	 	 	 	 
	 	 	Equipment Rental
	 	 	11	 	 	Months	 	 	3,137	 	 	34,510	 	 	 	 	 	110,000	 	 	 	(75,490	)
	 	 	Gas & Oil
	 	 	11	 	 	Months	 	 	818	 	 	9,000	 	 	 	 	 	89,000	 	 	 	(89,000	)
	 	 	General Labor
	 	 	—	 	 	Months	 	 	—	 	 	—	 	 	 	 	 	 	 	 	 	 	 
	 	 	Waste Removal
	 	 	11	 	 	Months	 	 	4,000	 	 	44,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Postage
	 	 	11	 	 	Months	 	 	1,050	 	 	12,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Final Cleaning
	 	 	1	 	 	ea	 	 	21,000	 	 	21,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Job-General Conditions Cost
	 	 	 	 	 	 	 	 	 	 	 	198,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SITEWORK	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Sedtment
& Eroston
	 	 	1	 	 	ls	 	 	20,000	 	 	20,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Construction Entrances
	 	 	1	 	 	ls	 	 	—	 	 	6,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Temp Access Roadways (Stone)
	 	 	1	 	 	ls	 	 	20,000	 	 	20,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Dewatering
	 	 	1	 	 	ls	 	 	5,000	 	 	6,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Temp. Water-Installation
	 	 	1	 	 	ls	 	 	1.000	 	 	1,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Temp Facility Ground Lease
	 	 	0	 	 	ls	 	 	5,000	 	 	—	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Temporary Facilities

	 	 	 	 	 	 	 	 	 	 	 	51,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Clear & Grub
	 	 	1	 	 	ls	 	 	30,000	 	 	30,000	 	 	 	 	 	 	 	 	 	 	 
	 	 	Grading
	 	 	9	 	 	acres	 	 	32,000	 	 	288,000	 	 	 	 	 	384,000	 	 	 	(96,000	)
	 	 	Cut & Fols
	 	 	9	 	 	acres	 	 	—	 	 	—	 	 	 	 	 	 	 	 	 	 	 
	 	 	Retaining Walls
	 	 	0	 	 	ls	 	 	—	 	 	—	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Grading,Walls, Fill, Cut Total
	 	 	 	 	 	 	 	 	 	 	 	318,000	 	 	 	 	 	 	 	 	 	 	 

 

	 	 	 

	

	 	DRAFT
	 	 
	 	CONWAY, AR
	 	 
	 	Sources and Uses Detail
	 

	 	June 26, 2009

	Project Unit Mix

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Unit Count	 	Type	 	Beds	 	Sq. Ft.	 	Total SF
	48

	 	2BRs
	 	 	98	 	 	 	839	 	 	 	40,272	 
	120

	 	3BRs
	 	 	360	 	 	 	1,180	 	 	 	141,800	 
	12

	 	4BRs
	 	 	48	 	 	 	1,701	 	 	 	20,412	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	180

	 	 	 	 	504	 	 	 	 	 	 	 	202,284	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Original	 	 	Variance	 
	Water Service
	 	 	1	 	 	ls	 	 	150,000	 	 	 	150,000	 	 	 	200,000	 	 	 	(50,000	)
	Sanitary Sewer Service
	 	 	1	 	 	ls	 	 	175,000	 	 	 	175,000	 	 	 	200,000	 	 	 	(25,000	)
	Storm Water
	 	 	1	 	 	ls	 	 	151,875	 	 	 	151,875	 	 	 	200,000	 	 	 	(48,125	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Utilities-Wet
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	476,875	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Video
	 	 	1	 	 	ls	 	 	149,000	 	 	 	149,000	 	 	 	 	 	 	 	 	 
	Internet
	 	 	1	 	 	ls	 	 	100,000	 	 	 	100,000	 	 	 	 	 	 	 	 	 
	Landline
Phone
	 	 	1	 	 	ls	 	 	20,000	 	 	 	20,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Utilities -
Structured
Wiring
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	269,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Water Service
	 	 	 	 	 	lf	 	 	—	 	 	 	—	 	 	 	 	 	 	 	 	 
	Sewer Service
	 	 	 	 	 	lf	 	 	25,000	 	 	 	25,000	 	 	 	—	 	 	 	25,000	 
	Street
Entrance
	 	 	460	 	 	If	 	 	200	 	 	 	100,000            	 	 	 	92,000	 	 	 	8,000	 
	Traller &
Pads Demo
	 	 	1	 	 	ls	 	 	6,250	 	 	 	6,250	 	 	 	 	 	 	 	 	 
	Dave Ward Dr.
Walkway
	 	 	1	 	 	ls	 	 	57,000	 	 	 	57,000	 	 	 	—	 	 	 	57,000	 
	House Demo
	 	 	1	 	 	ls	 	 	36,000	 	 	 	35,000	 	 	 	15,000	 	 	 	20,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Off-Site
Improvements
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	223,250	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asphaltic
Paving, Striping &
Signage
	 	 	210,000	 	 	sf	 	 	2.28	 	 	 	477,825	 	 	 	455,700	 	 	 	22,125	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Curb
	 	 	8000	 	 	lf	 	 	9.38	 	 	 	75,040	 	 	 	 	 	 	 	 	 
	Sidewalks
	 	 	8000	 	 	sf	 	 	3.00	 	 	 	24,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Site Concrate
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	99,040	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Landscape
	 	 	1	 	 	ls	 	 	141,000	 	 	 	141,000	 	 	 	125,000	 	 	 	16,000	 
	Irrigation
	 	 	1	 	 	ls	 	 	25,000	 	 	 	25,000	 	 	 	 	 	 	 	 	 
	Fencing -
Chain Link
	 	 	0	 	 	sf	 	 	—	 	 	 	—	 	 	 	60,000	 	 	 	(60,000	)
	Fencing-Decorative
	 	 	20,000	 	 	sf	 	 	5.00	 	 	 	100,000	 	 	 	36,000	 	 	 	66,000	 
	Entrance Gates
	 	 	1	 	 	ea	 	 	15,000	 	 	 	15,000	 	 	 	 	 	 	 	 	 
	Card
Reader
Access
	 	 	1	 	 	ls	 	 	25,000	 	 	 	25,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Landscape,
Fencing,
Irrigation
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	306,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Entry/Sign Monument
	 	 	1	 	 	ls	 	 	12,000	 	 	 	12,000	 	 	 	 	 	 	 	 	 
	B-Ball Court
	 	 	1	 	 	ls	 	 	15,000	 	 	 	15,000	 	 	 	 	 	 	 	 	 
	V-Ball
Court
	 	 	1	 	 	ls	 	 	15,000	 	 	 	15,000	 	 	 	 	 	 	 	 	 
	8 Brbeque
Grill w/tron
	 	 	1	 	 	ls	 	 	9,500	 	 	 	9,500	 	 	 	 	 	 	 	 	 
	Fire
Pit Area
	 	 	1	 	 	ls	 	 	5,500	 	 	 	5,500	 	 	 	 	 	 	 	 	 
	Pool
	 	 	1	 	 	ls	 	 	90,000	 	 	 	90,000	 	 	 	 	 	 	 	 	 
	Skimmer
	 	 	1	 	 	ls	 	 	18,000	 	 	 	18,000	 	 	 	 	 	 	 	 	 
	Kool Deck
	 	 	1	 	 	ls	 	 	20,000	 	 	 	20,000	 	 	 	 	 	 	 	 	 
	Blue Bottom
	 	 	1	 	 	ls	 	 	10,000	 	 	 	10,000	 	 	 	 	 	 	 	 	 
	Large
Size
	 	 	 	 	 	ls	 	 	 	 	 	 	—	 	 	 	 	 	 	 	 	 
	Compactor — SOG
	 	 	1	 	 	ls	 	 	3,500	 	 	 	3,500	 	 	 	 	 	 	 	 	 
	Compactor -
Enclosure
	 	 	1	 	 	ls	 	 	12,000	 	 	 	12,000	 	 	 	 	 	 	 	 	 
	Compactor — Gate
	 	 	1	 	 	ls	 	 	3,500	 	 	 	3,500	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Site Amenities
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	214,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Site Contingency
	 	 	1	 	 	ls	 	 	255,000	 	 	 	255,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Sitework Cost
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,689,990	 	 	 	 	 	 	 	 	 

 

 

	 	 	 

	

	 	DRAFT
	 	 
	 	CONWAY, AR
	 	 
	 	Sources and Uses Detail
	 

	 	June 26, 2009

	Project Unit Mix

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Unit Count	 	Type	 	 	Beds	 	 	Sq. Ft.	 	 	Total SF	 
	48
	 	2BRs	 	 	96	 	 	 	839	 	 	 	40,272	 
	120
	 	3BRs	 	 	360	 	 	 	1,180	 	 	 	141,600	 
	12
	 	4BRs	 	 	48	 	 	 	1,701	 	 	 	20,412	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	180
	 	 	 	 	 	 	504	 	 	 	 	 	 	 	202,284	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	VERTICAL IMPROVEMENTS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Original	 	 	Variance	 
	Concrete
	 	 	 	 	 	 	 	 	 	 	 	 	 	600,000	 	 	 	 	 	 	 	 	 
	Masonry
	 	 	 	 	 	 	 	 	 	 	 	 	 	380,000	 	 	 	 	 	 	 	 	 
	Metals
	 	 	 	 	 	 	 	 	 	 	 	 	 	150,000	 	 	 	145,000	 	 	 	5,000	 
	Wood & Plastics
	 	 	 	 	 	 	 	 	 	 	 	 	 	1,700,000	 	 	 	1,850,000	 	 	 	(160,000	)
	Thermal/Mosture
Protection
	 	 	 	 	 	 	 	 	 	 	 	 	 	540,000	 	 	 	640,000	 	 	 	(100,000	)
	Doors & Windows
	 	 	 	 	 	 	 	 	 	 	 	 	 	470,500	 	 	 	625,500	 	 	 	(55,000	)
	Finishes
	 	 	 	 	 	 	 	 	 	 	 	 	 	1,105,000	 	 	 	1,072,000	 	 	 	33,000	 
	Specialties
	 	 	 	 	 	 	 	 	 	 	 	 	 	130,000	 	 	 	103,600	 	 	 	26,600	 
	Mechanical
	 	 	 	 	 	 	 	 	 	 	 	 	 	1,785,000	 	 	 	 	 	 	 	 	 
	Electrical
	 	 	 	 	 	 	 	 	 	 	 	 	 	1,090,500	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Residence Buildings
	 	 	 	 	 	 	 	 	 	 	 	 	 	7,951,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Clubhouse
	 	 	 	 	 	 	 	 	 	 	 	 	 	525,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pavlton
	 	 	 	1	 ea	 	 	25,000	 	 	 	26,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Building Contingency
	 	 	 	1	 ea	 	 	255,000	 	 	 	255,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Tolal Vertical Improvements
	 	 	 	 	 	 	 	 	 	 	 	 	 	8,766,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	FF&E Apartment Appliances
	 	 	 	180	 units	 	 	1,815	 	 	 	326,711	 	 	 	319,336	 	 	 	7,375	 
	Apartment Furniture
	 	 	 	 	 	 	 	 	 	 	 	 	 	286,590	 	 	 	 	 	 	 	 	 
	Apartment Uphotstry
	 	 	 	 	 	 	 	 	 	 	 	 	 	100,566	 	 	 	 	 	 	 	 	 
	Apartment Mattress & Frames
	 	 	 	 	 	 	 	 	 	 	 	 	 	93,240	 	 	 	 	 	 	 	 	 
	Apartment FF&E Shipping,
Storage, Installation
	 	 	 	 	 	 	 	 	 	 	 	 	 	72,000	 	 	 	 	 	 	 	 	 
	Clubhouse Furniture
	 	 	 	 	 	 	 	 	 	 	 	 	 	43,870	 	 	 	 	 	 	 	 	 
	Clubhouse Amenities
	 	 	 	 	 	 	 	 	 	 	 	 	 	48,600	 	 	 	 	 	 	 	 	 
	Clubhouse Fixtures
	 	 	 	 	 	 	 	 	 	 	 	 	 	43,200	 	 	 	 	 	 	 	 	 
	Clubhouse Equipment
	 	 	 	 	 	 	 	 	 	 	 	 	 	237,755	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total FF&E
	 	 	 	 	 	 	 	 	 	 	 	 	 	1,250,532	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Per Unit	 	 	 	 
	Total Project Costs
	 	 	 	 	 	 	 	 	 	 	 	 	 	20,037,918	 	 	 	111,322	 	 	 	(5,892	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

Loan Number: 2757506477

EXHIBIT B

FORM OF DISBURSEMENT AGREEMENT

B-1

 

DISBURSEMENT AGREEMENT

     THIS DISBURSEMENT AGREEMENT is entered into as of the second day of July 2009, by and between
CAMPUS CREST AT CONWAY, LLC (“Owner”), CAMPUS CREST CONSTRUCTION, LLC (“General Contractor”),
CAMPUS CREST GROUP, LLC (“Owner’s Inspector”), and CENTENNIAL BANK, f/k/a First State Bank
(“Lender”).

     WHEREAS, Owner is the owner of that certain real property located in Faulkner County,
Arkansas, upon which Owner intends to construct ten (10) three (3) story residential apartment
buildings with a single story clubhouse/leasing office (the “Project”); and

     WHEREAS, Lender holds for the benefit of certain parties hereto funds in a construction
account which are scheduled to be disbursed so as to construct certain improvements to the Project
upon satisfaction of the terms and conditions of this Agreement; and

     WHEREAS, all parties agree to perform those obligations otherwise set forth herein; and

     NOW, THEREFORE, in consideration of the premises herein set forth and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby acknowledged, each of the
parties, intending to be legally bound by the provisions hereof, agrees as follows:

     1. On or before the last day of each month, General Contractor shall deliver to Owner’s
Inspector a list of subcontractors providing work to the Project during the applicable pay
period or
suppliers providing materials to the Project during such period, and the amounts payable to
each such
subcontractor or supplier on AIA Document G702 Application and Certificate for Payment
(“G702”). Delivery of the G702 shall constitute the General Contractor’s attestation and
certification
that the G702 accurately lists all subcontractors, laborers, and materialmen involved with
and
participating in the Project during the applicable pay period, and that the Project’s
construction to
date is in substantial accordance with all Project construction plans and specifications and
all local,
state, federal and other construction codes and requirements. Each G702 shall be signed by
General
Contractor and shall be accompanied by:

	 	(a)	 	A release of any and all statutory, common law or other liens of General
Contractor and each Project subcontractor regarding all work performed and materials
delivered, as described on the G702, in substantially the form of EXHIBIT A attached
hereto;
	 
	 	(b)	 	All invoice and supporting documentation regarding all work and materials
described on the G702; and
	 
	 	(c)	 	That form of Pay Request as is attached hereto as EXHIBIT B (or a form
substantially similar thereto which has been approved by Lender in its reasonable
discretion).

     2. Upon receipt of a G702 by Owner’s Inspector meeting the requirements of Section 1
hereof, Owner’s Inspector shall verify, certify and attest whether (a) all work as described on the

 

 

G702 has been performed, (b) all materials have been delivered to the Project by all suppliers
described on the G702 in accordance with the G702, (c) the G702 accurately lists all
subcontractors, laborers, and materialmen involved with and participating in the Project during
the applicable pay period, and (d) the Project’s construction to date is in substantial accordance
with all Project construction plans and specifications and all local, state, federal and other
construction codes and requirements (the “Draw Inspection”). Owner’s Inspector shall confirm
completion of the Draw Inspection by execution of the Certificate for Payment contained within the
G702 and shall forward the G702 and its required accompanying documents to the Lender.

     3. Upon Lender’s receipt and approval of all documents referenced above and the review and
approval of same by any inspector retained by Lender, Lender shall thereafter advance principal to
Borrower’s bank account, assuming Borrower otherwise is in full compliance with the provisions of
that Secured Construction Loan Agreement of even date herewith.

     4. This Disbursement Agreement shall be governed by and construed in accordance with the laws
of the State of Arkansas and the laws of the United States. This Agreement may only be modified by
a subsequent written document executed by all parties hereto.

     5. [RESERVED].

     6. [RESERVED].

[The
remainder of this page intentionally left blank; signatures appear on next page.]

 

 

[Signature Page to Disbursement Agreement]

     IN WITNESS WHEREOF the parties hereto have executed this Disbursement Agreement on the date
first above written.

	 	 	 	 	 
	 	OWNER:

CAMPUS CREST AT CONWAY, LLC,

a Delaware limited liability company

 	 
	 	By:  	HSRE-Campus Crest I, LLC, a Delaware limited liability company, its sole member
 	 

	 	 	 	 	 
	 	By:  	Campus Crest Ventures III, LLC, a Delaware limited liability company, a member
 	 

	 	 	 	 	 
	 	By:  	                                                               Campus Crest Properties, LLC, a North Carolina limited liability company, its Manager
 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Michael S. Hartnett 	 
	 	 	Its Manager 	 

	 	 	 	 	 	 
	 	GENERAL CONTRACTOR:

CAMPUS CREST CONSTRUCTION, LLC

 	 
	 	By:  	
 	 
	 	 	Title: 	 	 

	 	 	 	 	 	 
	 	OWNER’S INSPECTOR: 

CAMPUS CREST GROUP, LLC

 		 
	 	By:  	
 	 
	 	 	Title: 	 		 

	 	 	 	 	 	 
	 	LENDER:

CENTENNIAL BANK

 		 
	 	By:  	
 	 
	 	 	Title: 	 		 
	 	 	 		 

 

 

EXHIBIT A

MATERIALMEN’S LIEN WAIVER

     Contemporaneously
with the undersigned’s receipt of a check in payment of funds owed to the
undersigned in connection with services rendered or materials delivered in connection with that
construction project as is referenced below (the “Project”), the undersigned does release, waive
and relinquish any and all mechanics, materialmen, laborer and other liens or claims of whatever
nature, or rights to any such liens or claims against the above-referenced Project and/or Project
Owner provided for under the laws of the State of Arkansas insofar as the same may relate to work
at commencement of the above described Project through
                   
                     ,                      performed by the
undersigned, its employees and/or subcontractors. The undersigned further certifies and attests
that those subcontractors, laborers and materialmen listed on the APPLICATION AND CERTIFICATE OF
PAYMENT constitute and comprise all such subcontractors, laborers, and materialmen involved with
and participating in the project.

     IT IS UNDERSTOOD that the undersigned has executed this document with the understanding that
CENTENNIAL BANK and the Project Owner are expressly relying upon the representations set forth
above in making payments, or arrangements for payments, for work performed and or the materials
furnished to the property designated above.

Signed
and sealed on July 2, 2009

	 	 	 

	 

	 	 
	 

	 	General Contractor

Project:
                     
                              

Project
Owner:                                         

 

 

EXHIBIT B

PAY REQUEST

(For use by all general contractors and subcontractors)

	 	 	 	 	 

	Company Name:

	 	 

	 	No: 

	Company Address:

	 	 

	 	Date: 

	 

	 	 

	 	 
	 

	 	 

	 	SS or Federal ID #:
	Project:

	 	 

	 	 

	Project Owner:

	 	 

	 	 
	Project Address:

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	Approval:

	 	 

	 	 

	 	 	 	 	 
	DESCRIPTION	 	UNIT PRICE	 	AMOUNT
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	Vendor
#                             
              
 

	 	Sub Total	 	 
	 
	Job #
                            
                     
 

	 	Less Insurance	 	 
	 
	Account #
                            
              
 

	 	Miscellaneous	 	 
	 
	 

	 	 	Total
 	 
	 

LABOR/CONTRACTOR LIEN WAIVER

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged,
the undersigned does hereby release, waiver and relinquish in full any and all mechanics,
materialmen’s, laborers and other liens and encumbrances of whatever nature, whether vested or
unvested, contingent or liquidated, which the undersigned may possess against the Project as
described above or against Project Owner which may relate to that construction work performed by
the undersigned and its agents, employees and subcontractors at the Project up to and as of the
date of this Pay Request.

IT IS UNDERSTOOD that the undersigned has executed this document with the understanding that Owner
is expressly relying upon the representations set forth above in making payments, or arrangements
for payments, for work performed and or the materials furnished to the property designated above.

	 	 	 	 	 

	Signed and sealed on July, 2009

	 	 

Signature
	 	 
	 
	 	 	 	 	 
	Owner:
	 	 

Title or Capacity
	 	 
	 
	 
	 	 	 	 
	 

	 	 

Company Name
	 	 

 

 

Loan Number: 2757506477

EXHIBIT C

LEGAL DESCRIPTION

C-1

 

TRACT 1

Lot 1, The Grove at Conway: Being a part of the SW1/4 NW1/4 of Section 14, T-5-N, R-14-W,
Faulkner County, Arkansas;
more particularly described as beginning at the Northeast corner of said SW1/4 NW1/4;
thence along the East line of said
SW1/4 NW1/4 South 02 degrees 06 minutes 29 seconds West 904.38 feet; thence leaving
said East line North 88 degrees 10 mintues 04 seconds West 105.05
feet; thence South 02 degrees 06 minutes 29 seconds West 359.51 feet to the North right of way of State
Highway #60; thence along said right of way to a point South 88 degrees 43 minutes 08
seconds West 60.00 feet; thence leaving said right of way North 02 degrees 56 minutes 51
seconds East 134.25 feet; thence North 01 degree 45 minutes
46 seconds East 344.02 feet; thence North 87 degrees 47 minutes 38 seconds West 494.45
feet to the West Line of the E1/2
SW1/4 NW1/4; thence along said West line North 02 degrees 04 minutes 02 seconds East
783.63 feet to the Northwest corner
of the El/2 SW1/4 NW1/4; thence along the North line of the SW1/4 NW1/4 South 88 degrees
20 minutes 41 seconds East 660.08 feet to the point of beginning.

TRACT 2

Nutter Parcel: Being a part of the E1/2 of the E1/2 of the SW1/4 of the NW1/4 of Section 14,
T5N, R14W, Faulkner County,
Arkansas, described as commencing at the Southeast corner of said E1/2 E1/2 SW1/4 NW1/4;
thence North 02 degrees 06 minutes 29 seconds East along the East line thereof a
distance of 62.09 feet to the point of beginning, said point being on the Northerly
right of way of State Highway 60 (Dave Ward Drive); thence North 89 degrees 16 minutes
14 seconds West along the Northerly right of way of State Highway 60 a distance of
105.08 feet; thence leaving said right of way North 02 degrees 06 minutes 29 seconds
East 359.51 feet; thence South 88 degrees 10 minutes 04 seconds East 105.05 feet to the
East line of said SW1/4, NW1/4; thence along East line South 02
degrees 06 minutes 29
seconds West 357.49 feet to the point of beginning.exv10w55

Exhibit
10.55

CONSTRUCTION LOAN AGREEMENT

BETWEEN

CAMPUS CREST AT STATESBORO, LLC, a Delaware limited liability

company, as Borrower

AND

THE
PRIVATEBANK AND TRUST COMPANY

an Illinois state chartered bank, as Lender

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	1.	 	 	RECITALS	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	2.	 	 	DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	3.	 	 	COMMITMENT TO LEND	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.1	 	 	Loan Amount; Prepayment
	 	 	8	 
	 

	 	 	3.2	 	 	Loan Advances Evidenced by Note
	 	 	8	 
	 

	 	 	3.3	 	 	Calculation of Interest
	 	 	8	 
	 

	 	 	3.4	 	 	Payments of Interest and Principal
	 	 	8	 
	 

	 	 	3.5	 	 	Default Rate
	 	 	8	 
	 

	 	 	3.6	 	 	Late Charge
	 	 	8	 
	 

	 	 	3.7	 	 	Fees
	 	 	8	 
	 

	 	 	3.8	 	 	Equity Requirement
	 	 	8	 
	 

	 	 	3.9	 	 	Earn Out Provision
	 	 	9	 
	 

	 	 	3.10	 	 	Extension of Matuirity Date
	 	 	9	 
	 
	 	 	 	 	 	 	 	 	 	 
	4.	 	 	LOAN DOCUMENTS	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 
	5.	 	 	DISBURSEMENT OF THE LOAN	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.1	 	 	Conditions Precedent in General
	 	 	14	 
	 

	 	 	5.2	 	 	Use of Loan Proceeds; Inspections of the Work
	 	 	14	 
	 
	 	 	5.3	 	 	Disbursement Requests 	 	 	15	 
	 
	 	 	5.4	 	 	Certifications, Representations and Warranties	 	 	16	 
	 

	 	 	5.5	 	 	Amount of Disbursements; Retainage
	 	 	17	 
	 

	 	 	5.6	 	 	Costs
	 	 	17	 
	 

	 	 	5.7	 	 	Reserves
	 	 	17	 
	 

	 	 	5.8	 	 	Loan in Balance
	 	 	18	 
	 

	 	 	5.9	 	 	Escrow; Application of Disbursements
	 	 	18	 
	 

	 	 	5.10	 	 	Release of Retainage
	 	 	19	 
	 

	 	 	5.11	 	 	Lender’s Representatives
	 	 	20	 
	 

	 	 	5.12	 	 	Stored and Unincorporated Materials
	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	6.	 	 	REPRESENTATIONS AND WARRANTIES 	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.1	 	 	Borrower
	 	 	21	 
	 

	 	 	6.2	 	 	Guarantor
	 	 	21	 
	 

	 	 	6.3	 	 	Title
	 	 	21	 
	 

	 	 	6.4	 	 	Improvements
	 	 	21	 
	 

	 	 	6.5	 	 	Validity and Enforceability of Documents
	 	 	21	 
	 

	 	 	6.6	 	 	Litigation
	 	 	22	 
	 

	 	 	6.7	 	 	Utilities; Authorities
	 	 	22	 
	 

	 	 	6.8	 	 	Solvency
	 	 	22	 
	 

	 	 	6.9	 	 	Financial Statements
	 	 	22	 
	 

	 	 	6.10	 	 	Compliance with Laws
	 	 	22	 
	 

	 	 	6.11	 	 	Construction Contract
	 	 	23	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 

	 	 	6.12	 	 	Subcontracts
	 	 	23	 
	 

	 	 	6.13	 	 	Architectural Contract
	 	 	23	 
	 

	 	 	6.14	 	 	Engineering Contract
	 	 	23	 
	 

	 	 	6.15	 	 	Plans and Specifications
	 	 	23	 
	 

	 	 	6.16	 	 	Budget
	 	 	23	 
	 

	 	 	6.17	 	 	Financing Statements
	 	 	23	 
	 

	 	 	6.18	 	 	Event of Default
	 	 	23	 
	 

	 	 	6.19	 	 	No Defects
	 	 	23	 
	 

	 	 	6.20	 	 	Additional Agreements
	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 
	7.

	 	 	BORROWER’S COVENANTS
	 	24	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.1	 	 	Manner of Construction
	 	 	24	 
	 

	 	 	7.2	 	 	Certificate of Completion
	 	 	24	 
	 

	 	 	7.3	 	 	Change Orders
	 	 	24	 
	 

	 	 	7.4	 	 	Compliance with Laws
	 	 	24	 
	 

	 	 	7.5	 	 	Inspection
	 	 	25	 
	 

	 	 	7.6	 	 	Mechanics’ Liens
	 	 	25	 
	 

	 	 	7.7	 	 	Release by Lender
	 	 	25	 
	 

	 	 	7.8	 	 	Financial Statements; Reports
	 	 	25	 
	 

	 	 	7.9	 	 	Affirmation of Representations and Warranties
	 	 	26	 
	 

	 	 	7.10	 	 	Title
	 	 	26	 
	 

	 	 	7.11	 	 	Proceedings Affecting Property
	 	 	26	 
	 

	 	 	7.12	 	 	Disposal and Encumbrance of Property
	 	 	27	 
	 

	 	 	7.13	 	 	Insurance
	 	 	27	 
	 

	 	 	7.14	 	 	Performance of Obligations; Notice of Default
	 	 	27	 
	 

	 	 	7.15	 	 	Restrictions Affecting Borrower
	 	 	27	 
	 

	 	 	7.16	 	 	Use of Receipts; Limitation on Distributions
	 	 	27	 
	 

	 	 	7.17	 	 	Budget
	 	 	28	 
	 

	 	 	7.18	 	 	Management and Leasing Agreements; Subordination
	 	 	28	 
	 

	 	 	7.19	 	 	Additional Documents
	 	 	28	 
	 

	 	 	7.20	 	 	Survey
	 	 	28	 
	 

	 	 	7.21	 	 	Borrower’s Accounts
	 	 	28	 
	 

	 	 	7.22	 	 	Ineligible Securities
	 	 	29	 
	 

	 	 	7.23	 	 	OFAC
	 	 	29	 
	 

	 	 	7.24	 	 	Loan Expenses
	 	 	29	 
	 

	 	 	7.25	 	 	Lender’s Action for Lender’s Own Protection Only
	 	 	29	 
	 

	 	 	7.26	 	 	DSCR
	 	 	29	 
	 

	 	 	7.27	 	 	Depository Relationship
	 	 	29	 
	 

	 	 	7.28	 	 	Construction of Clubhouse
	 	 	29	 
	 
	 	 	 	 	 	 	 	 	 	 
	8.	 	 	EVENTS OF DEFAULT	 	 	29	 
	 
	 	 	 	 	 	 	 	 	 	 
	9.	 	 	REMEDIES	 	 	32	 
	 
	 	 	 	 	 	 	 	 	 	 
	10.	 	 	MISCELLANEOUS	 	 	33	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.1	 	 	Additional Indebtedness
	 	 	33	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 

	 	 	10.2	 	 	Additional Acts
	 	 	33	 
	 

	 	 	10.3	 	 	Loan Agreement Governs
	 	 	33	 
	 

	 	 	10.4	 	 	Additional Advances
	 	 	33	 
	 

	 	 	10.5	 	 	Amendment; Waiver; Approval
	 	 	33	 
	 

	 	 	10.6	 	 	Notice
	 	 	34	 
	 

	 	 	10.7	 	 	Benefit; Assignment
	 	 	34	 
	 

	 	 	10.8	 	 	Governing Law
	 	 	35	 
	 

	 	 	10.9	 	 	Indemnity
	 	 	35	 
	 

	 	 	10.10	 	 	Headings
	 	 	35	 
	 

	 	 	10.11	 	 	No Partnership or Joint Venture
	 	 	35	 
	 

	 	 	10.12	 	 	Time is of the Essence
	 	 	35	 
	 

	 	 	10.13	 	 	Invalid Provisions	 	 	35	 
	 

	 	 	10.14	 	 	Offset
	 	 	35	 
	 

	 	 	10.15	 	 	Acts by Lender
	 	 	35	 
	 

	 	 	10.16	 	 	Binding Provisions
	 	 	36	 
	 

	 	 	10.17	 	 	Counterparts
	 	 	36	 
	 

	 	 	10.18	 	 	No Third Party Beneficiary
	 	 	36	 
	 

	 	 	10.19	 	 	Publicity
	 	 	36	 
	 

	 	 	10.20	 	 	Joint and Several Obligations
	 	 	36	 
	 

	 	 	10.21	 	 	JURISDICTION AND VENUE
	 	 	36	 
	 

	 	 	10.22	 	 	JURY WAIVER
	 	 	36	 

-iii-

 

CONSTRUCTION LOAN AGREEMENT

     This Construction Loan Agreement (“Agreement”) is dated as of November 12, 2009, by and
between CAMPUS CREST AT STATESBORO, LLC, a Delaware limited liability company (“Borrower”), and
THE PRIVATEBANK AND TRUST COMPANY, an Illinois state chartered bank, and its successors and
assigns (“Lender”).

     1. RECITALS.

     1.1 Borrower is the fee owner of the Land (this and all other capitalized terms used in this
Article 1 and not otherwise defined shall have the meanings ascribed thereto in Article 2 below).

     1.2 Borrower has requested that Lender make a construction loan to Borrower in the maximum
principal amount of $16,130,000.00 to pay a portion of the amounts needed to finance the Project
Costs associated with the construction of a student housing community consisting of eight (8),
4-story apartments buildings and a club house. Lender has agreed to make the Loan subject to the
terms and conditions set forth herein.

     1.3 In consideration of the mutual agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower and
Lender agree as follows:

     2. DEFINITIONS. As used in this Agreement, the following terms shall have the following meanings:

     2.1 “Applicable Laws” shall mean all laws, statutes, ordinances, rules, regulations,
judgments, decrees or orders of any state, federal or local government or agency which are
applicable to the Obligors and/or the Project.

     2.2 “Architect” shall mean James L. Browning, who shall perform architectural services with
respect to the construction of the Improvements.

     2.3 “Architectural Contract” shall mean that certain contract dated January 19, 2009, as
amended, between Borrower and the Architect regarding the architectural services to be performed
by the Architect in connection with the construction of the Improvements, which is in form and
substance reasonably acceptable to Lender.

     2.4 “Assignment of Agreements” shall mean that certain Assignment of Agreements Affecting
Real Estate dated as of even date herewith from Borrower to Lender, as the same may be amended,
restated, modified or supplemented and in effect from time to time.

     2.5 “Assignment of Leases and Rents” mean that certain Assignment of Leases and Rents dated
as of even date herewith from Borrower to Lender, as the same may be amended, restated, modified
or supplemented and in effect from time to time.

     2.6 “Available Proceeds” shall have the meaning ascribed to it in Section 5.8 of this
Agreement.

1

 

     2.7 “Budget” shall mean the detailed budget of all costs to be incurred in connection with
the Work, including both hard costs and soft costs, as set forth in Exhibit C attached
hereto and made a part hereof.

     2.8 “Building” shall mean any one (1) of the buildings to be constructed on the Land as more
particularly described in Recital 1.2 above and “Buildings” shall mean the eight (8) buildings to
be constructed on the Land as more particularly described in Recital 1.2 above.

     2.9 ‘‘Business Day” shall mean each day excluding Saturdays, Sundays and any other day on
which Lender is closed for business to the public.

     2.10 “Club House” shall mean the club house to be constructed as part of the Improvements.

     2.11 “Construction Commencement Date” shall mean the date which is on or prior to fifteen
(15) days following the Loan Opening Date.

     2.12 “Construction Completion Date” shall mean on or before August 14, 2010.

     2.13 “Construction Contract” shall mean that certain guaranteed maximum price contract dated
as of November 1, 2008 between Borrower and the Contractor regarding the general contracting
services to be performed in connection with the construction of the Improvements, which is in form
and substance reasonably acceptable to Lender.

     2.14 “Consultant” shall mean an independent architect or engineer selected by Lender. Nothing
contained in this Agreement shall prohibit such Consultant from being an employee of Lender or any
of Lenders’ affiliates.

     2.15 “Contractor” shall mean Campus Crest Construction, LLC, who shall perform general
contracting services with respect to the construction of the Improvements.

     2.16 “Debt Service” shall mean, during any Quarter, the sum of all interest and principal
payments on the Loan that are due and payable during such Quarter assuming the full Loan amount is
amortized in equal monthly installments over a thirty (30) year period at the Notional Interest
Rate (except as otherwise contemplated in Section 3.10(e), Section 7.17 and Section 7.26 hereof).

     2.17 “Debt Service Coverage Ratio” shall mean the ratio of Operating Cash Flow during such
Quarter to Debt Service during such Quarter.

     2.18 “Default Rate” shall mean the Interest Rate plus five percent (5%) per annum.

     2.19 “Engineer” shall mean Maxwell-Reddick and Associates, who shall perform engineering
services with respect to the construction and operation of the Improvements and the Project.

     2.20 “Engineering Contract” shall mean that certain contract dated October 17, 2007 between
Borrower and the Engineer regarding engineering services to be performed by the Engineer in
connection with the construction of the Improvements, which is in form and substance reasonably
acceptable to Lender.

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     2.21 “Environmental Laws” shall mean any and all federal, state and local laws or statutes
that relate to or impose liability or standards of conduct concerning public or occupational
health and safety or the environment, as now or hereafter in effect and as have been or hereafter
may be amended, modified or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.).
the Hazardous Materials Transportation Authorization Act of 1994 (42 U.S.C. §5101 et seq.), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. §6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. §1251 et seq.), the Toxic Substances Control Act (15 U.S.C. §2601
et seq.), the Clean Air Act (42 U.S.C. §7401 et seq.), the Safe Drinking Water Act of 1974 (42
U.S.C. §300(f) et seq.), and the Occupational Safety and Health Act of 1970 (29 U.S.C. §651 et
seq.), and all rules, regulations, codes, ordinances and guidance documents now or hereafter
promulgated or published thereunder, and the provisions of any licenses, permits, orders and
decrees now or hereafter issued pursuant to any of the foregoing.

     2.22 “Event of Default” shall have the meaning ascribed to it in Section 8 of this
Agreement.

     2.23 “Guarantor” shall mean Ted Rollins, Michael Hartnett, TXG, LLC, a South Carolina limited
liability company, Madiera Group, LLC, a North Carolina limited liability company, and MXT
Capital, LLC, a Delaware limited liability company, jointly and severally.

     2.24 “Guaranty” shall mean, collectively, the Guaranty of Payment and the Guaranty of
Completion.

     2.25 “Guaranty of Completion” shall mean the Guaranty of Completion dated as of even date
herewith from Guarantor in favor of Lender, guaranteeing completion of the Project and performance
of Borrower’s other obligations under the Loan Documents.

     2.26 “Guaranty of Payment” shall mean the Guaranty of Payment dated as of even date herewith
from the Guarantor in favor of Lender, guaranteeing the repayment of the Loan.

     2.27 “Hazardous Substances” shall mean:

     (a) Any substance, material, or waste that is included within the definitions of
“hazardous substances,” “hazardous materials,” “hazardous waste,” “toxic substances,” “toxic
materials,” “toxic waste,” or words of similar import in any Environmental Law;

     (b) Those substances listed as hazardous substances by the United States Department of
Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by
the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and
amendments thereto); and

     (c) Any substance, material, or waste that is petroleum, petroleum-related, or a
petroleum by-product, asbestos or asbestos-containing material, polychlorinated biphenyls,
flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any
other agricultural chemical.

     2.28 “Improvements” shall mean the Buildings and all other structures, the Club House, all
paving, lighting, landscaping, utility lines and equipment and all other site improvements
and all other
improvements to be constructed on the Land in accordance with the Plans and Specifications.

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     2.29 “Indemnity Agreement” shall mean that certain Environmental Indemnity Agreement
dated as of even date herewith by Borrower and the Guarantor in favor of Lender.

     2.30 “Initial Advance” shall mean the first draw or disbursement made from the proceeds of
the Loan.

     2.31 “Interest Rate” shall have the meaning ascribed to such term in the Note.

     2.32 “Interest Reserve” shall have the meaning ascribed to it in Section 5.7 of this
Agreement.

     2.33 “Land” shall mean the tract of land located in Statesboro, Georgia and legally described
in Exhibit A attached hereto.

     2.34 “Leases” shall mean all leases now or hereafter executed by or on behalf of Tenants
pertaining to the rental of space within a Building.

     2.35 “Letters of Credit” shall have the meaning ascribed to it in Section 3.11 hereof.

     2.36 “Loan” shall mean the construction loan from Lender to Borrower in an amount not to
exceed $16,130,000.00 in the aggregate which is to be disbursed pursuant to this Agreement and
which loan shall otherwise be governed by the provisions hereof.

     2.37 “Loan Advance” shall mean a disbursement of all or any portion of the Loan.

     2.38 “Loan Documents” shall mean this Agreement, the Mortgage, the Note, the Assignment of
Leases and Rents, the Assignment of Agreements, the Guaranty, the Indemnity Agreement and every
other document now or hereafter evidencing, securing or otherwise executed in conjunction with the
Loan, together with all amendments, restatements, supplements and modifications thereof.

     2.39 “Loan Expenses” shall mean, collectively, the expenses, charges, costs (including both
hard costs and soft costs) and fees relating to the making, administration, negotiation,
documentation or any other aspect of the Loan or relating to the performance of the Work,
including, without limitation, Lender’s reasonable attorneys’ fees and costs in connection with the
negotiation, documentation and enforcement of the Loan, the fees of the Consultant, all recording
fees and charges, title insurance charges and premiums, escrow fees, fees of insurance consultants,
costs of surveys and of other bonds required by the Title Company in connection with clearing title
to the Real Property or the issuance of title reports, binders, policies and the like, and all
other costs, expenses, charges and fees referred to in or necessitated by the terms of this
Agreement or any of the other Loan Documents.

     2.40 “Loan Opening Date” shall mean November 12, 2009.

     2.41 “Maturity Date” shall mean February 12, 2012, subject to extension as provided in
Section 3.10 hereof.

     2.42 “Mortgage” shall mean the Deed to Secure Debt encumbering the Real Property dated as of
even date herewith by Borrower for the benefit of Lender to secure the Loan, as the same may be
amended, restated, modified or supplemented and in effect from time to time.

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     2.43 “Note” shall mean the Promissory Note evidencing the Loan dated as of even date herewith
by Borrower payable to the order of Lender in the original principal amount of $16,130,000.00, as
the same may be amended, restated, modified or supplemented and in effect from time to time.

     2.44 “Notional Interest Rate” shall mean a rate of interest equal to the greatest of (i)
seven and one-half percent (7.50%) per annum, (ii) three percent ( 3.00%) plus the yield
(converted as necessary to an annual interest rate) on the United States Treasury Security (as
hereinafter defined) having a maturity date closest to ten (10) years from the Determination Date
(as hereinafter defined) as displayed in the Bloomberg Financial Markets system at approximately
8:00 a.m. Chicago, Illinois time on the second (2nd) Business Day preceding the date on which the
Debt Service Coverage Ratio is calculated (the “Determination Date”), provided, however, if the
Bloomberg Financial Markets system is no longer available, the Lender, in its sole discretion,
shall designate another daily financial or governmental news service or publication of national
circulation to be used to determine such yield and/or such spread and (iii) the actual greatest
rate of interest accruing on the Loan on the Determination Date. As used herein, “United States
Treasury Security” shall mean any actively traded United States Treasury bond, bill or note, and
if more than one issue of United States Treasury Security is scheduled to mature on or about the
Maturity Date then to the extent possible, the United States Treasury Security maturing most
recently prior to the tenth anniversary of the original Maturity Date will be chosen as the basis
of the yield.

     2.45 “Obligors” shall mean each of the Borrower and the Guarantor.

     2.46 “Operating Cash Flow” shall mean at the time of calculation, during any Quarter, all
base rental revenue actually received by Borrower during such Quarter pursuant to signed Leases
arising from the ownership and operation of the Property (excluding tenant security deposits and
rent paid during such Quarter by any Tenant for more than three months of rental obligations), and
any business interruption insurance proceeds in the event there is a casualty at the Property and
some or all of the tenants are not making rental payments due to such casualty, less the sum of
all costs, taxes, expenses and disbursements of every kind, nature or description due and payable
during such Quarter in connection with the leasing, management, operation, maintenance and repair
of the Property, fixtures, machinery, equipment, systems and apparatus located therein or used in
connection therewith including management fees equal to the greater of (A) the actual management
fees being charged or (B) 3.0% of gross revenues, but excluding (i) non-cash expenses, such as
depreciation and amortization costs, (ii) state and federal income taxes, (iii) capital
expenditures, (iv) debt service payable on the Loan, and (v) leasing commission fees. In
determining Operating Cash Flow, extraordinary items of income, such as those resulting from
casualty or condemnation or lease termination payments of Tenants, shall be deducted from income.

     2.47 “Permitted Exceptions” shall mean the exceptions to the title of the Real Property listed
on Exhibit B attached hereto and all Leases of the Property (approved by Lender if such approval is
required) executed in accordance with the terms of the Loan Documents.

     2.48 “Person” shall mean any individual, firm, corporation, business enterprise, trust,
association, joint venture, partnership, governmental body or other entity, whether acting in an
individual, fiduciary or other capacity.

     2.49 “Personal Property” shall mean and include any and all furniture, furnishings,
appliances, equipment and all fixtures (to the extent such fixtures are attached in a manner so as
not to be deemed to be part of the Real Property) to be located at the Land which will be used or
usable in connection with the ownership, development or operation of the Real Property and which
will be owned, leased or otherwise possessed by Borrower or any of its affiliates.

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     2.50 “Plans and Specifications” shall mean, collectively, the architectural and
engineering plans and specifications relating to the Work or any portion thereof, all of which
must be acceptable to Lender in its sole and absolute discretion.

     2.51 “Prime Rate” shall have the meaning ascribed thereto in the Note.

     2.52 “Principal Balance” shall mean the unpaid principal balance of the Loan outstanding from
time to time.

     2.53 “Project” shall mean the Improvements developed in accordance with the terms of this
Agreement.

     2.54 “Project Costs” shall mean each of the following items, but only to the extent
specifically set forth in the Budget and only to the extent specifically required to complete the
Project:

     (a) The actual hard costs of completing construction of the Improvements, including
demolition and environmental remediation costs;

     (b) The actual costs of acquiring the Land and acquiring and installing the Personal
Property;

     (c) Premiums for title, casualty, liability and other insurance required by Lender;

     (d) The cost of recording and filing the applicable Loan Documents;

     (e) Real estate taxes and other assessments which Borrower is obligated to pay during
the term of the Loan;

     (f) Interest, fees and similar charges payable by Borrower to Lender hereunder or under
the Note or any of the other Loan Documents;

     (g) Legal and other closing costs;

     (h) Architectural, engineering and consulting fees;

     (i) Such other soft costs as may be set forth in the Budget or as may be hereafter
approved in writing by Lender; and

     (j) All other Loan Expenses.

     2.55 “Projected Debt Service Coverage Ratio” shall mean the ratio of Projected Operating Cash
Flow during such Quarter to Debt Service during such Quarter.

     2.56 “Projected Operating Cash Flow” shall mean at the time of calculation, during any
Quarter, all base rental revenue projected to be received by Borrower during such Quarter pursuant
to signed Leases arising from the ownership and operation of the Property (excluding tenant
security deposits and rent to be paid during such Quarter by any Tenant for more than three months
of rental obligations), and any business interruption insurance proceeds in the event there is a
casualty at the Property and some or all of the tenants are not making rental payments due to such
casualty, less the sum of all projected costs, taxes, expenses and disbursements of every kind,
nature or description approved by

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Lender which would be due and payable during such Quarter in connection with the leasing,
management, operation, maintenance and repair of the Property, fixtures, machinery, equipment,
systems and apparatus located therein or used in connection therewith including management fees
equal to the greater of (A) the actual management fees being charged or (B) 3.0% of gross
revenues, but excluding (i) non-cash expenses, such as depreciation and amortization costs, (ii)
state and federal income taxes, (iii) capital expenditures, (iv) debt service payable on the
Loan, and (v) leasing commission fees. In determining Operating Cash Flow, extraordinary items of
income, such as those resulting from casualty or condemnation or lease termination payments of
Tenants, shall be deducted from income.

     2.57 “Property” shall mean the Real Property, the Buildings, the Club House, and the Personal
Property (whether before or after completion of the Work) and all other tangible and intangible
assets benefitting or otherwise appertaining to the Project, including, without limitation, all of
the collateral for the Loan described in the Loan Documents.

     2.58 “Quarter” shall mean any calendar three-month period prior to the date of such
calculation.

     2.59 “Real Property” shall mean the Land, the improvements and all easements and appurtenants
thereto.

     2.60 “Reserves” shall mean the reserves described in Section 5.7 below.

     2.61 “Retainage” shall mean the portion of each Loan Advance retained by Lender in accordance
with Section 5.5 below.

     2.62 “State” shall mean the State of Georgia.

     2.63 “Subcontractor” shall mean any person or entity having a contract with Contractor or any
Subcontractor for the construction, equipping or supplying by such Subcontractor of any portion of
the Project.

     2.64 “Subcontracts” shall mean the subcontracts now or hereafter entered into by the
Contractor or Borrower for the construction of any of the Improvements or the installation of any
of the Personal Property or the performance of any other aspect of the Work, together with all
sub-subcontracts, material or equipment purchase orders, equipment leases and other agreements
entered into by the Contractor, any subcontractor or any other party supplying labor or materials
in connection with the Work.

     2.65 “Survey” shall mean the plat of survey of the Real Property as described in Section 4.2
below.

     2.66 “Tenants” shall mean all tenants now or hereafter occupying space within the Buildings
or at the Property pursuant to validly existing Leases.

     2.67 “Title Company” shall mean Chicago Title Insurance Company.

     2.68 “Title Policy” shall mean the title insurance policy described in Section 4.4 below.

     2.69 “Unmatured Default” shall mean an event or circumstance that with the giving of notice,
the passage of time, or both, would constitute an Event of Default.

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     2.70 “Work” shall mean the performance of all work to be performed and the supplying of
all materials to be supplied in connection with the building, furnishing, fixturing and equipping
of the Project, all in accordance with the provisions of this Agreement and with the Plans and
Specifications, the Budget and the other documentation approved by Lender.

     3. COMMITMENT TO LEND.

     3.1 Loan Amount; Prepayment. The Lender agrees to lend to Borrower, and Borrower may
borrow from Lender from time to time prior to the Maturity Date the maximum aggregate principal
amount of $16,130,000.00 for the purposes, upon the terms, and subject to the conditions contained
in this Agreement. The Loan is not a revolving credit facility and, accordingly, any portion of the
Principal Balance that is repaid or prepaid may not be reborrowed.

     3.2 Loan Advances Evidenced by Note. All Loan Advances hereunder shall be evidenced
by the Note, which shall be executed and delivered by Borrower simultaneously with the execution
of this Agreement.

     3.3 Calculation of Interest. Interest shall be calculated in accordance with the
terms of the Note.

     3.4 Payments of Interest and Principal. Payments of principal and interest due under
this Agreement shall be made in accordance with the terms of the Note.

     3.5 Default Rate. Upon the occurrence of an Event of Default (which has not been
waived in writing by Lender) under this Agreement or any of the other Loan Documents, and after
the Maturity Date or following the acceleration of the maturity of the Loan, Lender, at its
option, may, if permitted under Applicable Law, do one or both of the following: (a) increase the
rate of interest on the Principal Balance and any other amounts then owing by Borrower to Lender
to the Default Rate until paid in full and (b) add any unpaid accrued interest to principal and
such sum shall bear interest therefrom until paid in full at the Default Rate. Neither the
Interest Rate nor the Default Rate shall exceed the maximum rate permitted by Applicable Law under
any circumstance.

     3.6 Late Charge. If any payment under this Agreement or any other Loan Document (with
the exception of the final payment due at maturity) is not made within ten days after such payment
is due, then, in addition to the payment of the amount so due, Borrower shall pay to Lender a
“late charge” equal to five percent (5.0%) of the amount of that payment. This late charge may be
assessed without notice, shall be immediately due and payable and shall be in addition to all
other rights and remedies available to Lender. The Borrower agrees that the damages to be
sustained by the. Lender for the detriment caused by any late payment are extremely difficult and
impractical to ascertain, and that the amount of five cents for each one dollar due is a
reasonable estimate of such damages, does not constitute interest, and is not a penalty.

     3.7 Fees. Lender has fully earned a non-refundable loan fee in the amount of
$161,300.00, and, concurrently with the execution of this Agreement, the unpaid balance of such
fee, if any, shall be due and payable by Borrower to Lender.

     3.8 Equity Requirement. Borrower shall demonstrate an investment in the Project of at
least $6,453,070.00 (which may be reduced to $5,380,070.00 pursuant to Section 3.9 below) (the
“Equity Requirements”), which amount shall be so disbursed prior to or simultaneously with
the Initial Advance. The amount of the Equity Requirements represented by the Land and any
improvements thereon shall be

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valued at the cost to the Borrower of the Land and such improvements, unless otherwise
approved by Lender in writing.

     3.9 Earn Out Provision. $1,073,000.00 of the Loan amount (the “Earn-Out Proceeds”) shall be
held back and shall not be disbursed until the Project has achieved a Debt Service Coverage Ratio
of not less than 1.25 to 1.10. Lender shall not be required to disburse more than $15,057,000.00
until such time as the requirement set forth in this Section 3.9 has been satisfied. The Earn-Out
Proceeds shall be disbursed directly to Borrower upon satisfaction of the condition contained in
this Section 3.9.

     3.10 Extension of Maturity Date. The Borrower shall have one (1) option to extend the
Maturity Date to February 12, 2013 upon satisfaction of the following conditions precedent:

     (a) Extension Request. The Borrower shall deliver written notice of such request (the
“Extension Request”) to Lender not earlier than the date which is ninety (90) days prior to
the Maturity Date and not later than the date which is thirty (30) days prior to the
Maturity Date;

     (b) Payment of the Extension Fee. Borrower shall pay to Lender an extension fee in the
amount of fifty (50) basis points on the outstanding principal balance of the Loan at the
time of such extension;

     (c) No Default. On the date the Extension Request is submitted, there shall exist no
Event of Default, and on the Maturity Date, there shall exist no Unmatured Default or Event
of Default;

     (d) Certificate of Occupancy. Borrower has obtained and delivered to Lender a
certificate of occupancy for the entire Project from the applicable governmental entity.

     (e) DSCR. The Project shall have achieved a Debt Service Coverage Ratio of not less
than 1.25 to 1.0; provided, however, that (i) Borrower shall have the right to make a
principal repayment on the outstanding principal balance of the Loan in order to comply
with the required Debt Service Coverage Ratio, and such reduced outstanding principal
balance will be utilized in re-calculating Debt Service, and (ii) in the event the Earn-Out
Proceeds have not been disbursed to Borrower in accordance with Section 3.9 above, the Loan
amount for purposes of calculating Debt Service shall not include the Earn-Out Proceeds.

3.11 Letters of Credit.

     (a) Issuance and Purpose. Lender agrees to issue one or more letters of credit (the
“Letters of Credit”) under and pursuant to an application and Master Letter of Credit
Agreement of Lender duly executed and delivered by Borrower to Lender (collectively, the
“Letter of Credit Application”), which Letters of Credit shall be issued for the benefit of
the City of Statesboro or such other governmental agency or private vendor (the
“Beneficiary”) to assure the performance by Borrower of certain public improvements with
respect to the Project or non-public on-site or off-site improvements with respect to the
Project or the payment of amounts related to furniture or equipment to be installed at the
Project, all as approved by Lender and the Beneficiary. The Letters of Credit shall be
irrevocable and shall have expiration dates no later than the earlier of (i) twelve (12)
months from the date of issuance, and (ii) the Maturity Date. The face amount of each
Letter of Credit shall reduce the amount of the Loan available for disbursement and all
draws against a Letter of Credit shall constitute disbursements of proceeds of the Loan
(until repaid by Borrower), shall bear interest at the Default Rate and shall be secured by
the Mortgage

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and other Loan Documents. Upon the issuance of any Letter of Credit, Borrower shall
cause the Title Company to issue a Letter of Credit Endorsement to the Lender’s title policy
referencing such Letter of Credit. Borrower shall apply to the Beneficiary, at appropriate
intervals as reasonably requested by Lender, for reduction in the amount of the Letter of
Credit to reflect the construction, in whole or part, of the improvements for which such
Letter of Credit was issued, if applicable, and the amount of the Loan available for
disbursement shall be increased by the amount of any such reduction. To the extent that the
cost of work or materials covered by any Letter is Credit is included in the Budget, Lender
will disburse to Borrower proceeds of the Loan to cover such costs as they are incurred by
Borrower, subject to Borrower’s compliance with the terms and conditions of this Agreement,
and subject to the adjustment to the Loan amount commensurate with any change in the face
amount of each Letter of Credit.

     (b) Draws. The Beneficiary shall be entitled to draw on the Letters of Credit
upon presentation of a sight draft to Lender on or before 5:00 p.m. Chicago time during
any Business Day in accordance with the terms and provisions of the Letters(s) of Credit.
Borrower shall reimburse Lender for any amount drawn under the Letters of Credit plus
interest thereon at the Default Rate (or at the rate set forth in the Letter of Credit
application, whichever is higher) within two (2) Business Days after the date such draft
is paid by Lender and failure to reimburse Lender by such date shall constitute an
additional Event of Default hereunder without notice to Borrower of any kind, provided,
however, that it is the intent of the parties that Loan proceeds will be advanced to repay
any draw under a Letter of Credit hereunder, so long as: (i) no other Event of Default
exists, (ii) the Loan is in balance, (iii) Loan proceeds for the work which was the basis
of Beneficiary making a draw under the Letter of Credit have not previously been disbursed
by Lender, and (iv) Beneficiary certifies to Lender that the work which was the basis of
Beneficiary making a draw under the Letter of Credit has been completed to Beneficiary’s
satisfaction.

     (c) Letter of Credit Fee. Borrower shall pay to Lender a fee for issuance of
the Letters of Credit equal to two percent (2.0%) per annum (computed on the basis of a
year of 360,-days and the actual number of days of the stated term of the Letters of
Credit) of the aggregate stated amount of Letters of Credit issued by Lender. Such fee
shall be payable quarterly in advance with the first such payment to be made on the date
of issuance of the first Letter of Credit.

     (d) Termination of Letters of Credit. If the Letters of Credit have not been
presented for a draw pursuant to their respective terms, the Letters of Credit shall
terminate upon the earlier to occur of the stated expiry date thereof or the date such
Letters of Credit are returned to Lender. In no event shall the liens and security
interests created by the Loan Documents be released unless or until the Letters of Credit
have all been terminated. In the event a Letter of Credit is terminated or the face amount
thereof is reduced, or in the event a Letter of Credit has been drawn on by the
Beneficiary but Borrower has repaid all amounts due Lender in connection with such draw
under Section 3.11(b) above, the amount of such Letter of Credit, if terminated, or the
reduced face amount of such Letter of Credit, if applicable (or the amount of such
repayment by Borrower), shall be available for disbursement provided no Event of Default
has occurred.

     4. LOAN DOCUMENTS. Prior to the Initial Advance, Borrower shall execute and/or
deliver to Lender those of the following documents and other items required to be executed and/or
delivered by Borrower, and shall cause to be executed and/or delivered to Lender those of the
following documents and other items required to be executed and/or delivered by others, all of
which documents

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and other items shall contain such provisions as shall be required to conform to this
Agreement and otherwise shall be satisfactory in form and substance to Lender:

     4.1 The Loan Documents.

     4.2 A plat of survey (“Survey”) of the Real Property made by a land surveyor licensed in the
State, which Survey must be satisfactory to the Lender, showing:

     (a) the location of all existing foundations, driveways, parking areas, number of
parking spaces, fences and other improvements on the Land including the Project;

     (b) the location (and recording numbers, to the extent recorded) of all visible or
recorded easements (including appurtenant easements), water courses, drains, sewers, public
and private roads (including the names and widths thereof and recording numbers for the
dedications thereof), other rights of way, and curb cuts, if any, within, adjacent to or
serving the Real Property or to which the Real Property is subject, and the proposed
location of any such easements to be granted; and that all portions of the Project will
have direct access to dedicated public roads;

     (c) the location of the servient estate of any easements, if the Land is the dominant
estate thereunder;

     (d) the common street address of the Real Property and the dimensions, boundaries and
acreage or square footage of the Land;

     (e) that all foundations and other structures under construction and all other
improvements on the Land, are placed within the lot and building lines and in compliance
with all deed restrictions, recorded plats, other restrictions of record and ordinances
relating to the location thereof (and, to the extent that any deed restrictions, recorded
plats, other restrictions of record or ordinances require any structure to be set back
specified distances from any line, showing said line and the measured distance of said
structure, from said line);

     (f) that there are no encroachments onto the Land from improvements located on
adjoining property;

     (g) any above-ground evidence of utility lines;

     (h) if the Real Property comprises more than one parcel, interior lines and other
data sufficient to insure contiguity; and

     (i) such additional information which may be reasonably required by Lender or the
Title Insurance Company.

     The Survey shall be made in accordance with (i) the 2005 survey standards of the American Land
Title Association and American Congress on Surveying and Mapping including items 1, 2, 3, 4, 6,
7(a) and (b), 8, 9, 10 and 11(a), of Table A thereof and (ii) the laws of the State. To the extent
that there is any conflict or inconsistency among the Survey standards described above, the more
restrictive standard shall apply. The Survey shall be dated not later than sixty (60) days prior to
the date of this Agreement, and shall bear a proper certificate by the surveyor, which certificate
shall recite compliance with the laws and

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standards enumerated above, shall include the legal description of the Land and shall run in favor
of Borrower, Lender and the Title Company.

     4.3 Borrower, at its expense, shall obtain (or cause to be obtained) and deliver to Lender
certificates evidencing the policies of insurance as provided in the Mortgage.

     4.4 An ALTA 2006 Loan Policy of Title Insurance (the “Title Policy”) issued by the Title
Company in the full amount of the Note insuring that the Mortgage will be a first priority lien
upon the fee simple title to the Real Property to the extent of advances of the Loan made by
Lender from time to time under this Agreement, subject to no liens, claims, exceptions or
encumbrances except the Permitted Exceptions and containing the following endorsements (to the
extent the Title Company is permitted to issue such endorsements):

     (a) Endorsements for Interim Certification;

     (b) Modified ALTA Broad Form 3.1-06 Zoning Endorsement (in the form modified for
construction loans), including coverage for parking and for loading docks and bays and
deleting the marketability limitation, based upon the completion of the Project in
accordance with the Plans and Specifications;

     (c) Modified Comprehensive Endorsement (Endorsement 9.3-06) (in form modified for
construction loans);

     (d) Access Endorsement (ALTA Endorsement 17-06);

     (e) Survey Endorsement;

     (f) Tax Parcel Endorsement (ALTA Endorsement 18-06 or 18.1-06 as applicable);

     (g) Creditors’ rights endorsement (ALTA Endorsement 21-06);

     (h) Contiguity Endorsement, if applicable (ALTA Endorsement 19-06);

     (i) Utility Facilities Endorsement;

     (j) Usury Endorsement;

     (k) Environmental Protection Lien Endorsement;

     (l) Pending Disbursement (Future Advance) Endorsement (ALTA Endorsement 14-06); and

     (m) Such additional endorsements as may be reasonably required by Lender based upon
its review of the Title Policy and Survey.

     4.5 Copies of all recorded documents described in the Title Policy.

     4.6 Current Uniform Commercial Code, federal and state tax lien and judgment searches, pending
suit and litigation searches and bankruptcy court filings searches covering each Obligor and
disclosing no matters objectionable to Lender.

12

 

     4.7 Certificates executed by the Architect and the Engineer satisfactory in form and content
to Lender.

     4.8 Certified copies of the Construction Contract, Architectural Contract, the Engineering
Contract, and, to the extent available, all licenses, permits and governmental approvals necessary
for the construction, use or operation of the Project and all other documents and instruments
relating to performance of the Work that may be reasonably requested by Lender.

     4.9 Opinion letter from legal counsel for Borrower and the Guarantor (which counsel must be
approved by Lender with respect to the issuance of such opinion) opining to the authority of said
parties to execute, deliver and perform their respective obligations under the Loan Documents, to
the validity and binding effect and enforceability of the Loan Documents and to such other matters
as Lender and its counsel shall reasonably require.

     4.10 A soil test report prepared by a licensed soil engineer approved by Lender and otherwise
satisfactory in all respects to Lender containing, among other things, boring logs and the
locations of all borings and confirming that no condition exists with respect to the Land which
would cause subsidence of any portion of the Land and showing that no state of facts exists which
would adversely affect the completion of the Work in accordance with the Plans and Specifications
or would require any costs with respect thereto not otherwise provided for in the Budget.

     4.11 Evidence that (a) no portion of the vertical Improvements is located in an area
designated by the Secretary of Housing and Urban Development as having special flood hazards, or
if any portion of the vertical Improvements is so located, evidence that flood insurance is in
effect; and (b) no portion of the Real Property is located in a federally, state or locally
designated wetland or other type of government protected area, or if any portion of the Real
Property is so located, evidence that the wetlands will not be impacted by the Work.

     4.12 Certified copies of (a) Borrower’s articles of organization, including all amendments
thereto; (b) the operating agreement of Borrower, including all amendments thereto; (c) the
articles of organization and operating agreement for each manager and/or managing member of
Borrower, and (d) such documents as Lender deems appropriate evidencing the authority of Borrower
to borrow the proceeds of the Loan and execute and deliver this Agreement and the other Loan
Documents.

     4.13 A form of Lease.

     4.14 Certified copies of all service contracts, development agreements and other material
agreements affecting the use, development or operation of the Project, if any, executed by the
Borrower.

     4.15 Evidence that the environmental condition of the Property is, and the environmental
condition of the Project upon completion will be, satisfactory to Lender. Such evidence shall
include, but shall not be limited to, a Phase I Environmental Audit certified to Borrower and
Lender. Such testing and investigation shall be performed by an environmental professional
acceptable to Lender in a manner satisfactory to Lender.

     4.16 Evidence that, as of the date of the Initial Advance, there has been no material adverse
change in the financial or other projections for the Project, the physical condition of the
Property or the financial condition of the Borrower or Guarantor since the date of the most recent
financial statements or projections delivered to Lender or the most recent inspections of the
condition of the Property made by the Consultant, as the case may be.

13

 

     4.17 An MAI appraisal prepared in accordance with the requirements of FIRREA by a licensed or
certified appraiser acceptable to Lender indicating that the amount of the Loan is not more than
sixty-four and two-tenths percent (64.2%) of the aggregate fair market “as-stabilized” value of
the Project.

     4.18 A reasonably detailed Project development and construction schedule in form and
substance reasonably acceptable to Lender.

     4.19 The consent of the Contractor, the Architect and the Engineer to the collateral
assignment of the Construction Contract, the Architectural Contract and the Engineering Contract,
respectively, pursuant to the Assignment of Agreements.

     4.20 The Plans and Specifications, which have been approved by Borrower and the Contractor
and approved by the appropriate governmental authorities, including detailed descriptions (with
drawings and specifications).

     5. DISBURSEMENT OF THE LOAN.

     5.1 Conditions Precedent in General. In addition to the other conditions set forth
herein, the obligation of Lender to make the Initial Advance and each subsequent Loan Advance under this
Agreement shall be conditioned upon and subject to the payment to Lender of all loan fees
then owing from Borrower to Lender and to satisfaction of all of the following conditions:

     (a) All representations and warranties contained in this Agreement and in the other
Loan Documents shall be true in all material respects on and as of the date of such
disbursement.

     (b) Borrower shall have performed all of its obligations under all Loan Documents
which are required to be performed on or prior to the date of such disbursement.

     (c) The Loan shall not be “out of balance” as determined under Section 5.8 below, and
the disbursement shall not cause the Loan to be “out of balance.”

     (d) There shall be no material adverse change in the financial condition of Borrowed
or any Guarantor as reasonably determined by Lender.

     (e) No Event of Default shall have occurred that has not been waived in writing by
Lender, and no Unmatured Default shall then exist.

     (f) No litigation or proceedings are pending (including proceedings under Title 11 of
the United States Code) against Borrower, Guarantor or the Project, which litigation or
proceedings, in the reasonable judgement of Lender, would adversely affect Borrower’s or
Guarantor’s ability to perform its respective obligations under the Loan Documents.

     5.2
Use of Loan Proceeds; Inspections of the Work. The proceeds of the Loan disbursed
to Borrower shall be used by Borrower solely for the purpose of paying (or reimbursement to
others for payment of) items of Project Cost actually incurred by Borrower, and, in connection
therewith, no Project Cost shall include expenses relating to any development, construction, operating or other
cost attributable to any project other than the Project specifically described in this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, all inspections of the Work made by Lender, the
Consultant or their respective agents, employees and designees shall be solely for Lender’s own
information and

14

 

shall not be deemed to have been made for or on account of Borrower or any other party. Borrower
hereby specifically relieves Lender of any and all liability or responsibility relating in any way
whatsoever to the construction of the Project, including but not limited to, the work thereat, the
material or labor supplied in connection therewith, and any errors, inconsistencies or other
defects in the Project or the Plans and Specifications.

     5.3 Disbursement Requests.

     (a) Borrower shall request and Lender shall be required to make disbursements of the
Loan not more frequently than once each calendar month (except that up to 3 times during
the term of the Loan, Borrower may submit twice monthly disbursements of the Loan). Lender
may at any time take such action as it deems appropriate to verify that the conditions
precedent to each disbursement have been satisfied, including, without limitation,
verification of any amounts due under the Construction Contract or any Subcontract.
Borrower agrees to cooperate with Lender in any such action. If in the course of any such
verification, any amount shown on any contract or subcontract entered into for the
performance of any portion of the Work, or any application for payment, sworn statement or
waiver of lien is subject to a possible discrepancy, such discrepancy shall be resolved by
Borrower to Lender’s satisfaction. Each request for disbursement shall be made within ten
(10) Business Days of the requested date of disbursement, by a letter from the chief
financial officer of Borrower, addressed to Lender, specifying in detail the amount and
mode of each disbursement and accompanied by the following, all in form and substance
satisfactory to Lender:

	 	(i)	 	An Owner’s Sworn Statement and disbursement request;
	 
	 	(ii)	 	A Contractor’s Application for Payment and
Sworn Contractor’s Statement from Contractor, and a statement of a
duly authorized officer of Contractor that all items of construction
cost have been incorporated into the Project in accordance with the
Plans and Specifications, together with waivers of lien with respect
to the current disbursement and all previous disbursements from the
Contractor and all subcontractors and materialmen to whom payment is
to be made, as are required by the Title Company as a condition to
issuing the date-down endorsement described in subparagraph 5.3(b)
below;
	 
	 	(iii)	 	A certificate of the Contractor certifying
(based on its diligent investigation of the Project and the Work then
performed) (A) that all construction to the date of the request for
disbursement has been completed in accordance with the Plans and
Specifications; (B) that the percentage of completion of each component
of the Work; (C) its approval of the request for disbursement; (D) that
there has been no material deviation from the contract amount under the
Construction Contract or any Subcontract or from the projected time of
completion of any component of the Work; and (E) that the remaining
undisbursed funds of the Loan (after giving effect to all amounts
previously certified for payment plus the amount then requested shall
be sufficient to pay all costs required to complete the construction of
the Project in accordance with the Plans and Specifications;

15

 

	 	(iv)	 	An inspection report of the Consultant (to be obtained by
Lender) certifying the percentages of completion of the components
of the Work and setting forth the amount authorized for disbursement
and such other matters as Lender may require (including compliance
with the Plans and Specifications). It is understood and agreed by
Borrower that any and all inspections of the Work made by Lender,
the Consultant or their respective agents, employees and/or
designees shall be solely for Lender’s own information and shall not
be deemed to have been made for or on account of Borrower or any
other party, and Lender shall have no liability or responsibility
relating in any way whatsoever to the construction of the Project,
including, but not limited to, the work thereon, the material or
labor supplied in connection therewith, and any errors,
inconsistencies or other defects in the Plans and Specifications;
and
	 
	 	(v)	 	Such other documents, assignments,
certificates and opinions as are required by the Title Company, or as
may be reasonably required by Lender.

     (b) Notwithstanding anything contained in this Agreement to the contrary, Lender shall
not be required to make any disbursement of the Loan pursuant to this Agreement until the
Title Company is prepared to issue an endorsement to the Title Policy, updating the same to
the date of such disbursement and increasing the amount of coverage thereunder to the
Principal Balance (taking into account the then current
disbursement), and insuring the lien
of the Mortgage to be superior to all defects in title other than the Permitted Exceptions
and other exceptions hereafter approved by Lender in writing.

     (c) No disbursement of any amount shown in the Budget as a contingency reserve shall
by made without Lender’s approval with respect to the type and amount of the requested
expenditure.

     5.4
Certifications, Representations and Warranties. Each request for disbursement by
Borrower shall constitute (a) Borrower’s certification that the representations and warranties
contained in Article 6 below are true and correct in all material respects as of the date of such
request, (b) Borrower’s certification that Borrower is in compliance with the conditions contained
in this Article 5, and (c) Borrower’s representation and warranty to Lender, with respect to the
Work, materials and other items for which payment is requested that (i) such Work and materials
have been incorporated into the Project (except for stored materials approved by Lender pursuant to
Section 5.12 below), free and clear of liens, claims and encumbrances, (ii) the value thereof is as
estimated therein, (iii) such Work and materials substantially conform to the Plans and
Specifications, this Agreement and all Applicable Laws, and (iv) the requisitioned value of such
Work and materials and the amounts of all other items of cost for which payment is requested by
Borrower have theretofore been in fact paid for in cash by Borrower or the same are then due and
owing by Borrower and (unless Lender disburses funds directly to the parties performing the Work or
to the Title Company) will in fact be paid in cash by Borrower within five days after Borrower’s
receipt of the requested disbursement. Neither review nor approval by Lender of requests for
disbursement or any information contained therein or any other information provided to Lender in
accordance with the other provisions of this Article 5 shall constitute the acceptance or approval
by Lender of any portion of the Work.

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     5.5
Amount of Disbursements; Retainage. Subject to the other conditions and
limitations set forth herein, the amount of each disbursement shall be the amount requested by
Borrower; provided, however, that (a) Lender shall have the right to retain 10% of each “hard
cost” item of Project Costs (other than (i) amounts requested for payment to suppliers of
materials only who have either fully delivered all materials or delivered such portion thereof
whereby it is reasonable and necessary to fully pay for such materials and (ii) amounts requested
for payment to subcontractors whose work has been completed and who have furnished a final lien
waiver and release), which Retainage shall be disbursed in accordance with the provisions of
Section 5.10 below, and (b) in no event shall Lender be obligated to disburse for any item an
amount in excess of the amount allocated for such item pursuant to the Budget (as the Budget may
be revised as permitted herein).

     5.6 Costs. For purposes of this Agreement: (a) the cost of labor and material (except
stored and unincorporated materials) furnished for the Work shall be deemed to be incurred by
Borrower when the labor and material have been incorporated into the Project and the payment
therefor is due and payable, (b) the cost of stored and unincorporated materials shall be deemed
to be incurred by Borrower when such materials are purchased by Borrower, (c) the cost of services
(other than labor included in the Work) shall be deemed to be incurred by Borrower when the
services are actually rendered and the payment therefor is due and payable, (d) real estate taxes,
interest and insurance premiums shall be deemed to be incurred by Borrower when such items become
due and payable, and (e) any other costs shall be deemed to be incurred by Borrower when the
payment therefor is due and payable, but not before the value to be received in return for such
cost has been received by Borrower.

     5.7 Reserves. In addition to any reserves for specific line items that are already
established in the Budget, if an Event of Default or Unmatured Default has occurred, Lender may
establish and set aside out of the undisbursed proceeds of the Loan, reserves (collectively, the
“Reserves”) in such amounts as may be reasonably estimated by Lender from time to time to provide
for payment of the items of Project Cost as the same may accrue or become payable prior to the
repayment in full of the Loan. Amounts set aside as Reserves shall not be available for
disbursement to Borrower for any purpose other than payment of the item or group or items for which
the Reserve was established. Based upon the facts then available to Lender, Lender may adjust and
reallocate the amount of any Reserve from time to time. Items for which Reserves may be established
shall include (i) interest on the Loan, (ii) real estate taxes and assessments, and (iii) premiums
on insurance policies and bonds (if any) required to be furnished by Borrower hereunder. Borrower
hereby acknowledges that Lender has established and set aside out of the Loan, an interest reserve
(the “Interest Reserve”) in the amount of $400,000.00 for the payment of interest on the Loan as
the same may accrue or become payable prior to the repayment in full of the Loan. Amounts set aside
as the Interest Reserve shall not be available for disbursement to Borrower for any purpose other
than payment of interest. Disbursement of the Interest Reserve shall be made only if there is
negative cash flow for the Property and the Interest Reserve shall be used only to the extent of
the excess of the negative cash flow to pay the interest on the Loan. Notwithstanding anything to
the contrary contained herein, Borrower shall not be required to pay interest on the Interest
Reserve unless funds are disbursed from such Interest Reserve. To the extent Reserves are
established for any of the items set forth in clauses (ii) and (iii) above and provided that (i) no
Event of Default or Unmatured Default hereunder has occurred, and (ii) the Loan is not out of
balance, as described in Section 5.8 below, Lender may, and at the request of Borrower shall,
disburse the Reserves for the respective purposes for which they have been set aside, either by
payment of items for which the Reserves have been set aside, or by reimbursement to Borrower for
payment so made by Borrower; provided that nothing herein shall impose upon Lender any obligations
whatsoever to see to the proper allocation of any such monies by Borrower.

17

 

     5.8 Loan In Balance.

     (a)
At all times prior to repayment of the Loan in full, (i) the sum of (A) the undisbursed
proceeds from the Loan (net of any unpaid accrued interest on the Loan) allocated to each line item
in the Budget (including any reserve specifically set aside for such line item) plus (B) the
aggregate amount of all amounts deposited by Borrower pursuant to Section 5.8(c) (the aggregate
amount of such proceeds being hereinafter referred to as the “Available Proceeds”) must be
sufficient, in Lender’s sole and absolute determination, to pay the unpaid costs and expenses that
will be incurred to complete such item, and (ii) the aggregate Available Proceeds must be
sufficient, in Lender’s reasonable determination, to pay all Project Costs remaining unpaid and all
operating, management and other expenses of the Project.

     (b) If Lender determines that (i) the costs and expenses to complete any line item in the
Budget exceeds the Available Proceeds allocated therefor, or (ii) the Project Costs remaining
unpaid and all estimated operating, management and other expenses of the Project, exceed the sum
of the Available Proceeds, then the Loan shall be deemed “out of balance” to the extent of such
excess.

     (c) If Lender deems the Loan to be out of balance as aforesaid, Borrower shall, within ten
(10) days after written request by Lender, deposit into an account maintained at Lender (and
pledged to Lender as additional security for the Loan) an amount equal to the excess amount or
amounts determined pursuant to subparagraphs (a) and (b) above of this Section 5.8 (the
“Balancing Deposit”‘) The sums thus deposited with Lender will be disbursed by Lender to
complete the Work prior to any further disbursement of Loan proceeds. If such deposit is not
made within such time, an Event of Default shall be deemed to have occurred. No interest shall
be payable to Borrower on the amounts so deposited pursuant to this subparagraph. Anything to
the contrary contained in this Section 5.8 notwithstanding, in the event that Borrower is
required to deposit the Balancing Deposit and the Project is thereafter completed with
subsequent savings that, had said savings occurred prior to the requirement of the Balancing
Deposit, would have rendered all or a portion of the Balancing Deposit to be unnecessary,
Borrower shall be entitled to a reimbursement from Lender equal to the lesser of (a) the amount
of such subsequent savings, and (b) the amount of the Balancing Deposit.

     (d) Lender shall not be required to disburse any portion of the Loan at any time that the
Loan is “out of balance” or if the requested disbursement would cause the Loan to be “out of
balance.”

     5.9
Escrow; Application of Disbursements.

     (a) Lender shall make each requested disbursement of the Loan within ten (10) Business Days
after all of the conditions precedent to such disbursement set forth in this Article have been
satisfied (including delivery of all documentation required under Section 5.3 above), except
that Lender, in its discretion, may make payments of Project Costs directly to Borrower (or, if
an Unmatured Default or Event of Default exists hereunder, to the person or entity Lender
determines is entitled to such payment or jointly to Borrower and such person or entity).

     (b) Notwithstanding the foregoing, Lender shall not be responsible, liable or obligated to
the contractors, subcontractors, suppliers, materialmen, laborers, architects, engineers, or any
other parties, for services or work performed, or for goods delivered by them or

18

 

any of them, in and upon the Land or employed directly or indirectly in the performance of the
Work, or for any debts or claims whatsoever accruing in favor of any such parties and against
Borrower or others, or against the Project. It is expressly understood and agreed that Borrower is
not and shall not be an agent of Lender for any purpose whatsoever. Without limiting the
generality of the foregoing, advances made at Lender’s option, directly to any contractor,
subcontractor or supplier of labor or materials, or any other party, shall not be deemed a
recognition by Lender of any third party beneficiary status of any such person or entity.

     (c) Borrower covenants and agrees that except for the Earn Out Proceeds, it shall receive all
advances of Loan proceeds to be made hereunder by Lender as a trust fund and that Borrower shall
withdraw and use said funds solely for the payment of the bills for the labor and materials used
in the performance of the Work for which such Loan funds were requested by Borrower, and for the
payment of the other items of Project Cost for which such Loan proceeds were requested by
Borrower, and for no other purpose whatsoever; however, nothing herein shall impose upon Lender
any obligation whatsoever to see to the proper application of any such monies by Borrower.

     (d) Whenever so requested by Lender, Borrower shall promptly furnish Lender written evidence
reasonably satisfactory to Lender that all monies theretofore advanced by Lender pursuant to this
Agreement have actually been paid or applied in payment of the cost of performance of the Work and
in payment of the other items of Project Cost for which such funds were advanced by Lender, and
until such evidence is produced, at the option of Lender, no future or additional payments or
advances of Loan funds need be made hereunder.

     5.10 Release of Retainage. Retainage(s) shall be released as follows:

     (a) Retainage on any Subcontract shall be released within thirty days after such
Subcontract has been fully performed and the following conditions have been satisfied:

	 	(i)	 	Borrower has delivered final and unconditional waivers of
lien from the subcontractor whose individual Subcontract has been fully
performed to the Title Company with copies to Lender;
	 
	 	(ii)	 	All conditions precedent to disbursement of proceeds of the
Loan as set forth in this Agreement have been fully satisfied; and
	 
	 	(iii)	 	Lender has received a certificate in writing signed by a
duly authorized officer of Contractor certifying that the Work provided for
in the Subcontract has been fully and satisfactorily completed in accordance
with the Plans and Specifications, and in substantial compliance with all
Applicable Laws, and the Consultant has approved all such Work.

     (b) Final disbursement of construction Retainages to the Contractor for the Work not
previously released shall be made upon satisfaction of the following conditions in addition
to satisfaction of the other conditions precedent for disbursement of proceeds of the Loan by
Lender:

	 	(i)	 	Borrower has delivered to Lender (A) a certificate in
writing signed by a duly authorized officer of the Contractor certifying that
all obligations of the Contractor under the Construction Contract and all
obligations of the

19

 

	 	 	 	subcontractors under the Subcontracts have been fully performed,
and (B) a certificate signed by the Contractor, certifying that the
construction of the Work has been completed in all respects in
accordance with the Plans and Specifications and the use and
occupancy of the Project is permitted under all Applicable Laws;
	 
	 	(ii)	 	If requested by Lender, Lender shall have
received a certificate in writing signed by the Consultant certifying
that the construction of the Work has been substantially completed in
all material respects in accordance with the Plans and Specifications
and the use and occupancy of the Project is permitted under all
Applicable Laws;
	 
	 	(iii)	 	Borrower has delivered to Lender all
applicable licenses or permits necessary for the use of the Project,
including without limitation, a certificate of occupancy the Project
(or a local equivalent, if applicable);
	 
	 	(iv)	 	Borrower has delivered to Lender certificates
of fire and extended coverage insurance as herein required (or, if
requested by Lender, copies of such policies), and if any Tenants are
in occupancy, rent loss insurance in form and substance reasonably
satisfactory to Lender, with Lender named as mortgagee and as an
additional insured party and loss payee, as applicable;
	 
	 	(v)	 	The Title Company is unconditionally prepared
to issue its final updated date down endorsement covering the
Principal Balance of the Loan, subject only to the Permitted
Exceptions and other exceptions approved by Lender in writing, and
containing its final forms of Comprehensive Endorsement 1 and ALTA 3.1
Zoning Endorsement (without exception and based on as-built
conditions), and including full coverage against all mechanics’ liens
and such other endorsements as are required under Section 4.4 above;
and
	 
	 	(vi)	 	Borrower has delivered to the Title Company and
Lender final and unconditional waivers of lien from the Contractor and
all subcontractors and materialmen who have supplied labor or material
in connection with the Work and who have not previously submitted such
final waivers.

     5.11 Lender’s Representatives. Lender, at Borrower’s expense, shall have the right to
engage personnel in connection with the negotiation and documentation of the Loan, including
without limitation, the Consultant, to (i) review and approve the Plans and Specifications, (ii)
review and approve Borrower’s final construction budget, (iii) conduct monthly inspections of the
Work and report on the progress of construction thereof, (iv) review and approve all change orders,
(v) review and approve applications for disbursements and accompanying documents, (vi) issue
reports and certificates to Lender, (vii) inspect the structural, mechanical, electrical, plumbing,
HVAC and roof systems constituting the Work, (viii) determine whether the Work has been completed
in accordance with the Plans and Specifications, and (ix) provide other services as requested by
Lender, and Borrower shall fully cooperate with the Consultant and other personnel in all
reasonable respects in connection therewith.

20

 

     5.12 Stored and Unincorporated Materials. No disbursement for materials
purchased by Borrower but not yet installed or incorporated into the Project shall be made
without Lender’s prior approval of the conditions under which such materials are purchased and
stored. In no event shall any such disbursement be made unless the materials involved have been
delivered to the Land or stored with a bonded warehouseman, with satisfactory evidence of
security, insurance both during storage and transit and suitable storage. Borrower shall provide
Lender, in connection with such materials, a copy of a bill of sale or other evidence of title
in Borrower, together with a copy of UCC searches against Borrower and the warehouseman, if
applicable, indicating no liens or claims which may affect such materials. Borrower shall
provide Lender, any architect and any applicable governmental agency or testing authority having
jurisdiction over the Project with access to inspect, test or otherwise examine such stored and
unincorporated materials.

     6. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to execute
this Agreement and to make the Loan, Borrower represents and warrants to Lender as follows:

     6.1 Borrower. Borrower is a duly formed limited liability company under the laws of
the State of Delaware, validly existing, in good standing and fully qualified to do business in
the States of Delaware and Georgia and has full power and authority to execute the Loan
Documents. The articles of organization and operating agreement of Borrower, copies of which
have been furnished to Lender, are in effect, unamended, and are the true, correct and complete
documents relating to the Borrower’s creation and governance.

     6.2 Guarantor. Each Guarantor has full power and authority to execute the Guaranty,
the Indemnity Agreement and all other Loan Documents executed by him, her or it and to perform his,
her or its respective obligations thereunder.

     6.3 Title. Borrower owns good and marketable fee simple title to the Real Property
and the Personal Property except for leased trailers for construction and leasing, leased office
equipment in the ordinary course of business, leased trash dumpsters and trash compactors, and
any leased golf carts used in the future at the Property. The Real Property and the Personal
Property are owned free and clear of all liens, claims and encumbrances, except the Permitted
Exceptions and except for leased trailers for construction and leasing, leased office equipment in
the ordinary course of business, leased trash dumpsters and trash compactors, and any leased golf
carts used in the future at the Property.

     6.4 Improvements. Subject to the terms and conditions contained in this Agreement,
Borrower intends to improve the Land with the Improvements. The Work will be performed
substantially in accordance with the provisions of the Plans and Specifications and the Budget
and all of the other requirements of this Agreement.

     6.5 Validity and Enforceability of Documents. Upon the execution and delivery of
the Loan Documents, the Loan Documents shall be valid and binding upon the parties that have
executed the same in accordance with the respective provisions thereof, and shall be enforceable
in accordance with the respective provisions thereof, subject only to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting the enforcement of
creditor’s rights. Execution, delivery and performance of the Loan Documents do not and will not
contravene, conflict with, violate or constitute a default under the articles of organization
creating Borrower, the operating agreement of Borrower or the resolutions of the directors of
Borrower, or any Applicable Law or any agreement, indenture or instrument to which Borrower, or
the Guarantor is a party or is bound or which is binding upon or applicable to the Project or
any portion thereof.

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     6.6 Litigation. There is not any condition, event or circumstance existing, or any
litigation, arbitration, governmental or administrative proceeding, action, examination, claims or
demand pending or, to the best of Borrower’s knowledge after due inquiry, threatened affecting
Borrower, the Guarantor or the Project, or involving the validity or enforceability of the Loan
Documents or involving any material risk of a judgment or liability which, if satisfied, would
have a material adverse effect on the priority of the lien of the Mortgage, or which would prevent
Borrower or the Guarantor from complying with or performing his, her or its obligations under this
Agreement, the Note, the Guaranty or any of the other Loan Documents within the time limits set
forth therein for such compliance or performance and no basis for any such matter exists.

     6.7 Utilities; Authorities. All utilities necessary for the use, operation and
occupancy of the Project (including, without limitation, water, storm sewer, sanitary sewer and
drainage, electric, gas and telephone facilities) are (or will be) available at the boundaries of
the Land (or in the streets adjoining the Land), and all requirements for the use of such
utilities have been (or will be) fulfilled. All building, zoning, safety, disabled persons,
health, fire, water district, sewerage and environmental protection agency permits and other
licenses and permits which are required by any governmental authority for construction of the
Improvements, and the use, occupancy and operation of the Project in accordance with the Plans and
Specifications have been obtained by or furnished to Borrower and are in full force and effect or
will be obtained by and maintained in full force and effect by Borrower when and as required by
any governmental authority.

     6.8 Solvency. Each Obligor is solvent and able to pay such Obligor’s debts as such
debts become due, and has capital sufficient to carry on such Obligor’s present business
transactions. The value of each Obligor’s property, at a fair valuation, is greater than the sum
of such Obligor’s debts. No Obligor is bankrupt or insolvent, nor has any Obligor made an
assignment for the benefit of such Obligor’s creditors, nor has there been a trustee or receiver
appointed for the benefit of such Obligor’s creditors, nor has there been any bankruptcy,
reorganization or insolvency proceedings instituted by or against any Obligor, nor will any
Obligor be rendered insolvent by such Obligor’s execution, delivery or performance of the Loan
Documents or by the transactions contemplated thereunder.

     6.9 Financial Statements. All financial statements submitted to Lender relating to
Borrower, the Guarantor and the Project are true, complete and correct, and have been prepared in
accordance with generally accepted accounting principles and fairly present the financial
condition of the Person to which they pertain and the other information therein
described and do not contain any untrue statement of a material fact or omit to state a fact
material to the financial statement submitted or this Agreement. No material adverse change has
occurred in the financial condition of Borrower, any Guarantor or the Project since the dates of
each such financial statements.

     6.10 Compliance with Laws. Upon completion of the Work in substantial accordance with the
Plans and Specifications, the Project and the use, occupancy and operation thereof for their
intended purposes will not violate any Applicable Laws, any contractual arrangements with third parties, or
any covenants, conditions, easements, rights of way or restrictions of record affecting the Project
that, individually, or in the aggregate, will have a material adverse effect on the financial condition
of the Project or the Borrower. Neither Borrower nor any agent thereof has received any notice, written or
otherwise, alleging any such violation, which violation has not previously been cured. Upon
completion of the Work in accordance with the Plans and Specifications, the Project will be in substantial
compliance and conformity with all zoning requirements, including without limitation, those relating to
setbacks, height, parking, floor area ratio, fire lanes and percentage of land coverage, and will not be a
non-

22

 

conforming or special use. No right to any off-site facilities will be necessary to insure
compliance by the Project with all Applicable Laws.

     6.11 Construction Contract. Pursuant to the Construction Contract, the Contractor
will construct the Improvements. The Construction Contract is in full force and effect, unamended,
and no default exists thereunder by any party thereto. In the event of any conflict between the
terms of the Construction Contract, any Subcontracts and this Agreement or any other Loan
Document, Borrower shall abide by and shall cause the Contractor to act in accordance with the
provisions of the Loan Documents.

     6.12 Subcontracts. The Subcontracts that have been entered into prior to the date
hereof are in full force and effect, unamended, and no default exists thereunder by
any party thereto.

     6.13 Architectural Contract. Pursuant to the Architectural Contract, the Architect
has agreed to perform architectural services in connection with the design and construction of
the Improvements. The Architectural Contract is in full force and effect, unamended, and no
default exists thereunder by either party thereto.

     6.14 Engineering Contract. Pursuant to the Engineering Contract, the Engineer has
agreed to perform engineering services in connection with the design and construction of the
Improvements. The Engineering Contract is in full force and effect, unamended, and no default
exists thereunder by either party thereto.

     6.15 Plans and Specifications. Borrower has delivered to Lender true, complete and
correct copies of the Plans and Specifications. The Plans and Specifications have been designed
using generally accepted trade practices, are complete in all respects, and contain all other
details requisite for the Project which, when built and equipped in accordance therewith, shall
be ready for the intended use thereof. Lender hereby agrees to approve any revision to the Plans
and Specifications which adds an additional eight (8) apartment units above the clubhouse to be
constructed on the Property, provided, however, such revision does not impair the value of the
Property in Lender’s reasonable judgment.

     6.16 Budget. The Budget is a true, complete and correct projection of the budget
with respect to the costs of the Work (including both hard costs and soft costs associated
therewith).

     6.17 Financing Statements. There are no UCC financing statements in effect with
respect to the Personal Property other than (i) those to be filed and/or recorded by Lender
which name Borrower as debtor and (ii) any that may be related to leased equipment permitted
herein.

     6.18 Event of Default. No Event of Default or Unmatured Default has occurred.

     6.19 No Defects. To the best of Borrower’s knowledge, there are no defects in the
design or construction of the Building which would have a material adverse affect on its value,
safety or intended use.

     6.20 Additional Agreements. There are no management, leasing or development
agreements in existence that affect the Project, other than those described in the schedule of
Permitted Exceptions or as previously delivered to Lender.

     All representations and warranties which have been made by Borrower in this Agreement or the
other Loan Documents shall be true in all material respects at the time of each disbursement of
the Loan,

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and in the event of any material breach, misrepresentation or omission after the expiration
of any applicable grace period, Lender shall have the absolute right to terminate its obligations
under this Agreement (without any obligation to refund any loan or other fees previously paid),
and upon demand by Lender, Borrower shall reimburse Lender for the Loan Expenses, and Lender
shall be entitled to recover from Borrower all losses and damages resulting therefrom.

     7. BORROWER’S COVENANTS.

     7.1 Manner of Construction. Borrower shall, at its sole cost and expense, cause the
construction of the Project to be diligently and expeditiously carried out, in a good and
workmanlike manner, substantially in accordance with the Plans and Specifications and all
Applicable Laws. All materials, fixtures, equipment or articles used in the renovation,
construction or equipping of the Project shall materially comply with the Plans and Specifications.
Without limiting the generality of the foregoing, Borrower will commence construction of the
Project on or prior to the Construction Commencement Date and will use commercially reasonable
efforts to cause construction to continue without interruption (except as provided in Section 8(d)
below) until completion, and to be completed in accordance with the Plans and Specifications and
Applicable Laws prior to the Construction Completion Date, subject to force majeure. Construction
of the Project shall not be deemed to be complete until the Contractor and the Consultant have
certified that all space located within the Project can be used and occupied in accordance with all
Applicable Laws and a certificate of occupancy (or local equivalent) has been issued by the City of
Statesboro, Georgia therefor.

     7.2 Certificate of Completion. Within fifteen days after the Project is completed,
Borrower shall deliver to Lender a certificate of the Contractor stating that the Project has
been completed substantially in accordance with the Plans and Specifications and all Applicable
Laws.

     7.3 Change Orders. Borrower shall not, without the prior written approval of Lender,
make or permit any modification of the Plans and Specifications, or amend or modify the
Construction Contract, the Architectural Contract or the Engineering Contract or enter into any
change orders or additional contracts for the performance of any portion of the Work; provided,
however, Borrower shall have the right to enter into one or more change orders without Lender’s
consent, so long as (a) no Event of Default or Unmatured Default exists under this Agreement or
any of the other Loan Documents, (b) the change order does not individually result in a change in
the cost of constructing the Project of more than $50,000, (c) the change order does not,
together with all other change orders, result in a change in the cost of constructing the Project
of more than $200,000, (d) the change order does not affect any structural portion of the
Project, the overall appearance of the Project or the use or operation of the Project in any
material respect, and (e) any increased cost resulting from the change order is paid for from the
contingency line item in the Budget, cost savings in other line items in the Budget or any
additional funds deposited by Borrower with Lender. In any event, Borrower shall deliver to
Lender copies of all such change orders not requiring Lender’s prior approval, together with all
related documentation in the next draw package submitted to Lender. Except to the extent
expressly permitted in this Section, Borrower shall not, without the prior written approval of
Lender and the Consultant, make or permit any change in the Plans and Specifications.

     7.4 Compliance with Laws. Borrower shall comply or cause compliance with all
Applicable Laws governing the construction, development, use and operation of the Project.
Evidence of such compliance shall be submitted to Lender on request, if Lender has reason to
believe that there has been an incident of non-compliance.

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     7.5 Inspection. Upon reasonable prior written or oral notice (which shall not be
required in the event of an emergency), Borrower shall permit inspection of the Property by
Lender, the Consultant and any other agent or designee of Lender. In addition, upon reasonable
prior written or oral notice (which notice shall not be required in the event of an emergency),
Borrower shall permit Lender and/or its agents and designees access to and the right to inspect,
audit and copy all books, records, contracts and other documents and information relating to
Borrower, the Guarantor or the Property. Lender shall use reasonable efforts to keep confidential
all information and documentation obtained by Lender in connection with such audits and
inspections, except to the extent that Lender determines, in its reasonable discretion, a need to
disclose same; provided, however, under no circumstances shall Lender have any liability to
Borrower or Guarantor in the event of an unintentional disclosure or disclosure deemed necessary
by Lender. All such books, records and accounts of operations relating to the Property shall be
kept in accordance with sound accounting practices consistently applied. Borrower shall promptly
respond to any inquiry from Lender for information with respect to the Property, which information
may be verified by Lender at Lender’s expense (unless an Unmatured Default or Event of Default
exists, in which case verification will be at Borrower’s expense); provided, however, that Lender
shall at all times be entitled to rely upon any statements or representations made by Borrower or
any agent thereof.

     7.6 Mechanics’ Liens. Borrower shall use good faith efforts not to permit any
mechanics’ lien claims to be filed or otherwise asserted against the Project or against any funds
due any contractor or subcontractor, and Borrower shall promptly (and in any event within sixty
days after Borrower has received notice of such filing) discharge or cause to be discharged (by
payment, bonding over or otherwise) the same in case of the filing of any claims for lien or
proceedings for the enforcement thereof; provided that in connection with any such lien or claim
which Borrower may in good faith desire to contest, Borrower may contest the same by appropriate
legal proceedings diligently prosecuted, but only if Borrower shall furnish to the Title Company
such security or indemnity as the Title Company requires to induce the Title Company to issue an
endorsement to the Title Policy insuring over the exception created by such lien, and provided
further, that Lender shall not be required to make any further disbursements of the Loan until any
mechanics’ lien claims have been so insured against by the Title Company.

     7.7 Release by Lender. With respect to the matters set forth in Section 7.6 above, if
Borrower shall (a) fail promptly to discharge any asserted liens or claims as required herein, or
(b) fail promptly to contest asserted liens or claims or to give security or indemnity in the
manner provided in Section 7.6 above, or (c) having commenced to contest the same, and having
given such security or indemnity, fail to prosecute such contest with diligence, or to maintain
such indemnity or security so required by the Title Company for its full amount, or (d) upon
adverse conclusion of any such contest, fail promptly to cause any judgment or decree to be
satisfied and lien to be released, then Lender may, but shall not be required to, procure the
release and discharge of any such claim and any judgment or decree thereon and, further, may, in
its sole discretion, effect any settlement or compromise of the same, or may furnish such security
or indemnity to the Title Company, and any amounts so expended by Lender, including premiums paid
or security furnished in connection with the issuance of any surety company bonds, shall be deemed
to constitute disbursements of the proceeds of the Loan hereunder and shall bear interest from the
date so disbursed until paid at the Default Rate. In settling, compromising or discharging any
claims for lien, Lender shall not be required to inquire into the validity or amount of any such
claim.

     7.8 Financial Statements; Reports. Borrower shall deliver or cause to be delivered to
Lender each month, a detailed report showing the progress of the Work. In addition to such progress
reports and any other financial statements required to be delivered to Lender pursuant to the provisions
of any of the

25

 

other Loan Documents, Borrower will from time to time furnish or cause to be furnished to Lender
such information and reports, financial and otherwise, concerning each Obligor, the performance of
the Work and the operation of the Project as Lender reasonably requires, including, without
limitation, the following:

     (a) Upon construction completion, within ninety (90) days after the end of each fiscal
year (ending July 31 of each year) and within sixty (60) days after the end of each fiscal
quarter, compiled financial statements of the Project on a form acceptable to Lender,
containing income and expense statements and a balance sheet.

     (b) Within ninety (90) days after the end of each fiscal year, financial statements
for each Guarantor, such financial statements to be on Lender’s standard form or another
form acceptable to Lender, and certified by such Guarantor as fairly and accurately
presenting the information contained therein.

     (c) Within thirty (30) days of the filing thereof (but not later than April 1 unless
proper extension requests have been filed and copies delivered to Lender within ten days of
the extended filing date), copies of the federal and state income tax returns for each
Obligor, together with all supporting schedules.

     (d) Upon construction completion, within thirty (30) days after the end of each fiscal
quarter, a rent roll covering all leases of space in the Project, on a form acceptable to
Lender, and certified by the chief financial officer of Borrower as fairly and accurately
presenting the information contained therein.

     (e) Upon request from Lender, leasing updates, general building information, projected
tax expenses, tax information, and applicable market data.

     7.9 Affirmation of Representations and Warranties. Borrower agrees that all
representations and warranties of Borrower contained in Article 6 hereof shall remain true in all
material respects at all times until the Loan is repaid in full.

     7.10 Title. Except for (a) the Mortgage and other security for the Loan, (b) the lien
of general real estate taxes payment of which is not yet due, (c) mechanics’ liens which are
contested in the manner permitted in Paragraph 7.6 above, and (d) any other Permitted Exceptions,
Borrower shall keep its fee simple title to the Project free and clear of all liens, claims and
encumbrances, whether senior or junior to or at parity with the Mortgage.

     7.11 Proceedings Affecting Property. If any proceedings are filed seeking to enjoin or
otherwise prevent or declare invalid or unlawful the construction, occupancy, use, maintenance or
operation of the Project, or any portion thereof, Borrower shall cause such proceedings to be
vigorously contested in good faith, and in the event of an adverse ruling or decision, prosecute
all allowable appeals therefrom, and shall, without limiting the generality of the foregoing,
resist the entry or seek the stay of any temporary or permanent injunction that may be entered, and
use its commercially reasonable efforts to bring about a favorable and speedy disposition of all
such proceedings. All such proceedings, including without limitation, all of Lender’s costs, and
fees and disbursements of Lender’s counsel in connection with any such proceedings, whether or not
Lender is a party thereto, shall be at Borrower’s expense. To the extent that Lender incurs any
such expenses, including reasonable attorneys’ fees and fees and charges for court costs, bonds and
the like, Borrower shall reimburse Lender for such expenses

26

 

and the amount due Lender shall bear interest from the date so incurred by Lender until repaid
to Lender at the Default Rate and shall be payable to Lender on demand.

     7.12 Disposal and Encumbrance of Property. Borrower shall not, without Lender’s
prior written consent (unless such consent is not required, as expressly provided in the Loan
Documents), suffer, permit or enter into any agreement for any sale, lease, transfer, or in any
way encumber or dispose of or grant or suffer any security or other assignment (collateral or
otherwise) of or in all or any portion of the Project; provided, however, that Borrower, without
Lender’s prior written or verbal consent, may enter into (i) Leases in accordance with the terms
and conditions of the Assignment of Leases and Rents, (ii) customary utility easements necessary
for the development of the Project and (iii) the types of leasing arrangements described in
Section 6.3 hereof. Any consent given by Lender or any waiver of default under this Section,
shall not constitute a consent to, or waiver of any right, remedy or power of Lender under any
subsequent default hereunder..

     7.13 Insurance. Borrower shall pay or cause to be paid all premiums on all
insurance policies required from time to time under the Mortgage, no later than the date of
renewal of any such policies, and Borrower shall furnish to Lender, certificates or other
written documentation evidencing additional and/or renewal policies in form, and with companies,
coverage and amounts satisfactory to Lender. In the event of failure by Borrower to provide such
evidence of insurance, Lender may, but shall not be required to, place insurance and treat the
amounts expended therefor as disbursements of Loan proceeds and such amounts from the date so
expended by Lender until repaid to Lender shall bear interest at the Default Rate.

     7.14 Performance of Obligations; Notice of Default. Borrower shall promptly and
fully perform and comply in all material respects with the obligations, terms, agreements,
provisions and requirements of this Agreement and the other Loan Documents and all other
documents and instruments relating thereto and will not permit to occur any default or breach
hereunder or thereunder. Borrower shall promptly give to Lender notice of the occurrence of any
Unmatured Default or of any event that could have a material adverse effect on any security for
the Loan or on Borrower’s ability to perform its obligations under this Agreement or any of the
other Loan Documents or on the Guarantor’s ability to perform his, her or its obligations under
the Guaranty and the other Loan Documents to which Guarantor is a party.

     7.15 Restrictions Affecting Borrower. Borrower covenants and agrees that, without
the prior written consent of Lender, there shall not occur any amendment or modification of the
Articles of Organization establishing Borrower. At all times prior to the repayment of the Loan,
(A) Borrower, without Lender’s prior written consent, shall not enter into any contract or
agreement for the provision of services or otherwise with respect to the Project with any member
or manager or affiliate of Borrower, unless such contract or agreement is an arms-length, market
rate agreement and is cancelable upon thirty days written notice from any owner of the Project;
and (B) Borrower shall not be dissolved or its existence terminated.

     7.16 Use of Receipts; Limitation on Distributions. Borrower shall cause all rents and
other income and receipts realized and received by Borrower, if any, from and in connection
with the Project to , be used for the purpose of paying the actual costs and expenses incurred by
Borrower in connection with the ownership, operation, management and repair of the Project,
including without limitation, operating expenses, real estate taxes, insurance premiums and
interest on the Loan. Borrower shall not make any distributions to its members until the Loan is
repaid in full; provided that Borrower may make such distributions if the Project has achieved, and
is maintaining, a Debt Service Coverage Ratio of not less

27

 

than 1.0 to 1.0; provided further that Borrower shall not distribute any permitted prepaid
rents in excess of the amount attributable to rental payments due for the current month. In the
event the Project at any time is not maintaining a Debt Service Coverage Ratio of not less than
1.0 to 1.0, Borrower shall not make any such distributions.

     7.17 Budget. With the exception of change orders permitted herein, Borrower shall not make any
changes in the expenses contained in the Budget without the prior written consent of Lender;
provided, however, that Borrower shall have the right to reallocate a final cost savings in a
particular line item of the Budget to the contingency line item of the Budget without Lender’s
consent, provided Borrower has delivered such documentation as is reasonably required by Lender to
confirm such cost savings. Borrower shall not be entitled to reallocate among line items in the
Budget without the prior written consent of Lender, which consent shall not be unreasonably
withheld, if Borrower has (a) proposed the reduction of a line item and the reallocation of the
amount of such reduction to other line items in the Budget, and (b) provided Lender with
satisfactory evidence that the reduction of a line item is appropriate and reasonable because the
amount originally set forth with respect thereto will not be required to complete said item. Lender
agrees to use good faith efforts to respond to any such requested reallocation within ten (10) days
of Borrower’s request In the event the Project is completed with a final cost savings, Lender,
after any reimbursement to Borrower pursuant to the last sentence of Section 5.8(c), shall reduce
the amount of the Loan by the amount of such cost savings, and the lesser of (i) such reduced Loan
amount, or (ii) if the Earn-Out Proceeds have not been advanced, $15,057,000.00 shall be used for
purposes of calculating Debt Service thereafter until such time as the Earn-Out Proceeds may be
advanced to Borrower.

     7.18 Management and Leasing Agreements; Subordination. Borrower shall not amend, extend,
substitute or enter into any new management or property leasing agreement covering all or any
portion of the Project without Lender’s prior written consent. In the event that Lender grants
such, consent, Borrower shall cause the manager or leasing broker under said agreement to enter
into aft agreement with Lender, acceptable in form and substance to Lender, pursuant to which said
manager or broker subordinates its liens for unpaid fees to the liens of the Mortgage and the
other Loan Documents.

     7.19 Additional Documents. Except as permitted under Section 7.12 hereof, Borrower shall not
execute or record any document pertaining to, affecting or running with all or any portion of the
Property, including, without limitation, any condominium declaration or plat, without the prior
written approval of Lender of the form and substance of such documents, which approval shall not
be unreasonably withheld. Upon granting such approval, Lender agrees to execute such consents and
subordination agreements with respect to such condominium documents as are acceptable to Lender in
its reasonable discretion.

     7.20 Survey. If requested by Lender in writing, within thirty days subsequent to the
completion of the foundation of the final Building and as a condition to any subsequent
disbursement by Lender, the Survey shall be updated to show the location of such Building
foundations; that such foundations are within all applicable lot, side, rear and set-back lines; and that there are
no encroachments by the improvements over easements or adjoining property. If requested by
Lender in writing, within thirty days subsequent to the substantial completion of the Work
and as a condition to the final Loan Advance by Lender, the Survey shall be updated to show
the Buildings “as built” and to show the location of all utilities and any additional
easements or other matters of record affecting the Project.

     7.21 Borrower’s Accounts. Borrower shall maintain any and all operating, security deposit,
and reserve accounts for the Property with Lender and pledge the same to Lender as security
for the Loan.

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     7.22 Ineligible Securities. Borrower represents and warrants that no portion of
any advance or loan made hereunder shall be used directly or indirectly to purchase ineligible
securities, as defined by applicable regulations of the Federal Reserve Board, underwritten by any
affiliate of Lender during the underwriting period and for thirty (30) days thereafter.

     7.23 OFAC. The Borrower shall (a) ensure that no person or entity that owns a
controlling interest in or otherwise controls the Borrower is or shall be listed on the Specially
Designated Nationals and Blocked Person List or other similar lists maintained by the Office of
Foreign Assets Control (“OFAC”), the Department of the Treasury or included in any
Executive Orders, (b) not use or permit the use of any proceeds of the Loan to violate any of the
foreign asset control regulations of OFAC or any enabling statute or Executive Order relating
thereto, and (c) comply with all applicable Bank Secrecy Act (“BSA”) laws and regulations, as
amended.

     7.24 Loan Expenses. Borrower agrees to pay all of the Loan Expenses. Any Loan
Expenses paid by Lender shall bear interest commencing on the date demand for repayment thereof is
made by Lender until repaid to Lender at the Default Rate and shall be paid by Borrower upon
demand, or may be paid by Lender at any time by disbursement of proceeds of the Loan. Any Loan
Expenses paid by Lender shall be reimbursed to Lender by Borrower regardless of whether there
shall be any disbursements of the Loan.

     7.25 Lender’s Action for Lender’s Own Protection Only. The authority herein conferred
upon Lender and any action taken by Lender or Consultant or their agents or employees in making
inspections of the Property, attending regularly scheduled Project meetings, procuring sworn
statements and waivers of lien, approving the Construction Contract and, if applicable,
Subcontracts and approving Plans and Specifications will be taken by Lender and Consultant and by
their agents or employees for their own protection only, and neither Lender nor Consultant nor
their agents or employees shall be deemed to have assumed any responsibility to Borrower or any
Guarantor or any other person or entity with respect to any such action herein authorized or taken
by them or with respect to the proper construction and equipping of the Project, performance of the
Construction Contract or Subcontracts or prevention of claims for mechanics’ or materialmen’s
liens.

     7.26 DSCR. On August 15, 2010 the Project shall have achieved a Projected Debt
Service Coverage Ratio of not less than 1.00 to 1.00; provided, however, that the definition of
Debt Service for purposes of this Section 7.26 only shall mean during any Quarter, the actual
interest payments on the Loan that are due and payable during such Quarter.

     7.27 Depository Relationship. From and after the date hereof, Borrower shall
establish and maintain deposits consisting of cash and operating accounts with Lender in the
amount of not less than $2,000,000.00, and Borrower shall cause Harrison Street Partners LP, to
maintain additional deposits consisting of cash and operating accounts with Lender in the amount
of not less than $1,000,000.00.

     7.28 Construction of Clubhouse. In the event Borrower elects to add an additional
eight (8) apartment units to the Project above the clubhouse, Borrower shall not commence
construction of the clubhouse until the revised Plans and Specifications have been approved by
Lender and the appropriate governmental agency.

     8. EVENTS OF DEFAULT. The occurrence of any one or more of the following shall
constitute an “Event of Default”:

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     (a) Failure by Borrower or any other Obligor to make: (i) any payment of principal or interest
under the Note when due, or (ii) any other payment under the Loan Documents within ten (10) days after written notice from Lender; or.

     (b) Failure by Borrower to perform or cause to be performed any other obligation or observe
any other condition, covenant, term, agreement or provision required to be performed or observed
by Borrower contained in this Agreement or in any of the other Loan Documents and not
specifically referred to elsewhere in this Section 8; provided, however, that if such failure by
its nature can be cured, then so long as the continued operation and safety of the Project, and
the priority, validity and enforceability of the liens created by this Agreement, the Mortgage
or any of the other Loan Documents and the value of the Property is not materially impaired,
threatened or jeopardized, then Borrower shall have a period (“Cure Period”) of thirty
(30) days after Borrower obtains actual knowledge of such failure or receives written notice of
such failure to cure the same and an Event of Default shall not be deemed to exist during the
Cure Period (provided, however, such period shall be limited to ten (10) days if such failure
can be cured by the payment of money), provided further that if Borrower commences to cure such
failure during the Cure Period and is diligently and in good faith attempting to effect such
cure, the Cure Period shall be extended for sixty (60) additional days, but in no event shall
the Cure Period be longer than ninety (90) days in the aggregate; or

     (c) The existence of any material inaccuracy or untruth in any representation or warranty
contained in this Agreement or any other Loan Documents, or of any statement or certification as
to facts delivered to Lender by or on behalf of Borrower or the Guarantor which would have a
material adverse effect on the Project or Borrower’s and Guarantor’s obligations under the Loan
Documents; provided, however, that if the underlying condition of such inaccurate
representation, warranty, statement or certification is susceptible of being cured, Borrower or
Guarantor, as applicable, shall have a period of ten (10) days to make such representation,
warranty, statement or certification true and correct.

     (d) A discontinuance of the construction of the Work for a period of thirty consecutive
days (unless otherwise approved by Lender), other than a discontinuance resulting from strikes,
acts of God, adverse weather conditions or other occurrences beyond the reasonable control of
Borrower (it being understood that a delay caused by an insufficiency of funds shall not be
deemed to be beyond the control of Borrower), or any delay in the Work, regardless of cause, the
result of which may be, in Lender’s sole judgment, that the Work will not be substantially
completed prior to the Construction Completion Date.

     (e) Borrower or any Guarantor, or any successors or permitted assigns of any of them, shall:

	 	(i)	 	file a voluntary petition in bankruptcy or an arrangement
or reorganization under any federal or state bankruptcy, insolvency or
debtor relief law or statute (hereinafter referred to as a “Bankruptcy
Proceeding”);
	 
	 	(ii)	 	file any answer in any Bankruptcy Proceeding or any other
action or proceeding admitting insolvency or inability to pay his, her or
its debts;

30

 

	 	(iii)	 	fail to oppose, or fail to obtain a vacation or stay of, any
involuntary Bankruptcy Proceeding within sixty (60) days after the filing
thereof;
	 
	 	(iv)	 	solicit or cause to be solicited petitioning creditors for
any involuntary Bankruptcy Proceeding against Borrower or Guarantor;
	 
	 	(v)	 	be granted a decree or order for relief, or be adjudicated
a bankrupt or declared insolvent in any Bankruptcy Proceeding, whether
voluntary or involuntary;
	 
	 	(vi)	 	have a trustee or receiver appointed for or have any court
take jurisdiction of its property, or the major part thereof, or all of any
portion of the Property, in any voluntary or involuntary proceeding for the
purpose of reorganization, arrangement, dissolution or liquidation, and,
with respect to an involuntary proceeding only, such trustee or receiver is
not discharged or such jurisdiction is not relinquished, vacated or stayed
on appeal or otherwise, within sixty (60) days after the commencement
thereof;
	 
	 	(vii)	 	make an assignment for the benefit of creditors;
	 
	 	(viii)	 	consent to any appointment of a receiver or trustee or liquidator of all of
its property, or the major part thereof, or all or any portion of the
Property; or
	 
	 	(ix)	 	have an attachment or execution levied with respect to, or
other judicial seizure be effected for, all or substantially all of its
assets or all or any portion of the Property, or the placing of any
attachment, levy of execution, charging order, or other judicial seizure on
the interest of the parent of Borrower; or

     (f) Borrower intentionally causes or knowingly permits any of the Work to be performed in a
manner which is materially contrary to the Plans and Specifications or any provisions of this
Agreement or the other Loan Documents; provided, however, that if such contrary Work is susceptible
of being cured, Borrower shall have a period of thirty (30) days to cause such Work to be redone in
material compliance with the Plans and Specifications.

     (g) Any sale, transfer, lease, assignment, conveyance, financing, lien, encumbrance or other
transaction made in violation of Sections 7.12 or 7.16 above.

     (h) Failure of Borrower for a period of thirty (30) days after Lender’s demand to
procure the reversal, dismissal or disposition to Lender’s satisfaction of any order enjoining or
otherwise preventing or declaring invalid or unlawful the construction, occupancy, maintenance,
operation or use of the Project, or any portion thereof, in the manner required by the terms of
this Agreement, or of any proceedings which could or might affect the validity or priority of the
lien of the Mortgage or any of the other security for the Loan, or which could materially affect
Borrower’s ability to perform its obligations under this Agreement or the other Loan Documents.

     (i) The assignment or attempted assignment of this Agreement by Borrower without
Lender’s prior written consent.

31

 

     (j) The filing of formal charges under any federal, state or local law, statute or
ordinance for which Borrower’s forfeiture of all or any portion of the Project is a
potential penalty, which is not dismissed within thirty (30) days of such filing.

     (k) The occurrence of the death or legal incompetency of any Guarantor; provided an
Event of Default shall not be deemed to exist if within the sixty (60) day period
immediately following such death or declaration of legal incompetency the Borrower provides
the Lender with a substitute guarantor who is acceptable to the Lender in the Lender’s sole
discretion, and such substitute guarantor executes a guaranty in favor of the Lender in
form and substance substantially similar to the existing guaranty and otherwise satisfactory
to the Lender.

     (1) The Construction Contract is terminated without Lender’s written consent.

     (m) The occurrence of a material adverse change in the financial condition of
Borrower or Guarantor; provided, an Event of Default shall not be deemed to exist if
within the sixty (60) day period immediately following the discovery of such material
adverse change the Borrower provides the Lender with a substitute guarantor who is
acceptable to the Lender in the Lender’s sole discretion, and such substitute guarantor
executes a guaranty in favor of the Lender in form and substance substantially similar to
the existing guaranty and otherwise satisfactory to the Lender.

     (n) The occurrence of an Event of Default under any of the other Loan Documents.

     9. REMEDIES. Upon the occurrence of any Event of Default (unless waived by Lender),
Lender, in addition to availing itself of any remedies conferred upon it at law or in equity and
by the terms of the Note, the Mortgage and the other Loan Documents, may pursue any one or more
of the following remedies first, concurrently or successively with each other and with any other
available remedies, it being the intent hereof that none of such remedies shall be to the
exclusion of any others:

     (a) Take possession of the Project and complete the Work and do anything necessary or
desirable in Lender’s sole judgment to fulfill the obligations of Borrower hereunder,
including either the right to avail itself of and procure performance of the Construction
Contract, any Subcontracts or any other contract entered into for the performance of all
or any portion of the Work (or any substitute therefor), or to let new or additional
contracts with the same contractors or subcontractors or others, and to employ watchmen to
protect the Project from injury. Without restricting the generality of the foregoing and
for the purposes aforesaid, Borrower hereby appoints and constitutes Lender its lawful
attorney-in-fact with full power of substitution (i) to complete the Work in the name of
Borrower; (ii) to use portions of the Loan or other funds which may be reserved, escrowed
or set aside for any purposes hereunder at any time to complete the Work; (iii) to make
changes in the Plans and Specifications which shall be reasonably necessary or reasonably
desirable to complete the Work; (iv) to retain or employ new general contractors,
subcontractors, architects, engineers and inspectors as shall be required for such
purposes; (v) to pay, settle or compromise all existing bills and claims, which may be
liens or security interests or to avoid such bills and claims becoming Hens or security
interests against the Project, or as may be necessary or desirable for the completion of
the Work or for the clearance of title; (vi) to execute all applications and certificates
in the name of Borrower which may be required by any of the Loan Documents; (vii) to
prosecute and defend all actions or proceedings in connection with the Work; (viii) to
take such action and require such performance as it deems necessary under any of the bonds
to be furnished pursuant to the provisions hereof and to make settlements and

32

 

compromises with the surety or sureties thereunder, and in connection therewith, to execute
instruments of release and satisfaction; it being understood that the foregoing power of
attorney is coupled with an interest and cannot be revoked. All sums expended by Lender
pursuant to this Article 9 shall be deemed to have been paid to Borrower and secured by the
Mortgage and the other Loan Documents, and shall bear interest at the Default
Rate until repaid to Lender.

     (b) Withhold further disbursements of proceeds of the Loan.

     (c) Declare the unpaid indebtedness evidenced by the Note to be immediately due and payable.

     (d) Apply the balance of any deposits made with Lender toward the repayment of the Loan.

     10. MISCELLANEOUS.

     10.1 Additional Indebtedness. If any advances or payments made by Lender pursuant to
this Agreement or any other Loan Document, together with disbursements of the Loan, shall exceed
the aggregate face amount of the Note, all such advances and payments shall constitute additional
indebtedness secured by the Mortgage and all other security for the Loan, and shall bear interest
at the Default Rate from the date advanced until paid.

     10.2 Additional Acts. Borrower shall, upon request, execute and deliver such further
instruments and documents and do such further acts and things as may be reasonably required to
provide to Lender the evidence of and security for the Loan contemplated by this Agreement.

     10.3 Loan Agreement Governs. In the event of any inconsistency between any provision
of this Agreement and any provision of any other Loan Document, the provision of this Agreement
shall govern; provided, however, that the provisions of all of the Loan Documents shall be
construed as an integrated set of provisions governing the Loan and, accordingly, shall be
interpreted and construed liberally to give the maximum validity, enforceability and effect to all
of such provisions.

     10.4 Additional Advances. If an Event of Default shall occur, Lender may, but shall
not be obligated to, take any and all actions to cure such default, and all amounts expended in so
doing, all Loan Expenses and all other amounts paid or advanced by Lender pursuant to the Loan
Documents, and all other amounts advanced by Lender in connection with the performance of the Work
or preserving any security for the Loan, shall constitute additional advances of the Loan, shall
be secured by the Mortgage and all other security for the Loan, and shall bear interest at the
Default Rate from the date advanced until paid.

     10.5 Amendment; Waiver; Approval. This Agreement shall not be amended, modified or
supplemented without the written agreement of Borrower and Lender at the time of such amendment, modification or supplement. No waiver of any provision of this Agreement or any of the other Loan
Documents shall be effective unless set forth in writing signed by the party making such waiver,
and any such waiver shall be effective only to the extent therein set forth. Failure by Lender to
insist upon full and prompt performance of any provisions of this Agreement or any of the other
Loan Documents, or to take action in the event of any breach of any such provision or upon the
occurrence of any Event of Default, shall not constitute a waiver of any rights of Lender, and
Lender may at any time thereafter exercise all available rights and remedies with respect to such
breach or Event of Default. Receipt by Lender of any instrument or document shall not constitute or
be deemed to be an approval thereof. Any

33

 

approvals required under any of the other Loan Documents must be in writing, signed by
Lender and directed to Borrower.

     10.6 Notice. All notices or other written communications hereunder shall be deemed
to have been properly given (a) upon delivery, if delivered in person, (b) one (1) Business Day
after having been deposited for overnight delivery with any reputable overnight courier service, or (c) three
(3) Business Days after having been deposited in any post office or mail depository regularly maintained
by the U.S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt
requested, addressed to the addresses set forth below in this Section or as such party may from time to
time designate by written notice to the other parties. Either party by notice to the other in the
manner provided herein may designate additional or different addresses for subsequent notices or
communications:

	 	 	 

	To Lender:

	 	The PrivateBank and Trust Company
	 

	 	120 South LaSalle Street
	 

	 	Chicago, IL 60603
	 

	 	Attn: Commercial Real Estate Division
	 
	 	 
	With copy to:

	 	Dykema Gossett PLLC
	 

	 	10 S. LaSalle Street
	 

	 	Suite 2300
	 

	 	Chicago, Illinois 60606
	 

	 	Attn: Michael S. Kurtzon, Esq.
	 
	 	 
	To Borrower:

	 	Campus Crest at Statesboro, LLC
	 

	 	2100 Rexford Road
	 

	 	Suite 414
	 

	 	Charlotte, North Carolina 28211
	 

	 	Attn: General Counsel
	 
	 	 
	With copy to:

	 	Bradley Arant Boult Cummings LLP
	 

	 	1819 5th Avenue North
	 

	 	Birmingham, Alabama 35203
	 

	 	Attn: Dawn Helms Sharff
	 
	 	 
	And with Copy to

	 	Harrison Street Real Estate Capital
	 

	 	71 South Wacker Drive
	 

	 	Suite 3585
	 

	 	Chicago, Illinois 60606
	 

	 	Attn: General Counsel

     10.7 Benefit; Assignment. The rights, powers and remedies of Lender under this
Agreement shall inure to the benefit of Lender and its successors and assigns. The rights and
obligations of Borrower under this Agreement may not be assigned and any purported assignment by Borrower shall be
null and void. Lender shall have the right to sell, assign or transfer portions of its right, title
and/or interest in and to this Agreement and the other Loan Documents (including the sale of participation interests
therein), without the consent or approval of Borrower, and Borrower, at no cost to Borrower, agrees to
cooperate and to cause the Guarantor to cooperate in all respects with Lender in connection therewith,
including without limitation, the execution of all documents and instruments reasonably requested by
Lender or

34

 

such transferee provided that such documents and instruments do not materially adversely
affect any of Borrower’s or Guarantor’s duties or obligations under the Loan Documents.

     10.8 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois.

     10.9 Indemnity. Borrower agrees to indemnify, defend and hold Lender harmless from
and against any and all liabilities, obligations, losses, damages, claims, costs and expenses
(including court costs and reasonable attorneys’ fees) of whatever kind or nature which may be
imposed on, incurred by or asserted against Lender at any time which relate to or arise from the
performance of the Work, the offer for sale or sale of any limited partnership interest,
shareholder interest or membership interest in Borrower, the acquisition or sale or offer for sale
of all or any portion of the Property and/or the ownership, use, operation or maintenance of the
Property, including, without limitation, any brokerage commissions or finder’s fees asserted
against Lender with respect to the making of the Loan, the acquisition of the Property or other
matters; provided, however, that the foregoing indemnity shall not extend to any liabilities,
obligations, claims, losses, costs, damages or expenses resulting from the gross negligence or
willful misconduct of Lender.

     10.10 Headings. The titles and headings of the articles, sections and paragraphs of
this Agreement have been inserted as a matter of convenience of reference only and shall not
control or affect the meaning or construction of any of the terms or provisions of this Agreement.

     10.11 No Partnership or Joint Venture. Lender, by executing and performing this
Agreement shall not become a partner or joint venturer with Borrower or Guarantor or any of their
respective associates or affiliates and all inspections of the Property herein provided for are
for the sole benefit of Lender.

     10.12 Time is of the Essence. Time is of the essence of the payment of all amounts
due Lender under the Loan Documents and performance and observance by Borrower of each covenant,
agreement provision and term of this Agreement and the other Loan Documents.

     10.13 Invalid Provisions. In the event that any provision of this Agreement is deemed
to be invalid by reason of the operation of law, or by reason of the interpretation placed thereon
by any administrative agency or any court, Borrower and Lender shall negotiate an equitable
adjustment in the provisions of the same in order to effect, to the maximum extent permitted by
law, the purpose of this Agreement and the validity and enforceability of the remaining provisions,
or portions or applications thereof, shall not be affected thereby and shall remain in full force
and effect.

     10.14 Offset. Without limitation of any other right or remedy of Lender hereunder or
provided by law, any indebtedness relating to the Property or its operation and now or hereafter
owing to Borrower by Lender (including, without limitation, any amounts on deposit in any demand,
time, savings, passbook or like account maintained by Borrower with Lender) may be offset and
applied by Lender hereunder, or under the Note, the Mortgage or any of the other Loan Documents.

     10.15 Acts by Lender. Notwithstanding anything herein contained to the contrary,
Lender will not be required to make any disbursement or perform any other act under this Agreement
if, as a result thereof, Lender will violate any law, statute, ordinance, rule, regulation or
judicial decision applicable thereto.

35

 

     10.16 Binding Provisions. The covenants, warranties, agreements, obligations,
liabilities and responsibilities of Borrower under this Agreement shall be binding upon and
enforceable against Borrower and its legal representatives, administrators, successors and
permitted assigns.

     10.17 Counterparts. This Agreement may be executed in counterparts, and all said
counterparts when taken together shall constitute one and the same Agreement.

     10.18 No Third Party Beneficiary. This Agreement is only for the benefit of the
parties hereto and their permitted successors and assigns. No other person or entity shall be
entitled to rely on any matter set forth herein without the prior written consent of such parties.

     10.19 Publicity. Subject to compliance with Applicable Laws, Lender reserves the
right to publicize the making of the Loan in any manner it deems appropriate; provided, however
that any reference to Borrower’s sole member or the members of Borrower’s sole member shall be
subject to Borrower’s written approval, and Lender shall not disclose the specific terms of the
Loan (including, without limitation, the interest rate, loan to value ratio or other terms or
underwriting criteria). In addition, Borrower agrees that Lender, subject to Applicable Laws shall
have the right to erect and maintain a sign at the Project in a prominent location for the
duration of the term of the Loan stating that Lender is providing the financing for construction
of the Project. The sign shall be furnished by Lender and the sign shall be located in a place
selected by Lender, provided that such location does not interfere with performance of the Work.

     10.20 Joint and Several Obligations. If this Agreement is executed by more than one
Borrower, the obligations and liabilities of Borrower under this Agreement shall be joint and
several and shall be binding upon and enforceable against Borrower and their respective successors
and assigns.

     10.21 JURISDICTION AND VENUE. BORROWER HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS
INITIATED BY BORROWER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT SHALL BE LITIGATED
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS OR, IF LENDER INITIATES SUCH ACTION, ANY COURT IN WHICH LENDER SHALL
INITIATE SUCH ACTION AND WHICH HAS JURISDICTION. BORROWER HEREBY EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER IN ANY OF SUCH
COURTS, AND HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR
PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR
PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS TO WHICH
NOTICES ARE TO BE SENT PURSUANT TO THIS AGREEMENT. BORROWER WAIVES ANY CLAIM THAT CHICAGO,
ILLINOIS OR THE NORTHERN DISTRICT OF ILLINOIS IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED
ON LACK OF VENUE. SHOULD BORROWER, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS,
COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE
MAILING THEREOF, BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED
BY LENDER AGAINST BORROWER AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR
PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR BORROWER SET FORTH IN THIS SECTION SHALL NOT BE DEEMED
TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING BY
LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE JURISDICTION, AND BORROWER
HEREBY WAIVES THE RIGHT, IF ANY, TO COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.

     10.22 JURY WAIVER. BORROWER AND LENDER HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) BETWEEN

36

 

OR AMONG BORROWER AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR ANY RELATIONSHIP BETWEEN BORROWER AND LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT
TO LENDER TO PROVIDE THE LOAN DESCRIBED HEREIN AND IN THE OTHER LOAN DOCUMENTS.

[Signature page follows]

37

 

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first
above written.

	 	 	 	 	 
	 	LENDER:

THE PRIVATEBANK AND TRUST COMPANY, an

Illinois state chartered bank

 	 
	 	By:  	/s/ Alison Dempsey
 	 
	 	 	Name:  	Alison Dempsey 	 
	 	 	Title:  	Private Banking Officer 	 
	 
	 	BORROWER:

CAMPUS CREST AT STATESBORO, LLC, a Delaware limited liability company

 	 
	 	By:  	HSRE-Campus Crest I, LLC, a Delaware limited liability company, its sole member 	 
	 	 	 
	 	By:  	Campus Crest Ventures III, LLC, a Delaware limited liability company, a member 	 
	 	 	 
	 	By:  	Campus Crest Properties, LLC, a North Carolina limited liability company, its Manager 	 
	 	 	 
	 	By:  	/s/ Michael S. Hartnett 	 
	 	 	Michael S. Hartnett 	 
	 	 	Its Manager 	 

38

 

Schedule of Exhibits

	 	 	 	 	 	 	 

	 

	 	A
	 	-
	 	Legal Description 
	 
	 	 	 	 	 	 
	 

	 	B
	 	-
	 	Permitted Exceptions 
	 
	 	 	 	 	 	 
	 

	 	C
	 	-
	 	Budget 

39

 

EXHIBIT “A”

LEGAL DESCRIPTION

All those tracts or parcels of land situate, lying and being in the 1209th G.M. District of
Bulloch County, Georgia, and in the City of Statesboro, designated as Parcel 30 “Revised,”
containing 13.71 acres; Parcel 30 “B-2,” containing 0.087 acre; Parcel 21 “B,” containing 0.171
acre, and Parcel 32, containing 13,78 acres; as shown on a plat of survey prepared for Campus
Crest Development, LLC, by Maxwell-Reddick & Associates, Inc., John A. Dotson, Ga. RLS No. 2500,
dated February 26, 2009 and recorded in Plat Book 64, Page 161, Bulloch County, Georgia records,
which plat is incorporated herein by reference for a more detailed description, being more fully
described on Exhibit “B”.

TOGETHER WITH those ingress and egress rights over those roads more fully described in
Quit-Claim Deed from Market District, LLC to Market District Property Owners Association, Inc.,
dated December 22,2006, filed December 28,2006, recorded in Deed Book 1717, Page 149, Bulloch
County, Georgia records, according to the terms thereof.

ALSO TOGETHER WITH those easement rights over a portion of Parcel 21 Revised, Parcel 22, and
Parcel 30B-1, more fully described in Paragraph 2 (a, e and f), Pages 2 and 3, of that certain
Reciprocal Easement Agreement by and between Seacoast Enterprises, Inc., Campus Crest at
Statesboro, LLC, and The Market District Center MSB II, LLC, dated                     , 2009,
filed                     , 2009, recorded in Deed Book                     , Page                     , Bulloch County, Georgia
records.

	 	 	 

	ADDRESS:

	 	Approximately 27.75 vacant acres
	 

	 	NW corner of Bermuda Run and Brampton Avenue,
	 

	 	Statesboro, GA
	 
	 	 
	TAX
PARCEL #S:

	 	MS74-000-198A-030;
	 

	 	MS74-000-198A-021; AND
	 

	 	MS74-000-198A-032

 

 

Exhibit“B” to Exhibit “A”

LEGAL DESCRIPTION — PARCEL 30 “REVISED”

     All that certain parcel of land lying in the 1209th G.M.D. of
Bulloch County, Statesboro, Georgia, containing 13.71 acres, designated
as Parcel 30 “Revised”, Market District, and being more particularly
described according to a plat by John A. Dotson dated February 26,
2009, which reads as follows:

     COMMENCING at a rebar found (RBF) on the intersection of the northwestern right-of-way of Brampton Avenue (60’ right-of-way) and the
southwestern right-of-way of Bermuda Run (Proposed 60’
right-of-way); THENCE along the northwestern right-of-way of Brampton Ave., S 59°13’38”W
for a distance of 55.30’ to a rebar found (RBF); THENCE along the right-of-way, counterclockwise on the arc of a
curve (radius = 380.02’), which subtends a chord of S
52°22’45”W for a distance of 90.62’ to a rebar found (RBF);
THENCE along the right-of-way, counterclockwise on the arc of a curve (radius = 380.02’), which subtends a chord of S
36°03’55”W for a distance of 125.00’ to a rebar found (RBF); THENCE along the right-of-way, counterclockwise on
the arc of a curve (radius = 380.02’), which subtends a chord of
S 17°19’27”W for a distance of 122.50’ to a rebar
found (RBF); THENCE N 81°57’03”W for a distance of 250.00’ to a capped rebar found (CRBF), which is the POINT
OF BEGINNING.

BEGINNING at said capped rebar found (CRBF);

     THENCE
S 01°36’29”E for a distance of 211.38’ to a capped rebar
found (CRBF);

     THENCE
S 20°l5’25”E for a distance of 205.57’ to a
capped rebar found (CRBF);

     THENCE
S 68°11’32”W for a distance of 193.40’ to a
capped rebar set (CRBS);

     THENCE S 50°05’07”W for a distance of 106.46’ to a one
inch iron pipe found (1” IPF);

     THENCE
N 88°53’51”W for a distance of 314.45’ to a one inch iron
pipe found (1” IPF) in the run of the branch;

     THENCE along the run of a branch, which meanders along a traverse line of

N
28°11’25”W for a distance of 549.33’ to a one inch iron pipe found (1”
IPF);

     THENCE along the run of a branch, which meanders along a traverse
line of

 

 

N 09°00’30”W for a distance of 256.84’ to a three-quarter inch iron pipe found
(3/4”IPF);

     THENCE S 87°47’25”E
for a distance of 300.00’ to a capped rebar found (CRBF);

     THENCE N 03°55’21”E for a distance of 519.56’ to a three quarter inch iron pipe
found (3/4” IPF);

     THENCE
S 53°24’54”E for a distance, of 207.16’ to a capped rebar found (CRBF);

     THENCE N 38°42’19”E for a
 distance of 85.10’ to a capped rebar set (CRBS) on the right-of-way
of Hill Pond Lane (Proposed 60’ R/W);

     THENCE along the right-of-way, S
49°10’27”E for a distance of 60.00’ to a
capped rebar found (CRBF);

     THENCE along the right-of-way, clockwise on the arc of a curve (radius =
1090.00’), which subtends a chord of N 42°51’46”E for a distance of 77.48’ to a
capped rebar set (CRBS);

     THENCE S 08°02’57”W
for a distance of 628.46’ to a capped rebar set (CRBS);

     THENCE S 79°10’27”E for a distance of 237.47’ to a capped rebar found (CRBF),
which is the POINT OF BEGINNING.

Said property bound as follows:

          NORTH by parcels 29, 32 & the proposed right-of-way of Hill Pond Lane, property of Market
District Property Owners Association, Inc.

          EAST by parcels 19, 20, 21, 22, 24, 25, 30“A” & the proposed right-of-way of Hill Pond Lane,
property of Market District Property Owners Association, Inc.

          SOUTH by parcel 31, property of Andrew A. Burns & Donald P. Nesmith.

          WEST by lands of Southern Place LLC., and parcel 32.

 

 

LEGAL DESCRIPTION — PARCEL 30 “B-2”

     All that certain parcel of land lying in the 1209th G.M.D. of Bulloch County, Statesboro,
Georgia, containing 0.087 acre, designated as Parcel 30 “B-2”, Market District, and being more
particularly described according to a plat by John A. Dotson dated February 26, 2009, which reads
as follows:

     COMMENCING at a rebar found (RBF) on the intersection, of the northwestern right-of-way of
Brampton Avenue (60’ right-of-way) and the southwestern right-of-way of Bermuda Run (Proposed 60’
right-of-way); THENCE along the northwestern right-of-way of Brampton Ave., S 59°13’38”W for a
distance of 55.30’ to a rebar found (RBF), THENCE along the right-of-way, counterclockwise on the
arc of a curve (radius = 380.02’), which subtends a chord of S 52°22’45”W for a distance of 90.62’
to a rebar found (RBF); THENCE along the right-of-way, counterclockwise on the arc of a curve
(radius = 380.02’), which subtends a chord of S 36°03’55”W for a distance of 125.00’ to a rebar
found (RBF); THENCE along the right-of-way, counterclockwise on the arc of a curve (radius =
380.02’) which subtends a chord of S 20o52’35”W for a distance of 75.79’ to a capped
rebar set (CRBS), THENCE along the right-of-way, counterclockwise on the arc of a curve (radius =
380.02’) which subtends a chord of S 13°51’55”W for a distance of 17.09’ to a capped rebar set
(CRBS) THENCE along the right-of-way, counterclockwist on the arc of a curve (radius = 380.02’)
which subtends a chord of S 10°18’47”W for a distance of 30.02’ to a rebar found (RBF); THENCE N
81°57’03”W for a distance of 250.00’ to a capped rebar found (CRBF) which is the POINT OF
BEGINNING.

BEGINNING at said capped rebar found (CRBF);

THENCE N 79°10’27” W for a distance of 138.32’ to a capped rebar
set (CRBS); THENCE clockwise along the arc of a curve (radius = 110.50’) which subtends a chord
of N 59°18’32”E for a distance of 45.26’ to a capped rebar set (CRBS); THENCE S
79°16’38”E for a distance of 107.70’ to a capped rebar set (CRBS); THENCE S 17°00’25”W for a
distance of 30.37’ to a capped rebar found (CRBF) which is the POINT OF BEGINNING.

Said property bound as follows:

     NORTH by parcel 30 “B-l”.

     EAST by parcel 21 “B”.

     SOUTH by parcel 20, property of Weston M. Fortson, Jr.

     WEST by parcel 30 “Revised”.

 

 

LEGAL DESCRIPTION — PARCEL 21 “B”

     All that certain parcel of land lying in the 1209th G.M.D. of Bulloch County, Statesboro,
Georgia, containing 0.171 acre, designated as Parcel 21 “B”, Market District, and being more
particularly described according to a plat by John A. Dotson dated February 26, 2009, which reads
as follows:

     COMMENCING at a rebar found (RBF) on the intersection of the northwestern right-of-way of
Brampton Avenue (60’ right-of-way) and the southwestern right-of-way of Bermuda Run
(Proposed 60’ right-of-way); THENCE along the northwestern right-of-way of Brampton Ave., S
59°13’38”W for a distance of 55.30’ to a rebar
found (RBF)., THENCE along the right-of-way,
counterclockwise on the arc of a curve (radius = 380.02’), which subtends a chord of S 52°22’45”W
for a distance of 90.62’ to a rebar found (RBF); THENCE along the right-of-way, counterclockwise on
the arc of a curve (radius = 380.02’), which subtends a chord of S 36°03’55”W for a distance of
125.00’ to a rebar found (RBF); THENCE along the right-of-way, counterclockwise on the arc of a
curve (radius = 380.02’) which subtends a chord of S 20°52’35”W for a distance of 75.79’ to a
capped rebar set (CRBS); THENCE along the right-of-way, counterclockwise on the arc of a curve
(radius = 380.02’) which subtends a chord of S 13°51’55”W for a distance of 17.09’ to a capped
rebar set (CRBS) which is the POINT OF BEGINNING.

BEGINNING at said capped rebar set (CRBS) on the northwestern right-of-way of Brampton Avenue;

     THENCE along the right-of-way, counterclockwise on the arc of a curve (radius = 380.02’),
which subtends a chord of S 10°18’47”W for a distance of 30.02’ to rebar found (RBF);

     THENCE N 81°57’03”W for a distance of 250.00’ to a capped rebar found (CRBF);

     THENCE N 17°00’25”E for a distance of 30.37’ to a capped rebar set (CRBS);

     THENCE S 81°57’03”E for a distance of 246.46’ to a capped rebar set (CRBS) which is the POINT
OF BEGINNING.

Said property bound as follows:

     NORTH by parcel 21 “Revised”.

     EAST by the right-of-way of Brampton Avenue.

     SOUTH by parcel 20, property of Weston M. Fortson, Jr.

     [ILLEGIBLE]

 

 

LEGAL DESCRIPTION – PARCEL 32

     All that certain parcel of land lying in the 1209th G.M.D. of Bulloch County, Statesboro,
Georgia, containing 13.78 acres, designated as Parcel 32, Market District, and being more
particularly described according to a plat by John A. Dotson dated February 26, 2009, which reads
as follows:

     COMMENCING at a rebar found (RBF) on the intersection of the northwestern right-of-way of
Brampton Avenue (60’ right-of-way) and the southwestern right-of-way of Bermuda Run (Proposed 60’
right-of-way); THENCE along the northwestern right-of-way of Brampton
Ave., S 59°13’38”W for a distance of 55.30’ to a rebar found (RBF); THENCE along the right-of-way,
counterclockwise on the arc of a curve (radius = 380.02’), which subtends a chord of S
52°22’45”W for a distance of 90.62’ to a rebar found (RBF); THENCE along the right-of-way,
counterclockwise on the arc of a curve (radius = 380.02’), which subtends a chord of S
36°03’55”W for a distance of 125.00’ to a rebar found (RBF); THENCE along the right-of-way,
counterclockwise on the arc of a curve (radius = 380.02’), which subtends a chord of S
17°19’27”W for a distance of 122.50’ to a rebar found (RBF);

     THENCE N 81°57’03”W for a distance of 250.00’ to a capped rebar found (CRBF);

     THENCE S 01°36’29”E for a distance of 211.38’ to a capped rebar found (CRBF);

     THENCE
S 20°15’25”E for a distance of 205.57’ to a capped rebar found (CRBF);

     THENCE S 68°11’32”W for a distance of 193.40’ to a capped rebar set (CRBS);

     THENCE S 50°05’07”W for a distance of 106.46’ to a one inch iron pipe found (1” IPF);

     THENCE N 88°53’51”W for a distance of 314.45’ to a one inch iron pipe found (1” IPF);

     THENCE N 28°11’25”W for a distance of 549.33’ to a one inch iron pipe found (1” IPF);

     THENCE N 09°00’30”W for a distance of 256.84’ to a three-quarter inch iron pipe found (3/4”
IPF) , which is the POINT OF BEGINNING;

BEGINNING at said three-quarter inch iron pipe found (3/4” IPF);

     THENCE N 73°17’09”W for a distance, of 93.62’ to a three-quarter inch iron pipe found (3/4”
IPF);

     THENCE N 69°22’16”W for a distance of 82.34’ to a three-quarter inch iron
pipe found (3/4” IPF);

 

 

     THENCE N 43°24’48”W for a distance of 181.01’ to a three-quarter inch iron pipe
found (3/4” IPF);

     THENCE N 27°55’38”W for a distance of 87.14’ to a rebar found (RBF);

     THENCE N 61°06’18”E for a distance of 68.16” to a three-quarter inch iron pipe found (3/4”
IPF);

     THENCE N 09°37’55”E for a distance of 33.22’ to a three-quarter inch iron pipe found (3/4”
IPF);

     THENCE N 19°30’40”B for a distance of 148.43’ to a rebar found (RBF);

     THENCE N 19°29’14”E for a distance of 66.72’ to a rebar found (RBF);

     THENCE N 22°08’26”E for a distance of 113.88’ to a three-quarter inch iron pipe found (3/4”
IPF);

     THENCE N 02°59’22”W for a distance of 158.77’ to a three-quarter inch iron pipe found (3/4”
IPF);

     THENCE N 07°31’02”w for a distance of 154.01’ to a three-quarter inch iron pipe found (3/4”
IPF);

     THENCE N 39°40’51”W for a distance of 87.17’ to a three-quarter inch iron pipe found (3/4”
IPF);

     THENCE N 04°16’43”W for a distance of 139.53’ to a three-quarter inch iron pipe found (3/4”
IPF);

     THENCE N 24°30’38”E for a distance of 55.02’ to a point in the run of the branch;

     THENCE along the run of a branch, which meanders along a traverse line of N 12°25’33”W for a
distance of 147.86’to a one & one-half inch iron pipe found (1 1/2” IPF);

     THENCE S 51°14’39”E for a distance of 180.65’ to a one & one-half inch iron pipe found (1 1/2”
IPF);

     THENCE S 37°54’36”E for a distance of 137.60’ to a one & one-half inch iron pipe
found (1 1/2” IPF);

     THENCE S 44°40’59”E for a distance of 101.66’ to a rebar found (RBF);

     THENCE S 44°40’59”E for a distance of 78.13” to a capped rebar found (CRBF);

     THENCE S 59°22’41”E for a distance of 390.95’ to a capped rebar found (CRBF);

     THENCE S 30o01’33”E for a distance of 83.65’ to a capped rebar found (CRBF);

     THENCE S 37°49’26”W for a distance of 67.37’ to a capped rebar found (CRBF);

     THENCE S 37°49’26”W for a distance of 154.62’ to a one-half inch iron pipe found (1/2” IPF);

     THENCE S 03°55’21”W for a distance of 566.84’ to a capped rebar found (CRBF);

 

 

     THENCE N 87°47’25”W for a distance of 300.00’ to a three-quarter inch iron pipe found (3/4”
IPF) which is the POINT OF BEGINNING.

Said property bound as follows:

     NORTHEAST by Bermuda Run Commonwealth, LLC and parcel 27, property of Market District Center
Association, Inc.

     EAST by parcels 28, 29 & 30 “Revised”.

     SOUTH by lands of Southern Place LLC and parcel 30 “Revised”.

     WEST by lands of Quinnco Statesboro 1, LLC, Lanier Drive Associates, LLC & EDR statesboro,
LLC.

 

 

EXHIBIT B

Permitted Exceptions

THE FOLLOWING ARE THE PERMITTED TITLE EXCEPTIONS PER PRO FORMA LOAN CASE NO. 54377.02(B) ISSUED BY
TRINITY TITLE INSURANCE AGENCY, INC., ON BEHALF OF CHICAGO TITLE INSURANCE COMPANY:

EXCEPTION NOS. 1, 2, 3, 4, 5, 7, 8, 9, 10, 11, 13, 14 AND 15 AS SET FORTH ON SCHEDULE B,
PART I, TOGETHER WITH EXCEPTION NOS. 1 AND 2 AS SET FORTH ON SCHEDULE B, PART II.

Exhibit B-1 

 

EXHIBIT C

Budget

See Attached

Exhibit C-1

 

	 	 	 

	The Grove at Statesboro
	 	 
	Georiga Southern University
	 	 
	Development Cost Analysis

	 	Sources & Uses Summary

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Costs	 	Debt	 	Equity	 	 	 	 
	 

	 	 	21,510,070	 	 	15,057,000	 	 	6,453,070	 	 	 	 
	 

	 	 	100	%	 	 	70	%	 	 	30	%	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Cost Per Unit	 	 	Total Costs	 	 	Debt	 	 	Equity	 
	 
	Land Acquisition & Capitalized Costs
	 	 	14,585	 	 	 	2,917,000	 	 	 	 	 	 	 	 	 
	 
	Site Stabilization & Temporary Facilities
	 	 	255	 	 	 	51,000	 	 	 	 	 	 	 	 	 
	Site Work & Retaining Walls
	 	 	3,230	 	 	 	646,000	 	 	 	 	 	 	 	 	 
	Site Utilities
	 	 	4,345	 	 	 	869,000	 	 	 	 	 	 	 	 	 
	Off Site Improvements
	 	 	350	 	 	 	70,000	 	 	 	 	 	 	 	 	 
	Paving & Concrete
	 	 	2,774	 	 	 	554,740	 	 	 	 	 	 	 	 	 
	Landscaping,
Fencing, & Irrigation
	 	 	1,925	 	 	 	385,000	 	 	 	 	 	 	 	 	 
	Site Amenities
	 	 	970	 	 	 	194,000	 	 	 	 	 	 	 	 	 
	 
	Sub-Total Site
	 	 	13,849	 	 	 	2,769,740	 	 	 	 	 	 	 	 	 
	 
	Site Contingency
	 	 	1,250	 	 	 	250,000	 	 	 	 	 	 	 	 	 
	 
	Total Site
	 	 	15,099	 	 	 	3,019,740	 	 	 	 	 	 	 	 	 
	 
	Construction Overhead
	 	 	5,486	 	 	 	1,097,138	 	 	 	 	 	 	 	 	 
	Corporate Overhead
	 	 	2,745	 	 	 	549,000	 	 	 	 	 	 	 	 	 
	General Conditions
	 	 	1,383	 	 	 	276,540	 	 	 	 	 	 	 	 	 
	Construction Profit
	 	 	—	 	 	 	—	 	 	 	 	 	 	 	 	 
	 
	Total General Conditions
	 	 	9,613	 	 	 	1,922,678	 	 	 	 	 	 	 	 	 
	 
	Vertical Construction — Residences
	 	 	45,027	 	 	 	9,005,475	 	 	 	 	 	 	 	 	 
	Vertical Construction — Clubhouse
	 	 	2,625	 	 	 	525,000	 	 	 	 	 	 	 	 	 
	Vertical Construction — Pavilion
	 	 	125	 	 	 	25,000	 	 	 	 	 	 	 	 	 
	 
	Sub-Total Vertical Improvements
	 	 	47,777	 	 	 	9,555,475	 	 	 	 	 	 	 	 	 
	 
	Vertical Contingency
	 	 	1,250	 	 	 	250,000	 	 	 	 	 	 	 	 	 
	 
	Total Vertical Improvements
	 	 	49,027	 	 	 	9,805,475	 	 	 	 	 	 	 	 	 
	 
	Furniture, Fixtures, & Equipment
	 	 	6,383	 	 	 	1,276,624	 	 	 	 	 	 	 	 	 
	 
	Development Costs
	 	 	80,123	 	 	 	16,024,517	 	 	 	 	 	 	 	 	 
	 
	Design & Engineering
	 	 	945	 	 	 	189,000	 	 	 	 	 	 	 	 	 
	Third Party Reports & Consultants
	 	 	85	 	 	 	17,000	 	 	 	 	 	 	 	 	 
	Pre Opening Operations Budget
	 	 	1,550	 	 	 	310,000	 	 	 	 	 	 	 	 	 
	Development Overhead
	 	 	4,024	 	 	 	804,753	 	 	 	 	 	 	 	 	 
	Impact Fees
	 	 	2,060	 	 	 	412,000	 	 	 	 	 	 	 	 	 
	Permit Fees
	 	 	510	 	 	 	102,000	 	 	 	 	 	 	 	 	 
	Other Municipal Fees & Charges
	 	 	135	 	 	 	27,000	 	 	 	 	 	 	 	 	 
	 
	Total Soft Costs
	 	 	8,799	 	 	 	1,861,753	 	 	 	 	 	 	 	 	 
	 
	Loan Fees
	 	 	807	 	 	 	161,300	 	 	 	 	 	 	 	 	 
	Third Party Lender Fees
	 	 	188	 	 	 	37,500	 	 	 	 	 	 	 	 	 
	Closing Costs
	 	 	250	 	 	 	50,000	 	 	 	 	 	 	 	 	 
	Lender Inspection Fees
	 	 	40	 	 	 	8,000	 	 	 	 	 	 	 	 	 
	Construction Period Interest
	 	 	2,000	 	 	 	400,000	 	 	 	 	 	 	 	 	 
	 
	Total Financing Costs
	 	 	3,284	 	 	 	656,800	 	 	 	 	 	 	 	 	 
	 
	Sub-Total Soft Costs & Financing
	 	 	12,593	 	 	 	2,518,553	 	 	 	 	 	 	 	 	 
	Development Contingency
	 	 	250	 	 	 	50,000	 	 	 	 	 	 	 	 	 
	 
	Total Soft Costs & Financing
	 	 	12,843	 	 	 	2,568,553	 	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Total Project Costs
	 	 	107,550	 	 	 	21,510,070	 	 	 	15,057,000	 	 	 	6,453,070	 
	 
	 
	 	 	 	 	 	 	100	%	 	 	70	%	 	 	30	%

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