Document:

exv10w47

Exhibit
10.47

LOAN AGREEMENT

by and between

CAMPUS CREST AT MOBILE, LLC

CAMPUS CREST AT JACKSONVILLE, AL, LLC

CAMPUS CREST AT NACOGDOCHES, LP

CAMPUS CREST AT ABILENE, LP

CAMPUS CREST AT GREELEY, LLC

CAMPUS CREST AT ELLENSBURG, LLC

and

SILVERTON BANK, N.A.,

a national banking association

Dated as of February 29, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I
	 	DEFINITIONS; CONSTRUCTION	 	 	1	 
	Section 1.01
	 	Definitions	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	LOAN	 	 	7	 
	Section 2.01
	 	Disbursment	 	 	7	 
	Section 2.02
	 	Note; Repayment of Principal and Interest	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	GENERAL TERMS	 	 	7	 
	Section 3.01
	 	Closing Fee	 	 	7	 
	Section 3.02
	 	Payments, Prepayments and Computations	 	 	7	 
	Section 3.03
	 	Collateral	 	 	7	 
	Section 3.04
	 	Agreements Regarding Interest and Other Charges	 	 	8	 
	Section 3.05
	 	Property Release Privilege	 	 	8	 
	Section 3.06
	 	Substitution of Collateral	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 	REPRESENTATIONS AND WARRANTIES	 	 	12	 
	Section 4.01
	 	Organization; Authorization; Valid and Binding Obligations	 	 	12	 
	Section 4.02
	 	Actions Pending	 	 	12	 
	Section 4.03
	 	Title to Land	 	 	12	 
	Section 4.04
	 	Taxes	 	 	12	 
	Section 4.05
	 	Conflicting Agreements and Other Matters	 	 	13	 
	Section 4.06
	 	Governmental Consent	 	 	13	 
	Section 4.07
	 	Disclosure	 	 	13	 
	Section 4.08
	 	Improvements	 	 	13	 
	Section 4.09
	 	No Default	 	 	13	 
	Section 4.10
	 	Compliance with Requirements :	 	 	13	 
	Section 4.11
	 	Condition of Land and Improvements	 	 	13	 
	Section 4.12
	 	Personality	 	 	13	 
	Section 4.13
	 	Zoning	 	 	14	 
	Section 4.14
	 	Restrictions	 	 	14	 
	Section 4.15
	 	Status of Service Contracts	 	 	14	 
	Section 4.16
	 	Status of Leases	 	 	14	 
	Section 4.17
	 	Encroachments	 	 	15	 
	Section 4.18
	 	Access	 	 	15	 
	Section 4.19
	 	Availability of Utilities	 	 	15	 
	Section 4.20
	 	Brokerage Commissions	 	 	15	 
	Section 4.21
	 	Composition of Property	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE V
	 	AFFIRMATIVE COVENANTS	 	 	15	 
	Section 5.01
	 	Records and Accounts	 	 	15	 
	Section 5.02
	 	Financial Statements, Certificates and Information	 	 	15	 
	Section 5.03
	 	Inspection of Projects and Books	 	 	16	 
	Section 5.04
	 	Maintenance of Existence, Properties, Licenses, Etc.	 	 	17	 
	Section 5.05
	 	Payment of Taxes and Claims	 	 	17	 

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	 	 	 	 	Page	 
	 
	Section 5.06
	 	Parking Requirements	 	 	17	 
	Section 5.07
	 	Expenses	 	 	17	 
	Section 5.08
	 	Indemnity	 	 	17	 
	Section 5.09
	 	Notices	 	 	18	 
	Section 5.10
	 	Fiscal Year	 	 	19	 
	Section 5.11
	 	Estoppel Certificates	 	 	19	 
	Section 5.12
	 	Replacement of Note	 	 	19	 
	Section 5.13
	 	Notification of Name Change; Location	 	 	19	 
	Section 5.14
	 	No Joint Venture	 	 	19	 
	Section 5.15
	 	New Appraisals	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 	NEGATIVE COVENANTS	 	 	20	 
	Section 6.01
	 	Restrictions on Indebtedness	 	 	20	 
	Section 6.02
	 	Restrictions on Liens, Etc.	 	 	20	 
	Section 6.03
	 	Restrictions on Investments	 	 	21	 
	Section 6.04
	 	Distributions	 	 	22	 
	Section 6.05
	 	Merger, Consolidation	 	 	22	 
	Section 6.06
	 	Liquidation; Change in Name; Etc.	 	 	22	 
	Section 6.07
	 	Transactions with Affiliates and Officers	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE VII
	 	FINANCIAL COVENANTS	 	 	23	 
	Section 7.01
	 	Debt Coverage Ratio	 	 	23	 
	Section 7.02
	 	Debt Yield	 	 	23	 
	Section 7.03
	 	LTV Ratio	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 	EVENTS OF DEFAULT	 	 	24	 
	Section 8.01
	 	Events of Default	 	 	24	 
	Section 8.02
	 	Remedies	 	 	26	 
	Section 8.03
	 	Costs and Expenses	 	 	27	 
	Section 8.04
	 	Remedies Cumulative	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE IX
	 	JOINT BORROWER PROVISIONS	 	 	27	 
	Section 9.01
	 	Joint Borrower Provisions	 	 	27	 
	Section 9.02
	 	Waivers by the Borrowers	 	 	28	 
	Section 9.03
	 	Benefit of Guaranty	 	 	29	 
	Section 9.04
	 	Subordination of Subrogation, Etc.	 	 	29	 
	Section 9.05
	 	Election of Remedies	 	 	29	 
	Section 9.06
	 	Limitation	 	 	29	 
	Section 9.07
	 	Contribution with Respect to Guaranty Obligations	 	 	30	 
	Section 9.08
	 	Liability Cumulative	 	 	31	 
	Section 9.09
	 	Accommodation	 	 	31	 
	Section 9.10
	 	Independent Obligations	 	 	31	 
	Section 9.11
	 	Fraudulent Conveyance	 	 	31	 
	 
	 	 	 	 	 	 
	ARTICLE X
	 	MISCELLANEOUS	 	 	32	 
	Section 10.01
	 	Notices	 	 	32	 
	Section 10.02
	 	No Waiver; Remedies Cumulative	 	 	33	 
	Section 10.03
	 	Successors and Assigns; Sale of Interest	 	 	33	 
	Section 10.04
	 	Modification	 	 	33	 

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	 	 	 	 	Page	 
	 
	Section 10.05
	 	Time of Essence	 	 	33	 
	Section 10.06
	 	Governing Law	 	 	33	 
	Section 10.07
	 	Counterparts	 	 	33	 
	Section 10.08
	 	Effectiveness; Survival	 	 	34	 
	Section 10.09
	 	Severability	 	 	34	 
	Section 10.10
	 	Independence of Covenants	 	 	34	 
	Section 10.11
	 	Headings Descriptive	 	 	34	 
	Section 10.12
	 	Termination of Agreement	 	 	34	 
	Section 10.13
	 	Entire Agreement	 	 	34	 
	Section 10.14
	 	Jury Trial Waiver; Consent to Forum	 	 	35	 

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LOAN AGREEMENT

THIS AGREEMENT is made and entered into as of February 29, 2008 by and among CAMPUS CREST AT
MOBILE, LLC, an Alabama limited liability company, CAMPUS CREST AT JACKSONVILLE, AL, LLC, an
Alabama limited liability company, CAMPUS CREST AT NACOGDOCHES, LP, a Delaware limited
partnership, CAMPUS CREST AT ABILENE, LP, a Delaware limited partnership, CAMPUS CREST AT GREELEY,
LLC, a Delaware limited liability company, and CAMPUS CREST AT ELLENSBURG, LLC, a Delaware limited
liability company (collectively, “Borrowers”), and SILVERTON BANK, N.A., a national banking
association (“Lender”).

WITNESSETH:

          WHEREAS, Borrowers have requested that Lender make that certain loan (the “Loan”) to
Borrowers in the principal amount of $104,000,000; and

          WHEREAS, Lender is willing to make the Loan to Borrowers on the terms and subject to the
conditions and requirements set forth in this Agreement.

          NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the parties to this Agreement hereby agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

     Section 1.01 Definitions. For purposes of this Agreement, the following terms shall
have the indicated meanings as set forth below:

          “Affiliate” shall mean any corporation, limited liability company, partnership or other
entity which is controlling of, controlled by or under common control with a Person or the estate
of such Person. For purposes hereof, a trust for the benefit of (i) Ricker, Hartnett or Rollins,
(ii) a spouse of Ricker, Hartnett or Rollins, or (iii) the lineal descendants of Ricker, Hartnett
or Rollins shall be deemed an Affiliate of such Person if such Person is the sole trustee of such
trust.

          “Agreement” shall mean this Loan Agreement, as amended, supplemented or modified from time to
time.

          “Appraisal” shall mean an appraisal of the fair market of real property, in full compliance
with FIRREA, taking into account the current permissible uses of such property under existing laws
and applications applicable thereto, independently and impartially prepared in writing by a
qualified appraiser selected by Lender, who is not employed by the Borrowers or an Affiliate of the
Borrowers, the form and substance of such appraisal to be reviewed and approved by Lender.

 

 

          “Appraised Value” shall mean, with respect to any Project, the fair market “As Is” value
determined by the most recent Appraisal of such Project.

          “Assignment of Management Agreement” shall mean collectively the Assignments, Consent and
Subordination Regarding Management Agreement executed this date by Borrowers in favor of Lender
with respect to the Management Agreements, and any modifications or replacements thereof or
therefor.

          “Assignment of Rents and Leases” shall mean collectively the Assignments of Rents and Leases
executed this date by Borrowers in favor of Lender.

          “Bed” shall mean a bedroom in a Rental Unit.

          “Borrower Parties” shall mean collectively the Borrowers and the Guarantors, and each may be
referred to herein as a Borrower Party.

          “Borrowers” shall have the meaning given such term in the preamble to this Agreement and each
may be referred to herein as a Borrower.

          “Business Day” shall mean any day excluding Saturday, Sunday and any other day on which banks
in Atlanta, Georgia are customarily closed.

          “Campus Crest GP” shall mean Campus Crest GP, LLC, a Delaware limited liability company.

          “CCP” shall mean Campus Crest Properties, LLC, a North Carolina limited liability company.

          “Change of Control” shall mean Ricker, Hartnett and Rollins and their Affiliates cease to own
and control, collectively, at least fifty-one percent (51%) of the equity interests of each
Borrower and each manager or general partner, as applicable, of each Borrower that are entitled to
vote with respect to the management of the business and affairs of such Persons.

          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

          “Collaterar” shall mean any and all of the property which is granted, pledged or assigned to
Lender or in which Lender is otherwise granted a Lien to secure the obligations pursuant to any
and all of the Security Documents.

          “Debt Service” shall mean, for any period, the sum of all scheduled interest payments of
Borrowers plus all scheduled principal payments paid with respect to all indebtedness for money
borrowed by Borrowers; provided, however, that for purposes of this definition, the Loan will be
assumed to be an amortizing loan (a fixed payment each month that

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includes principal and interest) based on a thirty (30) year amortization and the actual interest
rate for the Loan.

          “Debt Service Coverage Ratio” shall mean, for any period, the ratio of (x) NOI to (y) Debt
Service.

          “Debt Yield Percentage” shall mean the ratio, expressed as a percentage, of (x) NOI for any
twelve (12) month period (or lesser period that may be annualized as set forth in Section 7.02) to
(y) the average outstanding principal balance of the Loan during such period.

          “Default’’ shall mean any condition or event which, with notice or lapse of time or both,
would constitute an Event of Default.

          “Distributions” shall mean with respect to any Person, the declaration or payment of any
cash, cash flow, dividend or distribution, other than for the payment of taxes, on or in respect
of any shares of any class of capital stock, partner’s interest, member’s interest or other
beneficial interest of such Person; the purchase, redemption, exchange or other retirement of any
shares of any class of capital stock, partner’s interest, member’s interest or other beneficial
interest of such Person, directly or indirectly through a subsidiary of such Person or otherwise;
the return of capital by a Person to its shareholders, partners, members or other beneficial
owners as such; or any other distribution on or in respect of any shares of any class of capital
stock, partner’s interest, member’s interest or other beneficial interest of such Person.

          “Environmental Indemnification Agreement” shall mean collectively the Environmental
Indemnification Agreements executed this date by Borrowers and the Guarantors in favor of Lender,
and any extensions, renewals, modifications or replacements thereof or therefor.

          “Event of Default” shall have the meaning provided in Article VIII hereof.

          “FIRREA” shall mean Title XI of the Financial Institutions Reform, Recovery and Enforcement
Act of 1989 (12 U.S.C. §3331 et seq.) as amended from time to time.

          “Guarantors” shall mean collectively Hartnett, Ricker, Rollins, Madiera, and TXG and each may
be referred to as Guarantor.

          “Guaranty” shall mean the Limited Guaranty Agreement executed this date by Guarantors in
favor of Lender, as the same may be modified or amended from time to time hereafter.

          “Hartnett” shall mean Michael S. Hartnett, an individual resident of the State of North
Carolina.

          “Improvements” shall mean all improvements constructed on the Land.

3

 

          “Investments” shall mean with respect to any Person, all shares of capital stock, partnership
interests, limited liability company interests, evidences of indebtedness and other securities
issued by any other Person, all loans, advances, or extensions of credit to, or contributions to
the capital of, any other Person, all purchases of the securities or business or integral part of
the business of any other Person and commitments and options to make such purchases, all interests
in real property, and all other investments; provided, however, that the term “Investment”
shall not include (i) equipment, vehicles, construction equipment, heavy machines, tools, building
materials, fixtures, appliances, inventory and other tangible personal property acquired in the
ordinary course of business or used in the development of the Land, or (ii) current trade and
customer accounts receivable for services rendered in the ordinary course of business and payable
in accordance with customary trade terms.

          “Land” shall mean, collectively, all of the real property described and defined as “Land” in
the Mortgage.

          “Leases” shall have the meaning given such term in the Security Instruments.

          “Lender” shall have the meaning given such term in the preamble to this Agreement.

          “Lien” shall mean any mortgage, deed to secure debt, Mortgage, pledge, security interest,
security deposit, encumbrance, lien or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any lease in the
nature thereof, and the filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction).

          “Loan” shall have the meaning given such term in the preamble to this Agreement.

          “Loan Documents” shall mean, collectively, this Agreement, the Note, the Security
Documents, the Guaranty, and any other certificates or written undertakings of a Borrower Party
in favor of Lender delivered contemporaneously with the delivery of this Agreement, other than
the Environmental Indemnification Agreement.

          “LTV Ratio” shall mean, at any time, the ratio (expressed as a percentage) of (x) the
outstanding principal balance of the Loan to (y) the sum of the Appraised Values of the Property
then subject to the Mortgage.

          “Madiera” shall mean Madiera Group, LLC, a North Carolina limited liability company.

          “Management Agreements” shall mean those certain Property Management Agreements between The
Grove Student Properties, LLC and each Borrower with respect to management of such Borrower’s
Project.

4

 

          “Material Adverse Effect” shall mean a material adverse effect upon, or a material adverse
change in, any of the (i) results of operations, properties, or financial condition of any
Borrower Party, (ii) validity, binding effect or enforceability of any Loan Document or the
Environmental Indemnification Agreement, or (iii) ability of any Borrower Party to perform its
payment obligations or other Obligations under the Loan Documents or the Environmental
Indemnification Agreement.

          “Mortgage” shall mean collectively the Deeds of Trust/Mortgages, Security Agreements,
Financing Statements and Fixture Filings dated on or about this date by Borrowers for the benefit
of Lender, to be recorded in the real estate records of the county where the Property is located,
and any extensions, renewals, modifications or replacements thereof or therefor.

          “NOI” shall mean, for any period, an amount equal to (i) the sum of Borrowers’ aggregate
rental income plus aggregate ancillary income, minus (ii) Borrowers’ aggregate operating expenses,
and minus (iii) reserves equal to $115 per Bed.

          “Note” shall mean that certain Promissory Note executed by Borrowers and payable to the order
of Lender in the original principal amount of $104,000,000 as evidence of the Loan, and any
extensions, renewals, modifications or replacements thereof or therefor.

          “Obligations” shall mean, collectively, all amounts now or hereafter owing to Lender by
Borrowers pursuant to the terms of or as a result of this Agreement, the Note, or any other Loan
Documents or the Environmental Indemnification Agreement, including without limitation, the unpaid
principal balance of the Loan and all interest, fees, expenses and other charges relating thereto
or accruing thereon, as well as any and all other indebtedness, liabilities, covenants, duties and
obligations of Borrowers, whether direct or indirect, absolute or contingent, or liquidated or
unliquidated, monetary or non-monetary, which may be now existing or may hereafter arise under or
as a result of any of the Loan Documents, the Environmental Indemnification Agreement, and
together with any and all renewals, extensions, or modifications of any of the foregoing.

          “Permitted Indebtedness” shall have the meaning set forth in Section 6.01.

          “Permitted Liens” shall have the meaning set forth in Section 6.02

          “Person” shall mean any individual, partnership, limited partnership, limited liability
company, firm, corporation, association, joint venture, trust or other entity, or any government
or political subdivision or agency, department or instrumentality thereof.

          “Projects” shall mean the residential apartment developments located on the parcels of
Property. The initial Projects are described on Schedule 1 attached hereto.

          “Property” shall mean, collectively, the property, including the Land and all Improvements,
fixtures and related personal property located thereon. The initial parcels comprising the
Property are described on Schedule 1 attached hereto.

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          “Requirements” shall have the meaning given such term in Section 4.10 hereof.

          “Rental Unit” shall mean each of the apartments in the Projects.

          “Richer” shall mean Carl H. Ricker, Jr., an individual resident of the State of North
Carolina.

          “Rollins” shall mean Ted W. Rollins, an individual resident of the State of Florida.

          “Security Documents” shall mean, collectively, the Security Instruments, the Assignment of
Management Agreement, and each other affidavit, certificate, security, mortgage, assignment,
financing statements or other collateral document, whether now existing or hereafter executed and
delivered in connection with, or securing any or all of, the Obligations.

          “Security Instruments” shall mean, collectively, the Mortgage, the Assignment of Rents and
Leases, the UCC Financing Statements, and other security instruments executed this date by
Borrower in favor of Lender, to be recorded in the real estate records of the county where the
Property is located, and any extensions, renewals, modifications or replacements thereof or
therefor.

          “Tax Distributions” shall mean for any period, the aggregate Distributions made by a Borrower
to its members, partners or shareholders to pay the actual or estimated aggregate federal, state
and local income taxes of such members, partners or shareholders with respect to such members’ or
shareholders’ interests in such Person, as applicable, to the extent such members or shareholders
have not already received Distributions during such period in excess of such taxes, to be
determined by using the highest marginal tax rates applicable to any such member or shareholder.

          “Taxes” shall mean any present or future taxes, levies, imposts, duties, fees, assessments,
deductions, withholdings or other charges of whatever nature, now or hereafter imposed or levied
by the United States of America, or any state or local government or by any department, agency or
other political subdivision or taxing authority thereof or therein and all interest, penalties,
additions to tax and similar liabilities with respect thereto other than taxes on the income of
Lender.

          “TXG” shall mean TXG, LLC, a South Carolina limited liability company.

     Section 1.02 Other Definitional Terms. The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this Agreement as a whole,
and not to any particular provision of this Agreement. Any pronoun used herein shall be deemed to
cover all genders and all singular terms used herein shall include the plural and vice versa. A
reference to any Person includes its or his permitted successors and permitted assigns. Unless
otherwise expressly indicated herein, all references herein to a period of time which runs “from”
or “through” a particular date shall be deemed to include such date,

6

 

and all references herein to a period of time which runs “to” or “until” a particular date shall
be deemed to exclude such date.

ARTICLE II

 LOAN

     Section 2.01 Disbursement. Subject to the terms and conditions of this Agreement,
Lender agrees to advance to Borrowers the Loan to be evidenced by and subject to the terms and
provisions of the Note.

     Section 2.02 Note; Repayment of Principal and Interest. Borrowers’ obligations to pay
to Lender the principal of and interest on the Loan shall be evidenced by the Note. The Loan shall
bear interest at the rate or rates per annum specified in the Note and such interest shall be
calculated and shall be paid and shall accrue in the manner specified in the Note.

ARTICLE III

GENERAL TERMS

     Section 3.01 Closing Fee. In consideration of Lender’s entering into this Agreement
and making the Loan hereunder, Borrowers agree to pay to Lender, on the date of the initial
funding of the Loan hereunder, a closing fee in the amount of $1,040,000, which closing fee shall
be deemed fully earned upon Lender’s execution and delivery of this Agreement and the initial
funding of the Loan.

     Section 3.02 Payments, Prepayments and Computations. Except as may be otherwise
specifically provided herein, all payments by Borrowers with respect to the Loan or any other
Obligations under this Agreement or any of the other Loan Documents or the Environmental
Indemnification Agreement shall be made without defense, set-off or counterclaim to Lender not
later than 2:00 p.m. (Eastern Time) on the date when due and shall be made in lawful money of the
United States of America in immediately available funds. Any payment received by Lender on a
non-Business Day or after 2:00 p.m. (Eastern Time) on any Business Day shall be deemed received by
Lender at the opening of its business on the next Business Day. Whenever any payment to be made
hereunder or under the Note or any of the other Loan Documents or the Environmental
Indemnification Agreement shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with respect to payments
of principal, interest thereon shall be payable at the applicable rate during such extension.
Interest shall be calculated on the basis of a year consisting of 360 days and with twelve
thirty-day months, except that interest due and payable for less than a full month shall be
calculated by multiplying the actual number of days elapsed in such period by a daily interest
rate based on a 360-day year. The Loan may be prepaid in whole or in part as specifically provided
in the Note.

     Section 3.03 Collateral. The Obligations shall be secured pursuant to any or all
Security Documents. Borrowers also shall execute or deliver (or cause to be executed and delivered)
any and all financing statements and such other documents as Lender may reasonably

7

 

request from time to time in order to perfect or maintain the perfection of Lender’s Liens
under such Security Documents.

     Section 3.04 Agreements Regarding Interest and Other Charges. Borrowers and Lender
hereby agree that the only charges imposed or to be imposed by Lender upon Borrowers for the use
of money in connection with the Loan is and will be the interest required to be paid under the
provisions of this Agreement as well as the related provisions of the Note. In no event shall the
amount of interest due and payable under this Agreement, the Note or any of the other Loan
Documents or the Environmental Indemnification Agreement exceed the maximum rate of interest
allowed by applicable law. It is the express intent hereof that Borrowers not pay and Lender not
receive, directly or indirectly or in any manner, interest in excess of that which may be lawfully
paid under applicable law. Any and all charges, fees, and other amounts payable hereunder not
identified as “interest” are not intended, and shall not be deemed, to be interest. All interest,
and all other charges, fees or other amounts deemed to be interest notwithstanding the preceding
sentence, which are paid or agreed to be paid to Lender under this Agreement, the Note or any of
the other Loan Documents shall, to the maximum extent permitted by applicable law, be amortized,
allocated and spread on a pro rata basis throughout the entire actual term of the Loan
(including any extension or renewal period), or at Lender’s election and to the extent permitted
by applicable law, credited as a payment of principal.

     Section 3.05 Property Release Privilege. Provided no Event of Default (as hereinafter
defined) exists, Borrowers shall be allowed to partially prepay the Loan, upon thirty (30) days
prior written notice to Lender (“Release Request”), and to thereby obtain a release of the
Mortgage of any parcel of Property securing the Loan (the “Release Privilege”) subject to the
following conditions:

          (i) Borrowers shall provide Lender with a pro forma Compliance Certificate as described in
Section 5.02(c) below that demonstrates compliance with the financial covenants set forth in
Article VII after giving effect to the Release Request and the proposed partial prepayment of the
Loan to made in conjunction with the Release Request;

          (ii) Borrowers shall pay all costs, fees and expenses associated with the Release Privilege,
including without limitation, one hundred percent (100%) of all attorneys’ fees and expenses
incurred by or on behalf of Lender in connection therewith, and all such sums shall be due and
payable on the date of closing and delivery of the release documentation by Lender;

          (iii) Borrowers shall provide Lender with an endorsement to its loan title policies (as to
the Mortgage) with respect to the remaining parcels in form and substance satisfactory to Lender
in its sole discretion insuring the Loan through the date and time of recording of the release and
modification instrument, with no new exceptions since the date of this Agreement unless approved
by Lender in writing.

Nothing contained herein shall be deemed to require from the Borrowers in conjunction with a
Release Request hereunder a principal prepayment in excess of that amount necessary to cause the
Borrowers to be in compliance with the financial covenants set forth in Article VII hereof after
giving effect to the Release Request.

8

 

     Section 3.06 Substitution of Collateral. Notwithstanding the provisions of this
Agreement or any of the Loan Documents to the contrary, Borrowers may submit a written request
(“Substitution Request”), upon at least ninety (90) days prior notice, that Lender permit a
substitution (each a “Substitution”) of a substitute property (each a “Substitute Property”)
(which previously has not been the subject of inclusion in the Collateral for the Loan) for any
individual Property then serving as Collateral for the Loan (in such capacity a “Replaced
Property”) upon and subject to the following terms and conditions:

          (a) Borrowers must submit a Substitution Request, identifying the proposed Substitute
Property and the proposed Replaced Property at least ninety (90) days prior to the proposed
closing date for the Substitution. Lender shall evaluate the request for the proposed Substitution
and the proposed Substitute Property pursuant to its then customary underwriting and pricing
criteria. In its underwriting and pricing analysis, Lender may review items such as, but not
limited to, location, occupancy, lease term, rollover, tenant exposure, average Rental Unit rates
and operating statements.

          (b) The owner of the Substitute Property must be a single purpose entity owned and controlled
in such manner that inclusion of such owner as a Borrower would not result in a Change of Control
and such owner must execute a joinder agreement in the form of Exhibit A to join this
Agreement as a Borrower. No properties will be permitted other than multi-family student oriented
rental housing properties. The Substitute Property must be located in the continental United
States.

          (c) Lender in its sole discretion shall acknowledge within ten (10) business days of the
Lender’s receipt of the Substitution Request whether the proposed Substitute Property appears to
be acceptable to permit the Substitution. If Lender approves the Substitution Request, the
Substitution will be subject to the other conditions outlined in this Section 3.06.

          (d) Borrowers shall pay a loan fee to Lender equal to one-half of one percent (0.5%) of an
amount equal to eighty percent (80%) of the appraised fair market “As Is” value of the Substitute
Property at closing of each approved Substitution; provided, however, that such fee shall be
$50,000 with respect to each of the first three (3) Substitutions. A “Substitution Deposit” of
$25,000.00 shall be required with submission of a Substitution Request, which deposit shall be
applied to the loan fee at closing of the Substitution. The deposit and loan fee contemplated by
this subsection are in addition to attorneys’ fees and expenses incurred in the documentation of
such Substitution and in the review of due diligence.

          (e) All improvements on the Substitute Property shall have been completed in a good and
workmanlike manner and in compliance, in all material respects, with all applicable governmental
requirements. The Substitute Property must be lien free (except for easements and other matters of
record acceptable to Lender) and all land, improvements and personal property must be paid for in
full.

          (f) The appraised fair market “As Is” value of the Substitute Property shall be equal to or
greater than the greater of (x) the then appraised fair market value, or gross sales proceeds, as
the case may be, of the Replaced Property, and (y) the original appraised value of

9

 

the Replaced Property as set forth in the appraisal delivered to Lender in connection with the
closing of the loan on the Replaced Property; provided, however, that, Borrowers may prepay the
Loan by the amount of any shortfall in the appraised fair market “As Is” value of the Substitute
Property with respect to the foregoing requirement.

          (g) Borrowers must demonstrate to Lender’s satisfaction that, after giving effect to such
Substitution (and any proposed prepayment of the Loan to be made in conjunction therewith, if
applicable), the Borrowers will be in compliance with the financial covenants set forth in Article
VII.

          (h) Lender’s outside counsel shall prepare and Borrowers shall execute (1) amendments to the
Note, the Mortgage, the Assignments of Rents and Leases, the Environmental Indemnification
Agreement, and this Agreement to the extent deemed necessary or appropriate by Lender, and (2) all
Loan Documents Lender shall deem necessary or appropriate, including, but not limited to, any new
security instrument, assignment of rents and leases, environmental indemnities, etc. relating to
the Substitute Property (all of which documentation shall be substantially in the form of the
applicable documents executed in connection with the closing of the Loan with such changes thereto
as Lender reasonably deems appropriate to reflect the terms and circumstances of the Substitution
and Substitute Property) (collectively, the “Substitute Loan Documents”). The Substitution Loan
Documents shall be cross-defaulted and cross-collateralized with the existing Loan Documents for
the Loan.

          (i) Borrowers shall be required to supply for Lender’s review and approval due diligence
materials relating to the Substitute Property prior to closing of the Substitution similar to
those items required for closing of this Loan, and such other materials as may then be customarily
required as part of its then current commercial loan closing policies, procedures, standards and
practices for properties of similar type and in similar locations as the Substitute Property,
including, without limitation, a current as-built ALTA survey, proof of adequate insurance, title
insurance in conformance with the requirements for the closing of this Loan, proof of compliance
with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and
attornment agreements, franchise agreements and comfort letters. The Lender shall, at the
Borrowers’ sole cost and expense, receive for its review and approval all additional due diligence
materials in any way relating to the Substitute Property, including but not limited to, appraisal,
hazardous substance report, seismic report and engineer report as required by Lender in its
reasonable discretion. The items listed in this subsection are not exhaustive.

          (j) The Substitute Loan Documents, financing statements, and other instruments required to
perfect the liens in the Substitute Property and all collateral under such documents shall be
recorded, registered and filed (as applicable) in such manner as may be required by law to create
a valid, perfected lien and security interest with respect to the Substitute Property and the
personal property related thereto. The liens created by the Substitute Loan Documents shall be
first liens and security interests on the Substitute Property and the personal property related
thereto, subject only to such exceptions as Lender shall approve in its reasonable discretion. At
closing of the Substitution, Borrowers shall have good and marketable title to the Substitute
Property and good and valid title to any personal property located thereon

10

 

or used in connection therewith, in each case satisfactory to the Lender. The title policies to
the remaining parcels of Property in the Loan must also be endorsed to bring forward the effective
dates thereof through the dates and times of recording of the modification instruments and showing
no new exceptions since the original Loan closing unless approved by Lender in writing and
continuing all coverage provided in the original Loan title policy.

          (k) Lender shall receive (1) a confirmation and reaffirmation of all Loan Documents by the
Borrowers for the remaining Property, (2) a consent to such Substitution by the Guarantors, and
(3) such other instruments and agreements and such certificates and opinions of counsel, in form
and substance satisfactory to the Lender in connection with such Substitution as it may reasonably
request.

          (1) Borrowers shall be responsible for all documentary stamp and intangible taxes on the
Substitution and the Mortgage encumbering the Substitute Property and all other parcels of
Property in the Loan that shall arise in connection with such Substitution. Lender shall require
payment of all such documentary stamp and intangibles taxes required by law and authorities having
jurisdiction as a condition of closing the Substitution and the corresponding loan modifications
to the Loan, regardless of whether the taxing authority imposes taxes duplicative of those
incurred at the original closing of the Loan.

          (m) No Event of Default shall have occurred and be continuing hereunder or under any other
Loan Documents for the Loan on the date of Substitution Request or at closing of the Substitution.

          (n) Lender shall be satisfied that no material adverse change in the financial condition,
operations or prospects of any Borrower Party has occurred since the closing of the Loan.

          (o) Borrowers shall pay all reasonable out-of-pocket costs and expenses incurred in connection
with any such Substitution .and the reasonable out-of-pocket fees and expenses incurred by Lender,
its outside counsel and its loan correspondent and servicer in connection therewith. Without
limiting the generality of the foregoing, Borrowers shall, in connection with, and as a condition
to, each Substitution, pay the reasonable fees and expenses of Lender’s counsel, the reasonable
fees and expenses of Lender’s engineers, appraisers, construction consultants, insurance
consultants and other due diligence consultants and contractors, recording charges, title insurance
charges, and documentary stamp and/or mortgage or similar taxes, transfer taxes.

Nothing contained herein shall be deemed to require from the Borrowers in conjunction with a
Substitution Request hereunder a principal prepayment in excess of that amount necessary to cause
the Borrowers to be in compliance with the financial covenants set forth in Article VII hereof
after giving effect to the Substitution.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Borrowers hereby jointly and severally represent and warrant to Lender as follows:

     Section 4.01 Organization; Authorization; Valid and Binding Obligations. Each Borrower
is a limited liability company or limited partnership duly organized and validly existing under the
laws of the State of Delaware, or in the case of Campus Crest at Mobile, LLC and Campus Crest at
Jacksonville, AL, LLC, the State of Alabama. CCP is the manager of each Borrower that is a limited
liability company and is duly organized and validly existing under the laws of the State of North
Carolina. Campus Crest GP is the general partner of each Borrower that is a limited partnership and
is duly organized and validly existing under the laws of the State of Delaware. Each Borrower is
duly qualified and authorized to do business and is in good standing in all other states and
jurisdictions where the ownership of property or the nature of the business transacted by it, makes
such qualification necessary, including, without limitation, the state where the Property of such
Borrower is located. Each Borrower has all requisite power and authority to execute and deliver the
Loan Documents and the Environmental Indemnification Agreement, to perform its obligations under
such Loan Documents and the Environmental Indemnification Agreement and to own its property and
carry on its business. The Loan Documents and the Environmental Indemnification Agreement have been
duly authorized by all requisite partnership or limited liability company action on the part of
each Borrower and duly executed and delivered by authorized officers, partners, managers or other
representatives (as the case may be) of such Borrower. Each of the Loan Documents and the
Environmental Indemnification Agreement constitutes a valid obligation of each Borrower party
thereto, legally binding upon and enforceable against such Borrower in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general
principles of equity.

     Section 4.02 Actions Pending. There is no action, suit, investigation or proceeding
pending or, to the knowledge of Borrowers, threatened against Borrowers, any properties, assets or
rights of Borrowers including, without limitation, the Property, by or before any court,
arbitrator or administrative or governmental body that would have a material adverse effect on
Borrowers if resulting in a decision not in favor of Borrowers.

     Section 4.03 Title to Land. The Land is free and clear of all liens and encumbrances,
except for the Permitted Liens and except as specifically set forth in the mortgagee title
policy(ies) delivered to Lender in connection with the Loan, and except for unrecorded leases
provided to Lender.

     Section 4.04 Taxes. Borrowers have filed all federal, state and other income tax
returns prior to the required filing date which, to the knowledge of Borrowers, are required to be
filed, and has paid all Taxes as shown on such returns and on all assessments received by it to
the extent that such Taxes have become due, except such Taxes as are not due or which are being
contested in good faith by Borrowers by appropriate proceedings for which adequate reserves have
been established in accordance with sound accounting practices consistently applied.

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     Section 4.05 Conflicting Agreements and Other Matters. Neither the execution nor
delivery of this Agreement, nor fulfillment of or compliance with the terms and provisions of this
Agreement, will conflict with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the creation of any Lien
(other than any Lien arising under any Loan Document) upon the Property or any other properties or
assets of Borrowers, the charter or by-laws or other organizational documents of Borrowers, any
award of any arbitrator or any agreement, instrument, order, judgment, decree, statute, law, rule
or regulation to which Borrowers, the Property or any other properties or assets of Borrowers is
subject.

     Section 4.06 Governmental Consent. Except for any recording or filing which may be
required by applicable law to perfect or maintain the perfection of Lender’s Liens in the
Collateral, no consent, approval or authorization of, or declaration or filing with, any
governmental authority is required for the valid execution, delivery and performance by Borrowers
of the Loan Documents or the Environmental Indemnification Agreement or the consummation of any of
the transactions contemplated by the Loan Documents.

     Section 4.07 Disclosure. Neither this Agreement nor any other document, certificate
or statement furnished to Lender by Borrowers in connection herewith contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make the statements
contained herein and therein not materially misleading.

     Section 4.08 Improvements. All certificates, permits and licenses required in
connection with the ownership, operation and occupancy of the Property have been issued and are in
full force and effect.

     Section 4.09 No Default. The Loan Documents and the Environmental Indemnification
Agreement have been complied with and are in full force and effect and no defaults or events of
default exist thereunder; Borrowers have no knowledge of any facts or circumstances, which with
the giving of notice or passage of time (or both) would constitute a default or event of default
thereunder, and all obligations and agreements required to be performed by Borrowers thereunder
have been performed.

     Section 4.10 Compliance with Requirements. The Improvements have been constructed
free from material faults and defects, and in all material respects conform to and comply with all
valid and applicable laws, ordinances, regulations and rules of all governmental entities having
jurisdiction over, and all covenants, conditions, restrictions and reservations affecting the Land
and the Improvements (the “Requirements”).

     Section 4.11 Condition of Land and Improvements. Neither the Land nor the Improvements
have been injured or damaged by fire or other casualty which has not been restored.

     Section 4.12 Personalty. Except as otherwise expressly provided in the Leases and
except with respect to certain office equipment located at the Property that is leased by

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Borrowers (as lessee) in the ordinary course of business, title to all goods, materials, supplies,
equipment, machinery and other personal property and fixtures used in the operation or maintenance
of the Property, is vested in Borrowers free and clear of all liens, encumbrances and security
interests, other than Permitted Liens, and Borrowers have not executed any security agreement,
purchase order or other contract or agreement under which any person or other entity is granted or
reserves the right to retain title to, remove or repossess any of such goods, materials, supplies,
equipment, machinery or other personal property or fixtures.

     Section 4.13 Zoning. Under the applicable zoning ordinance of each jurisdiction in
which each parcel of Land is located, each parcel of Land is zoned in a zoning classification that
permits the use of the Land and Improvements for all purposes as currently used, without any
conditions other than with respect to which such conditions have been complied in full and without
exception. Furthermore in the event the Improvements were damaged or destroyed, the Improvements
could be restored or reconstructed as they now exist without the requirement of any zoning variance
or waiver.

     Section 4.14 Restrictions. To the best of Borrowers’ knowledge, the Land is not
subject to: (i) any use or occupancy restrictions, except those imposed by applicable zoning laws
and regulations, any such restrictions described in the mortgagee title policy(ies) delivered to
Lender in connection with the Loan, and those restrictions set forth in the Security Instruments;
(ii) special assessments except as may be described in the mortgage title policy(ies) delivered to
Lender in connection with the Loan; (iii) utility tap-in fees, except those generally applicable
throughout the tax districts in which the Land is located; or (iv) other material charges or
restrictions, whether existing of record or arising by operation of law, unrecorded agreement, the
passage of time or otherwise, except any such charges or restrictions described in the mortgagee
title policy(ies) delivered to Lender in connection with the Loan.

     Section 4.15 Status of Service Contracts. Borrowers are not in default under any
development, management, service or other agreements and contracts relating to the operation or
management of the Property in a manner which could reasonably be expected to have a Material
Adverse Effect; there is no material default on the part of any other party to any of such
contracts or the existence of any facts or circumstances, which with the giving of notice or
passage of time (or both), would constitute a material default under any of such contracts, which
defaults could reasonably be expected to have a Material Adverse Effect. Such contracts have not
been modified or amended in any material respect since the date true and correct copies of the
same were delivered to Lender by Borrowers. Borrowers have not done or omitted to do any act so as
to be estopped from exercising any of its rights under any of such contracts, and there is no
assignment of any of Borrowers’ rights under any of such contracts to any person or entity, other
than Lender.

     Section 4.16 Status of Leases. Borrowers are not in default under any of the Leases,
and there is no default on the part of any other party to any Lease, which defaults, in either
case, could reasonably be expected to have a Material Adverse Effect. None of the Leases have been
modified or amended in any material respect since the date true and correct copies of the same
were delivered to Lender by Borrowers. Borrowers have not done or omitted to do any act so as to
be estopped from exercising any of its rights under any of the Leases, and there is no

14

 

assignment of any of Borrowers’ right under any of such contracts to any person or entity other
than Lender.

     Section 4.17 Encroachments. Except as shown on those certain surveys previously
delivered to Lender in connection with the Loan, there are no encroachments on the Land; there
are no strips or gores within or affecting the boundaries of the Land; and all Improvements are
situated entirely within the boundaries of the Land and within any applicable building lines.

     Section 4.18 Access. All streets and roads necessary for access to the Land have
been completed and are either dedicated to public use and accepted for maintenance by all
necessary governmental entities or subject to recorded, insurable easements that benefit the
Land.

     Section 4.19 Availability of Utilities. All utility facilities and services
necessary for the full use, occupancy and operation of the Improvements are available to the Land
through public or private easements or rights-of-way at the boundaries of the Land, including,
without limitation, water, storm and sanitary sewer, electricity and telephone.

     Section 4.20 Brokerage Commissions. All real estate and land brokerage commissions
payable in connection with the acquisition of the Land, construction of the Improvements and the
Loan, and all brokerage commissions or finders fees due and payable in connection with the
current terms of any of the Leases, have been paid in full, or will be paid in full upon the
execution of this Agreement.

     Section 4.21 Composition of Property. Subject to the matters disclosed in the title
policies delivered to Lender in connection with the Loan, the Property includes all improvements
and land, and other estates and rights (including, without limitation, any appurtenant easement .
rights and covenants and restrictions) which are necessary to allow for the continued use thereof
as residential apartments, or other uses presently in effect as of the date of this Agreement, and
as may be required by any of the Requirements, or to satisfy all tenant requirements under the
Leases.

ARTICLE V

AFFIRMATIVE COVENANTS

          For so long as this Agreement is in effect, and unless Lender expressly consents in writing
to the contrary, Borrowers jointly and severally covenant and agree to comply with the following
covenants:

     Section 5.01 Records and Accounts. Borrowers will keep (a) true and accurate records
and books of account in which true, correct and complete entries will be made in accordance with
Generally Accepted Accounting Principles, and (b) adequate reserves for all taxes (including
income and real estate taxes), contingencies and other reserves.

     Section 5.02 Financial Statements, Certificates and Information. Borrowers will deliver
to Lender:

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     (a) As soon as practicable, but in any event not later than one hundred twenty (120)
days after the end of each fiscal year of Borrowers, the balance sheets, statements of income,
changes in capital and cash flows for such year for each Borrower, each setting forth in
comparative form the figures for the previous fiscal year and all such statements to be in
reasonable detail, prepared in accordance with Generally Accepted Accounting Principles, and
reviewed by an accounting firm reasonably acceptable to Lender (and for purposes hereof, Lender
agrees that Easley, Endres, Parkhill & Brackendorff, P.C. is an acceptable accounting firm), and
any other information Lender may reasonably require to complete a financial analysis of Borrowers,
together with a certification by the principal financial or accounting officer of Borrowers that
the information contained in such financial statements fairly presents the financial position of
Borrowers on the date thereof;

     (b) As soon as practicable, but in any event not later than sixty (60) days after the end of
each fiscal quarter of Borrowers, the balance sheets of each Borrower and the related consolidated
statements of income, changes in capital and cash flows for the portion of the fiscal year then
elapsed on an aggregated basis, all (except for the changes in capital and cash flows) prepared in
accordance with Generally Accepted Accounting Principles, together with a certification by the
principal financial or accounting officer of Borrowers that the information contained in such
financial statements fairly presents the financial position of the Borrowers on the date thereof
(subject to year end adjustments);

     (c) Simultaneously with the delivery of the financial statements referred to in subsections
(a) and (b) above, a statement (a “Compliance Certificate”) certified by the chief
executive officer, chief financial officer, principal finance or accounting officer of Borrowers
in the form of Exhibit B hereto evidencing compliance with covenants contained in Article
VII and the other covenants described therein and further certifying that such officer has caused
this Agreement to be reviewed and has no knowledge of any Default or Event of Default in the
performance or observance of any of the provisions hereof during such Fiscal Quarter or at the end
of such year, or, if such officer has such knowledge, specifying each Default or Event of Default
and the nature thereof;

     (d) Simultaneously with the delivery of the financial statements referred to in subsection
(b) above, a current rent roll for each Project and a status report on leasing activities at each
Project, in such form and containing such detail as Lender shall reasonable require; and

     (e) From time to time such other financial data and information in the possession of the
Borrowers (including without limitation auditors’ management letters, market comparable studies,
property inspection and environmental reports and information as to zoning and other legal and
regulatory changes affecting Borrowers) as Lender may reasonably request.

     Section 5.03 Inspection of Projects and Books. Lender, or any representative
designated by Lender, may inspect any Project, any books and records of the Borrowers (and make
copies thereof and extracts therefrom) and discuss the affairs, finances and accounts of the
Borrowers with, and to be advised as to the same by, its officers at its reasonable discretion
during normal business hours upon prior notice to the Borrowers to confirm compliance with this
Agreement. Lender and its representative shall conduct any on-site inspection so as to avoid
interference with ongoing work and operations at a Project or leasing efforts with respect
thereto.

16

 

The reasonable out-of-pocket expenses of one such inspection per calendar year during the Loan
term plus any such inspections while a Default or Event of Default is in existence shall be at the
expense of the Borrowers, and Lender shall provide the Borrowers with invoices for such expenses.
Any other such inspections shall be at Lender’s expense.

     Section 5.04 Maintenance of Existence, Properties, Licenses, Etc. Except to the
extent otherwise permitted hereby, Borrowers will do or cause to be done all things reasonably
necessary to preserve, renew and keep in full force and effect the corporate, partnership or other
legal existence of Borrowers and the patents, trademarks, service marks, trade names, service
names, copyrights, licenses, leases, permits, franchises and other rights, that continue to be
useful in some material respect to the business of Borrowers or to the operation of the Property.

     Section 5.05 Payment of Taxes and Claims. Borrowers will pay and discharge or cause
to be paid and discharged all Taxes, assessments and governmental charges or levies imposed upon
it or upon its respective income and profits or upon any of its property, real, personal or mixed
or upon any part thereof, before the same shall become in default as well as all lawful claims for
labor, materials and supplies or otherwise, which, if unpaid, might become a Lien or charge upon
such properties or any part thereof. Notwithstanding anything contained herein to the contrary,
Borrowers shall not be required to pay or discharge any Taxes, assessments and governmental
charges or levies and liens for labor, materials, supplies or otherwise so long as Borrowers shall
in good faith contest the same or the validity thereof by appropriate legal proceedings which
shall operate to prevent the collection of the levy, lien or imposition so contested and the sale
of the Property, or any part thereof, to satisfy any obligation arising therefrom, provided that
the Borrowers shall give such security as may be demanded by the Lender to insure such payments
and prevent any sale or forfeiture of the Property by reason of such nonpayment, failure of
performance or contest by Borrowers. Any such contest shall be prosecuted with due diligence and
Borrowers shall promptly after final determination thereof pay the amount of any levy, lien or
imposition so determined, together with all interest and penalties, which may be payable in
connection therewith. Notwithstanding the provisions of this paragraph, Borrowers shall (and if
Borrowers shall fail so to do, Lender may but shall not be required to) pay any such levy, lien or
imposition notwithstanding such contest if in the reasonable opinion of Lender, the Property shall
be in jeopardy or in danger of being forfeited or foreclosed. If requested by Lender, Borrowers
shall provide periodic endorsements to Lender’s mortgagee title policies to reflect timely payment
of ad valorem property Taxes on the Property.

     Section 5.06 Parking Requirements. At all times during the terms of the Loan, there
shall be sufficient parking spaces to satisfy requirements of all Leases, parking or cross-parking
agreements, and applicable zoning requirements and other Requirements.

     Section 5.07 Expenses. Borrowers shall pay all cost, fees, documentary stamp taxes,
intangibles taxes and charges of closing of the Loan, including, without limitation, Lender’s
attorneys’ fees, recording costs, environmental audit costs, survey and appraisal costs, title
examination fees, and title insurance premiums.

     Section 5.08 Indemnity. Borrowers covenant and agree to indemnify and hold Lender
harmless from and against any and all claims for brokerage fees or commissions with respect to

17

 

the making or consummation of the Loan, and all claims, actions, suits, proceedings, costs,
expenses, losses, damages and liabilities of any kind, including but not limited to attorneys’
fees, expenses, penalties and interest, which may be asserted against or incurred by Lender by
reason of any matter relating directly to the Loan, and arising out of the ownership, condition,
development, construction, sale, rental or financing of the Property or any part thereof, other
than to the extent arising as a direct result of the gross negligence or willful misconduct of
Lender. The foregoing indemnity shall survive the payment and performance of all Obligations to
Lender under the Loan Documents, and should Lender incur any liability for or in defense of any of
the foregoing matters, the amount thereof (and all costs, expenses and attorneys’ fees incurred by
Lender in connection therewith) shall be added to the principal amount of the Loan and shall bear
interest at the Default Rate (as defined in the Note) to the extent permitted by applicable law.
Furthermore, Borrowers covenant that, upon notice from Lender that any action or proceeding has
been brought against Lender by reason of any such matters, Borrowers shall promptly resist or
defend such action or proceeding in a manner satisfactory to Lender at Borrowers’ expense.

     Section 5.09 Notices.

     (a) Defaults. Upon discovery thereof, Borrowers will promptly notify Lender in
writing of the occurrence of any Default or Event of Default.

     (b) Notification of Claims Against Collateral. Borrowers will, promptly upon becoming
aware thereof, notify Lender in writing of any setoff, claims (including, with respect to the
Property, environmental claims), withholdings or other defenses to which any of the Collateral, or
the rights of Lender with respect to the Collateral, are subject in excess of $250,000 (other than
Permitted Liens).

     (c) Notice of Litigation and Judgments. Borrowers will give notice to Lender in
writing within thirty (30) days of becoming aware of any litigation or proceedings threatened in
writing or any pending litigation and proceedings affecting any Borrower Party or to which any of
such Persons is or is to become a party involving an uninsured claim against any of such Persons
that is reasonably likely to result in liability to such Person in excess of $250,000 and stating
the nature and status of such litigation or proceedings, in any case above that has not previously
been disclosed in writing to Lender. Borrowers will give notice to Lender, in writing, in form and
detail satisfactory to Lender within ten (10) Business Days of any judgment, whether final or
otherwise, against the Borrowers in an amount not covered by insurance in excess of $250,000.

     (d) Notice of Material Adverse Effect. Borrowers will give notice to Lender in
writing within ten (10) Business Days of becoming aware of the occurrence of any event or
circumstance which would reasonably be likely to result in a Material Adverse Effect.

     (e) Notice of Microbial Impact, Casualty or Condemnation. Borrowers will promptly give
notice to Lender in writing upon any Borrower obtaining knowledge or otherwise becoming aware of
any mold condition affecting any Improvement. Borrowers will give notice to Lender in writing
within ten (10) Business Days of becoming aware of any casualty to or condemnation of all or any
portion of any Project having a value in excess of $250,000.

18

 

     Section 5.10 Fiscal Year. Borrowers shall not change their fiscal year except upon
prior written notice to Lender.

     Section 5.11 Estoppel Certificates. Borrowers shall, from time to time, upon request
by Lender, promptly execute, acknowledge and deliver to Lender a certificate of Borrowers stating
the amount of principal and interest then owing on the Obligations, whether or not any setoffs or
defenses exist with respect to all or any part of the Obligations, and, if any such setoffs or
defenses exist, stating in detail the specific facts relating to each such setoff or defense. Any
such certificate may be relied upon by any prospective assignee of Lender.

     Section 5.12 Replacement of Note. Upon receipt of notice from Lender of the loss,
theft, destruction or mutilation of the Note, Borrowers shall execute and deliver, in lieu
thereof, a replacement note identical in form and substance to the Note and dated as of the date
of the Note, except that such replacement note shall state on its face that it is a replacement
and upon such execution and delivery all references in the Loan Documents and the Environmental
Indemnification Agreement, to such Note so replaced shall be deemed to refer to such replacement
note.

     Section 5.13 Notification of Name Change; Location. Borrowers shall furnish Lender
with notice of any change in any Borrower’s name or address or principal place of business within
fifteen (15) days of the effective date of such change, and Borrowers shall promptly execute any
financing statements or other instruments deemed necessary by Lender to prevent any filed financing
statement from becoming misleading or losing its perfected status.

     Section 5.14 No Joint Venture. Neither the provisions of any of the Loan Documents or
the Environmental Indemnification Agreement nor the acts of the parties thereto shall be construed
to create a partnership or joint venture between Borrowers and Lender.

     Section 5.15 New Appraisals. Upon request of Lender at any time during which an Event
of Default exists, or if deemed reasonably necessary by Lender because of regulatory requirements,
Borrowers will obtain, at Borrowers’ expense, new, revised or updated Appraisals of the Property
or portions thereof. In addition, Lender may obtain, at Lender’s expense, new, revised or updated
Appraisals of the Property or portions thereof at any time, and Lender agrees to provide to
Borrowers a copy of any such Appraisals.

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ARTICLE VI

NEGATIVE COVENANTS

     For so long as this Agreement is in effect, and unless Lender expressly consents in writing
to the contrary, Borrowers jointly and severally agree to comply with the following covenants:

     Section 6.01 Restrictions on Indebtedness. No Borrower will create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any indebtedness
other than the following (collectively, the “Permitted Indebtedness”):

     (a) indebtedness to the Lender arising under any of the Loan Documents;

     (b) current liabilities of such Persons incurred in the ordinary course of business but not
incurred through (i) the borrowing of money or (ii) the obtaining of credit except for credit on
an open account basis customarily extended and in fact extended in connection with normal
purchases of goods and services;

     (c) indebtedness in respect of Taxes and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be made in accordance with the
provisions of Section 5.05;

     (d) indebtedness in respect of judgments or awards that do not give rise to an Event of
Default under Section 8.01(j);

     (e) endorsements for collection, deposit or negotiation and warranties of products or
services, in each case incurred in the ordinary course of business; and

     (f) purchase money indebtedness with respect to purchases of equipment in the ordinary course
of each Borrower’s business up to a maximum outstanding amount at any time with respect to each
Borrower of $100,000.00.

     Section 6.02 Restrictions on Liens, Etc. No Borrower will create or incur or suffer to
be created or incurred or to exist any Lien of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits therefrom,
provided that such Persons may create or incur or suffer to be created or incurred or to
exist (collectively, the “Permitted Liens”):

          (i) Liens on properties to secure (A) Taxes and other governmental charges not overdue or (B)
claims for labor, material or supplies in respect of obligations not overdue, except Liens being
contested in good faith and by appropriate proceedings or otherwise related to unpaid Taxes and
other governmental charges permitted by Section 5.05;

          (ii) nonmonetary encumbrances on properties (including the Collateral) consisting of
easements, rights of way, zoning restrictions, mineral rights reservations, restrictions on the use
of real property, landlord’s or lessor’s liens under leases to which such Person is a party, and
other minor non-monetary liens or encumbrances none of which interferes

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materially with the use, marketability or development of the property effected in the ordinary
conduct of the business of such Person, which encumbrances or liens do not individually or in the
aggregate have a Material Adverse Effect.

          (iii) Liens in favor of the Lender under the Loan Documents to secure the Obligations; and

          (iv) Liens and encumbrances on the Property expressly permitted under the terms of the
Mortgage (including any permitted exceptions set forth on Schedule B of any Title Policy) relating
thereto and approved by Lender;

          (v) Liens of banks (including rights of set-off), carriers, warehousemen, landlords,
mechanics, vendors, laborers and materialmen incurred in the ordinary course of business for sums
not yet due or being diligently contested in good faith, if reserves or appropriate provisions
shall have been made therefor;

          (vi) Liens incurred in the ordinary course of business in connection with worker’s
compensation and unemployment insurance, social security obligations, assessments or government
charges which are not overdue for more than sixty (60) days;

          (vii) Liens to secure performance of statutory obligations, surety or appeal bonds,
performance bonds, bids or tenders; or

          (viii) Liens arising in connection with the Permitted Indebtedness described in Section
6.01(f) above.

     Section 6.03 Restrictions on Investments. No Borrower will make or permit to exist or
to remain outstanding any Investment except Investments in:

     (a) marketable direct or guaranteed obligations of the United States of America that mature
within one (1) year from the date of purchase by such Person;

     (b) marketable direct obligations of any of the following: Federal Home Loan Mortgage
Corporation, Student Loan Marketing Association, Federal Home Loan Lenders, Federal National
Mortgage Association, Government National Mortgage Association, Lender for Cooperatives, Federal
Intermediate Credit Lenders, Federal Financing Lenders, Export-Import Lender of the United States,
Federal Land Lenders, or any other agency or instrumentality of the United States of America;

     (c) demand deposits, certificates of deposit, bankers acceptances and time deposits of United
States banks having total assets in excess of $100,000,000; provided, however, that
the aggregate amount at any time so invested with any single bank having total assets of less than
$1,000,000,000 will not exceed $200,000;

     (d) securities commonly known as “commercial paper” issued by a corporation organized and
existing under the laws of the United States of America or any State which at the time of purchase
are rated by Moody’s Investors Service, Inc. or by Standard & Poor’s

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Corporation at not less than “P 1” if then rated by Moody’s Investors Service, Inc., and not less
than “A 1”, if then rated by Standard & Poor’s Corporation;

     (e) mortgage-backed securities guaranteed by the Government National Mortgage Association, the
Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation and other
mortgage-backed bonds which at the time of purchase are rated by Moody’s Investors Service, Inc. or
by Standard & Poor’s Corporation at not less than “AA” if then rated by Moody’s Investors Service,
Inc. and not less than “AA” if then rated by Standard & Poor’s Corporation; and

     (f) shares of so-called “money market funds” registered with the SEC under the Investment
Company Act of 1940 which maintain a level per-share value, invest principally in investments
described in the foregoing subsections (a) through (f) and have total assets in excess of
$50,000,000;

     Section 6.04 Distributions. During any period during which a Default or Event of
Default exists, no Borrower shall pay any Distributions except for Tax Distributions.

     Section 6.05 Merger, Consolidation. No Borrower shall become a party to any merger,
consolidation or other business combination, or agree to effect any asset acquisition, stock
acquisition or other acquisition.

     Section 6.06 Liquidation; Change in Name; Etc. No Borrower shall at any time:

     (a) Liquidate or dissolve itself (or suffer any liquidation or dissolution) or otherwise wind
up its business;

     (b) Become a partner or joint venturer with any third party; or

     (c) Change its company name without giving Lender thirty (30) days prior written notice of
its intention to do so and complying with all reasonable requirements of Lender in regard thereto.

     Section 6.07 Transactions with Affiliates and Officers. No Borrower shall:

     (a) enter into any transaction, including without limitation, the purchase, sale or exchange
of property or the rendering of any services, with any Affiliate or any officer or director
thereof, or enter into, assume or suffer to exist any employment or consulting contract with any
Affiliate or an officer or director thereof, except the Management Agreements and except for
services agreements with Campus Crest Construction, LLC for renovation, maintenance and repair
work on the Projects so long as the consideration to be paid under such agreements is comparable
to consideration that would be paid to a non-Affiliate in an arms-length agreement;

     (b) make any advance or loan to any Affiliate or any director or officer thereof or to any
trust of which any of the foregoing is a beneficiary, or guarantee any such loan to any such
Person; or

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     (c) pay any fees or expenses to, or reimburse or assume any obligation for the reimbursement
of any expenses incurred by, any Affiliate or any officer or director thereof except for any fees
or expenses incurred in connection with the Management Agreements and in connection with those
other transactions permitted in Section 6.07(a) above.

ARTICLE VII

FINANCIAL COVENANTS

     For so long as this Agreement is in effect, and unless Lender expressly consents in writing
to the contrary, Borrowers jointly and severally agree to comply with the following covenants:

     Section 7.01 Debt Coverage Ratio. Borrowers shall maintain a Debt Service Coverage
Ratio of not less than 1.20 to 1.0. Compliance with this covenant will be tested at the end of
each calendar quarter beginning with the quarter ending December 31, 2008 based upon NOI and Debt
Service for the most recently completed twelve (12) month period, except that (i) for the period
ending December 31, 2008, NOI and Debt Service for the most recently completed three (3) month
period will be multiplied by four (4) for purposes of determining compliance with this covenant,
(ii) for the period ending March 31, 2009, NOI and Debt Service for the most recently completed
six (6) month period will be multiplied by two (2) for purposes of determining compliance with
this covenant, and (iii) for the period ending June 30, 2009, NOI and Debt Services for the most
recently completed nine (9) month period will be multiplied by 1.33 for purposes of determining
compliance with this covenant.

     Section 7.02 Debt Yield. Borrowers shall maintain a Debt Yield Percentage of not less
than 9.0%. This covenant shall be tested at the end of each calendar quarter beginning with the
quarter ending December 31, 2008 based upon NOI for the most recently completed twelve (12) month
period, except that (i) for the period ending December 31, 2008, NOI for the most recently
completed three (3) month period will be multiplied by four (4) for purposes of determining
compliance with this covenant, (ii) for the period ending March 31, 2009, NOI for the most recently
completed six (6) month period will be multiplied by two (2) for purposes of determining compliance
with this covenant, and (iii) for the period ending June 30, 2009, NOI for the most recently
completed nine (9) month period will be multiplied by 1.33 for purposes of determining compliance
with this covenant.

     Section 7.03 LTV Ratio. Borrowers shall maintain a LTV Ratio of not more than eighty
percent (80%).

Provided, however, that with respect to each covenant in this Article VII, Borrowers shall have a
period of thirty (30) days to cure any non-compliance with these covenants before it becomes an
Event of Default by prepaying the Loan, providing additional Collateral acceptable to Lender in
its sole discretion, providing other evidence of cure satisfactory to Lender in its sole
discretion, or any one or more of the foregoing.

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ARTICLE VIII

EVENTS OF DEFAULT

     Section 8.01 Events of Default. Each of the following events shall constitute an
Event of Default under this Agreement:

     (a) Borrowers shall fail to pay any principal of the Loan when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment;

     (b) Borrowers shall fail to pay any interest on the Loans within five (5) days of the date
due or if any Borrower or any Guarantor shall fail to pay any other fees or sums due hereunder or
under any of the other Loan Documents, when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other date fixed for
payment;

     (c) Borrowers shall fail to comply with any covenant contained in Sections 5.03, 5.08, 5.10,
or 5.11, Article VI or Article VII (subject to the last sentence of such Article) or in any
Security Document which are applicable to them;

     (d) Any Borrower Party shall fail to perform any other term, covenant or agreement contained
herein or in any of the other Loan Documents (not specified in subsection (a), (b) or (c) above)
that are applicable to them and such failure continues for thirty (30) days after the earlier of
any Borrower Party having knowledge of such failure or written notice thereof to Borrowers from
Lender; provided, however, that if such failure is not subject, in Lender’s determination, to cure
within such thirty (30) day period but Borrowers are proceeding in good faith diligently to effect
such cure, such cure period will be extended for an additional thirty (30) days.

     (e) Any representation or warranty made by or on behalf of any Borrower Party in any Loan
Document, or in any report, certificate, financial statement or in any other document or
instrument delivered pursuant to or in connection with this Agreement, or any other Loan Document
shall prove to have been false in any material respect upon the date when made or deemed to have
been made or repeated;

     (f) Any Borrower Party shall fail to pay at maturity, or within any applicable period of
grace, any obligation for borrowed money or credit received or other indebtedness, in each case, in
excess of $250,000, or fail to observe or perform any material term, covenant or agreement
contained in any agreement by which it is bound (including any event or condition that requires
such debt to be prepaid or redeemed), evidencing or securing any such borrowed money or credit
received or other indebtedness, in each case, in excess of $250,000 for such period of time as
would permit (assuming the giving of appropriate notice if required) the holder or holders thereof
or of any obligations issued thereunder to accelerate the maturity thereof;

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     (g) Any Borrower Party (i) shall make an assignment for the benefit of creditors, or
admit in writing its general inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of any such Person or of any substantial part of the assets of any thereof,
(ii) shall commence any case or other proceeding relating to any such Person under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or (iii) shall take any action to
authorize or in furtherance of any of the foregoing;

     (h) A petition or application shall be filed for the appointment of a trustee or other
custodian, liquidator or receiver of any Borrower Party or any substantial part of the assets of
any thereof, or a case or other proceeding shall be commenced against any such Person under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect, and any such Person
shall indicate its approval thereof, consent thereto or acquiescence therein or such petition,
application, case or proceeding shall not have been dismissed within ninety (90) days following the
filing or commencement thereof;

     (i) A decree or order is entered appointing any such trustee, custodian, liquidator or
receiver or adjudicating any Borrower Party bankrupt or insolvent, or approving a petition in any
such case or other proceeding, or a decree or order for relief is entered in respect of any
Borrower Party in an involuntary case under federal bankruptcy laws as now or hereafter
constituted;

     (j) There shall remain in force, undischarged, unsatisfied and unstayed, for more than sixty
(60) days, whether or not consecutive, any uninsured final judgment against any Borrower Party
that, with other outstanding uninsured final judgments, undischarged, against any such Person or
other Borrower Parties exceeds in the aggregate at any time outstanding $500,000;

     (k) If all or any portion of the Loan Documents shall be canceled, terminated, revoked or
rescinded other than in accordance with the terms thereof or with the express prior written
agreement, consent or approval of Lender, or any action at law, suit in equity or other legal
proceeding to cancel, revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of any Borrower Party or any of their respective stockholders, partners, members or
beneficiaries, or any such Person shall assert that any of the Loan Documents do not apply to
future advances under this Agreement or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the Loan Documents is
illegal, invalid or unenforceable in accordance with their respective terms;

     (l) Any suit or proceeding shall be filed against any of the Borrower Parties or any
Collateral which in the good faith business judgment of Lender after giving consideration to the
likelihood of success of such suit or proceeding and the availability of insurance to cover any
judgment with respect thereto and based on the information available to them, if adversely
determined, would result in an uninsured judgment or settlement that would have a Material Adverse
Effect;

25

 

     (m) Any Guarantor denies that such Guarantor has any liability or obligation under the
Guaranty or any Environmental Indemnity Agreement pursuant to the terms of such document, or shall
notify Lender of such Guarantor’s intention to attempt to cancel or terminate the Guaranty or any
Environmental Indemnity Agreement, or shall fail to observe or comply with any term, covenant,
condition or agreement under this Agreement, the Guaranty or any Environmental Indemnity Agreement
after the expiration of any applicable cure periods provided therein, if any;

     (n) The occurrence of a Change of Control;

     (o) Any “Event of Default”, as defined in any of the other Loan Documents, shall occur;

     (p) Any Borrower Party shall be indicted for a federal crime, a punishment for which could
include the forfeiture of any assets of such Person, including the Collateral;

     (q) The occurrence of both (i) the death of any Guarantor that is an individual or the
dissolution, liquidation, consolidation or other termination of existence of any Guarantor that is
a corporation, partnership or limited liability company, and (ii) the failure to provide Lender
with a substitute guarantor, additional collateral or other assurances satisfactory to Lender in
its sole discretion within ninety (90) days thereafter; or

     (r) Any amendment to or termination of a financing statement naming any Borrower as debtor
and Lender as secured party, or any correction statement with respect thereto, is filed in any
jurisdiction by, or caused by, or at the instance of any Borrower or by, or caused by, or at the
instance of any principal, member, general partner or officer of any Borrower without the prior
written consent of Lender.

     Section 8.02 Remedies. Upon the occurrence and during the continuance of an Event of
Default, Lender may, in its discretion, exercise one or more of the following remedies:

     (a) Accelerate the maturity of the Obligations and declare the entire unpaid principal
balance of, and any unpaid interest then accrued on, the Note, without demand or notice of any
kind to Borrowers or any other Person, to be immediately due and payable;

     (b) Take all, any or any combination of the actions Lender may take under any of the other
Loan Documents or the Environmental Indemnification Agreement upon the occurrence of a default or
an event of default thereunder, notwithstanding the fact that the event that is an Event of Default
hereunder may not constitute a default or an event of default under any such other Loan Document or
the Environmental Indemnification Agreement, including, without limitation acceleration of the
Obligations evidenced by the Note and foreclosure and sale of the Land and the Improvements under
the Security Instruments;

     (c) Perform, or cause to be performed, any obligation, covenant or agreement that Borrowers
have failed to perform or comply with, and in such event all costs and expenses incurred by Lender
in performing any such obligation, covenant or agreement shall be added to the Obligations and
shall be secured by the Security Instruments, and shall bear interest at the

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Default Rate (as defined in the Note) from the date paid or incurred by Lender, and the interest
thereon shall also be added to and become a part of the Obligations and shall be secured by the
Security Instruments;

     (d) Continue to act, with respect to Borrowers and the Loan, as if no Event of Default had
occurred, which continuance shall not be or be construed as a waiver of Lender’s rights; and
assert the Event of Default and take any action provided for herein at any time after the
occurrence and during the existence of the Event of Default;

     (e) Proceed as authorized by law to obtain payment of the Loan; or

     (f) Take all, any, or any combination of the actions Lender may take under applicable law or
equity.

No failure or delay on the part of Lender to exercise any right or remedy hereunder or under the
Loan Documents or the Environmental Indemnification Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any right or remedy hereunder preclude any further
exercise thereof or the exercise of any further right or remedy hereunder or under the Loan
Documents or the Environmental Indemnification Agreement. No exercise by Lender of any remedy under
the other Loan Documents or the Environmental Indemnification Agreement shall operate as a
limitation on any rights or remedies of Lender under this Agreement, except to the extent of moneys
actually received by Lender under the other Loan Documents or the Environmental Indemnification
Agreement.

     Section 8.03 Costs and Expenses. All costs and expenses incurred by Lender in
connection with any of the actions authorized in this Article, after an Event of Default,
including without limitation attorneys’ fees, shall be and constitute a portion of the Loan,
secured in the same manner and to the same extent as the Loan, even though such costs and expenses
may cause the amount of the Loan to exceed the face amount of the Note. Whenever the terms of this
Agreement require Borrowers to pay attorneys’ fees of Lender, such obligation shall extend only to
reasonable attorneys’ fees, without regard to statutory interpretations, actually incurred at
normal hourly rates.

     Section 8.04 Remedies Cumulative. The foregoing remedies are cumulative of, and in
addition to, and not restrictive or in lieu of, the other remedies provided for herein and the
remedies provided for or allowed by the other Loan Documents or the Environmental Indemnification
Agreement, or provided for or allowed by law, or in equity.

ARTICLE IX

JOINT BORROWER PROVISIONS.

     Section 9.01 Joint Borrower Provisions.

     (a) Each Borrower hereby agrees that such Borrower is jointly and severally liable for, and
hereby absolutely and unconditionally guarantees to Lender and its successors and

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assigns, the full and prompt payment (whether at stated maturity, by acceleration or otherwise)
and performance of, all Obligations owed or hereafter owing to Lender by each other Borrower. Each
Borrower agrees that its guaranty obligation hereunder is a continuing guaranty of payment and
performance and not of collection, that its obligations under this Article IX shall not be
discharged until payment and performance, in full, of the Obligations has occurred, and that its
obligations under this Article IX shall be absolute and unconditional, irrespective of, and
unaffected by,

          (i) the genuineness, validity, regularity, enforceability or any future amendment of, or
change in, this Agreement, any other Loan Document or any other agreement, document or instrument
to which any Borrower is or may become a party;

          (ii) the absence of any action to enforce this Agreement (including this Article IX) or any
other Loan Document or the waiver or consent by Lender with respect to any of the provisions
thereof;

          (iii) the existence, value or condition of, or failure to perfect its Lien against, any
security for the Obligations or any action, or the absence of any action, by Lender in respect
thereof (including the release of any such security);

          (iv) the insolvency of any Borrower Party; or

          (v) any other action or circumstances that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.

     Each Borrower shall be regarded, and shall be in the same position, as principal debtor with
respect to the Obligations guaranteed hereunder.

     (b) Each Borrower expressly represents and acknowledges that it is part of a common enterprise
with the other Borrowers and that any financial accommodations by Lender, to any other Borrower
hereunder and under the other Loan Documents are and will be of direct and indirect interest,
benefit and advantage to all Borrowers. Each of the Borrowers acknowledges and agrees that, for
purposes of the Loan Documents, it receives a benefit from the availability of credit under this
Agreement to all of the Borrowers.

     Section 9.02 Waivers by the Borrowers. Each Borrower expressly waives all rights it
may have now or in the future under any statute, or at common law, or at law or in equity, or
otherwise, to compel Lender to marshal assets or to proceed in respect of the Obligations
guaranteed hereunder against any other Borrower Party, any other party or against any security for
the payment and performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower. It is agreed among each Borrower and Lender that the foregoing
waivers are of the essence of the transaction contemplated by this Agreement and the other Loan
Documents and that, but for the provisions of this Article and such waivers, Lender would decline
to enter into this Agreement. Each of the Borrowers waives all defenses arising under the laws of
suretyship; to the extent such laws are applicable, in connection with its joint and several
obligations under this Agreement.

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     Section 9.03 Benefit of Guaranty. Each Borrower agrees that the provisions of this
Article are for the benefit of Lender and its successors, transferees, endorsees and assigns, and
nothing herein contained shall impair, as between any other Borrower and Lender, the obligations
of such other Borrower under the Loan Documents.

     Section 9.04 Subordination of Subrogation, Etc. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, and except as set forth in Section 9.07,
each Borrower hereby expressly and irrevocably subordinates to payment of the Obligations any and
all rights at law or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor until the Obligations are indefeasibly paid in full in cash. Each
Borrower acknowledges and agrees that this subordination is intended to benefit Lender and shall
not limit or otherwise affect such Borrower’s liability hereunder or the enforceability of this
Article IX, and that Lender and its successors and assigns are intended third party beneficiaries
of the waivers and agreements set forth in this Article IX.

     Section 9.05 Election of Remedies. If Lender may, under applicable law, proceed to
realize its benefits under any of the Loan Documents giving Lender a Lien upon any Collateral,
whether owned by any Borrower or by any other Person, either by judicial foreclosure or by
non-judicial sale or enforcement, Lender may, at its sole option, determine which of its remedies or
rights it may pursue without affecting any of its rights and remedies under this Article IX. If, in
the exercise of any of its rights and remedies, Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Borrower or any other Person,
whether because of any applicable laws pertaining to “election of remedies” or the like, each
Borrower hereby consents to such action by Lender and waives any claim based upon such action, even
if such action by Lender shall result in a full or partial loss of any rights of subrogation that
each Borrower might otherwise have had but for such action by Lender. Any election of remedies that
results in the denial or impairment of the right of the Lender to seek a deficiency judgment
against any Borrower shall not impair any other Borrower’s obligation to pay the full amount of the
Obligations. In the event Lender shall bid at any foreclosure or trustee’s sale or at any private
sale permitted by law or the Loan Documents, Lender may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Lender but shall be credited against the
Obligations. The amount of the successful bid at any such sale, whether Lender or any other party
is the successful bidder, shall be conclusively deemed to be the fair market value of the
Collateral and the difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations guaranteed under this Article IX,
notwithstanding that any present or future law or court decision or ruling may have the effect of
reducing the amount of any deficiency claim to which Lender might otherwise be entitled but for
such bidding at any such sale.

     Section 9.06 Limitation. Notwithstanding any provision herein contained to the
contrary, each Borrower’s liability under this Article IX shall be limited to an amount not to
exceed as of any date of determination the greater of:

     (a) the amount of the Loan advanced to such Borrower;

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     (b) the net amount the Loan advanced to another Borrower under this Agreement and then
re-loaned or otherwise transferred to, or for the benefit of, such Borrower; and

     (c) the amount that could be claimed by Lender from such Borrower under this Article IX
without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar foreign or domestic statute or common law after taking into account,
among other things, such Borrower’s right of contribution and indemnification from each other
Borrower under Section 9.07.

     Section 9.07 Contribution with Respect to Guaranty Obligations.

     (a) To the extent that any Borrower shall make a payment under this Article IX of all or any
of the Obligations (other than the portion of the Loan made to that Borrower for which it is
primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor
Payments then previously or concurrently made by any other Borrower, exceeds the amount that such
Borrower would otherwise have paid if each Borrower had paid the aggregate Obligations satisfied
by such Guarantor Payment in the same proportion that such Borrower’s “Allocable Amount” (as
defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate
Allocable Amounts of each of the Borrowers as determined immediately prior to the making of such
Guarantor Payment, then, following indefeasible payment in full in cash of the Obligations, such
Borrower shall be entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Borrower for the amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

     (b) As of any date of determination, the “Allocable Amount” of any Borrower shall be
equal to the maximum amount of the claim that could then be recovered from such Borrower under this
Article IX without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.

     (c) This Section 9.07 is intended only to define the relative rights of Borrowers and nothing
set forth in this Section 9.07 is intended to or shall impair the obligations of Borrowers,
jointly and severally, to pay any amounts as and when the same shall become due and payable in
accordance with the terms of this Agreement, including Section 9.01. Nothing contained in this
Section 9.07 shall limit the liability of any Borrower to pay the portion of the Loan made
directly or indirectly to that Borrower and accrued interest, fees and expenses with respect
thereto for which such Borrower shall be primarily liable.

     (d) The parties hereto acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets of the Borrowers to which such contribution and indemnification
is owing.

     (e) The rights of the indemnifying Borrowers against other Borrowers under this Section 9.07
shall be exercisable upon the full and indefeasible payment of the Obligations.

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     Section 9.08 Liability Cumulative. The liability of Borrowers under this Article IX
is in addition to and shall be cumulative with all liabilities of each Borrower to Lender under
this Agreement and the other Loan Documents to which such Borrower is a party or in respect of any
Obligations or obligation of the other Borrowers, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability specifically provides to the
contrary.

     Section 9.09 Accommodation. It is understood and agreed that the handling of this
credit facility on a joint borrowing basis as set forth in this Agreement is solely as an
accommodation to the Borrowers and at their request. Accordingly, Lender is entitled to rely, and
shall be exonerated from any liability for relying upon, any request made by a purported officer
of any Borrower without the need for any consent or other authorization of any other Borrower and
upon any information or certificate provided on behalf of any Borrower by a purported officer of
such Borrower.

     Section 9.10 Independent Obligations. The obligation of each Borrower hereunder is
independent of the obligation of each other Borrower and, in the event of any event of default
under the Loan Documents, a separate action or actions may be brought and prosecuted against any
Borrower whether or not said Borrower is the alter ego of another Borrower or any Guarantor and
whether or not any other Borrower or any Guarantor is joined therein or a separate action or
actions are brought against any other Borrower or any Guarantor. Lender’s rights hereunder shall
not be exhausted until all of the Obligations have been fully paid and performed.

     Section 9.11 Fraudulent Conveyance. Anything in this Agreement to the contrary
notwithstanding, it is the intention of the Borrowers and Lender that the Borrowers’ Obligations
hereunder or any liens or security interest granted by any Borrower securing this Agreement not be
a Fraudulent Conveyance as defined below. Consequently, Lender and Borrowers agree that if the
liability of any Borrower hereunder or any liens or security interests granted by such Borrower
securing its obligations hereunder would, but for the application of this sentence, constitute a
Fraudulent Conveyance which could be set aside as of the date of such determination, the liability
of such Borrower and the liens and security interests granted by such Borrower securing this
Agreement shall be valid and enforceable only to the extent of the Maximum Obligation and the
liability of said Borrower under this Agreement shall automatically be deemed to have been amended
accordingly. For purposes of this provision, the “Maximum Obligation” shall mean the
aggregate amount due hereunder, but in no event higher than the maximum amount for which that
Borrower could be liable hereunder without rendering its obligation hereunder or the granting of
liens and security interests in connection herewith void under applicable law as a Fraudulent
Conveyance. A “Fraudulent Conveyance” shall mean a fraudulent conveyance under title 11 of
the United States Code as amended or under applicable state law regarding fraudulent conveyances,
fraudulent transfer or other similar law in effect from time to time. In making such determination,
the parties agree that the Maximum Obligation may increase from time to time as the maximum amount
for which any Borrower could be liable without rendering its obligations hereunder void under
applicable law as a Fraudulent Conveyance increases.

31

 

ARTICLE X

MISCELLANEOUS

     Section 10.01 Notices.

          (a) All notices, demands, requests, and other communications desired or required to be given
hereunder (“Notices”), shall be in writing and shall be given by: (i) hand delivery to the address
for Notices; (ii) delivery by overnight courier service to the address for Notices; or (iii)
sending the same by United States mail, postage prepaid, certified mail, return receipt requested,
addressed to the address for Notices.

          (b) All Notices shall be deemed given and effective upon the earlier to occur of (i) the hand
delivery of such Notice to the address for Notices; (ii) one business day after the deposit of
such Notice with an overnight courier service by the time deadline for next day delivery addressed
to the address for Notices; or (iii) three business days after depositing the Notice in the United
States mail as set forth in (a)(iii) above. All Notices shall be addressed to the following
addresses:

	 	 	 

	Borrowers:

	 	c/o Campus Crest Group, LLC
	 

	 	2100 Rexford Road
	 

	 	Suite 414
	 

	 	Charlotte, NC 28211
	 

	 	Attention: F. Brian Schneiderman
	 
	 	 
	With a copy to:

	 	Bradley Arant Rose & White LLP
	 

	 	One Federal Place 
	 
	 	1819 Fifth Avenue North 

Birmingham, AL 35203
	 

	 	Attention: Dawn Helms Sharff
	 
	 	 
	Lender:

	 	Silverton Bank, N.A.
	 

	 	3284 Northside Parkway
	 

	 	Atlanta, GA 30327-2245
	 

	 	Attention: CRE Apartment
	 
	 	 
	With a copy to:

	 	Powell Goldstein LLP
	 

	 	One Atlantic Center

 Fourteenth Floor
	 

	 	1201 West Peachtree Street, NW
	 

	 	Atlanta, Georgia 30309-3488
	 

	 	Attention: Gerald Blanchard, Esq.

or to such other persons or at such other place as any party hereto may by Notice designate as a
place for service of Notice; provided, however, that the “copy to” Notice to be given as
set forth above is a courtesy copy only; and a Notice given to such person is not sufficient to
effect giving

32

 

a Notice to the principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.

     Section 10.02 No Waiver; Remedies Cumulative. No failure or delay on the part of
Lender in exercising any right or remedy hereunder and no course of dealing between Borrowers and
Lender shall operate as a waiver thereof, nor shall any single or partial exercise of any right or
remedy hereunder or under the Note preclude any other or further exercise thereof or the exercise
of any other right or remedy hereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which Lender would otherwise have. No
notice to or demand on Borrowers not required hereunder or under any other Loan Document in any
case shall entitle Borrowers to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of Lender to any other or further action in any
circumstances without notice or demand.

     Section 10.03 Successors and Assigns; Sale of Interest. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective legal
representatives, successors and permitted assigns of the parties hereto; provided that
Borrowers may not assign or transfer any of its rights or obligations hereunder without the prior
written consent of Lender, other than to the extent expressly permitted by the Security
Instruments. Lender may sell, assign, or sell or grant participations in all or any part of
Lender’s rights, title or interests hereunder and under the other Loan Documents or the
Environmental Indemnification Agreement without the prior written consent of Borrowers;
provided, however that any such assignment or sale shall not increase any of the
obligations of Borrowers under the Loan Documents or the Environmental Indemnification Agreement.
In that event, such successor or assignee shall be entitled to all of the rights of Lender under
the Loan Documents or the Environmental Indemnification Agreement, subject to the terms of any
sale, assignment or participation agreement.

     Section 10.04 Modification. This Agreement shall not be modified or amended in any
respect except by a written agreement executed by the parties in the same manner as this Agreement
is executed.

     Section 10.05 Time of Essence. Time is of the essence of this Agreement and each of
the other Loan Documents and the Environmental Indemnification Agreement.

     Section 10.06 Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of the State of
Alabama, without regard to principles of conflicts of laws thereof.

     Section 10.07 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together constitute one and the
same instrument.

33

 

     Section 10.08 Effectiveness; Survival.

     (a) This Agreement shall become effective on the date on which all of the parties hereto
shall have signed a copy hereof (whether the same or different copies) and Lender shall have
received the same.

     (b) All representations and warranties made herein, in the certificates, reports, notices,
and other documents delivered pursuant to this Agreement shall survive the execution and delivery
of this Agreement, the other Loan Documents, the Environmental Indemnification Agreement, and such
other agreements and documents, the making of the Loan hereunder and the execution and delivery of
the Note, and shall terminate at such time as the Obligations have been paid and satisfied in
full; provided, however, that the Environmental Indemnification Agreement shall
remain in full force and effect in accordance with the terms thereof notwithstanding any payment
and dissatisfaction of the Obligations.

     Section 10.09 Severability. In case any provision in or Obligation under this
Agreement or the other Loan Documents or the Environmental Indemnification Agreement shall be
invalid, illegal or unenforceable, in whole or in part, in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

     Section 10.10 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be otherwise within the
limitation of, another covenant, shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or condition exists. To the extent any of the terms of this
Agreement conflicts with the terms of the other Loan Documents, the terms of this Agreement shall
control.

     Section 10.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.

     Section 10.12 Termination of Agreement. At such time as all Obligations have been
paid and satisfied in full, this Agreement shall terminate; provided however, that any and
all indemnity obligations of Borrowers to Lender arising hereunder or under any of the other Loan
Documents, which are expressly stated to survive satisfaction of the Obligations shall survive the
termination of this Agreement or such other Loan Documents, and provided further that all
indemnity obligations under the Environmental Indemnification Agreement shall survive such payment
and satisfaction of the Obligations to the extent contemplated in the Environmental Indemnification
Agreement.

     Section 10.13 Entire Agreement. This Agreement and the other Loan Documents and the
Environmental Indemnification Agreement constitute the entire agreement between Borrowers and
Lender with respect to the Loan, the other Obligations and the Collateral and

34

 

supersede all prior agreements, representations and understandings related to such subject
matters.

     Section 10.14 Jury Trial Waiver; Consent to Forum.

     (a) TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH BORROWER IRREVOCABLY WAIVES ALL RIGHT OF
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE ENVIRONMENTAL INDEMNIFICATION AGREEMENTS OR
ANY MATTER ARISING HEREUNDER OR THEREUNDER.

     (b) EACH BORROWER ALSO AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE ENVIRONMENTAL INDEMNIFICATION AGREEMENTS OR TO
ENFORCE ANY JUDGMENT OBTAINED AGAINST SUCH BORROWER IN CONNECTION WITH THIS AGREEMENT OR SUCH OTHER
LOAN DOCUMENT, MAY BE BROUGHT BY LENDER IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF THE
STATE IN WHICH LENDER’S ADDRESS SHOWN ABOVE IS LOCATED, OR IN ANY ONE OR MORE OTHER STATE OR
FEDERAL COURTS SITTING IN ANY COUNTY AND STATE IN WHICH ANY OF THE PROPERTY IS LOCATED. EACH
BORROWER IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE AFORESAID STATE AND FEDERAL COURTS, AND
IRREVOCABLY WAIVES ANY PRESENT OR FUTURE OBJECTION TO VENUE IN ANY SUCH COURT, AND ANY PRESENT OR
FUTURE CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM, IN CONNECTION WITH ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE ENVIRONMENTAL
INDEMNIFICATION AGREEMENTS.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

35

 

     IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly
executed and delivered on their behalf as of the date first above stated.

	 	 	 	 	 
	 	BORROWERS:

CAMPUS CREST AT MOBILE, LLC, an

Alabama limited liability company

 	 
	 	By:  	Campus Crest Properties, LLC, a North 
Carolina limited liability company 	 
	 	Its: 	Manager 	 
	 	 	 
	 	By:  	/s/ F. Brian Schneiderman 	 
	 	 	Name:  	F. Brian Schneiderman 	 
	 	 	Title:  	Manager 	 
	 
	 	CAMPUS CREST AT JACKSONVILLE, AL, LLC, an Alabama limited liability company
 	 
	 	By:  	Campus Crest Properties, LLC, a North 
Carolina limited liability company 	 
	 	Its: 	Manager 	 
	 	 	 
	 	By:  	/s/ F. Brian Schneiderman 	 
	 	 	Name:  	F. Brian Schneiderman 	 
	 	 	Title:  	Manager 	 
	 
	 	CAMPUS CREST AT GREELEY, LLC, a

Delaware limited liability company

 	 
	 	By:  	Campus Crest Properties, LLC, a North 
Carolina limited liability company 	 
	 	Its: 	Manager 	 
	 	 	 
	 	By:  	/s/ F. Brian Schneiderman 	 
	 	 	Name:  	F. Brian Schneiderman 	 
	 	 	Title:  	Manager 	 
	 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

Silverton — Campus Crest Loan Agreement

 

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

	 	 	 	 	 
	 	CAMPUS CREST AT ELLENSBURG, LLC, a

Delaware limited liability company

 	 
	 	By:  	Campus Crest Properties, LLC, a North 
Carolina limited liability company 	 
	 	Its: 	Manager 	 
	 	 	 
	 	By:  	/s/ F. Brian Schneiderman
 	 
	 	 	Name:  	F. Brian Schneiderman 	 
	 	 	Title:  	Manager 	 
	 
	 	CAMPUS CREST AT ABILENE, LP, a

Delaware limited partnership

 	 
	 	By:  	Campus Crest GP, LLC, a Delaware limited 
liability company  	 
	 	Its: 	General Partner 	 
	 	 	 
	 	By:  	/s/ F. Brian Schneiderman 	 
	 	 	Name:  	F. Brian Schneiderman 	 
	 	 	Title:  	 Manager 	 
	 
	 	

CAMPUS CREST AT NACOGDOCHES, LP, a

Delaware limited partnership

 	 
	 	By:  	Campus Crest GP, LLC, a Delaware limited 
liability company  	 
	 	Its: 	General Partner 	 
	 	 	 
	 	By:  	/s/ F. Brian Schneiderman 	 
	 	 	Name:  	F. Brian Schneiderman 	 
	 	 	Title:  	Manager 	 
	 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

	 	 	 	 	 
	 	LENDER:

SILVERTON BANK, N.A.

 	 
	 	By:  	/s/ Jason D. Brown
 	 
	 	 	Name:  	Jason D. Brown 	 
	 	 	Title:  	SVP 	 
	 

 

 

EXHIBIT A

Form of Joinder Agreement

THIS JOINDER AGREEMENT (“Joinder Agreement”) is executed as of                          , 200                    , by         
                          , a                                       
(“Joining Party”), and delivered to Silverton Bank, N.A., a
national banking association (“Bank”) pursuant to Section 3.06(b) of the Loan
Agreement dated as of
                                        , 2008, as from time to time in effect
(the “Loan Agreement”), by and
between Campus Crest at Mobile, LLC, Campus Crest at Jacksonville, AL, LLC,
Campus Crest at Nacogdoches, LP, Campus Crest at Abilene, LP, Campus Crest at
Greeley, LLC, and Campus Crest at Ellensburg, LLC (collectively,
“Borrowers”) and Bank. Terms used but not defined in this Joinder
Agreement shall have the meanings defined for those terms in the Loan Agreement.

RECITALS

          (A) Joining Party is required, pursuant to Section 3.06(b) of the Loan
Agreement, to become an additional Borrower under the Loan Agreement and a party
to all the other Loan Documents to which the existing Borrowers are a party.

          (B) Joining Party expects to realize direct and indirect benefits as a
result of the availability to Borrowers of the credit facilities under the Loan
Agreement.

     NOW, THEREFORE, Joining Party agrees as follows:

AGREEMENT

     1. Joinder. By this Joinder Agreement, Joining Party hereby becomes
a “Borrower” under the Loan Agreement with respect to all the Obligations of a
Borrower now or hereafter incurred under the Loan Agreement and the other Loan
Documents. Joining Party agrees that Joining Party is and shall be bound by, and
hereby assumes, all representations, warranties, covenants, terms, conditions,
duties and waivers applicable to a Borrower under the Loan Agreement and the
other Loan Documents.

     2. Representations and Warranties of Joining Party. Joining Party
represents and warrants to Bank that, as of the Effective Date (as defined
below), except as disclosed in writing by Joining Party to Bank on or prior to
the date hereof and approved by Bank in writing (which disclosures shall be
deemed to amend the Schedules and other disclosures delivered as contemplated in
the Loan Agreement), the representations and warranties contained in the Loan
Agreement are true and correct in all material respects as applied to Joining
Party as a Borrower on and as of the Effective Date as though made on that date.
As of the Effective Date, all covenants and agreements in the Loan Documents of
the Borrowers are true and correct with respect to Joining Party and no Default
or Event of Default shall exist or might exist upon the Effective Date in the
event that Joining Party becomes a Borrower.

Exhibit A
– Form of Joinder Agreement

 

 

     3. Promissory Notes. Joining Party hereby agrees that, as of the
Effective Date, each Note heretofore delivered to Bank shall be a joint and
several obligation of Joining Party to the same extent as if executed and
delivered by Joining Party, and upon request by Bank, will promptly endorse Bank’s Note(s) to confirm such obligation.

     4. Further Assurances. Joining Party agrees to execute and deliver
such other instruments and documents and take such other action, as Bank may
reasonably request, in connection with the transactions contemplated by this
Joinder Agreement.

     5. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
BE A CONTRACTUAL OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH , THE LAWS OF THE STATE OF ALABAMA.

     6. The effective date (the “Effective Date”) of this Joinder Agreement is
                    , 20     .

	 	 	 	 	 	 	 

	 	 	“JOINING PARTY”

	 	 
	 
	 	 	 	 	,	 a 
	 	 	nbsp;	 	 
	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	

Name:
	 	 

	 	 
	 

	 	

Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 

	ACKNOWLEDGED :	 	 
	 
	 	 	 	 
	SILVERTON BANK, N.A., a national
banking association	 	 
	 
	 	 	 	 
	 
	By:
	 	 	 	 
	
Name:

	 	 

	 	 
	

Title:

	 	 

	 	 
	 

	 	 

	 	 

Exhibit A
– Form of Joinder Agreement

 

 

EXHIBIT
B

Form of Compliance Certificate

			
	To:	 	Silverton Bank, N.A.

3284 Northside Parkway

Atlanta, GA 30327-2245

Attn:                                  

			
	Re:	 	Compliance Certificate dated                     , 2008

Ladies and Gentlemen:

     Reference is made to that certain Loan Agreement, dated as of                     , 2008 (the “Loan
Agreement”), among Campus Crest at Mobile, LLC, Campus Crest at Jacksonville, AL,
LLC, Campus Crest at Nacogdoches, LP, Campus Crest at Abilene, LP, Campus Crest at
Greeley, LLC, and Campus Crest at Ellensburg, LLC (collectively, “Borrower”),
and Silverton Bank, N.A., a national banking association (“Bank”). Capitalized
terms used in this Compliance Certificate have the meanings set forth in the Loan
Agreement unless specifically defined herein.

     Pursuant to Section 5.02(c) of the Loan Agreement, the undersigned officer of
Borrower hereby certifies that:

     1. The
financial information of Borrower furnished in Schedule 1 attached
hereto, has been prepared in accordance with Generally Accepted Accounting Principles
and fairly presents the financial condition of Borrower.

     2. Such
officer has reviewed the terms of the Loan Agreement and has made, or caused
to be made under his/her supervision, a review in reasonable detail of the transactions
and condition of Borrower during the accounting period covered by the financial
statements delivered pursuant to Section 5.02 of the Loan Agreement.

     3. Such review has not disclosed the existence on and as of the date hereof, and
the undersigned does not have knowledge of the existence as of the date hereof, of any
event or condition that constitutes a Default or Event of Default, except for such
conditions or events listed on Schedule 2 attached hereto, specifying the
nature and period of existence thereof and what action Borrower has taken, is taking,
or proposes to take with respect thereto.

     4. Borrower is in timely compliance with all representations, warranties, and
covenants set forth in the Loan Agreement and the other Loan Documents, except as set
forth on Schedule 2 attached hereto. Without limiting the generality of the
foregoing, Borrower is in compliance with the covenants contained in Article 7
of the Loan Agreement as demonstrated on Schedule 3 hereof.

Exhibit B
– Compliance Certificate

 

 

     IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this                     day of                     , 20     ,

	 	 	 	 	 	 	 

	 
	 	 	 	 	 
	 

	 	

Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	
Title:	 	 	 	 
	 

	 	 	 	 

	 	 

Exhibit B
– Compliance Certificate

 

 

Schedule 1

Financial Information

 Compliance Certificate

 

 

Schedule 2

Defaults and Events of Default

 Compliance Certificate

 

 

Schedule 3

Compliance With Financial Covenants

 Compliance Certificateexv10w49

Exhibit
10.49

CONSTRUCTION LOAN AGREEMENT

WACHOVIA BANK, NATIONAL ASSOCIATION,

401 South Tryon Street, 2nd Floor

Mail Code NC1193

Charlotte, North Carolina 28288-1193

Attn: Real Estate Financial Services

(Hereinafter referred to as “Lender”)

CAMPUS CREST GROUP, LLC and EACH SPE BORROWER

SET FORTH UNDER SCHEDULE I ATTACHED HERETO

2100 Rexford Road

Suite 414

Charlotte, NC 28211

(Hereinafter referred to individually and collectively as “Borrower”)

This CONSTRUCTION LOAN AGREEMENT is dated November 18, 2008 (together with any amendments or
modifications hereto in effect from time to time, the “Agreement”), by, between and among Lender,
Borrower and the other Loan Parties (as hereinafter defined and including each and every one of
the Guarantors of the Loan).

Lender has agreed to extend a $47,068,000.00 senior secured non-revolving construction line of
credit (the “Construction Loan”) to Borrower. Borrower has agreed to accept the Construction Loan
proceeds in the aggregate principal amount of $47,068,000.00, on the terms and conditions set
forth herein. The Construction Loan shall be evidenced by the Note.

This Agreement applies to the Construction Loan evidenced by the Note and the L/C Facility
(hereinafter defined). As used in this Agreement, and in any other Loan Document (unless otherwise
specified therein), terms shall have the meanings set forth on Exhibit A hereto, and in
accordance with the provisions set forth therein.

Relying upon the covenants, agreements, representations and warranties contained in this
Agreement, Lender is willing to extend credit to Borrower upon the terms and subject to the
conditions set forth herein, and Lender and Borrower agree as follows:

CONSTRUCTION LOAN. Lender will make a construction loan in the principal amount of FORTY SEVEN
MILLION SIXTY EIGHT THOUSAND AND NO/100 DOLLARS ($47,068,000.00) to Borrower. The Construction
Loan proceeds are to be used by Borrower solely to finance the land acquisition or leasehold
estate and construction of certain multifamily housing projects (upon satisfaction of the Project
Requirements, each proposed multifamily housing project listed on Schedule II attached
hereto shall be deemed a “Project” hereunder) upon the lands described in each Security Instrument
(the “Property”) in accordance with the plans and specifications approved by Lender (as same may
be modified from time to time with the written approval of Lender, the “Plans and
Specifications”). A ground leasehold interest in a Project site pursuant to a ground lease in form
and content approved by Lender of a Project site shall qualify as Property.

TERM OF CONSTRUCTION LOAN; OPTION TO EXTEND. The entire outstanding principal balance of the
Construction Loan plus all accrued but unpaid interest shall be due and payable in full on May 15,
2011 (the “Maturity Date”). Provided, however, Borrower shall have the option to extend the
Maturity Date for a period of 12 months until May 15, 2012 on the conditions that: (i) Borrower is
not in Default under this Agreement, the Note or any other Loan Document and no event has occurred
which, with the passage of time or the giving of notice, could constitute a Default under this
Agreement, the Note or any other Loan Document; (ii) certificates of occupancy for all buildings in
all Projects have been issued and the Leases for all Projects must provide sufficient net operating
income from all the Projects to provide

 

 

not less than a 1.20:1 debt service coverage ratio for all the Projects collectively where
debt service is computed using the outstanding principal amount of the Loan, an assumed 25 year
amortization and an assumed interest rate per annum of the greater of (a) 7%, or (b) the 10
year U.S. Treasury yield, plus 200 basis points and the 10 year swap spread, all as
determined by Lender; and (iii) payment by Borrower to Lender of an extension fee equal to 0.20% of
the outstanding principal balance of the Construction Loan. Borrower must give Lender written
notice of its election to extend the Maturity Date not less than ninety (90) days prior to the
Maturity Date.

CONSTRUCTION LOAN TERMS. The following terms apply to each Project: Construction Budget. Subject to
compliance by Borrower with the terms and conditions of this Agreement, Lender shall make advances
of the Construction Loan to Borrower for hard construction costs incurred by Borrower in connection
with the construction of the Project (“Hard Costs”) and for all other costs, other than Hard Costs,
incurred by Borrower in connection with the Construction Loan, the acquisition of the Property and
the construction of the Projects, including advances for interest payments due under the terms of
the Note (“Soft Costs”), in accordance with the sources and uses statement provided to Lender (as
same may be revised from time to time with the written approval of Lender, the “Construction
Budget”); provided, however, that (i) in no event shall Lender be obligated to make
disbursements of the Construction Loan in excess of Verified Project Costs (as hereafter defined),
subject to Lender’s obligation to make disbursements for Retainage, as hereinafter provided, and
(ii) subject to the immediately succeeding sentence, in no event shall the maximum principal amount
advanced under the Construction Loan for a specific Project exceed the amount of the Project
Tranche (defined hereinafter) assigned by Lender to each Project financed by the Construction Loan
as based on a Lender approved Project Budget (such amount for each specific Project being the “Project Tranche” for such specific Project). The individual Project Tranches may be increased or
decreased by up to $250,000.00 in the aggregate after closing as requested by Borrower and approved
by Lender subject to offsetting changes in Construction Budgets as approved by Lender; provided,
however, in no event shall the total outstanding amount of the Construction Loan exceed the
lesser of (i) seventy percent (70.0%) of the as-stabilized appraised value of all the
Projects, including the value of the underlying real estate, or (ii) eighty percent (80.0%) of all
the development costs as shown on the then current Construction Budgets for all the Projects, in
the aggregate. Verified Project Costs. As used in this Agreement, “Verified Project Costs” means
the aggregate, from time to time, of (i) Soft Costs actually incurred by Borrower and approved for
funding by Lender in accordance with the applicable Construction Budget, and (ii) Hard Costs
actually incurred by Borrower for work in place as part of the applicable Project, as certified by
Lender’s Inspector (as hereinafter defined) pursuant to the provisions of this Agreement,
minus the Retainage. Equity Requirement. Prior to the initial Construction Loan advance for
a Project, Borrower shall invest into the Project the Equity Requirement as set forth in the
Construction Budget for such Project Tranche or such other amount as otherwise approved in writing
by Lender, it being understood that the Property (including a ground leasehold interest pursuant to
a ground lease in form and content approved by Lender) will be contributed as a portion of the
equity in partial satisfaction of this requirement (“Equity Requirement”). In no event shall any
single Project have less than twenty percent (20%) equity invested by Borrower as determined by
Lender. If at any time Lender and Lender’s Inspector determine in their sole discretion that based
on revised or actual costs for the Project additional equity is required, Lender may, prior to any
further Construction Loan advances, require that additional funds be invested in the Project by
Borrower to satisfy the Equity Requirement. The Equity Requirement shall remain invested in the
Project and Borrower agrees that no portion of the Equity Requirement will be reimbursed directly
or indirectly without Lender’s prior written consent. Notwithstanding the foregoing, if, after
completion of a Project for which additional equity was injected by Borrower hereunder, the final
Project Budget for such Project exceeds Borrower’s final costs in completing the Project (any such
difference being referred to herein as “Final Project Savings”), Lender may, in Lender’s sole and
absolute discretion, advance to Borrower an amount equal to the lesser of (i) the remaining
unadvanced proceeds under the applicable Project Tranche, (ii) the amount of additional equity
contributed toward the Project by Borrower and (iii) the amount of Final Project Savings for such
Project. Retainage. Lender shall retain from each advance of Construction Loan proceeds an amount
equal to the greater of (i) 5.0% of Hard Costs actually incurred by Borrower for work in place as
part of the Project, as certified from time to time by Lender’s Inspector, or (ii) the amount
actually held back by Borrower from the general contractor and each subcontractor and

Page 2

 

shall not be released until the Project is completed as evidenced by satisfaction of all of
the conditions set forth in the Final Advance Section. Deficiency in Loan Amount. If at any time
it appears that the actual cost to complete construction of the Project, in the sole opinion of
Lender or Lender’s Inspector, exceeds the undisbursed balance of the Construction Loan for such
Project (the amount by which such cost exceeds the Construction Loan balance hereinafter referred
to as the “Deficiency”), Lender may require Borrower to deposit with Lender (and Borrower shall
deposit within 7 days after written notice from Lender) funds in the amount of the Deficiency
(“Deficiency Deposit”). At Lender’s option, no further Construction Loan advances shall be made
until Borrower has fully complied with this requirement. All such deposited funds shall be
additional security for the Obligations. Lender shall use the Deficiency Deposit to pay costs to
complete construction of the Project. Notwithstanding the foregoing, if, after completion of a
Project for which additional equity was injected by Borrower hereunder, the final Project Budget
for such Project exceeds Borrower’s final costs in completing the Project (any such difference
being referred to herein as “Final Project Savings”), Lender may, in its sole and absolute
discretion, advance to Borrower an amount equal to the lesser of (i) the remaining unadvanced
proceeds under the applicable Project Tranche, (ii) the amount of additional equity contributed
toward the Project by Borrower and (iii) the amount of Final Project Savings for such Project
Contingency Reserve. Advances from that portion of the Construction Loan proceeds allocated to
Contingency (the “Contingency Reserve”) on the Construction Budget may be disbursed in Lender’s
sole and absolute discretion for payment of Hard Costs or Soft Costs as documented by paid
receipts and otherwise as provided herein. Funding for Stored Materials. Lender shall not be
required to make disbursements of the Construction Loan for costs incurred by Borrower with
respect to materials stored on or off the Property unless Lender shall, in its sole discretion,
deem it advisable to do so. If Lender elects to authorize a disbursement for stored materials, all
stored materials must be incorporated into the Project within 45 days of Borrower’s Request for
Advance (as hereinafter defined) regarding such materials, and the following conditions shall
apply: (i) copies of all invoices related to such stored materials and a stored material inventory
sheet shall be submitted with the Request for Advance; (ii) with respect to materials stored on
the Property, such materials shall be adequately secured, as determined by Lender’s Inspector; and
(iii) with respect to materials stored off the Property, such materials must be (A) adequately
stored at a bonded warehouse, (B) insured under an Inland Marine Policy naming Lender as an
additional insured, (C) subject to a first priority lien held by Lender, and (D) subject to
inspection by Lender’s Inspector. Lender may impose such additional conditions and requirements as
it deems appropriate in its sole discretion. Notwithstanding the foregoing, Lender and Borrower
have made agreements regarding the purchase of furniture, lumber, sheathing, trusses, HVAC
equipment and plumbing supplies, all of which may be stored onsite or offsite to the satisfaction
of Lender. Lender’s Inspector. Lender shall have the right to retain an inspector (“Lender’s
Inspector”) to review and advise Lender with respect to all Plans and Specifications,
construction, architectural and other design professional contracts, change orders, governmental
permits and approvals, and other matters related to the design, construction, operation and use of
each Project, to monitor the progress of construction and to review on behalf of Lender all
requests for Construction Loan advances submitted by Borrower. The reasonable fees and expenses of
Lender’s Inspector, whether internal or external, shall be paid by Borrower, including, without
limitation, the Plan and Cost Review fees set forth on Schedule III attached hereto, which
shall be due and payable at closing, and the Monthly Inspection Fee for the Project set forth on
Schedule III which shall be paid monthly by Borrower. Borrower acknowledges that (i)
Lender’s Inspector has been retained by Lender to act as a consultant, and only as a consultant,
to Lender in connection with the construction of the Project, and Lender’s Inspector may be an
employee of Lender, (ii) Lender’s Inspector shall in no event have any power or authority to make
any decision or to give any approval or consent or to do any other thing which is binding upon
Lender, and any such purported decision, approval, consent or act by Lender’s Inspector on behalf
of Lender shall be void and of no force or effect; provided, however that if Lender’s Inspector is
also the loan officer for the Construction Loan with Lender, Lender may agree to such power or
authority acting solely in the employee’s capacity as loan officer for the Lender, (iii) Lender
reserves the right to
make any and all decisions required to be made by Lender under this Agreement, in its sole
and absolute discretion, and without in any instance being bound or limited in any manner
whatsoever by any opinion expressed or not expressed by Lender’s Inspector to Lender or any
other person with respect thereto, and (iv) Lender reserves the right in its sole and
absolute discretion to replace Lender’s Inspector with another inspector at any time and
without prior notice to or approval by Borrower. All inspections by or on behalf of Lender
shall be solely for the benefit of Lender, and Borrower shall have no right to claim any

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loss or damage against Lender or Lender’s Inspector (whether or not an employee of Lender)
arising from any alleged (i) negligence or failure to perform such inspections, (ii) failure to
monitor Construction Loan disbursements or the progress or quality of construction, or (iii)
failure to otherwise properly administer the construction aspects of the Construction Loan. Initial
Closing Conditions. Lender will have no obligations to Close the Construction Loan unless Lender
has received the following from Borrower or any Guarantors, as applicable (if not expressly waived
by Lender), all in form and substance satisfactory to Lender; (a) each of the Loan Documents duly
executed by Borrower or any Guarantors, as the case may be; (b) evidence of compliance with any
applicable title, survey, environmental, soils tests or insurance requirements as set forth in the
Loan Documents or otherwise requested by Lender, which shall be, unless expressly waived by Lender,
in accordance with Lender’s minimum standards in effect at closing (copies of such standards shall
be provided to Borrower upon request); (c) each of the other documents, certificates, affidavits,
releases, agreements, counsel opinions, or other closing items required by Lender as a condition to
making the Construction Loan, (d) fully complete and accurate rent rolls for the projects
(excluding the Murfreesboro, TN project) identified in Schedule III of that Construction Loan
Agreement dated June 18, 2007, as amended (the “2007 Loan Agreement”) (the “2007 Projects”) and the
Project known as Campus Crest at Mobile Phase II closed March 14, 2008 (the “Mobile Phase II
Project”), provided to Lender sufficient to provide a blended or cumulative 1.00:1 debt service
coverage ratio based on debt service on an interest only basis for all the 2007 Projects and the
Mobile Phase II Project collectively, plus, if requested by Lender, (i) copies of sample executed
Leases for the 2007 Projects, (ii) evidence of parental signatures on such leases, and (iii) copies
of deposits or rent checks for certain tenants under such leases; (e) evidence that each of the
2007 Projects and the Mobile Phase II Project is on schedule and compliant with the budgets (as
modified with the approval of Lender) associated for each 2007 Project or the Mobile Phase II
Project, as applicable, as determined by the Lender, or, if cost overruns have occurred or are
contemplated, evidence that Borrower and Guarantors have deposited such additional cash equity with
Lender to cover such cost overruns, and (f) representation from the Borrower and Guarantors that no
“Default” or “Event of Default” (as defined in the 2007 Loan Agreement or in the loan documents for
the Mobile Phase II Project, as applicable) has occurred and is continuing on the date hereof after
giving effect to this Agreement. “Close” shall mean the agreement of Lender to the terms and
conditions of the Construction Loan and the L/C Facility by execution of the Loan Documents and the
initial funding of the Construction Loan (which may occur later than the effective date of the Loan
Documents), and including without limitation, the following:

     (a) Opinion of Counsel. On or prior to the date of the initial borrowing under the
Construction Loan or the L/C Facility, Borrower will provide Lender with an opinion letter or
letters, in form and substance satisfactory to Lender, from an attorney or attorneys acceptable to
Lender. The opinion or opinions taken as a whole will provide, to Lender’s satisfaction, that the
Borrower and any Guarantor are duly organized and validly existing under the laws of the
jurisdictions where Borrower and any Guarantors are organized and qualified, that each Borrower
that owns a Property is qualified to transact business and is in good standing under the laws of
the state in which the Property is located, and that the Borrower and each Guarantor has full power
and authority to undertake the activities contemplated by the Loan; that all Loan Documents (as
defined in the Note) have been duly authorized, executed and delivered by Borrower and any
Guarantors and the Loan Documents are valid and binding obligations of Borrower and Guarantors
enforceable in accordance with their terms; that, if the Construction Loan is secured, the Loan
Documents create a first priority lien on or security interest in the Collateral (as defined in the
Loan Documents) except when otherwise specified in the opinion letter, to the knowledge of such
counsel, no litigation is pending or threatened which, if adversely determined, would have a
material adverse effect on Borrower or any Guarantor; and that the Construction Loan and its terms
do not violate Borrower’s or Guarantors’ organizational documents or any laws including, without
limitation, any usury laws or similar laws of the jurisdictions where Borrower, any Guarantors and
any Collateral are located, and such other matters and opinions as Lender reasonably requests. It
is contemplated that multiple attorneys and/or law firms will issue opinion letters to Lender to
satisfy the requirements of this subparagraph.

     (b) Operating Documents. On or prior to the date of the initial borrowing under the
Construction Loan, Lender shall have received from Borrower and any entity Guarantor, a copy of
Borrower’s and such Guarantor’s operating agreement or partnership agreement, certified as to

Page 4

 

completeness and accuracy by an appropriate officer, manager, managing member or partner of
such respective Borrower and Guarantor.

     (c) Charter Documents. Lender shall have received from Borrower and each entity Guarantor a
copy of its Articles of Organization or Articles or Certificate of Partnership for the legal entity
and all other charter documents of such Borrower and Guarantor, all certified by the Secretary of
State of the state of Borrower’s and Guarantor’s organization.

     (d) Certificate of Good Standing. Lender shall have received from Borrower and each entity
Guarantor a certificate of the Secretary of State of the state of Borrower’s and such Guarantor’s
organization as to the good standing status of Borrower and such Guarantor.

     (e) Certificate of Incumbency. Lender shall have received from Borrower and each entity
Guarantor a certificate of an appropriate officer of Borrower and such entity Guarantor as to the
incumbency and signatures of the officers of Borrower and such entity Guarantor executing the Loan
Documents.

     (f) Borrowing Authorization. Lender shall have received from Borrower a borrowing resolution
or other proof of authority to enter into the transactions contemplated herein.

The Borrower may request an increase or decrease in the amount of one or more Project Tranches
after its initial funding in an amount not to exceed $250,000 per Project Tranche, as approved by
the Lender; provided, however, any such increase shall not increase the amount of the overall
Construction Loan and shall be subject to offsetting changes in the Construction Budgets for each
such Project. Additionally, after giving effect to such increase or decrease, as applicable, the
overall advances under the Construction Loan, plus any unfunded commitments under the Construction
Loan shall not exceed the lesser of (A) 70% of the total as-stabilized aggregate appraised
value of all the Projects, or (B) 80.0% of the total Project development costs of all the
Projects, in the aggregate, as approved by Lender.

PROJECTS TO BE INCLUDED AT CLOSING. At Loan closing, the Projects listed on Schedule II
that are owned or ground leased by Borrower will be included in the Construction Loan.

PROCEDURES AND CONDITIONS FOR ADVANCES. The following procedures and conditions apply to each
Project: Frequency of Advances. Unless otherwise agreed by Lender, Lender shall not be obligated
to make advances of the Construction Loan more frequently than twice in every calendar month.
Request for Advance. For each request for an advance of the Construction Loan, Borrower shall
submit to Lender, at least 5 business days prior to the requested date of disbursement, a
completed written disbursement request (each, a “Request for Advance”) in such form and detail as
required by Lender. Each Request for Advance shall certify and contain in detail acceptable to
Lender: (i) the cost of the labor that has been performed; (ii) the materials that have been
incorporated into the Project; (iii) a written summary of all Hard Costs and Soft Costs incurred
to date; (iv) an updated Construction Budget; (v) the Borrower’s interest rate selection as
provided in the Note; and (vi) as required by Lender, invoices for Soft Costs in excess of
$5,000.00 incurred since the date of the previous advance. Accompanying Materials. The Request for
Advance shall be accompanied by such supporting data as Lender may require, including, without
limitation, invoices, waivers of mechanic’s and materialmen’s liens, and AIA Forms G702 and G703
certified by the general contractor and architect and/or engineer for the Project, as applicable.
Conditions To Advance. Lender will have no obligation to make any advance if a Default (as defined
in the Loan Documents) or event which, with the giving of notice or the passage of time, or both,
would constitute a Default under any of the Loan Documents has occurred and is continuing, and
unless it has received from the Borrower (if not expressly waived by Lender), in form and
substance satisfactory to Lender: (i) evidence of an updated title search and/or endorsement to
the title policy required by Lender, as applicable, which shall be, unless expressly waived by
Lender, in compliance with Lender’s minimum standards in effect at the time of such advance; and
if any title policy contains a pending disbursement clause, the amount of the policy shall
increase by the Construction Loan advance being made in connection therewith; (ii) if applicable,
satisfactory evidence that Borrower has invested the required portion of the Equity Requirement
for the Project; and (iii) evidence of compliance with any

Page 5

 

other conditions as reasonably required by Lender. Inspection. If required by Lender upon
receiving a Request for Advance, Lender’s Inspector may determine prior to any advance (a) whether
the work completed to the date of such Request for Advance has been done satisfactorily and in
accordance with the Plans and Specifications, (b) the percentage of construction of the Project
completed as of the date of such Request for Advance, (c) the Hard Costs (as applicable) actually
incurred for work in place as part of the Project as of the date of such Request for Advance, (d)
the actual sum necessary to complete construction of the Project in accordance with the Plans and
Specifications, and (e) the amount of time from the date of such Request for Advance which will be
required to complete construction of the Project in accordance with the Plans and Specifications
and/or the Construction Budget. Disbursement of Advance. At Lender’s option, Lender may make
advances of the Construction Loan directly into a separate construction disbursement account or
other Borrower account with Lender, to Borrower directly,  to a title insurance company or other
third party, or directly to the general contractor, subcontractor, materialmen or other suppliers
providing labor, services or materials in connection with the Project Lender shall have no
obligation after making Construction Loan disbursements in a particular manner to continue to make
Construction Loan disbursements in that manner. Notwithstanding the foregoing, Lender’s records of
any advance made pursuant to this Agreement shall, in the absence of manifest error, be deemed
correct and acceptable and binding upon Borrower. Use of Advance Proceeds. The proceeds of each
advance shall be used by Borrower solely to pay or as reimbursement for the obligations for which
the advance is sought. Final Advance. Lender will have no obligation to make the final advance of
the Construction Loan, unless Lender has received the following from Borrower, all in form and
substance satisfactory to Lender: (a) unless waived by Lender, any final endorsement to a title
policy; (b) if required by Lender, the final certified “as-built” survey showing the completed
Project and any flood hazard area in accordance with Lender’s minimum standards in effect at the
time of the final advance; (c) evidence that Borrower’s builder’s risk insurance has been converted
to an “all-risk” fire and extended coverage hazard insurance policy in accordance with the
requirements of the Security Instrument; (d) the final Request for Advance shall have been approved
by Lender’s Inspector if required, and completion of the Project shall have been certified by the
construction architect, engineer, and/or Lender’s Inspector, as applicable and required by Lender;
(e) a certificate of occupancy or comparable written approval, if applicable, shall have been
issued by the appropriate governmental authorities as shall be required to establish to Lender’s
satisfaction that the Project has been properly completed and is not subject to any violations or
uncorrected conditions noted or filed in any municipal department, including, without limitation,
if required by Lender, a final release from such municipality; (f) if required by Lender, full and
complete lien releases from all contractors and/or suppliers or other evidence satisfactory to
Lender confirming that final payment has been made (or will be made upon funding of the final
advance) for all materials supplied and labor furnished in connection with the Project; (g) the
Project is ready for use and occupancy (as applicable), and shall have been accepted by Borrower;
and (h) Lender reserves the right to require that an escrow be established in an amount
satisfactory to Lender to remedy any physical or other deficiency of the Project. All remedial
costs must, to the extent possible, be verified by fixed cost contracts, and all items of cost
incapable of verification by means of fixed cost contracts must be supportable as reasonable
estimates.

     PROJECT REQUIREMENTS. Prior to requesting an advance under the Construction Loan for any
Project, Borrower must satisfy the applicable requirements set forth on Schedule IV
attached hereto for such Project (“Project Requirements”) to the satisfaction of Lender. Lender
agrees that subject to the requirements of Schedule IV, Section A, Borrower may
request, and Lender may make, advances for land costs, Soft Costs, site work and up to $500,000
for bulk construction material purchases, including, but not limited to furniture, appliances
and lumber, prior to Lender’s completion of the Plan & Cost Review.

     CROSS-COLLATERALIZATION AND CROSS-DEFAULT. The Security Instrument for each Project
financed with proceeds of the Construction Loan shall contain both cross-collateralization and
cross-default provisions relating to all other Projects financed with proceeds of the
Construction Loan. In lieu of perfecting the cross-collateralization, the amount of the
Construction Loan secured by each applicable Security Instrument shall be 110% of the as
stabilized appraised value (acceptable to Lender) of the applicable Project; provided, however,
in those jurisdictions where there is no recording tax based

Page 6

 

on the amount secured by the applicable Security Instrument, the Security Instrument shall secure
the entire amount of the Construction Loan.

     CONSTRUCTION COVENANTS. The following covenants apply to each Project: Construction of
Project. Unless otherwise expressly agreed to by Lender, (i) construction of the Project, including
delivery of materials or performance of lienable work, shall not commence before recording of the
Security Instrument; (ii) construction of the Project shall commence within 30 days from the date
of completion of the Project Requirements and shall be carried on diligently and without delay or
interruption for more than 10 consecutive days; and (iii) the Project shall be constructed in a
good and workmanlike manner, in accordance with the Plans and Specifications, the other
Construction Documents (as hereinafter defined) and/or the Construction Budget submitted to Lender,
and in compliance with all applicable statutes, ordinances, codes, regulations and restrictions.
“Construction Documents” shall mean all construction contracts, contracts with architects,
engineers or other design professionals, Plans and Specifications, drawings, budgets, bonds and
other agreements pertaining to construction of the Project all engineering, soil and other reports
and studies and all surveys pertaining thereto and or required by Lender’s Inspector, together with
all modifications and additions thereto. Completion of Project. Borrower shall complete
construction of the Project by the date which is 12 months from the initial Project advance
(“Completion Date”). Change Orders. No amendment shall be made to the Plans and Specifications or
the other Construction Documents, nor shall any change orders be made thereunder without the prior
written consent of Lender and the surety under the Bonds described below, except that any such
single amendment or change order in an amount of $150,000.00 or less may be made without such prior
written consent so long as the aggregate of all such amendments or change orders for a particular
Project does not exceed $500,000.00. Liens and Lien Waivers. Borrower shall take all action
necessary to have any mechanic’s and materialmen’s liens, judgment liens or other liens or
encumbrances filed against the Property released or transferred to bond within 30 days of the date
Borrower receives notice of the filing of such liens or encumbrances. If any such lien or
encumbrance is filed, no Construction Loan advances related to such Project will be made until (i)
the lien is removed and a copy of the recorded release thereof is received by Lender and accepted
by the title insurance company, or (ii) other appropriate measures have been taken by Borrower to
cause the title insurance company to insure over such lien. Lender shall not be obligated to
disburse any funds to Borrower related to such Project if, in the opinion of Lender, any
Construction Loan advance, the Property, or any other collateral for the Construction Loan would be
subject to a mechanic’s or materialmen’s lien or any other lien or encumbrance. Borrower shall be
fully and solely responsible for compliance in all respects whatsoever with the applicable
mechanic’s and materialmen’s lien laws. Title. Unless otherwise expressly waived by Lender,
Borrower shall ensure that the Security Instrument is and remains a valid first lien on the
Property, and the Property is and remains free and clear of all liens, defects, or other
encumbrances with the exception of those permitted exceptions approved by Lender. Surveys. If any
surveys are required by Lender, Lender’s Inspector, or the issuer of any title policy, Borrower
shall deliver such surveys within 30 days after such, request. Any change in the state of facts
shown in any updated survey shall be subject to approval by Lender and Lender’s Inspector. The
Project shall be constructed entirely on the Property and will not encroach upon or overhang any
easement, right of way, or any other land, and shall be constructed wholly within applicable
building setback restrictions. Compliance with Laws and Restrictions.  All construction shall be
performed strictly in accordance with all applicable statutes, ordinances, codes, regulations and
restrictions. All contractors, subcontractors, mechanics or laborers and other persons providing
labor or material in construction of the Project shall have or be covered by worker’s compensation
insurance, if required by applicable law. Soil, Concrete and Other Tests. Borrower shall, at
Borrower’s expense, cause to be made such soil, compaction, concrete and other tests as Lender or
Lender’s Inspector may require from time to time, each in form and substance and from testing
companies reasonably acceptable to Lender. Insurance. In addition to the insurance requirements set
forth in the Security Instrument, Borrower shall maintain during construction of any improvements
on the Property, “special perils or special cause of loss” builders risk insurance which must
include windstorm, hail damage, fire and vandalism (non-reporting Completed Value with Special
Cause of Loss form), in an amount not less than the completed replacement value of the improvements
under construction, naming Lender as mortgagee and loss payee, and endorsed to provide that
occupancy by any person shall not void such coverage. Borrower shall provide a certificate
evidencing such insurance to Lender. All contractors, subcontractors,, mechanics or laborers and
other person providing labor or

Page 7

 

material in construction of the Project shall have or be covered by worker’s compensation
insurance, if required by applicable law. Notwithstanding the requirements of this subparagraph
entitled “Insurance” or any other requirement of the Loan Documents, Borrower may provide Lender
with a reporting form builders risk policy (otherwise in compliance with the terms of this
subsection), which allows for coverage to increase as Borrower commences construction on additional
buildings within the Project on the Property. Borrower understands and agrees that it shall be the
sole duty and responsibility of Borrower to provide Lender with an endorsement to the builders risk
policy increasing coverage (in an amount acceptable to Lender) upon commencement of construction of
each additional building within the Project on the Property. Lender reserves the right at any time
and for any reason in its sole discretion, to revoke its accommodation to Borrower enabling the use
of a reporting form of coverage as described in the two immediately preceding sentences. Assignment
of Construction Documents. As additional security for the obligations of Borrower under this
Agreement and the other Loan Documents, Borrower hereby collaterally assigns, transfers and grants
a security interest in ail of Borrower’s right, title, interest and benefits in or under the
Construction Documents to Lender. Contractors. Borrower agrees it will not engage in or permit any
general contractor to engage or continue to employ any contractor, subcontractor or materialman who
may be reasonably objectionable to Lender. If requested by Lender, Borrower shall deliver a fully
executed copy of any or all agreements between Borrower and any contractors, or between any general
contractor and its subcontractors, each of which shall be in form and substance reasonably
satisfactory to Lender. Leases. Borrower will comply with the terms and conditions of, and deliver
leased premises at the time and in the condition required by any Lender-approved lease. Borrower
will not enter into, amend or renew any leases or other occupancy agreements affecting the Property
without Lender’s prior written consent, but shall be permitted to make amendments, modifications or
accept prepayments to the extent that they affect, in the aggregate, no more than two percent
(2.0%) of the value of the Lender’s interest in the leases on the Property (however,
notwithstanding the above, it is understood that Borrower may make non-material changes to the
standard residential lease form (to be approved by Lender for each Project) without the consent of
Lender). Lender’s consent may be conditioned upon receipt of such documents and agreements as
Lender may. require. Notwithstanding the above, or anything else herein to the contrary, during the
term of the Loan, Borrower may lease apartment units within each Project without Lender’s prior
written consent, subject to the following requirements as determined by Lender: All leases of
apartment units within the Project must (a) be on a standard residential lease form (to be approved
by Lender for each Project), (b) be for a minimum of 12 months in term, (c) include a parental
guarantee for not less than 95% of the leases for each Project, (d) have an upfront lease deposit
in an amount, if any, to be determined for each Project, from time to time, by Borrower, and (e) be
for an average monthly rental rate approved by Lender (the “Leases”). Notwithstanding the
foregoing, up to 25% of the Leases in a Project may be for a shorter term (not less than 9 months)
if the total rents to be received are at least 95% of the total rents that would be received under
a comparable 12-month lease. Borrower shall provide to Lender quarterly lease financial status
reports (which include detailed information regarding rents and other income, as well as expenses,
associated with the rental of apartment units). Management and Leasing Agreements. All future
management and leasing agreements (excluding tenant leases) shall be subject to prior review and
approval by Lender, and shall provide that Lender shall have the right to terminate such agreements
in the event Lender acquires title to the Project. Other Documents. If the Project involves a
cooperative, subdivision, planned unit development or homeowner’s association, all documents
required in connection with the formation thereof shall be subject to Lender’s prior review and
approval. Ownership of Material and Fixtures. No materials, equipment or fixtures incorporated by
Borrower into the Project shall be purchased or installed under any security agreement, conditional
sales contract, lease, or other arrangement wherein the seller reserves title or any interest in
such items or the right to remove or repossess such items or to consider them personal property
after their incorporation into the Project, without the prior written consent of Lender. This
provision shall not apply to equipment and fixtures which are not incorporated into the Property as
real estate fixtures under applicable state law. Payment and Performance Bonds. Borrower shall
furnish Lender with both payment and performance bonds (collectively the “Bonds”) regarding all
major subcontractors whose contract exceeds 10% of the Project’s Hard Costs (“Major
Subcontractors”), and at a minimum such payment and performance bonds shall be required for the
site work and site utility contractor and electrician, each issued by a surety acceptable to Lender
naming the Borrower and Lender as dual obligees thereunder. Lender agrees that the Construction
Loan may be closed prior to Lender being provided the above required payment and

Page 8

 

performance bonds. However, Borrower shall not be entitled to its first draw on the Construction
Loan after the initial funding at closing until all payment and performance bonds have been
delivered to Lender. Notwithstanding the requirement of the immediately preceding sentence, Lender
may, in its absolute and sole discretion, permit a Borrower delay in delivery of some or all of
such required payment and performance bonds, and allow advances prior to such receipt of one or
more of such bonds, providing that any such Request for Advance is not being requested for the
purpose of payment of work completed by a contractor or subcontractor that has not been bonded (and
is a contractor or subcontractor that is required to be bonded pursuant to the terms of this
Agreement or in the discretion of the Lender) as of the date of such advance. No Warranty by
Lender; Indemnification. Nothing contained in this Agreement or any other Loan Document shall
constitute or create any duty on or warranty by Lender regarding (i) the proper application by
Borrower, general contractor or any subcontractor of the Construction Loan proceeds, (ii) the
quality or condition of the Projects, or (iii) the competence or qualifications of the general
contractor or any other party furnishing labor or materials in connection with construction of the
Projects. Borrower (a) acknowledges that Borrower has not relied and will not rely upon any
experience, awareness or expertise of Lender regarding such matters, and (b) shall indemnify, hold
harmless, and defend Lender from any costs, expenses, damages, judgments, or liabilities, including
without limitation, attorneys’ fees, arbitration fees, and expert witness fees, arising from or
connected with (i) such matters, (ii) payment or non-payment for labor or materials furnished for
construction of the Projects, (iii) any claims of mechanics or materialmen, or (iv) any action or
inaction by Borrower with respect to the foregoing except when such claim is a result of the gross
negligence of Lender; provided, however, if Lender is not grossly negligent, Lender shall continue
to benefit from this indemnity by Borrower. Advertising. Lender shall have the right to erect one
or more signs on the Property advertising its financing of the Project. Time is of the Essence. In
all matters pertaining to this Agreement, time is of the essence.

REPRESENTATIONS. The following representations apply to each Project Borrower represents that from
the date of this Agreement and until final payment in full of the Obligations: Access and
Utilities. (i)The Property has, or will have upon completion of construction, adequate legal
vehicular and pedestrian access to public roads; (ii) sewer, water and all other appropriate
utilities are or will be available at ordinary costs at the Property through public or unencumbered
private easements, and in sufficient quantities to serve the Project; and (iii) if applicable,
required written approvals of septic tanks or wells have been issued by all appropriate
governmental authorities. Laws, Zoning and Approvals. (i) The Plans and Specifications (if
applicable) and the anticipated use of the Property and the Project comply and shall comply with
all applicable restrictive covenants, zoning ordinances, building laws and codes, and other
applicable laws, regulations and requirements (including without limitation, the Americans with
Disabilities Act, as amended); (ii) the zoning classification of the Property at the time of the
applicable Project Tranche closing and any covenants and restrictions affecting the Property permit
the construction and intended use of the Project; and (iii) Borrower has obtained (or will obtain
in a timely manner) all permits and approvals of any type required to construct the Project, and
all such permits and approvals will be final and unappealable and remain in full force and effect
without restriction or modification; and (iv) all public improvements included in the Project have
been or will be fully authorized by appropriate ordinance or municipal action, and Borrower shall
satisfy all conditions imposed by any governmental authority in connection with any grant of
subdivision or land development approval. Construction Documents. Borrower has furnished or shall
furnish to Lender full and complete copies of all Construction Documents requested by Lender, and
there are no other material oral or written agreements pertaining to the construction of the
Project. Condemnation. No notice of taking by eminent domain or condemnation of any part of the
Property has been received, and Borrower has no knowledge that any such proceeding is contemplated.
Casualty Damage. No part of the Property or the Project has been damaged as a result of any fire,
explosion, accident, flood or other casualty which is not now fully restored. Corporate or Other
Power. Borrower has the power and authority to execute and perform this Agreement, to borrow
hereunder and to execute and deliver the Note, each Security Instrument and the other Loan
Documents. Borrower’s performance hereunder shall not constitute a breach of any agreement to which
Borrower is a party. Financial Condition of Borrower. The financial statements which Borrower has
submitted to Lender to induce it to make the Loan are correct and complete, and accurately present
the financial condition of Borrower on the dates thereof and the results of their operations for
the periods then ended and there has not been any material adverse change in the

Page 9

 

financial condition of Borrower since the date of such financial statements. Litigation
Disclosed. Borrower has disclosed all pending or threatened litigation to Lender. No Default. To
the best of Borrower’s knowledge, Borrower is not in default in the performance, observance or
fulfillment of any of the material obligations, covenants or conditions contained in any agreement
or instrument to which it is a party. Indemnity. In addition to any other indemnities contained in
this Agreement, Borrower hereby indemnifies Lender and its affiliates from and against any losses,
liabilities, claims, damages, penalties or fines imposed upon, asserted or assessed against or
incurred by Lender arising out of the inaccuracy or breach of any of the representations contained
in this Agreement or any other Loan Documents or any omission of facts necessary to make the
representations not misleading.

AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final payment in full
of the Obligations, unless Lender shall otherwise consent in writing, Borrower will: Access to
Books and Records. Allow Lender during normal business hours, access to the books, records and
such other documents of Borrower as Lender shall reasonably require, and allow Lender, at
Borrower’s expense, to inspect, audit and examine the same and to make extracts therefrom and to
make copies thereof. Business Continuity. Conduct its business in substantially the same manner
and locations as such business is now and has previously been conducted. Compliance with Other
Agreements. Comply with all terms and conditions contained in this Agreement, and any other Loan
Documents, and swap agreements, if applicable, as defined in the 11 U.S.C. § 101, as in effect
from time to time. Estoppel Certificate. Furnish, within 15 days after request by Lender, a
written statement duly acknowledged of the amount due under the Construction Loan and whether
offsets or defenses exist against the Obligations. Insurance. Maintain adequate insurance coverage
with respect to its properties and business against loss or damage of the kinds and in the amounts
customarily insured against by companies of established reputation engaged in the same or similar
businesses including, without limitation, commercial general liability insurance, workers
compensation insurance, and business interruption insurance; all acquired in such amounts and from
such companies as Lender may reasonably require. Maintain Properties. Maintain, preserve and keep
its property in good repair, working order and condition, making all replacements, additions and
improvements thereto necessary for the proper conduct of its business, unless prohibited by the
Loan Documents. Notice of Default and Other Notices, (a) Notice of Default. Furnish to Lender
promptly upon becoming aware of the existence of any condition or event which constitutes a
Default (as defined in the Loan Documents) or any event which, upon the giving of notice or lapse
of time or both, may become a Default, written notice specifying the nature and period of
existence thereof and the action which Borrower is taking or proposes to take with respect
thereto, (b) Other Notices. Promptly notify Lender in writing of (i) any material adverse change
in its financial condition or its business; (ii) any default under any material agreement,
contract or other instrument to which it is a party or by which any of its properties are bound,
or any acceleration of the maturity of any indebtedness owing by Borrower; (iii) any material
adverse claim against or affecting Borrower or any part of its properties; (iv) the commencement
of, and any material determination in, any litigation with any third party or any proceeding
before any governmental agency or unit affecting Borrower; and (v) at least 30 days prior thereto,
any change in Borrower’s name or address as shown above, and/or any change in Borrower’s
structure. Other Financial Information. Deliver promptly such other information regarding the
operation, business affairs, and financial condition of Borrower which Lender may reasonably
request. Payment of Debts. Pay and discharge when due, and before subject to penalty or further
charge, and otherwise satisfy before maturity or delinquency, all obligations, debts, taxes, and
liabilities of whatever nature or amount, except those, which Borrower in good faith disputes.
Reports and Proxies. Deliver to Lender, promptly, a copy of all financial statements, reports,
notices, and all regular or periodic reports required to be filed by Borrower with any
governmental agency or authority. Permanent Financing. When Borrower elects to arrange permanent
financing on the Property securing the Construction Loan, Borrower hereby grants Wachovia Capital
Markets, LLC, d/b/a Wachovia Securities, Wachovia Corporation and their affiliates, including
Wachovia Bank, National Association, the right of first opportunity to register lenders and to
provide permanent financing on the subject property on terms satisfactory to Borrower. Borrower
will provide first notification to Lender of its intent to obtain permanent financing and will in
a timely manner use its best efforts to provide Lender with the information necessary to enable it
to obtain such financing. Costs. On or before the closing, Borrower shall pay all reasonable
costs, expenses and fees (including, without limitation, any appraisal, survey, insurance,
environmental assessment, inspections, engineering, searches, recording and attorneys’ fees)
associated

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with this transaction. Lender is not providing legal advice or services to Borrower. Lender’s
attorneys’ fees will generally be based on the time and labor required, the novelty and difficulty
of the questions raised by the transaction contemplated hereunder, the skill required to perform
the services, the customary fee charged for a similar services, and the time limitations imposed
for performance.

NEGATIVE COVENANTS. Borrower agrees that from the date hereof and until final payment in full of
the Obligations, unless Lender shall otherwise consent in writing, Borrower will not: Default on
Other Contracts or Obligations. Default on any material contract with or obligation when due to a
third party or default in the performance of any obligation to a third party incurred for money
borrowed. Change of Control. Make or suffer a change of ownership that is not permitted under the
Note. Government Intervention. Permit the assertion or making of any seizure, vesting or
intervention by or under authority of any governmental entity, as a result of which the management
of Borrower or any Guarantor is displaced of its authority in the conduct of its respective
business or such business is curtailed or materially impaired. Judgment Entered. Permit the entry
of any monetary judgment against, the filing of any tax lien against, or the issuance of any writ
of garnishment or attachment against any property of or debts due Borrower or any Guarantor. Retire
or Repurchase Capital Stock. Retire or otherwise acquire any of its capital stock or limited
liability company membership interests or limited partnership interests except as hereinafter
provided as to Campus Crest Group, LLC. Control of Campus Crest Group, LLC. Notwithstanding the
preceding sentence, any transfers of limited liability company membership interests in Campus Crest
Group, LLC shall not result in or cause Ted W. Rollins and/or Michael S. Hartnett owning or to own,
directly or indirectly, less than a sufficient percentage of limited liability company membership
interests or other voting interests in Campus Crest Group, LLC, to have and maintain voting control
of Campus Crest Group, LLC. Limitation on Additional Indebtedness. Prior to March 15, 2009, neither
Borrower nor any Guarantor other than Carl H. Ricker, Jr. shall obtain or guarantee any additional
construction loan financing for any multifamily student housing projects except for the
construction of any of the Campus Crest multifamily student housing projects located in Huntsville,
TX (Sam Houston State University), Reno, NV (University of Nevada), Statesboro, GA (Georgia
Southern University), Lawrence KS (University of Kansas), Clarksville, TN (Austin Peay State
University), Turlock CA (California State University, Stanislaus), and Conway, AR (University of
Central Arkansas).

PROJECT COVENANTS. Borrower agrees that from the date hereof and until final payment in full of
the Obligations, unless Lender shall otherwise consent in writing, Borrower shall comply with the
following: Loan to Cost Limitation. Total advances under the Construction Loan for all the
Projects, in the aggregate, shall not exceed the lesser of seventy percent (70%) of the
as-stabilized aggregate appraised value of all the Projects and eighty percent (80%) of all the
developmental costs as shown on the then current Construction Budgets for all the Projects, in the
aggregate. Construction Completion. Construction of a Project must be substantially complete, as
evidenced by a certificate of occupancy on all buildings, by no later than 12 months after the
initial Construction Loan advance for a Project. Secondary Financing. Secondary financing is not
permitted on any Property. Primary Banking Accounts. Borrower shall establish a primary
Construction Loan disbursement account with Lender. Additionally, Borrower shall establish all
other banking accounts related to each Project with Lender.

ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Lender, within 90 days after the close of
each fiscal year, unaudited management-prepared financial statements reflecting its operations
during such fiscal year, including, without limitation, a balance sheet, profit and loss statement
and statement of cash flows, with supporting schedules and in reasonable detail, prepared in
conformity with generally accepted accounting principles, applied on a basis consistent with that
of the preceding year. If unaudited statements are required, such statements shall be certified as
to their correctness by a principal financial officer of Borrower.

PERIODIC FINANCIAL STATEMENTS. Borrower shall deliver to Lender, within 30 days after the end of
each fiscal quarter, unaudited management-prepared quarterly financial statements including,
without limitation, a balance sheet, profit and loss statement and statement of cash flows, with
supporting schedules; all in reasonable detail and prepared in conformity with generally accepted
accounting principles, applied on a basis consistent with that of the preceding year. Such
statements shall be

Page 11

 

certified as to their correctness by a principal financial officer of Borrower and in each case,
if audited statements are required, subject to audit and year-end adjustments.

TAX RETURNS. Borrower shall deliver to Lender, within 30 days of filing, complete copies of
federal and state tax returns, as applicable, together with all schedules thereto, each of which
shall be signed and certified by Borrower to be true and complete copies of such returns. In the
event an extension is filed, Borrower shall deliver a copy of the extension within 30 days of
filing.

PROPERTY REPORTS. Borrower shall deliver to Lender, within 90 days after the close of each fiscal
year and, if requested by Lender, within 30 days after the end of each fiscal quarter, a certified
rent roll and financial statements relating to the operation of each Property (as defined in the
Security Instrument securing the Construction Loan), including, without limitation, a balance
sheet, income and expense statement and statement of cash flows, with supporting schedules; and
summary of leases, as applicable; ail in reasonable detail, prepared in conformity with generally
accepted accounting principles, applied on a basis consistent with that of the preceding year.

DEFAULTS AND REMEDIES. If any of the following events occur, a default (“Default”) under this
Agreement shall exist (i) Failure to pay any monetary payment due under the Loan Documents within
fifteen (15) days of the due date of such payment; (ii) Failure to timely perform any of the other
terms, covenants or obligations under this Agreement or a default under any other Loan Document for
a period of thirty (30) days after the date on which Lender gives Borrower written notice of any
such failure of performance or default; provided however, if any such failure of performance or
default is incapable of being cured within such thirty (30) day period, then Borrower shall have a
commercially reasonable amount of additional time to cure any such failure of performance or
default provided Borrower is diligently pursuing the cure of any such failure of performance or
default; (iii) Failure to complete the Project in accordance with the Plans and Specifications on
or before the Completion Date or to obtain the prior written consent of Lender to changes to the
Plans and Specifications, as required; provided, however, if the failure to complete the Project in
accordance with the Plans and Specifications on or before the Completion Date is due solely to
Force Majeure, then such failure shall not be a Default if the Project is completed in accordance
with the Plans and Specifications within a reasonable time taking into account the number of days
of delay actually caused by such Force Majeure; and (iv) The commencement of any bankruptcy or
insolvency proceeding by or against the general contractor for the Project or the termination of
the construction contract without the prior written consent of Lender; provided, however, it shall
not be a default under this Agreement if Borrower obtains a new general contractor reasonably
acceptable to Lender within sixty (60) days after the date of such bankruptcy or insolvency of the
general contractor or the date of termination of such construction contract.

Upon the occurrence of a Default, Lender may refuse to make any further advances hereunder and may
terminate Lender’s commitment to make the Construction Loan and to issue Letters of Credit under
the L/C Facility. Thereupon, Lender shall have the right to declare immediately due and payable
the outstanding principal balance of the Note, all accrued and unpaid interest thereon and all
other sums due in connection therewith, and Lender may exercise any right, power or remedy
permitted by law or as set forth in any of the Loan Documents.

Notwithstanding the foregoing, Borrower shall be permitted a 30-day cure period in the event of
Project defaults such as cost overruns or failure to reach lease up requirements. In order to cure
any such default, additional equity from Borrower or Guarantors may be required by Lender.

NO THIRD PARTY BENEFICIARY. The parties hereto do not intend the benefits of this Agreement to
inure to any third party. Notwithstanding anything contained in this Agreement or any other Loan
Document, or any course of conduct by any of the parties hereto, this Agreement shall not be
construed as creating any rights, claims, or causes of action against Lender or any of its
officers or employees, in favor of any contractor, subcontractor, supplier of labor, materials or
services, or any of their respective creditors, or any other person or entity other than Borrower.

Page 12

 

PARTIAL RELEASES OF COLLATERAL. Upon payment in full of all Obligations for a Project Tranche,
(and termination of any Commitment to make Construction Loan advances under such Project Tranche
and repayment of all Obligations under the L/C Facility related to such Project), upon the request
of Borrower, Lender will release its liens and security interest in the Property that is the
subject of such Project Tranche, at Borrower’s expense; provided, however, the amounts advanced
under the Construction Loan for the remaining Projects, plus any unfunded commitments under the
Construction Loan, must not exceed, in the aggregate, the lesser of (A) seventy percent
(70%) of the as-stabilized appraised value of the remaining Projects, including the value of the
underlying real estate, or (B) eighty percent (80%) of the total development costs as shown on the
then current or final Construction Budgets of the remaining Projects.

WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

GOVERNING LAW; JURISDICTION

     (a) Governing Law. This Agreement shall be governed by, and construed in accordance
with, the law of the State of North Carolina.

     (b) Submission to Jurisdiction. The Borrower (and each other party to this Agreement)
irrevocably and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the courts of the State of North Carolina sitting in Mecklenburg County and of the
United States District Court of the Western District of North Carolina, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this Agreement or any
other Loan Document, or for recognition or enforcement of any judgment, and each of the parties
hereto irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such North Carolina State court or, to the fullest extent
permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or in any other Loan Document shall affect any right that Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan Document against the
Borrower (or any other party hereto) or its properties in the courts of any jurisdiction, to the
extent necessary to enforce any of the Security Instruments.

     (c) Waiver of Venue. The Borrower (and each other party to this Agreement)
irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of venue of any action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

     (d) Service of Process. Each party hereto irrevocably consents to service of process
in the manner provided for notices in subparagraph (a) of the paragraph below entitled “NOTICES;
EFFECTIVENESS”. Nothing in this Agreement will affect the right of any party hereto to serve
process in any other manner permitted by applicable law.

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COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION

     (a) Counterparts: Integration: Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Loan Documents, and any separate letter agreements with respect to
fees payable to Lender, constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. This Agreement shall become effective when it shall have
been executed by Lender and when Lender shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

     (b) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,”
and words of like import in any Assignment and Assumption shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

NOTICES; EFFECTIVENESS

     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in paragraph (b) of this
Section below), all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service or mailed by certified mail to the
addresses listed on Schedule V attached hereto. Notices sent by hand or overnight courier
service or mailed by certified mail, shall be deemed to have been given when received.

     (b) Change of Address, etc. Any party hereto may change its address for notices and
other communications hereunder by notice to the other parties hereto.

THE L/C FACILITY; LETTERS OF CREDIT

In addition to the Construction Loan, Lenders will make available to Borrower up to TWO MILLION
NINE HUNDRED THIRTY TWO THOUSAND AND NO/100 DOLLARS ($2,932,000.00) for issuance of letters of
credit (the “L/C Facility” or the “Letter of Credit Facility”). Lender will, upon a request of
Borrower, which request must be reasonable in view of the need for Letters of Credit for all
three Projects, issue to Borrower letters of credit with respect to the L/C Facility and any
Project in an aggregate amount not to exceed $2,932,000.00 (“Letters of Credit”). All Letters of
Credit issued by Lender under the L/C Facility shall be secured by each Security Instrument and
other Loan Documents. Such Letters of Credit shall be issued (i) to municipalities for financial
assurance of site improvement completion, (ii) to vendors for payment of furniture, fixtures and
equipment costs that are included in the applicable Construction Budget, and (iii) for general
operating purposes in the ordinary course of business. The fee payable to Lender for each Letter
of Credit shall equal the greater of $1,500, or 1.25% of the face amount of such Letter of
Credit.

YIELD PROTECTION

Notwithstanding anything else in this Agreement, or any of the Loan Documents to the contrary, the
parties hereto agree to the following terms:

     (a) Increased Costs.

          (1) Increased Costs Generally. If any Change in Law shall:

Page 14

 

               (A) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account of, or
credit extended or participated in by, Lender (except any reserve requirement reflected in the
Adjusted LIBOR Rate);

               (B) subject Lender to any tax of any kind whatsoever with respect to this Agreement, any
Letter of Credit, any Letter of Credit or any Eurodollar Loan made by it, or change the basis of
taxation of payments to Lender in respect thereof (except for Indemnified Taxes or Other Taxes
covered in this Section hereinbelow and the imposition of, or any change in the rate of, any
Excluded Tax payable by Lender); or

               (C) impose on Lender or the London interbank market any other condition, cost or expense
affecting this Agreement or Eurodollar Loans made by Lender or any Letter of Credit;

and the result of any of the foregoing shall be to increase the cost to Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Construction
Loan), or to increase the cost to Lender of issuing or maintaining any Letter of Credit (or of
maintaining its obligation to issue any Letter of Credit), or to reduce the amount of any sum
received or receivable by Lender (whether of principal, interest or any other amount) then, upon
request of Lender, the Borrower will pay to Lender such additional amount or amounts as will
compensate Lender for such additional costs incurred or reduction suffered.

          (2) Capital Requirements. If Lender determines that any Change in Law affecting
Lender or any lending office of Lender or Lender’s holding company, regarding capital requirements
has or would have the effect of reducing the rate of return on Lender’s capital or on the capital
of Lender as a consequence of this Agreement, the commitment of Lender or the Construction Loan
made by Lender, to a level below that which Lender or Lender’s holding company could, have
achieved but for such Change in Law (taking into consideration Lender’s policies and the policies
of Lender’s holding company with respect to capital adequacy), then from time to time the Borrower
will pay to Lender such additional amount or amounts as will compensate Lender or Lender’s holding
company for any such reduction suffered.

          (3) Certificates for Reimbursement. A certificate of Lender setting forth the amount
or amounts necessary to compensate Lender or its holding company, as the case may be, as specified
in paragraph (1) or (2) of this subsection (a) and delivered to the Borrower shall be conclusive
absent manifest error. The Borrower shall pay Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

          (4) Delay in Requests. Failure or delay on the part of Lender to demand compensation
pursuant to this subsection (a) shall not constitute a waiver of Lender’s right to demand such
compensation, provided that the Borrower shall not be required to compensate Lender pursuant to
this subsection (a) for any increased costs incurred or reductions suffered more than nine months
prior to the date that Lender notifies Borrower of the Change in Law giving rise to such increased
costs or reductions and of Lender’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of retroactive effect
thereof).

     (b) Taxes.

          (1) Payments Free of Taxes. Any and all payments by or on account of any obligation
of the Borrower hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the
Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional sums payable under
this

Page 15

 

subsection (b)) Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall
timely pay the full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

          (2) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subparagraph (1) of this subsection (b) above, the Borrower shall timely pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.

          (3) Indemnification by the Borrower. The Borrower shall indemnify Lender, within 10
days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this subsection (b)) paid by Lender and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as
to the amount of such payment or liability delivered to the Borrower by Lender shall be conclusive
absent manifest error.

          (4) Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
Lender the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to Lender.

          (5) Treatment of Certain Refunds. If Lender determines, in its sole discretion, that
it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this Section with
respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses
of Lender and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrower, upon the request of Lender,
agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to Lender in the event Lender is required
to repay such refund to such Governmental Authority. This paragraph shall not be construed to
require Lender to make available its tax returns (or any other information relating to its taxes
that it deems confidential) to the Borrower or any other Person.

     (c) Mitigation Obligations.

          (1) Designation of a Different Lending Office. If Lender requests compensation under
subsection (a) of this paragraph entitled “YIELD PROTECTION”, or requires the Borrower to pay any
additional amount to Lender or any Governmental Authority for the account of Lender pursuant to
subsection (b) of this paragraph entitled “YIELD PROTECTION”, then Lender shall use reasonable
efforts to designate a different lending office for funding or booking the Construction Loan
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to such subsection (a) or (b), as the case may be, in the future
and (ii) would not subject Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by Lender in connection with any such designation or assignment.

EXPENSES; INDEMNITY; DAMAGE WAIVER

     (a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by Lender (including the reasonable fees, charges and disbursements of counsel
for Lender), (whether or not the transactions contemplated hereby shall be consummated), and (ii)
all out-of-pocket expenses incurred by Lender (including the fees, charges and disbursements of
any counsel for Lender), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and

Page 16

 

the other Loan Documents, including
its rights under this Section, or (B) in connection with
the Construction Loan made hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Construction Loan.

     (b) Indemnification
by the Borrower. The Borrower shall indemnify Lender, and each
Related Party of Lender (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses
(including the fees, charges and disbursements of any counsel for any Indemnitee), and shall
indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against
any Indemnitee by any third party or by the Borrower (or any other Loan Party) arising out of, in
connection with, or as a result of (i) the execution or delivery of this Agreement any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, (ii) any Construction Loan or the use or proposed use
of the proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous Materials
on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought by a third party or
by the Borrower (or any other Loan Party), and regardless of whether any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from the. gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the
Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has
obtained a final and nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.

     (c) Waiver of Consequential Damages, etc. To the fullest extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or as a result of,
this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Construction Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) of this paragraph entitled “EXPENSES;
INDEMNITY; DAMAGE WAIVER” shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby.

     (d) Payments.
All amounts due under this Section shall be payable promptly after
demand therefor.

ASSIGNMENT OF LOAN DOCUMENTS. Lenders agrees to cooperate with Borrower in a commercially
reasonable manner if Borrower obtains financing from an interim or permanent lender (the “Future
Lender”) in an amount sufficient to pay all indebtedness and obligations due Lender from Borrower
by assigning this Agreement and all Loan Documents to such Future Lender, provided that (a) any
such assignment shall be made without recourse, (b) the full amount of all indebtedness due Lender
is paid in full on the same date, (c) all reasonable costs and expenses of Lender relating to such
assignment shall be paid by Borrower, and (d) such other terms and conditions as Lender may
reasonably require.

FEES DUE LENDER. Upon the execution of this Agreement and the closing of the Construction Loan,
Borrower shall pay Lender a Facility Fee equal to 0.55% of the $47,068,000.00 Construction Loan.

Page 17

 

     IN WITNESS WHEREOF, Borrower, Lender and Guarantors on the day and year first written above,
have caused this Agreement to be executed under seal.

	 	 	 	 	 
	 	BORROWER:

CAMPUS CREST GROUP, LLC, a North Carolina limited
liability
company (SEAL)

By: Madeira Group, LLC, a North Carolina limited liability

       company 

Its: Manager

 	 
	 	By:  	/s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 

	 	 	 	 	 
	 	CAMPUS CREST AT MOSCOW, LLC, a Delaware limited
liability company (SEAL)

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/ F. Brian Schneiderman
 	 
	 	 	F. Brian Schneiderman	 
	 	 	Its Manager 	 
	 

[Execution Signatures Continued On Next Page]

Page 18

 

	 	 	 	 	 
	 	CAMPUS CREST AT SAN ANGELO, LP, a Delaware limited partnership (SEAL)

By: HSRE Campus Crest GP I, LLC, a Delaware limited
 liability company 

Its: Sole general partner

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/ F. Brian Schneiderman
 	 
	 	 	F. Brian Schneiderman	 
	 	 	Its Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	CAMPUS CREST AT SAN MARCOS, LP, a Delaware limited partnership (SEAL)

By: HSRE Campus Crest GP I, LLC, a Delaware limited
 liability company 

Its: Sole general partner

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/ F. Brian Schneiderman
 	 
	 	 	F. Brian Schneiderman       	 
	 	 	Its Manager 	 
	 

[Execution Signatures Continued On Next Page]

Page 19

 

	 	 	 	 	 
	 	LENDER:

WACHOVIA BANK, NATIONAL ASSOCIATION 

 	 (SEAL)
	 	By:  	/s/ Robert D. Willingham
 	 
	 	 	Name:  	Robert D. Willingham 	 
	 	 	Title:  	Director 	 
	 

[Execution Signatures Continued On Next Page]

Page 20

 

	 	 	 	 	 
	 	GUARANTORS:

TXG, LLC, a South Carolina limited company (SEAL)

 	 
	 	By:  	/s/ Ted W. Rollins
 	 
	 	 	Name:  	Ted W. Rollins  	 
	 	 	Title:  	Manager 	 
	 

	 	 	 	 	 
	 	MXT CAPITAL, LLC, a Delaware limited liability company

By: Campus Crest Properties, LLC, a North Carolina 

     limited
 liability company (SEAL) 

Its: Manager

 	 
	 	By:  	/s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 

	 	 	 	 	 
	 	MADEIRA GROUP, LLC a North
Carolina limited liability
company 

 	 (SEAL)
	 	By:  	/s/ Michael S. Hartnett
 	 
	 	 	Name:  	Michael S. Hartnett 	 
	 	 	Title:  	Manager 	 
	 

	 	 	 	 	 
	 	 	 
	 	
/s/ Michael S. Hartnett
 	 (SEAL)
	 	MICHAEL S. HARTNETT 	 
	 	 	 
	 
	 	 	 
	 	/s/ Ted W. Rollins
 	 
	 	TED W. ROLLINS   	 (SEAL)
	 	 	 
	 
	 	 	 
	 	
/s/ Carl H. Ricker, Jr.	 (SEAL)
	 	CARL H. RICKER, JR. 	 
	 	 	 

Page 21

 

SCHEDULE I

SPE Borrowers

1. Campus Crest at Moscow, LLC

2. Campus Crest at San Angelo, LP

3. Campus Crest at San Marcos, LP

 

 

SCHEDULE II

Projects

	 	 	 	 	 
	Name	 	Project Tranche	 
	1. The Grove at Moscow
	 	$	16,170,000.00	 
	2. The Grove at San Angelo
	 	$	14,668,000.00	 
	3. The Grove at San Marcos
	 	$	16,230,000.00	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	$	47,068,000.00	 
	 
	 	 	 

 

 

SCHEDULE III

PLAN AND COST REVIEW/PROPERTY INSPECTION

SCHEDULE OF FEES

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	PLAN AND COST	 	 	INSPECTION FEE	 
	SITE	 	VENDOR	 	REVIEW FEE	 	 	(MONTHLY)	 
	The Grove at Moscow
	 	DDN Commercial Services	 	$	1,700.00	 	 	$	450.00	 
	The Grove at San Angelo
	 	DDN Commercial  Services	 	$	1,700.00	 	 	$	450.00	 
	The Grove at San Marcos
	 	DDN Commercial Services	 	$	1,700.00	 	 	$	450.00	 

 

 

SCHEDULE IV

Project Requirements

(A) The following information must be provided to Lender for each Project prior to the
initial Construction Loan advance for such Project:

•     Lump sum construction contract, the content of which must be satisfactory in Lender’s
sole determination.

•     Agreement and certificate from Project architect or engineer granting Lender the
right to use the Plans and Specifications following default.

•     Agreement from Project general contractor that general contractor will perform under
construction contract following default.

•     Project Budget and a detailed trade breakdown of Project construction costs (G702/703).

•     Establish a primary loan disbursement account with Lender.

•     The site plan, engineer’s blueprints, and subsoil geo-technical report relating to the
Project.

•     Executed copies of all agreements affecting or relating to the use, operation, development
or construction of the Project, including without limitation, the construction contract, the
engineer’s contract, the Major Subcontractor’s contract, indicating an acceptable maximum
fixed price, and the architect’s contract must be submitted to Lender for approval.
Borrower’s interest in each such contract shall be assigned to Lender, with such assignment
consented and agreed to by the architect, the engineer, the general contractor, and each
Major Subcontractor. No changes in the construction contract or major subcontracts which are
greater than $150,000.00 will be made without the prior written consent of Lender.

•     Evidence acceptable to Lender of compliance with all zoning, environmental and other laws,
ordinances and regulations affecting the Property and the construction and operation of the
Project.

•     Evidence acceptable to Lender that adequate utility services are available at the
Property, including water, sewer, electric and gas.

•     Copies of applicable approvals and permits of governmental agencies, requested by
Lender for the construction of the Project, including without limitation the grading permit.

•     Appraisal to be ordered and approved by Lender. In no event shall the total
outstanding amount of the Construction Loan exceed the lesser of (i) seventy percent (70%) of
the as-stabilized aggregate appraised value of the Projects or (ii) eighty percent (80%) of
all the development costs as shown on the then current Construction Budgets for all the
Projects, in the aggregate.

•     Project overview and internal market study detailing the school, the site,
comparables, market rents and capture rate analysis to be reviewed and approved by Lender.

•     Environmental site assessment, to be obtained by Borrower, subject to approval of
Lender’s environmental consultant and satisfactory review of the report by Lender’s
environmental staff. As necessitated by the Property condition and recommended actions by
either the environmental consultant or Lender’s environmental staff, Borrower will be
required to complete additional environmental due diligence and/or remediation as required
by Lender.

•     Income and Expense Pro Forma Analysis with proposed Project rental rates prepared by
Borrower, which includes the Projected Debt Service Coverage (“PDSC”) ratio for the initial
year and second academic year of operations, to be reviewed and approved by Lender. The PDSC
ratio for the second academic year of operations must be not less than 1.20:1.00 using pro
forma rentals acceptable to Lender. PDSC is defined to mean the Projected Net Operating
Income, divided by Debt Service. “Projected Net Operating Income” is defined as 12 months of
pro forma operating revenue based on pro forma rental rates, less pro forma operating
expenses as approved by Lender to include an allowance for a management fee of 3% of gross
income and reserves of $100 per bed annually. “Debt Service” will be

 

 

based on an assumed 25-year amortization and an assumed interest rate equal to the greater
of (i) 7% per annum, or (ii) the 10-year US Treasury yield, plus 200 basis points and the
10-year swap spread.

•
Rental rates will include a minimum monthly rent per bed to be approved by Lender.

• Confirmation by Lender of Borrower’s investment of the Equity Requirement.

(B) Borrower must provide the following to Lender within 60 days of the Project’s initial
Construction Loan advance:

• A full set of building Plans and Specifications. Lender will provide the Project
information to Lender’s Inspector to perform a Plan & Cost Review. This report must be
obtained, reviewed and accepted by Lender prior to funding for any vertical improvements.

• .Copies of applicable building permits.

(C) Borrower must provide the following to Lender within 12 months of the Project’s initial
Construction Loan advance:

• Confirmation that construction is substantially complete, as evidenced by a
certificate of occupancy for all buildings.

 

 

SCHEDULE V

Notice Addresses

Borrower:

2100 Rexford Road

Suite 414

Charlotte, NC 28211

Attn.: F. Brian Schneiderman

Telephone No: 704-496-2500

Telecopier No. 704-496-2598 or 2599

With a copy to:

Bradley Arant Rose & White LLP

One Federal Place

1819 5th Avenue North

Birmingham, Alabama 35203

Attn.: Dawn H. Sharff

Telecopier No. 205-488-6200

Telephone No. 205-521-8200

And a copy to:

Harrison Street Real Estate Capital, LLC

71 South Wacken Drive

Suite 3571

Chicago. IL 60606

Attn: Stephen M. Gordon

Phone: 312-376-0119

Fax: 312-920-1855

And a copy to:

DLA Piper US LLP

203 N. Lasalle #1900

Chicago, IL 60601

Attn: Michael Gershowitz

Phone: 312-368-7283

Fax: 312-630-6306

Lender:

Wachovia Bank, National Association

401 S. Tryon Street,
2nd      Floor

Mail Code NC1193 

Charlotte, NC 28288-1193

Attention: Real Estate Financial Services

Telecopier No. 704-374-4775

Telephone No. 704-383-0292

 

 

EXHIBIT A

DEFINITIONS

“ABR Rate” means the Prime Rate of Wachovia Bank, National Association, as that
rate may change from time to time. For purposes of this Agreement and the other Loan
Documents the “Prime Rate” means that rate announced by Wachovia Bank from time to
time as its prime rate and is one of several interest rate bases used by Wachovia
Bank. Wachovia Bank lends at rates both above and below its Prime Rate, and Borrower
(and all parties to this Agreement) acknowledge that Wachovia Bank’s Prime Rate is
not represented or Intended to be the lowest or most favorable rate
of interest
offered by Wachovia Bank.

“Affiliate” means, with respect to a specified Person, another Person who directly,
or indirectly through one or more Intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental Authority
or (c) the making or issuance of any request, guideline or directive (whether or not
having the force of law) by any Governmental Authority.

“Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management, or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto.

“Excluded Taxes” means, with respect to Lender or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder,
(a) taxes imposed on or measured by its overall net income (however denominated),
and franchise taxes imposed on it (in lieu of net Income taxes), by the
jurisdiction (or any political subdivision thereof) under the laws of which such
recipient is organized or in which its principal office is located or, in the case
of any Lender, in which its applicable lending office is located, and (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower is located.

“Force Majeure” means “any act of God”, war or terrorism, fire, other catastrophe,
electrical or computer or telecommunications failure, any event beyond the control
of the Borrower, or fraud committed by any third party.

“Governmental Authority” means the government of the United States of America
or any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government
(including any supranational bodies such as the European Union or the European
Central Bank).

“Indemnified Taxes ” means Taxes other than Excluded Taxes.

“Issuing Lender” means, with respect to a Letter of Credit, Wachovia Bank, National Association.

“L/C Facility” means the facility from Bank to Borrower of up to $2,932,000.00 to
be used by Borrower for the issuance of Letters of Credit relating to any of the
Projects.

“Loan Documents,” as used in this Agreement, is defined in the Note.

“Note” means the Promissory Note executed of even date herewith, by Borrower,
in favor of Lender, and in the stated principal amount of $47,068,000.00.

 

 

“Loan
Party” shall mean Borrower or any of the Guarantors. “Loan Parties” shall
mean Borrower and all of the Guarantors of the Construction Loan, collectively.

“Obligations”, as used herein, means all obligations as defined in the Note
and all obligations under the L/C Facility.

“Other Taxes” means all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made
hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan
Document

“Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other
entity.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and
the partners, directors, officers, employees, agents and advisors of such Person
and of such Person’s Affiliates.

“Security Instrument” means any Mortgage, Deed of Trust or Deed to Secure Debt (fee
or leasehold) encumbering any part of the Property and securing all or any portion
of the Construction Loan.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

Terms
Generally

     The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words “include”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The word “will’ shall be construed to have the same meaning and effect
as the word “shall.” Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein
to any Person shall be construed to include such Person’s successors and assigns,
(c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to this Agreement, (e) any reference to any law or regulation herein
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time and (f) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities, accounts
and contract rights.

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