Exhibit 10.3

Execution Version

CONSTRUCTION LOAN AGREEMENT

by and between

CAMPUS CREST AT VALDOSTA, LLC,

a Delaware limited liability company,

as Borrower,

and

COMMUNITY & SOUTHERN BANK,

a Georgia bank

as Lender,

with respect to

The Grove at Valdosta

Table of Contents

Article I General Information.					1
Section 1.1		Conditions to Closing.			1
Section 1.2		Schedules.			1
Section 1.3		Defined Terms.			1
Article II Advances of the Loan.					1
Section 2.1		The Loan.			1
Section 2.2		Purpose; Reallocation; Revenues from Property.			2
Section 2.3		Draw Requests.			2
Section 2.4		Additional Terms Regarding Advances.			2
Section 2.5		Liability of Lender.			2
Section 2.6		Letters of Credit.			3
Article III Representations and Warranties.					3
Section 3.1		Organization, Power and Authority of Borrower; Loan Documents.			3
Section 3.2		Other Documents; Laws.			3
Section 3.3		Taxes.			3
Section 3.4		Legal Actions.			3
Section 3.5		Nature of Loan.			4
Section 3.6		Trade Names.			4
Section 3.7		Financial Statements.			4
Section 3.8		ERISA and Prohibited Transactions.			4
Section 3.9		Compliance with Zoning and Other Requirements.			4
Section 3.10		Plans and Specifications.			4
Section 3.11		Building Permits; Other Permits.			5
Section 3.12		Utilities.			5
Section 3.13		Access; Roads.			5
Section 3.14		Other Liens.			5
Section 3.15		No Material Adverse Change.			5
Section 3.16		Defaults.			5
Section 3.17		Affirmation of Representations and Warranties.			6
Article IV Affirmative Covenants and Agreements.					6
Section 4.1		Commencement and Completion of Construction.			6
Section 4.2		Approval of Construction.			6
Section 4.3		Deposits to Balance Loan.			6
Section 4.4		Compliance with Laws; Encroachments.			7
Section 4.5		Inspections; Cooperation.			7
Section 4.6		Contracts, Vouchers and Receipts.			7
Section 4.7		Payment and Performance of Contractual Obligations.			8
Section 4.8		Correction of Construction Defects.			8
Section 4.9		Insurance.			8

Section 4.10		Adjustment of Condemnation and Insurance Claims.			9
Section 4.11		Utilization of Net Proceeds.			10
Section 4.12		Management.			10
Section 4.13		Books and Records; Financial Statements; Tax Returns.			11
Section 4.14		Estoppel Certificates.			11
Section 4.15		Taxes.			11
Section 4.16		Lender’s Rights to Pay and Perform.			11
Section 4.17		Reimbursement; Interest.			12
Section 4.18		Notification by Borrower.			12
Section 4.19		Indemnification by Borrower.			12
Section 4.20		Fees and Expenses.			13
Section 4.21		Appraisals.			13
Section 4.22		Leasing and Tenant Matters.			13
Article V Negative Covenants.					13
Section 5.1		Conditional Sales.			13
Section 5.2		Changes to Plans and Specifications.			13
Section 5.3		Insurance Policies and Bonds.			14
Article VI Events of Default.					14
Section 6.1		Payment Default.			14
Section 6.2		Default Under Other Loan Documents.			14
Section 6.3		Accuracy of Information; Representations and Warranties.			14
Section 6.4		Deposits.			14
Section 6.5		Insurance Obligations.			14
Section 6.6		Other Obligations.			15
Section 6.7		Progress of Construction.			15
Section 6.8		Damage to Improvements.			15
Section 6.9		Lapse of Permits or Approvals.			15
Section 6.10		Completion of Construction.			15
Section 6.11		Mechanic’s Lien.			15
Section 6.12		Survey Matters.			15
Section 6.13		General Contractor Default.			16
Section 6.14		Performance Enjoined or Prohibited.			16
Section 6.15		Bankruptcy.			16
Section 6.16		Appointment of Receiver, Trustee, Liquidator.			16
Section 6.17		Judgment.			16
Section 6.18		Dissolution; Change in Business Status.			16
Section 6.19		Default Under Other Indebtedness.			16
Section 6.20		Material Adverse Change.			17
Article VII Remedies on Default.					17
Section 7.1		Remedies on Default.			17
Section 7.2		No Release or Waiver; Remedies Cumulative and Concurrent.			18

Article VIII Miscellaneous.					19
Section 8.1		Further Assurances; Authorization to File Documents.			19
Section 8.2		No Warranty by Lender.			19
Section 8.3		Standard of Conduct of Lender.			19
Section 8.4		No Partnership.			19
Section 8.5		Severability.			20
Section 8.6		Notices.			20
Section 8.7		Permitted Successors and Assigns; Disclosure of Information.			21
Section 8.8		Modification; Waiver.			21
Section 8.9		Third Parties; Benefit.			21
Section 8.10		Rules of Construction.			22
Section 8.11		Counterparts.			22
Section 8.12		Signs; Publicity.			22
Section 8.13		Governing Law.			22
Section 8.14		Time of Essence.			22
Section 8.15		Electronic Transmission of Data.			23
Section 8.16		[RESERVED]			23
Section 8.17		Forum.			23
Section 8.18		USA Patriot Act Notice.			23
Section 8.19		Entire Agreement.			23
Section 8.20		No Material Misstatements.			24

		Schedules to Construction Loan Agreement
Schedule 1		Definitions
Schedule 2		Form of Draw Request
Schedule 3		Budget
Schedule 4		Project Schedule
Schedule 5		Additional Terms Regarding Advances
Schedule 6		Leasing and Tenant Matters
Schedule 7		Letters of Credit

Construction Loan Agreement

     This Construction Loan Agreement (this “Agreement”) is made as of the 16th day of November, 2010, by and between Campus Crest at Valdosta, LLC, a Delaware limited liability company (“Borrower”), and Community & Southern Bank, a Georgia bank (“Lender”).

Recitals

     Borrower has applied to Lender for a loan to finance certain costs related to the construction and development of improvements on real property in which Borrower has acquired or is acquiring an interest. Lender has agreed to make the loan on the terms and conditions set forth in this Agreement and in the other documents evidencing and securing the loan.

     Now, therefore, in consideration of the premises, and in further consideration of the mutual covenants and agreements herein set forth and of the sum of Ten Dollars ($10.00) paid by each party to the other, receipt of which is hereby acknowledged, the parties covenant and agree as follows:

Agreements

Article I
General Information.

     Section 1.1 Conditions to Closing.

     The conditions precedent to closing the Loan and recording the Mortgage, unless waived or modified by Lender, are set forth in the Closing Checklist.

     Section 1.2 Schedules.

     The Schedules attached to this Agreement are incorporated herein and made a part hereof.

     Section 1.3 Defined Terms.

     Capitalized terms in this Agreement shall have the meanings ascribed to such terms in the Preamble hereto and in Schedule 1.

Article II
Advances of the Loan.

     Section 2.1 The Loan.

     Borrower agrees to borrow the Loan from Lender, and Lender agrees to lend the Loan to Borrower, subject to the terms and conditions herein set forth, in incremental advances which will not exceed, in the aggregate, the Loan Amount. Interest shall accrue and be payable in arrears only on sums advanced hereunder for the period of time outstanding. The Loan is not a revolving loan; amounts repaid may not be re-borrowed.

     Section 2.2 Purpose; Reallocation; Revenues from Property.

     The Loan shall be advanced by Lender in accordance with the terms of this Agreement to pay those expenses related to the Loan and the Property that are described in the Budget, but not, in the aggregate with respect to any line item set forth in the Budget, in excess of the amount of the Loan to be disbursed for such line item, as set forth in the Budget. Borrower will receive each advance in trust for the purpose of paying only those costs for which the advance is made and will utilize the funds advanced for no other purpose. With the prior approval of Lender, any cost savings, actual or estimated, affecting any approved line item within the Budget, other than the interest reserve, may be reallocated by Borrower to any other line item within the Budget. Lender agrees not to unreasonably withhold or delay any Budget line item reallocation requests from Borrower, with Lender agreeing to use good faith efforts to approve or disapprove any such requested reallocation within ten (10) business days of Borrower’s written request. Upon completion of the Improvements and the payment of all costs in connection therewith, any undisbursed proceeds of the Loan shall be allocated to the interest reserve or to such other line item as Lender shall approve. Each disbursement from a contingency reserve shall be subject to approval by Lender as to the amount and purpose for which such disbursement will be used. If and when revenues are derived from the Property in amounts sufficient to pay all or any portion of the operating expenses of the Property or all or any portion of the interest on the Loan, revenues will be used to pay such expenses and/or interest, and Lender, at its sole option, may restrict or prohibit future disbursements of the Loan for such purposes to the extent that revenues are sufficient to pay such amounts.

     Section 2.3 Draw Requests.

     Advances shall be made not more frequently than twice monthly based on draw requests signed by an Authorized Signer in the form attached hereto as Schedule 2 or in another form approved by Lender. Each draw request for hard costs shall be set forth on AIA Forms G702 and G703 or another form approved by Lender, and shall be reviewed by the Construction Consultant and signed by the General Contractor. Draw requests for hard costs shall show the percentage of completion of construction and shall set forth in trade breakdown form and in such detail as may be required by Lender the amounts expended and/or costs incurred for work done and materials incorporated in the Improvements. Additional requirements for advances, including the terms under which retainage will be withheld and released, are set forth in Schedule 5. Each draw request shall be supported by such information and documentation (such as paid receipts, invoices, statements of accounts, lien releases, etc.) as Lender may require to assure that amounts requested are to be used to reimburse Borrower for costs previously paid by Borrower or to pay costs incurred by Borrower that are to be paid from proceeds of the Loan, as set forth in the Budget. Unless reasonably requested by Lender in any instance, Borrower will not be required to provide any individual invoice for soft costs for an amount less than or equal to $5,000.00 in support of a draw request.

     Section 2.4 Additional Terms Regarding Advances.

     Advances of the Loan shall also be subject to the terms and conditions set forth in Schedule 5.

     Section 2.5 Liability of Lender.

     Lender shall in no event be responsible or liable to any Person other than Borrower for the disbursement of or failure to disburse the Loan proceeds or any part thereof and neither the General Contractor, Construction Consultant nor any subcontractor, laborer or material supplier shall have any right or claim against Lender under this Agreement or the other Loan Documents.

     Section 2.6 Letters of Credit.

     All Letters of Credit and drawings thereunder shall be subject to the terms and conditions of Schedule 7.

Article III
Representations and Warranties.

     Borrower represents and warrants to Lender that:

     Section 3.1 Organization, Power and Authority of Borrower; Loan Documents.

     Borrower (a) is a limited liability company duly organized, existing and in good standing under the laws of the state in which it is organized and is duly qualified to do business and in good standing in the state in which the Land is located (if different from the state of its formation) and in any other state where the nature of Borrower’s business or property requires it to be qualified to do business, and (b) has the power, authority and legal right to own its property and carry on the business now being conducted by it and to engage in the transactions contemplated by the Loan Documents. The Loan Documents to which Borrower is a party have been duly executed and delivered by Borrower, and the execution and delivery of, and the carrying out of the transactions contemplated by, such Loan Documents, and the performance and observance of the terms and conditions thereof, have been duly authorized by all necessary organizational action by and on behalf of Borrower. The Loan Documents to which Borrower is a party constitute the valid and legally binding obligations of Borrower and are fully enforceable against Borrower in accordance with their respective terms, except to the extent that such enforceability may be limited by laws generally affecting the enforcement of creditors’ rights.

     Section 3.2 Other Documents; Laws.

     The execution and performance of the Loan Documents to which Borrower is a party and the consummation of the transactions contemplated thereby will not conflict with, result in any breach of, or constitute a default under, the organizational documents of Borrower, or any contract, agreement, document or other instrument to which Borrower is a party or by which Borrower or any of its properties may be bound or affected, and such actions do not and will not violate or contravene any Law to which Borrower is subject.

     Section 3.3 Taxes.

     Borrower has filed all federal, state, county and municipal Tax returns required to have been filed by Borrower and has paid all Taxes which have become due pursuant to such returns or pursuant to any Tax assessments received by Borrower.

     Section 3.4 Legal Actions.

     There are no Claims or investigations by or before any court or Governmental Authority, pending, or to the best of Borrower’s knowledge and belief, threatened against or affecting Borrower, Borrower’s business or the Property. Borrower is not in default with respect to any order, writ, injunction, decree or demand of any court or any Governmental Authority affecting Borrower or the Property.

     Section 3.5 Nature of Loan.

     Borrower is a business or commercial organization. The Loan is being obtained solely for business or investment purposes, and will not be used for personal, family, household or agricultural purposes.

     Section 3.6 Trade Names.

     Borrower conducts its business solely under the name set forth in the Preamble to this Agreement and makes use of no trade names in connection therewith, unless such trade names have been previously disclosed to Lender in writing. Lender hereby acknowledges Borrower’s use of the name “The Grove.”

     Section 3.7 Financial Statements.

     The financial statements heretofore delivered by Borrower and Guarantor to Lender are true and correct in all material respects, have been prepared in accordance with sound accounting principles consistently applied, and fairly present the respective financial conditions of the subjects thereof as of the respective dates thereof.

     Section 3.8 ERISA and Prohibited Transactions.

     As of the date hereof and throughout the term of the Loan: (a) Borrower is not and will not be (i) an “employee benefit plan,” as defined in Section 3(3) of ERISA, (ii) a “governmental plan” within the meaning of Section 3(32) of ERISA, or (iii) a “plan” within the meaning of Section 4975(e) of the Code; (b) the assets of Borrower do not and will not constitute “plan assets” within the meaning of the United States Department of Labor Regulations set forth in Section 2510.3-101 of Title 29 of the Code of Federal Regulations; (c) transactions by or with Borrower are not and will not be subject to state statutes applicable to Borrower regulating investments of fiduciaries with respect to governmental plans; and (d) Borrower will not engage in any transaction that would cause any Obligation or any action taken or to be taken hereunder (or the exercise by Lender of any of its rights under the Mortgage or any of the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA or Section 4975 of the Code. Borrower agrees to deliver to Lender such certifications or other evidence of compliance with the provisions of this Section as Lender may from time to time request.

     Section 3.9 Compliance with Zoning and Other Requirements.

     The anticipated use of the Property complies with applicable zoning ordinances, regulations and restrictive covenants affecting the Land. All use and other requirements of any Governmental Authority having jurisdiction over the Property have been satisfied or will be satisfied prior to Completion of Construction. No material violation of any Law exists with respect to the Property.

     Section 3.10 Plans and Specifications.

     The Plans and Specifications are complete and adequate for the Construction of the Improvements. The Plans and Specifications have been approved (or will be approved prior to commencement of construction of vertical Improvements on the Land) by all Governmental Authorities having or claiming jurisdiction over the Property and by the beneficiary of each restrictive covenant affecting the Property whose approval is required. The Plans and Specifications have also been approved by any tenant and by any prospective purchaser of the Property or provider of permanent financing for the Property whose approval is required. To the best of Borrower’s knowledge, the Improvements, if

constructed substantially in accordance with the Plans and Specifications, will fully comply with all applicable Laws, including those Laws relating to access and facilities for disabled persons.

     Section 3.11 Building Permits; Other Permits.

     All building, construction and other permits necessary or required in connection with the Construction of the Improvements have been validly issued or will be issued in a timely manner by a date sufficient to ensure commencement of construction and Completion of Construction in accordance with the Project Schedule. All required fees have been paid and bonds and/or other security have been posted in connection with all permits that have been issued, and adequate amounts are included in the Budget to pay all fees and the cost of all bonds and other security in connection with permits to be issued in the future. Following the issuance thereof, all permits will remain in full force and effect.

     Section 3.12 Utilities.

     All utility services necessary for the Construction of the Improvements and the operation thereof for their intended purposes are available at the boundaries of the Land (or will be available upon the completion of work shown in the Plans and Specifications), including telephone service, cable television, water supply, storm and sanitary sewer facilities, natural gas (if applicable) and electric facilities, including cabling for telephonic and data communication, and the capacity to send and receive wireless communication.

     Section 3.13 Access; Roads.

     All roads and other accesses necessary for the Construction of the Improvements and full utilization thereof for their intended purposes have either been completed or the necessary rights of way therefor have either been acquired by the appropriate Governmental Authority, or have been dedicated to public use and accepted by such Governmental Authority and all necessary steps have been taken by Borrower or such Governmental Authority to assure the complete construction and installation thereof by a date sufficient to ensure the Completion of Construction of the Improvements in accordance with the Project Schedule.

     Section 3.14 Other Liens.

     Except for contracts for labor, materials and services furnished or to be furnished in connection with the Construction of the Improvements, Borrower has made no contract or arrangement of any kind the performance of which by the other party thereto would give rise to a lien on the Property.

     Section 3.15 No Material Adverse Change.

     No material adverse change has occurred in the financial conditions reflected in the financial statements of Borrower or Guarantor since the respective dates of such statements, and no material additional liabilities have been incurred by Borrower since the dates of such statements other than the borrowings contemplated herein or as approved in writing by Lender.

     Section 3.16 Defaults.

     There is no Default or Event of Default under any of the Loan Documents, and there is no material default or event of default under any material contract, agreement or other document related to the Construction of the Improvements or the operation thereof, except for defaults under Leases that may

occur from time to time but which will not result in a material adverse effect on Borrower’s ability to fulfill its obligations under the Loan Documents.

     Section 3.17 Affirmation of Representations and Warranties.

     Each draw request and each receipt of the funds requested thereby shall constitute an affirmation that (a) the foregoing representations and warranties of Borrower are true and correct as of the date of the draw request and, unless Lender is notified to the contrary prior to the disbursement of the advance requested, will be so on the date of the disbursement, (b) the work completed to the date of the draw request is of quality and in all other material respects consistent with the Plans and Specifications, and (c) if applicable, Construction of the Improvements is proceeding in accordance with the Project Schedule.

Article IV
Affirmative Covenants and Agreements.

     Section 4.1 Commencement and Completion of Construction.

     Borrower shall cause the Construction of the Improvements to be commenced and prosecuted in a good and workmanlike manner and shall cause the same to be completed in accordance with the Project Schedule and substantially in accordance with the Plans and Specifications.

     Section 4.2 Approval of Construction.

     No work associated with the Construction of the Improvements (with the exception of site preparation work which has been properly permitted) shall be commenced by Borrower unless and until the Plans and Specifications have been approved by Lender, by all Governmental Authorities having or claiming jurisdiction over the Land and Improvements, by the beneficiary of any applicable restrictive covenant whose approval is required, and by any other party whose approval is required under applicable agreements, and unless and until all building, construction and other permits necessary or required in connection with the applicable portion of the Construction of the Improvements have been validly issued and all fees, bonds and any other security required in connection therewith have been paid or posted.

     Section 4.3 Deposits to Balance Loan.

     If at any time Lender shall determine that (a) the proceeds of the Loan remaining to be advanced for any line item within the Budget are not or will not be sufficient to pay, in a timely manner, the amount of such line item remaining to be paid, and (b) the deficiency cannot be remedied by a reallocation of budgeted amounts pursuant to Section 2.2, then Borrower shall deposit with Lender, within ten (10) days from the effective date of a Notice from Lender requesting such deposit, funds in an amount equal to the deficiency. Such funds shall be held by Lender in a Borrower’s Deposit Account, which shall be an interest-bearing account, with all accrued interest to become part of Borrower’s deposit. Borrower agrees that it shall include all interest and earnings on any such deposit as its income (and, if Borrower is a partnership or other pass-through entity, the income of its partners, members or beneficiaries, as the case may be), and shall be the owner of all funds on deposit in the Borrower’s Deposit Account for federal and applicable state and local tax purposes. Lender shall have the exclusive right to manage and control all funds in the Borrower’s Deposit Account, but Lender shall have no fiduciary duty with respect to such funds. Advances of the deposited funds will be made from time to time for the payment of deficient line item amounts, prior to the advance of proceeds of the Loan for such amounts. Advances of the deposited funds will be subject to the terms of this Agreement regarding advances of the Loan. Any account fees and charges may be deducted from the balance, if any, in the Borrower’s Deposit Account. Borrower

grants to Lender a security interest in the Borrower’s Deposit Account and all such deposited funds hereafter deposited to such deposit account, and any proceeds thereof, as security for the Obligations. Such security interest shall be governed by the Uniform Commercial Code of the State, and Lender shall have available to it all of the rights and remedies available to a secured party thereunder. The Borrower’s Deposit Account may be established and held in such name or names as Lender shall deem appropriate, including in the name of Lender. Borrower hereby constitutes and appoints Lender and any officer or agent of Lender its true and lawful attorneys-in-fact with full power of substitution to open the Borrower’s Deposit Account and to do any and every act that Borrower might do on its own behalf to fulfill the terms of this Section 4.3. To the extent permitted by Law, Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. It is understood and agreed that this power of attorney, which shall be deemed to be a power coupled with an interest, cannot be revoked. Anything to the contrary contained in this Section 4.3 notwithstanding, in the event that Borrower is required to deposit balancing funds with Lender hereunder and the Improvements are thereafter completed with subsequent savings that, had they occurred prior to the requirement of the balancing funds, would have rendered all or a portion of such deposit to be unnecessary, Borrower shall be entitled to a reimbursement of the funds deposited equal to the lesser of (a) the amount of such subsequent savings or (b) the amount of the balancing funds deposit.

     Section 4.4 Compliance with Laws; Encroachments.

     The Improvements shall be constructed in accordance with all applicable (whether present or future) Laws. The Improvements shall be constructed entirely on the Land and shall not encroach upon any easement or right-of-way, or upon the land of others, except to the extent Borrower has obtained recorded easement rights for construction purposes. Construction of the Improvements shall occur wholly within all applicable building restriction lines and set-backs, however established, and shall be in strict compliance with all applicable use or other restrictions and the provisions of any prior agreements, declarations, covenants and all applicable zoning and subdivision ordinances and regulations.

     Section 4.5 Inspections; Cooperation.

     Borrower shall permit representatives of Lender and the Construction Consultant to enter upon the Land, to inspect the Improvements and any and all materials to be used in connection with the Construction of the Improvements, to examine all detailed plans and shop drawings and similar materials as well as all records and books of account maintained by or on behalf of Borrower relating thereto and to discuss the affairs, finances and accounts pertaining to the Loan and the Improvements with representatives of Borrower. Borrower shall at all times cooperate and cause the General Contractor and each and every one of its subcontractors and material suppliers to cooperate with the representatives of Lender and the Construction Consultant in connection with or in aid of the performance of Lender’s functions under this Agreement. Except in the event of an emergency, Lender shall give Borrower at least twenty-four hours’ notice by telephone in each instance before entering upon the Land and/or exercising any other rights granted in this Section.

     Section 4.6 Contracts, Vouchers and Receipts.

     Borrower shall furnish to Lender, promptly on demand, copies of any contracts, major subcontracts, bills of sale, statements, receipted vouchers or other agreements relating to the Construction of the Improvements, including any such items pursuant to which Borrower has any claim of title to any materials, fixtures or other articles delivered or to be delivered to the Land or incorporated or to be incorporated into the Improvements. Borrower shall furnish to Lender, promptly on demand, a verified written statement, in such form and detail as Lender may require, setting forth the names and addresses of

all contractors, subcontractors and suppliers furnishing labor or materials in the Construction of the Improvements and showing all amounts paid for labor and materials and all items of labor and materials furnished or to be furnished for which payment has not been made and the amounts to be paid therefor.

     Section 4.7 Payment and Performance of Contractual Obligations.

     Borrower shall perform in a timely manner all of its obligations under the Architect’s Contract, the Construction Contract and any and all other contracts and agreements related to the Construction of the Improvements or the operation thereof, and Borrower will pay when due all bills for services or labor performed and materials supplied in connection with the Construction of the Improvements. Within sixty (60) days after the filing of any mechanic’s lien or other lien or encumbrance against the Property, Borrower will promptly discharge the same by payment or filing a bond or otherwise as permitted by Law. So long as Lender’s security has been protected by the filing of a bond or otherwise in a manner satisfactory to Lender in its sole and absolute discretion, Borrower shall have the right to contest in good faith any claim, lien or encumbrance, provided that Borrower does so diligently and without prejudice to Lender or delay in completing Construction of the Improvements.

     Section 4.8 Correction of Construction Defects.

     Promptly following any demand by Lender, Borrower shall correct or cause the correction of any structural defects in the Improvements, any work that fails to comply with the requirements of Section 4.4 and any material departures or deviations from the Plans and Specifications not approved in writing by Lender.

     Section 4.9 Insurance.

     Borrower shall maintain the following insurance at its sole cost and expense:

     (a) Insurance against Casualty to the Property under a policy or policies covering such risks as are presently included in “special form” (also known as “all risk”) coverage, but in any event including fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, damage from aircraft, smoke, vandalism, malicious mischief and acts of terrorism. Such insurance shall name Lender as mortgagee and loss payee. Unless otherwise agreed in writing by Lender, such insurance shall be for the full insurable value of the Property, with a deductible amount, if any, satisfactory to Lender. No policy of insurance shall be written such that the proceeds thereof will produce less than the minimum coverage required by this Section by reason of co-insurance provisions or otherwise. The term “full insurable value” means one hundred percent (100%) of the actual replacement cost of the Property (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items).

     (b) Comprehensive (also known as commercial) general liability insurance on an “occurrence” basis against claims for “personal injury” liability and liability for death, bodily injury and damage to property, products and completed operations, in limits satisfactory to Lender with respect to any one occurrence and the aggregate of all occurrences during any given annual policy period. Such insurance shall name Lender as an additional insured.

     (c) Workers’ compensation insurance for all employees of Borrower in such amount as is required by Law and including employer’s liability insurance, if required by Lender.

     (d) During any period of construction upon the Property, Borrower shall maintain, or cause others to maintain, builder’s risk insurance (non-reporting form) for one hundred percent (100%) of the full replacement cost of work in place and materials stored at or upon the Property.

     (e) If at any time any portion of any structure on the Property is insurable against Casualty by flood and is located in a Special Flood Hazard Area under the Flood Disaster Protection Act of 1973, as amended, a flood insurance policy on the structure and Borrower owned contents in form and amount acceptable to Lender but in no amount less than the amount sufficient to meet the requirements of applicable Law as such requirements may from time to time be in effect. The flood insurance policy on contents shall be required upon completion of the structure or any unit or component thereof, or as soon thereafter as a flood insurance policy on contents may be obtained.

     (f) Loss of rental value insurance or business interruption insurance in an amount acceptable to Lender.

     (g) Such other and further insurance as may be required from time to time by Lender in order to comply with regular requirements and practices of Lender in similar transactions including, if required by Lender, wind insurance and earthquake insurance, so long as any such insurance is generally available at commercially reasonable premiums as determined by Lender from time to time.

     In addition to the foregoing, Borrower shall cause the General Contractor to provide and maintain comprehensive (commercial) general liability insurance and workers’ compensation insurance for all employees of the General Contractor meeting, respectively, the requirements of Subsections (b) and (c), above.

     Each policy of insurance (i) shall be issued by one or more insurance companies each of which must have an A.M. Best Company financial and performance rating of A-VII or better and are qualified or authorized by the Laws of the State to assume the risks covered by such policy, (ii) with respect to the insurance described under the preceding Subsections (a), (d), (e) and (f), shall have attached thereto standard non-contributing, non-reporting mortgagee clauses in favor of and entitling Lender without contribution to collect proceeds payable under such insurance, either as sole payee or as joint payee with Borrower, (iii) shall provide that such policy shall not be canceled without at least thirty (30) days prior written notice to Lender, and (iv) shall provide that any loss otherwise payable thereunder shall be payable notwithstanding any act or negligence of Borrower which might, absent such agreement, result in a forfeiture of all or a part of such insurance payment. Borrower shall promptly pay all premiums when due on such insurance and, not less than twenty (20) days prior to the expiration dates of each such policy, Borrower will deliver to Lender acceptable evidence of insurance, such as a renewal policy or policies marked “premium paid” or other evidence reasonably satisfactory to Lender reflecting that all required insurance is current and in force. Borrower will immediately give Notice to Lender of any cancellation of, or material change in, any insurance policy. Lender shall not, because of accepting, rejecting, approving or obtaining insurance, incur any liability for (A) the existence, nonexistence, form or legal sufficiency thereof, (B) the solvency of any insurer, or (C) the payment of losses. Borrower may satisfy any insurance requirement hereunder by providing one or more “blanket” insurance policies, subject to Lender’s approval in each instance as to limits, coverages, forms, deductibles, inception and expiration dates, and cancellation provisions.

     Section 4.10 Adjustment of Condemnation and Insurance Claims.

     Borrower shall give prompt Notice to Lender of any Casualty or any Condemnation or threatened Condemnation. Lender is authorized, at its sole and absolute option, to commence, appear in and prosecute, in its own or Borrower’s name, any action or proceeding relating to any Condemnation or

     Casualty, and to make proof of loss for and to settle or compromise any Claim in connection therewith, and in such case, Lender shall have the right to receive all Condemnation Awards and Insurance Proceeds, and may deduct therefrom any or all of its Expenses; provided, however, that (i) if no Default or Event of Default then exists, and (ii) the Claim is for less than $200,000 and does not materially and adversely affect Lender’s security or Borrower’s ability to perform its obligations under the Loan Documents, Borrower shall have the right to prosecute, settle or compromise such Claim. So long as no Event of Default has occurred and Borrower is diligently pursuing its rights and remedies with respect to a Claim, Lender will obtain Borrower’s written consent (which consent shall not be unreasonably withheld or delayed) before making proof of loss for or settling or compromising such Claim. Borrower agrees to diligently assert its rights and remedies with respect to each Claim and to promptly pursue the settlement and compromise of each Claim subject to Lender’s approval, which approval shall not be unreasonably withheld or delayed. If, prior to the receipt by Lender of any Condemnation Award or Insurance Proceeds, the Property shall have been sold pursuant to the provisions of the Mortgage, Lender shall have the right to receive such funds (a) to the extent of any deficiency found to be due upon such sale with interest thereon (whether or not a deficiency judgment on the Mortgage shall have been sought or recovered or denied), and (b) to the extent necessary to reimburse Lender for its Expenses. If any Condemnation Awards or Insurance Proceeds are paid to Borrower, Borrower shall receive the same in trust for Lender. Within ten (10) days after Borrower’s receipt of any Condemnation Awards or Insurance Proceeds, Borrower shall deliver such awards or proceeds to Lender in the form in which they were received, together with any endorsements or documents that may be necessary to effectively negotiate or transfer the same to Lender. Borrower agrees to execute and deliver from time to time, upon the request of Lender, such further instruments or documents as may be requested by Lender to confirm the grant and assignment to Lender of any Condemnation Awards or Insurance Proceeds.

     Section 4.11 Utilization of Net Proceeds.

     (a) Net Proceeds must be utilized either for payment of the Obligations or for the restoration of the Property. Net Proceeds will be utilized for the restoration of the Property only if no Default shall exist and only if in the reasonable judgment of Lender (i) there has been no material adverse change in the financial viability of the construction or operation of the Improvements, (ii) the Net Proceeds, together with other funds deposited with Lender for that purpose, are sufficient to pay the cost of the restoration pursuant to a budget and plans and specifications approved by Lender, and (iii) the restoration can be completed prior to the final maturity of the Loan. Otherwise, Net Proceeds shall be utilized for payment of the Obligations.

     (b) If Net Proceeds are to be utilized for the restoration of the Property, the Net Proceeds, together with any other funds deposited with Lender for that purpose, must be deposited in an interest-bearing account with Lender, which account will be assigned to Lender as additional security for the Loan. The account will be opened, managed and controlled in a manner consistent with, and subject to, the provisions of Section 4.3 governing a Borrower’s Deposit Account, including those provisions permitting Lender to require Borrower to deposit funds in the event of a deficiency in the funds available to complete restoration as herein contemplated. Disbursements of funds from the account will be made in a manner consistent with, and subject to, the requirements for the closing and funding of the Loan and the terms of this Agreement regarding the disbursement of Loan proceeds.

     Section 4.12 Management.

     Borrower at all times shall provide for the competent and responsible management and operation of the Property. Any management contract or contracts affecting the Property must be approved in

writing by Lender prior to the execution of the same. Lender hereby approves The Grove Student Properties, Inc. as the property manager for the Property.

     Section 4.13 Books and Records; Financial Statements; Tax Returns.

     Borrower will keep and maintain full and accurate books and records administered in accordance with sound accounting principles, consistently applied, showing in detail the earnings and expenses of the Property and the operation thereof. Borrower will keep and maintain its books and records, including recorded data of any kind and regardless of the medium of recording, at the address of Borrower set forth in Section 8.6. Borrower shall permit Lender, or any Person authorized by Lender, to inspect and examine such books and records (regardless of where maintained) and all supporting vouchers and data and to make copies and extracts therefrom at all reasonable times and as often as may be requested by Lender. Borrower will furnish or cause to be furnished to Lender annual financial statements, including balance sheets and income statements, for Borrower, Guarantor and the Property, within ninety (90) days after each fiscal year end for the respective reporting party. In addition, Borrower will furnish or cause to be furnished to Lender, with reasonable promptness but in no event more than forty-five (45) days after the end of each of the first three calendar quarters of each fiscal year, quarterly financial statements of Borrower, Guarantor and the Property, together with such additional information, reports or statements in connection therewith, as Lender may from time to time request. All financial statements must be in form and detail acceptable to Lender, must be certified as to accuracy by Borrower or the Guarantor, as the case may be, and in the case of annual financial statements of the Guarantor, must be audited with an unqualified opinion by an independent certified public accountant satisfactory to Lender. Borrower shall provide, upon Lender’s request, convenient facilities for the audit and verification of any such statement. All certifications and signatures on behalf of corporations, partnerships, limited liability companies and other entities shall be by a representative of the reporting party satisfactory to Lender. Lender hereby acknowledges and agrees that Borrower providing Lender with a copy of the annual audit report and the quarterly financial statements filed by Guarantor with the Securities and Exchange Commission shall satisfy Guarantor’s requirement hereunder to provide interim and annual financial statements. Promptly after filing, Borrower will provide to Lender copies of annual tax returns filed by Borrower and Guarantor.

     Section 4.14 Estoppel Certificates.

     Within ten (10) days after any request by Lender or a proposed assignee or purchaser of the Loan or any interest therein, Borrower shall certify in writing to Lender, or to such proposed assignee or purchaser, the then unpaid balance of the Loan and whether Borrower claims any right of defense or setoff to the payment or performance of any of the Obligations, and if Borrower claims any such right of defense or setoff, Borrower shall give a detailed written description of such claimed right.

     Section 4.15 Taxes.

     Borrower shall pay and discharge all Taxes prior to the date on which penalties are attached thereto unless and to the extent only that such Taxes are contested in accordance with the terms of the Mortgage.

     Section 4.16 Lender’s Rights to Pay and Perform.

     If, after any required notice, Borrower fails to promptly pay or perform any of the Obligations within any applicable grace or cure periods, Lender, without Notice to or demand upon Borrower, and without waiving or releasing any Obligation or Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of Borrower.

Lender may enter upon the Property for that purpose and take all action thereon as Lender considers necessary or appropriate. At the option of Lender, during the existence of an Event of Default, Lender may apply any undisbursed Loan proceeds to the satisfaction of the conditions of the Loan Documents, irrespective of the allocation of such Loan proceeds in the Budget. Without limiting the generality of the foregoing, Lender may pay directly from the proceeds of the Loan all interest bills rendered by Lender in connection with the Loan, and during the existence of an Event of Default may make advances directly to the General Contractor, the title insurance company, any subcontractor or material supplier, or to any of them jointly. The execution hereof by Borrower shall, and hereby does, constitute an irrevocable authorization so to advance the proceeds of the Loan. No further direction or authorization from Borrower shall be necessary to warrant such direct advances. Each advance shall be secured by the Mortgage and shall satisfy the obligations of Lender hereunder to the extent of the amount of the advance.

     Section 4.17 Reimbursement; Interest.

     If Lender shall incur any Expenses or pay any Claims by reason of the Loan or the rights and remedies provided under the Loan Documents (regardless of whether or not any of the Loan Documents expressly provide for an indemnification by Borrower against such Claims), Lender’s payment of such Expenses and Claims shall constitute advances to Borrower which shall be paid by Borrower to Lender on demand, together with interest thereon from the date incurred until paid in full at the rate of interest then applicable to the Loan under the terms of the Note. Each advance arising out of the Environmental Agreement shall be unsecured. All other advances shall be secured by the Mortgage and the other Loan Documents as fully as if made to Borrower, regardless of the disposition thereof by the party or parties to whom such advance is made. Notwithstanding the foregoing, however, in any action or proceeding to foreclose the Mortgage or to recover or collect the Obligations, the provisions of Law governing the recovery of costs, disbursements and allowances shall prevail unaffected by this Section.

     Section 4.18 Notification by Borrower.

     Borrower will promptly give Notice to Lender of the occurrence of any Default or Event of Default hereunder or under any of the other Loan Documents. Borrower will also promptly give Notice to Lender of any claim of a default by Borrower, or any claim by Borrower of a default by any other party, under the Architect’s Contract or the Construction Contract.

     Section 4.19 Indemnification by Borrower.

     Borrower agrees to indemnify Lender and to hold Lender harmless from and against, and to defend Lender by counsel approved by Lender against, any and all Claims directly or indirectly arising out of or resulting from any transaction, act, omission, event or circumstance in any way connected with the Property or the Loan, including any Claim arising out of or resulting from (a) Construction of the Improvements, including any defective workmanship or materials; (b) any failure by Borrower to comply with the requirements of any Laws or to comply with any agreement that applies or pertains to the Property, including any agreement with a broker or “finder” in connection with the Loan or other financing of the Property; (c) any failure by Borrower to observe and perform any of the obligations imposed upon the landlord under the Leases; (d) any other Default or Event of Default hereunder or under any of the other Loan Documents; or (e) any assertion or allegation that Lender is liable for any act or omission of Borrower or any other Person in connection with the ownership, development, financing, leasing, operation or sale of the Property; provided, however, that Borrower shall not be obligated to indemnify Lender with respect to any Claim arising solely from the gross negligence or willful misconduct of Lender. The agreements and indemnifications contained in this Section shall apply to Claims arising both before and after the repayment of the Loan and shall survive the repayment of the

Loan, any foreclosure or deed, assignment or conveyance in lieu thereof and any other action by Lender to enforce the rights and remedies of Lender hereunder or under the other Loan Documents and until such time as the applicable statute of limitations for such Claim expires.

     Section 4.20 Fees and Expenses.

     Borrower shall pay all fees, charges, costs and expenses required to satisfy the conditions of the Loan Documents. Without limitation of the foregoing, Borrower will pay, when due, and if paid by Lender will reimburse Lender on demand for, all fees and expenses of the Construction Consultant, the title company, environmental engineers, appraisers, surveyors and Lender’s counsel in connection with the closing, administration, modification or any “workout” of the Loan, or the enforcement of Lender’s rights and remedies under any of the Loan Documents.

     Section 4.21 Appraisals.

     Lender may obtain from time to time an appraisal of all or any part of the Property, prepared in accordance with written instructions from Lender, from a third-party appraiser satisfactory to, and engaged directly by, Lender. The cost of any such appraisal shall be borne by Lender, except that the cost of each such appraisal obtained by Lender during the existence of an Event of Default shall by borne by Borrower and shall be paid by Borrower on demand.

     Section 4.22 Leasing and Tenant Matters.

     Borrower shall comply with the terms and conditions of Schedule 6 in connection with the leasing of space within the Improvements.

Article V
Negative Covenants.

     Section 5.1 Conditional Sales.

     Borrower shall not incorporate in the Improvements any property acquired under a conditional sales contract or lease or as to which the vendor retains title or a security interest, without the prior written consent of Lender.

     Section 5.2 Changes to Plans and Specifications.

     Borrower shall not make or permit any changes in the Plans and Specifications, including any such changes that alter, diminish or add to the work to be performed or change the design of the Improvements, without the prior written consent of Lender and under such reasonable conditions as Lender may establish, including, without limitation, the furnishing of AIA Form G701 if requested by Lender. Lender’s prior written consent shall not be required, however, as to any change order which (a) individually does not cause the fixed or guaranteed maximum price of the Construction Contract to be increased or decreased by more than One Hundred Thousand Dollars ($100,000.00) and, when added to all previous change orders, does not cause such price to be increased or decreased by more than Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate, (b) does not result in a material change to the design of the Improvements, and (c) has been approved in writing by the General Contractor and any Governmental Authority, tenant or other party whose approval is required.

     Section 5.3 Insurance Policies and Bonds.

     Borrower shall not do or permit to be done anything that would materially and adversely affect the coverage or indemnities provided for pursuant to the provisions of any insurance policy, performance bond, labor and material payment bond or any other bond given in connection with the Construction of the Improvements.

Article VI
Events of Default.

     The occurrence or happening, from time to time, of any one or more of the following shall constitute an Event of Default under this Agreement:

     Section 6.1 Payment Default.

     Borrower fails to pay any Obligation under this Agreement when due, whether on the scheduled due date or upon acceleration, maturity or otherwise, but giving effect to any grace period provided in the Note.

     Section 6.2 Default Under Other Loan Documents.

     An Event of Default (as defined therein) occurs under the Note or the Mortgage, or Borrower or Guarantor fails to promptly pay, perform, observe or comply with any term, obligation or agreement contained in any of the other Loan Documents (within any applicable grace or cure period).

     Section 6.3 Accuracy of Information; Representations and Warranties.

     Any information contained in any financial statement, schedule, report or any other document delivered by Borrower, Guarantor or any other Person to Lender in connection with the Loan proves at any time not to be in all material respects true and accurate, or Borrower, Guarantor or any other Person shall have failed to state any material fact or any fact necessary to make such information not misleading, or any representation or warranty contained in this Agreement or in any other Loan Document or other document, certificate or opinion delivered to Lender in connection with the Loan, proves at any time to be incorrect or misleading in any material respect either on the date when made or on the date when reaffirmed pursuant to the terms of this Agreement.

     Section 6.4 Deposits.

     Borrower fails to deposit funds with Lender, in the amount requested by Lender, pursuant to the provisions of Section 4.3 or Section 4.11, within ten (10) days from the effective date of a Notice from Lender requesting such deposit, or Borrower fails to deliver to Lender any Condemnation Awards or Insurance Proceeds required to be remitted to Lender hereunder within ten (10) days after Borrower’s receipt thereof.

     Section 6.5 Insurance Obligations.

     Borrower fails to promptly perform or comply with any of the covenants contained in the Loan Documents with respect to maintaining insurance, including the covenants contained in Section 4.9, and such failure continues uncured for a period of twenty (20) days after the earlier of (a) the date on which Borrower obtains knowledge of such failure or (b) Notice from Lender to Borrower; provided, however,

that in no event shall such cure period with respect to a failure to provide acceptable evidence of required insurance in force extend beyond the expiration date of the applicable policy.

     Section 6.6 Other Obligations.

     Borrower fails to promptly perform or comply with any of the Obligations set forth in this Agreement (other than those expressly described in other Sections of this Article VI), and such failure continues uncured for a period of thirty (30) days after Notice from Lender to Borrower, unless (a) such failure, by its nature, is not capable of being cured within such period, and (b) within such period, Borrower commences to cure such failure and thereafter diligently prosecutes the cure thereof, and (c) Borrower causes such failure to be cured no later than ninety (90) days after the date of such Notice from Lender.

     Section 6.7 Progress of Construction.

     Construction of the Improvements is abandoned or is discontinued for a period of more than twenty (20) consecutive days, subject to Force Majeure in the case of discontinuance (but with the sixty (60) day limitation specified in the definition of Force Majeure).

     Section 6.8 Damage to Improvements.

     The Improvements are substantially damaged or destroyed by fire or other casualty and Lender determines that the Improvements cannot be restored and completed in accordance with the terms and provisions of this Agreement and the Mortgage.

     Section 6.9 Lapse of Permits or Approvals.

     Any permit, license, certificate or approval that Borrower is required to obtain with respect to the construction, operation, development, leasing or maintenance of the Improvements or the Property lapses or ceases to be in full force and effect and such lapse or ceasing to be in full force and effect continues for more than ten (10) days.

     Section 6.10 Completion of Construction.

     Completion of Construction does not occur in accordance with the Project Schedule, or Lender reasonably determines that Completion of Construction will not occur in accordance with the Project Schedule.

     Section 6.11 Mechanic’s Lien.

     A lien for the performance of work or the supply of materials filed against the Property, or any stop notice served on Borrower, the General Contractor or Lender, remains unsatisfied or unbonded for a period of sixty (60) days after the date of filing or service.

     Section 6.12 Survey Matters.

     Any Survey required by Lender during the period of construction shows any matter which in Lender’s reasonable judgment would interfere with the Construction of the Improvements or the operation or use of the Property, and such matter is not removed within a period of thirty (30) days after Notice thereof by Lender to Borrower.

     Section 6.13 General Contractor Default.

     The General Contractor defaults under the Construction Contract in a manner which Lender deems to be material, and, unless otherwise agreed in writing by Lender, Borrower fails promptly to exercise its rights and remedies under the Construction Contract with respect to such default.

     Section 6.14 Performance Enjoined or Prohibited.

     Borrower is enjoined or prohibited from performing any of its obligations under any of the Loan Documents for a period of more than fifteen (15) consecutive days.

     Section 6.15 Bankruptcy.

     Borrower, any member of Borrower or Guarantor files a bankruptcy petition or makes a general assignment for the benefit of creditors, or a bankruptcy petition is filed against Borrower, any member of Borrower or any Guarantor and such involuntary bankruptcy petition continues undismissed for a period of sixty (60) days after the filing thereof.

     Section 6.16 Appointment of Receiver, Trustee, Liquidator.

     Borrower, any member of Borrower or Guarantor applies for or consents in writing to the appointment of a receiver, trustee or liquidator of Borrower, any member of Borrower or Guarantor, the Property, or all or substantially all of the other assets of Borrower, any member of Borrower or Guarantor, or an order, judgment or decree is entered by any court of competent jurisdiction on the application of a creditor appointing a receiver, trustee or liquidator of Borrower, any member of Borrower, Guarantor, the Property, or all or substantially all of the other assets of Borrower, any member of Borrower or Guarantor.

     Section 6.17 Judgment.

     Any judgments or orders, either individually or in the aggregate, for the payment of money in excess of $200,000 shall be rendered against Borrower or $2,000,000 shall be rendered against Guarantor and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; provided, however, that any such judgment or order shall not give rise to an Event of Default under this Section 6.17 if the amount of such judgment or order which remains unsatisfied is covered by a valid and binding policy of insurance that has been issued by an insurer reasonably satisfactory to Lender.

     Section 6.18 Dissolution; Change in Business Status.

     Unless the written consent of Lender is previously obtained, all or substantially all of the business assets of Borrower or Guarantor are sold, Borrower or Guarantor is dissolved, or there occurs any change in the form of business entity through which Borrower or any Guarantor presently conducts its business or any merger or consolidation involving Borrower or Guarantor, except in the case of a merger of Borrower or Guarantor, where Borrower or Guarantor, as applicable, is the surviving entity.

     Section 6.19 Default Under Other Indebtedness.

     Borrower or Guarantor fails to pay any indebtedness (other than the Loan) owed by Borrower or Guarantor to Lender when and as due and payable (whether by acceleration or otherwise), after the expiration of any applicable notice and/or cure period.

     Section 6.20 Material Adverse Change.

     In the reasonable opinion of Lender, the prospect of payment or performance of all or any part of the Obligations has been impaired because of a material adverse change in the financial condition, results of operations, business or properties of Borrower, Guarantor or any other Person liable for the payment or performance of any of the Obligations.

Article VII
Remedies on Default.

     Section 7.1 Remedies on Default.

     Upon the happening and during the continuance of any Event of Default, Lender shall have the right, in addition to any other rights or remedies available to Lender under the Mortgage or any of the other Loan Documents or under applicable Law, to exercise any one or more of the following rights and remedies:

     (a) Lender may terminate its obligation to advance any further principal of the Loan pursuant to this Agreement by Notice to Borrower.

     (b) Lender may accelerate all of Borrower’s Obligations under the Loan Documents whereupon such Obligations shall become immediately due and payable, without notice of default, acceleration or intention to accelerate, presentment or demand for payment, protest or notice of nonpayment or dishonor, or notices or demands of any kind or character (all of which are hereby waived by Borrower).

     (c) Lender may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property.

     (d) Lender may set off the amounts due Lender under the Loan Documents against any and all accounts, credits, money, securities or other property of Borrower now or hereafter on deposit with, held by or in the possession of Lender to the credit or for the account of Borrower, without notice to or the consent of Borrower.

     (e) Lender may enter into possession of the Property and perform any and all work and labor necessary to complete the Construction of the Improvements (whether or not in accordance with the Plans and Specifications) and to employ watchmen to protect the Property and the Improvements. All sums expended by Lender for such purposes shall be deemed to have been advanced to Borrower under the Note and shall be secured by the Mortgage. For this purpose, Borrower hereby constitutes and appoints Lender its true and lawful attorney-in-fact with full power of substitution, which power is coupled with an interest, to complete the work in the name of Borrower, and hereby empowers said attorney or attorneys, in the name of Borrower or Lender:

			(i) To use any funds of Borrower including any balance which may be held by Lender and any funds which may remain unadvanced hereunder for the purpose of completing the Construction of the Improvements, whether or not in the manner called for in the Plans and Specifications;
			(ii) To make such additions and changes and corrections to the Plans and Specifications as shall be necessary or desirable in the judgment of Lender to complete the Construction of the Improvements;

			(iii) To employ such contractors, subcontractors, agents, architects and inspectors as shall be necessary or desirable for said purpose;
			(iv) To pay, settle or compromise all existing bills and claims which are or may be liens against the Property, or may be necessary or desirable for the completion of the work or the clearance of title to the Property;
			(v) To execute all applications and certificates which may be required in the name of Borrower;
			(vi) To enter into, enforce, modify or cancel Leases and to fix or modify Rents on such terms as Lender may consider proper;
			(vii) To file for record, at Borrower’s cost and expense and in Borrower’s name, any notices of completion, notices of cessation of labor, or any other notices that Lender in its sole and absolute discretion may consider necessary or desirable to protect its security; and
			(viii) To do any and every act with respect to the Construction of the Improvements which Borrower may do in its own behalf.

     It is understood and agreed that this power of attorney shall be deemed to be a power coupled with an interest which cannot be revoked. Said attorney-in-fact shall also have the power to prosecute and defend all actions or proceedings in connection with the Construction of the Improvements and to take such actions and to require such performance as Lender may deem necessary.

     Section 7.2 No Release or Waiver; Remedies Cumulative and Concurrent.

     Borrower shall not be relieved of any Obligation by reason of the failure of Lender to comply with any request of Borrower or of any other Person to take action to foreclose on the Property under the Mortgage or otherwise to enforce any provision of the Loan Documents, or by reason of the release, regardless of consideration, of all or any part of the Property. No delay or omission of Lender to exercise any right, power or remedy accruing upon the happening of an Event of Default shall impair any such right, power or remedy or shall be construed to be a waiver of any such Event of Default or any acquiescence therein. No delay or omission on the part of Lender to exercise any option for acceleration of the maturity of the Obligations, or for foreclosure of the Mortgage following any Event of Default as aforesaid, or any other option granted to Lender hereunder in any one or more instances, or the acceptance by Lender of any partial payment on account of the Obligations shall constitute a waiver of any such Event of Default and each such option shall remain continuously in full force and effect. No remedy herein conferred upon or reserved to Lender is intended to be exclusive of any other remedies provided for in the Loan Documents, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder, or under the Loan Documents, or now or hereafter existing at Law or in equity or by statute. Every right, power and remedy given by the Loan Documents to Lender shall be concurrent and may be pursued separately, successively or together against Borrower or the Property or any part thereof, and every right, power and remedy given by the Loan Documents may be exercised from time to time as often as may be deemed expedient by Lender.

Article VIII
Miscellaneous.

     Section 8.1 Further Assurances; Authorization to File Documents.

     At any time, and from time to time, upon request by Lender, Borrower will, at Borrower’s expense, (a) correct any defect, error or omission which may be discovered in the form or content of any of the Loan Documents, and (b) make, execute, deliver and record, or cause to be made, executed, delivered and recorded, any and all further instruments, certificates and other documents as may, in the opinion of Lender, be necessary or desirable in order to complete, perfect or continue and preserve the lien of the Mortgage. Upon any failure by Borrower to do so, Lender may make, execute and record any and all such instruments, certificates and other documents for and in the name of Borrower, all at the sole expense of Borrower, and Borrower hereby appoints Lender the agent and attorney-in-fact of Borrower to do so, this appointment being coupled with an interest and being irrevocable. Without limitation of the foregoing, Borrower irrevocably authorizes Lender at any time and from time to time to file any initial financing statements, amendments thereto and continuation statements deemed necessary or desirable by Lender to establish or maintain the validity, perfection and priority of the security interests granted in the Mortgage, and Borrower ratifies any such filings made by Lender prior to the date hereof. In addition, at any time, and from time to time, upon request by Lender, Borrower will, at Borrower’s expense, provide any and all further instruments, certificates and other documents as may, in the opinion of Lender, be necessary or desirable in order to verify Borrower’s identity and background in a manner satisfactory to Lender.

     Section 8.2 No Warranty by Lender.

     By accepting or approving anything required to be observed, performed or fulfilled by Borrower or to be given to Lender pursuant to this Agreement, including any certificate, Survey, receipt, appraisal or insurance policy, Lender shall not be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof and any such acceptance or approval thereof shall not be or constitute any warranty or representation with respect thereto by Lender.

     Section 8.3 Standard of Conduct of Lender.

     Nothing contained in this Agreement or any other Loan Document shall limit the right of Lender to exercise its business judgment or to act, in the context of the granting or withholding of any advance or consent under this Agreement or any other Loan Document, in a subjective manner, whether or not objectively reasonable under the circumstances, so long as Lender’s exercise of its business judgment or action is made or undertaken in good faith. Borrower and Lender intend by the foregoing to set forth and affirm their entire understanding with respect to the standard pursuant to which Lender’s duties and obligations are to be judged and the parameters within which Lender’s discretion may be exercised hereunder and under the other Loan Documents. As used herein, “good faith” means honesty in fact in the conduct and transaction concerned.

     Section 8.4 No Partnership.

     Nothing contained in this Agreement shall be construed in a manner to create any relationship between Borrower and Lender other than the relationship of borrower and lender and Borrower and Lender shall not be considered partners or co-venturers for any purpose on account of this Agreement.

     Section 8.5 Severability.

     In the event any one or more of the provisions of this Agreement or any of the other Loan Documents shall for any reason be held to be invalid, illegal or unenforceable, in whole or in part or in any other respect, or in the event any one or more of the provisions of any of the Loan Documents operates or would prospectively operate to invalidate this Agreement or any of the other Loan Documents, then and in either of those events, at the option of Lender, such provision or provisions only shall be deemed null and void and shall not affect the validity of the remaining Obligations, and the remaining provisions of the Loan Documents shall remain operative and in full force and effect and shall in no way be affected, prejudiced or disturbed thereby.

     Section 8.6 Notices.

     All Notices required or which any party desires to give hereunder or under any other Loan Document shall be in writing and, unless otherwise specifically provided in such other Loan Document, shall be deemed sufficiently given or furnished if delivered by personal delivery, by nationally recognized overnight courier service or by certified United States mail, postage prepaid, addressed to the party to whom directed at the applicable address set forth below (unless changed by similar notice in writing given by the particular party whose address is to be changed). Any Notice shall be deemed to have been given either at the time of personal delivery or, in the case of courier or mail, as of the date of first attempted delivery at the address and in the manner provided herein; provided that service of a Notice required by any applicable statute shall be considered complete when the requirements of that statute are met. Notwithstanding the foregoing, no notice of change of address shall be effective except upon actual receipt. This Section shall not be construed in any way to affect or impair any waiver of notice or demand provided in this Agreement or in any other Loan Document or to require giving of notice or demand to or upon any Person in any situation or for any reason.

The address and fax number of Borrower are:

Campus Crest at Valdosta, LLC
2100 Rexford Road, Suite 414
Charlotte, North Carolina 28211

With copies to:

Bradley Arant Boult Cummings LLP
One Federal Place
1819 Fifth Avenue North
Birmingham, Alabama 35203-2119
Attention: Dawn Helms Sharff

and with a copy to:

Harrison Street Real Estate Capital
71 South Wacker Drive, Suite 3585
Chicago, Illinois 60606
Attention: General Counsel

The address and fax number of Lender are:

Community & Southern Bank
201 Maple Street
Carrollton, Georgia 30117

     Section 8.7 Permitted Successors and Assigns; Disclosure of Information.

     (a) Each and every one of the covenants, terms, provisions and conditions of this Agreement and the Loan Documents shall apply to, bind and inure to the benefit of Borrower, its successors and those assigns of Borrower consented to in writing by Lender, and shall apply to, bind and inure to the benefit of Lender and the endorsees, transferees, successors and assigns of Lender, and all Persons claiming under or through any of them.

     (b) Borrower agrees not to transfer, assign, pledge or hypothecate any right or interest in any payment or advance due pursuant to this Agreement, or any of the other benefits of this Agreement, without the prior written consent of Lender, which consent may be withheld by Lender in its sole and absolute discretion. Any such transfer, assignment, pledge or hypothecation made or attempted by Borrower without the prior written consent of Lender shall be void and of no effect. No consent by Lender to an assignment shall be deemed to be a waiver of the requirement of prior written consent by Lender with respect to each and every further assignment and as a condition precedent to the effectiveness of such assignment.

     (c) Lender may sell or offer to sell the Loan or interests therein to one or more assignees or participants. Borrower shall execute, acknowledge and deliver any and all instruments reasonably requested by Lender in connection therewith, and to the extent, if any, specified in any such assignment or participation, such assignee(s) or participant(s) shall have the same rights and benefits with respect to the Loan Documents as such Person(s) would have if such Person(s) were Lender hereunder. Lender may disseminate any information it now has or hereafter obtains pertaining to the Loan, including any security for the Loan, any credit or other information on the Property (including environmental reports and assessments), Borrower, any of Borrower’s principals or any Guarantor, to any actual or prospective assignee or participant, to Lender’s Affiliates, to any regulatory body having jurisdiction over Lender, to any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to Borrower and the Loan, or to any other party as necessary or appropriate in Lender’s reasonable judgment.

     Section 8.8 Modification; Waiver.

     None of the terms or provisions of this Agreement may be changed, waived, modified, discharged or terminated except by instrument in writing executed by the party or parties against whom enforcement of the change, waiver, modification, discharge or termination is asserted. None of the terms or provisions of this Agreement shall be deemed to have been abrogated or waived by reason of any failure or failures to enforce the same.

     Section 8.9 Third Parties; Benefit.

     All conditions to the obligation of Lender to make advances hereunder are imposed solely and exclusively for the benefit of Lender and its assigns and no other Persons shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Lender will refuse to make advances in the absence of strict compliance with any or all thereof and no other Person shall, under any circumstances, be deemed to be the beneficiary of such conditions, any or all of which

may be freely waived in whole or in part by Lender at any time in the sole and absolute exercise of its discretion. The terms and provisions of this Agreement are for the benefit of the parties hereto and, except as herein specifically provided, no other Person shall have any right or cause of action on account thereof.

     Section 8.10 Rules of Construction.

     The words “hereof,” “herein,” “hereunder,” “hereto,” and other words of similar import refer to this Agreement in its entirety. The terms “agree” and “agreements” mean and include “covenant” and “covenants.” The words “include” and “including” shall be interpreted as if followed by the words “without limitation.” The captions and headings contained in this Agreement are included herein for convenience of reference only and shall not be considered a part hereof and are not in any way intended to define, limit or enlarge the terms hereof. All references (a) made in the neuter, masculine or feminine gender shall be deemed to have been made in all such genders, (b) made in the singular or plural number shall be deemed to have been made, respectively, in the plural or singular number as well, (c) to the Loan Documents are to the same as extended, amended, restated, supplemented or otherwise modified from time to time unless expressly indicated otherwise, (d) to the Land, the Improvements or the Property shall mean all or any portion of each of the foregoing, respectively, and (e) to Articles, Sections and Schedules are to the respective Articles, Sections and Schedules contained in this Agreement unless expressly indicated otherwise.

     Section 8.11 Counterparts.

     This Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall together constitute one and the same instrument.

     Section 8.12 Signs; Publicity.

     At Lender’s request, but at the expense of Borrower, Borrower shall place a sign at a location on the Property satisfactory to Lender, which sign shall recite, among other things, that Lender is financing the Construction of the Improvements. Borrower expressly authorizes Lender to prepare and to furnish to the news media for publication from time to time news releases with respect to the Property, specifically to include releases detailing Lender’s involvement with the financing of the Property; provided, however, that any reference to Borrower’s sole member or the members of Borrower’s sole member shall be subject to Borrower’s written approval, and Lender shall not disclose the specific terms of the Loan, including without limitation, the interest rate, loan-to-value ratio or other terms or underwriting criteria, but not including any matter that is in the public records.

     Section 8.13 Governing Law.

     This Agreement shall be governed by and construed, interpreted and enforced in accordance with the laws of the State.

     Section 8.14 Time of Essence.

     Time shall be of the essence for each and every provision of this Agreement of which time is an element.

     Section 8.15 Electronic Transmission of Data.

     Lender and Borrower agree that certain data related to the Loan (including confidential information, documents, applications and reports) may be transmitted electronically, including transmission over the Internet. This data may be transmitted to, received from or circulated among agents and representatives of Borrower and/or Lender and their Affiliates and other Persons involved with the subject matter of this Agreement. Borrower acknowledges and agrees that (a) there are risks associated with the use of electronic transmission and that Lender does not control the method of transmittal or service providers, (b) Lender has no obligation or responsibility whatsoever and assumes no duty or obligation for the security, receipt or third party interception of any such transmission, and (c) Borrower will release, hold harmless and indemnify Lender from any claim, damage or loss, including that arising in whole or part from Lender’s strict liability or sole, comparative or contributory negligence, which is related to the electronic transmission of data.

     Section 8.16 [RESERVED]

     Section 8.17 Forum.

     Borrower hereby irrevocably submits generally and unconditionally for itself and in respect of its property to the jurisdiction of any state court or any United States federal court sitting in the State specified in the governing law section of this Agreement and to the jurisdiction of any state court or any United States federal court sitting in the state in which any of the Property is located, over any Dispute. Borrower hereby irrevocably waives, to the fullest extent permitted by Law, any objection that Borrower may now or hereafter have to the laying of venue in any such court and any claim that any such court is an inconvenient forum. Borrower hereby agrees and consents that, in addition to any methods of service of process provided for under applicable law, all service of process in any such suit, action or proceeding in any state court or any United States federal court sitting in the state specified in the governing law section of this Agreement may be made by certified or registered mail, return receipt requested, directed to Borrower at its address for notice set forth in this Agreement, or at a subsequent address of which Lender received actual notice from Borrower in accordance with the notice section of this Agreement, and service so made shall be complete five (5) days after the same shall have been so mailed. Nothing herein shall affect the right of Lender to serve process in any manner permitted by Law or limit the right of Lender to bring proceedings against Borrower in any other court or jurisdiction.

     Section 8.18 USA Patriot Act Notice.

     Lender hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), Lender is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Lender to identify Borrower in accordance with the Act.

     Section 8.19 Entire Agreement.

     The Loan Documents constitute the entire understanding and agreement between Borrower and Lender with respect to the transactions arising in connection with the Loan, and supersede all prior written or oral understandings and agreements between Borrower and Lender with respect to the matters addressed in the Loan Documents. In particular, and without limitation, the terms of any commitment by Lender to make the Loan are merged into the Loan Documents. Except as incorporated in writing into the Loan Documents, there are no representations, understandings, stipulations, agreements or promises, oral or written, with respect to the matters addressed in the Loan Documents. If there is any conflict between

the terms, conditions and provisions of this Agreement and those of any other instrument or agreement, including any other Loan Document, the terms, conditions and provisions of this Agreement shall prevail.

     Section 8.20 No Material Misstatements.

     No information, documents, reports, financial statements, exhibits or schedules, taken as a whole, furnished by or on behalf of the Borrower to the Lender in connection with the Loan contains or will contain any material misstatement of fact or omitted, omits or will omit to state any material fact necessary to make the statements therein not materially misleading, provided that to the extent any such information, document, report, financial statement, exhibit or schedule was based upon or constitutes a forecast or projection, the Borrower represents only that it acted in good faith and utilized reasonable assumptions and due care in the preparation of such information, document, report, financial statement, exhibit or schedule.

     IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be executed under seal as of the date first above written.

		BORROWER:
		CAMPUS CREST AT VALDOSTA, LLC, a Delaware limited liability company
		By:		Campus Crest Properties, LLC, a North Carolina limited liability company, its manager
				By:		/s/ Donald L. Bobbitt, Jr.		(SEAL)
				Name:		Donald L. Bobbitt, Jr.
				Title:		Manager

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

		LENDER:
		COMMUNITY & SOUTHERN BANK, a Georgia bank
		By:		/s/ Jason D. Brown
		Name:		Jason D. Brown
		Title:		Vice President
				[BANK SEAL]

Schedule 1

Definitions

     Unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified, such definitions to be applicable equally to the singular and the plural forms of such terms and to all genders:

     “Act” means the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

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

     “Architect” means James L. Browning, Architect, his successors and permitted assigns.

     “Architect’s Contract” means the Standard Form of Agreement between Design Builder and Architect/Engineer for Design/Build Projects dated November 5, 2010, by and between General Contractor and the Architect, as architect, as assigned by General Contractor to Borrower, as owner, pursuant to that certain Assignment Agreement dated November 9, 2010, and any other contract for architectural services relating to the Construction of the Improvements between Borrower and an architect, and approved in writing by Lender, as the same may be amended from time to time with the prior written approval of Lender.

     “Authorized Signer” means any signer of this Agreement, acting alone, or any other representative of Borrower duly designated and authorized by Borrower to sign draw requests in a writing addressed to Lender, which writing may include a draw request in the form attached hereto as Schedule 2.

     “Banking Day” means any day that is not a Saturday, Sunday or banking holiday in the State.

     “Borrower’s Deposit Account” means an account established with Lender pursuant to the terms of Section 4.3.

     “Budget” means the breakdown of hard costs and soft costs attached hereto as Schedule 3, as the same may be revised from time to time with the written approval of Lender.

     “Casualty” means any act or occurrence of any kind or nature that results in damage, loss or destruction to the Property.

     “Claim” means any liability, suit, action, claim, demand, loss, expense, penalty, fine, judgment or other cost of any kind or nature whatsoever, including fees, costs and expenses of attorneys, consultants, contractors and experts.

     “Closing Checklist” means that certain Closing Requirements and Checklist setting forth the conditions for closing the Loan and recording the Mortgage.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Completion of Construction” means, with respect to the Construction of the Improvements or any component thereof, the satisfaction of all of the conditions of Section 5 of Schedule 5.

     “Condemnation” means any taking of title to, use of, or any other interest in the Property under the exercise of the power of condemnation or eminent domain, whether temporarily or permanently, by any Governmental Authority or by any other Person acting under or for the benefit of a Governmental Authority.

     “Condemnation Awards” means any and all judgments, awards of damages (including severance and consequential damages), payments, proceeds, settlements, amounts paid for a taking in lieu of Condemnation, or other compensation heretofore or hereafter made, including interest thereon, and the right to receive the same, as a result of, or in connection with, any Condemnation or threatened Condemnation.

     “Construction Consultant” means a person or firm appointed or designated by Lender from time to time to inspect the progress of the Construction of the Improvements and the conformity of construction with the Plans and Specifications, the Budget and the Project Schedule, and to perform such other acts and duties for such other purposes as Lender may from time to time deem appropriate or as may be required by the terms of this Agreement.

     “Construction Contract” means the agreement dated October 27, 2010 by and between Borrower, as owner, and the General Contractor, as general contractor, and any other contract for the Construction of the Improvements between Borrower and a contractor, and approved in writing by Lender, as the same may be amended from time to time with the prior written approval of Lender.

     “Construction of the Improvements” means the development of the Land and/or the construction of the Improvements.

     “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” or “Controlled” have meanings correlative thereto.

     “Default” means an event or circumstance that, with the giving of Notice or lapse of time, or both, would constitute an Event of Default under the provisions of this Agreement.

     “Dispute” means any controversy, claim or dispute between or among the parties to this Agreement, including any such controversy, claim or dispute arising out of or relating to (a) this Agreement, (b) any other Loan Document, (c) any related agreements or instruments, or (d) the transaction contemplated herein or therein (including any claim based on or arising from an alleged personal injury or business tort).

     “Environmental Agreement” means the Environmental Indemnification and Release Agreement of even date herewith by and between Borrower and Lender pertaining to the Property, as the same may from time to time be extended, amended, restated or otherwise modified. The Environmental Agreement is unsecured.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “Event of Default” means any event or circumstance specified in Article VI and the continuance of such event or circumstance beyond the applicable grace and/or cure periods therefor, if any, set forth in Article VI.

     “Expenses” means all fees, charges, costs and expenses of any nature whatsoever incurred at any time and from time to time (whether before or after an Event of Default) by Lender in making, funding,

administering or modifying the Loan, in negotiating or entering into any “workout” of the Loan, or in exercising or enforcing any rights, powers and remedies provided in the Mortgage or any of the other Loan Documents, including attorneys’ fees, court costs, receiver’s fees, management fees and costs incurred in the repair, maintenance and operation of, or taking possession of, or selling, the Property.

     “Force Majeure” means strikes, lock-outs, war, civil disturbance, natural disaster, acts of terrorism or acts of God which cause a delay in Borrower’s performance of an Obligation related to the work of construction; provided, however, that (a) Borrower must give Notice to Lender within fifteen (15) days after the occurrence of an event which it believes to constitute Force Majeure, (b) in no event shall Force Majeure extend the time for the performance of an Obligation by more than sixty (60) days, and (c) circumstances that can be remedied or mitigated through the payment of money shall not constitute Force Majeure hereunder to the extent such remedy or mitigation is deemed reasonable by Lender in its sole discretion.

     “General Contractor” means Campus Crest Construction, Inc., its successors and permitted assigns.

     “Governmental Authority” means any governmental or quasi-governmental entity, including any court, department, commission, board, bureau, agency, administration, service, district or other instrumentality of any governmental entity.

     “Guarantor” means Campus Crest Communities, Inc. and its successors and assigns.

     “Guaranty” means the Guaranty Agreement of even date herewith executed by Guarantor for the benefit of Lender, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified.

     “Improvements” means all on-site and off-site improvements to the Land for a student housing apartment complex to be constructed on the Land, together with all fixtures, tenant improvements and appurtenances now or later to be located on the Land and/or in such improvements.

     “Insurance Proceeds” means the insurance claims under and the proceeds of any and all policies of insurance covering the Property or any part thereof, including all returned and unearned premiums with respect to any insurance relating to such Property, in each case whether now or hereafter existing or arising.

     “Land” means the land described in and encumbered by the Mortgage.

     “Laws” means all federal, state and local laws, statutes, rules, ordinances, regulations, codes, licenses, authorizations, decisions, injunctions, interpretations, orders or decrees of any court or other Governmental Authority having jurisdiction as may be in effect from time to time.

     “Leases” means all leases, license agreements and other occupancy or use agreements (whether oral or written), now or hereafter existing, which cover or relate to the Property or any part thereof, together with all options therefor, amendments thereto and renewals, modifications and guaranties thereof, including any cash or security deposited under the Leases to secure performance by the tenants of their obligations under the Leases, whether such cash or security is to be held until the expiration of the terms of the Leases or applied to one or more of the installments of rent coming due thereunder.

     “Letter of Credit” means any letter of credit issued by Lender for the account of Borrower or its nominee in connection with the Construction of the Improvements, together with any and all extensions, renewals or modifications thereof, substitutions therefor or replacements thereof.

     “Loan” means the loan from Lender to Borrower, the repayment obligations in connection with which are evidenced by the Note.

     “Loan Amount” means Thirteen Million Seven Hundred Forty-Seven Thousand Five Hundred Seventy-Six and No/100 Dollars ($13,747,576.00).

     “Loan Documents” means this Agreement, the Note, the Mortgage, the Environmental Agreement, the Guaranty, any application or reimbursement agreement executed in connection with any Letter of Credit, and any and all other documents which Borrower, Guarantor or any other party or parties have executed and delivered, or may hereafter execute and deliver, to evidence, secure or guarantee the Obligations, or any part thereof, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified.

     “Mortgage” means the Deed to Secure Debt, Assignment and Security Agreement of even date herewith given by Borrower to Lender to secure the Obligations except for Obligations arising out of the Environmental Agreement, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified.

     “Net Proceeds,” when used with respect to any Condemnation Awards or Insurance Proceeds, means the gross proceeds from any Condemnation or Casualty remaining after payment of all expenses, including attorneys’ fees, incurred in the collection of such gross proceeds.

     “Note” means the Promissory Note of even date herewith, in an amount equal to the Loan Amount, made by Borrower to the order of Lender, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified.

     “Notice” means a notice, request, consent, demand or other communication given in accordance with the provisions of Section 8.6 of this Agreement.

     “Obligations” means all present and future debts, obligations and liabilities of Borrower to Lender arising pursuant to, or on account of, the provisions of this Agreement, the Note or any of the other Loan Documents, including the obligations: (a) to pay all principal, interest, late charges, prepayment premiums (if any) and other amounts due at any time under the Note; (b) to pay all Expenses, indemnification payments, fees and other amounts due at any time under the Mortgage or any of the other Loan Documents, together with interest thereon as provided in the Mortgage or such Loan Document; and (c) to perform, observe and comply with all of the terms, covenants and conditions, expressed or implied, which Borrower is required to perform, observe or comply with pursuant to the terms of the Mortgage or any of the other Loan Documents. Notwithstanding any language contained in the Loan Documents, the Obligations of Borrower to pay and perform under the Environmental Agreement are unsecured.

     “Person” means an individual, a corporation, a partnership, a joint venture, a limited liability company, a trust, an unincorporated association, any Governmental Authority or any other entity.

     “Plans and Specifications” means any and all plans and specifications prepared in connection with the Construction of the Improvements and approved in writing by Lender, as the same may from time to time be amended with the prior written approval of Lender.

     “Project Schedule” means the schedule for commencement and completion of the Construction of the Improvements attached hereto as Schedule 4, as the same may be revised from time to time with the written approval of Lender.

     “Property” means the real and personal property conveyed and encumbered by the Mortgage.

     “Rents” means all of the rents, royalties, issues, profits, revenues, earnings, income and other benefits of the Property or any part thereof, or arising from the use or enjoyment of the Property or any part thereof, including all such amounts paid under or arising from any of the Leases and all fees, charges, accounts or other payments for the use or occupancy of rooms or other public facilities within the Property or any part thereof.

     “State” means the State of Georgia.

     “Stored Materials” means building materials or furnishings that have not yet been incorporated into the Improvements.

     “Survey” means a map or plat of survey of the Land which conforms with Lender’s survey requirements set forth in the Closing Checklist and with the “Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys” jointly established and adopted by ALTA and NSPS in 2005, and pursuant to the Accuracy Standards as adopted by ALTA and NSPS and in effect on the date when the Survey is certified to Lender in the form specified in the Closing Checklist.

     “Taxes” means all taxes and assessments whether general or special, ordinary or extraordinary, or foreseen or unforeseen, which at any time may be assessed, levied, confirmed or imposed by any Governmental Authority or any communities facilities or other private district on Borrower or on any of its properties or assets or any part thereof or in respect of any of its franchises, businesses, income or profits.

     “Upfront Equity” has the meaning ascribed to such term in Schedule 5.

Schedule 2

Form of Draw Request

[BORROWER’S LETTERHEAD]

DRAW REQUEST NO. _________

TO: COMMUNITY & SOUTHERN BANK (“Lender”)

LOAN NO.		______________________________
PROJECT		______________________________
LOCATION		______________________________
BORROWER		CAMPUS CREST AT VALDOSTA, LLC 2100 Rexford Road Suite 414 Charlotte, North Carolina 28211

FOR PERIOD ENDING __________________________

     In accordance with the Construction Loan Agreement in the amount of $____________ dated ____________ 2010, between Borrower and Lender, Borrower requests that [$____________ be advanced from Loan proceeds] [$____________ be advanced from Borrower’s Upfront Equity]. The proceeds should be credited to the account of ____________ Account No. 9004904, at ____________.

1. CURRENT DRAW REQUEST FOR HARD COSTS		$____________
2. CURRENT DRAW REQUEST FOR SOFT COSTS		$____________
3. TOTAL DRAW REQUEST		$____________
AUTHORIZED SIGNER:
________________________		Dated: ____________

Schedule 3

Budget

Schedule 4

Project Schedule

     1. Commencement.

          Subject to Force Majeure, Borrower shall cause Construction of the Improvements to commence no later than November 24, 2010.

     2. Completion of Construction of All Improvements.

          Subject to Force Majeure, Borrower shall cause (i) substantial completion of all of the Improvements sufficient to obtain a certificate of occupancy no later than September 15, 2011 and (ii) Completion of Construction of all of the Improvements to occur no later than October 31, 2011.

     3. Outside Date for Completion of Construction.

          Regardless of the existence or non-existence or occurrence or non-occurrence of Force Majeure, in no event shall Completion of Construction of the Improvements occur later than the earliest of (i) the date of the maturity of the Loan, or (ii) January 31, 2012.

Schedule 5

Additional Terms Regarding Advances

     The conditions precedent to closing the Loan, recording the Mortgage and making the first advance are set forth in the Closing Checklist. Subsequent advances of the Loan shall be subject to the following additional terms and conditions:

     1. Advances Under the Budget.

          As listed in the Budget: (a) the “Total Costs” are the maximum costs anticipated by Borrower for each item specified; (b) the “Total Budget” is the maximum cost anticipated by Borrower for the Construction of the Improvements and Borrower’s satisfaction of the other requirements of the Loan; (c) the “Loan Proceeds” are the maximum amount to be advanced under the Loan; and (d) “Upfront Equity” is the amount that Borrower is required to expend on the Land and Improvements before Lender is required to advance any of the Loan proceeds. Whenever Borrower is required to pay any items from Upfront Equity, Lender, at its option, may restrict or prohibit advances of the Loan for such items to the extent that Upfront Equity is sufficient to pay such amounts. In the event that any portion of Borrower’s Upfront Equity is on deposit with Lender, Lender shall make all advances first from such equity before advancing any Loan proceeds to Borrower. After the exhaustion of Upfront Equity, Lender will advance Loan proceeds pursuant to the Budget. Notwithstanding the foregoing, Lender and Borrower acknowledge that Lender will advance $1,000.00 of Loan proceeds at the time of Loan closing.

     2. Special Conditions to First Advance for Hard Costs.

          Prior to the first advance for hard costs, Borrower shall furnish the following items to Lender, all of which must be satisfactory to Lender:

          (a) The original title insurance policy insuring Lender’s interest under the Mortgage, issued pursuant to the commitment for title insurance approved by Lender prior to closing of the Loan;

          (b) Evidence of Borrower’s Upfront Equity investment in the Property of not less than Seven Million Four Hundred Two Thousand Five Hundred Forty-One and No/100 Dollars ($7,402,541.00) from sources other than the Loan, in accordance with the Budget;

          (c) The Plans and Specifications shall have been approved by all Governmental Authorities having or claiming jurisdiction over the Property; and

          (d) All building, construction and other permits necessary or required in connection with the then applicable portion of the Construction of the Improvements.

     3. Additional Items Required for Each Advance.

          Lender shall not be obligated to make an advance of Loan proceeds until and unless the following additional items shall have been received and approved by Lender, as and to the extent required by Lender, prior to the date of the advance:

          (a) A notice of title continuation or an endorsement to the title insurance policy with respect to the Land theretofore delivered to Lender, showing that since the last preceding advance, there has been no change in the status of title and no other exception not theretofore approved by Lender, which endorsement shall have the effect of advancing the effective date of the policy to the date of the advance

then being made and increasing the coverage of the policy by an amount equal to the advance then being made, if the policy does not by its terms provide automatically for such an increase.

          (b) Interim acknowledgments of payment and releases of liens from all Persons who have furnished labor, materials and/or services in the Construction of the Improvements, covering work performed, materials supplied and services rendered through the date of the last preceding advance.

          (c) Soil compaction test reports, bearing capacity test reports and concrete test reports.

          (d) Once all foundations have been poured, a foundation Survey disclosing no violation, encroachment or other variance from applicable set-backs or other restrictions unless approved in writing by Lender.

          (e) Evidence that the Improvements have not been materially damaged by fire or other Casualty unless Lender shall have received Insurance Proceeds, or satisfactory assurance that it will receive such proceeds in a timely manner pursuant to Section 4.10 that when combined with any additional funds deposited by Borrower will be sufficient in the judgment of Lender to effect a satisfactory restoration and completion of the Improvements in accordance with the terms of the Mortgage and this Agreement.

          (f) Evidence that all work requiring inspection by any Governmental Authority having or claiming jurisdiction has been duly inspected and approved by such authority and by any rating or inspection organization, bureau, association or office having or claiming jurisdiction.

          (g) Evidence, including a report from the Construction Consultant, that all work completed at the time of the application for an advance has been performed in a good and workmanlike manner, that all materials and fixtures usually furnished and installed at that stage of construction have been so furnished and installed, that the Improvements can be completed in accordance with the Project Schedule, and that the balance of the Loan proceeds then held by Lender and available for advance pursuant to the terms of this Agreement, together with other funds which Lender determines to be available to Borrower for such purpose, are and will be sufficient to pay the cost of such completion.

     4. Conditions Precedent to All Advances.

          Lender shall not be obligated to make an advance of Loan proceeds unless the following additional conditions shall have been satisfied or waived in writing by Lender as of the date of each advance (and Lender may require written certification by Borrower as to these matters prior to making such advance):

          (a) No lien for the performance of work or supplying of labor, materials or services shall have been filed against the Land and remain unsatisfied or unbonded.

          (b) No condition or situation shall exist at the Land which, in the reasonable determination of Lender, constitutes a danger to or impairment of the Property or presents a danger or hazard to the public.

          (c) The representations and warranties made in Article III shall be true and correct on and as of the date of the advance with the same effect as if made on such date (except to the extent that any such representation or warranty specifically refers to an earlier date in which case it is true and correct as of such earlier date).

          (d) All terms and conditions of the Loan Documents required to be met as of the date of the applicable advance shall have been met to the satisfaction of Lender.

          (e) No Default or Event of Default shall have occurred and be continuing.

          (f) Lender shall have received all due diligence materials it deems necessary with respect to verifying Borrower’s identity and background information in a manner satisfactory to Lender.

     5. Advances for Hard Costs.

          Lender shall make periodic advances for hard costs as construction progresses. Each advance shall be equal to Borrower’s total costs as reflected in the applicable draw request, net of retainage in the amount of 5%; provided, however that no retainage shall apply with respect to payments to subcontractors whose work has been completed and who have furnished to Borrower a final lien waiver and release. Lender shall not be obligated to make the final advance of the Loan for hard costs in the amount of 5% of all hard cost line items in the Budget (subject to the exceptions from retainage described in the preceding sentence) unless the following additional conditions shall have been satisfied, to the extent required by Lender:

          (a) The Construction Consultant and the General Contractor shall have certified to Lender that construction has been completed in a good and workmanlike manner, in accordance with applicable requirements of all Governmental Authorities and substantially in accordance with the Plans and Specifications;

          (b) To the extent required by applicable Governmental Authorities for the use and occupancy of the Improvements, certificates of occupancy and other applicable permits and releases shall have been issued with respect to the Improvements and copies thereof have been furnished to Lender;

          (c) Lender shall have received a satisfactory as-built Survey showing the location of the Improvements;

          (d) Lender shall have received a satisfactory final affidavit from the General Contractor and full and complete releases of lien from the General Contractor and each subcontractor of and supplier to the General Contractor with respect to work performed and/or materials supplied in the Construction of the Improvements;

          (e) Lender shall have received a satisfactory set of as-built plans and specifications for the Improvements;

          (f) Lender shall have received a satisfactory endorsement to its title insurance policy; and

          (g) All other terms and conditions of this Agreement and the other Loan Documents required to be met as of the date of the final advance of the Loan for hard costs shall have been met to the satisfaction of Lender.

     6. [RESERVED]

     7. Advances for Stored Materials.

          No advances will be made for Stored Materials unless (a) Borrower has good title to the Stored Materials and has furnished satisfactory evidence of such title to Lender, to the extent required by Lender, (b) the Stored Materials are components in a form ready for incorporation into the Improvements and will be so incorporated within a period of forty-five (45) days from the date of the advance for the Stored Materials, (c) the Stored Materials are in Borrower’s possession and are satisfactorily stored on the Land or at such other location as Lender may approve, in each case with adequate safeguards to prevent commingling with materials for other projects, (d) the Stored Materials are protected and insured against loss, theft and damage in a manner and amount satisfactory to Lender, (e) the Stored Materials have been paid for in full or will be paid for in full from the funds to be advanced, (f) Lender has or will have upon the payment for the Stored Materials from the advanced funds a perfected, first priority security interest in the Stored Materials, (g) all lien rights and claims of the supplier have been released or will be released upon payment with the advanced funds, and (h) following the advance for the Stored Materials, the aggregate amount of advances for Stored Materials that have not yet been incorporated into the Improvements will not exceed One Million Dollars ($1,000,000.00). The foregoing requirements except for clause (h) shall not apply with respect to (i) an advance of up to $400,000 to be used to pay in advance for appliances being purchased from Sears, and (ii) advances of up to $250,000 to be used for a 50% deposit for clubhouse furnishings; provided that in the case of subsection (i), such appliances shall have been delivered to Borrower within forty-five (45) days after the advance therefor was made. Borrower agrees that failure to satisfy such forty-five (45) day requirement shall constitute an Event of Default.

     8. Advances for Soft Costs.

          Lender shall make periodic advances for soft costs, each in the amount requested in the applicable draw request, without retainage.

     9. Advances for Interest.

          Lender shall make periodic advances to pay interest as and when it becomes due. Borrower hereby irrevocably authorizes Lender to make any interest payment on Borrower’s behalf by debiting the interest reserve in the amount of the payment and applying the debited amount to accrued and unpaid interest on the Loan.

     10. Advances for Developer’s Fees.

          The first twenty-five percent (25%) of the developer’s fee may be paid from Upfront Equity. The next fifty percent (50%) of developer’s fees will be paid monthly either from Upfront Equity until it has been exhausted or advances in equal monthly installments during construction and prior to Completion of Construction. The remaining twenty-five percent (25%) will be paid from an advance upon Completion of Construction.

     11. [INTENTIONALLY OMITTED]

     12. Account for Funding Advances.

          Subject to Lender’s right to advance Loan proceeds as provided in this Agreement, Lender may make advances into Borrower’s checking account No. ____________ maintained with Lender. Borrower hereby irrevocably authorizes Lender to deposit any advance to the credit of Borrower in that account, by wire transfer or other deposit. Borrower further irrevocably authorizes Lender to pay and reimburse itself for any Expenses incurred by Lender by Debit to such account. This account shall be

used solely for the payment of costs and other purposes associated with the Construction of the Improvements, the Property and/or the Loan, and shall not be used for any other purpose.

Schedule 6

Leasing and Tenant Matters

     1. Representations and Warranties of Borrower Regarding Leases.

          Borrower represents and warrants that Borrower has delivered to Lender Borrower’s standard form of tenant lease.

     2. Covenants of Borrower Regarding Leases and Rents.

          Borrower covenants that Borrower (a) will observe and perform all of the obligations imposed upon the landlord in the Leases and will not do or permit to be done anything to impair the security thereof; (b) will use its good faith efforts to enforce or secure, or cause to be enforced or secured, the performance of each and every obligation and undertaking of the respective tenants under the Leases and will appear in and defend, at Borrower’s sole cost and expense, any action or proceeding arising under, or in any manner connected with, the Leases consistent with the ordinary course of the student housing apartment leasing business; (c) will not collect any of the Rents in advance of the time when the same become due under the terms of the Leases, except (i) expressly provided early rent payments contemplated in the Leases, (ii) isolated prepayments from student financial aid, and (iii) isolated prepayments by parents who may want to pre-pay a semester’s rent up front; (d) will not discount any future accruing Rents; (e) without the prior written consent of Lender, will not execute any assignment of the Leases or the Rents; (f) other than in the ordinary course of the student housing apartment leasing business, will not alter, modify or change the terms of the Leases, or surrender, cancel or terminate the same without the prior written consent of Lender; and (g) will execute and deliver, at the request of Lender, all such assignments of the Leases and Rents in favor of Lender as Lender may from time to time require.

     3. Leasing Guidelines.

          Borrower shall not enter into any Lease of space in the Improvements unless approved or deemed approved by Lender prior to execution. Lender shall be “deemed” to have approved any Lease that: (a) is on the standard form lease approved by Lender with no material deviations except as approved by Lender; (b) is entered into in the ordinary course of business with a bona fide unrelated third party tenant (except that an immaterial number of Leases may have employees of Borrower as tenants), with a full guarantee by a parent of the tenant (except for an immaterial number of Leases where a parental guarantee is not required or obtained), and Borrower, acting in good faith and exercising due diligence has determined that the tenant is financially capable of performing its obligations under the Lease; (c) reflects a transaction on arm’s length terms at then-current market rate for comparable space (except for an immaterial number of Leases to employees of Borrower); and (d) contains no option or right of first refusal to purchase all or any portion of the Property or any present or future interest therein. Borrower shall provide to Lender a correct and complete copy of each Lease, including any exhibits, and any guaranty(ies) thereof, prior to execution unless the Lease meets the foregoing requirements for “deemed” approval by Lender. Borrower shall pay all reasonable costs incurred by Lender in reviewing and approving Leases and any guaranties thereof.

     4. Delivery of Leasing Information and Documents.

          From time to time upon Lender’s request, Borrower shall (a) make available to Lender for its review at the Property complete executed originals of each Lease, including any exhibits thereto and any guaranty(ies) thereof, (b) promptly deliver within forty-five (45) days after the end of each calendar quarter to Lender a complete rent roll of the Property in such detail as Lender may require,

together with such operating statements and leasing schedules and reports as Lender may require as of the end of such calendar quarter, and (c) promptly deliver to Lender such other information regarding tenants and prospective tenants and other leasing information as Lender may request.

Schedule 7

Letters of Credit

     1. Issuance of Letters of Credit. Subject to the terms and conditions set forth in this Agreement, at any time and from time to time from the closing through the day that is one hundred eighty (180) days prior to the Maturity Date, Lender shall issue such Letters of Credit as Borrower may request upon the delivery of a letter of credit request to Lender, provided that (i) no Default or Event of Default shall have occurred and be continuing, (ii) upon the issuance of such Letter of Credit, the outstanding Letters of Credit shall not exceed Five Hundred Thousand and No/100ths Dollars ($500,000.00), (iii) in no event shall the sum of the outstanding Letters of Credit plus the outstanding principal amount of the Loan plus the undrawn amount of the Loan exceed the Loan Amount, and (iv) in no event shall any amount drawn under a Letter of Credit be available for reinstatement or a subsequent drawing under such Letter of Credit. Each Letter of Credit shall be issued pursuant to a reimbursement agreement on Lender’s standard form; provided that to the extent any of the terms of the reimbursement agreement are contrary to the terms of this Agreement, the terms of this Agreement shall control.

     2. Terms of Letters of Credit; Purposes. The term of any Letter of Credit shall not exceed the Maturity Date. The purposes for which Letters of Credit will be issued are (i) to support purchase orders with suppliers for the purchase of furniture, fixtures and equipment, and (ii) to support completion obligations of Borrower with respect to infrastructure as may be required by Governmental Authorities. Each Letter of Credit shall be subject to allocation to a Budget line item and the amount of such Letter of Credit come within the limits of such line item.

     3. Letter of Credit Requests. Each letter of credit request shall be submitted by Borrower to Lender at least ten (10) business days prior to the date upon which the requested Letter of Credit is to be issued. Each such letter of credit request shall contain (i) a statement as to the purpose for which such Letter of Credit shall be used (which purpose shall be allowed under paragraph 2 above) and (ii) a certification by an authorized officer that Borrower is and will be in compliance with all covenants under the Loan Documents after giving effect to the issuance of such Letter of Credit. Borrower shall further deliver to Lender such additional applications and documents as Lender reasonably may require, in conformity with the then standard practices of its letter of credit department, in connection with the issuance of such Letter of Credit.

     4. Lender Approval; Fee: Subject to the conditions set forth in this Agreement, Lender, if it reasonably approves of the letter of credit request, shall issue the Letter of Credit on or before ten (10) business days following receipt of the documents required in paragraph 3 above. Each Letter of Credit shall be in form and substance satisfactory to Lender in its sole discretion. Upon any such issuance, Borrower shall pay to Lender a fee equal to one-quarter of one percent (0.25%) of the face amount of such Letter of Credit.

     5. Amounts Drawn Considered Loan Advance. If and to the extent that any amounts are drawn upon any Letter of Credit, the amounts so drawn shall, from the date of payment thereof by Lender, be considered a Loan advance for all purposes hereunder, bearing interest as provided in the Note.