exv10w59






Exhibit 10.59




THIRD AMENDMENT

TO THE

OPERATING AGREEMENT

OF

HSRE-CAMPUS CREST I, LLC



     This THIRD AMENDMENT (this “Amendment”) to the Operating Agreement of HSRE-CAMPUS CREST I,
LLC, a Delaware limited liability company (the “Company”) is entered into as of September 12, 2010
(the “Effective Date”) by and between HSRE-CAMPUS CREST IA, LLC, a Delaware limited liability
company (“HSRE”), and CAMPUS CREST VENTURES III, LLC, a Delaware limited liability company (“Campus
Crest”).



R E C I T A L S:




     A. The internal affairs of the Company are governed by the Operating Agreement of the Company,
dated as of November 7, 2008, as amended by that certain First Amendment to the Operating Agreement
of the Company, dated as of November 12, 2009, and that certain Second Amendment to the Operating
Agreement of the Company, dated as of March 26, 2010 (as amended, the “Operating Agreement”), by
and between HSRE and Campus Crest; and



     B. The Members desire to amend the Operating Agreement in order to reflect an agreement
between HSRE and Campus Crest with respect to the grant by HSRE of an option to Campus Crest to
purchase all of the membership interest, general partnership interest and limited partnership
interest, as the case may be, in each of Campus Crest at Conway, LLC, Campus Crest at Statesboro,
LLC and Campus Crest at Huntsville, LP not held by Campus Crest at the time of the Option Closing
(as defined herein) on the terms and conditions contained herein.



     NOW THEREFORE, in consideration of the foregoing, of the mutual promises contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:



     1. Terms. Except as otherwise specifically set forth in this Amendment, all
capitalized terms used herein shall have the meanings set forth in the Operating Agreement.



     2. Grant by HSRE of Option to Campus Crest. A new Section 13.20 is added to the
Operating Agreement as follows:




     “Section 13.20. Grant by HSRE of Option to Campus Crest. (a) HSRE
hereby grants an option (the “Option”) to Campus Crest to (1) cause HSRE to direct
the Company (jointly with Campus Crest) to distribute all of the membership
interest, general partnership interest and limited partnership interest of the
Company in each of Campus Crest at Conway, LLC, Campus Crest at Statesboro, LLC and
Campus Crest at Huntsville, LP (the “Option Project Interest”) to each of HSRE and
Campus Crest in proportion to their respective Participating Percentage and (2)
purchase all of the Option Project Interest not



 









 






directly or indirectly held by Campus Crest at the time of the Option Closing
(as defined herein). The Option shall be exercisable in full but not in part at the
sole discretion of Campus Crest; provided, however, that the Option
shall expire at 11:59 p.m., Charlotte, North Carolina time, on December 31, 2010.
The closing of the Option (the “Option Closing”) shall be held on the fifth
(5th) business day following the delivery to HSRE of written notice by
Campus Crest of its intent to exercise the Option. At the Option Closing, Campus
Crest shall pay the Option Purchase Price (as defined herein) to HSRE by wire
transfer of immediately available funds. The parties shall conduct an escrow style
closing through a party selected by Campus Crest and HSRE so that it will not be
necessary for any party to physically attend the Option Closing.




(b) Notwithstanding anything to the contrary contained herein, HSRE and Campus Crest
shall be under no obligation to complete the transactions contemplated in Section
13.20(a) hereof unless and until the following conditions have been satisfied prior
to December 31, 2010 or such later date as mutually agreed upon by HSRE and Campus
Crest (collectively, the “Option Conditions Precedent”): (i) the consummation of the
proposed initial public offering of capital shares in Campus Crest Communities,
Inc., (ii) HSRE and Campus Crest have received the written consent of the third
party lenders to Campus Crest at Conway, LLC, Campus Crest at Statesboro, LLC and
Campus Crest at Huntsville, LP (the “Option Lenders”), if required under the
applicable loan documents, in a form reasonably acceptable to HSRE and HSRE
consenting to the transactions contemplated herein (the “Option Lenders Consent”)
provided, however, that the failure of the Option Lenders to modify the recourse
provisions or release or alter the liability of the then existing guarantors under
the loan documents shall not be the basis for Campus Crest to withhold its approval
of the Option Lenders Consent, and (iii) the JV I Closing (as defined in the
Purchase and Sale Agreement (as defined herein)) has occurred.




(c) In the event that Campus Crest exercises the Option, the purchase price for the
Option Project Interest (the “Option Purchase Price”) shall be equal to the excess
of (X) $22,000,000 minus (Y) $964,286, which is the sum of the pro-rata portion of
the purchase price paid by HSRE to Campus Crest for the 9.9% interest (the “Original
Interest”) in the Company sold by Campus Crest to HSRE pursuant to the HSRE-CC JV I
Assignment Agreement (the “JV I Assignment Agreement”) entered into on March 26,
2010 plus the pro-rata portion of the premium owed by Campus Crest to HSRE for the
repurchase by Campus Crest from HSRE of the Original Interest pursuant to the JV I
Assignment Agreement minus (Z) the purchase price paid by Campus Crest to HSRE for
the JV I HSRE Interest pursuant to and as defined in that certain Purchase and Sale
Agreement (the “Purchase and Sale Agreement”) entered into on March 26, 2010 by and
among HSRE, affiliates of Campus Crest and certain other parties thereto. At the
Option Closing, each of Campus Crest at Conway, LLC, Campus Crest at Statesboro, LLC
and Campus Crest at Huntsville, LP, as the case may be, will



 









 






remain subject to all debt encumbering the respective property owned by such entity
as of the date of the Option Closing.




(d) In the event that Campus Crest exercises the Option, the Closing deliveries,
prorations and process for the Closing shall be in form and substance substantially
similar to the deliveries, prorations and process agreed to be used by the parties
with respect to the closing of the purchase and sale of the San Marcos Interest
pursuant to Section 2 of the Purchase and Sale Agreement. Any cash flow of Campus
Crest at Conway, LLC, Campus Crest at Statesboro, LLC and Campus Crest at
Huntsville, LP for the period between the Option Closing and the date of closing of
the repurchase by Campus Crest from HSRE of the Original Interest pursuant to the JV
I Assignment Agreement and the transactions contemplated by the Purchase and Sale
Agreement shall be prorated at the Option Closing in accordance with the respective
membership interests held by Campus Crest and HSRE as of such date.”



     3. Early Swap Termination Payments. A new Section 13.21 is added to the Operating
Agreement as follows:




     “Section 13.21. Early Swap Termination Payments. Campus Crest shall
be solely responsible for any termination payment and the fees and expenses of the
San Marcos Lender in conjunction with any early termination or partial termination
of the swap agreement in connection with the JV I Loan due to the payment by Campus
Crest at San Marcos, LP to the San Marcos Lender of any amounts required to reduce
the principal balance of the JV I Loan in order to obtain the release of the San
Marcos Property from the JV I Loan (any capitalized terms used in this Section 13.21
that are not otherwise defined in the Operating Agreement shall have the meaning
ascribed to them in the Purchase and Sale Agreement).”



     4. Confirmation of Operating Agreement. Except as set forth herein, the terms and
provisions of the Operating Agreement are hereby confirmed, ratified and approved in their
entirety, and shall continue in full force and effect.



     5. Further Acts. The parties hereto agree to do such further acts and execute,
deliver, file and record such further documents and instruments as any of them may deem to be
reasonably necessary or advisable to effect and evidence the transactions contemplated by this
Amendment.



     6. Effective Date. Each provision of this Amendment shall be effective as of the
Effective Date.



     7. Counterparts. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.



 









 





THIRD AMENDMENT

TO THE OPERATING AGREEMENT

OF HSRE-CAMPUS CREST I, LLC




COUNTERPART SIGNATURE PAGE



     IN WITNESS WHEREOF, each of the parties has executed this Amendment, as of the date first set
forth above, and agrees to be bound by this Amendment.



	 	 	 	 	 	 	 	 	 	 	 

	 	 	MEMBERS:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CAMPUS CREST VENTURES III, LLC, a
	 	 	Delaware limited liability company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Campus Crest Properties, LLC, a	 	 
	 	 	 	 	 	 	North Carolina limited liability	 	 
	 	 	 	 	 	 	company, its Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Michael S. Hartnett 	 	 
	 

	 	 	 	 	 	Name:
	 	 

Michael S. Hartnett
	 	 
	 

	 	 	 	 	 	Its:
	 	Manager	 	 






	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	HSRE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	HSRE-CAMPUS CREST IA, LLC, a	 	 
	 	 	Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	HSREP II Holding, LLC, a Delaware	 	 
	 	 	 	 	 	 	limited liability company, its sole	 	 
	 	 	 	 	 	 	member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	HSRE REIT II, a Maryland real
	 	 	 	 	 	 	 	 	estate investment trust, a member
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	/s/ Stephen Gordon	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	 

Stephen Gordon
	 	 
	 

	 	 	 	 	 	 	 	Its:
	 	Trustee