Document:

exv10w17

Exhibit 10.17

     REGISTRATION RIGHTS AGREEMENT dated as of                     , 2010 (the “Agreement”) among
CAMPUS CREST COMMUNITIES, INC., a Maryland corporation (including any successor entity, the
“Company”), CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, LP, a Delaware limited
partnership (the “Operating Partnership”), and MXT Capital, LLC, a Delaware limited
liability company, Ted W. Rollins and Michael S. Hartnett.

RECITALS

     WHEREAS, in connection with the initial public offering of shares of the Company’s common
stock, par value $0.01 per share, the Company, the Operating Partnership and the Investors (as
herein defined) engaged in formation transactions whereby each such Investor contributed to the
Operating Partnership their interests in certain properties and other assets in exchange for OP
Units (as herein defined) in the Operating Partnership;

     WHEREAS, pursuant to the Partnership Agreement (as herein defined) OP Units owned by the
Investors will be redeemable for cash or exchangeable for shares of Common Stock of the Company
upon the terms and subject to the conditions contained therein; and

     WHEREAS, as part of the formation transactions, the Company agreed to grant to the Investors
certain rights to register any shares of Common Stock of the Company obtained by such Investors
upon conversion of their OP Units in accordance with the terms of the Partnership Agreement.

     NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations
hereinafter set forth, the Company, the Operating Partnership and each of MXT Capital, LLC, Ted W.
Rollins and Michael S. Hartnett hereby agree as follows:

     Section 1. Definitions.

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

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

     “Closing Date” means the date of the closing of the Initial Public Offering.

     “Commission” means the Securities and Exchange Commission or any other agency at the
time administering the Securities Act.

     “Common Stock” means the common stock, par value $0.01 per share, of the Company or
such other Securities of the Company into which such common stock may, at any time, be converted or
exchanged.

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     “Control” means (including, with correlative meanings, “controlled by” and
“under common control with”), with respect to any Person, 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 ownership of voting securities, by contract or otherwise.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect from time to time.

     “Governmental Entity” means any federal, state, municipal, foreign or other
government, governmental department, commission, administrative agency, board, bureau, agency or
instrumentality, or any private or public court or tribunal.

     “Initial Public Offering” means the Company’s proposed initial public offering of
Common Stock pursuant to a Registration Statement on Form S-11 (File No. 333-166834).

     “Investors” means each of the Persons listed on Schedule 1 hereto which engaged in the
Company’s formation transactions whereby such Investors contributed certain assets to the Operating
Partnership in exchange for OP Units, and includes MXT Capital, LLC and any Affiliate, spouse,
lineal descendant of Ted W. Rollins or Michael S. Hartnett or any brother or sister or any personal
representative, estate or executor under the will of such Persons or any trust established for the
benefit of any one or more of the foregoing, and any permitted successor to, or permitted assignee
or permitted transferee of any such Person under Section 16 of this Agreement.

     “Notice and Questionnaire” means a written notice, substantially in the form attached
as Exhibit A, delivered by an Investor to the Company containing all information about such
Investor required to be included in such registration statement in accordance with applicable law,
including Item 507 of Regulation S-K promulgated under the Securities Act, as amended from time to
time, or any similar successor rule thereto.

     “OP Units” means partnership units of the Operating Partnership.

     “Operating Partnership” means Campus Crest Communities Operating Partnership, LP.

     “Other Shares” means at any time those shares of Common Stock which do not constitute
Primary Shares or Registrable Shares hereunder.

     “Partnership Agreement” means the Agreement of Limited Partnership of the Operating
Partnership, as filed with the Securities and Exchange Commission as Exhibit 10.1 to the Company’s
Registration Statement on Form S-11 (File No. 333-166834).

     “Person” shall be construed as broadly as possible and shall include an individual or
natural person, a partnership (including a limited liability partnership), a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a Governmental Entity.

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     “Primary Shares” means at any time any authorized but unissued Securities of the
Company or Securities held in the treasury of the Company.

     “Redemption Limitation” has the meaning specified in Section 7(a).

     “Registrable Shares” means the shares of (a) Common Stock held by the Investors which
constitute Restricted Shares, (b) the shares of Common Stock that, at the election of the Company,
may be issued and delivered to the Investors in connection with their redemption of OP Units, and
(c) the shares of Common Stock that may be issued and delivered to the Investors pursuant to
Section 7 hereof, which shares of Common Stock referenced in the preceding clauses (b) and (c), as
the case may be upon such issuance and delivery, would be Restricted Shares. For purposes of
clarification and not limitation, holders of OP Units shall be deemed to be holders of the number
of Registrable Shares that, at the election of the Company, may be issued and delivered to such
holders if they were to redeem all such OP Units then outstanding, and references to “outstanding”
Registrable Shares shall be deemed to include such OP Units that are then outstanding (it being
understood that the Company shall not have any obligation to register such OP Units under this
Agreement prior to their redemption in exchange for shares of Common Stock).

     “Resale Shelf Registration Statement” shall have the meaning set forth in Section 2(a)
hereof.

     “Restricted Shares” means shares of Common Stock held by any Investor at any time and
from time to time and any other Securities which by their terms are exercisable or exchangeable for
or convertible into shares of Common Stock which are held by such Investor. As to any particular
Restricted Shares, once issued, such Restricted Shares shall cease to be Restricted Shares when (i)
they have been registered under the Securities Act, the registration statement in connection
therewith has been declared effective and they have been disposed of pursuant to such effective
registration statement, (ii) they, together with all other Securities held by an Investor, are
eligible to be sold or distributed pursuant to Rule 144 in a single transaction by such Investor
without limitation, or (iii) they shall have ceased to be outstanding.

     “Rule 144” means Rule 144 promulgated under the Securities Act or any successor rule
thereto or any complementary rule thereto (such as Rule 144A).

     “Securities Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations of the Commission thereunder, all as the same shall be in
effect from time to time.

     “Security” has the meaning given to such term under Section 2 of the Securities Act.

     Section 2. Shelf Registration.

     (a) Subject to the conditions of this Section 2, the Company shall prepare and file
not earlier than the first anniversary of the Closing Date and not later than thirteen (13) months
after the Closing Date, a “shelf” registration statement with respect to the resale of the
Registrable Shares not previously registered pursuant to Sections 3 or 4 hereof by the Investors on
an appropriate form for an offering to be made on a delayed or continuous basis pursuant to

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Rule 415 under the Securities Act (the “Resale Shelf Registration Statement”) and permitting the
resale of such Registrable Shares by such Investors in accordance with the methods of distribution
set forth in the Resale Shelf Registration Statement. The Company shall use its commercially
reasonable efforts to cause the Resale Shelf Registration Statement to be declared effective by the
Commission as promptly as reasonably practicable after the filing thereof, and, subject to
Section 11, to keep such Resale Shelf Registration Statement continuously effective for a
period ending when all shares of Common Stock covered by the Resale Shelf Registration Statement
are no longer Registrable Shares. Each Investor that has delivered a duly completed and executed
Notice and Questionnaire to the Company on or prior to the date ten (10) business days prior to the
date of effectiveness of the Resale Shelf Registration Statement shall be named as a selling
securityholder in the Resale Shelf Registration Statement and the related prospectus. If required
by applicable law, subject to the terms and conditions hereof, after effectiveness of the Resale
Shelf Registration Statement, the Company shall file a supplement to such prospectus or amendment
to the Resale Shelf Registration Statement as necessary to name as selling securityholders therein
any other Investors that provide to the Company a duly completed and executed Notice and
Questionnaire subsequent to ten (10) business days prior to the initial date of effectiveness, and
shall use commercially reasonable efforts to cause any post-effective amendment to such Resale
Shelf Registration Statement filed for such purpose to be declared effective by the Commission as
promptly as reasonably practicable after the filing thereof; provided, however, that the Company
shall not be obligated to file any such prospectus supplement or post-effective amendment more
frequently than every three months.

     (b) Notwithstanding anything contained in this Section 2 to the contrary, the Company
shall not be obligated to effect the registration of Registrable Shares under this Section
2 unless and until such time as the Company shall have qualified for the use of Form S-3
promulgated under this Securities Act or any successor form thereto.

     (c) Any Investor that has not delivered a duly completed and executed Notice and Questionnaire
shall not be entitled to be named as a selling shareholder in, or have the Registrable Shares held
by it covered by, a Resale Shelf Registration Statement.

     Section 3. Demand Registration

     (a) Subject to the conditions of this Section 3, at any time on or after the date on which
this Agreement becomes effective, if the Investors holding at least a majority of Registrable
Shares then outstanding shall request in writing that the Company effect the registration of at
least twenty-five percent (25%) of the Registrable Shares then outstanding (or a lesser percent if
the anticipated aggregate offering price, net of underwriting discounts and commissions, would
exceed $3,000,000) under the Securities Act, the Company shall promptly use its best efforts to
effect the registration under the Securities Act of such Registrable Shares.

     (b) Notwithstanding anything contained in this Section 3 to the contrary, the Company
shall not be obligated to effect any registration under the Securities Act except in accordance
with the following provisions:

     (i) The Company shall not be obligated to file and cause to become effective
more than two registration statements initiated pursuant to Section 3(a)

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above on Form S-11 promulgated under the Securities Act (or any successor form
thereto).

     (ii) The Company shall not be obligated to effect the registration of
Registrable Shares under this Section 3(a) following effectiveness of a registration
statement filed by the Company pursuant to Section 2 above.

     (iii) (A) The Company may delay the filing or effectiveness of any registration
statement for a period of up to 90 days after the date of any request for
registration pursuant to Section 3(a) if at the time of such request: (X)
the Company is engaged, or has fixed plans to engage within 15 days of the time of
such request, in a firm commitment underwritten public offering of Primary Shares in
which the holders of Registrable Shares have been or will be permitted to include
all the Registrable Shares so requested to be registered pursuant to Section
4 or (Y) the Company reasonably determines that such registration and offering
would interfere with, or require premature disclosure of, any material transaction
or material litigation involving the Company or any of its Subsidiaries;
provided, however, that the Company shall only be entitled to invoke
its rights under this Section 3(b)(iii) one time during any twelve month
period.

     (B) If the Company shall delay the filing or effectiveness of any registration
statement pursuant to Section 3(b)(iii)(A) and if the Investors requesting
such registration pursuant Section 3(a) shall within 30 calendar days after
receipt of the notice of postponement advise the Company in writing that they have
determined to withdraw such request for registration, then such request for
registration shall be deemed to be withdrawn and shall not be counted as a request
for registration pursuant to Section 3(a) hereof.

     (iv) With respect to any registration pursuant to this Section 3, the
Company shall give notice of such registration to the Investors who do not request
registration hereunder and the Company may include in such registration any Primary
Shares or Other Shares; provided, however, that, with respect to any
underwritten offering, if the managing underwriter advises the Company that the
inclusion of all Registrable Shares, Primary Shares and/or Other Shares proposed to
be included in such registration would interfere with the successful marketing
(including pricing) of the Registrable Shares proposed to be included in such
registration, then the number of Registrable Shares, Primary Shares and/or Other
Shares proposed to be included in such registration shall be included in the
following order:

     (A) first, the Registrable Shares for which registration has been requested
(or, if necessary, such Registrable Shares pro rata among the holders thereof based
upon the number of Registrable Shares requested to be registered by each such
holder);

     (B) second, the Primary Shares; and

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     (C) third, the Other Shares.

     (v) If the holders of Registrable Shares requesting to be included in a
registration pursuant to Section 3(a) so elect, the offering of such
Registrable Shares pursuant to such registration shall be in the form of an
underwritten offering. The holders of Registrable Shares requesting such
registration shall select one or more nationally recognized firms of investment
bankers reasonably acceptable to the Company to act as the lead managing underwriter
or underwriters in connection with such offering.

     (vi) At any time before the registration statement covering such Registrable
Shares becomes effective, the holders of a majority of such shares may request the
Company to withdraw or not to file the registration statement. In that event, unless
such request of withdrawal was made pursuant to Section 3(b)(iii)(B) or
caused by, or made in response to, a material adverse effect or a similar event
related to the business, properties, condition, or operations of the Company not
known (without imputing the knowledge of any other Person to such holder) by the
holders initiating such request at the time their request was made, or other
material facts not known to such holders at the time their request was made, the
holders shall be deemed to have used one of their registration rights under
Section 3(a).

     Section 4. Piggyback Registration.

     (a) If, prior to the effectiveness of any registration statement filed pursuant to Section
2 or 3 hereof, the Company at any time proposes for any reason to register Primary
Shares or Other Shares under the Securities Act (other than on Form S-4 or Form S-8 promulgated
under the Securities Act (or any successor forms thereto)), it shall give written notice to the
Investors of its intention to so register such Primary Shares or Other Shares at least 30 days
before the initial filing of the registration statement related thereto and, upon the request,
delivered to the Company within 20 days after delivery of any such notice by the Company, of the
Investors to include in such registration Registrable Shares (which request shall specify the
number of Registrable Shares proposed to be included in such registration), the Company shall use
its commercially reasonable efforts to cause all such Registrable Shares to be included in such
registration on the same terms and conditions as the Securities otherwise being sold in such
registration; provided, however, that if the managing underwriter advises the
Company that the inclusion of all Registrable Shares requested to be included in such registration
would interfere with the successful marketing (including pricing) of the Primary Shares or Other
Shares proposed to be registered by the Company, then the number of Primary Shares, Registrable
Shares and Other Shares proposed to be included in such registration shall be included in the
following order:

     (i) first, the Primary Shares;

     (ii) second, the Registrable Shares for which registration has been requested
(or, if necessary, such Registrable Shares pro rata among the holders

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thereof based upon the number of Registrable Shares requested to be registered
by each such holder); and

     (iii) third, the Other Shares.

     If any Investor disapproves of the terms of any such underwriting, such Investor may elect to
withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten
(10) days prior to the effective date of the registration statement. Any Registrable Shares
excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.

     (b) The Company shall have the right to terminate or withdraw any registration initiated by it
under this Section 4(a) prior to the effectiveness of such registration whether or not any
Investor has elected to include securities in such registration. The expenses of such withdrawn
registration shall be borne by the Company in accordance with Section 8 hereof.

     Section 5. Holdback Agreement.

     Upon the effectiveness of this Agreement, each Investor agrees that he, she or it, shall not
sell publicly, make any short sale of, or otherwise dispose publicly of, any Restricted Shares
(other than sales or dispositions to its Affiliates and other than with respect to those Securities
included in such registration) without the prior written consent of the Company, for a period (the
“Lockup Period”) designated by the Company in writing to the Investors, which period shall
not last more than 180 days after the date on which this Agreement becomes effective;
provided, however, that all parties subject to a Lockup Period shall only be
released early from their obligations thereunder on a pro rata basis.

     Section 6. Preparation and Filing.

     If and whenever the Company is under an obligation pursuant to the provisions of this
Agreement to effect the registration of any Registrable Shares, the Company shall, as expeditiously
as practicable:

     (a) use its best efforts to cause a registration statement that registers such Registrable
Shares to become and remain effective for a period of one year or until all of such Registrable
Shares have been disposed of (if earlier);

     (b) furnish, at least ten business days before filing a registration statement that registers
such Registrable Shares, a prospectus relating thereto or any amendments or supplements relating to
such a registration statement or prospectus, to one counsel selected by the holders of Registrable
Shares requesting such registration (the “Investors’ Counsel”), copies of all such
documents proposed to be filed (it being understood that such ten business day period need not
apply to successive drafts of the same document proposed to be filed so long as such successive
drafts are supplied to the Investors’ Counsel in advance of the proposed filing by a period of time
that is customary and reasonable under the circumstances);

     (c) prepare and file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to

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keep such registration statement effective for a period of one year or until all of such
Registrable Shares have been disposed of (if earlier) and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of such Registrable Shares;

     (d) notify in writing the Investors’ Counsel of the receipt by the Company of any notification
with respect to (i) any comments by the Commission with respect to such registration statement or
prospectus or any amendment or supplement thereto or any request by the Commission for the amending
or supplementing thereof or for additional information with respect thereto, (ii) the issuance by
the Commission of any stop order suspending the effectiveness of such registration statement or
prospectus or any amendment or supplement thereto or the initiation or threatening of any
proceeding for that purpose and (iii) the suspension of the qualification of such Registrable
Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such
purposes;

     (e) use its commercially reasonable efforts to register or qualify such Registrable Shares
under such other securities or blue sky laws of such jurisdictions as the holders of Registrable
Shares reasonably request and do any and all other acts and things which may be reasonably
necessary or advisable to enable the Investors to consummate the disposition in such jurisdictions
of the Registrable Shares owned by the Investors; provided, however, that the
Company will not be required to qualify generally to do business, subject itself to general
taxation or consent to general service of process in any jurisdiction where it would not otherwise
be required to do so but for this paragraph (e);

     (f) furnish to the Investors such number of copies of a summary prospectus, if any, or other
prospectus, including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such Investors may reasonably request in order to
facilitate the public sale or other disposition of such Registrable Shares;

     (g) without limiting subsection (e) above, use its commercially reasonable efforts to cause
such Registrable Shares to be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of the Company to enable
the Investors holding such Registrable Shares to consummate the disposition of such Registrable
Shares;

     (h) notify the Investors holding such Registrable Shares on a timely basis at any time when a
prospectus relating to such Registrable Shares or any document related thereto includes an untrue
statement of a material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances then existing
and, at the request of the Investors prepare and furnish to such Investors a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the offerees of such shares, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances then
existing;

     (i) make available upon reasonable notice and during normal business hours, for inspection by
the Investors holding such Registrable Shares, any underwriter participating in any

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disposition pursuant to such registration statement and any attorney, accountant or other
agent retained by the Investors or underwriter (collectively, the “Inspectors”), all
pertinent financial and other records, pertinent documents and properties of the Company
(collectively, the “Records”), as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers, directors and employees to
supply all information (together with the Records, the “Information”) reasonably requested
by any such Inspector in connection with such registration statement. Any of the Information which
the Company determines in good faith to be confidential, and of which determination the Inspectors
are so notified, shall not be disclosed by the Inspectors unless (i) the disclosure of such
Information is necessary to avoid or correct a material misstatement or omission in the
registration statement, (ii) the release of such Information is ordered pursuant to a subpoena or
other order from a court or governmental agency or authority of competent jurisdiction, (iii) such
Information has been made generally available to the public through no breach of the nondisclosure
obligations of the Inspectors or their Affiliates or (iv) such disclosure is required to be made
under applicable law;

     (j) use its commercially reasonable efforts to obtain from its independent certified public
accountants “cold comfort” letters in customary form and at customary times and covering matters of
the type customarily covered by cold comfort letters;

     (k) use its commercially reasonable efforts to obtain from its counsel an opinion or opinions
in customary form;

     (l) provide a transfer agent and registrar (which may be the same entity and which may be the
Company) for such Registrable Shares;

     (m) promptly issue to any underwriter to which the Investors holding such Registrable Shares
may sell shares in such offering certificates evidencing such Registrable Shares;

     (n) list such Registrable Shares on any national securities exchange (including the New York
Stock Exchange, the Nasdaq Stock Market or the American Stock Exchange) on which the shares of
Common Stock are listed at the time of effectiveness of the registration statement;

     (o) otherwise use its best efforts to comply with all applicable rules and regulations of the
Commission and make available to its securityholders, as soon as reasonably practicable, earnings
statements covering a period of 12 months beginning within three months after the effective date of
the subject registration statement; and

     (p) otherwise use its commercially reasonable efforts to take all other steps necessary to
effect the registration of such Registrable Shares contemplated hereby.

     Each holder of the Registrable Shares, upon receipt of any notice from the Company of any
event of the kind described in Section 6(h) hereof, shall forthwith discontinue disposition
of the Registrable Shares pursuant to the registration statement covering such Registrable Shares
until such holder’s receipt of the copies of the supplemented or amended prospectus contemplated by
Section 6(h) hereof, and, if so directed by the Company, such holder shall deliver to the
Company all copies, other than permanent file copies then in such holder’s

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possession, of the prospectus covering such Registrable Shares at the time of receipt of such
notice.

     Section 7. Purchase of OP Units.

     (a) The Company’s obligations to facilitate the registration of Registrable Shares hereunder
shall apply notwithstanding Section 8.6.E of the Partnership Agreement (the “Redemption
Limitation”). If Registrable Shares are eligible to be sold pursuant to a registration
statement filed hereunder notwithstanding the Redemption Limitation, the Company shall facilitate
such sale by acquiring the underlying OP Units and exchanging such OP Units for shares of Common
Stock pursuant to Section 7(b) hereof.

     (b) If an Investor shall have requested the registration of Registrable Shares pursuant to
Section 3 or 4 hereof and the Company shall be obligated to facilitate the sale of such
Registrable Shares by exchanging OP Units for shares of Common Stock pursuant to Section
7(a) hereof, the settlement date for such exchange shall be such date as the Investor may
reasonably request and the number of shares of Common Stock to be exchanged shall equal the REIT
Shares Amount as determined pursuant to Section 8.6.B of the Partnership Agreement, mutatis
mutandis, with the settlement date or dates reasonably requested by the Investor from time to time
pursuant hereto considered the Specified Redemption Date (as defined in the Partnership Agreement)
for purposes of such determination.

     Section 8. Expenses.

     All expenses incurred by the Company and the Investors in complying with their obligations
pursuant to this Agreement and in connection with the registration and disposition of Registrable
Shares, including, without limitation, all registration and filing fees (including all expenses
incident to filing with the Financial Industry Regulatory Authority), fees and expenses of
complying with securities and blue sky laws, printing expenses, fees and expenses of the Company’s
counsel and accountants, including the expenses of any regular or special audits incident to or
required by any such registration, and fees and expenses of the Investors’ Counsel shall be paid by
the Company; provided, however, that all underwriting discounts, selling
commissions applicable to the Registrable Shares, Primary Shares and Other Shares shall be borne by
the holders selling such Registrable Shares, Primary Shares and Other Shares, in proportion to the
number of Registrable Shares, Primary Shares and Other Shares sold by each such holder.

     Section 9. Indemnification.

     (a) In connection with any registration of any Registrable Shares under the Securities Act
pursuant to this Agreement, the Company shall indemnify and hold harmless each holder of
Registrable Shares, each of such holder’s officers, directors, employees, members, partners, and
advisors and their respective Affiliates, each underwriter, broker or any other person acting on
behalf of any holder of Registrable Shares and each other Person, if any, who controls any of the
foregoing Persons within the meaning of the Securities Act against any losses, claims, damages,
liabilities, or actions joint or several (or actions in respect thereof), to which any of the
foregoing

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persons may become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or allegedly untrue statement of a material fact contained in the registration
statement under which such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein or otherwise filed with the Commission
or any free writing prospectus that the Company has filed, or is required to file, pursuant to Rule
433(d) of the Securities Act, or, in any case, any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or, with respect to any
prospectus, necessary to make the statements therein in light of the circumstances under which they
were made not misleading, or any violation by the Company of the Securities Act or state securities
or blue sky laws applicable to the Company or relating to action or inaction required of the
Company in connection with such registration or qualification under such state securities or blue
sky laws; and shall reimburse such Persons for any legal or other expenses reasonably incurred by
any of them in connection with investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action (including any legal or other
expenses incurred) arises out of or is based upon an untrue statement or allegedly untrue statement
or omission or alleged omission made in said registration statement, preliminary prospectus, final
prospectus, amendment, supplement or document incident to registration or qualification of any
Registrable Shares in reliance upon and in conformity with written information furnished to the
Company by the holders of Registrable Shares (with respect to which such indemnity is sought)
specifically for use in the preparation thereof.

     (b) In connection with any registration of Registrable Shares under the Securities Act
pursuant to this Agreement, each holder of Registrable Shares shall severally (based on the
percentage of all Registrable Shares, Primary Shares and Other Shares included in such registration
that were owned by such holder) and not jointly and severally indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 9(a)) the Company, each director
and officer of the Company who shall sign such registration statement, each underwriter, broker or
other person acting on behalf of the holders of Registrable Shares and each person who controls any
of the foregoing persons within the meaning of the Securities Act with respect to any statement or
omission from such registration statement, any preliminary prospectus or final prospectus contained
therein or otherwise filed with the Commission or any free writing prospectus that the Company has
filed, or is required to file, pursuant to Rule 433(d) of the Securities Act, or, in any case, any
amendment or supplement thereto or any document incident to registration or qualification of any
Registrable Shares, if such statement or omission was made in reliance upon and in conformity with
written information furnished to the Company or such underwriter by such holder of Registrable
Shares specifically for use in connection with the preparation of such registration statement,
preliminary prospectus, final prospectus, amendment, supplement or document; provided,
however, that the maximum amount of liability in respect of such indemnification shall be
limited, in the case of each holder of Registrable Shares, to an amount equal to the net proceeds
actually received by such holder from the sale of Registrable Shares effected pursuant to such
registration.

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     (c) Promptly after receipt by an indemnified party of notice of the commencement of any action
involving a claim referred to in this Section 9, such indemnified party will, if a claim in
respect thereof is made against an indemnifying party, give written notice to the latter of the
commencement of such action. The failure of any indemnified party to notify an indemnifying party
of any such action shall not (unless such failure shall have a material adverse effect on the
indemnifying party) relieve the indemnifying party from any liability in respect of such action
that it may have to such indemnified party hereunder. In case any such action is brought against an
indemnified party, the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified to the extent that it
may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be responsible for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof; provided, however,
that if any indemnified party shall have reasonably concluded that there may be one or more legal
or equitable defenses available to such indemnified party which are additional to or conflict with
those available to the indemnifying party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided hereunder, the
indemnifying party shall not have the right to assume the defense of such action on behalf of such
indemnified party (but shall have the right to participate therein with counsel of its choice) and
such indemnifying party shall reimburse such indemnified party and any Person controlling such
indemnified party for that portion of the fees and expenses of any counsel retained by the
indemnified party which is reasonably related to the matters covered by the indemnity agreement
provided hereunder. If the indemnifying party is not entitled to, or elects not to, assume the
defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel
with respect to such claim.

     (d) If the indemnification provided for hereunder is held by a court of competent jurisdiction
to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or
action referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a
result of such loss, claim, damage, liability or action in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the indemnified party
on the other in connection with the statements or omissions which resulted in such loss, claim,
damage, liability or action as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission. The parties agree
that it would not be just and equitable if contribution pursuant hereto were determined by errata
allocation or by any other method or allocation which does not take account of the equitable
considerations referred to herein. No person guilty or liable of fraudulent misrepresentation shall
be entitled to contribution from any person.

12

 

     Section 10. Investors’ Obligations.

     It shall be a condition precedent to the obligations of the Company to take any action
pursuant to this Agreement with respect to the Registrable Shares of any Investor that such
Investor shall:

     (a) Furnish to the Company such written information regarding such Investor and the
distribution proposed by such Investor as the Company may reasonably request in writing and as
shall be reasonably required in connection with any registration referred to in this Agreement
including, without limitation, the Notice and Questionnaire, and shall undertake to update such
information on a timely basis during the periods when any registration statement that includes the
Registrable Shares is effective and cooperate with the Company in preparing any such registration
and any amendments thereto;

     (b) Agree, with respect to a particular offering, to sell their Registrable Shares to the
underwriters at the same price and on substantially the same terms and conditions as the Company or
the other Persons on whose behalf the registration statement was being filed have agreed to sell
their Securities; and

     (c) Promptly notify the Company of the sale or transfer of any Registrable Shares.

     Section 11. Suspension of Use of Registration Statement.

     (a) If the Board of Directors of the Company determines in its good faith judgment that the
filing of a registration statement under this Agreement or the use of any related prospectus would
be materially detrimental to the Company because such action would require the disclosure of
material information that the Company has a bona fide business purpose for preserving as
confidential or the disclosure of which would materially impede the Company’s ability to consummate
a significant transaction, and that the Company is not otherwise required by applicable securities
laws or regulations to disclose, upon written notice of such determination by the Company to the
Investors which shall be signed by the Chief Executive Officer, Chief Investment Officer, President
or any Executive Vice President of the Company certifying thereto, the rights of the Investors to
offer, sell or distribute any Registrable Shares pursuant to a registration or to require the
Company to take action with respect to the registration or sale of any Registrable Shares pursuant
to this Agreement shall be suspended until the earliest of (i) the date upon which the Company
notifies the Investors in writing that suspension of such rights for the grounds set forth in this
Section 11 is no longer necessary and they may resume use of the applicable prospectus,
(ii) the date upon which copies of the applicable supplemented or amended prospectus is distributed
to the Investors, and (iii) up to 60 consecutive days after the notice to the Investors; provided,
that the Company shall not be entitled to exercise any such right more than two (2) times in any
twelve month period or less than 30 days from the termination of the prior such suspension period.
The Company agrees to give the notice under (i) above as promptly as practicable following the date
that such suspension of rights is no longer necessary.

     (b) If all reports required to be filed by the Company pursuant to the Exchange Act have not
been filed by the required date without regard to any extension, or if the consummation of any
business combination by the Company has occurred or is probable for purposes of Rule 3-05, Rule
3-14 or Article 11 of Regulation S-X promulgated under the Securities Act or any

13

 

similar successor rule, upon written notice thereof by the Company to the Investors, the
rights of the Investors to offer, sell or distribute any Registrable Shares pursuant to a Resale
Shelf Registration Statement or to require the Company to take action with respect to the
registration or sale of any Registrable Shares pursuant to a Resale Shelf Registration Statement
shall be suspended until the date on which the Company has filed such reports or obtained and filed
the financial information required by Rule 3-05 or Article 11 of Regulation S-X to be included or
incorporated by reference, as applicable, in a Resale Shelf Registration Statement, and the Company
shall notify the Investors as promptly as practicable when such suspension is no longer required.

     Section 12. Exchange Act Compliance.

     From the date on which this Agreement becomes effective, the Company shall comply with all of
the reporting requirements of the Exchange Act applicable to it and shall comply with all other
public information reporting requirements of the Commission which are conditions to the
availability of Rule 144. The Company shall reasonably cooperate with the Investors in supplying
such information as may be reasonably necessary for the Investors to complete and file any
information reporting forms presently or hereafter required by the Commission as a condition to the
availability of Rule 144.

     Section 13. No Conflict of Rights; Future Rights.

     (a) The Company shall not, after the date hereof, grant any registration rights which conflict
with or impair the rights granted to the Investors hereby. If at any time following the date
hereof, the Company shall grant to any present or future securityholder of the Company rights to in
any manner cause or participate in any registration statement of the Company that, in the
reasonable judgment of the Investors, are superior to or conflict with the rights granted to the
Investors hereby such grant shall be null, void and ultra vires.

     (b) As of the date of this Agreement, no Person other than the Investors has rights, and no
Person other than the Investors is the beneficiary of any agreement, understanding or arrangement
with respect to the provision of rights by the Company, with respect to the registration under
federal or state securities laws of the issuance or sale of the Common Stock or other securities of
the Company, the Operating Partnership or any other Affiliate of the Company.

     Section 14. Termination.

     This Agreement shall terminate and be of no further force or effect upon the date at which
there shall no longer be any Registrable Shares, including any Registrable Shares that may, at the
election of the Company, be issued and delivered to the Investors in connection with the redemption
of OP Units, outstanding.

     Section 15. Benefits of Agreement; Third Party Beneficiaries.

     Except as provided herein, this Agreement shall bind and inure to the benefit of the Company,
the Investors and subject to Section 15, the respective successors and assigns of the
Company and the Investors. Each of the non-signatory Investors to this Agreement are intended

14

 

third party beneficiaries of this Agreement. The managing underwriter(s) in connection with
the Initial Public Offering are intended third party beneficiaries of the agreements of the Persons
contained in Section 5.

     Section 16. Assignment.

     Each Investor may assign its rights hereunder to any purchaser or transferee of Registrable
Shares; provided, however, that such purchaser or transferee shall, as a condition
to the effectiveness of such assignment, be required to execute a counterpart to this Agreement
agreeing to be treated as an Investor whereupon such purchaser or transferee shall have the
benefits of, and shall be subject to the restrictions contained in, this Agreement as if such
purchaser or transferee was originally included in the definition of an Investor herein and had
originally been a party hereto. The Company may not assign any rights hereunder without the consent
of the Investors, except by operation of Law.

     Section 17. Entire Agreement; Amendment and Restatement; Effectiveness.

     This Agreement, and the other writings referred to herein or delivered pursuant hereto,
contain the entire agreement among the parties hereto with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings with respect thereto, and
shall become effective immediately upon the consummation of the Initial Public Offering.

     Section 18. Notices.

     All notices, requests, consents and other communications hereunder to any party shall be
deemed to be sufficient if contained in a written instrument delivered in person or sent by
facsimile, electronic mail nationally—recognized overnight courier or first class registered or
certified mail, return receipt requested, postage prepaid, addressed to such party at the address
set forth below or such other address as may hereafter be designated in writing by such party to
the other parties:

	 	 	 	 	 

	 

	 	(i)
	 	if to the Company or the Operating Partnership, to:
	 
	 	 	 	 
	 

	 	 	 	Campus Crest Communities, Inc.
	 

	 	 	 	2100 Rexford Rd, Suite 414
	 

	 	 	 	Charlotte NC 28211
	 

	 	 	 	Attn: Donald L. Bobbitt, Jr.
	 

	 	 	 	Telephone: (704) 496-2500
	 

	 	 	 	Facsimile: (704) 496-2599
	 

	 	 	 	Email: donnie.bobbitt@campuscrest.com

15

 

	 	 	 	 	 

	 
	 	 	 	 
	 

	 	 	 	with a copy (which shall not constitute notice) to:
	 
	 	 	 	 
	 

	 	 	 	Bradley Arant Boult Cummings LLP
	 

	 	 	 	1819 5th Avenue North
	 

	 	 	 	Birmingham, AL 35203
	 

	 	 	 	Attention: J. Andrew Robison
	 

	 	 	 	Telephone: 205-521-8596
	 

	 	 	 	Facsimile: 205-521-8800
	 

	 	 	 	Email: arobison@babc.com
	 
	 	 	 	 
	 

	 	(ii)
	 	if to any Investor:
	 
	 	 	 	 
	 

	 	 	 	Initially to the address indicated in such Investor’s Notice and Questionnaire or,
if no Notice and Questionnaire has been delivered, c/o Campus Crest Properties,
Inc., 2100 Rexford Road, Suite 414, Charlotte, NC 28211, Attention: Chief Executive
Officer, or to such other address and to such other Persons as any Investor may
hereafter specify in writing.

     All such notices, requests, consents and other communications shall be deemed to have been
delivered (a) in the case of personal delivery or delivery by facsimile or electronic mail, on the
date of such delivery assuming such date is a business day, and if such date is not a business day
on the date that is the business day immediately subsequent to such date, (b) in the case of
dispatch by nationally—recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the third business day after the posting thereof.

     Section 19. Modifications; Amendments; Waivers.

     The terms and provisions of this Agreement may not be modified or amended except pursuant to a
writing signed by the Company, and by the Investors holding at least a majority of all Registrable
Shares then outstanding. Any waiver of any provision of this Agreement requested by any party
hereto must be granted in advance, in writing by the party granting such waiver; provided,
however, that the holders of a majority of all then outstanding Registrable Shares may
grant a waiver on behalf of all Investors.

     Section 20. Counterparts; Facsimile Signatures.

     This Agreement may be executed in any number of original or facsimile counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but one agreement.

     Section 21. Headings.

     The headings of the various sections of this Agreement have been inserted for convenience of
reference only and shall not be deemed to be a part of this Agreement.

16

 

     Section 22. Governing Law; Consent to Jurisdiction and Venue; Waiver of Jury
Trial.

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware, without giving effect to any law or rule that would cause the laws of any jurisdiction
other than the State of Delaware to be applied.

     EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

     Section 23. Severability.

     It is the desire and intent of the parties that the provisions of this Agreement be enforced
to the fullest extent permissible under the law and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, in the event that any provision of this Agreement would
be held in any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn
so as not be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other jurisdiction.

* * * *

17

 

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

	 	 	 	 	 	 	 	 
								
	 	 	CAMPUS CREST COMMUNITIES, INC.	
	 
	 	 	 	 	 	 	
	 

	 	By:	 	 	 	 	
	 	 	 	 	 	
	 

	 	 	 	Name:	 	 	
	 

	 	 	 	 	 	 	
	 

	 	 	 	Title:	 	 	
	 

	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	
	 	 	CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, LP	
	 
	 	 	 	 	 	 	
	 	 	By:	 	Campus Crest
Communities, Inc.,
 its General Partner	
	 
	 	 	 	 	 	 	
	 

	 	By:	 	 	 	 	
	 	 	 	 	 	
	 

	 	 	 	Name:	 	 	
	 

	 	 	 	 	 	 	
	 

	 	 	 	Title:	 	 	
	 

	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	
	 	 	INVESTORS:	
	 
	 	 	 	 	 	 	
	 	 	MXT CAPITAL, LLC	
	 
	 	 	 	 	 	 	
	 

	 	By:	 	 	 	 	
	 	 	 	 	 	
	 

	 	 	 	Name:	 	 	
	 

	 	 	 	 	 	 	
	 

	 	 	 	Title:	 	 	
	 

	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	
	 	 	 	 	 	
	 	 	 	 	Ted W. Rollins	
	 
	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	
	 	 	 	 	 	
	 	 	 	 	Michael S. Hartnett	

18

 

Schedule I

Investors

Ted W. Rollins

Michael S. Hartnett

MXT Capital, LLC

Carl H. Ricker, Jr.

Flynn Development, LLC

Mansion Ridge Investment Company, LLC

Marc Rollins

Steve Emtman

Horatio Alger Association Endowment

Matthew S. O’Reilly

19

 

Exhibit A

Form of Notice and Questionnaire

CAMPUS CREST COMMUNITIES, INC.

Selling Securityholder Notice and Questionnaire

     The undersigned beneficial owner of common stock (the “Common Stock”) of Campus Crest
Communities, Inc. (the “Company”) understands that the Company has filed or intends to file
with the Securities and Exchange Commission (the “Commission”) a registration statement
(the “Registration Statement”) for the registration and resale of the Registrable
Securities in accordance with the terms of the Registration Rights
Agreement, dated as of [   ], 20___ (the “Registration Rights Agreement”), among the Company, Campus Crest Communities
Operating Partnership, LP, MXT Capital, LLC, Ted W. Rollins and Michael S. Hartnett. A copy of the
Registration Rights Agreement is available from the Company upon request at the address set forth
below. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.

     The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate:

QUESTIONNAIRE

	1.	 	Name.

	 	(a)	 	Full Legal Name of Selling Securityholder
	 
	 	(b)	 	Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
	 
	 	(c)	 	Full Legal Name of Control Person or Persons (which means a person who directly
or indirectly, alone or with others, has power to vote or dispose of the securities
covered by this Notice and Questionnaire):

20

 

	2.	 	Address for Notices to Selling Securityholder:

Telephone:                                                                       
 

Fax:                                                                                  

Contact Person:                                                                 

Email:                                                                                

	3.	 	Beneficial Ownership of Registrable Securities:

	 	(a)	 	Type and Number of Registrable Securities beneficially owned:

	4.	 	Broker-Dealer Status and Distribution Arrangements:

	 	(a)	 	Are you a broker-dealer?

Yes
 o       No o

	 	Note:  	 	If yes, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

	 	(b)	 	Are you an affiliate of a broker-dealer?

Yes o       No o

	 	(c)	 	If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?

Yes o       No o

	 	Note: 	 	 If no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

21

 

	 	(d)	 	If you, at the time of your purchase of the Registrable Securities, have any
agreements or understandings, directly or indirectly, with any person to distribute the
Registrable Securities, please describe such agreements or understandings.

	5.	 	Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder.

	 	 	Except as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable Securities
listed above in Item 3.

	 	(a)	 	Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:

	6.	 	Relationships with the Company:

	 	 	Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.
	 
	 	 	State any exceptions here:

22

 

	7.	 	General:
	 
	 	 	If there is any additional information necessary to make the answers that you have given
above not misleading in light of the circumstances under which such answers were given,
please provide such information.

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof.

By signing below, the undersigned consents to the disclosure of the information contained herein in
its answers to Items 1 through 6 and the inclusion of such information in the Registration
Statement and the related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of the Registration
Statement and the related prospectus.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent.

	 	 	 	 	 
	Dated:                                              
	Beneficial
Owner:	
 

	 	 	 	 	 
	 	By: 	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:

[                     ]

23exv10w56

Exhibit 10.56

Operating Agreement

of

HSRE-Campus Crest I, LLC

(a Delaware limited liability company)

DATED: AS OF NOVEMBER 7, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE	 	Page	 
	 
	 	 	 	 
	ARTICLE 1 ORGANIZATION
	 	 	1	 
	 
	 	 	 	 
	1.1 Definitions and Construction
	 	 	1	 
	1.2 Formation
	 	 	2	 
	1.3 Name
	 	 	2	 
	1.4 Initial Members
	 	 	2	 
	1.5 Registered Office and Agent
	 	 	2	 
	1.6 Principal Office
	 	 	2	 
	1.7 Term
	 	 	2	 
	1.8 Foreign Qualification
	 	 	2	 
	 
	 	 	 	 
	ARTICLE 2 PURPOSE AND POWER
	 	 	3	 
	 
	 	 	 	 
	2.1 Principal Purpose
	 	 	3	 
	2.2 Other Purposes
	 	 	3	 
	2.3 Additional Properties
	 	 	3	 
	2.4 Non-Competition and Right of First Opportunity
	 	 	4	 
	2.5 Powers
	 	 	4	 
	 
	 	 	 	 
	ARTICLE 3 CONTRIBUTIONS BY MEMBERS; FINANCING
	 	 	4	 
	 
	 	 	 	 
	3.1 Initial Contributions
	 	 	4	 
	3.2 Capital Contributions for Acquisition and/or Development of Additional
Properties
	 	 	4	 
	3.3 Pre-Construction Funding for Development Projects, and Pre-Development
Costs; Pre-Acquisition Costs for Acquisition Properties
	 	 	5	 
	3.4 Funding for a Development Project
	 	 	6	 
	3.5 Construction Loans/Acquisition Loans
	 	 	8	 
	3.6 Failure to Fund Required Amount
	 	 	8	 
	3.7 Operating Deficits; Necessary Cost Loans and Necessary Cost Capital
Contributions
	 	 	11	 
	3.8 Obligations of Campus Crest Guarantors
	 	 	13	 
	3.9 Organizational Legal Expenses
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 4 DISTRIBUTIONS TO MEMBERS
	 	 	13	 
	 
	 	 	 	 
	4.1 Distribution of Net Cash Flow
	 	 	13	 
	4.2 Timing of Distributions/Prohibition against Reinvesting Proceeds
	 	 	14	 
	4.3 Withholding
	 	 	15	 
	4.4 Clawback
	 	 	15	 
	4.5 Other Compensation
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 5 MANAGEMENT
	 	 	15	 
	 
	 	 	 	 
	5.1 Management of Company Affairs
	 	 	15	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	ARTICLE	 	Page	 
	 
	 	 	 	 
	5.2 Major Decisions
	 	 	18	 
	5.3 Property Management Agreement
	 	 	22	 
	5.4 Notice of Certain Developments
	 	 	22	 
	5.5 Annual Business Plan and Operating Budget
	 	 	22	 
	5.6 Development of Project
	 	 	23	 
	5.7 Rights of HSRE
	 	 	24	 
	5.8 Meetings of the Members
	 	 	24	 
	5.9 REIT Related Provisions
	 	 	25	 
	 
	 	 	 	 
	ARTICLE 6 TRIGGERING EVENTS; REMEDIES
	 	 	26	 
	 
	 	 	 	 
	6.1 Campus Crest Triggering Event
	 	 	26	 
	6.2 Remedies for Campus Crest Triggering Event
	 	 	27	 
	6.3 HSRE Triggering Event
	 	 	27	 
	6.4 Remedies for HSRE Triggering Event
	 	 	28	 
	6.5 Replacement of Campus Crest as Day-to-Day Manager; Executive Committee
Changes upon
	 	 	28	 
	6.6 Other Remedies for Breach
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 7 INDEMNIFICATION
	 	 	29	 
	 
	 	 	 	 
	7.1 General
	 	 	29	 
	7.2 Insurance
	 	 	30	 
	7.3 Approval of Payments
	 	 	30	 
	7.4 Indemnification by Member
	 	 	30	 
	 
	 	 	 	 
	ARTICLE 8 ACCOUNTING; REPORTING
	 	 	30	 
	 
	 	 	 	 
	8.1 Fiscal Year
	 	 	30	 
	8.2 Accounting Method
	 	 	30	 
	8.3 Determination and Allocation of Profits and Losses
	 	 	31	 
	8.4 Returns
	 	 	31	 
	8.5 Financial Statements and Reports to Members
	 	 	31	 
	8.6 Books and Records
	 	 	32	 
	8.7 Information; Cooperation with HSRE
	 	 	32	 
	8.8 Banking
	 	 	33	 
	 
	 	 	 	 
	ARTICLE 9 SALE OF PROPERTIES; PURCHASE OPTION
	 	 	33	 
	 
	 	 	 	 
	9.1 Right to Initiate Sale of Properties
	 	 	33	 
	9.2 Initiation and Elections
	 	 	33	 
	9.3 Failure of Non-Initiating Member to Exercise Purchase Option; Marketing
of Properties
	 	 	34	 
	9.4 Releases; Consents
	 	 	35	 
	9.5 Liabilities; Indemnity
	 	 	36	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	ARTICLE	 	Page	 

	 
	 	 	 	 
	9.6 Purchase of Initiating Member Interest; Closing
	 	 	36	 
	9.7 Purchase of Loans
	 	 	36	 
	9.8 Remedies for Noncompliance
	 	 	36	 
	9.9 Assignees
	 	 	37	 
	9.10 Limitation on Competing Options
	 	 	37	 
	9.11 Expenses/Fees
	 	 	37	 
	 
	 	 	 	 
	ARTICLE 10 TRANSFER OF MEMBERSHIP INTERESTS
	 	 	37	 
	 
	 	 	 	 
	10.1 General Prohibition
	 	 	37	 
	10.2 Permitted Transfers
	 	 	38	 
	10.3 Involuntary Transfers
	 	 	38	 
	10.4 Dissolution or Termination of Members
	 	 	38	 
	10.5 Status of Assignor and Assignee
	 	 	39	 
	10.6 Admission Requirements
	 	 	39	 
	10.7 Effective Assignment
	 	 	40	 
	10.8 Cost of Admission
	 	 	40	 
	 
	 	 	 	 
	ARTICLE 11 DISSOLUTION
	 	 	40	 
	 
	 	 	 	 
	11.1 Dissolution
	 	 	40	 
	11.2 Events of Withdrawal
	 	 	40	 
	11.3 No Voluntary Withdrawal
	 	 	41	 
	 
	 	 	 	 
	ARTICLE 12 LIQUIDATION
	 	 	41	 
	 
	 	 	 	 
	12.1 Liquidation
	 	 	41	 
	12.2 Priority of Payment
	 	 	42	 
	12.3 Liquidating Distributions
	 	 	42	 
	12.4 No Restoration Obligation
	 	 	43	 
	12.5 Timing
	 	 	43	 
	12.6 Liquidating Reports
	 	 	43	 
	12.7 Certificate of Dissolution
	 	 	43	 
	 
	 	 	 	 
	ARTICLE 13 GENERAL PROVISIONS
	 	 	43	 
	 
	 	 	 	 
	13.1 Amendment
	 	 	43	 
	13.2 Authorized Representatives
	 	 	43	 
	13.3 Arbitration
	 	 	44	 
	13.4 Unregistered Interests
	 	 	45	 
	13.5 Waiver of Dissolution Rights
	 	 	45	 
	13.6 Waiver of Partition Right
	 	 	45	 
	13.7 Waivers Generally
	 	 	45	 
	13.8 Notice
	 	 	45	 
	13.9 Other Business of Members
	 	 	46	 

-iii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	ARTICLE	 	Page	 
	 
	 	 	 	 
	13.10 Partial Invalidity
	 	 	47	 
	13.11 Entire Agreement
	 	 	47	 
	13.12 Benefit
	 	 	47	 
	13.13 Binding Effect
	 	 	47	 
	13.14 Further Assurances
	 	 	47	 
	13.15 Headings
	 	 	47	 
	13.16 Governing Law
	 	 	47	 
	13.17 Limited Liability of Member
	 	 	47	 
	13.18 Counterparts
	 	 	47	 
	13.19 Confidential Information
	 	 	47	 

EXHIBITS:

	A.	 	DEFINITIONS
	 
	B.	 	UNITED STATES INCOME TAX MATTERS
	 
	C.	 	LIST OF REVIEW ITEMS
	 
	D.	 	INITIAL CAPITAL CONTRIBUTIONS
	 
	E.	 	FUNDING CONDITIONS
	 
	F.	 	FORM OF DEVELOPMENT AGREEMENT
	 
	G.	 	FORM OF PROPERTY MANAGEMENT AGREEMENT
	 
	H.	 	NON-COMPETITION AND RIGHT OF FIRST OPPORTUNITY AGREEMENT
	 
	I.	 	FORM OF FINANCIAL STATEMENTS
	 
	J.	 	FORM OF CONSTRUCTION STATUS REPORTS
	 
	K.	 	FORM OF ACQUISITION BUDGET AND DEVELOPMENT BUDGET
	 
	L.	 	FORM OF COMPLETION AND COST OVERRUN GUARANTY
	 
	M.	 	FORM OF ADDITIONAL PROJECT SCHEDULE
	 
	N.	 	FORM OF SERVICES AGREEMENT
	 
	O.	 	FORM CONSTRUCTION AGREEMENT

SCHEDULE I:

Schedule of Potential Pool One and Pool Two Development Projects & Projected Construction Target
Dates

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OPERATING AGREEMENT

OF

HSRE-CAMPUS CREST I, LLC

     This OPERATING AGREEMENT OF HSRE-CAMPUS CREST I, LLC, a Delaware limited liability company
(the “Company”) is made as of the 7th day of November, 2008, 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:

     WHEREAS, the Company is being formed to, directly or indirectly, acquire and develop,
redevelop/reposition, operate, manage, lease and sell or otherwise dispose of student housing
properties as set forth herein;

     WHEREAS, subject to the satisfaction of the conditions contained herein, the Company intends
to acquire, develop, redevelop/reposition, operate, manage, lease and sell or otherwise dispose of
the Development Projects set forth on Schedule I attached hereto; and

     WHEREAS, the parties hereto desire to enter into this Agreement in order to set forth the
rights and obligations of the parties hereto with respect to the Company.

     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 intending to be legally bound hereby agree as follows:

ARTICLE 1

ORGANIZATION

     1.1 Definitions and Construction. Terms used in this Agreement with initial capital
letters have the meanings specified in the Recitals to this Agreement, and in Exhibit A attached
hereto. Unless the context of this Agreement otherwise clearly requires, (a) references to the
plural include the singular, and references to the singular include the plural, (b) references to
any gender include the other genders, (c) the words “include”, “includes” and “including” do not
limit the preceding terms or words and shall be deemed to be followed by the words “without
limitation”, (d) the term “or” has the inclusive meaning represented by the phrase “and/or”,
(e) the terms “hereof”, “herein”, “hereunder”, “hereto” and similar terms in this Agreement refer
to this Agreement as a whole and not to any particular provision of this Agreement, (f) the terms
“day” and “days” mean and refer to calendar day(s) and (g) the terms “year” and “years” mean and
refer to calendar year(s). Unless otherwise set forth herein, references in this Agreement to
(i) any document, instrument or agreement (including this Agreement) (A) includes and incorporates
all exhibits, schedules and other attachments thereto, (B) includes all documents,

 

 

instruments or agreements issued or executed in replacement thereof and (C) means such
document, instrument or agreement, or replacement or predecessor thereto, as amended, modified or
supplemented from time to time in accordance with its terms and in effect at any given time, (ii) a
particular Law (as hereinafter defined) means such Law as amended, modified, supplemented or
succeeded, from time to time and in effect at any given time, and (iii) a specific Section of a Law
shall be deemed to refer also to the corresponding provision(s) of succeeding Law. All Section and
Exhibit references herein are to Sections and Exhibits of this Agreement, unless otherwise
specified. This Agreement shall not be construed as if prepared by one of the parties hereto, but
rather according to its fair meaning as a whole, as if all parties hereto had prepared it.

     1.2 Formation. The Company was formed on October 16, 2008, by filing the Certificate
with the Delaware Secretary of State pursuant to the Act. The rights and obligations of the
Members shall be as provided in the Act except as otherwise expressly provided in this Agreement.
The Members agree to execute such certificates or documents and to do such filings and recordings
and all other acts, including the filing or recording of any amendments to the Certificate and any
assumed name filings in the appropriate offices in the States of Delaware and any other applicable
jurisdictions as may be required to comply with applicable law.

     1.3 Name. The name of the Company is “HSRE-CAMPUS CREST I, LLC”. The business of the
Company will be conducted under such name, as well as any other name or names as the Members may
from time to time determine.

     1.4 Initial Members. The initial Members of the Company are HSRE and Campus Crest.
No Additional Member shall be admitted except as otherwise permitted herein.

     1.5 Registered Office and Agent. The Company’s initial registered agent and office
shall be The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801. The Company may subsequently change its registered office or registered agent in
Delaware in accordance with the Act.

     1.6 Principal Office. The Company’s principal office shall initially be at the
offices of Campus Crest located at c/o Campus Crest Group, LLC, 2100 Rexford Road, Suite 414,
Charlotte, North Carolina, 28211. The Company’s principal office may be relocated from time to
time as the Members may determine.

     1.7 Term. The Company will be effective from the date the Certificate was filed with
the Delaware Secretary of State and will continue until its Dissolution as provided herein.

     1.8 Foreign Qualification. The Company shall make all filings and take such other
action to the extent required from time to time to do business or to have any Subsidiaries do
business in the jurisdictions where the Properties are located.

2

 

ARTICLE 2

PURPOSE AND POWER

     2.1 Principal Purpose. The business and principal purpose of the Company is to,
directly or indirectly, develop, redevelop, own, operate, manage, lease, finance and sell or
otherwise dispose of the Properties, subject to and in accordance with the terms and conditions set
forth in this Agreement.

     2.2 Other Purposes. The Company may engage in activities related or incidental to its
principal purpose. In addition, as provided in the Act, the Company is subject to other applicable
Laws which govern or limit the conduct of a particular business or activity.

     2.3 Additional Properties. The Members intend, subject to satisfaction of the Funding
Conditions, to acquire, develop, redevelop/reposition, operate, manage, lease and sell or otherwise
dispose of student housing properties in separate pools, each of which shall be held, directly or
indirectly, in a separate limited liability company (each such limited liability company of which
the Company is the first, being referred to herein as a “Portfolio Company”). Subject to the
satisfaction of the Funding Conditions, the Company shall commence development of student housing
properties pursuant to the terms of this Agreement until the Pool Cutoff Date for the Company. The
Members hereby agree that subject to satisfaction of the Funding Conditions for each Property
(including, without limitation, the Approval by HSRE of the construction schedule for such
Property), the initial pool of Properties to be held by the Company shall consist of those
Properties set forth on lines 1 through 7 on Schedule I attached hereto. After the Pool Cutoff
Date for the Company, a second Portfolio Company shall be formed, which shall continue to acquire,
develop, redevelop/reposition, operate, manage, lease and sell or otherwise dispose of student
housing properties pursuant to the terms of an operating agreement in the form of this Agreement.
The second Portfolio Company shall continue to commence construction of student housing properties
until the Pool Cutoff Date for the second Portfolio Company. The Members hereby agree that subject
to satisfaction of the Funding Conditions for each Property (including, without limitation, the
Approval by HSRE of the construction schedule for such Property), the pool of Properties to be held
by the second Portfolio Company shall include those Properties set forth on lines 8 through 10 on
Schedule I attached hereto and any other Properties Approved by the Executive Committee and for
which the Funding Conditions have been satisfied. With respect to each Property set forth on lines
1 through 7 on Schedule I which have been acquired by the Company, in the event construction does
not begin as of the target date set forth on Schedule I, such Property shall be assigned and
transferred to the second Portfolio Company, unless the Members agree otherwise. After the Pool
Cutoff Date for the second Portfolio Company, the Members may agree to form subsequent Portfolio
Companies pursuant to the same provisions and processes outlined in this Section 2.3. Each
individual Property acquired by the Company, or by any subsequent Portfolio Company, shall be
acquired in each case by a special purpose entity that shall in turn be wholly owned by the Company
or subsequent Portfolio Company, unless otherwise agreed to by the Members. Each special purpose
entity shall be a limited liability company or limited partnership (i) organized under the laws of
the State of Delaware and qualified to transact business in the state in which the particular
property is located or (ii) organized under the laws of the state in which the particular property
is located, unless the

3

 

use of an entity formed in another jurisdiction would avoid taxes that would otherwise be
incurred by the Company or the subsequent Portfolio Company.

     2.4 Non-Competition and Right of First Opportunity. Concurrently with the execution
of this Agreement, Campus Crest and/or its Affiliates and HSRE and/or its Affiliates shall enter
into the Non-Competition and Right of First Opportunity Agreement in the form attached hereto as
Exhibit H, under which, among other things, HSRE and/or its Affiliates shall have the right
to provide the equity capital for certain projects proposed to be acquired or developed by Campus
Crest and its Affiliates.

     2.5 Powers. The Company has all of the powers granted to a limited liability company
under the Act, as well as all powers necessary or convenient to achieve its purposes and to further
its business.

ARTICLE 3

CONTRIBUTIONS BY MEMBERS; FINANCING

     3.1 Initial Contributions. Concurrent with the execution of this Agreement, each
Member shall make (or has already made prior to the date hereof), the initial Capital Contribution
in cash, set forth opposite such Member’s name on Exhibit D. In addition to the foregoing,
subject to the satisfaction of the Funding Conditions for each Property, Campus Crest shall assign,
or cause to be assigned, to the applicable Property Owning Subsidiaries of the Company all of its
rights, title and interest in and to the lease agreement or purchase and sale agreement for each
Property and the limited liability company or limited partnership interest in such Property Owning
Subsidiary.

     3.2 Capital Contributions for Acquisition and/or Development of Additional Properties.
In the event the Funding Conditions for the acquisition of an Additional Property or development
of a Development Project have been satisfied (or waived, in writing, by each Member), then each
Member shall be obligated to make Mandatory Capital Contributions in an amount equal to (i) the
Mandatory Capital Limit, multiplied by (ii) such Member’s Participating Percentage. Mandatory
Capital Contributions shall be funded, pari passu, in proportion to the Members’ respective
Participating Percentages. Capital calls for Mandatory Capital Contributions (“Capital Calls”)
shall be made by Campus Crest, in writing, pursuant to a written notice setting forth (in addition
to other items required under Section 3.4(d) for Development Projects): (i) the general
purpose of the Capital Call, (ii) the aggregate dollar amount of the Capital Call, and (iii) the
date on which payment shall be due (“Due Date”), which date shall be no less than five (5) days
after the date of receipt of notice of such Capital Call. Capital Calls for the acquisition of an
Additional Property shall be made following the satisfaction of the Funding Condition for the
acquisition of such Property at such time(s) as Campus Crest shall reasonably determine is
necessary to close the applicable transaction. Capital Calls relating to Development Projects
shall be funded in accordance with Section 3.4 below. For the purposes of confirming each
Member’s respective Capital Contribution and Capital Account balances with respect to the
acquisition of an Additional Property or the development of a Development Project, the

4

 

Members hereby agree to complete and execute an Additional Project Schedule in the form
attached hereto as Exhibit M.

     3.3 Pre-Construction Funding for Development Projects, and Pre-Development Costs;
Pre-Acquisition Costs for Acquisition Properties.

     (a) Pre-Construction Funding. Prior to the satisfaction of the Funding Conditions for
a Development Project, all pre-construction costs and expenditures (“Pre-Development Costs”)
shall be funded by Campus Crest or an Affiliate thereof, and HSRE shall not be required to
contribute to the Company any portion of such costs. Such Pre-Development Costs shall not
be considered a loan or Capital Contribution to the Company by Campus Crest or its
Affiliates for any purpose hereunder, and neither Campus Crest nor its Affiliates shall be
entitled to reimbursement of such amounts unless and until (i) HSRE has Approved such
Development Project and (ii) all Funding Conditions for such Development Project have been
satisfied. In the event the Funding Conditions are met, the Pre-Development Costs funded by
HSRE and Campus Crest shall be trued up at closing of the construction loan for the
Development Project, so that HSRE funds ninety percent (90%) of the Pre-Development Costs as
a Mandatory Capital Contribution and Campus Crest funds ten percent (10%) of the
Pre-Development Costs as a Mandatory Capital Contribution. Within ten (10) days after the
Funding Conditions for the Development Project are satisfied (or such other date Approved by
HSRE and Campus Crest), Campus Crest shall transfer and assign (or cause to be transferred
and assigned) to the Company (or a Subsidiary thereof) one hundred percent (100%) of the
ownership interests with respect to the Development Project held by Campus Crest and/or its
Affiliates, including, without limitation, any contractual rights with respect to the
acquisition, design, construction, development, operation, management and/or leasing of the
Development Project (collectively, the “Contributed Property Interests”). In connection
with the acquisition of such Contributed Property Interests, the Company or Subsidiary shall
assume (or take subject to) those liabilities encumbering the Contributed Property
Interests, but only to the extent Approved by the Executive Committee.

     (b) Pre-Acquisition Costs. With regard to proposed acquisitions of Acquisition
Properties, prior to the delivery by HSRE to Campus Crest of written notice of the approval
of its investment committee of a proposed acquisition (“IC Approval Notice”), all costs and
earnest money deposits related to such proposed acquisition (“Pre-Acquisition Costs”) shall
be borne and funded by Campus Crest or an Affiliate thereof, and neither HSRE nor the
Company shall bear any such Pre-Acquisition Costs, except as provided below. Following the
delivery of an IC Approval Notice by HSRE to Campus Crest, which notice shall include a
statement that the Pre-Acquisition Due Diligence Budget has been Approved by HSRE, all
Pre-Acquisition Costs (including those incurred prior to the delivery of the Approval Notice
and included in the Pre-Acquisition Due Diligence Budget) shall be borne fifty percent (50%)
by Campus Crest and fifty percent (50%) by HSRE. The Members hereby agree that the
expenditure of any Pre-Acquisition Costs in excess of the applicable line item set forth in
the Pre-Acquisition Due Diligence Budget shall constitute a Major Decision requiring the
Approval of the Executive Committee. In the event HSRE delivers an IC Approval

5

 

Notice to Campus Crest with respect to a proposed acquisition, and the Company closes
on such proposed acquisition, the Pre-Acquisition Costs funded by HSRE and Campus Crest
shall be trued up at the closing of such transaction, so that HSRE and Campus Crest each
fund such Pre-Acquisition Costs in accordance with their Participating Percentages. In the
event HSRE delivers an IC Approval Notice to Campus Crest with respect to a proposed
acquisition, and the Company does not close on such proposed acquisition, then the Company
shall deliver written notice to the Members that such transaction has been terminated
(“Acquisition Termination Notice”), which notice shall include (i) an itemized list of the
Pre-Acquisition Costs, and (ii) the amount required to be funded by each Member to cause the
Pre-Acquisition Costs to be trued up and borne in accordance with the applicable ratio set
forth in this Section 3.3(b) (i.e., 50/50). Each Member shall be obligated to fund
as a Mandatory Capital Contribution the amount owed, if any, within four (4) Business Days
after the receipt of such Acquisition Termination Notice. Any amount funded in excess of a
Member’s share of Pre-Acquisition Costs shall be reimbursed as soon as practicable following
delivery of the Acquisition Termination Notice.

     3.4 Funding for a Development Project.

     (a) Timing/Completion Date. The Members shall be obligated to make their respective
Mandatory Capital Contributions for a Development Project when and as called by Campus Crest
in accordance with Section 3.4(d) and Section 3.4(e).

     (b) In Balance Requirement; Cost Overrun and Completion Guaranty.

     (i) Notwithstanding anything to the contrary contained in this Agreement, HSRE
shall not be required to fund a Mandatory Capital Contribution at any time when a
Development Project is not “In Balance” (as defined under the Development Agreement)
on the Due Date of such Mandatory Capital Contribution as a result of Excess Project
Costs for which Developer is responsible to fund pursuant to the Development
Agreement. The Developer and/or the Campus Crest Guarantors shall be jointly and
severally liable to fund all Cost Overruns (as determined pursuant to and as
provided in the Development Agreement and the Completion and Cost Overrun Guaranty
Agreement). Any amounts funded by the Developer and/or the Campus Crest Guarantors
for Cost Overruns or other amounts under the Development Agreement and other amounts
required to be funded by the Developer under the Development Agreement or the
Completion and Cost Overrun Guaranty, as the case may be, shall not be reimbursed by
the Company to the payor except as provided in the Development Agreement and/or
Completion and Cost Overrun Guaranty and shall not be deemed loans to the Company or
Capital Contributions for any purpose hereunder (or under the Related Party
Agreements).

     (ii) Notwithstanding anything to the contrary contained in this Agreement, in
the event that the Developer and/or Campus Crest Guarantors fund any Cost Overruns
and the Reimbursement Conditions are satisfied, then

6

 

Developer and/or Campus Crest Guarantors, as applicable, shall be entitled to a
reimbursement from the Company equal to the Reimbursement Amount. For the purposes
hereof, the Reimbursement Conditions shall be deemed to be satisfied upon compliance
with or satisfaction of the conditions of subsection (1) of the definition of
Reimbursement Conditions under the Development Agreement. The payment of the
Reimbursement Amount shall be paid to the Developer and/or Campus Crest Guarantors,
as applicable, as set forth in Section 4.1(a)(ii).

     (c) Application of Capital Contributions for Development Projects. Each Member
authorizes Campus Crest to apply its Mandatory Capital Contribution to the payment of all
charges, costs and expenses incurred by the Company in connection with the construction of a
Development Project, and the payment of any fees pursuant to the Development Agreement all
subject to and in accordance with the Development Budget. Notwithstanding the foregoing, any
funding for Cost Overruns shall be applied only to the Cost Overrun which gave rise to the
need for such funds.

     (d) Funding Procedures for Development Projects. Subject to Section 3.4(e),
which requires a shorter notice and contribution period with respect to emergency
situations, not less than five (5) days prior to the Due Date for any Capital Calls for a
Development Project, as a condition of the obligation of the Members to fund their
respective Mandatory Capital Contributions, Cost Overruns and any other amount required to
be funded pursuant to Sections 3.2, 3.3 and 3.4 (with the
exception of Section 3.4(b)), hereof (each, a “Required Amount”), Campus Crest shall
have delivered to the Members the following documents and materials relating to such
disbursements:

     (i) A disbursement request executed by Campus Crest (“Request for Advance”)
specifying each Member’s Required Amount. Each Request for Advance shall include:
(i) a breakdown of any unfunded Budgeted Project Costs to which said Required Amount
relates, (ii) a breakdown of any concurrent application (i.e., any application made
within the same construction draw cycle) of net cash receipts of the Company, or of
proceeds of the Required Amount to the payment of unfunded Budgeted Project Costs,
(iii) a good faith determination of whether the Development Project is on schedule
or if not, an estimate of any delays in the schedule, (iv) a good faith projection,
based on information then available to Campus Crest, of future Unfunded Excess
Project Costs and future unfunded Budgeted Project Costs, as applicable, and (v) a
statement by Campus Crest as to whether or not the Development Project is In
Balance, including appropriate detail and analysis, and (if the Development Project
is not In Balance) setting forth the category and amount of any amount that would
need to be made to cause the Development Project to be In Balance.

     (ii) A certification to the Members, as of the date of the applicable request
for disbursement, that: (1) the payment which is the subject of the Request for
Advance is not inconsistent with, and will be applied in accordance with, the
requirements of the Construction Loan; and (2) to the knowledge of Campus Crest, no
Event of Default, or condition or event which, with the giving of notice

7

 

or passage of time, or both, would constitute an Event of Default, exists under
the terms of this Agreement concerning the Development Project in question or the
Construction Loan (except any default thereunder that would be cured by the
application of all or any portion of the funds which are the subject of the Request
for Advance in question); and

     (iii) All relevant back-up materials to evidence the expenditures set forth in
such draw request, as reasonably requested by the Member, in writing, including,
without limitation, timesheets, invoices, disbursements, and any and all other
documents required to be delivered to the lender under the Construction Loan as
conditions to draws thereunder simultaneously with the delivery of such documents to
said lender.

     (e) Emergency Funding. Notwithstanding Section 3.1 which provides that the Due
Date for a Capital Call shall not be less than five (5) days after the date of receipt of
notice of such Capital Call, if a Request for Advance is for the purpose of funding any
amount necessary to prevent or ameliorate an emergency that will result in substantial
damage to the Development Project or bodily injury to any Person at or about the Development
Project as reasonably determined by Campus Crest, then each Member will be required to fund
its Required Amount immediately upon receipt of the applicable disbursement request or
Capital Call notice.

     3.5 Construction Loans/Acquisition Loans. Campus Crest shall be responsible for
obtaining, on behalf of the Company and/or the applicable Subsidiary, a Construction Loan for each
Development Project or an Acquisition Loan for each Property to be acquired by the Company for a
minimum amount of eighty percent (80%) of the total construction costs (including hard and soft
costs, acquisition costs and due diligence expenses) in the case of a Development Project or eighty
percent (80%) of the total acquisition costs (including due diligence expenses) in the case of an
Additional Property to be acquired by the Company, as the case may be. Each Construction Loan or
Acquisition Loan and any agreements and documents pertaining thereto shall be subject to the
Approval of HSRE. In the event Campus Crest is unable to obtain a non-recourse Construction Loan
or Acquisition Loan with the foregoing terms, Campus Crest shall, subject to the Approval of HSRE
(which consent may not be unreasonably conditioned, delayed or withheld), cause Campus Crest to
guaranty repayment of such loan and/or any other obligations imposed by the lender.

     3.6 Failure to Fund Required Amount.

     (a) Failure to Fund. If any Member (a “Defaulting Member”) fails to fund, in full, any
Required Amount to be funded under Sections 3.2, 3.3 or 3.4(a), by
the required Due Date, any Member that has fully funded its Required Amount (the
“Contributing Member”) by the required Due Date shall have the right, but shall not be
obligated, to fund the Defaulting Member’s Required Amount that was not funded (the “Default
Amount”), and shall have the right to exercise remedies, as set forth below.

8

 

     (b) Member Loans. The Contributing Member may fund all or any portion of the Default
Amount as a “Member Loan,” which shall be treated as loaned by the Contributing Member to
the Defaulting Member, and in turn, contributed by the Defaulting Member to the Company.
Any such Member Loan shall bear interest at an annual rate of which is the higher of
(i) fourteen percent (14%) per annum or (ii) five hundred (500) basis points over the Prime
Rate, adjusting when and as the Prime Rate adjusts. Until such time as a Member Loan has
been repaid in full by the Defaulting Member, all Distributions pursuant to this Agreement
that would otherwise be paid to the Defaulting Member shall instead be paid directly to the
Contributing Member. The amount paid to the Contributing Member pursuant to the preceding
sentence shall be deemed to have first been distributed by the Company to the Defaulting
Member pursuant to this Agreement, and then paid by the Defaulting Member to the
Contributing Member, and shall be applied first against accrued but unpaid interest owing
with respect to the Member Loan and then in reduction of the principal balance thereof.
Each Member Loan shall be due and payable in full upon the earlier of one (1) year from the
date advanced or the dissolution of the Company.

     (c) Security for Member Loan. Until such time as a Member Loan has been repaid in full
by the Defaulting Member, all Distributions pursuant to this Agreement that would otherwise
be paid to the Defaulting Member shall instead be paid directly to the Contributing Member.
Such amounts shall be deemed distributed by the Company to the Defaulting Member pursuant to
this Agreement and then paid by the Defaulting Member to the Contributing Member and shall
be applied first against accrued but unpaid interest owing with respect to the Member Loan
and then in reduction of the principal balance thereof. In order to secure the repayment of
any and all Member Loans made on behalf of a Defaulting Member, the Defaulting Member hereby
grants a security interest in favor of the Contributing Member in and to all Distributions
(including, without limitation, liquidation proceeds and any other cash proceeds and
interest and principal on any loans made to the Company by the Defaulting Member) to which
the Defaulting Member may be entitled under this Agreement, and hereby irrevocably appoints
the Contributing Member, and any of the Contributing Member’s representatives, agents,
officers or employees, as such Defaulting Member’s attorney(s)-in-fact, with full power to
prepare, execute, acknowledge, and deliver, as applicable, all documents, instruments,
and/or agreements memorializing and/or securing such Member Loan(s), including, without
limitation, such Uniform Commercial Code financing and continuation statements, mortgages,
pledge agreements and other security instruments as may be reasonably appropriate to perfect
and continue the security interest in favor of such Contributing Member. Upon repayment in
full of the Member Loan, any and all documents evidencing such security interest may be
discharged or terminated without any action on the part of such Contributing Member or such
Contributing Member’s representatives, agents, officers or employees.

     (d) Maturity of Member Loan. If, upon the maturity of a Member Loan (taking into
account any agreed upon extensions thereof), any principal thereof and/or accrued interest
thereon remains outstanding, then the Contributing Member may elect any one (1) of the
following options: (A) to renew such Member Loan pursuant to the

9

 

terms and provisions of Section 3.6(b), (B) to institute legal (or other)
proceedings against the Defaulting Member for repayment of such loan which may include,
without limitation, foreclosing against the security interest granted above, or (C) to
contribute all or any portion of such outstanding principal of, and accrued interest on,
such Member Loan (or portion thereof) to the capital of the Company in the manner described
in Section 3.6(e) below in satisfaction of such Member Loan. If (C) is elected,
(i) the Defaulting Member shall be deemed to have received a Distribution equal to the
amount of the outstanding principal amount of the Member Loan so contributed (plus the
accrued and unpaid interest thereon), (ii) the Capital Account and the unreturned Capital
Contributions of the Defaulting Member shall be reduced by such amount, (iii) the Defaulting
Member shall then be deemed to have repaid the outstanding principal of such Member Loan
(plus the accrued and unpaid interest thereon), and (iv) the Capital Account and the Capital
Contributions of the Contributing Member shall be increased by the amount of the Member Loan
(plus the accrued and unpaid interest thereon). Failure of the Contributing Member to give
written notice to the Non-Contributing Member within thirty (30) days after maturity shall
be deemed to constitute an election to renew such Member Loan for an additional term of one
hundred eighty (180) days on the terms set forth herein.

     (e) Capital Contribution of Default Amount/Dilution. Instead of making a Member Loan,
the Contributing Member may fund all or any portion of the Default Amount as a Capital
Contribution. Upon any such contribution by the Contributing Member, (i) the Participating
Percentage of the Defaulting Member shall be decreased by the Dilution Percentage, and (ii)
the Participating Percentage of the Contributing Member shall be increased by the reduction
in the Dilution Percentage of the Defaulting Member. The “Dilution Percentage” shall equal
the amount expressed in percentage points calculated based upon the following formula:
Dilution Percentage = 110% x the quotient of (x) the Default Amount divided by (y) the
total unreturned Capital Contributions of all Members (including the Default Amount
contributed by the Contributing Member). The respective percentage interest of the
Defaulting Member in each level of priority distributions under Section 4.1 shall be
adjusted in the same proportion as the adjustment made to the Member’s respective
Participating Percentage. Any adjustments to the Participating Percentages pursuant to this
Section 3.6(e) shall be rounded to the nearest one one-hundredth of one percentage
point (.01%). To illustrate, if (i) the Participating Percentages and unreturned Capital
Contributions of HSRE and Campus Crest were 90% and 9,000, and 10% and $1,000, respectively,
(ii) a Mandatory Contribution of $100 was required to be made by the Members on a 90/10
basis, (iii) Campus Crest failed to fund its $10 share, and (ii) HSRE funded its 90% share
(i.e., $90) as well as Campus Crest’s 10% share (i.e., $10), then the Dilution Percentage
would be 0.11% (i.e., 110% x 10/10,100), and the Participating Percentage of Campus Crest
would be reduced from 10% to 9.89%, while the Participating Percentage of HSRE would be
increased from 90% to 90.11%. In addition, the unreturned Capital Contributions of each
Member would be deemed to be equal to its revised Participating Percentage, multiplied by
the total unreturned Capital Contributions of the Members.

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     (f) Member Default. In addition, in the event a Contributing Member elects not to fund
the Default Amount as a Member Loan, the Default Amount shall bear interest at the same rate
that would apply in the case of a Member Loan until paid, and the Company shall withhold and
offset any Distributions that would otherwise be made to the Defaulting Member against the
Default Amounts and accrued interest thereon, until the Default Amount plus all accrued and
unpaid interest thereon has been paid. The failure of Campus Crest or HSRE to fund its
required share of any Required Amount, in full, by the required Due Date shall constitute a
Campus Crest Triggering Event or HSRE Triggering Event, respectively, as provided in
Section 6.1(a) and Section 6.3(a), respectively, unless such default is
cured within the time periods provided therein, and shall be subject to the remedies set
forth in Article 6.

     (g) Enforceability of Provisions. THE MEMBERS ACKNOWLEDGE AND AGREE THAT, UNDER THE
CIRCUMSTANCES EXISTING AS OF THE DATE HEREOF, THE REMEDIES PROVIDED FOR IN THIS
SECTION 3.6 ARE FAIR AND REASONABLE AND DO NOT CONSTITUTE A FORFEITURE OR PENALTY.
THE MEMBERS FURTHER ACKNOWLEDGE AND AGREE THAT THEY HAVE BEEN PROVIDED WITH THE OPPORTUNITY
TO CONSULT WITH INDEPENDENT COUNSEL WITH RESPECT TO THE PROVISIONS OF THIS
SECTION 3.6 AND AGREE AND COVENANT NOT TO CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY SUCH REMEDY AS A PENALTY, FORFEITURE OR OTHERWISE IN ANY COURT OF LAW OR EQUITY AND/OR
ARBITRATION (OR OTHERWISE).

     3.7 Operating Deficits; Necessary Cost Loans and Necessary Cost Capital Contributions.

     (a) The Members hereby agree that notwithstanding anything in this Agreement to the
contrary, if either Campus Crest or HSRE reasonably determines that the available funds of
the Company (including unfunded Mandatory Capital Contributions) are insufficient to pay any
Necessary Costs (as hereinafter defined) and such deficiency is not caused by a Member
failing to make a Mandatory Capital Contribution, such Member (the “Funding Member”) shall
have the right, but not the obligation, to make an Necessary Cost Capital Contribution to
the Company (“Necessary Cost Capital Contribution”) in an amount sufficient to pay such
Necessary Costs without the Approval of any other Member; provided, however, that nothing
contained in this Section 3.7 shall entitle any Member or the Campus Crest
Guarantors to make Necessary Cost Capital Contributions in lieu of their respective
obligations to fund any Required Amount, including without limitations, Cost Overruns under
this Agreement, the Development Agreement or the Completion and Cost Overrun Guaranty. Any
Member making a Necessary Cost Capital Contribution shall give ten (10) days written notice
(“Necessary Contribution Notice”) to the other Members prior to each Necessary Cost Capital
Contribution, unless immediate funding is necessary to prevent or ameliorate an emergency
that will result in substantial damage to the Development Project and/or Property or bodily
injury to any Person at or about the Development Project and/or Property as reasonably
determined by the Funding Member, in which case

11

 

the Funding Member shall give such notice to the other Members promptly following such
Necessary Cost Capital Contribution. Each Necessary Contribution Notice shall set forth the
amount of any Necessary Cost Capital Contribution, the due date such Necessary Cost Capital
Contribution was made (or the date made in the case of an emergency funding), and the
purpose of such Necessary Cost Capital Contribution.

     (b) Within ten (10) days after receipt of the Necessary Contribution Notice, the Member
not initiating the Necessary Cost Capital Contribution (i.e., Campus Crest or HSRE, as the
case may be) (the “Non-Funding Member”) shall have the right, but not the obligation, to
fund an amount up to its Participating Percentage of the Necessary Cost Capital
Contribution.

     (c) If the Non-Funding Member funds any portion of such amount within ten (10) days
after receipt of the Necessary Contribution Notice, then (i) such funded amount shall be
distributed to the Funding Member if the Funding Member funds more than its Participating
Percentage of the total amount funded by both Members, and (ii) the amounts funded by both
Members (reduced by any amount reimbursed to the Funding Member under Section
3.7(c)(i)) shall be treated as Capital Contributions, subject to Section 3.7(d)
below.

     (d) In the event a Non-Funding Member does not fully fund its Participating Percentage
of the Necessary Cost Capital Contribution within ten (10) days from the date of the
Necessary Contribution Notice, then that portion of the Funding Member’s Necessary Cost
Capital Contribution constituting the Excess Amount (as defined below) shall constitute a
loan to the Company (“Necessary Cost Loan”), which loan shall bear interest at an annual
rate which is the higher of (i) fourteen percent (14%) per annum and (ii) five hundred
(500) basis points over the Prime Rate, adjusting when and as the Prime Rate adjusts, and
shall be repaid prior to any Distributions under Article 4 or Article 12.
For purposes hereof, the “Excess Amount” shall mean (i) the total Necessary Cost Capital
Contribution funded by the Funding Member (reduced by any amount reimbursed to the Funding
Member under Section 3.7(c)(i)), minus (i) the Equity Portion. The Equity Portion
means (i) the quotient of (x) the amount (if any) funded by the Non-Funding Member, divided
by (y) the Participating Percentage of the Non-Funding Member, multiplied by (ii) the
Participating Percentage of the Funding Member. To illustrate, if the Participating
Percentages of HSRE and Campus Crest were ninety percent (90%) and ten percent (10%),
respectively, and HSRE funded a Necessary Cost Capital Contribution of $100 and Campus Crest
timely funded only $5, then (x) such $5 would be distributed to HSRE under Section
3.7(c)(i), (y) the $5 funded by Campus Crest would constitute a Necessary Cost Capital
Contribution, and (z) $45 of the amount funded by HSRE would be treated as an Necessary Cost
Capital Contribution. The remaining $50 funded by HSRE would be treated as a Necessary Cost
Loan.

     (e) For purposes hereof, the term “Necessary Costs” shall mean any amount in excess of
the costs required to be funded under Sections 3.2, 3.3, and 3.4
hereof, including without limitation, an expenditure which a Member reasonably determines in
good faith to be needed to preserve the physical integrity, safety and value of a Property,

12

 

including, without limitation, an expenditure which a Member, in good faith, determines
to be necessary to (i) to address health or safety concerns of Tenants, (ii) to pay
maintenance, taxes or insurance on a Property, (iii) to pay, or discharge any liens or
encumbrances on the Project other than loans or encumbrances that are not otherwise in
default, or create a default, under a Construction Loan, and/or (iv) to cure or otherwise
avoid any default occurring under any agreement entered into by the Company or which would
otherwise be binding upon the Properties in any respect (including, without limitation, any
construction or loan documents, Leases, management agreements or other agreements binding
upon the foregoing parties); provided, however, that in no event shall the payment of any
fees to a Member or its Affiliate be deemed a Necessary Cost.

     3.8 Obligations of Campus Crest Guarantors. The Campus Crest Guarantors shall have
the obligation to guarantee the completion of a Development Project and Cost Overruns with respect
to a Development Project as set forth in the Completion and Cost Overrun Guaranty Agreement
attached hereto and incorporated herein by reference as Exhibit L.

     3.9 Organizational Legal Expenses. In the event the Funding Conditions are satisfied,
the Company will pay the legal expenses incurred by HSRE and Campus Crest with respect to
negotiation and preparation of this Agreement, including, without limitation, any documents
attached as exhibits hereto up to a cap of $85,000 for the legal expenses owed to HSRE’s counsel
and $27,500 for the legal expenses owed to Campus Crest’s counsel (including local counsel retained
by Campus Crest); provided, however, that in the event either Member’s legal costs shall exceed the
cap, but the other Member’s legal fees are below its applicable cap, then the Company shall pay the
portion of the Member’s legal expenses in excess of the cap up to the aggregate of the caps of both
Members. Except as provided above, any legal expenses in excess of a Member’s respective cap shall
be borne by the Member whose counsel exceeded the cap. In the event the Funding Conditions are not
satisfied, then each Member shall be liable for its own legal expenses related to the Properties
and this Agreement. The Company shall pay any and all legal, accounting, loan, brokers and similar
fees and expenses incurred in connection with the closing of the purchase, lease and financing of
the Properties and shall allocate such costs among the Properties as determined by the Members.

ARTICLE 4

DISTRIBUTIONS TO MEMBERS

     4.1 Distribution of Net Cash Flow.

     (a) Operating Cash Flow, if any, shall be applied and distributed on a quarterly basis
in the following order of priority:

     (i) First, to the Members in proportion to and to the extent of the outstanding
principal amount of, and any accrued but unpaid interest on, any Necessary Cost
Loans made by the Members pursuant to Section 3.7 (interest on such loans
being paid prior to principal);

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     (ii) Second, to Developer and the Campus Crest Guarantors, as applicable, to
the extent of the Reimbursement Amount, if any, as set forth in Section
3.4(b)(ii);

     (iii) Third, to the Members, pro rata, in proportion to and in accordance with
their respective Participating Percentages, until HSRE has received cumulative
Distributions constituting an 11% Cash on Cash Return (not taking into account any
loans made by HSRE and payments received thereon);

     (iv) Fourth, seventy-five percent (75%) to HSRE and twenty-five percent (25%)
to Campus Crest, until HSRE has received cumulative Distributions constituting a 15%
Cash on Cash Return (not taking into account any loans made by HSRE and payments
received thereon); and

     (v) Thereafter, the balance, fifty percent (50%) to HSRE and fifty percent
(50%) to Campus Crest.

     (b) Capital Proceeds, if any, shall be applied and distributed in the following order
of priority:

     (i) First, to the Members in proportion to and to the extent of the outstanding
principal amount of, and any accrued but unpaid interest on, any Necessary Cost
Loans made by the Members pursuant to Section 3.7 (interest on such loans
being paid prior to principal);

     (ii) Second, to the Members, pro rata, in proportion to and to the extent of
the Net Invested Capital balances of such Member;

     (iii) Third, to the Members, pro rata, in proportion to and in accordance with
their respective Participating Percentages, until HSRE has received cumulative
Distributions constituting an eleven percent (11%) Internal Rate of Return (not
taking into account any loans made by HSRE and payments received thereon);

     (iv) Fourth, seventy-five percent (75%) to HSRE and twenty-five percent (25%)
to Campus Crest, until HSRE has received cumulative Distributions constituting an
eighteen percent (18%) Internal Rate of Return (not taking into account any loans
made by HSRE and payments received thereon); and

     (v) Thereafter, the balance, fifty percent (50%) to HSRE and fifty percent
(50%) to Campus Crest.

     4.2 Timing of Distributions/Prohibition against Reinvesting Proceeds. Operating Cash
Flow shall be distributed to the Members within fifteen (15) days following the close of each
calendar quarter, and any Capital Proceeds shall be distributed within thirty (30) days after
receipt thereof, unless otherwise Approved by the Executive Committee. Any Operating Cash

14

 

Flow and Capital Proceeds with respect to a particular Property shall not be reinvested,
contributed to any other Subsidiary, or used or reserved for payment of any costs or expenses
relating to any Property other than the Property which generated such Operating Cash Flow or
Capital Proceeds without the Approval of the Executive Committee. The foregoing priorities of
application of Net Cash Flow are for the benefit of the Members only and not for the benefit of any
third party or creditor of the Company or of any Member, and neither the Company nor any Member
shall be liable or responsible to any third party or creditor of the Company or of any Member for
any deviation from such priorities.

     4.3 Withholding. If required by either (i) the Code or (ii) by the laws of any State
or local government of the United States, the Company and each of its Subsidiaries will withhold
any required amount from Distributions to a Member or Distributions to the Company or a Subsidiary,
as the case may be, for payment to the appropriate taxing authority. Any amount so withheld from
either Member will be treated as a Distribution by the Company to such Member. Each Member agrees
to timely file any agreement that is required by any taxing authority in order to avoid any
withholding obligation that would otherwise be imposed on the Company.

     4.4 Clawback. If upon liquidation of the Company, the Members have not received
Distributions in an amount which results in each Member receiving an 11% Internal Rate of Return
(not taking into account any Incentive Distributions, loans made to the Company or either Member by
HSRE or Campus Crest and interest and principal payments received by the Member thereon, including,
without limitation, Necessary Cost Loans (the amount of the shortfall shall be referred to herein
as the “Distribution Shortfall”)), then Campus Crest shall be obligated to contribute to the
Company the lesser of: (i) the amount of Incentive Distributions received by Campus Crest, and (ii)
the Distribution Shortfall. Any such payment required by Campus Crest shall be made within ten
(10) days after the final Distribution of liquidating proceeds is made to the Members, and such
payment obligation of Campus Crest shall be added to the Campus Crest Required Amount for all
purposes hereunder. Any amount contributed to the Company by Campus Crest under this Section
4.4 shall be immediately distributed to the Members in accordance with Section 4.1(b)
and shall not be treated as a Capital Contribution or loan by Campus Crest hereunder.

     4.5 Other Compensation. Except as otherwise expressly provided in this Agreement and
in the Property Management Agreement, the Construction Agreement or the Development Agreement, or
with the written Approval of all Members, no Member or Affiliate of a Member will be entitled to
any salary or other form of compensation for services rendered to the Company.

ARTICLE 5

MANAGEMENT

     5.1 Management of Company Affairs.

     (a) General. Subject to the provisions of this Agreement, the Members shall be
responsible for the management of the Company’s business and affairs. Except as

15

 

otherwise provided herein, any action taken by HSRE or Campus Crest in accordance with
the terms of this Agreement shall constitute the act of and serve to bind the Company.
Subject to the limitations set forth herein, Campus Crest shall be responsible for the
day-to-day management of the Company’s business and affairs, shall be entitled to execute
agreements on behalf of the Company that will serve to bind the Company and shall devote
such time and effort to the Company as is appropriate in light of all facts and
circumstances; provided, however, that notwithstanding any other provision hereof, all
decisions and actions described in Section 5.2 shall require the Approval of the
Executive Committee. In addition, notwithstanding Section 5.5 and the limitations
of the Annual Business Plan and Annual Operating Budget for the Properties, Campus Crest
shall have the authority at any time or from time to time in an emergency situation to take
any action on behalf of the Company without obtaining the prior Approval of any Member if
such action is, in Campus Crest’s reasonable judgment, necessary or advisable to preserve or
protect the assets of the Company from imminent physical damage or to prevent injury to any
Person. Neither Campus Crest nor HSRE shall be liable to the Company or any Member for any
act or omission performed or omitted pursuant to authority granted by this Agreement;
provided that such limitation of liability shall not apply to the extent the
act or omission was attributable to fraud, gross negligence, or willful misconduct.

     (b) Responsibilities of Campus Crest. Without limiting the generality of
Section 5.1(a) above, the responsibilities of Campus Crest shall include, but are
not limited to, all of the following:

     (i) oversee the performance of the TRS, Developer, General Contractor and the
Property Manager in the performance of their respective responsibilities under the
Development Agreements, Construction Agreements and Property Management Agreements;

     (ii) use reasonable efforts to satisfy the Funding Conditions for the
acquisition and development of each Property;

     (iii) sourcing and securing the potential acquisition of Properties and
Development Projects;

     (iv) oversee the development of a Development Project and negotiate and
administer, on behalf of the Company, all contracts of the Company and its
Subsidiaries;

     (v) liase with local authorities on matters relating to the Properties;

     (vi) implement all Major Decisions Approved by the Executive Committee;

16

 

     (vii) supervise the operation of the Properties in a prudent manner and
establish appropriate marketing programs for the Properties, subject to the Annual
Business Plan and Operating Budget;

     (viii) establish and maintain a sound financial accounting system for the
Company and each of its Subsidiaries;

     (ix) institute and maintain adequate internal fiscal controls for the Company,
its Subsidiaries and each Property through commonly accepted budgeting, accounting
procedures and timely financial reporting in a manner consistent with the Annual
Business Plan and Annual Operating Budget;

     (x) cause the TRS and Property Manager to conform the operations of each
Property to and comply with all applicable Laws (including those pertaining to
licensing and customs); and take all steps necessary to ensure that all licenses and
certificates necessary to operate each Property is maintained at all times, without
interruption;

     (xi) cause the Property Manager to, consistent with the terms of the Leases and
prudent practices, endeavor to maintain the Properties as a reasonably safe and
secure environment, promptly notify the Company and HSRE of any security risks or
issues related to any Property that become known to Campus Crest, and attempt to
rectify or remedy promptly such risks or issues to the extent Company funds are
available for such purpose; and

     (xii) with respect to each Development Project, during the final thirty (30)
days of each construction warranty, whether or not falling within the term of the
Development Agreement and notwithstanding the expiration of the term of the
Development Agreement, use commercially reasonable efforts to cause the General
Contractor (and if appropriate, the Architect or another consultant) to conduct an
inspection of all systems, components and other work covered by such construction
warranty period, so as to identify and file any and all potential claims thereunder.

     (c) Material Change in Control. If a Campus Crest Material Change in Control
(as defined below) occurs, Campus Crest shall send Notice thereof to HSRE within ten (10)
days after such occurrence (the failure to send such Notice being a material breach of this
Agreement). In the event of a Campus Crest Material Change in Control, HSRE shall have the
right as of the date which is thirty (30) days after the date of the Campus Crest Material
Change in Control (the “Campus Crest Change in Control Effective Date”) to pursue any of the
remedies set forth in Section 6.2; provided, however, if a Material Change in
Control occurs under clause (B) below and HSRE Approves a proposed replacement of a Campus
Crest Key Person(s) prior to the Campus Crest Change in Control Effective Date, no Campus
Crest Triggering Event shall be deemed to have occurred; and provided further if the Campus
Crest Material Change in Control was caused by the death or legal disability of a Campus
Crest Key Person (and

17

 

HSRE has not Approved a replacement as provided above), then HSRE shall only have the
right to pursue the remedies set forth in Section 6.2(a) through Section 6.2(d).
For purposes of this Agreement, a Campus Crest Material Change in Control shall be deemed to
have occurred only if (A) Michael S. Hartnett (“Hartnett”) and Ted W. Rollins (“Rollins”
and, together, with Hartnet, the “Campus Crest Key Persons”) (or members of their
Immediately Family) cease to possess, in the aggregate, more than fifty percent (50%) of the
direct or indirect ownership interests in the following entities: (i) Campus Crest Group,
LLC, a North Carolina limited liablity company; (ii) Campus Crest Development, LLC, a North
Carolina limited liablity company; (iii) Campus Crest Properties, LLC, a North Carolina
limited liablity company; and (iv) Campus Crest; or (B) the Campus Crest Key Persons no
longer possess more than fifty percent (50%) of the direct or indirect voting power or no
longer directly or indirectly Control each of the following entities: (i) Campus Crest
Group, LLC, a North Carolina limited liablity company; (ii) Campus Crest Development, LLC, a
North Carolina limited liablity company; (iii) Campus Crest Properties, LLC, a North
Carolina limited liablity company; and (iv) Campus Crest.

     (d) Related Party Matters. Campus Crest shall not employ, or permit any other
Person to employ any funds or assets of the Company in any manner other than for the
exclusive benefit of the Company. Except as Approved by the Executive Committee, the
Company shall not pay fees or any other amounts to Campus Crest or any Affiliate as
consideration for the performance of its duties as such. Campus Crest may designate one or
more of its Affiliates, agents or employees to carry out its duties and responsibilities,
provided, however, such delegation shall in no manner diminish (or be deemed to diminish),
or relieve (or be deemed to relieve) Campus Crest of any obligations of Campus Crest
hereunder. Each Member shall have the right to submit a proposal to the Company and the
other Members to provide services that would otherwise be provided for the Company by a
third party. However, except for the Property Management Agreement, Construction Agreement
and the Development Agreement, no Member (or its Affiliates) shall receive any fees or
compensation from the Company (or any Subsidiary) (including, without limitation, for the
performance of any services relating to the development, operation, renovation, maintenance,
sale, financing, or refinancing of the Properties), unless the terms and documentation with
respect to such services have been Approved in advance by HSRE and Campus Crest. With
respect to any Related Party Agreement (as defined below), the Member who is not a party to
such Related Party Agreement (or whose Affiliate is not a party to such Related Party
Agreement) shall have the unilateral right to exercise and enforce any and all of the
Company’s rights under such Related Party Agreement. For purposes hereof, the term “Related
Party Agreement” shall mean any contract or agreement between the Company (or a Subsidiary)
and a Member (or an Affiliate of such Member) including, without limitation, any agreement
for the performance of any services with respect to the Properties or the sale or
refinancing of the Properties.

     5.2 Major Decisions. Notwithstanding the other provisions of this Agreement, neither
Campus Crest nor any manager, officer, employee or agent thereof shall have the authority on behalf
of the Company or any Subsidiary to take any action, make any decision,

18

 

expend any sum or suffer any obligation if to do so would constitute a Major Decision without
first obtaining the Approval of the Executive Committee. For these purposes, each of Campus Crest
and HSRE shall from time to time designate their respective Member representatives, each of whom
shall be authorized to act on behalf of such Member (all four appointed individuals shall be
referred to herein as the “Executive Committee”). The two (2) individuals initially authorized to
act on behalf of Campus Crest shall be Michael S. Hartnett and Ted W. Rollins. The two (2)
individuals initially authorized to act on behalf of HSRE shall be Stephen Gordon and Christopher
Merrill. Any representative appointed to the Executive Committee shall have the right to propose a
Major Decision. The representatives of Campus Crest and HSRE shall meet either by teleconference
(upon the agreement of Campus Crest and HSRE) or at the principal office of the Company (or at such
other location as Campus Crest and HSRE may agree upon) on the request of any Member upon seven (7)
business days’ prior written notice to (i) all of the individuals then authorized to act on behalf
of the other Member and (ii) all of the parties that are to receive notice under Section
13.8 on behalf of such Member. Any and all decisions of the Executive Committee shall require
the approval of not less three (3) of the four (4) members of the Executive Committee. The failure
of Campus Crest or HSRE to participate in any such meeting after confirmation of receipt of notice
whether by teleconference or otherwise, shall be deemed to constitute the written approval of such
Person of the proposed Major Decision. Any matters independently constituting Major Decisions
shall be deemed approved by the Executive Committee pursuant to this Section 5.2 if
included in a Budget approved by the Executive Committee in accordance with this
Section 5.2. As used herein, “Major Decision” means any decision proposed by a Member or
member of the Executive Committee to do or take any of the following actions:

     (a) Any Capital Event;

     (b) The adoption of (or Approval of any modifications to) the Annual Business Plan or
Annual Operating Budget;

     (c) Entering into, modifying or enforcing the rights of the Company under any Material
Contracts (as defined below). For purposes of this agreement, a Material Contract shall
mean any written agreement relating to (i) any Major Decision, or (ii) the development,
operation, maintenance, management, lease (excluding tenant leases), or marketing of all or
any portion of the Properties and/or any other asset of the Company, if (i) the services for
such contract are not provided for in the Annual Operating Budget, or (ii) such contract
requires the approval of the Owner under the Property Management Agreement, Construction
Agreement, Development Agreement or other Related Party Agreement or (iii) the contract or
agreement obligates the Company to make aggregate payments in excess of Twenty-Five Thousand
Dollars ($25,000). Notwithstanding the foregoing, change orders made by the General
Contractor where Owner’s consent is not required pursuant to the terms and conditions of the
Development Agreement shall not constitute a Major Decision hereunder;

     (d) The acquisition of any real or personal property other than as set forth in the
Annual Operating Budget and entering into any material license agreement, reciprocal
easement agreement, conditions, covenants and restrictions, or other similar agreements

19

 

or easements materially affecting any portion of the Properties or title thereto other
than as set forth in the Review Items Approved by HSRE in connection with a Development
Project;

     (e) After receipt by Campus Crest of the IC Approval Notice, all decisions and actions
of the Company with respect to Entitlements, changes in zoning and governmental approvals
with respect to a Property other than as set forth in the Review Items Approved by HSRE in
connection with a Development Project;

     (f) (i) The creation, assumption, incurring or consent to or release of any charge,
mortgage, deed of trust, pledge, encumbrance, lien or security interest of any kind upon any
property or assets of the Company; (ii) any interest rate “swap” agreement or similar
interest rate hedge or interest rate protection agreement; (iii) any loan, guaranty,
accommodation, endorsement or any other extension or pledge of credit to any Person; and
(iv) the documentation in connection with the foregoing and the exercise of any rights and
remedies with respect thereto;

     (g) Distribution of Operating Cash Flow less frequently than quarterly or Capital
Proceeds other than promptly within thirty (30) days receipt thereof;

     (h) Other than with respect to Bradley Arant Rose & White LLP and Easley, Endres,
Parkhill & Brackendorff, P.C. (which firms shall be deemed Approved by the Executive
Committee as of the date of this Agreement), appointing or replacing attorneys (other than
the appointment of attorneys to handle eviction or collection matters with respect to the
Properties), accountants, management consultants, bankers, engaging agents, architects,
engineers, environmental consultants or other independent contractors;

     (i) Establishing working capital and other reserves by or on behalf of the Company or
any Subsidiary (to the extent not set forth in the Annual Operating Budget), and determining
the amount of distributable Net Cash Flow;

     (j) Changing accounting policies, or approving, publishing or distributing, other than
to an existing or prospective lender or purchaser, audited or unaudited accounts of the
Company or any Subsidiary except to the extent required by Law or in the ordinary course of
business with respect to the preparation of consolidated information for the financial
statements of the parent or Affiliates of Campus Crest;

     (k) Any decisions and actions with respect to any tax matters, including, without
limitation, tax elections and other actions taken by Campus Crest in its capacity as tax
matters partner for the Company to the extent permitted by Law;

     (l) Permit the Company to take any action, or refrain from taking any action which, or
the effect of which, would constitute or result in the occurrence of a REIT Prohibited
Transaction (as defined below);

     (m) Review and Approve to file all tax returns of the Company and/or its Subsidiaries
within fifteen (15) days of receipt thereof;

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     (n) Indemnifying and advancing expenses in relation to any claim for indemnification to
any Member, Affiliate, agent, advisor, contractor, co-venturer, co-partner, co-shareholder
or investee company, partnership or other entity except to the extent permitted under
Article 7, the Property Management Agreement, Construction Agreement, Development
Agreement and/or any other Related Party Agreement;

     (o) The settlement, compromise, submission to arbitration or any other form of dispute
resolution, or abandonment of any claim, cause of action, liability, debt or damages, due or
owing to or from the Company, the enforcement or defense of suits, legal proceedings,
administrative proceedings, arbitration or other forms of dispute resolutions, and the
incurring of legal expenses, where the amount involved is reasonably expected to exceed
Twenty Five Thousand Dollars ($25,000);

     (p) (i) The filing or the consent by answer or otherwise to the filing of a petition
for relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium
or other similar law of any jurisdiction, (ii) the convening of a meeting of creditors or
the making or proposing of any arrangement or composition with, or any assignment for the
benefit of, its creditors, or the pursuing of any similar procedure under any applicable
Law, or (iii) the admission in writing of the inability to pay, or the refusal generally to
pay, debts as they become due;

     (q) Except to the extent provided herein, the issuance of additional Membership
Interests to an existing Member or other Person, voting rights, rights to Distributions,
warrants, options, securities convertible into Membership Interests or other rights to
acquire ownership interests in the Company or any Subsidiary; and the admission of any
Person as a Member in the Company or as a holder of equity of a Subsidiary;

     (r) Any merger, reorganization, recapitalization or similar transaction involving the
Company or any Subsidiary;

     (s) The formation of any Subsidiary and the ownership structure of Subsidiary, and the
terms and provisions of the organizational documents and governing agreements of such
entity;

     (t) Changing the name of the Company or any Subsidiary, other than as required by Law,
or changing the registered office or, registered agent of the Company;

     (u) Upon the liquidation of the Company, the appointment of one or more Persons to act
as the liquidator of the Company, and if Campus Crest, HSRE or any Affiliate thereof shall
be appointed as liquidator of the Company, all acts and deeds taken thereby in the
furtherance of the liquidation of the Company;

     (v) Subject to Section 13.19, the disclosure of confidential information
relating to financial matters, other than to existing or prospective lenders or purchasers

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Approved by HSRE and Campus Crest; and the disclosure of confidential information
relating to the Members; and any publicity, media communications or other public
announcements with respect to the Company or the Properties (other than with respect to
routine public relations and communications made by each Property in the ordinary course of
business); and

     (w) Any decision requiring the Approval of the Company or its subsidiaries under the
Development Agreement or any other Related Party Agreement; and

          Approval of the Executive Committee shall be evidenced by either the execution of a writing by
the required number of members of the Executive Committee or by a writing executed by an officer of
each of HSRE and Campus Crest, with any such writing being signed in counterparts.

     5.3 Property Management Agreement. Immediately after the satisfaction of the Funding
Conditions for each Property, the Company or the Property Owning Subsidiaries owning each Property
shall each enter into a Property Management Agreement with the Property Manager in the form
attached hereto as Exhibit G (completion of which shall be subject to HSRE Approval). The
Members hereby Approve The Grove Student Properties, LLC, as the Property Manager.

     5.4 Notice of Certain Developments. Each Member shall promptly notify the other
Member after such Member receives notice or has knowledge thereof, of (i) a default or alleged
default by the Company or a Property Owning Subsidiary under any material contract to which it is a
party; (ii) a default or alleged default by the Property Manager or Developer, Campus Crest or any
Affiliate of any such party under any Property Management Agreement, Construction Agreement or
Development Agreement; (iii) any threatened or pending litigation or investigation concerning the
Company or the Properties of which such Member has actual knowledge; or (iv) any act concerning the
Company, the Properties or any Subsidiary which constituted or would constitute a violation of Law.
The Members shall keep one another informed on a reasonably current basis concerning any such
matter of which Notice is required to be given.

     5.5 Annual Business Plan and Operating Budget.

     (a) Campus Crest shall prepare for the Approval of the Executive Committee, no later
than November 1 of each Fiscal Year (except for the 2009 Fiscal Year, no later than March
31, 2009), the Annual Business Plan for each Property for the next Fiscal Year, which shall
include the following:

     (i) A narrative description of any activity proposed to be undertaken;

     (ii) A detailed operating budget (“Annual Operating Budget”), including
schedules of projected Operating Cash Flow and projected sources and uses of funds
for such Fiscal Year, all projected operating costs and capital expenditures and
administrative expenses, and a schedule of projected operating income or deficits,
as the case may be;

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     (iii) A leasing plan indicating, among other things, recommendations for
achieving market rentals for Leases and minimum acceptable terms for Leases at the
Properties;

     (iv) A description of proposed construction, including projected dates for
commencement and completion and capital expenditure requirements; and

     (v) Such other information, including a description of plans, contracts,
agreements, governmental approvals and other matters, as may be necessary or
reasonably in order to inform the Executive Committee of all matters relevant to the
development, operation, management and/or sale of the Properties or any portion
thereof, and to otherwise allow the Executive Committee to make an informed decision
with respect to the approval of the Annual Business Plan and Annual Operating
Budget.

     (b) If the Executive Committee does not approve an Annual Operating Budget for any
Fiscal Year prior to the commencement of such Fiscal Year, then, until the Executive
Committee shall agree upon an Annual Operating Budget for such year, the Annual Operating
Budget in effect for the immediately preceding Fiscal Year shall constitute the Annual
Operating Budget for such Fiscal Year, except that (i) any items or portions of the Annual
Operating Budget for such Fiscal Year upon which the Executive Committee agrees shall be
substituted for the corresponding items in the preceding year’s Annual Operating Budget,
(ii) with respect to all items of cost and expense that are not within the discretion of the
Company (including, for example, debt service, real property taxes, utilities, costs of
compliance with governmental requirements, contractually required increases and all
expenditures required under the Management Agreement or any Lease), the actual amount of
each such item shall be substituted for the amount of such item set forth in the preceding
year’s Annual Operating Budget, and (iii) with respect to items of operating costs and
expenses that are within the discretion of the Company and which have not been authorized in
accordance with the terms of this Agreement, each such item of operating cost or expense
shall be not more than one hundred five percent (105%) of the amount of such items set forth
in the preceding year’s Annual Operating Budget; and (iv) the Annual Operating Budget shall
not include non-recurring capital expenditures in the prior year’s budget.

     5.6 Development of Project.

     (a) Delivery of Review Items. Without limiting the generality of
Section 5.1(b) above, Campus Crest shall submit to HSRE or their authorized
designees such agreements, studies and other information or due diligence items
(collectively, the “Review Items”) as may be reasonably requested by HSRE in order for HSRE
to adequately evaluate a subject Development Project (which Review Items may include,
without limitation, those items described in Exhibit C hereto).

     (b) Limitations on Authority. Except as provided in Section 3.3(a),
the Company shall not make any expenditures of Company funds with respect to the

23

 

development of any Property, unless and until the Funding Conditions with respect to
such Property have been met. In the event the Funding Conditions for a Development Project
have been satisfied and subsequently there are any material changes in the Plans and
Specifications for an approved Development Project from that reflected by the Review Items
previously submitted by Campus Crest to, and Approved by, the Executive Committee, Campus
Crest shall be required to re-submit the modified or corrected Review Items to the Executive
Committee, and to obtain updated Approval prior to making any further expenditures relative
to said Development Project.

     (c) Development Agreement; Property Management Agreement; and Completion and Cost
Overrun Guaranty.

     (i) Immediately after the satisfaction of the Funding Conditions set forth on
Exhibit E with respect to each Property, the Company, the applicable
Property Owning Subsidiary and the Developer shall enter into a Development
Agreement in the form attached hereto as Exhibit F (the completion of any
blanks shall be subject to the Approval of the Executive Committee) with respect to
such Property. The obligations of the Developer shall be guaranteed by the Campus
Crest Guarantors to the extent provided for under the Development Agreement and/or
Completion and Cost Overrun Guaranty.

     (ii) Concurrently with the closing of an Additional Property, the Company or
the Property Owning Subsidiary owning the such Property shall enter into the
Property Management Agreement with the Property Manager in the form attached hereto
as Exhibit G (completion of which shall be subject to HSRE Approval). The
property management fee shall be equal to the sum of (i) three percent (3%) of gross
revenue and (ii) three percent (3%) of net operating income, unless otherwise agreed
to by the Members and as set forth in the applicable Property Management Agreement.

     5.7 Rights of HSRE. Notwithstanding any other provision hereof, (i) HSRE has the
right to propose from time to time any Major Decision and (ii) Campus Crest shall, at the written
request of HSRE, promptly bring to all the Members for their consideration and Approval such
proposed Major Decisions and any other proposed action that Campus Crest is authorized or required
to propose to the Members for Approval hereunder or under the Act.

     5.8 Meetings of the Members. The Company shall have quarterly meetings of the Members at
such time as shall be determined by the Members for the purpose of the transaction of any business
as may come before such meeting or discussing issues concerning the business of the Company which
may be raised by a Member. Special meetings of the Members, for any purpose or purposes, may be
called by either Member at any time. Meetings of the Members shall be held by teleconference or
otherwise at such place as shall be agreed to by the Members. Written notice stating the place,
day and hour of the meeting, indicating that it is being issued by or at the direction of the
person or persons calling the meeting, stating the purpose or purposes for which the meeting is
called shall be delivered no fewer than ten (10) nor more than sixty (60) days before the date of
the meeting. Campus Crest shall be responsible for conducting and

24

 

directing meetings of the Members unless such meeting has been called by HSRE, in which case
HSRE shall be responsible for conducting and directing such meeting.

     5.9 REIT Related Provisions.

     (a) The Members recognize that HSRE may be owned directly or indirectly by a real
estate investment trust (“HSRE REIT”), and that HSRE REIT must comply with a number of
restrictions under the Code to maintain its status as a real estate investment trust
(“REIT”) under Section 856 of the Code. HSRE acknowledges that it has examined the books
and records associated with the Property and has determined that the current operational
structure of the Property would allow HSRE REIT to qualify as a REIT. In the event Campus
Crest desires to modify the structural operations of the Properties or take any action not
provided for under an applicable Annual Business Plan or Annual Operating Budget, it will
present such proposed modification to the Executive Committee. If HSRE determines that the
proposed modification (x) would cause any of the income derived by the Company to fail to
qualify as “rents from real property” or as other qualifying income under Section 856(c)(2)
of the Code or (y) would otherwise cause HSRE REIT to fail to qualify as a real estate
investment trust under the Code, such modification shall not occur without HSRE’s Approval.
Without limiting the generality of the foregoing, Campus Crest shall not modify the
structure currently utilized to provide at the Property if HSRE determines that it would
cause the Company to derive “impermissible tenant service income” within the meaning of
Section 856(d)(3) of the Code without first presenting such proposed modification to the
Executive Committee and obtaining HSRE’s Approval.

     (b) The Company will explore alternatives to providing such services including, but not
limited to, a “Taxable REIT Subsidiary” (“TRS”) of HSRE REIT or an independent contractor
(as defined in Code Section 856(d)(3)) from whom neither the Company nor HSRE REIT derives
any income, directly or indirectly. In this regard, the Members hereby agree that if
requested by HSRE, the Company will form a wholly owned subsidiary that will elect to be a
Taxable REIT Subsidiary for the purposes of (i) providing any services to the tenants of the
Properties that could potentially cause any income from the Properties to be impermissible
tenant services income and/or (ii) operating any retail activities undertaken at the
Property. Upon the acquisition or development of an Additional Property, the Company (or a
Property Owning Subsidiary) and the TRS shall enter into a services agreement (the “Services
Agreement”) in substantially the same form to be attached hereto as Exhibit N
following the date of this Agreement and upon the review and approval of both Members,
whereby the TRS shall perform such services as set forth in the Services Agreement.

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ARTICLE 6

TRIGGERING EVENTS; REMEDIES

     6.1 Campus Crest Triggering Event. Each of the following shall constitute a Campus
Crest Triggering Event:

     (a) Any material failure by Campus Crest to perform its obligations under this
Agreement that is not cured to HSRE’s reasonable satisfaction within fifteen (15) days after
Notice of breach by HSRE regarding monetary default and within forty (40) days after Notice
of breach by HSRE regarding non-monetary default (provided that such cure period for a
non-monetary default by Campus Crest shall be extended for an additional period, not
exceeding an additional ninety (90) days, so long as Campus Crest is diligently pursuing the
cure of such default during such extended cure period);

     (b) Any material breach of a representation, warranty or covenant (i) by the Property
Manager under the Property Management Agreement so long as the Property Manager is an
Affiliate of Campus Crest; (ii) by the Developer under the Development Agreement, so long as
the Developer is an Affiliate of Campus Crest; (iii) by Campus Crest or its Affiliates under
the Non-Competition and Right of First Opportunity Agreement; (iv) by the General Contractor
under the Construction Agreement so long as the General Contractor is an Affiliate of Campus
Crest or (v) by Campus Crest or its Affiliates under any Related Party Agreement, in each
case in the event such material breach is not cured within any applicable grace period under
the applicable contractual agreement;

     (c) The failure by Campus Crest to obtain the Approval of HSRE prior to taking any
action requiring the Approval of HSRE hereunder; provided, however, that a Campus Crest
Triggering Event shall not be deemed to have occurred if Campus Crest fails to obtain the
Approval of HSRE prior to taking any action requiring HSRE Approval and such action is
ultimately Approved by HSRE after such action is taken;

     (d) RESERVED;

     (e) The failure by Campus Crest to fund, in full, any Required Amount under Article
3 including any grace period provided therein;

     (f) Any transfer or encumbrance of Campus Crest’s Membership Interest in the Company or
any portion thereof or any direct or indirect interest therein not permitted herein without
the Approval of HSRE; provided, however, that in the event that such transfer or encumbrance
does not cause any material harm to HSRE, Campus Crest shall have the right to cure such
breach to HSRE’s reasonable satisfaction within fifteen (15) days of Notice of breach by
HSRE;

     (g) Any Material Change in Control not Approved by HSRE under Section 5.1(c);
and

26

 

     (h) Any act of willful misconduct or fraud by Campus Crest concerning its obligations
under this Agreement or any act of willful misconduct or fraud by the Developer concerning
its obligations under the Development Agreement, the General Contractor concerning its
obligations under the Construction Agreement or by the Property Manager concerning its
obligations under the Property Management Agreement or by any Affiliate of Campus Crest
under any other Related Party Agreement.

     6.2 Remedies for Campus Crest Triggering Event. In addition to the remedies set forth
herein, upon the occurrence of a Campus Crest Triggering Event, and at any time thereafter after
the applicable period for cure has lapsed, if any, HSRE may, at its option, exercise any one or
more of the following remedies without the Approval of any other Member:

     (a) Cause the Company to market and sell the Properties to a third party for such
prices and on such terms as HSRE deems appropriate, without the need for Approval of Campus
Crest and without any right on the part of Campus Crest to purchase any of the Properties;

     (b) Dissolve the Company;

     (c) Exercise, in its sole discretion, the Company’s right to terminate (or otherwise
enforce any other remedy with respect to) the Property Management Agreement, the
Construction Agreement, the Development Agreement or any other Related Party Agreement
between the Company or any Subsidiary and Campus Crest, or any Affiliate of Campus Crest;

     (d) Replace Campus Crest as the Member vested with day-to-day management control of the
affairs of the Company as set forth in Section 5.1 pursuant to Section 6.5;
and

     (e) In the case of a Campus Crest Triggering Event under Section 6.1(h) by
Campus Crest only, purchase the Membership Interest of Campus Crest for an amount equal to
the Net Invested Capital of Campus Crest.

     6.3 HSRE Triggering Event. Each of the following shall constitute an HSRE Triggering
Event:

     (a) Any material failure by HSRE to perform its obligations under this Agreement that
is not cured to Campus Crest’s reasonable satisfaction within fifteen (15) days after Notice
of breach by Campus Crest regarding monetary default and within forty (40) days after Notice
of breach by Campus Crest regarding a non-monetary default (provided that such cure period
for a non-monetary default shall be extended for an additional period, not exceeding an
additional ninety (90) days, so long as HSRE as the case may be, is diligently pursuing the
cure of such default during such extended cure period);

     (b) The failure to fund, in full, any Required Amount under Article 3;

27

 

     (c) Any transfer or encumbrance of HSRE’s Membership Interest in the Company or any
portion thereof or any direct or indirect interest therein not permitted herein without the
Approval of Campus Crest; provided, however, that in the event that such transfer or
encumbrance does not cause any material harm to Campus Crest, HSRE shall have the right to
cure such breach to Campus Crest’s reasonable satisfaction within fifteen (15) days of
Notice of breach by Campus Crest; and

     (d) Any act of willful misconduct or fraud by HSRE concerning its obligations under
this Agreement.

     6.4 Remedies for HSRE Triggering Event. Upon the occurrence of a HSRE Triggering
Event, and at any time thereafter, after the applicable period for cure has lapsed, if any, Campus
Crest may, at its option, exercise any one or more of the following remedies without the Approval
of any other Member:

     (a) Cause the Company to market and sell any or all of the Properties to a third party
for such prices and on such terms as Campus Crest deems appropriate, without the need for
approval of HSRE and without any right on the part of HSRE to purchase any of the
Properties;

     (b) Dissolve the Company; or

     (c) In the case of a HSRE Triggering Event under Section 6.3(d) by HSRE only,
purchase the Membership Interest of HSRE for an amount equal to the Net Invested Capital of
HSRE.

     6.5 Replacement of Campus Crest as Day-to-Day Manager; Executive Committee Changes upon
.

     (a) In the event a Campus Crest Triggering Event, HSRE may elect, by delivery of ten
(10) days prior written notice thereof to Campus Crest, to replace Campus Crest as the
Member vested with day-to-day management control of the affairs of the Company or to admit
an Affiliate of HSRE in such capacity, effective as of the date of the occurrence of such
Campus Crest Triggering Event or Event of Withdrawal as hereinafter defined (the “Conversion
Date”). In the event HSRE exercises its rights under this Section 6.5(a), Campus
Crest or its successor-in-interest, as the case may be, shall promptly upon demand of HSRE
execute and deliver to the Company all documents that may be necessary or appropriate, in
the opinion of counsel of the Company, to effect the transfer of management control of the
day-to-day affairs of the Company and Campus Crest shall remain liable for all liabilities,
duties and obligations of Campus Crest arising prior to such transfer of rights. From and
after the Conversion Date (whether or not such conversion election is made by HSRE), Campus
Crest shall have no rights to participate in the management and affairs of the Company. In
addition, upon the occurrence of a Campus Crest Triggering Event, HSRE shall have the right,
by delivery of written notice thereof to Campus Crest, to direct all Executive Committee
members previously appointed by Campus Crest to immediately resign as Executive Committee
members as

28

 

of the date of occurrence of the Campus Crest Triggering Event and after the Campus
Crest Conversion Date, (i) Campus Crest shall have no right to appoint any Executive
Committee Members, (ii) HSRE shall have the right to appoint all Executive Committee
Members, (iii) HSRE shall have the right to reduce the size of the Executive Committee to
any number it desires in its sole and absolute discretion, and (iv) Campus Crest shall have
no right to vote on any Major Decisions or other matters relating to the Company or
otherwise make any decisions on behalf of the Company, including, without limitation,
exercising any right to sell the Properties pursuant to Article 9. Notwithstanding
anything in this Section 6.5 to the contrary, Campus Crest shall retain the right to
receive distributions of the Company Operating Cash Flow and Capital Proceeds pursuant to
Article 4 herein.

     (b) If HSRE terminates Campus Crest’s management rights as provided above, HSRE shall
be entitled to provide and perform, or retain another Person to provide and perform, the
facilities, personnel and services formerly performed by Campus Crest (or its Affiliate) and
HSRE or such Person shall be entitled to a reasonable rate of compensation for such services
and to reimbursement for all expenses reasonably incurred in connection therewith,
including, without limitation, the cost of facilities, supplies and personnel acquired, used
or retained exclusively for the Company and an allocable portion of HSRE’s or such Person’s
general and administrative expenses to reflect the value of shared facilities, supplies and
personnel.

     6.6 Other Remedies for Breach. The rights and remedies of the Members set forth in
this Agreement are neither mutually exclusive nor exclusive of any right or remedy provided by law,
in equity or otherwise. Subject to the dispute resolution provisions of Section 13.3, the
Members agree that all legal remedies (such as monetary damages), other than punitive damages as
well as all equitable remedies (such as specific performance) will be available for any breach or
threatened breach of any provision of this Agreement.

ARTICLE 7

INDEMNIFICATION

     7.1 General. The Company shall, but only to the extent of its assets, indemnify and
hold harmless each Member and each of their Affiliates and employees and the employees, officers,
agents and members of the Executive Committee of the Company, from and against any loss, liability,
expense, damage or injury suffered or sustained by him, her or it by reason of any acts, omissions
or alleged acts or omissions arising out of his, her or its activities within the scope of the
authority conferred on the respective Members, or the Person so appointed by this Agreement or by
law, including any judgment, award, settlement, reasonable attorneys’ fees and other costs or
expenses incurred in connection with the defense of any actual or threatened action, proceeding or
claim, and provided that the acts, omissions or alleged acts or omissions upon which such actual or
threatened action, proceedings or claims are based were not performed or omitted to be performed in
bad faith and did not constitute gross negligence or willful misconduct. The Company shall have
the right to assume the defense in any action or claim with respect to which indemnification is
claimed hereunder.

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     7.2 Insurance. The indemnification provisions of this Article 7 do not limit
the right of a Member or other Person to recover under any insurance policy maintained by the
Company or a third party. If a Person is or may be entitled to receive a payment under any such
insurance policy, (i) the insurance coverage shall be such Person’s first recourse and the Company
shall be obligated to make payment under this Article 7 only to the extent that the claim
is not fully covered by insurance, and (ii) to the extent that the Company makes any payment under
this Article 7, it shall be subrogated to the claims of such Person under the applicable
insurance policies. If, with respect to any liability against which indemnification is due under
Section 7.1, any Member or other Person receives an insurance policy payment which,
together with any indemnification payment made by the Company, exceeds the amount of such
liability, then such Member or other Person will immediately repay such excess to the Company.

     7.3 Approval of Payments. Prior to making any payment or advance under
Section 7.1, the Company shall give notice to all Members of the proposed payment and shall
provide the Members with such information as they may request to assess the Company’s obligation to
make such payment. If either Member objects to such payment within ten (10) days after receipt of
such notice, the Company shall submit the issue to arbitration under Section 13.3 and shall
make payment to the claimant only to the extent that the arbitrators determine payment to be due or
that the Members subsequently agree. As a condition to the right to indemnification under this
Agreement, each Person otherwise entitled to indemnification must execute and deliver to the
Company a written agreement to be bound by the decision of the arbitrator with respect to any claim
for indemnification. Such Person shall be a party to any such arbitration proceedings, whether or
not such person elects to appear therein.

     7.4 Indemnification by Member. If the Company is made a party to any litigation or
otherwise incurs any loss or expense as a result of or in connection with any Member’s personal
obligations or liabilities unrelated to Company business, such Member shall indemnify and reimburse
the Company for all such loss and expense incurred, including reasonable attorneys’ fees. The
liability of any Member pursuant to this Section 7.4 may be assessed against such Member’s
interest in the Company, including such Member’s right to receive Net Cash Flow, and any other
Distributions or payments from the Company; provided, however, the liability of a Member under this
Section 7.4 shall not be limited to such Member’s interest in the Company, but shall also
be enforceable against such Member personally. Nothing herein contained shall be deemed to imply
that any Person shall be a third party beneficiary of the terms of this Section 7.4 (which
terms shall inure solely to the benefit of the Company and the respective Members, as expressly set
forth in this Section 7.4).

ARTICLE 8

ACCOUNTING; REPORTING

     8.1 Fiscal Year. For income tax and accounting purposes, the Fiscal Year of the
Company will end on December 31 in each year (unless otherwise required by the Code).

     8.2 Accounting Method. For income tax purposes, the Company will use the accrual
method of accounting (unless otherwise required by the Code). For financial reporting purposes,

30

 

financial statements of the Company are required to be prepared in accordance with the
Generally Accepted Accounting Principles under U.S. Standards (“GAAP”). Campus Crest acknowledges
that the financial statements of HSRE will be required to be reported in accordance with GAAP, and
hereby agrees to promptly make available to HSRE (and cause the accountants for the Company to
deliver) any and all information relating to the Company, including without limitation books and
records, working papers and financial accounts, which may be requested by HSRE to cause the
financial statements of HSRE to be prepared in accordance with the provisions hereof. Any such
costs, as well as reasonable costs incurred by HSRE, including reasonable fees of the accountants
of HSRE, to adjust financial reports received by the Company to be prepared in accordance with the
provisions hereof, shall be borne by the Company.

     8.3 Determination and Allocation of Profits and Losses. For each Fiscal Year, Profits
and Losses of the Company will be determined and allocated to the Members as provided in
Exhibit B.

     8.4 Returns. Campus Crest will, at the Company’s expense, cause the preparation and
timely filing of all tax returns required to be filed by the Company and any Subsidiary pursuant to
the Code, as well as all other tax returns required in each jurisdiction in which the Company or
any Subsidiaries is required to file a tax return, all of which shall be subject to Approval of the
Executive Committee as described in Section 5.2 hereof. Campus Crest shall deliver a Form
K-1 to each of the Members, along with any other information relating to the Company in order for
the Members to file their respective tax returns by March 15 of each taxable year. Campus Crest
shall deliver copies of all tax returns to HSRE for its prior Approval, which delivery shall be
made no later than forty-five (45) days following the end of each tax fiscal year.

     8.5 Financial Statements and Reports to Members. The Company shall prepare and
provide financial statements and reports to each Member as follows:

     (a) Monthly Financial Statements. Campus Crest shall prepare an unaudited
balance sheet of the Company as of the end of each month of each Fiscal Year and unaudited
operating statements, and statements of cash flow for each calendar month showing the
Company’s results for the month and the year to date and compared to the applicable budget
set forth in the then approved Annual Business Plan and Annual Operating Budget. Each such
financial statement shall be prepared in accordance with GAAP (or such other accounting
principles Approved by HSRE) consistently applied and shall be certified to be true and
correct to the best of Campus Crest’s knowledge and belief. Copies shall be furnished to the
Members within twenty (20) days after the end of each calendar month. A form of such
financial statement is attached hereto as Exhibit I.

     (b) Annual Financial Statements. If requested by HSRE, Campus Crest shall, at
the Company’s expense, engage a firm of independent certified public accountants which is
Approved by HSRE, in which case the independent certified public accountants shall within
sixty (60) days after the end of each Fiscal Year (i) render their opinion on the balance
sheet of the Company as of the end of each Fiscal Year, and on

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the Company’s statements of income and cash flow for each Fiscal Year, as prepared by
Campus Crest, and (ii) render their report on the computations of Net Cash Flow for each
Fiscal Year made by Campus Crest and as to whether distributions thereof during such Fiscal
Year were in accordance with Sections 4.1 hereof. There shall be no requirement
that an audit be performed with respect to the Company, unless so requested by a Member, in
which case the costs and expenses of such audit shall be borne by the Company.
Notwithstanding the foregoing, HSRE shall have the right at any time to cause the Company to
cease using an independent accounting firm to prepare the foregoing financial statements, in
which case such statements shall be prepared by Campus Crest’s internal accounting
department.

     (c) Monthly Status Report. Campus Crest shall prepare (or cause the Property
Manager or Developer, as the case may be, to prepare) and distribute to the Members not less
often than monthly a status report on the Properties which shall contain as appropriate (i)
a description of the status of construction of the Properties in a form attached hereto as
Exhibit J, (ii) occupancy rates and impending lease expirations, (iii) a summary of
rental rates being charged, and (iv) any material deviations or expected deviations from all
Development Budgets and the Annual Business Plan and Operating Budget for each Property and
an explanation thereof.

     8.6 Books and Records. Campus Crest shall keep or cause to be kept complete and
accurate books and records with respect to the Company’s business and the accounts of the Members
in which shall be entered all matters relating to the business and operations of the Company,
including all income, expenditures, assets and liabilities thereof. The books and records of the
Company will be maintained at the Company’s principal office.

     8.7 Information; Cooperation with HSRE.

     (a) Each Member shall have complete and unrestricted access to the books and records of
the Company and Subsidiaries and to all information and documents relating to the Company or
its affairs, including the right to copy any or all thereof. A Member wishing to exercise
the right of access shall be required to give Campus Crest reasonable notice and to conduct
its examination during normal business hours in a manner that does not unreasonably
interfere with the operation of Campus Crest’s or the Company’s business, but shall be
subject to no other procedures, requirements or conditions. Campus Crest shall not be
entitled to keep any information related to the Company confidential from the Members. A
Member need not state the purpose of any request for information. The information available
to the Members shall include, without limitation, all information relating to the
development of a Development Project or operation of a Property or the Company’s financial
affairs under this Agreement, the Property Management Agreement, the Construction Agreement,
the Development Agreement and any other Related Party Agreements.

     (b) Without limiting the generality of Section 8.7(a), the Members hereby agree
that the Company and Campus Crest shall cooperate with HSRE or its designees or

32

 

representatives in delivering to the foregoing parties any information and documents
requested by such parties.

     8.8 Banking. The Company shall establish one or more bank or financial accounts for
the Company and for each Subsidiary. Campus Crest may authorize one or more individuals to sign
checks on and withdraw funds from such bank or financial accounts, and may place such limitations
and restrictions on such authority as HSRE shall Approve.

ARTICLE 9

SALE OF PROPERTIES; PURCHASE OPTION

     9.1 Right to Initiate Sale of Properties. At any time after twenty-four (24) month
anniversary of the Substantial Completion Date of the last Property to be developed by the Company
(the “Buy/Sell Trigger Date”), either Campus Crest or HSRE (the “Initiating Member”) shall have the
right to initiate the provisions of this Article 9 with respect to all of the Properties
owned by the Company, by delivering written notice (a “Buy/Sell Notice”) to the other Member (the
“Non-Initiating Member”) setting forth a price (the “Buy/Sell Price”) for all of the Properties;
The Members further agree that in the event HSRE and Campus Crest and/or their Affiliates shall
establish one or more other Portfolio Companies, the buy/sell provisions set forth in the operating
agreement of such Portfolio Companies shall be the same as set forth in this Agreement.

     9.2 Initiation and Elections.

     (a) The Non-Initiating Member shall have a period of forty-five days after the receipt
of the Buy/Sell Notice (the “Exercise Period”) within which to notify the Initiating Member
in writing (the “Reply Notice”) whether the Non-Initiating Member, in its sole discretion,
shall either (x) buy the entire Membership Interest of the Initiating Member for cash
pursuant to Section 9.2(b) below (“Purchase Option”), or (y) consent to the sale of
all of the Properties (or its ownership interest in the Company) to the Initiating Member at
one hundred percent (100%) of the Buy/Sell Price or to a third party for a cash purchase
price (before deduction of Selling Expenses) not less than ninety-five percent (95%) of the
Buy/Sell Price set forth in the Buy/Sell Notice (“Sale Option”).

     (b) If the Non-Initiating Member timely gives the Reply Notice electing the Purchase
Option, the purchase price for the Initiating Member’s Membership Interest (the “Initiating
Member Purchase Price”) shall be equal to the amount which would be distributed under
Section 4.1 to the Initiating Member if (i) the Properties were sold in a
hypothetical sale for a net price equal to the Buy/Sell Price, less Selling Expenses, (ii)
all of the Company’s liabilities were paid, in full, (iii) rents, taxes and other similar
items were pro-rated, (iv) the Company was liquidated, and (v) the remaining proceeds were
distributed in accordance with Section 4.1. For purposes hereof, Selling Expenses
shall mean transfer taxes, survey and title charges, state deed fees, recording fees to
clear title, documentary fees and taxes, if incurred and other closing costs customarily
incurred by the seller for property that is the subject of this Agreement and apportioned to
the seller

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in accordance with local customs. If the Non-Initiating Member is HSRE, Campus Crest
shall promptly provide HSRE with all information regarding the Company which is reasonably
available to Campus Crest and necessary to calculate the Initiating Member Purchase Price.
If the Non-Initiating Member timely gives the Reply Notice electing the Purchase Option
above, the Non-Initiating Member shall be conclusively deemed to have agreed to purchase,
and the Initiating Member shall be conclusively deemed to have agreed to sell, the entire
Membership Interest in the Company of the Initiating Member at the Initiating Member
Purchase Price.

     (c) If the Non-Initiating Member timely gives the Reply Notice electing the Sale
Option, the Non-Initiating Member shall be deemed to have irrevocably consented to the sale
of the Properties for a cash price equal to or greater than ninety-five percent (95%) of the
price set forth in the Buy/Sell Notice (it being acknowledged that such proceeds shall be
distributed in accordance with Section 4.1 hereof), or if the Initiating Member
elects to purchase the Membership Interest of the Non-Initiating Member, to sell its
Membership Interest to the Initiating Member for a purchase price based on one hundred
percent (100%) of the Buy/Sell Price calculated pursuant to Section 9.3 below. If
the Non-Initiating Member fails to give a Reply Notice prior to the expiration of the
Exercise Period, it shall be conclusively presumed that the Non-Initiating Member has
properly elected the Sale Option.

     9.3 Failure of Non-Initiating Member to Exercise Purchase Option; Marketing of
Properties.

     (a) If the Initiating Member delivers a Buy-Sell Notice and the Non-Initiating Member
elects (or is deemed to have elected) the Sale Option, then the Initiating Member shall have
the obligation to either (i) during the one hundred eighty (180) day period (“Sale Period”)
following the exercise or deemed exercise of the Sale Option to take all steps reasonably
necessary to complete the sale of the Properties to a third party for a cash price equal to
or greater than ninety-five percent (95%) of the Buy/Sell Price and on terms deemed
satisfactory to the Initiating Member in its sole discretion; provided, however, that in no
event shall the Initiating Member have the right to execute on behalf of the Company any
contract or documentation imposing personal liability on any Member or Affiliate thereof or
indemnifying the purchaser for any breaches of covenants, representations or warranties of
the Company beyond one year after the date of sale or the expiration of the relevant statute
of limitations, as applicable, or (ii) during the sixty (60) day period following the
exercise or deemed exercise of the Sale Option to deliver written notice to the
Non-Initiating Member stating its intention to purchase the Membership Interest of the
Non-Initiating Member for a cash price (the “Non-Initiating Member Purchase Price”) equal to
the amount which would be distributed under Section 4.1 to the Non-Initiating Member
if the Properties were sold at one hundred percent (100%) of the price set forth in the
Buy/Sell Notice (and all of the Company’s liabilities were paid, in full, and rents, taxes
and other similar items were pro-rated, and the Company was liquidated).

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     (b) If the Initiating Member delivers written notice to the Non-Initiating Member
electing to purchase the Membership Interest of the Non-Initiating Member, upon delivery of
such notice, the Initiating Member shall be obligated to purchase the Membership Interest of
the Non-Initiating Member and the Non-Initiating Member shall be obligated to sell its
Membership Interest to the Initiating Member for a cash price equal to the Non-Initiating
Member Purchase Price.

     (c) Any marketing of the Properties shall be done in a commercially reasonable manner,
and in the event the Initiating Member causes the Company or the Members to enter into any
term sheet, letter of intent or contract for the sale of the Properties, any such document
shall include customary confidentiality provisions requiring the third party to keep
information regarding the Company confidential and prohibiting the disclosure of any
information relating to the Company to any person other than its attorneys, advisors,
representatives and lenders.

     9.4 Releases; Consents.

     (a) If any Member properly elects to purchase the Membership Interest of the other
Member(s) and the selling Member(s) or any of its Affiliates (including the Developer) is a
guarantor or an indemnitor of any obligations of the Company or its Subsidiaries or is
otherwise personally liable thereon (“Recourse Obligations”), a condition precedent to the
closing shall be that the purchasing Member shall obtain a release of all such Recourse
Obligations, except for Recourse Obligations that arise out of acts or events which occur
simultaneously with or prior to the Selling Member’s transfer of its Membership Interest to
the purchasing Member; or if such a release is obtainable only with the payment of money by
any Member, the purchasing Member shall fully indemnify the selling Member and its
Affiliates with respect to any such obligations. Any such indemnity by the purchasing
Member shall be secured by its right to all Distributions by the Company (both with respect
to the purchased Membership Interest and with respect to all other Membership Interests of
the purchasing Member and its Affiliates). The purchasing Member and the selling Member
shall both use their reasonable best efforts to obtain any such releases without the payment
of money. A condition precedent to the closing shall also be that the Company shall have
obtained the consent of any lenders or other third parties required under applicable
documentation to which the Company is a party. The purchasing Member and the selling Member
shall both use their reasonable best efforts to obtain any such consents to the transactions
contemplated by this Article 9.

     (b) The Members further acknowledge and agree that if any Member properly elects to
purchase the Membership Interest of the other Member(s) and (a) the selling Member or any of
its Affiliates (including the Developer) are owed any fees under a Property Management
Agreement, Construction Agreement, Development Agreement or any other Related Party
Agreement and/or are entitled to reimbursement for any Pre-Development Costs under this
Agreement, then a condition precedent to the closing shall be that the Company pay to the
selling Member any such costs and fees under such agreements up to and through the closing
of such transaction; provided, however, that

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reimbursement for Pre-Development Costs shall be made only if the Member entitled to
such reimbursement agrees, in writing, not to acquire the Development Project(s) to which
such Pre-Development Costs relate (either on its own or with a third party).

     9.5 Liabilities; Indemnity. If a Member’s Membership Interest is purchased by another
Member pursuant to any provision of this Article 9, the purchasing Member shall indemnify,
defend and hold the selling Member, its directors, officers, shareholders, partners, members,
managers, employees and agents, or any of them harmless from any and all claims, demands, actions,
losses, liabilities, costs, or expenses (including reasonable attorneys’ fees) arising out of or in
connection with all obligations or liabilities of the Company, whether or not incurred or accrued
while the selling Member was a Member or after the date of consummation of the purchase and sale of
the selling Member’s Membership Interest, such liability to be capped at the sale price for the
Membership Interest sold by the amount of proceeds received by the selling Member to the purchasing
Member.

     9.6 Purchase of Initiating Member Interest; Closing. In the event a Member properly
elects to purchase the Membership Interests of the other Member(s) under this Article 9,
the closing of the sale shall be consummated on a date selected by the purchasing Member (“Buy-Out
Closing Date”), which date shall be not less than thirty (30) days and not more than one hundred
eighty (180) days after the exercise of by the purchasing Member of its right to purchase the
Membership Interest of the other Member(s). Notwithstanding the foregoing, if as of the Buy-Out
Closing Date, the purchasing Member has not received any applicable permits and/or approvals
required from third parties, including any existing lender of the Company or of the Property Owning
Subsidiaries, as a condition to the purchase and sale of the selling Member’s Membership Interest
to the purchasing Member, the Buy-Out Closing Date may be extended by the purchasing Member to not
less than ten (10) days after the date of receipt of all such required permits and approvals but in
no event beyond one hundred twenty (120) days after the exercise of the right to purchase. At the
closing, the purchasing Member shall pay the applicable purchase price by wire transfer of
immediately available funds to the account or accounts designated by the selling Member, or by
certified bank check. At the closing, the selling Member shall execute and deliver assignments,
instruments of conveyance or other instruments appropriate to convey the entire membership interest
of the selling Member to the purchasing Member, and shall deliver to the purchasing Member such
evidence as the purchasing Member may reasonably request showing that the membership interest being
sold is owned free and clear of any and all claims, liens and encumbrances of any kind or nature.

     9.7 Purchase of Loans. If there shall be any outstanding loans due from the Company
to the selling Member or any Affiliate thereof (which is not also an Affiliate of the purchasing
Member), such loans, including accrued and unpaid interest, shall be purchased at par or otherwise
repaid in full by the purchasing Member on the Buy-Out Closing Date. The selling Member shall
deliver and endorse without recourse to the purchasing Member each note or other instrument
evidencing such loans and all documents securing such loans.

     9.8 Remedies for Noncompliance. The requirements or obligations, if any, of any Member to sell or purchase an interest in the Company in accordance with the provisions of this Article 9 shall be enforceable, without limitation, by an action for specific performance, with the

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same force and effect and at least to the same extent as is permitted at law or in equity for
the specific performance of a contract relating to the purchase of real property or an interest
therein. In the case of a Member obligated to purchase an interest in the Company pursuant to this
Article 9 who fails to effect such purchase in accordance with the terms hereof (a
“Defaulting Purchaser”), if an order for specific performance against the Defaulting Purchaser is
not enforceable due to the lack of funds or credit by the Defaulting Purchaser or the selling
Member elects not to pursue such an order, the selling Member may elect to pursue any other remedy
at law or in equity and, in addition, the selling Member (herein, the “Non-Defaulting Party”) shall
have the right to purchase the Membership Interest of the Defaulting Purchaser, the closing of
which shall occur on any date so designated by the Non-Defaulting Party, and the purchase price
being equal to the amount the Defaulting Purchaser would have received if the Properties were sold
at a price equal to (i) ninety percent (90%) of the Buy/Sell Price, less (ii) Selling Expenses, and
all of the Company’s liabilities were paid, in full, rents, taxes and other similar items were
pro-rated, and the Company was liquidated and the proceeds of such sale were distributed in
accordance with Section 4.1 hereof. In addition, the Defaulting Purchaser shall reimburse
the Non-Defaulting Party for legal fees and other costs reasonably incurred by the Non-Defaulting
Party in evaluating and responding to the Buy/Sell Notice and subsequent notices and documents
provided under Section 9.3.

     9.9 Assignees. For purposes of this Article 9, any elections made by or on
behalf of each Member under this Article 9 shall bind any assignee of any such Member; and
all references in this Article 9 to a Member shall include all Affiliates of such Member
and, except as provided above, all persons to which such Member has transferred or assigned any
portion of his Membership Interest in the Company.

     9.10 Limitation on Competing Options. The Members hereby agree that during the period
of time commencing on the date a Buy/Sell Notice is delivered by an Initiating Member to the
Non-Initiating Member and ending on the earlier of the last date upon which the closing of the sale
of the Properties or the Membership Interest of the selling Member was required to have been
consummated under this Article 9, no Member shall have the right to deliver a competing
Buy/Sell Notice under this Article 9.

     9.11 Expenses/Fees. Unless otherwise set forth in the Buy-Sell Notice, all
miscellaneous title charges, escrow fees, recording fees and transfer taxes shall be paid by the
party who is customarily responsible for such charges and the parties shall prorate items of income
and expense, in accordance with local custom and practice.

ARTICLE 10

TRANSFER OF MEMBERSHIP INTERESTS

     10.1 General Prohibition. Except as set forth herein, a Member may not sell,
transfer, encumber, pledge or assign all or any part of its Membership Interest (referred to herein
as a “Transfer”) without the prior written consent of all of the other Members, which consent may
be granted or withheld in each Member’s sole and absolute discretion. In order for an

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assignee to constitute a substituted or additional Member, the conditions set forth in
Section 10.6 must be satisfied.

     10.2 Permitted Transfers. Notwithstanding the provisions of Section 10.1, but
subject to this Section 10.2 and Section 10.6 below, a Member may Transfer all or
any part of its Membership Interest without the consent of any other Member to any of the following
(“Permitted Transferees”):

     (a) a general or limited partnership in which the assigning Member or persons
Controlling the assigning Member are the sole or managing general partner(s) or Control the
sole or managing general partner;

     (b) a corporation Controlled by the assigning Member or persons Controlling the
assigning Member;

     (c) a trust, the sole trustee of which is Controlled by the assigning Member or persons
Controlling the assigning Member on the date hereof, and the beneficiaries of which are
members of the Immediate Family of the assigning Member or of one or more of its owners on
the date hereof;

     (d) a limited liability company Controlled by the assigning Member or persons
Controlling the assigning Member; or

     (e) as otherwise permitted under this Agreement.

Notwithstanding anything in this Section 10.2 to the contrary, a Member may not assign all
or part of its Membership Interest if such assignment would (i) be to a Person that is not an
“accredited investor” (as defined by Rule 501 promulgated under the Securities Act of 1933),
(ii) result in the Company not qualifying for an exemption from the registration requirements of
the federal or any applicable state securities laws, (iii) subject the Company to withholding
obligations to any Member under the Foreign Investment in Real Property Tax Act of 1980, as
amended, (iv) cause any rent received by the Company under a lease to constitute related party
rents under Section 856(d)(2)(B) or (v) result in the violation of or a default under any term or
provision of any agreement to which the Company or any of its assets is bound.

     10.3 Involuntary Transfers. In the event any Member shall be adjudged Bankrupt (such
Member being referred to herein as a “Bankrupt Member”), the personal representative or trustee (or
successor-in-interest) of the deceased, insane or incompetent Member or Bankrupt Member shall be an
assignee of such Member’s Membership Interest having the rights set forth in Section 10.5
and shall not become an additional or substituted Member unless and until the conditions set forth
in Section 10.6 are satisfied; and any such Member’s estate (or successor-in-interest)
shall be liable for all of its obligations as a Member.

     10.4 Dissolution or Termination of Members. In the event of the dissolution of a
Member that is a partnership, limited liability company or a corporation or the termination of a
Member that is a trust, the successors-in-interest of the dissolved or terminated Member shall, for
the purposes of winding up the affairs of the dissolved or terminated Member, have the rights of

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an assignee of such Member’s Membership Interest, as described in Section 10.5, and
shall not become additional or substituted Members unless and until the conditions set forth in
Section 10.6 are satisfied.

     10.5 Status of Assignor and Assignee. The assignor of a Membership Interest shall
remain liable for all obligations of the assignor under this Agreement unless the other Members
unanimously approve the release of the assignor. Until the provisions of Section 10.6(b), (c)
and (d) are satisfied with respect to any such assignee, such assignee shall not be a Member
but shall be an assignee having the rights described in this Section 10.5. Any Person who
acquires all or any portion of the Membership Interest of a Member in the Company in any manner
(including pursuant to a transfer permitted by Section 10.2), shall not be a Member of the
Company unless and until the conditions of Section 10.6 are satisfied. Unless and until
such conditions are satisfied, such Person shall, to the extent of the Membership Interest
acquired, be entitled only to the transferor Member’s rights, if any, in the Profits, Losses,
Operating Cash Flow, Capital Proceeds and other distributions to the Members pursuant to this
Agreement, subject to the liabilities and obligations of transferor Member hereunder; but such
Person shall have no right to participate in the management of the business and affairs of the
Company and shall be disregarded in determining whether the approval, consent or any other action
has been given or taken by the Members. Any such assignee shall have the same right, subject to
the same limitations, as the transferor Member had under the provisions of this Article 10
to assign its Membership Interest as a Member (including the right to assign such Membership
Interest to any person to which such Member could have assigned its Membership Interest pursuant to
Section 10.2), but any such further assignee shall have only the rights set forth in this
Section 10.5 and shall not become an additional or substituted Member of the Company unless
and until the conditions of Section 10.6 have been satisfied.

     10.6 Admission Requirements. No assignee of all or any portion of a Member’s
Membership Interest or any other person shall be admitted as an additional or substituted Member of
the Company unless and until:

     (a) such admission has been Approved in writing by all Members having the right to
Approve such transfer hereunder, which approval may be given or withheld in the sole
discretion of each Member;

     (b) such assignment is made in writing, signed by the assigning Member (or its
successor) and accepted in writing by the assignee, and a duplicate original of such
assignment has been delivered to the non-transferring Member;

     (c) the Company has received an opinion of counsel as contemplated by
Section 10.1 or each Member has waived this requirement; and

     (d) the assignee executes and delivers to the Company and each other Member a written
agreement in form reasonably satisfactory to the Member and each Member, pursuant to which
such assignee agrees to be bound by and confirms the obligations, representations and
warranties contained in this Agreement.

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     10.7 Effective Assignment. In the event an assignment is made in accordance with this
Agreement, unless otherwise required by the Code:

     (a) the effective date of such assignment shall be the date the written instrument of
assignment is received and approved by all of the non-assigning Members;

     (b) the Company and the non-assigning Members shall be entitled to treat the assignor
of the assigned Membership Interest as the absolute owner thereof in all respects and shall
incur no liability for allocations of Profits or Losses and distributions of Operating Cash
Flow or Capital Proceeds made in good faith to such assignor until such time as the written
instrument of assignment has been actually received and approved by the other Members and
recorded in the books of the Company; and

     (c) any Profits and Losses shall be allocated between the assignor and the assignee of
the assigned Membership Interest in the manner described in Exhibit B.

     10.8 Cost of Admission. The cost of processing and perfecting an admission
contemplated by this Article 10 (including reasonable attorneys’ fees incurred by the
Company) shall be borne by the party seeking admission as a Member to the Company.

ARTICLE 11

DISSOLUTION

     11.1 Dissolution. Dissolution of the Company will occur upon the happening of any of
the following events:

     (a) Upon the sale or other disposition of substantially all of the assets of the
Company and its Subsidiaries;

     (b) An Event of Withdrawal of Campus Crest (as defined in Section 11.2),
unless the Company is continued as provided in Section 11.2;

     (c) The mutual agreement of Campus Crest and HSRE to dissolve the Company; or

     (d) The election of HSRE to dissolve the Company after a Campus Crest Triggering Event
as provided in Section 6.2, or the election of Campus Crest to dissolve the Company
after an HSRE Triggering Event as provided in Section 6.4.

     11.2 Events of Withdrawal. An Event of Withdrawal of a Member occurs when any of the
following occurs:

     (a) With respect to any Member that is a corporation, upon filing of articles of
dissolution of the corporation;

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     (b) With respect to any Member that is a partnership or a limited liability company,
upon dissolution of such entity;

     (c) With respect to any Member who is an individual, upon either the death of the
individual or the entry by a court of competent jurisdiction of an order adjudicating the
individual to be incompetent to manage such individual’s person or estate;

     (d) With respect to any Member that is a trust, upon termination of the trust;

     (e) With respect to any Member that is an estate, upon final distribution of the
estate’s Membership Interest;

     (f) With respect to any Member, the bankruptcy or insolvency of the Member; or

     (g) Any other event which terminates the continued membership of a Member in the
Company.

     Within 30 days following the occurrence of any Event of Withdrawal with respect to a Member,
such Member (or his representative) must give Notice of the date and the nature of such event to
the Company. The purpose of this Notice is to enable the remaining Members to continue the Company
if such remaining Members desire to avoid a Dissolution and liquidation of the Company. Any Member
failing to give such Notice will be liable in damages for the consequences of such failure as
otherwise provided in this Agreement. Upon the occurrence of an Event of Withdrawal, such Member
will cease to have any management rights under this Agreement and such Member’s Membership Interest
will be deemed transferred to such Member’s transferee or other successor in interest (which
Person, unless already a Member in such capacity, will have only the limited rights of a transferee
as set forth in Section 10.5, unless and until admitted as a Substitute Member).

     11.3 No Voluntary Withdrawal. Each Member agrees that such Member will not
voluntarily withdraw from the Company (whether by resignation, retirement or withdrawal) except for
permissible Transfers under this Agreement. Any such attempted voluntary withdrawal shall be void
and of no effect.

ARTICLE 12

LIQUIDATION

     12.1 Liquidation. Upon Dissolution of the Company, the Company will immediately
proceed to wind up its affairs and liquidate. As soon as possible following the occurrence of a
Dissolution event, the Company will file a statement of intent to dissolve with the Delaware
Secretary of State pursuant to the Act. Campus Crest or if Campus Crest shall no longer be the
day-to-day manager of the Company as a result of being replaced in such capacity pursuant to
Section 6.5, any Person appointed by a majority in interest (determined by Participating
Percentages) of the remaining Members will act as the liquidating trustee. The winding up and
Liquidation of the Company will be accomplished in a businesslike manner as determined by the

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liquidating trustee. A reasonable time will be allowed for the orderly Liquidation of the
Company and the discharge of liabilities to creditors so as to enable the Company to minimize any
losses attendant upon Liquidation. Any gain or loss on disposition of any Company assets in
Liquidation (including any distribution in kind) will be allocated to Members, and credited or
charged to Capital Accounts, in accordance with the Tax Allocation Provisions. Any liquidating
trustee (including Members) is entitled to reasonable compensation for services actually performed,
and may contract for such assistance in the liquidating process as such Person deems necessary or
desirable. Until the filing of articles of dissolution as provided in Section 12.7, the
liquidating trustee may settle and close the Company’s business, prosecute and defend suits,
dispose of its property, discharge or make provision for its liabilities, and make distributions in
accordance with the priorities set forth in Section 12.2.

     12.2 Priority of Payment. The assets of the Company will be distributed in
Liquidation in the following order:

     (a) First, to creditors by the payment or provision for payment of the debts and
liabilities of the Company (including any loans or advances that may have been made by any
Member or Affiliate) and the expenses of Liquidation;

     (b) Second, to the setting up of any reserves that Campus Crest and HSRE determine are
necessary for any contingent, conditional or unmatured liabilities or obligations of the
Company; and

     (c) Third, in the manner provided for in Section 4.1 hereof.

     12.3 Liquidating Distributions. The liquidating Distributions due to the Members will
be made by selling the assets of the Company and distributing the net proceeds. Notwithstanding
the preceding sentence, but only upon the agreement of all Members, the liquidating Distributions
may be made by distributing some or all of the assets of the Company in kind to the Members in
proportion to the amounts distributable to them pursuant to Section 12.2, and valuing such
assets at their Fair Market Value (net of liabilities secured by such property that the Member
takes subject to or assumes) on the date of Distribution. Except as provided herein, any assets
distributed in kind shall be deemed to have been sold for their Fair Market Value (net of such
liabilities) and the Capital Accounts of the parties shall be adjusted to reflect such deemed sale
for purposes of determining the Distributions to which they are entitled under
Section 12.2. Each Member agrees to save and hold harmless the other Members from such
Member’s proportionate share of any and all such liabilities which are taken subject to or assumed.
Appropriate and customary prorations and adjustments will be made incident to any Distribution in
kind. The Members will look solely to the assets of the Company for the return of their Capital
Contributions, and if the assets of the Company remaining after the payment or discharge of the
debts and liabilities of the Company are insufficient to return such contributions, they will have
no recourse against any other Member. The Members acknowledge that Section 12.2 may
establish Distribution priorities different from those set forth in the provisions of the Act
applicable to Distributions upon Liquidation, and the Members agree that they intend, to that
extent, to vary those provisions by this Agreement.

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     12.4 No Restoration Obligation. Nothing contained in this Agreement imposes on any
Member an obligation to make a contribution in order to restore a deficit Capital Account upon
Liquidation of the Company.

     12.5 Timing. Final Distributions in Liquidation will be made by the end of the
Company’s Fiscal Year in which such actual Liquidation occurs (or, if later, within 90 days after
such event) in the manner required to comply with the Treasury Regulations promulgated under
Section 704(b) of the Code (the “§704(b) Regulations”). If it is not practicable to make such
Distributions within that time, they may be delayed for a reasonable time to allow the orderly
liquidation of the Company’s assets. Payments or Distributions in Liquidation may be made to a
liquidating trust established by the Company for the benefit of those entitled to payments under
Section 12.2, in any manner consistent with this Agreement and the § 704(b) Regulations.

     12.6 Liquidating Reports. A report will be submitted with each liquidating
Distribution to Members, showing the collections, disbursements and Distributions during the period
which is subsequent to any previous report. A final report, showing cumulative collections,
disbursements and Distributions, will be submitted upon completion of the liquidation process.

     12.7 Certificate of Dissolution. Upon Dissolution of the Company and the completion
of the winding up of its business, the Company will file a Certificate of Dissolution (or other
instrument appropriate to cancel its Certificate of Formation) with the Delaware Secretary of State
pursuant to the Act. At such time, the Company will also file an application for withdrawal of its
certificate of authority in any jurisdiction where it is then qualified to do business.

ARTICLE 13

GENERAL PROVISIONS

     13.1 Amendment. This Agreement may be amended only by a writing signed by all
Members.

     13.2 Authorized Representatives.

     (a) For the purposes hereof, all Approvals hereunder shall be deemed valid and binding
on a Member if given by any Authorized Representative thereof.

     (b) The four individuals appointed to the Executive Committee under Section
5.2, shall be deemed the Authorized Representatives of the respective Members which
appointed them.

     (c) Any Member may remove or change any of its Authorized Representatives or appoint
additional Authorized Representatives by giving written notice thereof to the other Member.
Such change, removal, or appointment shall be effective upon the later to occur of (i) the
date of receipt of such notice by such other Member or (ii) the effective date for such
change, removal or appointment set forth in

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such notice. Any replacement or additional Authorized Representative thereof shall in
the case of the Campus Crest be either an officer or manager of Campus Crest or an Affiliate
thereof.

     13.3 Arbitration.

     (a) Except in the event of a breach by a Member under Article 10 or Section
13.19 hereof, if any dispute, controversy or claim arises between the Members with
respect to whether either Member is in breach or default of its respective obligations
hereunder, or as to whether any breach or default has occurred under the Property Management
Agreement, the Construction Agreement or the Development Agreement, or any agreement between
Campus Crest or any of its Affiliates and the Company (or any of its Affiliates), then the
dispute shall be settled by arbitration at a location in the United States where the
defendant Member has its principal place of business (or if the principal place of business
of the defendant Member is outside the United States, at a location in the United States
designated by the defendant Member). Such arbitration shall be administered by the American
Arbitration Association (“AAA”) and shall be conducted in accordance with the Commercial
Arbitration Rules (the “Rules”) of AAA then in effect, or such other arbitral body as the
Members may jointly select.

     (b) The award of the arbitrator shall be binding upon the parties and each party hereby
consents to the entry of judgment by any court of competent jurisdiction in accordance with
the decision of the arbitrator.

     (c) The prevailing party in any such arbitration shall be entitled to recover, in
addition to any other relief awarded, its reasonable costs of preparation for and
participation in the arbitration, including reasonable attorneys’ fees. The arbitrator
shall have no power to award punitive, treble or other multiple damages, as a result of this
Section 13.3, and the arbitrator’s jurisdiction is limited accordingly, and no
arbitration award issued pursuant to this Section 13.3 shall grant such damages.

     (d) The Members hereby agree to make a good faith effort to resolve any dispute,
controversy or claim arising between them prior to electing to arbitrate such matter.

     (e) Any such arbitration proceedings shall include by consolidation, joinder or joint
filing, any additional person or entity not a party to this Agreement to the extent
necessary to the final resolution of the matter in controversy.

     (f) In the event that a Member breaches any provision of Article 10 or
Section 13.19 hereof, the Company or the other Member, as applicable, shall be
entitled to institute and prosecute proceedings in any court of competent jurisdiction
(either in law or in equity) to enforce the specific performance thereof by the Member or to
enjoin the Member from any further or continuing breach or violation without the necessity
of showing actual damages or furnishing a bond or other security. In the event the Company
the other Member, as applicable, initiates any legal action (including, without

44

 

limitation, litigation) to enforce Article 10 or Section 13.19 hereof
or to seek damages for any breach hereof, the Company shall be entitled to recover from the
Member reasonable attorneys’ fees and all other costs incurred by it in connection with such
legal action. Each Member hereby irrevocably waives all defenses inconsistent with the
terms of this Section 13.3(f). Each Member hereby submits to the jurisdiction of the
federal or state courts of the location in the United States where the defendant Member has
its principal place of business (or if the principal place of business of the defendant
Member is outside the United States, at a location in the United States designated by the
defendant Member) for all matters related in any manner to this Section 13.3(f).

     13.4 Unregistered Interests. Each Member (a) acknowledges that the Membership
Interests are not securities and, therefore have not been registered under The Securities Act of
1933, as amended, or under similar provisions of state law, (b) represents and warrants that such
Person is an accredited investor as defined for federal securities laws purposes, (c) represents
and warrants that the Membership Interest is being acquired for such Person’s own account, for
investment, and with no view to the distribution of the Membership Interest, and (d) agrees not to
sell or to offer to sell all or any part of its Membership Interest without registration under the
Securities Act of 1933, as amended, and any applicable state securities laws, unless the transfer
is exempt from such registration requirements.

     13.5 Waiver of Dissolution Rights. The Members agree that irreparable damage would
occur if any Member should bring an action for judicial dissolution of the Company. Accordingly,
each Member accepts the provisions under this Agreement as such Person’s sole entitlement on
Dissolution of the Company and waives and renounces such Person’s right to seek a court decree of
dissolution or to seek the appointment by a court of a liquidator for the Company.

     13.6 Waiver of Partition Right. Each Member waives and renounces any right that it
may have prior to Dissolution and Liquidation to institute or maintain any action for partition
with respect to any real property held by the Company.

     13.7 Waivers Generally. No course of dealing will be deemed to amend or discharge any
provision of this Agreement. No delay in the exercise of any right will operate as a waiver of
such right. No single or partial exercise of any right will preclude its further exercise. A
waiver of any right on any one occasion will not be construed as a bar to, or waiver of, any such
right on any other occasion.

     13.8 Notice. All Notices under this Agreement will be in writing and will be sent
addressed as follows:

45

 

	 	 	 

	If to HSRE:

	 	c/o Harrison Street Real Estate Capital, LLC
	 

	 	71 S. Wacker Drive
	 

	 	Suite 3571
	 

	 	Chicago, IL 60606
	 

	 	Attn: Christopher N. Merrill
	 

	 	Stephen M. Gordon
	 
	 	 
	With copy (not constituting notice) to:

	 	DLA Piper US LLP
	 

	 	203 N. LaSalle #1900
	 

	 	Chicago, IL 60601
	 

	 	Attn: Jesse A. Criz
	 
	 	 
	If to Campus Crest:

	 	c/o Campus Crest Group, LLC
	 

	 	2100 Rexford Rd, 4th Floor
	 

	 	Charlotte, NC 28211
	 

	 	Attention: F. Brian Schneiderman
	 
	 	 
	With a copy (not constituting notice) to:

	 	c/o Bradley Arant Rose & White LLP
	 

	 	One Federal Place
	 

	 	1819 Fifth Avenue North
	 

	 	Birmingham, AL 35203
	 

	 	Attention: Dawn Helms Sharff

     Each Member shall have the right from time to time to change its address and add or delete, or
change the addresses of, Persons to whom copies of Notices must be sent. Any Notice given to any
Member in accordance with this Agreement will be deemed to have been duly given: (a) on the date
of receipt if personally delivered, (b) five (5) days after being sent by U.S. mail, postage
prepaid, (c) the date of receipt, if sent by registered or certified U.S. mail, postage prepaid, or
(d) one (1) business day after having been sent by a nationally recognized overnight courier
service. In computing time periods, the day of Notice will be included. For Notice purposes, a
day means a calendar day. Any Notice given by a Member to all other Members shall be deemed given
to the Company.

     13.9 Other Business of Members. Subject to the terms of this Agreement, the terms of
the Non-Competition and Right of First Opportunity Agreement and the terms of the Development
Agreement, Construction Agreement and Property Management Agreement, the Members, their constituent
owners, their Affiliates, and the respective employees and agents of all such parties, shall be
free to engage in or possess any interests in other business ventures of any kind, whether or not
directly competing with the Company or the Properties, and to exploit other business opportunities,
whether or not arising from the conduct of Company business, and the pursuit of such ventures or
business opportunities will not be deemed improper for purposes of this Agreement.

46

 

     13.10 Partial Invalidity. Wherever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law. However, if for any
reason any one or more of the provisions of this Agreement are held to be invalid, illegal or
unenforceable in any respect, such action will not affect any other provision of this Agreement.
In such event, this Agreement will be construed as if such invalid, illegal or unenforceable
provision had never been contained in it.

     13.11 Entire Agreement. This Agreement and the other instruments being entered into
between the parties pursuant hereto or thereto, contains the entire agreement and understanding of
the Members concerning its subject matter.

     13.12 Benefit. The contribution obligations of each Member will inure solely to the
benefit of the other Members and the Company, without conferring on any other Person any rights of
enforcement or other rights.

     13.13 Binding Effect. This Agreement is binding upon, and inures to the benefit of,
the Members and their permitted transferee; provided that, any transferee will have only the rights
specified in Section 10.5 unless admitted as a Substitute Member in accordance with this
Agreement.

     13.14 Further Assurances. Each Member agrees, without further consideration, to sign
and deliver such other documents of further assurance as may reasonably be necessary to effectuate
the provisions of this Agreement.

     13.15 Headings. Article and section titles have been inserted for convenience of
reference only. They are not intended to affect the meaning or interpretation of this Agreement.

     13.16 Governing Law. Except to the extent pre-empted by any federal law, this
Agreement will be governed by, and construed in accordance with, the laws of the State of Delaware.
Any conflict or apparent conflict between this Agreement and the Act will be resolved in favor of
this Agreement, except as otherwise expressly required by the Act.

     13.17 Limited Liability of Member. Except as expressly required under the Act or
required hereunder, (i) no Member shall have any liability to contribute money or make loans to,
the Company, and (ii) no Member shall be liable for any liabilities or obligations of the Company.

     13.18 Counterparts. This Agreement may be executed in multiple counterparts with
separate signature pages, each such counterpart shall be considered an original, but all of which
together shall constitute one and the same instrument. To facilitate the execution of this
Agreement, the parties may execute and exchange by facsimile or by Adobe Acrobat counterparts of
the signature pages, and such execution shall be deemed an original by the parties.

     13.19 Confidential Information. Except to the extent required or permitted by this
Agreement or required by any applicable Law, or compelled use in litigation, or for tax return
preparation, each Member shall maintain the confidentiality of, and not publicly disclose, (a) the

47

 

terms of this Agreement, any agreement executed in connection herewith or any agreement to
which the Company or any Subsidiary thereof is a party or (b) any financial information or other
forecasts regarding the Company or any Subsidiary thereof, in all cases other than with the
Approval of all Members (which Approval shall not be unreasonably withheld), without the consent of
the Company and the other Members. Without limiting the generality of the foregoing, prior to a
Member issuing any press release, disclosure statement or other marketing item, such release,
statement or item shall be presented to and subject to the Approval of the other Member, such
Approval not to be unreasonably withheld or delayed. Notwithstanding the foregoing, no information
provided by Campus Crest to its Affiliates or in any private placement memorandum, organizational
documents or regular reports that either HSRE or Campus Crest provides to investors (or potential
investors) in any fund of which it is a sponsor, managing general partner or the equivalent shall
be subject to the foregoing terms of this Section 13.19. Nothing in this Section
13.19 is intended to waive the attorney-client privilege or any other privilege, including the
tax advisor privilege under Section 7525 of the Code. In the event either Member shall disclose
any information of the other Member to the extent required by Law, (i) the disclosing Member shall
send Notice of such disclosure to the other Member immediately after such disclosure unless
prohibited by Law and (ii) the disclosing party shall use reasonable efforts to seek protection for
confidential information that is required to be disclosed.

[signature pages to follow]

48

 

     IN WITNESS WHEREOF, each of the parties has executed this Operating Agreement of HSRE-Campus
Crest I, LLC, as of the date first set forth above, and agrees to be bound by this Agreement.

	 	 	 	 	 
	 	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 investment trust, its sole member
 	 
	 

					
	 	
 	 
	 	By:  	/s/
Stephen Gordon 	 
	 	 	Name:  	Stephen Gordon 	 
	 	 	Its:       Trustee 	 

 

 

	 	 	 	 	 

JOINDER

     The undersigned hereby executes this Agreement not as a Member of the Company, but solely for
the purposes of guaranteeing payment of the obligations of Campus Crest and the Developer, to the
extent provided for under this Agreement, the Development Agreement and the Completion and Cost
Overrun Guaranty Agreement.

	 	 	 	 	 
	 	CAMPUS CREST GUARANTORS:

 	 
	November 7, 2008 	  	/s/
Michael S. Hartnett 	 
	 	 	MICHAEL S. HARTNETT 	 

	 	 	 	 	 
	 	 	 	 
	November 7, 2008 	  	/s/
Ted W. Rollins 	 
	 	 	TED W. ROLLINS 	 
	 	 	 	 

 

 

	 	 	 	 	 

JOINDER

     The undersigned hereby executes this Agreement not as a Member of the Company, but solely for
the purposes of approving the form of the Development Agreement attached hereto as Exhibit
F and the form of the Property Management Agreement attachment hereto Exhibit G.

	 	 	 	 	 
	 	PROPERTY MANAGER:
 	 
	November 7, 2008 	
 THE GROVE STUDENT PROPERTIES, LLC, a North Carolina limited liability company

 	 

					
	 	By:  	/s/
Shannon N. King 	 
	 	 	Name:  	Shannon N. King 	 
	 	 	Its: President 	 
	 

	 	 	 	 	 
	 	DEVELOPER:
 	 
	November 7, 2008  	

CAMPUS CREST GROUP, LLC, a
 North Carolina limited liability company
 	 
	 

					
	 	
 	 
	 	By:  	Madeira Group, LLC, a North
 Carolina limited liability company, its
 Manager
 	 
	 

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

 

 

EXHIBIT A

DEFINITIONS

     Act. The Delaware Limited Liability Company Act, as amended from time to time.

     Acquisition Budget. For each Property acquired by the Company, a form of which
attached as Exhibit K.

     Acquisition Loan. For each Property acquired by the Company, the loan(s) obtained by
the Company to fund the acquisition of such Property.

     Acquisition Property. An existing student housing Property that has been or is
intended to be acquired by the Company.

     Acquisition Termination Notice. The meaning set forth in Section 3.3(b)
hereof.

     Additional Member. Any new Member admitted after the date of this Agreement other
than a Substitute Member.

     Additional Properties. All Development Projects and Acquisition Properties acquired
by the Company.

     Affiliate. Any Person that directly, or through one or more intermediaries, Controls
or is Controlled by or is under Common control with a Member; any Person that is an officer,
director, partner, member, principal, manager or trustee of or serves in a similar capacity with
respect to a Member, or any Entity in which a Member, directly or indirectly, is a partner,
principal, shareholder, member, beneficiary or otherwise an owner. For purposes hereof, the term
“Control” of Person shall mean the power, directly or indirectly, to direct or cause the direction
of management and policies of such Person, whether through ownership of voting securities, by
contract or otherwise.

     Agreement. This Operating Agreement of the Company, also known as a limited liability
company agreement under the Act, as amended from time to time.

     Annual Business Plan. The annual business plan of the Company which has been approved
by the Members, from time to time pursuant to Section 5.5 hereof.

     Annual Operating Budget. The annual operating budget of the Company which has been
approved by the Members, from time to time pursuant to Section 5.5 hereof.

     Approve, Approved or Approval. As to the subject matter thereof and as the context
may require or permit, an express approval contained in a written statement signed by an approving
Person or any authorized representative thereof.

A-1

 

     Approved Pre-Development Costs or Pre-Acquisition Costs. The Pre-Development Costs or
Pre-Acquisition Costs incurred by Campus Crest and its Affiliates in connection with the
acquisition or development of a Property, each as set forth in the applicable Acquisition or
Development Budget Approved by HSRE.

     Budgeted Project Costs. The aggregate costs for the acquisition or development of a
Property as set forth in the applicable Acquisition or Development Budget, respectively.

     Buy-Out Closing Date. The meaning set forth in Section 9.6 hereof.

     Buy/Sell Notice. The meaning set forth in Section 9.1 hereof.

     Buy/Sell Price. The meaning set forth in Section 9.1 hereof.

     Campus Crest. The meaning set forth in the Recitals.

     Campus Crest Change in Control Effective Date. The meaning set forth in Section
5.1(c) hereof.

     Campus Crest Guarantor. Michael S. Hartnett and Ted W. Rollins.

     Campus Crest Key Persons. The meaning set forth in Section 5.1(c) hereof.

     Campus Crest Triggering Event. The meaning set forth in Section 6.1 hereof.

     Capital Account. The meaning set forth in Exhibit B hereof.

     Capital Call. The meaning as set forth in Section 3.2 hereof.

     Capital Contribution. The amount of money and/or the Fair Market Value of any
property contributed to the capital of the Company by a Member (less the amount of liabilities
encumbering such property assumed by the Company or to which such property is subject).

     Capital Event. The borrowing of any funds by the Company or the placement of new or
additional financing securing all or any portion of a Property or any interest therein; the
refinancing of any existing or new financing upon all or any portion of a Property or any interest
therein; or the sale, exchange, condemnation, casualty loss or other disposition (whether voluntary
or involuntary) of all or any portion of the Properties or any interest therein (including any
disposition in consideration for securities in any real estate investment trust or other entity),
other than leases of space and dispositions of personal property in the ordinary course of
business.

     Capital Proceeds. The consideration resulting from a Capital Event with respect to
one or more of the Properties, less the sum of (a) any expenses incurred in connection with such
Capital Event, (b) any portion of such proceeds applied toward the payment of any indebtedness
being refinanced or secured by or relating to the Property disposed of, (c) any portion of such
proceeds applied to acquire, develop, or rehabilitate real property or personal property or

A-2

 

interests therein in accordance with the terms hereof, and (d) any portion of the proceeds
reserved for payment of expenses and/or working capital Approved by HSRE.

     Certificate. The Certificate of Formation of the Company, as amended from time to
time.

     Certificate of Occupancy. The date upon which the Developer secures a final
certificate of occupancy or local equivalent for Development Properties.

     Code. The Internal Revenue Code of 1986, as amended from time to time (including
corresponding provisions of subsequent revenue laws).

     Company. HSRE-CAMPUS CREST I, LLC, a Delaware limited liability company, as formed
under the Certificate and governed by this Agreement.

     Completion and Cost Overrun Guaranty. The completion, payment and performance
guaranty to secure the completion of a Development Project and payment of Cost Overruns, executed
and delivered by the Campus Crest Guarantor in favor of the Company and, to the extent required,
the holder of the Construction Loan.

     Completion Date. The date upon which the final completion of a Development Project
occurs in accordance with the Development Agreement.

     Construction Agreement. That certain Construction Agreement to be entered into by
Campus Crest Construction, LLC, a North Carolina limited liability company, and each Property
Owning Subsidiary, a form of which is attached hereto as Exhibit O.

     Construction Loan. The indebtedness of the Company incurred pursuant to Section
3.6 hereof in connection with the construction and development of each Development Project.

     Construction Schedule. The construction schedule for a Development Project.

     Contributed Property Interest. The meaning set forth in Section 3.3(a)
hereof.

     Contributing Member. The meaning set forth in Section 3.6(a) hereof.

     Control or control. The power, directly or indirectly, to direct or cause the
direction of management and policies of a Person, whether through ownership of voting securities,
by contract or otherwise.

     Conversion Date. The meaning set forth in Section 6.5(a) hereof.

     Cost Overruns. The meaning set forth in the Development Agreement.

     “Day” or “day”. Any day which is not a Saturday or Sunday and on which banks are open
for business in the State of New York.

     Default Amount. The meaning set forth in Section 3.6(a) hereof.

A-3

 

     Defaulting Member. The meaning set forth in Section 3.6(a) hereof.

     Defaulting Purchaser. The meaning set forth in Section 9.8 hereof.

     Development Agreement. The Development Agreement in the form attached as Exhibit
F to be entered into by Developer and the Property Owning Subsidiary that develops a
Development Project.

     Development Budget. The final development budget for each Development Project
Approved by HSRE, a form of which is attached as Exhibit K.

     Development Project. A Property that has been or is intended to be developed and
constructed by the Company, including, without limitation, the Properties set forth on Schedule I
attached hereto.

     Developer. Campus Crest Development, LLC, a North Carolina limited liability company,
or such other Person as Approved by HSRE.

     Dilution Percentage. The meaning set forth in Section 3.6(e) hereof

     Distribution. The amount of any money (expressed in United States currency) and the
Fair Market Value of any property (net of liabilities) distributed by the Company to the Members,
whether as a distribution of Net Cash Flow or otherwise under this Agreement.

     Distribution Shortfall. The meaning set forth in Section 4.4 hereof.

     Dissolution. The occurrence of any of the events set forth in Section 11.1,
causing the Company to dissolve as a legal entity.

     11% Cash on Cash Return. Shall mean an eleven percent (11%) annual return on the
average daily balance of Net Invested Capital.

     Entitlements. Any and all entitlements, permits, zoning, governmental and/or
quasi-governmental approvals and exactions including, without limitation, a vesting tentative tract
map and conditional use permits required to be obtained in order to develop and construct a
Development Project.

     Entity. Any corporation, general partnership, limited partnership, joint venture,
trust, business trust, limited liability company or other association or other form of business or
legal entity.

     Exercise Amount. The meaning set forth in Section 3.7(d) hereof.

     Excess Project Costs. With respect to each line item of Project Costs, the amount, if
any, by which such line item of Project Costs exceeds said line item of Budgeted Project Costs.

     Exercise Period. The meaning set forth in Section 9.2(a) hereof.

A-4

 

     Event of Withdrawal. The meaning set forth in Section 11.2 hereof.

     Fair Market Value. The value of any property distributed to a Member by the Company,
as determined by the mutual agreement of HSRE and Campus Crest in the case of any other asset.

     15% Cash on Cash Return. Shall mean an fifteen percent (15%) annual return on the
average daily balance of Net Invested Capital.

     Financing Commitment. The meaning set forth in Section 9.2(b) hereof.

     Fiscal Year. The fiscal and taxable year of the Company, including both 12-month and
short fiscal or taxable years.

     Funding Conditions. Those conditions set forth in Exhibit E that must be
satisfied in order for HSRE to be obligated to make a Mandatory Capital Contribution for a
Development Project or the acquisition of a Property.

     Funding Member. The meaning set forth in Section 3.7(a) hereof.

     General Contractor. The general contractor for a Development Project Approved by the
Members.

     Governmental Authority. Any federal, state or local government, any political
subdivision thereof or any court, administrative or regulatory agency, department, instrumentality,
board, office, body or commission or other governmental authority or agency, domestic or foreign.

     Hard Costs. The total Budgeted Project Costs, excluding land cost, Soft Costs, any
transfer taxes and customary fees payable to local jurisdictions associated with selling the land
and any other fees payable to HSRE, Campus Crest or their Affiliates.

     Hartnett. The meaning set forth in Section 5.1(c).

     HSRE. The meaning as set forth in the Recitals.

     HSRE REIT. The meaning set forth in Section 5.9(a) hereof.

     HSRE Change in Control Effective Date. The meaning set forth in Section
5.1(c) hereof.

     HSRE Mandatory Capital Contribution. Any Mandatory Capital Contribution made by HSRE.

     HSRE Triggering Event. The meaning set forth in Section 6.3 hereof.

     IC Approval Notice. The meaning set forth in Section 3.3(b) hereof.

A-5

 

     Immediate Family. The parents, children, grandchildren and spouse of such Person.

     In Balance. As defined in the Development Agreement.

     Incentive Distributions. The portion of any Distributions of Net Cash Flow to Campus
Crest under Sections 4.1(a)(iii) and/or (iv) and Sections 4.1(b)(iv) and/or (v) in
excess of its Participating Percentage.

     Initial Capital Contribution shall mean the amount of cash or the Fair Market Value of
any property contributed to the Company by the Members pursuant to Section 3.1 hereof.

     Initiating Member. The meaning set forth in Section 9.1 hereof.

     Initiating Member Purchase Price. The meaning set forth in Section 9.2(b)
hereof.

     Internal Rate of Return. The rate, determined as set forth herein, which will
discount Distributions made to a Member by the Company to an amount equal to the Capital
Contributions made by such Member. A specified Internal Rate of Return (the “Applicable IRR”)
shall be deemed to have been attained as of any date that (i) the sum of the separate present
values of each Distribution made to the Member, when discounted to their present values as of the
date of the Initial Capital Contribution made by such Member, using a discount rate equal to the
Applicable IRR is equal to (ii) the sum of the separate present values of each Capital Contribution
made to the Company by such Member, when discounted to their present values as of the date of the
Initial Capital Contribution made by such Member, using the same specific discount rate as referred
to above. The XIRR function in Microsoft Excel, U.S. English Version MS Excel 2003 or any other
program approved by the Members shall be used to calculate whether an Applicable IRR is obtained,
and the present value shall be determined using monthly compounding periods. Any Capital
Contributions made by a Member and Distributions made by the Company to a Member during a month
shall be deemed to occur on the first or last day of the month in which such Distribution or
Capital Contribution is made, whichever is closer to the actual date of such Capital Contribution
or Distribution. The Internal Rate of Return with respect to any Member shall be deemed to include
any amount paid or received by any predecessor in interest of any Member.

     “Internal Revenue Service” or “IRS”. The Internal Revenue Service of the United
States.

     Laws. All statutes, rules, codes, regulations, restrictions, ordinances, orders,
decrees, approvals, directives, judgments, injunctions, writs, awards and decrees of, or issued by,
all Governmental Authorities.

     Lease. Any agreement in effect from time to time between the Company or a Property
Owning Subsidiary, as landlord, and any other Person, as tenant, conferring upon said tenant the
right to use and occupy space at a Property, including without limitation the leases for retail,
parking or storage space (including, without limitation, month-to-month tenancies), and any
occupancy, licensee, franchise and concessionaire agreement from time to time applicable to a
Property (other than subleases, occupancy, license, franchise, concessionaire agreements entered

A-6

 

into by tenants and third parties for space within such tenant’s premises) and all amendments
and supplements thereto.

     Liquidation. The process of winding up and terminating the Company after its
Dissolution.

     Major Decisions. The meaning set forth in Section 5.2 hereof.

     Mandatory Capital Contributions. With respect to any Member, any Capital Contribution
required to be made by such Member pursuant to Section 3.2, Section 3.4, or
otherwise designated as a “Mandatory Capital Contribution” under this Agreement.

     Mandatory Capital Limit. An amount equal to the Budgeted Project Costs for the
acquisition or development of a Property, minus the amount of Project Financing to be obtained by
the Company with respect to such Property, all as Approved by HSRE.

     Material Change in Control. The meaning set forth in Section 5.1(c) hereof.

     Member. An initial Member as listed in Section 1.4, and any other Person
subsequently admitted to the Company as an Additional Member or Substitute Member in accordance
with the terms of this Agreement.

     Membership Interest. With respect to each Person owning an interest in the Company,
all of the interests of such Person in the Company, including such Person’s interest in the Profits
and Losses of the Company, such Person’s Capital Account, such Person’s right to receive
Distributions and all other rights and obligations of such Person under this Agreement.

     Necessary Contributions. The meaning set forth in Section 3.7 hereof.

     Net Cash Flow. Operating Cash Flow and Capital Proceeds.

     Net Invested Capital. Shall mean the aggregate amount of Capital Contributions made
to the Company by a Member, reduced by the amount of distributions constituting a return of capital
under Section 4.1(b)(ii).

     Non-Competition and Right of First Opportunity Agreement. The Non-Competition and
Right of First Opportunity Agreement dated of even date herewith, by and between Campus Crest
Group, LLC, a North Carolina limited liability company, and Harrison Street Real Estate Capital,
LLC, a Delaware limited liability company.

     Non-Defaulting Purchaser. The meaning set forth in Section 9.8 hereof.

     No Funding Notice. The meaning set forth in Section 9.2(b) hereof.

     Non-Initiating Member. The meaning set forth in Section 9.1 hereof.

A-7

 

     Non-Initiating Member Purchase Price. The meaning set forth in Section 9.3(a)
hereof.

     Notice. A written notice actually delivered or deemed delivered under Section
13.8 hereof.

     Operating Cash Flow. With respect to any period, the amount by which the gross cash
receipts, other than Capital Contributions, in such period exceed the sum of the following (to the
extent not paid from Capital Proceeds): (a) all principal and interest payments on any indebtedness
of the Company or any Subsidiary, and all other sums paid to such lenders in such period; (b) all
cash expenditures (including expenditures for capital improvements) made in such period incident to
the operation of the Company or any Subsidiary business; and (c) working capital and other reserves
for operation of the Company business Approved by HSRE.

     Participating Percentages. With respect to each Member, the aggregate Capital
Contributions of a Member divided by the aggregate Capital Contributions of all of the Members, as
adjusted from time to time pursuant to the terms of this Agreement. If the Participating
Percentages of the Members are changed pursuant to the terms of this Agreement, such change shall
be effective for all purposes on the date of the change. As of the date hereof, the Participating
Percentages of each Member are as follows:

	 	 	 	 	 

	HSRE
	 	 	90	%
	Campus Crest
	 	 	10	%

     Permitted Transferees. The meaning set forth in Section 10.2 hereof.

     Person. An individual, corporation, partnership, limited partnership, trust,
unincorporated organization, association or other entity.

     Plans and Specifications. The plans and specifications for the Project, prepared by
the Architect (as defined in the Development Agreement), as the same may thereafter be changed,
replaced in whole or in part, or supplemented in accordance herewith.

     Pool Cutoff Date. With respect to the Company, January 15, 2009; and with respect to
each subsequent Portfolio Company, October 31 of the year in which such subsequent Portfolio
Company was formed, unless the Members agree otherwise.

     Portfolio Company. The meaning set forth in Section 2.3 hereof.

     Pre-Acquisition Costs. The pre-acquisition costs incurred by Campus Crest and its
Affiliates in connection with the acquisition of a Property.

     Pre-Acquisition Due Diligence Budget. The budgets submitted by Campus Crest to HSRE
setting forth the Pre-Acquisition Costs to be incurred with respect to an acquisition of an
Additional Property.

A-8

 

     Pre-Development Costs. The pre-development costs incurred by Campus Crest and its
Affiliates in connection with the development of a Development Project.

     Prime Rate. The “base rate” of interest announced from time to time by Citibank, New
York, New York; or, if Citibank shall cease to exist or shall cease to announce a prime rate, the
prime rate, corporate base rate or other comparable rate of interest announced from time to time by
the largest national banking association with headquarters in New York, New York.

     Project Costs. The actual costs to acquire, construct and complete the Development
Project, including the cost of land, construction debt financing, all Soft Costs and all actual
operating costs through the Completion Date, including any contingencies provided for in the
Development Budget.

     Project Financing. The amount of the Acquisition Loan, in the case of a Property that
is not a Development Project, or the Construction Loan, in the case of a Development Project, to be
obtained, as set forth in the Acquisition Budget or the Development Budget, as applicable, Approved
by HSRE.

     Properties. The properties set forth on Schedule I attached hereto and the Additional
Properties.

     Property Manager. The Grove Student Properties, LLC, a North Carolina limited
liability company.

     Property Management Agreement. The Property Management Agreement in the form attached
hereto as Exhibit G to be entered into by the Property Manager and the Company or the
relevant Property Owning Subsidiary.

     Property Owning Subsidiary. Each Subsidiary that owns a Property.

     Purchase Option. The meaning set forth in Section 9.2(a) hereof.

     Recourse Obligations. The meaning set forth in Section 9.4(a) hereof.

     Reimbursement Amount. The meaning set forth in the Development Agreement.

     Reimbursement Conditions. The meaning set forth in the Development Agreement.

     REIT. The meaning set forth in Section 5.9 hereof.

     Request for Advance. The meaning set forth in Section 3.4(d) hereof.

     Required Amount. The meaning set forth in Section 3.4(d) hereof.

     Related Party Agreement. The meaning set forth in Section 5.1(d) hereof.

     Reply Notice. The meaning set forth in Section 9.2(a) hereof.

A-9

 

     Review Items. The meaning set forth in Section 5.6 hereof.

     Rollins. The meaning set forth in Section 5.1(c).

     Sale Option. The meaning set forth in Section 9.2(a) hereof.

     Sale Period. The meaning set forth in Section 9.3(a) hereof.

     Secured Lender. Any owner or holder of a secured claim or lien against a Property,
including any mortgagee under construction or permanent financing.

     Services Agreement. The meaning set forth in Section 5.9(b) hereof.

     Soft Costs. The costs of design, engineering, legal, accounting, interest,
construction loan charges, title company charges and real estate taxes accrued during the
construction period as set forth in the Development Budget and any other costs designated as “soft
costs” in the Development Budget, including, without limitation, projected operating deficit
amounts through the Completion Date, and which shall include reasonable costs incurred by HSRE to
engage legal counsel to review and approve actions undertaken by Campus Crest, evaluate and advise
HSRE with respect to Company matters relating to a Development Project, evaluating approvals
requested by Campus Crest and otherwise performing services for the Company upon Campus Crest’s
prior approval and further provided that any costs incurred by either Member related to engaging
counsel in connection with a dispute between the Members shall not be Soft Costs.

     Subsidiary. Any business enterprise in which the Company has a direct or indirect
ownership interest and which is controlled directly or indirectly by the Company.

     Substantial Completion Date. Shall have the meaning set forth in the Development
Agreement.

     Substitute Member. A transferee of a Membership Interest who is admitted as a new
Member under Section 11.2 in respect of the Membership Interest transferred.

     Tax Allocation Provisions. The tax provisions to be followed by the Company as
described in Exhibit B.

     Transfer. The meaning set forth in Section 10.1 hereof.

     Treasury Regulations. The Treasury regulations promulgated under the Code, as amended
from time to time.

     TRS. The meaning set forth in Section 5.9(b) hereof.

     Unfunded Excess Project Costs. Any Excess Project Costs which, at the time they are
required to be paid by the Company, are not able to be funded from Mandatory Capital Contributions
and Project Financing. For purposes of determining Unfunded Excess Project Costs, the proceeds of
borrowings by the Company shall be deemed to be applied first to

A-10

 

Budgeted Project Costs, irrespective of how said proceeds may be allocated as between the
Company and the lenders in question.

A-11

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