Document:

exv10w1

Exhibit 10.1

TAX PROTECTION AGREEMENT

     THIS TAX PROTECTION AGREEMENT (this “Agreement”) is made and entered into as of
October 19, 2010 by and among CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership (the “Partnership”), CAMPUS CREST COMMUNITIES, INC., a Maryland
corporation (the “REIT”), and MXT CAPITAL, LLC, a Delaware limited liability company
(“MXT Capital”).

     WHEREAS, pursuant to that certain Contribution Agreement dated as of May 13, 2010, (the
“Contribution Agreement”), MXT Capital agreed to transfer to the Partnership all of MXT
Capital’s direct or indirect ownership interests in the Student Housing Entities (as defined in the
Contribution Agreement), in exchange for 232,593 units of limited partnership interest
(“Units”) in the Partnership and a cash payment of approximately is $3,334,062 (the
“Formation Transactions”) upon the consummation of the initial public offering of the
REIT’s common stock;

     WHEREAS, the Student Housing Entities, directly or indirectly, own certain real estate
properties (subject to certain liabilities) (the “Student Housing Properties”) and directly
or indirectly conduct the student housing business of MXT and certain other parties;

     WHEREAS, in consideration for the agreement of MXT Capital to enter into the Formation
Transactions the REIT and the Partnership desire to enter into this Agreement regarding amounts
that may become payable as a result of certain actions taken or to be taken by the Partnership with
respect to certain indebtedness of the Partnership and its Subsidiaries and with respect to Student
Housing Properties that secure such indebtedness.

     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants and agreements contained herein and in the Contribution Agreement, the parties hereto
hereby agree as follows:

ARTICLE 1

DEFINITIONS

     To the extent not otherwise defined herein, capitalized terms used in this Agreement have the
following meanings:

     “Closing Date” means the closing date of the Formation Transactions.

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

     “Consent” means the prior written consent to do the act or thing for which the consent is
required or solicited, which consent may be executed by a duly authorized officer or agent of the
party granting such consent.

     “Deficit Restoration Obligation” or “DRO” means a written obligation by a Protected Partner to
restore part or all of its deficit capital account balance in the Partnership upon the occurrence
of certain events.

 

 

     “DRO Amount” means the aggregate amount that is subject to a DRO by the Protected Partners at
any time.

     “General Partner” means Campus Crest Communities GP, LLC, the general partner of the
Partnership.

     “Guaranteed Amount” means the aggregate amount of each Guaranteed Debt that is guaranteed at
any time by Partner Guarantors.

     “Guaranteed Debt” means any loans assumed by the Partnership pursuant to the Formation
Transactions, or incurred (or assumed) by the Partnership or any Subsidiary that are guaranteed by
Partner Guarantors pursuant to Article 3 hereof at any time after the Closing Date.

     “Indirect Owner” in the case of a Protected Partner that is an entity classified as an “S
corporation”, a partnership or disregarded entity for federal income tax purposes, any person
owning an equity interest in such Protected Partner, and, in the case of any Indirect Owner that is
an entity classified as an “S corporation”, a partnership or disregarded entity for federal income
tax purposes, any person owning an equity interest in such entity.

     “Minimum Liability Amount” means, the amount set forth on Schedule 3.1 hereto.

     “Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section
1.752-1(a)(2).

     “Partner Guarantors” means those Protected Partners (or Indirect Owners) who have guaranteed
any portion of the Guaranteed Debt. The Partner Guarantors and each Partner Guarantor’s share of
the Guaranteed Amount will be set forth on Exhibit A to Schedule 3.7 hereto, as may be amended from
time to time.

     “Partnership” means Campus Crest Communities Operating Partnership, L.P., a Delaware limited
partnership.

     “Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of
Campus Crest Communities Operating Partnership, L.P., dated as of the Closing Date as amended, and
as the same may be further amended in accordance with the terms thereof.

     “Protected Partner” means (i) MXT Capital, LLC; and (ii) any person who acquires Units from a
Protected Partner in a transaction in which gain or loss is not recognized in whole or in part and
in which such transferee’s adjusted basis, as determined for federal income tax purposes, is
determined in whole or in part by reference to the adjusted basis of a Protected Partner in such
Units

     “Qualified Guarantee” has the meaning set forth in Section 3.2.

     “Qualified Guarantee Indebtedness” has the meaning set forth in Section 3.2.

     “Recourse Liability” has the meaning set forth in Treasury Regulations Section 1.752-1(a)(1).

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     “Subsidiary” means any entity in which the Partnership owns a direct or indirect interest
after giving effect to the Formation Transactions.

     “Tax Protection Period” means the period commencing on the Closing Date and ending on the
tenth (10th) anniversary of the Closing Date.

     “Units” means units of limited partnership interest of the Partnership, as described in the
Partnership Agreement.

ARTICLE 2

REPORTING OF FORMATION TRANSACTIONS

     For federal, state and local income tax purposes, the Partnership shall report: (i) MXT
Capital’s contribution of the Student Housing Entities to the Partnership as a tax free
contribution pursuant to Section 721 of the Code (or the corresponding provisions of state or local
law, as applicable); (ii) the payment $3,334,062 by the Partnership to MXT Capital as a
reimbursement of “pre-formation expenditures” (to the maximum extent permissible) under Section
1.707-4(d) of the Treasury Regulations or such other exception to the disguised sale rules; and
(iii) MXT Capital as a partner in the Partnership with respect to all Units received by MXT Capital
pursuant to the Formation Transactions. Notwithstanding the foregoing, the Partnership shall not
be deemed to have breached its obligations under this Article 2 solely because a governmental
taxing authority determines that the Partnership would be required to file an amended return or
amended information statement that reports the Formation Transactions other than as a contribution
pursuant to Section 721 of the Code and a reimbursement of “preformation expenditures” pursuant to
Section 1.707-4(d) of the Treasury Regulations.

ARTICLE 3

ALLOCATION OF LIABILITIES; GUARANTEE OPPORTUNITY

     3.1 Minimum Liability Allocation. During the Tax Protection Period, the
Partnership will offer to each Protected Partner (or, at the request of an Indirect Owner, such
Indirect Owner) the opportunity either (a) to enter into Qualified Guarantees (whether such
guarantee is in the form of a direct guarantee to the lender or an indemnification of the General
Partner or the REIT in the case of debt guaranteed or to be guaranteed by the General Partner or
the REIT) of Qualified Guarantee Indebtedness; or (b) to enter into a Deficit Restoration
Obligation or “DRO,” in such amount or amounts so as to cause the amount of partnership liabilities
allocated to such Protected Partner for purposes of Section 752 of the Code to be not less than
such Protected Partner’s Minimum Liability Amount, and to cause that amount of Partnership
liabilities with respect to which such Protected Partner will be considered “at risk” for purposes
of Section 465 of the Code to be not less than such Protected Partner’s Minimum Liability Amount,
as provided in this Article 3. In order to minimize the need for the Protected Partner (or Indirect
Owner) to enter into Qualified Guarantees or DROs, the Partnership will use the optional method
under Treasury Regulations Section 1.752-3(a)(3) to allocate Nonrecourse Liabilities to the
Protected Partners to the extent that the “built-in gain” with respect to Partnership properties
exceeds the amount of the Nonrecourse Liabilities considered secured by

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such properties allocated to the Protected Partners under Treasury Regulations Section
1.752-3(a)(2).

     3.2 Qualified Guarantee Indebtedness and Qualified Guarantee: Treatment of
Qualified Guarantee Indebtedness as Guaranteed Debt. In order for an offer by the
Partnership of an opportunity to guarantee indebtedness to satisfy the requirements of this Article
3 (whether in the form of a direct guarantee to the lender or an indemnification of the General
Partner or the REIT in the case of debt guaranteed or to be guaranteed by the General Partner or
the REIT), (i) the indebtedness to be guaranteed must satisfy all of the conditions set forth in
this Section 3.2 (indebtedness satisfying all such conditions is referred to as “Qualified
Guarantee Indebtedness”); (ii) the guarantee by the Partner Guarantors must be pursuant to a
Guarantee Agreement that satisfies the conditions set forth in Section 3.2(a) (each, a
“Qualified Guarantee”); (iii) the amount of debt required to be guaranteed by the Partner
Guarantor must not exceed the portion of the Guaranteed Amount for which an additional or
replacement guarantee is being offered; (iv) the debt to be guaranteed must be considered
indebtedness of the Partnership for purposes of determining the adjusted tax basis in their
partnership interests of the partners in the Partnership; and (v) the guarantee must cause the
Guaranteed Amount to be included in basis for federal income tax purposes of the Partner Guarantor
and considered to be “at risk” for purposes of Section 465 of the Code. If, and to the extent
that, a Partner Guarantor elects to guarantee Qualified Guarantee Indebtedness pursuant to an offer
made in accordance with this Article 3, such indebtedness thereafter shall be considered a
Guaranteed Debt and subject to all of the provisions of this Article 3. The conditions that must
be satisfied at all times with respect to any additional or replacement Guaranteed Debt offered
pursuant to this Article 3 hereof and the guarantees with respect thereto are as follows:

          (a) each such guarantee shall be a “bottom dollar guarantee” such that the lender with
respect to the Guaranteed Debt is required to pursue all other collateral and security for the
Guaranteed Debt (other than any “bottom dollar guarantees” permitted pursuant to this paragraph (a)
and/or Section 3.3 below) prior to seeking to collect on such a guarantee, and the lender shall
have recourse against the guarantee only if, and solely to the extent that, the total amount
recovered by the lender with respect to the Guaranteed Debt after the lender has exhausted its
remedies as set forth above is less than the aggregate of the Guaranteed Amounts with respect to
such Guaranteed Debt (plus the aggregate amounts of any other guarantees (x) that are in effect
with respect to such Guaranteed Debt at the time the guarantees pursuant to this Article 3 are
entered into, or (y) that are entered into after the date the guarantees pursuant to this Article 3
are entered into with respect to such Guaranteed Debt and that comply with Section 3.5 below, but
only to the extent that, in either case, such guarantees are “bottom dollar guarantees” with
respect to the Guaranteed Debt), and the maximum aggregate liability of each Partner Guarantor for
all Guaranteed Debt shall be limited to the amount actually guaranteed by such Partner Guarantor;

          (b) the fair market value of the collateral against which the lender has recourse pursuant
to the Guaranteed Debt, determined as of the time the guarantee is entered into (an independent
appraisal relied upon by the lender in making the loan shall be conclusive evidence of such fair
market value when the guarantee is being entered into in connection with the closing of such loan),
shall not be less than 150% of the sum of (1) the aggregate of the Guaranteed Amounts with respect
to such Guaranteed Debt, plus (2) the dollar amount of any

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other indebtedness that is senior to or pari passu with the Guaranteed Debt and as to which
the lender thereunder has recourse against property that is collateral of the Guaranteed Debt, plus
(3) the aggregate amounts of any other guarantees that are in effect with respect to such
Guaranteed Debt at the time the guarantees pursuant to this Article 3 are entered into with respect
to such Guaranteed Debt and that comply with Section 3.2(e) below, but only to the extent that such
guarantees are “bottom dollar guarantees” with respect to the Guaranteed Debt);

          (c) (i) the executed guarantee must be delivered to the lender, and (ii) (A) the execution
of the guarantee by the Partner Guarantors must be acknowledged by the lender as an inducement to
it to make a new loan, to continue an existing loan (which continuation is not otherwise required),
or to grant a material consent under an existing loan (which consent is not otherwise required to
be granted) or, alternatively, (B) the guarantee must otherwise be enforceable under the laws of
the state governing the loan and in which the property securing the loan is located or in which the
lender has a significant place of business (with any bona fide branch or office of the lender
through which the loan is made, negotiated, or administered being deemed a “significant place of
business” for the purposes hereof);

          (d) as to each Partner Guarantor that is executing a guarantee pursuant to this Agreement,
there must be no other person that would be considered to “bear the economic risk of loss,” within
the meaning of Treasury Regulations Section 1.752-2, or would be considered to be “at
risk” for purposes of Section 465(b) of the Code with respect to that portion of such debt for
which such Partner Guarantor is being made liable for purposes of satisfying the Partnership’s
obligations to such Partner Guarantor under this Article 3;

          (e) the aggregate Guaranteed Amounts with respect to the Guaranteed Debt will not exceed
25% of the amount of the Guaranteed Debt outstanding at the time the guarantee is executed. Except
for guarantees already in place at the time a guarantee opportunity is presented to the Protected
Partners, at no time can there be guarantees with respect to the Guaranteed Debt that are provided
by other persons that are “pari passu” with or at a lower level of risk than the guarantees
provided by the Protected Partners. If there are guarantees already in place at the time a
guarantee opportunity is presented to the Protected Partners that are “pari passu” with or at a
lower level of risk than the guarantees provided by the Protected Partners, then the amount of
Guaranteed Debt subject to such existing guarantees shall be added to the Guaranteed Amount for
purposes of calculating the 25% limitation set forth in this Section 3.2(d); and

          (f) the obligor with respect to the Guaranteed Debt is the Partnership or an entity which
is and will continue to be under the legal control of the Partnership (which shall include a
partnership or limited liability company in which the Partnership or a wholly-owned Subsidiary of
the Partnership is the sole managing general partner or sole managing member, as applicable).

     3.3 Covenant With Respect to Guaranteed Debt Collateral. The Partnership
covenants with the Partner Guarantors with respect to the Guaranteed Debt that it will not at any
time, whether during or following the Tax Protection Period, pledge the collateral with respect to
a Guaranteed Debt to secure any other indebtedness (unless such other indebtedness is, by its
terms, subordinate in all respects to the Guaranteed Debt for which such collateral is security) or

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otherwise voluntarily dispose of or reduce the amount of such collateral unless either (A)
after giving effect thereto the conditions in Section 3.2(b) would continue to be satisfied with
respect to the Guaranteed Debt, and the Guaranteed Debt otherwise would continue to be Qualified
Guarantee Indebtedness, or (B) the Partnership (x) obtains from the lender with respect to the
original Guaranteed Debt a full and complete release of any Partner Guarantor unless the Partner
Guarantor expressly requests that it not be released, and (y) if the Tax Protection Period has not
expired, offers to each Partner Guarantor with respect to such original Guaranteed Debt, not less
than thirty (30) days prior to such pledge or disposition, the opportunity to enter into a
Qualified Guarantee of other Partnership indebtedness that constitutes Qualified Guarantee
Indebtedness (with such replacement indebtedness thereafter being considered a Guaranteed Debt and
subject to this Article 3) in an amount equal to the amount of such original Guaranteed Debt that
was guaranteed by such Partner Guarantor or, at the option of the Protected Partner, to enter into
a Deficit Restoration Obligation in the amount of the original Guaranteed Debt that was guaranteed
by such Partner Guarantor.

     3.4 Repayment or Refinancing of Guaranteed Debt. The Partnership shall not, at
any time during the Tax Protection Period applicable to a Partner Guarantor, repay or refinance all
or any portion of any Guaranteed Debt unless (i) after taking into account such repayment, the
applicable Partner Guarantor would be entitled to include in its basis for its Units an amount of
Guaranteed Debt equal to its Minimum Liability Amount, or (ii) alternatively, the Partnership, not
less than thirty (30) days prior to such repayment or refinancing, offers to the applicable Partner
Guarantors the opportunity either (1) to enter into a Qualified Guarantee with respect to other
Qualified Guarantee Indebtedness; or (2) to enter into a Deficit Restoration Obligation, in either
case, in an amount sufficient so that, taking into account such guarantees of such other Qualified
Guaranteed Indebtedness, as applicable, each Partner Guarantor who guarantees such other Qualified
Guaranteed Indebtedness or enters into a Deficit Restoration Obligation would be entitled to
include in its adjusted tax basis of its Units debt equal to the Minimum Liability Amount for such
Partner Guarantor.

     3.5 Limitation on Additional Guarantees With Respect to Debt Secured by Collateral for
Guaranteed Debt. The Partnership shall not offer the opportunity or make available to any
person or entity other than a Protected Partner (or Indirect Owner) a guarantee of any Guaranteed
Debt or other debt that is secured, directly or indirectly, by any collateral for Guaranteed Debt
unless (i) such debt by its terms is subordinate in all respects to the Guaranteed Debt or, if such
other guarantees are of the Guaranteed Debt itself, such guarantees by their terms must be paid in
full before the lender can have recourse to the Partner Guarantors (i.e., the first dollar amount
of recovery by the applicable lenders must be applied to the Guaranteed Amount); provided that the
foregoing shall not apply with respect to additional guarantees of Guaranteed Debt so long as the
conditions set forth in Sections 3.2(b) and (e) would be satisfied immediately after the
implementation of such additional guarantee (determined in the case of Section 3.2(b), based upon
the fair market value of the collateral for such Guaranteed Debt at the time the additional
guarantee is entered into and adding the amount of such additional guarantee(s) to the sum of the
applicable Guaranteed Amounts plus any other preexisting “bottom dollar guarantee” previously
permitted pursuant to this Section 3.5 or Sections 3.2(a) and (b) above, for purposes of making the
computation provided for in Section 3.2(b)), and (ii) such other guarantees do not have the effect
of reducing the amount of the Guaranteed Debt that

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is includible by any Partner Guarantor in its adjusted tax basis for its Units pursuant to
Treasury Regulations Section 1.752-2.

     3.6 Process. Whenever the Partnership is required under this Article 3 to offer
to one or more of the Partner Guarantors an opportunity to guarantee Qualified Guarantee
Indebtedness or enter into a DRO, the Partnership shall be considered to have satisfied its
obligation if the other conditions in this Article 3 are satisfied and, not less than thirty (30)
days prior to the date that such guarantee would be required to be executed in order to satisfy
this Article 3, the Partnership sends by first class mail, return receipt requested, to the last
known address of each such Partner Guarantor (as reflected in the records of the Partnership) the
Guarantee Agreement, or DRO, as applicable, to be executed and an explanation of the relevant
circumstances (including, as applicable, that the offer is being made pursuant to this Article 3,
the circumstances giving rise to the offer, a brief summary of the terms of the Qualified Guarantee
Indebtedness to be guaranteed, a brief description of the collateral for the Qualified Guarantee
Indebtedness, a statement of the amount to be guaranteed, the address to which the executed
Guarantee Agreement or DRO, as applicable, must be sent and the date by which it must be received,
and a statement to the effect that, if the Protected Partner fails to execute and return such
Agreement within the time period specified, the Partner Guarantor thereafter would lose its rights
under this Article 3 with respect to the amount of debt that the Partnership is required to offer
to be guaranteed or made available for the DRO, and depending upon the Partner Guarantor’s
circumstances and other circumstances related to the Partnership, the Partner Guarantor could be
required to recognize taxable gain as a result thereof, either currently or prior to the expiration
of the Tax Protection Period, that otherwise would have been deferred).

     3.7 Presumption as to Schedule 3.7. The form of the Guarantee Agreement attached
hereto as Schedule 3.7 shall be conclusively presumed to satisfy the conditions set forth in
Section 3.2 and to have caused the Guaranteed Debt to be considered allocable to the Guarantor
Partner who enters into such Guarantee Agreement pursuant to Treasury Regulation § 1.752-2 and
Section 465 of the Code so long as all of the following conditions are met with respect such
Guaranteed Debt:

	 	(i)	 	there are no other guarantees in effect with respect to such
Guaranteed Debt (other than the guarantees contemporaneously being
entered into by the Partner Guarantors pursuant to this Article 3);
	 
	 	(ii)	 	the collateral securing such Guaranteed Debt is not, and shall not
thereafter become, collateral for any other indebtedness that is
senior to or pari passu with such Guaranteed Debt;
	 
	 	(iii)	 	no additional guarantees with respect to such Guaranteed Debt will
be entered into during the applicable Tax Protection Period pursuant
to the proviso set forth in Section 3.3;
	 
	 	(iv)	 	the lender with respect to such Guaranteed Debt is not the
Partnership, any Subsidiary or other entity in which the Partnership
owns a direct or indirect interest, the REIT, any other partner in
the Partnership, or any person related to any partner in the
Partnership as determined for purposes of Treasury

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	 	 	 	Regulation §
1.752-2 or any person that would be considered a “related party” as
determined for purposes of Section 465 of the Code; and

	 	(v)	 	none of the REIT, nor any other partner in the Partnership, nor any
person related to any partner in the Partnership as determined for
purposes of Treasury Regulation § 1.752-2 shall have provided, or
shall thereafter provide, collateral for, or otherwise shall have
entered into, or shall thereafter enter into, a relationship that
would cause such person or entity to be considered to bear the risk of
loss with respect to such Guaranteed Debt, as determined for purposes
of Treasury Regulation § 1.752-2 or that would cause such entity to be
considered “at risk” with respect to such Guaranteed Debt, as
determined for purposes of Section 465 of the Code.

     3.8 Deficit Restoration Obligation. The Partnership will maintain an amount of
indebtedness of the Partnership that would be considered a Recourse Liability (taking into account
all of the facts and circumstances related to the indebtedness, the Partnership and the General
Partner) equal to or greater than the sum of the amounts subject to a DRO of all Protected Partners
and other partners in the Partnership (the “Aggregate DRO Amount”). The deficit restoration
obligation shall be conclusively presumed to cause the Protected Partner to be allocated an amount
of liabilities equal to the DRO Amount of such Protected Partner for purposes of Section 752 of the
Code, provided that (1) the Partnership maintains an amount of debt that is considered “recourse”
indebtedness (determined for purposes of Section 752 of the Code and taking into account all of the
facts and circumstances related to the indebtedness, the Partnership and the General Partner) equal
to the aggregate DRO Amounts of all partners of the Partnership and (2) all other terms and
conditions of the Partnership Agreement with respect to such deficit restoration obligation are
met. For the avoidance of doubt, the purpose of this Section 3.8 is not to require the Partnership
to incur or increase the amount of Recourse Liabilities, if any, to which the Protected Properties
are subject, provided that the Partnership maintains in place sufficient Recourse Liabilities to
cover the Aggregate DRO Amount, if any, from time to time and does not take any actions (or cause
or permit such actions to be taken) that would decrease the amount of such Recourse Liabilities
that are allocable to the Protected Partners under Section 752 of the Code as a result of any such
DRO entered into by such Protected Partner.

     3.9 Additional Guarantee and DRO Opportunities. Without limiting any of the other
obligations of the Partnership under this Agreement, from and after the expiration of the Tax
Protection Period, the Partnership shall, upon a request from a Protected Partner, use commercially
reasonable efforts to permit such Protected Partner to enter into an agreement with the Partnership
to bear the economic risk of loss as to a portion of the Partnership’s recourse indebtedness by
undertaking an obligation to restore a portion of its negative capital account balance upon
liquidation of such Protected Partner’s interest in the Partnership and/or to bear financial
liability under a Guarantee Agreement substantially in the form of Schedule 3.7 hereto for
indebtedness that would be considered Qualifying Guarantee Indebtedness under Section 3.2 hereof,
if such Protected Partner shall provide information from its professional tax advisor satisfactory
to the Partnership showing that, in the absence of such agreement, such Protected Partner likely
would not be allocated from the Partnership sufficient indebtedness under

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Section 752 of the Code and the at-risk provisions under Section 465 of the Code to avoid the
recognition of gain (other than gain required to be recognized by reason of actual cash
distributions from the Partnership). The Partnership and its professional tax advisors shall
cooperate in good faith with such Protected Partner and its professional tax advisors to provide
such information regarding the allocation of the Partnership liabilities and the nature of such
liabilities as is reasonably necessary in order to determine the Protected Partner’s adjusted tax
basis in its Units and at-risk amount. If the Partnership permits a Protected Partner to enter into
an agreement under this Section 3.9, the Partnership shall be under no further obligation with
respect thereto, and the Partnership shall not be required to indemnify such Protected Partner for
any damage incurred, in connection with or as a result of such agreement or the indebtedness,
including without limitation a refinancing or prepayment thereof or taking any of the other actions
required by Article 3 hereof with respect to Qualified Indebtedness.

ARTICLE 4

REMEDIES FOR BREACH

     4.1 Monetary Damages. In the event that the Partnership breaches its obligations
set forth in Article 2, Article 3, or Article 6 with respect to a Protected Partner (or Indirect
Owner), the Protected Partner’s (and Indirect Owner’s) sole right shall be to receive from the
Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to
the aggregate federal, state and local income taxes incurred by the Protected Partner (or Indirect
Owner) as a result of the income or gain allocated to, or otherwise recognized by, such Protected
Partner (or Indirect Owner) with respect to its Units by reason of such breach plus an amount equal
to the aggregate federal, state, and local income taxes payable by the Protected Partner (or
Indirect Owner) as a result of the receipt of any payment required under this Section 4.1.

     For purposes of determining the amount of the indemnity payment owed to a Protected Partner or
Indirect Owner pursuant to this Section 4.1 (1) all income arising from a transaction or event that
is treated as ordinary income under applicable provisions of the Code and all payments under this
Section 4.1 shall be treated as subject to federal, state, and local income tax at an effective tax
rate imposed on ordinary income of individuals residing in the city and state of residence of such
Protected Partner, determined using the maximum federal rate of tax on ordinary income and the
maximum state and local rates of tax on ordinary income then in effect in such city and state, (2)
all income arising from a transaction or event that is treated as “unrecaptured section 1250 gain”
within the meaning of Section 1(h)(6) of the Code with respect to such Protected Partner shall be
subject to federal, state, and local income tax at the effective tax rate imposed on the
unrecaptured section 1250 gain of individuals residing in the city and state of residence of such
Protected Partner, (3) all other income arising from the transaction or event shall be subject to
federal, state and local income tax at the effective tax rate imposed on long-term capital gains of
individuals residing in the city and state of residence of the Protected Partner, determined using
the maximum federal, state, and local rates of tax imposed on long-term capital gains then in
effect, (4) any amounts giving rise to a payment under this Section 4.1 will be determined assuming
that the transaction or event giving rise to the Partnership’s obligation to make a payment was the
only transaction or event reported on the Protected Partner’s tax return (i.e., without giving
effect to any loss carryforwards or other deductions

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attributable to such Protected Partner) with respect to its direct or indirect investment in
the Partnership, and (5) any amounts payable with respect to state and local income taxes shall be
treated as deductible for federal income tax purposes (taking into account any limitation or
phaseout of itemized deductions applicable to taxpayers in the highest federal income tax bracket).
In the case of a Protected Partner that is a partnership, “S corporation” or a disregarded entity
for federal income tax purposes, the preceding sentence shall be applied treating each Indirect
Owner of such partnership, “S corporation” or disregarded entity as if it were directly a Protected
Partner.

     4.2 Process for Determining Damages.

          (a) At the time the Partnership (or a Subsidiary) enters into an agreement to consummate a
transaction that, if consummated, would result in a breach of the Partnership’s obligations under
Article 2, Article 3 or Article 6 hereof (a “Prohibited Transaction”), and in any case not
less than thirty (30) days prior to consummating such Prohibited Transaction, the Partnership shall
notify each affected Protected Partner (or Indirect Owner) in writing, which such notice shall
include the approximate sales price or other amount to be realized for income tax purposes in
connection with such Prohibited Transaction and all other relevant details of the Prohibited
Transaction and shall request from the Protected Partner (or Indirect Owner) such information that
is within the Protected Partner’s (or Indirect Owner’s) possession or control and is relevant to
the calculation of the indemnity set forth in Section 4.1 hereof within ten (10) days of such
request. Within ten (10) days after receipt of such information from the Protected Partner (or
Indirect Owner) (or, if no such information is requested, at the same time the Partnership notifies
the Protected Partner (or Indirect Owner) of the Prohibited Transaction as provided above), the
Partnership shall provide to the Protected Partner a computation of the indemnity payment, if any,
owing to the Protected Partner pursuant to Section 4.1 resulting from such Prohibited Transaction.
The Protected Partner (or Indirect Owner) shall have five (5) days from its receipt of the
Partnership’s calculation of the amount of the indemnity due under Section 4.1 hereof to review and
raise any objections to such calculation. The Partnership and the Protected Partner (or Indirect
Owner) hereby agree to negotiate in good faith any objections raised by the Protected Partner (or
Indirect Owner) to such indemnity calculation.

          (b) Notwithstanding anything to the contrary contained herein, the Partnership may not
enter into a Prohibited Transaction unless, at least fourteen (14) days prior to entering into such
transaction, the Partnership will have provided the Protected Partner with evidence reasonably
satisfactory to the Protected Partner that, following such transaction, and including any proceeds
from such transaction, the Partnership will have the requisite liquidity to make any necessary
indemnification payments required pursuant to this Agreement. The Protected Partner shall have the
right to seek and obtain specific performance or injunctive relief with respect to this Section
4.2(b).

     4.3 Required Notices: Time for Payment. The Partnership shall make any required
indemnity payment owing to a Protected Partner (or Indirect Owner) pursuant to Section 4.1 no later
than five (5) days prior to the due date of the quarterly estimated tax payment for individuals
which next follows the date that the Prohibited Transaction is consummated or, if later, ten (10)
days after the date required for the Partnership’s delivery of the computation of the indemnity
payment to the Protected Partner (or Indirect Owner). In the event of a payment

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required after the date required pursuant to this Section 4.3, interest shall accrue on the
aggregate amount required to be paid from such date to the date of actual payment at a rate equal
to the “prime rate” of interest, as published in the Wall Street Journal, or comparable publication
if the aforementioned rate is not available, effective as of the date the payment is required to be
made.

     4.4 Additional Damages for Breaches of Section 3.3. Notwithstanding any of the
foregoing in this Article 4, in the event that the Partnership should breach any of its covenants
set forth in Section 3.3 hereof and a Protected Partner (or Indirect Owner) is required to make a
payment in respect of such indebtedness that it would not have had to make if such breach had not
occurred (an “Excess Payment”), then, in addition to the damages provided for in the other
Sections of this Article 4, the Partnership shall pay to such Protected Partner (or Indirect Owner)
an amount equal to the sum of (i) the Excess Payment, and (ii) an amount equal to the aggregate
federal, state and local income taxes required to be paid by the Protected Partner (computed as set
forth in Section 4.1) as a result of any payment required under this Section 4.4. Such amount shall
be paid within fifteen (15) days of the Partnership’s receipt of notice from the Protected Partner
(or Indirect Owner) of the Partnership’s breach of the covenants set forth in Section 3.3 hereof.

ARTICLE 5

SECTION 704(C) METHOD AND ALLOCATIONS

     Notwithstanding any provision of the Partnership Agreement, the Partnership shall use, and
shall cause any other entity in which the Partnership has a direct or indirect interest to use, the
“traditional method” under Treasury Regulations Section 1.704-3(b) for purposes of making all
allocations under Section 704(c) of the Code with respect to each property listed on Schedule 5 to
take into account the book-tax disparities as of the Closing Date and with respect to any
revaluation of such property pursuant to Treasury Regulations Sections 1.704-1(b)(2)(iv)(f),
1.704-1(b)(2)(iv)(g), or 1.704-3(a)(6) with no “curative allocations”, “remedial allocations” or
adjustments to other items to offset the effects of the “ceiling rule,” including upon any sale of
any property listed on Schedule 5.

ARTICLE 6

ALLOCATIONS OF LIABILITIES PURSUANT TO REGULATIONS UNDER SECTION 752

     6.1 Allocation Methods to be Followed. Except as provided in Section 6.2, all tax
returns prepared by the Partnership with respect to the Tax Protection Period that allocate
liabilities of the Partnership for purposes of Section 752 of the Code and the Treasury Regulations
thereunder shall treat each Partner Guarantor as being allocated for federal income tax purposes an
amount of debt comprised of (i) Recourse Debt allocated pursuant to Treasury Regulations Section
1.752-2, (ii) any nonrecourse debt otherwise allocable to such Partner Guarantor in accordance with
the Partnership Agreement and Treasury Regulations Section 1.752-3 and (iii) any other recourse
liabilities allocable to such Partner Guarantor by reason of guarantees of indebtedness entered
into pursuant to other agreements with the Partnership at least equal to such Partner Guarantor’s
Minimum Liability Amount, as set forth on Schedule 3.1 hereto and as maybe reduced pursuant to the
terms of this Agreement, and the Partnership and the REIT shall not, during or with respect to the
Tax Protection Period, take any contrary or

11

 

inconsistent position in any federal or state income tax returns (including, without
limitation, information returns, such as Forms K-1, provided to partners in the Partnership and
returns of Subsidiaries of the Partnership) or any dealings involving the Internal Revenue Service
(including, without limitation, any audit, administrative appeal or any judicial proceeding
involving the income tax returns of the Partnership or the tax treatment of any holder of
partnership interests the Partnership).

     6.2 Exception to Required Allocation Method. Notwithstanding the provisions of
this Agreement, the Partnership shall not be required to make allocations of Guaranteed Debt or
other recourse debt of the Partnership to the Protected Partners as set forth in this Agreement if
and to the extent that the Partnership determines in good faith that there may not be “substantial
authority” (within the meaning of Treasury Regulations §1.6662-4(d)) for such allocation; provided
that the Partnership shall provide to each Protected Partner, notice of such determination and if,
within forty-five (45) days after the receipt thereof, the Partnership is provided an opinion of a
law firm recognized as expert in such matters or a nationally recognized public accounting firm to
the effect that there is “substantial authority” (within the meaning of Treasury Regulations
§1.6662-4(d)) for such allocations, the Partnership shall continue to make allocations of
Guaranteed Debt or other recourse debt of the Partnership to the Protected Partners as set forth in
this Agreement; provided further that if there shall have been a judicial determination in a
proceeding to which the Partnership is a party to the effect that such allocations are not correct,
Section 6.1 shall not apply unless the matter is being appealed to an applicable court of appeals,
the requirements of Section 9.10 shall have been satisfied in connection therewith, and the opinion
described above from counsel or accountants engaged by a Protected Partner shall have been
provided, except that such opinion shall be to the effect that it is more likely than not that such
allocations will be respected. In no event shall this Section 6.2 be construed to relieve the
Partnership for liability arising from a failure by the Partnership to comply with one or more of
the provisions of Article 3 of this Agreement.

     6.3 Cooperation in the Event of a Change. If a change in the Partnership’s
allocations of Guaranteed Debt or other recourse debt of the Partnership to the Protected Partners
is required by reason of circumstances described in Section 6.2, the Partnership and its
professional tax advisors shall cooperate in good faith with each Protected Partner (or in the
event of their death or disability, their executor, guardian or custodian, as applicable) and their
professional tax advisors to develop alternative allocation arrangements and/or other mechanisms
that protect the federal income tax positions of the Protected Partners in the manner contemplated
by the allocations of Guaranteed Debt or other recourse debt of the Partnership to the Protected
Partners as set forth in this Agreement.

ARTICLE 7

TAX PROCEEDINGS

     7.1 Notice of Tax Audits. If any claim, demand, assessment (including a notice of
proposed assessment) or other assertion is made with respect to taxes against the Protected
Partners or the Partnership, the calculation of which involves a matter covered in this Agreement,
that could result in tax liability to a Protected Partner (“Tax Claim”) or if the REIT or
the Partnership receives any notice from any jurisdiction with respect to any current or future
audit, examination, investigation or other proceeding (“Tax Proceeding”) involving the
Protected

12

 

Partners or the Partnership or that otherwise could involve a matter covered in this Agreement
and could directly or indirectly affect the Protected Partners (adversely or otherwise), the REIT
or the Partnership, as applicable, shall promptly notify the Protected Partners of such Tax Claim
or Tax Proceeding.

     7.2 Control of Tax Proceedings. The REIT, as the sole member in the general
partner of the Partnership, shall have the right to control the defense, settlement or compromise
of any Tax Proceeding or Tax Claim; provided, however, that the REIT shall not consent to the entry
of any judgment or enter into any settlement with respect to such Tax Claim or Tax Proceeding that
could result in tax liability to a Protected Partner (or Indirect Owner) without the prior written
consent of the affected Protected Partners (unless, and only to the extent, that any taxes required
to be paid by the Protected Partner (or Indirect Owners) as a result thereof would be required to
be reimbursed by the Partnership and the REIT under Article 4, and the Partnership and the REIT
agree in connection with such settlement or consent to make such required payments); provided
further that the Partnership shall keep the Protected Partners duly informed of the progress
thereof to the extent that such Proceeding or Tax Claim could directly or indirectly affect
(adversely or otherwise) the Protected Partners (or Indirect Owners) and that the Protected Partner
shall have the right to review and comment on any and all submissions made to the Internal Revenue
Service, a court, or other governmental body with respect to such Tax Claim or Tax Proceeding and
that the Partnership will consider such comments in good faith.

     7.3 Timing of Tax Returns: Periodic Tax Information. The Partnership shall cause
to be delivered to each Protected Partner, as soon as practicable each year, the Schedules K-1 that
the Partnership is required to deliver to such Protected Partner with respect to the prior taxable
year. In addition, the Partnership agrees to provide to each Protected Partner, upon request, an
estimate of the taxable income expected to be allocable for a specified taxable year from the
Partnership to such Protected Partner, provided that such estimates shall not be required to be
provided more frequently than once each calendar quarter.

ARTICLE 8

AMENDMENT OF THIS AGREEMENT; WAIVER OF CERTAIN PROVISIONS; APPROVAL OF CERTAIN TRANSACTIONS

     8.1 Amendment. This Agreement may not be amended, directly or indirectly
(including by reason of a merger between the Partnership and another entity) except by a written
instrument signed by the REIT, the General Partner, and each of the Protected Partners.

     8.2 Waiver. Notwithstanding the foregoing, upon written request by the
Partnership, each Protected Partner (or Indirect Owner), in its sole discretion, may waive the
payment of any damages that is otherwise payable to such Protected Partner (or Indirect Owner)
pursuant to Article 4 hereof. Such a waiver shall be effective only if obtained in writing from
the affected Protected Partner (or Indirect Owner).

13

 

ARTICLE 9

MISCELLANEOUS

     9.1 Additional Actions and Documents. Each of the parties hereto hereby agrees to
take or cause to be taken such further actions, to execute, deliver, and file or cause to be
executed, delivered and filed such further documents, and will obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and
conditions of this Agreement.

     9.2 Assignment. No party hereto shall assign its or his rights or obligations
under this Agreement, in whole or in part, except by operation of law, without the prior written
consent of the other parties hereto, and any such assignment contrary to the terms hereof shall be
null and void and of no force and effect.

     9.3 Successors and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of the Protected Partner, the Indirect Owners, and their respective successors and
permitted assigns, whether so expressed or not. This Agreement shall be binding upon the REIT, the
Partnership, and any entity that is a direct or indirect successor, whether by merger, transfer,
spin-off or otherwise, to all or substantially all of the assets of either the REIT or the
Partnership (or any prior successor thereto as set forth in the preceding portion of this
sentence), provided that none of the foregoing shall result in the release of liability of the REIT
and the Partnership hereunder. The REIT and the Partnership covenant with and for the benefit of
the Protected Partner (and Indirect Owners) not to undertake any transfer of all or substantially
all of the assets of either entity (whether by merger, transfer, spin-off or otherwise) unless the
transferee has acknowledged in writing and agreed in writing to be bound by this Agreement,
provided that the foregoing shall not be deemed to permit any transaction otherwise prohibited by
this Agreement.

     9.4 Modification: Waiver. No failure or delay on the part of any party hereto in
exercising any power or right hereunder shall operate as a waiver thereof nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the parties hereunder are cumulative and not
exclusive of any rights or remedies which they would otherwise have. No modification or waiver of
any provision of this Agreement, nor consent to any departure by any party therefrom, shall in any
event be effective unless the same shall be in writing, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No notice to or
demand on any party in any case shall entitle such party to any other or further notice or demand
in similar or other circumstances.

     9.5 Representations and Warranties Regarding Authority: Noncontravention.

          (a) Representations and Warranties of the REIT and the Partnership. Each of the
REIT and the Partnership has the requisite corporate or other (as the case may be) power and
authority to enter into this Agreement and to perform its respective obligations hereunder. The
execution and delivery of this Agreement by each of the REIT and the Partnership and the
performance of each of its respective obligations hereunder have been duly authorized by all
necessary corporate, partnership, or other (as the case may be) action on the part of each of the

14

 

REIT and the Partnership. This Agreement has been duly executed and delivered by each of the
REIT and the Partnership and constitutes a valid and binding obligation of each of the REIT and the
Partnership, enforceable against each of the REIT and the Partnership in accordance with its terms,
except as such enforcement may be limited by (i) applicable bankruptcy or insolvency laws (or other
laws affecting creditors’ rights generally) or (ii) general principles of equity. The execution
and delivery of this Agreement by each of the REIT and the Partnership do not, and the performance
by each of its respective obligations hereunder will not, conflict with, or result in any violation
of (x) the Partnership Agreement or (y) any other agreement applicable to the REIT and/or the
Partnership, other than, in the case of clause (y), any such conflicts or violations that would not
materially adversely affect the performance by the Partnership and the REIT of their obligations
hereunder.

          (b) Representations and Warranties of the Protected Partner. The Protected
Partner has the requisite corporate or other (as the case may be) power and authority to enter into
this Agreement and to perform its respective obligations hereunder. The execution and delivery of
this Agreement by the Protected Partner and the performance of its respective obligations hereunder
have been duly authorized by all necessary trust, partnership, or other (as the case may be) action
on the part of the Protected Partner. This Agreement has been duly executed and delivered by the
Protected Partner and constitutes a valid and binding obligation of the Protected Partner.

     9.6 Captions. The Article and Section headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for
any purpose, and shall not in any way define or affect the meaning, construction or scope of any of
the provisions hereof.

     9.7 Notices. All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of the date delivered,
mailed or transmitted, and shall be effective upon receipt, if delivered personally, mailed by
registered or certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified by like changes of
address) or sent by electronic transmission to the telecopier number specified below:

     (i) if to the Partnership or the REIT, to:

Campus Crest Communities, Inc.

2100 Rexford Road, Suite 414

Charlotte, NC 28211

Attention: Chief Financial Officer

Facsimile: (704) 937-0965

     (ii) if to a Protected Partner, (or Indirect Owner) to the address on file with the
Partnership.

Each party may designate by notice in writing a new address to which any notice, demand, request or
communication may thereafter be so given, served or sent. Each notice, demand, request, or
communication which shall be hand delivered, sent, mailed, telecopied or telexed in

15

 

the manner described above, or which shall be delivered to a telegraph company, shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at such time as it is
delivered to the addressee (with the return receipt, the delivery receipt, or (with respect to a
telecopy or telex) the answerback being deemed conclusive, but not exclusive, evidence of such
delivery) or at such time as delivery is refused by the addressee upon presentation.

     9.8 Counterparts. This Agreement may be executed in two or more counterparts, all
of which shall be considered one and the same agreement and each of which shall be deemed an
original.

     9.9 Governing Law. The interpretation and construction of this Agreement, and all
matters relating thereto, shall be governed by the laws of the State of North Carolina, without
regard to the choice of law provisions thereof.

     9.10 Dispute Resolution/Arbitration/Mediation.

          (a) Dispute Resolution. The parties hereby agree that, in order to obtain prompt
and expeditious resolution of any disputes under this Agreement, each claim, dispute or controversy
of whatever nature, arising out of, in connection with, or in relation to this Agreement (or any
other agreement contemplated by or related to this Agreement), including, the interpretation,
performance or breach thereof, and including without limitation any claim based on contract, tort
or statute, or the arbitrability of any claim hereunder (an “Arbitrable Claim”), shall be
settled by final and binding arbitration conducted in Charlotte, North Carolina. Any Arbitrable
Claims under this Agreement shall be resolved in accordance with a two-step dispute resolution
process administered by Judicial Arbitration & Mediation Services, Inc. (“JAMS”) involving, first,
mediation before a member of the JAMS panel, followed, if necessary, by final and binding
arbitration before the same, or if requested by either party, another JAMS panelist. Such dispute
resolution process shall be confidential, except as required for financial, tax, or legal advice;
to enforce the terms of this Agreement; or to secure and/or enforce a judgment on any award.

          (b) Mediation. In the event any Arbitrable Claim is not resolved by an informal
negotiation between the parties within fifteen (15) days after either party receives written notice
that a Arbitrable Claim exists, the matter shall be referred to the Atlanta, Georgia office of
JAMS, or any other office agreed to by the parties, for an informal, non-binding mediation
consisting of one or more conferences between the parties in which JAMS panelist will seek to guide
the parties to a resolution of the Arbitrable Claims. In the event the parties cannot agree on a
mediator, the Administrator of JAMS will appoint a mediator. The mediation process shall continue
until the earliest to occur of the following: (i) the Arbitrable Claims are resolved, (ii) the
mediator makes a finding that there is no possibility of resolution through mediation, or (iii)
thirty (30) days have elapsed since the Arbitrable Claim was first scheduled for mediation.

          (c) Arbitration. Should any Arbitrable Claims remain after the completion of the
mediation process described above, the parties agree to submit all remaining Arbitrable

16

 

Claims to final and binding arbitration administered by a single JAMS arbitrator in accordance
with the then existing JAMS Comprehensive Arbitration Rules & Procedures. Neither party nor the
arbitrator shall disclose the existence, content, or results of any arbitration hereunder without
the prior written consent of all parties, except as required for financial, tax, or legal advice;
to enforce the terms of this Agreement; or to secure and/or enforce a judgment on any arbitration
award. Except as provided herein, the North Carolina Revised Uniform Arbitration Act shall govern
the interpretation, enforcement and all proceedings pursuant to this subparagraph. The arbitrator
is without jurisdiction to apply any substantive law other than the laws selected or otherwise
expressly provided in this Agreement. The arbitrator shall render an award and a written, reasoned
opinion in support thereof. Judgment upon the award may be entered in any court having jurisdiction
thereof.

          (d) Survivability. This dispute resolution process shall survive the termination
of this Agreement. The parties expressly acknowledge that by signing this Agreement, they are
giving up their respective right to a jury trial.

     9.11 Severability. If any part of any provision of this Agreement shall be
invalid or unenforceable in any respect, such part shall be ineffective to the extent of such
invalidity or unenforceability only, without in any way affecting the remaining parts of such
provision or the remaining provisions of this Agreement.

     9.12 Costs of Disputes. Except as otherwise expressly set forth in this
Agreement, the nonprevailing party in any dispute arising hereunder shall bear and pay the costs
and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by
the prevailing party or parties in connection with resolving such dispute.

     9.13 Conflicts. The parties understand and agree that the obligations of the
Partnership under this Agreement shall be in addition to its obligations under the Partnership
Agreement, and to the extent of any inconsistency between this Agreement and the Partnership
Agreement, the terms of this Agreement shall control; provided, that under no circumstances shall
the terms or application of this Section 9.13 be deemed to be or result in an amendment to the
Partnership Agreement.

Signatures on the Following Page

17

 

     IN WITNESS WHEREOF, the REIT, the Partnership, the Protected Partner and the Indirect Owners
have caused this Agreement to be signed by their respective officers (or general partners)
thereunto duly authorized all as of the date first written above.

	 	 	 	 	 
	 	THE REIT:

CAMPUS CREST COMMUNITIES, INC.

 	 
	 	By:  	/s/
Earl C. Howell	 
	 	 	Earl C. Howell, President 	 
	 	 	 	 
	 
	 	THE PARTNERSHIP:

CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, L.P.

 	 
	 	By:  	CAMPUS CREST COMMUNITIES, GP, LLC, its General Partner
 	 
	 	 	 
	 	By:  	
CAMPUS CREST COMMUNITIES, INC., 

its sole Member
 	 
	 	 	 
	 	By:  	/s/
Earl C. Howell	 
	 	 	Earl C. Howell, President 	 
	 	 	 	 
	 	THE PROTECTED PARTNER:

MXT CAPITAL, LLC

 	 
	 	By:  	/s/
Ted W. Rollins	 
	 		its Managing Member 	 
	 	 	 	 
	 
	 	THE INDIRECT OWNERS:

 	 
	 	/s/
Ted W. Rollins	 
	 	TED W. ROLLINS 	 
	 	 	 	 
	 	/s/
Michael S. Hartnett
 	 
	 	MICHAEL S. HARTNETT 	 
	 	 	 	 

18

 

	 	 	 	 	 

SCHEDULE 3.1

MINIMUM LIABILITY AMOUNT

Fifty Six Million and No/100 ($56,000,000)

 

 

SCHEDULE 3.7

FORM OF GUARANTEE1

GUARANTEE

     This Guarantee is made and entered into as of the ____ day of ___________ ____, by the persons
listed on Exhibit A annexed hereto (the “Guarantors”) for the benefit of the Lender set
forth on Exhibit B annexed hereto and made a part hereof (the “Lender”) which term shall
include any person or entity who hereafter holds the Note (as defined below) in accordance with the
terms hereof).

RECITALS

     WHEREAS, the Lender has loaned to the borrower set forth on Exhibit B (the “Borrower”)
the amount set forth opposite such Lender’s name on Exhibit B, which loan (i) is evidenced by the
promissory note described on Exhibit C hereto (the “Note”), (ii) has a current outstanding
balance in the amount set forth on Exhibit B annexed hereto, and (ii) is secured by a mortgage or
deed of trust on the collateral described on Exhibit D annexed hereto (the “Deed of
Trust”), with the property and other assets securing such Deed of Trust referred to as the
“Collateral”);

 

			
	1	 	This Form of the Guarantee is for Guaranteed
Debt where the following conditions all are applicable:

	 	(i)	 	there are no other guarantees in effect with respect to such
Guaranteed Debt;
	 
	 	(ii)	 	the collateral securing such Guaranteed Debt is not collateral
for any other indebtedness that is senior to or pari passu with such
Guaranteed Debt;
	 
	 	(iii)	 	no additional guarantees with respect to such Guaranteed Debt
will be entered into during the applicable Tax Protection Period
pursuant to the proviso set forth in Section 3.5;
	 
	 	(iv)	 	the lender with respect to such Guaranteed Debt is not the
Partnership, any Subsidiary or other entity in which the Partnership
owns a direct or indirect interest, the REIT, any other partner in
the Partnership, or any person related to any partner in the
Partnership is determined for purposes of Treasury Regulation §
1.752-2; and
	 
	 	(v)	 	none of the REIT, nor any other partner in the Partnership, nor
any person related to any partner in the Partnership as determined
for purposes of Treasury Regulation § 1.752-2 shall have provided,
or shall thereafter provide, collateral for, or otherwise shall have
entered, or thereafter shall enter, into a relationship that would
cause such person or entity to be considered to bear risk of loss
with respect to such Guaranteed Debt, as determined for purposes of
Treasury Regulation § 1.752-2.
	 
	 	(vi)	 	If, and to the extent that, one or more of these conditions is not
applicable, appropriate changes to the attached Form of Guaranty will be
required in order to cause the various conditions set forth in Article 3 of the
Tax Protection Agreement to be satisfied.

 

 

     WHEREAS, the Borrower is either Campus Crest Communities Operating Partnership L.P., a
Delaware limited partnership (the “Partnership”) or a Subsidiary of the Partnership in
which the Partnership owns a [__%] or greater interest in the Subsidiary

     WHEREAS, the Guarantors are limited partners in the Partnership; and

     WHEREAS, the Guarantors are executing and delivering this Guarantee to guarantee a portion of
the Borrower’s payments with respect to the Note, subject to and otherwise in accordance with the
terms and conditions hereinafter set forth.

     NOW THEREFORE, in consideration of the foregoing recitals and facts and other good and
valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, each of
the Guarantors hereby agree as follows:

     1. Guarantee and Performance of Payment.

     (a) The Guarantors hereby irrevocably and unconditionally guarantee the collection
by the Lender of, and hereby agree to pay to the Lender upon demand (following (1)
foreclosure of the Deed of Trust, exercise of the powers of sale thereunder and/or
acceptance by the Lender of a deed to the Collateral in lieu of foreclosure, and (2) the
exhaustion of the exercise of any and all remedies available to the Lender against the
Borrower, including, without limitation, realizing upon the assets of the Borrower other
than the Collateral against which the Lender may have recourse), an amount equal to the
excess, if any, of the Guaranteed Amount set forth on Exhibit B over the Lender Proceeds (as
hereinafter defined) (which excess is referred to as the “Aggregate Guarantee Liability”).
The amounts payable by each Guarantor in respect of the guarantee obligations hereunder
shall be in the same proportion as the dollar amounts listed next to such Guarantor’s name
on Exhibit A attached hereto bears to the total Guaranteed Amount set forth on Exhibit A,
provided that, notwithstanding anything to the contrary contained in this Guarantee, each
Guarantor’s aggregate obligation under this Guarantee shall be limited to the dollar amount
set forth on Exhibit A attached hereto next to such Guarantor’s name. The Guarantors’
obligations as set forth in this paragraph 1(a) are hereinafter referred to as the
“Guaranteed Obligations.”

     (b) For the purposes of this Guarantee, the term “Lender Proceeds” shall
mean the aggregate of (i) the Foreclosure Proceeds (as hereinafter defined) plus (ii) all
amounts collected by the Lender from the Borrower (other than payments of principal,
interest or other amounts required to be paid by the Borrower to Lender under the terms of
the Note that are paid by the Borrower to the Lender at a time when no default has occurred
under the Note and is continuing) or realized by the Lender from the sale of assets of the
Borrower other than the Collateral.

     (c) For the purposes of this Guarantee, the term “Foreclosure Proceeds”
shall have the applicable meaning set forth below with respect to the Collateral:

2

 

     1. If at least one bona fide third party unrelated to the Lender (and
including, without limitation, any of the Guarantors) bids for such Collateral at a
sale thereof, conducted upon foreclosure of the related Deed of Trust or exercise of
the power of sale thereunder, Foreclosure Proceeds shall mean the highest amount bid
for such Collateral by the party that acquires title thereto (directly or through a
nominee) at or pursuant to such sale. For the proposes of determining such highest
bid, amounts bid for the Collateral by the Lender shall be taken into account
notwithstanding the fact that such bids may constitute credit bids which offset
against the amount due to the Lender under the Note.

     2. If there is no such unrelated third-party at such sale of the Collateral
so that the only bidder at such sale is the Lender or its designee, the Foreclosure
Proceeds shall be deemed to be fair market value (the “Fair Market Value”)
of the Collateral as of the date of the foreclosure sale, as such Fair Market Value
shall be mutually agreed upon by the Lender and the Guarantor or determined pursuant
to subparagraph 1(d).

     3. If the Lender receives and accepts a deed to the Collateral in lieu of
foreclosure in partial satisfaction of the Borrower’s obligations under the Note,
the Foreclosure Proceeds shall be deemed to be the Fair Market Value of such
Collateral as of the date of delivery of the deed-in-lieu of foreclosure, as such
Fair Market Value shall be mutually agreed upon by the Lender and the Guarantor or
determined pursuant to subparagraph 1(d).

     (d) Fair Market Value of the Collateral (or any item thereof) shall be the price at
which a willing seller not compelled to sell would sell such Collateral, and a willing buyer
not compelled to buy would purchase such Collateral, free and clear of all mortgages but
subject to all leases and reciprocal easements and operating agreements. If the Lender and
the Guarantor are unable to agree upon the Fair Market Value of any Collateral in accordance
with subparagraphs 1(c) 2. or 3. above, as applicable, within twenty (20) days after the
date of the foreclosure sale or the delivery of the deed-in-lieu of foreclosure, as
applicable, relating to such Collateral, either party may have the Fair Market Value of such
Collateral determined by appraisal by appointing an appraiser having the qualifications set
forth below to determine the same and by notifying the other party of such appointment
within twenty (20) days after the expiration of such twenty (20) day period. If the other
party shall fail to notify the first party, within twenty (20) days after its receipt of
notice of the appointment by the first party, of the appointment by the other party of an
appraiser having the qualifications set forth below, the appraiser appointed by the first
party shall alone make the determination of such Fair Market Value. Appraisers appointed by
the parties shall be members of the Appraisal Institute (MAI) and shall have at least ten
years’ experience in the valuation of properties similar to the Collateral being valued in
the greater metropolitan area in which such Collateral is located. If each party shall
appoint an appraiser having the aforesaid qualifications and if such appraisers cannot,
within thirty (30) days after the appointment of the second

3

 

appraiser, agree upon the determination hereinabove required, then they shall select a
third appraiser which third appraiser shall have the aforesaid qualifications, and if they
fail so to do within forty (40) days after the appointment of the second appraiser they
shall notify the parties hereto, and either party shall thereafter have the right, on notice
to the other, to apply for the appointment of a third appraiser to the chapter of the
American Arbitration Association or its successor organization located in the metropolitan
area in which the Collateral is located or to which the Collateral is proximate or if no
such chapter is located in such metropolitan area, in the metropolitan area closest to the
Collateral in which such a chapter is located. Each appraiser shall render its decision as
to the Fair Market Value of the Collateral in question within thirty (30) days after the
appointment of the third appraiser and shall furnish a copy thereof to the Lender and the
Guarantor. The Fair Market Value of the Collateral shall then be calculated as the average
of (i) the Fair Market Value determined by the third appraiser and (ii) whichever of the
Fair Market Values determined by the first two appraisers is closer to the Fair Market Value
determined by the third appraiser; provided, however, that if the Fair Market Value
determined by the third appraiser is higher or lower than both Fair Market Values determined
by the first two appraisers, such Fair Market Value determined by the third appraiser shall
be disregarded and the Fair Market Value of the Collateral shall then be calculated as the
average of the Fair Market Value determined by the first two appraisers. The Fair Market
Value of a Property, as so determined, shall be binding and conclusive upon the Lender and
the Guarantors. Guarantors shall bear the cost of its own appraiser and, subject to
subparagraph 1(e), shall bear all reasonable costs of appointing, and the expenses of, any
other appraiser appointed pursuant to this subparagraph (1)(d).

     (e) Notwithstanding anything in the preceding subparagraphs of this paragraph 1,
(i) in no event shall the aggregate amount required to be paid pursuant to this Guarantee by
the Guarantors as a group with respect to all defaults under the Note and the Deed of Trust
securing the obligations thereunder exceed the Guaranteed Amount set forth on Exhibit B
hereto, and (ii) the aggregate obligation of each Guarantor hereunder with respect to the
Guaranteed Obligation shall be limited to the lesser of (I) the product of (w) the
Individual Guarantee Percentage for such Guarantor set forth on Exhibit A hereto multiplied
by (x) the Guaranteed Amount, or (II) the product of (y) such Guarantor’s Individual
Guarantee Percentage multiplied by (z) the Aggregate Guarantee Liability.

     (f) In confirmation of the foregoing, and without limitation, the Lender must first
exhaust all of its rights and remedies against all property of the Borrower as to which the
Lender has (or may have) a right of recourse, including, without limitation, the institution
and prosecution to completion of appropriate foreclosure proceedings under the Deed of
Trust, before exercising any right or remedy or making any claim, under this Guarantee.

     (g) The obligations under this Guarantee shall be personal to each Guarantor and
shall not be affected by any transfer of all or any part of a Guarantor’s interests in the
Partnership; provided, however, that if a Guarantor has disposed of all of its equity

4

 

interests in the Partnership, the obligations of such Guarantor under this Guarantee
shall terminate 12 months after the date of such disposition (the “Termination Date”)
provided (i) the Guarantor notifies the Lender that it is terminating its obligations under
this Guarantee as of the Termination Date and (ii) the fair market value of the Collateral
exceeds the outstanding balance of the Note, including accrued and unpaid interest, as of
the Termination Date. Further, no Guarantor shall have the right to recover from the
Borrower any amounts such Guarantor pays pursuant to this Guarantee (except and only to the
extent that the amount paid to the Lender by such Guarantor exceeds the amount required to
be paid by such Guarantor under the terms of this Guarantee).

     (h) The obligations of any Guarantor who is an individual as a Guarantor hereunder
shall terminate with respect to such Guarantor one week after the death of such Guarantor
if, as a result of the death of such Guarantor, all property held by the Guarantor on the
date of death would have a basis for federal income tax purposes equal to the fair market
value of such property on such date (unless a later date were to be elected by the executor
of the Guarantor’s estate in accordance with the applicable provisions of the Internal
Revenue Code).

     2. Intent to Benefit Lender. This Guarantee is expressly for the benefit of the
Lender. The Guarantors intend that the Lender shall have the right to enforce the obligations of
the Guarantors hereunder separately and independently of the Borrower, subject to the provisions of
paragraph 1 hereof, without any requirement whatsoever of resort by the Lender to any other party.
The Lender’s rights to enforce the obligations of the Guarantors hereunder are material elements of
this Guarantee. This Guarantee shall not be modified, amended or terminated (other than as
specifically provided herein) without the written consent of the Lender. The Borrower shall furnish
a copy of this Guarantee to the Lender contemporaneously with its execution.

     3. Waivers. Each Guarantor intends to bear the ultimate economic responsibility for
the payment hereof of the Guaranteed Obligations to the extent set forth in Paragraph 1 above.
Pursuant to such intent:

     (a) Except as expressly set forth in Paragraph 1 above, each Guarantor expressly
waives any right (pursuant to any law, rule, arrangement or relationship) to compel the
Lender, or any subsequent holder of the Note or any beneficiary of the Deed of Trust to sue
or enforce payment thereof or pursue any other remedy in the power of the Borrower, the
Lender or any subsequent holder of the Note or any beneficiary of the Deed of Trust
whatsoever, and failure of the Borrower or the Lender or any subsequent holder of the Note
or any beneficiary of the Deed of Trust to do so shall not exonerate, release or discharge a
Guarantor from its absolute unconditional obligations under this Guarantee. Each Guarantor
hereby binds and obligates itself, and its permitted successors and assignees, for
performance of the Guaranteed Obligations according to the terms hereof, whether or not the
Guaranteed Obligations or any portion thereof are valid now or hereafter enforceable against
the Borrower or shall have been incurred in compliance with any of the conditions applicable
thereto, subject, however, in all respects to the Guarantee Limit and the other limitations
set forth in paragraph 1.

5

 

     (b) Each Guarantor expressly waives any right (pursuant to any law, rule,
arrangement, or relationship) to compel any other person (including, but not limited to, the
Borrower, the Partnership, any subsidiary of the Partnership or the Borrower, or any other
partner or affiliate of the Partnership or the Borrower) to reimburse or indemnify such
Guarantor for all or any portion of amounts paid by such Guarantor pursuant to this
Guarantee to the extent such amounts do not exceed the amounts required to be paid by such
Guarantor pursuant to paragraph 1 hereof (taking into account the limitations set forth
therein).

     (c) Except as expressly set forth in Paragraph 1 above, if and only to the extent
that the Borrower has made similar waivers under the Note or the Deed of Trust, each
Guarantor expressly waives: (i) the defense of the statute of limitations in any action
hereunder or for the collection or performance of the Note or the Deed of Trust; (ii) any
defense that may arise by reason o£ the incapacity, or lack of authority of the Borrower,
the revocation or repudiation hereof by such Guarantor, the revocation or repudiation of the
Note or the Deed of Trust by the Borrower, the failure of the Lender to file or enforce a
claim against the estate (either in administration, bankruptcy or any other proceeding) of
the Borrower; the unenforceability in whole or in part of the Note, the Deed of Trust or any
other document or instrument related thereto; the Lender’s election, in any proceeding by or
against the Borrower under the federal Bankruptcy Code, of the application of Section
1111(b)(2) of the federal Bankruptcy Code; or any borrowing or grant of a security interest
under Section 364 of the federal Bankruptcy Code; (iii) presentment, demand for payment,
protest, notice of discharge, notice of acceptance of this Guarantee or occurrence of, or
any default in connection with, the Note or the Deed of Trust, and indulgences and notices
of any other kind whatsoever, including, without limitation, notice of the disposition of
any collateral for the Note; (iv) any defense based upon an election of remedies (including,
if available, an election to proceed by non-judicial foreclosure) or other action or
omission by the Lender or any other person or entity which destroys or otherwise impairs any
indemnification, contribution or subrogation rights of such Guarantor or the right of such
Guarantor, if any, to proceed against the Borrower for reimbursement, or any combination
thereof; (v) subject to Paragraph 4 below, any defense based upon any taking, modification
or release of any collateral or guarantees for the Note, or any failure to create or perfect
any security interest in, or the taking of or failure to take any other action with respect
to any collateral securing payment or performance of the Note; (vi) any rights or defenses
based upon any right to offset or claimed offset by such Guarantor against any indebtedness
or obligation now or hereafter owed to such Guarantor by the Borrower; or (vii) any rights
or defenses based upon any rights or defenses of the Borrower to the Note or the Deed of
Trust (including, without limitation, the failure or value of consideration, any statute of
limitations, accord and satisfaction, and the insolvency of the Borrower); it being
intended, except as expressly set forth in Paragraph 1 above, that such Guarantor shall
remain liable hereunder, to the extent set forth herein, notwithstanding any act, omission
or thing which might otherwise operate as a legal or equitable discharge of any of such
Guarantor or of the Borrower.

6

 

     4. Amendment of Note and Deed of Trust. Without in any manner limiting the
generality of the foregoing, the Lender or any subsequent holder of the Note or beneficiary of the
Deed of Trust may, from time to time, without notice to or consent of the Guarantors, agree to any
amendment, waiver, modification or alteration of the Note or the Deed of Trust relating to the
Borrower and its rights and obligations thereunder (including, without limitation, renewal, waiver
or variation of the maturity of the indebtedness evidenced by the Note, increase or reduction of
the rate of interest payable under the Note, release, substitution or addition of any Guarantor or
endorser and acceptance or release of any security for the Note), it being understood and agreed by
the Lender, however, that the Guarantor’s obligations hereunder are subject, in all events, to the
limitations set forth in Paragraph 1;

provided that (i) in the event that the Lender consents to the release of any Collateral
securing the Note pursuant to the Deed of Trust, the Guaranteed Amount shall be reduced by the
Fair Market Value of such Collateral on the date of such release (determined as set forth in
Section 1(d)); and (ii) upon any material change to the Note or the Deed of Trust, including,
without limitation, the maturity date or the interest rate of the Note, or upon any release or
substitution of any Collateral securing the Note, within thirty (30) days of any Guarantor’s
receipt of actual notice of such event, subject to the following sentence, such Guarantor may
elect to terminate such Guarantor’s obligations under this Guarantee by written notice to the
Lender. Such termination shall take effect on the 31st day following such actual notice,
provided that no default under the Guaranteed Obligation has occurred and is then continuing.

     5. Termination of Guarantee. Subject to Paragraph 4, this Guarantee is irrevocable
as to any and all of the Guaranteed Obligations.

     6. Independent
Obligations. Except as expressly set forth in Paragraph 1, the
obligations of each Guarantor hereunder are independent of the obligations of the Borrower, and a
separate action or actions may be brought by a Lender against the Guarantors, whether or not
actions are brought against the Borrower. Each Guarantor expressly waives any and all rights of
subrogation, reimbursement, indemnity, exoneration, contribution or any other claim which such
Guarantor may now or hereafter have against the Borrower, or any other person directly or
contingently liable for the payment or performance of the Note and the Deed of Trust arising from
the existence or performance of this Guarantee (including, but not limited to, the Partnership,
Campus Crest Communities, Inc., or any other partner of the Partnership) (except and only to the
extent that a Guarantor makes a payment to the Lender in excess of the amount required to be paid
under paragraph 1 and the limitations set forth therein).

     7. Understanding With Respect to Waivers. Each Guarantor warrants and represents
that each of the waivers set forth above are made with full knowledge of their significance and
consequences, and that under the circumstances, the waivers are reasonable and not contrary to
public policy or law. If any of said waivers are determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the maximum extent permitted by law.

7

 

     8. No Assignment. No Guarantor shall be entitled to assign his or her rights or
obligations under this Guarantee to any other person without the written consent of the Lender.

     9. Entire Agreement. The parties agree that this Guarantee contains the entire
understanding and agreement between them with respect to the subject matter hereof and cannot be
amended, modified or superseded, except by an agreement in writing signed by the parties.

     10. Notices. Any notice given pursuant to this Guarantee shall be in writing and
shall be deemed given when delivered personally, or sent by registered or certified mail, postage
prepaid, as follows:

If to the Partnership:

Campus Crest Communities Operating Partnership, L.P.

Campus Crest Communities, Inc.

2100 Rexford Road, Suite 414

Charlotte, NC 28211

Attention: Chief Financial Officer

Facsimile: (704) 937-0965

or to such other address with respect to which notice is subsequently provided in the manner set
forth above; and

     If to a Guarantor, to the address set forth on Exhibit A hereto, or to such other address with
respect to which notice is subsequently provided in the manner set forth above.

     11. Applicable Law. This Guarantee shall be governed by, interpreted under and
construed in accordance with the laws of the State of Delaware without reference to its choice of
law provisions.

     12. Consent to Jurisdiction: Enforceability

     (a) This Guarantee and the duties and obligations of the parties hereto shall be
enforceable against each Guarantor in the courts of the State of Delaware. For such purpose,
each Guarantor hereby irrevocably submits to the nonexclusive jurisdiction of such courts
and agrees that all claims in respect of this Guarantee may be heard and determined in any
of such courts.

     (b) Each Guarantor hereby irrevocably agrees that a final judgment of any of the
courts specified above in any action or proceeding relating to this Guarantee shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.

     13. Condition of Borrower. Each Guarantor is fully aware of the financial
condition of the Borrower and is executing and delivering this Guarantee based solely upon its own

8

 

independent investigation of all matters pertinent hereto and is not relying in any manner
upon any representation or statement of the Lender or the Borrower. Each Guarantor represents and
warrants that it is in a position to obtain, and hereby assumes full responsibility for obtaining,
any additional information concerning the Borrower’s financial conditions and any other matter
pertinent hereto as it may desire, and it is not relying upon or expecting the Lender to furnish to
it any information now or hereafter in the Lender’s possession concerning the same. By executing
this Guarantee, each Guarantor knowingly accepts the full range of risks encompassed within a
contract of this type, which risks it acknowledges.

     14. Expenses. Each Guarantor agrees that, promptly after receiving Lender’s notice
therefor, such Guarantor shall reimburse Lender, subject to the limitation set forth in
subparagraph 1(e) and to the extent that such reimbursement is not made by Borrower, for all
reasonable expenses (including, without limitation, reasonable attorneys fees and disbursements)
incurred by Lender in connection with the collection of the Guaranteed Obligations or any portion
thereof or with the enforcement of this Guarantee.

     IN WITNESS WHEREOF, the undersigned Guarantors set forth on Exhibit A hereto have executed
this Guarantee as of the date first set forth above.

	 	 	 	 	 
	 	GUARANTORS SET FORTH ON
EXHIBIT A HERETO:

 	 
	 	By:  	 	 
	 
	 	By:  	
 	 
	 
	 	By:  	
 	 
	 	 	 
	 	By:  	
 	 
	 	 	 
	 	By:  	
 	 
	 	 	 	 
	 	 	 	 

9

 

Exhibit A to Guarantee

	 	 	 	 	 
	 	 	Guaranteed
	Name and Address of Partner Guarantors	 	Amount
	Guarantors, as a group

	 	$	 	 
	 
	 	 	 	 
	Individual Guarantors:

	 	Individual Guarantee Percentage

10

 

Exhibit B to Guarantee

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Date of and	 	 	 	 
	 	 	 	 	Principal Amount	 	Debt Balance as of	 	 
	Name of Lender	 	Name of Borrower	 	Loan	 	of    __/__/_____	 	Guaranteed Amount
	 
	 	 	 	 	 	 	 	 

11

 

Exhibit C to Guarantee

Summary of Principal Terms of Note [or attach copy of Note]

12

 

Exhibit D to Guarantee

Identification of Deed of Trust and

Brief Summary Description of Collateral

13

 

SCHEDULE 5

Property Subject to Traditional Allocation Method

Under Treasury Regulations Section 1.704-3(b)

Property

1. The Grove at Asheville

2. The Grove at Carrollton

3. The Grove at Cheney

4. The Grove at Ellensburg

5. The Grove at Jonesboro

6. The Grove at Las Cruces

7. The Grove at Lubbock

8. The Grove at Mobile

9. The Grove at Mobile Phase II

10. The Grove at Murfreesboro

11. The Grove at Nacogdoches

12. The Grove at Stephenville

13. The Grove at Troy

14. The Grove at Waco

15. The Grove at Wichita

16. The Grove as Wichita Fallsexv10w2

Exhibit 10.2

INDEMNIFICATION AGREEMENT

     This INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of
____________ (the “Effective Date”), by and between Campus Crest Communities, Inc., a Maryland
corporation (the “Company”), and ___________ (the “Indemnitee”).

     WHEREAS, the Indemnitee currently serves as a __________________ of the Company and may, in
connection therewith, be subjected to claims, suits or proceedings arising from such service;

     WHEREAS, as an inducement to the Indemnitee to continue to serve as such __________, the
Company has agreed to indemnify and to advance expenses and costs incurred by the Indemnitee in
connection with any such claims, suits or proceedings, to the maximum extent permitted by law as
hereinafter provided; and

     WHEREAS, the parties by this Agreement desire to set forth their agreement regarding
indemnification and advance of expenses.

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     Section 1. Definitions. For purposes of this Agreement:

          (a) “Change in Control” means a change in control of the Company occurring after the
Effective Date of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form)
promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), whether or
not the Company is then subject to such reporting requirement; provided, however,
that, without limitation, such a Change in Control shall be deemed to have occurred if after the
Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing ten percent (10%) or more of the combined voting power of
all the Company’s then-outstanding securities entitled to vote generally in the election of
directors without the prior approval of at least two-thirds of the members of the Board of
Directors of the Company (the “Board of Directors”) in office immediately prior to such
person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a
party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not
approved by at least two-thirds of the members of the Board of Directors then in office, as a
consequence of which members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii)
during any period of two consecutive years, other than as a result of an event described in clause
(a)(ii) of this Section 1, individuals who at the beginning of such period constituted the
Board of Directors (including for this purpose any new director whose election or nomination for
election by the Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board of Directors.

1

 

          (b) “Corporate Status” means the status of a person who is or was a director or officer of
the Company and the status of a person who, while a director of the Company, is or was serving at
the request of the Company as a director, officer, partner or trustee of another corporation, real
estate investment trust, partnership, joint venture, trust, employee benefit plan or any other
enterprise.

          (c) “Disinterested Director” means a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by
the Indemnitee.

          (d) “Expenses” means all expenses, including, but not limited to, all reasonable
attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts (and other
professionals), witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing to prosecute or
defend, appealing, investigating, being or preparing to be a witness in a Proceeding, establishing
or enforcing a right to inedmnification under this Agreement, applicable statutes or otherwise, and
amounts paid in settlement by or on behalf of Indemnitee. The term “expenses” shall also include
reasonable compensation for time spent by Indemnitee for which he is not compensated by the Company
for any period during which Indemnitee is not providing services for compensation to the Company.

          (e) “Independent Counsel” means a law firm, or a member of a law firm, selected by the
Indemnitee and reasonably acceptable to the Company, that is experienced in matters of business law
and that neither is, nor in the past two years has been, retained to represent (i) the Company or
the Indemnitee in any matter material to either such party (other than with respect to matters
concerning the Indemnitee under this Agreement or of other indemnitees of the Company under similar
indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding
giving rise to a claim for indemnification or advance of Expenses hereunder.

          (f) “Proceeding” means any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative hearing or any other
proceeding, whether formal or informal, civil, criminal, administrative or investigative (including
on appeal), except one initiated by an Indemnitee pursuant to Section 9.

     Section 2. Indemnification — General. The Company shall indemnify, and advance
Expenses to, the Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum
extent permitted by Maryland law in effect on the Effective Date and as amended from time to time;
provided, however, that no change in Maryland law shall have the effect of reducing
the benefits available to the Indemnitee hereunder based on Maryland law as in effect on the
Effective Date. The rights of the Indemnitee provided in this Section 2 shall include,
without limitation, the rights set forth in the other sections of this Agreement, including any
additional indemnification permitted by Section 2-418 (g) of the Maryland General Corporation Law
(“MGCL”).

2

 

     Section 3. Proceedings Other Than Derivative Proceedings by or in the Right of the
Company. The Indemnitee shall be entitled to the rights of indemnification provided in this
Section 3 if, by reason of his Corporate Status, he is, or is threatened to be, made a
party or witness to any threatened, pending, or completed Proceeding, other than a derivative
Proceeding by or in the right of the Company (or, if applicable, such other enterprise at which the
Indemnitee is or was serving at the request of the Company). Pursuant to this Section 3,
the Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in
settlement and all Expenses incurred by him or her, or on his or her behalf, in connection with a
Proceeding by reason of the Indemnitee’s Corporate Status unless it is established that (i) the act
or omission of the Indemnitee was material to the matter giving rise to the Proceeding and (a) was
committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) the
Indemnitee actually received an improper personal benefit in money, property or services, or (iii)
with respect to any criminal Proceeding, the Indemnitee had reasonable cause to believe that his
conduct was unlawful.

     Section 4. Derivative Proceedings by or in the Right of the Company. The
Indemnitee shall be entitled to the rights of indemnification provided in this Section 4
if, by reason of his Corporate Status, he is, or is threatened to be, made a party or witness to
any threatened, pending or completed derivative Proceeding brought by or in the right of the
Company (or, if applicable, such other enterprise at which Indemnitee is or was serving at the
request of the Company) to procure a judgment in its favor. Pursuant to this Section 4, the
Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses incurred by
him, or on his behalf, in connection with such Proceeding unless it is established that (i) the act
or omission of the Indemnitee was material to the matter giving rise to such a Proceeding and (a)
was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) the
Indemnitee actually received an improper personal benefit in money, property or services.

     Section 5. Indemnification for Expenses of a Party Who is Partly Successful.
Without limiting Section 3 and Section 4, if the Indemnitee is not wholly
successful in any Proceeding covered by this Agreement, but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify the Indemnitee under this Section 5 for all Expenses incurred by
him, or on his behalf, in connection with each successfully resolved claim, issue or matter,
allocated on a reasonable and proportionate basis. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with
or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

     Section 6. Advance of Expenses. The Company shall advance or reimburse all
Expenses incurred by or on behalf of the Indemnitee in connection with any Proceeding to which the
Indemnitee is, or is threatened to be, made a party or a witness, within twenty (20) calendar days
after the receipt by the Company of a statement or statements from the Indemnitee requesting such
advance or advances from time to time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by a written affirmation by the
Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for
indemnification by the Company as authorized by law and by this Agreement has been met and a
written undertaking by or on behalf of the Indemnitee, in substantially the form attached

3

 

hereto as
Exhibit A or in such form as may be required under applicable law as in effect at the time
of the execution thereof, to reimburse the portion of any Expenses advanced to the Indemnitee
relating to claims, issues or matters in the Proceeding as to which a court of competent
jurisdiction determines the Indemnitee is not entitled to indemnification. The undertaking
required by this Section 6 shall be an unlimited general obligation by or on behalf of the
Indemnitee and shall be accepted without reference to the Indemnitee’s financial ability to repay
such advanced Expenses and without any requirement to post security therefor.

Section 7. Procedure for Determination of Entitlement to Indemnification.

          (a) To obtain indemnification under this Agreement, the Indemnitee shall submit to the
Company a written request, including such documentation and information as is reasonably available
to the Indemnitee and is reasonably necessary to determine whether and to what extent the
Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in writing that the
Indemnitee has requested indemnification.

          (b) Upon written request by the Indemnitee for indemnification pursuant to the first
sentence of Section 7(a) hereof, a determination, if required by applicable law, with
respect to the Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if
a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board
of Directors, a copy of which shall be delivered to the Indemnitee; or (ii) if a Change of Control
shall not have occurred or if after a Change of Control the Indemnitee shall so request, (A) by the
Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum
consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of
Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such
quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the
Board of Directors, a copy of which shall be delivered to the Indemnitee, or (C) if so directed by
a majority of the members of the Board of Directors, by the stockholders of the Company; and, if it
is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee
shall be made within twenty (20) calendar days after such determination. The Indemnitee shall
reasonably cooperate with the person, persons or entity making such determination with respect to
the Indemnitee’s entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably available to the Indemnitee and
reasonably necessary to such determination.

Any Expenses incurred by the Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the determination as to
the Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold the
Indemnitee harmless therefrom.

          (c) The Company shall pay the fees and expenses of Independent Counsel, if one is
appointed pursuant to this Section 7.

4

 

Section 8. Presumptions and Effect of Certain Proceedings.

          (a) In making a determination with respect to entitlement to indemnification hereunder,
the person or persons or entity making such determination shall presume that the Indemnitee is
entitled to indemnification under this Agreement if the Indemnitee has submitted a request for
indemnification in accordance with Section 7(a) of this Agreement, and the Company shall
have the burden of proof to overcome that presumption in connection with the making of any
determination contrary to that presumption.

          (b) The termination of any Proceeding by judgment, order, settlement, conviction, a plea
of nolo contendere or its equivalent, or an entry of an order of probation prior to
judgment, does not create a presumption that the Indemnitee did not meet the requisite standard of
conduct described herein for indemnification.

Section 9. Remedies of Indemnitee.

          (a) If (i) a determination is made pursuant to Section 7 that the Indemnitee is
not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made
pursuant to Section 6, (iii) no determination of entitlement to indemnification shall have
been made pursuant to Section 7(b) within thirty (30) days after receipt by the Company of
the request for indemnification, (iv) payment of indemnification is not made pursuant to
Section 5 within twenty (20) days after receipt by the Company of a written request
therefor, or (v) payment of indemnification is not made within twenty (20) days after a
determination has been made that the Indemnitee is entitled to indemnification, the Indemnitee
shall (A) unless the Company demands arbitration as provided by Section 16, be entitled to
an adjudication in an appropriate court of the State of Maryland or in any other court of competent
jurisdiction or (B) be entitled to seek an award in arbitration as provided by Section 16,
in each case of his entitlement to such indemnification or advance of Expenses.

          (b) In any judicial proceeding or arbitration commenced pursuant to this Section
9, the Company shall have the burden of proving that the Indemnitee is not entitled to
indemnification or advance of Expenses, as the case may be.

          (c) If a determination shall have been made pursuant to Section 7(b) that the
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9, absent a
misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to
make the Indemnitee’s statement not materially misleading, in connection with the request for
indemnification.

          (d) In the event that the Indemnitee, pursuant to this Section 9, seeks a judicial
adjudication of or an award in arbitration as provided by Section 16 to enforce his rights
under, or to recover damages for breach of, this Agreement by the Company, the Indemnitee shall be
entitled to recover in full from the Company, and shall be indemnified in full by the Company for,
any and all Expenses incurred by him in such judicial adjudication or arbitration if it is
determined that the Indemnitee is entitled to enforce any of his rights under, or to recover any
damages for breach of, this Agreement by the Company.

5

 

Section 10. Defense of the Underlying Proceeding.

          (a) The Indemnitee shall notify the Company promptly upon being served with or receiving
any summons, citation, subpoena, complaint, indictment, information, notice, request or other
document relating to any Proceeding which may result in the right to indemnification or the advance
of Expenses hereunder; provided, however, that the failure to give any such notice
shall not disqualify the Indemnitee from the right, or otherwise affect in any manner any right of
the Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the
Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is
materially and adversely prejudiced thereby, and then only to the extent the Company is thereby
actually so prejudiced.

          (b) Subject to the provisions of the last sentence of this Section 10(b) and of
Section 10(c) below, the Company shall have the right to defend the Indemnitee in any
Proceeding which may give rise to indemnification hereunder; provided, however,
that the Company shall notify the Indemnitee of any such decision to defend within fifteen (15)
calendar days following receipt of notice of any such Proceeding under Section 10(a) above,
and the counsel selected by the Company shall be reasonably satisfactory to the Indemnitee. The
Company shall not, without the prior written consent of the Indemnitee, consent to the entry of any
judgment against the Indemnitee or enter into any settlement or compromise which (i) includes an
admission of fault of the Indemnitee or (ii) does not include, as an unconditional term thereof,
the full release of the Indemnitee from all liability in respect of such Proceeding, which release
shall be in form and substance reasonably satisfactory to the Indemnitee. This Section
10(b) shall not apply to a Proceeding brought by the Indemnitee under Section 9 above
or Section 15.

          (c) Notwithstanding the provisions of Section 10(b), if in a Proceeding to which
the Indemnitee is a party by reason of the Indemnitee’s Corporate Status, (i) the Indemnitee
reasonably concludes, based upon an opinion of counsel, where the choice of counsel has been
approved by the Company, which approval shall not be unreasonably withheld, that he may have
separate defenses or counterclaims to assert with respect to any issue which may not be consistent
with other defendants in such Proceeding, (ii) the Indemnitee reasonably concludes, based upon an
opinion of counsel, where the choice of counsel has been approved by the Company, which approval
shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential
conflict of interest exists between the Indemnitee and the Company, or (iii) the Company fails to
assume the defense of such Proceeding in a timely manner, the Indemnitee shall be entitled to be
represented by separate legal counsel of the Indemnitee’s choice, subject to the prior approval of
the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition,
if the Company fails to timely comply with any of its obligations under this Agreement or in the
event that the Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any Proceeding to deny or limit or to recover from the Indemnitee the
benefits intended to be provided to the Indemnitee hereunder, the Indemnitee shall have the right
to retain counsel of the Indemnitee’s choice, subject to the prior approval of the Company, which
shall not be unreasonably withheld, at the expense of the Company (subject to Section
9(d)), to represent the Indemnitee in connection with any such matter.

     Section 11. Liability Insurance. To the extent the Company maintains an insurance
policy or policies providing liability insurance for any of its directors or officers, the
Indemnitee

6

 

shall be covered by such policy or policies, in accordance with its or their terms, to
the maximum extent of the coverage available for any Company director or officer during the
Indemnitee’s tenure as a director or officer and, following a termination of the Indemnitee’s
service in connection with a Change in Control, for a period of six years thereafter.

Section 12. Non-Exclusivity; Survival of Rights; Subrogation.

          (a) The rights of indemnification and advance of Expenses as provided by this Agreement
shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be
entitled under applicable law, the Charter (as the same may be amended from time to time, the
“Charter”) or Bylaws of the Company (as the same may be amended from time to time, the
“Bylaws”), any agreement or a resolution of the stockholders entitled to vote generally in
the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or
repeal of this Agreement or of any provision hereof shall limit or restrict any right of the
Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal.

          (b) In the event of any payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute
all papers required and take all action necessary to secure such rights, including execution of
such documents as are necessary to enable the Company to bring suit to enforce such rights.

          (c) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that
the Indemnitee has otherwise actually received payment of such amounts, by or on behalf of the
Company, under any insurance policy, contract, agreement or otherwise.

     Section 13. Binding Effect.

          (a) The indemnification and advance of Expenses provided by, or granted pursuant to, this
Agreement shall be binding upon and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company),
shall continue as to an Indemnitee who has ceased to be a director or officer of the Company or of
any other corporation, real estate investment trust, partnership, joint venture, trust, employee
benefit plan or other enterprise which such person is or was serving at the written request of the
Company, and shall inure to the benefit of the Indemnitee and his spouse, assigns, heirs, devisees,
executors and administrators and other legal representatives.

          (b) Any successor of the Company (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or
assets of the Company shall be automatically deemed to have assumed and agreed to perform this
Agreement in the same manner and to the same extent that the Company would be required to perform
if no such succession had taken place, provided that no such assumption shall relieve the Company
of its obligations hereunder. To the extent required by applicable law to give effect to the
foregoing sentence and to the extent requested by the Indemnitee, the

7

 

Company shall require and
cause any such successor to expressly assume and agree to perform this Agreement by written
agreement in form and substance satisfactory to the Indemnitee.

     Section 14. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this Agreement (including, without
limitation, each portion of any section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions
of this Agreement (including, without limitation, each portion of any section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested
thereby.

     Section 15. Limitation and Exception to Right of Indemnification or Advance of
Expenses. Notwithstanding any other provision of this Agreement, (a) any indemnification or
advance of Expenses to which the Indemnitee is otherwise entitled under the terms of this Agreement
shall be made only to the extent such indemnification or advance of Expenses does not conflict with
applicable Maryland law and (b) the Indemnitee shall not be entitled to indemnification or advance
of Expenses under this Agreement with respect to any Proceeding brought by the Indemnitee, unless
(i) the Proceeding is brought to enforce indemnification or other rights under this Agreement, the
Charter, the Bylaws, liability insurance policy or policies, if any, or otherwise or (ii) the
Charter, the Bylaws, a resolution of the stockholders entitled to vote generally in the election of
directors or of the Board of Directors or an agreement approved by the Board of Directors to which
the Company is a party expressly provides otherwise.

     Section 16. Arbitration.

          (a) Any disputes, claims or controversies between the parties (i) regarding the
Indemnitee’s entitlement to indemnification or advance of Expenses hereunder or otherwise arising
out of or relating to this Agreement, or (ii) brought by or on behalf of any stockholder of the
Company (which, for purposes of this Section 16, shall mean any stockholder of record or
any beneficial owner of shares of the Company, or any former stockholder of record or beneficial
owner of shares of the Company), either on his own behalf, on behalf of the Company or on behalf of
any series or class of shares of the Company or stockholders of the Company against the Company or
any director, officer, agent or employee of the Company, including disputes, claims or
controversies relating to the meaning, interpretation, effect, validity, performance or enforcement
of this Agreement, the Charter or the Bylaws (all of which are referred to as “Disputes”)
or relating in any way to such a Dispute or Disputes, shall on the demand of any party to such
Dispute be resolved through binding and final arbitration in accordance with the Commercial
Arbitration Rules (the “Rules”) of the American Arbitration Association (the “AAA”)
then in effect, except as modified herein. For the avoidance of doubt, and not as a limitation,
Disputes are intended to include derivative actions against directors or officers of the Company
and class actions by the Indemnitee in his capacity as a stockholder against those individuals or
entities and the Company.

8

 

          (b) There shall be three arbitrators. If there are (i) only two parties to the Dispute,
each party shall select one arbitrator within 15 days after receipt by respondent of a copy of the
demand for arbitration and (ii) more than two parties to the Dispute, all claimants, on the one
hand, and all respondents, on the other hand, shall each select, by the vote of a majority of the
claimants or the respondents, as the case may be, one arbitrator. The two party-nominated
arbitrators shall jointly nominate the third and presiding arbitrator within 15 days of the
nomination of the second arbitrator. If any arbitrator has not been nominated within the time limit
specified herein, then the AAA shall provide a list of proposed arbitrators in accordance with the
Rules and the arbitrator shall be appointed by the AAA in accordance with a listing, striking and
ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.
For the avoidance of doubt, the arbitrators appointed by the parties to such Dispute may be
affiliates or interested persons of such parties but the third arbitrator elected by the party
arbitrators or by the AAA shall be unaffiliated with either party.

          (c) The place of arbitration shall be Delaware unless otherwise agreed by the parties.

          (d) There shall be only limited documentary discovery of documents directly related to the
issues in dispute, as may be ordered by the arbitrators.

          (e) In rendering an award or decision (the “Award”), the arbitrators shall be
required to follow the laws of the State of Maryland. Any arbitration proceedings or Award rendered
hereunder and the validity, effect and interpretation of this arbitration agreement shall be
governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq. The Award shall be in writing and
shall briefly state the findings of fact and conclusions of law on which it is based.

          (f) Except to the extent expressly provided by this Agreement (including Section 5
and Section 9(d)) or as otherwise agreed between the parties, each party involved in a
Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators
shall not render an award that would include shifting of any such costs or expenses (including
attorneys’ fees) or, in a derivative case by the Indemnitee as a stockholder of the Company, award
any portion of the Company’s award to the claimant or the claimant’s attorneys.

          (g) The Award shall be final and binding upon the parties thereto and shall be the sole
and exclusive remedy between such parties relating to the Dispute, including any claims,
counterclaims, issues or accounting presented to the arbitrators. Judgment upon the Award may be
entered in any court having jurisdiction. To the fullest extent permitted by law, no application or
appeal to any court of competent jurisdiction may be made in connection with any question of law
arising in the course of arbitration or with respect to any award made except for actions relating
to enforcement of this agreement to arbitrate or any arbitral award issued hereunder and except for
actions seeking interim or other provisional relief in aid of arbitration proceedings in any court
of competent jurisdiction.

          (h) Any monetary award shall be made and payable in U.S. dollars free of any tax,
deduction or offset. The party against which the Award assesses a monetary obligation shall pay
that obligation on or before the thirtieth (30th) calendar day following the date of the
Award or such other date as the Award may provide.

9

 

          (i) This Section 16 is intended to benefit and be enforceable by the directors,
officers, agents and employees of the Company and shall be binding on the stockholders of the
Company and the Company, as applicable, and shall be in addition to, and not in substitution for,
any other rights to indemnification or contribution that such individuals or entities may have by
contract or otherwise.

     Section 17. Period of Limitations. To the fullest extent permitted by law, no
legal action shall be brought, and no cause of action shall be asserted, by or on behalf of the
Company or any controlled affiliate of the Company against the Indemnitee, the Indemnitee’s spouse,
heirs, executors or personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, and any claim or cause of action of the Company or its
controlled affiliate shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such two-year period; provided, however, if any shorter
period of limitations is otherwise applicable to any such cause of action, such shorter period
shall govern.

     Section 18. Reports to Stockholders. To the extent required by the MGCL, the
Company shall report in writing to its stockholders the payment of any amounts for indemnification
of, or advance of Expenses to, the Indemnitee under this Agreement arising out of a derivative
Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the
Company next following the date of the payment of any such indemnification or advance of Expenses
or prior to such meeting.

     Section 19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the existence of this
Agreement.

     Section 20. Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction thereof.

     Section 21. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

     Section 22. Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing unless some other method of giving such notice,
report or other communication is accepted by the party to whom it is given, and shall be given by
being delivered at the following addresses to the parties hereto:

          (a) If to the Indemnitee, to: The address set forth on the signature page hereto.

10

 

	 	(b)	 	If to the Company to:

	 
	 	 	 	Campus Crest Communities, Inc.
2100 Rexford Road, Suite 414

	 	 	 	Charlotte, North Carolina 28211
Attn: Secretary

or to such other address as may have been furnished to the Indemnitee by the Company or to the
Company by the Indemnitee, as the case may be.

     Section 23. Governing Law. The parties agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of Maryland, without
regard to its conflicts of laws rules.

[SIGNATURE PAGE FOLLOWS]

11

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 
	ATTEST:	 	CAMPUS CREST COMMUNITIES, INC.
	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 
	WITNESS:	 	INDEMNITEE
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

12

 

EXHIBIT A

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED

Campus Crest Communities, Inc.

Re: Undertaking to Repay Expenses Advanced

Ladies and Gentlemen:

     This undertaking is being provided pursuant to that certain Indemnification Agreement dated
___________________, 2010, by and between Campus Crest Communities, Inc. (the “Company”)
and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am
entitled to advance of expenses in connection with [Description of Proceeding] (the
“Proceeding”).

     Terms used herein and not otherwise defined shall have the meanings specified in the
Indemnification Agreement.

     I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged
actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was
involved as [a director] [an officer] of the Company, in any of the facts or events giving rise to
the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not
receive any improper personal benefit in money, property or services and (3) in the case of any
criminal proceeding, had no reasonable cause to believe that any act or omission by me was
unlawful.

     In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and
related expenses incurred by me in connection with the Proceeding (the “Advanced
Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that
(1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was
committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually
received an improper personal benefit in money, property or services or (3) in the case of any
criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then
I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or
matters in the Proceeding as to which the foregoing findings have been established.

     IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this _______ day of
_____________________, 20__.

WITNESS:

            
                     
                      
          
                          (SEAL)

13

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