UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8–K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event
reported): January 30, 2015
CAMPUS CREST COMMUNITIES, INC.
(Exact name of registrant as specified
in its charter)
Maryland
(State or other jurisdiction
of incorporation or organization) |
001-34872
(Commission File
Number) |
27-2481988
(IRS Employer
Identification No.) |
|
|
|
2100 Rexford Road, Suite 414
Charlotte, North Carolina
(Address of principal executive
offices) |
|
28211
(Zip Code) |
|
|
|
Registrant’s telephone number, including area code: (704) 496-2500 |
|
|
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
Registration Rights Agreement
On January 30, 2015, in connection with
the consummation of the acquisition of additional membership interests in the Copper Beech Portfolio (as defined below), Campus
Crest Communities, Inc. (the “Company”) entered into a registration rights agreement (the “Registration Rights
Agreement”) with certain of the Sellers (as defined below), pursuant to which the Company has agreed to file a shelf registration
statement within nine months of the earlier of (i) the date on which all remaining interests in the Copper Beech Portfolio contemplated
to be acquired by the Company and/or its affiliates pursuant to the Second Amendment (as defined below) have been acquired (such
date, the “Second Closing Date”) and (ii) March 31, 2015, covering resales of shares of the Company’s common
stock, par value $0.01 per share (the “Common Stock”), issuable upon redemption of the OP Units (as defined below)
issued to the Sellers as consideration for the acquisition. In addition, the Company has agreed to use commercially reasonable
efforts to have the registration statement declared effective as soon as practicable after filing and to keep the registration
statement effective until such time as the Sellers no longer own any OP Units or shares of Common Stock issued upon conversion
of the OP Units.
The foregoing description of the Registration
Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement,
which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Tax Protection Agreement
On January 30, 2015, in connection with
the consummation of the acquisition of additional membership interests in the Copper Beech Portfolio, the Company and Campus Crest
Communities Operating Partnership, LP (the “Operating Partnership”) entered into a tax protection agreement (the “Tax
Protection Agreement”) with certain of the Sellers. Pursuant to the terms of the Tax Protection Agreement, and unless the
Company and the Operating Partnership indemnify the applicable Sellers for certain resulting tax liabilities, (i) the Company and
the Operating Partnership have agreed not to sell or otherwise to dispose of in a taxable exchange, for a period of 7 years following
the earlier of the Second Closing Date and March 31, 2015, any of seventeen specified properties, indirect interests in which have
been contributed by the Sellers to the Operating Partnership under the Second Amendment, and (ii) the Company and the Operating
Partnership have agreed to allocate to the Sellers, for a period of 7 years following the earlier of the Second Closing Date and
March 31, 2015, an aggregate amount of at least $100 million of debt of the Operating Partnership (which amount decreases ratably
as the number of OP Units held by the Sellers decreases) without any requirement that any Seller guarantee or directly bear the
risk for such indebtedness and, after the end of the 7-year period, to use commercially reasonable efforts to permit the Sellers
to enter into guarantees of “qualifying” debt or agreements to return a portion of their deficit capital account so
as to permit the Sellers to avoid certain adverse tax consequences.
The foregoing description of the Tax Protection
Agreement does not purport to be complete and is qualified in its entirety by reference to the Tax Protection Agreement, which
is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On January 30, 2015, the Company and certain
of its affiliates completed the acquisition (the “Initial Closing”) of (i) the Sellers’ remaining interests in
29 student housing properties of a portfolio consisting of 35 student housing properties, one undeveloped land parcel and a corporate
office building (the “Copper Beech Portfolio”) and (ii) the Sellers’ remaining interests in Copper Beech at Ames,
Iowa, pursuant to that certain Amendment (the “Second Amendment’) to the Company’s purchase and sale agreement
with the former members (the “Sellers”) of Copper Beech Townhome Communities, LLC (“CBTC”) and Copper Beech
Townhome Communities (PA), LLC (“CBTC PA” and, together with CBTC, “Copper Beech”).
As previously disclosed, pursuant to the
terms of the Second Amendment, the Company agreed to acquire the Sellers’ remaining interests in each of the properties comprising
the Copper Beech Portfolio other than Copper Beech Kalamazoo Phase 1, Copper Beech Kalamazoo Phase 2, Copper Beech Morgantown,
Copper Beech Harrisonburg, Copper Beech Greenville and Copper Beech Parkway. Following the consummation of the Initial Closing,
the Company holds a 100% interest in 27 of the properties in the Copper Beech Portfolio, an 85% interest in one property in the
Copper Beech Portfolio, an 86% interest in one property in the Copper Beech Portfolio and a 48% interest in 4 of the properties
in the Copper Beech Portfolio and has no ownership interests in 2 of the properties in the Copper Beech Portfolio and has a 100%
interest in Copper Beech at Ames, Iowa. The Company expects to complete the acquisition of the Sellers’ interests in the
remaining 2 properties in the Copper Beech Portfolio – Copper Beech San Marcos Phase 1 and Copper Beech IUP Buy – at
such time as it obtains the requisite lender consents. The Company expects to obtain all such consents and to complete the acquisition
of Copper Beech San Marco Phase 1 and Copper Beech IUP Buy on or before the end of the first quarter of 2015 (the date of completion
of such acquisition is referred to herein as the “Second Closing Date”).
As consideration for the additional interests
acquired in the Initial Closing, the Company paid to the Sellers aggregate cash consideration of approximately $58.9 million and
the Operating Partnership issued to the Sellers an aggregate of approximately 10.4 million limited partnership units of the Operating
Partnership (“OP Units”). The remaining consideration pursuant to the Second Amendment, consisting of approximately
$1.4 million in cash and approximately 2.0 million in OP Units, will be payable to the Sellers on the Second Closing Date.
Item 8.01. Other Events.
On February 2, the Company issued a press
release announcing the initial closing of the transactions contemplated by the Second Amendment, a copy of which is attached as
Exhibit 99.1. The information contained in the press release is incorporated herein by reference.
Item 9.01 Financial
Statements and Exhibits.
| (a) | Financial Statements of Real Estate Operations Acquired. |
No financial statements are being filed
with this report. All required financial statements in connection with the acquisition described in Item 2.01 will be filed by
amendment pursuant to Item 9.01(a)(4) within 71 calendar days after the date on which this Current Report on Form 8-K is required
to be filed.
| (b) | Pro Forma Financial Information. |
No pro forma financial information is being
filed with this report. All required pro forma financial information in connection with the acquisition described in Item 2.01
will be filed by amendment pursuant to Item 9.01(b)(2) within 71 calendar days after the date on which this Current Report on Form
8-K is required to be filed.
Exhibit
Number |
|
Description |
|
|
|
10.1 |
|
Registration Rights Agreement, dated as of January 30, 2015, by and among Campus Crest Communities, Inc., and the persons listed on Schedule 2.1(i) thereto. |
|
|
|
10.2 |
|
Tax Protection Agreement, dated as of January 30, 2015, by and among Campus Crest Communities, Inc., Campus Crest Communities Operating Partnership, L.P. and the other persons set forth on Schedule 2.1(i) thereto. |
|
|
|
99.1 |
|
Press release of Campus Crest Communities, Inc., issued on February 2, 2015 |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
CAMPUS CREST COMMUNITIES, INC. |
|
|
Date: February 2, 2015 |
/s/ Aaron Halfacre |
|
Aaron Halfacre |
|
Executive Vice President and Chief Investment Officer |
Exhibit Index
Exhibit
Number |
|
Description |
|
|
|
10.1 |
|
Registration Rights Agreement, dated as of January 30, 2015, by and among Campus Crest Communities, Inc., and the persons listed on Schedule 2.1(i) thereto. |
|
|
|
10.2 |
|
Tax Protection Agreement, dated as of January 30, 2015, by and among Campus Crest Communities, Inc., Campus Crest Communities Operating Partnership, L.P. and the other persons set forth on Schedule 2.1(i) thereto. |
|
|
|
99.1 |
|
Press release of Campus Crest Communities, Inc., issued on February 2, 2015 |
Exhibit 10.1
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS
AGREEMENT (this “Agreement”) is made and entered into as of January 29, 2015 by and among Campus Crest Communities,
Inc., a Maryland corporation (the “Company”), and the Persons listed on Schedule I hereto (the “Holders,”
and each individually, a “Holder”).
WHEREAS, the Company
is the sole member of Campus Crest GP, LLC, which is the general partner of Campus Crest Communities Operating Partnership, LP
(the “Operating Partnership”), which is the operating partnership of the Company;
WHEREAS, the Company
entered into that certain Purchase and Sale Agreement, dated as of February 26, 2013, by and among Copper Beech Townhome Communities,
LLC (“CBTC”), Copper Beech Townhome Communities (PA), LLC (“CBTC PA”), CB-Campus Crest, LLC
(“CB-Campus Crest”), CB-Campus Crest PA, LLC (“CB-Campus Crest PA”), the Company (together
with CBTC, CBC PA, CB-Campus Crest and CB-Campus Crest PA, the “Buyer Parties”) and the Holders, as amended
by that certain Amendment to Purchase and Sale Agreement, dated as of September 30, 2013 (as amended, the “Purchase Agreement”),
pursuant to which the Buyer Parties have agreed to acquire a portfolio of student housing properties (the “CB Portfolio”);
WHEREAS, the Company
is entering into an amendment (the “Second Amendment”) to the Purchase Agreement, pursuant to which, among other
things, the Buyer Parties will (i) increase their membership interests in certain of the student housing properties in the CB Portfolio
to 100%, (ii) acquire 100% of the remaining membership interests of CB Campus Crest Services, LLC, and (iii) acquire 100% of the
remaining membership interests in Copper Beech at Ames, Iowa;
WHEREAS, as consideration
for the transactions contemplated by the Second Amendment, the Company will cause the Operating Partnership to issue common limited
partnership units (the “OP Units”) to the Holders in such amounts as set forth in the Second Amendment;
WHEREAS, the Holders,
following the initial closing of the transactions contemplated by the Second Amendment, will hold OP Units, as set forth on Schedule
I hereto and following the Second Closing (as defined below), will hold OP Units, as set forth on Schedule II hereto;
WHEREAS, pursuant to
the terms of Section 8.6 and the other related provisions of the Second Amended and Restated Agreement of Limited Partnership
of the Operating Partnership (such agreement, as amended from time to time, the “Partnership Agreement”), at
any time on or after (i) the date twelve (12) months after the Effective Date (as defined in the Partnership Agreement) or (ii)
such later date as may be expressly stated in an agreement entered into between the Operating Partnership and any Holder of an
OP Unit, and subject to the various limitations contained in the Partnership Agreement and other instruments being delivered in
connection with the transactions contemplated by the Second Amendment, each Holder shall be entitled to require the Operating
Partnership to redeem all or any portion of any OP Units then held by such Holder for cash or, at the Company’s election,
shares of its common stock, par value $0.01 per share (the “Redemption
Shares”); and
WHEREAS,
the Company has agreed to grant to the Holders the registration rights described in this Agreement.
NOW,
THEREFORE, the parties hereto, in consideration of the foregoing, the mutual covenants and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are acknowledged, hereby agree as follows:
As
used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:
“Affiliate”
means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such
Person. For purposes of this definition, “control,” when used with respect to any Person, means the power to direct
the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Agreement”
mean this Registration Rights Agreement, as the same may be amended, supplemented or modified in accordance with the terms hereof.
“Black-Out Period”
has the meaning set forth in Section 2.4.
“Board of Directors”
means the board of directors of the Company.
“Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law
to close.
“Buyer Parties”
has the meaning set forth in the recitals to this Agreement.
“CB Portfolio”
has the meaning set forth in the recitals to this Agreement.
“CB-Campus Crest”
has the meaning set forth in the recitals to this Agreement.
“CB-Campus Crest
PA” has the meaning set forth in the recitals to this Agreement.
“CBTC”
has the meaning set forth in the recitals to this Agreement.
“CBTC PA”
has the meaning set forth in the recitals to this Agreement.
“Commission”
means the Securities and Exchange Commission or any successor agency then having jurisdiction to enforce the Securities Act.
“Common Shares”
means shares of the Company’s common stock, $0.01 par value per share, in the Company, including any capital stock of the
Company into which such shares of common stock are reclassified or reconstituted.
“Company”
has the meaning set forth in the preamble to this Agreement.
“Disclosure
Package” means, with respect to any offering of securities, (a) the Prospectus, (b) each Free Writing Prospectus and
(c) all other information, in each case, that is deemed, under Rule 159 under the Securities Act, to have been conveyed to purchasers
of securities at the time of sale of such securities (including a contract of sale).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.
“Filing Deadline”
has the meaning set forth in Section 2.3.
“FINRA”
means the Financial Industry Regulatory Authority.
“Free Writing
Prospectus” means any “free writing prospectus” as defined in Rule 405 under the Securities Act.
“Holder”
has the meaning set forth in the preamble to this Agreement.
“Indemnified
Party” has the meaning set forth in Section 4.3.
“Indemnifying
Party” has the meaning set forth in Section 4.3.
“Issuer Registration
Statement” has the meaning set forth in Section 2.3.
“Liquidated
Damages” has the meaning set forth in Section 2.3.
“OP Units”
has the meaning set forth in the recitals to this Agreement.
“Operating Partnership”
has the meaning set forth in the recitals to this Agreement.
“Partnership
Agreement” has the meaning set forth in the recitals to this Agreement.
“Person”
means an individual or a corporation, partnership, limited liability company, trust, unincorporated organization, associations
or other entity.
“Prospectus”
has the meaning set forth in Section 2.3.
“Redemption
Shares” has the meaning set forth in the recitals to this Agreement.
“Registrable
Securities” means the Redemption Shares and any Common Shares issued to a Holder with respect to the Redemption Shares
by way of share dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise and any Common Shares or voting common shares issuable upon conversion, exercise or exchange
thereof.
“Registration
Expenses” has the meaning set forth in Section 5.
“Registration
Statement” has the meaning set forth in Section 2.3.
“Second Amendment”
has the meaning set forth in the recitals to this Agreement.
“Second Closing”
means the closing of the acquisition by the Company and/or its affiliates of additional membership interests in each of Copper
Beech Townhome Communities Twenty Six, LLC, Copper Beech Townhome Communities Twenty Eight, LLC, Copper Beech Townhome Communities
Twenty Nine, LLC and Copper Beech Townhome Communities IUP Buy SPE Management, LLC.
“Second Closing
Date” means the date of the Second Closing.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Suspension
Event” has the meaning set forth in Section 2.3.
section 2 | REGISTRATION RIGHTS; ISSUER REGISTRATION STATEMENT |
2.1 Grant of Rights.
The Company hereby agrees that each Holder shall be entitled to offer its Registrable Securities for sale pursuant to a Registration
Statement, subject to the terms and conditions set forth in this Agreement (the “Registration Rights”).
2.2 Registrable
Securities. For the purposes of this Agreement, Registrable Securities shall cease to be Registrable Securities when (a) a
Registration Statement covering such Registrable Securities has been declared effective under the Securities Act by the Commission
and such Registrable Securities have been disposed of pursuant to such effective Registration Statement, (b) the entire amount
of the Registrable Securities owned by a Holder may be sold in a single sale, in the opinion of counsel satisfactory to the
Company and such Holder, each in their reasonable judgment, without any limitation as to volume pursuant to Rule 144 (or any successor
provision then in effect) under the Securities Act, or (c) the Registrable Securities are proposed to be sold or distributed by
a Person not entitled to the Registration Rights granted by this Agreement.
2.3 Issuer Registration
Statement. On or prior to the nine month anniversary of the earlier of (i) the Second Closing Date and (ii) March 31, 2015
(the “Filing Deadline”), the Company shall file with the Commission a shelf registration statement (an “Issuer
Registration Statement”) that, notwithstanding any redemption limitations set forth in the Second Amendment, registers
all of the Registrable Securities that may be issued to the Holders upon redemption of OP Units held by such Holders and complies
as to form in all material respects with applicable Commission rules providing for the registration of the Registrable Securities.
In the event that the Company fails to file an Issuer Registration Statement with the Commission on or prior to the Filing Deadline,
the Company shall pay liquidated damages (“Liquidated Damages”) to the Holders in an amount equal to $1,000
per day from and including the day following the Filing Deadline to but excluding the date on which the Company files an Issuer
Registration Statement with the Commission. Any Liquidated Damages accrued pursuant to this Section 2.3 shall be payable
by the Company to the Holders within ten (10) Business Days following the end of each 30-day period by wire transfer of immediately
available funds. The Company agrees to use commercially reasonable
efforts to cause the Issuer Registration Statement and related prospectus to be declared and remain effective by the Commission
as soon as practicable; provided that if the Company, in its good faith judgment, determines that any registration should
not be made or continued because the negotiation or consummation of a material transaction by the Company or its subsidiaries is
pending or an event has occurred, which negotiation, consummation or event would require additional disclosure by the Company in
the Issuer Registration Statement of material information which the Company has a bona fide business purpose for keeping
confidential and the non-disclosure of which in the Registration Statement would be expected, in the Company’s reasonable
determination, to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance
a “Suspension Event”), the Company may postpone the filing of an Issuer Registration Statement or suspend the
effectiveness thereof. The Company agrees to keep the Issuer Registration Statement continuously effective (including the preparation
and filing of any amendments and supplements necessary for that purpose) until such time as the Holders no longer own any Registrable
Securities. When the Registrable Securities are issued to the Holders pursuant to an Issuer Registration Statement, subject to
the foregoing provisos, the Company shall:
(a) promptly
notify the Holders: (i) when the Issuer Registration Statement, any pre-effective amendment, the prospectus or any prospectus supplement
related thereto or post-effective amendment to the Issuer Registration Statement has been filed, and, with respect to the Issuer
Registration Statement or any post-effective amendment, when the same has become effective, (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Issuer Registration Statement or the initiation or threat of any proceedings
for that purpose, and (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification
of any Redemption Shares for sale under the securities or “blue sky” laws of any jurisdiction or the initiation of
any proceeding for such purpose;
(b)
promptly use commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of the
Issuer Registration Statement, and, if any such order suspending the effectiveness of the Issuer Registration Statement is
issued, shall promptly use commercially reasonable efforts to obtain the withdrawal of such order at the earliest possible
moment; and
(c)
use commercially reasonable best efforts to cause all such Registrable Securities to be, or continue to be, listed on a
national securities exchange.
As used herein, “Registration
Statement” and “Prospectus” refer to a registration statement and related prospectus (including any
preliminary prospectus) filed pursuant to the Securities Act utilized by the Company to satisfy a Holder’s Registration Rights
pursuant to this Agreement, including, but not limited to, an Issuer Registration Statement and related prospectus (including any
preliminary prospectus) and any documents incorporated therein by reference.
2.4 Restrictions
on Public Sale by Holders. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter
of securities of the Company, directly or indirectly sell, offer to sell (including, without limitation, any short sale), grant
any option or otherwise transfer or dispose of any Registrable Securities (other than to donees or Affiliates of a Holder who agree
to be similarly bound) within seven days prior to and for up to 90 days following the effective date of a registration statement
of the Company filed under the Securities Act or the date of an underwriting agreement with respect to an underwritten public offering
of the Company’s securities (the “Black-Out Period”); provided, however, that:
(i)
all executive officers and directors of the Company then holding Common Shares shall enter into similar agreements;
(ii) the
Company shall use commercially reasonable efforts to obtain similar agreements from each 10% or greater equity holders of the Company;
and
(iii) the
Holders shall be allowed any concession or proportionate release allowed to any officer, director or other 10% or greater equity
holders of the Company that entered into similar agreements.
In order to enforce the foregoing covenant,
the Company shall have the right to place restrictive legends on the certificates representing the Registrable Securities subject
to this Section 2.4 and to impose stop transfer instructions with respect to the Registrable Securities and such other Common
Shares of a Holder (and the Common Shares or securities of every other person subject to the foregoing restriction) until the end
of such period.
2.5 Suspension
of Offering. Notwithstanding Section 2.3 hereof, if the Board of Directors, in its good faith judgment, determines that
any registration should not be made or continued because of a Suspension Event, the Company may postpone the filing of a Registration
Statement and, upon the approval of a majority of the Board of Directors, require the Holders not to sell under the Registration
Statement or to suspend the effectiveness thereof; provided, however, that the Company may not delay, suspend or withdraw
the Registration Statement for more than sixty (60) days at any one time, or more than twice in any twelve (12) month period.
Upon receipt of any written notice from the Company of the happening of any Suspension Event during the period the Registration
Statement is effective or if as a result of a Suspension Event the Registration Statement or related Prospectus contains any untrue
statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made (in the case of the Prospectus) not misleading, each Holder agrees
that (i) it will immediately discontinue offers and sales of the Registrable Securities under the Registration Statement until
such Holder receives copies of a supplemental or amended Prospectus (which the Company agrees to promptly prepare) that corrects
the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective
or unless otherwise notified by the Company that it may resume such offers and sales, and (ii) it will maintain the confidentiality
of any information included in the written notice delivered by the Company unless otherwise required by law or subpoena. If so
directed by the Company, each Holder will deliver to the Company all copies of the Prospectus covering the Registrable Securities
current at the time of receipt of such notice, other than permanent file copies then in the possession of such Holder’s counsel.
section 3 | REGISTRATION
PROCEDURES |
3.1 Qualification.
The Company agrees to use commercially reasonable efforts to register or qualify the Registrable Securities by the time the applicable
Registration Statement is declared effective by the Commission under all applicable state securities or “blue sky”
laws of such jurisdictions as a Holder may reasonably request in writing, and shall use commercially reasonable efforts to keep
each such registration or qualification effective during the period such Registration Statement is required to be kept effective
pursuant to this Agreement or during the period offers or sales are being made by the Holders after delivery of a Registration
Notice to the Company, whichever is shorter, and to do any and all other similar acts and things which may be reasonably necessary
or advisable to enable the Holders to consummate the disposition of the Registrable Securities in each such jurisdiction; provided,
however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register
as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Agreement, (ii) take
any action that would cause it to become subject to any taxation in any jurisdiction where it would not otherwise be subject to
such taxation or (iii) take any action that would subject it to the general service of process in any jurisdiction where it
is not then so subject.
3.2 Obligations
of the Company. When the Company is required to effect the registration of Registrable Securities under the Securities Act
pursuant to Section 2 of this Agreement, subject to Section 2.5 hereof (as applicable), the Company shall:
(a) prepare
and file with the Commission such amendments and supplements as to the Registration Statement and the Prospectus used in connection
therewith as may be necessary (i) to keep such Registration Statement effective and (ii) to comply with the provisions of the Securities
Act with respect to the disposition of the Registrable Securities covered by such Registration Statement, in each case for such
time as is contemplated in Section 2.3 of this Agreement;
(b) furnish,
without charge, to each Holder selling Registrable Securities, prior to filing a Registration Statement, such number of copies
of the Registration Statement, each amendment and supplement thereto (in each case including all exhibits, but excluding any documents
to be incorporated by reference therein that are publicly available on the Commission’s Electronic Data Gathering, Analysis
and Retrieval system), and the Prospectus included in such Registration Statement in conformity with the requirements of the Securities
Act as the Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities
owned by such Holder;
(c) notify
the Holders: (i) when the Registration Statement, any pre-effective amendment, the Prospectus or any prospectus supplement related
thereto or post-effective amendment to the Registration Statement has been filed, and, with respect to the Registration Statement
or any post-effective amendment, when the same has become effective, (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation or threat of any proceedings for that purpose, and (iii) of the
receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for
sale under the securities or “blue sky” laws of any jurisdiction or the initiation of any proceeding for such purpose;
(d) promptly
use commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement,
and, if any such order suspending the effectiveness of a Registration Statement is issued, shall promptly use commercially reasonable
efforts to obtain the withdrawal of such order at the earliest possible moment;
(e) use
commercially reasonable best efforts to cause all such Registrable Securities to be, or continue to be, listed on a national securities
exchange; and
(f) if
requested by a Holder participating in the offering of Registrable Securities, incorporate in a prospectus supplement or post-effective
amendment such information concerning such Holder or the intended method of distribution as such Holder reasonably requests to
be included therein and is reasonably necessary to permit the sale of the Registrable Securities pursuant to the Registration Statement,
including, without limitation, information with respect to the number of Registrable Securities being sold, the purchase price
being paid therefor and any other material terms of the offering of the Registrable Securities to be sold in such offering; provided,
however, that the Company shall not be obligated to include in any such prospectus supplement or post-effective amendment any
requested information that is not required by the rules of the Commission and is unreasonable in scope compared with the Company’s
most recent prospectus or prospectus supplement used in connection with a primary or secondary offering of equity securities by
the Company.
3.3 Obligations
of Holders. In connection with any Registration Statement utilized by the Company to satisfy the Registration Rights, each
Holder selling Registrable Securities agrees to cooperate with the Company in connection with the preparation of the Registration
Statement, and each Holder selling Registrable Securities agrees that it will (i) respond within ten (10) Business Days to any
reasonable written request by the Company to provide or verify information regarding such Holder or such Holder’s Registrable
Securities (including the proposed manner of sale) that may be required to be included in such Registration Statement and related
Prospectus pursuant to the rules and regulations of the Commission, and (ii) provide in a timely manner information regarding the
proposed distribution by such Holder of the Registrable Securities and such other information as may be requested by the Company
from time to time in connection with the preparation of and for inclusion in the Registration Statement and related Prospectus.
section 4 | INDEMNIFICATION;
CONTRIBUTION |
4.1 Indemnification
by the Company. The Company agrees to indemnify and hold harmless each Holder and each person, if any, who controls a Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and any of their partners,
members, officers, directors, employees or representatives, as follows:
(a) against
any and all loss, liability, claim, damage, judgment and expense whatsoever, as incurred, arising out of or based upon (a) any
untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, Disclosure Package, Prospectus,
Free Writing Prospectus or in any amendment or supplement thereto; and (b) the omission or alleged omission to state, in any
Registration Statement, Disclosure Package, Prospectus, Free Writing Prospectus or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements therein not misleading under the circumstances
such statements were made;
(b) against
any and all loss, liability, claim, damage, judgment and expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the Company; and
(c) against
any and all expense whatsoever, as incurred (including reasonable fees and disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or
threatened, in each case whether or not a party, or any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (a) or (b) above;
provided, however, that the indemnity
provided pursuant to this Section 4.1 does not apply to any Holder with respect to any loss, liability, claim, damage, judgment
or expense to the extent arising out of (A) any untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use in the Registration
Statement, Disclosure Package, Prospectus, Free Writing Prospectus or in any amendment or supplement thereto or (B) such Holder’s
failure to deliver an amended or supplemental prospectus furnished to such Holder by the Company, if such loss, liability, claim,
damage, judgment or expense would not have arisen had such delivery occurred. The Company shall also provide customary indemnities
to any underwriters of the Registrable Securities, their officers, directors and employees and each Person who controls such underwriters
(within the meaning of Section 15 of the Securities Act).
4.2 Indemnification
by Holder. Each Holder (and each permitted assignee thereof, on a several basis) severally and not jointly agrees to indemnify
and hold harmless the Company, and each of its directors or trustees, as applicable, and officers (including each director or trustee,
as applicable, and officer of the Company who signed a Registration Statement), any underwriter retained by the Company, and each
person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, as follows:
(a) against
any and all loss, liability, claim, damage, judgment and expense whatsoever, as incurred, arising out of or based upon (a) any
untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, Disclosure Package, Prospectus,
Free Writing Prospectus or in any amendment or supplement thereto; and (b) the omission or alleged omission to state, in any
Registration Statement, Disclosure Package, Prospectus, Free Writing Prospectus or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements therein not misleading under the circumstances
such statements were made;
(b) against
any and all loss, liability, claim, damage, judgment and expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of such Holder; and
(c) against
any and all expense whatsoever, as incurred (including reasonable fees and disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or
threatened, in each case whether or not a party, or any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (a) or (b) above;
provided, however, that the indemnity
provided pursuant to this Section 4.2 shall only apply with respect to any loss, liability, claim, damage, judgment
or expense to the extent arising out of (A) any untrue statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by such Holder expressly for use in the Registration Statement,
Disclosure Package, Prospectus, Free Writing Prospectus or in any amendment or supplement thereto or (B) such Holder’s failure
to deliver an amended or supplemental prospectus furnished to such Holder by the Company, if such loss, liability, claim, damage
or expense would not have arisen had such delivery occurred. Notwithstanding the provisions of this Section 4.2, such Holder
and any permitted assignee shall not be required to indemnify any Person pursuant to this Section 4.2 in excess of the amount
of the net proceeds (after deducting the underwriters’ discounts and commissions) to such Holder or such permitted assignee,
as the case may be, from sales of the Registrable Securities of such Holder under the Registration Statement that is the subject
of the indemnification claim.
4.3 Conduct of
Indemnification Proceedings. An indemnified party hereunder (the “Indemnified Party”) shall give reasonably
prompt notice to the indemnifying party (the “Indemnifying Party”) of any action or proceeding commenced against
it in respect of which indemnity may be sought hereunder, but failure to so notify the Indemnifying Party (i) shall not relieve
it from any liability which it may have under the indemnity agreement provided in Section 4.1 or 4.2 above, unless
and only to the extent the lack of notice by the Indemnified Party results in the forfeiture by the Indemnifying Party of substantial
rights and defenses, and (ii) shall not, in any event, relieve the Indemnifying Party from any obligations to any Indemnified
Party other than the indemnification obligation provided under Section 4.1 or 4.2 above. If the Indemnifying Party
so elects within a reasonable time after receipt of such notice, the Indemnifying Party may assume the defense of such action or
proceeding at such Indemnifying Party’s own expense with counsel chosen by the Indemnifying Party and approved by the Indemnified
Party, which approval shall not be unreasonably withheld; provided, however, that the Indemnifying Party will not settle,
compromise or consent to the entry of any judgment with respect to any such action or proceeding without the written consent of
the Indemnified Party unless such settlement, compromise or consent secures the unconditional release of the Indemnified Party.
The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof,
but the fees and expense of such counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay
the same, (ii) the Indemnifying Party fails to assume the defense of such action with counsel approved by the Indemnified Party
or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified
Party and such parties have been advised by such counsel that either (x) representation of such Indemnified Party and the
Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (y) there
may be one or more legal defenses available to the Indemnified Party which are different from or additional to those available
to the Indemnifying Party. In any of such cases, the Indemnifying Party shall not be entitled to assume such defense and the Indemnified
Party shall be entitled to separate counsel at the Indemnifying Party’s expense. If the Indemnifying Party is not entitled
to assume the defense of such action or proceeding as a result of clause (iii) above, the Indemnifying Party’s counsel shall
be entitled to conduct the Indemnifying Party’s defense and counsel for the Indemnified Party shall be entitled to conduct
the defense of the Indemnified Party, it being understood that both such counsel will cooperate with each other to conduct the
defense of such action or proceeding as efficiently as possible. If the Indemnifying Party is not so entitled to assume the defense
of such action or does not assume such defense, after having received the notice referred to in the first sentence of this paragraph,
the Indemnifying Party will pay the reasonable fees and expenses of counsel for the Indemnified Party. In such event, however,
the Indemnifying Party will not be liable for any settlement effected without the written consent of the Indemnifying Party. If
an Indemnifying Party is entitled to assume, and assumes, the defense of such action or proceeding in accordance with this paragraph,
the Indemnifying Party shall not be liable for any fees and expenses of counsel for the Indemnified Party incurred thereafter in
connection with such action or proceeding.
4.4 Contribution.
(a) In order to provide
for just and equitable contribution in circumstances in which the indemnity agreement provided for in Sections 4.1 and 4.2
above is for any reason held to be unenforceable by the Indemnified Party although applicable in accordance with its terms, the
Indemnified Party and the Indemnifying Party shall contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by such indemnity agreement incurred by the Indemnified Party and the Indemnifying Party, in such proportion
as is appropriate to reflect the relative fault of the Indemnified Party on the one hand and the Indemnifying Party on the other
hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities, or expenses.
The relative fault of the Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether
the action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by, the Indemnifying Party or the Indemnified Party,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action.
(b) The parties hereto
agree that it would not be just or equitable if contribution pursuant to this Section 4.4 were determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 4.4, a Holder shall not be required to contribute
any amount in excess of the amount of the net proceeds (after deducting the underwriters’ discounts and commissions) to such
Holder from sales of the Registrable Securities of such Holder under the Registration Statement that is the subject of the indemnification
claim.
(c) Notwithstanding
the foregoing, no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 4.4, each person, if any, who controls a Holder within the meaning of Section 15 of the Securities Act shall
have the same rights to contribution as such Holder, and each director of the Company, each officer of the Company who signed a
Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities
Act shall have the same rights to contribution as the Company.
The Company shall pay
all Registration Expenses (as defined below) incident to the performance by the Company of its registration obligations under Section
2 above, including (i) Commission, stock exchange and FINRA registration and filing fees, (ii) all fees and expenses
incurred in complying with securities or “blue sky” laws (including reasonable fees, charges and disbursements of counsel
to any underwriter incurred in connection with “blue sky” qualifications of the Registrable Securities as may be set
forth in any underwriting agreement), (iii) all printing, messenger and delivery expenses, and (iv) the fees, charges
and expenses of counsel to the Company and of its independent public accountants and any other accounting fees, charges and
expenses incurred by the Company (including, without limitation, any expenses arising from any “comfort” letters or
any special audits incident to or required by any registration or qualification). All of the costs and expenses described in the
preceding sentence of this Section 5 are referred to herein as “Registration Expenses.” Each Holder
shall be responsible for the payment of any brokerage and sales commissions, fees and disbursements of such Holder’s counsel,
accountants and other advisors, and any transfer taxes relating to the sale or disposition of the Registrable Securities by such
Holder pursuant to this Agreement.
section 6 | RULE
144 COMPLIANCE |
The Company covenants
that it will use its best efforts to timely file the reports required to be filed by the Company under the Securities Act and the
Exchange Act so as to enable the Holders to sell the Registrable Securities pursuant to Rule 144 under the Securities Act.
In connection with any sale, transfer or other disposition by a Holder of any Registrable Securities pursuant to Rule 144
under the Securities Act, the Company shall cooperate with such Holder to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities to be sold and not bearing any Securities Act legend, and enable certificates for such
Registrable Securities to be for such number of shares and registered in such names as Holder may reasonably request at least five (5)
Business Days prior to any sale of Registrable Securities hereunder.
7.1 Integration;
Amendment. This Agreement constitutes the entire agreement among the parties hereto with respect to the matters set forth herein
and supersedes and renders of no force and effect all prior oral or written agreements, commitments and understandings among the
parties with respect to the matters set forth herein. Except as otherwise expressly provided in this Agreement, no amendment, modification
or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by each of the parties hereto.
Notwithstanding the foregoing, the Company, without the consent of any other party hereto, may amend this Agreement to add any
permitted transferee of a Holder as a party to this Agreement as a Holder.
7.2 Waivers.
No waiver by a party hereto shall be effective unless made in a written instrument duly executed by the party against whom such
waiver is sought to be enforced, and only to the extent set forth in such instrument. Neither the waiver by any of the parties
hereto of a breach or a default under any of the provisions of this Agreement, nor the failure of any of the parties, on one or
more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder shall thereafter
be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights
or privileges hereunder.
7.3 Assignment;
Successors and Assigns. This Agreement and the rights granted hereunder may not be assigned by any Holder (except to another
Holder) without the written consent of the Company; provided, however, that a Holder may assign its rights and obligations
hereunder, without such consent, in connection with a transfer of some or all of such Holder’s Registrable Securities (i)
to the extent permitted under the Partnership Agreement or the Charter, as applicable, and (ii) provided such transferee agrees
in writing to be bound by all of the provisions hereof and the Holder provides written notice to the Company within ten (10) days
of the effectiveness of such assignment. This Agreement shall inure to the benefit of and be binding upon all of the parties hereto
and their respective heirs, executors, personal and legal representatives, successors and permitted assigns, including, without
limitation, any successor of the Company by merger, acquisition, reorganization, recapitalization or otherwise.
7.4 Notices.
All notices called for under this Agreement shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, (b) on the first Business Day following the date of dispatch if delivered by a nationally recognized
next-day courier service, (c) on the fifth Business Day following the date of mailing if delivered by registered or certified
mail, return receipt requested, postage prepaid, or (d) if sent by facsimile transmission during business hours on a Business
Day, when transmitted and receipt is confirmed, or otherwise on the following Business Day. All notices hereunder shall be delivered
to the parties at the addresses set forth opposite their signatures below, or to any other address or addressee as any party entitled
to receive notice under this Agreement shall designate, from time to time, to others in the manner provided in this Section 7.4
for the service of notices; provided, however, that notices of a change of address shall be effective only upon receipt
thereof.
7.5 Specific Performance.
The parties hereto acknowledge that the obligations undertaken by them hereunder are unique and that there would be no adequate
remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition
to any other remedy to which it may be entitled at law or in equity, shall be entitled to (i) compel specific performance
of the obligations, covenants and agreements of any other party under this Agreement in accordance with the terms and conditions
of this Agreement and (ii) obtain preliminary injunctive relief to secure specific performance and to prevent a breach or
contemplated breach of this Agreement in any court of the United States or any State thereof having jurisdiction.
7.6 Governing Law;
Consent to Jurisdiction.
(a) This Agreement,
the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed
in accordance with the laws of the State of Delaware (excluding the conflict of law provisions thereof). Each party irrevocably
submits to the exclusive jurisdiction of the State and Federal courts in the State of Delaware, and any appellate court from any
thereof, in any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby
or thereby, or for recognition or enforcement of any judgment, and each party irrevocably and unconditionally agrees that all claims
in respect of any such suit, action or other proceeding may be heard and determined in such Delaware State court or, to the extent
permitted by applicable law, in such Federal court. The parties agree that a final judgment in any such suit, action or other proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable
law.
(b) Each party irrevocably
and unconditionally waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have
to the laying of venue of any suit, action or other proceeding arising out of or relating to this Agreement or any transaction
contemplated hereby or thereby in any court referred to in the first sentence of paragraph (a) of this Section 7.6. Each
party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, the defense of an inconvenient
forum to the maintenance of any suit, action or other proceeding arising out of or relating to this Agreement or any transaction
contemplated hereby or thereby in any court referred to in the first sentence of paragraph (a) of this Section 7.6.
(c) Each party consents,
to the fullest extent permitted by applicable law, to service of any process, summons, notice or document in the manner provided
for notices in Section 7.4. Nothing in this Agreement will affect the right of any party to serve process in any other manner
permitted by applicable Law.
7.7 Waiver of Jury
Trial. Each party hereby waives, to the fullest extent permitted by applicable Law, any right it may have to a trial by jury
in respect to any litigation, directly or indirectly, arising out of or relating to this Agreement or any transaction contemplated
hereby or thereby. Each party (a) certifies that no representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it and the other parties have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications
in this Section 7.7.
7.8 Headings.
Section and subsection 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.
7.9 Pronouns.
All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.
7.10 Execution
in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all
of which together shall constitute one and the same agreement. This Agreement may be executed by facsimile signatures
7.11 Severability.
If fulfillment of any provision of this Agreement, at the time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity; and if any provision of
this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby.
7.12 No Third Party
Beneficiaries. It is the explicit intention of the parties hereto that no person or entity other than the parties hereto is
or shall be entitled to bring any action to enforce any provision of this Agreement against any of the parties hereto, and the
covenants, undertakings and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable
only by, the parties hereto or their respective successors, heirs, executors, administrators, legal representatives and permitted
assigns.
Signatures on following page
IN WITNESS WHEREOF, each
of the parties hereto has caused this Agreement to be duly executed on its behalf as of the date first herein above set forth.
|
COMPANY: |
|
|
|
CAMPUS CREST COMMUNITIES, INC. |
|
|
|
By: |
/s/ Aaron Halfacre |
|
Name: Aaron Halfacre |
|
Title: Executive Vice President and Chief Investment Officer |
[Signature Page to Registration Rights
Agreement]
|
MCWHIRTER FAMILY LIMITED PARTNERSHIP |
|
|
|
By: /s/ John R. McWhirter |
|
Name: John R. McWhirter |
|
Title: General Partner |
|
|
|
By: /s/ Jeanette D.. McWhirter |
|
Name: Jeanette D. McWhirter |
|
Title: General Partner |
|
|
|
/s/ John R. McWhirter |
|
John R. McWhirter |
|
|
|
/s/ Jeanette D. McWhirter |
|
Jeanette D. McWhirter |
|
|
|
/s/ John w. McWhirter |
|
John W. McWhirter |
|
|
|
/s/ Jodi McWhirter |
|
Jodi McWhirter |
|
|
|
/s/ Thomas D. Simco |
|
Thomas D. Simco |
|
|
|
/s/ Betty Simco |
|
Betty Simco |
|
|
|
/s/ Mark McWhirter |
|
Mark McWhirter |
[Signature Page to Registration Rights
Agreement]
|
/s/ Debbie McWhirter |
|
Debbie McWhirter |
|
|
|
/s/ Andy McWhirter |
|
Andy McWhirter |
|
|
|
/s/ Mary James |
|
Mary James |
|
|
|
/s/ Eric Heiser |
|
Eric Heiser |
|
|
|
/s/ Rebecca Heiser |
|
Rebecca Heiser |
|
|
|
/s/ Brian McWhirter |
|
Brian McWhirter |
|
/s/ Susan McWhirter |
|
Susan McWhirter |
|
|
|
/s/ Robert Heiser |
|
Robert Heiser |
|
|
|
/s/ Judy McWhirter |
|
Judy Heiser |
|
|
|
/s/ Gail McWhirter |
|
Gail McWhirter |
|
|
|
/s/ Frederick Brenner |
|
Frederick Brenner |
|
|
|
/s/ Patricia Oldford |
|
Patricia Oldford |
|
|
|
/s/ Chris Summers |
|
Chris Summers |
|
|
|
/s/ Maria Summers |
|
Maria Summers |
|
|
|
/s/ Thomas Foley |
|
Thomas Foley |
[Signature Page to Registration Rights
Agreement]
SCHEDULE I
Holders (Name and Address) | |
OP Units | |
McWhirter Family Limited Partnership | |
| 2,292,920 | |
| |
| | |
John W. McWhirter | |
| 468,599 | |
| |
| | |
Jodi McWhirter | |
| 468,599 | |
| |
| | |
Thomas D. Simco & Betty Simco | |
| 941,689 | |
| |
| | |
Mark McWhirter & Debbie McWhirter | |
| 962,755 | |
| |
| | |
Andrew J. McWhirter | |
| 481,378 | |
| |
| | |
Mary James | |
| 481,378 | |
| |
| | |
Eric Heiser & Rebecca Heiser | |
| 962,755 | |
| |
| | |
Brian McWhirter & Susan McWhirter | |
| 956,665 | |
| |
| | |
Robert Heiser & Judy Heiser | |
| 962,755 | |
| |
| | |
Gail McWhirter | |
| 183,895 | |
| |
| | |
Frederick Brenner | |
| 572,452 | |
| |
| | |
Patricia Oldford | |
| 297,424 | |
| |
| | |
Chris Summers & Maria Summers | |
| 321,435 | |
| |
| | |
Thomas Foley | |
| — | |
| |
| | |
Totals | |
| 10,354,699 | |
SCHEDULE II
Holders (Name and Address) | |
OP Units | |
McWhirter Family Limited Partnership | |
| 2,784,355 | |
| |
| | |
John W. McWhirter | |
| 550,408 | |
| |
| | |
Jodi McWhirter | |
| 550,408 | |
| |
| | |
Thomas D. Simco & Betty Simco | |
| 1,105,307 | |
| |
| | |
Mark McWhirter & Debbie McWhirter | |
| 1,126,373 | |
| |
| | |
Andy McWhirter | |
| 563,186 | |
| |
| | |
Mary James | |
| 563,186 | |
| |
| | |
Eric Heiser & Rebecca Heiser | |
| 1,126,373 | |
| |
| | |
Brian McWhirter & Susan McWhirter | |
| 1,120,283 | |
| |
| | |
Robert Heiser & Judy Heiser | |
| 1,126,373 | |
| |
| | |
Gail McWhirter | |
| 206,205 | |
| |
| | |
Frederick Brenner | |
| 728,100 | |
| |
| | |
Patricia Oldford | |
| 375,300 | |
| |
| | |
Chris Summers & Maria Summers | |
| 460,031 | |
| |
| | |
Thomas Foley | |
| 21,888 | |
| |
| | |
Totals | |
| 12,407,777 | |
[Signature Page to Registration Rights
Agreement]
Exhibit 10.2
EXECUTION VERSION
TAX PROTECTION AGREEMENT
THIS TAX PROTECTION
AGREEMENT (this “Agreement”) is made and entered into as of January 30, 2015 by and among Campus Crest Communities,
Inc., a Maryland corporation (the “REIT”), Campus Crest Communities Operating Partnership, L.P., a Delaware
limited partnership (the “Partnership”), and the other persons set forth on Schedule 2.1(i) hereof (each
a “Protected Partner,” and collectively the “Protected Partners”).
WHEREAS, pursuant to
the Second Amendment to Purchase and Sale Agreement dated as of November 3, 2014 (the “Contribution Agreement”),
interests in various entities of which the Protected Partners were members or partners and that directly or indirectly own real
property, were acquired by the Partnership or a subsidiary of the Partnership, with the Protected Partners receiving Class A common
units (“OP Units”) of limited partnership interest in the Partnership, cash, or a combination of OP Units and
cash (the “Transaction”).
WHEREAS, it is intended
for federal income tax purposes that the Transaction be treated in accordance with Section 15 of the Contribution Agreement;
WHEREAS, in accordance
with Section 15 of the Contribution Agreement, the parties desire to enter into this Agreement regarding certain tax matters associated
with the Transaction; and
WHEREAS, the REIT and
the Partnership desire to evidence their agreement regarding amounts that may be payable as a result of certain actions being taken
by the Partnership regarding the disposition of certain of the assets of Partnership or other contributed assets and certain debt
obligations of the Partnership, its partners and its subsidiaries.
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:
“Agreement” has the
meaning set forth in the Recitals.
“Cash Consideration” has
the meaning set forth in Section 2.3.
“Closing” means the
closing of the transactions contemplated by the Contribution Agreement other than the acquisition by the REIT and/or its affiliates
of additional membership interests in each of Copper Beech Townhome Communities Twenty Six, LLC, Copper Beech Townhome Communities
Twenty Eight, LLC, Copper Beech Townhome Communities Twenty Nine, LLC and Copper Beech Townhome Communities IUP Buy SPE Management,
LLC.
“Closing Date”
means the date hereof.
“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.
“Contribution Agreement”
has the meaning set forth in the recitals.
“Excess Payment” has
the meaning set forth in Section 4.4
“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 incurred (or assumed) by the Partnership or any Subsidiary that are guaranteed by Partner Guarantors pursuant to Section
3.3 hereof.
“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.
“Initial Per
Unit Minimum Liability Amount” means, for a Protected Partner, (1) from the Closing and until the Second Closing (if
the Second Closing occurs), the quotient of (a) the initial maximum Minimum Liability Amount set forth on Schedule 3.1(a)(i)
applicable to such Protected Partner, divided by (b) the number of OP Units issued to the Protected Partner on the Closing Date,
and (2) from the Second Closing (if the Second Closing occurs), the quotient of (A) sum of (I) the Unit-Based Minimum Liability
Amount for that Protected Partner, determined immediately prior to the Second Closing, plus (II) the difference between the maximum
Minimum Liability Amount applicable to such Protected Partner set forth on Schedule 3.1(a)(ii) applicable to such Protected
Partner minus the initial maximum Minimum Liability Amount set forth on Schedule 3.1(a)(i) applicable to such Protected
Partner, divided by (B) the sum of the number of OP Units held by the Protected Partner immediately prior to the Second Closing
plus the number of OP Units issued to the Protected Partner in the Second Closing Date.
“Minimum Liability
Amount” means, for each Protected Partner, initially the amount set forth on Schedule 3.1(a)(i) hereto next to
such Protected Partner’s name, and following the occurrence of the Second Closing (if the Second Closing occurs), initially
the amount set forth on Schedule 3.1(a)(ii) hereto next to such Protected Partner’s name, as amended from time to
time, but in any case which may not exceed at any time the Unit-Based Minimum Liability Amount for such Protected Partner. The
initial aggregate maximum Minimum Liability Amount for all Protected Partners shall be $90,441,089 and, immediately following the
occurrence of the Second Closing (if the Second Closing occurs), the aggregate maximum Minimum Liability Amount shall be $100,000,000
(subject to the Unit-Based Minimum Liability Amount-limit described in this definition).
“Nonrecourse Liability”
has the meaning set forth in Treasury Regulations Section 1.752-1(a)(2).
“OP Units”
has the meaning set forth in the Recitals.
“Partner Guarantors” means
those Protected Partners (or Indirect Owners) who have guaranteed any portion of the Guaranteed Debt pursuant to Section 3.3. 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” has the
meaning set forth in the Recitals.
“Partnership Agreement”
means the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of February 9, 2012, as amended
through the Closing Date, and as the same may be further amended in accordance with the terms thereof.
“Partnership Interest Consideration”
has the meaning set forth in Section 2.3.
“Protected
Gain” shall mean any gain that would be allocable to and recognized by a Protected Partner under Section 704(c) of
the Code in the event of the sale of a Protected Property in a fully taxable transaction (and, so, excluding such Protected
Partner’s corresponding share of “book gain,” if any, accruing after the Closing (for the Protected
Properties set forth on Schedule 2.1(ii)(a)) or accruing after the Second Closing (for the Protected Property set forth on
Schedule 2.1(ii)(b))). The initial maximum amount
of Protected Gain with respect to each Protected Partner shall be determined as if the Partnership sold a Protected
Property in a fully taxable transaction on the Closing Date (for the Protected Properties set forth on Schedule 2.1(ii)(a))
or the Second Closing Date (for the Protected Property set forth on Schedule 2.1(ii)(b)) for consideration equal to the
Section 704(c) Value of such Protected Property immediately following the Closing (for the Protected Properties set forth on
Schedule 2.1(ii)(a)) or following the Second Closing (for the Protected Property set forth on Schedule 2.1(ii)(b)). For
purposes of calculating the amount of Section 704(c) gain that is allocated to a Protected Partner, any “reverse
Section 704(c) gain” allocated to such Partner pursuant to Treasury Regulations § 1.704-3(a)(6) shall not be taken
into account unless, as a result of adjustments to the Gross Asset Value (as defined in the Partnership Agreement) of any
Protected Property pursuant to clause (b) of the definition of Gross Asset Value as set forth in the Partnership Agreement,
all or a portion of the gain recognized by the Partnership that would have been Section 704(c) gain without regard to such
adjustments becomes or is treated as “reverse Section 704(c) gain” or Section 704(b) gain under Section 704 of
the Code, then such gain shall continue to be treated as Section 704(c) gain.
“Protected Partner”
means (i) those persons set forth on Schedule 2.1(i) hereto as a “Protected Partner” and (ii) any person who
acquires OP 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 OP Units.
“Protected Property”
means (i) each of the properties identified as a Protected Property on Schedule 2.1(ii)(a) hereto and, following the consummation
of the Second Closing, each of the properties identified as a Protected Property on either Schedule 2.1(ii)(a) or on Schedule
2.1(ii)(b) hereto; (ii) a direct or indirect interest owned by the Partnership in any Subsidiary that owns an interest in a
Protected Property, if the disposition of such interest would result in the recognition of Protected Gain with respect to a Protected
Partner; and (iii) any other property that the Partnership directly or indirectly receives that is in whole or in part a “substituted
basis property” as defined in Section 7701(a)(42) of the Code with respect to a Protected Property or interest therein. For
the avoidance of doubt, if any Protected Property is transferred to another entity in a transaction in which gain or loss is not
recognized, and if the acquiring entity’s disposition of such Protected Property would cause the Protected Partners to recognize
gain or loss as a result thereof, such Protected Property (including any interest in such entity acquired directly or indirectly
by the Partnership in connection therewith) shall still be subject to this Agreement.
“Qualified Guarantee” has
the meaning set forth in Section 3.3.
“Qualified Guarantee Indebtedness”
has the meaning set forth in Section 3.3.
“REIT”
has the meaning set forth in the Recitals.
“Second Closing”
means the closing of the acquisition by the REIT and/or its affiliates of additional membership interests in each of Copper Beech
Townhome Communities Twenty Six, LLC, Copper Beech Townhome Communities Twenty Eight, LLC, Copper Beech Townhome Communities Twenty
Nine, LLC and Copper Beech Townhome Communities IUP Buy SPE Management, LLC.
“Second Closing
Date” means the date of the Second Closing.
“Section 704(c)
Value” means the fair market value of a Protected Property as set forth next to each Protected Property on Schedule
2.1(ii).
“Subsidiary” means any
entity in which the Partnership owns a direct or indirect interest.
“Successor Partnership”
has the meaning set forth in Section 2.2.
“Tax Claim”
has the meaning set forth in Section 7.1.
“Tax Proceeding”
has the meaning set forth in Section 7.1.
“Tax Protection Period”
means:
(1) with respect to
the obligations of the Partnership set forth in Article 2 hereof
(X) with
respect to the Protected Properties set forth on Schedule 2.1(ii)(a), the period commencing on the Closing Date and ending
at 12:01 AM on the day after the earlier of (a) seventh (7th) anniversary of the Second Closing (if the Second Closing
occurs) or (b) March 31, 2022; and
(Y) with
respect to the Protected Property set forth on Schedule 2.1(ii)(b), the period commencing on the Second Closing Date and
ending at 12:01 AM on the day after the earlier of (a) seventh (7th) anniversary of the Second Closing (if the Second
Closing occurs) or (b) March 31, 2022; and
(2) with respect to
the obligations of the Partnership set forth in Article 3 hereof, the period commencing on the Closing Date and ending at 12:01
AM on the day after the earlier of (a) seventh (7th) anniversary of the Second Closing (if the Second Closing occurs)
or (b) March 31, 2022.
“Transaction” has the
meaning set forth in the Recitals.
“Unit-Based
Minimum Liability Amount” means, at any given time for a Protected Partner, the product of (a) the Initial Per Unit Minimum
Liability Amount applicable to such Protected Partner, multiplied by (b) the number of OP Units then held by such Protected Partner.
ARTICLE
2
RESTRICTIONS
ON DISPOSITIONS OF PROTECTED PROPERTIES;
REPORTING
OF TRANSACTION
2.1 General
Prohibition on Disposition of Protected Properties. The REIT and the Partnership agree for the benefit of each Protected
Partner, for the term of the Tax Protection Period, that in the event that the Partnership, directly or indirectly sells, exchanges,
transfers, or otherwise disposes of a Protected Property or any interest therein (without regard to whether such disposition is
voluntary or involuntary) in a transaction that would cause a Protected Partner to recognize any Protected Gain, the provisions
of Article 4 shall apply and the Partnership shall make the payments to the Protected Partners provided for in Article 4.
Without limiting the
foregoing, the term “sale, exchange, transfer or disposition” by the Partnership shall be deemed to include, and the
rights of the Protected Partners with respect thereto under Article 4 shall extend to:
| (a) | any direct or indirect disposition by a Subsidiary of any Protected Property or any interest therein; |
| (b) | any direct or indirect disposition by the Partnership of any Protected Property (or any direct
or indirect interest therein) that is subject to Section 704(c)(1)(B) of the Code and the Treasury Regulations thereunder; and |
| (c) | any distribution by the Partnership to a Protected Partner that is subject to Section 737 of the
Code and the Treasury Regulations thereunder. |
Without limiting the
foregoing, a disposition shall include any transfer, voluntary or involuntary, by the Partnership or a Subsidiary in a foreclosure
proceeding, pursuant to a deed in lieu of foreclosure, or in a bankruptcy proceeding.
2.2 Exceptions
Where No Gain Recognized. Notwithstanding the restrictions set forth in Section 2.1, the Partnership or a Subsidiary may
dispose of any Protected Property (or an interest therein), and Article 4 shall not apply thereto, if and to the extent that such
disposition qualifies as a like-kind exchange under Section 1031 of the Code, or an involuntary conversion under Section 1033 of
the Code, or other transaction (including, but not limited to, a contribution of property to any entity that qualifies for the
non-recognition of gain under Section 721 or Section 351 of the Code, or a merger or consolidation of the Partnership with or into
another entity that qualifies for taxation as a “partnership” for federal income tax purposes (a “Successor
Partnership”)) that does not result (in the year of such disposition or in a later year within the Tax Protection Period)
in the recognition of Protected Gain to a Protected Partner. In further clarification thereof in the case of a Section 1031 like-kind
exchange, if such exchange is with a “related party” within the meaning of Section 1031(f)(3) of the Code, any direct
or indirect disposition by such related party of the Protected Property or any other transaction prior to the expiration of the
two (2)-year period following such exchange and within the Tax Protection Period that would cause Section 1031(f)(1) of the Code
to apply with respect to such Protected Property (including by reason of the application of Section 1031(f)(4) of the Code) and
a result of which is to cause a Protected Partner to recognize Protected Gain shall be considered a violation of Section 2.1 by
the Partnership.
2.3 Mergers.
Notwithstanding the foregoing, Section 2.1 shall not apply to a voluntary, actual disposition by a Protected Partner of OP Units
in connection with a merger or consolidation of the Partnership pursuant to which (1) the Protected Partner is offered either cash
or property treated as cash pursuant to Section 731 of the Code (“Cash Consideration”) or partnership interests
in a partnership that would be treated as the continuing partnership under the principles of Section 708 of the Code and the receipt
of such partnership interests would not result in the recognition of gain for federal income tax purposes by the Protected Partner
(“Partnership Interest Consideration”); (2) the Protected Partner has the ability to elect to receive solely
Partnership Interest Consideration in exchange for his OP Units and the continuing partnership has agreed in writing to assume
the obligations of the Partnership under this Agreement; (3) no Protected Gain is recognized by the Partnership as a result of
any partner of the Partnership receiving Cash Consideration; and (4) the Protected Partner elects to receive Cash Consideration.
2.4 Transactions.
For federal, state and local income tax purposes, the Partnership shall report the Transaction in a manner consistent with Section
15 of the Contribution Agreement.
ARTICLE 3
ALLOCATION OF LIABILITIES;
POST-TAX PROTECTION PERIOD GUARANTEE
OPPORTUNITIES
3.1 Minimum
Liability Allocation. . Immediately following the Closing and during the entire Tax Protection Period, each Protected Partner
will be allocated Nonrecourse Liabilities by the Partnership at least equal to the Minimum Liability Amount for such Protected
Partner; provided further that the Partnership shall not, during or with respect to the Tax Protection Period, take any
position contrary or inconsistent to such allocation in any federal or state income tax returns (including, without limitation,
information returns, such as Schedules 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). The Partnership will use the optional method under Treasury Regulation Section 1.752-3(a)(3) to allocate Nonrecourse
Liabilities considered secured by any property acquired by the Partnership pursuant to the Transaction to and for the benefit of
the Protected Partners to the extent that the “built-in gain” allocable to the Protected Partner under Section 704(c)
of the Code with respect to those properties exceeds the amount of the Nonrecourse Liabilities considered secured by such property
allocated to the Protected Partners under Treasury Regulation Section 1.752-3(a)(2).
3.2 Post-Tax
Protection Period Opportunities.
(a)
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 3.3 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 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 OP Units and at-risk amount. If the Partnership permits a Protected Partner to enter into an agreement
under this Section 3.2, 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 Guarantee Indebtedness.
(b)
Notwithstanding the foregoing, if, after the expiration of the Tax Protection Period, due to a change
in tax law after the date hereof, either the Partnership determines, or a Protected Partner is advised by counsel, that there
is a material risk that such Protected Partner may no longer continue to be allocated debt as a result of a guarantee entered
into pursuant to Section 3.3, such Protected Partner may request (i) that the Partnership elect to utilize “transition relief
rules” relating to such guarantee to permit and the Partnership shall elect to utilize such transition rules, provided that
(1) the change in law provides for transition relief rules, and (2) the transition relief rules do not have a material adverse
effect on the Partnership and its partners (other than the Protected Partner) other than a material adverse effect resulting solely
from the continued allocation pursuant to Section 752 of the Code and Treasury Regulations thereunder of Partnership liabilities
to the Protected Partner equal to the amount the liabilities guaranteed by the Protected Partner, or (ii) a modification of such
Guarantee Agreement and the Partnership will use its commercially reasonable efforts to work with the lender with respect to such
Guaranteed Debt to have the Guarantee Agreement amended in a manner that will permit such Protected Partner to be allocated such
Protected Partner’s Guaranteed Amount with respect to the Guaranteed Debt, or 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. For the avoidance of doubt, each Protected Partner
hereby acknowledges and agrees that the Partnership shall not be treated as violating its obligations to use commercially reasonable
efforts as described in Section 3.2 to the extent that, after such a change of tax law, the allocation of Partnership indebtedness
for tax purposes to the Protected Partner cannot be achieved due to the unwillingness of such Protected Partner either to provide
a guarantee or similar instrument that complies with the new tax law rules, elect to utilize transition rules (subject to the
limitations above), or 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; provided, however, that the Partnership’s obligations
as set forth in the last sentence of Section 3.1 shall continue to apply, but only to the extent permitted by applicable tax law
(including by virtue of the “transition relief rules” included in the relevant tax law). Any cost and expenses incurred
as a result of such a change in tax law shall be borne equally by the Partnership, on the one hand, and the relevant Protected
Partner, on the other hand.
3.3 Qualified
Guarantee Indebtedness and Qualified Guarantee: Treatment of Qualified Guarantee Indebtedness as Guaranteed Debt.
For purposes of this Agreement:
“Qualified Guarantee
Indebtedness” means indebtedness that satisfies all of the conditions set forth in this Section 3.3, including (i) 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 (ii) 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.
A “Qualified
Guarantee” means a guarantee by the Partner Guarantors pursuant to a Guarantee Agreement that satisfies the conditions
set forth in Section 3.3(a), including that 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.
The conditions that must
be satisfied at all times with respect to any Guaranteed Debt offered pursuant to Section 3.2 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 3.5 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 Section 3.2 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 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 Section 3.2
are entered into with respect to such Guaranteed Debt and that comply with Section 3.3(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 3.3(e); 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) and which the equity interest of the Partnership in both capital and profits is not less than 50%. |
3.4 Covenant
With Respect to Guaranteed Debt Collateral. The Partnership covenants with the Partner Guarantors with respect to the Guaranteed
Debt that it will not 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 otherwise
voluntarily dispose of or reduce the amount of such collateral unless either (A) after giving effect thereto the conditions in
Section 3.3(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 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.
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, however,
that the foregoing shall not apply with respect to additional guarantees of Guaranteed Debt so long as the conditions set
forth in Sections 3.3(b) and (e) would be satisfied immediately after the implementation of such additional guarantee (determined
in the case of Section 3.3(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 amounts guaranteed by Protected
Partners under Section 3.2 plus any other preexisting “bottom dollar guarantee” previously permitted pursuant to this
Section 3.5 or Sections 3.3(a) and (b) above, for purposes of making the computation provided for in Section 3.3(b)), and (ii)
such other guarantees do not have the effect of reducing the amount of the Guaranteed Debt that is includible by any Partner Guarantor
in its adjusted tax basis for its OP Units pursuant to Treasury Regulations Section 1.752-2.
3.6 [RESERVED]
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 3.3 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 Section 3.2); |
| (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) | 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 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 |
| (iv) | 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. |
ARTICLE 4
REMEDIES FOR BREACH
4.1 Monetary
Damages. In the event that the Partnership or a Subsidiary breaches its obligations set forth in Article 2 or Article 3
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 Protected Partner as damages, an amount equal to:
(i) in
the case of a violation of Article 3, the aggregate federal, state and local income taxes (including any applicable federal unearned
income Medicare contribution under Section 1411 of the Code) 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) by reason of such breach;
and
(ii) in
the case of a violation of Article 2, the aggregate federal, state, and local income taxes (including any applicable federal unearned
income Medicare contribution under Section 1411 of the Code) incurred with respect to the Protected Gain incurred with respect
to the Protected Property that is allocable to such Protected Partner (or Indirect Owner);
plus an additional
amount so that, after the payment by such Protected Partner (or Indirect Owner) of all federal, state and local income taxes on
amounts received pursuant to this Section 4.1 (including any tax liability incurred as a result of such Protected Partner’s
(or Indirect Owner’s) receipt of such indemnity payment), such Protected Partner (or Indirect Owner) retains an amount equal
to its total federal, state and local income tax liability incurred as a result of such breach.
For purposes of computing
the amount of the indemnity payment owed to a Protected Partner or Indirect Owner, (i) any deduction for state and local income
taxes payable as a result thereof shall be treated as fully deductible for purposes of computing federal income taxes (taking into
account any limitation or phaseout of itemized deductions applicable to taxpayers in the highest federal income tax bracket), and
(ii) a Protected Partner’s tax liability shall be computed using the highest federal, state and local marginal income tax
rates that would be applicable to such Protected Partner's taxable income (taking into account the character of such income or
gain) for the year with respect to which the taxes must be paid, and, except as described in clause (i), without regard to any
deductions, losses or credits that may be available to such Protected Partner that would reduce or offset its actual taxable income
or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner to offset other income,
gain or taxes of the Protected Partner, either in the current year, in earlier years, or in later years. 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. If the Partnership or a Subsidiary has breached or violated any of the covenants set forth in
Article 2 or Article 3 or a Protected Partner asserts that the Partnership or a Subsidiary has breached or violated any of the
covenants set forth in Article 2 or Article 3 (a “Prohibited Transaction”), the Partnership and the Protected
Partner agree to negotiate in good faith to resolve any disagreements regarding any such breach or violation and the amount of
damages, if any, payable to such Protected Partner under Section 4.1. If any such disagreement cannot be resolved by the Partnership
and such Protected Partner within (i) 60 days after the receipt of notice from the Partnership of such breach pursuant to Section
4.3, (ii) 60 days after the receipt of a notice from the Protected Partner that the Partnership or a Subsidiary has breached its
obligations under this Agreement, which notice shall set forth the amount of income asserted to be recognized by the Protected
Partner and the payment required to be made to such Protected Partner under Section 4.1 as a result of the breach, (iii) 10 days
following the date that the Partnership notifies the Protected Partner (and its Indirect Owners) of its intention to settle, compromise
and/or concede any Tax Claim or Proceeding pursuant to Section 7.2, or (iv) 10 days following any final determination of any Tax
Claim or Proceeding, the Partnership and the Protected Partner shall jointly retain a nationally recognized “Big Four”
independent public accounting firm (an “Accounting Firm”) to act as an arbitrator to resolve as expeditiously
as possible all points of any such disagreement (including, without limitation, whether a breach of any of the covenants set forth
in Article 2 and Article 3 has occurred and, if so, the amount of damages to which the Protected Partner is entitled as a result
thereof, determined as set forth in Section 4.1). All determinations made by the Accounting Firm with respect to the resolution
of any breach or violation of any of the covenants set forth in Article 2 and Article 3 and the amount of damages payable to the
Protected Partner under Section 4.1 shall, subject to any subsequent Tax Claim or Proceeding, and subject to the last sentence
of this Section 4.2, be final, conclusive and binding on the Partnership and the Protected Partner. The fees and expenses of any
Accounting Firm incurred in connection with any such determination shall be shared equally by the Partnership and the Protected
Partner; provided, however, that if the amount determined by the Accounting Firm to be owed by the Partnership to
the Protected Partner is more than 5% higher than the amount proposed by the Partnership to be owed to such Protected Partner prior
to the submission of the matter to the Accounting Firm, then all of the fees and expenses of any Accounting Firm incurred in connection
with any such determination shall be paid by the Partnership, and if the amount determined by the Accounting Firm to be owed by
the Partnership to the Protected Partner is less than 95% of the amount proposed by the Partnership to be owed to the Protected
Partner prior to the submission of the matter to the Accounting Firm then all fees and expenses of any Accounting Firm incurred
in connection with any such determination shall be paid by the Protected Partner. In the case of any Tax Claim or Proceeding that
is resolved pursuant to a final determination or that is settled, compromised and/or conceded pursuant to Section 7.2, the amount
of taxes due to the Internal Revenue Service or other taxing authority shall, to the extent that such taxes relate to matters covered
in this Agreement, be presumed to be damages resulting from a breach of this Agreement, and the amount of any such damages shall
be increased by any interest and penalties required to be paid by the Protected Partner (or Indirect Owner) with respect to such
taxes (other than interest and penalties resulting from a failure of the Protected Partner (or Indirect Owner) to timely and properly
file any tax return or to timely pay any tax, unless such failure resulted solely from the Protected Partner (or Indirect Owner)
reporting and paying its taxes in a manner consistent with the Partnership) so that the amount of the damages under Section 4.1
shall not be less than the amount required to be paid to the Internal Revenue Service or other taxing authority that pertains to
matters covered in this Agreement.
4.3 Required
Notices; Time for Payment. In the event that there has been a breach of Article 2 or Article 3, the Partnership shall provide
to the Protected Partners (or Indirect Owners), notice of the transaction or event giving rise to such breach, along with a calculation
of the amount of income to be recognized by any Protected Partner (or Indirect Owner), and the amount required to be paid to such
Protected Partner (or Indirect Owner), under Section 4.1 by reason thereof, not later than 30 days following the date that the
Partnership becomes aware that such transaction or event constitutes a breach of this Agreement.
(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 4.3(b).
(c)
All payments required to be made under Section 4.1 to any Protected Partner (or Indirect Owner)
shall be made to such Protected Partner (or Indirect Owner) no less than five (5) days prior to the due date of the quarterly
estimated tax payment for individuals which next follows the date that the transaction giving rise to the obligation
hereunder is consummated; and provided further that any payment required to be made under Section 4.1 to any Protected
Partner (or Indirect Owner) resulting from a Tax Claim or Proceeding shall be made on or before the date that the relevant
taxes are required to be paid as a result of any final determination of such Tax Claim or Proceeding or any settlement,
compromise and/or concession of such Tax Claim or Proceeding pursuant to Section 7.2. In the event of a payment made 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 lesser of the (i) the “prime rate” of interest, as
published in the Wall Street Journal (or if no longer published there, as announced by Citibank) effective as of the date the
payment is required to be made plus 10% or (ii) 20%, but not to exceed the maximum amount permitted by law.
4.4 Additional
Damages for Breaches of Section 3.4. 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 3.4 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 3.4 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 Subsidiary 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 the Protected
Properties and for all other properties acquired by the Partnership pursuant to the Contribution Agreement to take into
account the book-tax disparities as of the Closing Date (or, the Second Closing Date, as relevant) 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 such property.
ARTICLE 6
[RESERVED]
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 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 Partner (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 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;
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 (and if different, the general partner of the Partnership) 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).
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 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 Subsidiary
Entities. Any entity controlled by the Partnership or the REIT that holds an interest in the Protected Properties shall
be bound by all of the limitations and restriction to which the Partnership is subject hereunder as if such entity were originally
a signatory to this Agreement in lieu of the Partnership and the REIT.
9.5 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.
9.6 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: |
c/o Campus Crest
Communities, Inc.
2100 Rexford Road, Suite 414
Charlotte, North Carolina 28211
Attention: Chief Financial Officer
Facsimile: (704) 973-0965
| (ii) | if to a Protected Partner, 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, or faxed in the manner described
above, 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 facsimile) 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 Delaware, without regard to the choice of law provisions thereof.
9.10 Consent
to Jurisdiction; Enforceability.
(i) This
Agreement and the duties and obligations of the parties hereunder shall be enforceable against any of the parties in the courts
of the State of Delaware. For such purpose, each party hereto hereby irrevocably submits to the nonexclusive jurisdiction of such
courts and agrees that all claims in respect of this Agreement may be heard and determined in any of such courts.
(ii) Each
party hereto hereby irrevocably agrees that a final judgment of any of the courts specified above in any action or proceeding relating
to this Agreement shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
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 Representations
and Warranties Regarding Authority.
(i) 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 trust, partnership, or other (as the case may be) action on the part of each
of the 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.
(ii) Representations
and Warranties of the Protected Partners. Each of the Protected Partners 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 Protected Partners and the performance of each 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 each of the
Protected Partners. This Agreement has been duly executed and delivered by each of the Protected Partners and constitutes a valid
and binding obligation of each of the Protected Partners.
[SIGNATURE
PAGE FOLLOWS]
IN WITNESS WHEREOF, the
REIT, the Partnership, and the Protected Partners, 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.
|
CAMPUS CREST COMMUNITIES, INC. |
|
|
|
|
By: |
/s/ Aaron Halfacre |
|
Name: |
Aaron Halfacre |
|
Title: |
Executive Vice President and Chief Investment Officer |
|
|
|
|
CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, L.P. |
|
By: |
Campus Crest GP, LLC, its general partner |
|
By: |
Campus Crest Communities, Inc., its sole member |
|
|
|
|
By: |
/s/ Aaron Halfacre |
|
Name: |
Aaron Halfacre |
|
Title: |
Executive Vice President and Chief Investment Officer |
|
|
|
|
McWhirter Family Limited Partnership |
|
|
|
|
By: |
/s/ John R. McWhirter |
|
Name: |
John R. McWhirter |
|
Title: |
General Partner |
|
|
|
|
By: |
/s/ Jeanette D. McWhirter |
|
Name: |
Jeanette D. McWhirter |
|
Title: |
General Partner |
|
|
|
|
/s/ John W. McWhiter |
|
John W. McWhirter |
|
|
|
/s/ Jodi McWhiter |
|
Jodi McWhirter |
|
|
|
/s/ Thomas D. Simco |
|
Thomas D. Simco |
|
/s/ Betty Simco |
|
Betty Simco |
|
|
|
/s/ Mark McWhiter |
|
Mark McWhirter |
|
|
|
/s/ Deborah McWhiter |
|
Deborah McWhirter |
|
|
|
/s/ Andrew J. McWhiter |
|
Andrew J. McWhirter |
|
|
|
/s/ Mary James |
|
Mary James |
|
|
|
/s/ Eric Heiser |
|
Eric Heiser |
|
|
|
/s/ Rebeccas Heiser |
|
Rebecca Heiser |
|
|
|
/s/ Brian McWhiter |
|
Brian McWhirter |
|
|
|
/s/ Susan McWhiter |
|
Susan McWhirter |
|
|
|
Heiser Properties, LLC |
|
|
|
|
/s/ Robert F. Heiser |
|
Name: |
Robert F. Heiser |
|
Title: |
Authorized Signatory |
|
|
|
|
/s/ Judy Heiser |
|
Name: |
Judy Heiser |
|
Title: |
Authorized Signatory |
|
/s/ Gail McWhiter |
|
Gail McWhirter |
|
|
|
/s/ Frederick Brenner |
|
Frederick Brenner |
|
|
|
/s/ Patricia Oldford |
|
Patricia Oldford |
|
|
|
/s/ Chris Summers |
|
Chris Summers |
|
|
|
/s/ Maria Summers |
|
Maria Summers |
|
|
|
/s/ Thomas Foley |
|
Thomas Foley |
Schedule 2.1(i)
Protected Partners
Name of Protected Partner |
|
McWhirter Family Limited Partnership |
John W. McWhirter |
Jodi McWhirter |
Thomas & Betty Simco |
Mark & Deborah McWhirter |
Andrew J. McWhirter |
Mary James |
Eric & Rebecca Heiser |
Brian & Susan McWhirter |
Heiser Properties |
Gail McWhirter |
Frederick Brenner |
Patricia Oldford |
Chris & Maria Summers |
Thomas Foley |
Schedule 2.1(ii)
First Closing Protected Properties
Entity | |
Property | |
City | |
State | |
Section 704(c) Value Fair Market Value | |
| |
| |
| |
| |
| |
CBTC 3, LLC | |
IUP P1 | |
Indiana | |
PA | |
$ | 13,942,706 | |
| |
| |
| |
| |
| | |
CBTC 4, LLC | |
IUP P2 | |
Indiana | |
PA | |
$ | 10,009,171 | |
| |
| |
| |
| |
| | |
CBTC 7, LLC | |
Radford | |
Radford | |
VA | |
$ | 23,973,448 | |
| |
| |
| |
| |
| | |
CBTC 9, LLC | |
Northbrook | |
State College | |
PA | |
$ | 26,696,589 | |
| |
| |
| |
| |
| | |
CBTC 13, LLC | |
Mt. Pleasant P1 | |
Mt. Pleasant | |
MI | |
$ | 34,097,830 | |
| |
| |
| |
| |
| | |
CBTC 15, LLC | |
Bowling Green P1 | |
Bowling Green | |
OH | |
$ | 13,633,666 | |
| |
| |
| |
| |
| | |
CBTC 17, LLC | |
Bowling Green P2 | |
Bowling Green | |
OH | |
$ | 7,507,755 | |
| |
| |
| |
| |
| | |
CBTC 16, LLC | |
Grand Valley P1 | |
Allendale | |
MI | |
$ | 36,281,964 | |
| |
| |
| |
| |
| | |
CBTC 24, LLC | |
Grand Valley P2 | |
Allendale | |
MI | |
$ | 17,302,678 | |
| |
| |
| |
| |
| | |
CBTC 20, LLC | |
Missouri | |
Columbia | |
MO | |
$ | 39,129,761 | |
| |
| |
| |
| |
| | |
CBTC 21, LLC | |
Statesboro P1 | |
Statesboro | |
GA | |
$ | 44,723,700 | |
| |
| |
| |
| |
| | |
CBTC 25, LLC | |
South Carolina P1 | |
Columbia | |
SC | |
$ | 52,956,657 | |
| |
| |
| |
| |
| | |
CBTC 32, LLC | |
South Carolina P2 | |
Columbia | |
SC | |
$ | 11,108,995 | |
| |
| |
| |
| |
| | |
CBTC 35, LLC | |
San Marcos P2 | |
San Marcos | |
TX | |
$ | 25,582,568 | |
| |
| |
| |
| |
| | |
CBTC 36, LLC | |
Statesboro P2 | |
Statesboro | |
GA | |
$ | 14,825,669 | |
| |
| |
| |
| |
| | |
CBTC 38, LLC | |
Mt. Pleasant P2 | |
Mt. Pleasant | |
MI | |
$ | 14,103,688 | |
| |
| |
| |
| |
| | |
| |
| |
Total | |
| |
$ | 385,876,845 | |
Schedule 2.1(ii)()
Second Closing Protected Properties
Entity | |
Property | |
City | |
State | |
Section 704(c) Value Fair Market Value | |
| |
| |
| |
| |
| |
CBTC 29, LLC | |
San Marcos P1 | |
San Marcos | |
TX | |
$ | 51,211,123 | |
| |
| |
| |
| |
| | |
| |
| |
Total | |
| |
$ | 51,211,123 | |
Schedule 3.1(a)
Initial Minimum Liability Amount
Protected Partner | |
Minimum Liability Amount | |
MFLP | |
$ | 23,799,360 | |
John W. McWhirter | |
$ | 3,926,641 | |
Jodi McWhirter | |
$ | 3,926,656 | |
Thomas & Betty Simco | |
$ | 7,898,438 | |
Mark & Deborah McWhirter | |
$ | 7,564,668 | |
Andrew J. McWhirter | |
$ | 3,797,840 | |
Mary James | |
$ | 3,782,169 | |
Eric & Rebecca Heiser | |
$ | 7,549,329 | |
Brian & Susan McWhirter | |
$ | 7,539,278 | |
Heiser Properties | |
$ | 7,562,341 | |
Gail McWhirter | |
$ | 1,261,816 | |
Frederick Brenner | |
$ | 5,933,412 | |
Patricia Oldford | |
$ | 2,908,474 | |
Chris & Maria Summers | |
$ | 2,990,667 | |
Thomas Foley | |
| — | |
TOTAL | |
$ | 90,441,089 | |
Schedule 3.1(a)(ii)
Minimum Liability Amount – Following
Occurrence of the Second Closing
Protected Partner | |
Minimum Liability Amount | |
MFLP | |
$ | 26,285,821 | |
John W. McWhirter | |
$ | 4,337,428 | |
Jodi McWhirter | |
$ | 4,337,444 | |
Thomas & Betty Simco | |
$ | 8,724,381 | |
Mark & Deborah McWhirter | |
$ | 8,358,307 | |
Andrew J. McWhirter | |
$ | 4,196,161 | |
Mary James | |
$ | 4,178,973 | |
Eric & Rebecca Heiser | |
$ | 8,341,483 | |
Brian & Susan McWhirter | |
$ | 8,330,460 | |
Heiser Properties | |
$ | 8,355,754 | |
Gail McWhirter | |
$ | 1,394,768 | |
Frederick Brenner | |
$ | 6,574,137 | |
Patricia Oldford | |
$ | 3,222,194 | |
Chris & Maria Summers | |
$ | 3,346,578 | |
Thomas Foley | |
$ | 16,111 | |
TOTAL | |
$ | 100,000,000 | |
Schedule 3.7
Form of Guarantee
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”);
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:
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 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 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.
(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.
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.
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 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.
CCG Announces The Completion of The Copper Beech Transaction and Disposition of Land Parcels
CHARLOTTE, N.C., Feb. 2, 2015 /PRNewswire/ -- Campus Crest Communities, Inc. (NYSE: CCG) (the "Company"), an owner and manager of high-quality student housing properties, today announced the successful completion of the previously announced Copper Beech transaction and the closing of the disposition of six undeveloped parcels of land held for sale.
Copper Beech Transaction - In the Copper Beech transaction, which
was announced on November 3, 2014, the Company is acquiring the remaining interest in 32 properties in the Copper Beech portfolio. Total consideration being paid consists of approximately $60.3 million cash, approximately $140.6 million of debt assumption and the issuance of approximately 12.4 million operating partnership units. All of the consideration was payable at the initial closing on January 30, 2015, other than $1.4 million in cash and approximately 2.0 million OP Units which will be payable at a second closing expected to occur toward the end of February upon receipt of required lender consents for two of the properties.
Land Dispositions - Separately, the Company announced the sale of a portfolio of six undeveloped land parcels to a leading student housing developer for an undisclosed purchase price. The portfolio included parcels located in
Alabama, Arizona, California, Florida, Michigan and Washington. The sale was a part of the Company's previously announced strategic initiative to improve liquidity and simplify the balance sheet by selling certain properties previously held for development. The Company disposed of the parcels through a rigorous sale process which resulted in noticeable demand from a wide spectrum of bidders with numerous offers received – including multiple portfolio offers.
"We are pleased to announce the completion of both transactions. Not only do they bring balance sheet strength and clarity, but they are testament to our disciplined approach to capital allocation and our committed execution of the strategic repositioning of Campus Crest," said Richard Kahlbaugh, Executive Chairman and Interim Chief Executive Officer.
"Copper Beech provides diversification and
scale while the land sales unlocked value and enhanced liquidity. Both transactions were promised to investors and both were delivered. We thank our investors for their continued support and recognition of the progress being made," said Aaron Halfacre, Chief Investment Officer.
About Campus Crest Communities, Inc.
Campus Crest Communities, Inc. is a leading owner and manager of high-quality student housing properties located close to college campuses in targeted markets. It has ownership interests in 86 student housing properties with over 46,000 beds across North America. Additional information can be found on the Company's website at http://www.campuscrest.com.
Forward-Looking Statements
This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts" or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company's control, that may cause actual results to differ significantly from those expressed in any forward-looking statement. All forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, except as otherwise required by federal securities laws, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in
underlying assumptions or factors, new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the risk factors discussed in the Company's most recent Annual Report on Form 10-K, as updated in the Company's Quarterly Reports on Form 10-Q.
Logo - http://photos.prnewswire.com/prnh/20141205/162610LOGO
CONTACT: Investor Relations, (704) 496-2571, Investor.Relations@CampusCrest.com
Lehman Abs Mbna Capa (NYSE:CCG)
Historical Stock Chart
From May 2024 to Jun 2024
Lehman Abs Mbna Capa (NYSE:CCG)
Historical Stock Chart
From Jun 2023 to Jun 2024