Pre-Acquisition Costs. With regard to proposed acquisitions of Acquisition Properties, prior to the delivery by HSRE to Campus Crest of written notice of the approval of its investment committee of a proposed acquisition (“IC Approval Notice”), all costs and xxxxxxx money deposits related to such proposed acquisition (“Pre-Acquisition Costs”) shall be borne and funded by Campus Crest or an Affiliate thereof, and neither HSRE nor the Company shall bear any such Pre-Acquisition Costs, except as provided below. Following the delivery of an IC Approval Notice by HSRE to Campus Crest, which notice shall include a statement that the Pre-Acquisition Due Diligence Budget has been Approved by HSRE, all Pre-Acquisition Costs (including those incurred prior to the delivery of the Approval Notice and included in the Pre-Acquisition Due Diligence Budget) shall be borne fifty percent (50%) by Campus Crest and fifty percent (50%) by HSRE. The Members hereby agree that the expenditure of any Pre-Acquisition Costs in excess of the applicable line item set forth in the Pre-Acquisition Due Diligence Budget shall constitute a Major Decision requiring the Approval of the Executive Committee. In the event HSRE delivers an IC Approval Notice to Campus Crest with respect to a proposed acquisition, and the Company closes on such proposed acquisition, the Pre-Acquisition Costs funded by HSRE and Campus Crest shall be trued up at the closing of such transaction, so that HSRE and Campus Crest each fund such Pre-Acquisition Costs in accordance with their Participating Percentages. In the event HSRE delivers an IC Approval Notice to Campus Crest with respect to a proposed acquisition, and the Company does not close on such proposed acquisition, then the Company shall deliver written notice to the Members that such transaction has been terminated (“Acquisition Termination Notice”), which notice shall include (i) an itemized list of the Pre-Acquisition Costs, and (ii) the amount required to be funded by each Member to cause the Pre-Acquisition Costs to be trued up and borne in accordance with the applicable ratio set forth in this Section 3.3(b) (i.e., 50/50). Each Member shall be obligated to fund as a Mandatory Capital Contribution the amount owed, if any, within four (4) Business Days after the receipt of such Acquisition Termination Notice. Any amount funded in excess of a Member’s share of Pre-Acquisition Costs shall be reimbursed as soon as practicable following delivery of the Acquisition Termination Notice.
Appears in 4 contracts
Samples: Operating Agreement (Campus Crest Communities, Inc.), Operating Agreement (Campus Crest Communities, Inc.), Purchase and Sale Agreement (Campus Crest Communities, Inc.)
