UNCONDITIONAL GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT is executed as of November 8, 2004, by GMH COMMUNITIES
TRUST, a Maryland real estate investment trust (“Guarantor”), for the benefit of
the Credit Parties defined below.  Capitalized terms used herein shall, unless
otherwise indicated, have the respective meanings set forth in the Credit
Agreement  (as defined below).

 

R E C I T A L S:

 

1.             GMH Communities, LP, a Delaware limited partnership (“GMH
Operating Partnership”), and each of the Subsidiary Borrowers (GMH Operating
Partnership and the Subsidiary Borrowers are collectively, “Borrowers” and
individually a “Borrower”) may from time to time be indebted to Credit Parties
pursuant to that certain Credit Agreement dated of even date herewith (herein
referred to, together with all amendments, modifications, restatements, or
supplements thereof, as the “Credit Agreement”), by and between Borrowers,
Guarantor, Bank of America, N.A., a national banking association
(“Administrative Agent”), as Administrative Agent, and Lenders defined therein
(Administrative Agent and Lenders, together with their respective successors and
assigns are herein called “Credit Parties”).

 

2.             The Credit Parties are not willing to make loans under the Credit
Agreement or otherwise extend credit to Borrowers unless Guarantor
unconditionally guarantees payment of all present and future indebtedness and
obligations of Borrowers to Credit Parties under the Credit Agreement and the
Loan Documents.

 

3.             Guarantor will benefit from Credit Parties’ extension of credit
to Borrowers.

 

NOW, THEREFORE, as an inducement to Credit Parties to enter into the Credit
Agreement and to make loans to Borrowers thereunder, and to extend such credit
to Borrowers as Credit Parties may from time to time agree to extend, and for
other good and valuable consideration, the receipt and legal sufficiency of
which are hereby acknowledged, Guarantor hereby guarantees payment of the
Guaranteed Obligations (hereinafter defined) as more specifically described
hereinbelow in Section 1 and hereby agrees as follows:

 

1.             Guaranty.   Guarantor hereby absolutely and unconditionally
guarantees, as a guarantee of payment and not merely as a guarantee of
collection, prompt payment when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of any and all existing
and future indebtedness and liabilities of every kind, nature and character,
direct or indirect, absolute or contingent, liquidated or unliquidated,
voluntary or involuntary, of each Borrower to Credit Parties arising under the
Credit Agreement and all instruments, agreements and other documents of every
kind and nature now or hereafter executed in connection with the Credit
Agreement (including all renewals, extensions and modifications thereof and all
costs, attorneys’ fees and expenses incurred by Lender in connection with the
collection or enforcement thereof) (collectively, the “Guaranteed
Obligations”).  The Administrative Agent’s books and records showing the amount
of the Guaranteed Obligations shall be admissible in evidence in any action or
proceeding, and shall be binding upon Guarantor and conclusive for the purpose
of establishing the amount of the Guaranteed Obligations.  This Guaranty shall
not be affected by the genuineness, validity, regularity or enforceability of
the Guaranteed Obligations or any instrument or agreement evidencing any
Guaranteed Obligations, or by the existence, validity, enforceability,
perfection, or extent of any collateral therefor, or by any fact or circumstance
relating to the Guaranteed Obligations which might otherwise constitute a
defense to the obligations of Guarantor under this Guaranty.  The obligations of
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of

 

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the Bankruptcy Code (Title 11, United States Code) or any comparable provisions
of any applicable state law.

 

2.             No Setoff or Deductions; Taxes.   Guarantor represents and
warrants that it is incorporated and resident in the United States of America.
All payments by Guarantor hereunder shall be paid in full, without setoff or
counterclaim or any deduction or withholding whatsoever, including, without
limitation, for any and all present and future taxes. If Guarantor must make a
payment under this Guaranty, Guarantor represents and warrants that it will make
the payment from one of its U.S. resident offices to Credit Parties so that no
withholding tax is imposed on the payment.  If notwithstanding the foregoing,
Guarantor makes a payment under this Guaranty to which withholding tax applies,
or any taxes (other than taxes on net income (a) imposed by the country or any
subdivision of the country in which any Credit Party’s principal office or
actual lending office is located and (b) measured by the United States taxable
income Credit Parties would have received if all payments under or in respect of
this Guaranty were exempt from taxes levied by Guarantor’s country) are at any
time imposed on any payments under or in respect of this Guaranty including, but
not limited to, payments made pursuant to this Paragraph 2, Guarantor shall pay
all such taxes to the relevant authority in accordance with applicable law such
that Lender receives the sum it would have received had no such deduction or
withholding been made and shall also pay to Credit Parties, on demand, all
additional amounts which Credit Parties specify as necessary to preserve the
after-tax yield Credit Parties would have received if such taxes had not been
imposed.  Guarantor shall promptly provide Administrative Agent with an original
receipt or certified copy issued by the relevant authority evidencing the
payment of any such amount required to be deducted or withheld.

 

3.             No Termination.   This Guaranty is a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until all Guaranteed Obligations and any other
amounts payable under this Guaranty are indefeasibly paid and performed in full
and any commitments of Credit Parties or facilities provided by Credit Parties
with respect to the Guaranteed Obligations are terminated.  At Lender’s option,
all payments under this Guaranty shall be made to Administrative Agent’s office
in U.S. Dollars.

 

4.             Waiver of Notices.   Guarantor waives notice of the acceptance of
this Guaranty and of the extension or continuation of the Guaranteed Obligations
or any part thereof. Guarantor further waives presentment, protest, notice,
dishonor or default, demand for payment and any other notices to which Guarantor
might otherwise be entitled.

 

5.             Subrogation.   Guarantor shall exercise no right of subrogation,
contribution or similar rights with respect to any payments it makes under this
Guaranty until all of the Guaranteed Obligations and any amounts payable under
this Guaranty are indefeasibly paid and performed in full and any commitments of
Credit Parties or facilities provided by Credit Parties with respect to the
Guaranteed Obligations are terminated.  If any amounts are paid to Guarantor in
violation of the foregoing limitation, then such amounts shall be held in trust
for the benefit of Credit Parties and shall forthwith be paid to Credit Parties
to reduce the amount of the Guaranteed Obligations, whether matured or
unmatured.

 

6.             Waiver of Suretyship Defenses.   Guarantor agrees that
Administrative Agent on behalf of Lenders may, at any time and from time to
time, and without notice to Guarantor, make any agreement with any Borrower or
with any other person or entity liable on any of the Guaranteed Obligations or
providing collateral as security for the Guaranteed Obligations, for the
extension, renewal, payment, compromise, discharge or release of the Guaranteed
Obligations or any collateral (in whole or in part), or for any modification or
amendment of the terms thereof or of any instrument or agreement evidencing the
Guaranteed Obligations or the provision of collateral, all without in any way
impairing, releasing, discharging or otherwise affecting the obligations of
Guarantor under this Guaranty.  Guarantor waives

 

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any defense arising by reason of any disability or other defense of any Borrower
or any other guarantor, or the cessation from any cause whatsoever of the
liability of any Borrower, or any claim that Guarantor’s obligations exceed or
are more burdensome than those of any Borrower and waives the benefit of any
statute of limitations affecting the liability of Guarantor hereunder. 
Guarantor waives any right to enforce any remedy which any Credit Party now has
or may hereafter have against any Borrower and waives any benefit of and any
right to participate in any security now or hereafter held by Credit Parties. 
Further, Guarantor consents to the taking of, or failure to take, any action
which might in any manner or to any extent vary the risks of Guarantor under
this Guaranty or which, but for this provision, might operate as a discharge of
Guarantor.

 

7.             Exhaustion of Other Remedies Not Required.   The obligations of
Guarantor hereunder are those of primary obligor, and not merely as surety, and
are independent of the Guaranteed Obligations.  Guarantor waives diligence by
Credit Parties and action on delinquency in respect of the Guaranteed
Obligations or any part thereof, including, without limitation any provisions of
law requiring Credit Parties to exhaust any right or remedy or to take any
action against any Borrower, any other guarantor or any other person, entity or
property before enforcing this Guaranty against Guarantor.

 

8.             Reinstatement.   Notwithstanding anything in this Guaranty to the
contrary, this Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any portion of the Guaranteed
Obligations is revoked, terminated, rescinded or reduced or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of any
Borrower or any other person or entity or otherwise, as if such payment had not
been made and whether or not Administrative Agent is in possession of or has
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction.

 

9.             Subordination.   Guarantor hereby subordinates the payment of all
obligations and indebtedness of each Borrower owing to Guarantor, whether now
existing or hereafter arising, including but not limited to any obligation of
each Borrower to Guarantor as subrogee of Credit Parties or resulting from
Guarantor’s performance under this Guaranty, to the indefeasible payment in full
of all Guaranteed Obligations. If Administrative Agent so requests, any such
obligation or indebtedness of any Borrower to Guarantor shall be enforced and
performance received by Guarantor as trustee for Lender and the proceeds thereof
shall be paid over to Lender on account of the Guaranteed Obligations, but
without reducing or affecting in any manner the liability of Guarantor under
this Guaranty.

 

10.          Information.   Guarantor agrees to furnish promptly to
Administrative Agent any and all financial or other information regarding
Guarantor or its property as Administrative Agent may reasonably request in
writing.

 

11.          Stay of Acceleration.   In the event that acceleration of the time
for payment of any of the Guaranteed Obligations is stayed, upon the insolvency,
bankruptcy or reorganization of any Borrower or any other person or entity, or
otherwise, all such amounts shall nonetheless be payable by Guarantor
immediately upon demand by Administrative Agent.

 

12.          Expenses.   Guarantor shall pay on demand all out-of-pocket
expenses (including reasonable attorneys’ fees and expenses and the allocated
cost and disbursements of internal legal counsel) in any way relating to the
enforcement or protection of Credit Parties’ rights under this Guaranty,
including any incurred in the preservation, protection or enforcement of any
rights of Credit Parties in any case commenced by or against Guarantor under the
Bankruptcy Code (Title 11, United States Code) or any similar or successor
statute.  The obligations of Guarantor under the preceding sentence shall
survive termination of this Guaranty.

 

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13.          Amendments.   No provision of this Guaranty may be waived, amended,
supplemented or modified, except by a written instrument executed by
Administrative Agent and Guarantor.

 

14.          No Waiver; Enforceability.   No failure by Credit Parties to
exercise, and no delay in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy or power hereunder preclude any other or further exercise thereof
or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity.  The
unenforceability or invalidity of any provision of this Guaranty shall not
affect the enforceability or validity of any other provision herein.

 

15.          Assignment; Governing Laws; Jurisdiction.   This Guaranty shall
(a) bind Guarantor and its successors and assigns, provided that Guarantor may
not assign its rights or obligations under this Guaranty without the prior
written consent of Administrative Agent (and any attempted assignment without
such consent shall be void), (b) inure to the benefit of Credit Parties and
their successors and assigns and Credit Parties may, without notice to Guarantor
and without affecting Guarantor’s obligations hereunder, assign or sell
participations in the Guaranteed Obligations and this Guaranty, in whole or in
part, and (c) be governed by the internal laws of the State of New York. 
Guarantor hereby irrevocably (i) submits to the non-exclusive jurisdiction of
any United States Federal or State court sitting in New York, New York in any
action or proceeding arising out of or relating to this Guaranty, and
(ii) waives to the fullest extent permitted by law any defense asserting an
inconvenient forum in connection therewith.  Service of process by Credit
Parties in connection with such action or proceeding shall be binding on
Guarantor if sent to Guarantor by registered or certified mail at its address
specified in Section 10.02 of the Credit Agreement.  Guarantor agrees that
Credit Parties may disclose to any prospective purchaser and any purchaser of
all or part of the Guaranteed Obligations any and all information in Credit
Parties’ possession concerning Guarantor, this Guaranty and any security for
this Guaranty.

 

16.          Condition of Borrowers.   Guarantor acknowledges and agrees that it
has the sole responsibility for, and has adequate means of, obtaining from each
Borrower such information concerning the financial condition, business and
operations of such Borrower as Guarantor requires, and that Credit Parties have
no duty, and Guarantor is not relying on Credit Parties at any time, to disclose
to Guarantor any information relating to the business, operations or financial
condition of any Borrower.

 

17.          Setoff.   If and to the extent any payment is not made when due
hereunder, Credit Parties may setoff and charge from time to time any amount so
due against any or all of Guarantor’s accounts or deposits with Credit Parties.

 

18.          Other Guarantees.   Unless otherwise agreed by Administrative Agent
and Guarantor in writing, this Guaranty is not intended to supersede or
otherwise affect any other guaranty now or hereafter given by Guarantor for the
benefit of Credit Parties or any term or provision thereof.

 

19.          Representations and Warranties.   Guarantor represents and warrants
that (i) it is duly organized and in good standing under the laws of the
jurisdiction of its organization and has full capacity and right to make and
perform this Guaranty, and all necessary authority has been obtained; (ii) this
Guaranty constitutes its legal, valid and binding obligation enforceable in
accordance with its terms; (iii) the making and performance of this Guaranty
does not and will not violate the provisions of any applicable law, regulation
or order, and does not and will not result in the breach of, or constitute a
default or require any consent under, any material agreement, instrument, or
document to which it is a party or by which it or any of its property may be
bound or affected; (iv) all consents, approvals, licenses and authorizations of,
and filings and registrations with, any governmental authority required under
applicable law and regulations for the making and performance of this Guaranty
have been

 

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obtained or made and are in full force and effect; (v) by virtue of its
relationship with Borrowers, the execution, delivery and performance of this
Guaranty is for the direct benefit of Guarantor and it has received adequate
consideration for this Guaranty; and (vi) the financial information, that has
been delivered to Administrative Agent by or on behalf of Guarantor, is complete
and correct in all respects and accurately presents the financial condition and
the operational results of Guarantor and since the date of the most recent
financial statements delivered to Administrative Agent, there has been no
material adverse change in the financial condition or operational results of
Guarantor.

 

20.          WAIVER OF JURY TRIAL; FINAL AGREEMENT.   TO THE EXTENT ALLOWED BY
APPLICABLE LAW, GUARANTOR AND CREDIT PARTIES EACH WAIVE TRIAL BY JURY WITH
RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT OF THIS
GUARANTY.  THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

 

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GUARANTOR:

 

 

 

 

GMH COMMUNITIES TRUST,

 

a Maryland real estate investment trust, as Guarantor

 

 

 

 

By:

GARY M. HOLLOWAY

 

 

Name:

Gary M. Holloway

 

 

Title:

President, Chief Executive Officer

 

 

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