**Exhibit10.31**

**LOAN AGREEMENT**

Dated as of October 2,2006

Between

GMH COMMUNITIES, LP, asBorrower

and

WACHOVIA BANK, NATIONALASSOCIATION, as Lender

 

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TABLE OF CONTENTS
|             | ** ** | ** **                                                       | ** ** | **Page** |
|-------------|------------|------------------------------------------------------------------|------------|----------|
| ARTICLE I   |       | DEFINITIONS; PRINCIPLES  OF CONSTRUCTION                         |       | 1        |
| Section 1.1 |       | Definitions                                                      |       | 1        |
| Section 1.2 |       | Principles of Construction                                       |       | 19       |
| ARTICLE II  |       | GENERAL TERMS                                                    |       | 20       |
| Section 2.1 |       | Loan Commitment;  Disbursement to Borrower                       |       | 20       |
| Section 2.2 |       | Interest; Extension Options; Loan Payments; Late  Payment Charge |       | 21       |
| Section 2.3 |       | Prepayments                                                      |       | 28       |
| Section 2.4 |       | Prohibition on Sale of Individual Property(ies)                  |       | 30       |
| Section 2.5 |       | Prohibition on Sale of Mezzanine Assets                          |       | 31       |
| Section 2.6 |       | No Offsets                                                       |       | 32       |
| ARTICLE III |       | RESERVED                                                         |       | 33       |
| ARTICLE IV  |       | REPRESENTATIONS AND  WARRANTIES                                  |       | 33       |
| Section 4.1 |       | Borrower  Representations                                        |       | 33       |
| Section 4.2 |       | Survival of Representations                                      |       | 44       |
| ARTICLE V   |       | BORROWER COVENANTS                                               |       | 45       |
| Section 5.1 |       | Affirmative Covenants                                            |       | 45       |
| Section 5.2 |       | Negative Covenants                                               |       | 57       |
| Section 5.3 |       | Financial and REIT Status Covenants                              |       | 61       |
| Section 5.4 |       | Limitation on Indebtedness                                       |       | 62       |
| ARTICLE VI  |       | INSURANCE; CASUALTY;  CONDEMNATION; REQUIRED REPAIRS             |       | 63       |
| Section 6.1 |       | Insurance                                                        |       | 63       |
| Section 6.2 |       | Casualty                                                         |       | 67       |
| Section 6.3 |       | Condemnation                                                     |       | 67       |
| Section 6.4 |       | Restoration                                                      |       | 68       |

 

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| ARTICLE VII   |   | [RESERVED]                                                               |   | 72 |
|---------------|--------|--------------------------------------------------------------------------|--------|----|
| ARTICLE VIII  |   | DEFAULTS                                                                 |   | 72 |
| Section 8.1   |   | Event of Default                                                         |   | 72 |
| Section 8.2   |   | Remedies                                                                 |   | 76 |
| Section 8.3   |   | Remedies Cumulative; Waivers                                             |   | 77 |
| ARTICLE IX    |   | SPECIAL PROVISIONS                                                       |   | 78 |
| Section 9.1   |   | Sale of Notes and  Securitization                                        |   | 78 |
| Section 9.2   |   | Securitization Indemnification                                           |   | 80 |
| Section 9.3   |   | Servicer                                                                 |   | 80 |
| Section 9.4   |   | Recourse                                                                 |   | 80 |
| Section 9.5   |   | Waivers                                                                  |   | 80 |
| Section 9.6   |   | Intercreditor Agreements                                                 |   | 82 |
| Section 9.7   |   | UCC Plus/Eagle 9 UCC Insurance Policies                                  |   | 82 |
| ARTICLE X     |   | MISCELLANEOUS                                                            |   | 82 |
| Section 10.1  |   | Survival                                                                 |   | 82 |
| Section 10.2  |   | Lender’s Discretion                                                 |   | 82 |
| Section 10.3  |   | Governing Law                                                            |   | 83 |
| Section 10.4  |   | Modification, Waiver in Writing                                          |   | 83 |
| Section 10.5  |   | Delay Not a Waiver                                                       |   | 84 |
| Section 10.6  |   | Notices                                                                  |   | 84 |
| Section 10.7  |   | Trial by Jury                                                            |   | 85 |
| Section 10.8  |   | Headings                                                                 |   | 85 |
| Section 10.9  |   | Severability                                                             |   | 85 |
| Section 10.10 |   | Preferences                                                              |   | 85 |
| Section 10.11 |   | Waiver of Notice                                                         |   | 85 |
| Section 10.12 |   | Remedies of Borrower                                                     |   | 86 |
| Section 10.13 |   | Expenses; Indemnity                                                      |   | 86 |
| Section 10.14 |   | Schedules and Exhibits Incorporated                                      |   | 87 |
| Section 10.15 |   | Offsets, Counterclaims and Defenses                                      |   | 87 |
| Section 10.16 |   | No Joint Venture or Partnership; No Third-party  Beneficiaries           |   | 88 |
| Section 10.17 |   | Publicity                                                                |   | 88 |
| Section 10.18 |   | Cross-Default; Cross-Collateralization;  Waiver of Marshalling of Assets |   | 88 |
| Section 10.19 |   | Waiver of Counterclaim                                                   |   | 89 |
| Section 10.20 |   | Conflict; Construction of Documents; Reliance                            |   | 89 |
| Section 10.21 |   | Brokers and Financial Advisors                                           |   | 90 |
| Section 10.22 |   | Prior Agreements                                                         |   | 90 |
| Section 10.23 |   | Assignment; Participation                                                |   | 90 |
| Section 10.24 |   | Treatment of Certain Information; Confidentiality                        |   | 91 |

 

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| EXHIBIT A  | - | FORM OF CERTIFICATE OF  COMPLIANCE                                                               |
|------------|---|--------------------------------------------------------------------------------------------------|
| EXHIBIT B  | - | FORM OF NOTICE OF  BORROWING                                                                     |
| SCHEDULE A | - | Individual Properties  and Allocated Values                                                      |
| SCHEDULE B | - | Mezzanine Asset Owners,  Mezzanine Assets, Mezzanine Allocated Loan Amounts and Allocated Values |
| SCHEDULE C | - | Encumbered Properties                                                                            |
| SCHEDULE D | - | O&M Programs                                                                                 |
| SCHEDULE E | - | Sources & Uses                                                                               |

 

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**LOANAGREEMENT**

**THISLOAN AGREEMENT**, dated as of October 2, 2006 (as amended,restated, replaced, supplemented or otherwise modified pursuant to a writtenagreement signed by the parties hereto from time to time, this Agreement”), betweenWACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, having anoffice at 301 South College Street, Charlotte, North Carolina 28288 (“Lender”) and GMHCOMMUNITIES, LP, a Delaware limited partnership, having an address at 10 CampusBoulevard, Newtown Square, Pennsylvania 19073 (“Borrower”).

**W I T NE S S E T H:**

**WHEREAS**,Borrower desires to obtain the Loan (as hereinafter defined) from Lender; and

**WHEREAS**,Lender is willing to make the Loan to Borrower, subject to and in accordancewith the terms of this Agreement and the other Loan Documents (as hereinafterdefined).

**NOWTHEREFORE**, in consideration of the making of the Loan byLender and the covenants, agreements, representations and warranties set forthin this Agreement, the parties hereto hereby covenant, agree, represent andwarrant as follows:

# **ARTICLE I**

# DEFINITIONS; PRINCIPLESOF CONSTRUCTION

## Section 1.1             Definitions.

For all purposes of thisAgreement, except as otherwise expressly required or unless the context clearlyindicates a contrary intent:

“Acquiror”shall have the meaning set forth in Section 2.2.1(b)(i).

“AcquisitionTransaction” shall have the meaning set forth in Section 2.2.1(b)(i).

“AdditionalAdvance” shall have the meaning set forth in Section 2.1.5.

“AdjustedManagement EBITDA” shall mean the sum of (i) EBITDA received from themanagement of Student Housing Projects owned by a Person other than Borrower orits subsidiary for the three (3)-month period ending on the last day of thefiscal quarter ending on the date of determination, and (ii) EBITDA receivedfrom management fees, development fees, construction and renovation fees, andreturns in respect of Equity Interests in respect of operating 

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Military Housing Projects for the three (3)-month period ending on thelast day of the fiscal quarter ending on the date of determination, all ascalculated in accordance with GAAP.

“Adjusted Prime Rate”shall mean an interest rate per annum equal to the Prime Rate in effect fromtime to time plus the difference (expressed as the number of basis points)between (a) the Eurodollar Rate on the date LIBOR was last applicable to theLoan and (b) the Prime Rate on the date that LIBOR was last applicable to theLoan; provided, however, in no event shall such difference be anegative number.

“Affiliate” shall mean,as to any Person, any other Person that, directly or indirectly, is in controlof, is controlled by or is under common control with such Person.

“Allocated LoanAmount” shall mean, for an Individual Property, the amount set forth on ScheduleA attached hereto.

“AllocatedValue” shall mean, for an Individual Property, the amount set forth on ScheduleA attached hereto.

“ALTA” shall meanAmerican Land Title Association, or any successor thereto.

“Applicable Laws” shallmean all existing and future federal, state and local laws, orders, ordinances,governmental rules and regulations and court orders that are applicable to theapplicable Individual Property, the situation or the Person, as the case maybe.

“Applicable Interest Rate”shall mean for each Interest Period through and including the date on which theDebt is paid in full, an interest rate per annum equal to (I) the EurodollarRate or (II) the Adjusted Prime Rate if the Loan begins bearing interest at theAdjusted Prime Rate in accordance with the provisions of Section ‎2.2.3hereof.

“Appraisal” shall meanan appraisal prepared in accordance with the requirements of FIRREA, preparedby an independent third-party appraiser holding an MAI designation, who isState licensed or State certified if required under the laws of the State wherethe applicable Individual Property is located, who meets the requirements ofFIRREA and who is otherwise reasonably satisfactory to Lender.

“Assignment ofAgreements” those certain first priority assignment of agreements totrusts, liens, and permits, as the same may be amended, restated, replaced,supplemented, or otherwise modified from time to time.

“Assignment of Management Agreement”shall mean, with respect to each Individual Property, that certain ConditionalAssignment of Management Agreement dated the date hereof among Lender, PropertyGuarantor and Manager, as the same may be amended, restated, replaced,supplemented or otherwise modified pursuant to a written agreement signed bythe parties thereto from time to time.

“Award” shall mean anycompensation paid by any Governmental Authority in connection with aCondemnation in respect of all or any part of any Individual Property.

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“Bankruptcy Code” shallmean Title 11 U.S.C. § 101 *et seq.*,and the regulations adopted and promulgated pursuant thereto (as the same maybe amended from time to time).

“Basic Carrying Costs”shall mean, with respect to each Individual Property, the sum of the followingcosts associated with such Individual Property for the relevant Fiscal Year orpayment period:  (i) Taxes, and (ii)Insurance Premiums.

“Borrower” shall havethe meaning set forth in the introductory paragraph hereto, together with itsrespective successors and assigns.

“Breakage Costs” shallhave the meaning set forth in Section ‎2.2.3(d) hereof.

“Business Day” a dayother than a Saturday, Sunday or other day on which commercial banks in NewYork City are authorized or required by law to remain closed, exceptthat,when used in connection with a Eurodollar Loan, such day shall also be a day onwhich dealing between banks are carried on in U.S. dollar deposits in London,England.

“Capital Event”shall mean, after the Closing Date, (i) the sale, exchange, transfer,assignment or other disposition of (a) an Encumbered Property by an EncumberedProperty Subsidiary, or any portion thereof or direct or indirect interesttherein, or (b) any Mezzanine Asset by a Mezzanine Subsidiary (or a direct orindirect subsidiary of same) or any portion thereof or direct or indirectinterest therein, in each case including, but not limited to, master leases andground leases for all or substantially all of an Individual Property, MezzanineAsset or Encumbered Property, but excluding Leases for space in a MezzanineAsset or Encumbered Property, (ii) any financing by the Borrower, any MaterialSubsidiary or any Encumbered Property Subsidiary (or a direct or indirectAffiliate or subsidiary of the same) secured by an Individual Property,Mezzanine Asset or Encumbered Property or any portion thereof or a direct orindirect interest therein, or any refinancing of any indebtedness of Borrower,any Material Subsidiary or any Encumbered Property Subsidiary (or a direct orindirect Affiliate or subsidiary of the same) secured by an IndividualProperty, Mezzanine Asset or Encumbered Property (collectively, a “Refinancing”),(iii) the condemnation or deed in lieu of condemnation of an IndividualProperty, Mezzanine Asset or Encumbered Property or any portion thereof, (iv)any casualty with respect to an Individual Property, Mezzanine Asset orEncumbered Property, or (v) any other similar transaction involving Borrower,any Material Subsidiary or any Encumbered Property Subsidiary or any Affiliatethereof which is, in accordance with GAAP, treated as a capital or financingtransaction.

“Capital Expenditures”shall mean, for any period, the amount expended for items capitalized underGAAP (including expenditures for building improvements or major repairs,leasing commissions and tenant improvements).

“Capital Proceeds”shall mean the Net Profit received by the Borrower, Mezzanine Subsidiary,Mezzanine Asset Owner or Encumbered Property Subsidiary from a Capital Event,less the sum of (a) the principal and interest on any indebtedness of theEncumbered Property Subsidiary secured in whole or in part by the relatedEncumbered Property or a portion thereof which is then required to be and ispaid, in whole or part, with such proceeds, and (b) without duplication, allreasonable and ordinary costs and expenses (including any 

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defeasance and/or “make-whole”amounts) incurred in connection therewith which shall first be approved byLender, which approval shall not be unreasonably withheld, conditioned ordelayed.

“Capital Stock” shallmean any and all shares, interests, participations or other equivalents(however designated) of capital stock of a corporation, any and all similarownership interests in a Person (other than a corporation) and any and allwarrants, rights or options to purchase any of the foregoing.

“Cash” shall mean coinor currency of the United States of America or immediately available federalfunds, including such funds delivered by wire transfer.

“Cash FlowCollateral” shall mean the collateral pledged to Lender pursuant to theSecurity Agreement.

“Casualty” shall havethe meaning set forth in ‎Section 6.2 hereof.

“Casualty Consultant”shall have the meaning set forth in ‎Section 6.4(b)(iii) hereof.

“Casualty Retainage”shall have the meaning set forth in ‎Section 6.4(b)(iv) hereof.

“Closing Date” shallmean the date of the funding of the Loan.

“Code” shall mean theInternal Revenue Code of 1986, as amended, as it may be further amended fromtime to time, and any successor statutes thereto, and all applicable U.S.Department of Treasury regulations issued pursuant thereto in temporary orfinal form.

“Collateral” shall meanthe Properties, the Mezzanine Collateral, the Guaranty, the Personal Property,the Rents, the Cash Flow Collateral, and all other real or personal property ofBorrower or any Guarantor that is at any time pledged, mortgaged or otherwisegiven as security to Lender for the payment of the Debt under the SecurityInstruments, this Agreement, the Note or any other Loan Document.

“ComplianceCertificate” shall mean a certification signed by a Responsible Officer ofBorrower in the form attached hereto as Exhibit A and approved by Lender in itssole discretion.

“Condemnation” shallmean a temporary or permanent taking by any Governmental Authority as theresult or in lieu or in anticipation of the exercise of the right ofcondemnation or eminent domain, of all or any part of any Individual Property,or any interest therein or right accruing thereto, including any right ofaccess thereto or any change of grade affecting such Individual Property or anypart thereof.

“Condemnation Proceeds”shall have the meaning set forth in Section 6.4(b) hereof.

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“ConsolidatedInterest Charges” shall mean, for any Person for any period, the sum of (a)all interest, premium payments, debt discount, fees, charges and relatedexpenses of such Person in connection with borrowed money (includingcapitalized interest) or in connection with the deferred purchase price ofassets, in each case to the extent treated as interest in accordance with GAAP,and (b) the portion of rent expense of such Person with respect to such periodunder capital leases that is treated as interest in accordance with GAAP.

“ConsolidatedTangible Net Worth” shall mean, as of any date of determination for theBorrower and its Subsidiaries on a consolidated basis (except that the minorityEquity Interests in Borrower shall be included for purposes of thiscalculation), (a) Shareholders’ Equity of Borrower and its Subsidiaries onthat date *minus* (b) the Intangible Assets ofBorrower and its Subsidiaries on that date; *plus* (c) allaccumulated depreciation and amortization determined in accordance with GAAP ofthe Borrower and its Subsidiaries on that date.

“Control” (and thecorrelative terms “controlled by” and “controlling”) shall mean the possession,directly or indirectly, of the power to direct or cause the direction ofmanagement and policies of the business and affairs of the entity in questionby reason of the ownership of beneficial interests, by contract or otherwise.

“CreditAgreement” shall have the meaning set forth in ‎Section 2.1.4hereof.

“Creditors Rights Laws”shall mean with respect to any Person, any existing or future law of anyjurisdiction, domestic or foreign, relating to bankruptcy, insolvency,reorganization, conservatorship, arrangement, adjustment, winding-up, liquidation,dissolution, composition or other relief with respect to its debts or debtors.

“Debt” shall mean theoutstanding principal amount set forth in, and evidenced by, this Agreement andthe Note together with all interest accrued and unpaid thereon and all othersums due to Lender in respect of the Loan under the Note, this Agreement, theSecurity Instruments, the Guaranty or any other Loan Document.

“Default” shall meanthe occurrence of any event hereunder or under any other Loan Document which,but for the giving of notice or passage of time, or both, would constitute anEvent of Default.

“Default Rate” shallmean, with respect to the Loan, a rate per annum equal to the lesser of (a) theMaximum Legal Rate, or (b) four percent (4%) above the Applicable InterestRate.

“Disclosure Document”shall have the meaning set forth in ‎Section 9.2(a) hereof.

“EBITDA”shall mean for any period, for any Person, an amount equal to the net incomefor such period plus (a) the following to the extent deducted in calculatingsuch net income: (i) Consolidated Interest Charges for such period; (ii) theprovision for federal, state, local and foreign income taxes payable by suchPerson for such period; (iii) depreciation and amortization expense for suchperiod; and (iv) other non-recurring expenses of the Person reducing such netincome which do not represent a cash item in such period or any future periodminus (b) the following to the extent included in calculating such net income:(i) federal, state,

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local and foreign incometax credits of the Person for such period; and (ii) all non-cash itemsincreasing net income for such period.

“Eligible Account”shall mean a separate and identifiable account from all other funds held by theholding institution that is either (a) an account or accounts maintained with afederal or State-chartered depository institution or trust company or (b)a segregated trust account or accounts maintained with a federal or State-chartereddepository institution or trust company acting in its fiduciary capacity which,in the case of a State-chartered depository institution or trust company,is subject to regulations substantially similar to 12 C.F.R. §9.10(b), havingin either case a combined capital and surplus of at least $50,000,000 andsubject to supervision or examination by federal and State authority.  An Eligible Account will not be evidenced bya certificate of deposit, passbook or other instrument.

“Embargoed Person”shall have the meaning set forth in Section 4.1.27 hereof.

“EncumberedProperty” or “Encumbered Properties” shall mean individually, aproperty listed on Schedule C attached hereto, and collectively, theproperties listed on Schedule C attached hereto.

“EncumberedProperty Allocated Value” shall mean, for each Encumbered Property, (a) ifthe Capital Event with respect to such Encumbered Property is a sale of suchEncumbered Property, 100% of the value of such Encumbered Property determinedat the time of the sale based on an MAI appraisal prepared by an independentthird party appraiser and (b) if the Capital Event with respect to suchEncumbered Property is a Refinancing of such Encumbered Property, the greaterof (i) 80% of the value of such Encumbered Property determined at the time ofthe sale based on an MAI appraisal prepared by an independent third partyappraiser or (ii) the loan-to-value ratio of the new loan being obtained toeffectuate such Refinancing.

“EncumberedProperty Subsidiary” shall mean each Subsidiary of Borrower that owns anEncumbered Property.

“Environmental Indemnity”shall mean that certain Environmental Indemnity Agreement executed by Borrowerand Guarantor in connection with the Loan for the benefit of Lender, as thesame may be amended, restated, replaced, supplemented or otherwise modifiedpursuant to a written agreement signed by the parties thereto from time totime.

“Environmental Law”shall mean any federal, State and local laws, statutes, ordinances, rules,regulations, standards, policies and other government directives orrequirements, as well as common law, that, at any time, apply to Borrower,Guarantor or any Individual Property, Mezzanine Asset or Encumbered Propertyand related to Hazardous Materials, including, without limitation, theComprehensive Environmental Response, Compensation and Liability Act and theResource Conservation and Recovery Act.

“Environmental Liens”shall have the meaning set forth in Section 5.1.18 hereof.

“EquityInterests” shall mean, with respect to any Person, all of the shares ofcapital stock of (or other ownership of profit interests in) such Person, allof the warrants, options 

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or other rights for the purchase or acquisition from such Person ofshares of capital stock of (or other ownership or profit interests in) suchPerson, all of the securities convertible into or exchangeable for shares ofcapital stock of (or other ownership or profit interests in) such Person orwarrants, rights or options for the purchase or acquisition from such Person ofsuch shares (or such other interests), and all of the other ownership or profitinterests in such Person (including partnership, member or trust intereststherein), whether voting or nonvoting, and whether or not such shares,warrants, options, rights or other interests are outstanding on any date ofdetermination.

“ERISA” shall mean theEmployee Retirement Income Security Act of 1974, as the same may be amendedfrom time to time.

“Eurodollar Rate” shallmean, with respect to any Interest Period, an interest rate per annum equal toLIBOR plus the LIBOR Margin.

“Event of Default”shall have the meaning set forth in Section 8.1(a) hereof.

“Exchange Act” shallhave the meaning set forth in Section 9.2 hereof.

“Exchange Act Filing”shall have the meaning set forth in ‎Section 9.2 hereof.

“Extended Maturity Date”shall have the meaning set forth in Section 2.2.1(b) hereof.

“Extension Option One”shall have the meaning set forth in Section 2.2.1(b) hereof.

“Extension Option One Maturity Date”shall have the meaning set forth in Section 2.2.1(b) hereof.

“Extension Option Two”shall have the meaning set forth in Section 2.2.1(b) hereof.

“Financing Lease”:shall mean any lease of property, real or personal, the obligations of thelessee in respect of which are required in accordance with GAAP to becapitalized on a balance sheet of the lessee.

“FIRREA” means theFinancial Institutions Reform, Recovery and Enforcement Act of 1989, as thesame may be amended from time to time.

“Fiscal Year” shallmean each twelve (12) month period commencing on January 1 and ending onDecember 31 during the term of the Loan.

“Fitch” shall meanFitch, Inc.

“Flood Insurance Act”shall have the meaning set forth in ‎Section 6.1(a)(vii) hereof.

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“Force Majeure” shallmean any delay due solely to acts of god, governmental restriction, stays,judgments, orders or decrees of any court or other Governmental Authority,enemy actions, civil commotion, domestic or foreign terrorist action, strike,work stoppage, shortage of labor or materials or any or other cause or causesbeyond the reasonable control of Borrower, but lack of funds (in and of itself)shall not be deemed to constitute a cause beyond the reasonable control ofBorrower.

“GAAP” shall meangenerally accepted accounting principles in the United States of America as ofthe date of the applicable financial report.

“Governmental Authority”shall mean any court, board, agency, commission, office, central bank or otherauthority of any nature whatsoever for any governmental unit (federal, State,county, district, municipal, city, country or otherwise) or quasi-governmentalunit whether now or hereafter in existence.

“Guarantor” shall mean,collectively, Property Guarantor, Trust and Material Subsidiary or suchreplacement Guarantor that assumes all the obligations of Guarantor under theLoan Documents in accordance with the terms hereof.

“Guaranty” shall mean,collectively, the Property Guaranty, Trust Guaranty, the Mezzanine PropertyGuaranty and the Material Subsidiary Guaranty, as each of the same may beamended, restated, replaced, supplemented or otherwise modified from time totime by written agreement signed by the parties thereto.

“Hazardous Materials”shall mean petroleum and petroleum products and compounds containing them,including gasoline, diesel fuel and oil; explosives; flammable materials;radioactive materials; polychlorinated biphenyls (“PCBs”) and compounds containing them; lead andlead-based paint; asbestos or asbestos-containing materials in any form that isor could become friable; underground or above-ground storage tanks, whetherempty or containing any substance; toxic mold; any substance the presence ofwhich on any Individual Property, Mezzanine Asset or Encumbered Property isprohibited by any federal, State or local authority; any substance thatrequires special handling; and any other material or substance now or in thefuture defined as a “hazardous substance,” “hazardous material,” “hazardouswaste,” “toxic substance,” “toxic pollutant,” “contaminant,” “pollutant” orother words of similar import within the meaning of any Environmental Law.

“Improvements” shallhave the meaning set forth in Article 1 of the related SecurityInstrument with respect to each Individual Property.

“Indebtedness”: shallmean of any Person at any date, without duplication, (a) all indebtedness ofsuch Person for borrowed money (whether by loan or the issuance and sale ofdebt securities) or for the deferred purchase price of property or services(other than current trade liabilities incurred in the ordinary course ofbusiness and payable in accordance with customary practices), (b) any otherindebtedness of such Person which is evidenced by a note, bond, debenture or similarinstrument, (c) all obligations of such Person under Financing Leases orSynthetic Leases, (d) all obligations of such Person in respect of letters ofcredit, acceptances or similar instruments issued or created for the account ofsuch Person, (e) all liabilities secured by 

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(or for which the holderof such obligations has an existing right, contingent or otherwise, to besecured by) any Lien on any property owned by such Person even though suchPerson has not assumed or otherwise become liable for the payment thereof(other than ad valorem taxes not yet due), and (f) all Guarantee Obligations ofsuch Person in respect of obligations of the kind referred to in clauses (a)through (e) above.  The amount of any Indebtednessunder clause (e) shall be equal to the lesser of (A) the stated amount of therelevant obligations and (B) the fair market value of the property subject tothe relevant Lien.

“Indemnified Liabilities”shall have the meaning set forth in Section 10.13(b) hereof.

“Indemnified Parties”shall mean Lender, any Affiliate of Lender who is or will have been involved inthe origination of the Loan, any Person who is or will have been involved inthe servicing of the Loan, any Person in whose name the encumbrance created bythe Security Instruments or Pledge Agreement is or will have been recorded,Persons who may hold or acquire or will have held a full or partial interest inthe Loan, the holders of any Securities, as well as custodians, trustees andother fiduciaries who hold or have held a full or partial interest in the Loanfor the benefit of third parties) as well as the respective directors,officers, shareholders, partners, members, employees, agents, servants,representatives, contractors, subcontractors, Affiliates, subsidiaries, participants,successors and assigns of any and all of the foregoing (including but notlimited to any other Person who holds or acquires or will have held aparticipation or other full or partial interest in the Loan or any IndividualProperty or Mezzanine Collateral, whether during the term of the Loan or as apart of or following a foreclosure of the Loan and including, but not limitedto, any successors by merger, consolidation or acquisition of all or asubstantial portion of Lender’s assets and business).

“Indemnified Taxes”shall mean any present or future income, stamp or other taxes, levies, imposts,duties, charges, fees, deductions or withholdings, now or hereafter imposed,levied, collected, withheld or assessed by any Governmental Authority.

“Individual Property”shall mean each parcel of real property, the Improvements thereon and allPersonal Property owned by Property Guarantor and encumbered by a SecurityInstrument, together with all rights pertaining to such Property andImprovements, as more particularly described in Article 1 of eachSecurity Instrument and referred to therein as the “Property” and as listed on ScheduleA attached hereto.

“InitialAdvance” shall have the meaning set forth in Section 2.1.4 hereof.

“InitialMaturity Date” shall mean April 2, 2007.

“Initial Term”shall mean the period commencing on the date hereof and ending on the InitialMaturity Date.

“Insurance Premiums”shall have the meaning set forth in ‎Section 6.1(b) hereof.

“Insurance Proceeds”shall have the meaning set forth in ‎Section 6.4(b) hereof.

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“IntangibleAssets” shall mean assets that are considered to be intangible assets underGAAP, including customer lists, goodwill, computer software, copyrights, tradenames, trademarks, patents, franchises, licenses, unamortized deferred charges,unamortized debt discount and capitalized research and development costs.

“InterestPeriod” shall mean (a) initially, the period commencing on the date of thisAgreement and ending one (1), two (2) or three (3) months thereafter, asselected by Borrower in its Rate Request given to Lender with respect thereto;and (b) thereafter, each period commencing on the last day of the then expiringInterest Period applicable to the Loan and ending one (1), two (2) or three (3)months thereafter, as selected by the Borrower in its Rate Request given toLender; provided that, all of the foregoing provisions relating to InterestPeriods are subject to the following: (i) if any Interest Period pertaining tothe Loan would otherwise end on a day that is not a Business Day, such InterestPeriod shall be extended to the next succeeding Business Day; (ii) any InterestPeriod pertaining to the Loan that would otherwise extend beyond the thencurrent Maturity Date shall end on the then current Maturity Date; and (iii)any Interest Period pertaining to the Loan that begins on the last Business Dayof a calendar month (or on a day for which there is no numericallycorresponding day in the calendar month at the end of such Interest Period)shall end on the last Business Day of the last calendar month of such InterestPeriod.

“Key Entity”and “Key Entities” individually or collectively, as the context mayrequire, Borrower, each Property Guarantor, each Mezzanine Subsidiary, eachMezzanine Asset Owner and GMH Communities GP Trust.

“Leases” shall mean anylease, sublease, letting, license, concession or other agreement (whetherwritten or oral and whether now or hereafter in effect) pursuant to which anyPerson is granted a possessory interest in, or right to use or occupy all orany portion of any space in an Individual Property or Mezzanine Asset, andevery modification, amendment or other agreement relating to such lease orother agreement entered into in connection with such lease or other agreementand every guarantee of the performance and observance of the covenants,conditions and agreements to be performed and observed by the other partythereto.

“Legal Requirements”shall mean, with respect to each Individual Property, all applicable federal,State, county, municipal and other governmental statutes, laws, rules, orders,regulations, ordinances, judgments, decrees and injunctions of GovernmentalAuthorities affecting such Individual Property or any part thereof, or thezoning, construction, use, alteration, occupancy or operation thereof, or anypart thereof, whether now or hereafter enacted and in force, and all permits,licenses and authorizations and regulations relating thereto, and allcovenants, agreements, restrictions and encumbrances contained in anyinstruments, either of record or known to Borrower, at any time in forceaffecting such Individual Property or any part thereof, including, withoutlimitation, any which may (a) require repairs, modifications or alterations inor to such Individual Property or any part thereof, or (b) in any way limit theuse and enjoyment thereof.

“Lender” shall have themeaning set forth in the introductory paragraph hereto, together with its successorsand assigns.

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“LIBOR” shall mean therate of interest per annum for the first day of the Interest Period (the “ResetDate”) for deposits in U.S. Dollars for a period equal to the number ofmonths contained in the Interest Period which appears on Dow Jones Page 3750(or such other display page on the Dow Jones System or otherwise as may replacesaid Page 3750) as of 11:00 a.m. (London time) on the day that is two (2)Business Days prior to that Reset Date for a period, and in an amount,comparable to such Interest Period and the principal balance of the Loanoutstanding during such Interest Period; provided, however, that if such ratedoes not appear on Dow Jones Page 3750 (or such replacement page), LIBOR shallbe the rate on interest per annum quoted by Lender at approximately 11:00 a.m.New York time two (2) Business Days prior to the beginning of such InterestPeriod for the offering to leading banks in the London interbank market of U.S.Dollar deposits in immediately available funds for delivery on the first day ofsuch Interest Period for a period equal to such Interest Period and theprincipal balance of the Loan outstanding during such Interest Period.  Lender shall determine LIBOR for eachInterest Period and the determination of LIBOR by Lender shall be binding uponBorrower absent manifest error.

“LIBOR Margin” shallmean (a) 2.00% per annum during the Initial Term and after the Initial Termthrough the Extended Maturity Date if the Initial Term is extended due toBorrower’s exercise of Extension Option One and (b) 4.50% per annum for theperiod from and after the Initial Term through the Extended Maturity Date ifthe Initial Term is extended due to Borrower’s exercise of Extension OptionTwo.

“Lien” shall mean, withrespect to each Individual Property, any mortgage, deed of trust, lien, pledge,hypothecation, assignment, security interest, or any other encumbrance, chargeor transfer of, on or affecting Borrower, Property Guarantor, the relatedIndividual Property, any portion thereof or any interest therein, including,without limitation, any conditional sale or other title retention agreement,any financing lease having substantially the same economic effect as any of theforegoing, the filing of any financing statement, and mechanic’s, materialmen’sand other similar liens and encumbrances but excluding Permitted Encumbrances(but not excluding liens that may arise after the date hereof under or pursuantto such Permitted Encumbrances).

“Loan” shall mean theloan, in the maximum aggregate principal amount of Two Hundred Fifty Millionand 00/100 Dollars ($250,000,000.00), made by Lender to Borrower pursuant tothis Agreement and the other Loan Documents as the same may be amended or splitpursuant to the terms hereof.

“Loan Documents” shallmean, collectively, this Agreement, the Note, the Security Instruments, theAssignment of Agreements, the Environmental Indemnity, the Assignments ofManagement Agreement, the Guaranty, the Security Agreement, the PledgeAgreement and all other documents executed and/or delivered in connection withthe Loan.

“Losses” shall mean anyand all claims, suits, liabilities (including, without limitation, strictliabilities, but excluding consequential damages), actions, proceedings,obligations, debts, damages, losses, costs, expenses, fines, penalties,charges, fees, expenses, judgments, awards, amounts paid in settlement ofwhatever kind or nature (including but not limited to reasonable attorneys’fees and other costs of defense).

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“Management Agreement”shall mean, with respect to any Individual Property, the management agreemententered into by and between Property Guarantor and Manager, pursuant to whichthe Manager is to provide management and other services with respect to suchIndividual Property, or, if the context requires, the Replacement ManagementAgreement executed in accordance with the terms and provisions of thisAgreement.

“Manager” shall meanCollege Park Management, LLC, a Florida limited liability company, or, if thecontext requires, a Qualified Manager who is managing the Properties or anyIndividual Property in accordance with the terms and provisions of thisAgreement.

“MaterialAdverse Effect” shall mean any event or condition that has a materialadverse effect on (a) the financial condition or business of Borrower or itsability to perform its obligations under the Loan Documents, (b) the financialcondition or business of the Encumbered Property Subsidiaries as a whole ortheir ability to perform their obligations under their existing loan documentsor other contractual obligations as a whole, (c) the use, occupancy, operationor value of (including the net operating income) the Encumbered Properties as awhole, (d) the validity or enforceability of any Loan Document, (e) thevalidity, enforceability or priority of Lender’s security interest in theCollateral.

“MaterialSubsidiary” shall mean a subsidiary of Borrower or the Trust that has asignificant amount of assets or equity or is important to the operations ofBorrower to the extent not legally or contractually prohibited to guaranty theloan, including, but not limited to each Mezzanine Subsidiary, College ParkInvestments LLC, College Park Management, LLC, College Park Management TRS,Inc., GMH Military Housing, LLC and GMH Military Housing Investments, LLC, GMHCommunities TRS, Inc., GMH Communities GP Trust and GMH Communities Services,Inc.

“MaterialSubsidiary Guaranty” shall mean that certain payment and performanceguaranty executed and delivered by Material Subsidiary to Lender in connectionwith the Loan.

“Maturity Date” shallmean the Initial Maturity Date, as such date may be extended pursuant to Section2.2.1(b) hereof, or such other date on which the final payment of theprincipal of the Note becomes due and payable as therein or herein provided,whether at such stated maturity date, by declaration of acceleration, orotherwise.

“Maximum Legal Rate”shall mean the maximum nonusurious interest rate, if any, that at any time orfrom time to time may be contracted for, taken, reserved, charged or receivedon the indebtedness evidenced by the Note and as provided for herein or in theother Loan Documents, under the laws of such State or States whose laws areheld by any court of competent jurisdiction to govern the interest rate provisionsof the Loan.

“MezzanineAllocated Loan Amount” shall mean, for the Mezzanine Collateral, the amountset forth on Schedule B attached hereto.

“MezzanineAsset Owner” shall mean the single member limited liability company thatowns a Mezzanine Asset and each of which is 100% owned by the related MezzanineSubsidiary, as each Mezzanine Asset Owner is listed on Schedule Battached hereto.

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“MezzanineAssets” shall mean the properties, listed on Schedule B hereto, eachwhich is indirectly owned by a Mezzanine Subsidiary.

“MezzanineCollateral” shall have the meaning set forth in Section 2.5(a).

“MezzanineCollateral Release Price” shall mean, as to any applicable IndividualProperty, 100% of the Mezzanine Value for such Mezzanine Collateral.

“MezzanineProperty Guarantor” shall mean individually or collectively, as the contextmay require, Savoy Village Associates Intermediate, LLC, Croyden AvenueAssociates Intermediate, LLC, Monks Road Associates Intermediate, LLC, SouthCarolina Associates Intermediate, LLC, Reno Associates Intermediate, LLC,Denton Associates Intermediate, LLC and Lankford Drive Associates Intermediate,LLC.

“MezzanineProperty Guaranty” shall mean, that certain payment and performanceguaranty executed and delivered by the Mezzanine Property Guarantor to Lenderin connection with the Loan.

“MezzanineSubsidiary” or “Mezzanine Subsidiaries” shall mean individually orcollectively, as the context may require, Clarizz Boulevard AssociatesIntermediate, LLC, Lakeside Associates Intermediate, LLC, Urbana AssociatesIntermediate, LLC, Red Mile Road Associates Intermediate, LLC, Burbank DriveAssociates Intermediate III, LLC, Commons Drive Associates Intermediate, LLC,Abbott Road Associates Intermediate, LLC, Campus View Drive Associates Intermediate,LLC, Alexander Road Associates Intermediate, LLC, Brown Road AssociatesIntermediate, LLC, Keller Boulevard Associates Intermediate, LLC.

“MezzanineValue” shall mean for the Mezzanine Collateral, the value for the MezzanineCollateral as it relates to each Mezzanine Asset as set forth on Schedule Battached hereto.

“MilitaryHousing Projects” shall mean privatized military housing projects in theUnited States owned and/or operated by Borrower or Subsidiary of Borrower, withan average remaining ground lease term for all Military Housing Projects, takenas a whole, being forty (40) years or greater, and “Military Housing Project”means any one of the Military Housing Projects.

“Monthly Debt Service Payment Amount”shall mean a monthly payment of interest only calculated in accordance with theterms hereof.

“Moody’s” shall mean Moody’sInvestors Service, Inc.

“Net Proceeds” shallhave the meaning set forth in ‎Section 6.4(b) hereof.

“Net Proceeds Deficiency”shall have the meaning set forth in ‎Section 6.4(b)(vi) hereof.

“Net Profit”shall mean, in connection with any Capital Event, (a) if relating to a Casualtyor Condemnation, Net Proceeds less the amount of Net Proceeds utilized and/ormade available by Lender (or the applicable mortgage lender) to Borrower,Property Guarantor, 

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Mezzanine Asset Owner orEncumbered Property Subsidiary to restore the applicable Individual Property,Mezzanine Asset or Encumbered Property, as the case may be, and (b) for allother Capital Events, an amount equal to the gross proceeds received byBorrower, Mezzanine Subsidiary or Encumbered Property Subsidiary or anyAffiliate thereof in connection therewith, less all reasonable and customarycosts and expenses incurred in connection therewith.

“Non-U.S. Entity” shallhave the meaning set forth in Section 2.2.8 hereof.

“Note” shall mean thatcertain promissory note of even date herewith in the original principal amountof Two Hundred Fifty Million and 00/100 Dollars ($250,000,000.00), made byBorrower in favor of Lender, as the same may be amended, restated, replaced,extended, renewed, supplemented, severed, split, or otherwise modified pursuantto a written agreement signed by the parties thereto from time to time.

“Notice ofBorrowing” shall mean a notice signed by a Responsible Officer of Borrowerin the form attached hereto as Exhibit B.

“O&M Program” shallmean, with respect to each Individual Property, Mezzanine Asset or EncumberedProperty listed on Schedule D hereof, if any, that certain operationsand maintenance program developed by Borrower or Property Guarantor andapproved by Lender, as the same may be amended, replaced, supplemented orotherwise modified from time to time pursuant to an agreement executed by theparties thereto from time to time.

“Obligations” shallmean Borrower’s obligation to pay the Debt and perform its obligations underthe Note, this Agreement and the other Loan Documents.

“Officer’s Certificate”shall mean a certificate delivered to Lender by Borrower which is signed onbehalf of Borrower by a Responsible Officer.

“Other Charges” shallmean all maintenance charges, impositions other than Taxes, and any othercharges, including, without limitation, vault charges and license fees for theuse of vaults, chutes and similar areas adjoining any Individual Property, nowor hereafter levied or assessed or imposed against such Individual Property orany part thereof.

“Payment Date” shallmean the first (1st ) day of each calendar month during the termof the Loan or, if such day is not a Business Day, the immediately precedingBusiness Day.

“Permitted Encumbrances”shall mean, with respect to an Individual Property, collectively, (a) the Liensand security interests created by the Loan Documents, (b) all Liens,encumbrances and other matters (i) disclosed in the Title Insurance Policyrelating to such Individual Property or any part thereof or (ii) shown on theSurvey, (c) Liens, if any, for Taxes imposed by any Governmental Authority notyet delinquent, (d) such other title and survey exceptions as Lender hasapproved or may approve in writing in Lender’s reasonable discretion, and (e)easements, restrictions, covenants, reservations and rights consented to byLender pursuant to 5.2.10(f) hereof.

“Person” shall mean anyindividual, corporation, partnership, joint venture, limited liability company,estate, trust, unincorporated association, any federal, State, county or

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municipal government orany bureau, department or agency thereof and any fiduciary acting in suchcapacity on behalf of any of the foregoing.

“Personal Property”shall have the meaning set forth in Article 1 of the Security Instrumentwith respect to each Individual Property.

“Physical Conditions Report”shall mean, with respect to each Individual Property, a structural engineeringreport prepared by a company satisfactory to Lender regarding the physicalcondition of such Individual Property, satisfactory in form and substance toLender in its sole discretion.

“Plan” shall mean anemployee benefit plan (as defined in section 3(3) of ERISA) whether or notsubject to ERISA or a plan or other arrangement within the meaning of section4975 of the Code.

“Plan Assets” shallmean assets of a Plan within the meaning of section 29 C.F.R. section2510.3-101 or similar law.

“Pledge Agreement”shall mean the Pledge Agreement dated the date hereof made by Borrower and eachof the pledgors named therein, as the same may be amended, supplemented orotherwise modified from time to time.

“Policies” shall havethe meaning set forth in ‎Section 6.1(b) hereof.

“Prepayment Date” shallhave the meaning set forth in Section ‎2.3.1(a) hereof.

“Prime Rate” shallmean, on a particular date, a rate per annum equal to the rate of interestpublished in *The Wall Street Journal*as the “prime rate”, as in effect on such day, with any change in the primerate resulting from a change in said prime rate to be effective as of the dateof the relevant change in said prime rate; provided, however,that if more than one prime rate is published in *The Wall Street Journal* for a day, the average of the primerates shall be used; provided, further, however, that thePrime Rate (or the average of the prime rates) will be rounded to the nearest1/16 of 1% or, if there is no nearest 1/16 of 1%, to the next higher 1/16 of1%.  In the event that *The Wall Street Journal* should cease ortemporarily interrupt publication, then the Prime Rate shall mean the dailyaverage prime rate published in another business newspaper, or business sectionof a newspaper, of national standing chosen by Lender.  If *TheWall Street Journal* resumes publication, the substitute index willimmediately be replaced by the prime rate published in *The Wall Street Journal*.  In the event that a prime rate is no longergenerally published or is limited, regulated or administered by a governmentalor quasi-governmental body, then Lender shall select a comparable interest rateindex which is readily available to Borrower and verifiable by Borrower but isbeyond the control of Lender, provided, however, that suchcomparable index is used by Lender for borrowers similarly situated toBorrower.  Lender shall give Borrowerprompt written notice of its choice of a substitute index and when the changebecame effective.  Such substitute indexwill also be rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16of 1%, to the next higher 1/16 of 1%. The determination of the Prime Rate by Lender shall be conclusive andbinding absent manifest error.

“Prohibited Person”shall mean any Person:

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(a)           listed in the Annex to, or otherwisesubject to the provisions of, the Executive Order No. 13224 on TerroristFinancing, effective September 24, 2001, and relating to Blocking Property andProhibiting Transactions With Persons Who Commit, Threaten to Commit, or SupportTerrorism (the “Executive Order”);

(b)           that is owned or controlled by, oracting for or on behalf of, any person or entity that is listed to the Annexto, or is otherwise subject to the provisions of, the Executive Order;

(c)           with whom Lender is prohibited fromdealing or otherwise engaging in any transaction by any terrorism or moneylaundering law, including the Executive Order;

(d)           who commits, threatens or conspiresto commit or supports “terrorism” as defined in the Executive Order;

(e)           that is named as a “speciallydesignated national and blocked person” on the most current list published bythe U.S. Treasury Department Office of Foreign Assets Control at its officialwebsite, http://www.treas.gov.ofac/t11sdn.pdf or at any replacement website or otherreplacement official publication of such list; or

(f)            who is an Affiliate of or affiliatedwith a Person listed above.

“Properties” shallmean, collectively, each and every Individual Property which is subject to theterms of this Agreement.

“Property” shall mean,as the context may require, the Properties or an Individual Property.

“PropertyGuarantor” shall mean individually and collectively Savoy VillageAssociates, LLC, Croyden Avenue Associates, LLC, Monks Road Associates, LLC,South Carolina Associates, LLC, Reno Associates, LLC, Denton Associates, LLCand Lankford Drive Associates, LLC, the owners of the Properties.

“Property Guaranty”shall mean, that certain payment and performance guaranty, dated as of the datehereof, executed and delivered by Property Guarantor to Lender in connectionwith the Loan.

“Provided Information”shall have the meaning set forth in Section 9.1(a) hereof.

“QualifiedManager” shall mean a (A) reputable and experienced professional managementorganization (a) which manages student housing of quality and similar size tothe Properties (exclusive of the Properties) and (b) prior to whose employmentas manager of any Individual Property or Mezzanine Asset such employment shallhave been approved by Lender, which approval shall not be unreasonably withheldor delayed and (c) such other management organization reasonably acceptable toLender.  Notwithstanding the foregoing,any Manager replaced at the direction of the Lender pursuant to the termshereof shall no longer be deemed a Qualified Manager.

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“RatingAgencies” shall mean each of S&P, Moody’s, and Fitch, andany other nationally-recognized statistical rating agency which has ratedthe Securities.

“Refinancing”shall have the meaning set forth in the definition of “Capital Event”.

“Related Party”shall mean any Guarantor and any of their respective Affiliates.

“Release” of anyHazardous Materials shall mean any release, deposit, discharge, emission,leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,escaping, dumping, disposing or other movement of Hazardous Materials.

“Release Price”shall mean, as to any applicable Individual Property, 100% of the AllocatedValue for such Individual Property.

“Rents” shall have themeaning set forth in Article 1 of the Security Instrument with respectto each Individual Property.

“Replacement Management Agreement”shall mean, collectively, (a) either (i) a management agreement with aQualified Manager substantially in the same form and substance as theManagement Agreement, or (ii) a management agreement with a Qualified Manager,which management agreement shall be reasonably acceptable to Lender in form andsubstance; and (b) a conditional assignment of management agreementsubstantially in the form of the Assignment of Management Agreement (or suchother form reasonably acceptable to Lender), executed and delivered to Lenderby Borrower and such Qualified Manager at Borrower’s expense.

“Responsible Officer”means with respect to a Person, any duly authorized officer, member, partner,shareholder or other equity owner of such Person.

“Restoration” shallmean the repair and restoration of an Individual Property after a Casualty orCondemnation as nearly as possible to the condition the Individual Property wasin immediately prior to such Casualty or Condemnation, with such alterations asmay be reasonably approved by Lender.

“Restricted Party”shall mean Borrower, Trust, each Material Subsidiary, each Property Guarantor,each Mezzanine Property Guarantor, each Mezzanine Asset Owner or any shareholder,partner, member or non-member manager, or any direct or indirect legal orbeneficial owner of, any of the foregoing, but excluding any limited partner inBorrower and the holder of any interest in the Trust.

“S&P” shall meanStandard & Poor’s Ratings Services, a division of McGraw-Hill, Inc.

“Sale or Pledge” shallmean a voluntary or involuntary sale, conveyance, transfer or pledge of adirect or indirect legal or beneficial interest.

“Securities Act” shallhave the meaning set forth in ‎Section 9.2(a) hereof.

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“SecurityAgreement” shall mean that certain Security Agreement dated as of the datehereof executed and delivered by College Park Management TRS, Inc., a Delawarecorporation, GMH Military Housing, LLC, a Delaware limited liability company,GMH Communities TRS, Inc., a Delaware corporation, GMH Military HousingInvestments LLC, a Delaware limited liability company, College Park InvestmentsLLC, a Delaware limited liability company and College Park Management, LLC, aFlorida limited liability company, collectively as pledgors, to and for thebenefit of Lender, as secured party, and relating to the Cash Flow Collateral.

“Security Instrument”shall mean, with respect to each Individual Property, that certain firstpriority Mortgage (or Deed of Trust or Deed to Secure Debt, as applicable) andSecurity Agreement, executed and delivered by Property Guarantor as securityfor the Guaranty and encumbering such Individual Property, as the same may beamended, restated, replaced, supplemented or otherwise modified pursuant to awritten instrument signed by the parties thereto from time to time.

“Servicer” shall havethe meaning set forth in Section 9.3 hereof.

“Servicing Agreement”shall have the meaning set forth in Section 9.3 hereof.

“Severed Loan Documents”shall have the meaning set forth in Section 8.2(c) hereof.

“Shareholders’Equity” shall mean as of any date of determination for any Person,consolidated shareholders’ equity of such Person as that date determined inaccordance with GAAP.

“Special PurposeEntity” shall mean, (a) as to each Property Guarantor, an entity thatsatisfies the requirements of Section 3.6 of the related Security Instrument,(b) as to each Mezzanine Subsidiary, an entity that satisfies the requirementsof Section 19 of the Pledge Agreement, (c) as to each Mezzanine Asset Owner andMezzanine Property Guarantor, an entity that satisfies the requirements ofSection 6.1 of the Loan Agreement to which such entity is a party to with Bankof America, N.A. on the date hereof and (d) as to each Encumbered PropertySubsidiary, an entity that satisfies criteria similar to that which is setforth in Section 3.6 of each Security Instrument and which is included in eachsuch Encumbered Property Subsidiary’s loan documents encumbering the relatedEncumbered Property.

“State” shall mean, with respect to an IndividualProperty, the State or Commonwealth in which such Individual Property or anypart thereof is located.

“Student HousingProjects” shall mean real estate properties operated as student housing inthe United States owned by Borrower or a Subsidiary of Borrower, and “StudentHousing Project” means any one of the Student Housing Projects.

“Subsidiary” shallmean as to any Person, a corporation, partnership or other entity of whichshares of stock or other ownership interests having ordinary voting power(other than stock or such other ownership interests having such power only byreason of the happening of a contingency) to elect a majority of the board ofdirectors or other managers of such 

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corporation, partnership or other entity are at the time owned, or themanagement of which is otherwise controlled, directly or indirectly through oneor more intermediaries, or both, by such Person.  Unless otherwise qualified, all references toa “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to aSubsidiary or Subsidiaries of the Borrower.

“Survey” shall mean,with respect to an Individual Property, a survey prepared by a surveyorlicensed in the State where such Individual Property is located and reasonablysatisfactory to Lender and the company or companies issuing the Title InsurancePolicies, and containing a certification of such surveyor reasonablysatisfactory to Lender.

“Synthetic Lease” shallmean as to any Person, the monetary obligation under any synthetic, off-balancesheet, tax retention or tax leveraged lease.

“Taxes” shall mean allreal estate and personal property taxes, assessments, water rates or sewerrents or similar charges, now or hereafter levied or assessed or imposedagainst any Individual Property or part thereof.

“Tenant” shall mean anyPerson leasing, subleasing or otherwise occupying any portion of the Propertyunder a Lease or other occupancy agreement with Borrower.

“Title Insurance Policy”shall mean, with respect to each Individual Property, an ALTA mortgagee titleinsurance policy in a form reasonably acceptable to Lender (or, if anIndividual Property is located in a State which does not permit the issuance ofsuch ALTA policy, such form as shall be permitted in such State and acceptableto Lender) issued with respect to such Individual Property and insuring thelien of the Security Instrument encumbering such Individual Property.

“Transfer” shall havethe meaning set forth in Section 5.2.10(a) hereof.

“Trust”shall mean GMH Communities Trust, a Maryland real estate investment trust.

“Trust Guaranty”shall mean that certain payment and performance guaranty executed and deliveredby Trust to Lender in connection with the Loan.

“UCC” or “UniformCommercial Code” shall mean the Uniform Commercial Code as in effect in theState in which an Individual Property is located.

## Section 1.2             Principlesof Construction.

All references tosections and schedules are to sections and schedules in or to this Agreementunless otherwise specified.  All uses ofthe word “including” shall mean “including, without limitation” unless thecontext shall indicate otherwise.  Unlessotherwise specified, the words “hereof,” “herein” and “hereunder” and words ofsimilar import when used in this Agreement shall refer to this Agreement as awhole and not to any particular provision of this Agreement.  Unless otherwise specified, all meaningsattributed to defined terms herein shall be equally applicable to both thesingular and plural forms of the terms so defined.

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**ARTICLEII**

GENERAL TERMS

## Section 2.1             LoanCommitment; Disbursement to Borrower.

2.1.1          Agreementto Lend and Borrow.

Subject to and upon theterms and conditions set forth herein, Lender hereby agrees to make and Borrowerhereby agrees to accept the Initial Advance on the Closing Date.

2.1.2          RevolvingLoan.

Subject to the terms andconditions set forth herein, the Lender agrees to make the Loan available tothe Borrower in the aggregate principal amount of up to Two Hundred FiftyMillion Dollars ($250,000,000).  TheBorrower may borrow such amounts in cash, at any time or from time to time inaccordance with the terms of this Agreement, but only until the earliest tooccur of (a) ten (10) days before the Maturity Date or (b) such earlier datethat the Loan may be accelerated as provided in Section 8.2 hereof.Amounts repaid may be reborrowed upon satisfaction of the requirements of Section2.1.5 hereof.

2.1.3          TheNote, Security Instruments and Loan Documents.

The Loan shall beevidenced by the Note and secured by the Pledge Agreement, the Guaranty and theother Loan Documents.

2.1.4          Useof Proceeds.

The proceeds of aninitial advance of$                 (“Initial Advance”) will be used by Borrower as follows: (i) to repayany existing indebtedness of Borrower including, without limitation the CreditAgreement dated November 8, 2004 as amended (the “Credit Agreement”) andall costs and expenses necessary to repay all obligations under the CreditAgreement in full, (ii) to acquire, or cause two of the Mezzanine Asset Ownersto acquire the Mezzanine Assets being acquired on the date hereof and (iii) topay costs and expenses incurred in connection with the closing of the Loan.Borrower shall deliver a Notice of Borrowing to Lender in connection with theInitial Advance.

2.1.5          AdditionalAdvances.

Subsequent to the date ofthis Agreement and during the term of the Loan, Borrower may request one ormore additional advances for the payment of (a) general working capital costsof the Borrower pursuant to the Sources and Uses Statement attached as ScheduleE or otherwise approved by Lender in its sole discretion, (b) 4th quarter dividends for 2006 in an aggregateamount not to exceed $17,500,000.00 and (c) to pay 3rd quarter dividends for 2006 in an aggregateamount not to exceed $17,500,000.00, in each case as approved by Lender in itssole and absolute discretion (each such advance, an “Additional Advance”).  Such Additional Advances may be requested byBorrower and shall be made, upon three (3) Business Days’ notice provided thatBorrower has satisfied the following conditions: (i) no Event of Default or 

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Default exists as of thedate of the request or the date the Additional Advance is funded, (ii) Borrowerhas submitted to Lender a Notice of Borrowing and (iii) Borrower shall havedelivered an Officer’s Certificate certifying that Borrower is in compliancewith each of the covenants in Section 5.3 as of the date that theAdditional Advance is funded, that no Default or Event of Default exists andthat the Additional Advance is being made for the purposes set forth in clauses(a) – (c) of Section 2.1.5 of this Agreement.

2.1.6          MinimumAmounts of Additional Advances and Maximum Number of Tranches.  

With regard to the Loanas a whole, Lender may require that all Additional Advances shall be in aminimum amount of $1,000,000.00. Borrower shall not have the right to have more than five (5) distinctInterest Periods, in the aggregate, in respect of the Loan (including allAdditional Advances to date) in effect at any one time.

2.1.7          LoanAllocations.

Borrower and Lender agreethat the amount of the Loan allocated to the Mezzanine Collateral being pledgedwith respect to each Mezzanine Asset Owner is the Mezzanine Allocated LoanAmount set forth on Schedule B attached hereto.  Borrower and Lender agree that the amount ofthe Loan allocated to each Individual Property is the Allocated Value set forthon Schedule A attached hereto.

2.1.8          Contributionsto Certain Subsidiaries.

Borrower herebyrepresents, warrants and covenants to and for the benefit of the Lender that itwill contribute (a) directly or indirectly to the  applicable Property Guarantor, a portion ofthe proceeds of the Loan in the amount of the Allocated Value for the IndividualProperty that such Property Guarantor owns, and such Property Owner shall bepermitted to distribute such funds as permitted under its operating agreementand as may be directed by the Mezzanine Property Guarantor as the managingmember of the Property Guarantor, including the distribution of funds back tothe Borrower's main deposit account for which funds from all properties ownedand operated by the Borrower are held, and (b) directly or indirectly to theapplicable Mezzanine Asset Owner a portion of the proceeds of the Loan in theamount of the Allocated Loan Amount for the Mezzanine Asset that such MezzanineAsset Owner is acquiring at the direction of the Mezzanine Subsidiary as itssole member.

## Section 2.2             Interest;Extension Options; Loan Payments; Late Payment Charge.

2.2.1          Payments.

(a)           Interest.  Interest on the outstanding principal balanceof the Loan shall accrue from the Closing Date through but excluding theMaturity Date at the Applicable Interest Rate. Interest shall be payable monthly in arrears on each Payment Date.  Any change in the Prime Rate shall beautomatically effective as of the day on which such change in rate occurs.  Each determination of an interest rate byLender pursuant to any provision of this Agreement shall be conclusive andbinding on Borrower in the absence of manifest error.

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(b)           Extension of the Initial MaturityDate.  Borrower shall have the optionto extend the term of the Loan beyond the Initial Maturity Date for either (x)a term of three (3) months (“Extension Option One”) to a date which isthe earlier of (1) July 2, 2007 and (2) the date specified in writing byBorrower which shall not be later than the date that is three (3) months fromthe Initial Maturity Date (such date in (1) or (2) is the “Option One MaturityDate”) or (y) for a term of six (6) months (“Extension Option Two”)to October 2, 2007 (each such date, the “Extended Maturity Date” and theperiod from the Initial Maturity Date through the Extended Maturity Date is the“Extension Term”). Borrower may exercise Extension Option One, uponsatisfaction of the following terms and conditions:

(i)            Borrower shall have entered into adefinitive purchase and sale agreement, asset purchase agreement or mergeragreement (or similar agreement for the direct or indirect acquisition of theassets (or a substantial portion thereof) of Borrower) with an unaffiliatedthird party (except that investors in such third party may include existinglimited partners in the Borrower and shareholders in the Trust) (the “Acquiror”)pursuant to which the Acquiror has committed to the purchase and acquisition ofBorrower or all or substantially all of Borrower’s assets or the equityinterests in Borrower (any of the foregoing, an “Acquisition Transaction”);

(ii)           the Acquisition Transaction shallhave been approved by the Board of Trustees of the Trust;

(iii)          the Acquisition Transaction shall notbe subject to any financial contingencies or the ability of the Acquiror toobtain financing;

(iv)          the Acquisition Transaction shall onlybe subject to shareholder, governmental and regulatory approval, to the extentapplicable to such Acquisition Transaction;

(v)           Borrower shall have made anannouncement to the general public of the Acquisition Transaction;

(vi)          Lender shall have determined in itssole discretion based on a sources and uses statement for the AcquisitionTransaction, that (a) if the Acquisition Transaction is in the form of a saleof assets in exchange for cash, the proceeds of the Acquisition Transactionshall be sufficient to pay the Obligations in full or (b) if the AcquisitionTransaction is to be consummated by the delivery of some other form ofconsideration other than cash (i.e., a stock-for-stock or cash-for-stockmerger), Lender receives confirmation acceptable to Lender that uponconsummation of the Acquisition Transaction the Loan will be repaid in full;

(vii)         no Event of Default shall have occurredand be continuing at the time Extension Option One is exercised nor on the datethat the Extension Term commences;

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(viii)        Borrower shall notify Lender of itselection to extend the Initial Maturity Date as aforesaid not earlier thanninety (90) days and no later than fifteen (15) days prior to the InitialMaturity Date;

(ix)           Borrower shall have delivered toLender an Officer’s Certificate in form reasonably acceptable to the Lendercertifying that no Event of Default exists, such Officer’s Certificate to bedelivered not later than five (5) Business Days from the date that conditions (i)-(vi)above are satisfied;

(x)            Borrower and Lender shall executeand deliver to each other any documents reasonably required to evidence theExtension Term, together with any opinions reasonably required by Lender inconnection therewith (which opinions shall be in substantially the same form asthe opinions delivered in connection with the closing of the Loan), documentsto be delivered not later than five (5) Business Days from the date thatconditions (i)-(vi) above are satisfied; and

(xi)           each of the representations andwarranties set forth in the Loan Documents shall be true and correct as of thefirst day of the Extension Term and shall be deemed remade as of the first dayof the Extension Term.

In the event (y) that Extension Option One is notexercised or the requirements set forth in clauses (i)-(xi) above are notsatisfied on or prior to the Initial Maturity Date or (z) that Extension OptionOne has been exercised by Borrower and the Acquisition Transaction has not beenconsummated, Borrower may exercise Extension Option Two, upon satisfaction ofthe following terms and conditions, provided, that, Extension Option Two shallhave a term of three (3) months if Extension Option Two is being exercisedpursuant to clause (z) immediately preceding:

(A)          No Event of Default shall haveoccurred and be continuing at the time Extension Option Two is exercised nor onthe date that the Extension Term commences;

(B)           Borrower shall notify Lender of itselection to extend the Maturity Date as aforesaid not earlier than ninety (90)days and no later than fifteen (15) days prior to the later of the InitialMaturity Date or the Option One Maturity Date, as the case may be;

(C)           Borrower shall have delivered toLender an Officer’s Certificate in form reasonably acceptable to the Lendercertifying that no Event of Default exists;

(D)          Borrower and Lender shall execute anddeliver to each other any documents reasonably required to evidence theExtension Term, together with any opinions reasonably required by Lender inconnection therewith (which opinions shall be in substantially the same form asthe opinions delivered in connection with the closing of the Loan);

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(E)           Borrower shall have paid to Lender afee in an amount equal to 2.00% of the outstanding principal balance of theLoan as of the Initial Maturity Date or the Option One Maturity Date, as thecase may be;

(F)           each of the representations andwarranties set forth in the Loan Documents shall be true and correct as of thefirst day of the Extension Term and shall be deemed remade as of the first dayof the Extension Term; and

(G)           Borrower shall enter into definitivedocumentation with Lender setting up a lockbox and cash management systemacceptable to Lender in its sole and absolute discretion subject, however, toexisting cash management arrangements that the Encumbered Property Subsidiariesand Mezzanine Asset Owners are subject to at such time pursuant to theirrespective mortgage loan documents.

Notwithstanding any notice given from Borrower toextend the Initial Maturity Date as provided for herein, Borrower may at anytime prior to the later of the Initial Maturity Date or the Option One MaturityDate, as the case may be, terminate the applicable extension notice withoutpenalty or premium by delivering written notice to Lender, provided,that Borrower shall pay to Lender all of Lender’s reasonable out-of-pocketcosts and expenses associated with the anticipated extension.

All references in thisAgreement and in the other Loan Documents to the Maturity Date shall mean theapplicable Extended Maturity Date in the event that either Extension Option Oneor Extension Option Two Option is exercised.

In no event shall theExtended Maturity Date be later than October 2, 2007.

2.2.2          InterestCalculation.

Interest on theoutstanding principal balance of the Loan shall be calculated by multiplying(a) the actual number of days elapsed in the period for which the calculationis being made by (b) a daily rate equal to the Applicable Interest Rate dividedby three hundred sixty (360) by (c) the outstanding principal balance. 

2.2.3          EurodollarRate Unascertainable; Illegality; Increased Costs.

(a)           (i) In the event that Lender shall have determined (which determinationshall be conclusive and binding upon Borrower absent manifest error) that byreason of circumstances affecting the interbank eurodollar market, adequate andreasonable means do not exist for ascertaining LIBOR, then Lender shallforthwith give, as soon as reasonably practicable, notice by telephone of suchdetermination, to Borrower at least five (5) Business Days prior to the lastday of the related Interest Period, with a written confirmation of suchdetermination promptly thereafter.  Ifsuch timely notice is given, the Loan shall bear interest at the Adjusted PrimeRate beginning on the first day of the next succeeding Interest Period. (ii)If, pursuant to the terms of this Section ‎2.2.3(a),  the Loan is bearing interest at the AdjustedPrime Rate and Lender shall determine (which determination shall be conclusiveand binding upon Borrower absent manifest error) 

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that the event(s) or circumstance(s) which resulted insuch conversion shall no longer be applicable, Lender shall give notice thereofto Borrower by telephone of such determination, confirmed in writing, toBorrower as soon as reasonably practical, but in no event later than five (5)Business Days prior to the last day of the then current Interest Period.  If such timely notice is given, the Loanshall bear interest at the Eurodollar Rate beginning on the first day of thenext succeeding Interest Period. Notwithstanding any provision of this Agreement to the contrary, in noevent shall Borrower have the right to elect to have the Loan bear interest ateither the Eurodollar Rate or the Adjusted Prime Rate.

(b)           If any requirement of law or any changetherein or in the interpretation or application thereof, shall hereafter makeit unlawful for Lender in good faith to make or maintain the portion of theLoan bearing interest at the Eurodollar Rate, (I) the obligation of Lenderhereunder to make the Loan bearing interest at the Eurodollar Rate shall becanceled forthwith and (II) the Loan shall automatically bear interest at theAdjusted Prime Rate on the next succeeding Payment Date or within such earlierperiod as required by Applicable Law. Borrower hereby agrees promptly to pay Lender (within ten (10) BusinessDays of Lender’s written demand therefor), any additional amounts necessary tocompensate Lender for any reasonable costs incurred by Lender in making anyconversion in accordance with this Agreement, including, without limitation,any interest or fees payable by Lender to lenders of funds obtained by it inorder to make or maintain the Loan hereunder. Upon written demand from Borrower, Lender shall demonstrate inreasonable detail the circumstances giving rise to Lender’s determination andthe calculation substantiating the Adjusted Prime Rate and any additionalthird-party costs incurred by Lender in making the conversion.  Lender’s written notice of such costs, ascertified to Borrower, shall be conclusive absent manifest error.

(c)           In the event that any change in anyrequirement of any Applicable Law or in the interpretation or applicationthereof, or compliance in good faith by Lender with any request or directive(whether or not having the force of law) hereafter issued from any GovernmentalAuthority which is generally applicable to all Lenders subject to suchGovernmental Authority’s jurisdiction:

(i)            shall hereafter impose, modify orhold applicable any reserve, special deposit, compulsory loan or similarrequirement against assets held by, or deposits or other liabilities in or forthe account of, advances or loans by, or other credit extended by, or any otheracquisition of funds by, any office of Lender which is not otherwise includedin the determination of LIBOR hereunder;

(ii)           shall, if the Loan is then bearinginterest at the Eurodollar Rate, hereafter have the effect of reducing the rateof return on Lender’s capital as a consequence of its obligations hereunder toa level below that which Lender could have achieved but for such adoption,change or compliance (taking into consideration Lender’s policies with respectto capital adequacy) by any amount deemed by Lender to be material; or

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(iii)          shall, if the Loan is then bearinginterest at the Eurodollar Rate, hereafter impose on Lender any othercondition, the result of which is to increase the cost to Lender of making,renewing or maintaining loans or extensions of credit or to reduce any amountreceivable hereunder;

then, in any such case,Borrower shall promptly pay Lender (within ten (10) days of Lender’s writtendemand therefor), any additional amounts necessary to compensate Lender forsuch additional cost or reduced amount receivable which Lender deems to bematerial.  If Lender becomes entitled toclaim any additional amounts pursuant to this Section ‎2.2.3(c),Lender shall provide Borrower with written notice specifying in reasonabledetail the event or circumstance by reason of which it has become so entitledand the additional amount required to fully compensate Lender for suchadditional cost or reduced amount.  Acertificate as to any additional costs or amounts payable pursuant to theforegoing sentence submitted by Lender to Borrower shall be conclusive absentmanifest error.  This provision shallsurvive payment of the Note and the satisfaction of all other obligations ofBorrower under the Note, this Agreement and the other Loan Documents.

(d)           Borrower agrees to indemnify Lenderand to hold Lender harmless from any actual third-party out-of-pocket loss orexpense which Lender sustains or incurs as a consequence of (I) any default byBorrower in payment of the principal of or interest on the Loan while bearinginterest at the Eurodollar Rate, including, without limitation, any such lossor expense arising from interest or fees payable by Lender to lenders of fundsobtained by it in order to maintain the Eurodollar Rate, (II) any prepayment(whether voluntary or mandatory) of the Loan on a day that is not the dayimmediately following the last day of an Interest Period with respect thereto and(III) the conversion (for any reason whatsoever, whether voluntary orinvoluntary) of the Applicable Interest Rate from the Eurodollar Rate to theAdjusted Prime Rate with respect to any portion of the outstanding principalamount of the Loan then bearing interest at the Eurodollar Rate on a date otherthan the day immediately following the last day of an Interest Period (theamounts referred to in clauses (I), (II) and (III) are herein referred tocollectively as the “Breakage Costs”). This provision shall survive payment of the Note and the satisfaction ofall other obligations of Borrower under this Agreement and the other LoanDocuments.

2.2.4          Paymenton Maturity Date.

Borrower shall pay toLender on the Maturity Date the outstanding principal balance, all accrued andunpaid interest thereon, and all other amounts due hereunder and under theNote, the Security Instruments and the other Loan Documents. 

2.2.5          Paymentsafter Default.

Upon the occurrence andduring the continuance of an Event of Default, (a) interest on the outstandingprincipal balance of the Loan and, to the extent permitted by Applicable Law,overdue interest and other amounts due in respect of the Loan, shall accrue atthe Default Rate, calculated from the date such payment was due without regardto any grace or cure periods contained herein and (b) interest at the DefaultRate shall be computed from the 

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occurrence of the defaultuntil the actual receipt and collection of the Debt (or that portion thereofthat is then due).  To the extentpermitted by Applicable Law, interest at the Default Rate shall be added to theDebt, shall itself accrue interest at the same rate as the Loan and shall besecured by the Pledge Agreement and the Guaranty.  This paragraph shall not be construed as anagreement or privilege to extend the date of the payment of the Debt, nor as awaiver of any other right or remedy accruing to Lender by reason of theoccurrence of any Event of Default.

2.2.6          LatePayment Charge.

If any principal,interest or any other sums due under the Loan Documents (other than the paymentof principal due on the Maturity Date) is not paid by Borrower on the date onwhich it is due, Borrower shall pay to Lender upon demand an amount equal tothe lesser of four percent (4%) of such unpaid sum or the maximum amountpermitted by Applicable Law in order to defray the expense incurred by Lenderin handling and processing such delinquent payment and to compensate Lender forthe loss of the use of such delinquent payment. Any such amount shall be secured by the Pledge Agreement, the Guarantyand the other Loan Documents to the extent permitted by Applicable Law.

2.2.7          UsurySavings.

This Agreement and theNote are subject to the express condition that at no time shall Borrower beobligated or required to pay interest on the principal balance of the Loan at arate which could subject Lender to either civil or criminal liability as aresult of being in excess of the Maximum Legal Rate.  If, by the terms of this Agreement or theother Loan Documents, Borrower is at any time required or obligated to payinterest on the principal balance due hereunder at a rate in excess of theMaximum Legal Rate, the Applicable Interest Rate or the Default Rate, as thecase may be, shall be deemed to be immediately reduced to the Maximum LegalRate and all previous payments in excess of the Maximum Legal Rate shall bedeemed to have been payments in reduction of principal and not on account ofthe interest due hereunder.  All sumspaid or agreed to be paid to Lender for the use, forbearance, or detention ofthe sums due under the Loan, shall, to the extent permitted by Applicable Law,be amortized, prorated, allocated, and spread throughout the full stated termof the Loan until payment in full so that the rate or amount of interest onaccount of the Loan does not exceed the Maximum Legal Rate of interest fromtime to time in effect and applicable to the Loan for so long as the Loan isoutstanding.

2.2.8          IndemnifiedTaxes.

(a)           All payments made by Borrowerhereunder shall be made free and clear of, and without reduction for or onaccount of, Indemnified Taxes, excluding (i) Indemnified Taxes measured byLender’s net income, and franchise taxes imposed on it, by the jurisdictionunder the laws of which Lender is resident or organized, or any politicalsubdivision thereof, (ii) taxes measured by Lender’s overall net income, andfranchise taxes imposed on it, by the jurisdiction of Lender’s applicablelending office or any political subdivision thereof or in which Lender isresident or engaged in business, and (iii) withholding taxes imposed by theUnited States of America, any state, commonwealth, protectorate territory orany political subdivision or taxing authority 

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thereof or therein as a result of the failure of Lenderwhich is a Non-U.S. Entity to comply with the terms of paragraph (b)below.  If any non excluded IndemnifiedTaxes are required to be withheld from any amounts payable to Lender hereunder,the amounts so payable to Lender shall be increased to the extent necessary toyield to Lender (after payment of all non excluded Indemnified Taxes) interestor any such other amounts payable hereunder at the rate or in the amountsspecified hereunder.  Whenever any nonexcluded Indemnified Tax is payable pursuant to Applicable Law by Borrower,Borrower shall send to Lender an original official receipt showing payment ofsuch non excluded Indemnified Tax or other evidence of payment reasonablysatisfactory to Lender.  Borrower herebyindemnifies Lender for any incremental taxes, interest or penalties that maybecome payable by Lender which may result from any failure by Borrower to payany such non excluded Indemnified Tax when due to the appropriate taxingauthority or any failure by Borrower to remit to Lender the required receiptsor other required documentary evidence.

(b)           In the event that Lender or anysuccessor and/or assign of Lender is not incorporated under the laws of theUnited States of America or a state thereof (a “Non-U.S. Entity”) Lenderagrees that, prior to the first date on which any payment is due such entityhereunder, it will deliver to Borrower two duly completed copies of UnitedStates Internal Revenue Service Form W-8BEN or W-8ECI or successor applicableform, as the case may be, certifying in each case that such entity is entitledto receive payments under the Note, without deduction or withholding of anyUnited States federal income taxes.  Eachentity required to deliver to Borrower a Form W-8BEN or W-8ECI pursuant to thepreceding sentence further undertakes to deliver to Borrower two further copiesof such forms, or successor applicable forms, or other manner of certification,as the case may be, on or before the date that any such form expires (which, inthe case of the Form W-8ECI, is the last day of each U.S. taxable year of theNon-U.S. Entity) or becomes obsolete or after the occurrence of any eventrequiring a change in the most recent form previously delivered by it toBorrower, and such other extensions or renewals thereof as may reasonably berequested by Borrower, certifying in the case of a Form W-8BEN or W-8ECI thatsuch entity is entitled to receive payments under the Note without deduction orwithholding of any United States federal income taxes, unless in any such casean event (including, without limitation, any change in treaty, law orregulation) has occurred prior to the date on which any such delivery wouldotherwise be required which renders all such forms inapplicable or which wouldprevent such entity from duly completing and delivering any such form withrespect to it and such entity advises Borrower that it is not capable ofreceiving payments without any deduction or withholding of United Statesfederal income tax.

## Section 2.3             Prepayments.

2.3.1          VoluntaryPrepayments.

Except as otherwiseexpressly provided herein, Borrower shall have the right to prepay the Loan inwhole or in part at any time provided that:

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(a)           Borrower shall provide prior writtennotice to Lender specifying the date (the “Prepayment Date”) upon whichthe prepayment is to be made, which notice shall be delivered to Lender notless than five (5) days prior to such payment; and

(b)           Borrower shall pay to Lender,simultaneously with such prepayment, (i) all accrued and unpaid interestcalculated at the Applicable Interest Rate on the amount of principal beingprepaid through and including the Prepayment Date (or if the Prepayment Date isa Payment Date, excluding the Prepayment Date if such payment is made inaccordance with Section 2.3.4 hereof), (ii) Breakage Costs, if any,without duplication of any sums paid pursuant to the preceding clause (i); and(iii) upon repayment of the Loan as a whole, all other sums then due under thisAgreement, the Note or the other Loan Documents.

If a notice of prepaymentis given by Borrower to Lender pursuant to this Section 2.3.1, theamount designated for prepayment and all other sums required under this Section2.3.1 shall be due and payable on the Prepayment Date.  Notwithstanding any notice of prepaymentgiven by Borrower, Borrower may at any time prior to the Prepayment Dateterminate the applicable prepayment notice without penalty or premium bydelivering written notice to Lender, provided, that Borrower shall payto Lender all of Lender’s reasonable out-of-pocket costs and expensesassociated with the anticipated prepayment. 

2.3.2          MandatoryPrepayments.

(a)           On each date on which Borroweractually receives any Net Proceeds, if Lender is not obligated and elects notto make such Net Proceeds available to Borrower for the restoration of theProperty pursuant to Section 6.4, Borrower shall prepay the outstandingprincipal balance of the Note in an amount equal to one hundred percent (100%)of such Net Proceeds not made available by Lender for restoration and Lendershall apply such Net Proceeds to the reduction of the Debt when received.  To the extent Net Proceeds not made availableby Lender for restorations with respect to an Individual Property are less thanthe Allocated Value for such Individual Property, any amount so applied againstthe Debt shall be deemed credited against the Allocated Value for suchIndividual Property. 

(b)           On each date on which Borrower, anyMezzanine Subsidiary, Mezzanine Asset Owner or Encumbered Property Subsidiaryactually receives any Capital Proceeds (other than Capital Proceeds receivedwith respect to the Refinancing of (i) the Encumbered Property referred to as“University Crossings” located in Philadelphia, Pennsylvania and (ii) theMezzanine Assets referred to as Orchard Trails and The Enclave II and locatedin Orono, Maine and Bowling Green, Ohio, respectively), Borrower shall, withoutlimiting the provisions of Sections 2.4 and 2.5 hereof, prepaythe outstanding principal balance of the Note in an amount equal to one hundredpercent (100%) of such Capital Proceeds, provided, that, with respect toCapital Proceeds received in connection with a sale or Refinance of anEncumbered Property, such Capital Proceeds shall not be less than, and Borrowershall prepay the Loan in the minimum amount of, the applicable EncumberedProperty Allocated Value.  Lender shallapply all such Capital Proceeds to the reduction of the Debt on the datereceived if 

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received prior to 2:00 p.m., Charlotte, North Carolinatime, or on the first (1st) Business Day following the date of its receiptthereof if received after 2:00 p.m., Charlotte, North Carolina time.

(c)           On the closing date of an AcquisitionTransaction, the Debt shall be repaid in full notwithstanding that the MaturityDate may not yet have occurred.

2.3.3          Makingof Payments.

Each payment by Borrowerhereunder or under the Note shall be made in funds settled through the New YorkClearing House Interbank Payments System or other funds immediately availableto Lender by 2:00 p.m., Charlotte, North Carolina time, on or prior to the datesuch payment is due, to Lender by deposit to such account as Lender maydesignate by written notice to Borrower, which notice shall include wiretransfer instructions and shall be delivered to Borrower at least five (5) BusinessDays prior to any change becoming effective. Whenever any payment hereunder or under the Note shall be stated to bedue on a day which is not a Business Day, such payment shall be made on thefirst Business Day preceding such scheduled due date.

2.3.4          Applicationof Prepayments.

All prepayments receivedpursuant to ‎Section 2.3 shall be applied first, to interest onthe outstanding principal balance being prepaid that accrued through andincluding the Prepayment Date, and second, to the payments of principal dueunder the Loan in the inverse order of maturity.

## Section 2.4             Prohibitionon Sale of Individual Property(ies). 

Borrower shall not permitany Property Guarantor to sell the Individual Property that it owns unless anduntil each of the following conditions are satisfied:

(a)           Borrower and the related Property Guarantorshall provide Lender with at least twenty (20) days but no more than sixty (60)days prior written notice of its request to obtain a release of the IndividualProperty.  Notwithstanding any noticegiven from Borrower and the related Property Guarantor to request a release ofan Individual Property, Borrower may at any time prior to the actual release ofsuch Individual Property terminate the applicable request notice withoutpenalty or premium by delivering written notice to Lender, provided, that Borrowershall pay to Lender all of Lender’s reasonable actual out-of-pocket costs andexpenses associated with the anticipated release;

(b)           Lender shall have received a wiretransfer of immediately available federal funds in an amount equal to thegreater of (x) the applicable Release Price and (y) Capital Proceeds withrespect to such Individual Property, less any proceeds of casualty orcondemnation retained by Lender for the applicable Individual Property,together with (i) all accrued and unpaid interest calculated at the ApplicableInterest Rate on the amount of principal being prepaid through and includingthe Prepayment Date, (ii) Breakage Costs, if any, without duplication of anysums paid pursuant to the 

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preceding clause (i); and (iii) all other sums dueunder this Agreement, the Note or the other Loan Documents in connection with apartial prepayment;

(c)           Borrower shall submit to Lender, notless than five (5) Business Days prior to the date of such release, a releaseof Lien of the applicable Security Instrument for such Individual Property for execution by Lender.  Such release shall be in a form appropriatein each State in which the Individual Property is located and shall containstandard provisions, if any, protecting the rights of the releasinglender.  In addition, Borrower shallprovide all other documentation Lender reasonably requires to be delivered byBorrower in order to evidence compliance with the requirements set forth inthis Section 2.4.  In the eventthat Borrower fails to provide Lender such release of Lien, Lender shall, uponsatisfaction of all the other requirements set forth in this subsection (c),deliver to Borrower such release in such form reasonably acceptable to Lender;

(d)           In the event that the applicableMezzanine Property Guarantor owning an interest in the applicable PropertyGuarantor obtaining a release of the Lien of the related Security Instrumentshall continue to own an interest in any other Property Guarantor owning anyIndividual Property still encumbered by a Security Instrument (after givingeffect to such release), such Mezzanine Property Guarantor shall transfer anyinterest it owns in the applicable Borrower obtaining such release to a Personother than Borrower or Mezzanine Property Guarantor;

(e)           Lender shall have received payment ofall Lender’s reasonable third-party costs and expenses and reasonable counselfees and disbursements incurred in connection with the release of theIndividual Property from the lien of the related Security Instrument and thereview and approval of the documents and information required to be deliveredin connection therewith; and

(f)            In the event the Individual Propertyis being released in connection with a Refinancing of such Individual Property,Borrower shall have paid to Lender a fee in the amount of one percent (1%) ofthe principal amount of the Loan being repaid if such Refinancing is not fundedor placed by Lender or an Affiliate of Lender. 

## Section 2.5             Prohibitionon Sale of Mezzanine Assets.  

Borrower shall not permitany Mezzanine Subsidiary to cause or permit the applicable Mezzanine AssetOwner to sell such Mezzanine Asset unless and until each of the followingconditions are satisfied:

(a)           Borrower and the related MezzanineSubsidiary shall provide Lender with at least twenty (20) days but no more thansixty (60) days prior written notice of its request to obtain a release of thepledge of the direct or indirect equity interests in any Mezzanine Subsidiary,Mezzanine Property Guarantor or Mezzanine Asset Owner (any such collateral, the“Mezzanine Collateral”) related to a Mezzanine Asset that is the subjectof a Capital Event.  Notwithstanding anynotice given from Borrower and a Mezzanine Subsidiary to request a release ofMezzanine Collateral, Borrower may at 

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any time prior to the actual release of such MezzanineCollateral terminate the applicable request notice without penalty or premiumby delivering written notice to Lender, provided, that Borrower shall pay toLender all of Lender’s reasonable actual out-of-pocket costs and expensesassociated with the anticipated release of the Mezzanine Collateral;

(b)           Lender shall have received a wiretransfer of immediately available federal funds in an amount equal to thegreater of (x) the applicable Mezzanine Collateral Release Price and (y) theCapital Proceeds with respect to such Mezzanine Asset, together with (i) allaccrued and unpaid interest calculated at the Applicable Interest Rate on theamount of principal being prepaid through and including the Prepayment Date,(ii) Breakage Costs, if any, without duplication of any sums paid pursuant tothe preceding clause (i); and (iii) all other sums due under this Agreement,the Note or the other Loan Documents in connection with a partial prepayment;

(c)           Borrower shall provide all otherdocumentation Lender reasonably requires to be delivered by Borrower in orderto evidence compliance with the requirements set forth in this Section 2.5.  Lender shall, upon satisfaction of all theother requirements set forth in this Section 2.5, deliver to Borrower arelease of the Mezzanine Collateral, such release to be in form reasonablyacceptable to Lender; and

(d)           Lender shall have received payment ofall Lender’s reasonable third-party costs and expenses and reasonable counselfees and disbursements incurred in connection with the release of theIndividual Property from the lien of the related Security Instrument and thereview and approval of the documents and information required to be deliveredin connection therewith.

## Section 2.6             NoOffsets.  

The Borrower herebywaives the right to assert a counterclaim in any action or proceeding broughtagainst it by Lender or their agents or otherwise to offset any obligations tomake the payments required by the Loan Documents.  No failure by Lender to perform any of itsobligations hereunder shall be a valid defense to, or result in any offsetagainst, any payments which Borrower is obligated to make under any of the LoanDocuments.  The Obligations of Borrowerunder this Agreement and the other Loan Documents shall not be reduced,discharged or released because or by reason of any existing or future offset,claim or defense of Borrower, or any other party, against the Lender by reasonof the Lender's failure to perform its obligations under this Agreement,including, without limitation, the failure of the Lender to fund any AdditionalAdvance.  The Borrower hereby acknowledgesthe Borrower shall have no claim against any subsequent holder of the fundedportion of the Loan for any Additional Advance not funded by the Lender.  

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# **ARTICLEIII**

# RESERVED

# **ARTICLEIV**

# REPRESENTATIONS ANDWARRANTIES

## Section 4.1             BorrowerRepresentations.

Borrower for itself andfor each Key Entity (where applicable in this Article IV) represents andwarrants that:

### 4.1.1        Organization.

Each of the Key Entitiesand the Encumbered Property Subsidiaries is duly organized and is validlyexisting and in good standing in the jurisdiction in which it is organized,with requisite power and authority to transact the businesses in which it isnow engaged.  Each Key Entity possessesall rights, licenses, permits and authorizations, governmental or otherwise,necessary to entitle it to transact the businesses in which it is nowengaged.  Each Encumbered PropertySubsidiary possesses all rights, licenses, permits and authorizations,governmental or otherwise, necessary to entitle it to transact the businessesin which it is now engaged, except to the extent such failure is not reasonablylikely to have a Material Adverse Effect. Attached hereto as Schedule 4.1.1 is a true, correct and completeorganizational chart of Borrower, each of the Key Entities, and each of theEncumbered Property Subsidiaries.

### 4.1.2        Proceedings.

Each of the Key Entitieshas taken all necessary action to authorize the execution, delivery andperformance of this Agreement and the other Loan Documents to the extent suchKey Entity is a party thereto.  ThisAgreement and the other Loan Documents have been duly executed and delivered byor on behalf of each of the Key Entities, to the extent such Key Entity is aparty thereto.

### 4.1.3        NoConflicts.

The execution, deliveryand performance of this Agreement and the other Loan Documents by Borrower andthe Key Entities that are a party thereto will not conflict with or result in abreach of any of the terms or provisions of, or constitute a default under, orresult in the creation or imposition of any Lien, charge or encumbrance (otherthan pursuant to the Loan Documents) upon any of the property or assets of suchKey Entity pursuant to the terms of any indenture, mortgage, deed of trust,loan agreement, partnership agreement, management agreement, or other agreementor instrument to which such Key Entity is a party or by which any of such KeyEntity’s property or assets is subject, nor will such action result in anyviolation of the provisions of any statute or any order, rule or regulation ofany court or governmental agency or body having jurisdiction over a Key Entityor any of the Properties or Mezzanine Assets or any of any Key Entity’s otherassets, or any license or other approval required to operate the

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Properties or MezzanineAssets, and any consent, approval, authorization, order, registration orqualification of or with any Governmental Authority required for the execution,delivery and performance by each Key Entity (to the extent a party thereto) ofthis Agreement or any other Loan Documents have been obtained and is in fullforce and effect.

### 4.1.4        Litigation.

As of the date hereof,except as set forth on Schedule 4.1.4 attached hereto, there are no actions,suits or proceedings at law or in equity by or before any GovernmentalAuthority or other agency now pending or threatened in writing against oraffecting (i) any Key Entity or any Individual Property or Mezzanine Assetwhich are, individually or in the aggregate, reasonably likely to materially adversely affect the financial conditionor business of any Key Entity or the condition or ownership of any IndividualProperty, Mezzanine Asset or Encumbered Property, and (ii) any of theEncumbered Property Subsidiaries or Encumbered Properties which are,individually or in the aggregate, reasonably likely to have a Material AdverseEffect on the financial condition or business of the Encumbered PropertySubsidiaries or the condition or ownership of the Encumbered Properties.

### 4.1.5        Agreements.

No Key Entity is indefault in any material respect in the performance, observance or fulfillmentof any of the obligations, covenants or conditions contained in any agreementor instrument to which it is a party or by which such Key Entity or any of theProperties or Mezzanine Assets is bound which might materially and adverselyaffect any Key Entity or any Individual Property or Mezzanine Asset.  No Encumbered Property Subsidiary is indefault in any material respect in the performance, observance or fulfillmentof any of the obligations, covenants or conditions contained in any agreementor instrument to which it is a party or by which such Encumbered PropertySubsidiary or Encumbered Property is bound which might have a Material AdverseEffect****on the Encumbered PropertySubsidiaries or the Encumbered Properties. Borrower has no material financial obligation under any indenture,mortgage, deed of trust, loan agreement or other agreement or instrument to whichBorrower is a party or by which Borrower or any Property Guarantor, MezzanineAsset Owner, Individual Property or Mezzanine Asset is otherwise bound, otherthan (a) obligations incurred in the ordinary course of the operation of suchIndividual Property or Mezzanine Asset, (b) obligations set forth in thePermitted Encumbrances and (c) obligations under the Loan Documents.  No Key Entity has any material financialobligation under any indenture, mortgage, deed of trust, loan agreement orother agreement or instrument to which such Key Entity is a party or by whichsuch Key Entity or any Mezzanine Asset is otherwise bound, other than (a)obligations incurred in the ordinary course of the operation of such IndividualProperty or Mezzanine Asset and (b) obligations of such Key Entity under theLoan Documents or the loan documents with respect to the related MezzanineAsset which have been disclosed to Lender prior to the date hereof.  No Encumbered Property Subsidiary has anymaterial financial obligation under any indenture, mortgage, deed of trust,loan agreement or other agreement or instrument to which such EncumberedProperty Subsidiary is a party or by which such Encumbered Property Subsidiaryor any related Encumbered Property is otherwise bound, other than (a) obligationsincurred in the ordinary course of the operation of such Encumbered Propertyand (b) obligations of such Encumbered Property Subsidiary under the loandocuments with respect to the related Encumbered Property 

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which have been disclosedto Lender prior to the date hereof, and except to the extent would not have aMaterial Adverse Effect.

### 4.1.6        Solvency.

Borrower (a) has notentered into the transaction or executed the Note, this Agreement or any otherLoan Documents with the actual intent to hinder, delay or defraud any creditorand (b) has received reasonably equivalent value in exchange for itsobligations under the Loan Documents. Giving effect to the Loan, the fair saleable value of Borrower’s assetsexceeds and will, immediately following the making of the Loan, exceed Borrower’stotal liabilities, including, without limitation, subordinated, unliquidated,disputed and contingent liabilities. Borrower’s assets do not and, immediately following the making of theLoan will not, constitute unreasonably small capital to carry out its businessas conducted or as proposed to be conducted. Borrower does not intend to incur debt and liabilities (includingcontingent liabilities and other commitments) beyond its ability to pay suchdebt and liabilities as they mature (taking into account the timing and amountsof cash to be received by Borrower and the amounts to be payable on or inrespect of obligations of Borrower).  Nopetition under the Bankruptcy Code or similar state bankruptcy or insolvencylaw has been filed against Borrower or any constituent Person in the last seven(7) years, and neither Borrower nor any constituent Person in the last seven(7) years has ever made an assignment for the benefit of creditors or takenadvantage of any insolvency act for the benefit of debtors.  Borrower is not contemplating either thefiling of a petition by it under the Bankruptcy Code or similar statebankruptcy or insolvency law or the liquidation of all or a major portion ofBorrower’s assets or property, and Borrower has no knowledge of any Personcontemplating the filing of any such petition against it.

### 4.1.7        OFAC.

Borrower represents andwarrants that no Key Entity, no Encumbered Property Subsidiary nor anyGuarantor nor any of their respective Affiliates is a Prohibited Person, andeach Key Entity, Encumbered Property Subsidiary and Guarantor and theirrespective Affiliates are in full compliance with all applicable orders, rules,regulations and recommendations of The Office of Foreign Assets Control of theU.S. Department of the Treasury.

### 4.1.8        NoPlan Assets.

Borrower is not a Plan,and none of the assets of Borrower constitute or will constitute “Plan Assets”of one or more Plans.  In addition, (a)Borrower is not a “governmental plan” within the meaning of Section 3(32) ofERISA and (b) transactions by or with Borrower are not subject to Statestatutes regulating investment of, and fiduciary obligations with respect to,governmental plans similar to the provisions of Section 406 of ERISA or Section4975 of the Code currently in effect, which prohibit or otherwise restrict thetransactions contemplated by this Agreement.

### 4.1.9        Compliance.

Each Key Entity and eachof the Properties and the Mezzanine Assets and the use thereof comply in allmaterial respects with all applicable Legal Requirements, including, withoutlimitation, all Environmental Laws, building and zoning ordinances and codes.Each

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Encumbered PropertySubsidiary and each Encumbered Property and the use thereof comply in allmaterial respects with all applicable Legal Requirements, including, withoutlimitation, all Environmental Laws, building and zoning ordinances and codesexcept to the extent and such non-compliance would not have a Material AdverseEffect. No Key Entity is in default or violation of any order, writ,injunction, decree or demand of any Governmental Authority which could have amaterial adverse affect on any Key Entity or any of the Properties or theMezzanine Assets.  None of the EncumberedProperty Subsidiaries are in default or violation of any order, writ,injunction, decree or demand of any Governmental Authority which is reasonablylikely to have a Material Adverse Effect. There has not been committed by any Key Entity or to Borrower’sknowledge, any other Person in occupancy of or involved with the operation oruse of the Properties or the Mezzanine Assets any act or omission affording thefederal government or any other Governmental Authority the right of forfeitureas against any of the Individual Properties or the Mezzanine Assets or any partthereof or any monies paid in performance of Borrower’s obligations under anyof the Loan Documents.  There has notbeen committed by any Encumbered Property Subsidiary any act or omissionaffording the federal government or any other Governmental Authority the rightof forfeiture as against any of the Encumbered Properties or any part thereofor any monies paid in performance of Borrower’s obligations under any of theLoan Documents, except to the extent would not have a Material Adverse Effect.

### 4.1.10      FinancialInformation.

All financial data,including, without limitation, the consolidated statements of cash flow andconsolidated income and operating expense, that have been delivered to Lenderin respect of any of the Key Entities and any of the Encumbered PropertySubsidiaries (i) are true, complete and correct in all material respects, (ii)accurately represent the financial condition of the applicable Key Entities orEncumbered Property Subsidiaries, as applicable, as of the date of suchreports, and (iii) have, if applicable, been prepared in accordance with GAAP(subject, as to any interim statements, to year-end adjustments and the absenceof footnotes)****throughout the periods covered,except as disclosed therein.  Except forPermitted Encumbrances, (i) no Key Entity has any contingent liabilities,liabilities for taxes, unusual forward or long-term commitments orunrealized or anticipated losses from any unfavorable commitments that areknown to Borrower and reasonably likely to have a materially adverse effect onany Individual Property or Mezzanine Asset or the operation thereof asresidential buildings containing other appurtenant and related uses, and (ii)none of the Encumbered Property Subsidiaries has any contingent liabilities,liabilities for taxes, unusual forward or long-term commitments orunrealized or anticipated losses from any unfavorable commitments that areknown to Borrower and, individually or in the aggregate, are reasonably likelyto have a materially adverse effect on the Encumbered Properties, taken as awhole, or the operation thereof as residential buildings containing otherappurtenant and related uses, except as referred to or reflected in saidfinancial statements.  Since the date ofsuch financial statements, there has been no material adverse change in thefinancial condition, operations or business of any Key Entity from that setforth in such entity’s financial statements, and there has been no materialadverse change in the financial condition, operations or business of theEncumbered Property Subsidiaries, taken as a whole, from that set forth in suchentities’ financial statements.

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4.1.11      Condemnation.

No Condemnation or othersimilar proceeding has been commenced or, is threatened or contemplated inwriting with respect to all or any portion of any Individual Property,Mezzanine Asset or Encumbered Property or for the relocation of roadwaysproviding access to any Individual Property, Mezzanine Asset or EncumberedProperty.

### 4.1.12      FederalReserve Regulations.

No part of the proceedsof the Loan will be used for the purpose of purchasing or acquiring any “marginstock” within the meaning of Regulation U of the Board of Governors of theFederal Reserve System or for any other purpose which would be inconsistentwith such Regulation U or any other Regulations of such Board of Governors, orfor any purposes prohibited by Legal Requirements or by the terms andconditions of this Agreement or the other Loan Documents.

### 4.1.13      Utilitiesand Public Access.

#### (a)           Each tenant-occupied IndividualProperty and Mezzanine Asset has rights of access to public ways and is servedby public water, sewer, sanitary sewer and storm drain facilities adequate toservice such Individual Property or Mezzanine Asset, as the case may be, forits respective intended uses.  All publicutilities necessary or convenient to the full use and enjoyment of eachIndividual Property and Mezzanine Asset are located either in the public right-of-wayabutting each Individual Property or  MezzanineAsset (which are connected so as to serve each Individual Property or  Mezzanine Asset, as the case may be, withoutpassing over other property) or in recorded easements serving each IndividualProperty or Mezzanine Asset.  All roadsnecessary for the use of each Individual Property, Mezzanine Asset andEncumbered Property for their current respective purposes have been completed,are physically open and are dedicated to public use and have been accepted byall Governmental Authorities.

#### (b)           Each tenant-occupied EncumberedProperty has rights of access to public ways and is served by public water,sewer, sanitary sewer and storm drain facilities adequate to service suchEncumbered Property for its intended uses except to the extent any failure to havesuch rights and service would not have a Material Adverse Effect.  All public utilities necessary or convenientto the full use and enjoyment of each Encumbered Property are located either inthe public right of way abutting each Encumbered Property (which are connectedso as to serve each Encumbered Property without passing over other property) orin recorded easements serving each Encumbered Property except to the extentthat such failure for such utilities to be so located would not have a MaterialAdverse Effect.

### 4.1.14      Nota Foreign Person.

Borrower is not a “foreignperson” within the meaning of §1445(f)(3) of the Code.

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4.1.15      Separate Lots.

Each Individual Propertyis comprised of one (1) or more parcels which constitute a separate tax lot orlots and does not constitute a portion of any other tax lot not a part of suchIndividual Property.

### 4.1.16      Assessments.

As of the date hereof, tothe best of Borrower’s knowledge, there are no pending or proposed special orother assessments for public improvements or otherwise affecting any IndividualProperty, nor are there any contemplated improvements to any IndividualProperty that may result in such special or other assessments.

### 4.1.17      Enforceability.

The Loan Documents arenot subject to any right of rescission, set-off, counterclaim or defenseby any Key Entity that is a party thereto, including the defense of usury, andno Key Entity has asserted any right of rescission, set-off, counterclaimor defense with respect thereto.

### 4.1.18      NoPrior Assignment.

There are no priorassignments of the Leases or any portion of the Rents due and payable or tobecome due and payable which are presently outstanding.

### 4.1.19      Insurance.

Borrower has obtained andhas delivered to Lender insurance abstracts and certificates of insurancereasonably acceptable to Lender, reflecting the insurance coverages, amountsand other requirements set forth in this Agreement.  Borrower, and to the best of Borrower’sknowledge, no other Person, has done, by act or omission, anything which wouldmaterially impair the coverage of any such policy.

### 4.1.20      Useof Property.

Each Individual Propertyis substantially used exclusively for student housing. Each Mezzanine Asset issubstantially used exclusively for student housing.

### 4.1.21      Certificateof Occupancy; Licenses.

Each Key Entity, to theextent the owner of a property, has obtained and shall keep and maintain allmaterial certifications, permits, licenses and approvals, including withoutlimitation, certificates of completion and occupancy permits required for thelegal use, occupancy and operation of each Individual Property, Mezzanine Assetand Encumbered Property  by theapplicable Key Entity as student housing and other appurtenant and relateduses.

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4.1.22      Flood Zone.

Either (a) none of theImprovements on any Individual Property or Mezzanine Asset are located in anarea as identified by the Federal Emergency Management Agency as an area havingspecial flood hazards or (b) the flood insurance required pursuant to ‎Section6.1(a)(vii) is in full force and effect with respect to each suchIndividual Property or Mezzanine Asset. To Borrower’s knowledge, either (a)none of the Improvements on any Encumbered Property are located in an area asidentified by the Federal Emergency Management Agency as an area having specialflood hazards or (b) the flood insurance required by the related EncumberedProperty Subsidiary’s mortgage loan documents is in full force and effect.

### 4.1.23      PhysicalCondition.

#### (a)           Each Individual Property andMezzanine Asset, including, without limitation, all buildings, improvements,parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems,HVAC systems, fire protection systems, electrical systems, equipment,elevators, exterior sidings and doors, landscaping, irrigation systems and allstructural components, are in good condition, order and repair in all materialrespects.  There exists no structural orother material defects or damages in any Individual Property or MezzanineAsset, whether latent or otherwise and neither Borrower nor any Mezzanine AssetOwner has received written notice from any insurance company or bonding companyof any defects or inadequacies, whether latent or otherwise, in any IndividualProperty or Mezzanine Asset, or any part thereof, which would materiallyadversely affect the insurability of the same or cause the imposition ofextraordinary premiums or charges thereon or of any termination or threatenedtermination of any policy of insurance or bond. Each Individual Property and Mezzanine Asset is free from damage coveredby fire or other casualty insurance.  Nosubstantial construction is currently being performed at any IndividualProperty or Mezzanine Asset other than routine maintenance and repairs.

#### (b)           Each Encumbered Property, including,without limitation, all buildings, improvements, parking facilities, sidewalks,storm drainage systems, roofs, plumbing systems, HVAC systems, fire protectionsystems, electrical systems, equipment, elevators, exterior sidings and doors,landscaping, irrigation systems and all structural components, are in goodcondition, order and repair in all material respects except where such failurewould not have a Material Adverse Effect. There exists no structural or other material defects or damages in anyEncumbered Property which would be reasonably likely to have a Material AdverseEffect, whether latent or otherwise and no Borrower nor any Encumbered PropertySubsidiary has received written notice from any insurance company or bondingcompany of any defects or inadequacies, whether latent or otherwise, in theEncumbered Properties taken as a whole which would be reasonably likely to havea Material Adverse Effect, materially and adversely the insurability of thesame as a whole or cause the imposition of extraordinary premiums or chargesthereon or of any termination or threatened termination of any policy ofinsurance or bond related to the Encumbered Properties taken as a whole.  Each Encumbered Property is free from damagecovered by fire or other casualty insurance except any such damage that is notreasonably likely to have a Material Adverse Effect.

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#### No substantialconstruction is currently being performed at any Encumbered Property other thanroutine maintenance and repairs except to the extent such construction is notreasonably likely to have a Material Adverse Effect.

#### 4.1.24         Boundaries.

All of the materialimprovements which were included in determining the appraised value of eachIndividual Property, Mezzanine Asset and Encumbered Property lie wholly withinthe boundaries and building restriction lines of such Individual Property,Mezzanine Asset or Encumbered Property, (b) no improvements on adjoiningproperties encroach upon such Individual Property, Mezzanine Asset orEncumbered Property, and (c) no easements or other encumbrances upon theapplicable Individual Property, Mezzanine Asset or Encumbered Property encroachupon any of the improvements located thereon, in each case that is reasonablylikely to have a Material Adverse Effect.

#### 4.1.25         Leases.

#### (a)           Mezzanine Asset Owner and PropertyGuarantor are the owners and lessors of landlord’s interest in the Leases.  No Person has any possessory interest in anyIndividual Property or Mezzanine Asset or right to occupy the same except underand pursuant to the provisions of the Leases or the PermittedEncumbrances.  As of the date hereof, thecurrent Leases are in full force and effect and there are no material defaultsby Mezzanine Asset Owner and Property Guarantor or, to Borrower’s knowledge anytenant under any Lease, and, there are no conditions that, with the passage oftime or the giving of notice, or both, would constitute a material defaultunder any Lease.  Not more than 10% ofthe Rents at any Individual Property have been paid more than four (4) monthsin advance of its due date.  As of thedate hereof, there are no offsets or defenses to the payment of any portion ofthe Rents.  As of the date hereof, allwork required (if any) to be performed by Mezzanine Asset Owner or PropertyGuarantor under each Lease as of the date hereof has been performed in allmaterial respects as required and has been accepted by the applicable tenant,and any payments, free rent, partial rent, rebate of rent or other payments,credits, allowances or abatements required to be given by Mezzanine Asset Owneror Property Guarantor to any tenant has already been received by such tenantexcept to the extent the failure of the foregoing representation to be true isnot reasonably likely to have a Material Adverse Effect.  As of the date hereof, there has been noprior sale, transfer or assignment, hypothecation or pledge of Mezzanine AssetOwner’s or Property Guarantor’s interest in any Lease or of the Rents receivedtherein which is still in effect.  Notenant under any Lease has a currently effective option (or an option that willtake effect in the future) pursuant to such Lease or otherwise to purchase allor any part of the leased premises or the building of which the leased premisesare a part.  No tenant under any Leasehas a currently effective right (or a right that will take effect in thefuture) of first offer or refusal to purchase all or any part of the leasedpremises or the building of which the leased premises are a part.  To the best of Borrower’s knowledge, noHazardous Materials have been disposed, stored or treated by any tenant underany Lease on or about the leased premises in violation of Environmental Law nordoes Mezzanine Asset Owner or Property Guarantor have any knowledge of anytenant’s intention to use its leased premises for

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#### any activitywhich, directly or indirectly, involves the use, generation, treatment,storage, disposal or transportation of any Hazardous Materials, except thosethat are both (i) in compliance with current Environmental Laws and withpermits issued pursuant thereto (if such permits are required), and (ii) either(A) in amounts not in excess of that necessary to operate, clean, repair andmaintain the applicable Individual Property or Mezzanine Asset or each tenant’srespective business at such Individual Property or Mezzanine Asset as set forthin their respective Leases, (B) held by a tenant for sale to the public in itsordinary course of business, or (C) fully disclosed to and approved by Lenderin writing pursuant to the environmental reports delivered to Lender inconnection with the Loan.

### 4.1.26      Survey.

To the best of Borrower’sknowledge, the Survey for each Individual Property delivered to Lender inconnection with this Agreement does not fail to reflect any material matteraffecting such Individual Property or the title thereto.

### 4.1.27      EmbargoedPerson.

As of the date hereof andat all times throughout the term of the Loan, including after giving effect toany Transfers permitted pursuant to the Loan Documents, (a) none of the fundsor other assets of any Key Entity, Encumbered Property Subsidiary or Guarantorconstitute property of, or are beneficially owned, directly or indirectly, byany person, entity or government subject to trade restrictions under U.S. law, includingbut not limited to, the International Emergency Economic Powers Act, 50 U.S.C.§§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., andany Executive Orders or regulations promulgated thereunder with the result thatthe investment in Borrower, any Key Entity, Encumbered Property Subsidiary orGuarantor, as applicable (whether directly or indirectly), is prohibited by lawor the Loan made by the Lender is in violation of law (“Embargoed Person”);(b) no Embargoed Person has any interest of any nature whatsoever in any KeyEntity, Encumbered Property Subsidiary or Guarantor or any Affiliate thereof,as applicable, with the result that the investment in any Key Entity,Encumbered Property Subsidiary or Guarantor, as applicable (whether directly orindirectly), is prohibited by law or the Loan is in violation of law; and (c)none of the funds of any Key Entity, Encumbered Property Subsidiary orGuarantor, as applicable, have been derived from any unlawful activity with theresult that the investment in any Key Entity or Guarantor, as applicable(whether directly or indirectly), is prohibited by law or the Loan is inviolation of law.

### 4.1.28      Filingand Recording Taxes.

All mortgage, mortgagerecording, stamp, intangible or other similar tax required to be paid by anyPerson under applicable Legal Requirements currently in effect in connectionwith the execution, delivery, recordation, filing, registration, perfection orenforcement of any of the Loan Documents, including, without limitation, theSecurity Instruments, have been paid.

### 4.1.29      CovenantCompliance.

On  the date hereof Borrower has delivered toLender an Officer’s Certificate pursuant to which Borrower certified to LenderBorrower’s compliance with each of the

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covenants set forth in Sections5.3 and 5.4 hereof calculated on a proforma basis for the yearending December 31, 2006 and which was accompanied by all applicable financialcalculations (the “Compliance Statement”).  Borrower represents and warrants to Lenderthat all information and certifications set forth in the Compliance Statementare complete, true and correct as of the date hereof.  In connection with any Compliance Certificaterequired to be delivered pursuant to this Agreement, such ComplianceCertificate may exclude any updates of representations and warranties as toproforma calculations of financial covenant compliance.

### 4.1.30      ManagementAgreement.

The Management Agreementsare in full force and effect and there is no default thereunder by any partythereto and no event has occurred that, with the passage of time and/or thegiving of notice would constitute a default thereunder.

### 4.1.31      IllegalActivity.

No portion of anyIndividual Property or any Mezzanine Asset has been purchased with proceeds ofany illegal activity.

### 4.1.32      NoChange in Facts or Circumstances; Disclosure.

All information submittedby Borrower or any other Key Entity to Lender and in all financial statements,rent rolls, reports, certificates and other documents submitted in connectionwith the Loan or in satisfaction of the terms thereof are, as of the datehereof, accurate, complete and correct in all material respects.  No statement of fact made by Borrower or anyKey Entity in this Agreement or in any of the other Loan Documents contains anyuntrue statement of a material fact or omits to state any material factnecessary to make statements contained herein or therein not misleading in anymaterial respect.  There has been nomaterial adverse change in any condition, fact, circumstance or event thatwould make any such information inaccurate, incomplete or otherwise misleadingin any material respect or that otherwise materially and adversely affects ormight materially and adversely affect the use, operation or value of theProperties, the Mezzanine Assets or the Encumbered Properties or the businessoperations or the financial condition of Borrower or any Guarantor.  Borrower has not failed to disclose anymaterial fact that is reasonably likely to have a material adverse effect onthe financial condition of Borrower or any Key Entity or the condition orownership of any Individual Property, Mezzanine Asset or Encumbered Property.

### 4.1.33      InvestmentCompany Act.

Borrower is not (a) an “investmentcompany” or a company “controlled” by an “investment company,” within themeaning of the Investment Company Act of 1940, as amended; or (b) subject toany other federal or State law or regulation which purports to restrict orregulate its ability to borrow money.

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4.1.34      Principal Place of Business; State ofOrganization.

Borrower’s principalplace of business as of the date hereof is the address set forth in theintroductory paragraph of this Agreement. Borrower’s organizational identification number is 3806640.

### 4.1.35      SpecialPurpose Entities.

Borrower shall cause eachProperty Guarantor, each Mezzanine Property Guarantor, each MezzanineSubsidiary, each Mezzanine Asset Owner and each Encumbered Property Subsidiaryto be, at all times, a Special Purpose Entity.

### 4.1.36      BusinessPurposes.

The Loan is solely forthe general business purpose of Borrower, and is not for personal, family,household, or agricultural purposes.

### 4.1.37      Taxes.

Each Key Entity has filedall material federal, State, county, municipal, and city income and other taxreturns required to have been filed by it and has paid all taxes and relatedliabilities which have become due pursuant to such returns or pursuant to anyassessments received by it.  As of thedate hereof, Borrower knows of no basis for any additional assessment in respectof any such taxes and related liabilities for prior years.

### 4.1.38      Forfeiture.

No Key Entity nor to thebest of Borrower’s knowledge any other Person in occupancy of or involved withthe operation or use any of the Properties, Mezzanine Assets or EncumberedProperties has committed any act or omission affording the federal governmentor any State or local government the right of forfeiture as against any of theProperties, Mezzanine Assets or Encumbered Properties or any part thereof orany monies paid in performance of Borrower’s obligations under the Note, thisAgreement or the other Loan Documents. Borrower hereby covenants and agrees not to commit, permit or suffer toexist any act or omission affording such right of forfeiture.

### 4.1.39      EnvironmentalRepresentations and Warranties.

Borrower represents andwarrants, that: (a) there are no Hazardous Materials or underground storagetanks in, on, or under any of the Properties or Mezzanine Assets except thosethat are both (i) in compliance with current Environmental Laws and withpermits issued pursuant thereto (if such permits are required), and (ii) either(A) in amounts not in excess of that necessary to operate, clean, repair andmaintain the applicable Individual Property or Mezzanine Asset or each tenant’srespective business at such Individual Property or Mezzanine Asset as set forthin their respective Leases, or (B) held by a tenant for sale to the public inits ordinary course of business, (b) there are no past, present or threatenedReleases of Hazardous Materials in violation of any Environmental Law and whichwould require remediation by a Governmental Authority in, on, under or from anyof the Properties or Mezzanine Assets (except to the extent

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such remediation has beenapproved by the applicable Governmental Authority); (c) to Borrower’s knowledgethere is no threat of any Release of Hazardous Materials migrating to any ofthe Properties or Mezzanine Assets; (d) there is no past or presentnon-compliance with current Environmental Laws, or with permits issued pursuantthereto, in connection with any of the Properties or Mezzanine Assets;(e) neither Borrower, nor any other Key Entity knows of, nor has received,any written notice from any Person (including but not limited to a GovernmentalAuthority) relating to Hazardous Materials in, on, under or from any of theProperties or Mezzanine Assets in violation of Environmental Laws; and (f) eachKey Entity has truthfully and fully provided to Lender, in writing, any and allinformation of which it is aware relating to environmental conditions in, on,under or from any of the Properties or Mezzanine Assets known to any Key Entityor contained in any Key Entity’s files and records, including but not limitedto any reports relating to Hazardous Materials in, on, under or migrating to orfrom any of the Properties, Mezzanine Assets or Encumbered Properties and/or tothe environmental condition of the Properties or Mezzanine Assets.  Borrower represents and warrants that each ofthe representations and warranties set forth in clause (a)-(f) above are truewith respect to the Encumbered Properties except to the extent that the failureof such representation or warranty to be true is not reasonably likely to havea Material Adverse Effect.

### 4.1.40      TaxpayerIdentification Number.

Borrower’s United Statestaxpayer identification number is 20-1162699.

### 4.1.41      MilitaryContracts.

Borrower herebyrepresents and warrants to Lender that none of the contracts related to theownership, equity, management, development or construction that Borrower or aSubsidiary of Borrower (including without limitation, GMH Military HousingDevelopment LLC, GMH Military Housing Construction LLC, GMH Military HousingManagement LLC and GMH Military Housing Investments LLC) is a party to, or hasan interest in, with respect to Military Housing Projects can be assigned bysuch party to Lender as direct or indirect collateral for the Loan without theconsent or approval of third parties, which consent or approval has not beenobtained.

### 4.1.42      Representationsand Warranties with respect to Encumbered Property Subsidiaries.

Borrower herebyrepresents and warrants to Lender that each of the representations andwarranties set forth in this Section 4.1 are true and correct as to eachEncumbered Property Subsidiary as if such representations and warranties werespecifically made as to each Encumbered Property Subsidiary except to theextent that any such failure of the representation or warranty to be true as tothe Encumbered Property Subsidiaries would not have a Material Adverse Effect.

## Section 4.2             Survivalof Representations.

Borrower agrees that allof the representations and warranties set forth in ‎Section 4.1and elsewhere in this Agreement, the Pledge Agreement, the Security Instrumentsand in the other Loan Documents shall survive for so long as any amount remainsowing to Lender under

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this Agreement or any ofthe other Loan Documents by Borrower or any Guarantor.  All representations, warranties, covenantsand agreements made in this Agreement or in the other Loan Documents byBorrower or any Key Entity shall be deemed to have been relied upon by Lendernotwithstanding any investigation heretofore or hereafter made by Lender or onits behalf.

# **ARTICLE V**

# BORROWER COVENANTS

## Section 5.1             AffirmativeCovenants.

From the date hereof anduntil payment and performance in full of all Obligations of Borrower under theLoan Documents, Borrower for itself and for each Key Entity hereby covenantsand agrees with Lender that:

### 5.1.1        Existence;Compliance with Legal Requirements.

#### (a)           Borrower shall cause each Key Entityto do or cause to be done all things necessary to preserve, renew and keep infull force and effect its existence, rights, licenses, permits and franchises,and comply, in all material respects, with all Legal Requirements applicable toit and the Properties, the Mezzanine Assets and Encumbered Properties except tothe extent the failure to do so would not reasonably be expected to have amaterial adverse affect on the financial condition or business of any KeyEntity or the condition or ownership of any Individual Property, MezzanineAsset or Encumbered Property.  Thereshall never be committed by any Key Entity or any Affiliate of any Key Entityin occupancy of or involved with the operation or use of any IndividualProperty, Mezzanine Asset or Encumbered Property any act or omission affordingthe federal government or any State or local government the right of forfeitureagainst any Individual Property, Mezzanine Asset or Encumbered Property or anypart thereof or any monies paid in performance of Borrower’s obligations underany of the Loan Documents.  Each KeyEntity shall use its best efforts to cause no other Person in occupancy of orinvolved with the operation or use of the Properties, the Mezzanine Assets andEncumbered Properties to perform any act or omission affording the federalgovernment or any State or local government the right of forfeiture against anyIndividual Property, Mezzanine Asset or Encumbered Property or any part thereofor any monies paid in performance of Borrower’s obligations under any of theLoan Documents.  Borrower herebycovenants and agrees not to commit, permit or suffer to exist any act oromission affording such right of forfeiture. Each Key Entity shall keep theProperties, the Mezzanine Assets and Encumbered Properties in good workingorder and repair (ordinary wear and tear excepted), and from time to time make,or cause to be made, all commercially reasonably necessary repairs, renewals,replacements, betterments and improvements thereto.  Borrower shall cause each Key Entity tooperate any Individual Property, Mezzanine Asset or Encumbered Property that isthe subject of any O&M Program in accordance with the terms and provisionsthereof in all material respects.

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#### (b)           After prior written notice to Lender,Borrower or Property Guarantor, at its own expense, may contest by appropriatelegal proceeding promptly initiated and conducted in good faith and with duediligence, the validity of any Legal Requirement, the applicability of anyLegal Requirement to Borrower or Property Guarantor or any Individual Propertyor any alleged violation of any Legal Requirement, provided that (i) noEvent of Default has occurred and remains uncured; (ii) such proceeding shallbe permitted under and be conducted in accordance with the provisions of anyinstrument to which Borrower or Property Guarantor is subject and shall notconstitute a default thereunder and such proceeding shall be conducted inaccordance with all Applicable Laws; (iii) no Individual Property nor any partthereof or interest therein will be in danger of being sold, forfeited,terminated, cancelled or lost; (iv) Borrower or Property Guarantor shallpromptly upon final determination thereof comply with any such LegalRequirement determined to be valid or applicable or cure any violation of anyLegal Requirement; (v) such proceeding shall suspend the enforcement of thecontested Legal Requirement against Borrower or Property Guarantor or anyIndividual Property; and (vi) Borrower or Property Guarantor shall furnishsuch security as may be required in the proceeding, or as may be reasonablyrequested by Lender, to insure compliance with such Legal Requirement, togetherwith all interest and penalties payable in connection therewith.  Lender may apply any such security or partthereof, as necessary to cause compliance with such Legal Requirement at anytime when, in the reasonable judgment of Lender, the validity, applicability orviolation of such Legal Requirement is finally established or any IndividualProperty (or any part thereof or interest therein) shall be in danger of beingsold, forfeited, terminated, cancelled or lost.

#### (c)           Borrower shall not cause or permitany Mezzanine Subsidiary or Mezzanine Asset Owner to contest any LegalRequirement unless such contest is conducted in accordance with, and subject tothe provisions of, clause (b) above.

### 5.1.2        Taxesand Other Charges.

#### (a)           Borrower shall pay or cause PropertyGuarantor to pay all Taxes and Other Charges now or hereafter levied orassessed or imposed against the Properties or any part thereof as the samebecome due and payable.  Borrower orProperty Guarantor shall furnish to Lender evidence for the payment of all materialTaxes and the Other Charges prior to the date the same shall become delinquentand shall promptly deliver to Lender receipts evidencing such payment as soonas they become available.  NeitherBorrower nor Property Guarantor shall suffer and shall promptly cause to bepaid and discharged any Lien or charge whatsoever which may be or become a Lienor charge against the Properties, and shall promptly pay for all utilityservices provided to the Properties for which Borrower is liable.  After prior written notice to Lender,Borrower or Property Guarantor, at its own expense, may contest by appropriatelegal proceeding, promptly initiated and conducted in good faith and with duediligence, the amount or validity or application in whole or in part of anyTaxes or Other Charges, provided that (i) no Event of Default hasoccurred and remains uncured; (ii) such proceeding shall be permitted under andbe conducted in accordance with the provisions of any other instrument to whichBorrower or Property Guarantor is subject and shall not constitute a defaultthereunder and such proceeding shall be conducted in accordance with all

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#### ApplicableLaws; (iii) no Individual Property nor any part thereof or interest thereinwill be in danger of being sold, forfeited, terminated, cancelled or lost; (iv)Borrower or Property Guarantor shall promptly upon final determination thereofpay the amount of any such Taxes or Other Charges, together with all costs,interest and penalties which may be payable in connection therewith; (v) suchproceeding shall suspend the collection of such contested Taxes or OtherCharges from the applicable Individual Property; and (vi) Borrower or PropertyGuarantor shall furnish such security as may be required in the proceeding, oras may be reasonably requested by Lender (including, without limitation, theposting of a bond acceptable to Lender), to insure the payment of any suchTaxes or Other Charges, together with all interest and penalties thereon.  Lender may apply such security or part thereofheld by Lender at any time when, in the reasonable judgment of Lender, thevalidity or applicability of such Taxes or Other Charges are established or anyIndividual Property (or part thereof or interest therein) shall be in danger ofbeing sold, forfeited, terminated, cancelled or lost or there shall be anydanger of the Lien of any Security Instrument being primed by any related Lien.

#### (b)           Borrower shall not suffer, nor permitany Mezzanine Subsidiary or Mezzanine Asset Owner to suffer, and shall promptlycause to be paid and discharged, any Lien or charge whatsoever which may be orbecome a Lien or charge against any Mezzanine Asset, and shall promptly pay forall utility services provided to the Mezzanine Assets for which any MezzanineSubsidiary or Mezzanine Asset Owner is liable. Borrower shall not cause or permit any Mezzanine Subsidiary or MezzanineAsset Owner to contest any Taxes or Other Charges unless such contest isconducted in accordance with, and subject to the provisions of, clause (a)above.

### 5.1.3        Litigation.

After written receiptthereof by Borrower or any Key Entity, Borrower shall give prompt writtennotice to Lender of any litigation or governmental proceedings pending orthreatened against any Key Entity or any Guarantor which might materiallyadversely affect (the financial) condition or business of any Key Entity or anyGuarantor or the condition or ownership of any Individual Property, MezzanineAsset or Encumbered Property.

### 5.1.4        Accessto Properties.

Borrower shall permit,and shall cause each applicable Key Entity to permit, agents, representativesand employees of Lender to inspect the Properties, Mezzanine Assets andEncumbered Properties, as the case may be, or any part thereof at reasonablehours upon reasonable advance notice accompanied by a representative of Borrower(if so elected by Borrower), subject to the rights of tenants and parties underany applicable reciprocal easement agreement.

### 5.1.5        Noticeof Default.

Borrower shall promptlyadvise Lender of any material adverse change in any Key Entity’s condition, financialor otherwise.

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5.1.6        Cooperate in Legal Proceedings.

Borrower shall cooperatefully with Lender with respect to any proceedings before any court, board orother Governmental Authority which may in any way materially adversely affectthe rights of Lender hereunder or any rights obtained by Lender under any ofthe other Loan Documents and, in connection therewith, permit Lender, at itselection, to participate in any such proceedings.

### 5.1.7        Awardand Insurance Benefits.

Upon Lender’s reasonablerequest, Borrower shall cooperate, and cause each Property Guarantor tocooperate, with Lender in obtaining for Lender the benefits of any Awards orInsurance Proceeds lawfully or equitably payable in connection with anyIndividual Property, and Lender shall be reimbursed for any out-of-pocketexpenses incurred in connection therewith (including reasonable attorneys’ feesand disbursements, and the payment by Borrower or Property Guarantor of theexpense of an appraisal on behalf of Lender in case of Casualty or Condemnationaffecting any Individual Property or any part thereof) out of such Award orInsurance Proceeds.

### 5.1.8        FurtherAssurances.

Borrower shall, and shallcause each Property Guarantor and Mezzanine Subsidiary, at Borrower’s sole costand expense, to:

#### (a)           furnish to Lender all instruments,documents, boundary surveys, footing or foundation surveys, certificates, plansand specifications, appraisals, title and other insurance reports andagreements, and each and every other document, certificate, agreement andinstrument required to be furnished by Borrower or Property Guarantor pursuantto the terms of the Loan Documents;

#### (b)           execute and deliver to Lender suchdocuments, instruments, certificates, assignments and other writings, and dosuch other acts necessary or desirable, to evidence, preserve and/or protectthe collateral at any time securing or intended to secure the obligations ofBorrower under the Loan Documents, as Lender may reasonably require including,without limitation, the authorization of Lender to execute or file and/or theexecution or filing by Borrower, Mezzanine Subsidiary or Property Guarantor ofUCC financing statements and the execution and delivery of all such writingsnecessary to transfer any liquor licenses into the name of Lender or itsdesignee after the occurrence and during the continuance of any Event ofDefault; and

#### (c)           do and execute all and such furtherlawful and reasonable acts, conveyances and assurances for the better and moreeffective carrying out of the intents and purposes of this Agreement and theother Loan Documents, as Lender shall reasonably require from time to timeprovided the same is consistent with the intent of the Loan Documents andcreates no new obligations on, or liability to, Borrower or Property Guarantoror Mezzanine Subsidiary other than as intended pursuant to the Loan Documentsor otherwise to a de minimis extent.

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#### 5.1.9        Mortgage and Intangible Taxes.

Borrower shall pay orcause to be paid all State, county and municipal recording, mortgage, intangible,and all other taxes imposed upon the execution and recordation of the SecurityInstruments and/or upon the execution and delivery of the Note, the Guarantyand the Pledge Agreement.

### 5.1.10      FinancialReporting.

So long as the Debt shallremain unpaid or unsatisfied, Borrower shall:

##### (a)      deliver to Lender, in form and detailsatisfactory to Lender:

##### (i)       as soon as available,but in any event within ninety (90) days after the end of each fiscal year ofthe Trust, a consolidated balance sheet of the Trust as at the end of suchfiscal year, and the related consolidated statements of income or operations,shareholders’ equity and cash flows for such fiscal year, setting forth in eachcase in comparative form the figures for the previous fiscal year, all inreasonable detail and prepared in accordance with GAAP, such consolidatedstatements to be audited and accompanied by a report and opinion of anindependent certified public accountant of nationally recognized standingreasonably acceptable to the Lender, which report and opinion shall be preparedin accordance with generally accepted auditing standards and shall not besubject to any “going concern” or like qualification or exception or anyqualification or exception as to the scope of such audit and such consolidatingstatements to be certified by a Responsible Officer of the Trust to the effectthat such consolidated statements are fairly stated in all material respectswhen considered in relation to the consolidated financial statements of theTrust;

##### (ii)      as soon as available,but in any event within forty-five (45) days after the end of each of the firstthree (3) fiscal quarters of each fiscal year of the Trust, a consolidatedbalance sheet of the Trust as at the end of such fiscal quarter, and the relatedconsolidated statements of income or operations and cash flows for such fiscalquarter and for the portion of the Trust’s fiscal year then ended, settingforth in each case in comparative form the figures for the corresponding fiscalquarter of the previous fiscal year and the corresponding portion of theprevious fiscal year, all in reasonable detail, such consolidated statements tobe certified by a Responsible Officer of the Trust as fairly presenting thefinancial condition, results of operations and cash flows of the companies inaccordance with GAAP, subject only to normal year-end audit adjustments and theabsence of footnotes and such consolidating statements to be certified by aResponsible Officer of the Trust to the effect that such statements are fairlystated in all material respects when considered in relation to the consolidatedfinancial statements of the Trust; and

##### (iii)     Borrower will furnish,or cause to be furnished, to Lender on or before forty-five (45) days after theend of each calendar quarter the following

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##### items,accompanied by an Officer’s Certificate stating that such items are true,correct, accurate, and complete and fairly present results of the operations ofProperty Guarantors and Mezzanine Asset Owners and the Individual Propertiesand the Mezzanine Assets (subject to normal year-end adjustments): (i) a rentroll and sales reports from retail tenants for the subject quarter, asapplicable, accompanied by an Officer’s Certificate with respect thereto and(ii) quarterly and year-to-date operating statements prepared for each calendarquarter noting net operating income, gross income from operations, andoperating expenses, and other information requested by Lender and necessary andsufficient to fairly represent the results of operation of the Propertiesduring such calendar quarter and containing a comparison of budgeted income andexpenses and the actual income and expenses, all in form reasonablysatisfactory to Lender.

##### (iv)    Borrower will furnish, orcause to be furnished, to Lender on or before forty-five (45) days after theend of each calendar quarter a listing of all properties directly or indirectlyowned by Borrower, any Key Entity and any Encumbered Property Subsidiarycertified by a Responsible Officer of Borrower.

#### (b)           concurrently with the delivery of thefinancial statements referred to in clause (a)(i), a certificate of itsindependent certified public accountants certifying such financial statementsand stating that in making the examination necessary therefor no knowledge wasobtained of any Default under the financial covenants set forth herein or, ifany such Default shall exist, stating the nature and status of such event;

#### (c)           concurrently with the delivery of thefinancial statements referred to in clause (a), a duly completedCompliance Certificate certifying Borrower’s compliance with the covenants setforth in Sections 5.3 and 5.4 accompanied by all calculationsnecessary to make such compliance certifications;

#### (d)           promptly after any request by Lender,copies of any detailed audit reports, management letters or recommendationssubmitted to the board of directors (or the audit committee of the board ofdirectors) of the Trust by independent accountants in connection with theaccounts or books of the companies, or any audit of any of them;

#### (e)           promptly after the same areavailable, copies of each annual report, proxy or financial statement or otherreport or communication sent to the stockholders of the Trust or Borrower, andcopies of all annual, regular, periodic and special reports and registrationstatements which the Trust or Borrower may file or be required to file with theSEC under Section 13 or 15(d) of the Securities Exchange Act of 1934; and

#### (f)            promptly, such additionalinformation regarding the business, financial or corporate affairs of thecompanies, or compliance with the terms of the Loan Documents, as Lender mayfrom time to time reasonably request.

### 5.1.11      Businessand Operations.

Borrower and Key Entitywill continue in all material respects to engage in the businesses presentlyconducted by it as and to the extent the same are necessary for the

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ownership, maintenance,management and operation of the Properties, the Mezzanine Assets and theEncumbered Properties.  Borrower shallcause each Key Entity to remain in good standing under the laws of eachjurisdiction to the extent required to continue to conduct its business as thesame is conducted on the date hereof, except to the extent the failure to do sowould not reasonably be expected to have a material adverse affect on thefinancial condition or business of such Key Entity or the condition orownership of any Individual Property, Mezzanine Asset or EncumberedProperty.  Borrower shall cause eachIndividual Property and Mezzanine Asset to be in compliance with ApplicableLaws except to the extent the failure to do so would not be reasonably likelyto have a Material Adverse Effect.

### 5.1.12      Costsof Enforcement.

In the event (a) that theSecurity Instrument encumbering the Property is foreclosed in whole or in partor that the Security Instrument is, following the occurrence of an Event ofDefault, put into the hands of an attorney for collection, suit, action orforeclosure, (b) of the foreclosure of any mortgage prior to or subsequent tothe Security Instrument encumbering the Property in which proceeding Lender ismade a party, (c) that the Pledge Agreement encumbering the MezzanineCollateral is foreclosed in whole or in part or the subject of a UCC Sale orthat the Pledge Agreement is, following the occurrence of an Event of Default,put into the hands of an attorney for collection, suit, action or foreclosureor (d) of the bankruptcy, insolvency, rehabilitation or other similarproceeding in respect of any Key Entity or an assignment by a Key Entity forthe benefit of its creditors, Borrower, its successors or assigns, shall bechargeable with and agrees to pay all costs of collection and defense,including reasonable attorneys’ fees and costs, incurred by Lender or Borrowerin connection therewith and in connection with any appellate proceeding or postjudgment action involved therein, together with all required service or usetaxes.

### 5.1.13      EstoppelStatement.

#### (a)           After request by Lender, Borrowershall within ten (10) Business Days furnish Lender with a statement, dulyacknowledged and certified, setting forth (i) the amount of the originalprincipal amount of the Note, (ii) the unpaid principal amount of the Note,(iii) the Applicable Interest Rate of the Note, (iv) the date installments of interestand/or principal were last paid, (v) to the best of Borrower’s knowledge, anyoffsets or defenses to the payment of the Debt, and (vi) that the Note, thisAgreement, the Security Instruments and the other Loan Documents are valid,legal and binding obligations and have not been modified or if modified, givingparticulars of such modification.

#### (b)           After request by Borrower, Lendershall within ten (10) Business Days furnish Borrower with a statement, dulyacknowledged and certified, setting forth (i) the amount of the originalprincipal amount of the Note, (ii) the unpaid principal amount of the Note,(iii) the Applicable Interest Rate of the Note, (iv) the date installments ofinterest and/or principal were last paid and (iv) that the Note, thisAgreement, the Security Instrument have not been modified or if modified,giving particulars of such modification.

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### 5.1.14      Loan Proceeds.

Borrower shall use theproceeds of the Loan received by it on the Closing Date only for the purposesset forth in Section ‎2.1.4 and Section 2.1.5.

### 5.1.15      Performance by Borrower.

Borrower shall in atimely manner observe, perform and fulfill each and every covenant, term andprovision of each Loan Document executed and delivered by, or applicable to,Borrower.

### 5.1.16      Leasing Matters.

#### (a)           Priorto execution of any Leases of space in the Improvements after the date hereof,Borrower shall submit to Lender, for Lender’s prior approval, which approvalshall not be unreasonably withheld, a copy of the form Lease each PropertyGuarantor plans to use in leasing space in the Improvements or at anyIndividual Property.  All such Leases ofspace in the Improvements or at any Individual Property shall be on termsconsistent with the terms for similar leases in the market area of theProperty, shall provide for market rents then prevailing in the market area ofthe applicable Individual Property or Mezzanine Asset and with respect to asubstantial portion of such Leases, shall be for a term of not less than six(6) months or greater than one (1) year. Borrower shall also submit to Lender for Lender’s approval, whichapproval shall not be unreasonably withheld, prior to the execution thereof,any proposed Lease of the Improvements or any portion thereof that differsmaterially and adversely from the aforementioned form Lease.  Borrower shall not permit and PropertyGuarantor nor any Mezzanine Asset Owner to execute any Lease for all or asubstantial portion of any Individual Property or Mezzanine Asset, except foran actual occupancy by the tenant, lessee or licensee thereunder, and shall atall times promptly and faithfully perform, or cause to be performed, all of thecovenants, conditions and agreements contained in all Leases with respect toany Individual Property or Mezzanine Asset, now or hereafter existing, on thepart of the landlord, lessor or licensor thereunder to be kept and performed.  Borrower shall furnish to Lender, within ten(10) days after a request by Lender to do so, but in any event by January 1 ofeach year, a current Rent Roll, certified by the applicable Property Guarantoror Mezzanine Asset Owner as being true and correct, containing the names of allTenants with respect to each Individual Property and Mezzanine Asset,respectively, the terms of their respective Leases, the spaces occupied and therentals or fees payable thereunder and the amount of each Tenant’s securitydeposit.  Upon the request of Lender,Borrower shall cause each Property Guarantor and Mezzanine Asset Owner todeliver to Lender a copy of each such Lease. Borrower shall not do or suffer to be done, nor permit any PropertyGuarantor or Mezzanine Asset owner to do or suffer to be done, any act, or omitto take any action, that might result in a default by the landlord, lessor orlicensor under any such Lease or allow the tenant thereunder to withholdpayment of rent or cancel or terminate same and shall not further assign anysuch Lease or any such Rents.  Borrowershall cause each Property Guarantor and Mezzanine Asset Owner, at no cost orexpense to Lender, shall enforce, short of termination, the performance andobservance of each and every 

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#### material condition and covenant of each of the parties under suchLeases and no Property Guarantor nor Mezzanine Asset Owner shall anticipate,discount, release, waive, compromise or otherwise discharge any rent payableunder any of the Leases except in the normal course of business in a mannerwhich is consistent with sound and customary leasing and management practicesfor similar properties in the community in which the applicable IndividualProperty or Mezzanine Asset is located. Notwithstanding the foregoing, at any time and from time to time, Lendershall be entitled to, and Borrower shall cause each Property Guarantor andMezzanine Asset Owner to grant the Lender the right to, undertake any and allaction as may be required (in the sole discretion of Lender) to cure anydefault, or event which with the passage of time following any notice and cureperiod shall constitute a default by Property Guarantor or Mezzanine AssetOwner, as the case may be, under such Leases. No Property Guarantor or Mezzanine Asset Owner shall, without the priorwritten consent of Lender, modify any of the Leases, terminate or accept thesurrender of any Leases, waive or release any other party from the performanceor observance of any obligation or condition under such Leases except in the normalcourse of business in a manner which is consistent with sound and customaryleasing and management practices for similar properties in the community inwhich the applicable Individual Property or Mezzanine Asset is located.

### 5.1.17      Management Agreement.

#### (a)           TheProperties and Mezzanine Assets are operated under the terms and conditions ofthe Management Agreements.  In no eventshall the management fees under any Management Agreement (but excludingconstruction, leasing and ancillary fees) exceed 4% of the gross income derivedfrom the applicable Individual Property or Mezzanine Asset.  Borrower shall cause each Property Guarantorand each Mezzanine Asset Owner to (i) diligently perform and observe allof the material terms, covenants and conditions of the Management Agreements,on the part of Property Guarantor or Mezzanine Asset Owner, as the case may be,to be performed and observed to the end that all things shall be done which arenecessary to keep unimpaired the rights of Property Guarantor or MezzanineAsset Owner, under the Management Agreements and (ii) promptly notify Lender ofthe giving of any notice by Manager to Property Guarantor or any MezzanineAsset Owner of any default beyond any applicable notice and cure period byBorrower in the performance or observance of any of the terms, covenants orconditions of any Management Agreement on the part of Property Guarantor orMezzanine Asset Owner to be performed and observed and deliver to Lender a truecopy of each such notice.  No PropertyGuarantor nor Mezzanine Asset Owner shall surrender any Management Agreement,consent to the assignment by the Manager of its interest under the applicableManagement Agreement, or terminate or cancel any Management Agreement, ormodify, change, supplement, alter or amend any Management Agreement, in anymaterial respect, either orally or in writing. If Property Guarantor or any Mezzanine Asset Owner shall default in theperformance or observance of any material term, covenant or condition of anyManagement Agreement on the part of Property Guarantor or such Mezzanine AssetOwner to be performed or observed, then, without limiting the generality of theother provisions of this Agreement, Lender shall have the right, but shall beunder no obligation, to pay any 

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#### sums and to perform any act or take any action as may be appropriate tocause all the terms, covenants and conditions of any Management Agreement onthe part of Property Guarantor or Mezzanine Asset Owner to be performed orobserved to be promptly performed or observed on behalf of Property Guarantoror Mezzanine Asset Owner, as the case may be, to the end that the rights ofProperty Guarantor or Mezzanine Asset Owner, as the case may be, in, to andunder the Management Agreements shall be kept unimpaired and free fromdefault.  Lender and any Persondesignated by Lender shall have, and are hereby granted, upon reasonable priornotice to Property Guarantor and Mezzanine Asset Owner and subject to therights of tenants, the right to enter upon the applicable Individual Propertyor Mezzanine Asset at any time and from time to time for the purpose of takingany such action.  If the Manager shalldeliver to Lender a copy of any notice sent to Property Guarantor or MezzanineAsset Owner of default under any Management Agreement, such notice shallconstitute full protection to Lender for any action taken or omitted to betaken by Lender in good faith, in reliance thereon.  Except as expressly provided in theManagement Agreements, neither Property Guarantor nor Mezzanine Asset Ownershall, and shall not permit the Manager to, sub-contract any or all of itsmanagement responsibilities under any Management Agreement to a third-partywithout the prior written consent of Lender, which consent shall not beunreasonably withheld, conditioned or delayed. Borrower shall cause Property Guarantor and Mezzanine Asset Owner to,from time to time, obtain from the Manager such certificates of estoppel withrespect to compliance by Property Guarantor and Mezzanine Asset Owner with theterms of the applicable Management Agreement as may be reasonably requested byLender.  Any sums expended by Lenderpursuant to this paragraph (i) shall bear interest at the Default Rate from thedate such cost is incurred to the date of payment to Lender, (ii) shall bedeemed to constitute a portion of the Debt, (iii) shall be secured by the lienof the Pledge Agreement and Security Instruments and the other Loan Documentsand (iv) shall be immediately due and payable upon demand by Lender therefor.

#### (b)           Withoutlimitation of the foregoing, Borrower shall cause Property Guarantor andMezzanine Asset Owner, upon the request of Lender, to terminate any or all ofthe Management Agreements and replace the Manager, without penalty or fee, ifat any time during the Loan: (a) any Manager shall become insolvent or a debtorin any bankruptcy or insolvency proceeding, (b) there exists an uncured Eventof Default or (c) there exists a material event of default beyond anyapplicable notice and cure period by Manager under any ManagementAgreement.  At such time as the Managermay be removed, a Qualified Manager shall assume management of the applicableIndividual Property pursuant to a Replacement Management Agreement.

#### (c)           Notwithstandingthe foregoing, Borrower may permit Property Guarantor and Mezzanine Asset Ownerto terminate any Management Agreement in accordance with its terms and appointa successor Manager upon thirty (30) days prior written notice to Lender,provided (i) that the successor Manager is a Qualified Manager and (ii)Property Guarantor or Mezzanine Asset Owner, as the case may be, and thesuccessor Manager enter into a Replacement Management Agreement.

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### 5.1.18      Environmental Covenants.

#### (a)           Borrowercovenants and agrees that so long as the Loan is outstanding (i) all uses andoperations on or of the Properties, whether by any Key Entity or any otherPerson, shall be in compliance in all material respects with all EnvironmentalLaws and permits issued pursuant thereto; (ii) there shall be no Releases ofHazardous Materials in, on, under or from any of the Properties, MezzanineAssets or Encumbered Properties except in compliance in all respects with allEnvironmental Laws; (iii) there shall be no Hazardous Materials in, on, orunder any of the Properties, Mezzanine Assets or Encumbered Properties, exceptthose that are both (A) in compliance with all Environmental Laws and withpermits issued pursuant thereto, if and to the extent required, and (B) (1) inamounts not in excess of that necessary to operate, clean, repair or maintainthe applicable Individual Property, Mezzanine Asset or Encumbered Property or(2) used in the conduct of business of a tenant or a product sold to the publicpursuant to the operations of such tenant’s business; (iv) Borrower shall keep,or cause to be kept, the Properties, Mezzanine Assets or Encumbered Propertiesfree and clear of all liens and other encumbrances imposed pursuant to anyEnvironmental Law, whether due to any act or omission of any Key Entity or anyother Person (the “EnvironmentalLiens”); (v) Borrower shall, and shall cause each Key Entityto, at its sole cost and expense, fully and expeditiously cooperate in allactivities pursuant to paragraph (b) below, including but not limited toproviding all relevant information and making knowledgeable persons availablefor interviews; (vi) Borrower shall, and shall cause each Key Entity to, at itssole cost and expense, perform any environmental site assessment or otherinvestigation of environmental conditions in connection with the Properties,Mezzanine Assets or Encumbered Properties, pursuant to any reasonable writtenrequest of Lender, upon Lender’s reasonable belief that an Individual Property,Mezzanine Asset or Encumbered Property is not in full compliance with allEnvironmental Laws, and share with Lender the reports and other resultsthereof, and Lender and other Indemnified Parties shall be entitled to rely onsuch reports and other results thereof; (vii) Borrower shall, and shall causeeach Key Entity to, at its sole cost and expense, comply with all reasonablewritten requests of Lender to (A) reasonably effectuate remediation of anyHazardous Materials in, on, under or from any Individual Property, MezzanineAsset or Encumbered Property; for which remediation is required pursuant toEnvironmental Law and (B) comply with any Environmental Law; (viii) neitherBorrower nor any Key Entity shall allow any tenant or other user of any of theProperties, Mezzanine Assets or Encumbered Properties to violate any EnvironmentalLaw; and (ix) Borrower shall, and shall cause each Key Entity to, immediatelynotify Lender in writing after it has become aware of (A) any presence orRelease or threatened Releases of Hazardous Materials in, on, under, from ormigrating towards any of the Properties, Mezzanine Assets or EncumberedProperties; (B) any non compliance with any applicable Environmental Lawsrelated in any way to any of the Properties, Mezzanine Assets or EncumberedProperties; (C) any actual or potential Environmental Lien; (D) any required orproposed remediation of environmental conditions relating to any of theProperties, Mezzanine Assets or Encumbered Properties; and (E) any written ororal notice or other communication of which Borrower or any Key Entity becomesaware from any source whatsoever (including but 

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#### not limited to a Governmental Authority) relating in any way toHazardous Materials in connection with the Properties, Mezzanine Assets orEncumbered Properties.

#### (b)           UponLender’s reasonable belief that any Individual Property, Mezzanine Asset orEncumbered Property does not comply with Environmental Laws, Lender and anyother Person designated by Lender, including but not limited to anyrepresentative of a Governmental Authority, and any environmental consultant,and any receiver appointed by any court of competent jurisdiction, shall havethe right, but not the obligation, to enter upon any Properties, MezzanineAssets or Encumbered Properties at all reasonable times and after reasonablenotice to Borrower or the applicable Key Entity, subject to the rights oftenants, to assess any and all aspects of the environmental condition of anyIndividual Property, Mezzanine Asset or Encumbered Property and its use,including but not limited to conducting any environmental assessment or audit(the scope of which shall be determined in Lender’s sole and absolutediscretion) and taking samples of soil, groundwater or other water, air, orbuilding materials, and conducting other invasive testing.  Borrower shall cooperate, and shall causeeach Key Entity to cooperate, with and provide access to Lender and any suchPerson designated by Lender.

### 5.1.19      Alterations.

Borrower shall causeProperty Guarantor and Mezzanine Asset Owner to obtain Lender’s prior writtenconsent to any alterations to any improvements at any Individual Property orMezzanine Asset, which consent shall not be unreasonably withheld, conditionedor delayed except with respect to alterations that may have a material adverseeffect on Borrower’s, Property Guarantor’s or Mezzanine Asset Owner’sconsolidated financial condition or the value of the related IndividualProperty or Mezzanine Asset. Notwithstanding the foregoing, Lender’s consent shall not be required inconnection with any alterations for any Individual Property or Mezzanine Assetthat (A) (i) do not adversely affect the base building, core, shell or thestructural integrity of any improvements thereon, or (ii) would not have amaterial adverse effect on the Individual Property or Mezzanine Asset or (iii)cost less than $50,000 or (B) relate to the performance of tenant improvementson the Property required pursuant to the terms of any Lease otherwise approvedby Lender.

### 5.1.20      OFAC.

At all times throughoutthe term of the Loan, Borrower, Guarantor and their respective Affiliates shallbe in full compliance with all applicable orders, rules, regulations andrecommendations of The Office of Foreign Assets Control of the U.S. Departmentof the Treasury.

### 5.1.21      O&M Program.

Borrower shall cause eachProperty Guarantor and Mezzanine Asset Owner to covenant and agree to implementand follow the terms and conditions of any O&M Program for each applicableIndividual Property or Mezzanine Asset during the term of the Loan, includingany extension or renewal thereof.  Lender’srequirement that Borrower shall cause Property 

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Guarantor and MezzanineAsset Owner to comply with the O&M Program shall not be deemed toconstitute a waiver or modification of any of Borrower’s covenants andagreements with respect to Hazardous Materials or Environmental Laws.

### 5.1.22      Covenants with Respect to Encumbered Properties andEncumbered Property Subsidiaries.

Borrower hereby covenantsfor the benefit of Lender to cause each Encumbered Property and each EncumberedProperty Subsidiary, as the case may be, to comply with the covenants set forthin this Section 5.1 as if such covenants were specified to apply to eachEncumbered Property and/or Encumbered Property Subsidiary, as the case may be,except to the extent that any such failure of the Borrower to cause suchcovenant compliance by an Encumbered Property and/or Encumbered PropertySubsidiary would not have a Material Adverse Effect.

## Section 5.2             Negative Covenants.

From the date hereofuntil payment and performance in full of all Obligations of Borrower under theLoan Documents, Borrower covenants and agrees with Lender that it will not do,directly or indirectly, any of the following:

### 5.2.1        Liens.

Subject to Borrower’sright to contest such Liens in the same manner relating to Taxes set forth in Section5.1.2, Borrower shall not create, incur, assume or suffer to exist any Lienon any portion of any Individual Property or any Mezzanine Asset or permit anysuch action to be taken, except for Permitted Encumbrances.

### 5.2.2        Dissolution.

Borrower shall not (a)engage in any dissolution, liquidation or consolidation or merger with or intoany other business entity, (b) transfer, lease or sell, in one transaction orany combination of transactions, the assets or all or substantially all of theassets of Borrower, (c) except as expressly permitted under the Loan Documents,modify, amend, waive or terminate its organizational documents or itsqualification and good standing in any jurisdiction in any material respect or(d) cause any Key Entity to (i) dissolve, wind up or liquidate or take anyaction, or omit to take an action, as a result of which the Key Entity would bedissolved, wound up or liquidated in whole or in part, or (ii) except asexpressly permitted under the Loan Documents, amend, modify, waive or terminatethe certificate of incorporation, bylaws or similar organizational documents ofthe Key Entity, in each case, without obtaining the prior written consent ofLender.

### 5.2.3        Change In Business.

Borrower shall not enterinto any line of business other than its current business (including providingservices in connection therewith), or make any material change in the scope ornature of its business objectives, purposes or operations or undertake orparticipate in activities other than the continuance of its present business tothe extent it would reasonably be 

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expected to have amaterial adverse affect on the financial condition or business ofBorrower.  Borrower shall not permit anyKey Entity  to enter into any line ofbusiness other than its current business (including providing services inconnection therewith), or make any material change in the scope or nature ofits business objectives, purposes or operations or undertake or participate inactivities other than the continuance of its present business to the extent itwould reasonably be expected to have a material adverse affect on the financialcondition or business of such Key Entity or the condition or ownership of anyIndividual Property or Mezzanine Asset.

### 5.2.4        Debt Cancellation.

Borrower shall not cancelor otherwise forgive or release any material claim or debt (other thantermination of Leases in accordance herewith or the settlement of a disputewith a provider of materials or services in the ordinary course of Borrower’sbusiness) owed to Borrower by any Person, except for adequate consideration andin the ordinary course of Borrower’s business. Borrower shall not permit any Key Entity to cancel or otherwise forgiveor release any material claim or debt (other than termination of Leases inaccordance herewith or the settlement of a dispute with a provider of materialsor services in the ordinary course of such Key Entity’s business) owed to suchKey Entity by any Person, except for adequate consideration and in the ordinarycourse of such Key Entity’s business.

### 5.2.5        Zoning.

No Key Entity shallinitiate or consent to any zoning reclassification of any portion of anyIndividual Property or Mezzanine Asset or seek any variance under any existingzoning ordinance or use or permit the use of any portion of any IndividualProperty or Mezzanine Asset in any manner that could reasonably be expected toresult in the current use becoming a non conforming use under any applicablezoning ordinance or any other Applicable Law without the prior written consentof Lender, which consent shall not be unreasonably withheld, conditioned ordelayed.

### 5.2.6        No Joint Assessment.

Borrower shall not, norpermit any Property Guarantor or Mezzanine Asset Owner to, suffer, permit orinitiate the joint assessment of any Individual Property or Mezzanine Assetwith (a) any other real property constituting a tax lot separate from suchIndividual Property or Mezzanine Asset, or (b) any portion of such IndividualProperty or Mezzanine Asset which may be deemed to constitute personalproperty, or any other procedure whereby the Lien of any taxes which may belevied against such personal property shall be assessed or levied or charged tosuch Individual Property or Mezzanine Asset.

### 5.2.7        Name, Identity, Structure, or Principal Place of Business.

Borrower shall not changeits name, identity (including its trade name or names), or  principal place of business set forth in theintroductory paragraph of this Agreement, without, in each case, first givingLender thirty (30) days prior written notice. Borrower shall not permit any Property Guarantor or Mezzanine Subsidiaryto change its name, identity (including its trade name or names), or  principal place of business from that whichexists on the date hereof, without, in each case, first giving Lender thirty(30) days prior written notice.  Borrowershall 

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not change its corporate,partnership or other structure (except as expressly permitted in Section5.2.10), or the place of its organization as set forth in Section ‎4.1.34,without, in each case, the consent of Lender. Borrower shall not permit any Property Guarantor or Mezzanine Subsidiaryor Mezzanine Asset Owner to change its corporate, partnership or otherstructure, or the place of its organization, without, in each case, the consentof Lender. Upon Lender’s request, Borrower shall execute and deliver, and causeeach Property Guarantor and Mezzanine Subsidiary to deliver, additionalfinancing statements, security agreements and other instruments which may benecessary to effectively evidence or perfect Lender’s security interest in theProperty or Mezzanine Collateral as a result of such change of principal placeof business or place of organization.

### 5.2.8        ERISA.

#### (a)           Duringthe term of the Loan or of any obligation or right hereunder, Borrower shallnot be a Plan and none of the assets of Borrower shall constitute Plan Assets.

#### (b)           Borrowerfurther covenants and agrees to deliver to Lender such certifications or otherevidence from time to time throughout the term of the Loan, as reasonablyrequested by Lender represents and covenants that (A) Borrower is not and doesnot maintain an “employee benefit plan” as defined in Section 3(3) of ERISA,which is subject to Title I of ERISA, or a “governmental plan” within themeaning of Section 3(32) of ERISA; (B) Borrower is not subject to Statestatutes regulating investments and fiduciary obligations with respect togovernmental plans; and (C) one or more of the following circumstances is true:

##### (i)       Equityinterests in Borrower are publicly offered securities, within the meaning of 29C.F.R. §2510.3 101(b)(2);

##### (ii)      Lessthan twenty-five percent (25%) of each outstanding class of equityinterests in Borrower are held by “benefit plan investors” within the meaningof 29 C.F.R. §2510.3 101(f)(2); or

##### (iii)     Borrowerqualifies as an “operating company” or a “real estate operating company” withinthe meaning of 29 C.F.R. §2510.3 101(c) or (e).

### 5.2.9        Affiliate Transactions.

Borrower shall not enterinto, or be a party to, any transaction with an Affiliate of Borrower except inthe ordinary course of business and on terms which are fully disclosed toLender in advance and are no less favorable to Borrower or such Affiliate thanwould be obtained in a comparable arm’s-length transaction with anunrelated third-party.

### 5.2.10      Transfers.

#### (a)           Borrowershall not (i) cause or permit Property Guarantor nor any Mezzanine Asset Ownerto sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grantoptions with respect to, or otherwise transfer or dispose of (directly or 

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#### indirectly, voluntarily or involuntarily, by operation of law orotherwise, and whether or not for consideration or of record) any IndividualProperty or any Mezzanine Asset or any part thereof or any legal or beneficialinterest therein or (ii) cause or permit a Sale or Pledge of an interest in anyRestricted Party other than interest in the Trust (collectively, a “Transfer”), other thanpursuant to Leases of space in the Improvements to tenants in accordance withthe provisions of Section ‎5.1.16 hereof.

#### (b)           ATransfer shall include, but not be limited to: (i) an installment salesagreement wherein Property Guarantor or any Mezzanine Asset Owner agrees tosell one or more Individual Properties or Mezzanine Assets or any part thereoffor a price to be paid in installments; (ii) an agreement by any PropertyGuarantor or any Mezzanine Asset Owner leasing all or a substantial part of anyIndividual Property or Mezzanine Asset for other than actual occupancy by atenant thereunder or a sale, assignment or other transfer of, or the grant of asecurity interest in, Property Guarantor’s or Mezzanine Asset Owner’s right,title and interest in and to any Leases or any Rents; (iii) if a RestrictedParty is a corporation, any merger, consolidation or Sale or Pledge of suchcorporation’s stock or the creation or issuance of new stock; (iv) if aRestricted Party is a limited or general partnership or joint venture, anymerger or consolidation or the change, removal, resignation or addition of ageneral partner or the Sale or Pledge of the partnership interest of anygeneral partner or limited partner or any profits or proceeds relating to suchpartnership interest, or the Sale or Pledge of limited partnership interests orany profits or proceeds relating to such limited partnership interests or thecreation or issuance of new limited partnership interests; (v) if a RestrictedParty is a limited liability company, any merger or consolidation or thechange, removal, resignation or addition of a managing member or non-membermanager (or if no managing member, any member) or the Sale or Pledge of themembership interest of a managing member (or if no managing member, any member)or any profits or proceeds relating to such membership interest, or the Sale orPledge of non-managing membership interests or the creation or issuanceof new non-managing membership interests; (vi) if a Restricted Party is atrust or nominee trust (other than the Trust), any merger, consolidation or theSale or Pledge of the legal or beneficial interest in a Restricted Party or thecreation or issuance of new legal or beneficial interests; or (vii) the removalor the resignation of the Manager (including, without limitation, an AffiliatedManager) other than in accordance with Section ‎5.1.17 hereof.

#### (c)           Lendershall not be required to demonstrate any actual impairment of its security orany increased risk of default hereunder in order to declare the Debtimmediately due and payable upon a Transfer in violation of this Section5.2.10.  This provision shall applyto every Transfer (other than a taking by eminent domain) regardless of whethervoluntary or not, or whether or not Lender has consented to any previousTransfer.

#### (d)           Borrowermay permit Property Guarantor or Mezzanine Asset Owner, with Lender’s consent,which consent shall not be unreasonably withheld, grant easements,restrictions, covenants, reservations and rights of way in the ordinary courseof business for access, water and sewer lines, telephone and telegraph lines,electric lines or other utilities or for other similar purposes or otherpurposes (which may 

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#### include amendments to existing reciprocal easement agreements)reasonably approved by Lender, provided that no such encumbrance oramendment set forth in this clause (d) shall materially impair the utility,operation and use of the applicable Individual Property or Mezzanine Asset orotherwise have a material adverse effect on the applicable Individual Propertyor Mezzanine Asset.  In connection withany such grant permitted pursuant to this Section 5.2.10(d), Lendershall execute and deliver any instrument reasonably necessary or appropriate tosubordinate the Lien of the Security Instrument to such easements,restrictions, covenants, reservations and rights of way or other similar grantsupon receipt by Lender of: (a) fifteen (15) days prior written notice thereof;(b) a copy of the instrument or instruments of such grant; (c) an Officer’sCertificate stating that such grant does not materially impair the utility,operation and use of the Individual Property or Mezzanine Asset or have amaterial adverse effect on the consolidated financial condition or business ofBorrower or Property Guarantor’s or Mezzanine Asset Owner’s or the condition orownership of the Individual Property or Mezzanine Asset, as the case may be;and (d) reimbursement of all of Lender’s reasonable out-of-pocket costs andexpenses incurred in connection with such grant.

### 5.2.11      Limitation on Distributions.

From and after theoccurrence of an Event of Default specified in Section 8.1(a)(i), (a)(vi)or (a)(vii), Borrower shall not make any distributions of any nature.

### 5.2.12      Negative Covenants with Respect to Encumbered Properties andEncumbered Property Subsidiaries.

Borrower hereby covenantsfor the benefit of Lender to cause each Encumbered Property and each EncumberedProperty Subsidiary, as the case may be, to comply with the covenants set forthin this Section 5.2 as if such covenants were specified to apply to eachEncumbered Property and/or Encumbered Property Subsidiary, as the case may be,except to the extent that any such failure of the Borrower to cause suchcovenant compliance by an Encumbered Property and/or Encumbered PropertySubsidiary would not have a Material Adverse Effect.

## Section 5.3             Financial and REIT StatusCovenants.

#### (a)           Borrowershall maintain at all times a Fixed Charge Coverage Ratio of not less than 1.25to 1.00.  The Fixed Charge Coverage Ratioshall be calculated as the quotient of (i) the trailing twelve-monthnet operating income at owned Student Housing Projects net of a management feerepresenting 3% of aggregate student housing revenue and a turnover expense ofthe greater of (A) $125 per bed or (B) actual turnover expenses incurred perbed, less a capital reserve of $125 per bed in aggregate, and (ii) the sum ofConsolidated Interest Charges****(excludingunamortized upfront fees that shall be recorded in respect to the CreditAgreement and upfront fees that shall be recorded pertaining to the Loan),principal amortization and preferred dividends of the Borrower and any of itsSubsidiary entities, as calculated over the same time period. For any propertyowned less than one (1) year the turnover expenses and capital reserve 

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#### calculation will be prorated for the number of days the property hasbeen owned by the Borrower or its Subsidiary.

#### (b)           Borrowershall not permit Consolidated Tangible Net Worth to be less than $455,000,000.

#### (c)           Borrowershall maintain a quarterly minimum aggregate Adjusted Management EBITDA of$5,000,000.

#### (d)           Atall times, the Trust (including its organization and method of operations andthose of its subsidiaries) shall qualify as a REIT.

All calculations offinancial covenants shall be in accordance with GAAP and shall be reportedquarterly.

## Section 5.4             Limitation on Indebtedness.Borrower and its Subsidiaries shall not create, incur, assume or suffer toexist any Indebtedness or issue any shares or interests of preferred CapitalStock, except:

#### (a)           Indebtednessof the Borrower and the Guarantors under this Agreement and the other LoanDocuments;

#### (b)           Indebtednessof any Guarantor to the Borrower;

#### (c)           Indebtednessof an entity which becomes a Subsidiary after the date hereof, provided that(i) such Indebtedness existed at the time such entity became a Subsidiary andwas not created in anticipation thereof and (ii) immediately after givingeffect to the acquisition of such corporation by the Borrower no Default orEvent of Default shall have occurred and be continuing;

#### (d)           Indebtednessrelating to future property acquisitions or refinancings or equity commitmentsas may be budgeted on a Lender approved basis;

#### (e)           Indebtednessrelating to financings or refinancings relating to Military Housing Projectsthat are non-recourse to Borrower or its Subsidiaries and subject only tocustomary “bad acts” guarantees provided in connection with such projects;

#### (f)            Indebtednessexisting as of the date hereof relating to Student Housing Projects;

#### (g)           Indebtednessrelating to existing equity commitments related to Military Housing Projectsnone of which will become payable prior to payment in full of the Obligations;and

#### (h)           Indebtednessrelating to acquisitions and financings (including amounts) and equity commitments (including amounts) specifiedon  the Sources and Uses attached heretoas Schedule E.

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# **ARTICLEVI**

# INSURANCE;CASUALTY; CONDEMNATION; REQUIRED REPAIRS

## Section 6.1             Insurance.

#### (a)          Borrowershall obtain and maintain, or cause to be maintained, Policies for Borrower,each Property Guarantor and each Individual Property (individually orcollectively, as the context requires, an “Insured Asset”) providing atleast the following coverages:

##### (i)            comprehensiveall risk insurance on the Improvements and the Personal Property, in each case(A) in an amount equal to 100% of the “Full Replacement Cost,” which forpurposes of this Agreement shall mean actual replacement value (exclusive ofcosts of excavations, foundations, underground utilities and footings) with awaiver of depreciation, (B) containing an agreed amount endorsement withrespect to the Improvements and Personal Property waiving all co-insuranceprovisions; (C) providing for no deductible in excess of $50,000; and (D)providing coverage for contingent liability from Operation of Building Laws,Demolition Costs and Increased Cost of Construction Endorsements together withan “Ordinance or Law Coverage” or “Enforcement” endorsement if any of theImprovements or the use of each Insured Asset shall at any time constitutelegal non-conforming structures or uses;

##### (ii)           commercialgeneral liability insurance against claims for personal injury, bodily injury,death or property damage occurring upon, in or about each Insured Asset, suchinsurance (A) to be on the so-called “occurrence” form with a generalaggregate limit of not less than $2,000,000 and a per occurrence limit of notless than $1,000,000; (B) to continue at not less than the aforesaid limit; and(C) to cover at least the following hazards: (1) premises and operations; (2)products and completed operations on an “if any” basis; (3) independentcontractors; (4) blanket contractual liability for all written and oralcontracts; and (5) contractual liability covering the indemnities contained in Article10 of the Security Instruments to the extent the same is available;

##### (iii)          businessinterruption/loss of rents insurance (A) with loss payable to Lender; (B)covering all risks required to be covered by the insurance provided for in ‎Section6.1(a)(i); (C) in an amount equal to 100% of the projected gross incomefrom each Insured Asset (on an actual loss sustained basis) for a periodcontinuing until the Restoration of the Insured Asset is completed; the amountof such business interruption/loss of rents insurance shall be determined priorto the Closing Date and at least once each year thereafter based on Borrower’s,Property Guarantor’s or Mezzanine Asset Owner’s, as the case may be, reasonableestimate of the gross income from each Insured Asset for the full calendar yearprior to the date the amount of such insurance is being determined, in eachcase for the succeeding eighteen (18) month period and (D) containing anextended period of indemnity endorsement which provides that after the physicalloss to the 

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##### improvements and the Personal Property has been repaired, the continuedloss of income will be insured until such income either returns to the samelevel it was at prior to the loss, or the expiration of six (6) months from thedate that the applicable Insured Asset is repaired or replaced and operationsare resumed, whichever first occurs, and notwithstanding that the policy mayexpire prior to the end of such period; subject to the rights of any mortgagelender on a Mezzanine Asset, all insurance proceeds payable to Lender pursuantto this ‎Section 6.1(a)(iii) shall be held by Lender and shall beapplied to the obligations secured hereunder from time to time due and payablehereunder and under the Note and this Agreement.  Nothing herein contained, however, shall bedeemed to relieve Borrower of its obligations to pay the obligations securedhereunder on the respective dates of payment provided for in the Note and thisAgreement except to the extent such amounts are actually paid out of theproceeds of such business interruption/loss of rents insurance.

##### (iv)          atall times during which structural construction, repairs or alterations arebeing made with respect to the improvements: (A) owner’s contingent orprotective liability insurance covering claims not covered by or under theterms or provisions of the insurance provided for in ‎Section6.1(c)(ii); and (B) the insurance provided for in ‎Section6.1(a)(i) shall be written in a so-called builder’s risk completedvalue form (1) on a non-reporting basis, (2) against all risks insuredagainst pursuant to ‎Section 6.1(a)(i), (3) shall includepermission to occupy each Insured Asset, and (4) shall contain an agreed amountendorsement waiving co-insurance provisions;

##### (v)           workers’compensation, subject to the statutory limits of the State in which eachInsured Asset is located, and employer’s liability insurance with a limit of atleast $1,000,000.00 per accident and per disease per employee, and$1,000,000.00 for disease aggregate in respect of any work or operations on orabout each Insured Asset, or in connection with such Insured Asset or itsoperation (if applicable);

##### (vi)          comprehensiveboiler and machinery insurance, if applicable, in amounts as shall bereasonably required by Lender on terms consistent with the commercial propertyinsurance policy required under ‎Section 6.1(a)(i);

##### (vii)         ifany portion of the improvements is at any time located in an area identified bythe Secretary of Housing and Urban Development or any successor thereto as anarea having special flood hazards pursuant to the National Flood Insurance Actof 1968, the Flood Disaster Protection Act of 1973 or the National FloodInsurance Reform Act of 1994, as each may be amended, or any successor law (the“Flood Insurance Acts”),flood hazard insurance of the following types and in the following amounts (A)coverage under Policies issued pursuant to the Flood Insurance Acts (the “Flood Insurance Policies”)in an amount equal to the maximum limit of coverage available for theapplicable Insured Asset under the Flood Insurance Acts, subject only tocustomary deductibles under such Policies and (B) coverage under supplementalprivate Policies in an amount, which when 

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##### added to the coverage provided under the Flood Act Policies withrespect to an Insured Asset, is not less than the Allocated Value for suchInsured Asset;

##### (viii)        ifrequired by Lender, earthquake, sinkhole and mine subsidence insurance inamounts equal to the probable maximum loss of each Insured Asset as determinedby Lender in its sole discretion and in form and substance reasonablysatisfactory to Lender, provided that the insurance pursuant to this ‎Section6.1(a)(viii) hereof shall be on terms consistent with the all riskinsurance policy required under ‎Section 6.1(a)(i) hereof;

##### (ix)          umbrellaliability insurance in an amount not less than Seventy-Five Million and00/100 Dollars ($75,000,000.00) per occurrence on terms consistent with thecommercial general liability insurance policy required under ‎Section6.1(a)(ii) hereof;

##### (x)           insuranceagainst damage resulting from acts of terrorism on terms consistent with thecommercial property insurance policy required under subsection (i) aboveand on terms consistent with the commercial general liability insurance requiredunder subsection (ii) above;

##### (xi)          suchother insurance and in such amounts as Lender from time to time may reasonablyrequest against such other insurable hazards which at the time are commonlyinsured against for property similar to each Insured Asset located in or aroundthe region in which the each Insured Asset is located.

#### (b)           Allinsurance provided for in Section 6.1(a) hereof shall be obtained undervalid and enforceable policies (the “Policies” or in the singular, the “Policy”),in such forms as may be reasonably satisfactory to Lender, issued byfinancially sound and responsible insurance companies authorized to do businessin the State in which the Insured Asset is located and approved by Lender.  The Policies shall be issued by financiallysound and responsible insurance companies authorized to do business in theState and having a claims paying ability rating of “BBB” or better by S&Pand its equivalent from each of the other Rating Agencies and/or a generalpolicy rating of “A” or better and a financial class of VIII or better by A.M.Best Company, Inc.  The Policiesdescribed in *Section 6.1(a)* shall designate Lender and itssuccessors and assigns as additional insureds, mortgagees and/or loss payee asdeemed appropriate by Lender. To the extent such Policies are not available asof the Closing Date, Borrower shall deliver to Lender prior to the Closing Datean Accord 28 or similar certificate of insurance evidencing the coverages andamounts required hereunder and, upon request of Lender as soon as availableafter the Closing Date, certified copies of all Policies.  Borrower shall deliver to Lender withinthirty (30) days of the Closing Date, the final Policies required to bemaintained pursuant to this Article 8. Not less than ten (10) days prior to the expiration dates of anyinsurance coverage in place with respect to the Insured Asset, Borrower shalldeliver to Lender an Accord 28 or similar certificate, accompanied by evidencesatisfactory to Lender of payment of the premiums due in connection therewith(the “Insurance Premiums”),and as soon as available thereafter, certified copies of all renewal Policies.

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#### (c)           AllPolicies provided for in ‎Section 6.1(a) hereof shall containclauses or endorsements to the effect that:

##### (i)       noact or negligence of Borrower or anyone acting for Borrower, including PropertyGuarantor or Mezzanine Asset Owner or failure to comply with the provisions ofany Policy which might otherwise result in a forfeiture of the insurance or anypart thereof, shall in any way affect the validity or enforceability of theinsurance insofar as Lender is concerned;

##### (ii)      thePolicies shall not be materially changed (other than to increase the coverageprovided thereby) or cancelled without at least 30 days’ written notice toLender and any other party named therein as an insured;

##### (iii)     eachPolicy shall provide that the issuers thereof shall give written notice toLender if the Policy has not been renewed thirty (30) days prior to itsexpiration; and

##### (iv)    Lendershall not be liable for any Insurance Premiums thereon or subject to anyassessments thereunder.

#### (d)           Borrowershall furnish or cause to be furnished to Lender, on or before thirty (30) daysafter the close of each of Borrower’s fiscal years, a statement certified byBorrower or a subsidiary of Borrower or a duly authorized officer of Borrowerof the amounts of insurance maintained in compliance herewith, of the riskscovered by such insurance and of the insurance company or companies which carrysuch insurance and, if requested by Lender, verification of the adequacy ofsuch insurance by an independent insurance broker or appraiser acceptable toLender.

#### (e)           Ifat any time Lender is not in receipt of written evidence that all insurancerequired hereunder is in full force and effect, Lender shall have the right(subject to the rights of the mortgage lender with respect to the MezzanineAssets), without notice to Borrower, Property Guarantor or  Mezzanine Asset Owner to obtain suchinsurance as required pursuant to this Agreement, and all expenses incurred byLender in connection with such action or in obtaining such insurance andkeeping it in effect shall be paid by Borrower to Lender upon demand and untilpaid shall be secured by the Pledge Agreement and Security Instruments andshall bear interest at the Default Rate. Lender agrees to use commercially reasonable efforts to notify Borrower,Property Guarantor or Mezzanine Asset Owner, as the case may be, if it isexercising any rights it may have under this subsection (e), provided, however,any failure to deliver such notice shall in no way affect or impair any rightsLender may have hereunder.

#### (f)            Inthe event of a foreclosure of any of the Security Instruments, or othertransfer of title to any Insured Asset in extinguishment in whole or in part ofthe Debt all right, title and interest of Borrower or Property Guarantor in andto the Policies then in force and all proceeds payable thereunder shallthereupon vest in the purchaser at such foreclosure or Lender or othertransferee in the event of such other transfer of title.

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#### (g)           Borrowershall cause each Mezzanine Asset Owner and Encumbered Property Subsidiary tomaintain the insurance required pursuant to the mortgage loan documentsencumbering the related Mezzanine Asset and Encumbered Property.

## Section 6.2             Casualty.

If an Insured Asset shallbe damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrowershall give prompt notice or cause prompt notice to be given of such damage toLender and shall, taking into account the time necessary to adjust the loss,obtain permits and enter into restoration contracts, promptly commence anddiligently prosecute the completion of the Restoration of the Insured Asset asnearly as possible to the condition the Insured Asset was in immediately priorto such Casualty, with such alterations as may be reasonably approved by Lenderand otherwise in accordance with Section 6.4.  Subject to the Net Proceeds being madeavailable by Lender (or any mortgage lender with respect to the MezzanineAssets), Borrower shall pay, or cause Property Guarantor or Mezzanine AssetOwner to pay, all costs of such Restoration whether or not such costs arecovered by insurance, provided, however, regardless of whetherNet Proceeds available for Restoration, Borrower shall cause Property Guarantorand Mezzanine Asset Owner to promptly commence and diligently prosecute theremoval and disposal of any debris, refuse or hazards resulting from theCasualty and insure that the applicable Insured Asset is in a safe condition.  Lender may, but shall not be obligated tomake proof of loss (subject to the rights of any mortgage lender with respectto the Mezzanine Assets) if not made promptly by Borrower or Property Guarantoror Mezzanine Asset Owner, as the case may be.

## Section 6.3             Condemnation.

Borrower shall promptlygive Lender notice of the actual or threatened commencement of any proceedingfor the Condemnation of all or any part of any Insured Asset and shall deliverto Lender copies of any and all papers served in connection with such proceedings.  Lender may participate in any suchproceedings, and Borrower, Property Guarantor or Mezzanine Asset Owner, as thecase may be, shall from time to time deliver to Lender all instrumentsreasonably requested by it to permit such participation.  Borrower, Property Guarantor or MezzanineAsset Owner, as the case may be, shall, at its expense, diligently prosecuteany such proceedings, and shall consult with Lender, its attorneys and experts,and cooperate with them in the carrying on or defense of any suchproceedings.  Notwithstanding any takingby any public or quasi-public authority through Condemnation or otherwise(including, but not limited to, any transfer made in lieu of or in anticipationof the exercise of such taking), Borrower shall continue to pay the Debt at thetime and in the manner provided for its payment in the Note and in thisAgreement and the Debt shall not be reduced until any Award due to PropertyGuarantor or Mezzanine Asset Owner shall have been actually received andapplied by Lender, after the deduction of reasonable out-of-pocket expenses ofcollection, to the reduction or discharge of the Debt.  Lender shall not be limited to the interestpaid on the Award by the condemning authority but shall be entitled to receiveout of the Award interest at the rate or rates provided herein or in theNote.  If any Insured Asset or anyportion thereof is taken by a condemning authority, Borrower shall causeProperty Guarantor and Mezzanine Asset Owner, as the case may be, to, promptlycommence and diligently prosecute the Restoration of the applicable InsuredAsset and otherwise comply with the provisions of 

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‎Section 6.4.  If any Insured Asset is sold, throughforeclosure or otherwise, prior to the receipt by Lender of the Award, Lender shallhave the right, whether or not a deficiency judgment on the Note or under theGuaranty shall have been sought, recovered or denied, to receive the Award, ora portion thereof sufficient to pay the Debt.

## Section 6.4             Restoration.

The following provisionsshall apply in connection with the Restoration of any Insured Asset:

(a)           Ifthe Net Proceeds shall be less than $100,000 and the costs of completing theRestoration shall be less than $100,000, the Net Proceeds will be disbursed byLender to Borrower or Property Guarantor upon receipt, provided that allof the conditions set forth in Section 6.4(b)(i) are met and Borrowerdelivers to Lender a written undertaking to expeditiously commence and tocomplete the Restoration in accordance with the terms of this Agreement.

(b)           Ifthe Net Proceeds are equal to or greater than $100,000 or the costs ofcompleting the Restoration is equal to or greater than $100,000 Lender shallmake the Net Proceeds available for the Restoration in accordance with theprovisions of this Section 6.4. The term “Net Proceeds”shall mean:  (i) the net amount of allinsurance proceeds received by Lender pursuant to Section 6.1(a)(i), (iv),(vi), (vii), (viii) and (x) as a result of suchdamage or destruction, after deduction of the reasonable out-of-pocket costsand expenses (including, but not limited to, reasonable counsel fees), if any,in collecting same (“InsuranceProceeds”), or (ii) the net amount of the Award, afterdeduction of its reasonable out-of-pocket costs and expenses (including, butnot limited to, reasonable counsel fees), if any, in collecting same (“Condemnation Proceeds”),whichever the case may be.

(i)       The Net Proceeds shall be made availableto Borrower or to Property Guarantor for Restoration provided that eachof the following conditions are met:

(A)          noEvent of Default shall have occurred and be continuing;

(B)          (1)in the event the Net Proceeds are Insurance Proceeds, less than thirty-fivepercent (35%) of the total floor area of the Improvements on the Individual Propertyhas been damaged, destroyed or rendered unusable as a result of such Casualtyor (2) in the event the Net Proceeds are Condemnation Proceeds, less thanfifteen percent (15%) of the land constituting the Individual Property istaken, and such land is located along the perimeter or periphery of theIndividual Property, and less than ten percent (10%) of the floor area of theImprovements is the subject of the Condemnation;

(C)          Leasescovering in the aggregate at least seventy-five percent (75%) of the totalrentable space in the Property which has been demised under executed anddelivered Leases in effect as of the date of the 

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occurrence of such Casualty or Condemnation, whicheverthe case may be, is in effect as of such date shall remain in full force andeffect during and after the completion of the Restoration without abatement ofrent beyond the time required for Restoration;

###### (D)          Borrowershall cause Property Guarantor to commence the Restoration as soon asreasonably practicable (but in no event later than sixty (60) days after suchCasualty or Condemnation, whichever the case may be, occurs) and shalldiligently pursue the same to satisfactory completion in compliance with allApplicable Laws, including, without limitation, all applicable EnvironmentalLaws.  For purposes of this subsection(D), the filing for an application for a building permit for such Restorationshall be deemed commencement of such Restoration;

###### (E)           Lendershall be reasonably satisfied that any operating deficits, including allscheduled payments of principal and interest under the Note, which will beincurred with respect to the Individual Property as a result of the occurrenceof any such Casualty or Condemnation, whichever the case may be, will becovered out of (1) the Net Proceeds, (2) the insurance coverage referred to in Section6.1(a)(iii), if applicable, or (3) by other funds of Borrower;

###### (F)           Lendershall be reasonably satisfied that the Restoration will be completed on orbefore the earliest to occur of (1) the earliest date required for suchcompletion under the terms of any Leases which are required in accordance withthe provisions of this Section 6.4(b) to remain in effect subsequent tothe occurrence of such Casualty or Condemnation and the completion of the Restoration,or (2) such time as may be required under Applicable Law in order to repair andrestore the Property to the condition it was in immediately prior to suchCasualty or Condemnation or (3) the expiration of the insurance coveragereferred to in Section 6.1(a)(iii), unless Borrower has postedreasonably acceptable additional collateral with Lender;

###### (G)           theIndividual Property and the use thereof after the Restoration will be incompliance with and permitted under all Applicable Laws;

###### (H)          suchCasualty or Condemnation, as applicable, does not result in the total permanentloss of access to the Individual Property or the related Improvements;

###### (I)            Borrowershall deliver, or cause to be delivered, to Lender a signed detailed budgetapproved in writing by Borrower’s architect or engineer stating the entire costof completing the Restoration, which budget shall show that the Restoration canbe completed from Net 

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###### Proceeds and Cash or Cash equivalents deposited by Borrower withLender;

###### (J)            theNet Proceeds together with any Cash or Cash equivalent deposited by Borrowerwith Lender are sufficient in Lender’s reasonable discretion to cover the costof the Restoration; and

###### (K)          theManagement Agreement in effect as of the date of the occurrence of suchCasualty or Condemnation, whichever the case may be, shall (1) remain in fullforce and effect during the Restoration and shall not otherwise terminate as aresult of the Casualty or Condemnation or the Restoration or (2) if terminated,shall have been replaced with a Replacement Management Agreement with aQualified Manager, prior to the opening or reopening of the applicableIndividual Property or any portion thereof for business with the public.

##### (ii)      TheNet Proceeds shall be held by Lender in an interest-bearing account (withinterest accruing for the benefit of Borrower) and, until disbursed inaccordance with the provisions of this ‎Section 6.4(b) shallconstitute additional security for the Debt and other obligations under theLoan Documents.  The Net Proceeds shallbe disbursed by Lender to, or as directed by, Borrower or Property Guarantorfrom time to time during the course of the Restoration, upon receipt ofevidence reasonably satisfactory to Lender that (A) all materials installed andwork and labor performed (except to the extent that they are to be paid for outof the requested disbursement) to the date of the request in connection withthe Restoration have been paid for in full, and (B) there exist no notices ofpendency, stop orders, mechanic’s or materialman’s liens or notices ofintention to file same, or any other Liens or encumbrances of any naturewhatsoever on the Individual Property which have not either been fully bondedto the reasonable satisfaction of Lender and discharged of record or in the alternativefully insured to the reasonable satisfaction of Lender by the title companyissuing the Title Insurance Policy.

##### (iii)     Allplans and specifications required in connection with the Restoration, shall besubject to prior review and acceptance in all respects by Lender and by anindependent consulting engineer selected by Lender (the “Casualty Consultant”),such review and acceptance shall not be unreasonably withheld, conditioned ordelayed.  Lender shall have the use ofthe plans and specifications and the benefit of all permits, licenses andapprovals required or obtained in connection with the Restoration.  The identity of the contractors,subcontractors and materialmen engaged in the Restoration as well as thecontracts under which they have been engaged, shall be subject to prior reviewand acceptance by Lender and the Casualty Consultant, such review andacceptance shall not be unreasonably withheld, conditioned or delayed.  All reasonable costs and expenses incurred byLender in connection with making the Net Proceeds available for the Restorationincluding, without limitation, 

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##### reasonable counsel fees and disbursements and the Casualty Consultant’sfees, shall be paid by Borrower or Property Guarantor.

##### (iv)    Inno event shall Lender be obligated to make disbursements of the Net Proceeds inexcess of an amount equal to the costs actually incurred from time to time forwork in place as part of the Restoration, as certified by the CasualtyConsultant, minus the Casualty Retainage. The term “Casualty Retainage” shall mean an amount equal to tenpercent (10%), of the hard costs actually incurred for work in place as part ofthe Restoration, as certified by the Casualty Consultant, until the Restorationhas been completed.  The CasualtyRetainage shall be reduced to five percent (5%) of the hard costs incurred uponreceipt by Lender of satisfactory reasonably evidence that fifty percent (50%)of the Restoration has been completed. The Casualty Retainage shall in no event, and notwithstanding anythingto the contrary set forth above in this Section 6.4(b), be less than theamount actually held back by Borrower or Property Guarantor from contractors,subcontractors and materialmen engaged in the Restoration.  The Casualty Retainage shall not be releaseduntil the Casualty Consultant certifies to Lender that the Restoration has beensubstantially completed in accordance with the provisions of this ‎Section6.4(b) and Lender receives evidence satisfactory to Lender that the costsof the Restoration have been paid in full or will be paid in full out of theCasualty Retainage; provided, however, that Lender will releasethe portion of the Casualty Retainage being held with respect to anycontractor, subcontractor or materialman engaged in the Restoration as of thedate upon which the Casualty Consultant certifies to Lender that thecontractor, subcontractor or materialman has satisfactorily and substantiallycompleted all work and has supplied all materials in accordance with theprovisions of the contractor’s, subcontractor’s or materialman’s contract, thecontractor, subcontractor or materialman delivers the lien waivers (or similarreleases) and evidence of payment in full of all sums due to the contractor,subcontractor or materialman as may be reasonably requested by Lender or by thetitle company issuing the Title Insurance Policy for the related IndividualProperty, and Lender receives an endorsement to such Title Insurance Policyinsuring the continued priority of the Lien of the related Security Instrumentand evidence of payment of any premium payable for such endorsement.  If required by Lender, the release of anysuch portion of the Casualty Retainage shall be approved by the surety company,if any, which has issued a payment or performance bond with respect to thecontractor, subcontractor or materialman.

##### (v)     Lendershall not be obligated to make disbursements of the Net Proceeds morefrequently than once every calendar month.

##### (vi)    Ifat any time the Net Proceeds or the undisbursed balance thereof shall not, inthe reasonable opinion of Lender in consultation with the Casualty Consultant,if any, be sufficient to pay in full the balance of the costs which areestimated by the Casualty Consultant to be incurred in connection with thecompletion of the Restoration, Borrower shall deposit the deficiency (the “Net Proceeds Deficiency”)with Lender before any further disbursement of the Net 

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##### Proceeds shall be made.  The NetProceeds Deficiency deposited with Lender shall be held by Lender and shall bedisbursed for costs actually incurred in connection with the Restoration on thesame conditions applicable to the disbursement of the Net Proceeds, and untilso disbursed pursuant to this ‎Section 6.4(b) shall constituteadditional security for the Debt and other obligations under the LoanDocuments.

##### (vii)   Theexcess, if any, of the Net Proceeds and the remaining balance, if any, of theNet Proceeds Deficiency deposited with Lender after the Casualty Consultantcertifies to Lender that the Restoration has been substantially completed inaccordance with the provisions of this ‎Section 6.4(b), and thereceipt by Lender of evidence reasonably satisfactory to Lender that all costsincurred in connection with the Restoration have been paid in full, shall beremitted by Lender to Borrower, provided no Event of Default shall have occurredand shall be continuing under the Note, this Agreement or any of the other LoanDocuments.

#### (c)           AllNet Proceeds not required (i) to be made available for the Restoration or (ii)to be returned to Borrower as excess Net Proceeds pursuant to ‎Section6.4(b)(vii) may be retained and applied by Lender toward the payment of theDebt whether or not then due and payable in such order, priority andproportions as Lender in its sole discretion shall deem proper, or, at thediscretion of Lender, the same may be paid, either in whole or in part, toBorrower for such purposes as Lender shall approve, in its discretion.  If Lender shall receive and retain NetProceeds, the Lien of the Security Instruments shall be reduced only by theamount thereof received and retained by Lender and actually applied by Lenderin reduction of the Debt in accordance with Section 2.3.2 hereof.

#### (d)           Borrowershall cause each Mezzanine Asset Owner and Encumbered Property Subsidiary tocomply with the restoration requirements set forth in the mortgage loandocuments encumbering the related Mezzanine Asset and Encumbered Property.

# **ARTICLEVII**

# **[RESERVED]**

# **ARTICLEVIII**

# DEFAULTS

## Section 8.1             Event of Default.

#### (a)           Eachof the following events shall constitute an event of default hereunder (an “Event of Default”):

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##### (i)       if(A) any regularly scheduled payment of interest or principal (including theprincipal and interest due on the Maturity Date) or any deposit to any reserveaccount described herein is not paid within three (3) Business Days after thedate the same is due and payable or (B) any other portion of the Debt is notpaid within five (5) Business Days after demand therefore (or such longerperiod of time expressly provided for in the Loan Documents);

##### (ii)      ifany of the Taxes are not paid on or before the date the same become delinquentunless Lender determines, in its sole discretion, that such failure to payTaxes is not likely to have a Material Adverse Effect;

##### (iii)     ifthe Policies are not kept in full force and effect or if certified copies ofthe Policies are not delivered to Lender on request;

##### (iv)    ifany Key Entity or Mezzanine Property Guarantor or any other Person transfers orencumbers any portion of any Individual Property or any Mezzanine Collateral orthe direct or indirect interests in any Key Entity, Mezzanine PropertyGuarantor, Material Subsidiary or Encumbered Property Subsidiary in violationof the provisions of Section ‎5.2.10 hereof;

##### (v)     ifany representation or warranty made by Borrower herein or in any other LoanDocument, or in any report, certificate, financial statement or otherinstrument, agreement or document furnished to Lender shall have been false ormisleading in any material respect as of the date the representation orwarranty was made; provided, however, as to any such false ormisleading representation or warranty which was unintentionally submitted toLender and which can be made true and correct by action of Borrower, Borrowershall have a period of ten (10) Business Days following written notice thereof forBorrower to undertake and complete all action necessary to make suchrepresentation, warranty, acknowledgement or statement true and correct as andwhen made;

##### (vi)    ifany Key Entity or any Guarantor shall make an assignment for the benefit ofcreditors;

##### (vii)   ifa receiver, liquidator or trustee shall be appointed for any Key Entity or anyGuarantor or if any Key Entity or any Guarantor shall be adjudicated a bankruptor insolvent, or if any petition for bankruptcy, reorganization or arrangementpursuant to the Bankruptcy Code, or any similar federal or State law, shall befiled by or against, consented to, or acquiesced in by, any Key Entity or anyGuarantor or if any proceeding for the dissolution or liquidation of any KeyEntity or any Guarantor shall be instituted; provided, however,if such appointment, adjudication, petition or proceeding was involuntary andnot consented to by any Key Entity or any Guarantor upon the same not beingdischarged, stayed or dismissed within sixty (60) days;

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##### (viii)  ifBorrower attempts to assign its rights under this Agreement or any of the otherLoan Documents or any interest herein or therein in contravention of the LoanDocuments;

##### (ix)     ifBorrower breaches any of its respective negative covenants contained in ‎Section5.2;

##### (x)      ifBorrower violates or does not comply with any of the provisions of Section5.1.18 hereof;

##### (xi)     ifa default by Borrower or Property Guarantor or Mezzanine Asset Owner hasoccurred and continues beyond any applicable cure period under any ManagementAgreement (or any Replacement Management Agreement) and the Manager thereunderduly terminates or cancels such Management Agreement (or any relatedReplacement Management Agreement);

##### (xii)    ifany Property Guarantor or Mezzanine Subsidiary is not a Special Purpose Entityunless Lender determines, in its sole discretion, that such failure to be aSpecial Purpose Entity is not likely to have a Material Adverse Effect;

##### (xiii)   ifany Individual Property or Mezzanine Asset becomes subject to any mechanic’s, materialman’sor other Lien other than a Lien for local real estate taxes and assessments notthen due and payable and the Lien shall remain undischarged of record (bypayment, bonding or otherwise) for a period of sixty (60) days after Borrower,Property Guarantor, Mezzanine Asset Owner or Mezzanine Subsidiary obtainsnotice thereof; provided, however, if any action is brought toenforce such Lien, it shall be an Event of Default if such Lien remainsundischarged of record (by payment, bonding or otherwise) for a period of five(5) Business Days after the commencement of such action;

##### (xiv)   ifany federal tax Lien or state or local income tax Lien is filed against any KeyEntity or any Guarantor or any Individual Property or Mezzanine Asset and sameis not discharged of record (by payment, bonding or otherwise) within sixty(60) days after Borrower obtains notice thereof; provided, however,if any action is brought to enforce such Lien, it shall be an Event of Defaultif such Lien remains undischarged of record (by payment, bonding or otherwise)for a period of five (5) Business Days after the commencement of such action;

##### (xv)    (A)Borrower fails to provide Lender with the written certification and evidencerequired pursuant to Section ‎5.2.8 hereof, (B) Borrower is a Planor its assets constitute Plan Assets; or (C) Borrower consummates a transactionwhich would cause the Security Instruments or Lender’s exercise of its rightsunder the Security Instruments, the Pledge Agreement, the Note, this Agreementor the other Loan Documents to constitute a nonexempt prohibited transactionunder ERISA or result in a violation of a State statute regulating governmentalplans, subjecting Lender to liability for a violation of ERISA, the Code, a Statestatute or other similar law;

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##### (xvi)   ifany default occurs under any guaranty or indemnity executed in connectionherewith (including, without limitation, the Guaranty and the EnvironmentalIndemnity) and such default continues after the expiration of applicable noticeand grace periods, if any;

##### (xvii)  ifany Key Entity shall be in default beyond applicable notice and grace periodsunder any other mortgage, deed of trust, deed to secure debt or other securityagreement covering any part of any Individual Property or any Mezzanine Asset;

##### (xviii) ifthere shall occur a default, beyond any applicable notice and cure period,under any Indebtedness of Borrower or its Subsidiaries in excess of $5,000,000;

##### (xix)   ifthere shall be default under the Security Instruments, the Pledge Agreement,any Guaranty or any of the other Loan Documents beyond any applicable noticeand cure periods contained in such documents;

##### (xx)    Borrowerfails to perform, satisfy or observe any covenant or agreement contained in Section5.3 or Section 5.4 of this Agreement;

##### (xxi)   ifthe Trust (including its organization and method of operations and those of itssubsidiaries) shall fail to qualify as a REIT;

##### (xxii)  ifthe Trust at any time fails to maintain its current listing on the New York StockExchange; or

##### (xxiii) ifBorrower shall continue to be in Default under any of the other terms,covenants or conditions of this Agreement not specified in subsections (i) to(xx), for ten (10) Business Days after notice to Borrower from Lender, in the caseof any Default which can be cured by the payment of a sum of money, or forthirty (30) days after notice from Lender in the case of any other Default; provided,however, that if such non-monetary Default is susceptible of curebut cannot reasonably be cured within such 30-day period and provided furtherthat Borrower shall have commenced to cure such Default within such thirty (30)day period and thereafter diligently and expeditiously proceeds to cure thesame, such thirty (30) day period shall be extended for such time as isreasonably necessary for Borrower in the exercise of due diligence to cure suchDefault, such additional period not to exceed ninety (90) days.

#### (b)           Uponthe occurrence and during the continuance of an Event of Default (other than anEvent of Default described in clauses (vi) or (vii) above), in addition to anyother rights or remedies available to it pursuant to this Agreement and theother Loan Documents or at law or in equity, Lender may take such action,without notice or demand (except as expressly set forth in this Agreement ,that Lender deems advisable to protect and enforce its rights against Borrowerand in and to all or any Individual Property or Mezzanine Collateral,including, without limitation, declaring the Debt to be immediately due andpayable, and Lender may enforce or avail itself of any or all rights 

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#### or remedies provided in the Loan Documents against Borrower and any orall of the Properties, including, without limitation, all rights or remediesavailable at law or in equity; and upon any Event of Default described inclauses (vi) or (vii) above, the Debt and all other obligations of Borrowerhereunder and under the other Loan Documents shall immediately andautomatically become due and payable, without notice or demand, and Borrowerhereby expressly waives any such notice or demand, anything contained herein orin any other Loan Document to the contrary notwithstanding.

## Section 8.2             Remedies.

#### (a)           Ifan Event of Default shall occur and be continuing or shall exist, the Lendershall be under no further obligation to make Additional Advances hereunder andmay declare the unpaid principal amount of the Note, interest accrued thereonand all other amounts owing by the Borrower or any Guarantor hereunder or underthe Note, the Guaranty or the other Loan Documents to be immediately due andpayable without presentment, demand, protest or further notice of anykind.  Upon the occurrence and during thecontinuance of an Event of Default, all or any one or more of the rights, powers,privileges and other remedies available to Lender against Borrower under thisAgreement or any of the other Loan Documents executed and delivered by, orapplicable to, Borrower or at law or in equity may be exercised by Lender atany time and from time to time, whether or not all or any of the Debt shall bedeclared due and payable, and whether or not Lender shall have commenced anyforeclosure proceeding, UCC sale or other action for the enforcement of itsrights and remedies under any of the Loan Documents with respect to all or anyIndividual Property, Mezzanine Collateral or any other Collateral.  Any such actions taken by Lender shall becumulative and concurrent and may be pursued independently, singly, successively,together or otherwise, at such time and in such order as Lender may determinein its sole discretion, to the fullest extent permitted by Applicable Law,without impairing or otherwise affecting the other rights and remedies ofLender permitted by Applicable Law, equity or contract or as set forth hereinor in the other Loan Documents.  Withoutlimiting the generality of the foregoing, Borrower agrees that if an Event ofDefault is continuing (i) Lender is not subject to any “one action” or “electionof remedies” law or rule, and (ii) all Liens and other rights, remedies orprivileges provided to Lender shall remain in full force and effect untilLender has exhausted all of its remedies against the Properties and the otherCollateral and each Security Instrument and the Pledge Agreement has beenforeclosed, sold and/or otherwise realized upon in satisfaction of the Debt orthe Debt has been paid in full.

#### (b)           Withrespect to Borrower and the Properties, nothing contained herein or in anyother Loan Document shall be construed as requiring Lender to resort to anyIndividual Property or Collateral for the satisfaction of any of the Debt inpreference or priority to any other Individual Property or Collateral, andLender may seek satisfaction out of all of the Properties or any other Collateralor any part thereof, in its absolute discretion in respect of the Debt.  In addition, Lender shall have the right fromtime to time to partially foreclose the Security Instruments in any manner andfor any amounts secured by the Security Instruments then due and payable asdetermined by Lender in its sole discretion including, without limitation, thefollowing circumstances:  (i) in the 

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#### event Borrower defaults beyond any applicable grace period in thepayment of one or more scheduled payments of principal and interest, Lender mayforeclose one or more of the Security Instruments to recover such delinquentpayments, or (ii) in the event Lender elects to accelerate less than the entireoutstanding principal balance of the Loan, Lender may foreclose one or more ofthe Security Instruments to recover so much of the principal balance of theLoan as Lender may accelerate and such other sums secured by one or more of theSecurity Instruments as Lender may elect. Notwithstanding one or more partial foreclosures, the Properties shallremain subject to the Security Instruments to secure payment of sums secured bythe Security Instruments and not previously recovered.

#### (c)           Lendershall have the right, from time to time, to sever the Note and the other LoanDocuments into one or more separate notes, Security Instruments and othersecurity documents (the “SeveredLoan Documents”) in such denominations as Lender shalldetermine in its sole discretion for purposes of evidencing and enforcing itsrights and remedies provided hereunder. Borrower shall execute and deliver to Lender from time to time, promptlyafter the request of Lender, a severance agreement and such other documents asLender shall request in order to effect the severance described in thepreceding sentence, all in form and substance reasonably satisfactory toLender.  Borrower and on behalf ofProperty Guarantor hereby absolutely and irrevocably appoints Lender as itstrue and lawful attorney, coupled with an interest, in its name and stead tomake and execute all documents necessary or desirable to effect the aforesaidseverance, Borrower ratifying all that its said attorney shall do by virtuethereof; provided, however, Lender shall not make or execute anysuch documents under such power until ten (10) Business Days after notice hasbeen given to Borrower by Lender of Lender’s intent to exercise its rightsunder such power.  The Severed LoanDocuments shall not contain any representations, warranties or covenants notcontained in the Loan Documents and any such representations and warrantiescontained in the Severed Loan Documents will be given by Borrower only as ofthe Closing Date.

#### (d)           Inaddition to (and without limitation of) any right of setoff, bankers’ lien orcounterclaim Lender may otherwise have, Lender shall be entitled, at itsoption, to offset balances (general or special, time or demand, provisional orfinal) held by it for the account of Borrower at any of Lender’s officesagainst any amount payable by Borrower to Lender hereunder or under any otherLoan Document which is not paid when due (regardless of whether such balancesare then due to Borrower), in which case it shall promptly notify Borrower;provided, however, that Lender’s failure to give such notice shall not affectthe validity thereof and further, provided, that the rights of Lender hereundershall not apply to Excluded Assets (as defined in the Security Agreement).

## Section 8.3             Remedies Cumulative; Waivers.

To the extent permittedby Applicable Law, the rights, powers and remedies of Lender under thisAgreement shall be cumulative and not exclusive of any other right, power orremedy which Lender may have against Borrower pursuant to this Agreement or theother Loan Documents, or existing at law or in equity or otherwise.  Lender’s rights, powers and remedies may bepursued singularly, concurrently or otherwise, at such time and in such orderas Lender 

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may determine in Lender’ssole discretion.  No delay or omission toexercise any remedy, right or power accruing upon an Event of Default shallimpair any such remedy, right or power or shall be construed as a waiverthereof, but any such remedy, right or power may be exercised from time to timeand as often as may be deemed expedient. A waiver of one or more Defaults or Events of Default with respect toBorrower shall not be construed to be a waiver of any subsequent Default orEvent of Default by Borrower or to impair any remedy, right or power consequentthereon.

# **ARTICLEIX**

# SPECIALPROVISIONS

## Section 9.1             Sale of Notes and Securitization.  

Lender may, at any time,sell, transfer or assign (in each case, in whole or in part) the Note, thisAgreement, the Security Instruments and the other Loan Documents, and any orall servicing rights with respect thereto, or grant participations therein orissue mortgage pass-through certificates or other securities (the “Securities”)evidencing a beneficial interest in a rated or unrated public offering orprivate placement (including any sale or participations, a “Securitization”).  At the request of the holder of the Note and,to the extent not already required to be provided by Borrower under thisAgreement, Borrower shall satisfy the market standards which may be reasonablyrequired in the marketplace or by the Rating Agencies in connection with aSecuritization or the sale of the Note or the participations or Securities,including, without limitation, to:

#### (a)           (i)          provide such financial and otherinformation with respect to the Properties, Borrower, Guarantor and theManager, (ii) provide budgets relating to the Properties and (iii) uponreasonable prior written notice and at reasonable times, to perform or cause tobe performed such site inspection, appraisals, market studies, environmentalreviews and reports (Phase I’s and, if appropriate, Phase II’s), engineeringreports and other due diligence investigations of the Properties, as may bereasonably requested by the holder of the Note or the Rating Agencies or as maybe necessary or appropriate in connection with the Securitization (the “Provided Information”),together, if customary, with appropriate verification and/or consents of theProvided Information through letters of auditors or opinions of counsel ofindependent attorneys reasonably acceptable to Lender and the Rating Agencies;

#### (b)           ifreasonably required by the Rating Agencies, deliver (i) a nonconsolidationopinion, (ii) revised opinions of counsel as to due execution andenforceability with respect to the Properties, Borrower, Indemnitor, Guarantor,Principal, and their respective Affiliates and the Loan Documents, and (iii)revised organizational documents for Borrower, Guarantor and Principal(including, without limitation, such revisions as are necessary to cause suchentity to be a Special Purpose Entity to the extent required hereunder), whichcounsel, opinions and organizational documents shall be reasonably satisfactoryto Lender and the Rating Agencies;

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#### (c)           ifreasonably required by the Rating Agencies, use commercially reasonable effortsto deliver estoppel letters from parties to agreements that affect theProperties, which estoppel letters, subordination agreements or otheragreements shall be reasonably satisfactory to Lender and the Rating Agencies.

#### (d)           executesuch amendments to the Loan Documents and organizational documents as may bereasonably requested by the holder of the Note or the Rating Agencies orotherwise to effect the Securitization; provided, however, thatBorrower shall not be required to modify or amend any Loan Document if suchmodification or amendment would (except for modifications and amendmentsrequired to be made pursuant to Sections (e) and (f) below) (i)change the interest rate, the stated maturity or the amortization of principalset forth in the Note, or (ii) modify or amend any other economic term of theLoan or (iii) increase the liability or decrease the rights of Borrower underany of the Loan Documents other than to a de minimis extent.

#### (e)           ifLender elects, in its sole discretion, prior to or upon a Securitization, tosplit the Loan into two or more parts, or the Note into multiple componentnotes or tranches which may have different interest rates, amortizationpayments, principal amounts and maturities, Borrower agrees to reasonablycooperate and cause each Mezzanine Subsidiary to cooperate with Lender inconnection with the foregoing and to execute the required modifications andamendments to the Note, this Agreement and the Loan Documents and to provideopinions necessary to effectuate the same. Such Notes or components may be assigned different interest rates, solong as the initial weighted average of such interest rates does not exceed theApplicable Interest Rate and the other terms and conditions of such componentnotes are substantially similar to the terms and conditions of the Note, providedthat Borrower’s liability or rights under the Loan Documents shall not beincreased or decreased, respectively, other than to a de minimis extent;

#### (f)            uponreasonable prior written notice, execute modifications to the Loan Documentschanging the interest rate for the Loan, provided that the initialweighted average of the interest rate spreads for the Loan after suchmodification shall not exceed the weighted average of the interest rate spreadsfor the Loan immediately prior to such modification.  The Borrower shall also provide opinions andtitle insurance reasonably necessary to effectuate the same;

#### (g)           updatethe representations and warranties contained in the Loan Documents as of theclosing date of the Securitization and make any such representation andwarranties with respect to the Property, Borrower, Guarantor and the LoanDocuments as are customarily provided in securitization transactions and as maybe reasonably requested by the holder of the Note or the Rating Agencies andconsistent with the facts covered by such representations and warranties asthey exist on the date thereof, including the representations and warrantiesmade in the Loan Documents; and

#### (h)           supplyto Lender, at Lender’s sole cost and expense, such documentation, financialstatements and reports in form and substance reasonably required for Lender tocomply with Regulation S-X of the federal securities law, if applicable.

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Notwithstanding anythingto the contrary contained in this Agreement or the other Loan Documents, Lendershall reimburse Borrower for all of the Borrower’s reasonable costs andexpenses incurred in connection with Borrower’s complying with requests madeunder this Section 9.1 and Section 9.2.

## Section 9.1             Securitization Indemnification.  Borrower understands that certain of theProvided Information may be included in disclosure documents in connection withthe Securitization, including, without limitation, a prospectus supplement,private placement memorandum, offering circular or other offering document (eacha “Disclosure Document”) and may also be included in filings (an “ExchangeAct Filing”) with the Securities and Exchange Commission pursuant to theSecurities Act of 1933, as amended (the “Securities Act”), or theSecurities and Exchange Act of 1934, as amended (the “Exchange Act”), orprovided or made available to investors or prospective investors in theSecurities, the Rating Agencies, and service providers relating to theSecuritization.  In the event that theDisclosure Document is required to be revised prior to the sale of allSecurities, Borrower will cooperate with the holder of the Note in updating theProvided Information by providing all current information reasonably necessaryto keep the Provided Information accurate and complete in all materialrespects.

## Section 9.3             Servicer.  At the option of Lender, the Loan may beserviced by a servicer/trustee (the “Servicer”) selected by Lender and Lender maydelegate all or any portion of its responsibilities under this Agreement andthe other Loan Documents to the Servicer pursuant to a servicing agreement (the“Servicing Agreement”)between Lender and Servicer. Borrower may rely upon the written instructions,approvals, acceptances, waivers and decisions given to Borrower by Servicer asif made by Lender and Lender agrees to bound thereby.

## Section 9.4             Recourse.

The Debt shall be fullyrecourse to Borrower.

## Section 9.5             Waivers.

#### (a)           Borrowerwaives:

###### (A)          anyright to require Lender to proceed against any other person or to proceedagainst or exhaust any security held by Lender at any time or to pursue anyother remedy in Lender’s power before proceeding against Borrower;

###### (B)           anydefense based upon any legal disability or other defense of, any guarantor ofany other person or by reason of the cessation or limitation of the liabilityof any guarantor from any cause other than full payment of all sums payableunder the Note, this Agreement and any of the other Loan Documents;

###### (C)           anydefense based upon any statute or rule of law which provides that the obligationof a surety must be neither larger in amount nor in any other respects moreburdensome than that of a principal;

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###### (D)          anydefense based upon any failure by Lender to obtain collateral for theindebtedness or failure by Lender to perfect a lien on any collateral;

###### (E)           presentment,demand, protest and notice of any kind except as set forth in this Agreement;

###### (F)           anydefense based upon any failure of Lender to give notice of sale or otherdisposition of any collateral to any other person or entity or any defect inany notice that may be given in connection with any sale or disposition of anycollateral;

###### (G)           anydefense based upon any election by Lender, in any bankruptcy proceeding, of theapplication or non-application of Section 1111(6)(2) of the Bankruptcy Code orany successor statute;

###### (H)          anydefense based upon any use of cash collateral under Section 363 of theBankruptcy Code;

###### (I)            anydefense based upon any agreement or stipulation entered into by Lender withrespect to the provision of adequate protection in any bankruptcy proceeding;

###### (J)            anydefense based upon any borrowing or any grant of a security interest underSection 364 of the Bankruptcy Code;

###### (K)          anydefense based upon the avoidance of any security interest in favor of Lenderfor any reason;

###### (L)           anydefense based upon any bankruptcy, insolvency, reorganization, arrangement,readjustment of debt, liquidation or dissolution proceeding, including anydischarge of, or bar or stay against collecting, all or any of the obligationsevidenced by the Note or owing under any of the Loan Documents; and

###### (M)         anydefense or benefit based upon Borrower’s, or any other party’s, resignation ofthe portion of any obligation secured by the applicable Security Instruments tobe satisfied by any payment from any such party.

###### (N)          anyclaim or other right which Borrower might now have or hereafter acquire againstany other person that arises from the existence or performance of anyobligations under the Note, this Agreement, the Security Instruments or theother Loan Documents, including, without limitation, any of the following: (i)any right of subrogation, reimbursement, exoneration, contribution, orindemnification; or (ii) any right to participate in any claim or remedy ofLender against any collateral 

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###### security therefor, whether or not such claim, remedy or right arises inequity or under contract, statute or common law; and

## Section 9.6             Intercreditor Agreements.

Lender, in one or morecapacities, is party to a certain intercreditor agreement dated on or aroundthe date hereof (the “Intercreditor Agreement”), memorializing itsrights and obligations with respect to the Loan, Borrower, MezzanineSubsidiaries and the Mezzanine Assets. Borrower hereby acknowledges and agrees that (i) such IntercreditorAgreement is intended solely for the benefit of Lender and (ii) Borrower is notan intended third party beneficiary of any of the provisions therein and shallnot be entitled to rely on any of the provisions contained therein.  Lender shall have no obligation to discloseto Borrower the contents of the Intercreditor Agreement.  Borrower’s obligations hereunder areindependent of such Intercreditor Agreement and remain unmodified by the termsand provisions thereof.

## Section 9.7             UCC Plus/Eagle 9 UCC InsurancePolicies.

Borrower hereby covenantsthat upon request of Lender, Borrower shall promptly cooperate with Lender inobtaining UCC-Plus or Eagle 9 UCC insurance policies with respect to thecollateral pledged to Lender pursuant to the Pledge Agreement and, ifavailable, the Security Agreement.  Suchcooperation may include, without limitation, delivery of organizationaldocuments, authority documents and supplemental UCC filings.  Borrower shall pay all costs and expensesincurred by Lender in obtaining such UCC-Plus or Eagle 9 UCC insurancepolicies, including the premium therefor.

# **ARTICLE X**

# MISCELLANEOUS

## Section 10.1           Survival.

This Agreement and allcovenants, agreements, representations and warranties made herein and in thecertificates delivered pursuant hereto shall survive the making by Lender ofthe Loan and the execution and delivery to Lender of the Note, and shallcontinue in full force and effect so long as all or any of the Debt isoutstanding and unpaid unless a longer period is expressly set forth herein orin the other Loan Documents.  Whenever inthis Agreement any of the parties hereto is referred to, such reference shallbe deemed to include the legal representatives, successors and assigns of suchparty.  All covenants, promises andagreements in this Agreement, by or on behalf of Borrower, shall inure to thebenefit of the legal representatives, successors and assigns of Lender.

## Section 10.2           Lender’s Discretion.

Whenever pursuant to thisAgreement, Lender exercises any right given to it to approve or disapprove, orany arrangement or term is to be satisfactory to Lender, the decision of Lenderto approve or disapprove or to decide whether arrangements or terms aresatisfactory or 

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not satisfactory shall(except as is otherwise specifically herein provided) be in the sole discretionof Lender and shall be final and conclusive.

## Section 10.3           Governing Law.

#### (a)           THISAGREEMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OFTHE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIEDAND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUTREGARD TO PRINCIPLES OF CONFLICTS OF LAWS), PROVIDED HOWEVER, THAT WITH RESPECTTO THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIENS AND SECURITYINTERESTS CREATED BY THIS AGREEMENT, THE SECURITY INSTRUMENTS AND THE OTHERLOAN DOCUMENTS, AND THE DETERMINATION OF DEFICIENCY JUDGMENTS, THE LAWS OF THESTATE WHERE EACH INDIVIDUAL PROPERTY IS LOCATED SHALL APPLY.

#### (b)           WITHRESPECT TO ANY CLAIM OR ACTION ARISING HEREUNDER OR UNDER THIS AGREEMENT, THENOTE, OR THE OTHER LOAN DOCUMENTS, BORROWER AND LENDER EACH (A) IRREVOCABLYSUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORKAND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEWYORK, NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF, AND (B) IRREVOCABLYWAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING ON VENUE OFANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,THE NOTE OR THE OTHER LOAN DOCUMENTS BROUGHT IN ANY SUCH COURT, IRREVOCABLYWAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCHCOURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  NOTHING IN THIS AGREEMENT, THE NOTE OR THEOTHER LOAN DOCUMENTS INSTRUMENT WILL BE DEEMED TO PRECLUDE LENDER FROM BRINGINGAN ACTION OR PROCEEDING WITH RESPECT HERETO IN ANY OTHER JURISDICTION.

## Section 10.4           Modification, Waiver in Writing.

No modification,amendment, extension, discharge, termination or waiver of any provision of thisAgreement, the Note, or of any other Loan Document, nor consent to anydeparture by Borrower therefrom, shall in any event be effective unless thesame shall be in a writing signed by the party against whom enforcement issought, and then such waiver or consent shall be effective only in the specificinstance, and for the purpose, for which given. Except as otherwise expressly provided in this Agreement or in any ofthe other Loan Documents, no notice to, or demand on Borrower, shall entitleBorrower to any other or future notice or demand in the same, similar or othercircumstances.

 

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## Section 10.5           DelayNot a Waiver.

Neither any failure norany delay on the part of Lender in insisting upon strict performance of anyterm, condition, covenant or agreement, or exercising any right, power, remedyor privilege hereunder, or under the Note or under any other Loan Document, orany other instrument given as security therefor, shall operate as or constitutea waiver thereof, nor shall a single or partial exercise thereof preclude anyother future exercise, or the exercise of any other right, power, remedy orprivilege.  In particular, and not by wayof limitation, by accepting payment after the due date of any amount payableunder this Agreement, the Note or any other Loan Document, Lender shall not bedeemed to have waived any right either to require prompt payment when due ofall other amounts due under this Agreement, the Note or the other LoanDocuments, or to declare a default for failure to effect prompt payment of anysuch other amount.

## Section 10.6           Notices.

All notices or otherwritten communications hereunder shall be deemed to have been properly givenupon receipt or rejection if sent either by (i) overnight delivery with anyreputable overnight courier service, charges prepaid, return receipt requestedor (ii)  registered or certified mail,postage prepaid, return receipt requested, in either event, addressed asfollows:
| If to Borrower: |   | GMH Communities, LP                   |
|-----------------|--------|---------------------------------------|
|            |   | 10 Campus Boulevard                   |
|            |   | Newtown Square, PA 19073              |
|            |   | Attention: Joseph Macchione           |
|            |   |                                  |
| With a copy to: |   | Morgan, Lewis & Bockius LLP       |
|            |   | 1701 Market Street                    |
|            |   | Philadelphia, PA 19103                |
|            |   | Attention: Michael J. Pedrick, Esq.   |
|            |   |                                  |
| If to Lender:   |   | Wachovia Bank, National Association   |
|            |   | One Wachovia Center                   |
|            |   | 301 South College Street, NC0172      |
|            |   | Charlotte, NC 28288                   |
|            |   | Attention: Rex Rudy                   |
|            |   |                                  |
| With copy to:   |   | Cadwalader, Wickersham & Taft LLP |
|            |   | 227 West Trade Street, Suite 2400     |
|            |   | Charlotte, NC 28202                   |
|            |   | Attention: Richard Madden, Esq.       |

or addressed as suchparty may from time to time designate by written notice to the other parties.

Either party by notice tothe other may designate additional or different addresses for subsequentnotices or communications.

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## Section 10.7           Trialby Jury.

BORROWER AND LENDERHEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BYJURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCHRIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANYCLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY ISGIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TOENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO ATRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER AND BORROWER ARE HEREBY AUTHORIZED TO FILE A COPY OF THISPARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWEROR LENDER, AS APPLICABLE.

## Section 10.8           Headings.

The Article and/orSection headings and the Table of Contents in this Agreement are includedherein for convenience of reference only and shall not constitute a part ofthis Agreement for any other purpose.

## Section 10.9           Severability.

Wherever possible, eachprovision of this Agreement shall be interpreted in such manner as to beeffective and valid under Applicable Law, but if any provision of thisAgreement shall be prohibited by or invalid under Applicable Law, suchprovision shall be ineffective to the extent of such prohibition or invalidity,without invalidating the remainder of such provision or the remaining provisionsof this Agreement.

## Section 10.10         Preferences.

Lender shall have thecontinuing and exclusive right to apply or reverse and reapply any and allpayments by Borrower to any portion of the obligations of Borrowerhereunder.  To the extent Borrower makesa payment or payments to Lender, which payment or proceeds or any part thereofare subsequently invalidated, declared to be fraudulent or preferential, setaside or required to be repaid to a trustee, receiver or any other party underany bankruptcy law, State or federal law, common law or equitable cause, then,to the extent of such payment or proceeds received, the obligations hereunderor part thereof intended to be satisfied shall be revived and continue in fullforce and effect, as if such payment or proceeds had not been received byLender.

## Section 10.11         Waiverof Notice.

Borrower shall not beentitled to any notices of any nature whatsoever from Lender except withrespect to matters for which this Agreement or the other Loan Documentsspecifically and expressly provide for the giving of notice by Lender toBorrower and except with respect to matters for which Borrower is not, pursuantto applicable Legal Requirements, permitted to waive the giving of notice.  Borrower hereby expressly waives the right toreceive 

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any notice from Lenderwith respect to any matter for which this Agreement or the other Loan Documentsdo not specifically and expressly provide for the giving of notice by Lender toBorrower.

## Section 10.12         Remediesof Borrower.

In the event that a claimor adjudication is made that Lender or its agents have acted unreasonably orunreasonably delayed acting in any case where by law or under this Agreement orthe other Loan Documents, Lender or such agent, as the case may be, has anobligation to act reasonably or promptly, Borrower agrees that neither Lendernor its agents shall be liable for any monetary damages, and Borrower’s soleremedies shall be limited to commencing an action seeking injunctive relief ordeclaratory judgment.  The parties heretoagree that any action or proceeding to determine whether Lender has actedreasonably shall be determined by an action seeking declaratory judgment.

## Section 10.13         Expenses;Indemnity.

#### (a)           Borrower covenants and agrees to payor, if Borrower fails to pay, to reimburse, Lender within five (5) days ofreceipt of written notice from Lender for all reasonable out-of-pocket costsand expenses (including reasonable attorneys’ fees and disbursements) incurredby Lender in connection with (i) the preparation, negotiation, execution anddelivery of this Agreement and the other Loan Documents and the consummation ofthe transactions contemplated hereby and thereby and all the costs offurnishing all opinions by counsel for Borrower (including without limitationany opinions requested by Lender as to any legal matters arising under thisAgreement or the other Loan Documents with respect to the Properties or theCollateral; (ii) Lender’s ongoing performance and compliance with allagreements and conditions contained in this Agreement and the other LoanDocuments on its part to be performed or complied with after the Closing Date;(iii) the negotiation, preparation, execution, delivery and administration ofany consents, amendments, waivers or other modifications to this Agreement andthe other Loan Documents and any other documents or matters requested byBorrower; (iv) securing Borrower’s compliance with any requests made pursuantto the provisions of this Agreement; (v) the filing and recording fees andexpenses, title insurance and reasonable fees and expenses of counsel forproviding to Lender all required legal opinions, and other similar expensesincurred in creating and perfecting the Liens in favor of Lender pursuant tothis Agreement and the other Loan Documents; (vi) enforcing or preserving anyrights, in response to third-party claims or the prosecuting or defending ofany action or proceeding or other litigation, in each case against, under oraffecting Borrower, this Agreement, the other Loan Documents, the Properties,the Collateral or any other security given for the Loan; and (vii) enforcingany obligations of or collecting any payments due from Borrower under thisAgreement, the other Loan Documents or with respect to the Properties or inconnection with any refinancing or restructuring of the credit arrangementsprovided under this Agreement in the nature of a “work out” or of anyinsolvency or bankruptcy proceedings; provided, however, thatBorrower shall not be liable for the payment of any such costs and expenses tothe extent the same arise by reason of the gross negligence, illegal acts,fraud or willful misconduct of Lender.

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#### (b)           Borrower shall indemnify, defend andhold harmless Lender from and against any and all other liabilities,obligations, losses, damages, penalties, actions, judgments, suits, claims,costs, expenses and disbursements of any kind or nature whatsoever (including,without limitation, the reasonable fees and disbursements of counsel for Lenderin connection with any investigative, administrative or judicial proceedingcommenced or threatened, whether or not Lender shall be designated a partythereto), that may be imposed on, incurred by, or asserted against Lender inany manner relating to or arising out of (i) any breach by Borrower of itsobligations under, or any material misrepresentation by Borrower contained in,this Agreement or the other Loan Documents, or (ii) the use or intended use ofthe proceeds of the Loan (collectively, the “Indemnified Liabilities”); provided, however,that Borrower shall not have any obligation to Lender hereunder to the extentthat such Indemnified Liabilities arise from the gross negligence, illegalacts, fraud or willful misconduct of Lender. To the extent that the undertaking to indemnify, defend and holdharmless set forth in the preceding sentence may be unenforceable because itviolates any law or public policy, Borrower shall pay the maximum portion thatit is permitted to pay and satisfy under Applicable Law to the payment andsatisfaction of all Indemnified Liabilities incurred by Lender.

#### (c)           Borrower shall, at its sole cost andexpense, protect, defend, indemnify, release and hold harmless Lender and theIndemnified Parties from and against any and all losses (including, withoutlimitation, reasonable attorneys’ fees and costs incurred in the investigation,defense, and settlement of losses incurred in correcting any prohibitedtransaction or in the sale of a prohibited loan, and in obtaining anyindividual prohibited transaction exemption under ERISA, the Code, any Statestatute or other similar law that may be required, in Lender’s sole discretion)that Lender may incur, directly or indirectly, as a result of a default under Sections‎4.1.8 or ‎5.2.8 hereof.

#### (d)           Borrower covenants and agrees to payfor any consent, approval, waiver or confirmation obtained from such RatingAgency pursuant to the terms and conditions of the Loan Documents as a resultof a request or action of Borrower and Lender shall be entitled to requirepayment of such fees and expenses as a condition precedent to the obtaining ofany such consent, approval, waiver or confirmation.

## Section 10.14         Schedulesand Exhibits Incorporated.

The Schedules andExhibits annexed hereto are hereby incorporated herein as a part of thisAgreement with the same effect as if set forth in the body hereof.

## Section 10.15         Offsets,Counterclaims and Defenses.

Any assignee of Lender’sinterest in and to this Agreement, the Note and the other Loan Documents shalltake the same free and clear of all offsets, counterclaims or defenses whichare unrelated to such documents which Borrower may otherwise have against anyassignor of such documents, and no such unrelated counterclaim or defense shallbe interposed or asserted by Borrower in any action or proceeding brought byany such assignee upon such documents and any such right to interpose or assertany such unrelated offset, counterclaim or defense in any such action orproceeding is hereby expressly waived by Borrower.

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## Section 10.16         NoJoint Venture or Partnership; No Third-party Beneficiaries.

#### (a)           Borrower and Lender intend that therelationships created hereunder and under the other Loan Documents be solelythat of borrower and lender.  Nothingherein or therein is intended to create a joint venture, partnership, tenancy-in-common,or joint tenancy relationship between Borrower and Lender nor to grant Lenderany interest in the Properties other than that of mortgagee, beneficiary orlender.

#### (b)           This Agreement and the other LoanDocuments are solely for the benefit of Lender and Borrower and nothingcontained in this Agreement or the other Loan Documents shall be deemed toconfer upon anyone other than Lender and Borrower any right to insist upon orto enforce the performance or observance of any of the obligations containedherein or therein.  All conditions to theobligations of Lender to make the Loan hereunder are imposed solely andexclusively for the benefit of Lender and no other Person shall have standingto require satisfaction of such conditions in accordance with their terms or beentitled to assume that Lender will refuse to make the Loan in the absence ofstrict compliance with any or all thereof and no other Person shall under anycircumstances be deemed to be a beneficiary of such conditions, any or all ofwhich may be freely waived in whole or in part by Lender if, in Lender’s solediscretion, Lender deems it advisable or desirable to do so.

## Section 10.17         Publicity.

All news releases,publicity or advertising by Borrower, Lender or their respective Affiliatesthrough any media intended to reach the general public which refers to the LoanDocuments or the financing evidenced by the Loan Documents, to Borrower, Lenderor any of their respective Affiliates shall be subject to the prior writtenapproval of Lender and Borrower as applicable, which shall not be unreasonablywithheld.  Borrower shall request suchapproval from Lender as it relates to the Related Parties.  Notwithstanding the foregoing, disclosurerequired by Applicable Laws (as reasonably determined by Borrower, Lender orthe Related Parties, as applicable) shall not be subject to the prior writtenapproval of Lender or Borrower, as applicable. Further notwithstanding the foregoing, nothing in this Section 10.17shall limit (i) Lender’s rights set forth in Sections 9.1, 9.2 or10.23 or (ii) Lender’s discretion with respect to the contents containedin any Disclosure Document.

## Section 10.18         Cross-Default;Cross-Collateralization; Waiver of Marshalling of Assets.

#### (a)           Property Guarantor acknowledges thatLender has made the Loan to Borrower upon the security of Property Guarantor’scollective interest in the Properties and in reliance upon the aggregate of theProperties taken together being of greater value as collateral security thanthe sum of each Individual Property taken separately.  Property Guarantor agree that the SecurityInstruments are and will be cross-collateralized and cross-defaultedwith each other so that subject to the release or substitution of anyIndividual Property as provided herein (i) an Event of Default under any of theSecurity Instruments shall constitute an Event of Default under each of theother Security Instruments which secure the Property Guaranty; (ii) an Event ofDefault under the Property Guaranty or this Agreement shall constitute an Eventof Default 

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#### under eachSecurity Instrument; (iii) each Security Instrument shall constitute securityfor the Guaranty as if a single blanket lien were placed on all of theProperties as security for the Note; and (iv) such cross collateralizationshall in no event be deemed to constitute a fraudulent conveyance.

#### (b)           To the fullest extent permitted byApplicable Law, Borrower, for itself and its successors and assigns, and onbehalf of Property Guarantor waives all rights to a marshalling of the assetsof Borrower, Borrower’s partners and others with interests in Borrower, and ofthe Properties, or to a sale in inverse order of alienation in the event offoreclosure of all or any of the Security Instruments, and agrees not to assertany right under any laws pertaining to the marshalling of assets, the sale ininverse order of alienation, homestead exemption, the administration of estatesof decedents, or any other matters whatsoever to defeat, reduce or affect theright of Lender under the Loan Documents to a sale of the Properties for thecollection of the Debt without any prior or different resort for collection orof the right of Lender to the payment of the Debt out of the net proceeds ofthe Properties in preference to every other claimant whatsoever.  In addition, Borrower, for itself and itssuccessors and assigns and Property Guarantor, waives in the event offoreclosure of any or all of the Security Instruments, any equitable rightotherwise available to Borrower or Property Guarantor which would require theseparate sale of the Properties or require Lender to exhaust its remediesagainst any Individual Property or any combination of the Properties beforeproceeding against any other Individual Property or combination of Properties;and further in the event of such foreclosure Borrower does hereby expresslyconsents to and authorizes, at the option of Lender, the foreclosure and saleeither separately or together of any combination of the Properties.

## Section 10.19         Waiverof Counterclaim.

Borrower hereby waivesthe right to assert a counterclaim, other than a compulsory counterclaim, inany action or proceeding brought against it by Lender or its agents.

## Section 10.20         Conflict;Construction of Documents; Reliance.

In the event of anyconflict between the provisions of this Agreement and any of the other LoanDocuments, the provisions of this Agreement shall control.  The parties hereto acknowledge that they wererepresented by competent counsel in connection with the negotiation, draftingand execution of the Loan Documents and that such Loan Documents shall not besubject to the principle of construing their meaning against the party whichdrafted same.  Borrower acknowledgesthat, with respect to the Loan, Borrower shall rely solely on its own judgmentand advisors in entering into the Loan without relying in any manner on anystatements, representations or recommendations of Lender or any parent,subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exerciseof any rights or remedies available to it under any of the Loan Documents orany other agreements or instruments which govern the Loan by virtue of theownership by it or any parent, subsidiary or Affiliate of Lender of any equityinterest any of them may acquire in Borrower, and Borrower hereby irrevocablywaives the right to raise any defense or take any action on the basis of theforegoing with respect to Lender’s exercise of any such rights orremedies.  Borrower 

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acknowledges that Lenderengages in the business of real estate financings and other real estatetransactions and investments which may be viewed as adverse to or competitivewith the business of Borrower or its Affiliates.

## Section 10.21         Brokersand Financial Advisors.

Each of Borrower andLender hereby represents that it has dealt with no financial advisors, brokers,underwriters, placement agents, agents or finders in connection with thetransactions contemplated by this Agreement. Each of Borrower and Lender shall indemnify, defend and hold the otherharmless from and against any and all claims, liabilities, costs and expensesof any kind (including Lender’s reasonable attorneys’ fees and expenses) in anyway relating to a breach of the representation in the preceding sentence.  The provisions of this ‎Section10.21 shall survive the expiration and termination of this Agreement andthe payment of the Debt.

## Section 10.22         PriorAgreements.

This Agreement and theother Loan Documents contain the entire agreement of the parties hereto andthereto in respect of the transactions contemplated hereby and thereby, and allprior agreements among or between such parties, whether oral or written,between Borrower and/or its Affiliates and Lender are superseded by the termsof this Agreement and the other Loan Documents.

## Section 10.23         Assignment;Participation.   Lender may at anytime, at no cost to Borrower, grant to one or more banks or other institutions(each a “Participant”)participating interests in the Loan (each a “Participation”). In the event of any such grant by Lender of a Participation to aParticipant (whether or not Borrower was given notice thereof), Lender shallremain responsible for the performance of its obligations hereunder, andBorrower shall continue to deal solely and directly with Lender in connectionwith all rights and obligations hereunder. Such participation agreement may provide that such Lender will not agreeto any modification, amendment or waiver, without the consent of theParticipants, which would effect any of the following:  (a) reduce the principal of, or interest on,the Note or any fees due hereunder or any other amount due hereunder or underany other Loan Document; (b) postpone any date fixed for any payment ofprincipal of, or interest on, the Note or any fees due hereunder or under anyother Loan Document; (c) release any material portion of the Properties orother Collateral for the Loan other than in accordance with the Loan Documents;(d) release any Guarantor, in whole or in part, other than in accordance withthe Loan Documents; or (e) increase the Loan amount.  Each Participant shall have the right toeffect a Securitization with respect to its Participation interest. Borroweragrees to provide all assistance reasonably requested by Lender to enableLender to sell Participations as aforesaid, or make assignments of its interestin the Loan as hereinafter provided in this Section.  Borrower and Lender shall execute suchmodifications to the Loan Documents as shall, in the reasonable judgment ofLender, be necessary or desirable in connection with assignments in accordancewith the foregoing provisions of this Section; provided, however,that no such modifications shall increase Borrower’s liability or obligations,or decrease its rights, in respect of the Loan. Lender and any Participant may at any time freely assign all or anyportion of its rights under this Agreement and the Note.  Notwithstanding anything in this Agreement tothe contrary, Borrower recognizes that in connection with 

90

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## Lender’s selling of Participations or making of assignments, any or alldocumentation, financial statements, appraisals and other data, or copiesthereof, relevant to Borrower, any Guarantor, any Collateral or the Loan may beexhibited to and retained by any such Participant or assignee or prospectiveParticipant or assignee.  Lender’sdelivery of any financial statements and appraisals to any such Participant orassignee or prospective Participant or assignee shall be accompanied by Lender’sstandard confidentiality statement indicating that the same are delivered on aconfidential basis.

## Section 10.24         Treatmentof Certain Information; Confidentiality.

Lender agrees to maintainthe confidentiality of the Information (as defined below), except thatInformation may be disclosed (a) to its Affiliates and to its and itsAffiliates’ respective partners, directors, officers, employees, agents,advisors and representatives (it being understood that the Persons to whom suchdisclosure is made will be informed of the confidential nature of such Informationand instructed to keep such Information confidential), (b) to the extentrequested by any regulatory authority purporting to have jurisdiction over it(including any self-regulatory authority, such as the National Association ofInsurance Commissioners), (c) to the extent required by applicable laws orregulations or by any subpoena or similar legal process, (d) to any other partyhereto, (e) in connection with the exercise of any remedies hereunder or underany other Loan Document or any action or proceeding relating to this Agreementor any other Loan Document or the enforcement of rights hereunder orthereunder, (f) subject to an agreement containing provisions substantially thesame as those of this Section, to any assignee of or Participant in, or anyprospective assignee of or Participant in, any of its rights or obligationsunder this Agreement , (g) with the consent of the Trust and the  Borrower or (h) to the extent suchInformation (x) becomes publicly available other than as a result of a breachof this Section or (y) becomes available to Lender or any of  its Affiliates on a nonconfidential basisfrom a source other than the Trust or Borrower.

For purposes of thisSection, “Information”means all information received from the Borrower or any of its Affiliatesrelating to the Borrower or its businesses, other than any such informationthat is available to Lender on a nonconfidential basis prior to disclosure bythe  Borrower, provided that, in the caseof information received from the Borrower or any of its Affiliates after the date hereof, suchinformation is clearly identified at the time of delivery as confidential.  Any Person required to maintain theconfidentiality of Information as provided in this Section shall be consideredto have complied with its obligation to do so if such Person has exercised thesame degree of care to maintain the confidentiality of such Information as suchPerson would accord to its own confidential information.

[SIGNATURE PAGESIMMEDIATELY FOLLOW]

 

91

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IN WITNESS WHEREOF, theparties hereto have caused this Agreement to be duly executed by their dulyauthorized representatives, all as of the day and year first above written.
|        |   | BORROWER:                                                             |
|--------|--------|-----------------------------------------------------------------------|
|   |   |                                                                  |
|   |   | GMH COMMUNITIES, LP, a Delaware limited partnership                   |
|   |   |                                                                  |
|   |   | By:                                                                   | GMH Communities GP Trust, a  Delaware statutory trust, its general partner |
|   |   |                                                                  |
|   |   | By:                                                                   | /s/ Joseph M. Macchione |
|   |   |                                                                  | Name: Joseph M.  Macchione |
|   |   |                                                                  | Title: Vice  President |
|   |   |                                                                  |
|   |   | LENDER:                                                               |
|   |   |                                                                  |
|   |   | WACHOVIA BANK, NATIONAL   ASSOCIATION, a national banking association |
|   |   |                                                                  |
|   |   | By:                                                                   | /s/ Rex E. Rudy |
|   |   |                                                                  | Name: Rex E. Rudy |
|   |   |                                                                  | Title: Managing Director |

 

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**EXHIBIT A**

FORM OF COMPLIANCECERTIFICATE

                      ,200    

Wachovia Bank, NationalAssociationOne Wachovia Center301 South College StreetMail Code:  NC0172Charlotte, North Carolina  28288-0166

Ladies and Gentlemen:

Reference is made to thatcertain Loan Agreement dated as of October 2, 2006 (as amended, restated,supplemented or otherwise modified from time to time, the “Loan Agreement”),by and among GMH Communities, LP (the “Borrower”) and Lender.  Capitalized terms used herein, and not otherwisedefined herein, have their respective meanings given them in the LoanAgreement.

Pursuant toSection 5.1.10 of the Loan Agreement, the undersigned hereby certifies tothe Lender as follows:

(1)           The undersigned is the                                of the Borrower.

(2)           The undersigned has examined thebooks and records of the Borrower and has conducted such other examinations andinvestigations as are reasonably necessary to provide this ComplianceCertificate.

(3)           No Default or Event of Default exists*[if such is not the case, specify such Default or Event of Default andits nature, when it occurred and whether it is continuing and the steps beingtaken by the Borrower with respect to such event, condition or failure]*.

(4)           The representations and warrantiesmade or deemed made by the Borrower and any Key Entity in the Loan Documents towhich any is a party, are true and correct in all material respects on and asof the date hereof except to the extent that such representations andwarranties expressly relate solely to an earlier date (in which case suchrepresentations and warranties shall have been true and correct on and as ofsuch earlier date) and except for changes in factual circumstances notprohibited under the Loan Documents.

(5)           Attached hereto as Schedule 1are reasonably detailed calculations establishing whether or not the Borrowerand its Subsidiaries were in compliance with the covenants contained inSections 5.3 and 5.4 of the Credit Agreement.

IN WITNESS WHEREOF, theundersigned has executed this certificate as of the date first above written.

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|        |   |
|--------|--------|
|   | Name:  |   |
|   | Title: |   |

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**NOTICE OF BORROWING**

                         ,200   

Wachovia Bank, NationalAssociationOne Wachovia Center301 South College StreetMail Code:  NC0172Charlotte, North Carolina  28288-0166

Ladies and Gentlemen:

Reference is made to thatcertain Loan Agreement dated as of October 2, 2006 (as amended, restated,supplemented or otherwise modified from time to time, the “Loan Agreement”),by and among GMH Communities, LP (the “Borrower”) and Lender.  Capitalized terms used herein, and nototherwise defined herein, have their respective meanings given them in the LoanAgreement. Capitalized terms used herein, and not otherwise defined herein,have their respective meanings given them in the Loan Agreement.

Pursuant to Section 2.1.5of the Loan Agreement, Borrower hereby requests that the Lender make anAdditional Advance on the date hereof to the Borrower as follows:
| *First,*Amount of Additional Advance:             |   | $       |   |
|---------------------------------------------------|--------|---------|--------|
| * *                                          |   |    |
| *Second,*Interest Period for  Additional Advance: |   |    |
|                                              | o      | 30 days |
|                                              | o      | 60 days |
|                                              | o      | 90 days |

 

The proceeds of thisAdditional Advance will be used for the following purposes:                                             .[INSERTDESCRIPTION]

Borrower herebyrepresents and warrants to Lender that no Default or Event of Default exists[if such is not the case, specify such Default or Event of Default and itsnature, when it occurred and whether it is continuing and the steps being takenby the Borrower with respect to such event, condition or failure].

The representations andwarranties made or deemed made by the Borrower and any Key Entity in the LoanDocuments to which any is a party, are true and correct in all material respectson and as of the date hereof except to the extent that such representations andwarranties expressly relate solely to an earlier date (in which case suchrepresentations and warranties shall have been true and correct on and as ofsuch earlier date) and except for changes in factual circumstances notprohibited under the Loan Documents.

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Sincerely,

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**SCHEDULE A**

INDIVIDUAL PROPERTIES,PROPERTY GUARANTORS, ALLOCATED LOAN AMOUNTS AND ALLOCATED VALUES

 
| **Individual  Property**                                      | ** ** | **Property Guarantor**         | ** ** | **Allocated Value** |
|---------------------------------------------------------------|------------|--------------------------------|------------|---------------------|
| University  Fields  200 Curtis Street   Savoy, Illinois       |       | Savoy Village Associates, LLC  |       | $                   | 25,237,798.00 |
| University  Centre   5200 Croyden Avenue  Kalamazoo, Michigan |       | Croyden Avenue Associates, LLC |       | $                   | 26,946,062.00 |
| The Summit   1801 Marks Avenue   Mankato, Minnesota           |       | Monks Road Associates, LLC     |       | $                   | 23,760,480.00 |
| University Oaks   21 National Guard Rd   Columbia, SC         |       | South Carolina Associates, LLC |       | $                   | 29,435,713.00 |
| University  Highlands   2800 Enterprise Blvd   Reno, Nevada   |       | Reno Associates, LLC           |       | $                   | 36,978,807.00 |
| University  Uptown   2700 West Oak   Denton, Texas            |       | Denton Associates, LLC         |       | $                   | 36,978,807.00 |
| Blanton Commons   Lankford Drive   Valdosta, Georgia          |       | Lankford Drive Associates, LLC |       | $                   | 26,808,504.00 |

 

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**SCHEDULE B**

MEZZANINE ASSETS,MEZZANINE ASSET OWNERS, MEZZANINE ALLOCATEDLOAN AMOUNTS AND MEZZANINE ALLOCATED VALUES

 
| **Mezzanine  Asset**                   | ** ** | **Mezzanine   Subsidiary**                     | ** ** | **Mezzanine Asset   Owner**       | ** ** | **Mezzanine   Allocated Loan  Amount** | ** ** | **Mezzanine   Allocated   Value** |
|----------------------------------------|------------|------------------------------------------------|------------|-----------------------------------|------------|----------------------------------------|------------|-----------------------------------|
| University  Commons:  Bloomington, IN  |       | Clarizz Boulevard Associates Intermediate, LLC |       | Clarizz Boulevard Associates, LLC |       | $                                      | 5,667152   |                              | $ | 26,683,052 |
| University  Commons:  Athens, GA       |       | Lakeside Associates Intermediate, LLC          |       | Lakeside Associates, LLC          |       | $                                      | 2,095,346  |                              | $ | 17,675,230 |
| University  Commons:  Urbana, IL       |       | Urbana Associates Intermediate, LLC            |       | Urbana Associates, LLC            |       | $                                      | 2,642,732  |                              | $ | 26,306,200 |
| University  Commons:  Lexington, KY    |       | Red Mile Road Associates Intermediate, LLC     |       | Red Mile Road Associates, LLC     |       | $                                      | 1,917,461  |                              | $ | 19,591,215 |
| University  Commons:  Baton Rouge, LA  |       | Burbank Drive Associates Intermediate III, LLC |       | Burbank Drive Associates III, LLC |       | $                                      | 1,444,136  |                              | $ | 21,159,200 |
| University  Commons:

Eugene, OR       |       | Commons Drive Associates Intermediate, LLC     |       | Commons Drive Associates, LLC     |       | $                                      | 1,468,027  |                              | $ | 21,548,677 |
| University  Commons:  East Lansing, MI |       | Abbott Road Associates Intermediate, LLC       |       | Abbott Road Associates, LLC       |       | $                                      | 3,252,900  |                              | $ | 20,981,215 |
| University  Commons:  Starkville, MS   |       | Campus View Drive Associates Intermediate, LLC |       | Campus View Drive Associates, LLC |       | $                                      | 680,524    |                              | $ | 10,649,316 |
| University  Commons:  Cayce, SC        |       | Alexander Road Associates Intermediate, LLC    |       | Alexander Road Associates, LLC    |       | $                                      | 2,354,558  |                              | $ | 26,798,100 |
| University  Commons:  Oxford, OH       |       | Brown Road Associates Intermediate, LLC        |       | Brown Road Associates, LLC        |       | $                                      | 2,154,091  |                              | $ | 21,344,944 |
| University  Commons:  Tuscaloosa, AL   |       | Keller Boulevard Associates Intermediate, LLC  |       | Keller Boulevard Associates, LLC  |       | $                                      | 3,075,000  |                              | $ | 23,240,896 |

 

----

 

**SCHEDULE C**

ENCUMBERED PROPERTIES
| 1.  |   | Cambridge at Southern-Statesboro, GA |
|-----|--------|--------------------------------------|
| 2.  |   | University Crescent                  |
| 3.  |   | University Greens                    |
| 4.  |   | University Heights                   |
| 5.  |   | University Lodge                     |
| 6.  |   | University Pines                     |
| 7.  |   | University Trails                    |
| 8.  |   | University Court                     |
| 9.  |   | University Estates                   |
| 10. |   | University Gables                    |
| 11. |   | University Glades                    |
| 12. |   | University Manor                     |
| 13. |   | University Mills                     |
| 14. |   | University Place                     |
| 15. |   | Collegiate Hall                      |
| 16. |   | Campus Club-Statesboro               |
| 17. |   | University Edge                      |
| 18. |   | Campus Connection                    |
| 19. |   | University Pointe                    |
| 20. |   | College Park-Chapel Ridge            |
| 21. |   | Grand Marc at University Village     |
| 22. |   | The Verge                            |
| 23. |   | Willowtree Apartments and Towers     |
| 24. |   | Campus Walk                          |
| 25. |   | Pirates Cove                         |
| 26. |   | University Walk                      |
| 27. |   | Campus Club-Gainesville              |
| 28. |   | The Enclave                          |
| 29. |   | The Ridge                            |

----

 
| 30. |   | The View                              |
|-----|--------|---------------------------------------|
| 31. |   | State College Park                    |
| 32. |   | Nittany Crossing                      |
| 33. |   | GrandMarc at Seven Corners            |
| 34. |   | Campus Edge Associates LLC            |
| 35. |   | Chapel View                           |
| 36. |   | Campus Ridge Apartments               |
| 37. |   | Southview Apartments                  |
| 38. |   | Stone Gate Apartments                 |
| 39. |   | The Commons Apartments                |
| 40. |   | University Crossings (KS)             |
| 41. |   | Seminole Suites                       |
| 42. |   | The Tower at 3rd                      |
| 43. |   | Campus Walk-UNCW                      |
| 44. |   | University Crossing                   |
| 45. |   | University Meadows                    |
| 46. |   | Pegasus Connection                    |
| 47. |   | Royal Riverwood Manor (Univ. Village) |
| 48. |   | Jacobs Heights                        |
| 49. |   | University Commons (Norman, OK)       |
| 50. |   | University Commons (State College)    |
| 51. |   | Aspen Apartments                      |
| 52. |   | Brookstone Village                    |
| 53. |   | College Suites Stadium                |
| 54. |   | College Manor Apartments              |
| 55. |   | Jacob Height Phase III                |
| 56. |   | Blanton Commons Phase II              |

** **

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**SCHEDULE D**

O&M PROGRAMS

NONE

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**SCHEDULEE**

SOURCES AND USES

(see attached page)

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**SCHEDULE 4.1.1**

ORGANIZATIONAL CHART

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**SCHEDULE 4.1.4**

LITIGATION

1.                                       GMHCommunities Trust (“Trust”) is currently involved in several class actionlawsuits that are pending class certification. Material facts surrounding thelitigation are presented in the Trust’s periodic reports as filed with theUnited States Securities and Exchange Commission, including its Annual Reporton Form 10-K for the fiscal year ended December 31, 2005, and in each of itssubsequent Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,2006 and June 30, 2006.  The Trust willcontinue to report material updates with respect to such litigation in itsperiodic reports filed in the future.

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