Exhibit
10.35


SECURITY AGREEMENT


This SECURITY AGREEMENT
(this “Agreement”), dated as of October 2, 2006, is made by GMH
COMMUNITIES, LP, a Delaware limited partnership (the “Borrower”),
COLLEGE PARK MANAGEMENT, LLC, a Florida limited liability company, GMH
COMMUNITIES SERVICES, INC., a Delaware corporation, GMH COMMUNITIES TRUST, a
Maryland real estate investment trust, GMH COMMUNITIES TRS, INC., a Delaware
corporation, GMH MILITARY HOUSING INVESTMENTS, LLC, a Delaware limited
liability company, COLLEGE PARK MANAGEMENT TRS, INC., a Delaware corporation
and GMH MILITARY HOUSING, LLC, a Delaware limited liability company (together
with the Borrower, each a “Grantor”, collectively, the “Grantors”),
in favor of WACHOVIA BANK, NATIONAL ASSOCIATION (the “Secured Party”).


RECITALS


Pursuant to the Loan
Agreement, dated as of October 2, 2006 (as amended, supplemented or otherwise
modified from time to time, the “Loan Agreement”), among the Borrower
and Secured Party, the Secured Party has agreed to make a loan (consisting of
an Initial Advance and Additional Advances to be made after the date hereof)
(the “Loan”) to the Borrower upon the terms and subject to the
conditions set forth therein.  It is a
condition precedent to the obligation of the Secured Party to make the loan to
the Borrower under the Loan Agreement that each Grantor shall have executed and
delivered this Agreement to the Secured Party.


NOW, THEREFORE, in
consideration of the premises and to induce the Secured Party to enter into the
Loan Agreement and to induce the Secured Party to make the Loan to the Borrower
under the Loan Agreement, each Grantor hereby agrees with the Secured Party, as
follows:


1.     Defined Terms.  (a) 
Unless otherwise defined herein, capitalized terms which are defined in
the Loan Agreement and used herein shall have the meanings given to them in the
Loan Agreement; the following terms which are defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof are used herein as
so defined: Account(s), Certificated Security, Chattel Paper, Documents,
Equipment, Farm Products, General Intangibles, Instruments, Inventory,
Investment Property, Letter-of-Credit Rights, Proceeds, Securities Account and
Supporting Obligations; and the following terms shall have the following
meanings:


“Account
Control Agreement”: with respect to any Deposit Account, a control
agreement in a form approved by the Lender, as amended, supplemented or
otherwise modified from time to time.


“Code”: the
Uniform Commercial Code as from time to time in effect in the State of New
York.


“Collateral”:
as defined in Section 2 of this Agreement (and shall not include any Excluded
Collateral).


“Collateral
Account”:  any collateral account
established by the Secured Party as provided in Section 3(d) or 8.


“Copyright”:
(a)  any copyright in any original work
of authorship fixed in any tangible medium of expression (including, without
limitation, any thereof referred to on Schedule V hereto), 













including, without
limitation, all databases, source codes, object codes and manuals, whether
published or unpublished, whether now or hereafter existing, and whether in the
United States or any other country, and all applications, registrations,
renewals, extensions and recordings relating thereto filed in the United States
Copyright Office or in any other governmental office or agency in the United
States or any other country or political subdivision thereof, in each case in
which any Grantor has any right, title or interest, whether as author,
assignee, transferee or otherwise, and all other rights which any Grantor
presently has or hereafter acquires pursuant to any Copyright License relating
to any such copyright, including, without limitation, copyright assignments,
and exclusive and nonexclusive licenses, and (b) all right, title and interest
of any Grantor in all physical materials embodying any work with respect to
which any Grantor owns or holds rights in any Copyright or Copyright License.


“Copyright
License”: (a) any agreement, written or oral, naming any Grantor as
licensor or licensee, granting any right in or to any Copyright or copyright
registration in the United States or any foreign country (including, without
limitation, any thereof referred to on Schedule V hereto) or (b) any and all
present and future agreements, including, without limitation, assignments and
consents, as any such agreements may from time to time be amended or
supplemented, pursuant to which any Grantor now has or hereafter acquires any
direct or beneficial interest in any Copyright, or is a grantor of rights to
any third party with respect to any copyright, whether as a party to any such
agreement or as an assignee of any rights under any such agreement (including,
without limitation, any thereof referred to on Schedule V hereto) excluding,
however, non-exclusive computer software licenses.


“Deposit
Account”: a “deposit account” as defined in the Uniform Commercial Code of
any applicable jurisdiction and, in any event, including without limitation any
demand, time, savings, passbook or like account maintained with any depositary
institution.


“Excess Cash
Flow Receivables”:  all of Borrower’s
right, title and interest in all amounts to be paid, and all amounts paid, from
time to time to any Grantor pursuant to the Excess Cash Flow Direction Letter.


“Excluded
Assets”: any asset of any Grantor described in clauses (i) through (xx) of
the definition of “Collateral” to the extent that the grant of a security
interest therein pursuant to this Agreement (i) is prohibited by any contract,
agreement, instrument or indenture in existence as of October 2, 2006 of any
Grantor or any Subsidiary of such Grantor to the extent such prohibition is
applicable to such Grantor, (ii) would terminate any contract, agreement,
instrument or indenture of the Grantor or its Subsidiaries or give any other
party thereto or to any such contract, agreement, instrument or indenture the
right to terminate such party’s obligations under any such contract, agreement,
instrument or indenture, (iii) is permitted only with the consent of any other
Person, which consent has not been obtained, or (iv) would result in, or
require, the creation of any Lien on any portion of the Collateral pursuant to
the terms of any contract, agreement, instrument or indenture of such Grantor,
but only, in the case of each of subclauses (i) through (iv), to the extent
that any such prohibition, limitation or restriction would be effective under
applicable law (including, without limitation, as provided under Sections 9-406
and 9-408 of the Code).


“GMH Facility
Account”: a Deposit Account established by each Grantor in accordance with
the requirements of this Agreement with respect to which the applicable
Grantor(s) shall execute and deliver, and cause to be delivered, an Account
Control Agreement.


“Patent License”:
any agreement, whether written or oral, providing for the grant by or to any
Grantor of any right to manufacture, use or sell any invention covered by a
Patent, and all rights of any Grantor under such agreement.



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“Patents”:
(a) all letters patent of the United States or any other country, including
patents, design patents and utility models, and all registrations and
recordings thereof, (b) all applications for letters patent of the United
States or any other country and (c) all reissues, extensions, divisions,
continuations and continuations-in-part thereof, and the inventions disclosed
or claimed therein, including the right to make, sell and/or use the inventions
disclosed or claimed therein; including, without limitation.


“Receivable”: any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account), including, without limitation,
all Excess Cash Flow Receivables.


“Trademark
License”: any agreement, written or oral, providing for the grant by or to
any Grantor of any right to use any Trademark.


“Trademarks”:
(a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers, all prints or labels on which any of the
foregoing appear, and all designs and general intangibles of a like nature, and
the goodwill associated therewith or symbolized thereby, and all other assets,
rights and interests that uniquely embody such goodwill, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and
all applications in connection therewith, whether in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any state thereof or any other country or any political subdivision thereof, or
otherwise, and (b) all extensions or renewals thereof.


(b)           The words “hereof”, “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Schedule. Annex, and Exhibit references are to this
Agreement unless otherwise specified. 
The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.


2.             Grant of Security Interest.  As collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, each Grantor hereby grants to
the Secured Party a security interest in all of the following property now
owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest (collectively, the “Collateral”):


	
   

  	
  (i)

  	
   

  	
  all Receivable;

  
	
   

  	
  (ii)

  	
   

  	
  all Accounts;

  
	
   

  	
  (iii)

  	
   

  	
  all Chattel Paper;

  
	
   

  	
  (iv)

  	
   

  	
  all Copyrights;

  
	
   

  	
  (v)

  	
   

  	
  all Copyright Licenses;

  
	
   

  	
  (vi)

  	
   

  	
  all Deposit Accounts;

  
	
   

  	
  (vii)

  	
   

  	
  all Documents;

  
	
   

  	
  (viii)

  	
   

  	
  all Equipment;

  
	
   

  	
  (ix)

  	
   

  	
  all General Intangibles;

  
	
   

  	
  (x)

  	
   

  	
  all Instruments;

  
	
   

  	
  (xi)

  	
   

  	
  all Inventory;

  
	
   

  	
  (xii)

  	
   

  	
  all Investment Property;

  
	
   

  	
  (xiii)

  	
   

  	
  all Letter of Credit Rights;

  
	
   

  	
  (xiv)

  	
   

  	
  all Patents;

  



 


 



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  (xv)

  	
   

  	
  all Patent Licenses;

  
	
   

  	
  (xvi)

  	
   

  	
  all Securities Accounts, and all Investment Property
  held therein or credited thereto;

  
	
   

  	
  (xvii)

  	
   

  	
  all Trademarks;

  
	
   

  	
  (xviii)

  	
   

  	
  all Trademark Licenses;

  
	
   

  	
  (xix)

  	
   

  	
  all Goods and other property not otherwise described
  above;

  
	
   

  	
  (xx)

  	
   

  	
  all books and records pertaining to the Collateral;

  
	
   

  	
  (xxi)

  	
   

  	
  to the extent not otherwise included, all Proceeds
  and products of any and all of the foregoing, all Supporting Obligations in
  respect of any of the foregoing, and all collateral security and guarantees
  given by any Person with respect to any of the foregoing,

  



provided, that the Collateral shall not include the
Excluded Assets.


3.             Certain Matters Respecting
Receivables.


(a)             Grantors
Remain Liable under Receivables. 
Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise to each such
Receivable.  Secured Party shall not have
any obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Secured Party of any payment relating to such Receivable pursuant hereto, nor
shall the Secured Party be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any
agreement giving rise thereto), to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto), to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.


(b)           Communication
with and Notice to Receivable Obligors. The
Secured Party may at any time communicate with obligors under the Receivables
to verify with them to the Secured Party’s satisfaction the existence, amount
and terms of any Receivables. Upon the request of the Secured Party at
any time after the occurrence and during the continuance of an Event of
Default, each Grantor shall notify account debtors on the Receivables that the
Receivables have been assigned to the Secured Party and that payments in
respect thereof shall be made directly to the Secured Party.


(c)           Analysis
of Receivables.  The Secured Party
shall have the right to make test verifications of the Receivables in any
manner and through any medium that it reasonably considers advisable, and each
Grantor shall furnish all such reasonable assistance and information as the
Secured Party may require in connection therewith.  Not more than once per calendar year (or
otherwise during the occurrence of an Event of Default), upon the Secured Party’s
request and at the expense of the Grantors, each Grantor shall cause
independent public accountants or others satisfactory to the Secured Party to
furnish to the Secured Party reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.  The Secured Party may in its own name or in
the name of others communicate with account debtors on the Receivables to
verify with them to its satisfaction the existence, amount and terms of any
Receivables.


(d)           Collections
on Receivables.  Except as provided
in clause (e) of this Section 3, the Secured Party hereby authorizes each
Grantor to collect the Receivables.  If
required by the Secured Party at any time when an Event of Default shall have
occurred and be continuing, any payments of Receivables, when collected by any
Grantor, shall be forthwith (and, in any event, within two Business 



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Days) deposited by such Grantor in the exact form received, duly
endorsed by such Grantor to the Secured Party if required, in a special
collateral account maintained by the Secured Party, subject to withdrawal by
the Secured Party only, as hereinafter provided, and, until so turned over,
shall be held by such Grantor in trust for the Secured Party, segregated from
other funds of the Grantors.  Upon
request, each Grantor shall provide a report identifying in reasonable detail
each deposit of any such Proceeds, including the nature and source of the
payments included in the deposit.  All
Proceeds constituting collections of Receivables while held by the Secured
Party (or by any Grantor in trust for the Secured Party) shall continue to be
collateral security for all of the Obligations and shall not constitute payment
thereof until applied as hereinafter provided. 
At such intervals as may be agreed upon by the Grantors and the Secured
Party, or, if an Event of Default shall have occurred and be continuing, at any
time at the Secured Party’s election, the Secured Party shall apply all or any
part of the funds on deposit in said Collateral Account on account of the
Obligations in such order as the Secured Party may elect, and any part of such
funds which the Secured Party elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to time by
the Secured Party to the Grantors or to whomsoever may be lawfully entitled to
receive the same.  At the Secured Party’s
request, each Grantor shall deliver to the Secured Party all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts. At
any time during the continuance of an Event of Default, each Grantor will
cooperate with the Secured Party to
establish a system of lockbox accounts, under the sole dominion and control of
the Secured Party, into which all
Receivables shall be paid and from which all collected funds will be
transferred to a Collateral Account.


(e)           Excess
Cash Flow Receivables.  Upon the
occurrence of an Event of Default, the Secured Party shall establish the GMH
Facility Account.  The GMH Facility
Account shall be in the name of the Secured Party, shall be subject to the sole
dominion and control of the Secured Party, and no Grantor shall have any right
of withdrawal therefrom.  On or prior to
the Closing Date, the Borrower and each applicable Subsidiary shall have
executed and delivered the Excess Cash Flow Direction Letter.  Pursuant to the Excess Cash Flow Direction
Letter, all payments on Excess Cash Flow Receivables (which shall occur through
a series of distributions as more particularly described in the Excess Cash
Flow Direction Letter) shall, from and after the occurrence of an Event of
Default, be made by wire transfer directly to the GMH Facility Account.  The Secured Party shall retain all proceeds
of the Excess Cash Flow Receivables in the GMH Facility Account and shall be
entitled to apply them to the Obligations (whether matured or unmatured) in
such manner as the Secured Party may elect.


4.             Representations and Warranties.  Each Grantor hereby represents and warrants
that:


(a)           Title;
No Other Liens.  Except for the Liens
granted to the Secured Party for the ratable benefit of the Secured Party
pursuant to this Agreement, and the other Liens permitted to exist on the
Collateral pursuant to the Loan Agreement, each Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others.  No security agreement, financing statement or
other public notice with respect to all or any part of the Collateral is on
file or of record in any public office, except such as may have been filed in
favor of the Secured Party, for the ratable benefit of the Secured Party,
pursuant to this Agreement or as may be permitted pursuant to the Loan
Agreement.


(b)           Perfected
First Priority Liens.  The Liens
granted pursuant to this Agreement will constitute perfected Liens in favor of
the Secured Party in the Receivables and in the Collateral as collateral
security for the Obligations, (i) with respect to all Collateral, except as
provided in clauses (ii) and (iii) below, when financing statements have been
filed in the offices in the jurisdictions where the Grantor is organized as set
forth on Schedule I, (ii) solely with respect to Collateral constituting
Investment Property evidenced by certificates, all of which are listed on Schedule
II, if any, when such 



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certificates have been delivered to the Lender, and (iii) solely with
respect to Collateral consisting of the Deposit Accounts listed in Schedule
III, if any, when each such Deposit Account becomes subject to the
applicable Account Control Agreement, which Liens are prior to all other Liens
on the Collateral created by the Grantors and in existence on the date hereof
and which are enforceable as such against all creditors of and purchasers from
any Grantor and against any owner or purchaser of the real property where any
of the Equipment or Inventory is located and any present or future creditor
obtaining a Lien on such real property. 
To the extent the same constitutes Collateral, each Grantor shall cause
each of the Deposit Accounts and Security Accounts set forth on Schedule III,
if any, to be subject to an Account Control Agreement on or before October       ,
2006.


(c)           Receivables.  The amount represented by each Grantor to the
Secured Party from time to time as owing by each obligor or by all obligors in
respect of the Receivables will at such time be the correct amount actually
owing by such obligor or obligors thereunder. 
No amount payable to any Grantor under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Secured Party.  The
place where each Grantor keeps its records concerning the Receivables is
specified for such Grantor on Schedule I.


(d)           Inventory
and Equipment.  The Inventory and the
Equipment are kept at the locations listed on Schedule IV hereto.


(e)           Chief
Executive Office.  Each Grantor’s
chief executive office and chief place of business is, and for the four (4)
months preceding the date hereof has been, located at the place specified for
such Grantor on Schedule I.


(f)            Jurisdiction
of Organization.  Each Grantor is a “registered
organization” as defined in the Code and is organized as the type of entity, as
under the laws of the jurisdiction, specified for such Grantor on Schedule I.


(g)           Name.  (i) The exact legal name of each Grantor
is as specified for such Grantor on Schedule I; and (ii) no Grantor
has done business under a previous name, assumed name or trade name, except as
specified for such Grantor on Schedule I.


(h)           Farm
Products.  None of the Collateral
constitutes, or is the Proceeds of, Farm Products.


(i)            Insurance
Policies.  None of the Collateral
constitutes an interest or claim in or under any policy of insurance or
contract for annuity, except to the extent the same constitutes Proceeds.


(j)            Copyrights,
Patents and Trademarks.  Schedule
V hereto includes all Copyrights and Copyright Licenses owned by each
Grantor in its own name as of the date hereof. 
Schedule VI hereto includes all Patents and Patent Licenses owned
by each Grantor in its own name as of the date hereof.  Schedule VII hereto includes all
Trademarks and Trademark Licenses owned by each Grantor in its own name as of
the date hereof.  To the best of each
Grantor’s knowledge, each Copyright, Patent and Trademark is valid, subsisting,
unexpired, enforceable and has not been abandoned.  Except as set forth in Schedules V, VI
or VII, none of such Copyrights, Patents and Trademarks is the subject
of any licensing or franchise agreement. 
No holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of any Copyright,
Patent or Trademark.  Except as disclosed
on Schedules V, VI or VII, no action or proceeding is pending (i)
seeking to limit, cancel or question the validity of any Copyright, Patent or
Trademark, or (ii) which, if adversely determined, would have a material
adverse effect on the value of any Copyright, Patent or Trademark.



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(k)           Governmental
Obligors.  None of the obligors on
any Receivables is a Governmental Authority.


(l)            Deposit
Accounts and Securities Accounts. 
All Deposit Accounts and Securities Accounts with respect to each Grantor
are listed on Schedule III, including the institution at which such
Deposit Account or Securities Account is established, the purpose thereof, the
name thereon, and the account number thereof. 
Each Grantor agrees that at no time after the date that is fifteen (15)
days after the Closing Date, may the aggregate amount of funds held in such
Deposit Accounts of the Grantors and Investment Property held in Securities
Accounts which are not subject to Account Control Agreements exceed $100,000;
provided that this requirement shall not apply to amounts held in the payroll
account to the extent such amounts are held therein solely for the purposes of
disbursing payroll in a manner consistent with past practices (it being
understood that any cash and/or Investment Property held therein in excess of
the amount required shall be transferred to a Deposit Account and/or Securities
Account which is subject to an Account Control Agreement).  Each Grantor agrees that it will not transfer
assets out of any Securities Account, or transfer any Securities Account to
another securities intermediary, unless such Grantor, the Lender, and the
substitute securities intermediary have entered into an Account Control
Agreement.  No arrangement contemplated
hereby or by any Account Control Agreement in respect of any Securities Account
or other Investment Property shall be modified by any Grantor without the prior
written consent of the Lender.  Upon the
occurrence and during the continuance of an Event of Default, the Lender may notify
any securities intermediary to liquidate the applicable Securities Account or
any related Investment Property maintained or held thereby and remit the
proceeds thereof to an account specified by the Lender (including any
Collateral Account).


Each of the
foregoing representations and warranties set forth in this Section 4 apply only
to the extent that they are applicable to Collateral.


5.             Covenants.  Each Grantor covenants and agrees with the
Secured Party that, from and after the date of this Agreement until the
Obligations are paid in full:


(a)           Maintenance
of Perfected Security Interests; Further Documentation; Pledge of Instruments
and Chattel Paper.  Each Grantor
shall maintain the security interest created by this Agreement as a perfected
security interest having at least the priority described in Section 4(b) hereof
and shall defend such security interest against the claims and demands of all
Persons whomsoever.  At any time and from
time to time, upon the written request of the Secured Party, and at the sole
expense of the Grantors, each Grantor will promptly and duly execute and
deliver such further instruments and documents and take such further action as
the Secured Party may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any financing
or continuation statements under the Uniform Commercial Code in effect in any
jurisdiction with respect to the Liens created hereby and (ii) in the case of
Investment Property, Deposit Accounts and any other relevant Collateral, taking
any actions (including, without limitation, entering into, and using its best
efforts to cause any relevant third party to enter into, one or more control
agreements) necessary to enable the Secured Party to obtain “control” (within
the meaning of the applicable Uniform Commercial Code) with respect
thereto.  Each Grantor also hereby
authorizes the Secured Party to file any such financing or continuation
statement without the signature of the Grantors to the extent permitted by
applicable law.  Any such financing
statement may, at the option of the Secured Party, describe the property
covered thereby and “all assets” or “all personal property” of such Grantor, or
may use a similar description.  A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.  If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any Instrument,
Chattel Paper or Certified Security, such Instrument, Chattel Paper or
Certified Security 



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shall be immediately delivered to the Lender, duly endorsed in a manner
satisfactory to the Lender, to be held as Collateral pursuant to this
Agreement.


(b)           Indemnification.  Each Grantor agrees, jointly and severally,
to pay, and to save the Secured Party harmless from, any and all liabilities,
costs and expenses (including, without limitation, reasonable legal fees and
expenses actually incurred) (i) with respect to, or resulting from, any delay
in paying, any and all excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral, (ii) with
respect to, or resulting from, any delay in complying with any Requirement of
Law applicable to any of the Collateral or (iii) in connection with any of the
transactions contemplated by this Agreement. 
In any suit, proceeding or action brought by the Secured Party under any
Receivable for any sum owing thereunder, or to enforce any provisions of any
Receivable, each Grantor will save, indemnify and keep the Secured Party
harmless from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction or liability whatsoever
of the account debtor or obligor thereunder, arising out of a breach by any
Grantor of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such account
debtor or obligor or its successors from any Grantor.


(c)           Maintenance
of Records.  Each Grantor will keep
and maintain at its own cost and expense satisfactory and complete records of
the Collateral, including, without limitation, a record of all payments
received and all credits granted with respect to the Accounts.  To the extent requested by the Secured Party,
each Grantor will mark its books and records pertaining to the Collateral to evidence
this Agreement and the security interests granted hereby.  Upon the occurrence and during the
continuance of an Event of Default, each Grantor shall turn over any books and
records pertaining to the Collateral to the Secured Party or to its representatives
during normal business hours at the request of the Secured Party.


(d)           Right
of Inspection.  Upon reasonable
notice, the Secured Party shall at all times have full and free access during
normal business hours to all the books, correspondence and records of each
Grantor, and the Secured Party or its respective representatives may examine
the same, take extracts therefrom and make photocopies thereof (subject tot eh
terms of Section 10.24 of the Loan Agreement), and each Grantor agrees to
render to the Secured Party, at the Grantors’ cost and expense, such clerical
and other assistance as may be reasonably requested with regard thereto.  The Secured Party and its representatives
shall, upon reasonable notice, also have the right during normal business hours
to enter into and upon any premises where any of the Inventory or Equipment is
located for the purpose of inspecting the same, observing its use or otherwise
protecting its interests therein.


(e)           Compliance
with Laws, etc.  Each Grantor will
comply in all material respects with all Applicable Laws applicable to the
Collateral or any part thereof or to the operation of such Grantor’s business; provided,
however, that each Grantor may contest any Applicable Laws in any
reasonable manner which shall not, in the reasonable opinion of the Secured
Party, adversely affect the Secured Party’s rights or the priority of its Liens
on the Collateral.


(f)            Compliance
with Terms of Contracts, etc.  Each
Grantor will perform and comply in all material respects with all its
obligations under all its contractual obligations relating to the Collateral.


(g)           Payment
of Obligations.  Each Grantor will
pay promptly when due all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of its income or profits therefrom,
as well as all claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the Collateral,
except that no such charge need be paid if (i) the validity thereof is being
contested in good faith by appropriate proceedings, (ii) such proceedings do
not involve any material danger of the sale, forfeiture or loss of any of the
Collateral or any interest 



 8
 









therein and (iii) such charge is adequately reserved against on such
Grantor’s books in accordance with GAAP.


(h)           Limitation
on Liens on Collateral.  No Grantor
will create, incur or permit to exist, will defend the Collateral against, and
will take such other action as is necessary to remove, any Lien or claim on or
to the Collateral, other than the liens created hereby and other than as
permitted pursuant to the Loan Agreement, and will defend the right, title and
interest of the Secured Party in and to any of the Collateral against the
claims and demands of all Persons whomsoever.


(i)            Limitations
on Dispositions of Collateral.  No
Grantor will sell, transfer, lease or otherwise dispose of any of the
Collateral, or attempt, offer or contract to do so except for sales of
Inventory in the ordinary course of its business or as otherwise permitted by
the Loan Agreement.


(j)            Limitations
on Modifications of Agreements Giving Rise to Receivables; Exercise of Rights;
Notices.  No Grantor will (i) other
than in the ordinary course of business as generally conducted by such Grantor
over a period of time, amend, modify, terminate or waive any provision of any
agreement giving rise to a Receivable (including, in respect of the Excess Cash
Flow Receivables, any related mortgage loan documents) in any manner which
could reasonably be expected to materially adversely affect the value of such
Receivable as Collateral, (ii) other than in the ordinary course of business as
generally conducted by such Grantor over a period of time, fail to exercise
promptly and diligently each and every material right which it may have under
each agreement giving rise to a Receivable (other than any right of
termination) or (iii) fail to deliver to the Secured Party a copy of each
material demand, notice or document received by it relating in any way to any
agreement giving rise to a material Receivable.


(k)           Limitations
on Discounts, Compromises, Extensions of Receivables.  Other than in the ordinary course of business
consistent with its past practice, no Grantor will (i) grant any extension
of the time of payment of any Receivable, (ii) compromise, compound or
settle any Receivable for less than the full amount thereof,
(iii) release, wholly or partially, any Person liable for the payment of
any Receivable, or (iv) allow any credit or discount whatsoever on any
Receivable.


(l)            Maintenance
of Equipment.  Each Grantor will
maintain each item of Equipment in good operating condition, ordinary wear and
tear and immaterial impairments of value and damage by the elements excepted,
and will provide all maintenance, service and repairs necessary for such purpose,
except that such Grantor’s obligations pursuant to this Section 5(l) shall not
extend to obsolete Equipment.


(m)          Maintenance
of Insurance.  Each Grantor will
maintain, with financially sound and reputable companies, insurance policies
(i) insuring the Inventory and Equipment against loss by fire, explosion, theft
and such other casualties as may be reasonably satisfactory to the Secured
Party in amounts comparable to amounts of insurance coverage obtained by
similar businesses of similar size acting prudently and (ii) insuring each
Grantor and the Secured Party against liability for personal injury and
property damage relating to such Inventory and Equipment, such policies to be
in such form and amounts and having such coverage as shall be comparable to forms,
amounts and coverage, respectively, obtained by similar businesses of similar
size acting prudently, with losses payable to any Grantor and the Secured Party
as its interest may appear or, in the case of liability insurance, showing the
Secured Party as additional insured parties. 
Each Grantor shall deliver to the Secured Party a report of a reputable
insurance broker with respect to such insurance at the beginning of each
calendar year and such supplemental reports with respect thereto as the Secured
Party may from time to time reasonably request.



 9















(n)           Further
Identification of Collateral.  Each
Grantor will furnish to the Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Secured Party may reasonably
request, all in reasonable detail.


(o)           Notices.  Each Grantor will advise the Secured Party
promptly, in reasonable detail, at its address set forth in the Loan Agreement,
(i) of any Lien (other than Liens created hereby or permitted under the Loan
Agreement) on, or claim asserted against, any of the Collateral and (ii) of the
occurrence of any other event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral or on the
Liens created hereunder.


(p)           Changes
in Locations, Name, etc.  No Grantor
will, without giving the Secured Party reasonable advance notice of the same,
(i) change the location of its jurisdiction of organization, as defined in the
Uniform Commercial Code of any relevant jurisdiction from that specified in
Section 4(f) or remove its books and records concerning the Receivables from
the location specified in Section 4(c), (ii) permit any of the Inventory or
Equipment to be kept at a location other than those listed on Schedule IV
hereto, (iii) change its name, identity or corporate or limited liability
company structure or (iv) reorganize under the laws of another jurisdiction or
as a different type of entity.


(q)           Patents,
Trademarks and Copyrights.


(i)            Each Grantor (either
itself or through licensees) will (i) continue to use each in a manner
sufficient to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) employ such Trademark with the
appropriate notice of registration, (iv) not adopt or use any mark which is
confusingly similar or a colorable imitation of such Trademark unless the
Secured Party, shall obtain a perfected security interest in such mark pursuant
to this Agreement, and (v) not (and not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any Trademark
may become invalidated.


(ii)           No Grantor will do
any act, or omit to do any act, whereby any material Patent may become
abandoned or dedicated.


(iii)          Each Grantor
(either itself or through licensees) will, for each work covered by a material
Copyright, continue to publish, reproduce, display, adopt and distribute the
work with appropriate copyright notice as necessary and sufficient to establish
and preserve such Grantor’s material rights under all applicable copyright
laws.


(iv)          Each Grantor will
notify the Secured Party immediately if it knows, or has reason to know, that
any material Patent, Trademark or Copyright or any application or registration
relating to any thereof may become abandoned, lost or dedicated, or of any
adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal or similar office in any country) regarding
such Grantor’s ownership of any Patent, Trademark or Copyright or its right to
register the same or to keep and maintain the same.


(v)           Whenever any
Grantor, either by itself or through any agent, employee, licensee or designee,
shall file an application for the registration of any Patent or Trademark with
the United States Patent and Trademark Office or any similar office or agency
in any other country or any political subdivision thereof, or shall file an
application for registration of any Copyright with 



 10
 









the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, such Grantor shall
report such filing to the Secured Party within fifteen (15) Business Days.


(vi)          Each Grantor shall
from time to time execute and deliver any and all agreements, instruments, documents,
and papers as the Secured Party may reasonably request (including, without
limitation, one or more Notice of Security Interest in Patents, one or more
Memorandum of Security Agreement - Trademarks and one or more Copyright
Security Agreements — Short Form, in each case in a form reasonably requested
by Secured Party and with appropriate completions and schedules) to evidence
the Secured Party’s security interest for the ratable benefit of the Secured
Party in any Patent, Trademark or Copyright and the goodwill and General
Intangibles of the Grantors relating thereto or represented thereby, and each
Grantor hereby constitutes the Secured Party its attorney-in-fact to execute
and file all such writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed, such power being coupled with an interest
is irrevocable until the Obligations are paid in full.


(vii)         Each Grantor will
take all reasonable and necessary steps, including, without limitation, in any
proceeding before the United States Patent and Trademark Office or the United
States Copyright Office, or any similar office or agency in any other country
or any political subdivision thereof, to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each registration of
the Patents, Trademarks and Copyrights, including, without limitation, timely
filing of applications for renewal, affidavits of use and affidavits of
incontestability and payment of maintenance fees.


(viii)        In the event that
any material Patent, Trademark or Copyright included in the Collateral is
infringed, misappropriated or diluted by a third party, each Grantor shall
promptly notify the Lender after it learns thereof and, at the Grantors’ sole
expense, shall, unless the Grantors shall reasonably determine that such
Patent, Trademark or Copyright is of negligible economic value to the Grantors,
promptly sue for infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution, or take such other actions as the
Grantors shall reasonably deem appropriate under the circumstances to protect
such Patent, Trademark or Copyright.


(ix)           Upon and during the
continuance of an Event of Default and at the reasonable request of the Secured
Party, each Grantor shall use its reasonable efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all of such Grantor’s rights,
title and interest thereunder to the Secured Party or its designee.


(r)    Inventory.  None of
the Inventory of any Grantor shall be evidenced by a warehouse receipt.


6.             Agent’s Appointment as
Attorney-in-Fact.


(a)           Powers.  Each Grantor hereby irrevocably constitutes
and appoints the Secured Party and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of each Grantor and in
the name of each Grantor or in its own name, from time to time in the Secured
Party’s discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all documents
and instruments which may be necessary or desirable to accomplish the purposes
of this 



 11
 









Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Secured Party the power and right, on behalf of each
Grantor, without notice to or assent by any Grantor, to do the following:


(i)            in the name of each
Grantor or its own name, or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Account, Instrument, Chattel Paper, General
Intangible or Excess Cash Flow Receivable or with respect to any other
Collateral and to file any claim or to take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by the Secured Party
for the purpose of collecting any and all such moneys due under any Account,
Instrument, Chattel Paper, General Intangible or Excess Cash Flow Receivable or
with respect to any other Collateral whenever payable;


(ii)           to pay or discharge
taxes and Liens levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of this Agreement
and to pay all or any part of the premiums therefor and the costs thereof;


(iii)          in the case of any
Patent, Trademark or Copyright, to execute and deliver any and all agreements,
instruments, documents and papers as the Lender may request to evidence the
Lenders’ security interest in such Patent, Trademark or Copyright and the
goodwill and general intangibles of the Grantors relating thereto or
represented thereby;


(iv)          to execute, in
connection with any sale provided for in Section 9 hereof, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the
Collateral; and


(v)           (A) to direct any
party liable for any payment under any of the Collateral to make payment of any
and all moneys due or to become due thereunder directly to the Secured Party or
as the Secured Party shall direct; (B) to ask or demand for, collect, receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral; (C)
to sign and endorse any invoices, freight or express bills, bills of lading, storage
or warehouse receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the Collateral; (D) to
commence and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect the Collateral or any thereof
and to enforce any other right in respect of any Collateral; (E) to defend any
suit, action or proceeding brought against any Grantor with respect to any
Collateral; (F) to settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, to give such discharges or releases as
the Secured Party may deem appropriate; and (G) to assign any Patent or
Trademark (along with the goodwill of the business to which any such Trademark
pertains), throughout the world for such term or terms, on such conditions, and
in such matter, as the Lender shall in its reasonable discretion determine; and
(H) generally, to sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Secured Party were the absolute owner thereof for all purposes, and to do,
at the Secured Party’s option and the Grantors’ expense, at any time, or from
time to time, all acts and things which the Secured Party deems necessary to
protect, preserve or realize upon the Collateral and the Secured Party’s, Liens
thereon for the ratable benefit of the Secured Party and to effect the intent
of this Agreement, all as fully and effectively as the Grantors might do.



 12
 









Anything in this
Section 6(a) to the contrary notwithstanding, the Secured Party agrees that it
will not exercise any rights under the power of attorney provided for in this
Section unless an Event of Default has occurred and is continuing.


Each Grantor
hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof.  This power of attorney
is a power coupled with an interest and is irrevocable.


(b)           No
Duty on Secured Party’s Part.  The
powers conferred on the Secured Party hereunder are solely to protect the
Secured Party’s interests in the Collateral and shall not impose any duty upon
the Secured Party to exercise any such powers. 
Secured Party shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither it nor any of
their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for its own gross
negligence or willful misconduct.


7.             Performance by Secured Party of
Grantors’ Obligations.  If any
Grantor fails to perform or comply with any of its agreements contained herein,
the Secured Party, at its option, but without any obligation to do so, may
itself, upon prior written notice to the Guarantors (which notice shall not be
required during the continuance of an Event of Default), perform or comply, or
otherwise cause performance or compliance, with such agreement.  The actual out-of-pocket expenses of the
Secured Party incurred in connection with such performance or compliance,
together with interest thereon at a rate equal to the amount set forth in the
Loan Agreement, shall be payable, jointly and severally, by the Grantors to the
Secured Party on demand and shall constitute Obligations secured hereby.


8.             Proceeds.


(a)           In
addition to the rights of the Secured Party specified in Section 3(d) and (e)
with respect to payments of Receivables, it is agreed that during an Event of
Default all Proceeds received by any Grantor consisting of cash, checks and
other near-cash items shall be held in an account subject to an Account Control
Agreement, or at Secured Party’s request, be held by the Grantors in trust for
the Secured Party, segregated from other funds of the Grantors, and shall, forthwith
upon receipt by any Grantor, be turned over to the Secured Party in the exact
form received by such Grantor (duly endorsed by such Grantor to the Secured
Party if required), and held by the Secured Party in a Collateral Account
maintained under the sole dominion and control of the Secured Party.  Any and all such Proceeds held by the Secured
Party in a Collateral Account (or by any Grantor in trust for the Secured
Party) shall continue to be held as collateral security for the Obligations and
shall not constitute payment thereof until applied as provided in this Section.


(b)           If
an Event of Default shall have occurred and be continuing, at any time at the
Secured Party’s election, the Secured Party may apply all or any part of the
Proceeds constituting Collateral, whether or not held in any Collateral
Account, and any Proceeds of the Pledge Agreement, the Guarantee or any other
Loan Document, or otherwise received by the Secured Party, against the
Obligations (whether matured or unmatured), such application to be  in such order as the Secured
Party shall elect, unless otherwise provided in the Loan Documents.  Any balance of such Proceeds remaining after
the Obligations shall have been paid in full and the Loan Agreement terminated
shall be paid over to the Grantors or to whomsoever may be lawfully entitled to
receive the same.


9.             Remedies.  If an Event of Default shall occur and be
continuing, the Secured Party, may exercise, in addition to all other rights
and remedies granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the Code. 
Without limiting the generality of the foregoing, the Secured Party,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any 



 13
 









kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker’s board or office of the Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk.  The Secured Party shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived or released.  Each Grantor further agrees, at the Secured
Party’s request, to assemble the Collateral and make it available to the
Secured Party at places which the Secured Party shall reasonably select,
whether at any Grantor’s premises or elsewhere. 
The Secured Party shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable and actual costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Secured Party arising out of
the exercise by the Secured Party hereunder, including, without limitation,
reasonable and actual attorneys’ fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Secured Party may elect,
unless otherwise provided in the Loan Documents, and only after such
application and after the payment by the Secured Party of any other amount
required by any provision of law, including, without limitation, Section 9-615
of the Code, need the Secured Party account for the surplus, if any, to the
Grantors.  To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Secured Party arising out of the exercise by the Secured
Party of any of its rights hereunder.  If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Obligations and the fees and disbursements of any
attorneys employed by the Secured Party to collect such deficiency.


10.           Grant of License to Use Patent,
Trademark and Copyright Collateral. 
For the purpose of enabling the Secured Party to exercise rights and
remedies under Section 9 hereof at such time as the Secured Party shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Secured Party an irrevocable, non-exclusive license (exercisable
without payment of royalty or other compensation to any Grantor) to use,
license or sublicense any of the Copyrights, Patents and Trademarks, now owned
or hereafter acquired by any Grantor, and wherever the same may be located, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored. 
The use of such license by the Secured Party shall be exercised, at the
option of the Secured Party for any purpose appropriate in connection with the
exercise of remedies hereunder, only upon the occurrence and during the
continuance of an Event of Default; provided that any license,
sublicense or other transaction entered into by the Secured Party in accordance
herewith shall be binding upon each Grantor notwithstanding any subsequent cure
of an Event of Default.  The Secured
Party agrees to apply the net proceeds received from any license as provided in
Section 8 hereof.


11.           Limitation on Duties Regarding
Presentation of Collateral.  The
Secured Party’s sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the Secured
Party deals with similar property for its own account. Neither the Secured
Party nor any of its directors, officers, employees, agents or advisors shall
be liable for failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor or
any other Person or to take any



 14
 









other action whatsoever
with regard to the Collateral or any part thereof.  The powers conferred on the Secured Party
hereunder are solely to protect the Secured Party’s interests in the Collateral
and shall not impose any duty upon the Secured Party or any Secured Party to
exercise any such powers.  The Secured
Party shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither it nor any of its officers,
directors, employees, agents or advisors shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.


12.           Powers Coupled with an Interest.  All authorizations and agencies herein
contained with respect to the Collateral are irrevocable and powers coupled with
an interest.


13.           Execution of Financing Statements.  Pursuant to Section 9-402 of the Code, each
Grantor hereby authorizes the Secured Party to file financing statements with
respect to the Collateral without the signature of such Grantor in such form and
in such filing offices as the Secured Party reasonably determined appropriate
to perfect the security interests of the Secured Party under this
Agreement.  A carbon, photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement for filing in any jurisdiction.


14.           Notices.  Notices, requests and demands to or upon the
Secured Party or any Grantor hereunder shall be effected in the manner set
forth in Section 10.6 of the Loan Agreement.


15.           Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


16.           Paragraph Headings.  The paragraph headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.


17.           No Waiver; Cumulative Remedies.
Secured Party shall not by any act (except by a written instrument pursuant to
Section 18 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions
hereof.  No failure to exercise, nor any
delay in exercising, on the part of the Secured Party, any right, power or
privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  A waiver by the Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Secured Party would otherwise have on any future
occasion.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.


18.           Waivers and Amendments; Successors
and Assigns; Governing Law.  None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by each Grantor
and the Secured Party, provided that any provision of this Agreement may be
waived by the Secured Party in a written instrument executed by the Secured Party.  This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Secured Party, its successors and assigns. 
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.



 15
 









[SIGNATURE PAGES
IMMEDIATELY FOLLOW]


 



 16














IN WITNESS WHEREOF, each
Grantor has caused this Agreement to be duly executed and delivered as of the
date first above written.


 


	
  

  	
   

  	
   

  	
   

  	
  GRANTOR:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  GMH COMMUNITIES, LP, a Delaware limited

  partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Joseph Macchione

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: 

  	
  Joseph Macchione

  
	
   

  	
   

  	
   

  	
   

  	
  Title: 

  	
  Vice President & Secretary

  
							



 


	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  COLLEGE PARK MANAGEMENT LLC, a 

  
	
   

  	
   

  	
   

  	
   

  	
  Florida limited liability company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Joseph 
  Macchione

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  John Ferer

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
							



 


	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  COLLEGE PARK MANAGEMENT TRS, INC., 

  
	
   

  	
   

  	
   

  	
   

  	
  a Delaware Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ John Ferer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  John Ferer

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
							



 











 


	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  GMH MILITARY HOUSING, LLC, a Delaware 

  
	
   

  	
   

  	
   

  	
   

  	
  limited liability company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ John Ferer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  John Ferer

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
							



 


	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  GMH MILITARY HOUSING INVESTMENTS 

  
	
   

  	
   

  	
   

  	
   

  	
  LLC, a Delaware limited liability

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ John Ferer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  John Ferer

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
							



 


	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  GMH COMMUNITIES TRS, INC., a Delaware 

  
	
   

  	
   

  	
   

  	
   

  	
  corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Joseph Macchione

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Joseph Macchione

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
							



 


	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  GMH COMMUNITIES TRUST, a Maryland real 

  
	
   

  	
   

  	
   

  	
   

  	
  estate investment trust

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Joseph Macchione

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Joseph Macchione

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President & Secretary

  
							



 











 


	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  GMH COMMUNITIES SERVICES, INC., a 

  
	
   

  	
   

  	
   

  	
   

  	
  Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Joseph Macchione

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Joseph Macchione

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
							



 











Schedule
I


NAMES, FORM OF ORGANIZATION AND
LOCATION OF GRANTORS


Legal Name: GMH
Communities, LP

Type of Organization: Limited Partnership

State of Incorporation/Organization: 
Delaware

Prior Names: None

Chief Executive Office/Chief Place of Business and Location where Grantor
maintains Receivables records:  10 Campus
Boulevard, Newtown Square, PA  19073


Legal Name: College Park
Management, LLC

Type of Organization: Limited Liability Company

State of Incorporation/Organization: Florida

Prior Names: None

Chief Executive Office/Chief Place of Business and Location where Grantor
maintains Receivables records:  10 Campus
Boulevard, Newtown Square, PA  19073


Legal Name: GMH
Communities Services, Inc.

Type of Organization: Corporation

State of Incorporation/Organization: Delaware

Prior Names: None

Chief Executive Office/Chief Place of Business and Location where Grantor
maintains Receivables records: 10 Campus Boulevard, Newtown
Square, PA  19073


Legal Name:  GMH Communities Trust

Type of Organization:  Real Estate
Investment Trust

State of Incorporation/Organization: Maryland

Prior Names: None

Chief Executive Office/Chief Place of Business and Location where Grantor
maintains Receivables records:  10 Campus
Boulevard, Newtown Square, PA  19073


Legal Name: GMH
Communities TRS, Inc.

Type of Organization:  Corporation

State of Incorporation/Organization: Delaware

Prior Names: None

Chief Executive Office/Chief Place of Business and Location where Grantor
maintains Receivables records:  10 Campus
Boulevard, Newtown Square, PA  19073


Legal Name:  GMH Military Housing, LLC

Type of Organization:  Limited Liability
Company

State of Incorporation/Organization: Delaware

Prior Names: None

Chief Executive Office/Chief Place of Business and Location where Grantor
maintains Receivables records:  10 Campus
Boulevard, Newtown Square, PA  19073











Legal Name:  GMH Military Housing Investments, LLC

Type of Organization:  Limited Liability
Company

State of Incorporation/Organization: Delaware

Prior Names: None

Chief Executive Office/Chief Place of Business and Location where Grantor
maintains Receivables records:  10 Campus
Boulevard, Newtown Square, PA  19073


Legal Name:  College Park Management TRS, Inc.

Type of Organization:  Corporation

State of Incorporation/Organization: Delaware

Prior Names: None

Chief Executive Office/Chief Place of Business and Location where Grantor
maintains Receivables records:  10 Campus
Boulevard, Newtown Square, PA  19073











Schedule II


Investment
Property


College Park Management, LLC


     
Money Market account — 2000018262980  (Wachovia)











Schedule III


Deposit
Accounts


GMH
Communities, LP


Central depository
account/ZBA is tied to this account - 2000012962189 (Wachovia)


Payroll account -
2000012962192 (Wachovia)


ZBA clearing
account  - 2000012962215 (Wachovia)


Bank account to be
closed (unknown as to purpose) - 2000018262980 (Wachovia)


College Park Management TRS, Inc.


        Merrill Lynch — checking account —
216-07702











Schedule IV


Inventory
and Equipment


The Grantors own
various items of equipment and inventory used in the normal course of their
respective operations. With respect to the student and military housing
segments, the properties and projects operate inventory and equipment (such as
computers, office equipment, tanning beds, televisions, game room-related
items, furniture and appliances) that are located on the site of the property
and are primarily owned by the property-level entity with respect to such
property; however, some items may be owned through the direct purchase by GMH
Communities, LP. With respect to the corporate operations of GMH Communities
Trust, general office-related equipment located at the corporate headquarters
building is generally owned by GMH Communities, LP.











Schedule V


Copyrights,
Copyright Licenses


None.











Schedule
VI


Patents
and Patent Licenses


None.











Schedule
VII


Trademarks
and Trademark Licenses


See attached Schedule A.