Exhibit 10.2


 


SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT


 


THIS
SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this “Agreement”) is
entered into to be effective as of August 9, 2005, by and among GMH COMMUNITIES, LP, a
Delaware limited partnership (“GMH Operating Partnership”), GMH COMMUNITIES TRUST, a Maryland real estate investment trust (the “Trust”), each
Subsidiary of the Trust that is a borrower pursuant to Section 2.16 of
the Credit Agreement defined below (individually, a “Subsidiary Borrower”
and collectively, “Subsidiary
Borrowers;” GMH Operating Partnership and Subsidiary Borrowers
are individually called a “Borrower”
and collectively called “Borrowers”),
each lender party to the Credit Agreement (collectively, the “Lenders” and
individually, a “Lender”),
and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.


 


R E  C  I  T  A  L
S


 


A.                                   Reference is hereby made to that certain
Credit Agreement dated as of November 8, 2004, executed by the Trust,
Borrowers, the Lenders, and Administrative Agent (as amended, the “Credit Agreement”).


 


B.                                     Capitalized terms used herein shall, unless
otherwise indicated, have the respective meanings set forth in the Credit
Agreement.


 


C.                                     The Trust, Borrowers, Administrative Agent,
and Lenders desire to waive and modify certain provisions contained in the
Credit Agreement, subject to the terms and conditions set forth herein.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:


 


1.                                      Waiver. 
Trust and Borrowers failed to maintain a Leverage Ratio equal to or less
than sixty percent (60%) as of the fiscal quarter ending June 30, 2005
(the “Subject Period”)
as required by Section 7.10(e).
Subject to the terms and conditions set forth herein, Lenders waive compliance
with Section 7.10(e) of
the Credit Agreement solely for the Subject Period.  No waiver by Lenders under the Credit
Agreement or any other Loan Document is granted except as expressly set forth
above, and Lenders expressly reserve the right to require strict compliance
with the terms of the Credit Agreement and the other Loan Documents in all
other respects.


 


2.                                      Amendments to the Credit
Agreement.


 


(a)                                  Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “Applicable Rate” in its entirety and replace
such definition with the following:


 


1





















 


“Applicable Rate” means the following
percentages per annum, based upon the Leverage Ratio as set forth in the most
recent Compliance Certificate received by Administrative Agent pursuant to Section 6.02(b):


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
  Eurodollar

  Rate +

  	
   

  	
   

  	
   

  	
   

  
	
  Pricing

  Level

  	
   

  	
  Leverage Ratio

  	
   

  	
   

  	
  Letters of

  Credit

  	
   

  	
   

  	
  Base Rate +

  	
   

  
	
  1

  	
   

  	
   

  	
  <0.45:1

  	
   

  	
  1.625

  	
  %

  	
  0.75

  	
  %

  
	
  2

  	
   

  	
   

  	
  >0.45:1 but <0.50:1

  	
   

  	
  1.750

  	
  %

  	
  1.00

  	
  %

  
	
  3

  	
   

  	
   

  	
  >0.50:1 but <0.55:1

  	
   

  	
  1.875

  	
  %

  	
  1.25

  	
  %

  
	
  4

  	
   

  	
   

  	
  >0.55:1 but <0.60:1

  	
   

  	
  2.125

  	
  %

  	
  1.50

  	
  %

  
	
  5

  	
   

  	
   

  	
  >0.60:1

  	
   

  	
  2.375

  	
  %

  	
  1.75

  	
  %

  



 


Any increase or decrease in the Applicable Rate resulting from a change
in the Leverage Ratio shall become effective as of the first (1st)
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.02(b); provided, however,
that if a Compliance Certificate is not delivered when due in accordance with
such Section, then Pricing Level 5 shall apply as of the first (1st)
Business Day after the date on which such Compliance Certificate was required
to have been delivered until and including the first (1st) Business
Day immediately following the date such Compliance Certificate is actually
delivered.  The Applicable Rate in effect
from the Second Amendment Effective Date through the date of delivery of the
next Compliance Certificate delivered pursuant to Section 6.02(b) shall
be determined based upon Pricing Level 4.


 


(b)                                  Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “Borrowing Base Value” in its entirety and replace such definition
with the following:


 


“Borrowing Base Value” means the sum
of (a) the Unencumbered Asset Value times sixty percent (60%) plus
(b) Management Cash Flow Value times fifty percent (50%); provided
that (i) the amount of Management Cash Flow Value included in the
calculation of Borrowing Base Value shall not exceed fifty percent (50%) of
Borrowing Base Value, and (ii) the Unencumbered Asset Value attributable
to any single Unencumbered Property shall not exceed thirty percent (30%) of
Borrowing Base Value.


 


(c)                                  Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “Leverage
Ratio” in its entirety and
replace such definition with the following:


 


“Leverage Ratio” means, as
of any date of determination, the ratio of (a) the Total Debt of
the Companies to (b) Total
Asset Value.


 


(d)                                  Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “Liabilities” in its entirety.


 


(e)                                  Section 1.01 of the Credit Agreement is hereby amended to
add the following definition of “MAI Appraisal Value”
between the definitions of “Loan Parties” and “Management Cash
Flow Value” :


 


2





















 


“MAI Appraisal Value” means, with
respect to any real property, the appraisal value of such property as
determined by written appraisal reports, in form and substance acceptable to
Administrative Agent, meeting the requirements of the Federal Institutions
Reform, Recovery and Enforcement Act of 1989, prepared by a professional
appraiser, who is a member of the Member Appraisal Institute.


 


(f)                                    Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “Military
Housing EBITDA” in its
entirety and replace such definition with the following:


 


“Military Housing EBITDA”
means, for any Person for any period, total Consolidated EBITDA received from fees and returns in
respect of Equity Interests in respect of operating Military Housing Projects,
all as calculated in accordance with GAAP.


 


(g)                                 Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “NOI
Value” in its entirety.


 


(h)                                 Section 1.01 of the Credit Agreement is hereby amended to
add the following definition of “Second Amendment Effective Date” between the definitions of “SEC” and “Secured Debt” :


 


“Second Amendment Effective Date”
means August 9, 2005.


 


(i)                                    Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “Total
Asset Value” in its entirety
and replace such definition with the following:


 


“Total Asset Value” means
the sum of (a) as of any date of determination, the
lesser of (i) the book value of the Student Housing Projects plus
accumulated depreciation on such Student Housing Projects, as determined on a consolidated basis in
accordance with GAAP, or (ii) the most recent MAI Appraisal Value
of the Student Housing Projects (solely to the extent available), plus (b) Management Cash Flow
Value, plus (c) the book value of other assets (excluding owned
real estate captured in clause (a) above) owned by the Companies,
as determined on a consolidated basis in accordance with GAAP; plus (d) GMH
Operating Partnership’s and each
Guarantor’s pro rata share of the book value of assets in joint ventures of
such Person that own student housing properties; provided  that,
current assets (as determined in accordance with GAAP) that are incurred in the
normal course of business shall be excluded from Total Asset Value; provided,
further  that, Management Cash Flow Value shall not exceed twenty
percent (20%) of Total Asset Value.


 


(j)                                    Section 1.01 of the Credit Agreement is hereby amended to
add the following definition of “Total Debt” between the definitions of “Total
Availability” and “Total
Outstandings”:


 


“Total Debt” means (without
duplication), for any Person as of any date, (a) all Indebtedness of such
Person, (b) all other indebtedness, liabilities, or obligations required
by GAAP to be classified upon such Person’s balance sheet as liabilities, and (c) such
Person’s pro rata share of all Indebtedness of joint ventures in which such
Person owns an Equity Interest that own student housing properties.
Notwithstanding the foregoing, the current liabilities (as determined in
accordance with GAAP) that are incurred in the normal course of business shall
be excluded from Total Debt.


 


3





















 


(k)                                Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “Unencumbered Asset Value” in its entirety and replace such definition
with the following:


 


“Unencumbered Asset Value” means an
amount equal to the lesser of (a) the sum of (i) the
aggregate book value of Unencumbered Properties plus (ii) accumulated
depreciation of such Unencumbered Properties, as determined on a consolidated basis in accordance with GAAP, or (b) the
most recent MAI Appraisal Value of the Unencumbered Properties (solely to the
extent available).


 


(l)                                    Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “Unencumbered Property Report” in its entirety and replace such definition
with the following:


 


“Unencumbered Property Report” means a
report in substantially the form of Exhibit I certified by a
Responsible Officer of GMH Operating Partnership, setting forth in reasonable
detail the Occupancy Rate, Approved Costs, Unencumbered Asset Value, Adjusted
Property NOI, NOI Value, the most recent MAI Appraisal Value of the
Unencumbered Properties, and Capital Expenditure Reserve for the Unencumbered
Properties (individually and in the aggregate).


 


(m)                              Article VI of
The Credit Agreement is hereby amended
by adding the following Section 6.14
thereto:


 


6.14                        Appraisal Rights.  To
the extent Administrative Agent reasonably determines that a new appraisal is
necessary for any Student Housing Project and provides notice of such
determination to Trust or any Borrower, obtain a new appraisal for such Student
Housing Project for purposes of calculating both the Unencumbered Asset
Value and Total Asset Value; provided
that so long as no Event of Default exists, Administrative Agent shall not
request more than one (1) new appraisal for any Student Housing Project
during any twelve (12) month period. 
Each appraiser shall be engaged by Administrative Agent (at Borrowers’
expense) and all appraisals shall be subject the review and approval of
Administrative Agent.


 


(n)                                 Section 7.01(j)
of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:


 


(j)                                     Liens securing
Indebtedness permitted under Section 7.03(g); provided that (i) each
such transaction is secured by no more than five (5) assets of the debtor
under such transaction


 


(o)                                  Section 7.03(f) of
the Credit Agreement is hereby deleted in
its entirety and replaced with the following:


 


(f)                                    Recourse Debt
(other than the Obligations) of the Companies (i) to the extent such
Recourse Debt is secured, in an aggregate principal amount not to exceed at any
time outstanding $25,000,000; and (ii) to the extent such Recourse Debt is
unsecured, in an amount not to exceed $125,000,000, as long as any such
unsecured Recourse Debt: (A) is pari-passu with, or subordinate (on terms
reasonably acceptable to Administrative Agent) to, all other unsecured Recourse
Debt of the Companies, (B) has covenants no more restrictive than under
this Agreement, (C) has a maturity date that is at least one hundred and
eighty (180) days beyond the Maturity Date, (D) if such debt is suitable
for bank investors, each Lender has had the opportunity


 


4





















 


to participate in such financing, and (E) shall otherwise be
approved by Administrative Agent (such approval not to be unreasonably
withheld).


 


(p)                                  Section 7.10(e) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:


 


(e)                                  Leverage
Ratio.  Permit the Leverage Ratio as of the end of
any fiscal quarter of the Trust to be greater than (i) from the Second
Amendment Effective Date through December 31, 2005, 65%, and (ii) after
December 31, 2005, 60%.


 


(q)                                  Schedule 2
and the first Schedule 3 to Exhibit D of the
Credit Agreement are hereby amended and replaced with Schedules 1 and 2 attached hereto.


 


3.                                      Amendments to Credit
Agreement and Other Loan Documents.


 


(a)                                  All references in the Loan Documents to the
Credit Agreement shall henceforth include references to the Credit Agreement as
modified and amended by this Agreement, and as may, from time to time, be
further modified, amended, restated, extended, renewed, and/or increased.


 


(b)                                  Any and all of the terms and provisions of
the Loan Documents are hereby amended and modified wherever necessary, even
though not specifically addressed herein, so as to conform to the amendments
and modifications set forth herein.


 


4.                                      Ratifications.  Each
Loan Party that is a party hereto (a) ratifies and confirms all provisions
of the Loan Documents as amended by this Agreement, (b) ratifies and
confirms that all guaranties and assurances, granted, conveyed, or assigned to the
Administrative Agent and the Lenders under the Loan Documents are not released,
reduced, or otherwise adversely affected by this Agreement and continue to
guarantee and assure full payment and performance of the present and future
Obligations, and (c) agrees to perform such acts and duly authorize,
execute, acknowledge, deliver, file, and record such additional documents and
certificates as the Administrative Agent or the Lenders may reasonably request
in order to create, preserve and protect those guaranties and assurances.


 


5.                                      Representations.  Each
Loan Party that is a party hereto represents and warrants to Lenders that as of
the date of this Agreement: (a) this Agreement has been duly authorized,
executed, and delivered by each such Loan Party; (b) no action of, or
filing with, any Governmental Authority is required to authorize, or is
otherwise required in connection with, the execution, delivery, and performance
by each such Loan Party of this Agreement; (c) the Loan Documents, as
amended by this Agreement, are valid and binding upon each Loan Party that is a
party thereto and are enforceable against each Loan Party in accordance with
their respective terms, except as limited by Debtor Relief Laws and general
principles of equity; (d) the execution, delivery, and performance by each
Loan Party that is a party hereto of this Agreement do not require the consent
of any other Person and do not and will not constitute a violation of any Laws,
order of any Governmental Authority, or material agreements to which any such
Loan Party that is a party or by which any such Loan Party is bound; (e) all
representations and warranties in the Loan Documents are true and correct in
all material respects on and as of the date of this Agreement, except to the
extent that (i) any of them speak to a different specific date, or (ii) the
facts on which any of them were based have been changed by transactions
contemplated or permitted by the Credit Agreement; and (f) both before and
after giving effect to this Agreement, no Default or Event of Default exists.


 


5





















 


6.                                      Conditions.  This
Agreement shall not be effective unless and until:


 


(a)                                  this Agreement is executed by each Borrower,
the Trust, each Guarantor, Administrative Agent, and the Required Lenders;


 


(b)                                  the representations and warranties in this
Agreement are true and correct in all material respects on and as of the date
of this Agreement, except to the extent that (i) any of them speak to a
different specific date, or (ii) the facts on which any of them were based
have been changed by transactions contemplated or permitted by the Credit
Agreement;


 


(c)                                  both before and after giving effect to this
Agreement, no Default or Event of Default exists; and


 


(d)                                  Administrative Agent shall have received, for
the benefit of the applicable Lenders, an amendment fee equal to 0.10% times
the Commitment of each Lender that executes this Agreement.


 


7.                                      Continued Effect. 
Except to the extent amended hereby or by any documents executed in
connection herewith, all terms, provisions, and conditions of the Credit
Agreement and the other Loan Documents, and all documents executed in
connection therewith, shall continue in full force and effect and shall remain
enforceable and binding in accordance with their respective terms.


 


8.                                      Miscellaneous. 
Unless stated otherwise (a) the singular number includes the plural
and vice versa and words of any
gender include each other gender, in each case, as appropriate, (b) headings
and captions may not be construed in interpreting provisions, (c) this
Agreement shall be construed — and its performance enforced — under New York
law, (d) if any part of this Agreement is for any reason found to be
unenforceable, all other portions of it nevertheless remain enforceable, and (e) this
Agreement may be executed in any number of counterparts with the same effect as
if all signatories had signed the same document, and all of those counterparts
must be construed together to constitute the same document.


 


9.                                      Parties.  This
Agreement binds and inures to each of the parties hereto and their respective
successors and permitted assigns.


 


10.                               ENTIRETIES.  THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS AMENDED BY THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES ABOUT THE SUBJECT MATTER OF THE CREDIT AGREEMENT AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


[Remainder of Page Intentionally Left Blank;
Signature Pages to Follow.]


 


6





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


	
   

  	
  BANK OF AMERICA, N.A., a national banking

  association, as Administrative Agent, L/C Issuer, Swing

  Line Lender, and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ron Odlozil

  	
   

  
	
   

  	
   

  	
  Ron
  Odlozil

  
	
   

  	
   

  	
  Senior
  Vice President

  



 


Signature Page to Second Amendment and Waiver
to Credit Agreement


 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


	
   

  	
  EUROHYPO AG, NEW YORK BRANCH, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						



 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


 


	
   

  	
  JPMORGAN CHASE BANK, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Donald Shokrian

  	
   

  
	
   

  	
   

  	
  Name:
  Donald Shokrian

  
	
   

  	
   

  	
  Title:
  Managing Director

  



 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


 


	
   

  	
  MERRILL LYNCH CAPITAL CORPORATION, as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael E. O’Brien

  	
   

  
	
   

  	
   

  	
  Name:
  Michael E. O’Brien

  
	
   

  	
   

  	
  Title:
  Vice President

  



 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


	
   

  	
  MORGAN STANLEY BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daniel Twenge

  	
   

  
	
   

  	
   

  	
  Name:
  Daniel Twenge

  
	
   

  	
   

  	
  Title:
  Vice President

  



 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


	
   

  	
  DEUTSCHE BANK TRUST COMPANY AMERICAS, as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Brenda Casey

  	
   

  
	
   

  	
   

  	
  Name:
  Brenda Casey

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steven P. Lapham

  	
   

  
	
   

  	
   

  	
  Name:
  Steven P. Lapham

  
	
   

  	
   

  	
  Title:
  Managing Director

  
					



 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


	
   

  	
  BANK MIDWEST, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy B. Kenney

  	
   

  
	
   

  	
   

  	
  Name:
  Timothy B. Kenney

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  



 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


 


	
   

  	
  GMH COMMUNITIES, LP,
  a Delaware limited partnership,

  as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GMH COMMUNITIES GP TRUST, a Delaware trust,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph
  M. Macchione

  
	
   

  	
   

  	
   

  	
  Secretary

  



 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


 


	
   

  	
  GMH COMMUNITIES TRUST, a Maryland real estate

  investment trust, as a
  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
  Name:
  Joseph M. Macchione

  
	
   

  	
   

  	
  Title:
  Senior Vice President and General Counsel

  



 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


 


	
   

  	
  COLLEGE PARK MANAGEMENT TRS, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
  Joseph M. Macchione

  
	
   

  	
   

  	
  Vice President and Secretary

  



 





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


 


	
   

  	
  GMH MILITARY HOUSING, LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
  Joseph M. Macchione

  
	
   

  	
   

  	
  Vice President and Secretary

  



 





















 


To
induce the Credit Parties to enter into this Agreement, the undersigned jointly
and severally (a) consent and agree to this letter’s execution and
delivery, (b) ratify and confirm that all guaranties, assurances, and
Liens granted, conveyed, or assigned to the Credit Parties under the Loan
Documents are not released, diminished, impaired, reduced, or otherwise
adversely affected by this Agreement and continue to guarantee, assure, and
secure the full payment and performance of all present and future Obligations
(except to the extent specifically limited by the terms of such guaranties,
assurances, or Liens), and (c) waive notice of acceptance of this consent
and agreement, which consent and agreement binds the undersigned and their
successors and permitted assigns and inures to the Credit Parties and their
respective successors and permitted assigns.


 


	
   

  	
  GMH COMMUNITIES TRUST, a Maryland real estate

  investment trust, as a
  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
  Name:
  Joseph M. Macchione

  
	
   

  	
   

  	
  Title:
  Senior Vice President and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GMH COMMUNITIES LP, a Delaware limited partnership, as

  a Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GMH COMMUNITIES GP TRUST, a Delaware trust,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
  Name:
  Joseph M. Macchione

  
	
   

  	
   

  	
  Title:
  Seecretary

  



 





















 


	
   

  	
  SOUTH CAROLINA ASSOCIATES, LLC, a Delaware

  limited liability company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  CROYDEN AVENUE ASSOCIATES, LLC, a Delaware

  limited liability company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  MONKS ROAD ASSOCIATES, LLC, a Delaware limited

  liability company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  LUBBOCK TWO ASSOCIATES, LLC, a Delaware limited

  liability company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  DENTON ASSOCIATES, LLC, a Delaware limited liability

  company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  SAVOY VILLAGE ASSOCIATES, LLC, a Delaware limited

  liability company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  RENO ASSOCIATES, LLC, a Delaware limited liability

  company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  COLLEGE PARK INVESTMENTS LLC, a Delaware limited

  liability company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  COLLEGE PARK MANAGEMENT LLC, a Delaware limited

  liability company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  GMH MILITARY HOUSING LLC, a Delaware limited liability

  company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  GMH MILITARY HOUSING INVESTMENTS LLC, a

  Delaware limited liability company, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
  Name:
  Joseph M. Macchione

  
	
   

  	
   

  	
  Title:
  Vice President

  



 





















 


	
   

  	
  COLLEGE PARK MANAGEMENT TRS, INC., a Delaware

  corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
  Joseph M. Macchione

  
	
   

  	
   

  	
  Vice President and Secretary

  



 





















 


For the Quarter/Year ended                      (“Statement
Date”)


 


SCHEDULE 1
to the Compliance Certificate

($ in 000’s)


 


	
  I.

  	
   

  	
  Section 7.10(a) – Minimum Net Worth.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A.

  	
   

  	
  GAAP Net Worth:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Intangible Assets

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Accumulated Depreciation and Amortization

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Consolidated Tangible Net Worth (Line I.A. – Line
  I.B. + Line I.C.)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  75% of Net Proceeds of Equity Issuances after date
  of the Agreement:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Minimum required Net Worth ($275,000,000 + Line
  I.E.):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  
	
  G.

  	
   

  	
  Excess or (deficiency) for covenant compliance (Line
  I.D. – I.F.):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  Section 7.10(b) –Interest Coverage Ratio.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Consolidated
  EBITDA (See Schedule 2)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Capital
  Expenditure Reserve

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  Adjusted
  EBITDA (Line II.A. – Line II.B.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
  Interest
  Expense

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E.

  	
  Ratio
  of Line II.C. to II.D.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum
  Required

  	
   

  	
  2.0
  to 1.0

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  Section 7.10(c) –Fixed Charge Coverage Ratio.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Consolidated
  EBITDA (See Schedule 2)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Capital
  Expenditure Reserve

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  Adjusted
  EBITDA (Line III.A. – Line III.B.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
  Interest
  Expense

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E.

  	
  Preferred
  Stock Dividends

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  F.

  	
  Scheduled
  Principal Payments (excluding balloon payments)

  	
   

  	
  $

  
							



 





















 


	
   

  	
   

  	
  G.

  	
  Fixed
  Charges (Line III.D. + Line III.E + Line III.F.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  H.

  	
  Ratio
  of III.C. to III.G.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum
  Required

  	
   

  	
  1.75
  to 1.0

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  Section 7.10(d) –Unsecured Interest Coverage Ratio.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  NOI
  from Unencumbered Properties (See Schedule 2)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Consolidated EBITDA from operation of Military Housing Projects

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
  C.

  	
  Consolidated EBITDA from operation of Student Housing Projects owned
  by third parties

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
  Capital Expenditure Reserve

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E.

  	
  Adjusted
  Borrowing Base Cash Flow

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Line
  IV.A. + Line IV.B. + Line IV.C. – Line IV.D.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  F.

  	
  Interest
  Expense on Indebtedness which is not Secured Debt

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  G.

  	
  Ratio
  of IV.E. to IV.F.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum
  Required

  	
   

  	
  2.25
  to 1.0

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  Section 7.10(e) – Leverage Ratio.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Total
  Debt

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Total
  Asset Value (See Schedule 1)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  Ratio
  of V.A. to V.B.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Maximum
  Allowed

  	
  [60%
  after December 31, 2005]

  
	
   

  	
   

  	
   

  	
  [65%
  through December 31, 2005]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  Section 7.10(f) –Total Recourse Debt.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Actual Recourse Debt (including the Obligations)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Borrowing Base Value (See Schedule 1)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  (Excess)
  or deficiency for covenant compliance (Line VI.A. – VI.B.):

  	
   

  	
  $

  
							



 





















 


	
  VII.

  	
   

  	
  Section 7.03(f)(i) – Secured Recourse Debt other than the
  Obligations.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Actual Secured Recourse Debt
  (excluding the Obligations)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Maximum Permitted

  	
   

  	
  $25,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  (Excess)
  or deficiency for covenant compliance (Line VII.A. – VII.B.):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
   

  	
  Section 7.03(f)(ii) - – Unsecured Recourse Debt other than
  the Obligations.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Actual Unsecured Recourse Debt
  (excluding the Obligations)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Maximum Permitted

  	
   

  	
  $125,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  Complies with the provision of Section 7.03(f)(ii)(A)-(E)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  (Excess)
  or deficiency for covenant compliance (Line VII.A. – VII.B.):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
   

  	
  Section 7.05(d) and (e) –Restricted Payments.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  GMH
  Operating Partnership:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)

  	
  Funds
  from Operations

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (ii)

  	
  Distributions

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (iii)

  	
  Percent
  (ii) / (i) (not to exceed 95%)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  Trust:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)

  	
  Funds
  from Operations

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (ii)

  	
  Distributions

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (iii)

  	
  Percent
  (ii) / (i) (not to exceed 95%)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
   

  	
  Section 7.02(b) – Investments

  	
   

  	
   

  



 


	
   

  	
   

  	
   

  	
   

  	
  Total Asset

  	
   

  	
  Maximum

  	
   

  
	
  Investments

  	
   

  	
  Amount

  	
   

  	
  Value

  	
   

  	
  Allowed

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
  Investments
  in raw land

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
  Investments
  in Properties under construction

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


	
   

  	
  (iii)

  	
  Unconsolidated
  Affiliates

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
  20

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  Other
  Non-Real Estate Investments

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  10

  	
  %

  
	
   

  	
  (v)

  	
  Indebtedness
  secured by Real Property 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
  All
  Investments described in (i) through (v) above

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
  30

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  Section 7.10(g) – Maximum Unhedged Variable Rate Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Actual Variable Rate Debt

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Total Indebtedness

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Ratio of Line X.A. to Line X.B.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  Maximum Permitted

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  30

  	
  %

  
											



 





















 


SCHEDULE 2


 


TO COMPLIANCE CERTIFICATE


 


CALCULATION OF TOTAL ASSET VALUE AND BORROWING BASE
VALUE


 


	
  A.

  	
   

  	
  TOTAL ASSET VALUE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  $

  	
  (a)

  	
   

  	
  the lesser of (i) the book value of the Student Housing Projects
  plus accumulated depreciation on such Student Housing Projects or
  (ii) the most recent MAI Appraisal Value of the Student Housing Projects.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  $

  	
  (a)

  	
   

  	
  (i) The Companies’ Military Housing EBITDA for the
  three month period ending on the last day of the fiscal quarter ending on
  date of determination times (ii) 4, multiplied by (b) 8.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  $

  	
  (a)

  	
   

  	
  (i) Consolidated EBITDA from the Companies’ management of
  third party owned Student Housing Projects for the three month period ending
  on the last day of the fiscal quarter ending on date of determination times
  (ii) 4, multiplied by (b) 3.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  $

  	
   

  	
   

  	
  Sum
  of Items 2 and 3
  (limited to 20% of Total Asset Value).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  $

  	
   

  	
   

  	
  Book
  value of other assets
  (excluding owned real estate to the extent captured in Item (1)(a)(i)) owned
  by the Borrowers and Guarantors, as determined on a consolidated basis in
  accordance with GAAP.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  $

  	
   

  	
   

  	
  GMH Operating Partnership’s
  and each Guarantor’s pro rata share of the book value of assets in joint
  ventures of such Person that own student housing properties.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  $

  	
   

  	
   

  	
  Sum
  of Items 1, 4, 5 and
  6.*

  



 










	
  *

  	
   

  	
  Current assets that are
  incurred in the normal course of business shall be excluded from Total Asset
  Value.

  



 


	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  BORROWING BASE VALUE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  $

  	
   

  	
   

  	
  the lesser of (a) the sum of (i) the
  aggregate book value of Unencumbered Properties plus (ii) accumulated
  depreciation of such Unencumbered Properties, as determined on a consolidated

  
						



 





















 


	
   

  	
   

  	
   

  	
   

  	
   

  	
  basis in accordance with GAAP,
  or (b) the most recent MAI Appraisal Value of the Unencumbered
  Properties. *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  $

  	
   

  	
   

  	
  Item
  1 multiplied by 0.60.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  $

  	
  (a)

  	
   

  	
  (i) The
  Companies’ Military
  Housing EBITDA for the three month period ending on the last day of the
  fiscal quarter ending on date of determination times (ii) 4, multiplied
  by (b) 8.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  $

  	
  (a)

  	
   

  	
  (i) Consolidated EBITDA from the Companies’ management of
  third party owned Student Housing Projects for the three month period ending
  on the last day of the fiscal quarter ending on date of determination times
  (ii) 4, multiplied by (b) 3.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  $

  	
   

  	
   

  	
  Sum
  of Item 3 + Item 4.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  $

  	
   

  	
   

  	
  Item
  5 multiplied by 0.50
  (limited to 50% of Borrowing Base Value).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  $

  	
   

  	
   

  	
  Sum of 2
  + 6.

  



 










	
  *

  	
   

  	
  The Unencumbered Asset Value of any single Unencumbered Property may
  not exceed 30% of the Borrowing Base Value

  



 





















 


EXHIBIT I


 


UNENCUMBERED PROPERTIES


 


	
  Property

  	
   

  	
  Occupancy

  	
   

  	
  Approved

  Costs

  	
   

  	
  Adjusted Property

  NOI

  	
   

  	
  NO1

  Value

  	
   

  	
  MAI Appraisal

  Value

  	
   

  	
  Unencumbered Asset

  Value

  	
   

  	
  Capital Expenditure Reserves

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (000’s)

  	
   

  	
  (000’s)

  	
   

  	
  (000’s)

  	
   

  	
  (000’s)

  	
   

  	
  (000’s)

  	
   

  	
  (000’s)