**Exhibit 10.4**

 

**THIRD AMENDMENT AND WAIVER TO CREDIT AGREEMENT**

 

THIS THIRD AMENDMENT ANDWAIVER TO CREDIT AGREEMENT (this “***Agreement***”) is entered into to be effectiveas of September 6, 2006, by and among **GMHCOMMUNITIES, LP,**a Delawarelimited partnership (“***GMH Operating Partnership***”), **GMHCOMMUNITIES TRUST,**aMaryland real estate investment trust (the “***Trust***”), eachSubsidiary of the Trust that is a borrower pursuant to ***Section 2.16*** ofthe Credit Agreement defined below (individually, a “***Subsidiary Borrower***”and collectively, “***SubsidiaryBorrowers***;” GMH Operating Partnership and Subsidiary Borrowersare individually called a “***Borrower***”and collectively called “***Borrowers***”),each lender party to the Credit Agreement (collectively, the “***Lenders***” andindividually, a “***Lender***”),and **BANK OF AMERICA, N.A**.,****asAdministrative Agent, Swing Line Lender and L/C Issuer.

 

**R****ECITALS**

 

A.            Reference is hereby made to that certainCredit 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, unlessotherwise indicated, have the respective meanings set forth in the CreditAgreement.

 

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

 

NOW, THEREFORE, for good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto agree as follows:

 

**1.****            ****Waiver**. The Trust and Borrower failed to complywith ***Sections 7.10(b)***and***(c)*** (the “***Coverage Ratios***”) as of the fiscalquarter ending June 30, 2006 (the “***Subject Period***”). Subject to the terms andconditions set forth herein, Lenders waive compliance with the Coverage Ratiossolely for the Subject Period; *provided* thatthis waiver is conditioned upon the Trust’s and Borrower’s compliance with theCoverage Ratios, as amended hereby. Nowaiver by Lenders under the Credit Agreement or any other Loan Document isgranted except as expressly set forth above, and Lenders expressly reserve theright to require strict compliance with the terms of the Credit Agreement andthe other Loan Documents in all other respects.

 

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**2.****            ****Amendments to the CreditAgreement.**

 

**(a)****          *****Section 1.01*** of the Credit Agreement is hereby amended todelete the definition of “Applicable Rate” in its entirety and replacesuch definition with the following:

 

“Applicable Rate” means the following percentages per annum,based upon the Leverage Ratio as set forth in the most recent ComplianceCertificate 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 but <0.65:1   |       | 2.375                       | %          | 1.75                      | %          |
| 6                  |       | >0.65:1                  |       | 2.625                       | %          | 2.00                      | %          |

 

Any increaseor decrease in the Applicable Rate resulting from a change in the LeverageRatio shall become effective as of the first (1st) Business Dayimmediately following the date a Compliance Certificate is delivered pursuantto Section 6.02(b); provided, however, that if aCompliance Certificate is not delivered when due in accordance with such Section,then Pricing Level 6 shall apply as of the first (1st) BusinessDay after the date on which such Compliance Certificate was required to havebeen delivered until and including the first (1st) Business Dayimmediately following the date such Compliance Certificate is actuallydelivered. The Applicable Rate in effect from the Third Amendment EffectiveDate through the date of delivery of the next Compliance Certificate deliveredpursuant to Section 6.02(b) shall be determined based upon PricingLevel 3.

 

**(b)****          *****Section 1.01*** of the Credit Agreement is hereby amended todelete the definition of “Consolidated EBITDA” in its entirety andreplace such definition with the following:

 

“Consolidated EBITDA” means, for anyperiod, for the Companies on a consolidated basis, an amount equal toConsolidated Net Income for such period plus (a) the following to theextent deducted in calculating such Consolidated Net Income: (i) ConsolidatedInterest Charges for such period; (ii) the provision for Federal, state, localand foreign income taxes payable by the Companies for such period; (iii)depreciation and amortization expense; (iv) other non-recurring expenses of theCompanies reducing such Consolidated Net Income which do not represent a cashitem in such period or any future period; and (v) commencing with the periodending June 30, 2006, all Special Investigation Expenses, minus (b)the following to the extent included in calculating such Consolidated NetIncome: (i) Federal, state, local and foreign income tax credits of theCompanies for such period; and (ii) all non-cash items increasing ConsolidatedNet Income for such period.

 

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**(c)****          *****Section 1.01*** of the Credit Agreement is hereby amended todelete the definition of “Funds from Operations” in its entirety andreplace such definition with the following:

 

“Funds from Operations” means, for any Person for any period,the sum of net earnings (or loss) after taxes of such Person, plusdepreciation and amortization expense (exclusive of amortization of financingcosts), all as determined in accordance with GAAP; provided that thereshall not be included in such calculation (a) any proceeds of any insurancepolicy other than rental or business interruption insurance received by suchPerson, (b) any gain or loss which is classified as “extraordinary” inaccordance with GAAP, or (c) any capital gains and taxes on capital gains. Fundsfrom Operations shall not be reduced by any Restricted Payment in respect ofany preferred Equity Interests of such Person or by any Special InvestigationExpenses.

 

**(d)****          *****Section 1.01*** of the Credit Agreement is hereby amended toadd the following definition of “Special Investigation Expenses” in the proper alphabetical order:

 

“SpecialInvestigation Expenses” means, for any period, all non-recurring expensesdeducted from Consolidated Net Income and paid in cash or to be paid in cash byBorrower in connection with (a) the investigative work conducted by the auditcommittee of the Trust and Borrower in connection with the Borrower’s 2005financial restatement, which shall include additional audit and legal fees andexpenses and any waiver fees paid in connection with the delivery of financialstatements and (b) formation and operations of the special committee of theTrust and Borrower that is developing strategic alternatives for the Trustand/or Borrower.

 

**(e)****          *****Section 1.01*** of the Credit Agreement is hereby amended toadd the following definition of “Third Amendment Effective Date” in the proper alphabetical order:

 

“Third Amendment Effective Date” means September 6, 2006.

 

**(f)****           *****Section 1.01*** of the Credit Agreement is hereby amended todelete the definition of “TotalAsset Value” in its entiretyand replace such definition with the following:

 

“Total Asset Value” means the sumof (a) as of any date of determination, the book value of theStudent Housing Projects plus accumulated depreciation on such Student HousingProjects, as determined on aconsolidated basis in accordance with GAAP, unless an MAI AppraisalValue is available, in which casesuch amount shall be  lesser of (i) the book value of the StudentHousing Projects plus accumulated depreciation on such Student Housing Projects, as determined on a consolidated basis inaccordance with GAAP and (ii) the most recent MAI Appraisal Value of theStudent Housing Projects, 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 theCompanies, as determined on a consolidated basis in accordance with GAAP; plus(d) GMH Operating Partnership’sand each Guarantor’s pro rata share of the book value of assets in jointventures of such Person that own student housing properties; providedthat,current assets (as determined in accordance with GAAP) that are incurred in thenormal course of business shall be excluded from Total Asset Value; provided,furtherthat, Management Cash Flow Value shall not exceed twentypercent (20%) of Total Asset Value.

 

**(g)**           ***Section 1.01*** of the Credit Agreement is hereby amended todelete the definition of “Unencumbered Asset Value” in its entirety and replace such definitionwith the following:

 

“Unencumbered Asset Value” means an amount equal (a) the sumof (i) the aggregate book value of Unencumbered Properties plus (ii)accumulated depreciation of such

 

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UnencumberedProperties, as determined on a consolidatedbasis in accordance with GAAP, unless an MAI Appraisal Value isavailable, in which case suchamount shall be the  lesser of (a) the sum of (i) theaggregate book value of Unencumbered Properties plus (ii) accumulateddepreciation of such Unencumbered Properties, as determined on a consolidated basis in accordance with GAAP and(b) the most recent MAI Appraisal Value of the Unencumbered Properties.

 

**(h)****           *Section 7.10(e)*** of the Credit Agreement is hereby deleted in itsentirety and replaced with the following:

 

(e)**           LeverageRatio.**Permit the Leverage Ratio asof the end of any fiscal quarter of the Trust to be greater than (i) from theThird Amendment Effective Date through December 31, 2006, 70%, and(ii) after December 31, 2006, 60%.

 

**(i)**          The Schedules attached to ***Exhibit D*** of the Credit Agreementare hereby renumbered as ***Schedules 2, 3,***and***4***, and ***Schedule 2***and***Schedule 4***to ***Exhibit D***(as renumberedhereby) of the Credit Agreement are hereby amended and replaced with ***Schedule 2***and***Schedule 4***attachedhereto.

 

**3.****            ****Amendments to CreditAgreement and Other Loan Documents.**

 

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

 

**(b)**           Any and all of the terms and provisions ofthe Loan Documents are hereby amended and modified wherever necessary, eventhough not specifically addressed herein, so as to conform to the amendmentsand 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 thisAgreement, (b) ratifies and confirms that all guaranties and assurances,granted, conveyed, or assigned to the Administrative Agent and the Lendersunder the Loan Documents are not released, reduced, or otherwise adverselyaffected by this Agreement and continue to guarantee and assure full paymentand performance of the present and future Obligations, and (c) agrees toperform such acts and duly authorize, execute, acknowledge, deliver, file, andrecord such additional documents and certificates as the Administrative Agentor the Lenders may reasonably request in order to create, preserve and protectthose guaranties and assurances.

 

**5.****            ****Representations.**Each Loan Party that is a party heretorepresents and warrants to Lenders that as of the date of this Agreement:(a) this Agreement has been duly authorized, executed, and delivered byeach such Loan Party; (b) no action of, or filing with, any GovernmentalAuthority is required to authorize, or is otherwise required in connectionwith, the execution, delivery, and performance by each such Loan Party of thisAgreement; (c) the Loan Documents, as amended by this Agreement, are validand binding upon each Loan Party that is a party thereto and are enforceableagainst each Loan Party in accordance with their respective terms, except aslimited by Debtor Relief Laws and general principles of equity; (d) theexecution, delivery, and performance by each Loan Party that is a party heretoof this Agreement do not require the consent of any other Person and do not andwill not constitute a violation of any Laws, order of any GovernmentalAuthority, or material agreements to which any such Loan Party that is a partyor by which any such Loan Party is bound; (e) all representations andwarranties in the Loan Documents are true and correct in all material respectson and as of the date of this Agreement, except to the extent that (i) anyof them speak to a different specific date, or (ii) the facts on which anyof them were based have been changed by transactions contemplated or permittedby the

 

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Credit Agreement; and (f) both beforeand after giving effect to this Agreement, no Default or Event of Defaultexists.

 

**6.****            ****Conditions.**This Agreement shall not be effective unlessand 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 thisAgreement are true and correct in all material respects on and as of the dateof this Agreement, except to the extent that (i) any of them speak to adifferent specific date, or (ii) the facts on which any of them were based havebeen changed by transactions contemplated or permitted by the Credit Agreement;

 

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

 

**(d)**           Administrative Agent shall have received, forthe benefit of the applicable Lenders, an amendment fee equal to 0.20% timesthe Commitment of each Lender that executes this Agreement.

 

**7.****            ****Continued Effect.**Except to the extent amended hereby or by anydocuments executed in connection herewith, all terms, provisions, andconditions of the Credit Agreement and the other Loan Documents, and alldocuments executed in connection therewith, shall continue in full force andeffect and shall remain enforceable and binding in accordance with theirrespective terms.

 

**8.****            ****Miscellaneous.**Unless stated otherwise (a) the singularnumber includes the plural and *vice versa*and words of any gender include each other gender, in each case, asappropriate, (b) headings and captions may not be construed in interpretingprovisions, (c) this Agreement shall be construed — and its performanceenforced — under New York law, (d) if any part of this Agreement is for anyreason found to be unenforceable, all other portions of it nevertheless remainenforceable, and (e) this Agreement may be executed in any number ofcounterparts with the same effect as if all signatories had signed the samedocument, and all of those counterparts must be construed together toconstitute the same document.

 

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

 

**10.****         ****ENTIRETIES. THE CREDITAGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED BY THIS AGREEMENT, REPRESENTTHE FINAL AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THE CREDITAGREEMENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, ORSUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORALAGREEMENTS BETWEEN THE PARTIES.**

 

*[Remainder of Page Intentionally Left Blank; Signature Pagesto Follow.]*

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto 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**

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto 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 |
|        |                                              |  |  |  |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto be duly executed as of the date first above written.

 

 
|   | **MERRILL  LYNCH CAPITAL CORPORATION**, as a  Lender |
|--------|------------------------------------------------------|
|   | ** **                                           |
|   |                                                 |
|   | By:                                                  | /s/ Chantal  Simon |
|   |                                                 | Name: | Chantal  Simon |
|   |                                                 | Title: | Vice  President |
|        |                                                      |  |  |  |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto be duly executed as of the date first above written.

 

 
|   | **MORGAN  STANLEY BANK**, as a  Lender |
|--------|----------------------------------------|
|   | ** **                             |
|   |                                   |
|   | By:                                    | /s/ Daniel  Twenge |
|   |                                   | Name: | Daniel  Twenge |
|   |                                   | Title: | Authorized  Signatory Morgan Stanley Bank |
|        |                                        |  |  |  |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto 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: | Director |
|   | ** **                                              |
|   |                                                    |
|   | By:                                                     | /s/ Joanna  Soliman |
|   |                                                    | Name: | Joanna  Soliman |
|   |                                                    | Title: | Assistant  Vice President |
|        |                                                         |  |  |  |  |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto 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 |
|        |                                       |  |  |  |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto 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 |
|   |                                                                   |   | Vice President |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto 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  Macchione |
|   |                                                                                 | Name: | Joseph  Macchione |
|   |                                                                                 | Title: | EVP and  General Counsel |
|        |                                                                                      |  |  |  |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto 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 |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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*IN WITNESSWHEREOF,*the parties hereto have caused this Agreementto 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 |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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

 
|   | **GMH  COMMUNITIES TRUST,**a Maryland real estate  investment trust, as a  Guarantor |
|--------|--------------------------------------------------------------------------------------|
|   | ** **                                                                           |
|   |                                                                                 |
|   | By:                                                                                  | /s/ Joseph  Macchione |
|   |                                                                                 | Name: | Joseph  Macchione |
|   |                                                                                 | Title: | EVP 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  Macchione |
|   |                                                                                 |   | Name: | Joseph  Macchione |
|   |                                                                                 |   | Title: | Secretary |
|        |                                                                                      |  |  |  |  |  |  |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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|   | **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  Macchione |
|   |                                                                                             | Name: | Joseph  Macchione |
|   |                                                                                             | Title: | Vice President |
|        |                                                                                                  |  |  |  |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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|   | **COLLEGE  PARK MANAGEMENT TRS, INC.**, a Delaware  corporation, as a Guarantor |
|--------|---------------------------------------------------------------------------------|
|   |                                                                            |
|   |                                                                            |
|   | By:                                                                             | /s/ Joseph  M. Macchione |   |
|   |                                                                            | Joseph M.  Macchione |
|   |                                                                            | Vice  President and Secretary |

 

 

 

**Signature Page to Third Amendment and Waiver to Credit Agreement**

 

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For the Quarter/Year ended                            (“StatementDate”)

 

**SCHEDULE 2**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  4)                      |   | $      |   |   |
|             |       |                                                                      |                                                       |   |   |   |
|             |       | 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  4)                      |   | $      |   |   |
|             |       |                                                                      |                                                       |   |   |   |
|             |       | 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) |   | $      |   |   |

 

**Third Amendment and Waiver To Credit Agreement**

 

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|             |       | 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 4)                                          |   | $      |       |   |
|             |       |                                                          |                                                                                        |   |   |       |
|             |       | 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  3)                                                         |   | $      |       |   |
|             |       |                                                          |                                                                                        |   |   |       |
|             |       | C.                                                            | Ratio of V.A. to V.B.                                                                       |   |   |       |
|             |       |                                                          |                                                                                        |   |   |
| Maximum Allowed  |       | [60% after  December 31, 2006]                           |                                                                                        |
|             |       | [70% through  December 31, 2006]                         |                                                                                        |
|             |       |                                                          |                                                                                        |   |   |
| **VI.**          | ** ** | **Section  7.10(f) –Total Recourse Debt.**               |                                                                                        |   |   |
|             |       |                                                          |                                                                                        |   |   |
|             |       | A.                                                            | Actual  Recourse Debt (including the Obligations)                                           |   | $      |       |   |
|             |       |                                                          |                                                                                        |   |   |       |
|             |       | B.                                                            | Borrowing  Base Value (See Schedule 3)                                                      |   | $      |       |   |
|             |       |                                                          |                                                                                        |   |   |       |
|             |       | C.                                                            | (Excess) or  deficiency for covenant compliance (Line VI.A. – VI.B.):                  |   | $      |       |   |
|                  |            |                                                               |                                                                                             |        |        |            |        |  |  |  |

 

**Third Amendment and Waiver To Credit Agreement**

 

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| **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 |       | $          |       |                 |       | %           | 20         | % |
|            |       |                                          |       |       |       |                 |       |        |       |
| (iii)           |       | Unconsolidated  Affiliates                    |       | $          |       |                 |       | %           | 20         | % |

 

**Third Amendment and Waiver To Credit Agreement**

 

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| (iv)   |   | Other  Non-Real Estate Investments                  |   | $      |   |   |   | %      | 10     | % |
|--------|--------|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|---|
|   |   |                                                |   |   |   |   |   |   |   |
| (v)    |   | Indebtedness  secured by Real Property              |   | $      |   |   |   | %      | 10     | % |
|   |   |                                                |   |   |   |   |   |   |   |
| (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     | % |

** **

**Third Amendment and Waiver To Credit Agreement**

 

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**SCHEDULE 4**

 

**TO COMPLIANCE CERTIFICATE**

 

($ in 000’s)

 
| **NOI from  Unencumbered  Properties**                             | ** ** | **Most Recent Fiscal Quarter  Annualized**                                        | ** ** |
|-------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------|------------|
| rental,  management, and operating income from Student Housing Projects |       | $                                                                                                |       |   |
| -                                                                       |       | property  operating expenses                                                                     |       | $ |   |   |
| -                                                                       |       | real estate  taxes                                                                               |       | $ |   |   |
| -                                                                       |       | bad debt  expense                                                                                |       | $ |   |   |
| -                                                                       |       | other  operating expenses and property charges related to operation of Student  Housing Projects |       | $ |   |   |
| +                                                                       |       | debt service                                                                                     |       | $ |   |   |
| +                                                                       |       | income taxes  paid                                                                               |       | $ |   |   |
| +                                                                       |       | depreciation,  amortization, and other non-cash expenses                                         |       | $ |   |   |
| =                                                                       |       | NOI from  Unencumbered Properties                                                                |       | $ |   |   |

 
| **Consolidated  EBITDA** | ** ** | **Most Recent Fiscal Quarter  Annualized**                         | ** ** |
|--------------------------|------------|-----------------------------------------------------------------------------------|------------|
| Consolidated Net Income  |       | $                                                                                 |       |   |
| +                        |       | Consolidated  Interest Charges                                                    |       | $ |   |   |
| +                        |       | income taxes                                                                      |       | $ |   |   |
| +                        |       | depreciation  expense                                                             |       | $ |   |   |
| +                        |       | amortization  expense                                                             |       | $ |   |   |
| +                        |       | non-recurring  non-cash expenses                                                  |       | $ |   |   |
| +                        |       | Special  Investigation Expenses (commencing with the period ending June 30, 2006) |       | $ |   |   |
| -                        |       | income tax  credits                                                               |       | $ |   |   |
| -                        |       | non-cash  income                                                                  |       | $ |   |   |
| =                        |       | Consolidated  EBITDA                                                              |       | $ |   |   |

 

**Third Amendment and Waiver To Credit Agreement**

 

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