**Exhibit 10.2**

 

**SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT**

 

THISSECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this “***Agreement***”) isentered into to be effective as of August 9, 2005, by and among **GMH COMMUNITIES, LP,**aDelaware limited partnership (“***GMH Operating Partnership***”), **GMH COMMUNITIES TRUST,**a Maryland 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 and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, the parties hereto agree as follows:

 

**1.****                                     ****Waiver**. Trust and Borrowers failed to maintain a Leverage Ratio equal to or lessthan 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 compliancewith ***Section 7.10(e) ***ofthe Credit Agreement solely for the Subject Period.  No waiver by Lenders under the CreditAgreement or any other Loan Document is granted except as expressly set forthabove, and Lenders expressly reserve the right to require strict compliancewith the terms of the Credit Agreement and the other Loan Documents in allother respects.

 

**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:

 

1

----

 

“Applicable Rate” means the followingpercentages per annum, based upon the Leverage Ratio as set forth in the mostrecent 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 changein the Leverage Ratio shall become effective as of the first (1st)Business Day immediately following the date a Compliance Certificate isdelivered pursuant to Section 6.02(b); provided, however,that if a Compliance Certificate is not delivered when due in accordance withsuch Section, then Pricing Level 5 shall apply as of the first (1st)Business Day after the date on which such Compliance Certificate was requiredto have been delivered until and including the first (1st) BusinessDay immediately following the date such Compliance Certificate is actuallydelivered.  The Applicable Rate in effectfrom the Second Amendment Effective Date through the date of delivery of thenext Compliance Certificate delivered pursuant to Section 6.02(b) shallbe determined based upon Pricing Level 4.

 

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

 

“Borrowing Base Value” means the sumof (a) the Unencumbered Asset Value times sixty percent (60%) plus(b) Management Cash Flow Value times fifty percent (50%); providedthat (i) the amount of Management Cash Flow Value included in thecalculation of Borrowing Base Value shall not exceed fifty percent (50%) ofBorrowing Base Value, and (ii) the Unencumbered Asset Value attributableto any single Unencumbered Property shall not exceed thirty percent (30%) ofBorrowing Base Value.

 

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

 

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

 

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

 

**(e)****                                 *****Section 1.01*** of the Credit Agreement is hereby amended toadd the following definition of “MAI Appraisal Value”between the definitions of “Loan Parties” and “Management CashFlow Value” :

 

2

----

 

“MAI Appraisal Value” means, withrespect to any real property, the appraisal value of such property asdetermined by written appraisal reports, in form and substance acceptable toAdministrative Agent, meeting the requirements of the Federal InstitutionsReform, Recovery and Enforcement Act of 1989, prepared by a professionalappraiser, who is a member of the Member Appraisal Institute.

 

**(f)****                                   *****Section 1.01*** of the Credit Agreement is hereby amended todelete the definition of “MilitaryHousing EBITDA” in itsentirety 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 inrespect 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 todelete the definition of “NOIValue” in its entirety.

 

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

 

“Total Asset Value” meansthe sum of (a) as of any date of determination, thelesser of (i) the book value of the Student Housing Projects plusaccumulated depreciation on such Student Housing Projects, as determined on a consolidated basis inaccordance with GAAP, or (ii) the most recent MAI Appraisal Valueof the Student Housing Projects (solely to the extent available), plus (b) Management Cash FlowValue, plus (c) the book value of other assets (excluding ownedreal estate captured in clause (a) above) owned by the Companies,as determined on a consolidated basis in accordance with GAAP; plus (d) GMHOperating Partnership’s and eachGuarantor’s pro rata share of the book value of assets in joint ventures ofsuch 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.

 

**(j)****                                   *****Section 1.01*** of the Credit Agreement is hereby amended toadd the following definition of “Total Debt” between the definitions of “TotalAvailability” and “TotalOutstandings”:

 

“Total Debt” means (withoutduplication), for any Person as of any date, (a) all Indebtedness of suchPerson, (b) all other indebtedness, liabilities, or obligations requiredby GAAP to be classified upon such Person’s balance sheet as liabilities, and (c) suchPerson’s pro rata share of all Indebtedness of joint ventures in which suchPerson owns an Equity Interest that own student housing properties.Notwithstanding the foregoing, the current liabilities (as determined inaccordance with GAAP) that are incurred in the normal course of business shallbe excluded from Total Debt.

 

3

----

 

**(k)****                               *****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 anamount equal to 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, or (b) themost recent MAI Appraisal Value of the Unencumbered Properties (solely to theextent available).

 

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

 

“Unencumbered Property Report” means areport in substantially the form of Exhibit I certified by aResponsible Officer of GMH Operating Partnership, setting forth in reasonabledetail the Occupancy Rate, Approved Costs, Unencumbered Asset Value, AdjustedProperty NOI, NOI Value, the most recent MAI Appraisal Value of theUnencumbered Properties, and Capital Expenditure Reserve for the UnencumberedProperties (individually and in the aggregate).

 

**(m)**                              ***Article VI*** ofThe Credit Agreement is hereby amendedby adding the following ***Section 6.14***thereto:

 

**6.14****                       ****Appraisal Rights**.  Tothe extent Administrative Agent reasonably determines that a new appraisal isnecessary for any Student Housing Project and provides notice of suchdetermination to Trust or any Borrower, obtain a new appraisal for such StudentHousing Project for purposes of calculating both the Unencumbered AssetValue and Total Asset Value; providedthat so long as no Event of Default exists, Administrative Agent shall notrequest more than one (1) new appraisal for any Student Housing Projectduring 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 ofAdministrative Agent.

 

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

 

(j)                                     Liens securingIndebtedness permitted under Section 7.03(g); provided that (i) eachsuch transaction is secured by no more than five (5) assets of the debtorunder such transaction

 

**(o)**                                  ***Section 7.03(f) ***ofthe Credit Agreement is hereby deleted inits entirety and replaced with the following:

 

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

 

4

----

 

to participate in such financing, and (E) shall otherwise beapproved by Administrative Agent (such approval not to be unreasonablywithheld).

 

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

 

(e)**                                  LeverageRatio.**  Permit the Leverage Ratio as of the end ofany fiscal quarter of the Trust to be greater than (i) from the SecondAmendment Effective Date through December 31, 2005, 65%, and (ii) afterDecember 31, 2005, 60%.

 

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

 

**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.**  EachLoan Party that is a party hereto (a) ratifies and confirms all provisionsof the Loan Documents as amended by this Agreement, (b) ratifies andconfirms that all guaranties and assurances, granted, conveyed, or assigned to theAdministrative Agent and the Lenders under the Loan Documents are not released,reduced, or otherwise adversely affected by this Agreement and continue toguarantee and assure full payment and performance of the present and futureObligations, and (c) agrees to perform such acts and duly authorize,execute, acknowledge, deliver, file, and record such additional documents andcertificates as the Administrative Agent or the Lenders may reasonably requestin order to create, preserve and protect those guaranties and assurances.

 

**5.****                                     ****Representations.**  EachLoan Party that is a party hereto represents and warrants to Lenders that as ofthe date of this Agreement: (a) this Agreement has been duly authorized,executed, and delivered by each such Loan Party; (b) no action of, orfiling with, any Governmental Authority is required to authorize, or isotherwise required in connection with, the execution, delivery, and performanceby each such Loan Party of this Agreement; (c) the Loan Documents, asamended by this Agreement, are valid and binding upon each Loan Party that is aparty thereto and are enforceable against each Loan Party in accordance withtheir respective terms, except as limited by Debtor Relief Laws and generalprinciples of equity; (d) the execution, delivery, and performance by eachLoan Party that is a party hereto of this Agreement do not require the consentof 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 suchLoan Party that is a party or by which any such Loan Party is bound; (e) allrepresentations and warranties in the Loan Documents are true and correct inall material respects on and as of the date of this Agreement, except to theextent that (i) any of them speak to a different specific date, or (ii) thefacts on which any of them were based have been changed by transactionscontemplated or permitted by the Credit Agreement; and (f) both before andafter giving effect to this Agreement, no Default or Event of Default exists.

 

5

----

 

**6.****                                     ****Conditions.**  ThisAgreement 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 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 basedhave been changed by transactions contemplated or permitted by the CreditAgreement;

 

**(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 0.10% timesthe Commitment of each Lender that executes this Agreement.

 

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

 

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

 

**9.****                                     ****Parties.** ThisAgreement binds and inures to each of the parties hereto and their respectivesuccessors and permitted assigns.

 

**10.****                              ****ENTIRETIES.  THE CREDIT AGREEMENT AND THE OTHER LOANDOCUMENTS, AS AMENDED BY THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT BETWEENTHE PARTIES ABOUT THE SUBJECT MATTER OF THE CREDIT AGREEMENT AND MAY NOTBE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORALAGREEMENTS OF THE PARTIES.  THERE ARE NOUNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.**

 

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

 

6

----

 

*IN WITNESS WHEREOF,*the parties hereto havecaused 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 Waiverto Credit Agreement**

 

----

 

*IN WITNESS WHEREOF,*the parties hereto havecaused 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 havecaused 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 havecaused 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 havecaused 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 havecaused 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 havecaused 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 havecaused 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 havecaused 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 havecaused 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 havecaused 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 |

 

----

 

Toinduce the Credit Parties to enter into this Agreement, the undersigned jointlyand severally (a) consent and agree to this letter’s execution anddelivery, (b) ratify and confirm that all guaranties, assurances, andLiens granted, conveyed, or assigned to the Credit Parties under the LoanDocuments are not released, diminished, impaired, reduced, or otherwiseadversely affected by this Agreement and continue to guarantee, assure, andsecure 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 consentand agreement, which consent and agreement binds the undersigned and theirsuccessors and permitted assigns and inures to the Credit Parties and theirrespective 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                      (“StatementDate”)

 

**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 BASEVALUE**

 
| 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)**                 | ** ** |
|         |       |          |       |                |       |                       |       |             |       |                     |       |                          |       |                             |       |
|         |       |          |       |                |       |                       |       |             |       |                     |       |                          |       |                             |       |

 

----