Document:

Exhibit 10.1

 

 

AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

by and among

 

IMMUNICON CORPORATION AND ITS SUBSIDIARIES,

 

as Borrowers

 

and

 

SILICON VALLEY BANK,

 

as Bank

 

OCTOBER 20, 2004

 

 

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

THIS AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (this “Agreement”) dated October 20, 2004,
between SILICON VALLEY BANK (“Bank”), whose address is 3003 Tasman Drive, Santa
Clara, California 95054 and having a loan production office at One Newton
Executive Park, Suite 200, 2221 Washington Street, Newton, Massachusetts 02462
and IMMUNICON CORPORATION, a Delaware corporation whose address is 3401 Masons
Mill Road, Suite 100, Huntingdon Valley, Pennsylvania 19006  (the “Company”); IMMUNIVEST CORPORATION, a
Delaware corporation, IMMC HOLDINGS, INC., a Delaware corporation and IMMUNICON
EUROPE, INC., a Delaware corporation whose addresses are 1209 Orange Street,
Wilmington, Delaware 19801 (each a “Borrower” and collectively, the “Borrowers”)
provides the terms on which Bank will lend to Borrowers and Borrowers will
repay Bank.

 

 

WHEREAS, Borrowers and Bank have previously entered into that certain
Loan and Security Agreement, dated as of April 30, 2002 (as amended from time
to time, the “Prior Agreement”);

 

WHEREAS, in connection with the Prior Agreement, the Company has issued
certain Warrants to Bank (the “Existing Warrants”); and

 

WHEREAS, Borrowers and Bank desire to amend and restate in its entirety
the Prior Agreement, all as more fully set forth herein.

 

NOW, THEREFORE, Borrowers and Bank hereby amend and restate in its
entirety the Prior Agreement as follows:

 

ACCOUNTING AND OTHER TERMS

 

Accounting terms not defined in this Agreement will be construed
following GAAP. Calculations and determinations must be made following
GAAP.  The term “financial statements”
includes the notes and schedules.  The
terms “including” and “includes” always mean “including (or includes) without
limitation,” in this or any Loan Document.

 

LOAN AND TERMS OF PAYMENT

 

Promise to Pay.

 

Borrowers jointly and severally promise to pay Bank on the terms and
conditions set forth herein, the unpaid principal amount of all Credit
Extensions and interest on the unpaid principal amount of the Credit
Extensions.

 

Term Loan.

 

Pursuant to the Prior Agreement Bank has made a Term Loan to Borrowers
in the original amount of Five Million Dollars ($5,000,000).

 

As of October 1, 2004, the unpaid principal balance of the Term Loan is
Eight Hundred Ninety Nine Thousand Nine Hundred Twenty Five and .32/100 Dollars
($899,925.32) and Borrowers have no defenses or set offs to the repayment of
the Term Loan.  It is expressly agreed
that the indebtedness evidenced by the Term Note has not been extinguished or
discharged by this Agreement.  The
Borrowers agree that the execution of this Agreement is not intended to and
shall not cause or result in a novation with respect to the Term Note and all
references in the Term Note to the Loan Agreement shall be deemed to refer to
the Prior Agreement as amended and restated in its entirety by this Agreement.

 

Borrowers shall in accordance with the Term Note continue to make equal
installments of Term Loan principal and accrued interest each in the amount of
$152,954.24 (the “Term Loan Payment”) on the first (1st) day of each month during the term
of the Term Loan.  Borrowers’ final Term
Loan Payment, due on the Term Loan Maturity Date, includes all outstanding Term
Loan principal, accrued and unpaid interest and any and all accrued and unpaid
fees.

 

Supplemental Equipment Loan.

 

Pursuant to the Prior Agreement Bank has made a Supplemental Equipment
Loan to Borrowers in the original amount of Two Million Dollars ($2,000,000).

 

As of October 1,  2004, the
unpaid principal balance of the Supplemental Equipment Loan is One Million
Eighty Two Thousand Four Hundred Forty Seven and .58/100 Dollars
($1,082,447.58) and Borrowers have no defenses or set offs to the repayment of
the

 

 

Supplemental Equipment Loan.  The Borrowers agree that the execution of
this Agreement is not intended to and shall not cause or result in a novation
with respect to the Tranche I Supplemental Equipment Term Note and the Tranche
II Supplemental Equipment Term Note and all references in the Tranche I
Supplemental Equipment Term Note and the Tranche II Supplemental Equipment Term
Note to the Loan Agreement shall be deemed to refer to the Prior Agreement as
amended and restated in its entirety by this Agreement.

 

Borrowers shall in accordance with the Tranche I Supplemental Equipment
Term Note and the Tranche II Supplemental Equipment Term Note, continue to make
equal installments of the Supplemental Equipment Loan principal and accrued
interest each in the amount of $61,839.57 (the “Supplemental Equipment Loan
Payment”) on the first (1st) day of each month during the term of the Supplemental
Equipment Loan.  Borrowers’ final
Supplemental Equipment Loan Payment, due on the Supplemental Equipment Maturity
Date, includes all outstanding Supplemental Equipment Loan principal, accrued
and unpaid interest and any and all accrued and unpaid fees.

 

Equipment Advances.

 

Through December 31, 2005 (the “Equipment Availability End Date”), Bank
will make advances (“Equipment Advance” and, collectively, “Equipment Advances”)
not exceeding the Committed Equipment Line. 
The Equipment Advances may only be used to finance or refinance
Equipment purchased on or after ninety (90) days before the date of each
Equipment Advance and may not exceed one hundred percent (100%) of the
equipment invoice, excluding taxes, shipping, warranty charges, freight
discounts and installation expense. 
Software may constitute up to twenty percent (20%) of the aggregate
amount of all Equipment Advances.  Each
Equipment Advance must be for a minimum of Two Hundred Thousand Dollars
($200,000).  The number of Equipment
Advances is limited to five (5).

 

Interest accrues from the date of each Equipment Advance at the rate in
Section 2.2 (a) and is payable monthly. 
Each Equipment Advance is payable in forty eight (48) equal monthly
installments (the “Repayment Period”) of principal, plus accrued interest,
beginning on the first (1st) day of each month after each Equipment Advance and continuing
thereafter until the last day of each Repayment Period (the “Equipment Maturity
Date”).  All Equipment Advances shall be
evidenced by the Equipment Term Note to be executed and delivered by Borrowers
to Bank on the Closing Date and shall be repaid in accordance with the terms of
the Equipment Term Note.  Equipment
Advances when repaid may not be reborrowed.

 

To obtain an Equipment Advance, the Company must notify Bank (the
notice is irrevocable) by facsimile no later than 3:00 p.m. Eastern time one
(1) Business Day before the day on which the Equipment Advance is to be
made.  The notice in the form of Exhibit
B (Payment/Advance Form) must be signed by a Responsible Officer or designee
and include a copy of the invoice for the Equipment being financed.

 

Interest Rate, Payments.

 

Interest Rate.  (i) Equipment Advances accrue interest on the
outstanding principal balance at a
per annum rate of one half of one percentage points (0.50%) above the Prime
Rate.  (ii)  The outstanding principal balance of the Term
Loan continues to accrue interest at the fixed rate of six and three quarters percent (6.75%) per annum.  (iii) 
The outstanding principal balance of the Supplemental Equipment Loan
continues to accrue interest at the fixed rate of eight and one half percent
(8.50%) per annum. After an Event of Default, Obligations accrue interest at
five percent (5%) above the rate effective immediately before the Event of
Default.  The interest rate increases or
decreases when the Prime Rate changes. 
Interest is computed on a 360 day year for the actual number of days
elapsed.

 

Payments.  Bank may debit any Borrower’s deposit
accounts including Account

 

 

Number                                        
for principal and interest payments owing or any amounts any Borrower owes
Bank.  Bank will promptly notify the
Company when it debits any Borrower’s accounts. 
These debits are not a set-off.  Payments
received after 12:00 noon Eastern time are considered
received at the opening of business on the next Business Day.  When a payment is due on a day that is not a
Business Day, the payment is due the next Business Day and additional fees or interest accrue.

 

On April 29, 2005 or if the Term Loan is accelerated following the
occurrence of an Event of Default, Borrowers will pay, in addition to the
unpaid principal and accrued interest and all other amounts due on such date
with respect to the Term Loan, an amount equal to the Final Payment.

 

In addition to the fees paid under the Prior Agreement, Borrowers will
pay:

 

Facility Fee.  A fully earned,
nonrefundable fee in the amount of Thirty Thousand Dollars ($30,000).

 

Bank Expenses.
All Bank Expenses (including reasonable attorneys’ fees and reasonable
expenses) incurred through and after the date of this Agreement, are payable
when due.

 

Joint Obligations.

 

Each Person included in the term “Borrower” hereby covenants and agrees
with Bank as follows:

 

(a) The Obligations include all present and future indebtedness,
duties, obligations, and liabilities, whether now existing or contemplated or
hereafter arising, of any one or more of the Borrowers.

 

(b) Reference in this Agreement and the other Loan Documents to the “Borrower”
or otherwise with respect to any one or more of the Persons now or hereafter
included in the definition of “Borrower” shall mean each and every such Person
and any one or more of such Persons, jointly and severally, unless the context requires
otherwise.

 

(c) Each Person included in the term “Borrower” in the discretion of
its respective management is to agree among themselves as to the allocation of
the benefits of each Equipment Advance.

 

(d) For administrative convenience, each Person included in the term “Borrower”
hereby irrevocably appoints the Company as the Borrower’s attorney-in-fact,
with power of substitution (with the prior written consent of Bank in the
exercise of its sole and absolute discretion), in the name of the Company or in
the name of any Borrower or otherwise to take any and all actions with respect
to this Agreement, the other Loan Documents, the Obligations and/or the
Collateral (including, without limitation, the proceeds thereof) as the Company
may so elect from time to time, including, without limitation, actions to (i)
request the Equipment Advance and direct Bank to disburse or credit the
proceeds of the Equipment Advance directly to an account of the Company, any
one or more of such Persons or otherwise, which direction shall evidence the
making of the Equipment Advance and shall constitute the acknowledgment by each
such Person of the receipt of the proceeds of the Equipment Advance, (ii) enter
into, execute, deliver, amend, modify, restate, substitute, extend and/or renew
this Agreement, any other Loan Documents, security agreements, mortgages,
deposit account agreements, instruments, certificates, waivers, letter of
credit applications, releases, documents and agreements from time to time, and
(iii) endorse any check or other item of payment in the name of such Person or
in the name of the

 

 

Company. 
The foregoing appointment is coupled with an interest, cannot be revoked
without the prior written consent of Bank, and may be exercised from time to
time through the Company’s duly authorized officer, officers or other Person or
Persons designated by the Company to act from time to time on behalf of the
Company.

 

(e) Each Person included in the term “Borrower” hereby irrevocably
authorizes Bank to make the Equipment Advance to any one or more or all of such
Person(s), pursuant to the provisions of this Agreement upon the written, oral
or telephone request any one or more of the Persons who is from time to time a
Responsible Officer of a Borrower under the provisions of the most recent
certificate of corporate resolutions and/or incumbency of the Person included
in the term “Borrower” on file with Bank and also upon the written, oral or
telephone request of any one of the Persons who is from time to time a Responsible
Officer of the Company under the provisions of the most recent certificate of
corporate resolutions and/or incumbency for the Company on file with Bank.

 

(f) Bank assumes no responsibility or liability for any errors,
mistakes, and/or discrepancies in the oral, telephonic, written or other
transmissions of any instructions, orders, requests and confirmations between
Bank and any one or more of the Persons included in the term “Borrower” or Bank
in connection with the Credit Extension or any other transaction in connection
with the provisions of this Agreement.

 

Inter-Company Debt, Contribution.

 

Without implying any limitation on the joint and several nature of the Obligations, Bank agrees that, notwithstanding
any other provision of this Agreement, the Persons included in the term “Borrower”
may create reasonable inter-company indebtedness between or among the Persons
included in the term “Borrower” with respect to the allocation of the benefits
and proceeds of the Equipment Advance. 
The Persons included in the term “Borrower” agree among themselves, and
Bank consents to that agreement, that each such Person shall have rights of
contribution from all of the such Persons to the
extent such Person incurs Obligations in excess of the proceeds of the Equipment
Advance received by, or allocated to purposes for the direct benefit of, such
Person.  All such indebtedness and rights
shall be, and are hereby agreed by the Persons included in the term “Borrower”
to be, subordinate in priority and payment to the indefeasible repayment in
full in cash of the Obligations, and, unless Bank agrees in writing otherwise,
shall not be exercised or repaid in whole or in part until all of the
Obligations have been indefeasibly paid in full in cash.  Each Person included in the term “Borrower”
agrees that all of such inter-company indebtedness and rights of contribution
are part of the Collateral and secure the Obligations.  Each Person included in the term “Borrower”
hereby waives all rights of counter claim, recoupment and offset between or
among themselves arising on account of that indebtedness and otherwise.  No Person included in the term “Borrower”
shall secure any inter-company indebtedness or rights of contribution with any
Lien or security.

 

Borrowers are Integrated Group.

 

Each Person included in the term “Borrower” hereby represents and
warrants to Bank that each of them will derive benefits, directly and
indirectly, from the Equipment Advance, both in their separate capacity and as
a member of the integrated group to which each such Person belongs and because
the successful operation of the integrated group is dependent upon the
continued successful performance of the functions of the integrated group as a
whole, because (i) the terms of the consolidated financing provided under this
Agreement are more favorable than would otherwise would be obtainable by such
Persons individually, and (ii) the additional administrative and other costs
and reduced flexibility associated with individual financing arrangements which
would otherwise be required if obtainable would substantially reduce the value
to such Persons of the financing.

 

Each Person included in the term “Borrower” hereby represents and
warrants

 

 

that all of the representations and warranties contained in the Loan
Documents are true and correct on and as of the date hereof as if made on and
as of such date, both before and after giving effect to this Agreement, and
that no Event of Default has occurred and is continuing or exists or would
occur or exist after giving effect to this Agreement.

 

Primary Obligations.

 

The obligations and liabilities of each Person included in the term “Borrower”,
as guarantor under this Section shall be primary, direct and immediate, shall
not be subject to any counterclaim, recoupment, set off, reduction or defense
based upon any claim that such Person may have against any one or more of the
other Persons included in the term “Borrower”, Bank and/or any other guarantor
and shall not be conditional or contingent upon pursuit or enforcement by Bank
of any remedies it may have against Persons included in the term “Borrower”
with respect to this Agreement or any of the other Loan Documents, whether
pursuant to the terms thereof or by operation of law.  Without limiting the generality of the
foregoing, Bank shall not be required to make any demand upon any of the
Persons included in the term “Borrower”, or to sell the Collateral or otherwise
pursue, enforce or exhaust its or their remedies against the Persons included
in the term “Borrower” or the Collateral either before, concurrently with or
after pursuing or enforcing its rights and remedies hereunder.  Any one or more successive or concurrent
actions or proceedings may be brought against each Person included in the term “Borrower”
under this Section, either in the same action, if any, brought against any one
or more of the Persons included in the term “Borrower” or in separate actions
or proceedings, as often as Bank may deem expedient or advisable.  Without limiting the foregoing, it is specifically
understood that any modification, limitation or discharge of any of the
liabilities or obligations of any one or more of the Persons included in the
term “Borrower”, any other guarantor or any obligor under any of the Loan
Documents, arising out of, or by virtue of, any bankruptcy, arrangement,
reorganization or similar proceeding for relief of debtors under federal or
state law initiated by or against any one or more of the Persons included in
the term “Borrower”, in their respective capacities as borrowers and guarantors
under this Section, or under any of the Loan Documents shall not modify, limit,
lessen, reduce, impair, discharge, or otherwise affect the liability of each
Borrower under this Section in any manner whatsoever, and this Section shall
remain and continue in full force and effect. 
It is the intent and purpose of this Section that each Person included
in the term “Borrower” shall and does hereby waive all rights and benefits
which might accrue to any other guarantor by reason of any such proceeding, and
the Persons included in the term “Borrower” agree that they shall be liable for
the full amount of the obligations and liabilities under this Section
regardless of, and irrespective to, any modification, limitation or discharge
of the liability of any one or more of the Persons included in the term “Borrower”,
any other guarantor or any obligor under any of the Loan Documents, that may
result from any such proceedings.

 

CONDITIONS OF LOANS

 

Conditions
Precedent to Initial Credit Extension.

 

Bank’s obligation to make the initial Credit Extension is subject to
the condition precedent that it receive the
agreements, documents and fees it requires.

 

Conditions Precedent to all Credit
Extensions.

 

Bank’s obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the following:

 

timely receipt of
any Payment/Advance Form; and

 

the
representations and warranties in Section 5 must be true on the date of the

 

 

Payment/Advance Form and on the effective date of each Credit Extension
and no Event of Default may have occurred and be continuing, or result from the
Credit Extension. Each Credit Extension is Borrower’s representation and
warranty on that date that the representations and warranties of Section 5 remain
true.

 

CREATION OF SECURITY INTEREST

 

Grant of
Security Interest.

 

Each Borrower grants Bank a continuing security interest in all
presently existing and later acquired Collateral to secure all Obligations and
performance of each of Borrower’s duties under the Loan Documents.  Except for Permitted Liens, any security
interest will be a first priority security interest in the Collateral.  Bank may place a “hold” on any deposit
account pledged as Collateral. 
Notwithstanding the foregoing, the security interest granted herein does
not extend to and the term “Collateral” does not include any license or
contract rights to the extent (i) the granting of a security interest in it
would be contrary to applicable law, or (ii) that such rights are nonassignable
by their terms (but only to the extent such prohibition is enforceable under
applicable law, including, without limitation, Section 9318(4) of the Code)
without the consent of the licensor or other party (but only to the extent such
consent has not been obtained).  Except
as disclosed on the Schedule, no Borrower is a licensee under, nor is bound by,
any license agreement for which the failure to maintain such license could have
a Material Adverse Change on such Borrower’s financial condition or business and
that prohibits or otherwise restricts such Borrower from granting a security
interest in such Borrower’s interest in such license or agreement or any other
property.  Notwithstanding the foregoing,
the security interest granted herein does not extend to and the term “Collateral”
does not include any Equipment leased to any Borrower pursuant to those certain
lease financing transactions more particularly described on the Schedule.  Notwithstanding the security interests
granted herein, nothing set forth herein is intended to, nor shall constitute,
an assignment of any Borrower’s obligations, including any obligations to
perform, under any contracts between any Borrower and its customers and or
clients, provided that subject to the foregoing provisions of this Section 4.1,
Bank shall have a security interest in all such contract rights as part of the “Collateral”.  If this Agreement is terminated, Bank’s lien
and security interest in the Collateral will continue until Borrowers fully
satisfy their Obligations.

 

Authorization to File.

 

Each Borrower authorizes Bank to file financing statements without
notice to any Borrower, with all appropriate jurisdictions, as Bank deems
appropriate, in order to perfect or protect Bank’s interest in the Collateral.

 

REPRESENTATIONS AND WARRANTIES

 

Each Borrower represents and warrants as follows:

 

Due Organization and Authorization.

 

The Company and each Borrower is duly existing and in good standing in
the State of Delaware and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be qualified, except where the failure to do so could
not reasonably be expected to cause a Material Adverse Change.  Each Borrower and each Subsidiary’s exact
legal name is as set forth on the first page of this
Agreement.  The execution, delivery and
performance of the Loan Documents have been duly

 

 

authorized, and do not conflict with
Borrower’s formation documents, nor constitute an event of default under any
material agreement by which any Borrower is bound.  Borrowers are not in default under any
agreement to which, or by which it is bound, in which the default could
reasonably be expected to cause a Material Adverse Change.

 

Each Borrower has good
title to the Collateral, free of Liens except Permitted Liens.  The Accounts are bona fide, existing
obligations, and the service or property has been performed or delivered to the
account debtor or its agent for immediate shipment to and unconditional
acceptance by the account debtor.  Each
Borrower has no notice of any actual or imminent Insolvency Proceeding of any
account debtor whose accounts are an Eligible Account in any Borrowing Base
Certificate.  All Inventory
is in all material respects of good and marketable quality, free from material
defects.  Except as noted on the
Schedule, No Borrower is party to, nor is bound by, any material license or
other material agreement with respect to which any Borrower is the licensee
that prohibits or otherwise restricts any Borrower from granting a security
interest in such Borrower’s interest in such license or agreement or any other
property.  Borrower will provide written
notice to Bank within ten (10) days of entering or becoming bound by any such
license or agreement which is reasonably likely to have a material impact on
any Borrower’s business or financial condition (other than over-the-counter
software that is commercially available to the public).  Each Borrower shall take such steps as Bank reasonably
requests to obtain the consent of, authorization by, or waiver by, any person
whose consent or waiver is necessary for all such licenses or contract rights
to be deemed “Collateral” and for Bank to have a security interest in it that
might otherwise be restricted or prohibited by law or by the terms of any such
license or agreement (such consent or authorization may include a licensor’s
agreement to a contingent assignment of the license to Bank if the Bank
determines that is necessary in its good faith judgment), whether now existing
or entered into in the future.

 

There are no actions or proceedings pending or, to the knowledge of the
Company’s Responsible Officers, threatened by or against any Borrower or any
Subsidiary in which a likely adverse decision could reasonably be expected to
cause a Material Adverse Change.

 

No Material Adverse Change in Financial Statements.

 

All consolidated financial statements for Borrowers, and any
Subsidiary, delivered to Bank fairly present in all material respects Borrowers’
consolidated financial condition and Borrowers’ consolidated results of
operations.  There has not been any
material deterioration in any Borrower’s consolidated financial condition since
the date of the most recent consolidated financial statements submitted to
Bank.

 

Solvency.

 

The fair salable value of Borrowers’ assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; the Borrowers are
not left with unreasonably small capital after the transactions in this
Agreement or any of the Loan Documents; and Borrowers are able to pay their
debts (including trade debts) as they mature.

 

Regulatory Compliance.

 

No Borrower is an “investment company” or a company “controlled” by an “investment
company” under the Investment Company Act. 
No Borrower is engaged as one of its important activities in extending
credit for margin stock (under Regulations T and U of the Federal Reserve Board
of Governors).  Each Borrower has
complied in all material respects with the Federal Fair Labor Standards
Act.  No Borrower has violated any laws,
ordinances or rules, the violation of which could reasonably be expected to
cause a Material Adverse Change.  None of
any Borrower’s or any Subsidiary’s properties or assets has been used by any
Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous
Persons, in disposing, producing,

 

 

storing, treating, or transporting any
hazardous substance other than legally. 
Each Borrower and each Subsidiary has timely filed all required tax
returns and paid, or made adequate provision to pay, all material taxes, except
those being contested in good faith with adequate reserves under GAAP.  Each Borrower and each Subsidiary has
obtained all consents, approvals and authorizations of, made all declarations
or filings with, and given all notices to, all government authorities that are
necessary to continue its business as currently conducted, except where the
failure to do so could not reasonably be expected to cause a Material Adverse
Change.

 

Subsidiaries.

 

Borrowers do not own any stock, partnership interest or other equity
securities except for Permitted Investments.

 

Full Disclosure.

 

No written representation, warranty or other statement of any Borrower
in any certificate or written statement given to Bank (taken together with all
such written certificates and written statements to Bank) contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements contained in the certificates or statements not
misleading.  It being recognized by Bank
that the projections and forecasts provided by Borrowers in good faith and
based upon reasonable assumptions are not viewed as
facts and that actual results during the period or periods covered by such
projections and forecasts may differ from the projected and forecasted results.

 

AFFIRMATIVE COVENANTS

 

Borrowers will do all of the following for so long as Bank has an
obligation to make any Credit Extension, or there are outstanding Obligations:

 

Government Compliance.

 

Each Borrower will maintain its and all Subsidiaries’ legal existence
and good standing as a Registered Organization in only the State of Delaware
and maintain qualification in each jurisdiction in which the failure to so
qualify would reasonably be expected to cause a material adverse effect on any
Borrower’s business or operations.  Each
Borrower will comply, and have each Subsidiary comply, with all laws,
ordinances and regulations to which it is subject, noncompliance with which
could have a material adverse effect on any Borrower’s business or operations
or would reasonably be expected to cause a Material Adverse Change.

 

Financial Statements, Reports, Certificates.

 

The Company will deliver to Bank: 
(i) as soon as available, but no later than thirty (30) days after the
last day of each month, a company prepared consolidated balance sheet and
income statement covering the Company’s consolidated operations during the
period certified by a Responsible Officer and in a form acceptable to Bank;
(ii) as soon as available, but no later than one hundred twenty (120) days
after the last day of Company’s fiscal year, audited consolidated financial
statements prepared under GAAP, consistently applied, together with an
unqualified opinion on the financial statements from an independent certified
public accounting firm reasonably acceptable to Bank; (iii) a prompt report of
any legal actions pending or threatened against any Borrower or any Subsidiary
that could result in damages or costs to any Borrower or any Subsidiary of
$100,000 or more; and (iv) budgets, sales projections, operating plans or other
financial information Bank reasonably requests.

 

 

Within thirty (30) days after the last day of each month, the Company
will deliver to Bank with the monthly financial statements a Compliance
Certificate signed by a Responsible Officer in the form of Exhibit C.

 

Allow
Bank to audit the Collateral at Borrowers’ expense.  Such audits will be conducted no more often
than every six (6) months unless an Event of Default has occurred and is
continuing.

 

Inventory; Returns.

 

Borrowers will keep all Inventory in good and
marketable condition, free from material defects.  Returns and allowances between any Borrower
and its account debtors will follow Borrowers’ customary practices as they
exist at execution of this Agreement. 
Borrowers must promptly notify Bank of all returns, recoveries, disputes
and claims, that involve more than $50,000.

 

Each Borrower will make, and cause each Subsidiary to make, timely
payment of all material federal, state, and local taxes or assessments (other
than taxes and assessments which any Borrower is contesting in good faith, with
adequate reserves maintained in accordance with GAAP) and will deliver to Bank,
on demand, appropriate certificates attesting to the payment.

 

Insurance.

 

Each Borrower will keep its business and the Collateral insured for
risks and in amounts standard for Borrower’s industry, and as Bank may
reasonably request.  Insurance policies
will be in a form, with companies, and in amounts that are satisfactory to Bank
in Bank’s reasonable discretion.  All
property policies will have a lender’s loss payable endorsement showing Bank as
an additional loss payee and all liability policies will show the Bank as an
additional insured and provide that the insurer must give Bank at least twenty
(20) days notice before canceling its policy. 
At Bank’s request, the Company will deliver certified copies of policies
and evidence of all premium payments. Proceeds payable under any policy will,
at Bank’s option, be payable to Bank on account of the Obligations.

 

Primary Accounts.

 

Each Borrower will maintain its primary depository and operating
accounts with Bank and Borrowers will at all times maintain not less than 33%
of cash on deposit with Bank, which is not subject to any security interest,
other than in favor of Bank. However this requirement will be limited to no
more than $12,500,000 of Borrower’s total available cash.

 

Financial Covenants.

 

Borrowers will maintain as of the last day of each month (unless
otherwise stated below):

 

Quick Ratio (Adjusted).  A ratio of Quick Assets to
Current Liabilities (including, without limitation, long term Indebtedness in
favor of Bank) minus Deferred Revenue of at least 2.00 to 1.00.

 

Remaining Months Liquidity.  At all times, Borrowers will maintain, as of
the last day of each month, at least six (6) Remaining Months
Liquidity.

 

 

Further Assurances.

 

Borrowers will execute any further instruments and take further action
as Bank reasonably requests to perfect or continue Bank’s security interest in
the Collateral or to effect the purposes of this
Agreement.

 

NEGATIVE COVENANTS

 

Borrowers will not do any of the following without Bank’s prior written
consent, for so long as Bank has an obligation to make Credit Extensions or
there are any outstanding Obligations:

 

Dispositions.

 

Convey, sell, lease, transfer or otherwise dispose of (collectively “Transfer”),
or permit any Subsidiaries to Transfer, all or any part of its business or
property, except for Transfers (i) of Inventory in the ordinary course of
business; (ii) of non-exclusive licenses and similar arrangements for the use
of the property of any Borrower or its Subsidiaries in the ordinary course of
business; or (iii) of worn-out or obsolete Equipment.

 

Changes in Business, Ownership, Management or
Business Locations.

 

Engage in or permit any of its Subsidiaries to engage in any business
other than the businesses currently engaged in by any Borrower or reasonably
related thereto or have a material change in its management.  Borrowers will not, without at least thirty
(30) days prior written notice, change their state of formation, relocate their
chief executive offices or add any new offices or business locations.

 

Mergers or Acquisitions.

 

Merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, except where (i) no Event of Default has occurred
and is continuing or would result from such action during the term of this
Agreement and (ii) such transaction would not result in a decrease of more than
twenty five percent (25%) of Tangible Net Worth.  A Subsidiary may merge or consolidate into
another Subsidiary or into another Borrower.

 

Indebtedness.

 

Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.

 

Encumbrance.

 

Create, incur, or allow any Lien on any of its property, or assign or
convey any right to receive income, including the sale of any Accounts, or
permit any of its Subsidiaries to do so, except for Permitted Liens, or permit
any Collateral not to be subject to the first priority security interest
granted here, subject to Permitted Liens. 
In addition, Borrowers shall not sell, transfer, assign, mortgage,
pledge, lease, grant a security interest in, or encumber, or enter into any
agreement, document, instrument or other arrangement (except with or in favor
of the Bank) with any Person which directly or indirectly prohibits or has the
effect of prohibiting Borrowers from selling, transferring, assigning,
mortgaging, pledging, leasing, granting a security interest in or upon, or
encumbering any of Borrower’s Intellectual Property.

 

 

Distributions; Investments.

 

Directly or indirectly acquire or own any Person, or make any
Investment in any Person, other than Permitted Investments, or permit any of
its Subsidiaries to do so.  Pay any
dividends or make any distribution or payment, except in connection with a
Permitted Investment or redeem, retire or purchase any capital stock.

 

Transactions with Affiliates.

 

Directly or indirectly enter into or permit to exist any material transaction
with any Affiliate of any Borrower except for transactions between Borrowers or
transactions that are in the ordinary course of a Borrower’s business, upon
fair and reasonable terms that are no less favorable to any Borrower than would
be obtained in an arm’s length transaction with a nonaffiliated Person.

 

Subordinated Debt.

 

Make
or permit any payment on any Subordinated Debt, except under the terms of the
Subordinated Debt, or amend any provision in any document relating to the
Subordinated Debt without Bank’s prior written consent.

 

Compliance.

 

Become an “investment company” or a company controlled by an “investment
company,” under the Investment Company Act of 1940 or undertake as one of its
important activities extending credit to purchase or carry margin stock, or use
the proceeds of any Credit Extension for that purpose; fail to meet the minimum
funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur; fail to comply with the Federal
Fair Labor Standards Act or violate any other law or regulation, if the
violation could reasonably be expected to have a material adverse effect on
Borrower’s business or operations or would reasonably be expected to cause a
Material Adverse Change, or permit any of its Subsidiaries to do so.

 

EVENTS OF DEFAULT

 

Any one of the following is an Event of Default:

 

Payment Default.

 

If any Borrower fails to pay any of the
Obligations within three (3) Business Days of when due.  During the additional period the failure to
cure the default is not an Event of Default (but no Credit Extension will be
made during the cure period);

 

Covenant Default.

 

If Borrowers fail to perform any obligation under Sections 6.2 or 6.7
or violates any of the covenants contained in Article 7 of this Agreement, or

 

If any Borrower fails or neglects to perform, keep, or observe any
other material term, provision, condition, covenant, or agreement contained in
this Agreement, in any of the Loan Documents, or in any other present or future
agreement between any Borrower and Bank and as to any default under such other
term, provision, condition, covenant or agreement that can

 

 

be cured, has failed to cure such default within ten (10) days after
the occurrence thereof; provided, however, that if the default cannot by its
nature be cured within the ten (10) day period or cannot after diligent
attempts by any Borrower be cured within such ten (10) day period, and such
default is likely to be cured within a reasonable time, then Borrowers shall
have an additional reasonable period (which shall not in any case exceed thirty
(30) days) to attempt to cure such default, and within such reasonable time
period the failure to have cured such default shall not be deemed an Event of
Default (provided that no Credit Extensions will be made during such cure
period);

 

Material Adverse Change.

 

If there (i) occurs a material adverse change in the business,
operations, or condition (financial or otherwise) of the Borrowers or (ii) Bank
determines, based upon information available to it and in its reasonable
judgment, that there is a reasonable likelihood that Borrowers will fail to
comply with one or more of the financial covenants in Section 6.7 during the
next succeeding financial reporting period.

 

Attachment.

 

If a material portion of Borrowers’ assets, taken as a whole, is
attached, seized, levied on, or comes into possession of a trustee or receiver
and the attachment, seizure or levy is not removed in ten (10) days, or if any
Borrower is enjoined, restrained, or prevented by court order from conducting a
material part of its business or if a judgment or other claim becomes a Lien on
a material portion of Borrowers’ assets taken together as a whole, or if a
notice of lien, levy, or assessment is filed against any of Borrower’s assets
by any government agency and not paid within ten (10) days after such Borrower
receives notice.  These are not Events of
Default if stayed or if a bond is posted pending contest by such Borrower (but
no Credit Extensions will be made during the cure period);

 

Insolvency.

 

If any Borrower becomes insolvent or if any Borrower begins an
Insolvency Proceeding or an Insolvency Proceeding is begun against any Borrower
and not dismissed or stayed within 30 days (but no Credit Extensions will be
made before any Insolvency Proceeding is dismissed);

 

Other Agreements.

 

If there is a default in any agreement between any Borrower and a third
party that gives the third party the right to accelerate any Indebtedness
exceeding $100,000 or that could be reasonably expected to cause a Material
Adverse Change;

 

Judgments.

 

If a money judgment(s) in the aggregate of at least $50,000 is rendered
against any Borrower and is unsatisfied and unstayed for 10 days (but no Credit
Extensions will be made before the judgment is stayed or satisfied);

 

Misrepresentations.

 

If any Borrower or any Person acting for Borrower makes any material
misrepresentation or material misstatement now or later in any warranty or
representation in this Agreement or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document;

 

 

or

 

Subsidiaries.

 

Any circumstance described in Sections 8.3, 8.4, 8.5 or 8.7 occurs to
any Subsidiary which is not also a Borrower.

 

BANK’S RIGHTS AND REMEDIES

 

Rights and Remedies.

 

When an Event of Default occurs and continues Bank may, without notice
or demand, do any or all of the following:

 

Declare all Obligations immediately due and payable (but if an Event of
Default described in Section 8.5 occurs all Obligations are immediately due and
payable without any action by Bank);

 

Stop advancing money or extending credit for Borrower’s benefit under
this Agreement or under any other agreement between any Borrower and Bank;

 

Settle or adjust disputes and claims directly with account debtors for
amounts, on terms and in any order that Bank considers advisable;

 

Make any payments and do any acts it considers necessary or reasonable
to protect its security interest in the Collateral.  Borrowers will assemble the Collateral if
Bank requires and make it available as Bank designates.  Bank may enter premises where the Collateral
is located, take and maintain possession of any part of the Collateral, and
pay, purchase, contest, or compromise any Lien which appears to be prior or
superior to its security interest and pay all expenses incurred.  Each Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank’s
rights or remedies;

 

Apply to the Obligations any (i) balances and deposits of any Borrower
with Bank or its Affiliate it holds, or (ii) 
amount held by Bank owing to or for the credit or the account of any
Borrower;

 

Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell the Collateral.  Bank is granted a non-exclusive, royalty-free
license or other right to use, without charge, Borrower’s labels, Patents,
Copyrights, rights of use of any name, trade secrets, trade names, Trademarks,
service marks, and advertising matter, or any similar property as it pertains
to the Collateral, in completing production of, advertising for sale, and
selling any Collateral and, in connection with Bank’s exercise of its rights
under this Section, each Borrower’s rights under all licenses and all franchise
agreements inure to Bank’s benefit;

 

Bank may place a “hold” on any account maintained with Bank and deliver
a notice of exclusive control, any entitlement order, or other directions or
instructions pursuant to any control agreement or similar agreements providing
control of any Collateral; and

 

Dispose of the Collateral according to the Code.

 

Power of Attorney.

 

Effective only when an Event of Default occurs and continues, each
Borrower irrevocably

 

 

appoints Bank as its lawful attorney to:  (i) endorse each Borrower’s name on any
checks or other forms of payment or security; (ii) sign each Borrower’s name on
any invoice or bill of lading for any Account or drafts against account
debtors, (iii) make, settle, and adjust all claims under Borrower’s insurance
policies; (iv) settle and adjust disputes and claims about the Accounts
directly with account debtors, for amounts and on terms Bank determines
reasonable; and (v) transfer the Collateral into the name of Bank or a third
party as the Code permits.  Bank may
exercise the power of attorney to sign each Borrower’s name on any documents
necessary to perfect or continue the perfection of any security interest
regardless of whether an Event of Default has occurred.  Bank’s appointment as each Borrower’s
attorney in fact, and all of Bank’s rights and powers, coupled with an
interest, are irrevocable until all Obligations have been fully repaid and
performed and Bank’s obligation to provide Credit Extensions terminates.

 

Accounts Collection.

 

When an Event of Default occurs and continues, Bank may notify any
Person owing any Borrower money of Bank’s security interest in the funds and
verify the amount of the Account.  Each
Borrower must collect all payments in trust for Bank and, if requested by Bank,
immediately deliver the payments to Bank in the form received from the account
debtor, with proper endorsements for deposit.

 

Bank Expenses.

 

If any Borrower fails to pay any amount or furnish any required proof
of payment to third persons, Bank may make all or part of the payment or obtain
insurance policies required in Section 6.5, and take any action under the
policies Bank deems prudent.  Any amounts
paid by Bank are Bank Expenses and immediately due and payable, bearing
interest at the then applicable rate and secured by the Collateral.  No payments by Bank are deemed an agreement
to make similar payments in the future or Bank’s waiver of any Event of
Default.

 

Bank’s Liability for Collateral.

 

If Bank complies with reasonable banking practices and the Code, it is
not liable for: (a) the safekeeping of the Collateral; (b) any loss or damage
to the Collateral; (c) any diminution in the value of the Collateral; or (d)
any act or default of any carrier, warehouseman, bailee, or other person.  Borrowers bear all risk of loss, damage or
destruction of the Collateral.

 

Remedies Cumulative.

 

Bank’s rights and remedies under this Agreement, the Loan Documents,
and all other agreements are cumulative. 
Bank has all rights and remedies provided under the Code, by law, or in
equity. Bank’s exercise of one right or remedy is not an election, and Bank’s
waiver of any Event of Default is not a continuing waiver. Bank’s delay is not
a waiver, election, or acquiescence. No waiver is effective unless signed by
Bank and then is only effective for the specific instance and purpose for which
it was given.

 

Demand Waiver.

 

Each Borrower waives demand, notice of default or dishonor, notice of
payment and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Bank on which any Borrower
is liable.

 

 

NOTICES

 

All notices or demands by any party about this Agreement or any other
related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by certified mail, postage prepaid, return receipt
requested, or by telefacsimile to the addresses set forth at the beginning of
this Agreement.  A party may change its
notice address by giving the other party written notice.

 

CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

 

Pennsylvania law governs
the Loan Documents without regard to principles of conflicts of law.  Borrowers and Bank each submit to the
exclusive jurisdiction of the State and Federal courts in the Commonwealth of
Pennsylvania provided, however, that if for any reason the Bank can not avail
itself of the courts of the Commonwealth of Pennsylvania, the Borrowers and
Bank each submit to the jurisdiction of the State and Federal Courts in Santa
Clara County, California.

 

BORROWERS AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER
INTO THIS AGREEMENT.  EACH PARTY HAS
REVIEWED THIS WAIVER WITH ITS COUNSEL.

 

GENERAL PROVISIONS

 

Successors and Assigns.

 

This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. 
Borrowers may not assign this Agreement or any rights under it without
Bank’s prior written consent which may be granted or withheld in Bank’s
discretion. Bank has the right, without the consent of or notice to Borrowers,
to sell, transfer, negotiate, or grant participation in all or any part of, or
any interest in, Bank’s obligations, rights and benefits under this Agreement.

 

Borrowers will jointly and severally indemnify, defend and hold harmless
Bank and its officers, employees, and agents against:  (a) all obligations, demands, claims, and
liabilities asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses incurred,
or paid by Bank from, following, or consequential to transactions between Bank
and Borrowers (including reasonable attorneys fees and expenses), except for
losses caused by Bank’s gross negligence or willful misconduct.

 

Time of Essence.

 

Time is of the essence for the performance of all obligations in this
Agreement.

 

Severability of Provision.

 

Each provision of this Agreement is severable from every other
provision in determining the enforceability of any provision.

 

Amendments in Writing, Integration.

 

All amendments to this Agreement must be in writing and signed by
Borrowers and Bank.  This Agreement
represents the entire agreement about this subject matter, and supersedes prior

 

 

negotiations or agreements.  All prior agreements, understandings, representations,
warranties, and negotiations between the parties about the subject matter of
this Agreement merge into this Agreement and the Loan Documents.  The Borrowers agree that the execution of
this Agreement is not intended to and shall not cause or result in a
cancellation or modification of the Existing Warrants, which Existing Warrants
shall remain in full force and effect.

 

Counterparts.

 

This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all taken together, constitute one Agreement.

 

Survival.

 

All covenants, representations and warranties made in this Agreement
continue in full force while any Obligations remain outstanding.  The joint and several obligations of each
Borrower in Section 12.2 to indemnify Bank will survive until all statutes of
limitations for actions that may be brought against Bank have run.

 

Confidentiality.

 

In handling any confidential information, Bank will exercise the same
degree of care that it exercises for its own proprietary information, but
disclosure of information may be made (i) to Bank’s subsidiaries or affiliates
in connection with their business with any Borrower, (ii) to prospective transferees
or purchasers of any interest in the loans (provided, however, Bank shall use
commercially reasonable efforts in obtaining such prospective transferee or
purchasers agreement of the terms of this provision), (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with Bank’s
examination or audit and (v) as Bank considers appropriate exercising remedies
under this Agreement.  Confidential
information does not include information that either: (a) is in the public
domain or in Bank’s possession when disclosed to Bank, or becomes part of the
public domain after disclosure to Bank; or (b) is disclosed to Bank by a third
party, if Bank does not know that the third party is prohibited from disclosing
the information.

 

Effective Date.

 

Notwithstanding anything set forth in this Agreement or any Loan
Document to the contrary, this Agreement and all of the Loan Documents shall
not be effective until the date on which the Bank executes this Agreement as
indicated on the signature page to this Agreement.

 

Attorneys’ Fees, Costs and Expenses.

 

In any action or proceeding between any Borrower and Bank arising out
of the Loan Documents, the prevailing party will be entitled to recover its
reasonable attorneys’ fees and other reasonable costs and expenses incurred, in
addition to any other relief to which it may be entitled.

 

DEFINITIONS

 

Definitions.

 

In this Agreement:

 

 

“Accounts” has the meaning
set forth in the Code and includes all existing and later arising accounts, contract
rights, and other obligations owed Borrower in connection with its sale or
lease of goods (including licensing software and other technology) or provision
of services, all credit
insurance, guaranties, other security and all merchandise returned or reclaimed
by Borrower and Borrower’s Books relating to any of the foregoing.

 

“Affiliate” of a Person is
a Person that owns or controls directly or indirectly the Person, any Person
that controls or is controlled by or is under common control with the Person,
and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability
company, that Person’s managers and members.

 

“Agreement” means this
Amended and Restated Loan and Security Agreement.

 

“Bank Expenses” are all
audit fees and expenses and reasonable costs and expenses (including reasonable
attorneys’ fees and expenses) for preparing, negotiating, administering,
defending and enforcing the Loan Documents (including appeals or Insolvency
Proceedings).

 

“Borrower’s Books” are all
Borrowers’ books and records including ledgers, records regarding Borrowers’
assets or liabilities, the Collateral, business operations or financial
condition and all computer programs or discs or any equipment containing the
information.

 

“Business Day” is any day
that is not a Saturday, Sunday or a day on which the Bank is closed.

 

“Cash Burn” is defined the
average net before tax loss for the three (3) month period then ending.

 

“Closing Date” is the date
of this Agreement.

 

“Code” is the Uniform
Commercial Code, in effect in the Commonwealth of Pennsylvania as in effect
from time to time.

 

“Collateral” is the
property described on Exhibit A.

 

“Committed Equipment Line”
is a Credit Extension of up to Twelve Million Dollars ($12,000,000).

 

“Contingent Obligation”
is, for any Person, any direct or indirect liability, contingent or not, of
that Person for (i) any indebtedness, lease, dividend, letter of credit or
other obligation of another such as an obligation directly or indirectly
guaranteed, endorsed, co-made, discounted or sold with recourse by that Person,
or for which that Person is directly or indirectly liable; (ii) any obligations
for undrawn letters of credit for the account of that Person; and (iii) all
obligations from any interest rate, currency or commodity swap agreement,
interest rate cap or collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices;  but “Contingent
Obligation” does not include endorsements in the ordinary course of
business.  The amount of a Contingent
Obligation is the stated or determined amount of the primary obligation for
which the Contingent Obligation is made or, if not determinable, the maximum
reasonably anticipated liability for it determined by the Person in good faith;
but the amount may not exceed the maximum of the obligations under the
guarantee or other support arrangement.

 

“Credit Extension” is each Equipment Advance or any other extension of credit by Bank for any Borrower’s
benefit, including, without limitation, all amounts advanced under the Term
Loan and the Supplemental Equipment Loan pursuant to the Prior Agreement.

 

 

“Current Assets” are
amounts that under GAAP should be included on that date as current assets on
Borrower’s consolidated balance sheet.

 

“Current Liabilities” are
the aggregate amount of Borrower’s Total Liabilities which mature within one
(1) year.

 

“Deferred Revenue” is all
amounts received in advance of performance under maintenance contracts and not
yet recognized as revenue.

 

“Equipment Advance” is
defined in Section 2.1.1.

 

“Equipment Availability End Date”
is defined in Section 2.1.1.

 

“Equipment Maturity Date”
is defined in Section 2.1.1.

 

“Equipment Term Note”
means that certain Equipment Term Note of even date herewith in the principal
amount of Twelve Million Dollars ($12,000,000) from Borrowers in favor of Bank,
together with all renewals, amendments, modifications and substitutions
therefor.

 

“ERISA” is the Employment
Retirement Income Security Act of 1974, and its regulations.

 

“Final Payment” is a payment (in addition to and not a
substitution for the regular monthly payments of principal plus accrued
interest) due on the last day of the repayment period for each advance made
under the Term Loan equal to the amount of each advance multiplied by the Final
Payment Percentage.

 

“Final Payment Percentage”
is five percent (5.0%).

 

“GAAP” is generally
accepted accounting principles.

 

“Guarantor” is any present
or future guarantor of the Obligations.

 

“Indebtedness” is (a)
indebtedness for borrowed money or the deferred price of property or services,
such as reimbursement and other obligations for surety bonds and letters of
credit, (b) obligations evidenced by notes, bonds, debentures or similar
instruments, (c) capital lease obligations and (d) Contingent Obligations.

 

“Insolvency Proceeding”
are proceedings by or against any Person under the United States Bankruptcy
Code, or any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, compositions, extensions generally with its creditors, or
proceedings seeking reorganization, arrangement, or other relief.

 

“Intellectual  Property” has the meaning set forth in
Schedule A.

 

“Inventory” has the
meaning set forth in the Code and includes is present and future inventory in
which any Borrower has any interest, including merchandise, raw materials,
parts, supplies, packing and shipping materials, work in process and finished
products intended for sale or lease or to be furnished under a contract of
service, of every kind and description now or later owned by or in the custody
or possession, actual or constructive, of any Borrower, including inventory
temporarily out of its custody or possession or in transit and including
returns on any accounts or other Proceeds from the sale or disposition of any
of the foregoing and any documents of title.

 

“Investment” is any
beneficial ownership of (including stock, partnership interest or other
securities) any Person, or any loan, advance or capital contribution to any
Person.

 

 

“Letter-of-credit right”
means a right to payment or performance under a letter of credit, whether or
not the beneficiary has demanded or is at the time entitled to demand payment
or performance.

 

“Lien” is a mortgage,
lien, deed of trust, charge, pledge, security interest
or other encumbrance.

 

“Liquidity” is defined as
unrestricted cash, cash equivalents, and marketable securities held at the
Bank, Bank affiliates or financial institutions with which the Bank has
executed account control agreements in place, in a form satisfactory to Bank
that includes notification provisions, less principal outstandings.

 

“Loan Documents” are,
collectively, this Agreement, the Equipment Term Note, the Term Note, the
Tranche I Supplemental Equipment Term Note, the Tranche II Supplemental
Equipment Term Note, any note, or
notes or guaranties executed by any Borrower or any Guarantor, and any other
present or future agreement between any Borrower and/or for the benefit of Bank
in connection with this Agreement, including, without limitation the Prior
Agreement, all as amended, extended or restated.

 

“Material Adverse Change”
means the occurrence of any of the events set forth in Section 8.3.

 

“Obligations” are debts,
principal, interest, Bank Expenses and other amounts any Borrower owes Bank now
or later, including cash management services, letters of credit and foreign
exchange contracts, if any and including interest accruing after Insolvency
Proceedings begin and debts, liabilities, or obligations of any Borrower
assigned to Bank.

 

“Permitted Indebtedness” is:

 

Borrowers’ indebtedness to Bank under this Agreement or any other Loan
Document;

 

Indebtedness
existing on the Closing Date and shown on the Schedule;

 

Subordinated
Debt;

 

Indebtedness
among the Borrowers;

 

Indebtedness
to trade creditors incurred in the ordinary course of business; and

 

Indebtedness
secured by Permitted Liens.

 

“Permitted Investments”
are:

 

Investments
shown on the Schedule and existing on the Closing Date; and

 

(i)  marketable direct obligations issued or
unconditionally guaranteed by the United States or its agency or any State
maturing within 1 year from its acquisition, (ii) commercial paper maturing no
more than 1 year after its creation and having the highest rating from either
Standard & Poor’s Corporation or Moody’s Investors Service, Inc., and (iii)
Bank’s certificates of deposit issued maturing no more than 1 year after issue.

 

“Permitted Liens”
are:

 

 

Liens
existing on the Closing Date and shown on the Schedule or arising under this
Agreement or other Loan Documents;

 

Liens
for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrowers maintain
adequate reserves on its Books, if they have no priority over any of Bank’s
security interests;

 

Purchase
money Liens (i) on Equipment acquired or held by any Borrower or its
Subsidiaries incurred for financing the acquisition of the Equipment, or (ii)
existing on Equipment when acquired, if the Lien is confined to the property
and improvements and the Proceeds of the Equipment;

 

Licenses
or sublicenses granted in the ordinary course of Borrower’s business and any
interest or title of a licensor or under any license or sublicense, if the
licenses and sublicenses permit granting Bank a security interest;

 

Leases
or subleases granted in the ordinary course of Borrower’s business, including
in connection with Borrower’s leased premises or leased property;

 

Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase.

 

“Person” is any individual, sole
proprietorship, partnership, limited liability company, joint venture, company
association, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, firm, joint stock company, estate,
entity or government agency.

 

“Proceeds” has the meaning described in the
Code as in effect from time to time.

 

“Prime Rate” is Bank’s most recently
announced “prime rate,” even if it is not Bank’s lowest rate.

 

“Quick Assets” is, on any date, the Company’s
consolidated, unrestricted cash, cash equivalents, net billed accounts
receivable and investments determined according to GAAP.

 

“Registered Organization” means an
organization organized solely under the law of a single state or the United
States and as to which the state or the United States must maintain a public
record showing the organization to have been organized.

 

“Remaining Months Liquidity” is Liquidity
divided by Cash Burn.

 

“Responsible  Officer” is each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Controller of the Company.

 

“Schedule” is any attached schedule of
exceptions.

 

“Subordinated Debt” is
debt incurred by any Borrower subordinated to Borrowers’ indebtedness owed to
Bank and which is reflected in a written agreement in a manner and form
acceptable to Bank and approved by Bank in writing.

 

“Subsidiary” is for any Person, or any other
business entity of which more than 50% of the voting stock or other equity
interests is owned or controlled, directly or indirectly, by the

 

 

Person
or one or more Affiliates of the Person.

 

“Supplemental Equipment Loan” means a the
terms loans made pursuant to the Prior Agreement in an amount of up to Two
Million Dollars ($2,000,000).

 

“Supplemental Equipment Loan Maturity Date”
is April 1, 2005 for all Credit Extensions made under the Tranche I
Supplemental Equipment Term Note and July 1, 2006 for all Credit Extensions
made under the Tranche II Supplemental Equipment Term Note.

 

“Supporting Obligation” means a
Letter-of-credit right, secondary obligation or obligation of a secondary
obligor or that supports the payment or performance of an account, chattel
paper, a document, a general intangible, an instrument
or investment property.

 

“Tangible Net Worth” is, on any date, the
consolidated total assets of Borrowers and their Subsidiaries minus, (i) any
amounts attributable to (a) goodwill, (b) intangible items such as unamortized
debt discount and expense, Patents, trade and service marks and names,
Copyrights and research and development expenses except prepaid expenses, and
(c) reserves not already deducted from assets, and (ii) Total Liabilities.

 

“Term Loan” is a loan made pursuant to the
Prior Agreement in the original principal amount of Five Million Dollars
($5,000,000).

 

“Term Loan Maturity Date” is April 1, 2005.

 

“Term Loan Payment” is defined in Section
2.1.1(c).

 

“Term Note” means that certain Equipment
Term Note dated April 30, 2002 in the principal amount of Five Million Dollars
($5,000,000) from Borrowers in favor of Bank, together with all renewals,
amendments, modifications and substitutions therefor.

 

“Total  Liabilities”
is on any day, obligations that should, under GAAP, be classified as liabilities
on the Company’s consolidated balance sheet, including all Indebtedness, and
current portion Subordinated Debt allowed to be paid, but excluding all other
Subordinated Debt.

 

“Tranche I Supplemental Equipment Term Note” means
that certain Tranche I Supplemental Equipment Term Note dated April 30, 2003 in
the principal amount of One Million Five Hundred Thousand Dollars ($1,500,000)
from Borrowers in favor of Bank, together with all renewals, amendments,
modifications and substitutions therefor.

 

“Tranche II Supplemental Equipment Term Note” means
that certain Tranche II Supplemental Equipment Term Note dated April 30, 2003
in the principal amount of Five Hundred Thousand Dollars ($500,000) from
Borrowers in favor of Bank, together with all renewals, amendments,
modifications and substitutions therefor.

 

[Signatures appear on the following page]

 

	
  BORROWERS:

  
	
   

  
	
  IMMUNICON
  CORPORATION

  
	
   

  
	
  By:

  	
   

  	
  (SEAL)

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
  IMMUNIVEST
  CORPORATION

  
	
   

  
	
  By:

  	
   

  	
  (SEAL)

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  IMMC
  HOLDINGS, INC.

  
	
   

  
	
  By:

  	
   

  	
  (SEAL)

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  IMMUNICON
  EUROPE, INC.

  
	
   

  
	
  By:

  	
   

  	
  (SEAL)

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  BANK:

  
	
   

  
	
  SILICON
  VALLEY BANK

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  Effective
  as of

  	
   

  	
  ,
  200 

  
						

 

EXHIBIT A

 

The
Collateral consists of all of Borrower’s right, title and interest in and to
the following:

 

All
goods and equipment now owned or hereafter acquired, including, without
limitation, all machinery, fixtures, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing, and all attachments, accessories,
accessions, replacements, substitutions, additions, and improvements to any of
the foregoing, wherever located;

 

All
inventory, now owned or hereafter acquired, including, without limitation, all
merchandise, raw materials, parts, supplies, packing and shipping materials,
work in process and finished products including such inventory as is
temporarily out of Borrower’s custody or possession or in transit and including
any returns upon any accounts or other Proceeds,  resulting from the sale or disposition
of any of the foregoing and any documents of title representing any of the
above;

 

All
contract rights and general intangibles now owned or hereafter acquired,
including,

 

 

without limitation, goodwill, license agreements, franchise agreements,
blueprints, drawings, purchase orders, customer lists, route lists,
infringements, claims, computer programs, computer discs, computer tapes,
literature, reports, catalogs, design rights, income tax refunds, payments of
insurance and rights to payment of any kind;

 

All
now existing and hereafter arising accounts, contract rights, royalties,
license rights and all other forms of obligations owing to Borrower arising out
of the sale or lease of goods, the licensing of technology or the rendering of
services by Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower;

 

All
Letter-Of-Credit Rights (whether or not the letter of credit is evidenced by a
writing);

 

All
documents, cash, deposit accounts, securities, securities entitlements,
securities accounts, investment property, financial assets, letters of credit,
certificates of deposit, instruments and chattel paper now owned or hereafter
acquired and Borrower’s Books relating to the foregoing;

 

All
Supporting Obligations and all Borrower’s Books relating to the foregoing and
any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and Proceeds thereof.

 

Borrower
has further agreed, among other things, not to sell, transfer, assign,
mortgage, pledge, lease grant a security interest in, or encumber any of its
Intellectual Property (as hereinafter defined) or enter into any agreement,
document, instrument or other arrangement (except with or in favor of the Bank)
with any Person which directly or indirectly prohibits or has the effect of
prohibiting Borrower from selling, transferring, assigning, mortgaging,
pledging, leasing, granting a security interest in, or encumbering any of its
Intellectual Property, without Bank’s prior written consent.

 

Notwithstanding the foregoing, the Collateral shall not be deemed to
include any copyrights, copyright applications, copyright registration and like
protection in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; any patents, patent
applications and like protections including without limitation improvements,
divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same, trademarks, servicemarks and applications
therefor, whether registered or not, and the goodwill of the business of
Borrower connected with and symbolized by such trademarks, any trade secret
rights, including any rights to unpatented inventions, know-how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; or any claims for damage by way of any past, present and
future infringement of any of the foregoing (collectively, the “Intellectual
Property”). 

 

EXHIBIT B

 

LOAN PAYMENT/ADVANCE REQUEST FORM

DEADLINE FOR SAME DAY PROCESSING IS 3:00 E.S.T.

Fax To: (617) 969-5962      Date:

 

 

	
  o

  	
  Loan
  Payment:                                 

  	
  Client Name (Borrower)

  
	
   

  	
   

  	
   

  
	
   

  	
  From Account #
                                 

  	
   

  	
  To Account #
                                 

  
	
  (Deposit Account #)

  	
  (Loan Account #)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Principal
  $                               

  	
  and/or interest
  $                                                                          

  
	
   

  	
   

  
	
   

  	
  All Borrower’s representations and warranties in the Loan and
  Security Agreement are true, correct and complete in all material respects to
  on the date of the telephone transfer request for and advance, but those
  representations and warranties expressly referring to another date shall be
  true, correct and complete in all material respects as of the date:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signature:

  	
   

  	
    Phone Number:

  
						

 

	
  o

  	
  Loan
  Paymenet:                                 

  	
  Client Name (Borrower)

  
	
   

  	
   

  	
   

  
	
   

  	
  From Account #
                                 

  	
   

  	
  To Account #
                                 

  
	
  (Deposit Account #)

  	
  (Loan Account #)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Principal
  $                               

  	
  and/or interest
  $                                                                          

  
	
   

  	
   

  
	
   

  	
  All Borrower’s representations and warranties in the Loan and
  Security Agreement are true, correct and complete in all material respects to
  on the date of the telephone transfer request for and advance, but those
  representations and warranties expressly referring to another date shall be
  true, correct and complete in all material respects as of the date:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signature:

  	
   

  	
    Phone Number:

  
						

 

	
  o

  	
  LOAN ADVANCE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Loan Account #)

  	
  (Deposit Account #)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Amount of Advance
  $                               

  
	
   

  	
   

  
	
   

  	
  All Borrower’s representations and warranties in the Loan and
  Security Agreement are true, correct and complete in all material respects to
  on the date of the telephone transfer request for and advance, but those
  representations and warranties expressly referring to another date shall be
  true, correct and complete in all material respects as of the date:

  
	
   

  	
   

  
	
   

  	
  Authorized Signature:

  	
   

  	
    Phone Number:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Complete Outgoing Wire Request
  section below if all or a portion of the funds from this loan advance are for
  an outgoing wire.

  
	
   

  	
  From Account #
                                 

  	
   

  	
  To Account #
                                 

  
	
  (Loan Account #)

  	
  (Deposit Account #)

  	
   

  
	
   

  	
  Amount of Advance $

  	
   

  
	
   

  	
   

  
	
   

  	
  All Borrower’s representations and warranties in the Loan and
  Security Agreement are true, correct and complete in all material respects to
  on the date of the telephone transfer request for and advance, but those
  representations and warranties expressly referring to another date shall be
  true, correct and complete in all material respects as of the date:

  
	
   

  	
   

  
	
   

  	
  Authorized Signature:

  	
   

  	
    Phone Number:

  
								

 

 

	
  o

  	
  Loan
  Payment:                                 

  	
  Client Name (Borrower)

  
	
   

  	
   

  
	
   

  	
  From Account #
                                 

  	
   

  	
  To Account #
                                 

  
	
  (Deposit Account #)

  	
  (Loan Account #)

  	
   

  
	
   

  
	
   

  	
  Principal
  $                               

  	
  and/or interest
  $                                                                          

  
	
   

  	
   

  
	
   

  	
  All Borrower’s representations and warranties in the Loan and
  Security Agreement are true, correct and complete in all material respects to
  on the date of the telephone transfer request for and advance, but those
  representations and warranties expressly referring to another date shall be
  true, correct and complete in all material respects as of the date:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signature:

  	
   

  	
    Phone Number:

  
						

 

	
  o

  	
  LOAN ADVANCE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Complete Outgoing Wire Request
  section below if all or a portion of the funds from this loan advance are for
  an outgoing wire.

  
	
   

  	
   

  
	
   

  	
  From Account #
                                 

  	
   

  	
  To Account #
                                 

  
	
   

  	
  (Loan Account #)

  	
  (Deposit Account #)

  	
   

  
	
   

  
	
   

  	
  Amount of Advance
  $                               

  
	
   

  	
   

  
	
   

  	
  All Borrower’s representations and warranties in the Loan and
  Security Agreement are true, correct and complete in all material respects to
  on the date of the telephone transfer request for and advance, but those
  representations and warranties expressly referring to another date shall be
  true, correct and complete in all material respects as of the date:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signature:

  	
   

  	
    Phone Number:

  
									

 

	
   

  	
  OUTGOING WIRE REQUEST

  	
   

  	
   

  
	
   

  	
  Complete only if all or a portion of funds from the loan advance above are to be wired.

  
	
  Deadline
  for same day processing is 12:00 p.m., E.S.T.

  
	
   

  	
   

  	
   

  
	
   

  	
  Beneficiary
  Name:                               

  	
  Amount
  of Wire: $                               

  
	
   

  	
   

  	
   

  
	
   

  	
  Beneficiary
  Bank:                               

  	
  Account
  Number:                               

  
	
   

  	
   

  	
   

  
	
   

  	
  City
  and State:                               

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Beneficiary
  Bank Transit (ABA) #:                               

  	
  Beneficiary
  Bank Code (Swift, Sort, Chip, etc,):

  
	
   

  	
   

  	
  (For International Wire Only)

  
	
   

  	
  Intermediary
  Bank:                               

  	
  Transit
  (ABA) #                               

  
	
   

  	
   

  	
   

  
	
   

  	
  For
  Further Credit to:                               

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Special
  Instruction:                               

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By signing below, I (we) acknowledge and agree that my
  (our) funds transfer request shall be processed in accordance with and
  subject to the terms and conditions set fortsh in the agreements(s) covering
  funds transfer service(s), which agreements(s) were previously received and
  executed by me (us).

  
	
   

  	
   

  
	
   

  	
  Authorized
  Signature:

  	
   

  	
  2nd
  Signature (If Required):

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print
  Name/Title:                               

  	
  Print
  Name/Title:                               

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone
  #                               

  	
  Telephone
  #                               

  
							

 

	
   

  	
  OUTGOING WIRE REQUEST

  	
   

  	
   

  
	
   

  	
  Complete only if all or a portion of funds from the loan advance above are to be wired

  
	
  Deadline
  for same day processing is 12:00 p.m., E.S.T.

  
	
   

  	
   

  	
   

  
	
   

  	
  Beneficiary
  Name:                               

  	
  Amount
  of Wire: $                               

  
					

 

 

	
   

  	
  Beneficiary
  Bank:                               

  	
  Account
  Number:                               

  
	
   

  	
  City
  and State:                               

  	
   

  
	
   

  	
  Beneficiary
  Bank Transit (ABA) #:                               

  	
  Beneficiary
  Bank Code (Swift, Sort, Chip, etc,):

  
	
   

  	
   

  	
  (For International Wire Only)

  
	
   

  	
  Intermediary
  Bank:                               

  	
  Transit
  (ABA) #

  
	
   

  	
  For
  Further Credit to:                               

  	
   

  
	
   

  	
  Special
  Instruction:                               

  	
   

  
	
   

  	
  By signing below, I (we) acknowledge and agree that my (our)
  funds transfer request shall be processed in accordance with and subject to
  the terms and conditions set forth in the agreements(s) covering funds
  transfer service(s), which agreements(s) were previously received and
  executed by me (us).

  
	
   

  	
   

  
	
   

  	
  Authorized
  Signature:

  	
   

  	
   

  	
  2nd Signature (If Required):

  	
   

  	
   

  
	
   

  	
  Print
  Name/Title:                               

  	
  Print
  Name/Title:                               

  
	
   

  	
  Telephone
  #                               

  	
  Telephone
  #                               

  
							

 

EXHIBIT C

COMPLIANCE CERTIFICATE

 

TO:  SILICON VALLEY BANK

3003
Tasman Drive

Santa
Clara, CA 95054

 

FROM:  Immunicon Corporation

 

The
undersigned authorized officer of Immunicon Corporation (“Borrower”) certifies
that under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for
the period ending                                
with all required covenants except as noted below and (ii) all representations
and warranties in the Agreement are true and correct in all material respects
on this date.  In addition, the
undersigned certifies that (1) Borrower and each Subsidiary has timely filed
all required tax returns and paid, or made adequate provision to pay, all
material taxes, except those being contested in good faith with adequate
reserves under GAAP and (ii) no liens has been levied or claims made against
Borrower or any of its Subsidiaries relating to unpaid employee payroll or
benefits which Borrower has not previously notified in writing to Bank.  Attached are the required documents
supporting the certification.  The Officer certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) consistently
applied from one period to the next except as explained in an accompanying
letter or footnotes.  The Officer
acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered.

 

Please indicate compliance status by circling Yes/No under “Complies”
column.

 

Reporting Covenant Required Complies

 

Monthly
financial statements + CC Monthly
within 30 days Yes No

Annual
(Audited)  FYE
within 120 days Yes No

 

Financial Covenant Required Actual Complies

 

Maintain
on a Monthly Basis:

Minimum
Quick Ratio (Adjusted) 2:1.00          :1.00
Yes No

Minimum
Liquidity Coverage 6 months             Yes No

 

Borrowers only have deposit accounts located
at the following institutions: 

 

 

                                        .

{PRIVATE } BANK USE ONLY

 

Received
by:

AUTHORIZED
SIGNER

 

Date:

 

Verified:

AUTHORIZED
SIGNER

 

Date:

Compliance
Status: Yes    No

 

Comments Regarding Exceptions:  See
Attached.

 

Sincerely,

 

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  SIGNATURE

  	
   

  
	
   

  
	
  TITLE

  	
   

  
	
   

  
	
  DATE

  	
   

  
					

 

Schedule to Loan and Security Agreement

 

The
exact correct corporate name of Borrower is:

 

1. Immunicon Corporation

 

2. Immunivest Corporation

 

3. IMMC Holdings, Inc.

 

4. Immunicon Europe, Inc.

 

Borrower’s State of formation: 
Delaware

 

Borrower has operated under only the following other names (if none, so
state):

 

Immunicon Corporation formerly conducted business, under the same name,
as a Pennsylvania corporation.

 

All other addresses at which the Borrower does business
are as follows (attach additional sheets if necessary and include all
warehouse addresses):

 

Immunicon Europe, Inc. has a business address at Hengelosestraat 705,
7521 PA Enschede, the Netherlands.

 

 

Borrower has deposit accounts and/or investment accounts located only
at the following institutions:

 

List Acct. Numbers:

 

Liens existing on the Closing Date and disclosed to and accepted by
Bank in writing:

 

 

Investments existing on the Closing Date and disclosed to and accepted
by Bank in writing:

 

 

Subordinated Debt:

 

Indebtedness
on the Closing Date and disclosed to and consented to by Bank in writing:

 

 

 

The following is a list of the Borrower’s copyrights (including
copyrights of software) which are registered with the United States Copyright
Office.  (Please include name of the
copyright and registration number and attach a copy of the registration):

 

 

 

The following is a list of all software which the Borrower sells,
distributes or licenses to others, which is not registered with the United
States Copyright Office. (Please include versions which are not registered:

 

 

 

The following is a list of all of the Borrower’s patents which are
registered with the United States Patent Office. (Please include name of the
patent and registration number and attach a copy of the registration.):

 

 

 

 

The following is a list of all of the Borrower’s patents which are
pending with the United States Patent Office. 
(Please include name of the patent and a copy of the application.):

 

 

 

The following is a list of all of the Borrower’s registered trademarks.
(Please include name of the trademark and a copy of the registration.):

 

 

 

Borrower is not subject to litigation which would have a material
adverse effect on the Borrower’s financial condition, except the following
(attach additional comments, if needed):

 

1. Immunicon Corporation: 
23-2269490

 

2. Immunivest Corporation: 51-0339032

 

3. IMMC Holdings, Inc.: 
75-2971611

 

Delaware Organizational Numbers:

 

1. Immunicon Corporation: 
3325853

 

2. Immunivest Corporation: 2289144

 

3. IMMC Holdings, Inc.:  3474398Exhibit
10.1

 

Published
CUSIP Number:                                 

 

CREDIT AGREEMENT

 

Dated
as of November 8, 2004

 

Among

 

GMH COMMUNITIES, LP

as a Borrower,

 

GMH COMMUNITIES TRUST

as
a Guarantor,

 

THE
SUBSIDIARY BORROWERS DEFINED HEREIN

as
Subsidiary Borrowers

 

BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender

and

L/C Issuer,

 

And

 

The Other Lenders Party Hereto

 

BANC OF
AMERICA SECURITIES LLC,

as

Sole
Lead Arranger and Sole Book Manager

 

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE I.

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
  1.01

  	
  Defined Terms.

  	
   

  
	
  1.02

  	
  Other Interpretive
  Provisions.

  	
   

  
	
  1.03

  	
  Accounting Terms.

  	
   

  
	
  1.04

  	
  Rounding.

  	
   

  
	
  1.05

  	
  Times of Day.

  	
   

  
	
  1.06

  	
  Letter of Credit Amounts.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
  THE COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  
	
  2.01

  	
  Committed Loans.

  	
   

  
	
  2.02

  	
  Borrowings,
  Conversions and Continuations of Committed Loans.

  	
   

  
	
  2.03

  	
  Letters of Credit.

  	
   

  
	
  2.04

  	
  Swing Line Loans.

  	
   

  
	
  2.05

  	
  Prepayments.

  	
   

  
	
  2.06

  	
  Termination
  or Reduction of Commitments.

  	
   

  
	
  2.07

  	
  Repayment of Loans.

  	
   

  
	
  2.08

  	
  Interest.

  	
   

  
	
  2.09

  	
  Fees.

  	
   

  
	
  2.10

  	
  Computation of
  Interest and Fees.

  	
   

  
	
  2.11

  	
  Evidence of Debt.

  	
   

  
	
  2.12

  	
  Payments
  Generally; Administrative Agent’s Clawback.

  	
   

  
	
  2.13

  	
  Sharing of Payments
  by Lenders.

  	
   

  
	
  2.14

  	
  Extension of Maturity
  Date.

  	
   

  
	
  2.15

  	
  Increase in Commitments.

  	
   

  
	
  2.16

  	
  Subsidiary Borrowers.

  	
   

  
	
  2.17

  	
  Guaranties.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  
	
  3.01

  	
  Taxes.

  	
   

  
	
  3.02

  	
  Illegality.

  	
   

  
	
  3.03

  	
  Inability to
  Determine Rates.

  	
   

  
	
  3.04

  	
  Increased
  Costs; Reserves on Eurodollar Rate Loans.

  	
   

  
	
  3.05

  	
  Compensation for Losses.

  	
   

  
	
  3.06

  	
  Mitigation
  Obligations; Replacement of Lenders.

  	
   

  
	
  3.07

  	
  Survival. Each

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
   

  
	
  4.01

  	
  Conditions
  of Initial Credit Extension.

  	
   

  
	
  4.02

  	
  Conditions to
  all Credit Extensions.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  5.01

  	
  Existence,
  Qualification and Power; Compliance with Laws.

  	
   

  
	
  5.02

  	
  Authorization; No
  Contravention.

  	
   

  
	
  5.03

  	
  Governmental
  Authorization; Other Consents.

  	
   

  
	
  5.04

  	
  Binding Effect.

  	
   

  
	
  5.05

  	
  Financial
  Statements; No Material Adverse Effect.

  	
   

  

 

i

 

	
  5.06

  	
  Litigation.

  	
   

  
	
  5.07

  	
  No Default.

  	
   

  
	
  5.08

  	
  Ownership of Property;
  Liens.

  	
   

  
	
  5.09

  	
  Environmental Compliance.

  	
   

  
	
  5.10

  	
  Insurance.

  	
   

  
	
  5.11

  	
  Taxes.

  	
   

  
	
  5.12

  	
  ERISA Compliance.

  	
   

  
	
  5.13

  	
  Subsidiaries;
  Equity Interests.

  	
   

  
	
  5.14

  	
  Margin
  Regulations; Investment Company Act; Public Utility Holding Company Act.

  	
   

  
	
  5.15

  	
  Disclosure.

  	
   

  
	
  5.16

  	
  Compliance with Laws.

  	
   

  
	
  5.17

  	
  Intellectual Property;
  Licenses, Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
  6.01

  	
  Financial Statements.

  	
   

  
	
  6.02

  	
  Certificates;
  Other Information.

  	
   

  
	
  6.03

  	
  Notices.

  	
   

  
	
  6.04

  	
  Payment of Obligations.

  	
   

  
	
  6.05

  	
  Preservation of
  Existence, Etc.

  	
   

  
	
  6.06

  	
  Maintenance of
  Properties.

  	
   

  
	
  6.07

  	
  Maintenance of Insurance.

  	
   

  
	
  6.08

  	
  Compliance with Laws.

  	
   

  
	
  6.09

  	
  Books and Records.

  	
   

  
	
  6.10

  	
  Inspection Rights.

  	
   

  
	
  6.11

  	
  Use of Proceeds.

  	
   

  
	
  6.12

  	
  Additional Guarantors.

  	
   

  
	
  6.13

  	
  REIT Status.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
  NEGATIVE COVENANTS

  	
   

  
	
  7.01

  	
  Liens.

  	
   

  
	
  7.02

  	
  Investments.

  	
   

  
	
  7.03

  	
  Indebtedness.

  	
   

  
	
  7.04

  	
  Fundamental Changes.

  	
   

  
	
  7.05

  	
  Restricted Payments.

  	
   

  
	
  7.06

  	
  Change in Nature of
  Business.

  	
   

  
	
  7.07

  	
  Transactions with
  Affiliates.

  	
   

  
	
  7.08

  	
  Burdensome Agreements;
  Negative Pledge Agreements.

  	
   

  
	
  7.09

  	
  Use of Proceeds.

  	
   

  
	
  7.10

  	
  Financial Covenants.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  	
  EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
  8.01

  	
  Events of Default.

  	
   

  
	
  8.02

  	
  Remedies Upon Event
  of Default.

  	
   

  
	
  8.03

  	
  Application of Funds.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX.

  	
  ADMINISTRATIVE AGENT

  	
   

  
	
  9.01

  	
  Appointment and
  Authority.

  	
   

  
	
  9.02

  	
  Rights as a Lender.

  	
   

  
	
  9.03

  	
  Exculpatory Provisions.

  	
   

  
	
  9.04

  	
  Reliance by
  Administrative Agent.

  	
   

  
	
  9.05

  	
  Delegation of Duties.

  	
   

  

 

ii

 

	
  9.06

  	
  Resignation of
  Administrative Agent.

  	
   

  
	
  9.07

  	
  Non-Reliance
  on Administrative Agent and Other Lenders.

  	
   

  
	
  9.08

  	
  No Other Duties, Etc.

  	
   

  
	
  9.09

  	
  Administrative
  Agent May File Proofs of Claim.

  	
   

  
	
  9.10

  	
  Guaranty Matters.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X.

  	
  MISCELLANEOUS

  	
   

  
	
  10.01

  	
  Amendments, Etc.

  	
   

  
	
  10.02

  	
  Notices;
  Effectiveness; Electronic Communication.

  	
   

  
	
  10.03

  	
  No Waiver;
  Cumulative Remedies.

  	
   

  
	
  10.04

  	
  Expenses;
  Indemnity; Damage Waiver.

  	
   

  
	
  10.05

  	
  Payments Set Aside.

  	
   

  
	
  10.06

  	
  Successors and Assigns.

  	
   

  
	
  10.07

  	
  Treatment
  of Certain Information; Confidentiality.

  	
   

  
	
  10.08

  	
  Right of Setoff.

  	
   

  
	
  10.09

  	
  Interest Rate
  Limitation.

  	
   

  
	
  10.10

  	
  Counterparts;
  Integration; Effectiveness.

  	
   

  
	
  10.11

  	
  Survival
  of Representations and Warranties.

  	
   

  
	
  10.12

  	
  Severability.

  	
   

  
	
  10.13

  	
  Replacement of Lenders.

  	
   

  
	
  10.14

  	
  Governing Law; Jurisdiction; Etc.

  	
   

  
	
  10.15

  	
  Waiver of Jury Trial.

  	
   

  
	
  10.16

  	
  USA PATRIOT Act Notice.

  	
   

  
	
  10.17

  	
  ENTIRE AGREEMENT.

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  	
   

  

 

iii

 

SCHEDULES

	
  2.01

  	
   

  	
  Commitments and Applicable Percentages

  
	
  5.05

  	
   

  	
  Supplement to Interim Financial Statements

  
	
  5.13

  	
   

  	
  Subsidiaries; Other Equity Investments

  
	
  7.01

  	
   

  	
  Existing Liens

  
	
  7.03

  	
   

  	
  Existing Indebtedness

  
	
  10.02

  	
   

  	
  Administrative Agent’s Office; Certain Addresses for
  Notices

  

 

 

 

EXHIBITS

Form of

 

	
  A

  	
   

  	
  Committed Loan Notice

  
	
  B

  	
   

  	
  Swing Line Loan Notice

  
	
  C

  	
   

  	
  Note

  
	
  D

  	
   

  	
  Compliance Certificate

  
	
  E

  	
   

  	
  Assignment and Assumption

  
	
  F-1

  	
   

  	
  Trust Guaranty

  
	
  F-2

  	
   

  	
  Subsidiary Guaranty

  
	
  F-3

  	
   

  	
  GMH Operating Partnership Guaranty

  
	
  G

  	
   

  	
  Opinion Matters

  
	
  H

  	
   

  	
  Borrower Accession Agreement

  
	
  I

  	
   

  	
  Unencumbered Property Report

  

 

iv

 

CREDIT AGREEMENT

                This CREDIT AGREEMENT (“Agreement”) is entered
into as of November 8, 2004, among GMH COMMUNITIES, LP, a
Delaware limited partnership (“GMH Operating Partnership”), GMH COMMUNITIES TRUST, a Maryland real estate investment
trust (the “Trust”), each Subsidiary of the Trust that becomes a
borrower hereunder pursuant to Section 2.16 (individually, a “Subsidiary
Borrower” and collectively, “Subsidiary Borrowers;” GMH Operating
Partnership and Subsidiary Borrowers are individually called a “Borrower”
and collectively called “Borrowers”), each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”),
and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C
Issuer.

                Borrowers have requested that the Lenders provide a
revolving credit facility, and the Lenders are willing to do so on the terms
and conditions set forth herein.

                In consideration
of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

1.01        Defined Terms.

                As used in this Agreement, the
following terms shall have the meanings set forth below:

                “Adjusted Borrowing Base Cash
Flow” means, for any period, the sum of: (i) NOI from all Unencumbered
Properties, plus (ii) Military Housing EBITDA, plus (iii)
Consolidated EBITDA obtained from management of Student Housing Projects owned
by a Person other than a Company, minus (iv) the Capital Expenditure
Reserve for the Unencumbered Properties.

                “Adjusted EBITDA” means,
for any period, Consolidated EBITDA minus the Capital Expenditure
Reserve for all Student Housing Projects owned by the Companies as of the last
day of such period.

                “Adjusted Management EBITDA”
means the product of (a) Consolidated EBITDA obtained from
management of Student Housing Projects owned by a Person other than a Company
for the three (3)- month period ending on the last day of the fiscal quarter
ending on the date of determination times (b) four (4).

                “Adjusted Military Housing
EBITDA” means the product of (a) Military Housing EBITDA for the
three (3)- month period ending on the last day of the fiscal quarter ending on
the date of determination, times (b) four (4).

                “Adjusted Property NOI”
means, for any Student Housing Project, the product of (a) the NOI
from such Student Housing Project for the three (3)- month period ending on the
last day of the fiscal quarter ending on the date of determination times
(b) four (4).

                “Administrative Agent”
means Bank of America in its capacity as administrative agent under any of the
Loan Documents, or any successor administrative agent.

 

1

 

                “Administrative Agent’s
Office” means Administrative Agent’s address and, as appropriate, account as
set forth on Schedule 10.02, or such other address or account as
Administrative Agent may from time to time notify to Borrowers and the Lenders.

                “Administrative Questionnaire”
means an Administrative Questionnaire in a form supplied by Administrative Agent.

                “Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the
Lenders.

                “Agreement” means this
Credit Agreement.

                “Applicable Percentage”
means with respect to any Lender at any time, the percentage (carried out to
the ninth decimal place) of the Aggregate Commitments represented by such
Lender’s Commitment at such time.  If the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 8.02
or if the Aggregate Commitments have expired, then the Applicable Percentage of
each Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent
assignments.  The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on Schedule
2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.

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

 

	
  Pricing

  	
   

  	
   

  	
   

  	
  Eurodollar

  Rate +

  	
   

  	
  Base Rate

  	
   

  
	
  Level

  	
   

  	
  Leverage Ratio

  	
   

  	
  Letters of Credit

  	
   

  	
  +

  	
   

  
	
  1

  	
   

  	
  <0.45:1

  	
   

  	
  1.50%

  	
   

  	
  0.625%

  	
   

  
	
  2

  	
   

  	
  >0.45:1
  but <0.50:1

  	
   

  	
  1.625%

  	
   

  	
  0.875%

  	
   

  
	
  3

  	
   

  	
  >0.50:1
  but <0.55:1

  	
   

  	
  1.75%

  	
   

  	
  1.125%

  	
   

  
	
  4

  	
   

  	
  >0.55:1
  but <0.60:1

  	
   

  	
  2.00%

  	
   

  	
  1.375%

  	
   

  
	
  5

  	
   

  	
  >0.60:1

  	
   

  	
  2.125%

  	
   

  	
  1.500%

  	
   

  

 

                Any increase or decrease in the Applicable Rate
resulting from a change in the Leverage Ratio shall become effective as of the
first (1st) Business Day immediately following the date a Compliance
Certificate is delivered pursuant to Section 6.02(b); provided, however,
that if a Compliance Certificate is not delivered when due in accordance with
such Section, then Pricing Level 5 shall apply as of the first (1st)

 

2

 

Business Day after the date
on which such Compliance Certificate was required to have been delivered until
and including the first (1st) Business Day immediately following the
date such Compliance Certificate is actually delivered.  The Applicable Rate in effect from the
Closing Date through the date of delivery of the initial Compliance Certificate
delivered pursuant to Section 6.02(b) shall be determined based upon
Pricing Level 2.

                “Applicable Unused Fee” means
(a) 0.25% per annum on each day that the Total Outstandings are less than or
equal to fifty percent (50%) of the actual daily amount of the Aggregate
Commitments and (b) 0.20% per annum on each day that the Total Outstandings are
greater than fifty percent (50%) of the actual daily amount of the Aggregate
Commitments.

                “Approved Costs” means,
for any Student Housing Project, the sum of the acquisition, construction, and
other capitalized costs of such Student Housing Project, whether in the form of
cash, property, liabilities assumed, or other consideration.

                “Approved Fund” means any
Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.

                “Arranger” means Banc of
America Securities LLC, in its capacity as sole lead arranger and sole book
manager.

                “Assignment and Assumption”
means an assignment and assumption entered into by a Lender and an Eligible
Assignee (with the consent of any party whose consent is required by Section
10.06(b), and accepted by Administrative Agent, in substantially the form
of Exhibit E or any other form approved by Administrative Agent.

                “Attributable Indebtedness”
means, on any date, (a) in respect of any capital lease of any Person, the
capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, and (b) in respect of any
Synthetic Lease Obligation, the capitalized amount of the remaining lease payments
under the relevant lease that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP if such lease were accounted
for as a capital lease.

                “Audited Financial Statements”
means the audited consolidated balance sheet of the  Companies for the fiscal year ended December
31, 2003 and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year of the Companies,
including the notes thereto.

                “Availability
Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate
Commitments pursuant to Section 2.06, and (c) the date of termination of
the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.

                “Bank of America” means
Bank of America, N.A. and its successors.

 

3

 

                “Base Rate” means for any day a fluctuating
rate per annum equal to the rate of interest in effect for such day as publicly
announced from time to time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of
America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  If Bank of America
no longer announces a “prime rate”, then the “Base Rate” shall be the a
fluctuating rate per annum equal to the Federal Funds Rate plus 1/2 of 1%. Any
change in such rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of such
change.

                Base Rate Committed Loan”
means a Committed Loan that is a Base Rate Loan.

                “Base Rate Loan” means a Loan that bears interest based on the Base
Rate.

                “Borrower” and “Borrowers”
have the meaning specified in the introductory paragraph hereto.

                “Borrower Accession Agreement”
means an accession agreement substantially in the form of Exhibit H.

                “Borrowing” means a
Committed Borrowing or a Swing Line Borrowing, as the context may require.

                “Borrowing Base Value”
means the sum of (a) Unencumbered Asset Value times sixty percent
(60%) plus (b) Management Cash Flow Value times fifty percent
(50%); provided that (i) the amount of Management Cash Flow Value
included in the calculation of Borrowing Base Value shall not exceed
thirty-five percent (35%) of Borrowing Base Value, and (ii) the Unencumbered
Asset Value attributable to any single Unencumbered Property shall not exceed
thirty percent (30%) of Borrowing Base Value.

                “Business Day” means any
day other than a Saturday, Sunday or other day on which commercial banks are
authorized to close under the Laws of, or are in fact closed in, the state
where Administrative Agent’s Office is located and, if such day relates to any
Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits
are conducted by and between banks in the London interbank eurodollar market.

                “Capital Expenditure Reserve”
means, on a per annum basis, an amount equal to $125 per bed in each Student
Housing Project.

                 “Cash
Collateralize” has the meaning specified in Section 2.03(g).

                 “Cash
Equivalents” means (a) investments and direct obligations of the United
States of America or any agency thereof, or obligations fully guaranteed by the
United States of America or any agency thereof, provided that such obligations
mature within one (1) year of the date of acquisition thereof,
(b) commercial paper rated “A-1” or
higher according to Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. or “P-1” or
better according to Moody’s Investors Service, Inc. and maturing not more than
one hundred and eighty (180) days from the date of acquisition thereof,
(c) time deposits with, and certificates of deposit and 

 

4

 

bankers’
acceptances issued by, Administrative Agent or any United States bank having
capital surplus and undivided profits aggregating at least $1,000,000,000, and
(d) mutual funds whose investments are limited to the foregoing.

                 “Change in Law”
means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

                “Change of Control”
means, with respect to any Person, an event or series of events by which:

                                (a)           any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of
such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such
plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under
the Securities Exchange Act of 1934, except that a person or group shall be
deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire (such right, an “option right”), whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of twenty-five percent (25%) or more of the equity
securities of such Person entitled to vote for members of the board of
directors or equivalent governing body of such Person on a fully-diluted basis
(and taking into account all such securities that such person or group has the
right to acquire pursuant to any option right);

                                (b)           during
any period of twelve (12) consecutive months, a majority of the members of the
board of directors or other equivalent governing body of such Person cease to
be composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses
(i) and (ii) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body (excluding, in the
case of both clause (ii) and clause (iii), any individual whose initial
nomination for, or assumption of office as, a member of that board or
equivalent governing body occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one or more
directors by any person or group other than a solicitation for the election of
one or more directors by or on behalf of the board of directors); or

                                (c)           any
Person or two or more Persons acting in concert shall have acquired by contract
or otherwise, or shall have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence over the management
or policies of such Person, or control over the equity securities of such
Person entitled to vote for members 

 

5

 

of the board of directors or
equivalent governing body of such Person on a fully-diluted basis (and taking
into account all such securities that such Person or group has the right to
acquire pursuant to any option right) representing twenty-five percent (25%) or
more of the combined voting power of such securities.

                “Closing Date” means the
first date all the conditions precedent in Section 4.01 are satisfied or
waived in accordance with Section 10.01.

                “Code” means the Internal
Revenue Code of 1986.

                “Commitment” means, as to
each Lender, its obligation to (a) make Committed Loans to Borrowers pursuant
to Section 2.01, (b) purchase participations in L/C Obligations, and (c)
purchase participations in Swing Line Loans, in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such
Lender’s name on Schedule 2.01 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.

                “Committed Borrowing”
means a borrowing consisting of simultaneous Committed Loans of the same Type
and, in the case of Eurodollar Rate Loans, having the same Interest Period made
by each of the Lenders pursuant to Section 2.01.

                “Committed Loan” has the
meaning specified in Section 2.01.

                “Committed Loan Notice”
means a notice of (a) a Committed Borrowing, (b) a conversion of Committed
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A.

                “Companies” means,
without duplication, the Trust and each of its Subsidiaries, and “Company”
means any one of the Companies.

                “Compliance Certificate”
means a certificate substantially in the form of Exhibit D.

                “Consolidated
EBITDA” means, for any period, for the Companies on a consolidated basis,
an amount equal to Consolidated Net Income for such period plus (a) the
following to the extent deducted in calculating such Consolidated Net Income:
(i) Consolidated Interest Charges for such period; (ii) the provision for
Federal, state, local and foreign income taxes payable by the Companies for
such period; (iii) depreciation and amortization expense; and (iv) other
non-recurring expenses of the Companies reducing such Consolidated Net Income
which do not represent a cash item in such period or any future period minus
(b) the following to the extent included in calculating such Consolidated Net
Income: (i) Federal, state, local and foreign income tax credits of the
Companies for such period; and (ii) all non-cash items increasing Consolidated
Net Income for such period.

                “Consolidated
Interest Charges” means, for any Person for any period, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related expenses
of such Person in connection with borrowed money (including capitalized
interest) or in connection with the 

 

6

 

deferred purchase price of assets, in each case to the extent treated
as interest in accordance with GAAP, and (b) the portion of rent expense of
such Person with respect to such period under capital leases that is treated as
interest in accordance with GAAP.

                “Consolidated
Net Income” means, for any Person for any period, the net income of such
Person (excluding extraordinary gains but including extraordinary losses) for
that period.

                “Consolidated
Tangible Net Worth” means, as of any date of determination for the
Companies on a consolidated basis (except that the minority Equity Interests in
GMH Operating Partnership shall be included for purposes of this calculation),
(a) Shareholders’ Equity of the Companies on that date minus (b) the
Intangible Assets of the Companies on that date, plus (c) all
accumulated depreciation and amortization determined in accordance with GAAP of
the Companies on that date.

                “Contractual
Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.

                “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.

                “Customary
Recourse Exceptions” means, with respect to any Non-Recourse Debt,
exclusions from the exculpation provisions with respect to such Non-Recourse
Debt for fraud, misapplication of cash, environmental claims, and other
circumstances customarily excluded by institutional lenders from exculpation
provisions and/or included in separate indemnification agreements in
non-recourse financings of real estate.

                “Credit Extension” means
each of the following: (a) a Borrowing; and (b) an L/C Credit Extension.

                “Debtor Relief Laws”
means the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

                “Default”
means any event or condition that constitutes an Event of Default or that, with
the giving of any notice, the passage of time, or both, would be an Event of
Default.

                “Default Rate”
means an interest rate equal to (a) the Base Rate plus (b) three percent
3% per annum.

                “Defaulting
Lender” means any Lender that (a) has failed to fund any portion of the
Committed Loans, participations in L/C Obligations or participations in Swing
Line Loans required to be funded by it hereunder within one Business Day of the
date required to be funded by it hereunder, (b) has otherwise failed to pay
over to Administrative Agent or any other Lender any other amount required to
be paid by it hereunder within one (1) Business Day of the date 

 

7

 

when due, unless the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding.

                “Disposition” or “Dispose”
means the sale, transfer, license, lease or other disposition (including any
sale and leaseback transaction) of any property by any Person, including any
sale, assignment, transfer or other disposal, with or without recourse, of any
notes or accounts receivable or any rights and claims associated therewith.

                “Dollar”
and “$” mean lawful money of the United States.

                “Eligible Assignee” means
(a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any
other Person (other than a natural person) approved by (i) Administrative
Agent, the L/C Issuer and the Swing Line Lender, and (ii) unless an Event of
Default has occurred and is continuing, Borrowers (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include the Trust or any
Borrower or any of the Trust’s or any Borrower’s Affiliates or Subsidiaries.

                “Environmental Laws”
means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or governmental restrictions relating
to pollution and the protection of the environment or the release of any
materials into the environment, including those related to hazardous substances
or wastes, air emissions and discharges to waste or public systems.

                “Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of the Companies, directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

                 “Equity
Interests” means, with respect to any Person, all of the shares of capital
stock of (or other ownership or profit interests in) such Person, all of the
warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests
in) such Person, all of the securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or acquisition from such
Person of such shares (or such other interests), and all of the other ownership
or profit interests in such Person (including partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are outstanding on any
date of determination.

                 “Equity
Issuance” means the issuance or sale by any Company of any Equity Interests
of such Company.

                 “ERISA”
means the Employee Retirement Income Security Act of 1974.

 

8

 

                “ERISA Affiliate” means
any trade or business (whether or not incorporated) under common control with
any Company within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).

                “ERISA Event” means: (a)
a Reportable Event with respect to a Pension Plan; (b) a withdrawal by any
Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated
as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by Any Company or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of
a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon any Company or any ERISA Affiliate.

                “Eurodollar Rate” means,
for any Interest Period with respect to a Eurodollar Rate Loan, the rate per
annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”),
as published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by Administrative Agent from time to
time) at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period.  If such rate is not available at
such time for any reason, then the “Eurodollar Rate” for such Interest
Period shall be the rate per annum determined by Administrative Agent to be the
rate at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the commencement of such Interest Period.

                “Eurodollar Rate Loan”
means a Committed Loan that bears interest at a rate based on the Eurodollar
Rate.

                “Event of Default” has
the meaning specified in Section 8.01.

                “Excluded Taxes” means,
with respect to Administrative Agent, any Lender, the L/C Issuer or any other
recipient of any payment to be made by or on account of any obligation of any
Borrower hereunder, (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the laws
of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable Lending Office
is located, (b) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which any Borrower is located
and (c) in the case of a 

 

9

 

Foreign
Lender (other than an assignee pursuant to a request by GMH Operating
Partnership under Section 10.13), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party hereto (or designates a new Lending Office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with Section 3.01(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from Borrowers with respect to such withholding tax pursuant to Section
3.01(a).

                “Federal Funds Rate” means, for any day, the rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided that (a) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of
1%) charged to Bank of America on such day on such transactions as determined
by Administrative Agent.

                “Fee Letter” means the
letter agreement dated September 17, 2004, among GMH Operating Partnership,
Administrative Agent, and the Arranger.

                “Fixed Charges” means,
for the Companies on a consolidated basis for any period, the sum of (a)
all regularly scheduled principal payments (but excluding any regularly
scheduled principal payments on any Indebtedness which pays such Indebtedness
in full, but only to the extent that the amount of such final payment is
greater than the scheduled principal payment immediately preceding such final
payment), (b) all Consolidated Interest Charges of the Companies, and (c) any
Restricted Payment paid or payable in cash or other property during such period
with respect to any preferred Equity Interests of the Companies.

                “Fixed Charge Coverage Ratio”
means, as of any date of determination, the ratio of (a) Adjusted
EBITDA for the three (3)- month period ending on the last day of the fiscal
quarter ending on the date of determination times four (4) to (b)
Fixed Charges for the three (3)- month period ending on the last day of the
fiscal quarter ending on the date of determination times four (4).  Adjusted EBITDA for any fiscal quarter may be
adjusted to annualize seasonal expenses incurred during such fiscal quarter in
a manner satisfactory to Administrative Agent in its sole discretion.

                “Foreign Lender” means
any Lender that is organized under the laws of a jurisdiction other than that
in which any Borrower is resident for tax purposes.  For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

                “FRB” means the Board of
Governors of the Federal Reserve System of the United States.

 

10

 

                “Fund” means any Person
(other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

                “Funds from Operations”
means, for any Person for any period, the sum of net earnings (or loss) after
taxes of such Person, plus depreciation and amortization expense
(exclusive of amortization of financing costs), all as determined in accordance
with GAAP; provided that there shall not be included in such calculation
(i) any proceeds of any insurance policy other than rental or business interruption
insurance received by such Person, (ii) any gain or loss which is classified as
“extraordinary” in accordance with GAAP, or (iii) any capital gains and taxes
on capital gains.  Funds from Operations
shall not be reduced by any Restricted Payment in respect of any preferred
Equity Interests of such Person.

                “GAAP” means generally
accepted accounting principles in the United States set forth in the opinions
and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession in the United
States, that are applicable to the circumstances as of the date of
determination, consistently applied.

                “GMH Operating Partnership
Guaranty” means the Guaranty made by GMH Operating Partnership in favor of
Administrative Agent, on behalf of Lenders, substantially in the form of Exhibit
F-3.

                “Governmental Authority”
means the government of the United States or any other nation, or of any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).

                “Guarantee” means, as to
any Person, any (a) any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of
assuring in any other manner the obligee in respect of such Indebtedness or
other obligation of the payment or performance thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or (b) any Lien
on any assets of such Person securing any Indebtedness or other obligation of
any other Person, whether or not such Indebtedness or other obligation is
assumed by such Person (or any right, contingent or otherwise, of any holder of
such Indebtedness to obtain any such Lien). 
The amount of any

 

11

 

Guarantee shall be deemed to be an amount
equal to the stated or determinable amount of the related primary obligation,
or portion thereof, in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.

 

“Guarantors” means, collectively, the Trust, GMH Operating
Partnership, and each Subsidiary Guarantor, and “Guarantor” means any
one of the Guarantors.

 

“Guaranties”
means the Trust Guaranty, the GMH Operating Partnership Guaranty, and the
Subsidiary Guaranty, and “Guaranty” means any one of the Guaranties.

 

“Hazardous
Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum
or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:

 

(a)           all obligations of
such Person for borrowed money and all obligations of such Person evidenced by
bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)           all direct or
contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments;

 

(c)           net obligations of
such Person under any Swap Contract;

 

(d)           all obligations of
such Person to pay the deferred purchase price of property or services (other
than trade accounts payable in the ordinary course of business);

 

(e)           indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;

 

(f)            capital leases and
Synthetic Lease Obligations;

 

(g)           all obligations of
such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of any Equity Interest in such Person or any other Person, valued,
in the case of a redeemable preferred interest, at the greater of its voluntary
or involuntary liquidation preference plus accrued and unpaid dividends;
and

 

(h)           all Guarantees of
such Person in respect of any of the foregoing.

 

 

12

 

For all purposes hereof, the
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or a joint
venturer, unless such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.  The amount of
any capital lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such
date.

 

“Indemnified Taxes”
means Taxes other than Excluded Taxes.

 

“Indemnitees” has the
meaning specified in Section 10.04(b).

 

“Intangible Assets” means assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.

 

“Interest Coverage Ratio”
means, as of any date of determination, the ratio of (a) Adjusted
EBITDA for the three (3)- month period ending on the last day of the fiscal
quarter ending on the date of determination times four (4) to
(b) Consolidated Interest Charges of the Companies for the three (3)-
month period ending on the last day of the fiscal quarter ending on the date of
determination times four (4). 
Adjusted EBITDA for any fiscal quarter may be adjusted to annualize
seasonal expenses incurred during such fiscal quarter in a manner satisfactory
to Administrative Agent in its sole discretion.

 

“Interest Payment Date”
means, (a) as to any Loan other than a Base Rate Loan, the last day of each
Interest Period applicable to such Loan and the Maturity Date; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds
three (3) months, the respective dates that fall every three (3) months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan (including a Swing Line Loan), the last Business
Day of each March, June, September and December, and the Maturity Date.

 

“Interest Period”
means, as to each Eurodollar Rate Loan, the period commencing on the date such
Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar
Rate Loan and ending on the date one (1), two (2), or three (3) months
thereafter, as selected by the applicable Borrower in its Committed Loan
Notice; provided that:

 

(i)            any Interest Period
that would otherwise end on a day that is not a Business Day shall be extended
to the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Business Day;

 

(ii)           any Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

(iii)          no Interest Period
shall extend beyond the Maturity Date.

 

 

13

 

“Investment” means,
as to any Person, any direct or indirect acquisition or investment by such
Person, whether by means of (a) the purchase or other acquisition of Equity
Interests or other securities of another Person, (b) a loan, advance or capital
contribution to, Guarantee or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor Guarantees
Indebtedness of such other Person, or (c) the purchase or other acquisition (in
one transaction or a series of transactions) of assets of another Person that
constitute a business unit.  For purposes
of covenant compliance, the amount of any Investment shall be the amount
actually invested, without adjustment for subsequent increases or decreases in
the value of such Investment.

 

“IP Rights” has the
meaning specified in Section 5.17.

 

“IRS” means the
United States Internal Revenue Service.

 

“ISP” means, with
respect to any Letter of Credit, the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice (or such
later version thereof as may be in effect at the time of issuance).

 

“Issuer Documents”
means with respect to any Letter of Credit, the Letter Credit Application, and
any other document, agreement and instrument entered into by the L/C Issuer and
GMH Operating Partnership or in favor the L/C Issuer and relating to any such
Letter of Credit.

 

“Laws” means,
collectively, all international, foreign, Federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.

 

“L/C Advance” means,
with respect to each Lender, such Lender’s funding of its participation in any
L/C Borrowing in accordance with its Applicable Percentage.

 

“L/C Borrowing” means
an extension of credit resulting from a drawing under any Letter of Credit
which has not been reimbursed on the date when made or refinanced as a
Committed Borrowing.

 

“L/C Credit Extension”
means, with respect to any Letter of Credit, the issuance thereof or extension
of the expiry date thereof, or the increase of the amount thereof.

 

“L/C Issuer” means
Bank of America in its capacity as issuer of Letters of Credit hereunder, or
any successor issuer of Letters of Credit hereunder.

 

“L/C Obligations”
means, as at any date of determination, the aggregate amount available to be
drawn under all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount
available to be 

 

14

 

drawn under any Letter of Credit, the amount
of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14 of
the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.

 

“Lender”
has the meaning specified in the introductory paragraph hereto and, as the
context requires, includes the Swing Line Lender.

 

“Lending Office”
means, as to any Lender, the office or offices of such Lender described as such
in such Lender’s Administrative Questionnaire, or such other office or offices
as a Lender may from time to time notify Borrowers and Administrative Agent.

 

“Letter of Credit”
means any standby letter of credit issued hereunder.

 

“Letter of Credit
Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C
Issuer.

 

“Letter of Credit
Expiration Date” means the day that is seven (7) days prior to the Maturity
Date then in effect (or, if such day is not a Business Day, the next preceding
Business Day).

 

“Letter of Credit Fee”
has the meaning specified in Section 2.03(i).

 

“Letter of Credit
Sublimit” means an amount equal to $20,000,000.  The Letter of Credit Sublimit is part of, and
not in addition to, the Aggregate Commitments.

 

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

 

“Liabilities” means
(without duplication), for any Person as of any date, (a) all Indebtedness
of such Person, and (b) all other indebtedness, liabilities, or
obligations required by GAAP to be classified upon such Person’s balance sheet
as liabilities.

 

“Lien” means any
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), charge, or preference, priority or other security
interest or preferential arrangement in the nature of a security interest of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any easement, right of way or other encumbrance on title
to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

 

“Loan” means an
extension of credit by a Lender to any Borrower under Article II in the
form of a Committed Loan or a Swing Line Loan.

 

“Loan Documents”
means this Agreement, each Note, each Issuer Document, the Fee Letter, and each
Guaranty.

 

15

 

“Loan Parties” means,
collectively, each Borrower and each Guarantor, and “Loan Party” means
any one of the Loan Parties.

 

“Management Cash Flow
Value” means an amount equal to the sum of (a) (i) Adjusted Military
Housing EBITDA, times (ii) eight (8) plus (b) (i) Adjusted
Management EBITDA times (ii) three (3).

 

“Material Adverse Effect”
means: (a) a material adverse change in, or a material adverse effect upon, the
operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of any Borrower or the Companies taken as
a whole; (b) a material impairment of the ability of any Loan Party to perform
its obligations under any Loan Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a
party.

 

“Material Subsidiaries”
means (a) each Subsidiary Borrower, (b) each Subsidiary of GMH
Operating Partnership that owns an Unencumbered Property, (c) each
Subsidiary of GMH Operating Partnership which directly or indirectly owns
another Subsidiary which owns an Unencumbered Property, (d) each other
Company that holds fee simple title to any real property not encumbered by a
first priority Lien, and (d) each other Company whose Military Housing
EBITDA is used in the calculation of Management Cash Flow Value for purposes of
determining Borrowing Base Value and Total Asset Value, and “Material
Subsidiary” means any one of the Material Subsidiaries.

 

“Maturity Date” means
the later of (a) November 8, 2007 and (b) if maturity is extended pursuant
to Section 2.14, such extended maturity date as determined pursuant to
such Section.

 

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

 

“Military Housing
Projects” means privatized military housing projects in the United States
owned and/or operated by GMH Operating Partnership or a wholly-owned Subsidiary
of GMH Operating Partnership, with an average remaining ground lease term for
all such Military Housing Projects, taken as a whole, being forty (40) years or
greater, and “Military Housing Project” means any one of the Military
Housing Projects.

 

“Multiemployer Plan”
means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Company or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.

 

“Net Proceeds” means,
with respect to any Equity Issuance by any Company, the amount of cash received
by such Company in connection with such transaction after deducting therefrom
the aggregate, without duplication, of the following amounts to the extent
properly attributable to such transaction: (a) brokerage commissions, attorneys’
fees, finder’s fees, financial advisory fees, accounting fees, underwriting
fees, investment banking fees, and other similar commissions 

 

16

 

and fees (and expenses and disbursements of
any of the foregoing), in each case, to the extent paid or payable by such
Company; (b) printing and related expenses and filing, recording, or
registration fees or charges or similar fees or charges paid by such Company;
and (c) taxes paid or payable by such Company to any Governmental Authority as
a result of such transaction.

 

“NOI” means, for any
period for any Person or any Student Housing Project, total rental income,
management income, and other operating income received from the operation of
Student Housing Projects by such Person or of such Student Housing Project
after deducting all expenses and other property charges incurred in connection
with the operation of such properties during such period, including, without
limitation, property operating expenses, real estate taxes and bad debt
expenses, but before payment or provision for debt service, income taxes, and
depreciation, amortization, and other non-cash expenses, all as determined in
accordance with GAAP.

 

“NOI Value” means,
for any Student Housing Project as of any determination date, (a) Adjusted
Property NOI for such Student Housing Project, divided by (b) eight and
one half percent (8.5%).

 

“Non-Recourse Debt”
means, for any Person, any Indebtedness of such Person in which the holder of
such Indebtedness may not look to such Person personally for repayment, other
than to the extent of any security therefor or pursuant to Customary Recourse
Exceptions.

 

“Note” means a
promissory note made by any Borrower in favor of a Lender evidencing Loans made
by such Lender, substantially in the form of Exhibit C.

 

“Obligations” means
all advances to, and debts, liabilities, obligations, covenants and duties of,
any Loan Party arising under any Loan Document or otherwise with respect to any
Loan or Letter of Credit, whether direct or indirect (including those acquired
by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding.

 

“Occupancy Rate”
means, for any Student Housing Project, the percentage of the rentable area of
such Student Housing Project leased pursuant to bona fide tenant leases,
licenses, or other agreements requiring current rent or other similar payments.

 

“Organization Documents”
means: (a) with respect to any corporation, the certificate or articles of
incorporation and the bylaws (or equivalent or comparable constitutive
documents with respect to any non-U.S. jurisdiction); (b) with respect to any
limited liability company, the certificate or articles of formation or
organization and operating agreement; and (c) with respect to any partnership,
joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any
agreement, instrument, filing or notice with respect thereto filed in
connection with its formation or organization with the applicable Governmental
Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such
entity.

 

17

 

“Other Taxes” means
all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan
Document.

 

“Outstanding Amount”
means (i) with respect to Committed Loans and Swing Line Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Committed Loans and Swing Line
Loans, as the case may be, occurring on such date; and (ii) with respect to any
L/C Obligations on any date, the amount of such L/C Obligations on such date
after giving effect to any L/C Credit Extension occurring on such date and any
other changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements by GMH Operating Partnership of
Unreimbursed Amounts.

 

“Participant” has the
meaning specified in Section 10.06(d).

 

“PBGC” means the
Pension Benefit Guaranty Corporation.

 

“Pension Plan” means
any “employee pension benefit plan” (as such term is defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by any Company or any ERISA Affiliate or to
which any Company or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five (5) plan years.

 

“Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity.

 

“Plan” means any “employee
benefit plan” (as such term is defined in Section 3(3) of ERISA) established by
any Company or, with respect to any such plan that is subject to Section 412 of
the Code or Title IV of ERISA, any ERISA Affiliate.

 

 “Recourse Debt” means all Indebtedness
that is not Non-Recourse Debt; provided that “Recourse Debt”
shall not include Recourse Debt of Unconsolidated Affiliates of a Person unless
the holder of such Recourse Debt has recourse against such Person for the
payment of such Recourse Debt other than to the extent of any security therefor
or pursuant to any Customary Recourse Exceptions.

 

“Register” has the
meaning specified in Section 10.06(c).

 

“REIT” means a “real
estate investment trust” for purposes of the Code.

 

“Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.

 

“Reportable Event”
means any of the events set forth in Section 4043(c) of ERISA, other than
events for which the thirty (30) day notice period has been waived.

 

18

 

“Request for Credit
Extension” means (a) with respect to a Borrowing, conversion or
continuation of Committed Loans, a Committed Loan Notice, (b) with respect to
an L/C Credit Extension, a Letter of Credit Application, and (c) with respect
to a Swing Line Loan, a Swing Line Loan Notice.

 

“Required Lenders”
means, as of any date of determination, Lenders having at least 66-2/3% of the
Aggregate Commitments or, if the commitment of each Lender to make Loans and
the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 8.02, Lenders holding in the aggregate at
least 66-2/3% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the
Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

 

“Responsible Officer”
means the chief executive officer, president, chief financial officer,
treasurer or assistant treasurer of a Loan Party.  Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
property) with respect to any capital stock or other Equity Interest of the
Companies, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
capital stock or other Equity Interest, or on account of any return of capital
to any Company’s stockholders, partners or members (or the equivalent Person
thereof).

 

“SEC” means the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any of its principal functions.

 

“Secured Debt” means,
for any Person, Indebtedness of such Person secured by Liens (other than Liens
permitted under Sections 7.01(c) through (h)) in any of such
Person’s Properties or other assets.

 

“Shareholders’ Equity”
means, as of any date of determination for any Person, consolidated
shareholders’ equity of such Person as of that date determined in accordance
with GAAP.

 

“Student Housing Projects”
means real estate properties operated as student housing in the United States
owned by GMH Operating Partnership or a wholly-owned Subsidiary of GMH
Operating Partnership, and “Student Housing Project” means any one of
the Student Housing Projects.

 

 “Subsidiary” of a Person means a
corporation, partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of securities or other
interests 

 

19

 

having ordinary voting power for the election
of directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall
refer to a Subsidiary or Subsidiaries of the Trust.

 

“Subsidiary Borrower”
and “Subsidiary Borrowers” are defined in the preamble to this
Agreement.

 

“Subsidiary Borrower
Sublimit” means an amount equal to $25,000,000.  The Subsidiary Borrower Sublimit is part of,
and not in addition to, the Aggregate Commitments.

 

“Subsidiary Guarantors”
means, as of any date, all Subsidiary Borrowers, all Subsidiaries of GMH Operating
Partnership owning an Unencumbered Property, and each other Company that is a
Material Subsidiary, and “Subsidiary Guarantor” means any one of the
Subsidiary Guarantors.

 

“Subsidiary Guaranty”
means the Guaranty made by each Subsidiary Guarantor in favor of Administrative
Agent on behalf of the Lenders, substantially in the form of Exhibit F-2.

 

“Swap Contract” means
(a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.

 

“Swap Termination Value”
means, in respect of any one or more Swap Contracts, after taking into account
the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been
closed out and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced in
clause (a), the amount(s) determined as the mark-to-market value(s) for such
Swap Contracts, as determined based upon one or more mid-market or other
readily available quotations provided by any recognized dealer in such Swap
Contracts (which may include a Lender or any Affiliate of a Lender).

 

20

 

“Swing Line” means
the revolving credit facility made available by the Swing Line Lender pursuant
to Section 2.04.

 

“Swing Line Borrowing”
means a borrowing of a Swing Line Loan pursuant to Section 2.04.

 

“Swing Line Lender”
means Bank of America in its capacity as provider of Swing Line Loans, or any
successor swing line lender hereunder.

 

“Swing Line Loan” has
the meaning specified in Section 2.04(a).

 

“Swing Line Loan Notice”
means a notice of a Swing Line Borrowing pursuant to Section 2.04(b),
which, if in writing, shall be substantially in the form of Exhibit B.

 

“Swing Line Sublimit”
means an amount equal to the lesser of (a) $25,000,000 and (b) the Aggregate
Commitments.  The Swing Line Sublimit is
part of, and not in addition to, the Aggregate Commitments.

 

“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a so-called
synthetic, off-balance sheet or tax retention lease, or (b) an agreement for
the use or possession of property creating obligations that do not appear on
the balance sheet of such Person but which, upon the insolvency or bankruptcy
of such Person, would be characterized as the indebtedness of such Person
(without regard to accounting treatment).

 

“Taxable REIT Subsidiary”
means a “qualified REIT subsidiary” as defined in the Code.

 

“Taxes” means all
present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable thereto.

 

“Threshold Amount”
means $1,000,000.

 

“Total Asset Value”
means the sum of (i) the sum of (without duplication) (a) the NOI
Value of each Student Housing Project as of such date of determination owned
for the entire fiscal quarter ending on such date of determination plus
(b) the Approved Cost of each Student Housing Project as of such date of
determination and acquired during the fiscal quarter ending on such date of
determination (without duplication), plus (ii) Management Cash Flow
Value, plus (iii) the book value of other assets (excluding owned real
estate) owned by the Companies, as determined on a consolidated basis in
accordance with GAAP; provided that Management Cash Flow Value shall not
exceed twenty percent (20%) of Total Asset Value.

 

“Total Outstandings”
means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

 

“Trust Guaranty”
means the Guaranty made by the Trust in favor of Administrative Agent on behalf
of the Lenders, substantially in the form of Exhibit F-1.

 

21

 

“Type” means, with
respect to a Committed Loan, its character as a Base Rate Loan or a Eurodollar
Rate Loan.

 

“Unconsolidated Affiliate”
means any Person in whom a Company holds Equity Interests and whose financial
results would not be consolidated under GAAP with the financial results of GMH
Operating Partnership or the Trust on the consolidated financial statements of
GMH Operating Partnership or the Trust, as the case may be.

 

“Unencumbered Asset Value”
means the sum of (without duplication):

 

(a)           the NOI Value of each Unencumbered Property as of such
date of determination owned for the entire fiscal quarter ending on such date
of determination; plus

 

(b)           the Approved Cost of each Unencumbered Property as of such
date of determination and acquired during the fiscal quarter ending on such
date of determination.

 

Notwithstanding
the foregoing, no Unencumbered Property can have a value,
calculated as provided above, of less than $0.00.

 

“Unencumbered Properties”
means, as of any date, a minimum of five (5) Student Housing Projects
identified by GMH Operating Partnership in the most recent Unencumbered
Property Report and approved by Administrative Agent, (a) in which GMH
Operating Partnership or a wholly-owned Subsidiary of GMH Operating Partnership
that has executed the Subsidiary Guaranty owns fee simple title, (b) that is
free and clear of any Liens (other than Liens permitted by Sections 7.01(a)
through (h)), (c) that is free of any material violations of any
Environmental Laws, and (d) that have, in the aggregate, a minimum aggregate
Occupancy Rate of at least eighty-five percent (85%), and “Unencumbered
Property” means any one of the Unencumbered Properties.

 

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

 

“Unfunded Pension
Liability” means the excess of a Pension Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

 

“United States” and “U.S.”
mean the United States of America.

 

“Unreimbursed Amount”
has the meaning specified in Section 2.03(c)(i).

 

“Unsecured Interest
Coverage Ratio” means, as of any date of determination, the ratio of
(a) Adjusted Borrowing Base Cash Flow for the three (3)- month period ending on
the last day of the fiscal quarter ending on the date of determination times
four (4) to (b) Consolidated Interest Charges related to all
Indebtedness of the Companies which is not Secured Debt for the three (3)-

 

22

 

 

month period ending on the last day of the
fiscal quarter ending on the date of determination times four (4).  Adjusted Borrowing Base Cash Flow for any
fiscal quarter may be adjusted to annualize seasonal expenses incurred during
such fiscal quarter in a manner satisfactory to Administrative Agent in its
sole discretion.

 

1.02        Other
Interpretive Provisions.  With reference
to this Agreement and each other Loan Document, unless otherwise specified
herein or in such other Loan Document:

 

(a)           The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i)
any definition of or reference to any agreement, instrument or other document
(including any Organization Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein or in any other Loan Document),
(ii) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (iii) the words “herein,” “hereof”
and “hereunder,” and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its entirety and
not to any particular provision thereof, (iv) all references in a Loan Document
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

(b)           In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from
and including;” the words “to” and “until” each mean “to
but excluding;” and the word “through” means “to and including.”

(c)           Section headings herein and in the
other Loan Documents are included for convenience of reference only and shall
not affect the interpretation of this Agreement or any other Loan Document.

1.03        Accounting
Terms.  (a)  Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed
herein.

 

 

23

 

 

(b)           Changes in GAAP. 
If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Trust and Borrowers or the Required Lenders shall so request, Administrative
Agent, the Lenders, the Trust, and Borrowers shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided  that, until so amended, (i) such ratio or requirement
shall continue to be computed in accordance with GAAP prior to such change
therein and (ii) the Trust and Borrowers shall provide to Administrative
Agent and the Lenders financial statements and other documents required under
this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP.

 

1.04        Rounding. 
Any financial ratios required to be maintained by the Trust and
Borrowers pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

 

1.05        Times
of Day.  Unless
otherwise specified, all references herein to times of day shall be references
to Eastern time (daylight or standard, as applicable).

 

1.06        Letter
of Credit Amounts.  Unless
otherwise specified herein, the amount of a Letter of Credit at any time shall
be deemed to be the stated amount of such Letter of Credit in effect at such
time; provided, however, that with respect to any Letter of
Credit that, by its terms or the terms of any Issuer Document related thereto,
provides for one or more automatic increases in the stated amount thereof, the
amount of such Letter of Credit shall be deemed to be the maximum stated amount
of such Letter of Credit after giving effect to all such increases, whether or
not such maximum stated amount is in effect at such time.

 

24

 

ARTICLE II.

THE COMMITMENTS AND CREDIT
EXTENSIONS

 

2.01        Committed
Loans.  Subject to the terms and
conditions set forth herein, each Lender severally agrees to make loans (each
such loan, a “Committed Loan”) to each Borrower from time to time, on
any Business Day during the Availability Period, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Commitment; provided,
however, that after giving effect to any Committed Borrowing, (a) the
Total Oustandings shall not exceed the Aggregate Commitments (b) the Total
Oustandings plus all other Recourse Debt of the Companies shall not exceed the
Borrowing Base Value, (c) the aggregate Outstanding Amount of the Committed
Loans of any Lender, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Commitment, and (d) the aggregate Amount of all Committed Loans
advanced to the Subsidiary Borrowers shall not exceed the Subsidiary Borrower
Sublimit.  Within the limits of each
Lender’s Commitment, and subject to the other terms and conditions hereof,
Borrowers may borrow under this Section 2.01, prepay under Section
2.05, and reborrow under this Section 2.01.  Committed Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.

 

2.02        Borrowings,
Conversions and Continuations of Committed Loans.

 

(a)           Each Committed Borrowing, each conversion of Committed
Loans from one Type to the other, and each continuation of Eurodollar Rate
Loans shall be made upon the requesting Borrower’s irrevocable notice to
Administrative Agent, which may be given by telephone.  Each such notice must be received by
Administrative Agent not later than 11:00 a.m. (i) three (3) Business Days
prior to the requested date of any Borrowing of, conversion to or continuation
of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base
Rate Committed Loans, and (ii) on the requested date of any Borrowing of Base
Rate Committed Loans.  Each telephonic
notice by the requesting Borrower pursuant to this Section 2.02(a) must
be confirmed promptly by delivery to Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of such Borrower.  Each Borrowing
of, conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof.  Except as provided in Sections
2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate
Committed Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof.  Each
Committed Loan Notice (whether telephonic or written) shall specify (i) whether
the requesting Borrower is requesting a Committed Borrowing, a conversion of
Committed Loans from one Type to the other, or a continuation of Eurodollar
Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Committed Loans to be borrowed, converted or continued,
(iv) the Type of Committed Loans to be borrowed or to which existing Committed
Loans are to be converted, and (v) if applicable, the duration of the Interest
Period with respect thereto.  If the
requesting Borrower fails to specify a Type of Committed Loan in a Committed
Loan Notice or if the requesting Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Committed Loans
shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans.  If the requesting 

 

25

 

 

Borrower requests a Borrowing of, conversion
to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice,
but fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one month.

 

(b)           Following receipt of a Committed Loan Notice,
Administrative Agent shall promptly notify each Lender of the amount of its
Applicable Percentage of the applicable Committed Loans, and if no timely
notice of a conversion or continuation is provided by the requesting Borrower,
Administrative Agent shall notify each Lender of the details of any automatic
conversion to Base Rate Loans described in the preceding subsection.  In the case of a Committed Borrowing, each
Lender shall make the amount of its Committed Loan available to Administrative
Agent in immediately available funds at Administrative Agent’s Office not later
than 1:00 p.m. on the Business Day specified in the applicable Committed Loan
Notice.  Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing
is the initial Credit Extension, Section 4.01), Administrative Agent shall
make all funds so received available to the requesting Borrower in like funds
as received by Administrative Agent either by (i) crediting the account of the
requesting Borrower on the books of Bank of America with the amount of such
funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) Administrative Agent by
the requesting Borrower; provided, however, that if, on the date
the Committed Loan Notice with respect to such Borrowing is given by the
requesting Borrower, there are L/C Borrowings outstanding, then the proceeds of
such Borrowing, first, shall be applied to the payment in full of any
such L/C Borrowings, and second, shall be made available to the
requesting Borrower as provided above.

 

(c)           Except as otherwise provided herein, a Eurodollar Rate
Loan may be continued or converted only on the last day of an Interest Period
for such Eurodollar Rate Loan.  During
the existence of a Default, no Loans may be requested as, converted to or
continued as Eurodollar Rate Loans without the consent of the Required Lenders.

 

(d)           Administrative Agent shall promptly notify the requesting
Borrower and the Lenders of the interest rate applicable to any Interest Period
for Eurodollar Rate Loans upon determination of such interest rate.  At any time that Base Rate Loans are
outstanding, Administrative Agent shall notify Borrowers and the Lenders of any
change in Bank of America’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

 

(e)           After giving effect to all Committed Borrowings, all
conversions of Committed Loans from one Type to the other, and all
continuations of Committed Loans as the same Type, there shall not be more than
seven (7) Interest Periods in effect with respect to Committed Loans.

 

2.03        Letters
of Credit.

 

(a)           The
Letter of Credit Commitment.

 

(i)            Subject to the
terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance
upon the agreements of the Lenders set forth in this Section 2.03, (1)
from time to time on any Business Day during the period from the Closing Date
until the Letter of Credit Expiration Date, to issue Letters of Credit for the
account of GMH 

 

26

 

Operating
Partnership, and to amend Letters of Credit  previously issued by it, in accordance with subsection
(b) below, and (2) to honor drawings under the Letters of Credit; and (B)
the Lenders severally agree to participate in Letters of Credit issued for the
account of GMH Operating Partnership and any drawings thereunder; provided
that after giving effect to any L/C Credit Extension with respect to any Letter
of Credit, (w) the Total Oustandings shall not exceed the Aggregate
Commitments, (x) the Total Oustandings plus all other Recourse Debt of the
Companies shall not exceed the Borrowing Base Value, (y) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and
(z) the Outstanding Amount of the L/C Obligations shall not exceed the
Letter of Credit Sublimit.  Each request
by GMH Operating Partnership for the issuance or amendment of a Letter of
Credit shall be deemed to be a representation by GMH Operating Partnership that
the L/C Credit Extension so requested complies with the conditions set forth in
the proviso to the preceding sentence. 
Within the foregoing limits, and subject to the terms and conditions
hereof, GMH Operating Partnership’s ability to obtain Letters of Credit shall
be fully revolving, and accordingly GMH Operating Partnership may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed.

 

(ii)           The L/C Issuer
shall not issue any Letter of Credit, if:

 

(A)           the expiry
date of such requested Letter of Credit would occur more than twelve (12)
months after the date of issuance, unless the Required Lenders have approved
such expiry date; or

 

(B)           the expiry date of such requested
Letter of Credit would occur after the Letter of Credit Expiration Date, unless
all the Lenders have approved such expiry date.

 

(iii)          The L/C Issuer
shall not be under any obligation to issue any Letter of Credit if:

 

(A)          any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or any Law
applicable to the L/C Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over the
L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the
issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good faith deems material
to it;

 

27

 

(B)           the issuance of such Letter of Credit
would violate one or more policies of the L/C Issuer;

 

(C)           except as otherwise agreed by
Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial
stated amount less than $100,000;

 

(D)          such Letter of Credit is to be
denominated in a currency other than Dollars;

 

(E)           such Letter of Credit contains any
provisions for automatic reinstatement of the stated amount after any drawing thereunder; or

 

(F)           a default of any Lender’s obligations
to fund under Section 2.03(c) exists or any Lender is at such time a
Defaulting Lender hereunder, unless the L/C Issuer has entered into
satisfactory arrangements with GMH Operating Company or such Lender to
eliminate the L/C Issuer’s risk with respect to such Lender.

 

(iv)          The L/C Issuer shall not amend any
Letter of Credit if the L/C Issuer would not be permitted at such time to issue
such Letter of Credit in its amended form under the terms hereof.

 

(v)           The L/C Issuer shall
be under no obligation to amend any Letter of Credit if (A) the L/C Issuer
would have no obligation at such time to issue such Letter of Credit in its
amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit
does not accept the proposed amendment to such Letter of Credit.

 

(vi)          The L/C Issuer shall
act on behalf of the Lenders with respect to any Letters of Credit issued by it
and the documents associated therewith, and the L/C Issuer shall have all of the
benefits and immunities (A) provided to Administrative Agent in Article
IX with respect to any acts taken or omissions suffered by the L/C Issuer
in connection with Letters of Credit issued by it or proposed to be issued by
it and Issuer Documents pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in Article IX included the L/C
Issuer with respect to such acts or omissions, and (B) as additionally provided
herein with respect to the L/C Issuer.

 

(b)           Procedures
for Issuance and Amendment of Letters of Credit.

 

(i)            Each Letter of
Credit shall be issued or amended, as the case may be, upon the request of GMH
Operating Partnership delivered to the L/C Issuer (with a copy to
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of GMH Operating
Partnership.  Such Letter of Credit
Application must be received by the L/C Issuer and Administrative Agent not later
than 11:00 a.m. at least two (2) Business Days (or such later date and time as
Administrative Agent and the L/C Issuer may agree in a particular instance in
their sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be.  In the
case of a request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to the L/C
Issuer: (A) the proposed issuance date of the requested Letter of Credit (which
shall be a Business Day); 

 

28

 

(B)
the amount thereof; (C) the expiry date thereof; (D) the name and address of
the beneficiary thereof; (E) the documents to be presented by such beneficiary
in case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the L/C Issuer may require. 
In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as the L/C Issuer
may require.  Additionally, GMH Operating
Partnership shall furnish to the L/C Issuer and Administrative Agent such
other documents and information pertaining to such requested Letter of Credit
issuance or amendment, including any Issuer Documents, as the L/C Issuer or
Administrative Agent may require.

 

(ii)           Promptly after
receipt of any Letter of Credit Application, the L/C Issuer will confirm with
Administrative Agent (by telephone or in writing) that Administrative Agent has
received a copy of such Letter of Credit Application from GMH Operating
Partnership and, if not, the L/C Issuer will provide Administrative Agent with
a copy thereof.  Unless the L/C Issuer
has received written notice from any Lender, Administrative Agent or any Loan
Party, at least one (1) Business Day prior to the requested date of issuance or
amendment of the applicable Letter of Credit, that one or more applicable
conditions contained in Article IV shall not then be satisfied, then,
subject to the terms and conditions hereof, the L/C Issuer shall, on the
requested date, issue a Letter of Credit for the account of GMH Operating
Partnership or enter into the applicable amendment, as the case may be, in each
case in accordance with the L/C Issuer’s usual and customary business practices.  Immediately upon the issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in
such Letter of Credit in an amount equal to the product of such Lender’s
Applicable Percentage times the amount of such Letter of Credit.

 

(v)           Promptly after its
delivery of any Letter of Credit or any amendment to a Letter of Credit to an
advising bank with respect thereto or to the beneficiary thereof, the L/C
Issuer will also deliver to GMH Operating Partnership and Administrative Agent
a true and complete copy of such Letter of Credit or amendment.

 

(c)           Drawings
and Reimbursements; Funding of Participations.

 

(i)            Upon receipt from
the beneficiary of any Letter of Credit of any notice of a drawing under such
Letter of Credit, the L/C Issuer shall notify GMH Operating Partnership and
Administrative Agent thereof.  Not later
than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of
Credit (each such date, an “Honor Date”), GMH Operating Partnership
shall reimburse the L/C Issuer through Administrative Agent in an amount equal
to the amount of such drawing.  If GMH
Operating Partnership fails to so reimburse the L/C Issuer by such time,
Administrative Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the
amount of such Lender’s 

 

29

 

Applicable
Percentage thereof.  In such event, GMH
Operating Partnership shall be deemed to have requested a Committed Borrowing
of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples specified in Section
2.02 for the principal amount of Base Rate Loans, but subject to the amount
of the unutilized portion of the Aggregate Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Committed Loan
Notice).  Any notice given by the L/C
Issuer or Administrative Agent pursuant to this Section 2.03(c)(i) may
be given by telephone if immediately confirmed in writing; provided that
the lack of such an immediate confirmation shall not affect the conclusiveness
or binding effect of such notice.

 

(ii)           Each Lender shall
upon any notice pursuant to Section 2.03(c)(i) make funds available to
Administrative Agent for the account of the L/C Issuer at Administrative Agent’s
Office in an amount equal to its Applicable Percentage of the Unreimbursed
Amount not later than 1:00 p.m. on the Business Day specified in such notice by
Administrative Agent, whereupon, subject to the provisions of Section
2.03(c)(iii), each Lender that so makes funds available shall be deemed to
have made a Base Rate Committed Loan to GMH Operating Partnership in such
amount.  Administrative Agent shall remit
the funds so received to the L/C Issuer.

 

(iii)          With respect to any
Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of
Base Rate Loans because the conditions set forth in Section 4.02 cannot
be satisfied or for any other reason, GMH Operating Partnership shall be deemed
to have incurred from the L/C Issuer an L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due
and payable on demand (together with interest) and shall bear interest at the
Default Rate.  In such event, each Lender’s
payment to Administrative Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(ii) shall be deemed payment in respect of its participation in such
L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03.

 

(iv)          Until each Lender
funds its Committed Loan or L/C Advance pursuant to this Section 2.03(c)
to reimburse the L/C Issuer for any amount drawn under any Letter of Credit,
interest in respect of such Lender’s Applicable Percentage of such amount shall
be solely for the account of the L/C Issuer.

 

(v)           Each Lender’s
obligation to make Committed Loans or L/C Advances to reimburse the L/C Issuer
for amounts drawn under Letters of Credit, as contemplated by this Section
2.03(c), shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the L/C Issuer, any Borrower
or any other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however,
that each Lender’s obligation to make Committed Loans pursuant to this Section
2.03(c) is subject to the conditions set forth in Section 4.02
(other than delivery by GMH Operating Partnership of a Committed Loan
Notice).  No such making of an L/C
Advance shall relieve or otherwise impair the obligation of GMH Operating 

 

30

 

Partnership
to reimburse the L/C Issuer for the amount of any payment made by the L/C
Issuer under any Letter of Credit, together with interest as provided herein.

 

(vi)          If any Lender fails
to make available to Administrative Agent for the account of the L/C Issuer any
amount required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting through
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the L/C Issuer in
accordance with banking industry rules on interbank compensation.  A certificate of the L/C Issuer submitted to
any Lender (through Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.

 

(d)           Repayment
of Participations.

 

(i)            At any time after
the L/C Issuer has made a payment under any Letter of Credit and has received
from any Lender such Lender’s L/C Advance in respect of such payment in
accordance with Section 2.03(c), if Administrative Agent receives for
the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from GMH Operating
Partnership or otherwise, including proceeds of Cash Collateral applied thereto
by Administrative Agent), Administrative Agent will distribute to such Lender
its Applicable Percentage thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s L/C
Advance was outstanding) in the same funds as those received by Administrative
Agent.

 

(ii)           If any payment
received by Administrative Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(i) is required to be returned under any of the circumstances
described in Section 10.05 (including pursuant to any settlement entered
into by the L/C Issuer in its discretion), each Lender shall pay to
Administrative Agent for the account of the L/C Issuer its Applicable
Percentage thereof on demand of Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned by such Lender, at
a rate per annum equal to the Federal Funds Rate from time to time in
effect.  The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(e)           Obligations Absolute.  The obligation of GMH Operating
Partnership to reimburse the L/C Issuer for each drawing under each Letter of
Credit and to repay each L/C Borrowing shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

 

(i)            any lack of
validity or enforceability of such Letter of Credit, this Agreement, or any
other Loan Document;

 

 

31

 

(ii)           the existence of
any claim, counterclaim, setoff, defense or other right that any Loan Party may
have at any time against any beneficiary or any transferee of such Letter of
Credit (or any Person for whom any such beneficiary or any such transferee may
be acting), the L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)          any draft, demand,
certificate or other document presented under such Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit;

 

(iv)          any payment by the
L/C Issuer under such Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such Letter of Credit to
any Person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of such
Letter of Credit, including any arising in connection with any proceeding under
any Debtor Relief Law; or

 

(v)           any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Loan Party.

 

GMH Operating Partnership
shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance
with GMH Operating Partnership’s instructions or other irregularity, GMH
Operating Partnership will immediately notify the L/C Issuer.  GMH Operating Partnership shall be
conclusively deemed to have waived any such claim against the L/C Issuer and
its correspondents unless such notice is given as aforesaid.

 

(f)            Role of L/C Issuer.  Each Lender and GMH Operating
Partnership agree that, in paying any drawing under a Letter of Credit, the L/C
Issuer shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document.  None of the L/C Issuer,
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document.  GMH Operating
Partnership hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall not,
preclude GMH Operating Partnership’s pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other 

 

32

 

agreement. 
None of the L/C Issuer, Administrative Agent, any of their respective
Related Parties nor any correspondent, participant or assignee of the L/C
Issuer shall be liable or responsible for any of the matters described in
clauses (i) through (v) of Section 2.03(e); provided, however,
that anything in such clauses to the contrary notwithstanding, GMH Operating Partnership
may have a claim against the L/C Issuer, and the L/C Issuer may be liable to
GMH Operating Partnership, to the extent, but only to the extent, of any
direct, as opposed to consequential or exemplary, damages suffered by GMH
Operating Partnership which GMH Operating Partnership proves were caused by the
L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason.

 

(g)           Cash Collateral. 
Upon the request of Administrative Agent, if, as of the Letter of Credit
Expiration Date, any L/C Obligation for any reason remains outstanding, GMH
Operating Partnership shall, in each case, immediately Cash Collateralize the
then Outstanding Amount of all L/C Obligations. 
Sections 2.05 and 8.02(c) set forth certain additional
requirements to deliver Cash Collateral hereunder.  For purposes of this Section 2.03, Section
2.05 and Section 8.02(c), “Cash
Collateralize” means to pledge and deposit with or deliver to
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to Administrative Agent and
the L/C Issuer (which documents are hereby consented to by the Lenders).  Derivatives of such term have corresponding
meanings.  GMH Operating Partnership
hereby grants to Administrative Agent, for the benefit of the L/C Issuer and
the Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.

 

(h)           Applicability of ISP and UCP.  Unless otherwise expressly agreed
by the L/C Issuer and GMH Operating Partnership when a Letter of Credit is
issued, the rules of the ISP shall apply to each Letter of Credit.

 

(i)            Letter of Credit Fees.  GMH Operating Partnership shall pay to
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate times
the daily amount available to be drawn under such Letter of Credit.  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  Letter of Credit Fees shall be (i) computed
on a quarterly basis in arrears and (ii) due and payable on the first Business
Day after the end of each March, June, September and December, commencing with
the first such date to occur after the issuance of such Letter of Credit, on
the Letter of Credit Expiration Date and thereafter on demand.  If there is any change in the Applicable Rate
during any quarter, the daily amount available to be drawn under each standby
Letter of Credit shall be computed and

 

 

33

 

multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in
effect.  Notwithstanding anything to the
contrary contained herein, upon the request of the Required Lenders, while any
Event of Default exists, all Letter of Credit Fees shall accrue at the Default
Rate.

 

(j)            Fronting Fee and Documentary and Processing Charges
Payable to L/C Issuer.  GMH Operating Partnership shall
pay directly to the L/C Issuer for its own account a fronting fee with respect to
each Letter of Credit, at the rate per annum specified in the Fee Letter,
computed on the daily amount available to be drawn under such Letter of Credit
on a quarterly basis in arrears, and due and payable on the first Business Day
after the end of each March, June, September and December, commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand.  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  In addition, GMH Operating Partnership shall
pay directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time
in effect.  Such customary fees and
standard costs and charges are due and payable on demand and are nonrefundable.

 

(k)           Conflict with Issuer Documents.  In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

 

2.04        Swing
Line Loans.

 

(a)           The Swing Line. 
Subject to the terms and conditions set forth herein, the Swing Line
Lender agrees, in reliance upon the agreements of the other Lenders set forth
in this Section 2.04, to make loans (each such loan, a “Swing Line
Loan”) to GMH Operating Partnership from time to time on any Business Day
during the Availability Period in an aggregate amount not to exceed at any time
outstanding the amount of the Swing Line Sublimit, notwithstanding the fact
that such Swing Line Loans, when aggregated with the Applicable Percentage of
the Outstanding Amount of Committed Loans and L/C Obligations of the Lender
acting as Swing Line Lender, may exceed the amount of such Lender’s Commitment;
provided, however, that after giving effect to any Swing Line
Loan, (i) the Total Oustandings shall not exceed the Aggregate Commitments,
(ii) the Total Oustandings plus all other Recourse Debt of the Companies shall
not exceed the Borrowing Base Value, and (iii) the aggregate Outstanding Amount
of the Committed Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment, and provided, further,
that GMH Operating Partnership shall not use the proceeds of any Swing Line
Loan to refinance any outstanding Swing Line Loan.  Within the foregoing limits, and subject to
the other terms and conditions hereof, GMH Operating Partnership may borrow
under this Section 2.04, prepay under Section 2.05, and reborrow
under this Section 2.04.  Each
Swing Line Loan shall be a Base Rate Loan. 
Immediately upon the making of a Swing Line Loan, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Swing Line Lender a risk participation in such Swing Line Loan in an amount
equal to the product of such Lender’s Applicable Percentage times the
amount of such Swing Line Loan.

 

 

34

 

(b)           Borrowing Procedures.  Each Swing Line Borrowing shall be made upon
GMH Operating Partnership’s irrevocable notice to the Swing Line Lender and
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and Administrative Agent not later than 1:00
p.m. on the requested borrowing date, and shall specify (i) the amount to be
borrowed, which shall be a minimum of $100,000, and (ii) the requested
borrowing date, which shall be a Business Day. 
Each such telephonic notice must be confirmed promptly by delivery to
the Swing Line Lender and Administrative Agent of a written Swing Line Loan
Notice, appropriately completed and signed by a Responsible Officer of GMH
Operating Partnership.  Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with Administrative Agent (by telephone or in
writing) that Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify Administrative Agent (by
telephone or in writing) of the contents thereof.  Unless the Swing Line Lender has received
notice (by telephone or in writing) from Administrative Agent (including at the
request of any Lender) prior to 2:00 p.m. on the date of the proposed Swing
Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line
Loan as a result of the limitations set forth in the proviso to the first
sentence of Section 2.04(a), or (B) that one or more of the applicable
conditions specified in Article IV is not then satisfied, then, subject
to the terms and conditions hereof, the Swing Line Lender will, not later than
3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make
the amount of its Swing Line Loan available to GMH Operating Partnership.

 

(c)           Refinancing
of Swing Line Loans.

 

(i)            The Swing Line Lender at any time in its sole and
absolute discretion may request, on behalf of GMH Operating Partnership (which
hereby irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Lender make a Base Rate Committed Loan in an amount equal to
such Lender’s Applicable Percentage of the amount of Swing Line Loans then
outstanding.  Such request shall be made
in writing (which written request shall be deemed to be a Committed Loan Notice
for purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02.  The Swing Line Lender shall furnish GMH
Operating Partnership with a copy of the applicable Committed Loan Notice
promptly after delivering such notice to Administrative Agent.  Each Lender shall make an amount equal to its
Applicable Percentage of the amount specified in such Committed Loan Notice
available to Administrative Agent in immediately available funds for the
account of the Swing Line Lender at Administrative Agent’s Office not later
than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Committed Loan to GMH
Operating Partnership in such amount. 
Administrative Agent shall remit the funds so received to the Swing Line
Lender.

 

(ii)           If for any reason any Swing Line Loan cannot be refinanced
by such a Committed Borrowing in accordance with Section 2.04(c)(i), the
request for Base Rate Committed Loans submitted by the Swing Line Lender as set
forth herein shall be deemed to be a request by the Swing Line Lender that each
of the Lenders fund its risk 

 

 

35

 

participation in the relevant Swing Line Loan and each Lender’s payment
to Administrative Agent for the account of the Swing Line Lender pursuant to Section
2.04(c)(i) shall be deemed payment in respect of such participation.

 

(iii)          If any Lender fails to make available to Administrative
Agent for the account of the Swing Line Lender any amount required to be paid
by such Lender pursuant to the foregoing provisions of this Section 2.04(c)
by the time specified in Section 2.04(c)(i), the Swing Line Lender shall
be entitled to recover from such Lender (acting through Administrative Agent),
on demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the Swing Line Lender at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the Swing Line Lender in accordance
with banking industry rules on interbank compensation.  A certificate of the Swing Line Lender
submitted to any Lender (through Administrative Agent) with respect to any amounts
owing under this clause (iii) shall be conclusive absent manifest error.

 

(iv)          Each Lender’s obligation to make Committed Loans or to
purchase and fund risk participations in Swing Line Loans pursuant to this Section
2.04(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the Swing Line Lender, any
Loan Party, or any other Person for any reason whatsoever, (B) the occurrence
or continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however,
that each Lender’s obligation to make Committed Loans pursuant to this Section
2.04(c) is subject to the conditions set forth in Section 4.02.  No such funding of risk participations shall
relieve or otherwise impair the obligation of GMH Operating Partnership to
repay Swing Line Loans, together with interest as provided herein.

 

(d)           Repayment
of Participations.

 

(i)            At any time after any Lender has purchased and funded a
risk participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Applicable Percentage of such payment
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s risk participation was funded) in the
same funds as those received by the Swing Line Lender.

 

(ii)           If any payment received by the Swing Line Lender in
respect of principal or interest on any Swing Line Loan is required to be
returned by the Swing Line Lender under any of the circumstances described in Section
10.05 (including pursuant to any settlement entered into by the Swing Line
Lender in its discretion), each Lender shall pay to the Swing Line Lender its
Applicable Percentage thereof on demand of Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is returned, at a
rate per annum equal to the Federal Funds Rate. 
Administrative Agent will make such demand upon the request of the Swing
Line Lender.  The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations
and the termination of this Agreement.

 

36

 

(e)           Interest for Account of Swing Line Lender.  The Swing Line Lender shall be responsible
for invoicing GMH Operating Partnership for interest on the Swing Line
Loans.  Until each Lender funds its Base
Rate Committed Loan or risk participation pursuant to this Section 2.04
to refinance such Lender’s Applicable Percentage of any Swing Line Loan,
interest in respect of such Applicable Percentage shall be solely for the
account of the Swing Line Lender.

 

(f)            Payments Directly to Swing Line Lender.  GMH Operating Partnership shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.

 

2.05        Prepayments.

(a)           Any Borrower may, upon notice to Administrative Agent, at
any time or from time to time voluntarily prepay Committed Loans in whole or in
part without premium or penalty; provided that (i) such notice must be
received by Administrative Agent not later than 11:00 a.m. (A) three (3)
Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B)
on the date of prepayment of Base Rate Committed Loans; (ii) any prepayment of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate
Committed Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding.  Each
such notice shall specify the date and amount of such prepayment and the
Type(s) of Committed Loans to be prepaid. 
Administrative Agent will promptly notify each Lender of its receipt of
each such notice, and of the amount of such Lender’s Applicable Percentage of
such prepayment.  If such notice is given
by a Borrower, such Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05.  Each such prepayment shall be applied to the
Committed Loans of the Lenders in accordance with their respective Applicable
Percentages.

 

(b)           GMH Operating Partnership may, upon notice to the Swing
Line Lender (with a copy to Administrative Agent), at any time or from time to
time, voluntarily prepay Swing Line Loans in whole or in part without premium
or penalty; provided that (i) such notice must be received by the Swing
Line Lender and Administrative Agent not later than 1:00 p.m. on the date of
the prepayment, and (ii) any such prepayment shall be in a minimum principal
amount of $100,000.  Each such notice
shall specify the date and amount of such prepayment.  If such notice is given by GMH Operating
Partnership, GMH Operating Partnership shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.

 

(c)           If for any reason the Total Outstandings at any time
exceed the Aggregate Commitments then in effect, Borrowers shall immediately
prepay Loans and/or GMH Operating Partnership shall Cash Collateralize the L/C
Obligations in an aggregate amount equal to such excess; provided, however,
that GMH Operating Partnership shall not be required to Cash

 

37

 

Collateralize the L/C Obligations pursuant to
this Section 2.05(c) unless after the prepayment in full of the Loans
the Total Outstandings exceed the Aggregate Commitments then in effect.

 

(d)           If for any reason the Total Outstandings at any time
exceed the Borrowing Base Value, the Borrowers shall immediately prepay Loans
in an amount equal to such excess.

 

Upon the termination of the
right of any Subsidiary Borrower to obtain Borrowings pursuant to Section
2.06(b), the Borrowers shall promptly prepay the entire Outstanding Amount
of all Borrowings of such Subsidiary Borrower.

 

2.06        Termination
or Reduction of Commitments.

 

(a)           GMH Operating Partnership may, upon notice to
Administrative Agent, terminate the Aggregate Commitments, or from time to time
permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by Administrative Agent not later than 11:00 a.m. five
(5) Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) GMH Operating Partnership shall
not terminate or reduce the Aggregate Commitments if, after giving effect
thereto and to any concurrent prepayments hereunder, the Total Outstandings
would exceed the Aggregate Commitments, and (iv) if, after giving effect to any
reduction of the Aggregate Commitments, the Letter of Credit Sublimit, the
Swing Line Sublimit, or the Subsidiary Borrower Sublimit exceeds the amount of
the Aggregate Commitments, such Sublimit shall be automatically reduced by the
amount of such excess.  Administrative
Agent will promptly notify the Lenders of any such notice of termination or
reduction of the Aggregate Commitments. 
Any reduction of the Aggregate Commitments shall be applied to the
Commitment of each Lender according to its Applicable Percentage.  All fees accrued until the effective date of
any termination of the Aggregate Commitments shall be paid on the effective
date of such termination.

 

(b)           Upon giving at least five (5) Business Days prior written
and irrevocable notice to Administrative Agent, GMH Operating Partnership may
terminate the right of any Subsidiary Borrower to request and receive
Borrowings under this Agreement.  Once
terminated, the ability of such Subsidiary Borrower to request and receive
Borrowings may not be reinstated.

 

2.07        Repayment
of Loans.

 

(a)           Borrowers shall repay to the Lenders on the Maturity Date
the aggregate principal amount of Committed Loans outstanding on such date.

 

(b)           GMH Operating Partnership shall repay each Swing Line Loan
on the earlier to occur of (i) the date three (3) Business Days after such Loan
is made and (ii) the Maturity Date.

 

2.08        Interest.

 

(a)           Subject to the provisions of subsection (b) below, (i)
each Eurodollar Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii)
each Base Rate Committed Loan shall bear interest on the outstanding principal
amount thereof

 

38

from the applicable borrowing date at a rate
per annum equal to the Base Rate plus the Applicable Rate; and (iii)
each Swing Line Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the
Base Rate plus the Applicable Rate.

 

(b)           (i)            If any
amount of principal of any Loan is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

 

(ii)           If any amount (other than principal of any Loan) payable
by any Borrower under any Loan Document is not paid when due (without regard to
any applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then upon the request of the Required Lenders, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(iii)          Upon the request of the Required
Lenders, while any Event of Default exists, Borrowers shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws.

 

(iv)          Accrued and unpaid interest on past
due amounts (including interest on past due interest) shall be due and payable
upon demand.

 

(c)           Interest on each Loan shall be due and payable in arrears
on each Interest Payment Date applicable thereto and at such other times as may
be specified herein.  Interest hereunder
shall be due and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under any
Debtor Relief Law.

 

2.09        Fees. 
In addition to certain fees described in subsections (i) and (j) of Section
2.03:

 

(a)           Unused Commitment Fee.  Borrowers shall pay to
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage, an unused commitment fee equal to the Applicable Unused
Fee times the actual daily amount by which the Aggregate Commitments
exceed the sum of (A) the Outstanding Amount of Committed Loans (plus,
solely with respect to the Swing Line Lender, the Outstanding Amount of the
Swing Line Loan) and (B) the Outstanding Amount of L/C Obligations. The
commitment fee shall accrue at all times during the Availability Period,
including at any time during which one or more of the conditions in Article
IV is not met, and shall be due and payable quarterly in arrears on the
last Business Day of each March, June, September and December, commencing with
the first such date to occur after the Closing Date, and on the Maturity
Date.  The commitment fee shall be
calculated quarterly in arrears, and if there is any change in the Applicable
Unused Fee during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Unused Fee separately for each period during such
quarter that such Applicable Unused Fee was in effect.

 

39

 

(b)           Other Fees.  (i) Borrowers
shall pay to the Arranger and Administrative Agent for their own respective
accounts fees in the amounts and at the times specified in the Fee Letter.  Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.

 

(ii)           Borrowers shall pay to the Lenders such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified.  Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.

 

2.10        Computation
of Interest and Fees.  All
computations of interest for Base Rate Loans when the Base Rate is determined
by Bank of America’s “prime rate” shall be made on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on
the basis of a 365-day year).  Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid, provided that any Loan that is repaid on the same day on
which it is made shall, subject to Section 2.12(a), bear interest for
one day.  Each determination by
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.

 

2.11        Evidence
of Debt.

 

(a)           The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
Administrative Agent in the ordinary course of business.  The accounts or records maintained by
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to Borrowers and the
interest and payments thereon.  Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of any Borrower hereunder to pay any amount
owing with respect to the Obligations. 
In the event of any conflict between the accounts and records maintained
by any Lender and the accounts and records of Administrative Agent in respect
of such matters, the accounts and records of Administrative Agent shall control
in the absence of manifest error.  Upon
the request of any Lender made through Administrative Agent, Borrowers shall
execute and deliver to such Lender (through Administrative Agent) a Note, which
shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.

 

(b)           In addition to the accounts and records referred to in
subsection (a), each Lender and Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit and Swing Line
Loans.  In the event of any conflict
between the accounts and records maintained by Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of Administrative Agent shall control in the absence of manifest error.

 

40

 

2.12        Payments
Generally; Administrative Agent’s Clawback.

 

(a)           General.  All
payments to be made by any Borrower shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided
herein, all payments by each Borrower hereunder shall be made to Administrative
Agent, for the account of the respective Lenders to which such payment is owed,
at Administrative Agent’s Office in Dollars and in immediately available funds
not later than 2:00 p.m. on the date specified herein.  Administrative Agent will promptly distribute
to each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender’s Lending Office.  All payments
received by Administrative Agent after 2:00 p.m. shall be deemed received on
the next succeeding Business Day and any applicable interest or fee shall
continue to accrue.  If any payment to be
made by any Borrower shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected in computing interest or fees, as the case may be.

 

(b)           (i)  Funding by
Lenders; Presumption by Administrative Agent.  Unless Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Committed
Borrowing that such Lender will not make available to Administrative Agent such
Lender’s share of such Committed Borrowing, Administrative Agent may assume
that such Lender has made such share available on such date in accordance with Section
2.02 and may, in reliance upon such assumption, make available to the
requesting Borrower a corresponding amount. 
In such event, if a Lender has not in fact made its share of the
applicable Committed Borrowing available to Administrative Agent, then the
applicable Lender and the requesting Borrower severally agree to pay to
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the requesting Borrower to
but excluding the date of payment to Administrative Agent, at (A) in the case
of a payment to be made by such Lender, the greater of the Federal Funds Rate
and a rate determined by Administrative Agent in accordance with banking
industry rules on interbank compensation and (B) in the case of a payment to be
made by the requesting Borrower, the interest rate applicable to Base Rate
Loans.  If the requesting Borrower and
such Lender shall pay such interest to Administrative Agent for the same or an
overlapping period, Administrative Agent shall promptly remit to the requesting
Borrower the amount of such interest paid by such Borrower for such
period.  If such Lender pays its share of
the applicable Committed Borrowing to Administrative Agent, then the amount so
paid shall constitute such Lender’s Committed Loan included in such Committed
Borrowing.  Any payment by the requesting
Borrower shall be without prejudice to any claim such Borrower may have against
a Lender that shall have failed to make such payment to Administrative Agent.

 

(ii)           Payments by Borrowers; Presumptions by Administrative
Agent.  Unless Administrative Agent
shall have received notice from Borrowers prior to the date on which any
payment is due to Administrative Agent for the account of the Lenders or the
L/C Issuer hereunder that Borrowers will not make such payment, Administrative
Agent may assume that Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or the L/C Issuer, as the case may be, the amount due.  In such event, if Borrowers have not in fact
made such payment, then each of the 

 

41

 

Lenders or the L/C Issuer, as the case may
be, severally agrees to repay to Administrative Agent forthwith on demand the amount
so distributed to such Lender or the L/C Issuer, in immediately available funds
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to Administrative Agent,
at the greater of the Federal Funds Rate and a rate determined by
Administrative Agent in accordance with banking industry rules on interbank
compensation.

 

A notice of Administrative
Agent to any Lender or Borrowers with respect to any amount owing under this subsection
(b) shall be conclusive, absent manifest error.

 

(c)           Failure to Satisfy Conditions Precedent.  If any Lender makes available to
Administrative Agent funds for any Loan to be made by such Lender as provided
in the foregoing provisions of this Article II, and such funds are not
made available to Borrowers by Administrative Agent because the conditions to
the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, Administrative Agent
shall return such funds (in like funds as received from such Lender) to such
Lender, without interest.

 

(d)           Obligations of Lenders Several.  The obligations of the Lenders hereunder to
make Committed Loans, to fund participations in Letters of Credit and Swing
Line Loans and to make payments pursuant to Section 10.04(c) are several
and not joint.  The failure of any Lender
to make any Committed Loan, to fund any such participation or to make any
payment under Section 10.04(c) on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so
make its Committed Loan, to purchase its participation or to make its payment
under Section 10.04(c).

 

(e)           Funding Source. 
Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

 

2.13        Sharing
of Payments by Lenders.  If any Lender
shall, by exercising any right of setoff or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of the Committed
Loans made by it, or the participations in L/C Obligations or in Swing Line
Loans held by it resulting in such Lender’s receiving payment of a proportion
of the aggregate amount of such Committed Loans or participations and accrued
interest thereon greater than its pro  rata share thereof as
provided herein, then the Lender receiving such greater proportion shall (a)
notify Administrative Agent of such fact, and (b) purchase (for cash at face
value) participations in the Committed Loans and subparticipations in L/C
Obligations and Swing Line Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Committed Loans and
other amounts owing them, provided that:

 

(i)            if any such participations or
subparticipations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations or 

 

42

 

subparticipations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and

 

(ii)           the provisions of this Section
shall not be construed to apply to (x) any payment made by any Borrower
pursuant to and in accordance with the express terms of this Agreement or (y)
any payment obtained by a Lender as consideration for the assignment of or sale
of a participation in any of its Committed Loans or subparticipations in L/C Obligations
or Swing Line Loans to any assignee or participant, other than to any Company
(as to which the provisions of this Section shall apply).

 

Each Loan Party consents to
the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Loan Party in the amount of such participation.

 

2.14        Extension
of Maturity Date.

 

(a)           Not earlier than ninety (90) days
prior to, nor later than sixty (60) days prior to, the Maturity Date, GMH
Operating Partnership may, upon notice to Administrative Agent (which shall
promptly notify the Lenders), request a one-year extension of the Maturity
Date.

 

(b)           If so extended, the Maturity Date
shall be extended to November ____, 2008, effective as of the Maturity Date
(the “Extension Effective Date”). 
Administrative Agent and GMH Operating Partnership shall promptly
confirm to the Lenders such extension and the Extension Effective Date.  As a condition precedent to such extension,
(i) each Borrower and each Guarantor shall deliver to Administrative Agent a
certificate of each Borrower and each Guarantor dated as of the Extension
Effective Date (in sufficient copies for each Lender) signed by a Responsible
Officer of each Borrower and each Guarantor (A) providing evidence satisfactory
to Administrative Agent that each Borrower and each Guarantor has taken all
necessary action to authorize such extension and (B) in the case of the Trust
and each Borrower, certifying that, before and after giving effect to such
extension, (x) the representations and warranties contained in Article V and
the other Loan Documents are true and correct on and as of the Extension
Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and except that for purposes of this Section 2.14,
the representations and warranties contained in subsection (a) of Section
5.05 shall be deemed to refer to the most recent statements furnished
pursuant to subsections (a) and (b), respectively, of Section
6.01, and (y) no Default or Event of Default exists before or after giving
effect to such extension, and (ii) Borrowers shall have paid to each Lender an
extension fee in an amount equal to twenty-five basis points (0.25%) times such
Lender’s Commitment.

 

(g)           Conflicting Provisions.  This Section shall supersede any
provisions in Section 2.13 or 10.01 to the contrary.

 

43

 

2.15        Increase
in Commitments.

 

(a)           The Lenders on the Closing
Date shall be the Lenders set forth on Schedule 2.01.

 

(b)           At any time after the Closing Date through November      ,
2007, but in no event more than three (3) times, Administrative Agent may, from
time to time at the request of Borrower, increase the Aggregate Commitments by
(i) admitting additional Lenders hereunder (each a “Subsequent Lender”),
or (ii) increasing the Commitment of any Lender (each an “Increasing
Lender”), subject to the following conditions:

 

(A)          each Subsequent Lender is an Eligible
Assignee;

 

(B)           Borrower executes (1) a new Note
payable to the order of a Subsequent Lender, if requested, (2) a
replacement Note payable to the order of an Increasing Lender if such
Increasing Lender previously received a Note, or (3) a new Note payable to
the order of an Increasing Lender if such Increasing Lender never received a
Note, if requested;

 

(C)           each Subsequent Lender executes and
delivers to Administrative Agent a signature page to this Agreement;

 

(D)          each Increasing Lender acknowledges in
writing to Administrative Agent and Borrower the increase in its Commitment;

 

(E)           after giving effect to the admission
of any Subsequent Lender or the increase in the Commitment of any Increasing
Lender, the Aggregate Commitment does not exceed $250,000,000;

 

(F)           the increase in the Aggregate
Commitment shall be in a minimum amount of $5,000,000;

 

(G)           no admission of any Subsequent Lender
shall increase the Commitment of any existing Lender without the written
consent of such Lender;

 

(H)          no Default or Event of Default exists;

 

(I)            the amount of all increases in the
Aggregate Commitments pursuant to this Section 2.14 shall not
exceed $100,000,000 in the aggregate; and

 

(J)            Borrower shall have paid to
Administrative Agent and Arranger all fees payable in connection with the increase
in the Aggregate Commitments.

 

After the admission of any
Subsequent Lender or the increase in the Commitment of any Increasing Lender,
Administrative Agent shall promptly provide to each Lender and to Borrower a
new Schedule 2.01 to this Agreement. 
In the event that there are any Borrowings outstanding after giving
effect to an increase in the Aggregate Commitments pursuant to this Section 2.14,
upon notice from Administrative Agent to each Lender, the amount of such
Borrowings owing to

 

44

 

 

each Lender shall be appropriately adjusted
to reflect the new Pro Rata Share of Lenders, and Borrower shall pay any
amounts required pursuant to Section 3.05.

 

(f)            Conflicting Provisions.  This Section shall supersede any
provisions in Sections 2.13 or 10.01 to the contrary.

 

2.16        Subsidiary
Borrowers.  

 

GMH Operating Partnership may, upon at least
fifteen (15) Business Days (or such lesser period agreed to by Administrative
Agent) prior written notice to Administrative Agent, request that any Taxable
REIT Subsidiary of the Trust (in each case reasonably acceptable to
Administrative Agent) become a Subsidiary Borrower by delivering to
Administrative Agent (a) a Borrower Accession Agreement duly executed by GMH
Operating Partnership, all other Borrowers, and such Subsidiary and (b) the
following documents relating to each such Subsidiary: (i) an Opinion each such
Subsidiary’s counsel acceptable to Administrative Agent; (ii) an Officer’s
Certificate certifying (A) the Organization Documents of each such Subsidiary,
(B) resolutions of each such Subsidiary’s Board of Directors approving and
authorizing the execution, delivery, and performance of this Agreement and the
other Loan Documents, certified as being in full force and effect without
modification or amendment, and (C) signatures and incumbency of officers of
each such Subsidiary; (iii) certificates of existence and good standing for
each such Subsidiary issued by its state of organization; and (iv) a copy of
the certificate of incorporation, declaration of trust, or other similar
Organization Documents of each such Subsidiary and all amendments thereto,
certified by its state of incorporation, formation, or organization. Upon
receipt by Administrative Agent of the items referenced in this Section 2.16,
each in form and substance acceptable to Administrative Agent and its counsel,
such Subsidiary shall become a Subsidiary Borrower and assume all the rights,
benefits, and obligations of a Subsidiary Borrower unless on such date a
Default or Event of Default exists and is continuing or would occur as a result
of such Subsidiary becoming a Subsidiary Borrower.

 

2.17        Guaranties.

 

Pursuant to the Trust
Guaranty, the Trust shall unconditionally guarantee in favor of Administrative
Agent and Lenders the full payment and performance of the Obligations.  Pursuant to the Subsidiary Guaranty or an
addendum thereto in the form attached to the Subsidiary Guaranty, the Trust and
Borrowers shall cause each Company that is a Material Subsidiary to
unconditionally guarantee in favor of Administrative Agent and Lenders the full
payment and performance of the Obligations, and GMH Operating Partnership shall
unconditionally guarantee in favor of Administrative Agent and Lenders the full
payment and performance of the Obligations of the Subsidiary Borrowers.

 

ARTICLE III.

TAXES,
YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.

 

(a)           Payments Free of Taxes.  Any and all payments by or on account of any
obligation of any Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, 

 

45

 

provided that if any
Borrower shall be required by applicable law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make such deductions and (iii) such Borrower
shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

(b)           Payment of Other Taxes by
Borrowers.  Without limiting the
provisions of subsection (a) above, Borrowers shall timely pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.

 

(c)           Indemnification by Borrowers.  The Trust and each Borrower shall indemnify
Administrative Agent, each Lender and the L/C Issuer, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by Administrative
Agent, such Lender or the L/C Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment
or liability delivered to the Trust and Borrowers by a Lender or the L/C Issuer
(with a copy to Administrative Agent), or by Administrative Agent on its own
behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent
manifest error.

 

(d)           Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by Borrower to a Governmental Authority, the
Trust and Borrowers shall deliver to Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to Administrative Agent.

 

(e)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Trust and any Borrower is resident for tax purposes,
or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Trust and
Borrowers (with a copy to Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Trust and Borrowers
or Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the
Trust and Borrowers or Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Trust and Borrowers
or Administrative Agent as will enable the Trust and Borrowers or
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

 

Without
limiting the generality of the foregoing, in the event that the Trust or any
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to 

 

46

 

the
Trust, Borrowers, and Administrative Agent (in such number of copies as shall
be requested by the recipient) on or prior to the date on which such Foreign
Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the request of the Trust and Borrowers or Administrative Agent, but only
if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

 

(i)            duly completed
copies of Internal Revenue Service Form W-8BEN claiming eligibility for
benefits of an income tax treaty to which the United States is a party,

 

(ii)           duly completed
copies of Internal Revenue Service Form W-8ECI,

 

(iii)          in the case of a
Foreign Lender claiming the benefits of the exemption for portfolio interest
under section 881(c) of the Code, (x) a certificate to the effect that such
Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A)
of the Code, (B) a “10 percent shareholder” of the Trust or any Borrower within
the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in section 881(c)(3)(C) of the Code and (y) duly
completed copies of  Internal Revenue
Service Form W-8BEN, or

 

(iv)          any other form
prescribed by applicable law as a basis for claiming exemption from or a
reduction in United States Federal withholding tax duly completed together with
such supplementary documentation as may be prescribed by applicable law to
permit the Trust or any Borrower to determine the withholding or deduction
required to be made.

 

(f)            Treatment of Certain Refunds.  If Administrative Agent, any Lender or the
L/C Issuer determines, in its sole discretion, that it has received a refund of
any Taxes or Other Taxes as to which it has been indemnified by Borrowers or
with respect to which Borrowers have paid additional amounts pursuant to this Section,
it shall pay to Borrowers an amount equal to such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by Borrowers
under this Section with respect to the Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses of Administrative Agent,
such Lender or the L/C Issuer, as the case may be, and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund), provided that Borrowers, upon the request of
Administrative Agent, such Lender or the L/C Issuer, agree to repay the amount
paid over to Borrowers (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to Administrative Agent, such Lender or
the L/C Issuer in the event Administrative Agent, such Lender or the L/C Issuer
is required to repay such refund to such Governmental Authority.  This subsection shall not be construed to require
Administrative Agent, any Lender or the L/C Issuer to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to Borrowers or any other Person.

 

3.02        Illegality. 
If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or
to determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed 

 

47

 

material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to Borrowers through
Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar
Rate Loans shall be suspended until such Lender notifies Administrative Agent
and Borrowers that the circumstances giving rise to such determination no
longer exist.  Upon receipt of such
notice, Borrowers shall, upon demand from such Lender (with a copy to
Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion,
Borrowers shall also pay accrued interest on the amount so prepaid or
converted.

 

3.03        Inability
to Determine Rates.  If the Required
Lenders determine that for any reason in connection with any request for a Eurodollar
Rate Loan or a conversion to or continuation thereof that (a) Dollar
deposits are not being offered to banks in the London interbank eurodollar
market for the applicable amount and Interest Period of such Eurodollar Rate
Loan, (b) adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or (c) the Eurodollar Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan,
Administrative Agent will promptly so notify Borrowers and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain Eurodollar Rate Loans shall be suspended until Administrative
Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, Borrowers may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Committed Borrowing of Base Rate Loans in the
amount specified therein.

 

3.04        Increased
Costs; Reserves on Eurodollar Rate Loans.

 

(a)           Increased
Costs Generally. If any Change in Law shall:

 

(i)            impose, modify or
deem applicable any reserve, special deposit, compulsory loan, insurance charge
or similar requirement against assets of, deposits with or for the account of,
or credit extended or participated in by, any Lender (except any reserve
requirement contemplated by Section 3.04(e)) or the L/C Issuer;

 

(ii)           subject any Lender
or the L/C Issuer to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any participation in a Letter of Credit or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes or
Other Taxes covered by Section 3.01 and the imposition of, or any change
in the rate of, any Excluded Tax payable by such Lender or the L/C Issuer); or

 

48

 

(iii)          impose on any
Lender or the L/C Issuer or the London interbank market any other condition,
cost or expense affecting this Agreement or Eurodollar Loans made by such
Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall
be to increase the cost to such Lender of making or maintaining any Eurodollar
Loan (or of maintaining its obligation to make any such Loan), or to increase
the cost to such Lender or the L/C Issuer of participating in, issuing or
maintaining any Letter of Credit (or of maintaining its obligation to
participate in or to issue any Letter of Credit), or to reduce the amount of
any sum received or receivable by such Lender or the L/C Issuer hereunder
(whether of principal, interest or any other amount) then, upon request of such
Lender or the L/C Issuer, Borrowers will pay to such Lender or the L/C Issuer,
as the case may be, such additional amount or amounts as will compensate such
Lender or the L/C Issuer, as the case may be, for such additional costs
incurred or reduction suffered.

 

(b)           Capital Requirements.  If any Lender or the L/C Issuer determines
that any Change in Law affecting such Lender or the L/C Issuer or any Lending
Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if
any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the L/C Issuer’s capital or on the
capital of such Lender’s or the L/C Issuer’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the L/C Issuer, to a level below that which such Lender or
the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s
holding company with respect to capital adequacy), then from time to time
Borrower will pay to such Lender or the L/C Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer
or such Lender’s or the L/C Issuer’s holding company for any such reduction
suffered.

 

(c)           Certificates for Reimbursement.  A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the
L/C Issuer or its holding company, as the case may be, as specified in subsection
(a) or (b) of this Section and delivered to Borrowers shall
be conclusive absent manifest error.  The
Borrowers shall pay such Lender or the L/C Issuer, as the case may be, the
amount shown as due on any such certificate within ten (10) days after receipt
thereof.

 

(d)           Delay in Requests. 
Failure or delay on the part of any Lender or the L/C Issuer to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such
compensation, provided that Borrowers shall not be required to
compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered
more than nine (9) months prior to the date that such Lender or the L/C Issuer,
as the case may be, notifies Borrowers of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the L/C Issuer’s
intention to claim compensation therefor (except that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).

 

49

 

(e)           Reserves on Eurodollar Rate Loans.  The Borrowers shall pay to each Lender, as
long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on
the unpaid principal amount of each Eurodollar Rate Loan equal to the actual
costs of such reserves allocated to such Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive), which
shall be due and payable on each date on which interest is payable on such
Loan, provided Borrowers shall have received at least ten (10) days’
prior notice (with a copy to Administrative Agent) of such additional interest
from such Lender.  If a Lender fails to
give notice ten (10) days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable ten (10) days from receipt of
such notice.

 

3.05        Compensation for Losses.  Upon demand of
any Lender (with a copy to Administrative Agent) from time to time, Borrowers
shall promptly compensate such Lender for and hold such Lender harmless from
any loss, cost or expense incurred by it as a result of:

 

(a)           any continuation, conversion, payment or prepayment of any
Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise);

 

(b)           any failure by any Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, continue or convert
any Loan other than a Base Rate Loan on the date or in the amount notified by
such Borrower; or

 

(c)           any assignment of a Eurodollar Rate Loan on a day other
than the last day of the Interest Period therefor as a result of a request by
any Borrower pursuant to Section 10.13;

 

including any loss
of anticipated profits and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.  The
Borrowers shall also pay any customary administrative fees charged by such Lender
in connection with the foregoing.

 

For purposes of calculating amounts payable by
Borrowers to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.

 

3.06        Mitigation Obligations; Replacement of
Lenders.

 

(a)           Designation of a
Different Lending Office.  If any
Lender requests compensation under Section 3.04, or Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, or if
any Lender gives a notice pursuant to Section 3.02, then such Lender
shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts

 

50

 

payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice
pursuant to Section 3.02, as applicable, and (ii) in each case, would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. 
The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

(b)           Replacement of Lenders.  If any Lender requests compensation under Section
3.04, or if Borrowers are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section
3.01, Borrowers may replace such Lender in accordance with Section 10.13.

 

3.07        Survival. Each  Borrower’s obligations under this Article
III shall survive termination of the Aggregate Commitments and repayment of
all other Obligations hereunder.

 

ARTICLE IV.        

CONDITIONS
PRECEDENT TO CREDIT EXTENSIONS

 

4.01        Conditions
of Initial Credit Extension.  The obligation
of the L/C Issuer and each Lender to make its initial Credit Extension
hereunder is subject to satisfaction of the following conditions precedent:

 

(a)           Administrative Agent’s receipt of the following, each of
which shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to Administrative Agent and each of
the Lenders:

 

(i)            executed
counterparts of this Agreement and each Guaranty, sufficient in number for
distribution to Administrative Agent, each Lender and GMH Operating
Partnership;

 

(ii)           a Note executed by
each Borrower requesting an initial Credit Extension in favor of each Lender
requesting a Note;

 

(iii)          such certificates
of resolutions or other action, incumbency certificates and/or other
certificates of Responsible Officers of each Loan Party as Administrative Agent
may require evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection with
this Agreement and the other Loan Documents to which such Loan Party is a
party;

 

(iv)          such documents and
certifications as Administrative Agent may reasonably require to evidence that
each Loan Party is duly organized or formed, and that each Borrower
and each Guarantor is validly existing, in good standing and qualified to
engage in business in each jurisdiction where its ownership, lease or operation
of properties or the conduct of its business requires such qualification,
except to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect;

 

51

 

(v)           a favorable opinion
of Morgan, Lewis & Bockius LLP, counsel to the Loan Parties, addressed to
Administrative Agent and each Lender, as to the matters set forth in Exhibit
G and such other matters concerning the Loan Parties and the Loan Documents
as the Required Lenders may reasonably request;

 

(vi)          a certificate of a
Responsible Officer of each Loan Party either (A) attaching copies of all
consents, licenses and approvals required in connection with the execution,
delivery and performance by such Loan Party and the validity against such Loan
Party of the Loan Documents to which it is a party, and such consents, licenses
and approvals shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required;

 

(vii)         a certificate signed
by a Responsible Officer of GMH Operating Partnership and the Trust certifying
(A) that the conditions specified in Sections 4.02(a) and (b)
have been satisfied, (B) that there has been no event or circumstance since the
date of the Audited Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect; and (C) a calculation of the  Leverage Ratio as of the last day of the
fiscal quarter of the Companies most recently ended prior to the Closing Date;

 

(viii)        a duly completed
Unencumbered Property Report as of the last day of the fiscal quarter of the
Companies most recently ended prior to the Closing Date;

 

(ix)           evidence that all
insurance required to be maintained pursuant to the Loan Documents has been
obtained and is in effect; and

 

(x)            such other
assurances, certificates, documents, consents or opinions as Administrative
Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders reasonably
may require.

 

(b)           Any fees required to be paid on or before the Closing Date
shall have been paid.

 

(c)           Unless waived by Administrative Agent, Borrowers shall
have paid all fees, charges and disbursements of counsel to Administrative
Agent to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of such fees, charges and disbursements as shall constitute
its reasonable estimate of such fees, charges and disbursements incurred or to
be incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between Borrowers
and Administrative Agent).

 

(d)           The Trust shall have completed its initial public offering
and shall have received at least $400,000,000 in gross cash equity.

 

Without limiting the
generality of the provisions of Section 9.04, for purposes of
determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Administrative Agent shall have received notice
from such Lender prior to the proposed Closing Date specifying its objection
thereto.

 

52

 

4.02        Conditions
to all Credit Extensions.  The obligation
of each Lender to honor any Request for Credit Extension (other than a
Committed Loan Notice requesting only a conversion of Committed Loans to the
other Type, or a continuation of Eurodollar Rate Loans) is subject to the
following conditions precedent:

 

(a)           The representations and warranties of the Trust and Borrowers
and each other Loan Party contained in Article V or any other Loan
Document, or which are contained in any document furnished at any time under or
in connection herewith or therewith, shall be true and correct on and as of the
date of such Credit Extension, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they shall
be true and correct as of such earlier date, and except that for purposes of
this Section 4.02, the representations and warranties contained in subsections
(a) and (b) of Section 5.05 shall be deemed to refer to the
most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01.

 

(b)           No Default shall exist, or would result from such proposed
Credit Extension or from the application of the proceeds thereof.

 

(c)           Administrative Agent and, if applicable, the L/C Issuer or
the Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.

 

Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurodollar Rate Loans) submitted by Borrower shall be deemed to
be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension.

 

ARTICLE V.

REPRESENTATIONS
AND WARRANTIES

 

The
Trust and each Borrower represents and warrants to Administrative Agent and the
Lenders that:

 

5.01        Existence,
Qualification and Power; Compliance with Laws. 
Each Loan Party (a) is duly organized or formed, validly existing and
in good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own its
assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i), (c)
or (d), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

5.02        Authorization;
No Contravention.  The execution,
delivery and performance by each Loan Party of each Loan Document to which such
Person is party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a)

 

53

 

contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is
subject; or (c) violate any Law.  Each
Loan Party is in compliance with all Contractual Obligations referred to in
clause (b)(i), except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect.

 

5.03        Governmental
Authorization; Other Consents.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.

 

5.04        Binding
Effect.  This Agreement
has been, and each other Loan Document, when delivered hereunder, will have
been, duly executed and delivered by each Loan Party that is party
thereto.  This Agreement constitutes, and
each other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.

 

5.05        Financial
Statements; No Material Adverse Effect.

 

(a)           The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein; and (ii) fairly present
the financial condition of the Companies as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein.

 

(b)           The unaudited consolidated and consolidating balance sheet
of the Companies dated                ,
and the related consolidated and consolidating statements
of income or operations, shareholders’ equity and cash flows for the fiscal
quarter ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and (ii) fairly present the financial condition of the
Companies as of the date thereof and their results of operations for the period
covered thereby, subject, in the case of clauses (i) and (ii), to the absence
of footnotes and to normal year-end audit adjustments.

 

(c)           Since the date of the Audited Financial Statements, there
has been no event or circumstance, either individually or in the aggregate,
that has had or could reasonably be expected to have a Material Adverse Effect.

 

5.06        Litigation. 
There are no actions, suits, proceedings, claims or disputes pending
or, to the knowledge of the Trust and Borrowers after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against any Company or against any of
their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated

 

54

 

hereby, or (b) either individually or in the aggregate, if determined
adversely, could reasonably be expected to have a Material Adverse Effect.

 

5.07        No
Default.  No Company is
in default under or with respect to any Contractual Obligation that could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.  No Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.

 

5.08        Ownership
of Property; Liens.  Each Company
has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
its business, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.  The property of the Companies is subject to
no Liens, other than Liens permitted by Section 7.01.

 

5.09        Environmental
Compliance.  The Companies
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility
for violation of any Environmental Law on their respective businesses,
operations and properties, and as a result thereof Borrower has reasonably
concluded that such Environmental Laws and claims could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

 

5.10        Insurance. 
The properties of the Companies are insured with financially sound and
reputable insurance companies not Affiliates of any Company, in such amounts,
with such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties in
localities where the Companies operate.

 

5.11        Taxes. 
The Companies have filed all Federal, state and other material tax
returns and reports required to be filed, and have paid all Federal, state and
other material taxes, assessments, fees and other governmental charges levied
or imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP.  There
is no proposed tax assessment against any Company that would, if made, have a
Material Adverse Effect.  Neither any
Loan Party nor any Subsidiary thereof is party to any tax sharing
agreement.  The Trust qualifies as a
REIT.

 

5.12        ERISA
Compliance.

 

(a)           Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other Federal or state
Laws.  Each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS or an application for such a letter is currently being
processed by the IRS with respect thereto and, to the best knowledge of the
Trust and each Borrower, nothing has occurred which would prevent, or cause the
loss of, such qualification.  Each
Company and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of
the Code has been made with respect to any Plan.

 

55

 

                (b)           There are no pending or, to the best
knowledge of the Trust and each Borrower, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan
that could reasonably be expected to have a Material Adverse Effect. There has
been no prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan that has resulted or could reasonably be
expected to result in a Material Adverse Effect.

                (c)           (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) no
Company nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) no
Company nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

                (d)           The assets of each Borrower are not “plan assets” as
defined in 29 C.F.R. § 2510.3 101(a)(1) (or any successor regulation) of any
Pension Plan.

                5.13        Subsidiaries; Equity Interests. The Trust and GMH
Operating Partnership have no Subsidiaries other than those specifically
disclosed in Part (a) of Schedule 5.13, and all of the outstanding
Equity Interests in such Subsidiaries have been validly issued, are fully paid
and nonassessable and are owned by a Loan Party in the amounts specified on
Part (a) of Schedule 5.13 free and clear of all Liens. The Trust
and GMH Operating Partnership have no equity investments in any other
corporation or entity other than those specifically disclosed in Part(b) of Schedule 5.13.

                5.14        Margin Regulations; Investment Company Act; Public Utility
Holding Company Act.

                (a)           Neither the Trust or any Borrower is engaged and will not
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock.

                (b)           Neither the Trust, any Borrower, any Person Controlling
such Borrower, or any Subsidiary of such Borrower (i) is a “holding company,”
or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company,” within the
meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is
required to be registered as an “investment company” under the Investment
Company Act of 1940.

            5.15        Disclosure.
The Trust and each
Borrower have disclosed to Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or

 

56

 

on behalf of any Loan Party
to Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered
hereunder or under any other Loan Document (in each case, as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Trust and each Borrower represents only that such information
was prepared in good faith based upon assumptions believed to be reasonable at
the time.

            5.16        Compliance with Laws. Each of the Companies
is in compliance in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

            5.17        Intellectual Property;
Licenses, Etc. Each of the Loan Parties own,
or possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, “IP Rights”) that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person that could reasonably be expected to have a
Material Adverse Effect. To the best knowledge of GMH Operating Partnership, no
slogan or other advertising device, product, process, method, substance, part
or other material now employed, or now contemplated to be employed, by any Loan
Party infringes upon any rights held by any other Person that could reasonably
be expected to have a Material Adverse Effect. No claim or litigation regarding
any of the foregoing is pending or, to the best knowledge of Borrower,
threatened, which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

ARTICLE VI.

AFFIRMATIVE COVENANTS

 

                So
long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Trust and each Borrower shall, and shall
(except in the case of the covenants set forth in Sections 6.01, 6.02,
and 6.03) cause each other Company to:

 

6.01        Financial
Statements.  Deliver to Administrative Agent and each
Lender, in form and detail satisfactory to Administrative Agent and the
Required Lenders:

 

                (a)           as soon as available, but in any event within ninety (90)
days after the end of each fiscal year of the Trust, a consolidated and
consolidating balance sheet of the Companies as at the end of such fiscal year,
and the related consolidated and consolidating statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, such
consolidated statements to be audited and accompanied by a

 

57

 

report
and opinion of an independent certified public accountant of nationally
recognized standing reasonably acceptable to the Required Lenders, which report
and opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any “going concern” or like qualification
or exception or any qualification or exception as to the scope of such audit
and such consolidating statements to be certified by a Responsible Officer of
the Trust to the effect that such statements are fairly stated in all material
respects when considered in relation to the consolidated financial statements
of the Companies; and

                (b)           as
soon as available, but in any event within forty-five (45) days after the end
of each of the first three (3) fiscal quarters of each fiscal year of the
Trust, a consolidated and consolidating balance sheet of the Companies as at
the end of such fiscal quarter, and the related consolidated and consolidating
statements of income or operations, shareholders’ equity and cash flows for
such fiscal quarter and for the portion of the Trust’s fiscal year then ended,
setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, such
consolidated statements to be certified by a Responsible Officer of the Trust
as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Companies in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes
and such consolidating statements to be certified by a Responsible Officer of
the Trust to the effect that such statements are fairly stated in all material
respects when considered in relation to the consolidated financial statements
of the Companies.

As to any information
contained in materials furnished pursuant to Section 6.02, the Trust and
each Borrower shall not be separately required to furnish such information
under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Trust and each Borrower to furnish the
information and materials described in clauses (a) and (b) above
at the times specified therein.

            6.02        Certificates; Other Information. Deliver to Administrative Agent and each Lender, in form
and detail satisfactory to Administrative Agent and the Required Lenders:

                (a)           concurrently with the delivery of the financial statements
referred to in Section 6.01(a), a certificate of its independent
certified public accountants certifying such financial statements and stating
that in making the examination necessary therefor no knowledge was obtained of
any Default under the financial covenants set forth herein or, if any such
Default shall exist, stating the nature and status of such event;

                (b)           concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b)  (commencing with the
delivery of the financial statements for the fiscal quarter ended December 31,
2004), (i) a duly completed Compliance Certificate
and (ii) an Unencumbered Property report, each signed by a Responsible Officer
of the Trust;

                (c)           promptly after any request by Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of the Trust by independent accountants in connection
with the accounts or books of the Companies, or any audit of any of them;

 

58

 

                (d)           promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or communication
sent to the stockholders of the Trust or any Borrower, and copies of all
annual, regular, periodic and special reports and registration statements which
the Trust or any Borrower may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise
required to be delivered to Administrative Agent pursuant hereto; and

                (e)           promptly, such additional information regarding the
business, financial or corporate affairs of the Companies, or compliance with
the terms of the Loan Documents, as Administrative Agent or any Lender may from
time to time reasonably request.

                Documents required to be
delivered pursuant to Section 6.01(a) or (b) or Section
6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Trust posts such documents, or provides a link thereto on the Trust’s website
on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Trust’s behalf on an Internet or
intranet website, if any, to which each Lender and Administrative Agent have
access (whether a commercial, third-party website or whether sponsored by
Administrative Agent); provided that: (i) the Trust shall deliver paper
copies of such documents to Administrative Agent or any Lender that requests
the Trust to deliver such paper copies until a written request to cease
delivering paper copies is given by Administrative Agent or such Lender and
(ii) the Trust shall notify Administrative Agent and each Lender (by telecopier
or electronic mail) of the posting of any such documents and provide to
Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. Notwithstanding anything contained herein, in every
instance the Trust shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to Administrative Agent. Except
for such Compliance Certificates, Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Trust with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

                The Trust and each Borrower
hereby acknowledge that (a) Administrative Agent and/or the Arranger will make
available to the Lenders and the L/C Issuer materials and/or information
provided by or on behalf of the Trust and Borrowers hereunder (collectively, “Borrower
Materials”) by posting Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders
that do not wish to receive material non-public information with respect to the
Trust or any Borrower or its securities) (each, a “Public Lender”). The
Trust and each Borrower hereby agree that (w) all Borrower Materials that are
to be made available to Public Lenders shall be clearly and conspicuously
marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall
appear prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Trust and each Borrower shall be deemed to have authorized Administrative
Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower
Materials as either publicly available information or not material information
(although it may be sensitive and proprietary) with respect to the Trust or any
Borrower or their securities for purposes of United States Federal and state
securities laws; (y) all Borrower Materials marked “PUBLIC” are

 

59

 

permitted
to be made available through a portion of the Platform designated “Public
Investor;” and (z) Administrative Agent and the Arranger shall be entitled to
treat any Borrower Materials that are not marked “PUBLIC” as being suitable
only for posting on a portion of the Platform not designated “Public Investor.”

                6.03        Notices.
Promptly
notify Administrative Agent and each Lender:

                (a)           of the occurrence of any Default;

                (b)           of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of any
Company; (ii) any dispute, litigation, investigation, proceeding or suspension
between the any Company and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting any Company, including pursuant to any applicable Environmental Laws;

                (c)           of the occurrence of any ERISA Event; and

                (d)           of any material change in accounting policies or financial
reporting practices by any Company.

                Each notice pursuant to this Section
shall be accompanied by a statement of a Responsible Officer of the Trust
setting forth details of the occurrence referred to therein and stating what
action the Trust and each Borrower has taken and proposes to take with respect
thereto. Each notice pursuant to Section 6.03(a) shall describe with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.

                6.04        Payment of Obligations. Pay and discharge as
the same shall become due and payable, all its obligations and liabilities,
including (a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained by the Companies; (b) all
lawful claims prior to such claim becoming a Lien upon its property; and (c)
all Recourse Debt having an aggregate principal amount (including undrawn committed
or available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $5,000,000, as and when
due and payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Recourse Debt.

                6.05        Preservation of Existence,
Etc. (a)
Preserve, renew and maintain in full force and effect its legal existence and
good standing under the Laws of the jurisdiction of its organization except in
a transaction permitted by Section 7.04; (b) take all reasonable action
to maintain all rights, privileges, permits, licenses and franchises necessary
or desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation of which could reasonably
be expected to have a Material Adverse Effect.

 

60

 

6.06        Maintenance of Properties. (a) Maintain, preserve
and protect all of its material properties and equipment necessary in the
operation of its business in good working order and condition, ordinary wear
and tear excepted; (b) make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) use the standard of care
typical in the industry in the operation and maintenance of its facilities.

6.07        Maintenance
of Insurance. Maintain with
financially sound and reputable insurance companies not Affiliates of any
Company, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.

6.08        Compliance
with Laws. Comply in all
material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except
in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate
proceedings diligently conducted; or (b) the failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect.

6.09        Books
and Records. (a) Maintain proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Companies, as
the case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority
having regulatory jurisdiction over the Companies, as the case may be.

6.10        Inspection
Rights. Permit representatives
and independent contractors of Administrative Agent and each Lender to visit and
inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants, all at the expense of Borrowers and at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to any Company; provided, however,
that when an Event of Default exists Administrative Agent or any Lender (or any
of their respective representatives or independent contractors) may do any of
the foregoing at the expense of Borrowers at any time during normal business
hours and without advance notice; and provided further that, unless a
Default exists, Borrowers shall not be required reimburse each individual
Lender (excluding Administrative Agent) for such Lender’s expenses with respect
to any of the foregoing more than one (1) time in any period of twelve (12)
consecutive months.

6.11        Use
of Proceeds. Use the proceeds of
the Credit Extensions for interim financing of acquisitions of properties,
working capital, and general corporate purposes not in contravention of any Law
or of any Loan Document.

6.12        Additional
Guarantors. Notify Administrative
Agent at the time that any Person becomes a Material Subsidiary, and promptly
thereafter (and in any event within thirty (30)

 

61

 

days), cause such Person to
(a) become a Guarantor by executing and delivering to Administrative Agent a
counterpart of the Guaranty or such other document as Administrative Agent
shall deem appropriate for such purpose, and (b) deliver to Administrative
Agent documents of the types referred to in clauses (iii) and (iv) of Section
4.01(a) and favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to in clause (a)), all in form,
content and scope reasonably satisfactory to Administrative Agent.

                6.13        REIT Status.

At
all times, the Trust (including its organization and method of operations and
those of its subsidiaries) shall qualify as a REIT.

ARTICLE VII.

NEGATIVE COVENANTS

                So long as any
Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, the Trust and Borrowers shall not, nor shall they permit
any other Company to, directly or indirectly:

                7.01        Liens. Create, incur, assume
or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, other than the following:

                (a)           Liens pursuant to any Loan Document;

                (b)           Liens existing on the date hereof and listed on Schedule
7.01 and any renewals or extensions thereof, provided that (i) the
property covered thereby is not changed, (ii) the amount secured or benefited
thereby is not increased, (iii) the direct or any contingent obligor with
respect thereto is not changed, and (iv) any renewal or extension of the
obligations secured or benefited thereby is permitted by Section 7.03(b);

                (c)           Liens for taxes not yet due or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;

                (d)           carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than thirty (30) days or which are being
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person;

                (e)           pledges or deposits in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;

 

62

 

                (f)            deposits to secure the performance of bids, trade
contracts and leases (other than Indebtedness and deposits on capital leases),
statutory obligations, surety bonds (other than bonds related to judgments or
litigation), performance bonds and other obligations of a like nature incurred
in the ordinary course of business;

                (g)           easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;

                (h)           Liens securing judgments for the payment of money not
constituting an Event of Default under Section 8.01(h) or securing
appeal or other surety bonds related to such judgments;

                (i)            Liens securing Indebtedness permitted under Section
7.03(e); provided that (i) such Liens do not at any time encumber
any property other than the property financed by such Indebtedness and (ii) the
Indebtedness secured thereby does not exceed the cost or fair market value,
whichever is lower, of the property being acquired on the date of acquisition;
and

                (j)            Liens securing Indebtedness permitted under Section
7.03(g); provided that (i) each such transaction is secured by no
more than three (3) assets of the debtor under such transaction.

            7.02        Investments. (a)   Make or have any Investments except:

(i)            Investments held by a Company in the form of Cash
Equivalents;

(ii)           advances to officers, directors and employees of the
Companies in an aggregate amount not to exceed $100,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;

(iii)          Investments of (A) the Trust in GMH Operating
Partnership, and (B) GMH Operating Partnership in any of its Subsidiaries
(or any Person that, upon such Investment, becomes a Subsidiary);

(iv)          Investments in Student Housing Projects and Military
Housing Projects (subject to the limitations set forth in Section 7.02(b));
and

(v)           other Investments described, and subject to the
limitations set forth, in Section 7.02(b).

(b)           Make or have Investments in:

(i)            raw land exceeding in the aggregate ten percent (10%) of
Total Asset Value;

(ii)           Student Housing Projects and Military Housing Projects
under development or construction (“Development Projects”)
(excluding Development Projects

 

63

 

of Unconsolidated Affiliates) having actual
and budgeted costs exceeding in the aggregate twenty percent (20%) of Total
Asset Value (including the total budgeted project costs for all Developments
Projects);

(iii)          Equity Interests (as calculated per GAAP) in Unconsolidated
Affiliates exceeding in the aggregate twenty percent (20%) of Total Asset
Value;

(iv)          Other non-real estate Investments exceeding in the
aggregate ten percent (10%) of Total Asset Value;

(v)           Indebtedness secured by valid and enforceable first
priority Liens on real property exceeding in the aggregate ten percent (10%) of
Total Asset Value; and

(vi)          the Investments described in (b) (i) through (b)
(v) above exceeding in the aggregate (without duplication) thirty percent
(30%) of Total Asset Value.

                7.03        Indebtedness. Create, incur, assume
or suffer to exist any Indebtedness, except:

                (a)           Indebtedness under the Loan Documents;

                (b)           Indebtedness outstanding on the date hereof and listed on Schedule
7.03 and any refinancings, refundings, renewals or extensions thereof; provided
that the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;

                (c)           Guarantees of any Loan Party in respect of Indebtedness
otherwise permitted hereunder of any Loan Party;

                (d)           obligations (contingent or otherwise) of the Companies
existing or arising under any Swap Contract, provided that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by
such Person, and not for purposes of speculation or taking a “market view;” and
(ii) such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;

                (e)           Indebtedness in respect of capital leases, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets within
the limitations set forth in Section 7.01(i); provided, however,
that the aggregate amount of all such Indebtedness at any one time outstanding
shall not exceed $3,000,000;

                (f)            Recourse Debt (other than the Obligations) of the
Companies in an aggregate principal amount not to exceed at any time
outstanding $25,000,000; and

                (g)           Non-Recourse Debt as permitted in 7.01(j).

 

64

 

                7.04        Fundamental Changes. Merge, dissolve,
liquidate, consolidate with or into another Person, or Dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except that, so long as no Default exists or would result therefrom:

                (a)           any Subsidiary may merge with (i) any Borrower, provided
that such Borrower shall be the continuing or surviving Person, or (ii) any one
or more other Subsidiaries, provided that when any wholly-owned
Subsidiary is merging with another Subsidiary, the wholly-owned Subsidiary
shall be the continuing or surviving Person; and

                (b)           any Subsidiary may Dispose of all or substantially all of
its assets (upon voluntary liquidation or otherwise) to any Borrower or to
another Subsidiary; provided that if the transferor in such a
transaction is a wholly-owned Subsidiary, then the transferee must either be a
Borrower or a wholly-owned Subsidiary.

                7.05        Restricted Payments. Declare or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except that, so long as no Default shall have occurred and
be continuing at the time of any action described below or would result
therefrom:

                (a)           each Subsidiary may make Restricted Payments to any
Borrower, the Guarantors and any other Person that owns an Equity Interest in
such Subsidiary, ratably according to their respective holdings of the type of
Equity Interest in respect of which such Restricted Payment is being made;

                (b)           Borrowers and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or other
common Equity Interests of such Person;

                (c)           Borrowers and each Subsidiary may purchase, redeem or
otherwise acquire Equity Interests issued by it with the proceeds received from
the substantially concurrent issue of new shares of its common stock or other
common Equity Interests;

                (d)           GMH Operating Partnership, for any fiscal year of GMH
Operating Partnership, may declare and make Restricted Payments in the form of
dividends or other distributions in an amount not to exceed ninety five percent
(95%) of GMH Operating Partnership’s Funds from Operations for such fiscal year
(plus additional distributions required to be paid during such fiscal year in
order for the Trust to qualify as a REIT) so long as no Default or Event of
Default exists or would result from such Restricted Payments; and

                (e)           the Trust, for any fiscal year of the Trust, may declare
and make Restricted Payments in the form of dividends or other distributions in
an amount not to exceed ninety five percent (95%) of the Trust’s Funds from
Operations for such fiscal year (plus additional distributions required to be
paid during such fiscal year in order for the Trust to qualify as a REIT) so
long as no Default or Event of Default exists or would result from such
Restricted Payments

 

65

 

 

7.06        Change
in Nature of Business.  Engage in any
material line of business substantially different from those lines of business
conducted by the Companies on the date hereof or any business substantially
related or incidental thereto.

 

7.07        Transactions
with Affiliates.  Enter into any
transaction of any kind with any Affiliate of any Company, whether or not in
the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to such Company as would be obtainable by such
Company at the time in a comparable arm’s length transaction with a Person
other than an Affiliate.

 

7.08        Burdensome
Agreements; Negative Pledge Agreements.  Enter into any
Contractual Obligation (other than this Agreement or any other Loan Document)
that (a) limits the ability (i) of any Subsidiary to make Restricted Payments
to any Borrower or any Guarantor or to otherwise transfer property to any
Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness
of any Borrower or (iii) of any Borrower or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person; provided, however,
that this clause (iii) shall not prohibit any negative pledge incurred or
provided in favor of any holder of Indebtedness permitted under Section
7.03(e) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; (b) requires the
grant of a Lien to secure an obligation of such Person if a Lien is granted to
secure another obligation of such Person; or (c) directly or indirectly
prohibits any Company from (i) creating or incurring any Lien (other than Liens
permitted under Section 7.01) on any Unencumbered Property, or (ii)
transferring ownership of any Unencumbered Property.

 

7.09        Use
of Proceeds.  Use the
proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB) or to extend credit to others
for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.

 

7.10        Financial
Covenants.

 

(a)           Minimum Consolidated Tangible Net
Worth.  Permit Consolidated
Tangible Net Worth at any time to be less than the sum of
(a) $275,000,000, plus (b) an amount equal to seventy-five percent
(75%) of the amount of Net Proceeds of any Equity Issuances subsequent to the
Closing Date

.

(b)           Interest Coverage
Ratio.  Permit the Interest
Coverage Ratio as of the end of any fiscal quarter of the Trust to be less than
2.00 to 1.00.

 

(c)           Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage
Ratio as of the end of any fiscal quarter of
the Trust to be less than 1.75 to 1.00.

 

(d)           Unsecured Interest Coverage
Ratio.  Permit the Unsecured
Interest Coverage Ratio as of the end of any fiscal quarter of the Trust to be
less than 2.25 to 1.00.

 

 

 

66

 

(e)           Leverage Ratio.  Permit the Leverage Ratio as of the end of
any fiscal quarter of the Trust to be greater than (a) from the Closing Date
through December 31, 2005, 62.5%, and (b) after December 31,
2005, 60%.

 

(f)            Total Recourse Debt.  Permit the aggregate amount of Recourse Debt
outstanding at any time to exceed the Borrowing Base Value.

 

(g)           Interest Rate
Hedging.  Permit, as of the
date that is ninety (90) days after the Closing Date and at all times
thereafter, the aggregate Indebtedness of the Companies that is (i) subject to
a variable interest rate and (ii) not subject to a Swap Contract acceptable to
Administrative Agent, to exceed thirty percent (30%) of the total Indebtedness
of the Companies.

 

ARTICLE VIII.

EVENTS OF
DEFAULT AND REMEDIES

 

8.01        Events
of Default.  Any of the following shall constitute an
Event of Default:

 

(a)           Non-Payment. 
Any Borrower or any other Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, or (ii) within three (3) days after the same becomes due, any interest
on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within
five days after the same becomes due, any other amount payable hereunder or
under any other Loan Document; or

 

(b)           Specific Covenants. 
Any Borrower fails to perform or observe any term, covenant or agreement
contained in any of Section 6.01, 6.02, 6.03, 6.05,
6.10, 6.11 or 6.12 or Article VII; or

 

(c)           Other Defaults. 
Any Loan Party fails to perform or observe any other covenant or
agreement (not specified in subsection (a) or (b) above) contained in any Loan
Document on its part to be performed or observed and such failure continues for
30 days; or

 

(d)           Representations and Warranties.  Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of any Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be materially incorrect or
misleading when made or deemed made; or

 

(e)           Cross-Default. 
(i) Any Company (A) fails to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any Recourse Debt (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than $5,000,000, or (B) fails to observe or perform any other agreement or condition
relating to any such Recourse Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such  Recourse Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause, with the
giving of notice if required, such Recourse Indebtedness to be demanded or to
become due or to be

 

 

67

 

repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem such Recourse Indebtedness to be made, prior to its stated maturity; or
(ii) there occurs under any Swap Contract an Early Termination Date (as defined
in such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which any Company is the Defaulting Party (as defined in such
Swap Contract) or (B) any Termination Event (as so defined) under such Swap
Contract as to which any Company is an Affected Party (as so defined) and, in
either event, the Swap Termination Value owed by such Company as a result
thereof is greater than $5,000,000; or

 

(f)            Insolvency Proceedings, Etc.  Any Company institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or
consent of such Person and the appointment continues undischarged or unstayed
for 60 calendar days; or any proceeding under any Debtor Relief Law relating to
any such Person or to all or any material part of its property is instituted
without the consent of such Person and continues undismissed or unstayed for
sixty (60) calendar days, or an order for relief is entered in any such
proceeding; or

 

(g)           Inability to Pay Debts; Attachment.  (i) Any Company becomes unable or admits in
writing its inability or fails generally to pay its debts as they become due,
or (ii) any writ or warrant of attachment or execution or similar process is
issued or levied against all or any material part of the property of any such
Person and is not released, vacated or fully bonded within thirty (30) days
after its issue or levy; or

 

(h)           Judgments. 
There is entered against any Company (i) a final judgment or order for
the payment of money in an aggregate amount exceeding the Threshold Amount (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect and, in either case, (A)
enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of ten (10) consecutive days during which a
stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or

 

(i)            ERISA.  (i)
An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan
which has resulted or could reasonably be expected to result in liability of
any Company under Title IV of ERISA to the Pension Plan, Multiemployer
Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or
(ii) any Company or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of the Threshold Amount; or

 

(j)            Invalidity
of Loan Documents.  Any Loan
Document, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or thereunder or satisfaction in full of
all the Obligations, ceases to be in full force and effect; or any Loan Party
or any other Person contests in any manner the validity or
enforceability of any 

 

68

 

Loan Document; or any Loan Party denies that it has
any or further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind any Loan Document; or

(k)           Change of Control. 
Either (i) there occurs any Change of Control with respect to the Trust,
(ii) the Trust ceases to own at least 100% of the Equity Interests of GMH
Communities GP Trust, the general partner of GMH Operating Partnership, (iii)
the Trust ceases to own at least thirty percent (30%) of the limited
partnership interests in GMH Operating Partnership, (iv) Gary M. Holloway,
directly or indirectly, and the Trust, on an aggregate basis, cease to own at
least fifty percent (50%) of the limited partnership interests in GMH Operating
Partnership, (iv) GMH Communities GP Trust ceases to be the sole general
partner of GMH Operating Partnership, or (v) Borrower ceases to own, directly
or indirectly, 100% of the Equity Interests of each Subsidiary Borrower; or

 

(l)            REIT Status. 
At any time after the Date hereof, the Trust shall fail to qualify as a
REIT.

 

8.02        Remedies
Upon Event of Default.  If any Event of
Default occurs and is continuing, Administrative Agent shall, at the request
of, or may, with the consent of, the Required Lenders, take any or all of the
following actions:

 

(a)           declare the
commitment of each Lender to make Loans and any obligation of the L/C Issuer to
make L/C Credit Extensions to be terminated, whereupon such commitments and
obligation shall be terminated;

(b)           declare the unpaid
principal amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived
by each Borrower;

(c)           require that GMH
Operating Partnership Cash Collateralize the L/C Obligations (in an amount
equal to the then Outstanding Amount thereof); and

(d)           exercise on behalf
of itself and the Lenders all rights and remedies available to it and the Lenders
under the Loan Documents;

provided, however, that upon the occurrence of an
actual or deemed entry of an order for relief with respect to any Borrower
under the Bankruptcy Code of the United States, the obligation of each Lender
to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions shall automatically terminate, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of GMH Operating
Company to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of
Administrative Agent or any Lender.

 

8.03        Application
of Funds.  After the exercise of remedies provided
for in Section 8.02 (or after the Loans have automatically become
immediately due and payable and the L/C Obligations have automatically been required to be
Cash Collateralized as set forth in the proviso

 

69

 

to Section 8.02), any amounts received on
account of the Obligations shall be applied by Administrative Agent in the
following order:

 

First, to payment of
that portion of the Obligations constituting fees, indemnities, expenses and
other amounts (including fees, charges and disbursements of counsel to
Administrative Agent and amounts payable under Article III) payable to
Administrative Agent in its capacity as such;

 

Second, to payment of
that portion of the Obligations constituting fees, indemnities and other
amounts (other than principal and interest) payable to the Lenders and the L/C
Issuer (including fees, charges and disbursements of counsel to the respective
Lenders and the L/C Issuer (including fees and time charges for attorneys who
may be employees of any Lender or the L/C Issuer) and amounts payable under Article
III), ratably among them in proportion to the amounts described in this
clause Second payable to them;

 

Third, to payment of
that portion of the Obligations constituting accrued and unpaid interest on the
Loans, L/C Borrowings and other Obligations, ratably among the Lenders and the
L/C Issuer in proportion to the respective amounts described in this clause Third
payable to them;

 

Fourth, to payment of
that portion of the Obligations constituting unpaid principal of the Loans and
L/C Borrowings, ratably among the Lenders and the L/C Issuer in proportion to
the respective amounts described in this clause Fourth held by them;

 

Fifth, to
Administrative Agent for the account of the L/C Issuer, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit; and

 

Last, the balance,
if any, after all of the Obligations have been indefeasibly paid in full, to
Borrowers or as otherwise required by Law.

 

Subject to Section 2.03(c), amounts
used to Cash Collateralize the aggregate undrawn amount of Letters of Credit
pursuant to clause Fifth above shall be applied to satisfy drawings
under such Letters of Credit as they occur. 
If any amount remains on deposit as Cash Collateral after all Letters of
Credit have either been fully drawn or expired, such remaining amount shall be
applied to the other Obligations, if any, in the order set forth above.

 

ARTICLE IX.

ADMINISTRATIVE
AGENT

 

9.01        Appointment
and Authority.

 

Each of the Lenders and the
L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as
Administrative Agent hereunder and under the other Loan Documents and
authorizes Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto.  The provisions of this
Article are solely for the

 

70

 

benefit of Administrative Agent, the Lenders
and the L/C Issuer, and neither any Borrower nor any other Loan Party shall
have rights as a third party beneficiary of any of such provisions.

 

9.02        Rights
as a Lender.  The Person
serving as Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as
though it were not Administrative Agent and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated or unless the context otherwise
requires, include the Person serving as Administrative Agent hereunder in its
individual capacity.  Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with the Companies or other Affiliate thereof as if such Person
were not Administrative Agent hereunder and without any duty to account
therefor to the Lenders.

 

9.03        Exculpatory
Provisions.  Administrative
Agent shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents. 
Without limiting the generality of the foregoing, Administrative Agent:

 

(a)           shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing;

 

(b)           shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided
that Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and

 

(c)           shall not, except as expressly set
forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating any
Company or any of their Affiliates that is communicated to or obtained by the
Person serving as Administrative Agent or any of its Affiliates in any
capacity.

 

Administrative Agent shall
not be liable for any action taken or not taken by it (i) with the consent or
at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary, or as Administrative Agent shall believe in
good faith shall be necessary, under the circumstances as provided in Sections
10.01 and 8.02) or (ii) in the absence of its own gross negligence
or willful misconduct.  Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given to Administrative Agent by Borrowers, a
Lender or the L/C Issuer.

 

Administrative Agent shall
not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance

 

71

 

or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document or (v) the satisfaction of any condition set forth in Article
IV or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to Administrative Agent.

 

9.04        Reliance
by Administrative Agent.

 

Administrative Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person.  Administrative Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying
thereon.  In determining compliance with
any condition hereunder to the making of a Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the satisfaction of a Lender or
the L/C Issuer, Administrative Agent may presume that such condition is
satisfactory to such Lender or the L/C Issuer unless Administrative Agent shall
have received notice to the contrary from such Lender or the L/C Issuer prior
to the making of such Loan or the issuance of such Letter of Credit.  Administrative Agent may consult with legal
counsel (who may be counsel for Borrowers), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

 

9.05        Delegation
of Duties.  Administrative
Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more sub-agents
appointed by Administrative Agent. 
Administrative Agent and any such sub-agent may perform any and
all of its duties and exercise its rights and powers by or through their
respective Related Parties.  The
exculpatory provisions of this Article shall apply to any such sub-agent
and to the Related Parties of Administrative Agent and any such sub-agent,
and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.

 

9.06        Resignation of Administrative Agent. 
Administrative Agent may at any time give notice of its resignation to
the Lenders, the L/C Issuer and Borrowers. 
Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with Borrowers, to appoint a successor,
which shall be a bank with an office in the United States, or an Affiliate of
any such bank with an office in the United States.  If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting
the qualifications set forth above; provided that if Administrative
Agent shall notify Borrowers and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents and (2) all payments,
communications and determinations provided to be made by, to or through
Administrative Agent

 

72

 

shall instead be made by or to each Lender
and the L/C Issuer directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section).  The fees payable
by Borrowers to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between Borrowers and such
successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

 

Any resignation by Bank of
America as Administrative Agent pursuant to this Section shall also constitute
its resignation as L/C Issuer and Swing Line Lender.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of
the retiring L/C Issuer and Swing Line Lender, (b) the retiring L/C Issuer and
Swing Line Lender shall be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (c) the successor
L/C Issuer shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other
arrangement satisfactory to the retiring L/C Issuer to effectively assume the
obligations of the retiring L/C Issuer with respect to such Letters of Credit.

 

9.07        Non-Reliance
on Administrative Agent and Other Lenders. 
Each Lender and the L/C Issuer acknowledges that it has, independently
and without reliance upon Administrative Agent or any other Lender or any of
their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement.  Each Lender and the L/C
Issuer also acknowledges that it will, independently and without reliance upon
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

9.08        No
Other Duties, Etc.  Anything herein
to the contrary notwithstanding, none of the Bookrunners, Book Manager,
Arrangers or other titles listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity, as applicable, as Administrative Agent,
a Lender or the L/C Issuer hereunder.

 

9.09        Administrative
Agent May File Proofs of Claim.  In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and

 

73

 

payable as herein expressed or by declaration
or otherwise and irrespective of whether Administrative Agent shall have made
any demand on any Borrower) shall be entitled and empowered, by intervention in
such proceeding or otherwise

 

(a)           to file and prove a
claim for the whole amount of the principal and interest owing and unpaid in
respect of the Loans, L/C Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders, the L/C Issuer and Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the L/C Issuer and Administrative
Agent and their respective agents and counsel and all other amounts due the
Lenders, the L/C Issuer and Administrative Agent under Sections 2.03(i)
and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and

 

(b)           to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same;

 

and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Lender and the L/C Issuer to
make such payments to Administrative Agent and, in the event that Administrative
Agent shall consent to the making of such payments directly to the Lenders and
the L/C Issuer, to pay to Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of Administrative
Agent and its agents and counsel, and any other amounts due Administrative
Agent under Sections 2.09 and 10.04.

 

Nothing contained herein
shall be deemed to authorize Administrative Agent to authorize or consent to or
accept or adopt on behalf of any Lender or the L/C Issuer any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

 

9.10        Guaranty
Matters.  The Lenders and
the L/C Issuer irrevocably authorize Administrative Agent, at its option and in
its discretion, to release any Guarantor from its obligations under the
Guaranty if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder.

 

Upon request by
Administrative Agent at any time, the Required Lenders will confirm in writing
Administrative Agent’s authority to release any Guarantor from its obligations
under the Guaranty pursuant to this Section 9.10.

 

ARTICLE X.

MISCELLANEOUS

 

10.01      Amendments, Etc.  No amendment or waiver of
any provision of this Agreement or any other Loan Document, and no consent to
any departure by any Borrower or any other Loan Party therefrom, shall be
effective unless in writing signed by the Required Lenders, the Trust, and
Borrowers or the applicable Loan Party, as the case may be, and acknowledged by

 

74

 

Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such
amendment, waiver or consent shall:

 

(a)           waive any condition set forth in Section 4.01(a)
without the written consent of each Lender;

 

(b)           extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 8.02) without
the written consent of such Lender;

 

(c)           postpone any date fixed by this Agreement or any other
Loan Document for any payment or mandatory prepayment of principal, interest,
fees or other amounts due to the Lenders (or any of them) or any scheduled or
mandatory reduction of the Aggregate Commitments hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby;

 

(d)           reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second
proviso to this Section 10.01) any fees or other amounts payable
hereunder or under any other Loan Document without the written consent of each
Lender directly affected thereby; provided, however, that only
the consent of the Required Lenders shall be necessary to amend the definition
of “Default Rate” or to waive any obligation of any Borrower to pay interest or
Letter of Credit Fees at the Default Rate;

 

(e)           change Section 2.13 or Section 8.03 in a
manner that would alter the pro rata sharing of payments required thereby
without the written consent of each Lender;

 

(f)            change any provision of this Section or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender; or

 

(g)           release all or substantially all of the Guarantors from
the Guaranties without the written consent of each Lender;

 

and, provided  further, that (i) no
amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer
in addition to the Lenders required above, affect the rights or duties of the
L/C Issuer under this Agreement or any Issuer Document relating to any Letter
of Credit issued or to be issued by it; (ii) no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Lender in addition to the
Lenders required above, affect the rights or duties of the Swing Line Lender
under this Agreement; (iii) no amendment, waiver or consent shall, unless in
writing and signed by Administrative Agent in addition to the Lenders required
above, affect the rights or duties of Administrative Agent under this Agreement
or any other Loan Document; and (iv) the Fee Letter may be amended, or rights
or privileges thereunder waived, in a writing executed only by the parties
thereto.  Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

 

 

75

10.02      Notices; Effectiveness; Electronic
Communication.

(a)           Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopier as follows, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:

 

(i)            if to Borrowers,
Administrative Agent, the L/C Issuer or the Swing Line Lender, to the address,
telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 10.02; and

 

(ii)           if to any other
Lender, to the address, telecopier number, electronic mail address or telephone
number specified in its Administrative Questionnaire.

 

Notices sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient).  Notices delivered through electronic
communications to the extent provided in subsection (b) below, shall be
effective as provided in such subsection (b).

 

(b)           Electronic Communications.  Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender or the L/C Issuer
pursuant to Article II if such Lender or the L/C Issuer, as applicable,
has notified Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. 
Administrative Agent or Borrowers may, in their discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

 

Unless
Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient,
such notice or communication shall be deemed to have been sent at the opening
of business on the next business day for the recipient, and (ii) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

 

(c)           Change of Address, Etc.  Each Borrower, Administrative Agent, the L/C
Issuer and the Swing Line Lender may change its address, telecopier or
telephone number for notices

 

76

 

and other communications
hereunder by notice to the other parties hereto.  Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to each Borrower, Administrative Agent, the L/C Issuer and the Swing
Line Lender.

 

(d)           Reliance by Administrative Agent,
L/C Issuer and Lenders.  Administrative Agent, the L/C
Issuer and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Committed Loan Notices and Swing Line Loan Notices)
purportedly given by or on behalf of any Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.  Each Borrower shall indemnify Administrative
Agent, the L/C Issuer, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of any Borrower.  All telephonic notices to and other
telephonic communications with Administrative Agent may be recorded by
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

10.03      No
Waiver; Cumulative Remedies.   No failure by any Lender, the L/C Issuer or
Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.

 

10.04      Expenses; Indemnity; Damage Waiver.

 

(a)           Costs and Expenses.  The Borrowers shall pay (i) all
reasonable out-of-pocket expenses incurred by Administrative Agent
and its Affiliates (including the reasonable fees, charges and disbursements of
counsel for Administrative Agent), in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses
incurred by the L/C Issuer in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by Administrative
Agent, any Lender or the L/C Issuer (including the fees, charges and
disbursements of any counsel for Administrative Agent, any Lender or the L/C
Issuer), and shall pay all fees and time charges for attorneys who may be
employees of Administrative Agent, any Lender or the L/C Issuer, in connection
with the enforcement or protection of its rights (A) in connection with
this Agreement and the other Loan Documents, including its rights under this
Section, or (B) in connection with the Loans made or Letters of Credit
issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

 

77

 

(b)           Indemnification by the Trust and
Borrowers.  The Trust and each
Borrower shall indemnify Administrative Agent (and any sub-agent thereof), each
Lender and the L/C Issuer, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the fees, charges and disbursements
of any counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all fees and time charges and disbursements for attorneys who
may be employees of any Indemnitee, incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by the Trust, any Borrower, or any
other Loan Party arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement, any other Loan Document
or any agreement or instrument contemplated hereby or thereby, the performance
by the parties hereto of their respective obligations hereunder or thereunder
or the consummation of the transactions contemplated hereby or thereby,
(ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Companies, or any
Environmental Liability related in any way to any Company, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by the Trust, any Borrower, or any other Loan
Party, and regardless of whether any Indemnitee is a party thereto,  IN ALL CASES, WHETHER OR
NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE,
CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Trust, any
Borrower, or any other Loan Party against an Indemnitee for breach in bad faith
of such Indemnitee’s obligations hereunder or under any other Loan Document, if
the Trust, such Borrower, or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.

 

(c)           Reimbursement by Lenders.  To the extent that the Trust or any Borrower
for any reason fails to indefeasibly pay any amount required under
subsection (a) or (b) of this Section to be paid by it to
Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related
Party of any of the foregoing, each Lender severally agrees to pay to
Administrative Agent (or any such sub-agent), the L/C Issuer or such Related
Party, as the case may be, such Lender’s Applicable Percentage (determined as
of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against Administrative Agent (or any such
sub-agent) or the L/C Issuer in its capacity as such, or against any Related
Party of any of the foregoing acting for Administrative Agent (or any such
sub-agent) or L/C Issuer in connection with such capacity.  The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.12(d).

 

78

 

(d)           Waiver of Consequential Damages,
Etc.  To the fullest extent permitted
by applicable law, neither the Trust nor any Borrower shall assert, and the
Trust and each Borrower hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or
thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b)
above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

 

(e)           Payments.  All amounts due under this Section shall be
payable not later than ten Business Days after demand therefor.

 

(f)            Survival.  The agreements in this Section shall survive
the resignation of Administrative Agent and the L/C Issuer, the replacement of
any Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.

 

10.05      Payments
Set Aside.   To the extent that any
payment by or on behalf of any Borrower is made to Administrative Agent, the
L/C Issuer or any Lender, or Administrative Agent, the L/C Issuer or any Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by Administrative Agent, the L/C Issuer or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in connection
with any proceeding under any Debtor Relief Law or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and the L/C Issuer severally agrees to pay to Administrative Agent upon demand
its applicable share (without duplication) of any amount so recovered from or
repaid by Administrative Agent, plus interest thereon from the date of such
demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect. 
The obligations of the Lenders and the L/C Issuer under clause (b) of
the preceding sentence shall survive the payment in full of the Obligations and
the termination of this Agreement.

 

10.06      Successors and Assigns.

 

(a)           Successors and Assigns Generally.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Trust, any Borrower, nor any other Loan Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection
(d) of this Section, or (iii) by way of pledge or assignment of a

 

 

79

 

security
interest subject to the restrictions of subsection (f) of this Section (and any
other attempted assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section
and, to the extent expressly contemplated hereby, the Related Parties of each
of Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

(b)           Assignments by Lenders.  Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this subsection (b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); provided
that

 

(i)            except in the case
of an assignment of the entire remaining amount of the assigning Lender’s
Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each of Administrative Agent and, so long as no
Event of Default has occurred and is continuing, Borrowers otherwise consent
(each such consent not to be unreasonably withheld or delayed);

 

(ii)           each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned, except that this clause (ii) shall not
apply to rights in respect of Swing Line Loans;

 

(iii)          any assignment of a
Commitment must be approved by Administrative Agent, the L/C Issuer and the
Swing Line Lender unless the Person that is the proposed assignee is itself a
Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); and

 

(iv)          the parties to each
assignment shall execute and deliver to Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500, and the
Eligible Assignee, if it shall not be a Lender, shall deliver to Administrative
Agent an Administrative Questionnaire.

 

Subject
to acceptance and recording thereof by Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the

 

80

 

interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 3.01, 3.04, 3.05, and 10.04
with respect to facts and circumstances occurring prior to the effective date
of such assignment.  Upon request,
Borrowers (at their expense) shall execute and deliver a Note to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

 

(c)           Register.  Administrative Agent, acting solely for this
purpose as an agent of Borrowers, shall maintain at Administrative Agent’s
Office a copy of each Assignment and Assumption delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and Borrowers, Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary.  The Register shall be
available for inspection by each of Borrowers and the L/C Issuer at any
reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for a
consent for a material or substantive change to the Loan Documents is pending,
any Lender wishing to consult with other Lenders in connection therewith may
request and receive from Administrative Agent a copy of the Register.

 

(d)           Participations.  Any Lender may at any time, without the
consent of, or notice to, the Trust, any Borrower, or Administrative Agent,
sell participations to any Person (other than a natural person, the Trust, any
Borrower, or any Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans
(including such Lender’s participations in L/C Obligations and/or Swing Line
Loans) owing to it); provided that (i) such Lender’s obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Trust, Borrowers, Administrative Agent, the
Lenders and the L/C Issuer shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.

 

Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any  provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 10.01 that
affects such Participant.  Subject to
subsection (e) of this Section, the Trust and each Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04
and 3.05 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to subsection (b)
of this Section.  To the extent permitted
by law, each

 

 

81

 

Participant
also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.13 as though it were
a Lender.

 

(e)           Limitations upon Participant
Rights.  A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Trusts and each
Borrower’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Trust and each
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Trust and Borrowers, to comply with Section
3.01(e) as though it were a Lender.

 

(f)            Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(g)           Electronic Execution of
Assignments.  The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records
Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

 

(h)           Resignation as L/C Issuer or Swing
Line Lender after Assignment. 
Notwithstanding anything to the contrary contained herein, if at any
time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon thirty (30) days’ notice to
the Trust, Borrowers, and the Lenders, resign as L/C Issuer and/or (ii) upon
thirty (30) days’ notice to the Trust and Borrowers, resign as Swing Line
Lender.  In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Trust and Borrowers shall
be entitled to appoint from among the Lenders a successor L/C Issuer or Swing
Line Lender hereunder; provided, however, that no failure by the
Trust or Borrowers to appoint any such successor shall affect the resignation
of Bank of America as L/C Issuer or Swing Line Lender, as the case may be.  If Bank of America resigns as L/C Issuer, it
shall retain all the rights and obligations of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Committed Loans
or fund risk participations in Unreimbursed Amounts pursuant to Section
2.03(c)).  If Bank of America resigns
as Swing Line Lender, it shall retain all the rights of the Swing Line Lender
provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right
to require the Lenders to make Base Rate Committed Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

 

82

 

10.07      Treatment
of Certain Information; Confidentiality.   Each of Administrative
Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its and its Affiliates’ respective partners,
directors, officers, employees, agents, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Trust or any Borrower and its obligations, (g) with
the consent of the Trust and the 
Borrowers or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or (y) becomes
available to Administrative Agent, any Lender, the L/C Issuer or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Trust or Borrowers.

 

For
purposes of this Section, “Information” means all information received
from the Companies relating to any Company or any of their respective
businesses, other than any such information that is available to Administrative
Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to
disclosure by the Companies, provided that, in the case of information
received from the Companies after the date hereof, such information is clearly
identified at the time of delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

10.08      Right
of Setoff.   If an Event of
Default shall have occurred and be continuing, each Lender, the L/C Issuer and
each of their respective Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by applicable law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by such Lender, the L/C Issuer or any such
Affiliate to or for the credit or the account of any Borrower or any other Loan
Party against any and all of the obligations of any Borrower or any other Loan
Party now or hereafter existing under this Agreement or any other Loan Document
to such Lender or the L/C Issuer, irrespective of whether or not such Lender or
the L/C Issuer shall have made any demand under this Agreement or any other
Loan Document and although such obligations of such Borrower or such  Loan Party
may be contingent or unmatured or are owed to a branch or office of such Lender
or the L/C Issuer different from the branch or office holding such deposit or
obligated on such indebtedness.  The
rights of each Lender, the L/C Issuer and their respective Affiliates under
this Section are in addition to other rights and remedies

 

 

83

 

(including other rights of setoff) that such
Lender, the L/C Issuer or their respective Affiliates may have.  Each Lender and the L/C Issuer agrees to
notify the Trust, Borrowers, and Administrative Agent promptly after any such
setoff and application, provided that the failure to give such notice
shall not affect the validity of such setoff and application.

 

10.09      Interest
Rate Limitation.   Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If Administrative Agent or any Lender shall
receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to Borrowers. 
In determining whether the interest contracted for, charged, or received
by Administrative Agent or a Lender exceeds the Maximum Rate, such Person may,
to the extent permitted by applicable Law, (a) characterize any payment that is
not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.

 

10.10      Counterparts;
Integration; Effectiveness.   This Agreement
may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof.  Except as provided in Section 4.01,
this Agreement shall become effective when it shall have been executed by
Administrative Agent and when Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

10.11      Survival
of Representations and Warranties.   All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been
or will be relied upon by Administrative Agent and each Lender, regardless of
any investigation made by Administrative Agent or any Lender or on their behalf
and notwithstanding that Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.

 

10.12      Severability.   If any provision of this
Agreement or the other Loan Documents is held to be illegal, invalid or
unenforceable, (a) the legality, validity and enforceability of the remaining
provisions of this Agreement and the other Loan Documents shall not be affected
or impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions.  The

 

 

84

 

invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10.13      Replacement
of Lenders.   If any Lender
requests compensation under Section 3.04, or if any Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 3.01, or if any Lender is
a Defaulting Lender, then GMH Operating Partnership may, at its sole expense
and effort, upon notice to such Lender and Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 10.06),
all of its interests, rights and obligations under this Agreement and the
related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:

 

(a)           Borrowers shall have paid to
Administrative Agent the assignment fee specified in Section 10.06(b);

 

(b)           such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and L/C
Advances, accrued interest thereon, accrued fees and all other amounts payable
to it hereunder and under the other Loan Documents (including any amounts under
Section 3.05) from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or Borrowers (in the case of all other
amounts);

 

(c)           in the case of any such assignment
resulting from a claim for compensation under Section 3.04 or
payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments
thereafter; and

 

(d)           such assignment does not conflict
with applicable Laws.

 

A
Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the GMH Operating Partnership to require such
assignment and delegation cease to apply.

 

10.14      Governing Law; Jurisdiction; Etc.

 

(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(b)           SUBMISSION TO JURISDICTION.  EACH BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK, NEW YORK AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT
OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
NEW YORK

 

 

85

STATE
COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT.  EACH OF THE PARTIES HERETO AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST ANY BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

(c)           WAIVER
OF VENUE.  EACH BORROWER AND EACH
OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN
PARAGRAPH (B) OF THIS SECTION.  EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d)           SERVICE
OF PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN SECTION 10.02.  NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15      Waiver
of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16      USA
PATRIOT Act Notice.  Each
Lender that is subject to the Act (as hereinafter defined) and Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the Trust
and each Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”),
it is required to

 

86

 

obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrower and other information that will allow such Lender or
Administrative Agent, as applicable, to identify the Trust and each Borrower in
accordance with the Act.

10.17      ENTIRE
AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[Signature Pages Follow]

 

87

 

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

 

	
   

  	
  GMH OPERATING PARTNERSHIP:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GMH COMMUNITIES, LP, a Delaware limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GMH COMMUNITIES GP TRUST, a Delaware trust, its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  GARY
  M. HOLLOWAY

  	
   

  
	
   

  	
   

  	
   

  	
  Name:
  

  	
  Gary
  M. Holloway

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Managing
  Trustee

  	
   

  
									

 

 

	
   

  	
  TRUST:

  
	
   

  	
   

  	
   

  
	
   

  	
  GMH COMMUNITIES TRUST, a Maryland real estate investment
  trust

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GARY
  M. HOLLOWAY

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gary
  M. Holloway

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President,
  Chief Executive Officer

  
						

 

 

	
   

  	
  BANK OF AMERICA, N.A., as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RON
  ODLOZIL

  
	
   

  	
   

  	
  Ron
  Odlozil, Senior Vice President

  

 

 

 

	
   

  	
  BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  RON
  ODLOZIL

  	
   

  
	
   

  	
   

  	
  Ron
  Odlozil, Senior Vice President

  
	
   

  	
   

  	
   

  

 

 

 

SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

 

	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Applicable

  Percentage

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  150,000,000

  	
   

  	
  100.000000000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  150,000,000

  	
   

  	
  100.000000000

  	
  %

  
								

 

 

 

1

 

 

SCHEDULE
5.13

 

SUBSIDIARIES AND

OTHER EQUITY INVESTMENTS

 

Part (a).  Subsidiaries.

 

Subsidiaries of the Trust

 

	
  Name of Subsidiary

  	
   

  	
  Jurisdiction of

  Formation/ Incorporation

  	
   

  
	
  GMH Communities GP Trust

  	
   

  	
  Delaware

  	
   

  

 

 

Subsidiaries of the Borrower

 

	
  Name of Subsidiary

  	
   

  	
  Jurisdiction of

  Formation/ Incorporation

  	
   

  
	
  College Park Investments, LLC

  	
   

  	
  Delaware

  	
   

  
	
  College Park Management TRS, Inc.

  	
   

  	
  Delaware

  	
   

  
	
  College Park Management, LLC

  	
   

  	
  Florida

  	
   

  
	
  GMH Military Housing, LLC (TRS)

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing Development LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing Construction LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing Management LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing Investments LLC

  	
   

  	
  Delaware

  	
   

  
	
  353 Associates

  	
   

  	
  Pennsylvania

  	
   

  
	
  Southeast Region I, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Southeast Region II, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Southeast Region III, LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH/GF Student Housing Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Properties II, LLC

  	
   

  	
  Delaware

  	
   

  
	
  GF II/Student Housing I, LLC

  	
   

  	
  Massachusetts

  	
   

  
	
  Southeast Region IV, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Southeast Region IV Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Lincoln Boulevard Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Lincoln Boulevard Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Palisades Drive Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Palisades Drive Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Campus Club Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Campus Club Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Towmed Housing, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Towmed Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  

 

 

2

 

 

	
  New Towmed, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Belle Chase Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Belle Chase Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Bethel Avenue Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Bethel Avenue Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Binford Street Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Binford Street Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Burbank Drive Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Burbank Drive Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Gainesville Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Gainesville Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Greenville Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Greenville Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Knotty Pine Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Knotty Pine Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Lanier Drive Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Lanier Drive Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Lubbock Main Street Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Lubbock Main Street Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Lynchburg Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Lynchburg Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Oak Tree Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Oak Tree Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Rutherford Boulevard Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Rutherford Boulevard Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Twenty Seventh Street Associates, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Twenty Seventh Street Associates Intermediate, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Croyden Avenue Associates, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  
	
  Denton Associates, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  
	
  Lubbock Two Associates, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  
	
  Reno Associates, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  
	
  Savoy Village Associates, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  
	
  South Carolina Associates, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  
	
  Monks Road Associates, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  
	
  Hattiesburg Associates, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  

 

 

3

 

 

	
  Sacramento Fourth Avenue Associates, LLC

  (closing TBD)

  	
   

  	
  Delaware

  	
   

  
	
  GrandMarc UCR, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  
	
  GrandMarc UCR Intermediate, LLC

  (closing 11/08/04)

  	
   

  	
  Delaware

  	
   

  
	
  Orchard Trails Housing, LLC

  (closing in 2005)

  	
   

  	
  Maine

  	
   

  
	
  Fort Hamilton Housing LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing — Fort Hamilton LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH/Benham Military Communities LLC

  	
   

  	
  Delaware

  	
   

  
	
  Northeast Housing LLC

  	
   

  	
  Delaware

  	
   

  
	
  Design Build LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing — Navy Northeast LLC

  	
   

  	
  Delaware

  	
   

  
	
  Benham Military Communities, LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing — Hampton Roads LLC

  	
   

  	
  Delaware

  	
   

  
	
  Fort Eustis/Fort Story Housing LLC

  	
   

  	
  Delaware

  	
   

  
	
  Stewart Hunter Housing LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing — Stewart Hunter LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Independent Member I, Inc.

  	
   

  	
  Delaware

  	
   

  
	
  Fort Carson Family Housing, LLC

  	
   

  	
  Colorado

  	
   

  
	
  Fort Carson Reinvestment Trust

  	
   

  	
  Colorado

  	
   

  
	
  J.A. Jones Trustee, Inc.

  	
   

  	
  Delaware

  	
   

  
	
  RJTL, LLC

  	
   

  	
  Georgia

  	
   

  
	
  RPBR, LLC

  	
   

  	
  Georgia

  	
   

  
	
  GMH Military Housing — Fort Carson LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing Management Fort Carson, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Fort Detrick/Walter Reed Army Medical Center Housing LLC

  	
   

  	
  Delaware

  	
   

  
	
  GMH Military Housing — FDWR LLC

  	
   

  	
  Delaware

  	
   

  

 

 

	
  Part (b).

  	
  Other Equity
  Investments.

  	
   

  
	
   

  	
  None.

  	
   

  

 

 

 

4

 

SCHEDULE
7.01

 

EXISTING LIENS

 

1.                                      UCC-1 financing statement, filed in the
State of Delaware.  The debtors are GMH
Communities GP, LLC and the Borrower. 
The secured party is Vornado Community GP, LLC.  Description of collateral: all of the debtors’
interests in the Borrower. [Termination Notice to be filed shortly.]

 

Existing Debt for Student Housing Properties

 

 

	
  Property Holding Entity

  	
   

  	
  Property

  Subject to Lien

  	
   

  	
  Lender

  	
   

  	
  Loan #

  	
   

  	
  Total Monthly Debt Service Payment

  	
   

  	
  Monthly Payment Amount

  	
   

  	
  Interest

  	
   

  	
  Rate

  	
   

  	
  Existing Debt (before Nov 1 debt service)

  	
   

  
	
  Binford Street Associates, LLC

  	
   

  	
  Sterling University Lodge

  	
   

  	
  Bank of America

  	
   

  	
  3165560

  	
   

  	
  $

  	
  56,532.87

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  47,281.20

  	
   

  	
  4.9200

  	
  %

  	
  $

  	
  11,160,000.00

  	
   

  
	
  Lanier Drive Associates, LLC

  	
   

  	
  Sterling University Pines

  	
   

  	
  Bank of America

  	
   

  	
  3138021

  	
   

  	
  $

  	
  92,156.68

  	
   

  	
  $

  	
  8,438.80

  	
   

  	
  $

  	
  70,465.39

  	
   

  	
  6.9500

  	
  %

  	
  $

  	
  11,774,212.34

  	
   

  
	
  Belle Chase Associates, LLC

  	
   

  	
  Sterling University Court

  	
   

  	
  Bank of America

  	
   

  	
  3137973

  	
   

  	
  $

  	
  110,883.62

  	
   

  	
  $

  	
  9,231.71

  	
   

  	
  $

  	
  77,086.30

  	
   

  	
  6.9500

  	
  %

  	
  $

  	
  12,880,514.08

  	
   

  
	
  Bethel Avenue Associates, LLC

  	
   

  	
  Sterling University Estates

  	
   

  	
  Bank of America

  	
   

  	
  3165552

  	
   

  	
  $

  	
  73,704.02

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  45,571.74

  	
   

  	
  4.9520

  	
  %

  	
  $

  	
  10,687,000.00

  	
   

  
	
  Rutherford Boulevard Associates, LLC

  	
   

  	
  Sterling University Gables

  	
   

  	
  Bank of America

  	
   

  	
  3137999

  	
   

  	
  $

  	
  121,606.39

  	
   

  	
  $

  	
  10,647.62

  	
   

  	
  $

  	
  88,909.35

  	
   

  	
  6.9500

  	
  %

  	
  $

  	
  14,856,053.05

  	
   

  
	
  Gainesville Associates, LLC

  	
   

  	
  Sterling University Glades

  	
   

  	
  Bank of America

  	
   

  	
  3138005

  	
   

  	
  $

  	
  80,090.99

  	
   

  	
  $

  	
  6,937.93

  	
   

  	
  $

  	
  57,932.96

  	
   

  	
  6.9500

  	
  %

  	
  $

  	
  9,680,141.06

  	
   

  
	
  Greenville Associates, LLC

  	
   

  	
  Sterling University Manor

  	
   

  	
  Bank of America

  	
   

  	
  3165578

  	
   

  	
  $

  	
  78,850.52

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  64,736.27

  	
   

  	
  4.9200

  	
  %

  	
  $

  	
  15,280,000.00

  	
   

  
	
  Twenty Seventh Street Associates, LLC

  	
   

  	
  Sterling University Mills

  	
   

  	
  Bank of America

  	
   

  	
  3165586

  	
   

  	
  $

  	
  59,445.13

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  39,994.13

  	
   

  	
  4.9200

  	
  %

  	
  $

  	
  9,440,000.00

  	
   

  
	
  Southeast Region I, LLC

  	
   

  	
  Campus Walk (SER I)

  	
   

  	
  GECC

  	
   

  	
  69-0073840

  	
   

  	
  $

  	
  29,728.11

  	
   

  	
   

  	
   

  	
  $

  	
  29,728.11

  	
   

  	
  3.9250

  	
  %*

  	
  $

  	
  8,795,660.00

  	
   

  

 

5

 

	
  Southeast Region II, LLC

  	
   

  	
  Pirates Cove (SER II)

  	
   

  	
  GECC

  	
   

  	
  79-0031405

  	
   

  	
  $

  	
  150,396.55

  	
   

  	
  $

  	
  26,315.42

  	
   

  	
  $

  	
  84,275.59

  	
   

  	
  4.5500

  	
  %

  	
  $

  	
  21,509,543.71

  	
   

  
	
  Southeast Region III, LLC

  	
   

  	
  University Walk (SER III)

  	
   

  	
  GECC

  	
   

  	
  79-0031403

  	
   

  	
  $

  	
  74,590.20

  	
   

  	
  $

  	
  13,249.76

  	
   

  	
  $

  	
  42,432.61

  	
   

  	
  4.5500

  	
  %

  	
  $

  	
  10,830,016.81

  	
   

  
	
  Burbank Drive Associates, LLC

  	
   

  	
  Sterling University Crescent

  	
   

  	
  Key Bank

  	
   

  	
  01-0010760

  	
   

  	
  $

  	
  123,838.84

  	
   

  	
  $

  	
  7,996.29

  	
   

  	
  $

  	
  101,269.53

  	
   

  	
  8.1800

  	
  %

  	
  $

  	
  14,376,935.22

  	
   

  
	
  Knotty Pine Associates, LLC

  	
   

  	
  Sterling University Heights

  	
   

  	
  Key Bank

  	
   

  	
  01-0014528

  	
   

  	
  $

  	
  102,708.53

  	
   

  	
  $

  	
  6,970.16

  	
   

  	
  $

  	
  71,438.32

  	
   

  	
  7.4400

  	
  %

  	
  $

  	
  11,150,621.87

  	
   

  
	
  Towmed Housing, LLC

  	
   

  	
  Campus Club (Gainesville)

  	
   

  	
  Wachovia

  	
   

  	
  19-5114172

  	
   

  	
  $

  	
  201,065.43

  	
   

  	
  $

  	
  20,058.36

  	
   

  	
  $

  	
  119,100.43

  	
   

  	
  7.4500

  	
  %

  	
  $

  	
  18,565,124.93

  	
   

  
	
  Oak Tree Associates, LLC

  	
   

  	
  Sterling University Greens

  	
   

  	
  Wachovia

  	
   

  	
  26-5950619

  	
   

  	
  $

  	
  59,962.82

  	
   

  	
  $

  	
  4,474.37

  	
   

  	
  $

  	
  45,858.59

  	
   

  	
  7.4400

  	
  %

  	
  $

  	
  7,157,947.99

  	
   

  
	
  Campus Club Associates, LLC

  	
   

  	
  Campus Club — Statesboro

  	
   

  	
  GECC

  	
   

  	
  69-0074295

  	
   

  	
  $

  	
  78,885.96

  	
   

  	
   

  	
   

  	
  $

  	
  78,885.96

  	
   

  	
  3.9250

  	
  %*

  	
  $

  	
  23,340,000.00

  	
   

  
	
  Lincoln Boulevard Associates, LLC

  	
   

  	
  Campus Connection

  	
   

  	
  GECC

  	
   

  	
  TBD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  17,782,116.00

  	
   

  
	
  Southeast Region IV, LLC

  	
   

  	
  Chapel Ridge

  	
   

  	
  GECC

  	
   

  	
  TBD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  20,225,441.00

  	
   

  
	
  Lubbock Main Street Associates, LLC

  	
   

  	
  Sterling University Trails

  	
   

  	
  GECC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lynchburg Associates, LLC

  	
   

  	
  Sterling University Place

  	
   

  	
  GECC

  	
   

  	
  69-0074194

  	
   

  	
  $

  	
  163,331.81

  	
   

  	
   

  	
   

  	
  $

  	
  163,331.81

  	
   

  	
  3.9250

  	
  %*

  	
  $

  	
  46,196,475.00

  	
   

  
	
  Palisades Drive Associates, LLC

  	
   

  	
  Collegiate Hall

  	
   

  	
  GECC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  295,687,803.06

  	
   

  

_________________

*: floating rate

 

 

6

 

 

SCHEDULE
7.03

 

EXISTING INDEBTEDNESS

(as of October 30, 2004)

 

Existing Debt for Student Housing Properties

 

	
  Property Holding Entity

  	
   

  	
  Property Subject to Lien

  	
   

  	
  Lender

  	
   

  	
  Loan #

  	
   

  	
  Total Monthly Debt Service Payment

  	
   

  	
  Monthly Payment Amount

  	
   

  	
  Interest

  	
   

  	
  Rate

  	
   

  	
  Existing Debt (before Nov 1 debt service)

  	
   

  
	
  Binford Street Associates, LLC

  	
   

  	
  Sterling University Lodge

  	
   

  	
  Bank of America

  	
   

  	
  3165560

  	
   

  	
  $

  	
  56,532.87

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  47,281.20

  	
   

  	
  4.9200

  	
  %

  	
  $

  	
  11,160,000.00

  	
   

  
	
  Lanier Drive Associates, LLC

  	
   

  	
  Sterling University Pines

  	
   

  	
  Bank of America

  	
   

  	
  3138021

  	
   

  	
  $

  	
  92,156.68

  	
   

  	
  $

  	
  8,438.80

  	
   

  	
  $

  	
  70,465.39

  	
   

  	
  6.9500

  	
  %

  	
  $

  	
  11,774,212.34

  	
   

  
	
  Belle Chase Associates, LLC

  	
   

  	
  Sterling University Court

  	
   

  	
  Bank of America

  	
   

  	
  3137973

  	
   

  	
  $

  	
  110,883.62

  	
   

  	
  $

  	
  9,231.71

  	
   

  	
  $

  	
  77,086.30

  	
   

  	
  6.9500

  	
  %

  	
  $

  	
  12,880,514.08

  	
   

  
	
  Bethel Avenue Associates, LLC

  	
   

  	
  Sterling University Estates

  	
   

  	
  Bank of America

  	
   

  	
  3165552

  	
   

  	
  $

  	
  73,704.02

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  45,571.74

  	
   

  	
  4.9520

  	
  %

  	
  $

  	
  10,687,000.00

  	
   

  
	
  Rutherford Boulevard Associates, LLC

  	
   

  	
  Sterling University Gables

  	
   

  	
  Bank of America

  	
   

  	
  3137999

  	
   

  	
  $

  	
  121,606.39

  	
   

  	
  $

  	
  10,647.62

  	
   

  	
  $

  	
  88,909.35

  	
   

  	
  6.9500

  	
  %

  	
  $

  	
  14,856,053.05

  	
   

  
	
  Gainesville Associates, LLC

  	
   

  	
  Sterling University Glades

  	
   

  	
  Bank of America

  	
   

  	
  3138005

  	
   

  	
  $

  	
  80,090.99

  	
   

  	
  $

  	
  6,937.93

  	
   

  	
  $

  	
  57,932.96

  	
   

  	
  6.9500

  	
  %

  	
  $

  	
  9,680,141.06

  	
   

  
	
  Greenville Associates, LLC

  	
   

  	
  Sterling University Manor

  	
   

  	
  Bank of America

  	
   

  	
  3165578

  	
   

  	
  $

  	
  78,850.52

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  64,736.27

  	
   

  	
  4.9200

  	
  %

  	
  $

  	
  15,280,000.00

  	
   

  
	
  Twenty Seventh Street Associates, LLC

  	
   

  	
  Sterling University Mills

  	
   

  	
  Bank of America

  	
   

  	
  3165586

  	
   

  	
  $

  	
  59,445.13

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  39,994.13

  	
   

  	
  4.9200

  	
  %

  	
  $

  	
  9,440,000.00

  	
   

  
	
  Southeast Region I, LLC

  	
   

  	
  Campus Walk (SER I)

  	
   

  	
  GECC

  	
   

  	
  69-0073840

  	
   

  	
  $

  	
  29,728.11

  	
   

  	
   

  	
   

  	
  $

  	
  29,728.11

  	
   

  	
  3.9250

  	
  %*

  	
  $

  	
  8,795,660.00

  	
   

  

 

7

 

	
  Southeast Region II, LLC

  	
   

  	
  Pirates Cove (SER II)

  	
   

  	
  GECC

  	
   

  	
  79-0031405

  	
   

  	
  $

  	
  150,396.55

  	
   

  	
  $

  	
  26,315.42

  	
   

  	
  $

  	
  84,275.59

  	
   

  	
  4.5500

  	
  %

  	
  $

  	
  21,509,543.71

  	
   

  
	
  Southeast Region III, LLC

  	
   

  	
  University Walk (SER III)

  	
   

  	
  GECC

  	
   

  	
  79-0031403

  	
   

  	
  $

  	
  74,590.20

  	
   

  	
  $

  	
  13,249.76

  	
   

  	
  $

  	
  42,432.61

  	
   

  	
  4.5500

  	
  %

  	
  $

  	
  10,830,016.81

  	
   

  
	
  Burbank Drive Associates, LLC

  	
   

  	
  Sterling University Crescent

  	
   

  	
  Key Bank

  	
   

  	
  01-0010760

  	
   

  	
  $

  	
  123,838.84

  	
   

  	
  $

  	
  7,996.29

  	
   

  	
  $

  	
  101,269.53

  	
   

  	
  8.1800

  	
  %

  	
  $

  	
  14,376,935.22

  	
   

  
	
  Knotty Pine Associates, LLC

  	
   

  	
  Sterling University Heights

  	
   

  	
  Key Bank

  	
   

  	
  01-0014528

  	
   

  	
  $

  	
  102,708.53

  	
   

  	
  $

  	
  6,970.16

  	
   

  	
  $

  	
  71,438.32

  	
   

  	
  7.4400

  	
  %

  	
  $

  	
  11,150,621.87

  	
   

  
	
  Towmed Housing, LLC

  	
   

  	
  Campus Club (Gainesville)

  	
   

  	
  Wachovia

  	
   

  	
  19-5114172

  	
   

  	
  $

  	
  201,065.43

  	
   

  	
  $

  	
  20,058.36

  	
   

  	
  $

  	
  119,100.43

  	
   

  	
  7.4500

  	
  %

  	
  $

  	
  18,565,124.93

  	
   

  
	
  Oak Tree Associates, LLC

  	
   

  	
  Sterling University Greens

  	
   

  	
  Wachovia

  	
   

  	
  26-5950619

  	
   

  	
  $

  	
  59,962.82

  	
   

  	
  $

  	
  4,474.37

  	
   

  	
  $

  	
  45,858.59

  	
   

  	
  7.4400

  	
  %

  	
  $

  	
  7,157,947.99

  	
   

  
	
  Campus Club Associates, LLC

  	
   

  	
  Campus Club — Statesboro

  	
   

  	
  GECC

  	
   

  	
  69-0074295

  	
   

  	
  $

  	
  78,885.96

  	
   

  	
   

  	
   

  	
  $

  	
  78,885.96

  	
   

  	
  3.9250

  	
  %*

  	
  $

  	
  23,340,000.00

  	
   

  
	
  Lincoln Boulevard Associates, LLC

  	
   

  	
  Campus Connection

  	
   

  	
  GECC

  	
   

  	
  TBD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  17,782,116.00

  	
   

  
	
  Southeast Region IV, LLC

  	
   

  	
  Chapel Ridge

  	
   

  	
  GECC

  	
   

  	
  TBD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  20,225,441.00

  	
   

  
	
  Lubbock Main Street Associates, LLC

  	
   

  	
  Sterling University Trails

  	
   

  	
  GECC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lynchburg Associates, LLC

  	
   

  	
  Sterling University Place

  	
   

  	
  GECC

  	
   

  	
  69-0074194

  	
   

  	
  $

  	
  163,331.81

  	
   

  	
   

  	
   

  	
  $

  	
  163,331.81

  	
   

  	
  3.9250

  	
  %*

  	
  $

  	
  46,196,475.00

  	
   

  
	
  Palisades Drive Associates, LLC

  	
   

  	
  Collegiate Hall

  	
   

  	
  GECC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  295,687,803.06

  	
   

  

 

*: floating rate

 

 

8

 

 

SCHEDULE 7.03

 

EXISTING INDEBTEDNESS

(as of October 30, 2004)

 

List of Borrower Guaranty Agreements

 

Sterling University Lodge: Consent and Assumption Agreement With
Release by and among Binford Street Associates, LLC, SUH Wyoming, LLC, Sterling
Housing, L.L.C., Borrower and Bank of America, N.A. dated July 29, 2004.

 

Sterling University Pines: Consent and Assumption Agreement With
Release by and among Lanier Drive Associates, LLC, SUH Georgia Southern,
L.L.C., Sterling Housing, L.L.C., Borrower, and Bank of America, N.A. dated
July 29, 2004.

 

Sterling University Estates: Consent and Assumption Agreement With
Release by and among Bethel Avenue Associates, LLC, SUH Muncie, L.L.C.,
Sterling Housing, L.L.C., Borrower and Bank of America, N.A. dated July 29,
2004.

 

Sterling University Glades: Consent and Assumption Agreement With
Release by and among Gainesville Associates, LLC, SUH UFLA, L.L.C., Sterling
Housing, L.L.C., Borrower and Bank of America, N.A. dated July 29, 2004.

 

Sterling University Manor: Consent and Assumption Agreement With
Release by and among Greenville Associates, LLC, SUH East Carolina, L.L.C.,
Sterling Housing, L.L.C., Borrower and Bank of America, N.A. dated July 29,
2004.

 

Sterling University Mills: Consent and Assumption Agreement With
Release by and among Twenty Seventh Street Associates, LLC, SUH Northern Iowa,
L.L.C., Sterling Housing, L.L.C., Borrower and Bank of America, N.A. dated July
29, 2004.

 

Sterling University Crescent: Assumption and Modification
Agreement by and among Burbank Drive Associates, LLC, SUH Baton Rouge, L.L.C.,
Wells Fargo Bank, N.A., Houston Fox Fire Apartments, Inc., and Borrower dated
July 29, 2004.

 

Sterling University Heights: Assumption and Modification Agreement
by and among Knotty Pine Associates, LLC, SUH Knoxville, L.L.C., Wells Fargo
Bank, N.A., Budde-256, Inc., and Borrower dated July 29, 2004.

 

Sterling University Greens: Substitution of Guarantor Agreement by
and among Borrower, Budde-256, Inc., and Wells Fargo Bank, N.A. dated 2004.

 

9

 

 

 

List of Assumed Debt 

 

1.             That certain
Promissory Note dated December 20, 2000 in the original principal amount of
$6,475,000 as secured by a certain Open-End Mortgage and Security Agreement,
with a principal balance of approximately $4,500,000 as of September 30, 2004,
executed by Corporate Flight Services, LLC in favor of General Electric Capital
Corporation. [Airplane]

 

2.             That certain
Promissory Note dated August 4, 2000 in the original principal amount of
$6,460,000, with a principal balance of approximately $5,800,000 as of
September 30, 2004, executed by 353 Associates in favor of Bank of America.
[Headquarters]

 

3.             That certain Note
dated August 4, 2000 in the original principal amount of $800,000, with a
current principal balance of $130,000 as of September 30, 2004, executed by GMH
Associates, Inc in favor of Bank of America. [FF&E]

 

 

List of Indemnified Agreements

 

Student Housing

 

Campus Club (Gainesville, FL)

 

1.             Substitution of
Indemnitor and Assumption of Obligations of Indemnitor dated January 28, 2000
by Gary M. Holloway in favor of Lasalle National Bank, as Trustee for First
Union-Lehman Brothers Commercial Mortgage Pass-Through Certificates, Series
1997-C2, in connection with the assumption of a $20,000,000 loan by Towmed
Housing, LLC.

 

Campus Walk (Oxford, MS), Pirate’s Cove (Greenville, NC),

and University Walk (Charlotte, NC)

 

1.             Hazardous Materials
Indemnity Agreement dated February 2, 2004 by Southeast Region I, LLC and
Gary M. Holloway in favor of General Electric Capital Corporation in connection
with a loan in the amount of $8,796,615 to Southeast Region I, LLC.

 

2.             Hazardous Materials
Indemnity Agreement dated February 27, 2004 by Southeast Region II, LLC and
Gary M. Holloway in favor of General Electric Capital Corporation in connection
with a loan in the amount of $21,698,955 to Southeast Region II, LLC.

 

3.             Joinder dated
February 27, 2004 by Gary M. Holloway guarantying the performance of Southeast
Region II, LLC of all obligations and liabilities for which it is personally
liable in connection with a loan in the amount of $21,698,955 to Southeast
Region II, LLC.

 

 

10

 

 

4.             Hazardous Materials
Indemnity Agreement dated February 27, 2004 by Southeast Region III, LLC
and Gary M. Holloway in favor of General Electric Capital Corporation in
connection with a loan in the amount of $10,925,385 to Southeast Region III,
LLC.

 

5.             Joinder dated
February 27, 2004 by Gary M. Holloway guarantying the performance of Southeast
Region III, LLC of all obligations and liabilities for which it is personally
liable in connection with a loan in the amount of $10,925,385 to Southeast
Region III, LLC.

 

 

Campus Club (Statesboro, GA)

 

1.             Hazardous Materials
Indemnity Agreement dated August 20, 2004 by Campus Club Associates, LLC and
Borrower in favor of General Electric Capital Corporation in connection with a
loan in the amount of $23,355,000 to Campus Club Associates, LLC.

 

 

Sterling University Trails (Lubbock,TX), Sterling University Place
(Lynchburg, VA),  and Collegiate Hall
(Birmingham, AL) 

 

 

1.             Hazardous Materials
Indemnity Agreement dated August 20, 2004 by and among Lubbock Main Street
Associates, LLC, Lynchburg Associates, LLC, Palisades Drive Associates, LLC,
and Borrower in favor of General Electric Capital Corporation in connection
with a loan contemporaneously guaranteed by Lubbock, Lynchburg and Palisades.

 

 

Headquarters

 

1.             Guaranty and
Security Agreement dated August 4, 2000 by Gary M. Holloway in favor of Bank of
America (successor in interest to Summit Bank) in connection with a Promissory
Note in the amount of $6,460,000 by 353 Associates.

 

2.             Guaranty and
Security Agreement dated August 4, 2000 by Gary M. Holloway in favor of Bank of
America (successor in interest to Summit Bank) in connection with a Note in the
amount of $800,000 by GMH Associates, Inc.

 

Airplane

 

1.             Individual Guaranty
dated December 20, 2000 by Gary M. Holloway in favor of General Electric
Capital Corporation in connection with a Promissory Note in the amount of
$6,475,000 by Corporate Flight Services, LLC.

 

 

11

 

 

Military Housing 

 

Fort Stewart/Hunter

 

1.             Exceptions to
Nonrecourse Guaranty dated November 1, 2003 by GMH Capital Partners, L.P. in
favor of GMAC Commercial Holding Capital Corp. and AMBAC Assurance Corporation
in connection with a loan in the amount of $246,500,000 to Stewart Hunter
Housing LLC.

 

2.             Indemnity dated
November 1, 2003 by GMH Associates, Inc. in favor of GMAC Commercial Holding
Capital Corp. and AMBAC Assurance Corporation in connection with a loan in the
amount of $246,500,000 to Stewart Hunter Housing LLC.

 

3.             Environmental
Indemnification Agreement dated November 1, 2003 by GMH Associates, Inc. in
favor of GMAC Commercial Holding Capital Corp. and AMBAC Assurance Corporation
in connection with a loan in the amount of $246,500,000 to Stewart Hunter
Housing LLC.

 

4.             Guaranty dated
November 1, 2003 by GMH Associates, Inc. and Gary M. Holloway in favor of
Stewart Hunter Housing, LLC and The United States of America.

 

Fort Hamilton

 

1.             Agreement of
Environmental Indemnification dated May 1, 2004 by Fort Hamilton Housing LLC,
GMH Military Housing — Fort Hamilton LLC, and GMH Capital Partners, L.P. in
favor of Lehman Brothers, Inc., The Bank of New York, as Master Trustee and as
Bond Trustee, and New York City Housing Development Corporation in connection
with a $47,545,000 loan to Fort Hamilton Housing LLC.

 

2.             Guaranty of
Completion dated June 1, 2004 by GMH Capital Partners, L.P. in favor of The
Bank of New York in connection with a $47,545,000 loan to Fort Hamilton Housing
LLC.

 

 

Fort Detrick/Walter Reed

 

1.             General
Guaranty dated July 1, 2004 by Fort Detrick/Walter Reed Army Medical Center
Housing LLC in favor of GMAC Holding Capital Corp. and AMBAC Assurance
Corporation in connection with a $83,200,000 loan to FDWR Parent LLC.

 

2.             Environmental
Indemnification Agreement (Borrower) dated July 1, 2004 by FDWR Parent LLC in
favor of GMAC Holding Capital Corp. and AMBAC Assurance Corporation in
connection with a $83,200,000 loan to FDWR Parent LLC.

 

 

12

 

3.             Environmental
Indemnification Agreement (Guarantor) dated July 1, 2004 by Fort Detrick/Walter
Reed Army Medical Center Housing LLC in favor of GMAC Holding Capital Corp. and
AMBAC Assurance Corporation in connection with a $83,200,000 loan to FDWR
Parent LLC.

 

4.             Guaranty dated July
1, 2004 by FDWR Parent LLC and Fort Detrick/Walter Reed Army Medical Center
Housing LLC in favor  of AMBAC Assurance
Corporation in connection with a $83,200,000 loan to FDWR Parent LLC.

 

5.             Guaranty dated July
1, 2004 GMH Associates, Inc. and Gary M. Holloway in favor of FDWR Parent LLC
and United States of America in connection with a $83,200,000 loan to FDWR
Parent LLC.

 

 

Fort Carson

 

1.             Limited Guaranty
dated November 28, 2003 by GMH Military Housing-Fort Carson LLC to and for the
benefit of J.P. Morgan Trust Company, National Association.

 

2.             General Indemnity
Agreement dated November 28, 2003 by GMH Military Housing-Fort Carson LLC in
favor of Fireman’s Insurance Company, The American Insurance Company, National
Surety Corporation, Associated Indemnity Corporation, and American Automobile
Insurance Company.

 

 

13

 

SCHEDULE 10.02

ADMINISTRATIVE
AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES

 

 

GMH OPERATING PARTNERSHIP:

 

GMH COMMUNITIES, LP, a Delaware limited partnership

10 Campus Blvd.

Newton Square, PA 19073

 

Attention:  Joseph Macchione

Telephone:  610.355.8180

Telecopier:  610.359.0572

Electronic Mail: 
jmacchione@gmh-inc.com

Website Address: www.gmh-inc.com

 

 

TRUST:

GMH COMMUNITIES TRUST, a Maryland real estate investment trust

10 Campus Blvd.

Newton Square, PA 19073

 

Attention:  Joseph Macchione

Telephone:  610.355.8180

Telecopier:  610.359.0572

Electronic Mail: 
jmacchione@gmh-inc.com

Website Address: www.gmh-inc.com

 

 

 

 

 

14

 

 

ADMINISTRATIVE AGENT:

 

Administrative
Agent’s Office

(for
payments and Requests for Credit Extensions):

Bank of America,
N.A.

901 Main Street,
64th Floor

Mail Code:  TX1-492-64-01

Dallas, Texas  75202

Attention:  Mr.
Ron Odlozil

Telephone: 
214.209.1512

Telecopier: 
214.209.0085

Electronic Mail: 
ron.odlozil@bankofamerica.com

Account No.:

Ref: 
                                              

ABA# 111000012

 

Other
Notices as Administrative Agent:

Bank of America,
N.A.

Agency Management

901 Main Street,
14th Floor

Mail Code:  TX1-492-14-01

Dallas, Texas  75202

Attention: 
Henry C. Pennell

Telephone:  214.209.1226

Telecopier:  214.290.9448

Electronic Mail: 
henry.pennell@bankofamerica.com

L/C
ISSUER:

Bank of America,
N.A.

Trade
Operations-Los Angeles #22621

333 S. Beaudry
Avenue, 19th Floor

Mail Code:  CA9-703-19-23

Los Angeles, CA
90017-1466

Attention:                                         Sandra Leon

                                                                                                Vice President

Telephone:  213.345.5231

Telecopier:  213.345.6694

Electronic
Mail:  Sandra.Leon@bankofamerica.com

 

 

15

 

SWING
LINE LENDER:

Bank of America,
N.A.

Agency Management

901 Main Street,
14th Floor

Mail Code:  TX1-492-14-01

Dallas, Texas  75202

Attention: 
Henry C. Pennell

Telephone:  214.209.1226

Telecopier:
214.290.9448

Electronic Mail: 
henry.pennell@bankofamerica.com

Account No.:

Ref:                                          

ABA# 111000012

 

 

16

 

 

EXHIBIT A

 

FORM
OF COMMITTED LOAN NOTICE

 

 

Date:                           ,
               

To:                              Bank of America, N.A., as Administrative
Agent

Borrower:                                                   

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of
November 8, 2004 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement;” the
terms defined therein being used herein as therein defined), among GMH
Communities Trust, each of the Subsidiary Borrowers defined therein, GMH
Communities, LP, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

 

The undersigned Borrower hereby requests (select one):

 

o  A Borrowing of Committed Loans                                                                                           o  A conversion or continuation of Loans

 

1.                             On                                                                     
(a Business Day).

2.                             In the amount of $                                              .

3.                             Comprised of                                                      .
                                                                    [Type
of Committed Loan requested]

 

4.             For Eurodollar Rate
Loans:  with an Interest Period of                      
months.

 

The Committed Borrowing, if any, requested herein complies with the
provisos to the first sentence of Section 2.01 of the Agreement.

 

BORROWER:

                                              ,
a                                            

 

By:          

               Name:  

               Title:  

 

17

 

EXHIBIT B

 

FORM
OF SWING LINE LOAN NOTICE

 

Date:                                     ,            

 

To:                              Bank of America, N.A., as Swing Line
Lender

Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of
November 8, 2004 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement;” the
terms defined therein being used herein as therein defined), among GMH
Communities Trust, each of the Subsidiary Borrowers defined therein, GMH
Communities, LP, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

 

The undersigned hereby requests a Swing Line Loan:

 

1.                             On                                                                                             
(a Business Day).

2.                             In the amount of $                                              .

 

The Swing Line Borrowing requested herein complies with the
requirements of the provisos to the first sentence of Section 2.04(a) of
the Agreement.

 

	
   

  	
  GMH COMMUNITIES, LP, a Delaware limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GMH Communities GP
  Trust, a Delaware trust, its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
					

 

 

18

 

 

EXHIBIT C

 

FORM
OF NOTE

November 8, 2004

 

FOR VALUE RECEIVED, the undersigned (the “Borrower”)
hereby promises to pay to                                               
or registered assigns (the “Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the principal amount of each Loan
from time to time made by the Lender to the Borrower under that certain Credit
Agreement dated as of November 8, 2004 (as amended, restated, extended, supplemented
or otherwise modified in writing from time to time, the “Agreement;” the
terms defined therein being used herein as therein defined), among the
Borrower, GMH Communities Trust, each of the other Borrowers defined
therein,  the Lenders from time to time
party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer
and Swing Line Lender.

 

The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the
Agreement.  All payments of principal and
interest shall be made to Administrative Agent for the account of the Lender in
Dollars in immediately available funds at the Administrative Agent’s
Office.  If any amount is not paid in
full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

 

This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. 
This Note is also entitled to the benefits of each Guaranty.  Upon the occurrence and continuation of one
or more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement.  Loans made by the Lender shall be evidenced
by one or more loan accounts or records maintained by the Lender in the
ordinary course of business. The Lender may also attach schedules to this Note
and endorse thereon the date, amount and maturity of its Loans and payments
with respect thereto.

 

The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.

 

 

19

 

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

BORROWER:

                                           ,
a 

By:   

Name:  

Title:

 

 

20

 

LOANS
AND PAYMENTS WITH RESPECT THERETO

 

	
  Date

  	
   

  	
  Type of 

  Loan Made

  	
   

  	
  Amount of

  Loan Made

  	
   

  	
  End of

  Interest Period

  	
   

  	
  Amount of Principal or Interest Paid This Date

  	
   

  	
  Outstanding Principal Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

 

21

 

 

 

EXHIBIT D

 

FORM
OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:               ,
20       

 

To:                              Bank of America, N.A., as Administrative
Agent

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of
November 8, 2004 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement;” the
terms defined therein being used herein as therein defined), among GMH
Communities Trust (the “Trust”), GMH Communities, L.P. (“GMH
Operating Partnership”), each Subsidiary Borrower party thereto from time
to time (GMH Operating Partnership and the Subsidiary Borrowers are
collectively, “Borrowers” and individually a “Borrower”), the
Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent and L/C Issuer.

 

The undersigned Responsible
Officer hereby certifies as of the date hereof that he/she is the               
              
              
              of
the Trust, and that, as such, he/she is authorized to execute and deliver this
Certificate to Administrative Agent on the behalf of the Trust and Borrowers,
and that:

 

[Use following paragraph 1 for fiscal year-end
financial statements]

 

1.             Attached hereto as Schedule
1 are the year-end audited financial statements required by Section
6.01(a) of the Agreement for the fiscal year of the Trust ended as of the
above date, together with the report and opinion of an independent certified
public accountant required by such section.

 

[Use following paragraph 1
for fiscal quarter-end financial statements]

 

1.             Attached hereto as Schedule
1 are the unaudited financial statements required by Section 6.01(b)
of the Agreement for the fiscal quarter of the Trust ended as of the above
date.  Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Companies in accordance with GAAP as at such date and for such period, subject
only to normal year-end audit adjustments and the absence of footnotes.

 

2.             The undersigned has
reviewed and is familiar with the terms of the Agreement and has made, or has
caused to be made under his/her supervision, a detailed review of the
transactions

 

 

22

 

 

 and condition (financial or
otherwise) of the Companies during the accounting period covered by the
attached financial statements.

 

3.             A review of the
activities of the Companies during such fiscal period has been made under the
supervision of the undersigned with a view to determining whether during such
fiscal period the Companies performed and observed all of their Obligations
under the Loan Documents, and

 

[select one:]

 

[to the best knowledge of the undersigned during such fiscal period,
the Companies performed and observed each covenant and condition of the Loan
Documents applicable to them.]

—or—

[the following covenants or conditions have not
been performed or observed and the following is a list of each such Default and
its nature and status:]

4.             The representations
and warranties of the Trust and each Borrower contained in Article V of
the Agreement, or which are contained in any document furnished at any time
under or in connection with the Loan Documents, are true and correct in all
material respects on and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct in all material respects as of such earlier
date, and except that for purposes of this Compliance Certificate, the
representations and warranties contained in subsections (a)(i) and (a)(ii)
of Section 5.05 of the Agreement shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01 of the Agreement, including the statements
in connection with which this Compliance Certificate is delivered.

 

5.             The financial
covenant analyses and information set forth on Schedule 2 and Schedule 3
attached hereto are true and accurate on and as of the date of this
Certificate.

IN WITNESS WHEREOF, the
undersigned has executed this Certificate as of                             ,
              .

 

TRUST:

 

GMH
COMMUNITIES TRUST,
a Maryland real estate investment trust

 

 

By:          

                Name:

                Title:

 

 

23

 

Acknowledged and Agreed:

GMH OPERATING PARTNERSHIP:

GMH COMMUNITIES, L.P., a Delaware limited partnership

By:                             GMH COMMUNITIES GP TRUST, a Delaware trust, its sole General
Partner

 

 

                By:

                               Name: 

                               Title: 

 

24

 

 

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

 

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 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

  	
   

  	
  $

  	
   

  

 

 

25

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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 less
  development and construction fee income (i.e. management fees and equity
  returns)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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

  	
   

  

 

26

 

	
  V.

  	
  Section 7.10(e) — Total Leverage Ratio.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Liabilities

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Total Asset Value (See Schedule 1)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Ratio of V.A. to V.B.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Maximum Allowed 

  	
  [60% after December 31, 2005]

  	
   

  
	
   

  	
   

  	
   

  	
  [62.5% 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) — Recourse Debt other than the
  Obligations.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Actual 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 7.05(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%)

  	
   

  	
   

  	
   

  
										

 

 

27

 

IX.           Section 7.02(b) — Investments

 

	
  Investments

  	
   

  	
  Amount

  	
   

  	
  Total Asset

  Value

  	
   

  	
  Maximum

  Allowed

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
  Investments in raw land

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii) 

  	
  Investments in Properties under construction

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
  20

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
  Unconsolidated Affiliates

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
  20

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv) 

  	
  Other Non-Real Estate Investments

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v) 

  	
  Indebtedness secured by Real Property

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi) 

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

  	
   

  	
  $

  	
   

  	
   

  	
  %

  	
  30

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  X.

  	
  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

  	
  %

  

 

 

 

28

 

 

                                                                                            SCHEDULE
3

 

TO COMPLIANCE CERTIFICATE

 

CALCULATION OF TOTAL ASSET VALUE
AND BORROWING BASE VALUE

 

 

A.                                   TOTAL
ASSET VALUE:

 

1.                                       $                                                       
(a) (i) The Companies’ NOI from 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, divided by (b) 8.5%.

 

2.                                       $                                                       
Approved Costs of each Student Housing Project 
acquired  during the fiscal
quarter ending on the date of determination.

 

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 Items 3 and 4 (limited to 20% of Total Asset Value).

 

6.                                       $                                                       Book
value of other assets (excluding owned real estate) owned by the Borrowers and
Guarantors, as determined on a consolidated basis in accordance with GAAP.

 

7.
                                    $                                                       Sum
of Items 1, 2, 5, and 6.

 

 

29

 

 

 

B.                                     BORROWING
BASE VALUE:

 

1.                                       $                                                       (a)
(i) The Companies’ NOI from 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, divided by (b) 8.5%.

 

2.
                                    $                                                       Approved
Costs of each Student Housing Project 
acquired  during the fiscal
quarter ending on the date of determination.

 

3.                                       $                                                       Sum
of Item 1 + Item 2.*

 

4.                                       $                                                       Item
3 multiplied by 0.60.

 

5.                                       $                                                       (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.

 

6.                                       $                                                       (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.

 

7.                                       $                                                       Sum
of Item 5 + Item 6 (limited to 35% of Borrowing Base Value).

 

8.                                       $                                                       Item
7 multiplied by 0.50.

 

9.                                     $                                                       Sum
of 4 + 8.

 

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

 

30

 

                                                                                            SCHEDULE
3

 

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

  	
   

  	
  $

  	
   

  	
   

  

 

 

31

 

 

 

	
  Consolidated EBITDA

  	
   

  	
  Most Recent Fiscal

  Quarter Annualized

  	
   

  
	
  Consolidated Net Income

  	
   

  	
  $

  	
   

  	
   

  
	
  +Consolidated Interest Charges

  	
   

  	
  $

  	
   

  	
   

  
	
  +income taxes

  	
   

  	
  $

  	
   

  	
   

  
	
  +depreciation expense

  	
   

  	
  $

  	
   

  	
   

  
	
  +amortization expense

  	
   

  	
  $

  	
   

  	
   

  
	
  +non-recurring non-cash expenses

  	
   

  	
  $

  	
   

  	
   

  
	
  -income tax credits

  	
   

  	
  $

  	
   

  	
   

  
	
  -non-cash income

  	
   

  	
  $

  	
   

  	
   

  
	
  =Consolidated EBITDA

  	
   

  	
  $

  	
   

  	
   

  

 

 

 

32

 

 

EXHIBIT E

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”)
is dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the “Assignor”)
and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee.  The
Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby
agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor’s rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, the Letters of Credit and the Swing Line Loans
included in such facilities) and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and any other right
of the Assignor (in its capacity as a Lender) against any Person, whether known
or unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice
claims, statutory claims and all other claims at law or in equity related to
the rights and obligations sold and assigned pursuant to clause (i) above (the
rights and obligations sold and assigned pursuant to clauses (i) and (ii) above
being referred to herein collectively as, the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

 

1.                                       Assignor:                                                                          

 

2.                                       Assignee:                                                                          
[and is an Affiliate/Approved Fund of [identify Lender]]

 

3.                                       Borrower(s):                                                                      

 

4.                                       Administrative Agent: Bank of America, N.A., as the
administrative agent under the Credit Agreement

 

5.                                       Credit Agreement: Credit Agreement, dated as of
November 8, 2004, among GMH Communities Trust, each of the Subsidiary
Borrowers defined therein, GMH Communities, LP, the Lenders from time to time
party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer,
and Swing Line Lender.

 

33

 

 

6.             Assigned
Interest:

 

	
  Aggregate Amount of 

  Commitment for all Lenders

  	
   

  	
  Amount of 

  Commitment Assigned

  	
   

  	
  Percentage Assigned of Commitment(1)

  	
   

  	
  CUSIP Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  

[7.            Trade
Date:                                                                       ](2)

Effective Date:
                                         ,
20       [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed
to:

 

ASSIGNOR

[NAME OF ASSIGNOR]

 

By: 

        Title:

 

ASSIGNEE

[NAME OF ASSIGNEE]

 

By: 

        Title:

Consented to and
Accepted:

 

BANK OF AMERICA,
N.A., as

  Administrative Agent

 

By: 

      Title:

 

 

(1) Set forth, to at least 9 decimals, as a percentage of the Commitment
of all Lenders thereunder.

 

(2) To be
completed if the Assignor and the Assignee intend that the minimum assignment
amount is to be determined as of the Trade Date.

 

34

 

 

 

Consented to:

 

BORROWERS:

 

By: 

      Title:

 

 

TRUST:

 

GMH COMMUNITIES
TRUST

 

By: 

      Title:

 

 

35

 

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.         Representations
and Warranties.

 

1.1.      Assignor.  The Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of any Borrower, any of their
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by any Borrower, any of their
Subsidiaries or Affiliates or any other Person of any of their respective obligations
under any Loan Document.

 

1.2.      Assignee.  The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee under the
Credit Agreement (subject to receipt of such consents as may be required under
the Credit Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
6.01 thereof, as applicable, and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption and to purchase the Assigned Interest on
the basis of which it has made such analysis and decision independently and
without reliance on the Administrative Agent or any other Lender, and (v) if it
is a Foreign Lender, attached hereto is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently
and without reliance on the Administrative Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

 

36

 

 

2.         Payments.  From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.

 

3.         General
Provisions.  This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed
counterpart of a signature page of this Assignment and Assumption by telecopy
shall be effective as delivery of a manually executed counterpart of this Assignment
and Assumption.  This Assignment and
Assumption shall be governed by, and construed in accordance with, the law of
the State of New York.

 

 

37

 

 

EXHIBIT
F-1

 

 

FORM
OF TRUST GUARANTY

 

UNCONDITIONAL
GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT is executed as of November 8, 2004, by GMH
COMMUNITIES TRUST, a Maryland real estate investment trust (“Guarantor”),
for the benefit of the Credit Parties defined below.  Capitalized terms used herein shall, unless otherwise
indicated, have the respective meanings set forth in the Credit Agreement  (as defined below).

 

R E  C  I  T  A
L  S:

 

1.             GMH Communities,
LP, a Delaware limited partnership (“GMH Operating Partnership”), and
each of the Subsidiary Borrowers (GMH Operating Partnership and the Subsidiary
Borrowers are collectively, “Borrowers” and individually a “Borrower”)
may from time to time be indebted to Credit Parties pursuant to that certain
Credit Agreement dated of even date herewith (herein referred to, together with
all amendments, modifications, restatements, or supplements thereof, as the “Credit
Agreement”), by and between Borrowers, Guarantor, Bank of America, N.A., a
national banking association (“Administrative Agent”), as Administrative
Agent, and Lenders defined therein (Administrative Agent and Lenders, together
with their respective successors and assigns are herein called “Credit
Parties”).

 

2.             The Credit Parties
are not willing to make loans under the Credit Agreement or otherwise extend
credit to Borrowers unless Guarantor unconditionally guarantees payment of all
present and future indebtedness and obligations of Borrowers to Credit Parties
under the Credit Agreement and the Loan Documents.

 

3.             Guarantor will
benefit from Credit Parties’ extension of credit to Borrowers.

 

NOW, THEREFORE, as an inducement to Credit Parties to enter into the
Credit Agreement and to make loans to Borrowers thereunder, and to extend such
credit to Borrowers as Credit Parties may from time to time agree to extend,
and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, Guarantor hereby guarantees
payment of the Guaranteed Obligations (hereinafter defined) as more
specifically described hereinbelow in Section 1 and hereby agrees as
follows:

 

1.             Guaranty.  Guarantor hereby absolutely and
unconditionally guarantees, as a guarantee of payment and not merely as a
guarantee of collection, prompt payment when due, whether at stated maturity,
upon acceleration or otherwise, and at all times thereafter, of any and all
existing and future indebtedness and liabilities of every kind, nature and
character, direct or indirect, absolute or contingent, liquidated or
unliquidated, voluntary or involuntary, of each Borrower to Credit Parties
arising under the Credit Agreement and all instruments, agreements and other
documents of every kind and nature now or hereafter executed in connection with
the Credit Agreement (including all renewals, extensions and modifications
thereof and all costs, attorneys’ fees and expenses incurred by Lender in
connection with 

 

 

38

 

the collection or enforcement thereof) (collectively, the “Guaranteed
Obligations”).  The Administrative
Agent’s books and records showing the amount of the Guaranteed Obligations
shall be admissible in evidence in any action or proceeding, and shall be
binding upon Guarantor and conclusive for the purpose of establishing the
amount of the Guaranteed Obligations. 
This Guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Guaranteed Obligations or any instrument or
agreement evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor, or by any
fact or circumstance relating to the Guaranteed Obligations which might
otherwise constitute a defense to the obligations of Guarantor under this
Guaranty.  The obligations of Guarantor
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the Bankruptcy Code (Title 11, United States Code) or any
comparable provisions of any applicable state law.

 

2.             No Setoff or Deductions;
Taxes. Guarantor represents and warrants that it is incorporated and resident
in the United States of America. All payments by Guarantor hereunder shall be
paid in full, without setoff or counterclaim or any deduction or withholding
whatsoever, including, without limitation, for any and all present and future
taxes. If Guarantor must make a payment under this Guaranty, Guarantor
represents and warrants that it will make the payment from one of its U.S.
resident offices to Credit Parties so that no withholding tax is imposed on the
payment.  If notwithstanding the
foregoing, Guarantor makes a payment under this Guaranty to which withholding
tax applies, or any taxes (other than taxes on net income (a) imposed by the
country or any subdivision of the country in which any Credit Party’s principal
office or actual lending office is located and (b) measured by the United
States taxable income Credit Parties would have received if all payments under
or in respect of this Guaranty were exempt from taxes levied by Guarantor’s
country) are at any time imposed on any payments under or in respect of this
Guaranty including, but not limited to, payments made pursuant to this Paragraph
2, Guarantor shall pay all such taxes to the relevant authority in
accordance with applicable law such that Lender receives the sum it would have
received had no such deduction or withholding been made and shall also pay to
Credit Parties, on demand, all additional amounts which Credit Parties specify
as necessary to preserve the after-tax yield Credit Parties would have received
if such taxes had not been imposed. 
Guarantor shall promptly provide Administrative Agent with an original
receipt or certified copy issued by the relevant authority evidencing the
payment of any such amount required to be deducted or withheld.

 

3.             No Termination.  This Guaranty is a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until all Guaranteed Obligations and any other
amounts payable under this Guaranty are indefeasibly paid and performed in full
and any commitments of Credit Parties or facilities provided by Credit Parties
with respect to the Guaranteed Obligations are terminated.  At Lender’s option, all payments under this
Guaranty shall be made to Administrative Agent’s office in U.S. Dollars.

 

4.             Waiver of Notices.  Guarantor waives notice of the acceptance of
this Guaranty and of the extension or continuation of the Guaranteed
Obligations or any part thereof. Guarantor further waives presentment, protest,
notice, dishonor or default, demand for payment and any other notices to which
Guarantor might otherwise be entitled.

 

5.             Subrogation.  Guarantor shall exercise no right of
subrogation, contribution or similar rights with respect to any payments it
makes under this Guaranty until all of the Guaranteed Obligations and any 

 

39

 

amounts payable under this Guaranty are indefeasibly paid and performed
in full and any commitments of Credit Parties or facilities provided by Credit
Parties with respect to the Guaranteed Obligations are terminated.  If any amounts are paid to Guarantor in
violation of the foregoing limitation, then such amounts shall be held in trust
for the benefit of Credit Parties and shall forthwith be paid to Credit Parties
to reduce the amount of the Guaranteed Obligations, whether matured or
unmatured.

 

6.             Waiver of
Suretyship Defenses.  Guarantor
agrees that Administrative Agent on behalf of Lenders may, at any time and from
time to time, and without notice to Guarantor, make any agreement with any
Borrower or with any other person or entity liable on any of the Guaranteed
Obligations or providing collateral as security for the Guaranteed Obligations,
for the extension, renewal, payment, compromise, discharge or release of the
Guaranteed Obligations or any collateral (in whole or in part), or for any
modification or amendment of the terms thereof or of any instrument or
agreement evidencing the Guaranteed Obligations or the provision of collateral,
all without in any way impairing, releasing, discharging or otherwise affecting
the obligations of Guarantor under this Guaranty.  Guarantor waives any defense arising by
reason of any disability or other defense of any Borrower or any other
guarantor, or the cessation from any cause whatsoever of the liability of any
Borrower, or any claim that Guarantor’s obligations exceed or are more
burdensome than those of any Borrower and waives the benefit of any statute of
limitations affecting the liability of Guarantor hereunder.  Guarantor waives any right to enforce any
remedy which any Credit Party now has or may hereafter have against any
Borrower and waives any benefit of and any right to participate in any security
now or hereafter held by Credit Parties. 
Further, Guarantor consents to the taking of, or failure to take, any
action which might in any manner or to any extent vary the risks of Guarantor
under this Guaranty or which, but for this provision, might operate as a
discharge of Guarantor.

 

7.             Exhaustion of Other
Remedies Not Required.  The
obligations of Guarantor hereunder are those of primary obligor, and not merely
as surety, and are independent of the Guaranteed Obligations.  Guarantor waives diligence by Credit Parties
and action on delinquency in respect of the Guaranteed Obligations or any part
thereof, including, without limitation any provisions of law requiring Credit
Parties to exhaust any right or remedy or to take any action against any Borrower,
any other guarantor or any other person, entity or property before enforcing
this Guaranty against Guarantor.

 

8.             Reinstatement.  Notwithstanding anything in this Guaranty to
the contrary, this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any portion of the Guaranteed
Obligations is revoked, terminated, rescinded or reduced or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of any
Borrower or any other person or entity or otherwise, as if such payment had not
been made and whether or not Administrative Agent is in possession of or has
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction.

 

9.             Subordination.  Guarantor hereby subordinates the payment of
all obligations and indebtedness of each Borrower owing to Guarantor, whether
now existing or hereafter arising, including but not limited to any obligation
of each Borrower to Guarantor as subrogee of Credit Parties or resulting from
Guarantor’s performance under this Guaranty, to the indefeasible payment in
full of all Guaranteed Obligations. If Administrative Agent so requests, any
such obligation or indebtedness of any Borrower to Guarantor shall be enforced
and performance received by Guarantor as trustee for Lender and the proceeds
thereof shall be paid over to Lender on account of the Guaranteed Obligations,
but without reducing or affecting in any manner the liability of Guarantor
under this Guaranty.

 

 

40

 

 

10.          Information.  Guarantor agrees to furnish promptly to
Administrative Agent any and all financial or other information regarding
Guarantor or its property as Administrative Agent may reasonably request in
writing.

 

11.          Stay of Acceleration.  In the event that acceleration of the time
for payment of any of the Guaranteed Obligations is stayed, upon the
insolvency, bankruptcy or reorganization of any Borrower or any other person or
entity, or otherwise, all such amounts shall nonetheless be payable by
Guarantor immediately upon demand by Administrative Agent.

 

12.          Expenses.  Guarantor shall pay on demand all
out-of-pocket expenses (including reasonable attorneys’ fees and expenses and
the allocated cost and disbursements of internal legal counsel) in any way
relating to the enforcement or protection of Credit Parties’ rights under this
Guaranty, including any incurred in the preservation, protection or enforcement
of any rights of Credit Parties in any case commenced by or against Guarantor
under the Bankruptcy Code (Title 11, United States Code) or any similar or
successor statute.  The obligations of
Guarantor under the preceding sentence shall survive termination of this
Guaranty.

 

13.          Amendments.  No provision of this Guaranty may be waived,
amended, supplemented or modified, except by a written instrument executed by
Administrative Agent and Guarantor.

 

14.          No Waiver;
Enforceability.  No failure
by Credit Parties to exercise, and no delay in exercising, any right, remedy or
power hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy or power hereunder
preclude any other or further
exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity.  The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of
any other provision herein.

 

15.          Assignment; Governing
Laws; Jurisdiction.  This
Guaranty shall (a) bind Guarantor and its successors and assigns, provided that Guarantor may not assign its rights or
obligations under this Guaranty without the prior written consent of
Administrative Agent (and any attempted assignment without such consent shall
be void), (b) inure to the benefit of Credit Parties and their successors and
assigns and Credit Parties may, without notice to Guarantor and without
affecting Guarantor’s obligations hereunder, assign or sell participations in
the Guaranteed Obligations and this Guaranty, in whole or in part, and (c) be
governed by the internal laws of the State of New York.  Guarantor hereby irrevocably (i) submits to
the non-exclusive jurisdiction of any United States Federal or State
court sitting in New York, New York in any action or proceeding arising out of
or relating to this Guaranty, and (ii) waives to the fullest extent permitted
by law any defense asserting an inconvenient forum in connection therewith.  Service of process by Credit Parties in
connection with such action or proceeding shall be binding on Guarantor if sent
to Guarantor by registered or certified mail at its address specified in Section
10.02 of the Credit Agreement. 
Guarantor agrees that Credit Parties may disclose to any prospective
purchaser and any purchaser of all or part of the Guaranteed Obligations any
and all information in Credit Parties’ possession concerning Guarantor, this
Guaranty and any security for this Guaranty.

 

16.          Condition of Borrowers.  Guarantor acknowledges and agrees that it has
the sole responsibility for, and has adequate means of, obtaining from each
Borrower such information concerning the 

 

41

 

financial condition, business and operations of such Borrower as
Guarantor requires, and that Credit Parties have no duty, and Guarantor is not
relying on Credit Parties at any time, to disclose to Guarantor any information
relating to the business, operations or financial condition of any Borrower.

 

17.          Setoff.  If and to the extent any payment is not made
when due hereunder, Credit Parties may setoff and charge from time to time any
amount so due against any or all of Guarantor’s accounts or deposits with
Credit Parties.

 

18.          Other Guarantees.  Unless otherwise agreed by Administrative
Agent and Guarantor in writing, this Guaranty is not intended to supersede or
otherwise affect any other guaranty now or hereafter given by Guarantor for the
benefit of Credit Parties or any term or provision thereof.

 

19.          Representations and
Warranties.  Guarantor
represents and warrants that (i) it is duly organized and in good standing
under the laws of the jurisdiction of its organization and has full capacity
and right to make and perform this Guaranty, and all necessary authority has
been obtained; (ii) this Guaranty constitutes its legal, valid and binding
obligation enforceable in accordance with its terms; (iii) the making and
performance of this Guaranty does not and will not violate the provisions of
any applicable law, regulation or order, and does not and will not result in
the breach of, or constitute a default or require any consent under, any
material agreement, instrument, or document to which it is a party or by which
it or any of its property may be bound or affected; (iv) all consents,
approvals, licenses and authorizations of, and filings and registrations with,
any governmental authority required under applicable law and regulations for
the making and performance of this Guaranty have been obtained or made and are
in full force and effect; (v) by virtue of its relationship with Borrowers, the
execution, delivery and performance of this Guaranty is for the direct benefit
of Guarantor and it has received adequate consideration for this Guaranty; and
(vi) the financial information, that has been delivered to Administrative Agent
by or on behalf of Guarantor, is complete and correct in all respects and
accurately presents the financial condition and the operational results of
Guarantor and since the date of the most recent financial statements delivered
to Administrative Agent, there has been no material adverse change in the
financial condition or operational results of Guarantor.

 

20.          WAIVER OF JURY TRIAL;
FINAL AGREEMENT.  TO THE
EXTENT ALLOWED BY APPLICABLE LAW, GUARANTOR AND CREDIT PARTIES EACH WAIVE TRIAL
BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT
OF THIS GUARANTY.  THIS GUARANTY
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN
THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

 

[Remainder of page
intentionally left blank.  Signature page
to follow]

 

 

42

 

 

 

GUARANTOR:

 

 

GMH
COMMUNITIES TRUST,

a Maryland real
estate investment trust, as Guarantor

 

By: 

Name: 

Title: 

 

43

 

EXHIBIT
F-2

 

FORM
OF SUBSIDIARY GUARANTY

 

 

UNCONDITIONAL GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT is executed as of November 8, 2004, by
EACH OF THE MATERIAL SUBSIDIARIES LISTED ON SCHEDULE 1 ATTACHED HERETO
or who become a party hereto pursuant to Paragraph 21 below (each a “Guarantor”
and collectively, “Guarantors”), for the benefit of the Credit Parties
defined below. Capitalized terms used herein shall, unless otherwise indicated,
have the respective meanings set forth in the Credit Agreement  (as defined below).

 

R E  C  I  T  A
L  S:

 

1.             GMH Communities,
LP, a Delaware limited partnership (“GMH Operating Partnership”), and
each of the Subsidiary Borrowers (GMH Operating Partnership and the Subsidiary
Borrowers are collectively, “Borrowers” and individually a “Borrower”)
may from time to time be indebted to Credit Parties pursuant to that certain
Credit Agreement dated of even date herewith (herein referred to, together with
all amendments, modifications, restatements, or supplements thereof, as the “Credit
Agreement”), by and between Borrowers, GMH Communities Trust, a Maryland
real estate investments trust, Bank of America, N.A., a national banking
association (“Administrative Agent”), as Administrative Agent, and the
Lenders defined therein (Administrative Agent and Lenders, together with their
respective successors and assigns are herein called “Credit Parties”).

 

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

 

3.             The Credit Parties
are not willing to make loans under the Credit Agreement or otherwise extend
credit to Borrowers unless Guarantors unconditionally guarantee payment of all
present and future indebtedness and obligations of each Borrower to the Credit
Parties under the Credit Agreement and the Loan Documents.

 

4.             Each Guarantor
will, directly or indirectly, benefit from the Credit Parties’ extension of
credit to Borrowers.

 

NOW, THEREFORE, as an inducement to the Credit Parties to enter into
the Credit Agreement and to make loans to Borrowers thereunder, and to extend
such credit to Borrowers as the Credit Parties may from time to time agree to
extend, and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, Guarantors hereby jointly and
severally guarantee payment of the Guaranteed Debt (hereinafter defined) as
more specifically described hereinbelow in Section 1 and hereby agree as
follows:

 

 

44

 

 

SECTION 1

 

NATURE AND SCOPE OF GUARANTY

 

1.             Guaranty.  Each Guarantor hereby absolutely and
unconditionally guarantees, jointly and severally, as a guarantee of payment
and not merely as a guarantee of collection, prompt payment when due, whether
at stated maturity, upon acceleration or otherwise, and at all times thereafter,
of any and all existing and future indebtedness and liabilities of every kind,
nature and character, direct or indirect, absolute or contingent, liquidated or
unliquidated, voluntary or involuntary, of each Borrower to the Credit Parties
arising under the Credit Agreement and all instruments, agreements and other
documents of every kind and nature now or hereafter executed in connection with
the Credit Agreement (including all renewals, extensions and modifications
thereof and all costs, attorneys’ fees and expenses incurred by the Credit
Parties in connection with the collection or enforcement thereof)
(collectively, the “Guaranteed Obligations”).  Administrative Agent’s books and records
showing the amount of the Guaranteed Obligations shall be admissible in
evidence in any action or proceeding, and shall be binding upon each Guarantor
and conclusive for the purpose of establishing the amount of the Guaranteed
Obligations.  This Guaranty shall not be
affected by the genuineness, validity, regularity or enforceability of the
Guaranteed Obligations or any instrument or agreement evidencing any Guaranteed
Obligations, or by the existence, validity, enforceability, perfection, or
extent of any collateral therefor, or by any fact or circumstance relating to
the Guaranteed Obligations which might otherwise constitute a defense to the
obligations of any Guarantor under this Guaranty.  The obligations of each Guarantor hereunder
shall be limited to an aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance under Section 548 of
the Bankruptcy Code (Title 11, United States Code) or any comparable provisions
of any applicable state law.

 

2.             No Setoff or Deductions; Taxes. Each Guarantor
represents and warrants that it is incorporated and resident in the United
States of America. All payments by any Guarantor hereunder shall be paid in
full, without setoff or counterclaim or any deduction or withholding
whatsoever, including, without limitation, for any and all present and future
taxes. If any Guarantor must make a payment under this Guaranty, such Guarantor
represents and warrants that it will make the payment from one of its U.S.
resident offices to the Credit Parties so that no withholding tax is imposed on
the payment.  If notwithstanding the
foregoing, any Guarantor makes a payment under this Guaranty to which
withholding tax applies, or any taxes (other than taxes on net income (a)
imposed by the country or any subdivision of the country in which any Credit
Parties’ principal office or actual lending office is located and (b) measured
by the United States taxable income the Credit Parties would have received if
all payments under or in respect of this Guaranty were exempt from taxes levied
by such Guarantor’s country) are at any time imposed on any payments under or
in respect of this Guaranty including, but not limited to, payments made
pursuant to this Paragraph 2, such Guarantor shall pay all such taxes to
the relevant authority in accordance with applicable law such that the Credit
Parties receives the sum it would have received had no such deduction or
withholding been made and shall also pay to the Credit Parties, on demand, all
additional amounts which the Credit Parties specifies as necessary to preserve the
after-tax yield the Credit Parties would have received if such taxes had not
been imposed.  Guarantors shall promptly
provide Administrative Agent with an original receipt or certified copy issued
by the relevant authority evidencing the payment of any such amount required to
be deducted or withheld.

 

3.             No Termination.  This Guaranty is a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until all Guaranteed 

 

 

45

 

 

Obligations and any other amounts payable under this Guaranty are
indefeasibly paid and performed in full and any commitments of the Credit
Parties or facilities provided by the Credit Parties with respect to the Guaranteed
Obligations are terminated.  At
Administrative Agent’s option, all payments under this Guaranty shall be made
at Administrative Agent’s Office in U.S. Dollars.

 

4.             Waiver of Notices.  Each Guarantor waives notice of the
acceptance of this Guaranty and of the extension or continuation of the
Guaranteed Obligations or any part thereof. each Guarantor further waives
presentment, protest, notice, dishonor or default, demand for payment and any
other notices to which any Guarantor might otherwise be entitled.

 

5.             Subrogation.  No Guarantor shall exercise right of
subrogation, contribution or similar rights with respect to any payments it
makes under this Guaranty until all of the Guaranteed Obligations and any
amounts payable under this Guaranty are indefeasibly paid and performed in full
and any commitments of the Credit Parties or facilities provided by the Credit
Parties with respect to the Guaranteed Obligations are terminated.  If any amounts are paid to any Guarantor in
violation of the foregoing limitation, then such amounts shall be held in trust
for the benefit of the Credit Parties and shall forthwith be paid to the Credit
Parties to reduce the amount of the Guaranteed Obligations, whether matured or
unmatured.

 

6.             Waiver of
Suretyship Defenses.  Each
Guarantor agrees that Administrative Agent on behalf of the Lenders may, at any
time and from time to time, and without notice to Guarantors, make any
agreement with any Borrower or with any other person or entity liable on any of
the Guaranteed Obligations or providing collateral as security for the
Guaranteed Obligations, for the extension, renewal, payment, compromise,
discharge or release of the Guaranteed Obligations or any collateral (in whole
or in part), or for any modification or amendment of the terms thereof or of
any instrument or agreement evidencing the Guaranteed Obligations or the
provision of collateral, all without in any way impairing, releasing,
discharging or otherwise affecting the obligations of any Guarantor under this
Guaranty.  Each Guarantor waives any
defense arising by reason of any disability or other defense of any Borrower or
any other guarantor, or the cessation from any cause whatsoever of the
liability of Borrower, or any claim that any Guarantor’s obligations exceed or
are more burdensome than those of any Borrower and waives the benefit of any
statute of limitations affecting the liability of any Guarantor hereunder.  Each Guarantor waives any right to enforce
any remedy which any Credit Party now has or may hereafter have against any
Borrower and waives any benefit of and any right to participate in any security
now or hereafter held by the Credit Parties. 
Further, each Guarantor consents to the taking of, or failure to take,
any action which might in any manner or to any extent vary the risks of any
Guarantor under this Guaranty or which, but for this provision, might operate
as a discharge of any Guarantor.

 

7.             Exhaustion of Other
Remedies Not Required.  The
obligations of each Guarantor hereunder are those of primary obligor, and not
merely as surety, and are independent of the Guaranteed Obligations.  Each Guarantor waives diligence by the Credit
Parties and action on delinquency in respect of the Guaranteed Obligations or any
part thereof, including, without limitation any provisions of law requiring the
Credit Parties to exhaust any right or remedy or to take any action against
Borrower, any other guarantor or any other person, entity or property before
enforcing this Guaranty against any Guarantor, including but not limited to the
benefits of Chapter 34 of the Texas Business and Commerce Code, §17.001 of the
Texas Civil Practice and Remedies Code, and Rule 31 of the Texas Rules of Civil
Procedure, or any similar statute.

 

 

46

 

 

8.             Reinstatement.  Notwithstanding anything in this Guaranty to
the contrary, this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any portion of the Guaranteed
Obligations is revoked, terminated, rescinded or reduced or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of any
Borrower or any other person or entity or otherwise, as if such payment had not
been made and whether or not Administrative Agent is in possession of or has
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction.

 

9.             Subordination.  Each Guarantor hereby subordinates the
payment of all obligations and indebtedness of any Borrower owing to such
Guarantor, whether now existing or hereafter arising, including but not limited
to any obligation of any Borrower to such Guarantor as subrogee of the Credit
Parties or resulting from such Guarantor’s performance under this Guaranty, to
the indefeasible payment in full of all Guaranteed Obligations. If
Administrative Agent so requests, any such obligation or indebtedness of each
Borrower to any Guarantor shall be enforced and performance received by such
Guarantor as trustee for the Credit Parties and the proceeds thereof shall be
paid over to Administrative Agent on account of the Guaranteed Obligations, but
without reducing or affecting in any manner the liability of any Guarantor
under this Guaranty.

 

10.          Information.  Each Guarantor agrees to furnish promptly to
Administrative Agent any and all financial or other information regarding such
Guarantor or its property as Administrative Agent may reasonably request in
writing.

 

11.          Stay of Acceleration.  In the event that acceleration of the time
for payment of any of the Guaranteed Obligations is stayed, upon the
insolvency, bankruptcy or reorganization of any Borrower or any other person or
entity, or otherwise, all such amounts shall nonetheless be payable by
Guarantors immediately upon demand by Administrative Agent.

 

12.          Expenses.  Guarantors shall pay on demand all
out-of-pocket expenses (including reasonable attorneys’ fees and expenses and
the allocated cost and disbursements of internal legal counsel) in any way
relating to the enforcement or protection of the Credit Parties’ rights under
this Guaranty, including any incurred in the preservation, protection or
enforcement of any rights of the Credit Parties in any case commenced by or
against any Guarantor under the Bankruptcy Code (Title 11, United States Code)
or any similar or successor statute.  The
obligations of Guarantors under the preceding sentence shall survive
termination of this Guaranty.

 

13.          Amendments.  No provision of this Guaranty may be waived,
amended, supplemented or modified, except by a written instrument executed by
Administrative Agent and Guarantors.

 

14.          No Waiver;
Enforceability.  No failure
by the Credit Parties to exercise, and no delay in exercising, any right,
remedy or power hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy or power hereunder
preclude any other or further
exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity.  The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of
any other provision herein.

 

15.          Assignment; Governing
Laws; Jurisdiction.  This
Guaranty shall (a) bind each Guarantor and its successors and assigns, provided
that no Guarantor may assign its rights or obligations under this 

 

 

47

 

Guaranty without the prior written consent of Administrative Agent (and
any attempted assignment without such consent shall be void), (b) inure to the
benefit of the Credit Parties and their successors and assigns and the Credit
Parties may, without notice to any Guarantor and without affecting any
Guarantor’s obligations hereunder, assign or sell participations in the
Guaranteed Obligations and this Guaranty, in whole or in part, and (c) be
governed by the internal laws of the State of Texas.  Each Guarantor hereby irrevocably (i) submits
to the non-exclusive jurisdiction of any United States Federal or State
court sitting in Dallas, Texas in any action or proceeding arising out of or
relating to this Guaranty, and (ii) waives to the fullest extent permitted by
law any defense asserting an inconvenient forum in connection therewith.  Service of process by Administrative Agent in
connection with such action or proceeding shall be binding on each Guarantor if
sent to such Guarantor by registered or certified mail at its address specified
below.  Each Guarantor agrees that the
Credit Parties may disclose to any prospective purchaser and any purchaser of
all or part of the Guaranteed Obligations any and all information in the Credit
Parties’ possession concerning any Guarantor, this Guaranty and any security
for this Guaranty.

 

16.          Condition of
Borrower.  Guarantors
acknowledges and agrees that it has the sole responsibility for, and has
adequate means of, obtaining from each Borrower such information concerning the
financial condition, business and operations of such Borrower as Guarantors require,
and that Credit Parties have no duty, and Guarantors are not relying on the
Credit Parties at any time, to disclose to Guarantors any information relating
to the business, operations or financial condition of Borrower.

 

17.          Setoff.  If and to the extent any payment is not made
when due hereunder, the Credit Parties may setoff and charge from time to time
any amount so due against any or all of Guarantors’ accounts or deposits with
any Credit Parties.

 

18.          Other Guarantees.  Unless otherwise agreed by Administrative
Agent and Guarantors in writing, this Guaranty is not intended to supersede or
otherwise affect any other guaranty now or hereafter given by Guarantors for
the benefit of the Credit Parties or any term or provision thereof.

 

19.          Representations and
Warranties.  Each
Guarantor represents and warrants that (i) it is duly organized and in good
standing under the laws of the jurisdiction of its organization and has full
capacity and right to make and perform this Guaranty, and all necessary authority
has been obtained; (ii) this Guaranty constitutes its legal, valid and binding
obligation enforceable in accordance with its terms; (iii) the making and
performance of this Guaranty does not and will not violate the provisions of
any applicable law, regulation or order, and does not and will not result in
the breach of, or constitute a default or require any consent under, any
material agreement, instrument, or document to which it is a party or by which
it or any of its property may be bound or affected; (iv) all consents,
approvals, licenses and authorizations of, and filings and registrations with,
any governmental authority required under applicable law and regulations for
the making and performance of this Guaranty have been obtained or made and are
in full force and effect; (v) by virtue of its relationship with Borrower, the
execution, delivery and performance of this Guaranty is for the direct benefit
of such Guarantor and it has received adequate consideration for this Guaranty;
and (vi) the financial information, that has been delivered to Administrative
Agent by or on behalf of such Guarantor, is complete and correct in all
respects and accurately presents the financial condition and the operational
results of such Guarantor and since the date of the most recent financial
statements delivered to Administrative Agent, there has been no material
adverse change in the financial condition or operational results of such
Guarantor.

 

48

 

 

20.          WAIVER OF JURY TRIAL;
FINAL AGREEMENT.  TO THE
EXTENT ALLOWED BY APPLICABLE LAW, EACH GUARANTOR AND THE CREDIT PARTIES EACH
WAIVE TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR
ARISING OUT OF THIS GUARANTY.  THIS
GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

21.          Additional
Guarantors.  The initial
Guarantors hereunder shall be each of the Material Subsidiaries that are
signatories hereto and that are listed on Schedule 1 attached
hereto.  From time to time subsequent to
the time hereof, additional Material Subsidiaries may become parties hereto as
additional Guarantors (each an “Additional Guarantor”) pursuant to Section
6.12 of the Credit Agreement by executing a counterpart of this Guaranty
Agreement in the form of Exhibit A attached hereto.  Upon delivery of any such counterpart to
Administrative Agent, notice of which is hereby waived by Guarantors, each such
Additional Guarantor shall be a Guarantor and shall be a party hereto as if
such Additional Guarantor were an original signatory hereof.  Each Guarantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Guarantor hereunder, or by any election by
Administrative Agent not to cause any Material Subsidiary to become an
Additional Guarantor hereunder.  This
Guaranty Agreement shall be fully effective as to any Guarantor that is or
becomes a party hereto regardless of whether any such person becomes or fails
to become or ceases to be a Guarantor hereunder.

 

22.          Release of
Guarantors.  Pursuant to Section
9.10 of the Credit Agreement, any Guarantor may be released from its
obligations under this Guaranty Agreement by Administrative Agent’s execution
of a Release of Guaranty in the form of Exhibit B attached hereto. Each
Guarantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the release of any other Guarantor hereunder.

 

EXECUTED as of the day and year first above written.

 

GUARANTORS:

 

 

 

By:          

Name:

Title:

 

 

49

 

 

 

 

SCHEDULE 1 to Form of Subsidiary Guaranty

 

INITIAL GUARANTORS

 

[To be Provided]

 

50

EXHIBIT A to Form of Subsidiary Guaranty

 

COUNTERPART TO SUBSIDIARY GUARANTY

 

In witness whereof, the undersigned Additional Guarantor has caused
this Guaranty Agreement to be executed and delivered by its officer thereunto
duly authorized as of                        ,
20    .

 

 

[NAME OF ADDITIONAL GUARANTOR]

 

 

By:

Name:

Title:

 

51

EXHIBIT B to Form of Subsidiary
Guaranty

 

FORM OF RELEASE OF GUARANTOR

 

 

In witness whereof, the undersigned
Administrative Agent, for itself and on behalf of each of the Credit Parties,
hereby releases and discharges                            
from any and all obligations and liabilities of                            
to the Credit Parties under that certain Unconditional Guaranty Agreement dated
as of November 8, 2004, executed by the Material Subsidiaries described
therein in favor of the Credit Parties defined therein.

 

BANK OF AMERICA, NA, as Administrative Agent

 

 

By:

                Name:

                Title:

 

52

EXHIBIT
F-3

 

FORM
OF GMH OPERATING PARTNERSHIP GUARANTY

 

 

UNCONDITIONAL
GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT is executed as of November 8, 2004, by GMH
COMMUNITIES, L.P., a Delaware limited partnership (“Guarantor”), for the
benefit of the Credit Parties defined below. 
Capitalized terms used herein shall, unless otherwise indicated, have
the respective meanings set forth in the Credit Agreement  (as defined below).

 

R E  C  I  T  A
L  S:

 

1.             Each of the
Subsidiary Borrowers (collectively, “Borrowers” and individually a “Borrower”)
may from time to time be indebted to Credit Parties pursuant to that certain
Credit Agreement dated of even date herewith (herein referred to, together with
all amendments, modifications, restatements, or supplements thereof, as the “Credit
Agreement”), by and between Borrowers, Guarantor, GMH Communities Trust,
Bank of America, N.A., a national banking association (“Administrative Agent”),
as Administrative Agent, and Lenders defined therein (Administrative Agent and
Lenders, together with their respective successors and assigns are herein
called “Credit Parties”).

 

2.             The Credit Parties
are not willing to make loans under the Credit Agreement or otherwise extend
credit to Borrowers unless Guarantor unconditionally guarantees payment of all
present and future indebtedness and obligations of Borrowers to Credit Parties
under the Credit Agreement and the Loan Documents.

 

3.             Guarantor will
benefit from Credit Parties’ extension of credit to Borrowers.

 

NOW, THEREFORE, as an inducement to Credit Parties to enter into the
Credit Agreement and to make loans to Borrowers thereunder, and to extend such
credit to Borrowers as Credit Parties may from time to time agree to extend,
and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, Guarantor hereby guarantees
payment of the Guaranteed Obligations (hereinafter defined) as more
specifically described hereinbelow in Section 1 and hereby agrees as
follows:

 

1.             Guaranty.  Guarantor hereby absolutely and
unconditionally guarantees, as a guarantee of payment and not merely as a
guarantee of collection, prompt payment when due, whether at stated maturity,
upon acceleration or otherwise, and at all times thereafter, of any and all existing
and future indebtedness and liabilities of every kind, nature and character,
direct or indirect, absolute or contingent, liquidated or unliquidated,
voluntary or involuntary, of each Borrower to Credit Parties arising under the
Credit Agreement and all instruments, agreements and other documents of every
kind and nature now or hereafter executed in connection with the Credit
Agreement (including all renewals, extensions and modifications thereof and all
costs, attorneys’ fees and expenses incurred by Lender in connection with the
collection or enforcement thereof) (collectively, the “Guaranteed
Obligations”).  The Administrative 

 

53

 

Agent’s books and records showing the amount of the Guaranteed
Obligations shall be admissible in evidence in any action or proceeding, and
shall be binding upon Guarantor and conclusive for the purpose of establishing
the amount of the Guaranteed Obligations. 
This Guaranty shall not be affected by the genuineness, validity, regularity
or enforceability of the Guaranteed Obligations or any instrument or agreement
evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor, or by any
fact or circumstance relating to the Guaranteed Obligations which might
otherwise constitute a defense to the obligations of Guarantor under this
Guaranty.  The obligations of Guarantor
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the Bankruptcy Code (Title 11, United States Code) or any
comparable provisions of any applicable state law.

 

2.             No Setoff or
Deductions; Taxes. Guarantor represents and warrants that it is
incorporated and resident in the United States of America. All payments by
Guarantor hereunder shall be paid in full, without setoff or counterclaim or
any deduction or withholding whatsoever, including, without limitation, for any
and all present and future taxes. If Guarantor must make a payment under this
Guaranty, Guarantor represents and warrants that it will make the payment from
one of its U.S. resident offices to Credit Parties so that no withholding tax
is imposed on the payment.  If notwithstanding
the foregoing, Guarantor makes a payment under this Guaranty to which
withholding tax applies, or any taxes (other than taxes on net income (a)
imposed by the country or any subdivision of the country in which any Credit
Party’s principal office or actual lending office is located and (b) measured
by the United States taxable income Credit Parties would have received if all
payments under or in respect of this Guaranty were exempt from taxes levied by
Guarantor’s country) are at any time imposed on any payments under or in
respect of this Guaranty including, but not limited to, payments made pursuant
to this Paragraph 2, Guarantor shall pay all such taxes to the relevant
authority in accordance with applicable law such that Lender receives the sum
it would have received had no such deduction or withholding been made and shall
also pay to Credit Parties, on demand, all additional amounts which Credit
Parties specify as necessary to preserve the after-tax yield Credit Parties
would have received if such taxes had not been imposed.  Guarantor shall promptly provide
Administrative Agent with an original receipt or certified copy issued by the
relevant authority evidencing the payment of any such amount required to be
deducted or withheld.

 

3.             No Termination.  This Guaranty is a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until all Guaranteed Obligations and any other
amounts payable under this Guaranty are indefeasibly paid and performed in full
and any commitments of Credit Parties or facilities provided by Credit Parties
with respect to the Guaranteed Obligations are terminated.  At Lender’s option, all payments under this
Guaranty shall be made to Administrative Agent’s office in U.S. Dollars.

 

4.             Waiver of Notices.  Guarantor waives notice of the acceptance of
this Guaranty and of the extension or continuation of the Guaranteed
Obligations or any part thereof. Guarantor further waives presentment, protest,
notice, dishonor or default, demand for payment and any other notices to which
Guarantor might otherwise be entitled.

 

5.             Subrogation.  Guarantor shall exercise no right of
subrogation, contribution or similar rights with respect to any payments it
makes under this Guaranty until all of the Guaranteed Obligations and any
amounts payable under this Guaranty are indefeasibly paid and performed in full
and any commitments of 

 

54

 

Credit Parties or facilities provided by Credit Parties with respect to
the Guaranteed Obligations are terminated. 
If any amounts are paid to Guarantor in violation of the foregoing
limitation, then such amounts shall be held in trust for the benefit of Credit
Parties and shall forthwith be paid to Credit Parties to reduce the amount of
the Guaranteed Obligations, whether matured or unmatured.

 

6.             Waiver of
Suretyship Defenses.  Guarantor
agrees that Administrative Agent on behalf of Lenders may, at any time and from
time to time, and without notice to Guarantor, make any agreement with any
Borrower or with any other person or entity liable on any of the Guaranteed
Obligations or providing collateral as security for the Guaranteed Obligations,
for the extension, renewal, payment, compromise, discharge or release of the
Guaranteed Obligations or any collateral (in whole or in part), or for any
modification or amendment of the terms thereof or of any instrument or
agreement evidencing the Guaranteed Obligations or the provision of collateral,
all without in any way impairing, releasing, discharging or otherwise affecting
the obligations of Guarantor under this Guaranty.  Guarantor waives any defense arising by
reason of any disability or other defense of any Borrower or any other
guarantor, or the cessation from any cause whatsoever of the liability of any
Borrower, or any claim that Guarantor’s obligations exceed or are more
burdensome than those of any Borrower and waives the benefit of any statute of
limitations affecting the liability of Guarantor hereunder.  Guarantor waives any right to enforce any remedy
which any Credit Party now has or may hereafter have against any Borrower and
waives any benefit of and any right to participate in any security now or
hereafter held by Credit Parties. 
Further, Guarantor consents to the taking of, or failure to take, any
action which might in any manner or to any extent vary the risks of Guarantor
under this Guaranty or which, but for this provision, might operate as a
discharge of Guarantor.

 

7.             Exhaustion of Other
Remedies Not Required.  The
obligations of Guarantor hereunder are those of primary obligor, and not merely
as surety, and are independent of the Guaranteed Obligations.  Guarantor waives diligence by Credit Parties
and action on delinquency in respect of the Guaranteed Obligations or any part
thereof, including, without limitation any provisions of law requiring Credit
Parties to exhaust any right or remedy or to take any action against any
Borrower, any other guarantor or any other person, entity or property before
enforcing this Guaranty against Guarantor.

 

8.             Reinstatement.  Notwithstanding anything in this Guaranty to
the contrary, this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any portion of the Guaranteed
Obligations is revoked, terminated, rescinded or reduced or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of any
Borrower or any other person or entity or otherwise, as if such payment had not
been made and whether or not Administrative Agent is in possession of or has
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction.

 

9.             Subordination.  Guarantor hereby subordinates the payment of
all obligations and indebtedness of each Borrower owing to Guarantor, whether
now existing or hereafter arising, including but not limited to any obligation
of each Borrower to Guarantor as subrogee of Credit Parties or resulting from
Guarantor’s performance under this Guaranty, to the indefeasible payment in
full of all Guaranteed Obligations. If Administrative Agent so requests, any
such obligation or indebtedness of any Borrower to Guarantor shall be enforced
and performance received by Guarantor as trustee for Lender and the proceeds
thereof shall be paid over to Lender on account of the Guaranteed Obligations,
but without reducing or affecting in any manner the liability of Guarantor
under this Guaranty.

 

55

 

10.          Information.  Guarantor agrees to furnish promptly to
Administrative Agent any and all financial or other information regarding Guarantor
or its property as Administrative Agent may reasonably request in writing.

 

11.          Stay of Acceleration.  In the event that acceleration of the time
for payment of any of the Guaranteed Obligations is stayed, upon the
insolvency, bankruptcy or reorganization of any Borrower or any other person or
entity, or otherwise, all such amounts shall nonetheless be payable by
Guarantor immediately upon demand by Administrative Agent.

 

12.          Expenses.  Guarantor shall pay on demand all
out-of-pocket expenses (including reasonable attorneys’ fees and expenses and
the allocated cost and disbursements of internal legal counsel) in any way
relating to the enforcement or protection of Credit Parties’ rights under this
Guaranty, including any incurred in the preservation, protection or enforcement
of any rights of Credit Parties in any case commenced by or against Guarantor
under the Bankruptcy Code (Title 11, United States Code) or any similar or
successor statute.  The obligations of Guarantor
under the preceding sentence shall survive termination of this Guaranty.

 

13.          Amendments.  No provision of this Guaranty may be waived,
amended, supplemented or modified, except by a written instrument executed by
Administrative Agent and Guarantor.

 

14.          No Waiver;
Enforceability.  No failure
by Credit Parties to exercise, and no delay in exercising, any right, remedy or
power hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy or power hereunder
preclude any other or further
exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity.  The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of
any other provision herein.

 

15.          Assignment; Governing
Laws; Jurisdiction.  This
Guaranty shall (a) bind Guarantor and its successors and assigns, provided that Guarantor may not assign its rights or
obligations under this Guaranty without the prior written consent of
Administrative Agent (and any attempted assignment without such consent shall
be void), (b) inure to the benefit of Credit Parties and their successors and
assigns and Credit Parties may, without notice to Guarantor and without
affecting Guarantor’s obligations hereunder, assign or sell participations in
the Guaranteed Obligations and this Guaranty, in whole or in part, and (c) be
governed by the internal laws of the State of New York.  Guarantor hereby irrevocably (i) submits to
the non-exclusive jurisdiction of any United States Federal or State
court sitting in New York, New York in any action or proceeding arising out of
or relating to this Guaranty, and (ii) waives to the fullest extent permitted
by law any defense asserting an inconvenient forum in connection
therewith.  Service of process by Credit
Parties in connection with such action or proceeding shall be binding on
Guarantor if sent to Guarantor by registered or certified mail at its address
specified in Section 10.02 of the Credit Agreement.  Guarantor agrees that Credit Parties may
disclose to any prospective purchaser and any purchaser of all or part of the
Guaranteed Obligations any and all information in Credit Parties’ possession
concerning Guarantor, this Guaranty and any security for this Guaranty.

 

16.          Condition of
Borrowers.  Guarantor
acknowledges and agrees that it has the sole responsibility for, and has
adequate means of, obtaining from each Borrower such information concerning the
financial condition, business and operations of such Borrower as Guarantor
requires, and that Credit 

 

56

 

Parties have no duty, and Guarantor is not relying on Credit Parties at
any time, to disclose to Guarantor any information relating to the business,
operations or financial condition of any Borrower.

 

17.          Setoff.  If and to the extent any payment is not made
when due hereunder, Credit Parties may setoff and charge from time to time any
amount so due against any or all of Guarantor’s accounts or deposits with
Credit Parties.

 

18.          Other Guarantees.  Unless otherwise agreed by Administrative
Agent and Guarantor in writing, this Guaranty is not intended to supersede or
otherwise affect any other guaranty now or hereafter given by Guarantor for the
benefit of Credit Parties or any term or provision thereof.

 

19.          Representations and
Warranties.  Guarantor
represents and warrants that (i) it is duly organized and in good standing
under the laws of the jurisdiction of its organization and has full capacity
and right to make and perform this Guaranty, and all necessary authority has
been obtained; (ii) this Guaranty constitutes its legal, valid and binding
obligation enforceable in accordance with its terms; (iii) the making and
performance of this Guaranty does not and will not violate the provisions of
any applicable law, regulation or order, and does not and will not result in
the breach of, or constitute a default or require any consent under, any
material agreement, instrument, or document to which it is a party or by which
it or any of its property may be bound or affected; (iv) all consents,
approvals, licenses and authorizations of, and filings and registrations with,
any governmental authority required under applicable law and regulations for
the making and performance of this Guaranty have been obtained or made and are
in full force and effect; (v) by virtue of its relationship with Borrowers, the
execution, delivery and performance of this Guaranty is for the direct benefit
of Guarantor and it has received adequate consideration for this Guaranty; and
(vi) the financial information, that has been delivered to Administrative Agent
by or on behalf of Guarantor, is complete and correct in all respects and
accurately presents the financial condition and the operational results of
Guarantor and since the date of the most recent financial statements delivered
to Administrative Agent, there has been no material adverse change in the
financial condition or operational results of Guarantor.

 

20.          WAIVER OF JURY TRIAL;
FINAL AGREEMENT.  TO THE
EXTENT ALLOWED BY APPLICABLE LAW, GUARANTOR AND CREDIT PARTIES EACH WAIVE TRIAL
BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT
OF THIS GUARANTY.  THIS GUARANTY
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN
THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

 

[Remainder of page
intentionally left blank.  Signature page
to follow]

 

57

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  GMH COMMUNITIES L.P.,

  
	
   

  	
  a Delaware limited partnership, as Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GMH COMMUNITIES GP TRUST, a Delaware trust, its
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

58

 

EXHIBIT G

 

OPINION
MATTERS

 

The matters contained in the following Sections of the Credit Agreement
should be covered by the legal opinion:

 

•                  Section 5.01(a), (b)
and (c)

•                  Section 5.02

•                  Section 5.03

•                  Section 5.04

•                  Section 5.06

•                  Section 5.14(b)

 

59

 

EXHIBIT H

 

FORM OF BORROWER ACCESSION AGREEMENT

 

To:              Bank of America,
N.A., as Administrative Agent

 

From:          [Subsidiary] and
GMH Operating Partnership

 

Dated:        

 

To Whom It May Concern:

 

We refer to that certain Credit Agreement dated as of November 8,
2004, by and between GMH Operating Partnership and the Subsidiary Borrowers
defined therein (collectively, “Borrowers”),
the Trust defined therein, the Lenders defined therein, and Bank of America,
N.A., as Administrative Agent (“Administrative Agent”)
for the Lenders (as renewed, extended, amended, or restated, the “Credit Agreement”).  GMH Operating Partnership, [Subsidiary], the
other Subsidiary Borrowers, the Trust, and Administrative Agent agree as
follows:

 

1.                                                   Terms defined
in the Credit Agreement shall have the same meanings herein.

 

2.                                                   Each of GMH
Operating Partnership, each Subsidiary Borrower, the Trust, and [Subsidiary]
requests that [Subsidiary] become a
Subsidiary Borrower pursuant to Section 2.16 of the Credit Agreement.

 

3.                                                   [Subsidiary] is a [type of
entity] duly organized under the laws of [name of relevant jurisdiction].

 

4.                                                   [Subsidiary] confirms that it has received from GMH Operating
Partnership a true and up-to-date copy of the Credit Agreement and a list of
all Borrowers as at the date hereof.

 

5.                                                   [Subsidiary] undertakes, upon its becoming a Borrower, to perform all
the obligations expressed to be undertaken under the Credit Agreement by a
Subsidiary Borrower and agrees that it shall be bound by the Credit Agreement
in all respects as if it had been an original party thereto as a Subsidiary
Borrower.

 

6.                                                   Each of GMH
Operating Partnership, the Trust, and the Subsidiary Borrowers:

 

(a)                      confirm that the representations and
warranties of a continuing nature contained in the Credit Agreement and each of
the other Loan Documents are true and

 

60

 

correct in all material respects, with the same force and effect as
though made on the date hereof (unless they speak to a different date or are
based on facts which have changed by transactions contemplated or permitted by
the Credit Agreement); and

 

(b)                     confirms that
no Default or Potential Default is continuing or would occur as a result of
[Subsidiary] becoming a Subsidiary Borrower.

 

7.                                                   [Subsidiary] makes the representations and warranties set out in Section
6 of the Credit Agreement.

 

8.                                                   [Subsidiary’s] administrative details are as follows:

 

Address:

Fax No.:

 

9.                                                   This Agreement
shall be governed by New York law.

 

BORROWERS:

 

GMH
COMMUNITIES L.P.,
a Delaware limited partnership

 

By:          GMH COMMUNITIES GP TRUST,

                a Delaware trust, its General
Partner

 

 

By:

Name:

Title:

 

By:              

Name:

Title:

 

 

[Subsidiary]

 

 

By:

Name:

Title:

 

61

 

GMH
COMMUNITIES TRUST,
a Maryland real

estate investment
trust

 

 

By:

Name:

Title:

 

62

 

ACCEPTED THIS        DAY OF                          ,
200       .

 

BANK OF AMERICA, N.A., as Administrative Agent

 

 

By:

Name:

Title:

 

63

EXHIBIT I

 

UNENCUMBERED PROPERTIES

 

 

	
  Property

  	
   

  	
  Occupancy

  	
   

  	
  Approved Costs

  	
   

  	
  Adjusted Property NOI

  	
   

  	
  NOI Value

  	
   

  	
  Unencumbered Asset Value

  	
   

  	
  Capital Expenditure Reserves

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (000’s)

  	
   

  	
  (000’s)

  	
   

  	
  (000’s)

  	
   

  	
  (000’s)

  	
   

  	
  (000’s)

  	
   

  

 

64

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