THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

GMH Communities Trust (GCT)

4/28/2005 Proxy Information

From time to time, we may acquire, manage or develop properties in which our trustees or executive officers have an interest. We may recruit other persons with experience in the student or military housing industries to join our board or management team who have financial interests in housing properties we intend to acquire, develop or manage. In transactions of this nature, there will be conflicts between our interests and the interest of the trustee or executive officer involved, and we do not intend to engage in these transactions without the approval of a majority of our independent disinterested trustees.

Benefits Received by Our Executive Officers and Trustees in Our Formation Transactions

Gary M. Holloway, Sr. and his affiliated entities owned interests in certain properties, operating companies and other assets that we acquired in our formation transactions prior to our IPO. In consideration of his contribution and assignment of interests in those properties, operating companies and other assets, Mr. Holloway and his affiliates received aggregate consideration valued at $250.2 million, including assumed indebtedness in the amount of $10.7 million as of November 2, 2004 (the date we completed our IPO), 19,624,294 OP units having a value of $235.5 million, and $4.0 million in cash. Mr. Holloway paid all of the cash consideration he received to certain of our employees and certain employees of entities affiliated with Mr. Holloway as bonus payments for services performed, as described in more detail below. In connection with the contribution of our corporate headquarters and the corporate aircraft to our operating partnership at the time of our IPO, we assumed $10.5 million of indebtedness as of November 2, 2004. We subsequently sold the interests in Corporate Flight Services, LLC, the entity that owns this aircraft, back to Mr. Holloway in February 2005, in consideration for Mr. Holloway's reassumption of approximately $4.2 million of indebtedness then outstanding on the aircraft.

Of the 19,624,294 OP units issued to Mr. Holloway as consideration for his contribution to us in our formation transactions, Mr. Holloway transferred 2,765,000 OP units, having an aggregate value of $33.2 million as of November 2, 2004, to certain employees of entities affiliated with Mr. Holloway, including several of our executive officers, who were previously awarded profits interests attributable to Mr. Holloway's contribution to our operating partnership of ownership interests in four student housing properties and our military housing privatization business acquired upon completion of our IPO. Mr. Holloway's son, Gary M. Holloway, Jr., received 125,000 of such OP units, having an aggregate value of $1.5 million, in satisfaction of the profits interests previously awarded to him.

Mr. Holloway agreed to pay all of the $4.0 million in cash consideration he received in our formation transactions to certain of our employees and certain employees of entities affiliated with Mr. Holloway. Approximately 71.4% of this cash consideration was paid to our employees, one of whom is Mr. Holloway's son, who received a cash bonus of $100,000, with the remainder paid to other individuals, including (i) Dennis J. O'Leary, one of our non-employee trustees, who was paid a cash bonus of $500,000, and (ii) Bradley W. Harris, our senior vice president and chief financial officer, who was paid a cash bonus of $50,000.

In June 2004, LVWD, Ltd. ("LVWD"), which is wholly owned by Gary M. Holloway, Sr. sold a commercial property in West Palm Beach, Florida. In order to complete a Section 1031 "like-kind exchange" that would allow LVWD to defer gain on this sale, LVWD identified the University Reno property as one of three potential replacement properties within the 45-day period required for such an exchange. Mr. Holloway, through an entity wholly owned by him, subsequently assigned his right to purchase the University Reno property to our operating partnership on July 27, 2004 in connection with our IPO formation transactions. Since the other two potential replacement properties proved to be unacceptable, Mr. Holloway rescinded his assignment of the right to purchase the University Reno property in October 2004, and assigned the right to purchase to LVWD on the same date. LVWD subsequently completed the acquisition of the University Reno property, thereby deferring any gain LVWD would have had on the sale of the West Palm Beach property. LVWD, pursuant to the contribution agreement between Mr. Holloway and our operating partnership, contributed the University Reno property to our operating partnership following its acquisition of the University Reno property, and we repaid from the proceeds of our IPO $32.5 million of indebtedness that LVWD incurred to complete the acquisition. Under the terms of the contribution agreement, we have agreed that, if we dispose of the University Reno property or any other real property Mr. Holloway contributed to our operating partnership, we will use our good faith, reasonable and diligent efforts to structure the disposition in a tax-deferred transaction, although the decision to dispose of the property and the terms of that disposition would be in our sole discretion. We also have agreed to maintain at least $40 million of indebtedness to enable LVWD to continue to defer the taxable gain on its sale of the West Palm Beach property. We believe the foregoing transactions had the same effect upon us from both a tax and accounting standpoint that a purchase by us of the University Reno property directly from the third party seller would have had.

The table below sets forth certain information relating to the amounts of consideration, including assumption and payment of indebtedness, that our executive officers received in connection with the contribution of the various interests and other assets we acquired through our operating partnership in our formation transactions and that we acquired, upon completion of our IPO in November 2004, including with respect to any profits interests owned by such executive officers. (See page 27 of proxy for table).

Denis J. Nayden, one of our trustees, is a senior advisor and managing partner of Oak Hill Partners, L.P., which holds an indirect minority interest in FW Military Housing LLC, which (prior to our IPO) owned a 90% membership interest in GMH Military Housing—Fort Carson LLC, which in turn owns a 30% ownership interest in one of our military housing privatization projects known as the Fort Carson project. In connection with our formation transactions, we issued 2,583,334 OP units to FW Military Housing LLC (valued at $31.0 million as of November 2, 2004, the date of issuance) for its membership interest in GMH Military Housing—Fort Carson LLC. As a result, FW Military Housing LLC currently owned a 4% limited partnership interest in our operating partnership as of March 31, 2005.

Richard Silfen, one of our trustees, was formerly a partner of the law firm of Morgan, Lewis & Bockius LLP from May 2000 through August 2004. The Trust engaged and paid legal fees to Morgan, Lewis & Bockius LLP during 2004 with respect to the provision of various legal services, including legal representation in connection with the Trust's formation transactions and IPO.

Investments in and Distributions from our Predecessor Entities

In addition, Gary M. Holloway, Sr. previously contributed cash capital to our predecessor entities and received distributions from them. Mr. Holloway contributed $15.5 million to the Trust's predecessor entities and received distributions in the amount of approximately $32.3 million during the period from January 1, 2004 through November 1, 2004.

Related Party Management and Other Services

In the ordinary course of our business operations, we have on-going business relationships with Gary M. Holloway, Sr., entities affiliated with Mr. Holloway, and entities in which Mr. Holloway or we have an equity investment. These relationships and related transactions are summarized below.

Prior to the completion of our formation transactions in connection with our IPO, the Trust's predecessor entities shared the cost of certain common services among themselves and other entities that comprised entities affiliated with Gary M. Holloway, Sr. that were not contributed to the Trust or operating partnership in connection with our IPO (such other entities collectively referred to as "GMH Associates"). These services included human resources, information technology, accounting, legal, payroll, marketing, office equipment and furniture and certain management personnel. Mr. Holloway owns equity interests in certain entities that have provided services to these predecessor entities during 2004. GMH Business Support, Inc., of which Mr. Holloway owns 100% of the equity interest, was the employer of substantially all of the employees of GMH Associates. Accordingly, substantially all of the services performed by our predecessor entities were performed by the employees of GMH Business Support, Inc. From January 1, 2004 through November 1, 2004, the Trust's predecessor entities reimbursed GMH Business Support Inc. for $2.1 million of its costs incurred to provide personnel to the predecessor entities.

In addition, since completion of the IPO, the Trust and certain employees of the Trust have continued to provide services for GMH Associates, which services include legal, IT, human resources, payroll, accounting, marketing, and use of the corporate aircraft. During the period from November 2, 2004 through December 31, 2004, GMH Associates paid to the Trust approximately $139,000 for the provision of these services.

Gary M. Holloway, Sr. also owns 100% of the equity interest in GMH Capital Partners, LP, an entity that provides property management services for office, retail, industrial, multi-family and corporate properties, as well as acquisition and disposition services. GMH Capital Partners, LP leases space in our corporate headquarters, which we acquired upon completion of our IPO. During the period of November 2, 2004 through December 31, 2004, GMH Capital Partners paid approximately $40,404 in rent to the Trust for the lease of space in our corporate headquarters, and is expected to continue to make monthly rental payments to the Trust of $20,202 for lease of this space. GMH Capital Partners, LP provided property management and other services for our corporate headquarters to the Trust's predecessor entities from January 1, 2004 through November 1, 2004 for which it was paid $77,000. We also may engage GMH Capital Partners, LP to provide certain of its services to us in the future.

We and our predecessor entities have provided property management and other services for properties that the Trust did not acquire in our formation transactions relating to our IPO and in which Gary M. Holloway, Sr. retains an interest. For these services, the owners of these properties paid the Trust's predecessor entities a total of $2.6 million during 2004, including $2.4 million for the period from January 1, 2004 through November 1, 2004, and $0.2 million for the period from November 2, 2004 through December 31, 2004.

In addition, upon completion of our IPO, we entered into an agreement with GMH Capital Partners Asset Services, LP, a wholly owned subsidiary of GMH Capital Partners, LP, to provide property management consulting services to GMH Capital Partners Asset Services, LP in connection with property management services that GMH Capital Partners Asset Services, LP provides for six student housing properties (one of which was no longer managed by GMH Capital Partners Asset Services, LP as of mid-November 2004). The consulting fees we receive equal 80% of the amount of the net management fees that GMH Capital Partners Asset Services, LP receives from the property owners. From November 2, 2004 through December 31, 2004, we received $62,000 in consulting fees from GMH Capital Partners Asset Services, LP for these services.

As of the completion of our IPO, Gary M. Holloway, Sr. and our executive officers retained ownership interests in four of the student housing properties for which we provided property management services. Specifically, Mr. Holloway owned a 20% equity ownership interest in Thatch Avenue Associates, LLC, the entity that, through a joint venture, owned The Commons, located near Auburn University in Alabama, and Bruce F. Robinson, Joseph M. Coyle and John DeRiggi, each of whom is one of our executive officers, and an affiliate of Mr. Robinson, collectively held interests totaling 37.4% of the gain realized upon sale of the property, if any. Pursuant to the consulting agreement described above, we provide consulting services to GMH Capital Partners Asset Services, LP, which manages The Commons. During 2004, Mr. Holloway also owned a 10% equity ownership in WHGMH Realty, LLC, W9/JP-TX Real Estate LP and W9/JP-M Real Estate LP, the entities that owned The Landings, a property located in Austin, Texas, and State College Park and Nittany Crossing, both of which are located in State College, Pennsylvania, and Bruce F. Robinson and Joseph M. Coyle, each of whom is one of our executive officers, and an affiliate of Mr. Robinson collectively held interests totaling 14.1% of the gain, if any, realized upon sale of each of these properties. The Landings was sold to a third party in March 2005, at which point we no longer managed the property. In addition, in March 2005, our operating partnership acquired the interests in WHGMH Realty, LLC and W9/JP-M Real Estate LP, which owns the State College Park and Nittany Crossing student housing properties.

In addition, Gary M. Holloway, Sr. owns Bryn Mawr Abstract, Inc., an entity that provides title abstract services to third party title insurance companies from which we have purchased title insurance with respect to student housing and military housing properties that we acquired in 2004. In connection with our purchase of title insurance for these properties, we paid customary premiums to title insurance companies, which fees in some cases are fixed according to statute. From these premiums, the title insurance companies paid to Bryn Mawr Abstract $471,094 in 2004 for the provision of title abstract services. We may continue to obtain title abstract services from Bryn Mawr Abstract, Inc. in the future.

Loans from General Electric Capital Corporation

Denis J. Nayden, one of our trustees, is a senior vice president of General Electric Company, which is the parent company of General Electric Capital Corporation. As of December 31, 2004, we had incurred from General Electric Capital Corporation indebtedness in an aggregate amount of $202.8 million secured by properties or other assets that we owned as of such date. Because Mr. Nayden has a fiduciary duty to our shareholders, he could experience conflicts of interest between these fiduciary duties to us and our shareholders and his duties to General Electric Company.