Document:

EX-10.1

LEASE AGREEMENT

[EDUCATION REALTY OPERATING PARTNERSHIP, LP

a Delaware limited partnership]

Landlord

AND

[PLACE PROPERTIES, L.P.,

a Tennessee limited partnership]

Tenant

As of __________, 2005

1

LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”) is dated as of the      day of      , 2005, but
effective as of      , 2005, and is between [EDUCATION REALTY OPERATING PARTNERSHIP, LP, a
Delaware limited partnership] “(Landlord”), and [PLACE PROPERTIES, L.P., a Tennessee
limited partnership] (“Tenant”).

W I T N E S S E T H:

WHEREAS, Landlord owns fee simple title to the Leased Property (this and other capitalized
terms used and not otherwise defined herein having the meanings ascribed to such terms in
Article 1); and

WHEREAS, Landlord desires to lease the Leased Property to Tenant, and Tenant desires to lease
the Leased Property from Landlord, on the terms and conditions herein set forth.

NOW THEREFORE, for and in consideration of the premises, the covenants and representations
herein made and other good and valuable consideration, the receipt, adequacy and sufficiency of
which are hereby acknowledged, Landlord and Tenant do hereby agree as follows:

ARTICLE 1

DEFINITIONS

For all purposes of this Lease, except as otherwise expressly provided or unless the context
otherwise requires, (a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular, (b) all accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with GAAP as at the time
applicable, (c) all references in this Lease to designated “Articles”, “Sections” and other
subdivisions are to the designated Articles, Sections and other subdivisions of this Lease, and (d)
the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Lease
as a whole and not to any particular Article, Section or other subdivision:

Additional Charges: As defined in Section 3.5.

Additional Rent: As defined in Section 3.4.

Additional Rent Base: As defined in Section 3.4.

Additional Rent Year: For purposes of this Lease, the annual twelve month period from
August 1 to July 31.

Affiliate: When used with respect to any corporation, limited liability company, or
partnership, any person, corporation, limited liability company, partnership or other legal entity,
which, directly or indirectly, controls or is controlled by or is under common control with such
corporation, limited liability company, or partnership. For the purposes of this definition,
“control” (including the correlative meanings of the terms “controlled by” and
“under common control with”), as used with respect to any person, corporation, limited
liability company, partnership or other legal entity, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such
person, corporation, limited liability company, partnership or other legal entity, through the
ownership of voting securities, partnership interests or other equity interests, by contract, or
otherwise.

Agreement: This Lease, as it may be amended from time to time as herein provided.

Agreement of Principals: As defined in Section 23.2.

Award: As defined in Section 11.1.

Base Rent: As defined in Section 3.2.

Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which money centers in the City of New York, New York are authorized, or obligated, by law or
executive order, to close.

Capital Expenditure: Any expenditure treated as capital in nature in accordance with
GAAP.

Cash Collateral: As defined in Section 3.9(h).

Code: The Internal Revenue Code of 1986, as amended, and, to the extent applicable,
the Treasury Regulations promulgated thereunder, each as from time to time amended.

Commencement Date:      , 2005.

Condemnation: As defined in Section 11.1.

Condemnor: As defined in Section 11.1.

Consumer Price Index: The Consumer Price Index, all urban consumers, all items, U.S.
City Average, published by the United States Department of Labor, Bureau of Labor Statistics, in
which 1982-1984 equals one hundred (100). If the Consumer Price Index is discontinued or revised
during the Term, such other governmental index or computation with which it is replaced shall be
used in order to obtain substantially the same result as would be obtained if the Consumer Price
Index had not been discontinued or revised.

Date of Taking: As defined in Section 11.1.

Encumbrance: As defined in Article 15.1.

Entity: Any corporation, general or limited partnership, limited liability company or
partnership, stock company or association, joint venture, trust, bank, business trust, Governmental
Authority, or any other legal entity.

Event of Default: As defined in Section 12.1.

Existing Lender: As defined in Section 15.4.

Existing Loan Agreement. As defined in Section 15.4. 

Existing Mortgage Loan: As defined in Section 15.4.

Extension Notice: As defined in Section 2.3.

Extension Term: As defined in Section 2.3.

Financial Officer’s Certificate: A certificate of the chief financial officer of
Tenant, accompanying the financial statements required to be delivered by Tenant pursuant to
Section 3.4 and Section 14.2 (i), (ii) and (iii), in which such officer
shall certify that to such officer’s best knowledge such statements have been prepared in
accordance with GAAP, are true, correct and complete in all material respects, and fairly present
the financial condition of Tenant at and as of the dates thereof and the results of its operations
for the periods covered thereby, subject only to normal year-end audit adjustments, if applicable.

Fiscal Year: The fiscal year for this Lease shall be the twelve (12) month period
from January 1 to December 31.

Fixed Term: As defined in Section 2.2.

Fixtures: As defined in Section 2.1.

Full Replacement Cost: As defined in Section 9.1.

GAAP: Generally accepted accounting principles as consistently applied in the United
States and in effect from time to time.

Governmental Authority: Any federal, state, county, municipal, or other governmental
authority or quasi-governmental authority, commission, agency, board, office or instrumentality of
any nature whatsoever having jurisdiction over the Leased Property or any portion thereof or the
Leased Improvements operated thereon.

Gross Rentals: As defined in Section 3.4.

Hazardous Materials: Any substance which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, or otherwise hazardous and is or becomes regulated by any
Governmental Authority including without limitation, asbestos or any substance containing asbestos
and deemed hazardous under any Hazardous Materials Law, the group of organic compounds known as
polychlorinated biphenyls, flammable explosives, radioactive materials, lead and lead based paint,
urea formaldehyde foam insulation, radon gas, infectious wastes, biomedical and medical wastes,
chemicals known to cause cancer or reproductive toxicity, pollutants, effluents, contaminants,
emissions or related materials and any items included in the definition of hazardous or toxic
wastes, materials or substances under any Hazardous Materials Law.

Hazardous Materials Laws: All local, state and federal laws or rule of common law,
consent order, judicial order, administrative order or other governmental directive that applies to
Tenant or to the Leased Property and relates to Hazardous Materials including, without limitation,
those relating to industrial hygiene or the use, analysis, generation, manufacture, storage,
discharge, release, disposal, transportation, treatment, investigation, or remediation of Hazardous
Materials, including, without limitation, the Resource Conservation and Recovery Act of 1976
(“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act of 1980
(“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), the
Hazardous Materials Transportation Act, 49 U.S.C. §6901, et seq., the Federal Water Pollution
Control Act, 33 U.S.C. §§1251 et seq., the Clean Air Act, 42 U.S.C. §§741 et seq., the Clean Water
Act, 33 U.S.C. §7401, et seq., the Toxic Substances Control Act, 15 U.S.C. §§2601-2629, the Safe
Drinking Water Act, 42 U.S.C. §§300f-300j, and all similar federal, state and local environmental
statutes, ordinances and the regulations, orders, or decrees now or hereafter promulgated
thereunder.

Impositions: Collectively, all real property and personal property taxes, assessments
(including, without limitation, all assessments imposed under instruments which encumber title to
the Leased Property and all assessments for public improvements or benefits to the Leased Property,
whether or not commenced or completed prior to the date hereof and whether or not to be completed
within the Term), water, sewer or other rents and charges, all excises, tax levies, fees
(including, without limitation, license, permit, inspection, authorization and similar fees), and
all other governmental charges, in each case whether general or special, ordinary or extraordinary,
or foreseen or unforeseen, of every character in respect of the Leased Property and/or the Rent
(including all interest and penalties thereon due to any failure in payment by Tenant), which at
any time prior to, during or in respect of the Term may be assessed or imposed on or in respect of
or be a lien upon (a) Landlord or Landlord’s interest in the Leased Property, (b) the Leased
Property or any part thereof or any rent therefrom or any estate, right, title or interest therein,
or (c) any occupancy, operation, use or possession of, sales from, or activity conducted on, or in
connection with, the Leased Property or the leasing or use of the Leased Property or any part
thereof; provided, however, nothing contained in this Lease shall be construed to require Tenant to
pay (1) any tax based on net income (whether denominated as a franchise or capital stock, financial
institutions or other tax) imposed on Landlord, or (2) any net revenue tax of Landlord, or (3) any
transfer fee or tax imposed with respect to the subsequent sale, exchange or other disposition by
Landlord of any portion of the Leased Property or the proceeds thereof, or (4) any principal or
interest on any Encumbrance on the Leased Property.

Indebtedness: With respect to Tenant, all obligations, contingent or otherwise, which
in accordance with GAAP should be reflected on Tenant’s balance sheet as liabilities.

Insurance Requirements: All terms of any insurance policy required by this Lease.

Interest Rate: An annual interest rate equal to the annual interest rate announced by
Citibank in New York, New York as its prime rate or base rate (which rate shall change
automatically and simultaneously from time to time with each change in the announced prime rate)
plus two percent (2%).

Land: As defined in Section 2.1(a).

Landlord: As defined in the Preamble and any permitted successor or assign thereof.

Landlord’s Notice Address: As defined in Section 22.1.

Lease: As defined in the Preamble.

Lease Extension Operating Test: As defined in Section 2.3.

Lease Year: A twelve (12) consecutive calendar month period falling within the Term,
with the first Lease Year commencing on the first day of the first calendar month beginning on or
after the Commencement Date and each subsequent Lease Year commencing on each anniversary of the
first day of the first Lease Year under this Lease. The period, if any, from the Commencement Date
to the beginning of the first Lease Year shall be treated as if it were a part of the first Lease
Year under this Lease.

Leased Improvements: As defined in Section 2.1.

Leased Property: As defined in Section 2.1.

Legal Requirements: All federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions
affecting Tenant’s operation of its business on the Leased Property, the Leased Property or the
construction, use or alteration of the Leased Improvements (including, without limitation, the
Americans With Disabilities Act and Section 504 of the Rehabilitation Act of 1973) whether now or
hereafter enacted and in force, including any which may (a) require repairs, modifications, or
alterations in or to the Leased Property, or (b) in any way adversely affect the use and enjoyment
thereof, and all permits, licenses, authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any instruments, either of record
or known to Tenant (other than encumbrances created by Landlord without the consent of Tenant), at
any time in force affecting the Leased Property.

Letter of Credit: As defined in Section 3.9.

Management Agreement: Any contracts and agreements entered into by Tenant for the
management of any or all of the Projects.

Manager: Any person, firm, corporation or other entity or individual engaged by
Tenant to manage any Project pursuant to a Management Agreement.

Mold. Any microbial or fungus contamination or infestation in the Leased Improvements
of a type and magnitude which poses a risk to human health or the environment or would materially,
negatively impact the value of the Leased Property, or any portion thereof.

Net Operating Income: With respect to any period of calculation, determined on an
accrual basis, the excess of (i) all revenues, receipts, and payments of every kind arising from
ownership and operation of the Leased Property, including all payments of rents from subtenants of
the Projects (but excluding condemnation and insurance proceeds, except to the extent such proceeds
are with respect to rent or business interruption insurance, and excluding tenant deposits and
prepaid rent not actually applied during such period), over (ii) Operating Expenses
attributable to such period of calculation.

Notice: A notice given in accordance with Section 22.1.

Officer’s Certificate: A certificate of Tenant signed by the Manager, the President,
any Vice President or the Treasurer of Tenant or another officer or representative authorized to so
sign by the governing body of Tenant, or any other person whose power and authority to act has been
authorized by delegation in writing by any of the persons holding the foregoing offices.

Operating Expenses: With respect to any period of calculation, all costs and expenses
accrued in accordance with GAAP relating to the operation, maintenance, repair, use and management
of the Leased Property, including, without limitation, utilities, repairs and maintenance,
insurance, property taxes and assessments, advertising expenses, payroll and related taxes,
equipment lease payments, and management fees equal to the lesser of (a) actual management fees, or
(b) a management fee equal to 3% of gross rentals for such period, but excluding (i) payments of
Base Rent, Additional Rent, and penalties and interest payable to Landlord under this Lease; (ii)
depreciation, amortization and other non-cash expenses of Tenant with respect to the Leased
Property; (iii) Capital Expenditures to the extent paid by Landlord; (iv) the cost of providing any
Letter of Credit or Additional Letter of Credit to be provided by Tenant under this Lease; and (v)
any fine, penalty, interest, and cost required to be paid by Tenant as a result of non-payment or
late payment of any Additional Charges required to be paid by Tenant. Operating Expenses shall
also include the amount of any deductible expense incurred by Tenant in connection with damage or
destruction of any Project during the Term.

Organizational Documents: As defined in Section 16.3.

Overdue Rate: On any date, the rate per annum which is the lesser of (i) fifteen
percent (15%) or (ii) the highest rate allowed by the laws of the State.

Permitted Use: As defined in Section 4.2.

Person: Any individual or Entity, and the heirs, executors, administrators, legal
representatives, successors and assigns of such Person where the context so admits.

Project: With respect to each individual Property described in Section 2.1, the
student housing oriented residential apartment complex being operated on such Property.

Project Mortgage: Any Encumbrance placed upon Landlord’s interest in a Property.

Project Mortgagee: The holder of any Project Mortgage.

Property: As defined in Section 2.1.

Rent: Collectively, the Base Rent, the Additional Rent, and the Additional Charges.

Single Purpose Entity: An entity which (i) exists solely for the purpose of leasing
the Leased Property and operating the Projects, (ii) conducts business only in its own name, (iii)
does not engage in any business other than the operation of the Projects, (iv) does not hold,
directly or indirectly, any ownership interest (legal or equitable) in any entity or any real or
personal property other than the interest in the Leased Property which it leases from Landlord
hereunder, (v) does not have any assets other than those related to its interest in the Leased
Property pursuant to this Lease and does not have any debt other than as permitted by this Lease
and does not guarantee or otherwise obligate itself with respect to the debts of any other person
or entity, (vi) has its own separate books, records, accounts and financial statements (with no
commingling of funds or assets), (vii) holds itself out as being a company separate and apart from
any other entity, and (viii) observes limited liability company/partnership/corporate formalities,
as the case may be, independent of any other entity.

Taking: A taking or voluntary conveyance during the Term of all or part of the Leased
Property, or any interest therein or right accruing thereto or use thereof, as the result of, or in
settlement of, any Condemnation or other eminent domain proceeding affecting the Leased Property
whether or not the same shall have actually been commenced.

Tangible Net Worth: For any Entity, the excess of total assets over total
liabilities, as determined in accordance with GAAP, but excluding from the determination of total
assets goodwill, organizational expenses, and other similar intangibles.

Tenant: As defined in the Preamble and any successor and assign herein permitted.

Tenant Related Party: Any Affiliate of Tenant and any partner, member, manager,
officer, director, or employee of Tenant or any Affiliate of Tenant.

Term: The actual duration of this Lease from and after the Commencement Date,
including the Fixed Term and the Extension Terms (if exercised by Tenant) and taking into account
any early termination.

Termination Fee: As defined in Section 2.4(b).

Unsuitable for its Permitted Use: By reason of damage or destruction, or a partial
Taking by Condemnation, any Project cannot be operated on a commercially practicable basis for the
Permitted Use, taking into account all relevant factors, and the effect of such damage or
destruction or partial Taking.

ARTICLE 2

LEASED PROPERTY AND TERM

2.1 Leased Property. Upon and subject to all of the other terms and conditions set forth in this
Lease, Landlord leases to Tenant and Tenant rents from Landlord the following (each of items (a)
through (e) below which, as of the Commencement Date, relates to any single Project, a
“Property” and, collectively, the “Leased Property”):

(a) those certain tracts or parcels of land more particularly described in Exhibits
A-1 through A-13 attached hereto and made a part hereof (the “Land”);

(b) all buildings, structures, and other improvements of every kind located on the
Land, including, but not limited to, the apartment buildings, clubhouses, mail buildings,
tennis courts, swimming pools, recreational facilities, sidewalks, utility pipes, conduits
and lines (on-site and off-site), parking areas and driveways appurtenant to such buildings
and structures presently or hereafter situated upon the Land (collectively, the “Leased
Improvements”);

(c) all easements, rights and appurtenances relating to the Land and the Leased
Improvements;

(d) all equipment, machinery, fixtures and other items of real and/or personal
property, including all components thereof, now and hereafter located in, on or used in
connection with, and permanently affixed to or incorporated into the Leased Improvements,
including, without limitation, all furnaces, boilers, heaters, electrical equipment,
heating, plumbing, lighting, ventilating, refrigerating, incineration, waste disposal,
air-cooling and air-conditioning systems and apparatus, cable or satellite television
systems, sprinkler systems and fire and theft protection equipment, all of which, to the
greatest extent permitted by law, are hereby deemed by the parties hereto to constitute real
estate, together with all replacements, modifications, alterations and additions thereto
(collectively, the “Fixtures”); and

(e) all equipment, appliances, furniture, furnishings, supplies, and other tangible
personal property of any kind or description used or useful in connection with the operation
of the Leased Improvements, and located on or in the Leased Improvements, and all
modifications, replacements, alterations and additions to such personal property, except
items, if any, included within the category of Fixtures (collectively, the “Leased
Personal Property”).

2.2 Fixed Term. The initial Term of this Agreement (the “Fixed Term”) shall commence on
the Commencement Date and shall expire on      , 2010.

2.3 Extension Rights. So long as no Event of Default has occurred and is continuing under this
Lease, and subject to satisfaction of the Lease Extension Operating Test for such extension period,
Tenant shall have the option (the “Extension Option”) to extend the Fixed Term of this
Lease for three (3) additional successive periods of five (5) years each (each an “Extension
Term”). Said Extension Option shall be subject, however, to the following terms and
conditions:

(a) Tenant shall exercise each such Extension Option by giving written notice to
Landlord at least six (6) months prior to the expiration of the Fixed Term or the then
current Extension Term, as applicable (the “Extension Notice”). Notwithstanding the
foregoing, in the event Tenant fails to give notice of its election to extend at least six
(6) months prior to the expiration of the Fixed Term or then current Extension Term, as the
case may be, then Landlord shall notify Tenant in writing of such failure and thereafter
Tenant shall have an additional fifteen (15) days to exercise the Extension Option by giving
an Extension Notice to Landlord; and in the event Tenant fails to exercise the Extension
Option within such fifteen (15) day period, then Tenant shall be deemed to have waived the
Extension Option, and the Term shall expire at the end of the Fixed Term or then current
Extension Term, as applicable.

(b) No Event of Default shall exist on the date of commencement of any Extension Term.

(c) Tenant shall have delivered to Landlord, on or before the first day of the
applicable Extension Term, a renewal or extension of the Letter of Credit or a substitute
letter of credit, upon the same terms and in the same amount (as the same may have been
adjusted pursuant to Section 3.9(n)) as the expiring Letter of Credit and otherwise
acceptable to Landlord, which renewed, extended, or substituted letter of credit shall be
maintained in effect, by automatic renewal or extension, until the date which is thirty (30)
days after expiration of the subject Extension Term. Any such renewed, extended, or
substituted letter of credit shall be deemed the “Letter of Credit” under this Lease
during the subject Extension Term and shall be held and governed pursuant to the terms of
Section 3.9 below which are applicable to the original Letter of Credit, including
without limitation the provisions of said Section 3.9 which permit the reduction of
the Letter of Credit from time to time.

Notwithstanding the foregoing, in the event that Net Operating Income from the Leased Property,
calculated on a trailing 12 month basis (excluding any Net Operating Income attributable to any
Property which has been released from this Lease), shall have been not less than an amount equal to
1.05 times annual Base Rent (excluding Base Rent attributable to any Property which has been
released from this Lease) for the eight (8) consecutive calendar quarters immediately preceding the
calendar month in which an Extension Term commences, Tenant shall not be required to provide and
maintain a Letter of Credit during such Extension Term.

The Base Rent for each Extension Term shall be adjusted and reallocated among the Properties as of
the first day of such Extension Term as provided in Section 3.3 below, and the Additional
Rent Base shall be adjusted as of the first day of such Extension Term as provided in Section
3.4 below.

Except for such adjustment of Base Rent and the Additional Rent Base, all of the terms, covenants
and conditions of this Lease shall continue in full force and effect during each Extension Term, as
if such Extension Term were part of the original Term.

For purposes of this Section 2.3, the “Lease Extension Operating Test” for any
Extension Term shall mean that annualized Net Operating Income from the Leased Property (excluding
any Net Operating Income attributable to any Property which has been released from this Lease) for
the three (3) calendar month period ending on the last day of the calendar month which is two (2)
months prior to the calendar month in which the applicable Extension Term commences shall be not
less than 1.05 times the annual Base Rent payable during such three (3) month calendar month period
(excluding any Base Rent attributable to any Property which has been released from this Lease).

2.4 Landlord’s Early Termination Rights.

(a) Net Operating Income Shortfall. Notwithstanding anything to the contrary
provided in this Lease, Landlord shall have the right to terminate this Lease upon not less
than thirty (30) days advance Notice to Tenant if any of the following events occur:

(i) Net Operating Income from the Leased Property, calculated on a trailing 12
month basis (excluding any Net Operating Income attributable to any Property which
has been released from this Lease prior to the end of such 12 month period), shall
have been less than an amount equal to 1.05 times annual Base Rent (excluding Base
Rent attributable to any Property which has been released from this Lease) for the
immediately preceding eight (8) consecutive calendar quarters; provided, however,
that Landlord shall not be entitled to exercise its termination right under this
subsection 2.4(a)(i) prior to the expiration of ten (10) full calendar quarters
following the Commencement Date; or

(ii) Net Operating Income from the Leased Property, calculated on a trailing 12
month basis (excluding any Net Operating Income attributable to any Property which
has been released from this Lease prior to the end of such 12 month period), shall
have been less than 0.80 times annual Base Rent (excluding Base Rent attributable to
any Property which has been released from this Lease) for the immediately preceding
two (2) consecutive calendar quarters; provided, however, that Landlord shall not be
entitled to exercise its termination right under this subsection 2.4(a)(ii) prior to
the expiration of four (4) full calendar quarters following the Commencement Date.

Any such Notice of termination shall be given within thirty (30) days following Landlord’s
receipt of the financial statements delivered pursuant to Section 14.2 which show
the results of operations which give rise to the right of termination described above, or
Landlord shall be deemed to have waived its right of termination pursuant to this
Section 2.4(a) with respect to the period of operations covered by such financial
statements.

(b) Sale of Property. Subject to the transfer restrictions of Section
20.1, Landlord shall have the right to terminate this Lease as to any individual
Property upon not less than sixty (60) days advance Notice to Tenant in connection with the
sale of such Property to an Entity which is not an Affiliate of Landlord; provided, however,
that Landlord shall not be entitled to exercise its termination right under this subsection
2.4 (b) prior to the fourth (4th) Lease Year. In the event that Landlord elects
to terminate this Lease during the Fixed Term or the first year of the first Extension Term
as to the entire Leased Property in connection with a sale of the entire Leased Property to
a non-Affiliate in a single transaction or a series of related transactions, Landlord shall
pay to Tenant a termination fee (a “Termination Fee”) equal to (i) $1.5 million, if
such termination occurs during the fourth (4th) Lease Year, (ii) $1.0 million, if
such termination occurs during the fifth (5th) Lease Year, and (iii) $0.5
million, if such termination occurs during the sixth (6th) Lease Year (if the
Lease is extended after the Fixed Term). In the event that Landlord elects to terminate
this Lease as to any individual Property in connection with the sale thereof during Lease
Years 4 or 5 or, if the Lease is extended after the Fixed Term, Lease Year 6, Landlord shall
pay to Tenant a termination fee with respect to such Property equal to such Property’s
allocable share of the applicable Termination Fee set forth above, which allocable share
shall correspond to such Property’s allocable share of the Base Rent, as established
pursuant to Section 3.2 or Section 3.3, as applicable below. After the
sixth (6th) Lease Year no Termination Fee shall be payable in connection with a
total or partial termination of this Lease by Landlord under this subsection 2.4(b).

2.5 Tenant’s Early Termination Right. Tenant shall have the right to terminate this Lease upon not
less than sixty (60) days advance Notice to Landlord at any time after any of the following events
occur:

(a) the Leased Property, or so much thereof as remains subject to the terms of this
Lease from time to time, is sold in its entirety to an Entity which is not an Affiliate of
Landlord or an Entity resulting from a consolidation or merger of Landlord;

(b) the termination of this Lease with respect to more than seven (7) of the individual
Properties, whether as a result of Landlord’s sale of such individual Properties, casualty,
or otherwise; or

(c) the termination of this Lease as to a Property by reason of a sale by Landlord of
such Property pursuant to Section 2.4(b) (other than (i) any foreclosure sale under
any Superior Mortgage, as defined in Section 15.2, (ii) any conveyance in lieu of a
foreclosure under any such Superior Mortgage, or (iii) any Condemnation), if, as a result of
such termination, the Net Operating Income from the remaining Properties would fall below an
amount equal to 1.10 times annual Base Rent (excluding the Base Rent attributable to the
Property sold), based upon the Net Operating Income of the remaining Properties for the most
recent calendar quarter for which financial statements have been provided pursuant to
Section 14.2.

In the event that Tenant exercises such termination right during the Fixed Term or the first Lease
Year of the first Extension Term, Landlord shall be required to pay to Tenant a Termination Fee
calculated in the manner described in Section 2.4(b) above.

2.6 No Other Termination. Except as otherwise specifically provided in this Agreement, each
of Landlord and Tenant, to the maximum extent permitted by law, shall remain bound by this Lease in
accordance with its terms and, without the consent of the other, shall not take any action without
the consent of the other to modify, surrender or terminate this Lease. Except as otherwise
expressly provided in this Lease, the respective obligations of Landlord and Tenant shall not be
affected by reason of (a) any damage to, or destruction of, Leased Property or any portion thereof
from whatever cause or any Taking of the Leased Property or any portion thereof, or (b) any
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding up or other proceedings affecting Landlord or any assignee or transferee of Landlord.
Except as otherwise specifically provided in this Agreement or as may be provided at law or in
equity, Tenant hereby specifically waives all rights, arising from any occurrence whatsoever, which
may now or hereafter be conferred upon it by law to modify, surrender or terminate this Lease or
quit or surrender the Leased Property or any portion thereof. The obligations of Landlord and
Tenant hereunder shall be separate and independent covenants and agreements and the Rent and all
other sums payable by Tenant hereunder shall continue to be payable in all events unless the
obligations to pay the same shall be terminated pursuant to the express provisions of this Lease.

ARTICLE 3

RENT

3.1 Rental Payments.

(a) Beginning on the Commencement Date and continuing thereafter throughout the Term,
Tenant hereby agrees to pay the Rent due and payable under this Lease. As used in this
Lease, the term “Rent” shall mean Base Rent (as defined in Section 3.2
below), Additional Rent (as defined in Section 3.4 below), and the Additional
Charges (as defined in Section 3.5 below). Base Rent shall be payable without
demand on the fifteenth (15th) day of each calendar month during the Term. If
the Term commences on a day other than the first day of a month, or terminates on a day
other than the last day of a month, the Base Rent for the first and last partial month shall
be prorated based upon the actual number of days in such a month. Except as specifically
set forth in this Lease, Rent shall be due and payable in all events, without any setoff or
deduction whatsoever, unless expressly allowed hereunder. All payments of Rent shall be
made in legal tender at the address of Landlord set forth in Section 22.1 hereof, or
at such other place as Landlord shall designate from time to time in writing.

(b) No payment by Tenant or acceptance by Landlord of an amount less than the Rent
herein stipulated shall be deemed a waiver of any additional amount due. No partial payment
or endorsement on any check or any letter accompanying any payment of Rent shall be deemed
an accord and satisfaction, but Landlord may accept such payment without prejudice to
Landlord’s right to collect the balance of any Rent due under the terms of this Lease.

(c) Whenever in this Lease a payment is required to be made by one party to the other,
but a specific date for payment is not set forth or a specific number of days within which
payment is to be made is not set forth, or the words “immediately,” “promptly” and/or “on
demand,” or the equivalent, are used to specify when such payment is due, then such payment
shall be due ten (10) days after the party which is entitled to such payment sends written
notice to the other party demanding payment.

(d) To the extent that Tenant is required to deliver all revenues and receipts from the
Leased Property to the Existing Lender and the Existing Lender applies such revenues and
receipts to fund obligations of Landlord under the Existing Loan Documents, the amounts so
applied by the Existing Lender shall be credited against Tenant’s obligations with respect
to Base Rent and Additional Rent hereunder, as more particularly described in Section
15.4(g) hereof.

3.2 Base Rent.

(a) Subject to adjustment as provided in Section 3.3, Article 10, and
Article 11, Tenant shall pay Landlord base rent (the “Base Rent”) in an
amount equal to THIRTEEN MILLION SEVEN HUNDRED THIRTY SIX THOUSAND SEVEN HUNDRED FIFTY AND
NO/100 Dollars ($13,736,750.00) per annum. Base Rent shall be payable in advance in equal,
consecutive monthly installments on the fifteenth (15th) day of each calendar
month of the Term, commencing after Commencement Date (prorated as to any partial month).

(b) Landlord and Tenant agree that during the Fixed Term the Base Rent shall be
allocated among the Properties as set forth in Exhibit B attached hereto and by this
reference made a part hereof. In the event that this Lease is extended in accordance with
Section 2.3 above, Base Rent shall be reallocated among the Properties in accordance with
the terms of Section 3.3(b) below.

3.3 Adjustments to Base Rent.

(a) In the event that the Fixed Term of this Lease is extended in accordance with
Section 2.3 above, Base Rent payable during the subject Extension Term shall be
increased or decreased over the Base Rent payable during the Fixed Term or immediately
preceding Extension Term, as applicable, by an amount equal to the product of the annual
Base Rent payable during such immediately preceding period multiplied by the percentage
increase or decrease in the Consumer Price Index for the period between the first month of
the Fixed Term or immediately preceding Extension Term, as applicable, and the month which
is four (4) months prior to the first month of the applicable Extension Term.

(b) In the event that the Fixed Term of this Lease is extended in accordance with
Section 2.3 above, the Base Rent applicable during such Extension Term shall be
reallocated among the Properties, or so many of the Properties as remain subject to this
Lease, as of the first day of the applicable Extension Period, so that the Base Rent
attributable to each Property shall bear the same proportion to total Base Rent as the Gross
Rentals from such Property for the immediately preceding Additional Rent Year bear to total
Gross Rentals from all Properties for such immediately preceding Additional Rent Year
(excluding Gross Rentals attributable to any Property which is no longer subject to the
Lease). For example, if the Gross Rentals generated by a Property during the last full
Additional Rent Year of the Fixed Term or an Extension Term represent twelve percent (12%)
of the total Gross Rentals during such Additional Rent Year from all Properties which remain
subject to this Lease as of the first day of the next following Extension Term, then twelve
percent (12%) of the Base Rent under this Lease during such Extension Term shall be
allocated to such Property. Within thirty (30) days after the commencement of an Extension
Term, Landlord and Tenant shall enter into an addendum to this Lease acknowledging the
reallocation of Base Rent among the Properties in accordance with this subparagraph (b), and
such revised allocation shall supersede Exhibit B hereto for the remainder of such
Extension Term.

(c) In the event that any individual Property is released from the terms of this Lease
in connection with the sale thereof as described in Section 2.4(b) or in connection
with the termination of this Lease as to such Property as a result of casualty or
condemnation pursuant to Article 10 or 11 hereof, Base Rent shall be reduced
by the affected Property’s allocable share of Base Rent, as determined by reference to
Section 3.2(b) or 3.3(b) above, as applicable.

3.4 Additional Rent.

(a) In addition to Base Rent, Tenant shall pay to Landlord additional rent
(“Additional Rent”) equal to forty one percent (41%) (the “Applicable
Percentage”) of the amount by which the Gross Rentals from the Leased Property for each
Additional Rent Year, or fraction thereof falling within the Term of this Lease, shall
exceed the Additional Rent Base (as hereinafter defined) applicable to such Additional Rent
Year, or an appropriate fraction thereof if the period in question during the Term hereof
shall be less than a full Additional Rent Year. The Applicable Percentage will remain
constant in the event that the Fixed Term of this Lease is extended in accordance with
Section 2.3.

(b) As used herein, during the Fixed Term “Additional Rent Base” shall mean as
follows:

In the first Lease Year of the Fixed Term: $23,481,624

In the second Lease Year of the Fixed Term: $23,716,440

In the third Lease Year of the Fixed Term: $23,953,605

In the fourth Lease Year of the Fixed Term: $24,193,141

In the fifth Lease Year of the Fixed Term: $24,435,072

For purposes of calculating Additional Rent due hereunder, the Additional Rent Base for
the period from the Commencement Date to July 31, 2006 shall equal a pro rata portion of the
Additional Rent Base for the first Lease Year, i.e., $23,481,624 times [Insert the fraction
determined by dividing the number of days between the Commencement Date and July 31, 2006 by
365]. The Additional Rent Base for subsequent Additional Rent Years shall equal the sum of
(i) a pro rata portion of the Additional Rent Base for any Lease Year ending during such
Additional Rent Year, plus (ii) a pro rata portion of the Additional Rent Base for any Lease
Year beginning during such Additional Rent Year, in each case based on the number of months
of each such Lease Year which fall within the applicable Additional Rent Year. For example,
for the Additional Lease Year commencing on August 1, 2006, the Additional Rent Base shall
be the sum of (i) $     , representing [insert applicable fraction] of the Additional
Rent Base for the first Lease Year, plus (ii) $     , representing [insert applicable
fraction] of the Additional Rent Base for the second Lease Year.

In the event that the Term of this Lease is extended in accordance with Section 2.3,
the Additional Rent Base for first Lease Year of the subject Extension Term shall be the
Additional Rent Base for the first Lease Year of the Fixed Term or immediately preceding
Extension Term, as applicable, multiplied by the percentage increase or decrease in the
Consumer Price Index for the period between the first month of the Fixed Term or immediately
preceding Extension Term, as applicable, and the month which is four (4) months prior to the
first month of the applicable Extension Term, with this new Additional Rent Base to increase
after the first Lease Year of the Extension Term by one percent (1%) per year during the
remainder of such Extension Term. In the event this Lease shall terminate with respect to
any individual Property in accordance with the terms of Section 2.4(b) or
Article 10 or Article 11, the Additional Rent Base for the period after the
effective date of such termination shall be reduced in an amount proportionate to the
reduction in Base Rent resulting from the release of the affected Property from this Lease,
as determined by reference to Section 3.3(c) hereof.

(c) The term “Gross Rentals” as used in this Lease shall include all rentals and other
sums or consideration received by Tenant from subtenants or other persons for or in respect
of any use or occupation of the Leased Property or any part thereof during the Term of this
Lease (whether pursuant to lease, concession, license, franchise or otherwise), including
without limitation apartment rental, clubhouse rental, fees for cable or telecom services,
income generated through leases for laundry services and equipment, non-refundable
application fees, and non-refundable security deposits or security deposits forfeited as
rent from subtenants, as well as proceeds of rent or business interruption insurance paid
for the relevant period of calculation in respect of such subtenant rents, but excluding any
interest or dividends earned on Tenant’s investment of surplus cash.

So long as Landlord shall desire to qualify for taxation as a real estate investment
trust, the term “Gross Rentals” shall be deemed to not include any amounts referred to above
which, if included in the definition of “Gross Rentals,” would result in any part of the
fixed rental and/or additional rental payable to Landlord hereunder being held not to
constitute “rents from real property” as that term is defined in Section 856(d) of the
Internal Revenue Code of 1954 and the regulations issued thereunder, as the same may be
amended from time to time.

(d) Additional Rent for each Additional Rent Year or portion thereof shall be
calculated and paid annually in arrears. Within sixty (60) days after the end of each
Additional Rent Year during the Term, commencing September 30, 2006, and within sixty (60)
days after the end of the final Lease Year of the Term or the prior termination of this
Lease, as the case may be, Tenant shall deliver to Landlord (i) a Financial Officer’s
Statement containing (A) a detailed report of the Gross Rentals for the Leased Property for
the preceding Additional Rent Year (or fraction thereof), as audited by the approved
accountants, and (B) Tenant’s computation of Additional Rent payable for such Additional
Rent Year, or applicable portion thereof, and (ii) Tenant’s check in payment of the
Additional Rent due and payable for such Additional Rent Year. All costs of audit of
Tenant’s reports of Gross Rentals shall be paid by Landlord.

(e) Tenant shall utilize, or cause to be utilized, an accounting system for each
Property in accordance with its usual and customary practices and in accordance with GAAP,
which will accurately record all Gross Rentals from each Property and Tenant shall retain,
for at least three (3) years after the expiration of each Additional Rent Year, reasonably
adequate records conforming to such accounting system showing all Gross Rentals for such
Property for such Additional Rent Year. Landlord, at its own expense, except as provided
hereinbelow, shall have the right, exercisable by Notice to Tenant within one (1) year after
receipt of the statement referred to in subsection (d) above, by its accountants or
representatives to audit the information set forth in such statement and, in connection with
such audit, to examine Tenant’s and the Manager’s books and records with respect thereto
(including supporting data). If any such audit discloses a deficiency in the payment of
Additional Rent and either Tenant agrees with the result of such audit or the matter is
otherwise compromised with or resolved in favor of Landlord, Tenant shall forthwith pay to
Landlord the amount of the deficiency, as finally agreed or determined, together with
interest at the Interest Rate from the date such payment should have been made to the date
of payment thereof. If such deficiency, as agreed upon, compromised, or resolved as
aforesaid, is more than four percent (4%) of the Gross Rentals reported by Tenant for such
Additional Rent Year and, as a result, Landlord did not receive at least ninety five percent
(95%) of the Additional Rent payable with respect to such Additional Rent Year, Tenant shall
pay the reasonable cost of such audit and examination. If any such audit discloses that
Tenant paid more Additional Rent for any Additional Rent Year than was due hereunder, and
either Landlord agrees with the result of such audit or the matter is otherwise determined,
Landlord shall grant Tenant a credit equal to the amount of such overpayment against Base
Rent and Additional Rent next coming due in the amount of such difference, as finally agreed
or determined, together with interest at the Interest Rate, which interest shall accrue from
the time of Tenant’s statement of Gross Rentals until the date such credit is applied and
paid, as the case may be. If such a credit cannot be made because the Term has expired
before the credit can be applied in full, Landlord shall pay the unapplied balance of such
credit to Tenant, together with interest at the Interest Rate, which interest shall accrue
until the date of payment from Landlord.

3.5 Additional Charges. In addition to the Base Rent and Additional Rent payable hereunder,
Tenant shall pay to the appropriate parties and discharge as and when due and payable the following
(collectively, the “Additional Charges”):

(a) Impositions. Subject to the terms of Article 8 relating to
permitted contests and except to the extent paid by any Project Mortgagee, Tenant will pay,
or cause to be paid, all Impositions before any fine, penalty, interest or cost may be added
for non-payment, such payments to be made directly to the taxing authorities or other party
to whom such Imposition is payable where feasible, and Tenant will promptly, upon request,
furnish to Landlord copies of official receipts or other satisfactory proof evidencing such
payments. Tenant’s obligation to pay the Impositions shall be deemed absolutely fixed upon
the date the Imposition becomes a lien upon the Leased Property or any part thereof. If any
Imposition may, at the option of the Landlord, lawfully be paid in installments (whether or
not interest shall accrue on the unpaid balance of such Imposition), Tenant may exercise the
option to pay the same (and any accrued interest on the unpaid balance of such Imposition)
in installments and, in such event, shall pay such installments during the Term (subject to
Tenant’s right of contest pursuant to the provisions of Article 8) as the same
respectively become due and before any fine, penalty, premium, further interest or cost may
be added thereto. Landlord, at its expense, shall prepare and file all tax returns and
reports as may be required by Governmental Authorities in respect of Landlord’s net income,
gross receipts, franchise taxes and taxes on its capital stock, and Tenant, at its expense
and to the extent permitted by applicable laws and regulations shall prepare and file all
tax returns and reports in respect of any Imposition as may be required by Governmental
Authorities. If any refund shall be due from any taxing authority in respect of any
Imposition paid by Tenant, the same shall be paid over to or retained by Tenant. Landlord
and Tenant shall, upon request of the other, provide such data as is maintained by the party
to whom the request is made with respect to the Leased Property as may be necessary to
prepare any required returns and reports. In the event Governmental Authorities classify
any property covered by this Lease as personal property, Tenant shall file all personal
property tax returns in such jurisdictions where filing is required and Tenant may legally
make such filing. Landlord, to the extent it possesses the same, and Tenant, to the extent
it possesses the same, will provide the other party, upon request, with cost and
depreciation records necessary for filing returns for any property so classified as personal
property. Where Landlord is legally required to file personal property tax returns, Tenant
will be provided with copies of assessment notices indicating a value in excess of the
reported value in sufficient time for Tenant to file a protest. All Impositions assessed
against such personal property shall be (irrespective of whether Landlord or Tenant shall
file the relevant return) paid by Tenant not later than the last date on which the same may
be made without interest or penalty, except to the extent such Impositions are to be paid by
any Project Mortgagee.

(b) Adjustment of Impositions. Impositions imposed in respect of the
tax-fiscal period during which the Term terminates shall be adjusted and prorated between
Landlord and Tenant, whether or not such Imposition is imposed before or after such
termination, and Tenant’s obligation to pay its prorated share thereof shall survive such
termination.

(c) Utility Charges. Tenant will contract for, in its own name or the name of
the Property, and will pay or cause to be paid all charges for electricity, power, gas, oil,
water, telephone, cable television, internet access, and other utilities used in connection
with the operation of the Leased Property. Landlord will provide any bonds, guarantees or
deposits required by any utility service providers.

(d) Insurance Premiums. Tenant shall pay or cause to be paid all premiums for
the insurance coverage required to be maintained by Tenant pursuant to Article 9.

(e) Other Charges. Tenant shall pay or cause to be paid all other amounts,
liabilities and obligations with respect to the operation of the Leased Property.

(f) Reimbursement for Additional Charges. If Tenant pays or causes to be paid,
or deposits in escrow with any Project Mortgagee any amounts for the payment of, property
taxes or similar or other Additional Charges attributable to periods after the end of the
Term, whether upon expiration or sooner termination of this Agreement, Tenant may, within a
reasonable time after the end of the Term, provide Notice to Landlord of its estimate of
such amounts. Landlord shall promptly reimburse Tenant for all payments or deposits of such
taxes and other similar Additional Charges that are attributable to any period after the
Term of this Agreement.

3.6 Monthly Impounds. Tenant agrees that, if at any time any Project Mortgagee requires Landlord
to deposit funds monthly with such Project Mortgagee for the payment of Impositions, then in
addition to the monthly installments of Base Rent required pursuant to Section 3.2, Tenant
shall deposit monthly with such Project Mortgagee, on the day of each month required by such
Project Mortgagee, a sum equal to the estimated Impositions required to be deposited by such
Project Mortgagee. If the total monthly payments made by Tenant under this Section 3.6
shall exceed the amount actually payable by Tenant for any such Imposition, such excess shall be
credited against subsequent monthly payments of Base Rent or Additional Rent due hereunder, or such
excess shall be returned to Tenant. If the total monthly payments made by Tenant under this
Section 3.6 shall be insufficient to pay such Impositions when due, the Tenant shall upon
demand pay to Landlord or, at Landlord’s direction, to the applicable Project Mortgagee the amount
necessary to make up the deficiency. To the extent that Tenant complies with this Section
3.6 and makes such payments to Landlord or a Project Mortgagee, Tenant shall be relieved from
compliance with the provisions of this Article 3 which require the direct payment of such
Impositions by Tenant. In the event of default in the payment of any monthly or any other
installment provided for in this Section 3.6, Landlord shall have the same remedies as
those provided for in this Lease for default in the payment of Rent. To the extent received by
Tenant, Tenant shall deliver to Landlord any bills received by Tenant for all Impositions for which
deposits are being made, in ample time to enable Landlord to cause the applicable Project Mortgagee
to pay the same before interest or penalty shall accrue. Landlord shall be furnished with
reasonable proof from Tenant that such deposits are actually being made to a Project Mortgagee.

3.7 Late Payment of Rent, etc. If any installment of Base Rent, Additional Rent or Additional
Charges (but only as to those Additional Charges which are payable directly to Landlord) shall not
be paid within five (5) days after its due date, Tenant shall pay Landlord, on demand, as
Additional Charges, a late charge (to the extent permitted by law) computed at the Overdue Rate on
the amount of such installment, from the due date of such installment to the date of payment
thereof. To the extent that Tenant pays any Additional Charges directly to Landlord or any Project
Mortgagee pursuant to any requirement of this Agreement, Tenant shall be relieved of its obligation
to pay such Additional Charges to the Entity to which they would otherwise be due. In the event of
any failure by Tenant to pay any Additional Charges when due, Tenant shall promptly pay and
discharge, as Additional Charges, every fine, penalty, interest and cost which is added by the
Entity to which such Additional Charges are due for non-payment or late payment of such items.
Such fines, penalties, interest and costs shall not constitute Operating Expenses for purposes of
this Lease.

3.8 Net Lease. Rent shall be paid absolutely net to Landlord, so that this Lease shall yield
to Landlord the full amount of Base Rent and Additional Rent throughout the Term, but subject to
any other provisions of this Lease which expressly provide for adjustment of Rent or other charges.

3.9 Letter of Credit.

(a) Tenant shall, simultaneously with the delivery of this Lease, deliver to Landlord
an irrevocable, stand-by letter of credit (a “Letter of Credit”) in the initial
amount of Five Million and No/100 Dollars ($5,000,000.00) to assure the payment by Tenant of
Base Rent and Additional Rent. The Letter of Credit shall be maintained in effect, by
automatic renewal or extension, until the date (the “LC Expiration Date”) which is
thirty (30) days after the expiration of the Fixed Term or earlier as set forth in
Section 3.9(l) below.

(b) The Letter of Credit shall be in the form attached hereto as Exhibit C or
in such other form as may be reasonably approved by Landlord and otherwise shall be subject
to the provisions of this Section 3.9. The Letter of Credit shall be issued by a
national bank approved by Landlord in its sole but reasonable discretion (the
“Bank”) and be “callable” by Landlord and payable through a branch office of the
Bank located in the City of Memphis, Tennessee. The premium or purchase price of, or any
other Bank fees associated with, such Letter of Credit shall be paid by Tenant (except those
payable by Landlord pursuant to Section 3.9(e) below) and shall not constitute an
Operating Expense for purposes of this Lease.

(c) The Letter of Credit shall (i) be subject to the International Standby Practices
1998, International Chamber of Commerce Publication No. 590, (ii) be fully transferable by
Landlord only in connection with a transfer of Landlord’s interest in this Lease, including
transfers by foreclosure or deed in lieu of foreclosure, and (iii) permit partial draws from
time to time.

(d) In addition to the foregoing, the Letter of Credit shall provide that Landlord
shall have the right to draw down for amounts of unpaid Base Rent and Additional Rent then
currently due up to the face amount of the Letter of Credit upon the presentation to the
Bank of the Letter of Credit and a Certificate signed by an officer of Landlord meeting the
requirements set forth in the form of Letter of Credit attached hereto as Exhibit
“C”.

(e) In the event of a transfer of Landlord’s interest in the Leased Property, Landlord
shall transfer the Letter of Credit (or cause a substitute letter of credit to be delivered,
as applicable) to the transferee, and it is agreed that the provisions hereof shall apply to
every transfer of the Letter of Credit to a new Landlord. Landlord shall be responsible for
all normal and customary charges of the Bank in connection with any such transfer.

(f) Except as described in subparagraph (h) below and in Section 12.2(d),
Landlord agrees not to draw upon the Letter of Credit unless an Event of Default by Tenant
in paying Base Rent or Additional Rent has occurred under this Lease, after giving such
notice thereof to Tenant as may be required in accordance with the terms of this Lease. If
Landlord does effect such a “draw” under this subparagraph (f), such “draw” amount may only
be made for (i) the past due amount of Base Rent or Additional Rent, or (ii) the amount of
any deficiency in Net Operating Income pursuant to Section 12.2(c)(i) hereof. In no
event shall Landlord be entitled to draw upon the Letter of Credit for accelerated Rent
pursuant to Section 12.2(c)(ii) hereof.

(g) Any failure or delay of Landlord to “draw” any portion of the Letter of Credit
shall not act as a waiver of Landlord’s right to do so at any time thereafter (through and
until the LC Expiration Date) or constitute a waiver of any Event of Default with respect to
this Lease.

(h) If the Letter of Credit is due to expire earlier than the LC Expiration Date,
Tenant shall provide a renewal letter of credit (or amendment renewing the same) or
substitute letter of credit (such renewal or amendment or substitute letter of credit to be
in effect and delivered to Landlord, as applicable, not later than thirty (30) days prior to
the expiration of the Letter of Credit), upon the same terms as the expiring Letter of
Credit (except for permitted reductions in amounts) or such other terms as may be acceptable
to Landlord in its reasonable discretion. If the Letter of Credit is not timely renewed or
a substitute letter of credit is not timely received, or if Tenant fails to maintain the
Letter of Credit in the amount and in accordance with the terms set forth in this Section,
the Landlord shall have the right to draw upon the Letter of Credit in the full face amount
thereof and hold all proceeds of the Letter of Credit as cash collateral (“Cash
Collateral”) for the payment of Base Rent and Additional Rent. Landlord shall hold any
Cash Collateral in an interest bearing account with a national banking association or other
depository or a money market fund having a branch office in Memphis, Tennessee requested by
Tenant and reasonably acceptable to Landlord, with any interest earned on such account to be
for the sole benefit of Tenant except to the extent used to pay Base Rent or Additional Rent
due Landlord. Landlord shall not co-mingle any Cash Collateral with other funds of
Landlord. Landlord shall have no liability to Tenant with respect to the amount of interest
paid on any such account.

(i) If there shall occur an Event of Default under the Lease with respect to payment of
Base Rent or Additional Rent, Landlord may, but without obligation to do so, in addition to
any other rights and remedies held by Landlord, draw upon the Letter of Credit and/or
utilize the Cash Collateral in an amount necessary to collect the unpaid Base Rent or
Additional Rent. No condition or term of this Lease shall be deemed to render the Letter of
Credit conditional upon this Lease or to justify the issuer of the Letter of Credit in
failing to honor a draw upon such Letter of Credit in a timely manner. In the event
Landlord is determined through any dispute resolution procedure agreed upon by the parties
or by a court of competent jurisdiction to have improperly drawn on the Letter of Credit,
then Tenant shall be entitled to receive a prompt refund of such improper amount from
Landlord (together with any bank fees and charges incurred by Tenant as a result thereof,
interest at the Overdue Rate and all costs and fees, including legal fees and expenses
incurred by Tenant in obtaining such refund).

(j) In the event Landlord draws upon the Letter of Credit or the Cash Collateral
pursuant to subparagraph (i) above, Tenant agrees that within ten (10) Business Days after
Tenant receives notice of such draw (i) in the case of any draw upon the Letter of Credit,
Tenant will cause the Letter of Credit to be amended so that the amount available thereunder
is restored to the amount available prior to such draw, and (ii) in the case of any draw
upon the Cash Collateral, Tenant will deposit with Landlord an amount equal to the amount so
drawn by Landlord, to be held as part of the Cash Collateral pursuant to the terms of this
Lease. Any failure by Tenant to so restore the amount of the Letter of Credit or the Cash
Collateral, as the case may be, shall constitute an Event of Default by Tenant under this
Lease.

(k) Tenant acknowledges and agrees that the Letter of Credit constitutes a separate and
independent contract between Landlord and the issuing bank, that Tenant is not a third party
beneficiary of such contract, and that Landlord’s claim under the Letter of Credit for the
full amount due and owing thereunder shall not be, in any way, restricted, limited, altered
or impaired by virtue of any provision of the Bankruptcy Code.

(l) If this Lease is terminated prior to the LC Expiration Date and such termination is
not the result of an Event of Default hereunder, or if this Lease is terminated as a result
of an Event of Default but Tenant’s obligation with respect to any deficiency in Base Rent
pursuant to Section 12.2(a)(i) shall have expired, the Letter of Credit or Cash Collateral,
as applicable, shall be promptly returned by Landlord to Tenant, subject to any draws for
unpaid Base Rent, Additional Rent, or Base Rent deficiencies which have previously been made
by Landlord. In any event, the Letter of Credit or Cash Collateral shall be promptly
returned to Tenant after Landlord has no further right to make any draws thereunder.

(m) Tenant will not assign or encumber Tenant’s interest in the Letter of Credit or
Cash Collateral, as the case may be, or any part thereof, and neither Landlord nor
Landlord’s successors or assigns will be bound by any such attempted assignment or
encumbrance.

(n) Notwithstanding anything to the contrary provided in this Section 3.9, provided
that (i) no uncured Event of Default shall exist, (ii) no amount of Base Rent or Additional
Rent is due and unpaid, and (iii) no restoration of the amount of the Letter of Credit is
required as of the time of any such reduction, then in the event that this Lease shall
terminate with respect to any individual Property in accordance with the terms of
Section 2.4(b) or Articles 10 or 11, Tenant shall be entitled at any
time thereafter to reduce the amount of the Letter of Credit in an amount proportionate to
the reduction in Base Rent resulting from the release of such Property, as determined by
reference to Section 3.3(c) hereof.

ARTICLE 4

CONDITION AND USE OF LEASED PROPERTY

4.1 Condition of the Leased Property. Tenant acknowledges receipt and delivery of possession
of the Leased Property and that Tenant has examined and otherwise has acquired knowledge of the
condition of the Leased Property prior to the execution and delivery of this Lease and has found
the same to be in good order and satisfactory for its purpose hereunder. Tenant is leasing the
Leased Property “as is” in its present condition, subject to the rights of parties in possession,
the existing state of title (as evidenced by title insurance policies and endorsements issued to
Landlord on the date of execution of this Lease, copies which have been made available to Tenant),
including all covenants, conditions, restrictions, reservations, easements and other matters of
record or that are visible or apparent on the Leased Property, all applicable Legal Requirements,
the lien of any financing instruments, mortgages, deeds to secure debt, and deeds of trust existing
as of the Commencement Date or permitted by the terms of this Agreement, and such other matters
which would be disclosed by an inspection of the Leased Property. TENANT REPRESENTS THAT IT HAS
INSPECTED THE LEASED PROPERTY AND ALL OF THE FOREGOING AND HAS FOUND THE CONDITION THEREOF
SATISFACTORY AND IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF LANDLORD OR LANDLORD’S AGENTS
OR EMPLOYEES WITH RESPECT THERETO AND TENANT WAIVES ANY CLAIM OR ACTION AGAINST LANDLORD IN RESPECT
OF THE CONDITION OF THE LEASED PROPERTY. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE,
SUITABILITY, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO
BE BORNE BY TENANT.

4.2 Permitted Uses. During the Term, Tenant shall use or cause to be used the Leased Property
as residential apartments and for such uses incidental thereto as may be permitted from time to
time by applicable law and which may enhance the value, rental, or rental value thereof as student
housing oriented residential apartment complexes (the “Permitted Use”). Tenant shall not
use the Leased Property or any portion thereof for any other use without the prior written consent
of Landlord, which Tenant agrees may be withheld in Landlord’s sole discretion.

4.3 Compliance with Legal and Insurance Requirements. Subject to Article 8 relating
to permitted contests and subject to Landlord’s obligation to fund the cost of capital repairs and
replacements pursuant to Section 5.2 hereof, Tenant, will promptly (a) comply with all
Legal Requirements and Insurance Requirements in respect of the use, operation, maintenance, and
repair of the Leased Property, and (b) procure, maintain and comply with all licenses and other
authorizations obtainable by Tenant required for the Tenant’s use and operation of the Leased
Property for the Permitted Use. Upon Landlord’s request, Tenant shall deliver copies of all such
licenses and other authorizations.

4.4 Lawful Use, Etc. Tenant covenants and agrees that Tenant shall not knowingly use, suffer
or permit the Leased Property to be used for any unlawful purpose. Tenant further covenants and
agrees that Tenant shall not commit or suffer to be committed any waste on any Leased Property, nor
shall Tenant knowingly cause or permit any unlawful nuisance thereon or therein.

4.5 Environmental Matters.

(a) During the Term, Tenant (i) shall comply, and cause the Leased Property to comply,
with all Hazardous Materials Laws relating to the operation of the Leased Property, (ii)
shall prohibit the use of the Leased Property for the generation, manufacture, refinement,
production, or processing of any Hazardous Material or for the storage, handling, transfer
or transportation of any Hazardous Material (other than in compliance with the Hazardous
Materials Laws and in commercially reasonable quantities in connection with the operation,
business and maintenance of the Leased Property as a residential apartment complex), (iii)
shall not permit to remain, install or permit the installation on the Leased Property of any
underground storage tanks, transformers containing polychlorinated biphenyl, or
asbestos-containing materials, (iv) shall cause any improvements to or alterations of the
Leased Property made by Tenant or its agents to comply with the Hazardous Materials Laws.

(b) Tenant agrees to protect, defend, indemnify and hold harmless Landlord, its
directors, officers, members, partners, shareholders, employees and agents, and any
successors and assigns of Landlord from and against any and all liability, including all
foreseeable and unforeseeable damages, including but not limited to attorneys’ and
consultants’ fees, fines, penalties and civil or criminal damages, the cost of any required
or necessary repair, response action, remediation, investigation, cleanup or detoxification
and the preparation of any closure or other required plans, directly or indirectly arising
out of (i) Tenant’s violation of Section 4.5(a) above or (ii) use, generation,
storage, treatment, release, discharge, presence or disposal of Hazardous Material from, on,
at, to, or under the Leased Property by Tenant, any Tenant Related Party, or any agent of
Tenant or any Tenant Related Party, before or during the Term. This agreement to indemnify
and hold harmless shall be in addition to any other obligations or liabilities Tenant may
have to Landlord at common law under all statutes and ordinances or otherwise, and shall
survive following the date of expiration or earlier termination of this Lease. Tenant
expressly agrees that the representations, warranties and covenants made and the indemnities
stated in this Lease are not personal to Landlord, and the benefits under this Lease may be
assigned to subsequent parties in interest to the chain of title to the Leased Property,
which subsequent parties in interest may proceed directly against Tenant to recover pursuant
to this Lease.

(c) Tenant shall promptly notify Landlord in writing upon Tenant’s learning of any:

(i) notice or claim to the effect that Tenant is or may be liable to any Person
as a result of the presence upon or release or threatened release of any Hazardous
Material into the environment from the Leased Property;

(ii) notice that any Property is subject to investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to the release
or threatened release of any Hazardous Material into the environment from such
Property or any portion thereof;

(iii) notice that the Leased Property or any portion thereof is subject to any
environmental lien; and

(iv) notice of violation to Tenant under any applicable Hazardous Material Law
that could have a material adverse effect upon the Leased Property or any portion
thereof.

4.6 Mold. Tenant shall be responsible for taking all reasonable and timely measures in the
ordinary course of business to detect, prevent, and abate the growth of Mold within the Leased
Improvements.

ARTICLE 5

MAINTENANCE AND REPAIRS

5.1 Tenant’s General Obligations. Subject to Landlord’s obligations under Section 5.2
below, Tenant shall keep the Leased Property in good operating condition and in good order and
repair (whether or not the need for such repairs occurs as a result of Tenant’s use, any prior use,
the elements, the age of the Leased Property or any portion thereof) and, subject to Landlord’s
election to perform certain work as set forth in Section 5.2(c), shall promptly make all
necessary and appropriate repairs thereto of every kind and nature, whether interior or exterior,
structural or non-structural, ordinary or extraordinary, foreseen or unforeseen or arising by
reason of a condition existing prior to the commencement of the Term (concealed or otherwise). All
repairs, to the extent reasonably achievable, shall be at least equivalent in quality to the
original work. All repairs shall be made in a good, workmanlike manner, consistent with industry
standards for like properties in like locations, in accordance with all applicable Legal
Requirements. Tenant’s obligations under this Section 5.1 shall be limited in the event of
any casualty or Condemnation as set forth in Articles 10 and 11. The cost of all
routine maintenance, repairs, and minor alterations which can be expensed under GAAP shall be paid
by Tenant, and shall be treated as a component of Operating Expenses.

5.2 Capital Repairs and Replacements.

(a) Landlord agrees to establish and maintain a ledger account (a “Capital
Expenditure Reserve”) to be used for the purpose of funding the cost of capital repairs,
replacements and renewals to the Leased Property necessary to cause the Projects to comply
with the standards described in Section 5.1, including major repairs, alterations,
improvements, renewals or replacements to the structure, roof, or exterior façade of the
Leased Improvements and to the mechanical, electrical, heating, ventilating, air
conditioning, plumbing, and vertical transportation systems of the Leased Improvements
(hereinafter referred to as “Major Repairs”), as well as routine repairs and
replacements of furnishings, fixtures and equipment, including routine repairs and
replacements to the mechanical, electrical, heating, ventilating, air conditioning and
plumbing systems, and routine maintenance to the Leased Improvements, which are normally
capitalized under GAAP (hereinafter referred to as “Routine Repairs”). During the
Fixed Term, Landlord agrees to allocate annually to the Capital Expenditure Reserve an
amount equal to not less than the product of $125.00 times the number of beds within the
Leased Improvements (i.e., initially $736,750.00 per annum, based on 5,894 beds). During
any Extension Term, the minimum annual amount to be allocated to the Capital Expenditure
Reserve shall be adjusted by an amount which reflects any increase or decrease in the
Consumer Price Index during the preceding five (5) year period, as calculated in the manner
set forth in Section 3.3(a) hereof. In addition, in the event of the termination of
this Lease with respect to any individual Property pursuant to the terms of Section
2.4(b) or Article 10 or 11, the minimum annual allocation to the Capital
Expenditure Reserve shall be adjusted to reflect the applicable reduction in the number of
beds within the Leased Improvements. Any portion of Capital Expenditure Reserve which is
not actually disbursed by Landlord during a Fiscal Year for Approved Capital Expenditures as
described below shall remain available to Tenant for use during any subsequent Fiscal Year.

(b) Each year, on or before November 1, Tenant shall prepare and submit to Landlord for
its review and approval a budget (the “Capital Expenditure Budget”) for both Routine
Repairs and Major Repairs which Tenant believes are necessary or desirable to be made with
respect to each of the Properties during the ensuing Fiscal Year (presented on both an
annual and monthly basis) in order to maintain the Projects in the condition required by
Section 5.1 above. In the event that such Capital Expenditure Budget includes any
Major Repairs, Tenant shall be entitled to include a reasonable construction supervision fee
for itself in such Capital Expenditure Budget with respect to such Major Repairs.
Landlord’s approval of such proposed Capital Expenditure Budget shall not be unreasonably
withheld or delayed. In the event Landlord shall fail to respond within fifteen (15) days
after receipt of a proposed Capital Expenditure Budget, then such Capital Expenditure Budget
shall be deemed approved by Landlord. All Capital Expenditures proposed by Tenant shall be
(as to both the amount of each such expenditure and the timing thereof) both reasonable and
necessary, given the objective that each Project will be maintained and operated to a
standard comparable to competitive apartment complexes and in good order and repair. Tenant
agrees to incorporate all reasonable revisions to any proposed Capital Expenditures Budget
which are required by Landlord. Upon approval of a proposed Capital Expenditure Budget by
Landlord, Landlord shall submit such Capital Expenditure Budget to any Project Mortgagee
(including the Existing Lender) which may have the right to review and approve such budget.
Landlord shall be responsible for obtaining approval of any such Capital Expenditure Budget
by any such Project Mortgagee. The Capital Expenditure Budget for the remainder of calendar
year 2005 has previously been approved by Landlord, Tenant, and the Existing Lender and is
attached hereto as Exhibit D and by this reference made a part hereof.

(c) Tenant shall, consistent with the Capital Expenditure Budgets approved by Landlord
and, if applicable, any Project Mortgagee, from time to time make Routine Repairs and Major
Repairs to the Leased Property, except to the extent that in the case of a Major Repair,
Landlord elects to be responsible for the performance of such work. Tenant shall not
materially deviate from any Capital Expenditure Budget approved by Landlord or any Project
Mortgagee (including the Existing Lender) without the prior approval of Landlord, except in
the case of emergency where immediate action is necessary to prevent imminent danger to
person or property or to comply with any applicable Legal Requirements.

(d) The cost of all Capital Expenditures incurred pursuant to an approved Capital
Expenditure Budget or otherwise approved or authorized pursuant to subsection (c) above
(“Approved Capital Expenditures”) shall be funded by Landlord. In the event the existing
amount allocated to the Capital Expenditure Reserve plus the minimum amounts to be allocated
thereto for the Fiscal Year of the approved Capital Expenditure Budget are not sufficient to
fully fund all such Approved Capital Expenditures for any Fiscal Year, Landlord shall
increase the amount allocated to the Capital Expenditure Reserve for such Fiscal Year in
order to fully fund the approved Capital Expenditure Budget. Upon Tenant’s written request
for disbursement, Landlord shall disburse funds to or for the account of Tenant, to pay for
or to reimburse Tenant for such Approved Capital Expenditures, upon satisfaction of the
conditions set forth in Section 5.3.

(e) Landlord shall not be obligated to fund the costs of Capital Expenditures in excess
of amounts included from time to time in the approved Capital Expenditure Budget for any
Fiscal Year unless such Capital Expenditures are expressly approved in advance by Landlord
or unless such expenditures are incurred by Tenant in an emergency situation where immediate
action is necessary to prevent imminent danger to person or property or to comply with any
applicable Legal Requirements. Tenant shall not make any capital replacements, repairs or
alterations to the Leased Property without Landlord’s prior written consent unless such
replacement, repair or alteration is made pursuant to an approved Capital Expenditure Budget
or is required in order to prevent imminent danger to person or property or to comply with
any applicable Legal Requirements.

5.3 Conditions to Capital Expenditure Reimbursements. Upon Tenant’s request, Landlord shall
pay for or reimburse Tenant for Approved Capital Expenditures incurred by Tenant upon satisfaction
of each of the conditions set forth below (provided that nothing herein shall require Tenant to
advance any funds for Major Repairs):

(a) Except as provided in this Section 5.3, each request for funds shall be
made only after completion of the capital repairs, replacements or alterations (the “Work”)
for which disbursement is requested.

(b) If the contractor performing such Work requires periodic payments pursuant to the
terms of a written contract, a request for funds may be made after completion of a portion
of the work under such contract, provided (v) such contract requires payment upon completion
of such portion of the work, (w) the materials for which the request is made are on site at
the applicable individual Project and are properly secured or have been installed in the
applicable individual Project, (x) all other conditions in this Section 5.3 for
disbursement have been satisfied and (y) if required by Landlord, each contractor or
subcontractor receiving payments under such contract shall provide a waiver of lien with
respect to amounts which have been paid to that contractor or subcontractor.

(c) Each disbursement of funds, except for a final disbursement, shall be in the amount
of actual costs incurred for completed Work (as certified by an approved architect, if
applicable), less a retainage equal to ten percent (10%) of such costs incurred in the case
of projects having a cost in excess of $50,000, until such Work has been completed. The
retainage shall in no event be less than the percentage of such costs that the contract with
the relevant contractor or supplier specifies to be retained and advanced as part of the
final disbursement. No funds will be advanced for materials stored at any individual
Project unless such materials are properly stored and secured at such individual Project in
accordance with sound construction practices as reasonably determined by Landlord. The
retainage shall not be released until the Tenant or, if applicable, an approved architect
certifies to Landlord that the Work has been completed substantially in accordance with the
provisions of this Section 5.3 and that all material approvals necessary at such
individual Project have been obtained from all appropriate Governmental Authorities, and
Landlord receives evidence reasonably satisfactory to Landlord that the costs of the Work
have been paid in full or will be paid in full out of the retainage.

(d) The amount of all invoices in connection with the Work with respect to which a
disbursement is requested and which has been approved by Landlord shall be disbursed by
Landlord either directly to the Tenant (in which event, such Tenant covenants and agrees to
promptly pay such invoices) or, if an Event of Default has occurred and is continuing, at
Landlord’s option and in Landlord’s sole and absolute discretion, directly to the
contractor, supplier, materialman, mechanic or subcontractor indicated on said invoices
unless already paid by Tenant and Landlord has received satisfactory evidence of such
payment in which case Landlord shall reimburse Tenant. In the event that Tenant requests
that any amounts be disbursed directly to Tenant pursuant to the foregoing sentence, Tenant
shall be required to deliver evidence reasonably acceptable to Landlord of payment of all
invoices for which disbursements were previously made to Tenant as a condition to such
requested disbursement.

(e) No more than one disbursement per Property will be made by Landlord in any calendar
month.

(f) Except to the extent such item is already contained in an approved Capital
Expenditure Budget, Landlord reserves the right, at its option and as a condition to the
funding of any Capital Expenditures, to approve (1) all drawings and plans and
specifications, if any, for any Work which requires aggregate payments in amounts exceeding
$50,000, and (2) all contracts and work orders with materialmen, mechanics, suppliers,
subcontractors, contractors and other parties providing labor or materials in connection
with any Work which requires aggregate payments in amounts exceeding $50,000. Any such
approval shall not be unreasonably withheld, conditioned or delayed and shall be deemed
given if Landlord fails to respond within fifteen (15) Business Days after Landlord receives
all information reasonably required to adequately review such drawings, plans and
specifications, contracts or work orders.

(g) For any Work which requires aggregate payments in amounts exceeding $50,000 or is
structural in nature or relates to the life safety systems at any individual Project,
Landlord may require an inspection of such individual Project prior to making a monthly
disbursement in order to verify completion of the Work for which disbursement is sought.
Landlord may require that such inspection be conducted by an appropriate independent
qualified architect or engineer selected by Landlord and/or may require a copy of a
certificate of completion by an independent qualified architect or engineer licensed in the
state where the applicable individual Project is located and otherwise acceptable to
Landlord prior to funding the cost of such Work.

5.4 Additional Provisions Relating to Capital Repairs and Replacements.

(a) In the event Landlord determines in its reasonable discretion that any Work being
performed by or under the supervision of Tenant is not being performed in a workmanlike or
timely manner or that any such Work has not been completed in a workmanlike manner, Landlord
shall have the option to withhold disbursement for such unsatisfactory Work and so notify
Tenant with reasonable detail regarding the basis for Landlord’s dissatisfaction and, after
the expiration of thirty (30) days from the giving of such Notice by Landlord to Tenant of
such unsatisfactory Work without the cure thereof (or, if such unsatisfactory Work is
susceptible of a cure but cannot reasonably be cured within said thirty (30) day period and
provided that Tenant shall have commenced to cure such unsatisfactory Work within said
thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the
same, after the expiration of such longer period as is reasonably necessary for Tenant in
the exercise of due diligence to cure such unsatisfactory Work, up to a maximum of an
additional sixty (60) days, without the cure thereof), Landlord may proceed under existing
contracts or contract with third parties to complete such Work, as the case may be, and
apply a portion of the Capital Expenditure Reserve toward the labor and materials necessary
to complete the same, without providing any additional prior Notice to Tenant, and exercise
any and all other remedies available to Landlord upon and during the continuance of an Event
of Default hereunder. Any dispute between Landlord and Tenant under this Section
5.4(a) shall be subject to arbitration in accordance with Article 25 below at
the request of either party.

(b) Tenant shall permit Landlord, any Project Mortgagee, and their respective agents
and representatives (including, without limitation, Landlord or said Project Mortgagee’s
engineer, architect or inspector) or third parties performing any Work on behalf of Landlord
pursuant to this Section 5.4 or otherwise to enter onto any individual Property
during normal business hours upon reasonable prior notice (subject to the rights of
subtenants under their leases) to inspect the progress of any Work and all materials being
used in connection therewith, to examine all plans and shop drawings relating thereto which
are or may be kept at the Property, and to complete any Work as permitted under this Section
5.4. Tenant shall cause all of its contractors and subcontractors to cooperate with
Landlord or Landlord’s representatives or such other persons described above in connection
with inspections described in this Section 5.4(b) or the completion of the Work
pursuant to Section 5.4(a). In the event Landlord elects to perform or be
responsible for the performance of any Major Repairs to any Property, Landlord (i) shall
perform such work in a good and workmanlike manner, consistent with industry standards for
like properties in like locations, in accordance with all applicable Legal Requirements,
(ii) shall coordinate the scheduling of such Work with Tenant, (iii) shall use its best
efforts to minimize any interference with Tenant’s operations at such Property in the
performance of such Work, and (iv) shall indemnify Tenant from any and all actions, claims,
costs, and expenses, including personal injury and property damage, resulting from the
negligent actions of Landlord, its agents, contractors, or employees, as well as from
Landlord’s failure to perform such Work in accordance with the requirements of (i) and (iii)
above.

(c) All Work and all materials, equipment, fixtures and any other items comprising a
part thereof shall be constructed, installed or completed by Landlord or Tenant, as
applicable, free and clear of all mechanic’s, materialman’s or other liens (subject, in the
case of any such Work performed by Tenant, to Landlord’s obligation to fund the cost of
such Work in accordance with Sections 5.2 and 5.3.

ARTICLE 6

INTENTIONALLY OMITTED

ARTICLE 7

LIENS

Subject to the provisions of Article 8 relating to permitted contests, Tenant will not
directly or indirectly create and will promptly discharge any lien, encumbrance, attachment, title
retention agreement or claim upon the Leased Property, or any part thereof or upon Tenant’s
leasehold estate hereunder, that arises from the use or occupancy of the Leased Property by Tenant
or, subject to Landlord’s funding of Approved Capital Expenditures pursuant to Section 5.2, by
reason of any labor, service or material furnished or claimed to have been furnished to or for the
benefit of Tenant or by reason of any construction or repairs by or at the direction of Tenant of
all or any part of the Leased Improvements. Nothing herein shall obligate Tenant to discharge (a)
restrictions, liens and other encumbrances which are consented to in writing by Landlord, (b) liens
for those taxes of Landlord which Tenant is not required to pay hereunder, (c) liens for
Impositions or for sums resulting from noncompliance with Legal Requirements so long as (1) the
same are not yet payable or are payable without the addition of any fine or penalty or (2) such
liens are in the process of being contested as permitted by Article 8, (d) liens of
mechanics, laborers, materialmen, suppliers or vendors engaged by Tenant for sums either disputed
or not yet due, provided that (1) the payment of such sums shall not be postponed for more than
sixty (60) days after the completion of the action giving rise to such lien and such reserve or
other appropriate provisions as shall be required by law or GAAP shall have been made therefor or
(2) any such liens are in the process of being contested as permitted by Article 8, (e)
liens of mechanics, laborers, materialmen, suppliers or vendors engaged by Landlord, and (f) any
liens which are the responsibility of Landlord pursuant to the provisions of Article 15 of
this Lease. Unless otherwise expressly provided herein, Tenant shall not mortgage or grant any
interest in, or otherwise assign, any part of the Tenant’s rights and interests in this Lease, the
Leased Property or any permits, licenses, or any other approvals required to operate the Leased
Property during the Term without the prior written consent of the Landlord, which may be withheld
at Landlord’s sole discretion.

ARTICLE 8

PERMITTED CONTESTS

Tenant shall have the right to contest the amount or validity of any Imposition, Legal
Requirement, Insurance Requirement, lien, attachment, levy, encumbrance, charge or claim
(collectively, “Claims”) as to the Leased Property, by appropriate legal proceedings
conducted in good faith and with due diligence, provided that (a) Tenant shall give Landlord prior
written notice of each such contest, (b) the foregoing shall in no way be construed as relieving,
modifying or extending Tenant’s obligation to pay any Claims which are Tenant’s obligations as
finally determined, (c) such contest shall be permitted under any Project Mortgage encumbering the
affected Property, and any conditions or requirements of any applicable Project Mortgagee shall be
satisfied, (d) no part of the Leased Property nor any Rent therefrom shall be in any immediate
danger of sale, forfeiture, attachment or loss, and (e) Tenant shall indemnify and hold harmless
Landlord from and against any cost, claim, damage, penalty or reasonable expense, including
reasonable attorneys’ fees, incurred by Landlord in connection therewith or as a result of Tenant’s
exercise of its rights under this Article 8. Any compromise or settlement of any such
contest shall be subject to the prior written approval of Landlord, which approval shall not be
unreasonably withheld, delayed or conditioned. Landlord agrees to join in any such proceedings if
required legally to prosecute such contest, provided that Landlord shall not thereby be subjected
to any liability therefor (including, without limitation, for the payment of any costs or expenses
in connection therewith) unless Tenant agrees, by agreement in form and substance reasonably
satisfactory to Landlord, to assume and indemnify Landlord with respect to the same. Tenant shall
be entitled to any refund of any Claims and such charges and penalties or interest thereon which
have been paid by Tenant or paid by Landlord to the extent that Landlord has been fully reimbursed
by Tenant. If Tenant shall fail (x) to pay or cause to be paid any Claims which are Tenant’s
obligation when finally determined, (y) to provide reasonable security therefor, or (z) to
prosecute or cause to be prosecuted any such contest diligently and in good faith, Landlord may,
upon reasonable notice to Tenant (which notice shall not be required if Landlord shall reasonably
determine that the same is not practicable), pay such charges, together with interest and penalties
due with respect thereto, and Tenant shall reimburse Landlord therefore, upon demand, as Additional
Charges.

ARTICLE 9

INSURANCE

9.1 General Insurance Requirements. During the Term, Tenant shall at all times keep the
Leased Property insured against loss or damage from such causes as are customarily insured against
by prudent owners of similar facilities, including the insurance described below. All insurance
shall be written by insurance companies (i) that have a claims paying ability rating by Standard &
Poor’s Rating Services of not less than “BBB,” by Moody’s Investors Services, Inc. of not less than
“BA3,” and by Fitch, Inc. of not less than “AA,” an A.M. Best Company, Inc. rating of not less than
A- and a financial size category of not less than X, or such higher ratings as may be required by
any Project Mortgagee, including Existing Lender with respect to the Properties which are subject
to the Existing Mortgage Loan, and (ii) authorized, licensed and qualified to do insurance business
in the state in which the insured Property is located. All liability policies must name Landlord
and its directors, officers, members, partners, employees, agents (and any other entities as
Landlord may deem necessary) as an additional insured and losses under any property insurance
policy shall be payable to Landlord and/or Tenant as provided in Article 10. Each
insurance policy required hereunder must (i) provide primary insurance without right of
contribution from any other insurance carried by Landlord, (ii) contain an express waiver by the
insurer of any right of subrogation, setoff or counterclaim against any insured party thereunder
including Landlord, (iii) permit Landlord to pay premiums at Landlord’s discretion, and (iv) as
respects any third party liability claim brought against Landlord, obligate the insurer to defend
Landlord as an additional insured thereunder. In addition, the policies of property insurance
shall name any Project Mortgagee as a mortgagee and loss payee, as its interest may appear, and
shall contain a standard “non-contributory mortgagee” endorsement or its equivalent. Evidence of
insurance shall be provided to Landlord and, if requested, to any Project Mortgagee(s). If any
provision of any Project Mortgage which constitutes a first lien on the Leased Property requires
deposits of insurance premiums to be made with such Project Mortgagee, Tenant shall either pay to
Landlord monthly the amounts required and Landlord shall transfer such amounts to such Project
Mortgagee or, pursuant to written direction by Landlord, Tenant shall make such deposits directly
with such Project Mortgagee, as described in Section 3.6 hereof. The policies on the
Leased Property shall insure against the following risks:

(a) All Risk or Special Form Property insurance against loss or damage to buildings and
improvements, including but not limited to, perils of fire, lightning, water, wind, theft,
vandalism and malicious mischief, plate glass breakage, and perils typically provided under
an Extended Coverage Endorsement and other forms of broadened risk perils, and insured on a
“replacement cost” value basis to the extent of the full replacement value of the Leased
Improvements located on each Leased Property. The policy shall include coverage for
subsidence (not including “man-made subsidence), building ordinance and law (including
demolition costs and increased cost of construction coverage), and “acts of terrorism” as
defined in the Terrorism Risk Insurance Act of 2002. Such policy shall be in an amount not
less than necessary to comply with any coinsurance percentage stipulated in the policy, but
not less than 100% of the Full Replacement Cost of all Leased Improvements within the Leased
Property (without any deduction for depreciation) unless otherwise approved by Landlord
(such approval not to be unreasonably withheld) and any applicable Project Mortgagee. The
deductible amount under such policy shall be borne by the Tenant as an Operating Expense in
the event of a loss and the deductible must not exceed Twenty Five Thousand and 00/100
Dollars ($25,000.00) per occurrence. Further, in the event of a loss, Tenant shall abide by
all provisions of the insurance contract, including proper and timely notice of the loss to
the insurer, and Tenant further agrees that it will notify Landlord of any loss in the
amount of Fifty Thousand and 00/100 Dollars ($50,000.00) or greater and that no claim at or
in excess of Two Hundred Thousand and 00/100 Dollars ($200,000.00) thereunder shall be
settled without the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed by Landlord.

(b) Broad form boiler and machinery insurance in an amount equal to the full
replacement cost of the Leased Improvements at each individual Property (without any
deduction for depreciation) in which the boiler or similar vessel is located, and including
coverage against loss or damage from (1) leakage or sprinkler systems and (2) damage,
breakdown or explosion of steam boilers, electrical machinery and equipment, air
conditioning, refrigeration, pressure vessels or similar apparatus and mechanical objects
now or hereafter installed at the Properties.

(c) If an individual Property is located in an area prone to geological phenomena,
including, but not limited to, sinkholes, mine subsidence, tidal waves or earthquakes,
insurance for such individual Property covering such risks in an amount not less than 100%
of the Full Replacement Cost of the Leased Improvements at such individual Property without
any deduction for depreciation, or such other amount as is approved by Landlord (such
approval not to be unreasonably withheld) and any applicable Project Mortgagee, with a
maximum permissible deductible of $25,000, or such other amount as is approved by Landlord
from time to time.

(d) Flood insurance for any individual Property which is located, in whole or in part,
in an area now or hereafter designated as “flood prone” or a “special flood hazard area” (as
defined under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994 (as each may be amended, or any
successor law, collectively, the “Flood Insurance Acts”)). Such policy shall be in
an amount equal to 100% of the Full Replacement Cost of the Leased Improvements at such
individual Property, or such other amount as is approved by Landlord (such approval not to
be unreasonably withheld) and any applicable Project Mortgagee from time to time, and shall
have a maximum permissible deductible equal to an amount customarily required by
institutional lenders for similar properties in the general vicinity of such individual
Property, but in no event in excess of $5,000, or such other amount as is approved by
Landlord (such approval not to be unreasonably withheld) and any applicable Project
Mortgagee from time to time.

(e) Business interruption or rent loss insurance in an amount equal to the gross income
or rentals from the Leased Property for an indemnity period of eighteen (18) months, such
amount being adjusted annually.

(f) During any period of reconstruction, renovation or alteration of any of the
Properties, a complete value, “All Risks” Builders Risk form or “Course of Construction”
insurance policy in non-reporting form and in an amount reasonably satisfactory to Landlord.

(g) Worker’s compensation insurance covering all persons employed by Tenant at the
Leased Property with statutory limits and otherwise with limits of and provisions in
accordance with the requirements of applicable local, state and federal law, and employer’s
liability insurance with maximum limits of One Million and 00/100 Dollars ($1,000,000.00)
per accident or disease.

(h) Automobile and vehicle liability insurance coverage for all owned, non-owned,
leased or hired automobiles and vehicles in a primary limit of One Million and 00/100
Dollars ($1,000,000.00) per occurrence for bodily injury and an annual aggregate policy
limit of One Million and 00/100 Dollars ($1,000,000.00) per Project.

(i) Commercial General Liability in a primary amount of at least One Million and 00/100
Dollars ($1,000,000.00) per occurrence, bodily injury and property damage combined, and Two
Million and 00/100 Dollars ($2,000,000.00) general aggregate per Project, with a deductible
or self-insurance retention no greater than Twenty Five Thousand and 00/100 Dollars
($25,000.00). This coverage shall also include blanket contractual liability, including
Tenant’s indemnification as set forth in this Lease, and products/completed operations
liability coverage for a period of at least two (2) years after termination of this Lease.

(j) Umbrella liability insurance in the minimum amount of Twenty Five Million and
00/100 Dollars ($25,000,000.00) for each occurrence and aggregate combined single limit for
all liability.

(k) Such other insurance and endorsements, if any, with respect to the Leased Property
and the operation thereof as Landlord may reasonably require from time to time, provided
same are customarily required by institutional owners of similar properties in the general
vicinity of the Properties, or which are otherwise required by any applicable Project
Mortgagee.

The term “Full Replacement Cost” as used herein, shall mean the actual replacement cost of
the subject Property, including an increased cost of construction endorsement, less exclusions
provided in the standard form of special form insurance policy. In the event either Landlord or
Tenant believes that the Full Replacement Cost for any Project has increased or decreased at any
time during the Term, it shall have the right to have such Full Replacement Cost re-determined by
an independent accredited appraiser approved by the other party, which approval shall not be
unreasonably withheld or delayed, hereinafter referred to as the “impartial appraiser.” The party
desiring to have the Full Replacement Cost so re-determined shall forthwith, on receipt of such
determination by such impartial appraiser, give written notice thereof to the other party hereto.
The determination of such impartial appraiser shall be final and binding on the parties hereto, and
Tenant shall forthwith increase, or may decrease, the amount of the insurance carried pursuant to
this Article 9, as the case may be, to the amount so determined by the impartial appraiser.
Tenant shall pay the fee, if any, of the impartial appraiser.

Notwithstanding anything to the contrary hereinabove provided, except as otherwise required by any
applicable Project Mortgagee(s), Tenant’s obligation to maintain the coverages, limits, and
deductibles described in this Section 9.1 and in Section 9.4 below shall be subject
to the availability of such coverages, limits, and deductibles for similar kinds of properties in
the general vicinity of the Properties at commercially reasonable premiums. Subject to the consent
of any applicable Project Mortgagee(s), to the extent that the coverages, limits and deductibles
specified hereinabove and in Section 9.4 are not available at commercially reasonable
premiums for similar types of properties in the locations of the Properties, Landlord and Tenant
shall endeavor to agree upon the proper and reasonable coverages, limits, and deductibles to be
maintained, based upon the insurance programs typically required by institutional investors and
permanent lenders for similar types of properties in the vicinity of the Properties. If the
parties shall be unable to agree thereon, the proper and reasonable coverages, limits and
deductibles shall be determined by reference to such standard by arbitration pursuant to the
provisions of Article 24 below.

9.2 Additional Insurance. In addition to the insurance described above, Tenant shall maintain
such additional insurance as may be required from time to time by any Project Mortgagee.

9.3 Waiver of Subrogation. Anything in this Lease to the contrary notwithstanding, Tenant
hereby releases and waives unto Landlord (including all partners, members, managers, stockholders,
officers, directors, employees and agents thereof), its successors, and assigns, and Landlord
hereby releases and waives unto Tenant (including all partners, members, managers, stockholders,
officers, directors, employees and agents thereof), its successors and assigns, all rights to claim
damages for any injury, loss, cost or damage to persons or to the Leased Property or any other
casualty, as long as the amount of such injury, loss, cost or damage has been paid either to
Landlord, Tenant, or any other person, firm or corporation, under the terms of any property,
commercial general liability, or other policy of insurance, to the extent such releases or waivers
are permitted under applicable law. As respects all policies of insurance carried or maintained
pursuant to this Lease and to the extent permitted under such policies, Landlord and Tenant each
waive the insurance carriers’ rights of subrogation.

9.4 Form of Insurance. All of the policies of insurance referred to in this Article 9
shall be written in form satisfactory to Landlord and by insurance companies satisfactory to
Landlord. Tenant shall pay all of the premiums therefor, and shall deliver such original policies,
or a certified copy thereof (which is certified in writing by a duly authorized agent for the
insurance company as a “true and certified” copy of the policy) to Landlord effective with the
Commencement Date and furnished annually thereafter (and, with respect to any renewal policy,
evidence of such renewal prior to the expiration of the existing policy) and in the event of the
failure of Tenant either to obtain such insurance in the names herein called for or to pay the
premiums therefor, or to deliver such policies or certified copies of such policies to Landlord at
the times required, Landlord shall be entitled, but shall have no obligation, to obtain such
insurance and pay the premiums therefor, which premiums shall be repayable to Landlord upon written
demand therefor, as Additional Charges, together with a late charge at the Overdue Rate from the
date such payment is made until the date repaid. All insurance policies and renewals thereof (i)
shall provide for a term of not less than one year, (ii) shall provide for claims to be made on an
occurrence basis, and (iii) shall contain a statement of values to be updated annually (if the
amount of coverage under such policy is based upon the replacement cost of any applicable
individual Property). All property damage insurance policies (except for flood and earthquake
policies) must automatically reinstate after each loss. Each insurer mentioned in this Article
9 shall agree, by endorsement on the policy or policies issued by it, or by independent
instrument furnished to Landlord, that it will give to Landlord thirty (30) days’ prior written
notice at Landlord’s Notice Address before the policy or policies in question shall be altered,
allowed to expire or canceled. The parties hereto agree that all insurance policies, endorsements
and certificates which provide that the insurer will “endeavor to” give notice before same may be
altered, allowed to expire or canceled will not be acceptable to Landlord. Notwithstanding
anything contained herein to the contrary, all policies of insurance required to be obtained by
Tenant hereunder shall provide (i) that such policies will not lapse, terminate, be canceled, or be
amended or modified to reduce limits or coverage terms unless and until Landlord has received not
less than thirty (30) days’ prior written notice at Landlord’s Notice Address, and (ii) that in the
event of cancellation due to non-payment of premium, the insurer will provide not less than ten
(10) days’ prior written notice to Landlord at Landlord’s Notice Address.

9.5 Increase in Limits. In the event that Landlord shall at any time deem the limits of the
personal injury, property damage or general public liability insurance then carried to be
insufficient, the parties shall endeavor to agree on the proper and reasonable limits for such
insurance to be carried, based upon limits typically required by institutional investors and
permanent lenders for similar properties in the general vicinity of the Properties, and such
insurance shall thereafter be carried by Tenant with the limits thus agreed on until further change
pursuant to the provisions of this Article 9. If the parties shall be unable to agree
thereon, the proper and reasonable limits for such insurance to be carried shall be determined by
an impartial third party selected by the parties, and any limits of coverage in excess of such
amounts shall be at the sole cost and expense of Landlord. Notwithstanding anything to the
contrary hereinabove provided, Tenant shall at all times maintain such limits of coverage as may be
required by any applicable Project Mortgages, the costs of which shall be treated as an Operating
Expense.

9.6 No Separate Insurance. Tenant shall not, on Tenant’s own initiative or pursuant to the
request or requirement of any third party, take out separate insurance concurrent in form or
contributing in the event of loss with that required in this Article 9 to be furnished by,
or which may reasonably be required to be furnished by, Tenant, or increase the amounts of any then
existing insurance by securing an additional policy or additional policies, unless all parties
having an insurable interest in the subject matter of the insurance, including in all cases
Landlord and all Project Mortgagees, are included therein as additional insureds and the loss is
payable under said insurance in the same manner as losses are required to be payable under this
Lease. Tenant shall immediately notify Landlord of the taking out of any such separate insurance
or of the increasing of any of the amounts of the then existing insurance by securing an additional
policy or additional policies.

ARTICLE 10

CASUALTY

10.1 Insurance Proceeds. All proceeds payable by reason of any loss or damage to the Leased
Property or any portion thereof and insured under any policy of insurance required by Article
9 (other than the proceeds of any business interruption or rent loss insurance, which shall be
payable to Tenant) shall be paid directly to Landlord (subject to the provisions of Section 10.2)
and all loss adjustments with respect to losses under such policies shall require the prior written
consent of Landlord; provided, however, that so long as no Event of Default shall have occurred and
be continuing, all such proceeds less than or equal to Two Hundred Thousand and 00/100 Dollars
($200,000), calculated on a Project-by-Project basis, shall be paid directly to Tenant and such
losses may be adjusted without Landlord’s consent. If Tenant is required to reconstruct or repair
such Property as provided herein, such proceeds shall be paid out by Landlord from time to time for
the reasonable costs of such reconstruction or repair, subject to and in accordance with the
provisions of Section 10.3. Any excess proceeds of insurance remaining after the
completion of the restoration or reconstruction of the Leased Property shall be gross rentals under
this Lease. All salvage resulting from any risk covered by insurance also shall be treated as
gross rentals under this Lease, provided any rights to same have been waived by the insurer.

10.2 Damage or Destruction.

10.2.1 Damage or Destruction of Leased Property. If, during the Term, any Project
shall be totally or partially destroyed and (i) is thereby rendered Unsuitable for its Permitted
Use, and (ii) in Tenant’s reasonable estimate, based on the evaluation of an independent architect
engaged by Landlord to evaluate such damage, cannot reasonably be expected to be restored to
substantially the same condition as existed immediately before such damage or destruction within
twelve (12) months following such damage or destruction, then in such event Tenant may, by the
giving of Notice thereof to the Landlord, terminate this Agreement with respect to such Property,
in which event this Agreement shall terminate with respect to the affected Property, Landlord shall
be entitled to retain the insurance proceeds payable on account of such damage, and Tenant shall
pay to Landlord on demand as an Operating Expense the amount of any deductible in connection
therewith; and Tenant shall thereafter have no obligation to pay the Base Rent allocable to such
Property, as determined in accordance with Section 3.3(c) hereof, for periods arising
after the effective date of such termination, and the Additional Rent Base shall be adjusted in
accordance with Section 3.4(b).

10.2.2 Partial Damage or Destruction. If, during the Term, any Project shall be
totally or partially destroyed but such Project is not rendered Unsuitable for its Permitted Use,
or, if rendered Unsuitable for its Intended Use, nevertheless in the opinion of the independent
architect engaged by Landlord to evaluate such damage reasonably can be expected to be restored to
the same condition as existed immediately before such damage or destruction within twelve (12)
months following such damage or destruction, Tenant or, if Landlord so elects, Landlord shall
promptly restore such Property as provided in Section 10.3 unless this Agreement is
terminated as to such Property as provided in Section 10.2.3. Landlord shall be
responsible for obtaining approval of any such restoration from any Project Mortgagee and for
coordinating the disbursement of funds therefore from such Project Mortgagee.

10.2.3 Insufficient Insurance Proceeds. If this Lease is not otherwise terminated
pursuant to this Article 10 and the cost of the repair or restoration of any Property
exceeds the amount of insurance proceeds received by Landlord and Tenant from the insurance
required under Article 9 plus the amount of any deductible in connection therewith, Tenant
shall give Landlord Notice thereof which notice shall set forth in reasonable detail the nature of
such deficiency and whether Tenant shall pay and assume the amount of such deficiency (Tenant
having no obligation to do so). In the event Tenant shall elect not to pay and assume the amount
of such deficiency, Landlord shall have the right (but not the obligation), exercisable at
Landlord’s sole election by Notice to Tenant, given within sixty (60) days after Tenant’s notice of
the deficiency, to elect to make available for application to the cost of repair or restoration the
amount of such deficiency. In the event that neither Landlord nor Tenant shall elect to make such
deficiency available for restoration, either Landlord or Tenant may terminate this Agreement with
respect to the affected Property by Notice to the other, whereupon this Agreement shall terminate
with respect to the affected Property as provided in Section 10.2.1, the Base Rent shall be
reduced in accordance with Section 3.3(c) hereof as of the effective date of such
termination by the affected Property’s allocable share of such Base Rent, and the Additional Rent
Base shall be adjusted in accordance with Section 3.4(b).

10.3 Disbursement of Proceeds. In the event Tenant is required to restore any Project
pursuant to Section 10.2, Tenant shall commence promptly and continue diligently to perform
the repair and restoration of such Project (hereinafter called the “Work”) in a good and
workmanlike manner, so as to restore such Project in compliance with all Legal Requirements and so
that such Project shall be, to the extent practicable, substantially equivalent in value and
general utility to its general utility and value immediately prior to such damage or destruction.
Subject to the terms hereof, Landlord shall advance the insurance proceeds and any additional
amounts payable by Landlord pursuant to Section 10.2.3 to Tenant regularly during the
repair and restoration period so as to permit payment for the cost of any such restoration and
repair. Any such advances shall be made not more than monthly within ten (10) Business Days after
Tenant submits to Landlord a written requisition and substantiation therefore on AIA Forms G702 and
G703 (or on such other form or forms as may be reasonably acceptable to Landlord). Landlord may,
at its option, condition advancement of said insurance proceeds and other amounts on (i) the
absence of any Event of Default, (ii) its approval of plans and specifications of an architect
satisfactory to Landlord (which approval shall not be unreasonably withheld, delayed or
conditioned), (iii) general contractors’ estimates, (iv) architect’s certificates, (v)
unconditional lien waivers of general contractors, if available, (vi) evidence of approval by all
Governmental Authorities and other regulatory bodies whose approval is required, and (vii) such
other certificates as Landlord may, from time to time, reasonably require, and (viii) such other
terms and conditions as the Project Mortgagee of such Project may require. In the event Landlord
elects to require Tenant to restore any Project pursuant to Section 10.2 rather than perform such
restoration itself, Tenant shall be entitled to receive a reasonable construction supervision fee
for Tenant’s services in connection with such restoration. In the event Landlord elects to perform
or be responsible for the performance of any such restoration, Landlord (i) shall perform such Work
in a good and workmanlike manner, in accordance with all applicable Legal Requirements, (ii) shall
coordinate the scheduling of such Work with Tenant, (iii) shall use its best efforts to minimize
any interference with Tenant’s operations at such Property in the performance of such work, and
(iv) shall indemnify Tenant from any and all actions, claims, costs, and expenses, including
personal injury and property damage, resulting from the negligent actions of Landlord, its agents,
contractors, or employees, as well as Landlord’s failure to perform such Work in accordance with
the requirements of (i) and (iii) above.

Landlord’s obligation to disburse insurance proceeds under this Article 10 shall be
subject to the release of such proceeds to Landlord by any Project Mortgagee. If any Project
Mortgagee shall be unwilling to disburse insurance proceeds in accordance with the terms of this
Agreement, Tenant shall have the right, by the giving of Notice thereof to Landlord within ten (10)
Business Days after Tenant learns of such unwillingness, to treat such Project as rendered
Unsuitable for its Permitted Use for purposes of Section 10.2.1. Tenant’s obligation to
restore the applicable Property pursuant to this Article 10 shall be subject to the release
of available insurance proceeds by the applicable Project Mortgagee to Landlord or directly to
Tenant, and, in the event such proceeds are insufficient, Landlord electing to make such deficiency
available therefor (and disbursement of such deficiency).

10.4 No Abatement of Rent. Unless terminated by either party pursuant to this Article
10 (and then only with respect to the affected Property), this Agreement shall remain in full
force and effect and Tenant’s obligation to make all payments of Rent and to pay all other charges
as and when required under this Agreement shall remain unabated during the Term notwithstanding any
damage involving any Property, provided that (i) Landlord shall credit against such payments any
amounts paid to Landlord as a consequence of such damage under any business interruption insurance
obtained by Tenant hereunder, and (ii) in the event that the Net Operating Income of the affected
Property is insufficient to pay the full Base Rent allocable to such Property because of such
damage, the period for payment of the Base Rent allocated to such Property, or an equitable portion
thereof, shall be extended until such time as the proceeds of Tenant’s business interruption or
rent loss insurance are disbursed to Tenant or Landlord. The provisions of this Article 10
shall be considered an express agreement governing any cause of damage or destruction to any
Property and, to the maximum extent permitted by law, no local or state statute, laws, rules,
regulation or ordinance in effect during the Term which provide for such a contingency shall have
any application in such case.

10.5 Damage Near End of Term. Notwithstanding any provisions of Sections 10.2 or
10.3 to the contrary, if damage to or destruction of any Project occurs during the last
twelve (12) months of the Term (including any exercised Extension Terms), and if such damage or
destruction cannot reasonably be expected to be fully repaired and restored prior to the date that
is six (6) months prior to the end of such Term, either party shall have the right to terminate
this Lease with respect to the affected Property by giving Notice to the other within thirty (30)
days after the date of damage or destruction, in which event Landlord shall be entitled to retain
the insurance proceeds and Tenant shall pay to Landlord on demand as an Operating Expense the
amount of any deductible in connection therewith, and Tenant thereafter shall have no obligation to
pay the Base Rent allocable to such Property, as determined in accordance with Section
3.3(c) hereof, for the period after the effective date of such termination; provided, however,
that if Tenant subsequently exercises an available option to extend the Term of this Lease, any
prior termination election by either Landlord or Tenant shall be superseded, the affected Property
shall be reinstated as a part of the Leased Property as of the date of exercise of Tenant’s
Extension Option (with Rent allocable to such Property to recommence as of such date), and the
affected Property shall be restored in accordance with Section 10.2.2.

10.6 Waiver. Tenant hereby waives any statutory or common law rights of termination which may
arise by reason of any damage or destruction of any Property or any portion thereof.

ARTICLE 11

CONDEMNATION

11.1 Definitions.

(a) “Condemnation” means (i) the exercise of any governmental power of eminent domain,
whether by legal proceedings or otherwise, by a Condemnor or (ii) a voluntary sale or
transfer by Landlord to any Condemnor, either under threat of Condemnation or while legal
proceedings for Condemnation are pending.

(b) “Date of Taking” means the date the Condemnor has the right to possession of the
property being condemned.

(c) “Award” means all compensation, sums or anything of value awarded, paid or received
on a total or partial Condemnation of the Leased Property (after deduction of all reasonable
legal fees and other costs and expenses, including, without limitation, expert witness fees,
incurred by Landlord in connection with obtaining any such award).

(d) “Condemnor” means any public or quasi-public authority, or private corporation or
individual, having the power of Condemnation.

11.2 Total Condemnation, etc. If either (i) the whole of any Property shall be taken by
Condemnation or (ii) a Condemnation of less than the whole of any Property renders such Property
Unsuitable for its Permitted Use, this Agreement shall terminate with respect to such Property,
Tenant and Landlord shall seek the Award for their interests in the applicable Property as provided
in Section 11.6 and, as of the effective date that the Property is Unsuitable for its
Permitted Use or the Date of Taking, whichever is first to occur, Base Rent payable hereunder shall
be reduced by such Property’s allocable share thereof in accordance with Section 3.3(c)
hereof, and the Additional Rent Base shall be adjusted in accordance with Section 3.4(b).

11.3 Partial Condemnation. In the event of a Condemnation of less than the whole of any
Property such that such Property is still suitable for its Permitted Use, Tenant or, if Landlord so
elects, Landlord shall, to the extent of the Award actually received by Landlord and/or Tenant and
any additional amounts disbursed by Landlord as hereinafter provided, commence promptly and
continue diligently to restore the untaken portion of the Leased Improvements so that such Leased
Improvements shall constitute a complete architectural unit of the same general character and
condition (as nearly as may be possible under the circumstances) as the Leased Improvements
existing immediately prior to such Condemnation, in full compliance with all Legal Requirements,
subject to the provisions of this Section 11.3. If Tenant is responsible for restoring the
Leased Improvements and the cost of the repair or restoration of such Property exceeds the amount
of the Award, Tenant shall give Landlord Notice thereof which notice shall set forth in reasonable
detail the nature of such deficiency and whether Tenant shall pay and assume the amount of such
deficiency (Tenant having no obligation to do so, except that if Tenant shall elect to make such
funds available, the same shall become an irrevocable obligation of Tenant pursuant to this
Agreement). In the event Tenant shall elect not to pay and assume the amount of such deficiency,
Landlord shall have the right (but not the obligation), exercisable at Landlord’s sole election by
Notice to Tenant given within sixty (60) days after Tenant’s Notice of the deficiency, to elect to
make available for application to the cost of repair or restoration the amount of such deficiency.
In the event that neither Landlord nor Tenant shall elect to make such deficiency available for
restoration, either Landlord or Tenant may terminate this Agreement with respect to the affected
Property, whereupon Tenant and Landlord shall be entitled to seek the Award for their interests in
the applicable Property as provided in Section 11.6 and Tenant shall have no obligation to
pay Base Rent allocable to such Property, as determined with Sections 3.3(c) hereof, and
the Additional Rent Base shall be adjusted in accordance with Section 3.4(b) hereof, for
periods arising after the earlier of the Date of Taking or the date that the Property is Unsuitable
for its Permitted Use.

Subject to the terms hereof, Landlord shall contribute to the cost of restoration that part of
the Award necessary to complete such repair or restoration, together with severance and other
damages awarded for the taken Leased Improvements and any deficiency Landlord has agreed to
disburse, to Tenant regularly during the restoration period so as to permit payment for the cost of
such repair or restoration. Landlord may, at its option, condition advancement of such Award and
other amounts on (i) the absence of any Event of Default, (ii) its approval of plans and
specifications of an architect satisfactory to Landlord (which approval shall not be unreasonably
withheld or delayed), (iii) general contractors’ estimates, (iv) architect’s certificates, (v)
unconditional lien waivers of general contractors, if available, (vi) evidence of approval by all
Governmental Authorities and other regulatory bodies whose approval is required, (vii) such other
certificates as Landlord may, from time to time, reasonably require, and (viii) such other terms
and conditions as the Project Mortgagee may require. In the event Landlord elects to require
Tenant to restore any Project pursuant to this Section 11.3 rather than perform such restoration
itself, Tenant shall be entitled to receive a reasonable construction supervision fee in connection
with Tenant’s services. In the event Landlord elects to perform or be responsible for the
performance of any such restoration, Landlord (i) shall perform such Work in a good and workmanlike
manner, in accordance with all applicable Legal Requirements, (ii) shall coordinate the scheduling
of such work with Tenant, (iii) shall use its best efforts to minimize any interference with
Tenant’s operations at such Property in the performance of such work, and (iv) shall indemnify
Tenant from any and all actions, claims, costs, and expenses, including personal injury and
property damage, resulting from the negligent actions of Landlord, its agents, contractors, or
employees, as well as from Landlord’s failure to perform such Work in accordance with the
requirements of (i) and (iii) above. Landlord’s obligation under this Section 11.3 to
disburse the Award and such other amounts shall be subject to (x) the collection thereof by
Landlord and (y) the release of such Award by the applicable Project Mortgagee. If any Project
Mortgagee shall be unwilling to disburse Award proceeds in accordance with the terms of this
Agreement, Tenant shall have the right, by the giving of Notice thereof to Landlord within ten (10)
Business Days after Tenant learns of such unwillingness, to treat such Property as rendered
Unsuitable for its Permitted Use for purposes of Section 11.2. Tenant’s obligation to
restore the Leased Property shall be subject to the release of the Award by the applicable Project
Mortgagee to Landlord or directly to Tenant.

11.4 Abatement of Rent. Unless terminated by either party pursuant to this Article (and then
only with respect to the affected Property), this Agreement shall remain in full force and effect,
provided that from and after the earlier of the Date of Taking or the date that the Property is
rendered Unsuitable for its Permitted Use, Base Rent allocable to the affected Property and the
Additional Rent Base shall be equitably reduced taking into account all of the relevant factors and
circumstances.

11.5 Temporary Condemnation. In the event of any temporary Condemnation of any Property or
Tenant’s interest therein, this Agreement shall continue in full force and effect and Tenant shall
continue to pay, in the manner and on the terms herein specified, the full amount of Rent, and the
entire amount of any Award made for such temporary Condemnation allocable to the Term shall be paid
to Tenant. Tenant or, if Landlord so elects, Landlord shall, promptly upon the termination of any
such period of temporary Condemnation, restore such Property to the condition that existed
immediately prior to such Condemnation, in full compliance with all Legal Requirements, unless such
period of temporary Condemnation shall extend beyond the expiration of the Term, in which event
Tenant shall not be required to make such restoration. If Tenant is required to so restore the
Property, Tenant shall be entitled to receive a reasonable construction supervision fee in
connection with Tenant’s services. In the event Landlord elects to perform or be responsible for
the performance of any such restoration, Landlord (i) shall perform such work in a good and
workmanlike manner, in accordance with all applicable Legal Requirements, (ii) shall coordinate the
scheduling of such work with Tenant, (iii) shall use its best efforts to minimize any interference
with Tenant’s operations at such Property in the performance of such work, and (iv) shall indemnify
Tenant from any and all actions, claims, costs, and expenses, including personal injury and
property damage, resulting from the negligent actions of Landlord, its agents, contractors, or
employees, as well as from Landlord’s failure to perform such work in accordance with the
requirements of (i) and (iii) above. For purposes of this Section 11.5, a Condemnation
shall be deemed to be temporary if the period of such Condemnation is not expected to, and does
not, exceed twelve (12) months.

11.6 Allocation of Award. Except as provided in Section 11.5 and the second sentence
of this Section 11.6, the total Award shall be solely the property of and payable to
Landlord. Any portion of the Award made for the taking of Tenant’s leasehold interest in any
Property or loss of business during the remainder of the Term shall be the sole property of and
payable to Tenant (subject to the provisions of Section 11.3). In any Condemnation
proceedings, Landlord and Tenant shall each seek its own Award in conformity herewith, at its own
expense. Landlord shall be responsible for obtaining approval of any restoration work from any
Project Mortgagee and for coordinating the disbursement of funds therefor from such Project
Mortgagee.

ARTICLE 12

DEFAULT

12.1 Events of Default. The occurrence of any one or more of the following events
(individually, an “Event of Default”) shall constitute Events of Default hereunder:

(a) if Tenant shall fail to make a payment of Rent or any other monetary payment due
and payable by Tenant under this Lease when the same becomes due and payable and such
failure shall continue without cure for a period of five (5) days after receipt of Notice of
non-payment from Landlord; provided, however, Landlord shall not be required to give Notice
of such failure more than twice in any calendar year; or

(b) if Tenant shall fail to maintain the insurance coverages required under Article
9 and such failure shall continue for ten (10) Business Days after written Notice
thereof (provided Tenant shall reimburse Landlord, at its own expense and not as an
Operating Expense, for the cost of any insurance obtained by Landlord during such period in
excess of the cost of the insurance obtained by Tenant); or

(c) if Tenant shall fail to observe or perform any other term, covenant or condition of
this Lease and such failure is not cured by Tenant within a period of thirty (30) days after
receipt by Tenant of written Notice thereof from Landlord, unless such failure cannot with
due diligence be cured within a period of thirty (30) days, in which case such failure shall
not be deemed to continue if Tenant proceeds promptly and with due diligence to cure the
failure and diligently completes the curing thereof within ninety (90) days after receipt by
Tenant of Landlord’s written Notice of default, or

(d) if Tenant shall:

(i) admit in writing its inability to pay its debts generally as they become
due,

(ii) file a petition in bankruptcy or a petition to take advantage of any
insolvency act,

(iii) make an assignment for the benefit of its creditors,

(iv) consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or

(v) file a petition or answer seeking reorganization or arrangement under the
Federal bankruptcy laws or any other applicable law or statute of the United States
of America or any state thereof, or

(vi) be declared insolvent according to any law; or assignment of Tenant’s
property is made for the benefit of creditors; or

(e) if a receiver or trustee is appointed for Tenant or its property; or the interest
of Tenant under this Lease in any Property or any part thereof is levied on or attached
under execution or other legal process; or any petition is filed by or against Tenant to
declare Tenant bankrupt or insolvent, or seeking liquidation, reorganization, arrangement,
adjustment, or composition of Tenant’s debts under any laws relating to bankruptcy,
insolvency, or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian, or other similar official for
Tenant or for any substantial part of the property of Tenant (provided that no such levy,
execution, legal process or petition filed against Tenant shall constitute an Event of
Default if Tenant shall contest the same by appropriate proceedings and shall remove or
vacate the same within a reasonable time from the date of its creation, service or filing);
or

(f) if Tenant shall be liquidated or dissolved, or shall begin proceedings toward such
liquidation or dissolution; or

(g) if any of the representations or warranties made by Tenant under or in connection
with this Lease or in any document or certificate delivered in connection herewith prove to
have been false or misleading in any material respect on the date made or deemed made to the
material adverse detriment of Landlord, and such adverse effect, to the extent same is
capable of being cured or corrected, is not so cured or corrected within thirty (30) days
after Notice from Landlord; or

(h) the assignment, mortgage, pledge, hypothecation, or other transfer of this Lease or
any interest of Tenant in the Leased Property in violation of the terms of Article
13 of this Lease; or

(i) the failure of Tenant to provide the financial reports due under Section
14.3 hereof and such failure shall continue for ten (10) Business Days after written
Notice thereof from Landlord; or

(j) the failure of Tenant to restore any amount drawn by Landlord on the Letter of
Credit or the Cash Collateral within ten (10) Business Days after Tenant’s receipt of notice
of a draw thereon by Landlord pursuant to Section 3.9(i) hereof.

12.2 Remedies. If an Event of Default shall have occurred, Landlord shall have the right at
its election, then or at any time thereafter until such Event of Default is cured or waived, to
pursue any one or more of the following remedies, in addition to any remedies which may be
permitted by law, in equity or by other provisions of this Lease, without further Notice or demand:

(a) Landlord, with or without terminating this Lease and without waiving or releasing
any obligation or Event of Default, may (but shall be under no obligation to) at any time
thereafter make any payment or perform any act required to be made or performed under this
Lease by Tenant for the account and at the expense of Tenant, and, to the extent permitted
by law, may enter upon the Leased Property for such purpose and take all such action thereon
as, in Landlord’s opinion, may be necessary or appropriate therefor. No such entry shall be
deemed an eviction of Tenant. All sums so paid by Landlord and all costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses, in each case, to
the extent permitted by law) so incurred, together with a late charge thereon (to the extent
permitted by law) at the Overdue Rate from the date on which such sums or expenses are paid
or incurred by Landlord, shall be paid by Tenant to Landlord on demand.

(b) Landlord shall be entitled to bring suit against Tenant for the performance of any
non-monetary covenant or obligation of Tenant or to seek injunctive or other equitable
relief with respect to any such default. In addition, Landlord shall be entitled to sue for
and recover any actual damages incurred by Landlord as a result of any non-monetary default,
and pursuit of any of the other remedies provided for in this Section 12.2 shall not
preclude pursuit of any such claim for actual damages.

(c) Landlord may immediately or at any time thereafter terminate this Lease by written
Notice to Tenant, in which event Tenant shall immediately surrender the Leased Property to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy
which Landlord may have for possession or arrearages in Rent (including any late charges
which may have accrued pursuant to Section 3.7), enter upon and take possession of
the Leased Property and expel or remove Tenant and any other person who may be occupying the
Leased Property or any part thereof, by force, if necessary, without being liable for
prosecution or any claim for damages therefor. Tenant hereby waives any statutory
requirement of prior written notice for filing eviction or damage suits for nonpayment of
rent. In addition, Tenant agrees to pay to Landlord on demand the amount of all loss and
damage which Landlord may suffer by reason of any termination effected pursuant to this
subsection (c), said loss and damage to be determined, at Landlord’s option, by either of
the following alternative measures of damages:

(i) Until Landlord is able, although Landlord shall be under no obligation to
attempt, to relet the Leased Property, Tenant shall pay to Landlord, on or before
the fifteenth (15th) day of each calendar month, until the scheduled
expiration of the Term of the Lease which was in effect as of the date of Tenant’s
Event of Default, the amount by which the sum of the Operating Expenses of the
Leased Property for the preceding calendar month plus the Base Rent provided in this
Lease for such preceding calendar month exceed the Gross Rentals collected by
Landlord from the operation of the Leased Property during such calendar month. If it
is necessary for Landlord to bring suit in order to collect any such deficiency,
Landlord shall have a right to allow such deficiencies to accumulate and to bring an
action on several or all of the accrued deficiencies at one time. Any such suit
shall not prejudice in any way the right of Landlord to bring a similar action for
any subsequent deficiency or deficiencies. Tenant shall have no right to any Net
Operating Income collected by Landlord in any calendar month in excess of the
monthly Base Rent provided in this Lease for such calendar month; provided that any
such excess Net Operating Income shall be credited against any other amounts owed
by Tenant to Landlord hereunder, including any subsequently occurring deficiency in
monthly Net Operating Income.

(ii) When Landlord desires, Landlord may demand a final settlement. Upon
demand for a final settlement, Landlord shall have a right to, and Tenant hereby
agrees to pay, the difference between the total of all net monthly rentals and other
charges provided in this Lease for the remainder of the Term of the Lease which was
in effect as of the date of Tenant’s Event of Default and the reasonable net rental
value of the Leased Property for such period, such difference to be discounted to
present value at a rate equal to the lowest rate of capitalization (highest present
worth) reasonably applicable at the time of such determination and allowed by
applicable law. If Landlord elects to compute damages in the manner prescribed by
subsection (c)(i) above, this election shall in no way prejudice Landlord’s right at
any time thereafter to demand a final settlement in accordance with this subsection
(c)(ii). Pursuit of any of the above remedies shall not preclude pursuit of any
other remedies prescribed in other sections of this Lease and any other remedies
provided by law or equity. Forbearance by Landlord to enforce one or more of the
remedies herein provided upon an Event of Default shall not be deemed or construed
to constitute a waiver of such default.

(d) Landlord shall be entitled to draw upon the Letter of Credit in the amount of any
unpaid Base Rent or Additional Rent owed to Landlord under this Lease. In addition, in the
event this Lease is terminated following an Event of Default pursuant to paragraph (c)
above, Landlord shall be entitled to draw upon the Letter of Credit in the amount of any
deficiency pursuant to Section 12.2(c)(i) above.

(e) In addition to other rights and remedies Landlord may have hereunder and at law and
in equity, in the event Landlord terminates this Lease due to an Event of Default, (i)
Landlord shall have the right, but not the obligation or responsibility, to hire all or some
of the employees of Tenant, and Tenant hereby acknowledges that no non-compete or
non-solicitation agreement is either implied or expressed hereunder relating to such
employees; and (ii) Tenant shall be deemed to have assigned to Landlord, at Landlord’s sole
option, all tenant subleases and occupancy agreements and all service agreements, licenses
and permits relating to the Leased Property.

12.3 Additional Expenses. If an Event of Default shall have occurred, Tenant shall reimburse
Landlord for (i) all reasonable expenses incurred by Landlord in recovering possession of the
Leased Property, (ii) all reasonable expenses incurred by Landlord in reletting (including among
other expenses, repairs, remodeling, replacements, advertisements and brokerage fees), and (iii)
Landlord’s reasonable attorneys’ fees actually incurred and reasonable expenses incurred in
enforcing any of the covenants and agreements of this Lease.

12.4 Waiver. If this Lease is terminated pursuant to Section 12.2, Tenant waives, to
the extent permitted by applicable law, (a) any right of redemption, re-entry or repossession, and
(b) the benefit of any laws now or hereafter in force exempting property from liability for rent or
for debt.

12.5 Application of Funds. Any payments otherwise payable to Tenant which are received by
Landlord under any of the provisions of this Lease during the existence or continuance of any Event
of Default shall be applied to Tenant’s obligations in the order which Landlord may reasonably
determine or as may be prescribed by the laws of the states in which the Leased Property is
located.

12.6 Notices. The provisions of this Article 12 concerning Notices shall be liberally
construed insofar as the contents of such Notices are concerned, and any such Notice shall be
sufficient if reasonably designed to apprise the other party of the nature and approximate extent
of any default.

12.7 Remedies Cumulative. To the extent permitted by law, each legal, equitable or
contractual right, power and remedy of Landlord or Tenant now or hereafter provided either in this
Lease or by statute or otherwise shall be cumulative and concurrent and shall be in addition to
every other right, power and remedy and the exercise or beginning of the exercise by Landlord or
Tenant of any one or more of such rights, powers and remedies shall not preclude the simultaneous
or subsequent exercise by Landlord or Tenant of any or all of such other rights, powers and
remedies.

12.8 Landlord’s Default. In the event that Landlord shall at any time be in default in the
observance or performance of any of the covenants and agreements required to be performed and
observed by Landlord under this Lease and any such default shall continue for a period of thirty
(30) days after written Notice to Landlord (or if such default cannot reasonably be cured within
thirty (30) days, then if Landlord has not commenced to cure such default within said thirty (30)
day period or, having commenced thereafter does not diligently prosecute such cure to completion
within ninety (90) days after Landlord’s receipt of Tenant’s written Notice of default), then
Tenant shall be entitled, at its election, in addition to any other rights it may have in law or in
equity, to bring suit for the collection of any amounts for which Landlord may be in default,
together with interest thereon at the Overdue Rate, or for the performance of any other covenant or
agreement devolving upon Landlord. In addition, Tenant shall be entitled to recover from Landlord
Tenant’s reasonable attorneys’ fees actually incurred and reasonable expenses incurred in enforcing
any of the covenants and agreements of Landlord under this Lease. In the event Tenant obtains a
judgment against Landlord arising out of Landlord’s default under the Lease, Tenant may, to the
extent the judgment is not paid by Landlord, elect to set off the amount of the judgment, plus
interest at the Overdue Rate, against the next due installments of Base Rent and Additional Rent.
Election by Tenant to set off against Rent shall not constitute an election of remedies and Tenant
may pursue all remedies available at law and equity to enforce the judgment against Landlord.

ARTICLE 13

SUBLETTING AND ASSIGNMENT

13.1 Except as provided in this Article 13, Tenant shall not, without Landlord’s prior
written consent, assign, mortgage, pledge, hypothecate, encumber or otherwise transfer this
Agreement or sublease all or any part of the Leased Property or suffer or permit this Agreement or
the leasehold estate created hereby or any other rights arising under this Agreement to be
assigned, transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in part, whether
voluntarily, involuntarily or by operation of law.

13.2 Notwithstanding anything to the contrary provided in Section 13.1, the approval rights of
Landlord with respect to subleasing shall not be deemed to apply to the leasing of individual beds,
bedroom units or apartments in the Leased Improvements for residential purposes, provided that:

(a) each such sublease shall be subject and subordinate to this Lease and the rights of
the Landlord hereunder;

(b) each sublease shall contain terms and conditions not materially different from the
form lease approved by Landlord for use in connection with the Leased Property;

(c) the term of any such sublease shall not exceed twelve (12) months; and

(d) each sublease shall provide for rental rates which in Tenant’s reasonable business
judgment are consistent with then-existing local market rates for similar type properties,
and which in any event meet the requirements of Existing Lender with respect to the Projects
which are subject to the Existing Loan.

13.3 Landlord agrees that, provided there is no Event of Default outstanding under this Lease,
Landlord will not unreasonably withhold its consent to an assignment or subletting of this Lease by
Tenant; provided, however, in exercising such right of consent, Landlord shall be entitled to take
into account any factor or factors reasonably relevant to such decision, including but not
necessarily limited to (i) the financial strength of any proposed assignee or subtenant and its
Affiliates (it being acknowledged that Landlord may require that any assignee or subtenant be a
Single Purpose Entity), and the adequacy of the proposed assignee’s, subtenant’s, and/or
Affiliate’s working capital, (ii) the business reputation and character of the proposed assignee or
subtenant and/or its Affiliates, and (iii) whether such proposed assignee or subtenant is a
Competitor of Landlord (as hereinbelow defined) or an Affiliate of such a Competitor. Moreover,
Tenant acknowledges and agrees that Landlord is entering into this Lease in order to achieve
professional and experienced operation and management of the Leased Property. Accordingly,
Landlord shall never be deemed to be unreasonable in withholding consent to any assignment or other
transfer of Tenant’s leasehold estate to any assignee, purchaser, transferee, subtenant, or other
party (x) not having a high degree of professionalism and experience in the operation and
management of student housing properties, or (y) which has not submitted to Landlord plans
reasonably satisfactory to Landlord by which such party demonstrates that such party or a third
party to be engaged by such party can manage the Leased Property with a degree of professionalism
and experience not less than that of Tenant. Tenant shall have no right to assign this Lease at
any time an Event of Default is outstanding. Further, notwithstanding anything to the contrary
provided in this Section 13.3, Landlord shall be entitled to withhold its consent to any
proposed assignment or subletting in Landlord’s sole and absolute discretion in the event that
annualized Net Operating Income from the Leased Property shall have been less than 1.05 times
annual Base Rent during the immediately preceding calendar quarter, or in the event that any
Project Mortgagee does not consent to such proposed assignment or subletting, to the extent consent
of such Project Mortgagee is required under the terms of a Project Mortgage. For purposes of this
Section 13.3 a “Competitor” shall mean any Entity which owns a portfolio of more
than five (5) student housing properties.

13.4 Should Tenant desire to assign this Lease or enter into any sublease other than as
described in Section 13.2 above, Tenant shall give Landlord written notice of such proposed
assignment or sublease (an “Assignment Notice”), which notice shall contain (i) the name and
address of the proposed assignee or subtenant and its form of organization, (ii) the material terms
and conditions of the proposed assignment or sublease (including, without limitation, the financial
terms of such proposed assignment or sublease and the date of the proposed assignment or sublease),
(iii) financial statements for the three (3) most recently completed fiscal years of the proposed
assignee, subtenant, and/or its Affiliates and such other financial information as Landlord shall
reasonably request, and (iv) such other information as Landlord shall reasonably request in order
to evaluate the factors described in Section 13.3 above. Landlord shall have a period of
ten (10) Business Days following receipt of such Assignment Notice within which to notify Tenant in
writing that Landlord elects either (a) to permit Tenant to assign this Lease or sublease the
Leased Property, (b) to withhold consent to such assignment or subleasing, or (c) in the event the
proposed assignment or sublease is limited solely to Tenant’s assignment or sublease of this Lease
and does not relate to or affect any Affiliate of Tenant, to acquire Tenant’s interest in this
Lease or sublease the Leased Property on the terms and conditions set forth in the Assignment
Notice. The failure of Landlord to notify Tenant in writing of such election within such ten (10)
Business Day period shall be deemed an election to withhold consent to such proposed assignment or
subleasing.

13.5 If Landlord exercises its option to acquire Tenant’s interest in this Lease pursuant to
Section 13.4 above, the closing of Landlord’s acquisition of Tenant’s interest shall be
held on the date set for in the Tenant’s Assignment Notice, provided that such date shall not be
sooner than sixty (60) days after the date of Landlord’s election to acquire Tenant’s interest,
unless otherwise agreed by Landlord and Tenant. If Landlord shall not exercise such option and
shall consent to Tenant’s proposed assignment or subletting, Tenant shall be entitled to assign or
sublet its interest in this Lease to the party identified in Tenant’s Notice strictly in accordance
with the terms set forth in Tenant’s Notice.

13.6 In the event that Landlord declines to consent to an assignment or subletting proposed by
Tenant and does not exercise its option to acquire Tenant’s interest in this Lease pursuant to
Section 13.4 above, and provided that (i) there is no Event of Default outstanding under
this Lease, (ii) the Fixed Term has expired and the Lease is in an Extension Term, and (iii)
annualized Net Operating Income from the Leased Property, calculated on a trailing twelve (12)
month basis (excluding any Net Operating Income attributable to any Property which has been
released from this Lease) shall have been not less than an amount equal to 1.05 times annual Base
Rent (excluding Base Rent attributable to any Property which has been released from this Lease) for
eight (8) consecutive calendar quarters immediately preceding the date of Tenant’s Assignment
Notice, then and in such event Tenant shall have the right, at its option, within thirty (30) days
after Landlord’s refusal to approve such assignment or subletting, to notify Landlord in writing
that Tenant elects to terminate this Lease. If Tenant elects to terminate this Lease, this Lease
shall terminate on the last day of the second full month following Tenant’s delivery of such notice
of termination to Landlord.

13.7 For purposes of this Article 13, an assignment shall be deemed to include a
change in control of Tenant resulting from any sale, transfer, or assignment of limited liability
company membership interests or management rights, partnership interests, shares of stock, or other
ownership interests in Tenant, whether occurring by operation of law or otherwise, except in the
case of the death or legal incompetency of a Person owning, directly or indirectly, a controlling
interest in Tenant. For purposes hereof, “control” means the ability to direct or cause the
direction of the operations and affairs of Tenant. Notwithstanding the foregoing or anything to
the contrary provided in this Article 13, the consent of the Landlord need not be obtained
to an assignment if the assignment (i) is to an Affiliate of Tenant, provided that any such
Affiliate is a Single Purpose Entity and is solvent as of and immediately following any such
assignment, or (ii) is the result of a change in control caused by the death or legal incompetency
of a Person owning, directly or indirectly, a controlling interest in Tenant. Tenant shall give
Landlord written notice of any assignment to an Affiliate as described above, including the
effective date of such assignment.

13.8 If this Lease is assigned, whether or not in violation of the provisions of this Lease,
the Landlord may and is hereby empowered to collect rent from the assignee. In such event, the
Landlord may apply the net amount received by it to the Base Rent, Additional Rent and other
payments herein reserved or provided for, and no such collection shall be deemed a waiver of the
covenant herein against assignment, mortgage, encumbrance, pledge or subletting, or an acceptance
of the assignee as a tenant under this Lease, or a release of the Tenant from the further
performance of the covenants herein contained on the part of the Tenant.

13.9 The making of any assignment, mortgage, pledge, encumbrance or subletting, in whole or in
part, whether or not with the consent of the Landlord, shall not operate to relieve the Tenant from
its obligations under this Lease and, notwithstanding any such assignment, mortgage, pledge,
encumbrance or subletting, the Tenant shall remain liable for the payment of all Rent and for the
due performance of all the covenants, agreements, terms and provisions of this Lease to the full
end of the term of this Lease.

13.10 Each and every assignee, whether or not approved by the Landlord and whether as assignee
or as successor in interest of any assignee of the Tenant, shall immediately be and become and
remain liable for the payment of the Rent and other charges payable under this Lease, and for the
due performance of all the covenants, agreements, terms and provisions of this Lease on the
Tenant’s part to be performed to the full end of the Term of this Lease and each and every
provision of this Lease applicable to the Tenant shall also apply to and bind every such assignee
during all periods that such assignee is the tenant hereunder with the same force and effect as
though such assignee were the Tenant named in this Lease. No transfer to such assignee shall be
binding upon the Landlord unless such assignee shall deliver to the Landlord a recordable
instrument which contains a covenant of assumption by said assignee to such effect, but the failure
or refusal of such assignee to deliver such instrument shall not release or discharge such assignee
from its obligations and liability as above set forth. In the event that any such assignee is a
Single Purpose Entity or otherwise does not have substantial assets other than the Leased Property,
Landlord shall have the right to require, as a condition to its approval of such assignment, that
an Affiliate of such assignee with financial strength reasonably acceptable to Landlord provide an
Agreement of Principals in a form similar to Exhibit F hereto, as modified to reflect the
contemplated transaction, with respect to potential liabilities, losses, and damages incurred by
Landlord as a result of certain actions by the assignee with respect to the Leased Property.
Provided Landlord shall have received such an Agreement of Principals from an Affiliate of the
assignee reasonably acceptable to Landlord, Landlord shall release the parties to the original
Agreement of Principals from any liability accruing from and after the completion of such
assignment, but not from any liabilities for acts and occurrences taking place prior to such
assignment.

13.11 Any consent by the Landlord herein contained or hereafter given to any act of
assignment, mortgage, pledge or encumbrance shall be held to apply only to the specific transaction
hereby or thereby approved. Such consent shall not be construed as a waiver of the duty of the
Tenant, or its successors or assigns, to obtain from the Landlord a consent to any other or
subsequent assignment, mortgage or encumbrance or as a modification or limitation of the right of
the Landlord with respect to the foregoing covenant by the Tenant.

13.12 Any assignment or subleasing of Tenant’s interest under this Lease not made in
compliance with the provisions of this Article 13 shall be void and of no force or effect
and shall be an Event of Default.

ARTICLE 14

FINANCIAL STATEMENTS AND OTHER CERTIFICATES

14.1 Estoppel Certificates. From time to time, each party hereto, on or before the date
specified in a request therefor made by the other party, which date shall not be earlier than ten
(10) days from the making of such request, but not more than two (2) times per calendar year, shall
execute, acknowledge and deliver to the other party a certificate evidencing whether or not (i)
this Lease is in full force and effect; (ii) this Lease has been amended in any way; (iii) there
are any existing defaults on the part of either party hereunder, to the knowledge of such other
party, and specifying the nature of such defaults, if any; (iv) stating the date to which rent and
other amounts due hereunder have been paid; and (v) such other matters as may reasonably be
requested by such party. Each certificate delivered pursuant to this Section 14.1 may be
relied on by any prospective transferee of Landlord’s or Tenant’s interest hereunder and any lender
of Landlord.

14.2 Financial Statements and Officer’s Certificates.

(a) During the Term, Tenant will furnish the following statements to Landlord on such
forms and in such detail as Landlord, from time to time, may reasonably request or approve:

(i) within sixty (60) days after the end of each Fiscal Year, audited annual
financial statements for the Leased Property, on an aggregate basis, including a
statement of revenues and expenses, a statement of changes in financial position for
such Fiscal Year, and a related balance sheet as of the end of such Fiscal Year, all
in reasonable detail and setting forth in comparative form the corresponding figures
for the preceding Fiscal Year, and prepared in accordance with GAAP, as well as
corresponding unaudited financial statements on a Property-by-Property basis. The
aggregated financial statements shall be certified by a nationally recognized
accounting firm or an independent certified public accounting firm acceptable to
Landlord and accompanied by a Financial Officer’s Certificate. All costs of
providing for audits of such financial statements shall be paid by Landlord.
Landlord acknowledges that Windham & Brannen, which is Tenant’s current auditor, is
an acceptable accounting firm for purposes hereunder so long as such firm maintains
the same financial condition and rating which exists as of the date hereof;

(ii) within forty-five (45) days after the end of each calendar quarter,
unaudited financial statements of the Leased Property for the quarter then ended and
year to date, prepared on a basis consistent with the annual statements, including a
balance sheet as of the end of such calendar quarter and a statement of revenues and
expenses, and including a calculation of the Net Operating Income of the Leased
Property, on both a combined and a Property-by-Property basis, for the calendar
quarter covered by such financial statements, all accompanied by a Financial
Officer’s Certificate;

(iii) within twenty (20) days after the end of each calendar month, current
unaudited month and year to date operating statements of the Leased Property,
prepared on a Property-by-Property basis, including, but not limited to statements of
cash flow and operating statistics, accompanied by a Financial Officer’s Certificate;

(iv) Within twenty (20) days after the end of each calendar month, current rent
rolls and occupancy reports, including a schedule of prepaid rents and security
deposits, prepared on a Property-by-Property basis;

(v) Not less than forty-five (45) days prior to the commencement of each Fiscal
Year during the Term, commencing on November 15, 2005, proposed annual operating
budgets, setting forth projected income and ordinary expenses projected to be
incurred by Tenant in managing, maintaining and operating the Leased Property, on
both a combined and a Project-by-Project basis, during the next succeeding Fiscal
Year (Landlord acknowledging prior receipt of the annual operating budget for
calendar year 2005); and

(vi) with reasonable promptness, such other information respecting the financial
condition and affairs of the Leased Property as Landlord may reasonably request from
time to time.

Landlord may at any time, and from time to time, provide any Project Mortgagee with
copies of the foregoing statements.

(b) If any required annual, quarterly, or monthly financial statement or report is not
received by Landlord by the due date thereof, Landlord may, at its option, impose upon
Tenant a late fee of One Thousand and No/100 Dollars ($1,000.00) for each Property for which
such statement or report is delinquent, such late fee to be due and payable at the time of
payment of the next succeeding monthly installment of Base Rent following notification of
assessment by Landlord. In addition, Tenant shall promptly reimburse Landlord for any late
fees or penalties imposed upon Landlord by the Existing Lender as a result of Tenant’s
failure to provide any such financial statement to Landlord and/or the Existing Lender
within the time periods provided for herein. The parties recognize that in connection with
any delinquent submission of required annual, quarterly, or monthly financial statements or
reports Landlord will incur administrative costs and that the amount of such administrative
costs will be difficult to compute in any specific case, and consequently the parties have
agreed on the above stated late fee as a fair and reasonable charge to compensate Landlord
for such administrative costs.

(c) Tenant shall also deliver to Landlord with each annual and quarterly financial
statement delivered to Landlord pursuant to this Section 14.2 (a) above, an
Officer’s Certificate in the form attached hereto as Exhibit E stating (i) whether
the representations and warranties of Tenant contained in this Agreement are true and
correct on the date of such certificate and if not, stating in what way they are incorrect
(excluding changes permitted by this Agreement), and (ii) whether or not Tenant is in
default in the performance of any of its covenants set forth in this Agreement, and if
Tenant is so in default, identifying each such default.

14.3 Maintenance of Accounts and Records. Tenant shall keep true records and books of account
in which full, true and correct entries will be made of dealings and transactions in relation to
the business and affairs of the Leased Property in accordance with GAAP, where applicable. Tenant
shall apply accounting principles in the preparation of the financial statements of Tenant which,
in the judgment of and the opinion of its independent public accountants, are in accordance with
GAAP, where applicable, except for changes approved by such independent public accountants. Tenant
shall provide to Landlord either in a footnote to the financial statements delivered under
Section 14.2 (a)(i) and Section 14.2(a)(ii) which relate to the period in which
such change occurs, or in separate schedules to such financial statements, information sufficient
to show the effect of any such changes on such financial statements.

14.4 Right of Inspection. Landlord and its authorized representatives, as well as any Project
Mortgagee or its authorized representatives designated by Landlord, shall have the right, from time
to time at Landlord’s sole cost and expense, upon reasonable Notice, during Tenant’s customary
business hours, to examine and make copies of Tenant’s books and records with respect to the Leased
Property at the place where such books and records are customarily kept and to discuss the affairs,
finances, and accounts of Tenant with the principal representatives of Tenant and its accountants,
and to visit and inspect the Projects and to discuss the operations thereof with Tenant’s employees
or Manager.

14.5 Landlord Securities Offering and Filings. Notwithstanding anything contained herein to
the contrary, Tenant agrees to cooperate with Landlord and its Affiliates in connection with any
securities offerings and filings and in connection therewith, Tenant shall at Landlord’s sole cost
furnish Landlord with such financial and other information as Landlord shall reasonably request and
Landlord and its Affiliates shall have the right of access, at reasonable business hours and upon
advance notice, to the Leased Property and all documentation and information relating to the Leased
Property and have the right to disclose any information regarding this Lease, the Tenant, the
Leased Property, and such other additional information or documents concerning this Lease, the
Tenant or the Leased Property which Landlord and/or its Affiliates may reasonably deem necessary.

ARTICLE 15

FINANCING OF THE LEASED PROPERTY

15.1 Financing by Landlord. Without the consent of Tenant, Landlord may, from time to time,
directly or indirectly, create or otherwise cause to exist any lien, encumbrance or security
interest (“Encumbrance”) upon the Leased Property, or any portion thereof or interest
therein, to secure any financing or refinancing of the Property, or any portion thereof.

15.2 Subordination of Lease. Subject to this Section 15.2, this Agreement, any and
all rights of Tenant hereunder, are and shall be subject and subordinate to all mortgages, deeds to
secure debt, and deeds of trust which may now or hereafter affect the Leased Property or any
improvements thereon, to each and every advance made or hereafter to be made under such mortgages,
deeds to secure debt, and deeds of trust, and to all renewals, modifications, replacements and
extensions of such mortgages, deeds to secure debt, and deeds of trust and all consolidations of
such mortgages, deeds to secure debt, and deeds of trust. This section shall be self-operative and
no further instrument of subordination shall be required provided that Tenant has received a
nondisturbance and attornment agreement from each Project Mortgagee consistent with the provisions
of this Section 15.2 and otherwise in form and substance reasonably satisfactory to Tenant.
In confirmation of such subordination, Tenant shall promptly execute, acknowledge and deliver any
instrument that Landlord, holder of any such mortgage or deed to secure debt or the trustee or
beneficiary of any deed of trust or any of their respective successors in interest may reasonably
request to evidence such subordination. Any mortgage, deed to secure debt, or deed of trust to
which this Agreement is, at the time referred to, subject and subordinate, is herein called
“Superior Mortgage” and the holder, trustee or beneficiary of a Superior Mortgage is herein called
a “Superior Mortgagee.”

If any Superior Mortgagee or the nominee or designee of any Superior Mortgagee shall succeed
to the rights of Landlord under this Agreement (any such person, “Successor Landlord”),
whether through possession or foreclosure action or delivery of a new lease or deed, or otherwise,
such Successor Landlord shall recognize Tenant’s rights under this Agreement as herein provided and
Tenant shall attorn to and recognize the Successor Landlord as Tenant’s landlord under this
Agreement and Tenant shall promptly execute and deliver any instrument that such Successor Landlord
may reasonably request to evidence such attornment (provided that such instrument does not alter
the terms of this Agreement), whereupon this Agreement shall continue in full force and effect as a
direct lease between the Successor Landlord and Tenant upon all of the terms, conditions and
covenants as are set forth in this Agreement, except that the Successor Landlord (unless formerly
Landlord under this Agreement or its nominee or designee) shall not be (a) liable in any way to
Tenant for any act or omission, neglect or default on the part of any prior Landlord under this
Agreement (provided that such Successor Landlord shall be obligated to cure any defaults of the
prior Landlord which are of a continuing nature), (b) subject to any offsets or counterclaims which
theretofore accrued to Tenant against any prior Landlord, except for any offsets which relate to a
failure by any prior Landlord to fund any Capital Expenditures required to be funded pursuant to
the terms of this Lease and which remain unfunded by such Successor Landlord, (c) bound by any
modification of this Agreement subsequent to such Superior Mortgage, or by any previous prepayment
of Base Rent or Additional Rent for more than one (1) month in advance of the date due hereunder,
which was not approved in writing by the Superior Mortgagee, or (d) liable to Tenant beyond the
Successor Landlord’s interest in the Leased Property and the rents, income, receipts, revenues,
issues and profits issuing from the Leased Property. Tenant agrees at any time and from time to
time to execute a suitable instrument in confirmation of Tenant’s agreement to attorn, as aforesaid
and Landlord agrees to provide Tenant with an instrument of nondisturbance and attornment from each
such Superior Mortgagee in form and substance reasonably satisfactory to Tenant. Nothing contained
in this Section 15.2 shall relieve Landlord from any liability to Tenant under this
Agreement following the exercise of remedies by a Superior Mortgagee.

15.3 Notice to Mortgagee. Subsequent to the receipt by Tenant of Notice from Landlord as to
the identity of any Project Mortgagee, no Notice from Tenant to Landlord as to the Leased Property
shall be effective unless and until a copy of the same is given to such Project Mortgagee at the
address set forth in the above described Notice, and the curing of any of Landlord’s defaults by
such Project Mortgagee shall be treated as performance by Landlord.

15.4 Existing Mortgage Loan. It is expressly understood and agreed between Landlord and
Tenant that this Lease is and shall be subject and subordinate to the terms of that certain loan in
the original principal amount of $98,660,000.00 (the “Existing Mortgage Loan”) originally
made by Greenwich Capital Financial Products, Inc. (hereinafter, together with any successor in
interest under the Existing Mortgage Loan being hereinafter referred to as “Existing
Lender”) to certain Affiliates of Tenant, as prior owners of the Leased Property, as such terms
are set forth in that certain Loan Agreement between said Affiliates of Tenant and Existing Lender
dated December 3, 2004 (the “Existing Loan Agreement”) and in the other documents and
instruments which evidence, secure, and relate to such Loan (the “Existing Loan
Documents”). Tenant and Landlord each hereby acknowledge receipt of copies of the Existing
Loan Agreement and the other Existing Loan Documents, and represent that they are familiar with the
terms, covenants, and conditions thereof. Tenant further hereby covenants and agrees as follows:

(a) No right, power, or privilege granted to Tenant under this Lease may be exercised
or enjoyed by Tenant if and to the extent that such exercise, enjoyment, or operation would
violate or be in conflict with any term, covenant, or condition of the Existing Mortgage
Loan applicable to Landlord. Tenant covenants and agrees that it will not, to the extent
within the control of Tenant, violate or breach or take any action which would cause a
violation or breach of any of the terms, covenants, or conditions of the Existing Mortgage
Loan.

(b) During the term of this Lease, Tenant shall, to the extent within the control of
Tenant, comply and cause the Properties which are subject to the Existing Mortgage Loan to
comply with the terms and requirements of Sections 5.5(A), 5.11, 5.12, and 5.13 of the
Existing Loan Agreement and, to the extent not provided in the financial reports described
in Section 14.2 hereof, shall provide to Landlord the financial statements and other
information required by Section 5.1(A)(iv), (v), (vi), and (vii) of the Existing Loan
Agreement with respect to the operation of the Leased Property.

(c) Tenant shall notify Landlord and Existing Lender promptly upon the occurrence of
any events of the type described in Section 5.1(D)(ii) or (F) of the Existing Loan
Agreement.

(d) Tenant shall maintain or cause to be maintained insurance in accordance with the
requirements of Section 5.4 of the Existing Loan Agreement.

(e) Tenant shall permit Existing Lender or any representative, agent, or designee of
Existing Lender, during normal business hours and upon reasonable prior Notice to Tenant, to
examine and make copies of the financial records of Tenant with respect to the Properties
which are subject to the Existing Mortgage Loan, and to discuss the affairs, finances, and
accounts of such Properties with the principal representatives of Tenant and its accountants
and auditors and to visit and inspect such Properties and to discuss the operations thereof
with Tenant’s employees, all at such reasonable times and as often as Existing Lender may
reasonably request.

(f) Tenant shall provide to Landlord and Existing Lender a proposed annual operating
budget and operate the Properties which are subject to the Existing Mortgage Loan in
accordance with the terms thereof upon approval thereof by the Existing Lender, all as more
particularly described in Section 7.3(F) of the Existing Loan Agreement, without material
deviation therefrom except with the approval of Landlord and Existing Lender.

(g) Tenant shall deposit (or cause to be deposited) all revenues, receipts, and other
payments of every kind arising from the operation of the Properties which are subject to the
Existing Mortgage Loan into collection accounts established for the benefit of and
controlled by the Existing Lender, as described in Section 5.15 of the Existing Loan
Agreement. To the extent that the Existing Lender applies such revenues and receipts to the
funding of (i) the Debt Service Sub-Account, or (ii) the Replacement Reserve Sub-Account, as
described in Section 7.3(A) of the Existing Loan Agreement, the amounts so applied by
Existing Lender shall be credited against subsequent monthly payments of Base Rent and
Additional Rent due under this Lease. So long as no Event of Default exists under this
Lease, Landlord shall direct Existing Lender to disburse all funds from the Operating
Expenses Sub-Account and all Net Available Cash remaining after funding of the sub-accounts
described in Section 7.3(A) of the Existing Loan Agreement directly to Tenant. In addition,
provided no Event of Default exists under this Lease, Landlord shall direct Existing Lender
to disburse any funds released by Existing Lender from the Imposition and Insurance Reserve
Sub-Account directly to Tenant. Further, so long as no Event of Default has occurred and is
continuing, Tenant is authorized on behalf of Landlord (and Landlord shall so advise
Existing Lender and its agents including any depository banks holding funds under the
Existing Mortgage Loan) to deal directly with Existing Lender (and such depository banks) on
any matters relating to Sections 7.1 and 7.2 of the Existing Loan.

ARTICLE 16

ADDITIONAL AGREEMENTS OF TENANT

16.1 Representations and Warranties. Tenant hereby represents and warrants to the Landlord as
follows:

(a) Tenant is a limited liability company duly organized and validly existing under the
laws of the State of Georgia.

(b) Tenant is duly authorized to enter into, deliver and perform this Lease and the
Lease constitutes the valid and binding obligation of Tenant, enforceable in accordance with
its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors generally, (ii) the exercise of judicial
discretion in accordance with general principles of equity, and (iii) the unenforceability
of certain rights, remedies and waivers contained herein.

(c) Subject to Landlord’s repayment or defeasance of all mortgage loans encumbering the
Leased Property as of the date of execution of this Lease other than the Existing Mortgage
Loan, neither the entering into of this Lease nor the performance by Tenant of its
obligations hereunder will violate any provision of law or any agreement, indenture, note or
other instrument binding upon Tenant.

(d) No authority from or approval by any Governmental Authority or consent of any third
party other than Existing Lender is required in connection with the making or validity of
and the execution, delivery and performance of this Lease.

(e) There are no actions, suits or proceedings pending against or, to the knowledge of
Tenant, its members, directors, officers, employees and agents, threatened against or
affecting Tenant or any Affiliate, in any court or before or by any governmental department,
agency or instrumentality, an adverse decision in which could materially and adversely
affect the financial condition, business or operations of Tenant or the ability of Tenant to
perform its obligations under this Lease or the other documents referred to herein.

(f) Tenant is in compliance with all applicable laws, ordinances, rules, regulations
and requirements of Governmental Authorities.

16.2 Single Purpose Entity. Tenant hereby represents and warrants that it is, at the time of
the execution of this Lease, and shall remain at all times during the Term, a Single Purpose Entity
created and to remain in good standing for the sole purpose of leasing the Leased Property and
operating the Projects in accordance with the terms of this Lease. Simultaneously with the
execution of this Lease, and as requested by Landlord at other times during the Term, Tenant shall
provide Landlord reasonable evidence that Tenant is a Single Purpose Entity and is in good standing
in the state of its organization and in the states in which the Projects are located.

16.3 Organizational Documents. Tenant shall not permit or suffer, without the prior written
consent of Landlord (i) an amendment or modification of its Organizational Documents which would
violate Section 16.2, (ii) any dissolution or termination of its existence, or (iii) change
in its state of formation or its name. Tenant, prior to or simultaneously with the execution of
this Lease, has delivered to Landlord a true and complete copy of the articles of
organization/certificate of formation and limited liability company operating agreement creating
Tenant, and all other documents creating and governing Tenant (collectively, the
“Organizational Documents”). Tenant warrants and represents that the Organizational
Documents (i) were duly executed and delivered, (ii) are in full force and effect, and binding upon
and enforceable in accordance with their terms, (iii) constitute the entire understanding among the
members of Tenant, and (iv) no breach exists under the Organizational Documents and no act has
occurred and no condition exists which, with the giving of notice or the passage of time, or both,
would constitute a breach under the Organizational Documents.

16.4 Notice of Litigation, Etc. Tenant shall give prompt Notice to Landlord of any litigation
or any administrative proceeding to which it may hereafter become a party of which Tenant has
notice or actual knowledge (excluding routine tenant/landlord disputes or dispossessory proceedings
or matters involving a potential uninsured liability of not more than $50,000) and of any material
development in any such litigation or administrative proceeding which, in Tenant’s reasonable
opinion, may otherwise result in any material adverse change in the business, operations, property,
prospects, results of operation or condition, financial or other, of Tenant.

16.5 Indebtedness of Tenant. Tenant shall not create, incur, assume or guarantee, or permit
to exist, or become or remain liable directly or indirectly upon, any Indebtedness except the
following:

(a) Indebtedness of Tenant to Landlord;

(b) Indebtedness of Tenant for Impositions, to the extent that payment thereof shall
not at the time be required to be made in accordance with the provisions of Section
3.5;

(c) Indebtedness of Tenant in respect of judgments or awards (i) which have been in
force for less than the applicable appeal period and in respect of which execution thereof
shall have been stayed pending such appeal or review, or (ii) which are fully covered by
insurance payable to Tenant, or (iii) which are for an amount not in excess of $100,000 in
the aggregate at any one time outstanding and (x) which have been in force for not longer
than the applicable appeal period, so long as execution is not levied thereunder or (y) in
respect of which an appeal or proceedings for review shall at the time be prosecuted in good
faith in accordance with the provisions of Article 8, and in respect of which
execution thereof shall have been stayed pending such appeal or review; and

(d) Operating liabilities incurred in the ordinary course of Tenant’s business.

16.6 Financial Condition of Tenant. Tenant hereby represents and warrants that as of the date
of this Lease, Tenant has a Tangible Net Worth of not less than $1,000,000.00.

16.7 Distributions. Tenant shall not declare, order, pay or make, directly or indirectly, any
distribution or payment to any Tenant Related Party if, at the time of such proposed distribution
or payment, or immediately after giving effect thereto, (i) an Event of Default shall exist, or
(ii) the Tangible Net Worth of Tenant shall be less than $1,000,000.00.

16.8 Prohibited Transactions. Tenant shall not permit to exist or enter into any agreement or
arrangement whereby it engages in a transaction of any kind with any Tenant Related Party, except
on terms and conditions which are commercially reasonable.

16.9 Competitive Developments. During the term of this Lease, neither Tenant nor any
Affiliate of Tenant shall develop or build any other student oriented apartment complexes or other
student housing in the specific market areas in which the Projects are located without the prior
written consent of Landlord, which consent may be granted or withheld in the sole and absolute
discretion of Landlord; provided that the foregoing restriction shall not be applicable to the
development or construction of student housing located on the campus of any college or university,
or off campus on land owned or controlled by a college or university or a college or university
sponsored affiliate, the development or construction of which is the subject of a formal and
competitive “request for approval” process, pursuant to which an Affiliate of Tenant shall have
been awarded the applicable rights of development.

16.10 Subleasing.

(a) Tenant shall enforce, in the ordinary course of Tenant’s operation of the Leased
Property, all of the material terms, covenants and conditions contained in the subleases of
the beds or bedroom units located within the Projects upon the part of the subtenants
thereunder to be observed or performed and shall effect a termination or diminution of the
obligations of the subtenants under such subleases, only in a manner that a prudent owner of
a similar property to the applicable Project would enforce such terms covenants and
conditions or effect such termination or diminution in the ordinary course of business.

(b) Tenant shall not collect any rents from any subtenant more than twelve (12) months
in advance, and the total amount of prepaid rents under the subleases at any Property shall
not in any event exceed 10% of the annual rents for such Property.

(c) Tenant shall make available to Landlord at the respective Projects executed copies
of all subleases now or hereafter made by Tenant.

16.11 Management Agreement.

(a) Tenant shall not enter into any Management Agreement unless (i) the Manager
thereunder has been approved in writing by Landlord, (ii) such agreement specifies that the
Manager’s right to collect or enforce payment of amounts due under such agreement on any
date shall be subordinate to the obligations of Tenant regarding the payment of Rent under
this Lease, and (iii) such agreement shall provide Landlord the right to terminate same upon
termination of the Lease without liability for any amounts owing under such agreement as of
such date of termination, for any termination fee, or otherwise. Landlord hereby approves
Tenant’s entering into a Management Agreement with Place Management Group, LLC.

(b) Tenant shall cause any Manager to manage the Leased Property or applicable portion
thereof in accordance with the applicable Management Agreement. Tenant shall (i) diligently
perform and observe all of the material terms, covenants and conditions of any Management
Agreement on the part of Tenant to be performed and observed and (ii) promptly notify
Landlord of any notice to Tenant of any material default under the Management Agreement of
which it is aware.

(c) Tenant shall not terminate, materially modify, or enter into any Management
Agreement (except that Tenant may continue to renew the existing Management Agreement with
Place Management Group, LLC unless the Manager thereunder is replaced pursuant to
subparagraph (d) below) without the express consent of Landlord, which consent may be
conditioned upon the approval of the applicable Project Mortgagee.

(d) Landlord shall have the right to require Tenant to replace the Manager for any
Project with a Person approved by Landlord and the applicable Project Mortgagee, following
any one or more of the following events: (i) thirty (30) days after Notice from Landlord to
Tenant that such Manager has engaged in fraud, gross negligence or willful misconduct
arising from or in connection with its performance under the applicable Management
Agreement, or such Manager’s default under the Management Agreement which is not cured
within any applicable cure period provided under the Management Agreement; (ii) a change in
control of such Manager, other than a change of control resulting from the death or legal
disability of the controlling owner(s) of Manager; or (iii) so long as the Existing Mortgage
Loan remains in place, if the Existing Lender shall require replacement of the Manager
pursuant to the terms of Section 5.13(C) of the Existing Loan Agreement. Notwithstanding
the foregoing, Landlord shall not unreasonably withhold its approval of a change of control
in Manager as long as (A) the then current executive management team of Manager continues to
furnish professional and experienced operation and management of the Projects, (B) Net
Operating Income from the Leased Property continues to equal not less than 1.05 times Base
Rent, and (C) as a result of such change of control Manager does not become an Affiliate of
a Competitor of Landlord.

16.12 Material Agreements. Except for subleases complying with the terms of this Lease and
any Management Agreement complying with the foregoing, without the prior written approval of
Landlord, Tenant shall not enter into, renew, allow to be automatically renewed, or become
obligated under any service, vendor, or other agreement pertaining to any of the Leased Property
(excluding agreements having a contract value of less than $50,000 with parties not affiliated with
Tenant or Manager for the provision of ordinary and necessary day-to-day services necessary to
operate the Leased Property), including without limitation brokerage agreements, unless the same
may be terminated without cause and without payment of a penalty or premium, on not more than
thirty (30) days’ prior written notice. Notwithstanding the foregoing, Landlord hereby expressly
acknowledges and consents to those certain web services agreements between Tenant and WebRoomz, a
Tenant Related Party.

16.13 Use of Place Trademark. Unless otherwise agreed by Landlord, Tenant shall continue to
utilize the “Place” tradename during the Term in connection with the identification, operation,
marketing, and advertising of the Projects.

ARTICLE 17

INDEMNIFICATION

Notwithstanding the existence of any insurance provided for in Article 9 but subject
to Section 9.3, and without regard to the policy limits of any such insurance, Tenant will
protect, indemnify, save harmless and defend Landlord and its directors, officers, members,
partners, employees, and agents from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses), to the extent permitted by law, imposed upon or incurred by or
asserted against Landlord by reason of: (a) any accident, injury to or death of persons or loss of
personal property occurring on or about the Leased Property, (b) any Impositions which are the
obligations of Tenant to pay pursuant to applicable provisions of this Lease, and (c) any failure
on the part of Tenant to perform or comply with any of the terms of this Lease. Any amounts which
become payable by Tenant under this section shall be paid within thirty (30) days after liability
therefor on the part of Tenant is determined by litigation or otherwise and, if not timely paid,
shall bear a late charge (to the extent permitted by law) at the Overdue Rate from the date of such
determination to the date of payment. Tenant, at its expense, shall contest, resist and defend any
such claim, action or proceeding asserted or instituted against Landlord or may compromise or
otherwise dispose of the same, with Landlord’s prior written consent (which consent may not be
unreasonably withheld or delayed). Nothing herein shall be construed as indemnifying Landlord
against its own negligence or omissions or willful misconduct. Tenant’s liability for a breach of
the provisions of this Article shall survive any termination and the expiration of this Lease.

In the event of any claim pursuant to this Article 17 which is covered by any
insurance maintained by Tenant pursuant to Article 9 hereof, Landlord shall exhaust any
rights of recovery against any such insurance prior to pursuing any recourse against Tenant.

ARTICLE 18

BROKERAGE

Landlord and Tenant represent and warrant that no broker, commission agent, real estate agent
or salesman has participated in the negotiation or execution of this Lease other than Blue Vista
Capital (“Broker”), which has acted as Tenant’s broker with regard to this Lease. Broker’s fee, if
any, shall be paid by Tenant pursuant to a separate agreement between Tenant and Broker. No other
person, firm, corporation, or other entity is or shall be entitled to the payment of any fee,
commission, compensation, or other form of remuneration in connection herewith in any manner.
Landlord shall and does hereby indemnify and agree to hold Tenant harmless from and against any
claims, demands, actions and judgments of any and all brokers, agents and other intermediaries
alleging a commission, fee or other payment to be owing by reason of Landlord’s dealings,
negotiations or communications in connection with this Lease or the demise of the Leased Property.
Likewise, Tenant shall and does hereby indemnify and agree to hold Landlord harmless from and
against any claims, demands, actions and judgments of any and all brokers, agents and other
intermediaries (including Broker) alleging a commission, fee or other payment to be owing by reason
of Tenant’s dealings, negotiations or communications in connection with this Lease or the demise of
the Leased Property.

ARTICLE 19

SURRENDER; HOLDING OVER

19.1 Surrender. Upon the expiration or prior termination of this Lease, Tenant, will vacate
and surrender the Leased Property to Landlord in the condition in which the Leased Property was
originally received from Landlord, except as improved, constructed, repaired, rebuilt, restored,
altered or added to as permitted or required by the provisions of this Lease and except for
ordinary wear and tear (subject to the obligation of Tenant to maintain the Leased Property in good
order and repair during the Term), damage caused by the gross negligence or willful acts of
Landlord and damage or destruction described in Article 10 or resulting from a Taking which
Tenant is not required by the terms of this Lease to repair or restore.

19.2 Holding Over. If Tenant shall for any reason remain in possession of the Leased Property
after the expiration of the Term or any earlier termination of the Term, such possession shall be
as a tenancy at will during which time Tenant shall pay as rental each month, one hundred and ten
percent (110%) of the aggregate of (a) one-twelfth of the aggregate Base Rent and Additional Rent
payable with respect to the last complete Lease Year prior to the expiration of the Term; (b) all
Additional Charges accruing during the month and (c) all other sums, if any, payable by Tenant
pursuant to the provisions of this Lease with respect to the Leased Property. During such period
of tenancy, Tenant shall be obligated to perform and observe all of the terms, covenants and
conditions of this Lease. Nothing contained herein shall constitute the consent, express or
implied, of Landlord to the holding over of Tenant after the expiration or earlier termination of
this Lease.

19.3 Cooperation. Upon termination of this Lease and for reasonable periods of time
immediately before and after such termination, Tenant shall use its best efforts to facilitate an
orderly transfer of the operation of the Leased Property to Landlord or any new tenant or operator
selected by Landlord, it being understood and agreed that such cooperation shall include, without
limitation, Tenant’s assignment, if and to the extent allowed by law, to Landlord or Landlord’s new
tenant or operator of any and all tenant subleases, service contracts, licenses, and permits,
delivery to Landlord all originals or executed copies of leases and all related tenant files,
delivery to Landlord of all tenant security deposits, prepaid rents, or other monies held for any
subtenant, and delivery of all keys to the Leased Property. In connection with such termination,
all income and Operating Expenses of the Leased Property shall be prorated between Landlord and
Tenant as of the date of such termination, with subsequent adjustments to the extent accurate
information is not available as of the date of Lease termination. Further, Landlord shall pay to
Tenant on a dollar for dollar basis an amount equal to any rents, reserves, escrows, or similar
funds held by any Project Mortgagees as of the date of Lease termination which were funded by
Tenant from Gross Rentals and not previously credited against Base Rent or Additional Rent owed by
Tenant under this Lease. For purposes of effecting the assignments and transfers herein described,
Tenant hereby irrevocably designates and appoints Landlord its true and lawful agent and
attorney-in-fact, either in the name of Landlord or in the name of Tenant to do all acts and things
and execute all documents which Landlord may deem necessary or advisable to effect the transfers
and assignments described herein, including, without limitation preparing, signing and filing any
and all agreements, documents, and applications necessary to effect such transfers or assignments.
Any recording fees or out-of-pocket expenses relating to the foregoing (not including any
attorneys’ fees incurred by Tenant) shall be at Landlord’s sole cost and expense. After
termination of this Lease, Landlord shall discontinue use of the “Place” tradename in connection
with the Leased Property in accordance with the terms of the license agreement between Landlord and
Tenant regarding such name.

ARTICLE 20

TRANSFERS BY LANDLORD

20.1 Sale Restriction. Landlord shall not, without Tenant’s prior written consent, have the
right to sell any individual Property prior to the expiration of the third (3rd) Lease
Year if such sale would result in the termination of this Lease with respect to such Property.
Further, after the third (3rd) Lease Year, Landlord shall not have the right to sell any
individual Property without Tenant’s prior written consent if (i) such sale would result in the
termination of this Lease with respect to such Property, and (ii) as a result of the release of
such Property from this Lease, the Net Operating Income from the remaining Properties would fall
below an amount equal to 1.05 times annual Base Rent (excluding the Base Rent attributable to the
released Property), based upon the Net Operating Income of the remaining Properties for the most
recent calendar quarter for which financial statements have been provided pursuant to Section
14.2 hereof. Notwithstanding the foregoing, this Section 20.1 shall not apply to (x)
any foreclosure sale under any Superior Mortgage, as defined in Section 15.2 hereof, (y)
any conveyance in lieu of a foreclosure under any such Superior Mortgage, or (z) any Condemnation.

20.2 Sales – General. Except as provided in Section 20.1 above, Landlord may sell all
or any portion of its interest in the Leased Property without requirement of Tenant’s consent, but
subject to the terms of Section 2.4(b) above, to the extent applicable. Landlord shall
have the right to terminate this Lease with respect to any individual Property in connection with
the sale thereof, as provided in Section 2.4(b). Subject to Section 2.5, Tenant
agrees that any purchaser of Landlord’s entire interest in the Leased Property shall be a successor
in interest to Landlord under this Lease and may exercise any and all rights of Landlord, as fully
as if such purchaser were the original landlord hereunder provided. Landlord may divulge to the
purchaser of any Property all information, reports, financial statements, certificates and
documents obtained by it from Tenant with respect to such Property. If Landlord or any successor
owner of Landlord’s interest in the entire Leased Property shall convey such interest in the Leased
Property, other than as security for a debt, the purchaser of such interest in the Leased Property
shall expressly assume all obligations of Landlord hereunder arising or accruing from and after the
date of such conveyance or transfer. Landlord shall transfer any Letter of Credit, any Additional
Letter of Credit, any Cash Collateral, and the Capital Improvement Reserve to such successor owner,
Landlord or such successor owner, as the case may be, shall thereupon be released from all future
liabilities and obligations of the Landlord under this Lease arising or accruing from and after the
date of such conveyance or other transfer as to Landlord’s interest in the Leased Property and all
such future liabilities and obligations shall thereupon be binding upon the new owner. At the time
of any transfer, Tenant shall be provided full and complete information as to the identity of any
purchaser of the Leased Property and copies of the documentation effecting the transfer and
assumption of Landlord’s rights and obligations under this Lease.

ARTICLE 21

QUIET ENJOYMENT

21.1 Quiet Enjoyment. So long as Tenant shall pay all Rent as the same becomes due and shall
fully comply with all of the terms of this Lease and fully perform its obligations hereunder,
Tenant shall peaceably and quietly have, hold and enjoy the Leased Property for the Term, free of
any claim or other action by Landlord or anyone claiming by, through or under Landlord, but subject
to all liens and encumbrances of record as of the date hereof or hereafter consented to by Tenant.
Tenant shall have the right by separate and independent action to pursue any claim it may have
against Landlord as a result of a breach by Landlord of the covenant of quiet enjoyment contained
in this Article 21.

ARTICLE 22

NOTICES

22.1 Notices. All notices, demands, consents, approvals, requests and other communications
required or permitted to be given under this Lease shall be in writing and shall be (a) delivered
in person, (b) sent by Federal Express, Express Mail or other comparable courier addressed to the
appropriate party at the address set out below, or (c) transmitted by facsimile transmission to the
facsimile number for each party set forth below (provided a copy is sent by the method described in
(b) for Next Business Day delivery):

	 	 	 	 	 	 	 	 	 	 	 	 	 
	(a)
	 	if to Tenant:
	 	c/o Place Properties, L.P.	 	 	 	 
	 
	 	 	 	 	 	Two Live Oak, Suite 1400
	 	 	 	 
	 
	 	 	 	 	 	3445 Peachtree Road, NE	 	 	 	 
	 
	 	 	 	 	 	Atlanta, Georgia 30326
	 	 	 	 
	 
	 	 	 	 	 	Attention:
	 	Robert E. Clark

	 
	 	 	 	 	 	Phone:
	 	 	(404) 495-7554	 
	 
	 	 	 	 	 	Fax:
	 	 	(404) 495-7555	 
	with copies to:
	 	 	 	 	 	c/o Place Properties, L.P.	 	 	 	 
	 
	 	 	 	 	 	Two Live Oak, Suite 1400
	 	 	 	 
	 
	 	 	 	 	 	3445 Peachtree Road, NE	 	 	 	 
	 
	 	 	 	 	 	Atlanta, Georgia 30326
	 	 	 	 
	 
	 	 	 	 	 	Attention:
	 	Cecil M. Phillips

	 
	 	 	 	 	 	Phone:
	 	 	(404) 495-7521	 
	 
	 	 	 	 	 	Fax:
	 	 	(404) 495-7523	 
	 
	 	and:	 	Smith Gambrell & Russell, LLP

	 
	 	 	 	 	 	Suite 3100, Promenade II
	 	 	 	 
	 
	 	 	 	 	 	1230 Peachtree Street, NE	 	 	 	 
	 
	 	 	 	 	 	Atlanta, Georgia 30309-3592
	 	 	 	 
	 
	 	 	 	 	 	Attention:
	 	Malcolm D. Young, Jr., Esq.

	 
	 	 	 	 	 	Phone:
	 	 	(404) 815-3774	 
	 
	 	 	 	 	 	Fax:
	 	 	(404) 685-7074	 
	(b)
	 	if to Landlord:	 	c/o Education Realty Trust, Inc.

	 	 	 	 	 	 	530 Oak Court Drive, Suite 300

	 
	 	 	 	 	 	Memphis, Tennessee 38117
	 	 	 	 
	 
	 	 	 	 	 	Attention:
	 	Paul Bower

	 
	 	 	 	 	 	Phone:
	 	 	(901) 259-2500	 
	 
	 	 	 	 	 	Fax:
	 	 	(901) 259-2594	 
	 
	 	with a copy to:	 	Morris, Manning & Martin, LLP

	 	 	 	 	 	 	1600 Atlanta Financial Center

	 
	 	 	 	 	 	3343 Peachtree Road, N.E.	 	 	 	 
	 	 	 	 	 	 	Atlanta, Georgia 30326-1044

	 
	 	 	 	 	 	Attention:
	 	Andrew C. Williams, Esq.

	 
	 	 	 	 	 	Phone:
	 	 	(404) 233-7000	 
	 
	 	 	 	 	 	Fax:
	 	 	(404) 365-9532	 

Each notice, demand, consent, approval, request and other communication shall be effective
upon receipt and shall be deemed to be duly received if delivered in person or by a national
courier service, when left at the address of the recipient and if sent by facsimile, upon receipt
by the sender of an acknowledgment or transmission report generated by the machine from which the
facsimile was sent indicating that the facsimile was sent in its entirety to the recipient’s
facsimile number; provided that if a notice, demand, consent, approval, request or other
communication is served by hand or is received by facsimile on a day which is not a Business Day,
or after 5:00 p.m. on any Business Day at the addressee’s location, such notice or communication
shall be deemed to be duly received by the recipient at 9:00 a.m. on the first Business Day
thereafter. Rejection or other refusal by the addressee to accept, or the inability to deliver
because of a changed address or changed facsimile number of which no notice was given, shall be
deemed to be receipt of the notice, demand, consent, approval, request or communication sent. Any
party shall have the right, from time to time, to change the address or facsimile number to which
notice to it shall be sent by giving to the other party or parties at least ten (10) days prior
notice of the changed address or changed facsimile number.

ARTICLE 23

MISCELLANEOUS

23.1 General. Anything contained in this Lease to the contrary notwithstanding, all claims
against, and liabilities of, Tenant or Landlord arising prior to any date of expiration or
termination of this Lease shall survive such expiration or termination. If any term or provision
of this Lease or any application thereof shall be invalid or unenforceable, the remainder of this
Lease and any other application of such term or provision shall not be affected thereby and a like
but valid and enforceable provision shall replace the invalid or unenforceable provision. If any
interest provided for in any provision of this Lease are based upon a rate in excess of the maximum
rate permitted by applicable law, the parties agree that such charges shall be fixed at the maximum
permissible rate.

23.2 Agreement of Principals. Contemporaneously herewith, Cecil M. Phillips and Place
Properties, L.P. are delivering to Landlord an Agreement of Principals in the form attached hereto
as Exhibit F pursuant to which said parties are agreeing to be personally liable for
liabilities, losses, and damages incurred by Landlord as a result of certain actions on the part of
Tenant with respect to the Leased Property.

23.3 Entire Agreement; Modifications. This Lease embodies and constitutes the entire
understanding between the parties with respect to the transactions contemplated herein, and all
prior to contemporaneous agreements, understandings, representations and statements (oral or
written) are merged into this Lease. Neither this Lease nor any provision hereof may be modified
or amended except by an instrument in writing signed by Landlord and Tenant.

23.4 Non-Recourse as to Landlord. Anything contained herein to the contrary notwithstanding,
any claim based on or in respect of any liability of Landlord under this Lease shall be enforced
only against Landlord’s interest in the Leased Property and not against any other assets,
properties or funds of (i) Landlord, (ii) any director, officer, general partner, member,
shareholder, limited partner, beneficiary, employee or agent of Landlord or any general partner or
manager of Landlord or any of its general partners or members (or any legal representative, heir,
estate, successor or assign of any thereof), (iii) any predecessor or successor partnership or
corporation (or other entity) of Landlord or any of its general partners, members, shareholders,
officers, directors, employees or agents, either directly or through Landlord or its general
partners, members, shareholders, officers, directors, employees or agents or any predecessor or
successor partnership or corporation (or other entity), or (iv) any person affiliated with any of
the foregoing, or any director, officer, employee or agent of any thereof.

23.5 Limitation on Liability of Tenant Related Parties. Except as otherwise provided in that
certain Agreement of Principals referenced in Section 23.2 above, any claim based on or in
respect of any liability of Tenant under this Lease shall be enforced only against the assets,
properties and funds of Tenant and not against (i) any director, officer, general partner, member,
manager, shareholder, limited partner, beneficiary, employee or agent of Tenant or any of its
general partners or members (or any legal representative, heir, estate, successor or assign of any
thereof), (ii) any predecessor or successor limited liability company, partnership or corporation
(or other entity) of Tenant or any of its general partners, members, shareholders, officers,
directors, employees or agents, either directly or through Tenant or its general partners, members,
shareholders, officers, directors, employees or agents or any predecessor or successor limited
liability company partnership or corporation (or other entity), or (iii) any Person affiliated with
any of the foregoing, or any director, officer, employee or agent of any thereof.

23.6 Counterparts. This Lease may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one and the same instrument.

23.7 No Waiver. No failure by Landlord or Tenant to insist upon the strict performance of any
term hereof or to exercise any right, power or remedy consequent upon a breach thereof, and no
acceptance of full or partial payment of Rent during the continuance of any such breach, shall
constitute a waiver of any such breach or any such term. To the extent permitted by law, no waiver
of any breach shall affect or alter this Lease, which shall continue in full force and effect with
respect to any other then existing or subsequent breach.

23.8 Surrender. No surrender to Landlord of this Lease or of the Leased Property or any part
of any thereof, or of any interest therein, shall be valid or effective unless agreed to and
accepted in writing by Landlord and no act by Landlord or any representative or agent of Landlord,
other than such a written acceptance by Landlord, shall constitute an acceptance of any such
surrender.

23.9 No Merger of Title. There shall be no merger of this Lease or of the leasehold estate
created hereby by reason of the fact that the same person, firm, corporation or other entity may
acquire, own or hold, directly or indirectly, (a) this Lease or the leasehold estate created hereby
or any interest in this Lease or such leasehold estate and (b) the fee estate in the Leased
Property.

23.10 Applicable Law, etc. Except to the extent that Landlord’s remedies hereunder with
respect to a particular Property may be controlled by the laws of the state in which such Property
is located, it is the intention of the parties that, to the maximum extent permitted by the laws of
the states in which the Properties are located, this Lease shall be interpreted, construed, applied
and enforced in accordance with the laws of the State of Georgia applicable to contacts or leases
between residents of the State of Georgia which are to be performed entirely within such state,
regardless of (i) where this Agreement is executed or delivered; or (ii) where any payment or other
performance required by this Agreement is made or required to be made; or (iii) where any breach of
any provision of this Agreement occurs, or any cause of action otherwise accrues; or (iv) where any
action or other proceeding is instituted or pending; or (v) the principal place of business or
jurisdiction of organization or domestication of any party; or (vi) whether the laws of the forum
jurisdiction otherwise would apply the laws of a jurisdiction other than the State of Georgia; or
(vii) any combination of the foregoing. To the maximum extent permitted by applicable law, any
action to enforce, arising out of, or relating in any way to, any of the provisions of this
Agreement may be brought and prosecuted in such court or courts located in the State of Georgia as
is provided by law; and the parties consent to the jurisdiction of said court or courts located in
the State of Georgia and to service of process by registered mail, return receipt requested, or by
any other manner provided by law.

23.11 Covenants Binding. The covenants, agreements, terms, provisions and conditions of this
Lease shall be binding upon and inure to the benefit of the successors and assigns of the Landlord
and, except as otherwise prohibited herein, the successors and assigns of the Tenant.

23.12 Headings. The headings to the various Articles and Sections of this Lease have been
inserted for purposes of reference only and shall not limit or define or otherwise affect the
express terms and provisions of this Lease.

23.13 Relationship of the Parties. Nothing contained herein shall be deemed or construed by
the parties hereto, or any third party, as creating the relationship of principal and agent or a
partnership or joint venture between the parties hereto, it being understood and agreed that
neither the method of computation of Rent nor any other provision contained herein, nor any acts of
the parties hereto, shall be deemed to create any relationship between the parties hereto other
than the relationship of landlord and tenant.

23.14 Attorneys’ Fees. In the event of any dispute arising out of the subject matter of this
Lease, the prevailing party shall be entitled to recover, in addition to any other damages
assessed, its reasonable attorneys’ fees and other costs and expenses incurred in litigating or
otherwise settling or resolving such dispute.

23.15 Time. Time is of the essence of this Lease and in all of the conditions, obligations,
agreements, provisions, terms and covenants hereof.

23.16 Survival. This Lease shall survive the expiration of the Term to the extent necessary
that any term, covenant or condition of this Lease which requires the performance of obligations or
forbearance of an act by either party hereto after the termination of this Lease. Such survival
shall be to the extent reasonably necessary to fulfill the intent thereof, or if specified, to the
extent of such specification, as same is reasonably necessary to perform the obligations and/or
forbearance of an act set forth in such term, covenant or condition. In the event of the
termination of this Lease by expiration of the stated Term or for any other cause or reason
whatsoever prior to the final determination of Rent or other amounts due hereunder, each party’s
agreement to pay any such sums shall survive termination of this Lease, and each party shall pay
any such amounts due to the other within thirty (30) days after being billed therefor.
Notwithstanding the foregoing, in the event a specific term, covenant or condition is expressly
provided for in such a clear fashion as to indicate that such performance of an obligation or
forbearance of an act is no longer required, then the specific shall govern over the general
provisions of the Lease.

ARTICLE 24

MEMORANDUM OF LEASE

24.1 Memorandum. Landlord and Tenant, promptly upon the request of either, shall enter into a
short form memorandum of this Lease, in form suitable for recording under the laws of each state in
which each Leased Property is located, in which reference to this Lease shall be made. The parties
shall share equally all costs and expenses of recording such memorandum.

ARTICLE 25

ARBITRATION

25.1 All disputes arising under this Lease concerning the interpretation, application, or
enforcement of any of the terms of this Lease shall be finally resolved pursuant to an arbitration
before a panel of three (3) arbitrators who will conduct the arbitration proceeding in accordance
with the provisions of this Agreement and the rules of the American Arbitration Association
(“AAA”). Unless otherwise mutually agreed by Landlord and Tenant, the arbitration proceedings will
be conducted in Atlanta, Georgia. All arbitrators appointed by or on behalf of either party shall
be independent persons with recognized expertise in the operation of apartment projects of similar
size and class as the Projects with not less than five (5) years’ experience in the apartment
industry. The party desiring arbitration will give written notice to that effect to the other
party, specifying in such notice the name, address and professional qualifications of the person
designated as arbitrator on its behalf. Within fifteen (15) days after service of such notice, the
other party will give written notice to the party desiring such arbitration specifying the name,
address and professional qualifications of the person designated to act as arbitrator on its
behalf. The two arbitrators will, within fifteen (15) days thereafter, select a third, neutral
arbitrator. As soon as possible after the selection of the third arbitrator, and no later than
fifteen (15) days thereafter, the parties will submit their positions on each disputed item in
writing to the three arbitrators. The arbitrators are instructed and directed to assume case
management, initiative, and control of the arbitration process and to initiate early scheduling to
assure resolution of the disputes as expeditiously as reasonably possible. To assist the
arbitrators in this determination, and after consultation with the parties, the arbitrators may
appoint one or more technical experts who are neutral, impartial and independent of the parties and
others having any known interest in the outcome of the arbitration who may advise and provide
information to the arbitrators; provided, however, that if and to the extent the arbitrators use or
rely on such technical experts, any substantive advice given by such experts to the arbitrators
shall also be provided to both parties in the form of a brief written summary, and the parties
shall be afforded a fair opportunity to comment or respond. The decision of the arbitrators so
chosen shall be given within a period of twenty (20) days after the appointment of such third
arbitrator. In rendering their decision the arbitrators shall not add to, subtract from, or
otherwise modify the provision of this Lease. A decision in which any two (2) arbitrators so
appointed and acting hereunder concur in writing with respect to each disputed item shall in all
cases be binding and conclusive upon Landlord and Tenant and a copy of said decision shall be
forwarded to the parties. Judgment may be entered in any court of competent jurisdiction on the
decision and award of the arbitrators so rendered.

25.2 The parties request that the arbitrators assess the costs and expenses of the Arbitration
and their fees against the parties based on a finding as to which parties substantive positions
were not upheld. Otherwise the fees and expenses of the arbitration will be treated as an
Operating Expense unless otherwise determined by the arbitrators.

25.3 If the party receiving a request for Arbitration fails to appoint its arbitrator within
the time above specified, or if the two arbitrators so selected cannot agree on the selection of
the third arbitrator within the time above specified, then either party, on behalf of both parties,
may request such appointment of such second or third arbitrator, as the case may be, by application
to the Atlanta, Georgia office of the AAA upon ten (10) days’ prior written notice to the other
party of such intent.

25.4 Without limiting the generality of Section 25.1 above, if there shall be a
dispute with respect to whether a party has unreasonably withheld, conditioned or delayed its
consent with respect to a matter for which such party has agreed herein not to unreasonably
withhold its consent, such dispute shall be resolved by Arbitration.

25.5 Notwithstanding any provision in this section to the contrary, either party has the right
to obtain temporary restraining orders and temporary or preliminary injunctive relief or such
similar judicial or administrative ruling, order or decree from a court of competent jurisdiction
for the purpose of protecting any rights or privileges granted hereunder.

[Signatures appear on following pages]

2

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed by their
incumbent and duly authorized representatives as of the date set forth below.

	 	 	 
	Date:

	 	LANDLORD:
	 

	 	

	 
	 	 
	Date:

	 	TENANT:
	 

	 	

3

Exhibit B

Allocation of Base Rent

	 	 	 	 	 
	 	 	Initial
	Property	 	Base Rent Allocation
	Berkeley Place
	 	$	1,330,725	 
	Cape Place
	 	 	766,800	 
	Carrollton Place
	 	 	832,000	 
	Clayton Place I & II
	 	 	2,357,300	 
	Clemson Place
	 	 	757,300	 
	Jacksonville Place
	 	 	1,151,500	 
	Macon Place
	 	 	743,000	 
	Martin Place
	 	 	796,025	 
	Murray Place
	 	 	713,000	 
	River Place
	 	 	1,083,600	 
	Statesboro Place
	 	 	1,362,300	 
	Troy Place
	 	 	945,600	 
	Western Place
	 	 	897,600	 
	 
	 	 	 	 
	Total Base Rent
	 	$	13,736,750	 
	 
	 	 	 	 

4

Exhibit C

Form of Letter of Credit

DATE

IRREVOCABLE STANDBY LETTER OF CREDIT NO.

TO:

WE HEREBY ESTABLISH OUR IRREVOCABLE LETTER OF CREDIT NO. IN YOUR

FAVOR AT THE REQUEST AND FOR THE ACCOUNT OF      , FOR THE SUM OF FIVE
MILLION AND NO/100 DOLLARS (US $5,000,000.00) AVAILABLE BY YOUR SIGHT DRAFT ON US, ACCOMPANIED BY A
STATEMENT SWORN BEFORE A NOTARY PUBLIC AND PURPORTEDLY SIGNED BY AN AUTHORIZED REPRESENTATIVE OF
BENEFICIARY STATING THE FOLLOWING:

“The undersigned, an authorized representative of Beneficiary, hereby
certifies under oath that either (i) an Event of Default by Tenant in
paying Base Rent or Additional Rent has occurred under the terms of that
certain Lease Agreement dated      , between Beneficiary and [name
of Tenant] (the “Lease”), (ii) a deficiency in Net Operating Income
exists under Section 12.2(c)(i) of the Lease, or (iii) Tenant has failed
to renew or replace the Letter of Credit as required under Section
3.9(h) of the Lease and, therefore, Beneficiary is entitled to draw
[insert amount of draw] under [Bank] Letter of Credit No.
     .”

PARTIAL DRAWINGS ARE PERMITTED.

ALL DRAFTS SO DRAWN MUST BE MARKED “DRAWN UNDER      STANDBY LETTER OF
CREDIT NO. , DATED .

THIS CREDIT EXPIRES AT OUR COUNTERS ON . THE ORIGINAL OF THIS LETTER OF
CREDIT MUST ACCOMPANY ALL DRAWINGS.

WE HEREBY ENGAGE WITH YOU THAT ALL DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS
LETTER OF CREDIT WILL BE DULY HONORED BY US UPON PRESENTATION.

THIS STANDBY LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS, INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500 (1993 REVISION).

[NAME OF BANK]

5

Exhibit E

Form of Officer’s Certificate 

Education Realty Operating Partnership, LP

530 Oak Court Drive, Suite 300

Memphis, Tennessee 38117

Attn: Randall H. Brown

Ladies and Gentlemen:

Reference is made to the Lease Agreement dated as of      , 2005 (the “Lease Agreement”)
by and among [Education Realty Operating Partnership, L.P.] (the “Landlord”) and [Name of Tenant]
(the “Tenant”). Terms defined in the Lease Agreement and not otherwise defined herein are used
herein as defined in the Lease Agreement.

Pursuant to the Lease Agreement, the undersigned officer hereby certifies as follows:

(i) To the best knowledge of the undersigned officer (but without affirmative
investigation), the representations and warranties of Tenant contained in Sections
16.1 and 16.2 of the Lease Agreement are true and correct as of the date hereof
[Note: If there has been a change in the representations and warranties, this certificate
should be revised to describe such changes]; and

(ii) The undersigned officer has no knowledge (without affirmative investigation) of
the existence of any Event of Default under the terms of the Lease Agreement [Note: If the
signer does have knowledge of any Event of Default, the form of certificate should be
revised to specify the Event of Default, the nature thereof and the actions taken, being
taken or proposed to be taken by the Tenant with respect thereto].

This certificate is submitted in compliance with requirements of §14.2(a) of the Lease
Agreement. The undersigned officer is the      of the Tenant.

IN WITNESS WHEREOF, I have hereunto set my hand this      day of      , 200     .

6

Exhibit F

Form of Agreement of Principals

THIS AGREEMENT OF PRINCIPALS (this “Agreement”) is made as of the      day of      ,
2005, by CECIL M. PHILLIPS, an individual resident of the State of Georgia, and PLACE PROPERTIES,
L.P., a Tennessee limited partnership (“Place”) (each such party being hereinafter sometimes
individually referred to as a “Principal,” and collectively as the “Principals”), in favor and for
the benefit of [EDUCATION REALTY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership]
(hereinafter referred to as “Landlord”);

RECITALS

A. On or prior to the date hereof, Landlord has acquired ownership of the entities those
certain student housing properties listed on Exhibit “A” attached hereto (said properties
and all improvements located thereon are hereinafter collectively called the “Leased Property”)
from affiliates of the Principals.

B. Concurrently herewith, Landlord is leasing the Leased Property to [Name of Tenant]
(“Tenant”) pursuant to the terms and conditions set forth in that certain Lease Agreement between
Landlord and Tenant dated of even date herewith (the “Lease”).

C. The Tenant is an affiliate of the Principals.

D. To induce Landlord to acquire the Leased Property and enter into the Lease, each Principal
has agreed to enter into this Agreement, each Principal acknowledging that without this Agreement
Landlord would be unwilling to acquire ownership of the entities owning the Leased Property or
enter into the Lease.

AGREEMENTS

NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Principals hereby
agree and covenant as follows:

1. Definitions. All capitalized terms not otherwise defined herein shall have the
meanings assigned to such terms in the Lease. In addition, for purposes of this Agreement the
term “Retained Liabilities” shall collectively refer to the Retained Greenwich Liabilities, as
defined in Section 2 below, and the Retained Lease Liabilities, as defined in Section 3 below.

2. Retained Greenwich Liabilities. The Principals shall, jointly and severally with
Tenant, be personally liable for all losses, damages, costs, liabilities, and expenses, including
attorneys’ fees, suffered or incurred by Landlord under the terms of the Existing Mortgage Loan as
a result of the following (collectively called the “Retained Greenwich Liabilities”):

(a) fraud or intentional misrepresentation by Tenant or any Affiliate of Tenant in
connection with the Existing Mortgage Loan;

(b) any removal or disposal of any personal property located on any individual Property
by Tenant, its Affiliates, officers, employees or agents, including Manager, to the extent
such personal property is not replaced by Tenant with like property of equivalent value;

(c) subject to Landlord’s fulfillment of its obligations under the Lease with respect
to capital repairs and replacements, Tenant’s waste of any portion of the Leased Property;

(d) Tenant’s failure to apply any insurance proceeds or condemnation awards received by
Tenant relating to the Leased Property in accordance with the provisions of the Lease;

(e) Tenant’s failure during the term of the Existing Mortgage Loan to deliver to
Existing Lender any rents and revenues (including, without limitation, prepaid rents and
security deposits) received or collected by Tenant from the Properties which are subject to
the Existing Mortgage Loan, as required pursuant to the terms of Section 15.4(g) of the
Lease;

(f) Tenant’s failure to utilize funds disbursed by Existing Lender to Tenant for the
payment of Operating Expenses in accordance with an annual operating budget which has been
approved by Existing Lender; and

(g) the failure of Tenant or any Affiliate of Tenant to comply with the covenants,
obligations, liabilities, warranties, and representations contained in Sections 4.16, 5.7,
5.8, 5.24, 5.25 and 5.26 of the Existing Loan Agreement prior to the date of the Lease.

3. Retained Lease Liabilities. In addition to the Retained Greenwich Liabilities,
Place shall, jointly and severally with Tenant, be personally liable for all losses, damages,
costs, liabilities, and expenses, including attorneys’ fees, suffered or incurred by Landlord as a
result of the following (collectively called the “Retained Lease Liabilities”):

(a) fraud or intentional misrepresentation by Tenant in connection with the Lease;

(b) Tenant’s failure to apply any insurance proceeds or condemnation awards relating to
the Leased Property in accordance with the provisions of the Lease;

(c) Tenant’s failure to utilize Gross Rentals received or collected by Tenant from the
Leased Property for payment of current Operating Expenses and Rent prior to distribution or
payment to any Tenant Related Party (except to the extent any such payment is in respect of
an Operating Expense);

(d) Tenant’s failure to utilize any funds disbursed by Landlord to Tenant for the
payment of Capital Expenditures for such purpose;

(e) Tenant’s failure or refusal to deliver any prepaid rents and security deposits to
Landlord upon the termination of the Lease;

(f) Any distributions or payments made by Tenant to any Tenant Related Party in
violation of Section 16.7 of the Lease; and

(g) Tenant’s failure to comply with Tenant’s covenants and obligations pursuant to
Section 4.5(a) and (b) of the Lease.

4. Primary Liability. The liability of each Principal under this Agreement shall be
direct and immediate as a primary and not a secondary obligation or liability, and is not
conditional or contingent upon the pursuit of any remedies against Tenant, any other Principal, or
any other person, or against any security for Tenant’s obligations under the Lease held by
Landlord. Each Principal waives any rights which it may have to require that (a) Landlord first
proceed against Tenant, any other Principal, or any other person or entity with respect to the
Retained Liabilities, (b) Landlord first proceed against any collateral held by Landlord with
respect to the Lease, or (c) any other party be joined in any proceeding to enforce the Retained
Liabilities.

5. Waiver of Subrogation Rights. Each Principal waives any rights to enforce any
remedy which Landlord may have against Tenant, and any rights of indemnity, reimbursement,
contribution or subrogation which any Principal may have against Tenant or against any other
Principal, with respect to the Retained Liabilities.

6. Amendments/Release. Each Principal hereby consents and agrees that Landlord may at
any time, and from time to time, without notice to or further consent from such Principal and
either with or without consideration, do any one or more of the following, all without affecting
the agreements contained herein or the liability of such Principal for the Retained Liabilities:
(a) release any other Principal hereunder; (b) surrender without substitution any collateral of
any kind or nature whatsoever held by Landlord, or by any person, firm or corporation on
Landlord’s behalf or for Landlord’s account, securing the Retained Liabilities; (c) modify the
terms of the Lease; (d) grant releases, compromises, and indulgences with respect to the Lease or
the Retained Liabilities to any persons or entities now or hereafter liable thereon; or (e) take
or fail to take any action of any type whatsoever with respect to the Lease or the Retained
Liabilities.

7. Waiver of Defenses. To the extent permitted by law, each Principal hereby waives
and agrees not to assert or take advantage of any defense based upon:

(a) the incapacity, lack of authority, death or disability of Tenant, any other
Principal, or any other person or entity;

(b) the failure of Landlord to commence an action against Tenant or any other Principal
or any other person or entity or to proceed against or exhaust any security held by Landlord
at any time or to pursue any other remedy whatsoever at any time;

(c) any duty on the part of Landlord to disclose to any Principal any facts it may now
or hereafter know regarding Tenant, regardless of whether Landlord has reason to believe
that any such facts materially increase the risk beyond that which any Principal intends to
assume or has reason to believe that such facts are unknown to any Principal, each Principal
acknowledging that it is fully responsible for being and keeping informed of the financial
condition and affairs of Tenant;

(d) lack of notice of default or demand for performance to Tenant, any other Principal,
or any other party with respect to the Lease or the Retained Liabilities;

(e) the consideration for this Agreement;

(f) an election of remedies by Landlord, including any election to proceed against any
collateral of any kind or nature held by Landlord, and whether or not any such election of
remedies destroys or otherwise impairs the subrogation rights of the Principals or the
rights of the Principals to proceed against Tenant or any other Principal for reimbursement,
or both;

(g) any statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in any other aspects more burdensome than that of a principal;

(h) Landlord’s election, in any proceeding instituted under the Federal Bankruptcy
Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code or any
successor statute.

8. Enforcement. Landlord shall have the right to enforce this Agreement in separate
actions against one or more of the Principals, or by an action against some or all of the
Principals, or any combination of the foregoing.

9. Expenses of Collection. Each Principal shall pay to the Landlord on demand any
and all expenses paid or incurred by the Landlord, including reasonable attorneys’ fees and
disbursements actually incurred, in connection with the collection and enforcement of the Retained
Liabilities owed by such Principal. Until paid to the Landlord, such sums will bear interest at
the Overdue Rate set forth in the Lease.

10. Entire Agreement. This Agreement contains the entire understanding of the
Principals and Landlord with respect to the subject matter hereof, and may not be amended except
in a writing signed by the Principals and Landlord. Should any one or more provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions hereof shall remain
in full force and effect.

11. Binding Effect. The Principals further agree that the provisions of this
Agreement shall bind each Principal and its heirs, personal representatives, successors, and
assigns, and shall inure to the benefit of Landlord and its successors and assigns.

12. Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Georgia.

13. Submission to Jurisdiction. Each Principal hereby consents and submits to, and
waives any objection to, the jurisdiction of any local, state or federal court located within the
State of Georgia for the resolution of disputes under this Agreement.

IN WITNESS WHEREOF, the Principals have executed this Agreement or have caused the same to be
executed by their duly authorized representatives as of the day and year first set forth above.

7Exhibit 4.1 - TDRP

    EXHIBIT
      4.1

    Tax
      Deferred Retirement Plan

    Document
      Explanation

     

     

    The
      Tax Deferred
Retirement
      Plan (the “Plan”)
      that is an exhibit to this filing has been established by Caterpillar Inc.
      (the
“Company”) to provide a tax-deferred method for retirement savings and
      investment to certain eligible employees. As of September 15,
      2005, the
      Plan is
      established pursuant to collective bargaining agreements between the Company
      and
      the following unions: (i) International Union, United Automobile, Aerospace,
      and
      Agricultural Implement Workers of America (UAW), and its affiliated locals
      145,
      751, 786, 974, 1415, 1989 and 2096 (“UAW Central”), (ii) International
      Union, United Automobile, Aerospace and Agricultural Implement Workers of
      America (UAW) and its Affiliated Local No. 119 (“UAW Local 119”), (iii)
      International Union, United Automobile, Aerospace and Agricultural Implement
      Workers of America (UAW) and its Affiliated Local
      No.
710
      (“UAW Local 710”), (iv) International
      Association
      of
      Machinists and
      Aerospace
      Workers,
      AFL-CIO, and
      Local Lodge No. 851
      (“IAM Local 851”),
      and (v) International Association of Machinists and Aerospace Workers, AFL-CIO,
      and District Lodge No. 77 (“IAM Local 77).

     

    The
      attached Plan
      document contains the common provisions of the Plan applicable to all of the
      above unions; however, a separate document exists for each of the unions, to
      show the variations in certain provisions. The following describes the material
      differences among the documents for each union.

     

    
      	
              1.

               

            	
              Supplemental
                Agreement for Tax Deferred Retirement Plan, Section 8 (Effective
                Date and
                Term of Agreement). The
                effective
                dates and term of agreement for the unions are as follows:

               

            

    

     

    
      
        	
                Union

                 

              	
                Effective
                  Date and Term of Agreement

                 

              
	
                UAW
                  Central

                 

              	
                (a)

                 

              	
                Subject
                  to
                  subparagraph (b), this Agreement shall be
                  effective
                  January 10, 2005 and shall remain
                  in
                  force through February
                  28,
                  2011,
                  and
                  thereafter from March
                  1
                  of
                  one
                  year
                  through the
                  last day
                  of February
                  of the next
                  succeeding year, unless at least 60 (but not more than 90) days
                  prior to
                  March
                  1,
                  2011,
                  or at least
                  60 (but not more than 90) days prior to March
                  1
                  of any
                  succeeding year, any party gives written notice to the other that
                  it
                  desires a modification or termination. In the event that any negotiations
                  following such notice do not result in an agreement for renewal,
                  with or
                  without modification, prior to the March
                  1
                  next
                  succeeding such notice, this Agreement shall terminate at the end
                  of any
                  term (including any one-year extension in accordance with the foregoing)
                  unless further extended by mutual agreement.

                 

              
	 	
                (b)

                 

              	
                [See
                  Section 8(b) (Effective Date and Term of Agreement) of the attached
                  Supplemental Agreement for Tax Deferred Retirement
                  Plan.]

              

      

    

     

    

      
        	
                UAW
                  Local 119

                 

              	
                (a)

                 

              	
                Subject
                  to
                  subparagraph (b), this Agreement shall be effective March
                  21,
                  2005
                  and shall
                  remain in effect through the sixtieth day following the effective
                  date of
                  the Central Agreement to succeed that expiring on February 28,
                  2011, and
                  thereafter from year to year, unless sixty days prior to the date
                  of
                  expiration either party gives notice to the other, in writing,
                  that it
                  desires to
                  modify or
                  terminate.
                  In the event
                  that any negotiations following such notice do not result in an
                  agreement
                  for renewal, with or without modification, prior to the last day
                  of
                  February next succeeding such notice, this Agreement shall terminate
                  at
                  the end of any term (including any one-year extension in accordance
                  with
                  the foregoing) unless further extended by mutual agreement. Termination
                  of
                  this Agreement shall not have the effect of otherwise automatically
                  terminating the Tax Deferred Retirement Plan.

                 

              
	 	
                (b)

                 

              	
                [See
                  Section 8(b) (Effective Date and Term of Agreement) of the attached
                  Supplemental Agreement for Tax Deferred Retirement
                  Plan.]

              

      

    

    

Page
      1

    
      
        
          

        

      

        
          	
                  UAW
                    Local 710

                   

                	
                  (a) 

                   

                	
                  Subject
                    to
                    subparagraph (b), this Agreement shall be effective April
                    4,
                    2005
                    and shall
                    remain in effect through the ninetieth day following the effective
                    date of
                    the Central Agreement to succeed that expiring on February 28,
                    2011, and
                    thereafter from year to year, unless ninety days prior to the
                    date of
                    expiration either party gives notice to the other, in writing,
                    that it
                    desires to modify or terminate. In the event that any negotiations
                    following such notice do not result in an agreement for renewal,
                    with or
                    without modification, prior to the last day of February next
                    succeeding
                    such notice, this Agreement shall terminate at the end of any
                    term
                    (including any one-year extension in accordance with the foregoing)
                    unless
                    further extended by mutual agreement. Termination of this Agreement
                    shall
                    not have the effect of otherwise automatically terminating the
                    Tax
                    Deferred Retirement Plan.

                   

                
	 	
                  (b)

                   

                	
                  [See
                    Section 8(b) (Effective Date and Term of Agreement) of the attached
                    Supplemental Agreement for Tax Deferred Retirement
                    Plan.]

                

        

        

        
          	
                  IAM
                    Local 851

                   

                	
                  (a) 

                   

                	
                  Subject
                    to
                    paragraph (b), this Agreement shall be effective May 2, 2005
                    and shall
                    remain in force through April 30, 2012, and thereafter from April
                    30 of
                    one year through April 30 of the next succeeding year, unless
                    at least 60
                    (but not more than 90) days prior to April 30, 2012, or at least
                    60 (but
                    not more than 90) days prior to April 30 of any succeeding year,
                    any party
                    gives written notice to the other that it desires a modification
                    or
                    termination. In the event that any negotiations following such
                    notice do
                    not result in an agreement for renewal, with or without modification,
                    prior to the April 30 next succeeding such notice, this Agreement
                    shall
                    terminate at the end of any term (including any one-year extension
                    in
                    accordance with the foregoing) unless further extended by mutual
                    agreement.

                   

                
	 	
                  (b)

                   

                	
                  [See
                    Section 8(b) (Effective Date and Term of Agreement) of the attached
                    Supplemental Agreement for Tax Deferred Retirement
                    Plan.]

                

        

        

        
          	
                  IAM
                    Local 77

                   

                	
                  This
                    Agreement and Plan shall become effective on December
                    1,
                    2004
                    (referred to
                    in this Agreement and the Plan as the “Effective
                    Date”),
                    and

                   

                
	 	
                  (a)

                   

                	
                  Subject
                    to
                    subparagraph (b), this Agreement shall remain in force until
November
                    30,
                    2007,
                    and
                    thereafter from December 1
                    of one year
                    until November 30 of the next succeeding year, unless at least
                    60 (but not
                    more than 90) days prior to December 1,
                    2007,
                    or at least
                    60 (but not more than 90) days prior to December 1
                    of any
                    succeeding year, any party gives written notice to the other
                    that it
                    desires a modification or termination. In the event that any
                    negotiations
                    following such notice do not result in an agreement for renewal,
                    with or
                    without modification, prior to the December 1
                    next
                    succeeding such notice, this Agreement shall terminate at the
                    end of any
                    term (including any one-year extension in accordance with the
                    foregoing)
                    unless further extended by mutual agreement.

                   

                
	 	
                  (b)

                   

                	
                  [See
                    Section 8(b) (Effective Date and Term of Agreement) of the attached
                    Supplemental Agreement for Tax Deferred Retirement
                    Plan.]

                

        

      

    

    
      
 Page
        2

    

    
      

    

     

     

    

    
      	
              2.

               

            	
              Memorandum
                of Agreement Relating to Implementation of Tax Deferred Retirement
                Plan.
                The
                Memorandum of Agreement Relating to Implementation of Tax Deferred
                Retirement Plan for the unions are as
                follows:

            

    

    

    
      	
              Union

               

            	
              Memorandum
                of Agreement Relating to Implementation of Tax Deferred Retirement
                Plan

               

            
	
              UAW
                Central

               

            	
              The
                Company
                and the Union agree that the following modifications to the Supplemental
                Agreement effective January 10, 2005 (the “Current Agreement”) and the
                Company’s Tax Deferred Retirement Plan (the “Current Plan”) that is an
                Exhibit to the Current Agreement are necessary to accomplish the
                transition of eligible employees and their dependents to the Current
                Plan.

               

              Notwithstanding
                any provision of the Current Agreement or the Current Plan:

               

            
	 	
              2.

               

            	
              The
                Supplemental Agreement dated as of the 16th day of March 1998, and
                the Tax
                Deferred Savings Plan that is an Exhibit thereto, shall remain in
                effect
                until the Transition Date, for the individuals who would otherwise
                be
                eligible under the Current Plan and the Company’s Tax Deferred Savings
                Plan.

               

            
	 	
              3.

               

            	
              Any
                individual who, as of January 9, 2005, was a Caterpillar Logistics
                Services employee who was hired or recalled from layoff to labor
                grades 1
                or 2 (1) on or after April 6, 1992 at Denver, Colorado (Local 1415)
                or
                York, Pennsylvania (Local 786); or (2) on or after March 23, 1998
                at
                Morton, Illinois (Local 974) or Memphis, Tennessee (Local 1989) will
                continue to participate in the Company’s Non-Contributory Pension Plan
                from and after the Transition Date, through June 30, 2005, or such
                later
                date selected by the Company in its discretion, and thereafter if
                the
                individual irrevocably elects to participate in such Plan in lieu
                of
                participation in the Current Plan, in accordance with procedures
                established by the Company.

               

            
	 	
              4.

               

            	
              The
                Company
                and the Union further agree and acknowledge that this Memorandum
                of
                Agreement will expire upon its terms and have no further force and
                effect
                as of Transition Date, except that paragraph 3 shall survive such
                expiration.

            

    

    

    
       

      
        Page
          3

        

      

    

    
       

       

    

    
      	
              UAW
                Local 119

               

            	
              The
                Company
                and the Union agree that the following modifications to the Supplemental
                Agreement effective March 21, 2005 (the “Current Agreement”) and the
                Company’s Tax Deferred Retirement Plan (the “Current Plan”) that is an
                Exhibit to the Current Agreement are necessary to accomplish the
                transition of eligible employees and their dependents to the Current
                Plan.

               

              Notwithstanding
                any provision of the Current Agreement or the Current Plan:

               

            
	 	
              1.

               

            	
              The
                Current
                Plan shall become effective on a date selected by the Company in
                its sole
                discretion (the “Transition Date”) that is not more than ninety days after
                ratification of the Basic Agreement and that is consistent with the
                Transition Dates under the Memorandum of Agreement Relating to
                Implementation of Non-Contributory Pension Plan and the Memorandum
                of
                Agreement Relating to Implementation of Tax Deferred Savings
                Plan.

               

            
	 	
              2.

               

            	
              The
                Supplemental Agreement dated as of the 14th day of October 1998,
                and the
                Tax Deferred Savings Plan that is an Exhibit thereto, shall remain
                in
                effect until the Transition Date, for the individuals who would otherwise
                be eligible under the Current Plan and the Company’s Tax Deferred Savings
                Plan.

               

            
	 	
              3.

               

            	
              Any
                individual who, as of March 16, 2005, was an
                employee
                who was hired or recalled from layoff (or deemed to be recalled from
                layoff) on or after October 14, 1998 at Dallas, Texas
                will
                continue to participate in the Company’s Non-Contributory Pension Plan
                from and after the Transition Date, through June 30, 2005, or such
                later
                date selected by the Company in its discretion, and thereafter if
                the
                individual irrevocably elects to participate in such Plan in lieu
                of
                participation in the Current Plan, in accordance with procedures
                established by the Company.

               

            
	 	
              4.

               

            	
              The
                Company
                and the Union further agree and acknowledge that this Memorandum
                of
                Agreement will expire upon its terms and have no further force and
                effect
                as of Transition Date, except that paragraph 3 shall survive such
                expiration.

            

    

    
      
 

      
        Page
          4

      

      
        
          

        

      

    

     

     

    
      	
              UAW
                Local 710

               

            	
              The
                Company
                and the Union agree that the following modifications to the Supplemental
                Agreement effective April 4, 2005 (the “Current Agreement”) and the
                Company’s Tax Deferred Retirement Plan (the “Current Plan”) that is an
                Exhibit to the Current Agreement are necessary to accomplish the
                transition of eligible employees and their dependents to the Current
                Plan.

               

              Notwithstanding
                any provision of the Current Agreement or the Current Plan:

               

            
	
            	
              1.

               

            	
              The
                Current
                Plan shall become effective on a date selected by the Company in
                its sole
                discretion (the “Transition Date”) that is not more than ninety days after
                ratification of the Basic Agreement and that is consistent with the
                Transition Dates under the Memorandum of Agreement Relating to
                Implementation of Non-Contributory Pension Plan and the Memorandum
                of
                Agreement Relating to Implementation of Tax Deferred Savings
                Plan.

               

            
	
            	
              2.

               

            	
              The
                Supplemental Agreement dated as of the 14th day of October 1998,
                and the
                Tax Deferred Savings Plan that is an Exhibit thereto, shall remain
                in
                effect until the Transition Date, for the individuals who would otherwise
                be eligible under the Current Plan and the Company’s Tax Deferred Savings
                Plan.

               

            
	 	
              3.

               

            	
              Any
                individual who, as of March 30, 2005, was
                an employee
                who was hired or recalled from layoff (or deemed to be recalled from
                layoff) on or after October 14, 1998 at Kansas City
                will
                continue to participate in the Company’s Non-Contributory Pension Plan
                from and after the Transition Date, through June 30, 2005, or such
                later
                date selected by the Company in its discretion, and thereafter if
                the
                individual irrevocably elects to participate in such Plan in lieu
                of
                participation in the Current Plan, in accordance with procedures
                established by the Company.

               

            
	 	
              4.

               

            	
              The
                Company
                and the Union further agree and acknowledge that this Memorandum
                of
                Agreement will expire upon its terms and have no further force and
                effect
                as of Transition Date, except that paragraph 3 shall survive such
                expiration.

            

    

    
      

Page 5 

      
        
          

        

    

    
       

    

    
      	
              IAM
                Local 851

               

            	
              The
                Company
                and the Union agree that the following modifications to the Supplemental
                Agreement effective May 2, 2005 (the “Current Agreement”) and the
                Company’s Tax Deferred Retirement Plan (the “Current Plan”) that is an
                Exhibit to the Current Agreement are necessary to accomplish the
                transition of eligible employees and their dependents to the Current
                Plan.

               

              Notwithstanding
                any provision of the Current Agreement or the Current Plan:

               

            
	 	
              1.

               

            	
              The
                Current
                Plan shall become effective on a date selected by the Company in
                its sole
                discretion (the “Transition Date”) that is not more than ninety days after
                ratification of the Basic Agreement and that is consistent with the
                Transition Dates under the Memorandum of Agreement Relating to
                Implementation of Non-Contributory Pension Plan and the Memorandum
                of
                Agreement Relating to Implementation of Tax Deferred Savings
                Plan.

               

            
	 	
              2.

               

            	
              The
                Supplemental Agreement dated as of the 30th day of April 1999, and
                the Tax
                Deferred Savings Plan that is an Exhibit thereto, shall remain in
                effect
                until the Transition Date, for the individuals who would otherwise
                be
                eligible under the Current Plan and the Company’s Tax Deferred Savings
                Plan.

               

            
	 	
              3.

               

            	
              The
                Company
                and the Union further agree and acknowledge that this Memorandum
                of
                Agreement will expire upon its terms and have no further force and
                effect
                as of the Transition Date.

            

    

    

    

    
      	
              IAM
                Local 77

               

            	
              The
                Company
                and the Union agree that the following modifications to the Supplemental
                Agreement for Tax Deferred Retirement Plan effective December 1,
                2004 (the
                “Current Agreement”) and the Tax Deferred Retirement Plan (the “Current
                Plan”) that is an Exhibit to the Current Agreement are necessary to
                accomplish the implementation of the Current Plan.

               

              Notwithstanding
                any provision of the Current Agreement or the Current Plan:

               

            
	 	
              1.

               

            	
              The
                Current
                Plan shall become effective on a date selected by the Company in
                its sole
                discretion that is not more than ninety days after ratification of
                the
                Basic Agreement.

               

            
	 	
              2.

               

            	
              The
                Company
                and the Union further agree and acknowledge that this Memorandum
                of
                Agreement will expire upon its terms and have no further force and
                effect
                as of April 1, 2005.

            

    

    

     

    
      	
              3.

               

            	
              Memorandum
                of Agreement Relating to Certain Employees under the Tax Deferred
                Retirement Plan.
                The
                following Memorandum of Agreement shall apply to the UAW Central
                only:

            

    

    

    
      	
              Union

               

            	
              Memorandum
                of Agreement Relating to Certain Employees under the Tax Deferred
                Retirement Plan

            
	
              UAW
                Central

               

            	
              The
                Company
                and the Union agree to the following modification to the Supplemental
                Agreement effective January 10, 2005 (the “Current Agreement”) and the
                Company’s Tax Deferred Retirement Plan (the “Current Plan”) that is an
                Exhibit to the Current Agreement. For Caterpillar Logistics Services
                Business Units, the Current Agreement shall remain in effect until
                the
                sixtieth day following the effective date of the Central Agreement
                and all
                Local Agreements covered by the Central Agreement to succeed those
                expiring on February 28, 2011.

            

    

    
       

      

        Page
          6

      

      
        
          

        

      

    

    
 

    
      	
              4.

               

            	
              Plan
                Section 3.01 (Eligible Employees).
                The general
                eligibility criteria for the unions are as
                follows:

            

    

    

    
      	
              Union

               

            	
              Plan
                Section 3.01 (Eligible Employees)

               

            
	
              UAW
                Central

               

            	
              Each
                employee
                of an Employer will be an eligible employee if the employee (1) was
                hired
                on or after January 10, 2005 but is not eligible to participate in
                the
                Company’s Tax Deferred Savings Plan (“TDSP”) and satisfies (a) through (e)
                below; (2) was
                eligible
                to participate in TDSP prior to the Effective Date but became ineligible
                thereunder because he was (A) a Caterpillar Logistics Services employee
                hired or recalled from layoff to labor grades 1 or 2 (I) on or after
                April
                6, 1992 at Denver, Colorado (Local 1415) and York, Pennsylvania (Local
                786), or (II) on or after March 23, 1998 at Morton, Illinois (Local
                974)
                or Memphis, Tennessee (Local 1989); or (B) a “Supplemental employee” as
                described in Letter of Agreement 27 to the Central Agreement hired
                prior
                to January 10, 2005 who has become a full-time employee on or after
                January 10, 2005; or (3) was participating or eligible to participate
                in
                TDSP prior to the Effective Date, and remained a participant or eligible,
                or, by virtue of being within a certain class of employees, could
                have
                subsequently become eligible to participate thereafter, under the
                provisions in effect January 10, 2005, but subsequently incurred
                a break
                in Continuity of Service and was rehired into one of the ineligible
                classes described in (2)(A) of this sentence and satisfied (a) through
                (e)
                below. When an employee described in (2) or (3) of the preceding
                sentence
                becomes an ineligible employee as described therein, the employee’s
                Accounts under TDSP will be transferred to this Plan. For purposes
                of this
                subsection, an Employee’s hire date is the Employee’s last date of rehire
                if it follows a break in Continuity of
                Service.

            

    

    

    
      	
              UAW
                Local 119

               

            	
              Each
                employee
                of an Employer will be an eligible employee if the employee (1) was
                hired
                on or after March
                21,
                2005
                but is not
                eligible to participate in the Company’s Tax Deferred Savings Plan
                (“TDSP”) and satisfies (a) through (e) below; (2) was
                eligible
                to participate in TDSP prior
                to the
                Effective Date
                but became
                ineligible thereunder because he was (A) an
                employee
                hired or recalled from layoff (or deemed to be recalled from layoff)
                on or
                after October 14, 1998 at Dallas, Texas;
                or (B) a
                “Supplemental employee” as described in the Basic Agreement hired prior to
                March
                21,
                2005 who has become a full-time employee on or after March 21,
                2005;
                or (3) was
                participating or eligible to participate in TDSP prior
                to the
                Effective Date,
                and
                remained a participant or eligible, or, by virtue of being within
                a
                certain class of employees, could have subsequently become
                eligible
                to participate thereafter, under the provisions in effect March
                21,
                2005,
                but
                subsequently incurred a break in Continuity of Service and was rehired
                into one of the ineligible classes described in (2)(A) of this sentence
                and satisfied (a) through (e) below. When an employee described in
                (2) or
                (3) of the preceding sentence becomes an ineligible employee as described
                therein, the employee’s Accounts under TDSP will be transferred to this
                Plan. For purposes of this subsection, an Employee’s hire date is the
                Employee’s last date of rehire if it follows a break in Continuity of
                Service.

            

    

    
      
 

      
        Page
          7

      

      
        
          

        

    

    
       

    

    
      	
              UAW
                Local 710

               

            	
              Each
                employee
                of an Employer will be an eligible employee if the employee (1) was
                hired
                on or after April
                4,
                2005
                but is not
                eligible to participate in the Company’s Tax Deferred Savings Plan
                (“TDSP”) and satisfies (a) through (e) below; (2) was
                eligible
                to participate in TDSP prior
                to the
                Effective Date
                but became
                ineligible thereunder because he was (A) an
                employee
                who was hired or recalled from layoff (or deemed to be recalled from
                layoff) on or after October 14, 1998 at Kansas City;
                or (B) a
                “Supplemental employee” as described in the Basic Agreement hired prior to
                April
                4, 2005
                who has become a full-time employee on or after April 4, 2005;
                or (3) was
                participating or eligible to participate in TDSP prior
                to the
                Effective Date,
                and
                remained a participant or eligible, or, by virtue of being within
                a
                certain class of employees, could have subsequently become
                eligible
                to participate thereafter, under the provisions in effect April
                4,
                2005,
                but
                subsequently incurred a break in Continuity of Service and was rehired
                into one of the ineligible classes described in (2)(A) of this sentence
                and satisfied (a) through (e) below. When an employee described in
                (2) or
                (3) of the preceding sentence becomes an ineligible employee as described
                therein, the employee’s Accounts under TDSP will be transferred to this
                Plan. For purposes of this subsection, an Employee’s hire date is the
                Employee’s last date of rehire if it follows a break in Continuity of
                Service.

            

    

    

    
      	
              IAM
                Local 851

               

            	
              Each
                employee
                of an Employer will be an eligible employee if the employee (1) was
                hired
                on or after May 2, 2005 but is not eligible to participate in the
                Company’s Tax Deferred Savings Plan (“TDSP”) and satisfies (a) through (e)
                below; (2) was
                eligible
                to participate in TDSP prior to the Effective Date but became ineligible
                thereunder because he was a “Supplemental employee” as described in Letter
                of Agreement 16 to the Basic Agreement hired prior to May 2, 2005
                who has
                become a full-time employee on or after May 2, 2005; or (3) was
                participating or eligible to participate in TDSP prior to the Effective
                Date, and remained a participant or eligible, or, by virtue of being
                within a certain class of employees, could have subsequently become
                eligible to participate thereafter, under the provisions in effect
                May 2,
                2005, but subsequently incurred a break in Continuity of Service
                and was
                rehired into the ineligible class described in (2) of this sentence
                and
                satisfied (a) through (e) below. When an employee described in (2)
                or (3)
                of the preceding sentence becomes an ineligible employee as described
                therein, the employee’s Accounts under TDSP will be transferred to this
                Plan. For purposes of this subsection, an Employee’s hire date is the
                Employee’s last date of rehire if it follows a break in Continuity of
                Service.

            

    

    

    
      	
              IAM
                Local 77

               

            	
              Each
                employee
                of an Employer will be an eligible employee if the employee (1) was
                hired
                on or after December 1, 2004 and is not eligible to participate in
                the
                Company’s Tax Deferred Savings Plan (“TDSP”) and satisfies (a) through (e)
                below. For purposes of this subsection, an Employee’s hire date is the
                Employee’s last date of rehire if it follows a break in Continuity of
                Service.

            

    

     

    
      
        Page
          8

      

      
        
          

        

      

    

    
       

      

        
          	
                  Table
                    of Contents

                  TAX
                    DEFERRED RETIREMENT PLAN

                   

                
	
                  SUPPLEMENTAL
                    AGREEMENT FOR TAX DEFERRED RETIREMENT PLAN

                
	 	
                  Section
                    1.
                    

                	
                  Definitions

                
	 	
                  Section
                    2.
                    

                	
                  Establishment
                    of Plan

                
	 	
                  Section
                    3.
                    

                	
                  Management
                    Rights

                
	 	
                  Section
                    4.
                    

                	
                  Information
                    to Union

                
	 	
                  Section
                    5.
                    

                	
                  Claim
                    Procedure

                
	 	
                  Section
                    6.
                    

                	
                  Complete
                    Agreement not Subject to Strikes, Etc.

                
	 	
                  Section
                    7.
                    

                	
                  Necessary
                    Approvals

                
	 	
                  Section
                    8.
                    

                	
                  Effective
                    Date and Term of Agreement

                
	
                  MEMORANDUM
                    OF
                    AGREEMENT RELATING TO IMPLEMENTATION OF TAX DEFERRED RETIREMENT
                    PLAN

                
	
                  EXHIBIT
                    A -
                    TAX DEFERRED RETIREMENT PLAN

                
	 	
                  Section
                    1.

                	
                  Introduction

                
	 	
                  Section
                    2.
                    

                	
                  Definitions

                
	 	 	
                  2.01

                	
                  “Account”.

                
	 	 	
                  2.02

                	
                  “Company
                    Shares”

                
	 	 	
                  2.03

                	
                  “Compensation”.

                
	 	 	
                  2.04

                	
                  “Continuity
                    of Service”.

                
	 	 	
                  2.05

                	
                  “Effective
                    Date”

                
	 	 	
                  2.06

                	
                  “Employer”

                
	 	 	
                  2.07

                	
                  “Participant”

                
	 	 	
                  2.08

                	
                  “Plan
                    Year”

                
	 	 	
                  2.09

                	
                  “Qualified
                    Military Service”.

                
	 	 	
                  2.10

                	
                  “Service”.

                
	 	 	
                  2.11

                	
                  “Transition”.

                
	 	 	
                  2.12

                	
                  “Trustee”

                
	 	
                  Section
                    3.
                    

                	
                  Eligibility
                    and Participation

                
	 	 	
                  3.01

                	
                  Eligible
                    Employees.

                
	 	 	
                  3.02

                	
                  Service.

                
	 	 	
                  3.03

                	
                  Period
                    of
                    Participation.

                
	 	 	
                  3.04

                	
                  Effect
                    of
                    Layoff or Leave of Absence.

                
	 	
                  Section
                    4.
                    

                	
                  Contributions

                
	 	 	
                  4.01

                	
                  Elections
                    and
                    Amount of Contributions.

                
	 	 	
                  4.02

                	
                  Suspension
                    of
                    Authorized Contributions.

                
	 	 	
                  4.03

                	
                  Employer
                    Payment of Authorized Contributions.

                
	 	 	
                  4.04

                	
                  Restrictions
                    on Employer Payments.

                
	 	 	
                  4.05

                	
                  Maximum
                    Payment Limitation.

                
	 	 	
                  4.06

                	
                  Timing
                    of
                    Employer Payments.

                
	 	 	
                  4.07

                	
                  Substitute
                    Employer Payment and Contributions.

                
	 	 	
                  4.08

                	
                  Employer
                    Matching Contributions.

                
	 	 	
                  4.09

                	
                  Employer
                    Nonelective Contributions.

                
	 	
                  Section
                    5.
                    

                	
                  Allocation
                    of
                    Employer Payments and Contributions; Rollover Contributions;
                    and
                    Transfers

                
	 	 	
                  5.01

                	
                  Allocation
                    of
                    Employer Payments.

                
	 	 	
                  5.02

                	
                  Rollover
                    Contributions From Other Plans.

                
	 	 	
                  5.03

                	
                  Transfers
                    from Other Plans.

                
	 	 	
                  5.04

                	
                  Transfers
                    to
                    Other Plans.

                
	 	
                  Section
                    6.
                    

                	
                  The
                    Trust
                    Fund and the Investment Funds

                
	 	 	
                  6.01

                	
                  The
                    Trust
                    Fund.

                
	 	 	
                  6.02

                	
                  The
                    Investment Funds.

                
	 	 	
                  6.03

                	
                  Investment
                    Fund Elections.

                
	 	 	
                  6.04

                	
                  Investment
                    Fund Transfers.

                
	 	 	
                  6.05

                	
                  Investment
                    in
                    Company Shares.

                
	 	
                  Section
                    7.
                    

                	
                  Distribution
                    of a Participant’s Account

                
	 	 	
                  7.01

                	
                  Amount
                    and
                    Form of Distribution.

                
	 	 	
                  7.02

                	
                  Time
                    of
                    Distributions and Withdrawals.

                
	 	 	
                  7.03

                	
                  Loans.

                
	 	 	
                  7.04

                	
                  Hardship
                    Withdrawals.

                
	 	 	
                  7.05

                	
                  To
                    Whom
                    Distributions are Made.

                
	 	 	
                  7.06

                	
                  Designation
                    of Beneficiaries.

                
	 	
                  Section
                    8.
                    

                	
                  Participant’s
                    Statement

                
	 	
                  Section
                    9.
                    

                	
                  Voting
                    of
                    Company Shares

                
	 	
                  Section
                    10.
                    

                	
                  Trustee
                    and
                    Plan Administrator

                
	 	 	
                  10.01

                	
                  The
                    Trustee.

                
	 	 	
                  10.02

                	
                  Plan
                    Administrator.

                
	 	
                  Section
                    11.
                    

                	
                  Accounting

                
	 	 	
                  11.01

                	
                  Participant
                    Accounts.

                
	 	 	
                  11.02

                	
                  Adjustments
                    of Participants’ Accounts.

                
	 	 	
                  11.03

                	
                  Fund
                    Accounting.

                
	 	
                  Section
                    12.
                    

                	
                  No
                    Reversion
                    to Employers

                
	 	
                  Section
                    13.
                    

                	
                  Miscellaneous

                
	 	 	
                  13.01

                	
                  Information
                    to Participants.

                
	 	 	
                  13.02

                	
                  Nonassignability.

                
	 	 	
                  13.03

                	
                  Notice
                    of
                    Claim Denial.

                
	 	 	
                  13.04

                	
                  Records.

                
	 	 	
                  13.05

                	
                  Absence
                    of
                    Guaranty.

                
	 	 	
                  13.06

                	
                  Mistake
                    of
                    Fact.

                
	 	 	
                  13.07

                	
                  Action
                    by
                    Employer.

                
	 	 	
                  13.08

                	
                  Employment
                    Rights.

                
	 	 	
                  13.09

                	
                  Gender
                    and
                    Number.

                
	 	 	
                  13.10

                	
                  Waiver
                    of
                    Notice.

                
	 	 	
                  13.11

                	
                  Attorneys,
                    Agents, Accountants, etc.

                
	 	 	
                  13.12

                	
                  Limitation
                    of
                    Liability.

                
	 	 	
                  13.13

                	
                  Limitation
                    of
                    Rights.

                
	 	 	
                  13.14

                	
                  Separate
                    Administration.

                
	 	 	
                  13.15

                	
                  Courts.

                
	 	 	
                  13.16

                	
                  Merger
                    of
                    Plan.

                
	 	
                  Section
                    14.
                    

                	
                  Amendment
                    and
                    Termination.

                
	 	
                  Section
                    15.
                    

                	
                  Employers
                    Other Than the Company

                
	 	
                  Section
                    16.
                    

                	
                  Qualified
                    Domestic Relations Orders

                
	 	
                  Section
                    17.
                    

                	
                  Participation
                    Test Limitation

                
	 	 	
                  17.01

                	
                  Applicability.

                
	 	 	
                  17.02

                	
                  Definition
                    of
                    Highly Compensated Employee.

                
	 	 	
                  17.03

                	
                  Tests.

                
	 	 	
                  17.04

                	
                  Limitation.

                
	 	 	
                  17.05

                	
                  Separate
                    Tests.

                
	 	
                  Section
                    18.
                    

                	
                  Employee
                    Stock Ownership Plan Provisions

                
	 	 	
                  18.01

                	
                  Introduction.

                
	 	 	
                  18.02

                	
                  Employee
                    Stock Ownership Plan Portion.

                
	 	 	
                  18.03

                	
                  Dividend
                    Election.

                
	 	 	
                  18.04

                	
                  Put
                    Option.

                
	 	 	
                  18.05

                	
                  Diversification.

                
	 	 	
                  18.06

                	
                  Hardship
                    Withdrawal.

                
	
                  LETTER
                    OF
                    AGREEMENT NO. 1.

                
	
                  Re:
                    Automatic
                    Amendments.

                

        

      

    

    
 

    
      
        

      

    
      SUPPLEMENTAL
        AGREEMENT FOR

    

    TAX
      DEFERRED
RETIREMENT
      PLAN

     

    On
      [Settlement
      Date],
      CATERPILLAR INC.
      (hereinafter referred to as the “Company” or as an
“Employer”)
      and
      the [See
      the
      attached Tax
      Deferred Retirement Plan Document Explanation.]
      (hereinafter
      collectively referred to as the “Union”), on behalf of the employees covered by
      the Central Agreement and applicable Local Agreements of which this Supplemental
      Agreement becomes a part, agree as follows:

     

    
      	
              Section
                1.

               

            	
              Definitions

               

            

    

    When
      used herein --

     

    
      	 	
              (a)

               

            	
              “Bargaining
                Unit” means the respective units for collective bargaining purposes to
                which the Tax Deferred
                Retirement Plan (as set forth
                in
                Exhibit A attached hereto and made a part hereof, as further modified
                in
                accordance with this Agreement) applies pursuant to this
                Agreement.

               

            
	 	
              (b)

               

            	
              “Basic
                Agreement” as applied to a Bargaining Unit means those provisions of the
                Central Agreement which apply to such Bargaining Unit, together with
                the
                provisions of the Local Agreement covering such Bargaining
                Unit.

               

            
	 	
              (c)

               

            	
              “Central
                Agreement” means the agreement between the Employers and the Union
                covering terms and conditions of employment of Employees (other than
                terms
                and conditions which are the subject of special supplemental agreements
                such as pensions, group insurance and supplemental unemployment benefits
                and other than terms and conditions which are governed by a Local
                Agreement).

               

            
	 	
              (d)

               

            	
              “Collective
                Bargaining Representative” means with respect to a Bargaining Unit, the
                Union and a local thereof to which recognition is extended by an
                Employer
                for that Bargaining Unit.

               

            
	 	
              (e)

               

            	
              “Employee”
                means any person in a Bargaining Unit covered by this Agreement who
                is
                actively employed by an Employer, or who is on the Seniority List
                for such
                Bargaining Unit, on or after the Effective
                Date specified in Section 8 hereof.

               

            
	 	
              (f)

               

            	
              “Local
                Agreement” means an agreement between an Employer and a Collective
                Bargaining Representative covering terms and conditions of employment
                of
                Employees (other than terms and conditions which are the subject
                of
                special supplemental agreements such as pensions, group insurance
                and
                supplemental unemployment benefits and other than terms and conditions
                which are governed by the Central Agreement).

               

            
	 	
              (g)

               

            	
              “Seniority
                List” means the Seniority List provided for in the Basic
                Agreement.

            

    

    

     

    
      	
              Section
                2

               

            	
              Establishment
                of Plan

               

            
	 	
              The
                Company
                has established for eligible Employees a Tax Deferred Retirement
                Plan, hereinafter
                referred to as the “Plan.” In the event of any conflict between the
                provisions of the Plan and the provisions of this Agreement, the
                provisions of this Agreement will supersede the provisions of the
                Plan to
                the extent necessary to eliminate such conflict. Each Employer, in
                its
                discretion, may extend the Plan to persons now or hereafter in its
                employ
                outside the Bargaining Unit.

            

    

     

    
      
        Page
          1

      

      
        
          

        

      

    

     

     

    
      	
              Section
                3

               

            	
              Management
                Rights

               

            
	 	
              The
                provisions of this Section 3 shall apply only to any matters or
                information in conjunction with this Plan. All decisions with respect
                to
                any and all matters affecting the business of an Employer are vested
                exclusively in the management and Board of Directors of the Employer.
                Neither the Union nor any Employees shall have the right to be informed,
                notified, or consulted with respect to, or provided information or
                data
                concerning such matters except that the Union shall be provided with
                such
                information and data as is required by the terms of this Agreement
                and the
                Plan, and upon request as is provided to the shareholders of the
                Company
                in the ordinary course of business.

               

              Such
                matters
                include, by way of example and without limitation: terms and conditions
                of
                employment of Employees not within recognized collective bargaining
                units
                represented by the Union; the investment of corporate funds; the
                incurring
                of debt, the purpose or cost of expenditures for overhead, operating
                or
                other expenses; the number, location, size, function and manning
                of
                facilities; research into existing or possible new products to be
                produced; the maintenance of materials and finished goods inventories,
                the
                marketing, merchandising, pricing and advertising policies; the financing
                of the Employers including incurring or retirement of debt, the issuance
                of stock, debentures, notes or other capital instruments; the declaration
                of dividends; the accounting and financial policies, practices and
                procedures of the Employers; the acquisition, merger, divestiture
                of
                assets and holdings; the maintenance of the business plans, and the
                financial books and records of the Employers in confidence; and all
                other
                matters heretofore traditionally determined by management or the
                Board of
                Directors exclusively.

               

              It
                is
                recognized and agreed that all information necessary for the Union
                to
                perform its representational duties with respect to the establishment,
                administration, modification or termination of this Agreement, the
                Plan or
                any future proposed agreement or plan is provided for by Section
                4 of this
                Agreement, or is contained in the published financial statements
                and such
                releases and periodic reports of the Company to its shareholders
                or to the
                Securities and Exchange Commission as are provided in the ordinary
                course
                of business pursuant to the Securities Exchange Act of 1934.

               

              The
                agreements herein with respect to the preservation of management
                rights
                and the Union’s disclaimers and waivers with respect thereto are given in
                express consideration for the benefits to be paid hereunder.

               

            

    

    

    
      	
              Section
                4

               

            	
              Information
                to Union

               

            
	 	
              The
                Company
                or its designee will provide to the Union a copy of materials provided
                to
                Participants in the Plan which show the performance of the investment
                funds referenced in Section 6 of the Plan, at approximately the same
                time
                such materials are provided to Participants. The Union hereby disclaims
                any interest in and waives any contractual or statutory right to
                any
                additional financial information or accounting records concerning
                the
                Employers.

            

    

     

    
      
        Page
          2

      

      
        
          

        

      

    

     

    
       

    

    
      	
              Section
                5

               

            	
              Claim
                Procedure

               

            
	 	
              In
                the event
                an Employee wishes to seek a review under the Plan and make a claim
                with
                respect to his eligibility or his Account, the following claim procedure
                will apply:

            

    

     

    
      	
              STEP
                1.

               

            	
              The
                Employee
                shall first seek a satisfactory explanation from the Employer with
                respect
                to his claim; and if he is unable to secure an explanation to his
                satisfaction, he may then request his designated local Union
                representative to review his claim with the designated management
                representative.

               

            
	
              STEP
                2.

               

            	
              The
                management representative will review the Employee’s claim with the local
                Union representative. If needed, more details with respect to the
                claim
                will be obtained by the management representative.

               

            
	
              STEP
                3.

               

            	
              If,
                after
                discussion with the management representative, the local Union
                representative feels that the claim was proper, he may notify in
                writing
                the Union
                and the
                management representative that he would like to have the claim further
                reviewed by the Union
                and the
                designated representative of the Company. The management representative
                will then direct a memorandum describing the discussions which have
                taken
                place (a copy which will be sent to the local Union representative
                and to
                the Union)
                to the
                Company representative and will forward the entire file to the Company
                representative. Thereupon, the Union
                should
                contact the Company representative to arrange a meeting at a mutually
                convenient time for purposes of further discussion of the
                claim.

               

            
	
              STEP
                4.

               

            	
              If,
                after
                discussion between the representative of the Union and the designated
                representative, the parties cannot resolve the claim in dispute and
                the
                representative of the Union continues to feel that the claim was
                improperly denied, such representatives shall appoint an impartial
                person
                to review the claim in dispute and to determine whether or not denial
                was
                proper. In the event of the inability of the parties to agree upon
                such an
                impartial person within a period of thirty days after it is determined
                that such an impartial person should be appointed, the parties shall
                ask
                the American Arbitration Association to furnish a suggested list
                of names
                of five persons, from which list the parties shall select one person
                to
                serve. Such selection shall be by agreement, if possible; otherwise,
                by
                the Union and the Company alternately eliminating names from said
                list.
                After each party has eliminated the names of two persons from said
                list,
                the remaining one shall be appointed to act.

               

              There
                shall
                be no appeal from any ruling by the impartial person so designated.
                Each
                such ruling shall be final and binding on the Employers, the Union,
                and
                the Employee or any other persons claiming eligibility or amounts
                under
                the Plan; and shall be based solely on the written facts submitted
                relating to the case in dispute and such ruling shall apply solely
                to the
                case in dispute and shall not be used as a precedent for future cases.
                No
                ruling in any one case nor any initial determination in any one case
                shall
                create a basis for retroactive adjustments in any other cases. The
                Union
                will discourage any attempt of their respective members and any other
                persons and will not encourage or cooperate with any of its members
                and
                any other person, in any appeal to any court or administrative board
                or
                agency from a ruling of such impartial person.

               

              The
                fees and
                expenses of such impartial person, and any clerical or stenographic
                expense mutually agreed to, shall be borne equally by the Company
                and the
                Union.

            

    

    
 

    
      
        Page
          3

      

      
        
          

        

      

    

    
 

    
      	
              Section
                6.

               

            	
              Complete
                Agreement not Subject to Strikes, Etc.

               

            
	 	
              During
                the
                term of this Agreement neither the Union nor any of its officers,
                agents,
                or representatives, nor any of the Employees or their agents or
                representatives, shall engage or continue to engage in or in any
                manner
                sanction or encourage any strike, work stoppage, slowdown, or other
                interruption or impeding of work, or engage, or continue to engage
                in any
                other use of economic force, for the purpose of securing any modification,
                change, or termination of this Agreement or of the Plan, or for the
                purpose of securing the establishment of any new, different or additional
                plan. During the term of this Agreement, the Employers shall have
                no
                obligation to negotiate or bargain with the Union
                or with
                the Employees or any other representative of the Employees with respect
                to
                any of the subject matters of this Agreement, the right to bargain
                with
                respect to any such matters being expressly
                waived.

            

    

    

    
      	
              Section
                7.

               

            	
              Necessary
                Approvals

               

            
	 	
              Notwithstanding
                any other provision of this Agreement or of the Plan, the Company,
                with
                the consent of the Union insofar as Employees in the Bargaining Unit
                are
                concerned, may, during the term of this Agreement, make revisions
                in the
                Plan not inconsistent with the purposes, structure and basic provisions
                thereof which shall be necessary to bring the Plan into conformance
                with
                any applicable federal or state legislation or regulations or which
                shall
                be necessary to obtain or maintain any necessary approval of any
                applicable federal or state authority. Any such revisions shall adhere
                as
                closely as possible to the language and intent of the provisions
                outlined
                in this Agreement and the attached Exhibit A; provided, however,
                that no
                such revisions will result in any increase in benefits or eligibility
                for
                benefits under any other benefit plan of the
                Employers.

            

    

    

    
      	
              Section
                8.

               

            	
              Effective
                Date and Term of Agreement

               

            
	 	
              (a)

               

            	
              [See
                the attached Tax
                Deferred Retirement Plan Document Explanation.]

               

            
	 	
              (b)

               

            	
              If
                at any
                time any of the approvals referred to in Section 7 ceases to be in
                effect,
                the Company (unless revisions made pursuant to Section 7 result in
                the
                complete reinstatement of such approval) may terminate this Agreement
                and
                shall provide written notice of such termination to the Union at
                least 30
                days prior to such termination, provided however, that termination
                of this
                Agreement shall not have the effect of automatically terminating
                the
                Plan.

            

    

    

     

    IN
      WITNESS HEREOF, the parties hereto have caused this Supplemental Agreement
      to be
      executed as of the day and year first above written.

     

    
      

        Page
          4

      

      
        
          

        

      

    

    
       

       

    

    MEMORANDUM
      OF
      AGREEMENT RELATING TO

    IMPLEMENTATION
      OF
      TAX DEFERRED RETIREMENT PLAN

     

    [See
      the
      attached Tax
      Deferred Retirement Plan Document Explanation.]

    
       

      

        Page
          5

      

      
        
          

        

      

    

    

     

    EXHIBIT
      A

     

    TAX
      DEFERRED RETIREMENT PLAN

     

    
      	
              Section
                1.

               

            	
              Introduction

               

            
	 	
              This
                Tax
                Deferred Retirement
                Plan (the
                “Plan”) has been established by Caterpillar Inc. (hereinafter, the
                “Company”) to provide a tax-deferred method for savings and investment to
                certain eligible employees of the Employers. The Plan is maintained
                pursuant to Sections 401 (a) and (k) of the Internal Revenue Code
                of 1986
                (the “Code”), as amended, and is conditioned upon determination by the
                Internal Revenue Service that it meets the requirements of such Sections
                or any successor statute of similar import. The Plan will be administered
                by the Plan Administrator described in subsection
                10.02.

            

    

    

    

      
        	
                Section
                  2.

                 

              	
                Definitions

                 

              
	 	
                2.01

                 

              	
                “Account”.means
                  the
                  interest of a Participant in the trust fund.

                 

              
	 	
                2.02

                 

              	
                “Company
                  Shares”.means
                  shares
                  of Common Stock of the Company.

                 

              
	 	
                2.03

                 

              	
                “Compensation”.means
                  a
                  Participant’s straight
                  time
                  basic hourly pay and payments under the Incentive Compensation
                  Plan
                  payable
                  in
                  any Plan Year to him by the Employers (before deductions and before
                  charging against such Compensation any Employer Payment under Section
                  4)
                  for services rendered, excluding, however, contributions by the
                  Employers
                  under any other profit sharing or any other employee benefit plan;
                  provided that Compensation shall not include annual compensation
                  in excess
                  of $205,000 or such other amount as shall be indicated by the Secretary
                  of
                  the Treasury in regulations or otherwise pursuant to Section 401(a)(17)
                  of
                  the Code.

                 

              
	 	
                2.04

                 

              	
                “Continuity
                  of Service”.means
                  service
                  with the Employer until it is broken by (i) the occurrence of an
                  employee’s death or retirement, or (ii) a quit or discharge unless the
                  employee is rehired before the end of the month in which the quit
                  or
                  discharge occurs, or (iii) expiration of the employee’s recall rights
                  under the Basic Agreement. In no case will a Transition be considered
                  a
                  break in Continuity of Service.

                 

              
	 	
                2.05

                 

              	
                “Effective
                  Date”.means,
                  with
                  respect to groups of employees, the date specified as such in any
                  collective bargaining agreement or extension memorandum applicable
                  to such
                  a group.

                 

              
	 	
                2.06

                 

              	
                “Employer”.means
                  the
                  Company and any subsidiary of the Company that adopts the plan
                  pursuant to
                  Section 15.

                 

              
	 	
                2.07

                 

              	
                “Participant”.means
                  an
                  eligible employee, in accordance with subsection 3.01.

                 

              
	 	
                2.08

                 

              	
                “Plan
                  Year”.means
                  calendar year.

                 

              
	 	
                2.09

                 

              	
                “Qualified
                  Military Service”.means
                  service
                  by a Participant or employee in the armed forces of the United
                  States of a
                  character that entitles the Participant or employee to re-employment
                  under
                  the Uniformed Services Employment and Reemployment Rights Act of
                  1994, but
                  only if the Participant or employee is re-employed during the period
                  following such service in which his right of re-employment is protected
                  by
                  such Act.

              

      

    

     

    
      Page
        6

      
        
          

        

      

    

     

     

    
      	 
	
              2.10

               

            	
              “Service”.means
                an
                employee’s period of employment as defined in subsection
                3.02.

               

            
	 	
              2.11

               

            	
              “Transition”.means
                moving
                from (1) employment by the Employer in a group to which the Plan
                has been
                made available by a collective bargaining agreement or by an extension
                by
                the Employer, to (2) employment by the Employer or other subsidiary
                of the
                Company that is not in a group to which the Plan has been made available
                by a collective bargaining agreement or by an extension by the Employer,
                or vice versa.

               

            
	 	
              2.12

               

            	
              “Trustee”.means
                the
                person, persons, organization or organizations described in subsection
                10.01.

            

    

     

    
      	
              Section
                3.

               

            	
              Eligibility
                and Participation

               

            
	 	
              3.01

               

            	
              Eligible
                Employees.

               

              [See
                the attached Tax
                Deferred Retirement Plan Document Explanation.]

               

              The
                standards
                referenced above are the following:

               

            
	 	 	
              (a)

               

            	
              He
                is a
                resident or citizen of the United States of America or
                Canada;

               

            
	 	 	
              (b)

               

            	
              He
                is an
                employee of one or more Employers;

               

            
	 	 	
              (c)

               

            	
              He
                is
                included in a group for which an agent for collective bargaining
                has
                signed an agreement making this Plan applicable to such group or
                in a
                group to whom this Plan has been extended by an Employer;

               

            
	 	 	
              (d)

               

            	
              He
                has
                completed at least one full Computation Year in which he has been
                credited
                with 1,000 or more hours if he is an employee described in paragraph
                3.02(b); and

               

            
	 	 	
              (e)

               

            	
              He
                has
                attained his eighteenth birthday.

               

            
	 	 	
              An
                eligible
                employee will become a Participant in the Plan as of [first
                Monday following ratification],
                or as soon
                as administratively feasible following the date such individual has
                satisfied the eligibility criteria listed in this subsection 3.01.
                For
                this purpose, an individual will have satisfied subsection 3.01(d)
                when he
                or she completes 1,000 hours in a Computation Year even if the Computation
                Year has not ended. Employees will be notified of the eligibility
                requirements as specified in the Plan through such general announcements
                as the Plan Administrator shall authorize, but neither the Employers,
                the
                Plan Administrator, nor the Trustee shall have any duty or obligation
                to
                notify any individual employee of any date as of which he is eligible
                to
                become a Participant in the Plan.

            

    

    
      
 Page
        7

      
        
          
            

          

        

         

        

          
            	 	
                    3.02

                     

                  	
                    Service

                     

                  
	 	 	
                    (a)

                     

                  	
                    This
                      paragraph shall apply to and determine rights and benefits
                      of employees
                      who are hired for an indefinite period and are employed on
                      the prevailing
                      full-time schedules of their respective departments.

                     

                  
	 	 	
                    For
                      all
                      purposes of the Plan, the term “Service” means the total period of service
                      with the Employers, including any period of leave of absence
                      or layoff.
                      Solely for the purposes of this subsection, the term “Employer” shall,
                      unless otherwise provided by the Company, include any organization
                      (whether a corporation, partnership, sole proprietorship or
                      other business
                      entity), regardless of when formed or acquired, as well as
                      all of its
                      affiliates and predecessors, the control of which organization
                      or a
                      substantial part of the assets of which organization have been
                      acquired
                      (whether before or after the Effective Date hereof) by the
                      Company or any
                      of its subsidiaries. Notwithstanding the foregoing provisions
                      of this
                      subsection, service shall not be duplicated for the same period
                      of service
                      with more than one Employer. The records of the respective
                      Employers with
                      respect to an employee’s service will be conclusive unless shown to the
                      Plan Administrator’s satisfaction to be incorrect.

                     

                  
	 	 	
                    (b)

                     

                  	
                    This
                      paragraph shall apply to and determine rights and benefits
                      of employees
                      who are not in the class of employees defined in paragraph
                      3.02(a),
                      notwithstanding any provisions of the Plan to the contrary.
“Service”
                      shall be determined as follows:

                     

                  
	 	 	 	
                    (i)

                     

                  	
                    An
                      employee
                      shall receive a full year of service for each Computation Year
                      for which
                      he is credited with 1,000 or more Hours Worked (as such terms
                      are defined
                      below), subject to the following provisions of this
                      paragraph.

                     

                  
	 	 	 	
                    (ii)

                     

                  	
                    “Computation
                      Year” shall mean a calendar year period that commences after December
                      31,
                      1994, coinciding with the annual 52/53, 26 or 12 pay periods
                      applicable to
                      employees who are paid weekly, biweekly or monthly,
                      respectively.

                     

                  
	 	 	 	
                    (iii)

                     

                  	
                    “Hours
                      Worked” shall mean (A) each hour for which an employee is paid or
                      entitled
                      to payment for the performance of duties for an employer; (B)
                      each hour
                      during which no such duties are performed but for which an
                      employee is
                      paid by an employer for vacation, holiday, illness, disability,
                      layoff,
                      jury duty, military duty, or leave of absence; and (C) each
                      hour for which
                      back pay is awarded or agreed to by an employer; except that
“Hours
                      Worked” shall not include (1) hours in excess of 501 hours of any
                      continuous period during which no duties are performed unless
                      a back
                      pay award is made for such period;
                      (2) hours
                      for which payment is due solely for purposes of complying with
                      applicable
                      workers’ compensation, unemployment compensation or disability insurance
                      laws; (3) any time period which is or may be related to payment
                      that
                      reimburses an employee for medical expenses; and (4) hours
                      related to back
                      pay where credit has already been given for such hours.

                     

                  
	 	 	 	
                    (iv)

                     

                  	
                    In
                      the case
                      of an employee as defined in this paragraph 3.02(b), who transfers
                      into
                      the class of employees as defined in paragraph 3.02(a), such
                      employee’s
                      service shall consist of:

                     

                  
	 	 	 	 	
                    (A)

                     

                  	
                    his
                      service
                      as of the end of the Computation Year immediately preceding
                      the
                      Computation Year during which such transfer
                      occurred;

                  

          

        

        
          
 Page
            8

          
            
              

            

          

        

      

    

     

     

    
      	 	 	 	 	
              (B)

               

            	
              the
                greater
                of (A) the service that would be credited under the provisions of
                paragraph 3.02(a) for his service during the entire Computation year
                in
                which such transfer occurred, as if he had been an employee as defined
                in
                paragraph 3.02(a) or (B) the service taken into account under this
                paragraph 3.02(b) (for such Year) as of the date of such transfer;
                and

               

            
	 	 	 	 	
              (C)

               

            	
              for
                any
                Computation Year subsequent to the Year in which such transfer occurred
                and during which such employee is a member of the class defined in
                paragraph 3.02(a), the service taken into account under the provisions
                of
                that paragraph.

               

            
	 	 	 	
              (v)

               

            	
              In
                the case
                of an employee as defined in paragraph 3.02(a) who transfers into
                the
                class of employees as defined in this paragraph 3.02(b), such employee’s
                service shall consist of:

               

            
	 	 	 	 	
              (A)

               

            	
              the
                number of
                years of service equal to the number of one-year periods of service
                credited to him as of the date of such transfer;

               

            
	 	 	 	 	
              (B)

               

            	
              with
                respect
                to any fractional part of a full year of service possessed by him
                as of
                the date of such transfer, one hundred ninety (190) hours of service
                for
                each month or part of a month for which the employee received service
                under paragraph 3.02(a); and

               

            
	 	 	 	 	
              (C)

               

            	
              for
                the
                period subsequent to the date of such transfer, the service credited
                to
                him in accordance with this paragraph
                3.02(b).

            

    

     

    
      	 	
              3.03

               

            	
              Period
                of
                Participation

               

            
	 	 	
              Subject
                to
                subsection 7.02, a Participant in the Plan shall continue as such
                until
                all of the assets in his Account under the Plan have been distributed
                or
                otherwise disposed of in accordance with the
                Plan.

            

    

    

     

    
      	 	
              3.04

               

            	
              Effect
                of
                Layoff or Leave of Absence

               

            
	 	 	
              If
                a
                Participant is granted a leave of absence or is laid off because
                of lack
                of work, his employment with an Employer shall not be deemed to have
                terminated for the purposes of this Plan unless and until such Participant
                incurs a break in Continuity of Service and/or loses his employment
                recall
                rights.

            

    

    
      
 Page
        9

      
        
          

        

      

    

    
       

    

    
      	
              Section
                4.

               

            	
              Contributions

               

            
	 	
              4.01

               

            	
              Elections
                and
                Amount of Contributions

               

            
	 	 	
              Subject
                to
                the limitations described in this Subsection 4.01, each Participant
                may
                elect to have a portion of his Compensation, not to exceed 70%
                thereof,
                contributed
                to the Plan. Such elective deferral contributions shall be stated
                as a
                whole percentage of the Participant’s Compensation and the percentage
                elected shall be withheld from each payment of Compensation to the
                Participant. Contributions so withheld shall be deposited in the
                Plan’s
                trust fund as soon as practical after being withheld, but in no event
                later than the fifteenth day of the month following the month in
                which the
                Compensation is paid. Contributions shall be allocated to the
                Participant’s account as of the accounting date coinciding with or next
                succeeding the date they are deposited. 

               

              A
                Participant
                is permitted to make or revise his contribution election as of the
                first
                day of any payroll period in the manner prescribed by the Plan
                Administrator. Such election change will take effect beginning with
                the
                first payroll period following the date on which it was received
                in
                accordance with such procedures. The Plan Administrator may also
                change
                the frequency of election dates, suspend deferrals, or establish
                additional election dates in special circumstances, provided that
                in all
                cases the availability of election dates shall not discriminate in
                favor
                of highly compensated employees as defined in Subsection 17.02 of
                the
                Plan.

               

              The
                total
                amount of elective
                deferral contributions
                made on behalf of any Participant under this Plan, plus the total
                amount
                of before-tax elective deferrals made on behalf of the Participant
                under
                any other plan described in Code Sections 401(k) or 402(h)(1)(B)
                plus
                amounts used to purchase an annuity under Code Section 403(b) pursuant
                to
                a salary reduction agreement under Code Section 402(g)(3), in any
                calendar
                year shall not exceed the dollar amount set forth in the table set
                forth
                below (or such other dollar limitation as may then be applicable
                for such
                calendar year under Code Section
                402(g)(5)).

            

    

     

    
      	
              Year

               

            	
              Maximum
                Contribution

               

            
	
              2004

               

            	
              $13,000

               

            
	
              2005

               

            	
              $14,000

               

            
	
              2006

            	
              $15,000

            

    

    
      
 

      
        
          Page
            10

          
            
              

            

          

        

      

    

    
       

    

    
      	 	 	
              If
                the
                Participant notifies the Plan Administrator not later than March
                31 of the
                following calendar year that the limitation of this Subsection 4.01
                has
                been exceeded for any calendar year, and specifies the amount of
                contributions that must be distributed from the Plan to satisfy such
                limitation, such amount shall be distributed to the Participant
                notwithstanding any other limitation on distributions contained in
                this
                Plan and any related matching contributions, if any, shall be abated.
                

               

              A
                Participant
                who has attained the age of 50 (or will attain the age of 50 during
                the
                Plan Year), and whose elective contributions are limited either by
                the
                provisions above (relating to Code Section 402(g)) or any of the
                other
                limitations set forth in this Plan, may elect to make “catch-up”
                contributions to the Plan. Except for purposes of matching contributions
                described in Subsection 4.08 below, or as otherwise specifically
                provided,
                catch-up contributions shall be treated as elective contributions
                for all
                purposes of the Plan, but shall not be subject to any of the limitations
                on contributions except as set forth in the table below. The maximum
                amount of catch-up contributions that may be made on behalf of a
                Participant for any Plan Year under this Plan and all other plans
                maintained by an Employer or Affiliate shall be equal to the lesser
                of the
                dollar amount set forth in the following table or the elective
                contributions (other than catch-up contributions) made to such
                Participant’s Account. The Plan Administrator shall adopt procedures
                providing for eligible Participants to elect to have Catch-Up
                Contributions made in accordance with Treasury Regulations issued
                pursuant
                to Code Section 414(v).

            

    

    

     

    
      	
              Year

               

            	
              Maximum

              Catch-Up
                Contribution

               

            
	
              2004

               

            	
              $3,000

               

            
	
              2005

               

            	
              $4,000

               

            
	
              2006

            	
              $5,000

            

    

    
      
 

      
        
          Page
            11

          
            
              

            

          

        

      

    

    
      

    

    
      	 	 	
              If
                an
                eligible employee does not elect to become a Participant as of his
                initial
                eligibility date, he subsequently may elect to become a Participant
                if he
                then meets the requirements of subsection
                3.01 of the
                Plan.

               

              A
                Participant
                who is re-employed following Qualified Military Service shall have
                the
                right to have additional contributions made on his behalf in accordance
                with this Section 4.01 in an amount up to the amount of contributions
                he
                could have made during the period of Qualified Military Service.
                Such
                additional contributions shall be made by additional withholding
                over a
                period of time not to exceed three times the length of his Qualified
                Military Service (but not more than five years). Such Participant
                shall
                also be entitled to receive any other contributions he would have
                received, had he been an active Participant during such period of
                service.
                All such contributions shall be deemed to have been received during
                the
                period of Qualified Military Service for purposes of applying all
                limitations on Contributions under this Plan. For purposes of this
                Section
                4.01, a Participant shall be deemed to have received Compensation
                during
                his period of Qualified Military Service based on the rate of Compensation
                he would have received had he been an employee during such period
                or, if
                such rate cannot be determined with reasonable accuracy, based on
                his
                average Compensation received during the 12-month period (or his
                entire
                period of employment, if shorter) immediately prior to the period
                of
                military service. The provisions of this Section 4.01 shall be interpreted
                and applied in accordance with Code Section 414(u) and the Treasury
                Regulations issued thereunder.

            

    

     

    
      	 	
              4.02

               

            	
              Suspension
                of
                Authorized Contributions

               

            
	 	 	
              A
                Participant
                may voluntarily suspend his authorization of contributions under
                the Plan
                in a manner prescribed by the Plan Administrator. The contributions
                of an
                employee who ceases to meet the eligibility requirements specified
                in
                subsection 3.01 of the Plan will be suspended automatically. An employee
                whose contributions were suspended for failure to meet such eligibility
                requirements will be eligible to resume his authorization of contributions
                after he again satisfies such
                requirements.

            

    

     

    
      	 	
              4.03

               

            	
              Employer
                Payment of Authorized Contributions

               

            
	 	 	
              For
                each
                calendar month after the Effective Date, each Employer shall make
                a
                payment (or payments) of authorized contributions (hereinafter referred
                to
                as “Payment”) under the Plan in an amount equal to the total Compensation
                reduction amounts elected by Participants for that month pursuant
                to
                subsection 4.01 who are employed by that Employer during the
                month.

            

    

    

    
      Page
        12

      
        
          

        

      

    

    
      
 

    

    
      	 	
              4.04

               

            	
              Restrictions
                on Employer Payments

               

            
	 	 	
              The
                Employers’ Payments,
                Employer
                matching contributions and Employer nonelective contributions
                for any Plan
                Year which are paid or payable to the Trustee shall be made from,
                to the
                extent required by law, its net income (i.e., its net profit before
                federal and state taxes on income) for that Plan Year, or its accumulated
                profits (i.e., its net profits after federal and state taxes on income
                which have been accumulated and retained in the business), or both.
                The
                Employers’ Payments,
                Employer
                matching contributions and Employer nonelective contributions
                for a Plan
                Year which are paid or payable to the Trustee are conditioned on
                their
                deductibility under Code Section 404, shall comply with the limitations
                set forth in subsection 4.05 and shall not exceed an amount equal
                to the
                maximum amount deductible on account thereof by the Company for that
                year
                for purposes of federal taxes on
                income.

            

    

     

    
      	 	
              4.05

               

            	
              Maximum
                Payment Limitation

               

            
	 	 	
              Notwithstanding
                anything contained herein to the contrary, the amount of any Employer
                Payments,
                Employer matching contributions and Employer nonelective
                contributions
                hereunder to
                the Trustee for the Account of any Participant in any Plan Year shall
                not
                exceed $41,000 (as
                adjusted
                pursuant to
                Code
                Section
                415(d)).
                For
                purposes of applying the foregoing limitation, this Plan shall be
                aggregated with any other plan or arrangement (in which the Participant
                participates) which is established pursuant to Code Section 401(k),
                or
                which must be aggregated with this Plan pursuant to applicable
                law.

            

    

     

    
      	 	
              4.06

               

            	
              Timing
                of
                Employer Payments

               

            
	 	 	
              The
                Employers’ Payments for any calendar month shall be made to the Trustee as
                soon as practicable after the payday on which the Participant’s
                Compensation is reduced and shall be held by the Trustee pending
                investment as set forth in subsection 6.02.
                The Employer
                matching and nonelective contributions for a Plan Year shall be made
                to
                the Trustee on or before the tax return due date, with extensions,
                for the
                Employer for the applicable year.

            

    

     

    

      
        	 	
                4.07

                 

              	
                Substitute
                  Employer Payment
                  and
                  Contributions

                 

              
	 	 	
                If,
                  because
                  of the limitations specified in the second sentence of subsection
                  4.04, an
                  Employer is prevented from making all or any part of its Payments
                  required
                  under subsection 4.03,
                  Employer
                  matching contributions under subsection 4.08 and/or Employer nonelective
                  contributions under subsection 4.09
                  (and which
                  are
                  to be paid
                  to the Trustee) for any Plan Year, then so much of such Payments
                  and
                  contributions that
                  the
                  Employer is so prevented from making may be made by the Company
                  if
                  authorized by the Company, to the extent that any substitute payments
                  and
                  contributions are
                  deductible by the Company under Code Section 404.

                 

                For
                  all
                  purposes of the Plan, payments made by the Company in accordance
                  with this
                  subsection on behalf of an Employer shall be considered as having
                  been
                  made by such Employer.

              

      

    

     

    
      Page
        13

      
        
          

        

      

    

     

     

    
      	 	
              4.08

               

            	
              Employer
                Matching Contributions

               

            
	 	 	
              (a)

               

            	
              The
                Participants eligible to receive matching contributions under this
                subsection 4.08 shall be those Participants on whose behalf elective
                contributions were made during the Plan Year.

               

            
	 	 	
              (b)

               

            	
              The
                Employers
                shall contribute on behalf of each eligible Participant matching
                contributions for each Plan Year in an amount equal to fifty
                percent
                (50%) of
                the
                portion of such Participant’s elective contributions (excluding catch-up
                contributions) for that Plan Year which does not exceed six
                percent
                (6%)
                of such
                Participant’s Compensation for the year. Each Participant’s matching
                contributions shall be allocated to the Participant’s Account as of the
                last day of the period to which the matching contributions relate,
                regardless of when deposited.
                A
                Participant
                shall be one hundred percent (100%) vested in the matching contributions
                in his Account upon completion of three (3) years of Service.

            

    

     

    
      	 	
              4.09

               

            	
              Employer
                Nonelective Contributions

               

            
	 	 	
              (a)

               

            	
              The
                Participants eligible to receive nonelective contributions under
                this
                subsection 4.08 shall be those Participants who have worked through
                the
                last day of the applicable Plan Year and who have received credit
                for
                1,000 Hours Worked (as described in subsection 3.02) for such
                year.

               

            
	 	 	
              (b)

               

            	
              The
                Employers
                shall contribute on behalf of each eligible Participant nonelective
                contributions for each Plan Year in an amount equal to three percent
                (3%)
                of the Compensation of such Participant (considering only Compensation
                earned while a Participant). A Participant shall be one hundred percent
                (100%) vested in the nonelective contributions in his Account upon
                completion of three (3) years of
                Service.

            

    

    

     

    
      	
              Section
                5.

               

            	
              Allocation
                of Employer Payments
                and
                Contributions;
                Rollover Contributions; and Transfers

               

            
	 	
              5.01

               

            	
              Allocation
                of
                Employer Payments

               

            
	 	 	
              As
                of each
                accounting date (as defined in subsection 11.02), an amount equal
                to the
                Employers’ Payments,
                matching
                contributions and nonelective contributions
                will be
                allocated to the Accounts of Participants. A Participant shall have
                a
                nonforfeitable right to the assets properly allocated to his Account
                and
                the assets which, pursuant to Section 11, are in his Account at the
                time
                of distribution pursuant to Section
                7.

            

    

    
      
 Page
        14

      
        
          

        

      

     

    
      	 	
              5.02

               

            	
              Rollover
                Contributions From Other Plans

               

            
	 	 	
              (a)

               

            	
              Notwithstanding
                any other provision of the Plan to the contrary, an otherwise eligible
                employee who has received an Eligible Rollover Distribution may contribute
                to the Trustee all or a portion of such distribution (and, if not
                already
                a Participant, become a Participant) for the purpose of making a
                Rollover
                Contribution, subject to the following conditions:

               

            
	 	 	 	
              (i)

               

            	
              If
                not
                already a Participant, such an employee must enroll according to
                the
                method prescribed by the Plan Administrator.

               

            
	 	 	 	
              (ii)

               

            	
              Any
                Rollover
                Contribution shall be received by the Employer in a direct rollover,
                or on
                or before the 60th day following the date on which the employee receives
                such distribution.

               

            
	 	 	 	
              (iii)

               

            	
              Any
                Rollover
                Contribution shall not include any amount treated as “employee
                contributions.”

               

            
	 	 	 	
              (iv)

               

            	
              Rollover
                Contributions shall be made solely in cash; where an Eligible Rollover
                Distribution consists in whole or part of property other than cash,
                such
                property must first be converted into cash before it can be received
                by
                the Trustee.

               

            
	 	 	
              (b)

               

            	
              The
                assets
                from such Rollover Contribution(s) shall be invested in one or more
                of the
                investment funds in accordance with the election of the Participant
                pursuant to subsection 6.03 (Investment Fund Elections).

               

            
	 	 	
              (c)

               

            	
              Rollover
                Contributions shall be made to and from a part of each investment
                fund
                elected at the price per share or unit value determined thereunder.
                Earnings on amounts invested shall be credited and invested in accordance
                with Section 11 of the Plan. If a Participant’s Rollover Contribution
                exceeds the maximum amount which may be contributed pursuant to
                subparagraph 5.02(a)(iii), the assets purchased with such excess
                contribution (and earnings on such assets) shall be returned to the
                Participant as soon as practicable after notification of such excess
                contribution is received by the Participant’s Employer.

               

            
	 	 	
              (d)

               

            	
              For
                purposes
                of Sections 4 (Contributions) and 17 (Participation Test Limitation),
                Rollover Contributions should not be considered as authorized
                Contributions (Employer Payments).

               

            
	 	 	
              (e)

               

            	
              As
                used
                herein -

               

            
	 	 	 	
              (i)

               

            	
              The
                term
                “Eligible Rollover Distribution” means a distribution defined in Code
                Section 402(c)(4) from a pension, profit sharing, stock bonus, or
                other
                plan that is qualified under Section 401(a) and exempt from tax under
                Code
                Section 501(a).

               

            
	 	 	 	
              (ii)

               

            	
              The
                term
                “Rollover Contribution” means the amount of an Eligible Rollover
                Distribution that may be contributed to the Trustee pursuant to this
                subsection 5.02.

            

    

    

    
      Page
        15

      
        
          

        

      

    

    
       

       

    

    
      	 	
              5.03

               

            	
              Transfers
                from Other Plans.

               

            
	 	 	
              Notwithstanding
                any other provision of the Plan to the contrary, an otherwise eligible
                employee may elect to have transferred to the Trustee all or a portion
                of
                any amount which would otherwise be an Eligible Rollover Distribution
                as
                defined in subparagraph 5.02(e)(i); except that no assets which are
                or are
                deemed to be employee contributions may be so transferred to the
                Trustee.
                Any such election shall be made in such form and at such time as
                may be
                directed by the Plan Administrator (and, if not already a Participant,
                such employee may become a Participant by making the election). Any
                amount
                so transferred shall be accounted for separately and invested in
                accordance with subparagraphs 5.02(b) and (c) as if such amount were
                a
                Rollover Contribution. If any such transfer includes property other
                than
                money, the Trustee may in its sole discretion refuse to accept such
                transfer, may accept such transfer and may sell such property, or
                may
                condition its acceptance of such transfer on such terms and conditions
                as
                it deems reasonable.

            

    

     

    
      	 	
              5.04

               

            	
              Transfers
                to
                Other Plans

               

            
	 	 	
              A
                Participant
                may elect a transfer to the trustee of an eligible retirement plan
                as
                defined by Code Section 402(c)(8) of all or a portion of any amount
                which,
                if distributed to him, would be includible in gross income and which
                qualifies as an “eligible rollover distribution” under Code Section
                402(c)(4), subject to the following: any such transfer shall include
                only
                assets otherwise distributable to him under the Plan. With respect
                to each
                such transfer, the Participant may elect only one recipient trustee
                of the
                eligible plan or individual retirement account or annuity, as the
                case may
                be. Any such transfer shall be made by the Trustee of this Plan,
                provided
                the transferee plan provides for the receipt of such a transfer and
                agrees
                to accept such transfer. Any such election shall be made in such
                form and
                at such time as may be directed by the Plan
                Administrator.

            

    

     

    
      	
              Section
                6.

               

            	
              The
                Trust Fund and the Investment Funds

               

            
	 	
              6.01

               

            	
              The
                Trust
                Fund

               

            
	 	 	
              A
                separate
                trust fund shall be established for purposes of the Plan. The trust
                fund
                will consist of all money, stocks, bonds, securities and other property
                held or acquired by the Trustee in accordance with the Plan and trust
                agreement.

            

    

    
      
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        16

      
        
          

        

      

    

    
       

       

    

    
      	 	
              6.02

               

            	
              The
                Investment Funds

               

            
	 	 	
              The
                Plan
                Administrator shall from time to time designate various investment
                funds
                and other alternative arrangements among which Participants may direct
                their investments. Pending investment, reinvestment or distribution
                as
                provided in the Plan, the Trustee may temporarily retain the assets
                of any
                one or more of the investment funds in cash, commercial paper, short-term
                government obligations, or undivided interest or participation in
                common
                or collective short-term investment funds, including the short-term
                investment or cash reserves fund of the Trustee. The Plan Administrator
                in
                his discretion may direct the Trustee to establish other investment
                funds,
                including but not limited to a fixed income fund, may direct the
                Trustee
                to terminate any of the investment funds, may direct the Trustee
                to
                segregate a portion of an investment fund into a separate sub-fund,
                may
                appoint an investment manager to direct the investment and reinvestment
                of
                the assets of any fund or sub-fund and terminate any such appointment,
                and
                may direct the Trustee to invest the assets of any fund or sub-fund
                in any
                designated commingled or collective fund, mutual fund or insurance
                contract, as the Plan Administrator from time to time considers
                appropriate and in the best interests of the Participants. The funds
                established hereunder may be referred to collectively as the “investment
                funds” and individually as an “investment
                fund.”

            

    

     

    
      	 	
              6.03

               

            	
              Investment
                Fund Elections

               

            
	 	 	
              A
                Participant
                shall direct the investment of his Accounts among the various investment
                funds and other alternative arrangements designated from time to
                time by
                the Plan Administrator as described in subsection 6.02 above. The
                Plan
                Administrator shall establish a written procedure to govern such
                investments, which procedure shall satisfy the requirements of Section
                404(c) of ERISA and the regulations thereunder, including without
                limitation the establishment of at least three investment funds that
                provide sufficient diversification, the identification of fiduciaries
                who
                are obligated to carry out Participant investment elections, and
                any
                limitations on permissible investments. The Plan Administrator, or
                a
                person designated by the Plan Administrator shall be the fiduciary
                designated to ensure that Participants’ investment elections are
                processed, and to furnish the disclosures required under applicable
                regulations. If a Participant fails to make an election under this
                subsection, his share of the Employer Payments will be invested in
                the
                short-term investment or cash reserves
                fund.

            

    

     

    
      	 	
              6.04

               

            	
              Investment
                Fund Transfers

               

            
	 	 	
              A
                Participant
                or his beneficiary may elect that all or a part of the interest of
                his
                Account in an investment fund shall be liquidated and the proceeds
                thereof
                transferred to one or more of the other investment funds. Each such
                election shall be made at such time, in such manner, and with respect
                to
                such investment funds as the Plan Administrator shall determine,
                and shall
                be effective only in accordance with such rules as the Plan Administrator
                shall establish and publish from time to time.

               

              The
                Plan
                Administrator may, in its discretion, impose restrictions on Participants’
                exercise of their authority to direct investments, as necessary to
                prevent
                market timing and other similar trading
                activity.

            

    

    
      
 

      
        
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            17

          
            
              

            

          

        

      

    

     

    
      	 	
              6.05

               

            	
              Investment
                in
                Company Shares

               

            
	 	 	
              Participants
                may elect to have a portion or all of their Accounts invested by
                the
                Trustee in the Company Stock Fund. Company Shares purchased by the
                Trustee
                shall be either previously issued shares or newly issued shares.
                Company
                Shares shall be purchased by the Trustee from any source including
                the
                Company at such times and in such manner as shall be determined by
                the
                Trustee in its sole discretion. Newly issued shares sold by the Company
                shall be priced at the closing price for Company Shares on the New
                York
                Stock Exchange on the date of purchase. Company Shares purchased
                from any
                source, including the Company, shall be charged to the Accounts of
                Participants at the average price per share paid by the Trustee for
                such
                shares (excluding brokerage commissions, transfer taxes, and other
                costs
                of purchase). For purposes of valuing interests in the Company Stock
                Fund
                and/or charges therefore to Participants’ Accounts, the Plan Administrator
                may establish such rules as it deems appropriate and also may adjust
                the
                average price per share as may be necessary to reflect appropriately
                the
                effect of any stock dividend, stock split, subdivision, reclassification,
                combination or other event affecting Company Shares held or acquired
                hereunder. Cash dividends and cash proceeds received by the Trustee
                in any
                month with respect to Company Shares held in the Company Stock Fund
                shall
                be credited to such Fund. Company Shares received by the Trustee
                as a
                stock dividend or because of a stock split, recapitalization or the
                like,
                as well as rights, warrants and options, if any, issued with respect
                to
                Company Shares, shall be allocated to Company Shares to which they
                appertain.

            

    

     

    
      	
              Section
                7.

               

            	
              Distribution
                of a Participant’s Account

               

            
	 	
              7.01

               

            	
              Amount
                and
                Form of Distribution

               

            
	 	 	
              Except
                as
                provided otherwise in subsection 7.02, distribution will include
                all
                assets in a Participant’s Account. The distribution shall be made in cash
                unless the Participant (or beneficiary or beneficiaries if he is
                deceased)
                elects to receive Company Shares in kind. The value of any full or
                fractional shares paid in cash will be based upon the average price
                per
                share the Trustee receives from sales of Company Shares for the purpose
                of
                making distribution. In accordance with rules established by the
                Plan
                Administrator, any such election shall be in writing and filed with
                the
                Plan Administrator prior to distribution and Company Shares distributed
                to
                a Participant shall be registered in the Participant’s name and/or in the
                name of such other person or persons as the Participant shall
                designate.

            

    

    
      
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        18

      
        
          

        

      

    

    
       

       

    

    
      	 	
              7.02

               

            	
              Time
                of
                Distributions and Withdrawals

               

            
	 	 	
              (a)

               

            	
              Prior
                to
                termination of employment, no withdrawal of the assets in a Participant’s
                Account may be made, except that (i) a Participant may withdraw once
                each
                year any assets in his Account (other than from the insurance contract
                fund or funds) if he has attained age 59-1/2 years, or he incurs
                a
                hardship and as a result of that hardship a withdrawal is permitted
                pursuant to the Internal Revenue Code and rulings and regulations
                thereunder; and (ii) distribution will begin no later than April
                1 of the
                calendar year following the year in which (A) the Participant attains
                age
                70-1/2 years for those Participants who reach age 70-1/2 years on
                and
                after January 1, 1988, or (B) he retires if he remains employed on
                or
                after January 1, 1997, beyond age 70-1/2 years, elects to defer
                commencement of his distribution until retirement, and such election
                is
                made prior to commencement of such distribution.

               

            
	 	 	
              (b)

               

            	
              Upon
                termination of employment for any reason, distribution will be made
                as
                soon as practicable unless the Participant elects otherwise.

               

            
	 	 	
              (c)

               

            	
              A
                Participant
                (but not a beneficiary) may elect to defer distribution of the assets
                otherwise distributable for any period following the date his employment
                is terminated which does not extend beyond the month in which the
                Participant attains age 70. If the Participant’s Account balance does not
                exceed $5,000 (or such higher amount provided under the Code), the
                entire
                amount of the Account shall be distributed to such Participant as
                soon as
                administratively feasible, in accordance with rules and procedures
                established by the Plan Administrator. For this purpose, the Account
                balance includes any outstanding loans but does not include rollover
                contributions (but the balance of his rollover contributions shall
                also be
                distributed if the remainder of his Account does not exceed $5,000,
                or
                such higher amount provided under the Code).

               

            
	 	 	
              A
                Participant
                may revoke his election to defer his distribution. On the expiration
                of
                such period of deferral or upon such revocation, distribution shall
                be
                made in a lump sum as soon as practicable thereafter. Such election
                shall
                be in writing and in accordance with rules established by the Plan
                Administrator. For purposes of this subsection, a Participant’s
                termination of employment shall include any termination because of
                total
                and permanent disability as determined by his Employer in accordance
                with
                the disability provisions of the Employer retirement plan which applies
                or
                which would apply in his case.

            

    

     

    
      	 	
              7.03

               

            	
              Loans

               

            
	 	 	
              A
                Participant
                may borrow against his Account, subject to the provisions set forth
                herein. Such loans shall be available to all Participants on a reasonably
                equivalent basis and shall not be made available to highly compensated
                employees (as defined in subsection 17.02 of the Plan), officers
                or
                shareholders in an amount greater than the amount (stated as a percentage
                of the Participant’s Account) made available to other
                Participants.

            

    

    
      
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        19

      
        
          

        

      

    

    
       

    

    

    
      	 	 	
              A
                loan to any
                Participant, when added to the outstanding balance of all other loans
                to
                him from the Plan, shall not exceed the lesser of (i) 50 percent
                of the
                vested portion of the Participant’s Account balance or (ii) $50,000
                reduced by the excess (if any) of (A) the highest outstanding balance
                of
                loans from the Plan during the one-year period ending on the day
                before
                the date of the loan over (B) the outstanding balance of loans from
                the
                Plan on the date of the loan.

               

              Each
                loan to
                a Participant shall provide for repayment over a period not to exceed
                five
                years, or a longer term in the case of a loan that is used to acquire
                any
                dwelling unit which within a reasonable time is used (determined
                at the
                time the loan is made) as the principal residence of the Participant.
                Each
                such loan shall provide for substantially level amortization (with
                payments not less frequently than quarterly) over the term of the
                loan.
                Notwithstanding the foregoing, payments shall be suspended during
                any
                Leave of Absence; provided that, except for Qualified Military Service,
                the period during which payments are suspended shall not exceed one
                year,
                and shall not have the effect of extending the term of the loan.
                Each such
                loan shall bear interest at a reasonable rate to be determined by
                the
                Trustee in a nondiscriminatory manner, taking into consideration
                interest
                rates currently being charged by commercial lending institutions
                for
                similar loans.

               

              Each
                loan
                made to a Participant shall be secured by not more than 50 percent
                of the
                vested portion of the Participant’s
                Account. Each Participant who is an employee shall be required
                to execute
                a
                wage withholding agreement providing for payments of principal and
                interest to be withheld from his compensation. Each loan shall also
                provide
                that termination of employment by the Participant is an event of
                default,
                whether or not a distribution is made from the Participant’s Account,
                permitting the balance of the loan to be offset against the Participant’s
                Account. 

               

              The
                loan
                shall for purposes of Section 6 be treated as an investment of the
                funds
                credited to the Participant’s Account. For purposes of the accounting
                adjustments until the loan is repaid in full, the Plan Administrator
                shall
                reduce the Participant’s Account balance by the unpaid balance on such
                loan and shall increase his Account by the amount of interest and
                other
                payments made by the Participant. Each such reduction or increase
                shall be
                applied to the Participant’s Account and the investment funds in which his
                Account is invested in such proportions as he may specify in accordance
                rules and procedures adopted by the Plan Administrator, or, if he
                fails to
                specify the proportions, shall be applied proportionately to such
                investment funds.

               

              No
                loan shall
                be made to any Participant in an amount of less than $1,000, or such
                lesser amount as the Plan Administrator may establish on a uniform
                basis.
                The Plan Administrator may establish additional restrictions on the
                number, frequency, or terms of loans (including fees charged therefor),
                provided that such restrictions are applied in a uniform and
                non-discriminatory manner and do not cause loans to fail to be available
                to Participants on a reasonably equivalent
                basis.

            

    

    

    
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        20

      
        
          

        

      

    

    
      

        
          	 	
                  7.04

                   

                	
                  Hardship
                    Withdrawals

                   

                
	 	 	
                  A
                    Participant
                    may receive a hardship withdrawal from the portion of his Account
                    balance
                    attributable to his elective contributions. In order to receive
                    a hardship
                    withdrawal, the Participant must demonstrate:

                   

                
	 	 	
                  	
                      the
                        Participant’s need to pay medical expenses (as defined in Code Section
                        213(d)) for the Participant, his spouse, or one of his dependents
                        (as
                        defined in Code Section 152);

                    
	
                      the
                        Participant’s need to purchase the Participant’s principal residence
                        (excluding mortgage payments);

                    
	
                      the
                        Participant’s need to pay tuition, related fees, and room and board for
                        up to twelve months of post-secondary education for the Participant,
                        his
                        spouse, one of his children, or one of his dependents (as
                        defined in
                        Code Section 152); or

                    
	
                      the
                        Participant’s need to pay rent to avoid eviction from his principal
                        residence, or mortgage payments to avoid foreclosure on his
                        principal
                        residence.

                    

                
	 	 	
                  A
                    hardship
                    withdrawal must be limited to the amount reasonably necessary
                    to satisfy
                    the financial need described above (after payment of all income
                    taxes and
                    penalties on the withdrawal). A withdrawal will be considered
                    reasonably
                    necessary to satisfy a financial need only if it satisfies the
                    following
                    criteria:

                   

                
	 	 	
                  	
                      the
                        Participant’s elective deferrals (as hereinafter defined) are suspended
                        for a period of at least twelve months (six months in the
                        case of a
                        hardship withdrawal made after December 31, 2001) after the
                        withdrawal
                        under all plans maintained by any Employer; 

                    
	
                      the
                        maximum
                        amount of such elective deferrals for the calendar year following
                        the
                        year of the withdrawal are limited to the amount set forth
                        in subsection
                        4.01 reduced by all elective deferrals made prior to the
                        withdrawal in
                        the year of the withdrawal. For this purpose, the term elective
                        deferrals includes all compensation the payment of which
                        is deferred on
                        a pre-tax basis, including that deferred under non-qualified
                        plans;
                        and

                    
	
                      the
                        Participant has obtained all other distributions permitted
                        under
                        paragraph (a) and loans permitted under subsection 7.03
                        above.

                    

                

        

      

       

    

     

    
      	 	
              7.05

               

            	
              To
                Whom
                Distributions are Made

               

            
	 	 	
              Distributions
                will be made to the Participant. However, if the Participant is deceased
                at the time of distribution, the distribution will be made to the
                beneficiary or beneficiaries as provided in subsection
                7.06.

            

    

    
      
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        21

      
        
          

        

      

    

    
       

       

    

    
      	 	
              7.06

               

            	
              Designation
                of Beneficiaries

               

            
	 	 	
              Each
                Participant who, at the date of his death, has been married for one
                year
                or more shall be deemed to have designated his spouse as 100% beneficiary
                unless such spouse consents in writing to another beneficiary or
                beneficiaries. Such consent shall acknowledge the effect thereof,
                and
                shall be witnessed by a representative of the Plan or a notary public
                but
                such consent shall not be required if the Participant submits a notarized
                statement that the spouse cannot be located or if, because of such
                other
                circumstances as may be prescribed in applicable regulations, such
                consent
                cannot be obtained. Consent and such notarized statement shall be
                on a
                form approved by the Company or its designee. If there is no such
                spouse,
                or if the spouse has so consented or if under applicable law such
                consent
                is not required, then the Participant from time to time may name
                any
                person or persons (who may be named contingently or successively)
                to whom
                the assets in his Account shall be distributed in case of his death
                before
                he receives all of such assets. In the absence of any designation
                to the
                contrary, a Participant’s named beneficiary shall be the same beneficiary
                or beneficiaries of his estate.

            

    

     

    
      	
              Section
                8.

               

            	
              Participant’s
                Statement

               

            
	 	
              At
                least once
                each Plan Year, each Participant will be furnished a statement showing
                the
                assets credited to the Participant’s Account. Each such statement shall be
                conclusive on the Participant unless written exceptions or objections
                to
                such statement are filed within thirty days after the date furnished
                to
                the Participant.

            

    

     

    
      	
              Section
                9.

               

            	
              Voting
                of Company Shares

               

            
	 	
              All
                Company
                Shares held or acquired by the Trustee under the Plan will be registered
                in the name of the Trustee or its nominee. Each Participant shall
                be
                entitled to vote the Shares representing his interest in the Company
                Stock
                Fund owned (insofar as practicable considering fractional interests
                in
                shares) by providing written direction to the Trustee as to how such
                Shares should be voted. A copy of the notice and proxy statement
                for each
                meeting of the holders of Company Shares will be mailed to each
                Participant at the same time mailed to shareholders, together with
                an
                appropriate form for the Participant’s use in instructing the Trustee with
                respect to voting the Company Shares that, at the record date for
                determination of the shareholders entitled to notice of, and to vote
                at,
                the meeting, are both (i) representing the interest of the Participant
                in
                the Company Stock Fund and (ii) of record in the name of the Trustee
                or
                its nominee. The Shares of Participants who do not provide timely
                instructions to the Trustee will not be
                voted.

            

    

    
      
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        22

      
        
          

        

      

    

    
       

    

    
      	
              Section
                10.

               

            	
              Trustee
                and Plan Administrator

               

            
	 	
              10.01

               

            	
              The
                Trustee

               

            
	 	 	
              The
                Plan
                Administrator shall designate a corporate Trustee (or Trustees) --
                referred to herein as “the Trustee” -- to act under the Plan and will
                enter into and execute such trust agreement or agreements -- referred
                to
                herein as the “trust agreement” -- with the Trustee as it may consider
                necessary or appropriate in order to carry out the provisions of
                the Plan.
                The Plan Administrator may at any time remove a Trustee and appoint
                a
                successor Trustee or Trustees. The Plan Administrator from time to
                time
                may enter into such other agreements with a Trustee or other parties,
                make
                such amendments to such agreements and take such other steps as they
                may
                deem necessary or desirable, without reference to (or action by)
                any
                Participant or beneficiary of a Participant. Except to the extent
                expressly provided in the Plan, no Participant or beneficiary of
                a
                Participant shall have any interest under any such agreement. A Trustee
                and the Plan Administrator may, by agreement in writing, arrange
                for the
                delegation by such Trustee of any of the functions of such Trustee
                to any
                Employer, any one or more employees of the Company or the Employers,
                the
                Plan Administrator, or such banks or trust companies as the Plan
                Administrator shall select.

            

    

     

    
      	 	
              10.02

               

            	
              Plan
                Administrator

               

            
	 	 	
              The
                Plan
                Administrator shall be the Vice President - Human Services Division
                of the
                Company. In the administration of the Plan, the Plan Administrator
                shall
                have the following powers, rights and duties in addition to those
                vested
                in him elsewhere in the trust agreement and the Plan:

               

            
	 	 	
              (a)

               

            	
              To
                adopt such
                rules of procedure and regulations as in his opinion may be necessary
                for
                the proper and efficient administration of the Plan and as are consistent
                with the Plan and the trust agreement.

               

            
	 	 	
              (b)

               

            	
              To
                enforce
                the Plan in accordance with its terms and with such applicable rules
                and
                regulations as are adopted by the Plan Administrator as
                above.

               

            
	 	 	
              (c)

               

            	
              To
                determine
                all questions arising under the Plan, including the power to determine
                the
                rights and eligibility of Participants (and their beneficiaries)
                and the
                value of their respective Accounts under the Plan.

               

            
	 	 	
              (d)

               

            	
              To
                maintain
                and keep adequate records concerning the respective Accounts of
                Participants as specified herein and concerning the Plan Administrator’s
                decisions and actions which records shall be open to the inspection
                of the
                Employers at all reasonable times.

            

    

    
      
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        23

      
        
          

        

      

    

    
 

    
      	 	 	
              The
                Plan
                Administrator may act or take action regarding financial aspects
                of the
                Plan in accordance with any direction provided by the benefit funds
                committee established pursuant to resolution of the Company’s Board of
                Directors. The Plan Administrator may execute any instrument or document
                by signing one instrument or document or multiple counterparts of
                such
                instrument or document, and may authorize any agent to sign any document
                on his behalf. Subject to subsection 13.03, and unless otherwise
                expressly
                provided in any applicable collective bargaining agreement, any decision
                by the Plan Administrator on any matter within his discretion shall
                be
                final, binding and conclusive upon all Participants and may be relied
                upon
                by the Employers, Employees, the Trustee, and all other persons
                whomsoever. The certificate of the Plan Administrator that he has
                taken or
                authorized any action shall be conclusive in favor of any person
                acting in
                reliance thereon. The Plan Administrator shall furnish to the Employers
                such information in his possession or within his control as the Employer
                considers necessary to perform its functions hereunder and under
                the trust
                agreement. To the extent permitted by law, neither the Plan Administrator
                nor any director, officer, or employee of the Company or the Employers
                shall incur any personal liability of any nature in connection with
                any
                act done or omitted to be done in good faith under or in connection
                with
                the Plan.

            

    

     

    
      	
              Section
                11.

               

            	
              Accounting

               

            
	 	
              11.01

               

            	
              Participant
                Accounts

               

            
	 	 	
              The
                Plan
                Administrator shall establish and maintain the following separate
                Accounts
                with respect to Participants:

               

            
	 	 	
              (a)

               

            	
              401(k)
                Contributions Account. A 401(k) Contributions Account shall be maintained
                on behalf of each Participant who elects to have Contributions under
                Subsection 4.01, including Catch-Up Contributions, made on his behalf,
                plus the Participant’s elective deferrals, if any, transferred to the Plan
                from TDSP.

               

            
	 	 	
              (b)

               

            	
              Matching
                Contributions Account. A Matching Contributions Account shall be
                maintained on behalf of each Participant who is allocated any matching
                contributions
                under the
                Plan.

               

            
	 	 	
              (c)

               

            	
              Nonelective
                Contributions Account. A Nonelective Contributions Account shall
                be
                maintained on behalf of each Participant who is allocated any nonelective
                contributions under the Plan.

               

            
	 	 	
              (d)

               

            	
              Rollover
                Account. A Rollover Account shall be maintained on behalf of each
                Participant who elects to make a Rollover Contribution to the
                Plan.

               

            
	
               

               

            	 	
              Each
                Account
                shall represent the aggregate amount of the type of Contribution
                referred
                to above, less any withdrawals or distributions charged thereto,
                and
                adjusted by the earnings, gains, losses, expenses, and unrealized
                appreciation or depreciation attributable to such Contributions.
                The
                maintenance of separate Account balances shall not require physical
                segregation of plan assets with respect to any Account. The Accounts
                maintained hereunder represent the Participants’ interests in the Plan and
                Trust and are intended as bookkeeping records to assist the Plan
                Administrator in the administration of the Plan. Any reference to
                a
                Participant’s “Accounts” or “Account Balances” shall refer to all of the
                Accounts maintained in the Participant’s name under the Plan unless the
                context otherwise requires.

            

    

    
      
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        24

      
        
          

        

      

    

     

     

    
      	 	
              11.02

               

            	
              Adjustments
                of Participants’ Accounts

               

            
	 	 	
              (a)

               

            	
              Accounting
                Dates. The end of each Plan Year shall be an Accounting Date. The
                day on
                which the Plan terminates or results in a partial termination with
                respect
                to any Employer or group of Participants or is merged with any other
                plan
                shall also be an Accounting Date. As to Accounts maintained in any
                investment fund which is valued daily, each business day on which
                the New
                York Stock Exchange is open for business shall be deemed to be an
                Accounting Date.

               

            
	 	 	
              (b)

               

            	
              Accounting
                Date Adjustments. As of each Accounting Date, the Trustee
                shall:

               

            
	 	 	 	
              (i)

               

            	
              First,
                charge
                to the proper Accounts all payments or distributions made from the
                Accounts since the immediately preceding Accounting Date.

               

            
	 	 	 	
              (ii)

               

            	
              Second,
                adjust the Account Balances upward or downward, on a proportional
                basis,
                according to the net gain or loss of the Trust assets from investments
                (as
                reflected by interest payments, dividends, realized and unrealized
                gains
                and losses on securities and other investment transactions), so that
                the
                aggregate Account Balances equal the fair market value (as determined
                by
                the Trustee, but excluding all unpaid items of income or expense)
                of the
                Trust assets on such Accounting Date.

               

            
	 	 	 	
              (iii)

               

            	
              Third,
                allocate and credit all Contributions.

               

            
	 	 	
              (c)

               

            	
              Timing
                of
                Adjustments. Every adjustment made pursuant to this Subsection 11.02
                shall
                be considered as having been made as of the Accounting Date regardless
                of
                the dates of actual receipt of Contributions or payment of distributions
                by the Trustee during the period ending on the Accounting Date.
                Notwithstanding the foregoing, the Trustee may adopt, or the Plan
                Administrator may direct the Trustee to adopt, any reasonable, consistent,
                and non-discriminatory method of accounting for the receipt of
                Contributions and payment of distributions. The Trustee’s determination as
                to the value of the assets of the Trust and the charges or credits
                to the
                Accounts of the Participants shall be conclusive and binding on all
                persons.

            

    

    
      
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        25

      
        
          

        

      

     

    
      	 	
              11.03

               

            	
              Fund
                Accounting

               

            
	 	 	
              (a)

               

            	
              Manner
                of
                Accounting. To the extent the Trust is divided into separate funds
                and
                alternative investment arrangements (collectively, “funds”), including
                those established pursuant to Subsection 6.02, the undivided interest
                of
                each Participant’s Account in each such fund shall be determined under the
                principles set forth in Subsection 11.02 but in accordance with the
                accounting procedures specified in the trust agreement, investment
                management agreement, insurance contract, custodian agreement or
                other
                document under which such fund is maintained. To the extent not
                inconsistent with such procedures, the following rules shall
                apply:

               

            
	 	 	 	
              (i)

               

            	
              Amounts
                deposited in a fund shall be deposited by means of a transfer of
                such
                amounts to such fund from another fund as required.

               

            
	 	 	 	
              (ii)

               

            	
              Amounts
                required to be transferred from a fund to satisfy benefit payments
                shall
                be transferred from such investment funds as soon as practicable
                following
                receipt by the trustee or investment manager of proper instructions
                to
                complete such transfers.

               

            
	 	 	 	
              (iii)

               

            	
              Except
                as
                provided in the applicable fund document, all amounts deposited in
                a fund
                shall be invested as soon as practical following receipt of such
                deposit.
                Notwithstanding the primary purpose or investment policy of a fund,
                assets
                of any fund which are not invested in the manner required by the
                fund
                document shall be invested in such short term instruments or funds
                as the
                Trustee or investment manager shall determine pending investment
                in
                accordance with such investment policy.

               

            
	 	 	
              (b)

               

            	
              Separate
                Participant Accounts. Notwithstanding the foregoing, if any portion
                of the
                Trust is invested in a fund that permits each Participant’s interest in
                the fund to be accounted for as a separate account, all Contributions,
                distributions, and earnings shall be accounted for as they are actually
                received, disbursed, or earned. 

            

    

     

    
      	
              Section
                12.

               

            	
              No
                Reversion to Employers

               

            
	 	 	
              The
                Employers
                shall not have any beneficial interest in the trust fund, or any
                part
                thereof, and no part of the trust fund shall ever revert or be repaid
                to
                the Employers, either directly or
                indirectly.

            

    

    
      
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        26

      
        
          

        

      

    

    
       

    

    
      	
              Section
                13.

               

            	
              Miscellaneous

               

            
	 	
              13.01

               

            	
              Information
                to Participants

               

            
	 	 	
              Any
                notice,
                statement or other communication required or permitted to be given
                hereunder to an employee, a Participant or beneficiary of a Participant
                will be properly given if delivered or mailed, postage prepaid, to
                the
                employee, Participant or beneficiary of a Participant at his last
                post
                office address shown on the Employers’ records, or if (in the case of an
                employee) delivered to him at his normal work station. Any notice
                or other
                communication from an employee, Participant or beneficiary to the
                Plan
                Administrator, the Employers, or the Trustee shall be in such form
                as may
                be prescribed by the Plan Administrator and shall be properly given
                or
                filed if delivered or mailed by registered or certified mail, postage
                prepaid, to the Plan Administrator, the Employers, or the Trustee,
                as the
                case may be, at such address as may be specified from time to time
                by the
                Plan Administrator.

            

    

    

    
      	 	
              13.02

               

            	
              Nonassignability.

               

            
	 	 	
              Except
                with
                respect to indebtedness owing hereunder and except as provided in
                Section
                16, the interests of Participants and their beneficiaries under the
                Plan
                are not in any way subject to their debts or other obligations and
                may not
                be voluntarily or involuntarily sold, transferred or assigned. When
                a
                Participant or the beneficiary of a Participant is under legal disability,
                or in the Plan Administrator’s opinion is in any way incapacitated so as
                to be unable to manage his financial affairs, the Plan Administrator
                may
                have the Trustee make distributions to the Participant’s or beneficiary’s
                legal representatives for his benefit, or the Plan Administrator
                may have
                the Trustee apply any distribution for the benefit of the Participant
                or
                beneficiary in any manner that the Plan Administrator determines.
                Any
                amount alienated or assigned to an Employer shall not exceed 10%
                of the
                amount payable under the Plan to the Participant or beneficiary and
                such
                alienation or assignment shall be revocable at any time by the person
                making such alienation or
                assignment.

            

    

     

    
      	 	
              13.03

               

            	
              Notice
                of
                Claim Denial

               

            
	 	 	
              The
                Plan
                Administrator or his delegate will provide adequate notice in writing
                to
                any employee, Participant or beneficiary whose claim for benefits
                under
                the Plan has been denied, setting forth the specific reasons for
                such
                denial. Subject to the express provisions of any applicable collective
                bargaining agreement, the employee, Participant or beneficiary will
                be
                given an opportunity for a full and fair review by the Plan Administrator
                (or his delegate) of the decision denying the claim. The employee,
                Participant or beneficiary will be given 60 days from the date of
                the
                notice denying such claim within which to request such
                review.

            

    

     

    
      	 	
              13.04

               

            	
              Records

               

            
	 	 	
              The
                records
                of the Plan Administrator, the Employers, and the Trustee with respect
                to
                the Plan and trust fund shall be conclusive on all employees, Participants
                and beneficiaries unless shown to the Plan Administrator’s satisfaction to
                be incorrect.

            

    

    
      
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        27

      
        
          

        

      

    

     

     

    
      	 	
              13.05

               

            	
              Absence
                of
                Guaranty

               

            
	 	 	
              Neither
                the
                Trustee, the Plan Administrator, nor any Employer in any way guarantees
                the trust fund from loss or depreciation, or the payment of any cash
                or
                other assets which may be or become due to any person from the trust
                fund.
                To the extent permitted by law, the liability of the Trustee to make
                any
                payment or distribution under the Plan will be limited to the available
                assets of the trust fund.

            

    

     

    
      	 	
              13.06

               

            	
              Mistake
                of
                Fact

               

            
	 	 	
              Any
                mistake
                of fact in any certificate, notice, or other document filed with
                any
                employee, Participant, beneficiary, the Employers, the Plan Administrator,
                the Trustee or any other person shall be corrected when it becomes
                known;
                and the Plan Administrator, insofar as may be practicable, shall
                make any
                adjustment required in a manner which, in his sole discretion, is
                equitable.

            

    

     

    
      	 	
              13.07

               

            	
              Action
                by
                Employer

               

            
	 	 	
              Any
                action
                required or permitted to be taken by any Employer hereunder may,
                except as
                otherwise expressly provided, be taken by the President or any Vice
                President of such Employer or by any other person designated by the
                President or any Vice President of such Employer to act for the
                Employer.

            

    

     

    
      	 	
              13.08

               

            	
              Employment
                Rights

               

            
	 	 	
              Participation
                in the Plan will not give any employee of an Employer any right to
                be
                retained in the service of the Company or its subsidiaries, nor any
                right
                to claim any benefit under the Plan unless such right or claim has
                specifically accrued under the terms of the
                Plan.

            

    

     

    
      	 	
              13.09

               

            	
              Gender
                and
                Number

               

            
	 	 	
              Where
                the
                context admits, words in the masculine gender shall include the feminine
                gender, the plural shall include the singular, and the singular shall
                include the plural.

            

    

     

    
      	 	
              13.10

               

            	
              Waiver
                of
                Notice

               

            
	 	 	
              Any
                notice
                required under the Plan may be waived by the person entitled
                thereto.

            

    

    
 Page
      28
      

    

    
       

    

    
      	 	
              13.11

               

            	
              Attorneys,
                Agents, Accountants, etc.

               

            
	 	 	
              The
                Plan
                Administrator may employ such agents, attorneys, accountants, and
                other
                persons (who also may be employed by the Employers) as in his opinion
                may
                be necessary or desirable for proper administration of the Plan and
                trust
                agreement and to advise the Plan Administrator, and pay them a reasonable
                compensation. The Plan Administrator may delegate to any agent, attorney,
                accountant, or other person selected by him, any power or duty vested
                in,
                imposed upon, or granted to him by this Plan or the trust agreement,
                and
                the Plan Administrator may act or refrain from acting on the advice
                or
                opinion of reputable agents, attorneys, accountants or other persons
                selected as above with reasonable diligence, without liability for
                so
                doing and without court action.

            

    

     

    
      	 	
              13.12

               

            	
              Limitation
                of
                Liability

               

            
	 	 	
              To
                the extent
                permitted by law, neither the Trustee, the Plan Administrator, nor
                any
                Employer or any director, officer or employee of any Employer, shall
                have
                any personal liability of any nature for any act done or omitted
                to be
                done in good faith, under or in connection with the Plan and the
                trust
                fund, including but not limited to delay in the making of any Payment,
                investment or distribution. To the extent permitted by law the Trustee,
                the Plan Administrator, and every director, officer and employee
                of the
                Employers shall be indemnified and saved harmless by the Employers
                against
                any claims, and the expenses of defending against such claims, resulting
                from any action or conduct relating to the administration of the
                Plan
                and/or the trust fund.

               

              Each
                of the
                Employers shall pay such proportion of any claim and/or expenses
                as the
                Plan Administrator shall direct. Any payment or distribution to a
                Participant, or in case of his death to his beneficiary, at the last
                known
                post office address of the distributee on file with the Employers,
                shall
                constitute a complete acquittance and discharge to the Plan Administrator,
                the Employers and the Trustee with respect thereto unless the Plan
                Administrator shall have received prior written notice of any change
                in
                the condition or status of such distributee. Neither the Plan
                Administrator, the Employers, nor the Trustee shall have any duty
                or
                obligation to search for or ascertain the whereabouts of any Participant
                or his beneficiary. Except as otherwise may be required by the Employee
                Retirement Income Security Act of 1974, the Employers will have no
                liability under this Plan except to make the Payments required under
                the
                Plan. Any distributions under the Plan will be made solely from the
                trust
                fund held by the Trustee.

            

    

     

    
      	 	
              13.13

               

            	
              Limitation
                of
                Rights

               

            
	 	 	
              Benefits
                under the Plan shall be payable out of the trust fund and no employee,
                Participant, beneficiary or other person shall have any rights under
                the
                Plan with respect to the trust fund (or against the Trustee, the
                Plan
                Administrator or any Employer) except as specifically provided in
                the
                Plan.

            

    

    
      
 

      
        
          Page
            29

          
            
              

            

          

        

      

    

    
      
         

      

      
        
          	 	
                  13.14

                   

                	
                  Separate
                    Administration

                   

                
	 	 	
                  The
                    Plan
                    Administrator, from time to time, may provide for the segregation
                    of trust
                    assets allocable to the employees of any one or more Employers,
                    or any
                    group of employees of any one or more Employers, and may provide
                    for the
                    administration and investment of such assets under a substantially
                    similar
                    plan and a trust forming a part thereof. No such segregation
                    or transfer
                    under a substantially similar plan shall constitute a termination
                    of this
                    Plan or a permanent discontinuance of Employer Payments hereunder
                    with
                    respect to employees affected
                    thereby.

                

        

      

       

    

    
      	 	
              13.15

               

            	
              Courts.

               

            
	 	 	
              In
                case of
                any court proceedings involving the Trustee, the Plan Administrator,
                the
                Employers, or the trust fund, only the Employers, the Plan Administrator,
                the Trustee and other named parties shall be necessary parties thereto,
                and no other employee, Participant, beneficiary or other person shall
                be
                entitled to any notice of process. Any final judgment entered in
                any such
                proceedings shall be conclusive upon the Employers, the Plan
                Administrator, the Trustee, all employees, Participants and all
                beneficiaries of the trust fund.

               

            

    

     

    
      	
               

               

            	
              13.16

               

            	
              Merger
                of
                Plan

               

            
	 	 	
              No
                merger or
                consolidation of the Plan with (or transfer in whole or in part of
                the
                assets or liabilities of the Plan to) any other plan maintained or
                to be
                established for the benefit of all or some of the Participants in
                this
                Plan, shall be permitted unless each Participant in this Plan would
                (if
                either this Plan or such other plan then terminated) receive a benefit
                immediately after the merger, consolidation, or transfer which is
                equal to
                or greater than the benefit such Participant would have been entitled
                to
                receive immediately before the merger, consolidation, or transfer
                (if this
                Plan had then terminated).

               

            

    

     

    
      	
              Section
                14.

               

            	
              Amendment
                and Termination

               

            
	 	 	
              Subject
                to
                the provisions of any applicable collective bargaining agreement,
                the
                Company specifically reserves the right to amend, modify, suspend
                or
                terminate the Plan at any time by action of its Board of Directors,
                or by
                action of any person or persons designated by such Board of Directors
                to
                act on its behalf, provided, however, that (1) no such action shall
                be
                effective as respects any other Employer and the employees employed
                by it
                unless such action is approved by such other Employer, (2) except
                to the
                extent considered necessary by the Plan Administrator to satisfy
                Internal
                Revenue Service or other governmental requirements, no such action
                shall
                reduce a Participant’s benefits below an amount equal to the benefits
                which he would be entitled to receive if his employment with the
                Company
                and all of its subsidiaries was terminated on the date of such action;
                (3)
                under no condition shall any such action result in the return or
                repayment
                to the Company of any portion of the trust fund, or the income therefrom,
                or result in the distribution thereof for the benefit of anyone other
                than
                Participants or their beneficiaries; and (4) no such action shall
                substantially change the duties of either the Plan Administrator
                or the
                Trustee without their consent. If the Plan is terminated or if all
                Employer Payments are permanently discontinued, then all amounts
                credited
                to Accounts of Participants may be held for distribution as provided
                in
                Section 7.

            

    

    
      
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        30

      
        
          

        

      

    

    
 

    
      	 	 	
              Upon
                termination or partial termination of the Plan or permanent discontinuance
                of Employer Payments (other than in the event of merger, consolidation
                or
                liquidation which does not result in termination or permanent
                discontinuance of Employer Payments, as provided below) as respects
                any
                Employer or any group of employees of an Employer, each Participant
                with
                respect to whom the Plan shall have been terminated or Employer Payments
                permanently discontinued shall receive distribution of all assets
                in his
                Account in such manner as the Plan Administrator shall determine.
                In the
                event of the merger, consolidation or liquidation of any Employer
                with or
                into another corporation (other than another Employer), the merged
                or
                consolidated corporation with the Plan Administrator’s consent may adopt
                the Plan with all obligations and rights of such former Employer
                hereunder
                (including, without limitation, those specified in this Section 14)
                or may
                substitute for the Plan another plan. In such event (or the merger
                or
                consolidation of two or more Employers or the liquidation of one
                Employer
                into another Employer), the Plan shall not be deemed to be terminated
                nor
                the Employer Payments permanently discontinued within the meaning
                of
                Section 15 or this Section 14 unless a substituted plan contains
                provisions which would have constituted changes or modifications
                prohibited by this Section 14 had they been adopted by the Employers.
                Any
                amendment or termination of the Plan shall be effective as of such
                date as
                the Board of Directors of the Company may
                establish.

            

    

     

    
      	
              Section
                15.

               

            	
              Employers
                Other Than the Company

               

            
	 	 	
              Any
                subsidiary of the Company may adopt the Plan and become a party to
                the
                trust agreement by:

               

            
	 	 	
              (a)

               

            	
              filing
                with
                the Plan Administrator and the Trustee a written instrument to that
                effect, which instrument shall be in such form as the Plan Administrator
                may require; and

               

            
	 	 	
              (b)

               

            	
              filing
                with
                the Trustee a certified copy of a form of consent to such action
                executed
                by the Plan Administrator.

               

            
	 	 	
              Any
                subsidiary may withdraw from participation in the Plan upon thirty
                days’
                prior written notice to the Trustee and the Plan Administrator, and
                upon
                such withdrawal for any reason (other than in the event of merger,
                consolidation, or liquidation which does not result in the Plan being
                terminated nor the Employer Payments permanently discontinued as
                provided
                in Section 14), the Plan then shall terminate insofar as, but only
                insofar
                as, such subsidiary is concerned and each Participant employed by
                such
                subsidiary then shall receive distribution of all assets in his Account
                in
                such manner as the Plan Administrator shall
                determine.

            

    

    
      
 

      
        
          Page
            31

          
            
              

            

          

        

      

    

    
      
 

    

    
      	
              Section
                16.

               

            	
              Qualified
                Domestic Relations Orders

               

            
	 	 	
              Notwithstanding
                any provisions of the Plan to the contrary, if a Participant’s Account is
                subject to a “qualified domestic relations order” (entered on or after
                January 1, 1985) as that term is defined and applied under Code Section
                414, then

               

            
	 	 	
              (a)

               

            	
              part
                or all
                of such Account shall be payable to one or more alternate payees
                (as such
                term in the singular number is defined in such Section 414) pursuant
                to
                the terms of such order, and

               

            
	 	 	
              (b)

               

            	
              the
                balance
                remaining, if any, shall continue to be held in such Account (or
                shall be
                distributed to the Participant as otherwise permitted under the
                Plan).

               

            
	 	 	
              Any
                such
                order may not require the Plan to provide any type or form of benefit
                or
                any option not otherwise provided under the Plan, may not require
                the Plan
                to provide increased benefits (determined on the basis of actuarial
                value), may not require the payment of benefits to an alternate payee
                which are required to be paid to another alternate payee under another
                order previously determined to be a qualified domestic relations
                order,
                and may not require the payment of benefits prior to the date on
                which the
                Participant terminates employment with his Employer; except that
                on or
                after the date the Participant attains age 50 years, payment may
                be made
                to an alternate payee in a lump sum of part or all of the assets
                of his
                Account; and further excepted that payment may be made at an earlier
                date
                if permitted under Section 414 and the regulations thereunder and
                the
                qualified domestic relations order requires earlier payment or provides
                that the time of payment to an alternate payee may be made pursuant
                to an
                agreement between the plan and the alternate payee; provided, however,
                that if such Participant dies before such payment is made yet such
                order
                nevertheless specifically requires payment of benefits to a former
                spouse
                of the employee who is an alternate payee, then such former spouse
                shall
                receive no more than what such former spouse could receive based
                upon the
                assets held in the Participant’s Account and which were attributable to
                the marriage of such Participant and spouse under applicable state
                law.

            

    

     

    
      	
              Section
                17.

               

            	
              Participation
                Test Limitation

               

            
	 	
              17.01

               

            	
              Applicability.

               

            
	 	 	
              To
                the extent
                required by applicable federal law, and notwithstanding any provision
                of
                the Plan to the contrary, a Participant’s contributions (and the portion
                of the Employer Payment relating thereto) shall be subject to the
                participation test limitation of this Section. For purposes of this
                Section 17, each eligible employee shall be assumed a
                Participant.

            

    

    
 

    
      
        Page
          32

        
          
            

          

        

      

    

     

    
      	 	
              17.02

               

            	
              Definition
                of
                Highly Compensated Employee

               

            
	 	 	
              For
                purposes
                of this Section, “highly compensated employee” shall have the meaning
                prescribed by Code Section 414(q)(1) and shall include any Participant
                who:

               

            
	 	 	
              (a)

               

            	
              during
                the
                Plan Year or immediately preceding Plan Year, owned more than five
                percent, by voting power or value, of the outstanding stock of an
                Employer
                or Affiliate that is a corporation, or owned more than five percent
                of the
                capital or profits interest in an Employer or affiliate that is not
                a
                corporation; or

               

            
	 	 	
              (b)

               

            	
              during
                the
                immediately preceding Plan Year, received Compensation (as defined
                in
                subsection 2.03) in excess of $90,000 and was in the top-paid group
                of
                employees for such year, provided, however, that a Participant who,
                during
                the preceding Plan Year, did not receive Compensation in excess of
                $90,000
                or was not in the top-paid group of employees shall not be considered
                a
                highly compensated employee for the then-current year. The $90,000
                figure
                referred to in this paragraph shall be adjusted by the applicable
                cost-of-living factor prescribed by the Secretary of the
                Treasury.

            

    

     

    
      	 	
              17.03

               

            	
              Tests

               

            
	 	 	
              In
                no event
                shall the actual deferral percentage (as defined below) of the highly
                compensated employees for any Plan Year exceed the greater
                of:

               

            
	 	 	
              (a)

               

            	
              the
                actual
                deferral percentage of all other employees for such Plan Year multiplied
                by 1.25; or

               

            
	 	 	
              (b)

               

            	
              the
                actual
                deferral percentage of all other employees for the prior Year multiplied
                by 2.0; provided that the actual deferral percentage of the highly
                compensated employees does not exceed that of all other employees
                by more
                than 2 percentage points.

               

            
	 	 	
              The
“actual
                deferral percentage” of a group of employees for a Plan Year means the
                average of the ratios (determined separately for each employee in
                such
                group) of: (A) the contributions, if any, by each such employee as
                a
                Participant for such Plan Year which are payable as part of an Employer
                Payment to the Trustee; to (B) the employee’s Compensation as defined in
                Code Section 414(s) for that year and assuming such employee were
                a
                Participant. The deferral percentage taken into account for any highly
                compensated employee who is a participant under two or more cash
                or
                deferred arrangements of any Employer shall be the sum of the deferral
                percentages for such employee under each of such arrangements. At
                the
                election of the Company, the tests above shall be applied using the
                actual
                deferral percentages of the non-highly compensated employee for the
                current year.

            

    

    
      
 

      
        
          Page
            33

          
            
              

            

          

        

      

    

    
      
 

    

    
      	 	
              17.04

               

            	
              Limitation.

               

            
	 	 	
              If
                for any
                Plan Year, neither of the tests in subsection 17.03 are met, then
                the
                participation test limitation shall apply to each highly compensated
                employee such that his share of the excess contributions shall, in
                the
                sole discretion of the Plan Administrator, either be returned to
                him in a
                cash payment or be recharacterized as a Participant payment and remain
                in
                the Plan but in either case the amount thereof shall be included
                as wages
                from his Employer for income tax purposes. For purposes of this
                subsection, “excess contributions” shall mean that portion of the
                aggregate contributions by highly compensated employees which would
                produce an excessive actual deferral percentage for such employees
                but for
                the limitation of subsection 17.03. Such distribution or
                recharacterization of the excess contributions for any plan year
                shall be
                made to highly compensated employees on the basis of the amount of
                contributions by, or on behalf of, each of such employees. Any reduction
                of excess contributions shall be determined in order of dollar amounts
                contributed, beginning with the highly compensated employee with
                the
                highest dollar amount contributed to the Plan for the year, reducing
                the
                amount contributed to equal the dollar amount of the highly compensated
                employee with the next highest dollar amount of contributions, and
                repeat
                the procedure as necessary until all excess contributions are
                abated.

            

    

     

    
      	 	
              17.05

               

            	
              Separate
                Tests

               

            
	 	 	
              Notwithstanding
                any provision of the Plan to the contrary, the tests described in
                subsection 17.03 shall be conducted separately for the employee stock
                ownership and non-employee stock ownership portions of the Plan (described
                in subsection 18.02).

            

    

     

     

    
      	
              Section
                18.

               

            	
              Employee
                Stock Ownership Plan Provisions

               

            
	 	
              18.01

               

            	
              Introduction

               

            
	 	 	
              The
                Plan is,
                in part, a stock bonus plan as defined in Treasury Regulations section
                1.401-1(b)(1)(iii) and a non-leveraged employee stock ownership plan
                satisfying the requirements of Code Sections 401(a), 409, and 4975(e).
                The
                employee stock ownership plan portion of the Plan is designed to
                be
                invested primarily in Company Shares, which are qualifying employer
                securities within the meaning of Code Section 4975(e)(8). For purposes
                of
                this Section 18, the term “participant” means any Participant, a
                Beneficiary in pay status and an alternate payee under a qualified
                domestic relations order within the meaning of Code Section 414(p),
                each
                of whom shall be considered to be a “named fiduciary” within the meaning
                of (and to the extent permitted under) ERISA Section 402(a)(2) with
                respect to the treatment of dividends paid on Company Shares credited
                to
                participants’ accounts.

            

    

    
 

    
      
        
          
            Page
              34

            
              
                

              

            

          

        
 

    

    

      
        	 	
                18.02

                 

              	
                Employee
                  Stock Ownership Plan Portion

                 

              
	 	 	
                The
                  employee
                  stock ownership plan portion of the Plan shall consist of all amounts
                  credited to a participant’s Account that are invested in Company
                  Shares;
                  provided
                  that any amount so invested that is attributable to a contribution
                  under
                  Section 4.01 shall not be part of the employee
                  stock ownership plan portion of the Plan until
                  a date
                  determined by the Plan Administrator (which shall occur on approximately
                  a
                  quarterly basis and on or before the record date for the Company’s
                  quarterly dividend). Once such an amount has been made a part of
                  the
                  employee stock ownership plan portion of the Plan, the foregoing
                  proviso
                  shall not apply to it. Amounts
                  credited to accounts in the employee stock ownership plan portion
                  of the
                  Plan shall be referred to herein as amounts credited to
                  participants’“employee stock ownership plan accounts” or “employee stock
                  ownership plan sub-accounts” and amounts credited to accounts in the
                  non-employee stock ownership plan portion of the Plan shall be
                  referred to
                  as amounts credited to participants’“non-employee stock ownership plan
                  accounts” or “non-employee stock ownership plan sub-accounts.” 

              

      

    

    

    
      	 	
              18.03

               

            	
              Dividend
                Election

               

            
	 	 	
              A
                participant
                (or his beneficiary) shall be offered an election to receive a payment
                or
                distribution of cash dividends that are paid on Company Shares credited
                to
                his employee
                stock ownership plan sub-account.
                The Plan
                Administrator may provide that this election may be offered:

               

            
	 	 	
              (a)

               

            	
              before
                a
                dividend is paid, in which case the dividend may be paid by the Company
                directly to the participant (or beneficiary), or to the Plan and
                then
                distributed to the participant (or beneficiary) not later than ninety
                (90)
                days after the close of the Plan Year in which paid to the Plan,
                or

               

            
	 	 	
              (b)

               

            	
              after
                the
                dividend has been paid, in which case the dividend paid to the Plan
                shall
                be distributed to the participant (or beneficiary) within ninety
                (90) days
                after the close of the Plan Year in which paid to the Plan.

               

            
	 	 	
              A
                participant
                shall be deemed to elect to have the cash dividends automatically
                reinvested in Company Shares, unless the participant files a timely
                election with the Plan Administrator to have all or a portion of
                the cash
                dividends paid to the participant. Dividends that are not paid or
                distributed to a participant (or beneficiary) pursuant to the election
                described above shall remain subject to the requirements of the Plan.
                The
                Plan Administrator shall determine the scope, manner and timing of
                the
                elections, dividend payments or distributions, and reinvestment in
                Company
                Shares described in this paragraph 18.03 in any manner that is consistent
                with section 404(k) and other applicable provisions of the Internal
                Revenue Code of 1986 and the Employee Retirement Income Security
                Act of
                1974, as amended."

            

    

    
 

    
      
        
          
            Page
              35

            
              
                

              

            

          

        

        
          	 	
                  18.04

                   

                	
                  Put
                    Option

                   

                
	 	 	
                  In
                    accordance
                    with §§409(h)(4), (5) and (6) of the Code, if the Company Shares are
                    or
                    become not readily tradable on an established market, then any
                    participant
                    who otherwise is entitled to a total distribution from the Plan
                    shall have
                    the right (hereinafter referred to as the "Put Option") to require
                    that
                    his Company Shares be repurchased by the Company. The Put Option
                    shall
                    only be exercisable during the sixty-day (60-day) period immediately
                    following the date of distribution, and if the Put Option is
                    not exercised
                    within such sixty-day (60-day) period, it can be exercised for
                    an
                    additional sixty (60) days in the following plan year.

                   

                
	 	 	
                  (a)

                   

                	
                  The
                    amount
                    paid for the Company Shares pursuant to the exercise of a Put
                    Option as
                    part of a total distribution shall be paid in substantially equal
                    periodic
                    payments (not less frequently than annually) over a period beginning
                    not
                    later than thirty (30) days after the request for total distribution
                    is
                    made and not exceeding five (5) years. There shall be adequate
                    security
                    provided and reasonable interest paid on an unpaid balance due
                    under this
                    paragraph.

                   

                
	 	 	
                  (b)

                   

                	
                  If
                    the
                    Company is required to repurchase Company Shares as part of an
                    installment
                    distribution, the amount to be paid for the Company Shares will
                    be paid
                    not later than thirty (30) days after the exercise of the Put
                    Option.

                

        

        

        
          	 	
                  18.05

                   

                	
                  Diversification.

                   

                
	 	 	
                  Notwithstanding
                    any other provision of the Plan, a participant who has attained
                    his
                    fifty-fifth birthday and who has at least ten years of participation
                    may
                    direct the Trustee to diversify his Account to the extent necessary
                    to
                    satisfy the requirements of §401(a)(28) of the
                    Code.

                

        

        

        
          	 	
                  18.06

                   

                	
                  Hardship
                    Withdrawal

                   

                
	 	 	
                  A
                    participant
                    who wishes a hardship withdrawal under paragraph 7.04, if any,
                    first must
                    elect to have paid to him all cash dividends that are subject
                    to the
                    dividend election provisions of paragraph 18.03, effective as
                    of the first
                    date allowed for new elections or changes in elections in accordance
                    with
                    the provisions of paragraph
                    18.03.

                

        

      

    

    
       

    

    
 

    
      
        
          
            Page
              36

            
              
                

              

            

          

        

      

    

     

    
 

    
      	
              LETTER
                OF
                AGREEMENT NO. 1.

               

            
	
              Re:
                Automatic
                Amendments

               

            
	
              This
                will
                confirm our agreement that if any of the following are changed under
                the
                Caterpillar 401(k) Plan for salaried employees (which is qualified
                under
                Section 401(k) of the Internal Revenue Code), then the Company will
                (a)
                provide notice thereof to the Union and
                (b) amend
                the Tax Deferred Retirement
                Plan to
                reflect any such change and send a copy of the amendment, if any,
                to such
                Union:

               

            
	 	
              1.

               

            	
              the
                limit on
                contributions (provided in subsection 4.01);

               

            
	 	
              2.

               

            	
              the
                investment fund options (under subsection 6.02; i.e., if an option
                is
                added or deleted, it will be added or deleted from this
                Plan);

               

            
	 	
              3.

               

            	
              administrative
                rules governing plan operation; and

               

            
	 	
              4.

               

            	
              the
                age 18
                eligibility rule (provided in subsection 3.01).

               

            

    

    
      
 Page
        37

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