Document:

Exhibit 10.3

 

EMPLOYMENT AGREEMENT

BETWEEN

JOSEPH M. COYLE

AND

GMH COMMUNITIES TRUST

 

This
Employment Agreement (the “Agreement”), dated as of November 2, 2004 (“Effective
Date”), between GMH Communities Trust (the “Company”), and Joseph M. Coyle (the
“Executive”):

 

WHEREAS,
the Company wishes to employ the Executive in the capacities and on the terms
and conditions set out below, and the Executive has agreed to such employment,
in the capacities and on the terms and conditions set forth below.

 

NOW,
THEREFORE, the Company and the Executive, in consideration of the respective
covenants set out below, hereby agree as follows:

 

1.             EMPLOYMENT.

 

(a)           POSITIONS.    The
Executive shall be employed by the Company as an Executive Vice-President. The
Executive may also serve as an officer of GMH Communities, L.P. (the “Partnership”),
its subsidiaries and its general partner.

 

(b)           DUTIES.    The Executive’s
principal employment duties and responsibilities shall be those duties and
responsibilities customary for the position of Executive Vice-President of the
Company and such other executive duties and responsibilities as the Company’s
Board of Trustees (the “Board”) shall from time to time reasonably assign to
the Executive. The Executive shall report directly to the Company’s President,
Chairman and Chief Executive Officer.

 

(c)           EXTENT OF
SERVICES.    Except for illnesses and vacation periods, the
Executive shall devote a substantial majority of his business time and
attention and his best efforts to the performance of his duties and
responsibilities under this Agreement. Notwithstanding the foregoing, the
Executive (i) subject to the Executive’s obligations set forth in
Section 11, may make any investment with respect to which he is not
obligated or required to, and does not in fact, devote efforts that would cause
him to be unable to devote a substantial majority of his business time and
attention and his best efforts to the performance of his duties and
responsibilities under this Agreement, (ii) may participate in charitable,
academic or community activities, and in trade or professional organizations,
or (iii) may hold directorships in other companies consistent with the
Company’s conflict of interest policies and corporate governance guidelines as
in effect from time to time.

 

2.             TERM.    This
Agreement shall be effective as of the Effective Date and shall continue in
full force and effect thereafter for a period of three (3) years (the “Initial
Term”), and shall be automatically extended for as many as two additional one
(1) year periods (each, a “Successor Term”) at the close of the Initial
Term and each Successor Term, unless either party provides a written notice not
less than 60 days prior to the end of the Initial Term or relevant
Successor Term of such party’s intent not to renew, or the Agreement is sooner
terminated pursuant to Section 7. For purposes of this Agreement, “Term”
shall mean the actual duration of the Executive’s employment hereunder, taking
into account any extensions pursuant to this Section 2 or early
termination of employment pursuant to Section 7.

 

3.             BASE
SALARY.    The Company shall pay the Executive a base
salary annually (the “Base Salary”), which shall be payable in periodic
installments according to the Company’s normal payroll practices. The initial
Base Salary shall be $300,000. The Board or the Board Committee charged with
responsibility for officer employment and compensation matters of the Company
(the “Compensation Committee”) shall review the Base Salary at least once a
year to determine whether the Base Salary should be increased effective
January 1 of any year during the Term; provided, however, that on each
January 1 during the Term, the Base Salary shall be increased by a minimum
positive amount equal to

 

 

the
Base Salary in effect on January 1 (or, for the first year of the Initial
Term, from the Effective Date until December 31, 2004) of the prior year
multiplied by the percentage increase in the Consumer Price Index applicable to
such year. The amount of the increase shall be determined before March 31
of each year and shall be retroactive to January 1. The Base Salary,
including any increases, shall not be decreased during the Term. For purposes
of this Agreement, the term “Base Salary” shall mean the amount established and
adjusted from time to time pursuant to this Section 3.

 

4.             INCENTIVE
AWARDS.    Provided that the Executive is employed by the
Company as of December 31, 2004, the Executive shall be entitled to a
fixed bonus for the 2004 calendar year in the amount of $100,000, subject to
the review and concurrence of the Compensation Committee after the end of the
2004 calendar year. Starting in 2005, the Executive shall be entitled to
receive an annual cash incentive bonus for each calendar year during the Term
of this Agreement consistent with a bonus policy adopted by the Board or the
Compensation Committee for each calendar year (which bonus policy shall be
adopted during the first 90 days of each calendar year) containing
individual performance goals for participants and corporate performance goals
set at Threshold, Target, Superior and Outperformance levels, and allocating
each participant’s annual cash incentive bonus on a percentage basis between
individual and corporate performance goals (the “Bonus Policy”). The Board or
the Compensation Committee shall meet during the first 90 days of each
calendar year to determine the relevant goals for the current calendar year and
to reach determination regarding bonus entitlement for the prior calendar year.
For each calendar year, the annual incentive bonus shall be determined under
the Bonus Policy in effect for such calendar year with reference to the
Executive’s attainment of his individual performance goals and the Company’s
attainment of the overall corporate goals, as follows:

 

total
annual incentive bonus = individual performance bonus + corporate
performance bonus

 

where:

 

individual
performance bonus =
individual performance level achieved (Threshold, Target, Superior or
Outperformance percentage) × individual goals allocation percentage
(20%) × Base Salary

 

corporate
performance bonus =
corporate performance level achieved (Threshold, Target, Superior or
Outperformance percentage) × corporate goals allocation percentage
(80%) × Base Salary

 

The
percentages established for the Executive for the performance bonus levels for
2005 shall be 40% for Threshold Level and 80% for Target Level, 120% for
Superior Level, and 175% for Outperformance Level. Except to the extent
otherwise provided in Section 8, no bonus shall be payable unless the
Executive was employed by the Company or a subsidiary as of the last day of the
relevant calendar year. After 2005 the percentages shall not be less than the
2005 percentages for each performance bonus level without the written
agreement of the Executive. For 2005 and thereafter, to the extent the
Executive’s annual incentive bonus exceeds either a performance bonus level of
100% or his then-current Base Salary, such excess bonus amount may, at the sole
discretion of the Company, be paid to the Executive one-half in cash and
one-half in Company Common Shares that shall vest ratably over a period of
three (3) years from the date of payment and shall be subject to dividend
payments, if any, by the Company. If Executive or the Company, as the case may
be, fails to satisfy the performance criteria contained in such Bonus Policy
for a calendar year, the Executive may be eligible to receive an incentive
bonus for such calendar year, in such amount as is recommended by the
Compensation Committee and subject to approval by the full Board (if such
approval is required). The annual incentive bonus shall be paid to the
Executive no later than thirty (30) days after the date on which final
approval of the annual incentive bonus payable to the Executive for such
calendar year is obtained. For purposes of this Agreement, the term “Annual
Incentive Bonus” shall mean the amount established pursuant to this
Section 4.

 

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5.             STOCK
BASED AWARDS.

 

(a)           OPTION GRANTS.    The
Company may establish an equity incentive plan (“Equity Incentive Plan”). The
Executive’s eligibility for grants under the Equity Incentive Plan and the
terms and conditions of such grants shall be determined by the Compensation
Committee.

 

(b)           RESTRICTED SHARE
AWARDS.    The Executive shall be eligible to receive
restricted Common Shares of the Company (“Restricted Share Grants”) as approved
by the Compensation Committee, but only to the extent that restricted shares
are available for issuance under the Equity Incentive Plan. The terms and
conditions of Restricted Share Grants shall be determined by the Compensation
Committee. Any Common Shares issued as Restricted Share Grants will have voting
and dividend rights, and, following the restriction period, shall be registered
and fully transferable by the Executive.

 

6.             BENEFITS.

 

(a)           VACATION.    The
Executive shall be entitled to an amount of vacation time consistent with
Company policy applicable to senior executives but at least five (5) weeks
of paid vacation per full calendar year, which shall accrue during the
Executive’s employment with the Company.

 

(b)           SICK AND PERSONAL
DAYS.    The Executive shall be entitled to sick and
personal days on an as needed basis.

 

(c)           EMPLOYEE BENEFITS.

 

(i)    PARTICIPATION
IN EMPLOYEE BENEFIT PLANS.    The Executive and his spouse
and eligible dependents, if any, and their respective designated beneficiaries
where applicable, will be eligible for and entitled to participate in all
Company sponsored employee benefits plan, as such plans may be amended or
modified from time to time, including but not limited to a 401(k) plan, group
health, accident, disability insurance, group life insurance and supplemental
life insurance, as such benefits may be offered from time to time, on a basis
no less favorable than that applicable to any other executive. Such benefits
coverage shall be in the aggregate, not materially less valuable to Executive
than the benefits made available to the Executive immediately prior to the
Effective Date by his then employer.

 

(ii)   DEFERRED
COMPENSATION PLAN.    To the extent practicable under
applicable law and deemed appropriate by the Compensation Committee, the
Company shall provide to the Executive an opportunity to participate in a Company
sponsored deferred compensation plan.

 

(d)           OTHER BENEFITS.

 

(i)    ANNUAL
PHYSICAL.    The Company shall provide, at its cost, a
medical examination for the Executive on an annual basis by a licensed
physician in the Philadelphia, Pennsylvania area selected by the Executive. The
results of such examination are the sole property of such Executive and shall
be treated in confidence.

 

(ii)   CAR
ALLOWANCE.    The Company shall pay Executive a monthly car
allowance of $1,000 in advance of the month to which the payment relates.

 

(iii)  TAX
PREPARATION AND FINANCIAL PLANNING.    The Company shall
pay or promptly reimburse the Executive for costs incurred by him in connection
with tax preparation and financial planning assistance, to be furnished by such
advisors as chosen by the Executive, up to a maximum aggregate of $10,000
annually.

 

(iv)  DIRECTORS
AND OFFICERS INSURANCE.    During the Term and the
Severance Period, the Executive shall be entitled to director and officer
insurance coverage for his acts and omissions while an officer and director of
the Company to the extent applicable, on a basis no less

 

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favorable to him than the
coverage provided to any other current officers and trustees. The provision of
such insurance coverage will be at the sole cost of the Company or the
Partnership.

 

(v)   DISABILITY
INSURANCE.    The Company shall maintain, at its cost,
supplemental renewable long-term disability insurance as agreed to by the
Company and the Executive.

 

7.             TERMINATION.    The
employment of the Executive by the Company pursuant to this Agreement shall
terminate upon the occurrence of any of the following:

 

(a)           DEATH OR PERMANENT
DISABILITY.    Immediately upon death or Permanent
Disability of the Executive. As used in this Agreement, “Permanent Disability”
shall mean an inability due to a physical or mental impairment to perform the
material services contemplated under this Agreement for a period of six
(6) months, whether or not consecutive, during any 365-day period. A
determination of Permanent Disability shall be made by a physician satisfactory
to both the Executive and the Company, provided that if the Executive and the
Company do not agree on a physician, the Executive and the Company shall each
select a physician and these two together shall select a third physician, whose
determination as to Permanent Disability shall be binding on all parties, with
the Company to bear all cost of securing such determination. The appointment of
one or more individuals to carry out the offices or duties of the Executive
during a period of the Executive’s inability to perform such duties and pending
a determination of Permanent Disability shall not be considered a breach of
this Agreement by the Company.

 

(b)           FOR CAUSE.    At the
election of the Company and subject to the provisions of this
Section 7(b), immediately upon written notice by the Company to the
Executive of his termination for Cause. For purposes of this Agreement, “Cause”
for termination shall be deemed to exist solely in the event of (i) the
conviction of the Executive of, or the entry of a plea of guilty or nolo contendere by the Executive to, a
felony (exclusive of any felony relating to negligent operation of a motor
vehicle and not including a conviction, plea of guilty or nolo contendere arising solely under a
statutory provision imposing criminal liability upon the Executive on a per se
basis due to the Company offices held by the Executive, so long as any act or
omission of the Executive with respect to such matter was not taken or omitted
in contravention of any applicable policy or directive of the Board),
(ii) a willful breach of his duty of loyalty which is materially
detrimental to the Company, or (iii) a willful failure to perform or adhere
to explicitly stated duties that are consistent with the terms of this
Agreement, or the Company’s reasonable and customary guidelines of employment
or reasonable and customary corporate governance guidelines or policies,
including without limitation any business code of ethics adopted by the Board,
or to follow the lawful directives of the Board (provided such directives are
consistent with the terms of this Agreement), which, in any such case,
continues for thirty (30) days after written notice from the Board to the
Executive. For purposes of this Section 7(b), no act, or failure to act,
on the Executive’s part will be deemed “willful” unless done, or omitted to be
done, by the Executive not in good faith and without a reasonable belief that
the Executive’s act, or failure to act, was in the best interest of the
Company. The parties agree that in order to terminate the Executive pursuant to
Subsections (ii) and (iii) hereof, the Company shall first be
required to prove to the reasonable satisfaction of the Executive that he
engaged in improper conduct under these Subsections, and if the Executive shall
not agree with the Company’s assessment of his conduct, then the Executive
shall not be terminated until an arbitrator, as provided for in
Section 13(b), has determined that the Executive’s conduct constituted
improper conduct under the applicable Subsection.

 

(c)           WITHOUT CAUSE; WITHOUT GOOD
REASON.    At the election of the Company, without Cause,
and at the election of the Executive, without Good Reason, in either case upon
thirty (30) days prior written notice to the Executive or the Company, as
the case may be.

 

(d)           FOR GOOD REASON.    At
the election of the Executive, for Good Reason. For purposes of this Agreement,
“Good Reason” shall mean any of the following actions or omissions

 

4

 

occurring without the
Executive’s written consent, provided the Executive notifies the Company of his
determination that Good Reason exists, with such notification to occur within
60 days of the time at which the Executive knows or should know of the
action or omission on which such determination is based:

 

(i)    failure
by the Company to renew this Agreement on at least comparable terms at the
conclusion of the Initial Term or of either Successor Term,

 

(ii)   a
material reduction of the Executive’s duties, responsibilities or reporting
requirements, or the assignment to the Executive of any duties,
responsibilities, or reporting requirements that are inconsistent with his
positions as Executive Vice-President, as the case may be,

 

(iii)  a
reduction by the Company in the Executive’s annual Base Salary,

 

(iv)  a
material reduction or loss of employee benefits or material fringe benefits,
both in terms of the amount of the benefit and the level of the Executive’s
participation therein, enjoyed by the Executive under the employee benefit and
welfare plans of the Company, including without limitation such benefits as
group health, dental, 401(k), accident, disability insurance, or group life
insurance, that is caused by the Company except as is required by applicable
law,

 

(v)   absent
the Executive’s prior written consent, the requirement by the Company that the
principal place of business at which the Executive performs his duties be changed
to a location that is outside of a 35 mile radius of Newtown Square,
Pennsylvania.

 

(vi)  a
material breach by the Company of any provision of this Agreement that
continues for a period of thirty (30) days after Executive provides
written notice to the Company of such breach.

 

8.             EFFECTS
OF TERMINATION.

 

(a)           BY THE COMPANY WITHOUT CAUSE; BY THE
EXECUTIVE FOR GOOD REASON.    In the event of a termination
of the Executive’s employment by the Company without Cause (including for these
purposes non-renewal of this Agreement pursuant to Section 2 as
termination without Cause) or by the Executive for Good Reason, then the
Company shall pay the Executive as follows:

 

(i)    an
amount equal to two (2) times (three (3) times if, in connection with
a Change of Control, either the Executive terminates employment with the
Company for Good Reason or the Company terminates the Executive without Cause),
the Executive’s Base Salary and Annual Incentive Bonus (determined at the
Superior Level for both compensation and individual performance for the year in
which the termination of employment occurs) (the “Applicable Amount”),
provided, however, that in the event of a resignation by the Executive for Good
Reason pursuant to Section 7(d)(i) after notice of non-renewal of
this Agreement by the Company with respect to the second Successor Term, the
multiplier shall be limited to one (1) times the Applicable Amount, and

 

(ii)   the
prorated amount of the Annual Incentive Bonus at the Superior Level for both
corporate and individual performance for the year in which the termination of
employment occurs, pro rated for the portion of such year during which the
Executive was employed prior to the effective date of his termination, and

 

(iii)  an
amount equal to accrued but unpaid Base Salary through the date of termination
plus any other compensation then due and owing from the Company.

 

(iv)  The
sum of the amounts payable under subsections (i), (ii) and
(iii) hereof is referred to herein as his “Severance Payment.”

 

5

 

(v)   The
Severance Payment shall be made in a single, lump sum cash payment no later
than ten (10) days after the effective date of the Executive’s termination
of employment.

 

(vi)  The
Company shall allow the Executive to continue to participate during the
three-year period commencing on the date of termination (the “Severance Period”)
in any healthcare, dental, vision and prescription drug plans in which the
Executive was entitled to participate immediately prior to his termination, to
the same extent and upon the same terms as the Executive participated in such
plans prior to his termination, provided that the Executive’s continued
participation is permissible or otherwise practicable under the general terms
and provisions of such benefit plans and programs. During the Severance Period,
the Company shall pay for the Executive’s continued participation in said
healthcare, dental, vision and prescription drug plans, including but not
limited to premiums for such programs. To the extent that continued
participation is neither permissible nor practicable, the Company shall take
such actions as may be necessary to provide the Executive with substantially
comparable benefits (without additional cost to the Executive) outside the
scope of such plans, including, without limitation, reimbursing the Executive
for his costs in obtaining such coverage, such as COBRA premiums paid by the
Executive and/or his eligible dependents. If the Executive engages in regular
employment after his termination of employment (whether as an executive or as a
self-employed person), any employee benefit and welfare benefits received by
the Executive in consideration of such employment which are similar in nature
to the healthcare, dental, vision and prescription drug plans provided by the
Company will relieve the Company of its obligation under this
Section 8(a)(vi) to provide comparable benefits to the extent of the
benefits so received.

 

(vii) The
Executive’s stock options, if any, awarded under the Equity Incentive Plan (or
any other or successor plan) shall immediately become 100% vested and he shall
have at least a two-year period following the effective date of his termination
of employment in which to exercise his vested stock options, including those
stock options that vested upon his termination of employment.

 

(viii) The
Executive’s restricted Common Shares awarded under the Equity Incentive Plan
(or any other or successor plan) shall immediately become 100% vested and all
restrictions shall lapse.

 

(b)           TERMINATION ON DEATH OR PERMANENT
DISABILITY.    Upon a termination of employment due to the
Executive’s death or his becoming subject to Permanent Disability, the Company
shall pay the Executive (or his estate or beneficiary) an amount equal to one (1) time
the sum of the Executive’s Base Salary and Annual Incentive Bonus (determined
at the Superior Level for both compensation and individual performance for the
year in which the termination of employment occurs), payable within ten
(10) business days of the occurrence of the relevant event. The Executive
shall become 100% vested in his stock options and restricted Common Shares
awarded under the Equity Incentive Plan. The Executive (or his estate or
beneficiary) shall have a one-year period following the occurrence of the
relevant event in which to exercise his vested stock options, including those
stock options that vested on such event. The Company shall pay to the Executive
(or his estate or beneficiary) any Base Salary, Incentive Bonus, expense reimbursements
and all other compensation related payments that are payable as of the date of
the occurrence of the relevant event and that are related to his period of
employment preceding such date. The Company shall pay to the Executive (or his
estate or beneficiary) the prorated amount of Incentive Bonus at the Target
Level for both corporate and individual performance for the year in which such
event occurs, prorated for the portion of the year during which the Executive
was employed prior to the occurrence of the relevant event.

 

(c)           BY THE COMPANY FOR CAUSE OR BY THE EXECUTIVE
WITHOUT GOOD REASON.    In the event that the Executive’s
employment is terminated by the Company for

 

6

 

Cause or by the Executive without
Good Reason, the Company shall pay the Executive his accrued Base Salary and,
with respect to a termination by the Executive without Good Reason, any amount
of Annual Incentive Bonus fully earned and payable through the date of
termination and payable under the applicable Incentive Bonus policy, expense
reimbursements and all other compensation related payments that are payable as
of his termination of employment date and that are related to his period of
employment preceding his termination date. The Executive shall be entitled to
exercise his vested stock options, determined as of his termination date,
pursuant to the terms of the option grant. Unless the Company and the Executive
agree otherwise, the Executive shall forfeit all unvested options and any
unvested Restricted Share Grants not acquired by the Executive for
consideration, subject to Section 9(b) below, and the Company has the
right to repurchase any unvested Restricted Share Grants that the Executive
acquired for consideration in accordance with the terms of the Equity Incentive
Plan (with the result that if the Executive acquired such unvested Restricted
Share Grants for any consideration, the Executive shall at most be entitled to
a return of such consideration). The Executive shall also be entitled to all
benefits accrued and vested under any employee benefit plan of the Company.

 

(d)           TERMINATION OF
AUTHORITY.    Immediately upon the Executive terminating or
being terminated from his employment with the Company for any reason, notwithstanding
anything else appearing in this Agreement or otherwise, the Executive will stop
serving the functions of his terminated or expired positions, and shall be
without any of the authority or responsibility for such positions. On request
of the Board, at any time following his termination of employment for any
reason, the Executive shall resign from the Board if then a member.
Notwithstanding any contrary provision in this Agreement, the Company shall
continue to indemnify the Executive and hold the Executive harmless to the
extent specified under the by-laws or other corporate documents of the Company
or the Partnership (as applicable) and permitted by applicable law.

 

9.             CHANGE
OF CONTROL.

 

(a)           CHANGE OF CONTROL.    For
purposes of this Agreement, a “Change of Control” will be deemed to have taken
place upon the occurrence of any of the following events:

 

(i)    the
acquisition by any person, entity or affiliated group, excluding the Company or
any employee benefit plan of the Company or any entity controlled directly or
indirectly by the Company, of more than 50% of the then outstanding voting
shares of the Company,

 

(ii)   the
consummation of any merger or consolidation of the Company into another
company, such that the holders of the voting shares of the Company immediately
prior to such merger or consolidation hold less than 50% of the voting power of
the securities of the surviving company or the parent of such surviving
company,

 

(iii)  the
complete liquidation of the Company or the sale or disposition of all or
substantially all of the Company’s assets, such that after the transaction, the
holders of the voting shares of the Company immediately prior to the
transaction hold less than 50% of the voting securities of the acquiror or the
parent of the acquiror, or

 

(iv)  Trustees
of the Company are elected such that a majority of the members of the Board
shall have been members of the Board for less than two years, unless the
election or nomination for election of each new trustee who was not a trustee
at the beginning of such two-year period was approved by a vote of at least
two-thirds of the trustees then still in office who were trustees at the
beginning of such period, or

 

(v)   a
majority of the Board of the Company votes in favor of a decision that a Change
of Control has occurred.

 

7

 

(b)           CERTAIN BENEFITS UPON A CHANGE OF
CONTROL.    In the event of a termination of the Executive’s
employment by the Executive or by the Company (or its successor) for any reason
other than Cause following a Change of Control, the Executive shall become 100%
vested in all unvested stock options and restricted Common Shares awarded under
the Equity Incentive Plan (or any other or successor plan) and the Executive
shall have a two (2) year period following the termination of his
employment in which to exercise his vested stock options, including those stock
options that vested upon the Change of Control.

 

(c)           EXCISE TAX.

 

(i)    In
the event that any payment or benefit received or to be received by the
Executive in connection with a change in control or a termination of the
Executive’s employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any person whose actions
result in a change in control or any person affiliated with the Company or such
person) (all such payments and benefits being hereinafter called “Total
Payments”), is in an amount such that the Executive will be subject (in whole
or in part) to the excise tax imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended (“Excise Tax”) on such payments and benefits,
then the Company shall pay to the Executive an additional amount (the “Gross-Up
Payment”) such that the net amount retained by the Executive, after deduction
of the Excise Tax and any federal, state and local tax on the Gross-Up Payment,
will be equal to the Total Payments. For purposes of determining the amount of
the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes
at the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rate of taxation in the state and locality of the
Executive’s residence on such date, net of the maximum deduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.

 

(ii)   The
Executive or the Company may request, prior to the time any payments under this
Agreement are made, a determination of whether any or all of the Total Payments
will be subject to the Excise Tax and, if so, the amount of such Excise Tax and
the federal, state and local tax imposed on the Gross-Up Payment. If such a
determination is requested, it shall be made promptly, at the Company’s
expense, by tax counsel selected by the Executive and approved by the Company
(with such approval not being unreasonably withheld), and such determination
shall be conclusive and binding on both parties. The Company agrees to provide
any information reasonably requested by such tax counsel. Tax counsel may
engage accountants or other experts, at the Company’s expense, to the extent
deemed necessary or advisable for them to reach a determination. For these
purposes, the term “tax counsel” shall mean a law firm with expertise in
federal income tax matters.

 

(iii)  In
the event that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder, the Executive will repay to the Company,
at the time that the amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to such reduction
plus that portion of the Gross-Up Payment attributable to the Excise Tax and
federal, state and local income tax imposed on the Gross-Up Payment, without
any interest thereon. In the event that the Excise Tax is determined to exceed
the amount taken into account hereunder, the Company will make an additional
Gross-Up Payment in respect of such excess and in respect of any portion of the
Excise Tax with respect to which the Company had not previously made a Gross-Up
Payment (plus any interest, penalties or additions to tax payable by the
Executive with respect to such excess and such portion) at the time that the
amount of such excess or such portion is finally determined, without any
interest thereon.

 

(iv)  Each
party agrees to notify the other party, in writing, of any claim that, if
successful, would require the payment by the Company of a Gross-Up Payment or
might entitle the Company

 

8

 

to a refund of all or part
of any previous Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Executive
or Company is informed in writing of such claim or otherwise becomes aware of
such claim. If notice of the claim arose as a result of a claim made against
the Executive by a taxing authority, Executive shall not pay such claim prior
to the expiration of the thirty (30) day period following the date on
which he gives notice to the Company. If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall: (A) give the Company any information
reasonably requested by the Company relating to such claim, (B) take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney selected by the
Executive and approved by the Company (with such approval not being
unreasonably withheld), (C) cooperate with the Company in good faith in
order to effectively contest such claim, and (D) permit the Company to
reasonably participate in any proceedings relating to such claim. The Company
shall bear and pay directly all costs and expenses (including legal fees and
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax (including interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and expenses.

 

(v)   Notwithstanding
the foregoing, the Company shall control all audits and proceedings taken in
connection with any claim, audit or proceeding involving Excise Taxes or
Gross-Up Payments and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of any such claim, audit or proceeding and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the tax in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such tax
and sue for a refund, the Company shall advance the amount of such payment to
the Executive, (including interest or penalties with respect thereto) and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance. The Company shall be required to consult with and keep
the Executive fully apprised of developments and actions being considered or
taken with respect to such claim, audit or proceeding. The Company’s control of
the contest shall be limited to issues with respect to which such a Gross-Up
Payment would be payable or refundable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue. Each party
agrees to keep the other party fully apprised of developments concerning such
claim, audit or proceeding and to cooperate with the other in good faith in
order to effectively resolve such claim, audit or proceeding.

 

(vi)  For
purposes of this Subsection (c), a determination of whether a payment is
subject to Excise Tax, including but not limited to, a determination of change
in control, shall be made pursuant to Section 280G of the Internal Revenue
Code of 1986, as amended.

 

10.           CONFIDENTIAL
INFORMATION.    The Executive recognizes and acknowledges
that certain assets of the Company constitute Confidential Information. The
term “Confidential Information” as used in this Agreement shall mean all
information which is known only to the Executive or the Company, other
employees of the Company, or others in a confidential relationship with the
Company, and relating to the Company’s business including, without limitation,
information regarding clients, customers, pricing policies, methods of
operation, proprietary Company programs, sales products, profits, costs,
markets, key personnel, formulae, product applications, technical

 

9

 

processes,
and trade secrets, as such information may exist from time to time, which the
Executive acquired or obtained by virtue of work performed for the Company, or
which the Executive may acquire or may have acquired knowledge of during the
performance of said work. The Executive shall not, during the Term or for a two
(2) year period after the Term, disclose all or any part of the
Confidential Information to any person, firm, corporation, association, or any
other entity for any reason or purpose whatsoever, directly or indirectly,
except as may be required by law or pursuant to his employment hereunder,
unless and until such Confidential Information becomes publicly available other
than as a consequence of the breach by the Executive of his confidentiality
obligations hereunder by law or in any judicial or administrative proceeding
(in which case, the Executive shall provide the Company with notice). In the
event of the termination of his employment, whether voluntary or involuntary
and whether by the Company or the Executive, the Executive shall deliver to the
Company all documents and data pertaining to the Confidential Information and
shall not take with him any documents or data of any kind or any reproductions
(in whole or in part) or extracts of any items relating to the Confidential
Information. The Company acknowledges that prior to his employment with the
Company, the Executive has lawfully acquired extensive knowledge of the
industries and businesses in which the Company engages in business, and that
the provisions of this Section 10 are not intended to restrict the
Executive’s use of such previously acquired knowledge.

 

In
the event that the Executive receives a request or is required (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process) to disclose all or any part of the Confidential Information,
the Executive agrees to (a) promptly notify the Company in writing of the
existence, terms and circumstances surrounding such request or requirement,
(b) consult with the Company on the advisability of taking legally
available steps to resist or narrow such request or requirement, and
(c) assist the Company in seeking a protective order or other appropriate
remedy. In the event that such protective order or other remedy is not obtained
or that the Company waives compliance with the provisions hereof, the Executive
shall not be liable for such disclosure unless disclosure to any such tribunal
was caused by or resulted from a previous disclosure by the Executive not
permitted by this Agreement.

 

11.           NON-COMPETITION
AND NONSOLICITATION.    During the Term and for a period of
18 calendar months after the termination of the Executive’s employment (the “Noncompete
Period”), the Executive shall not, directly or indirectly, either as a
principal, agent, employee, employer, stockholder, partner, member, director,
trustee or in any other capacity whatsoever: (a) engage or assist others
engaged, in whole or in part, in any business which is engaged in a business or
enterprise that is substantially similar to any primary segment of the business
of the Company that the Company was engaged in during the period of the
Executive’s employment with the Company, or (b) without the prior consent of
the Board, employ or solicit the employment of, or assist others in employing
or soliciting the employment of, any individual employed by the Company (other
than the Executive’s personal assistant or Executive’s secretary) at any time
during the six (6) month period prior to any termination of the Executive’s
employment with the Company; provided,
however, that the provisions of this Section 11 shall not apply
in the event the Company materially breaches this Agreement.

 

Further,
nothing in this Section 11 shall prohibit (a) Executive from making
any investment in a public company, or where he is the owner of five percent
(5%) or less of the issued and outstanding voting securities of any entity,
provided such ownership does not result in his being obligated or required to
devote any substantial amount of managerial efforts; or (b) Executive from
being engaged in activities permitted under Section 1(c).

 

10

 

The
Executive agrees that the restraints imposed upon him pursuant to this
Section 11 are necessary for the reasonable and proper protection of the
Company and its subsidiaries and affiliates, and that each and every one of the
restraints is reasonable in respect to subject matter, length of time and egographic
area. The parties further agree that, in the event that any provision of this
Section 11 shall be determined by any court of competent jurisdiction to
be unenforceable by reason of its being extended over too great a time, too
large a geographic area or too great a range of activities, such provision
shall be deemed to be modified to permit its enforcement to the maximum extent
permitted by law.

 

12.           INTELLECTUAL
PROPERTY.    During the Term, the Executive shall promptly
disclose to the Company or any successor or assign, and grant to the Company
and its successors and assigns without any separate remuneration or
compensation other than that received by him in the course of his employment,
his entire right, title and interest in and to any and all inventions,
developments, discoveries, models, or any other intellectual property of any
type or nature whatsoever (“Intellectual Property”), whether developed by him
during or after business hours, or alone or in connection with others, that is
in any way related to the business of the Company, its successors or assigns.
This provision shall not apply to (a) any Intellectual Property developed
by the Executive prior to the Term; and (b) books or articles authored by
the Executive during non-work hours, consistent with his obligations under this
Agreement, so long as such books or articles (i) are not funded in whole
or in part by the Company, and (ii) do not contain any Confidential
Information or Intellectual Property of the Company. The Executive agrees, at the
Company’s expense, to take all steps necessary or proper to vest title to all
such Intellectual Property in the Company, and cooperate fully and assist the
Company in any litigation or other proceedings involving any such Intellectual
Property.

 

13.           DISPUTES.

 

(a)           EQUITABLE RELIEF.    The
Executive acknowledges and agrees that upon any breach by the Executive of his
obligations under Sections 10, 11, or 12 hereof, the Company will have no
adequate remedy at law, and accordingly will be entitled to specific
performance and other appropriate injunctive and equitable relief.

 

(b)           ARBITRATION.    Excluding
only requests for equitable relief by the Company under Section 13(a), in
the event that there is any claim or dispute arising out of or relating to this
Agreement or the breach hereof, and the parties hereto shall not have resolved
such claim or dispute within 60 days after written notice from one party
to the other setting forth the nature of such claim or dispute, then such claim
or dispute shall be settled exclusively by binding arbitration in Montgomery
County, Pennsylvania, in accordance with the Employment Dispute Resolution
Rules of the American Arbitration Association (“Rules”), by an arbitrator
mutually agreed upon by the parties hereto or, in the absence of such
agreement, by an arbitrator selected according to such Rules. Notwithstanding
the foregoing, if either the Company or the Executive shall request, such
arbitration shall be conducted by a panel of three (3) arbitrators, one
selected by the Company, one selected by the Executive and the third selected
by agreement of the first two arbitrators, or, in the absence of such
agreement, in accordance with such Rules. Judgment upon the award rendered by
such arbitrator(s) shall be entered in any Court having jurisdiction thereof
upon the application of either party. The parties agree to use their reasonable
best efforts to have such arbitration completed as soon as is reasonably
practicable. Notwithstanding anything herein to the contrary, except as provided
in (c) below, each party shall bear its own costs and expenses incurred in
connection with the arbitration.

 

(c)           LEGAL FEES.    The
Company shall pay or promptly reimburse the Executive for the reasonable legal
fees and expenses incurred by the Executive in successfully enforcing or
defending any right of the Executive pursuant to this Agreement even if the
Executive does not prevail on each issue.

 

11

 

14.           INDEMNIFICATION.    The
Company shall indemnify the Executive, to the maximum extent permitted by
applicable law, against all costs, charges and expenses incurred or sustained
by the Executive, including the cost of legal counsel selected and retained by
the Executive in connection with any action, suit or proceeding to which the
Executive may be made a party by reason of the Executive being or having been
an officer, director, trustee, or employee of the Company or the Partnership.

 

15.           COOPERATION
IN FUTURE MATTERS.    The Executive hereby agrees that for
a period of 18 months following his termination of employment he shall
cooperate with the Company’s reasonable requests relating to matters that
pertain to the Executive’s employment by the Company, including, without
limitation, providing information or limited consultation as to such matters,
participating in legal proceedings, investigations or audits on behalf of the
Company, or otherwise making himself reasonably available to the Company for
other related purposes. Any such cooperation shall be performed at scheduled
times taking into consideration the Executive’s other commitments, and the
Executive shall be compensated at a reasonable hourly or per diem rate (based
on the Executive’s Base Salary as of his termination date). The Executive shall
not be required to perform such cooperation to the extent it conflicts with any
requirements of exclusivity of services for another employer or otherwise, nor
in any manner that in the good faith belief of the Executive would conflict
with his rights under or ability to enforce this Agreement.

 

16.           GENERAL.

 

(a)           NOTICES.    All notices
and other communications hereunder shall be in writing or by written
telecommunication, and shall be deemed to have been duly given if delivered
personally or if sent by overnight courier, to the relevant address set forth
below or to such other address as the recipient of such notice or communication
shall have specified in writing to the other party hereto, in accordance with
this Section 16(a). 

 

	
  If
  to the Company, to:

  	
   

  	
  GMH
  Communities Trust

  10 Campus Drive

  Newtown Square, PA 19073

  Attn: Board of Trustees

  
	
   

  	
   

  	
   

  
	
  With
  a Mandatory copy to:

  	
   

  	
  GMH
  Communities Trust

  10 Campus Drive

  Newtown Square, PA 19073

  Attn: General Counsel

  

 

If
to Executive, at his last residence shown on the records of the Company.

 

Any such notice shall be
effective (i) if delivered personally, when received, and (ii) if
sent by overnight courier, when receipted for, provided a copy of such
communication is sent, as described above.

 

(b)           SEVERABILITY.    If any
provision of this Agreement is or becomes invalid, illegal or unenforceable in
any respect under any law, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired.

 

(c)           WAIVERS.    No delay or
omission by either party hereto in exercising any right, power or privilege
hereunder shall impair such right, power or privilege, nor shall any single or
partial exercise of any such right, power or privilege preclude any further
exercise thereof or the exercise of any other right, power or privilege.

 

(d)           COUNTERPARTS.    This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same

 

12

 

instrument. In making proof
of this Agreement, it shall not be necessary to produce or account for more
than one such counterpart.

 

(e)           ASSIGNS.    This
Agreement shall be binding upon and inure to the benefit of the Company’s
successors and the Executive’s personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees. This Agreement
shall not be assignable by the Executive, it being understood and agreed that
this is a contract for the Executive’s personal services. This Agreement shall
not be assignable by the Company except that the Company shall assign it in
connection with a transaction involving the succession by a third party to all
or substantially all of the Company’s business and/or assets (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or
otherwise). When assigned to a successor, the assignee shall assume this
Agreement and expressly agree to perform this Agreement in the same manner and
to the same extent as the Company would be required to perform it in the
absence of such an assignment. For all purposes under this Agreement, the term “Company”
shall include any successor to the Company’s business and/or assets that
executes and delivers the assumption agreement described in the immediately
preceding sentence or that becomes bound by this Agreement by operation of law.

 

(f)            ENTIRE AGREEMENT.    This
Agreement contains the entire understanding of the parties, supersedes all
prior agreements and understandings, whether written or oral, relating to the
subject matter hereof and may not be amended except by a written instrument
hereafter signed by the Executive and a duly authorized representative of the
Board (other than the Executive).

 

(g)           GOVERNING LAW.    This
Agreement and the performance hereof shall be construed and governed in
accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to principles of conflicts of law.

 

(h)           CONSTRUCTION.    The
language used in this Agreement shall be deemed to be the language chosen by
the parties to express their mutual intent, and no rule of strict construction
shall be applied against any party. The headings of sections of this Agreement
are for convenience of reference only and shall not affect its meaning or
construction. Whenever any word is used herein in one gender, it shall be
construed to include the other gender, and any word used in the singular shall
be construed to include the plural in any case in which it would apply and vice
versa.

 

(i)            PAYMENTS AND EXERCISE OF RIGHTS AFTER
DEATH.    Any amounts payable hereunder after the Executive’s
death shall be paid to the Executive’s designated beneficiary or beneficiaries,
whether received as a designated beneficiary or by will or the laws of descent
and distribution. The Executive may designate a beneficiary or beneficiaries
for all purposes of this Agreement, and may change at any time such
designation, by notice to the Company making specific reference to this Agreement.
If no designated beneficiary survives the Executive or the Executive fails to
designate a beneficiary for purposes of this Agreement prior to his death, all
amounts thereafter due hereunder shall be paid, as and when payable, to his
spouse, if she survives the Executive, and otherwise to his estate.

 

(j)            CONSULTATION WITH
COUNSEL.    The Executive acknowledges that he has had a
full and complete opportunity to consult with counsel or other advisers of his
own choosing concerning the terms, enforceability and implications of this
Agreement, and that the Company has not made any representations or warranties
to the Executive concerning the terms, enforceability and implications of this
Agreement other than as are reflected in this Agreement. The Company will pay
the reasonable legal fees and expenses incurred in the drafting and negotiation
of this Agreement.

 

(k)           WITHHOLDING.    Any
payments provided for in this Agreement shall be paid net of any applicable
income tax withholding required under federal, state or local law.

 

13

 

(l)            CONSUMER PRICE
INDEX.    For purposes of this Agreement, the term “CPI”
refers to the Consumer Price Index as published by the Bureau of Labor
Statistics of the United States Department of Labor, U.S. City Average, All
Items for Urban Wage Earners and Clerical Workers (1982-1984=100). If the CPI
is hereafter converted to a different standard reference base or otherwise
revised, the determination of the CPI adjustment shall be made with the use of
such conversion factor, formula or table for converting the CPI, as may be
published by the Bureau of Labor Statistics, or, if the bureau shall no longer
publish the same, then with the use of such conversion factor, formula or table
as may be published by an agency of the United States, or failing such
publication, by a nationally recognized publisher of similar statistical
information.

 

(m)          SURVIVAL.    The
provisions of Sections 8, 9, 10, 11, 12, 13, 14 and 15 shall survive the
termination of this Agreement.

 

IN
WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto
have caused this Agreement to be duly executed as of the date first above
written. 

 

	
  GMH
  COMMUNITIES TRUST

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Gary M. Holloway

  	
   

  	
  /s/
  Joseph M. Coyle

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Gary
  M. Holloway

  	
   

  	
  JOSEPH
  M. COYLE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President
  and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated:
  November 2, 2004

  	
   

  	
  Dated:
  November 2, 2004

  
							

 

14Exhibit 10.4

 

EMPLOYMENT
AGREEMENT

BETWEEN

BRUCE F. ROBINSON

AND

GMH COMMUNITIES TRUST

 

This
Employment Agreement (the “Agreement”), dated as of November 2, 2004 (“Effective
Date”), between GMH Communities Trust (the “Company”), and Bruce F. Robinson
(the “Executive”):

 

WHEREAS,
the Company wishes to employ the Executive in the capacities and on the terms
and conditions set out below, and the Executive has agreed to such employment,
in the capacities and on the terms and conditions set forth below.

 

NOW,
THEREFORE, the Company and the Executive, in consideration of the respective
covenants set out below, hereby agree as follows:

 

1.             EMPLOYMENT.

 

(a)           POSITIONS. The Executive shall be employed by
the Company as an Executive Vice-President. The Executive may also serve as an
officer of GMH Communities, L.P. (the “Partnership”), its subsidiaries and its
general partner.

 

(b)           DUTIES. The Executive’s principal employment
duties and responsibilities shall be those duties and responsibilities
customary for the position of Executive Vice-President of the Company and such
other executive duties and responsibilities as the Company’s Board of Trustees
(the “Board”) shall from time to time reasonably assign to the Executive. The
Executive shall report directly to the Company’s President, Chairman and Chief
Executive Officer.

 

(c)           EXTENT OF SERVICES. Except for illnesses and
vacation periods, the Executive shall devote a substantial majority of his
business time and attention and his best efforts to the performance of his duties
and responsibilities under this Agreement. Notwithstanding the foregoing, the
Executive (i) subject to the Executive’s obligations set forth in
Section 11, may make any investment with respect to which he is not
obligated or required to, and does not in fact, devote efforts that would cause
him to be unable to devote a substantial majority of his business time and
attention and his best efforts to the performance of his duties and
responsibilities under this Agreement, (ii) may participate in charitable,
academic or community activities, and in trade or professional organizations,
or (iii) may hold directorships in other companies consistent with the
Company’s conflict of interest policies and corporate governance guidelines as
in effect from time to time.

 

2.             TERM. This Agreement shall be effective as of
the Effective Date and shall continue in full force and effect thereafter for a
period of three (3) years (the “Initial Term”), and shall be automatically
extended for as many as two additional one (1) year periods (each, a “Successor
Term”) at the close of the Initial Term and each Successor Term, unless either
party provides a written notice not less than 60 days prior to the end of
the Initial Term or relevant Successor Term of such party’s intent not to
renew, or the Agreement is sooner terminated pursuant to Section 7. For
purposes of this Agreement, “Term” shall mean the actual duration of the
Executive’s employment hereunder, taking into account any extensions pursuant
to this Section 2 or early termination of employment pursuant to
Section 7.

 

3.             BASE SALARY. The Company shall pay the
Executive a base salary annually (the “Base Salary”), which shall be payable in
periodic installments according to the Company’s normal payroll practices. The
initial Base Salary shall be $325,000. The Board or the Board Committee charged
with responsibility for officer employment and compensation matters of the
Company (the “Compensation Committee”) shall review the Base Salary at least
once a year to determine whether the Base Salary should be increased effective
January 1 of any year during the Term; provided, however, that on each
January 1 during the Term, the Base Salary shall be increased by a minimum
positive amount equal to

 

 

the
Base Salary in effect on January 1 (or, for the first year of the Initial
Term, from the Effective Date until December 31, 2004) of the prior year
multiplied by the percentage increase in the Consumer Price Index applicable to
such year. The amount of the increase shall be determined before March 31
of each year and shall be retroactive to January 1. The Base Salary,
including any increases, shall not be decreased during the Term. For purposes
of this Agreement, the term “Base Salary” shall mean the amount established and
adjusted from time to time pursuant to this Section 3.

 

4.             INCENTIVE AWARDS. Provided that the Executive
is employed by the Company as of December 31, 2004, the Executive shall be
entitled to a fixed bonus for the 2004 calendar year in the amount of $125,000,
subject to the review and concurrence of the Compensation Committee after the
end of the 2004 calendar year. Starting in 2005, the Executive shall be
entitled to receive an annual cash incentive bonus for each calendar year
during the Term of this Agreement consistent with a bonus policy adopted by the
Board or the Compensation Committee for each calendar year (which bonus policy
shall be adopted during the first 90 days of each calendar year)
containing individual performance goals for participants and corporate performance
goals set at Threshold, Target, Superior and Outperformance levels, and
allocating each participant’s annual cash incentive bonus on a percentage basis
between individual and corporate performance goals (the “Bonus Policy”). The
Board or the Compensation Committee shall meet during the first 90 days of
each calendar year to determine the relevant goals for the current calendar
year and to reach determination regarding bonus entitlement for the prior
calendar year. For each calendar year, the annual incentive bonus shall be
determined under the Bonus Policy in effect for such calendar year with
reference to the Executive’s attainment of his individual performance goals and
the Company’s attainment of the overall corporate goals, as follows:

 

total
annual incentive bonus = individual
performance bonus + corporate
performance bonus

 

where:

 

individual performance bonus = individual performance level achieved
(Threshold, Target, Superior or Outperformance
percentage) × individual goals allocation percentage
(20%) × Base Salary

 

corporate performance bonus = corporate performance level achieved
(Threshold, Target, Superior or Outperformance
percentage) × corporate goals allocation percentage
(80%) × Base Salary

 

The
percentages established for the Executive for the performance bonus levels for
2005 shall be 40% for Threshold Level and 80% for Target Level, 120% for
Superior Level, and 175% for Outperformance Level. Except to the extent
otherwise provided in Section 8, no bonus shall be payable unless the Executive
was employed by the Company or a subsidiary as of the last day of the relevant
calendar year. After 2005 the percentages shall not be less than the
2005 percentages for each performance bonus level without the written
agreement of the Executive. For 2005 and thereafter, to the extent the
Executive’s annual incentive bonus exceeds either a performance bonus level of
100% or his then-current Base Salary, such excess bonus amount may, at the sole
discretion of the Company, be paid to the Executive one-half in cash and
one-half in Company Common Shares that shall vest ratably over a period of
three (3) years from the date of payment and shall be subject to dividend
payments, if any, by the Company. If Executive or the Company, as the case may
be, fails to satisfy the performance criteria contained in such Bonus Policy
for a calendar year, the Executive may be eligible to receive an incentive
bonus for such calendar year, in such amount as is recommended by the
Compensation Committee and subject to approval by the full Board (if such
approval is required). The annual incentive bonus shall be paid to the
Executive no later than thirty (30) days after the date on which final
approval of the annual incentive bonus payable to the Executive for such calendar
year is obtained. For purposes of this Agreement, the term “Annual Incentive
Bonus” shall mean the amount established pursuant to this Section 4.

 

2

 

5.             STOCK BASED AWARDS.

 

(a)           OPTION GRANTS. The Company may establish an
equity incentive plan (“Equity Incentive Plan”). The Executive’s eligibility
for grants under the Equity Incentive Plan and the terms and conditions of such
grants shall be determined by the Compensation Committee.

 

(b)           RESTRICTED SHARE AWARDS. The Executive shall
be eligible to receive restricted Common Shares of the Company (“Restricted
Share Grants”) as approved by the Compensation Committee, but only to the
extent that restricted shares are available for issuance under the Equity
Incentive Plan. The terms and conditions of Restricted Share Grants shall be
determined by the Compensation Committee. Any Common Shares issued as
Restricted Share Grants will have voting and dividend rights, and, following
the restriction period, shall be registered and fully transferable by the
Executive.

 

6.             BENEFITS.

 

(a)           VACATION. The Executive shall be entitled to
an amount of vacation time consistent with Company policy applicable to senior
executives but at least five (5) weeks of paid vacation per full calendar
year, which shall accrue during the Executive’s employment with the Company.

 

(b)           SICK AND PERSONAL DAYS. The Executive shall
be entitled to sick and personal days on an as needed basis.

 

(c)           EMPLOYEE BENEFITS.

 

(i)    PARTICIPATION
IN EMPLOYEE BENEFIT PLANS. The Executive and his spouse and eligible
dependents, if any, and their respective designated beneficiaries where
applicable, will be eligible for and entitled to participate in all Company
sponsored employee benefits plan, as such plans may be amended or modified from
time to time, including but not limited to a 401(k) plan, group health,
accident, disability insurance, group life insurance and supplemental life
insurance, as such benefits may be offered from time to time, on a basis no
less favorable than that applicable to any other executive. Such benefits
coverage shall be in the aggregate, not materially less valuable to Executive
than the benefits made available to the Executive immediately prior to the
Effective Date by his then employer.

 

(ii)   DEFERRED
COMPENSATION PLAN. To the extent practicable under applicable law and deemed
appropriate by the Compensation Committee, the Company shall provide to the
Executive an opportunity to participate in a Company sponsored deferred
compensation plan.

 

(d)           OTHER BENEFITS.

 

(i)    ANNUAL
PHYSICAL. The Company shall provide, at its cost, a medical examination for the
Executive on an annual basis by a licensed physician in the Philadelphia,
Pennsylvania area selected by the Executive. The results of such examination
are the sole property of such Executive and shall be treated in confidence.

 

(ii)   CAR
ALLOWANCE. The Company shall pay Executive a monthly car allowance of $1,000 in
advance of the month to which the payment relates.

 

(iii)  TAX
PREPARATION AND FINANCIAL PLANNING. The Company shall pay or promptly reimburse
the Executive for costs incurred by him in connection with tax preparation and
financial planning assistance, to be furnished by such advisors as chosen by
the Executive, up to a maximum aggregate of $10,000 annually.

 

(iv)  DIRECTORS
AND OFFICERS INSURANCE. During the Term and the Severance Period, the Executive
shall be entitled to director and officer insurance coverage for his acts and
omissions while an officer and director of the Company to the extent
applicable, on a basis no less

 

3

 

favorable to him than the
coverage provided to any other current officers and trustees. The provision of
such insurance coverage will be at the sole cost of the Company or the
Partnership.

 

(v)   DISABILITY
INSURANCE. The Company shall maintain, at its cost, supplemental renewable
long-term disability insurance as agreed to by the Company and the Executive.

 

7.             TERMINATION. The employment of the Executive by
the Company pursuant to this Agreement shall terminate upon the occurrence of
any of the following:

 

(a)           DEATH OR PERMANENT DISABILITY. Immediately
upon death or Permanent Disability of the Executive. As used in this Agreement,
“Permanent Disability” shall mean an inability due to a physical or mental
impairment to perform the material services contemplated under this Agreement
for a period of six (6) months, whether or not consecutive, during any
365-day period. A determination of Permanent Disability shall be made by a
physician satisfactory to both the Executive and the Company, provided that if
the Executive and the Company do not agree on a physician, the Executive and
the Company shall each select a physician and these two together shall select a
third physician, whose determination as to Permanent Disability shall be
binding on all parties, with the Company to bear all cost of securing such
determination. The appointment of one or more individuals to carry out the
offices or duties of the Executive during a period of the Executive’s inability
to perform such duties and pending a determination of Permanent Disability
shall not be considered a breach of this Agreement by the Company.

 

(b)           FOR CAUSE. At the election of the Company and
subject to the provisions of this Section 7(b), immediately upon written
notice by the Company to the Executive of his termination for Cause. For
purposes of this Agreement, “Cause” for termination shall be deemed to exist
solely in the event of (i) the conviction of the Executive of, or the
entry of a plea of guilty or nolo contendere
by the Executive to, a felony (exclusive of any felony relating to
negligent operation of a motor vehicle and not including a conviction, plea of
guilty or nolo contendere arising
solely under a statutory provision imposing criminal liability upon the
Executive on a per se basis due to the Company offices held by the Executive,
so long as any act or omission of the Executive with respect to such matter was
not taken or omitted in contravention of any applicable policy or directive of
the Board), (ii) a willful breach of his duty of loyalty which is
materially detrimental to the Company, or (iii) a willful failure to
perform or adhere to explicitly stated duties that are consistent with the
terms of this Agreement, or the Company’s reasonable and customary guidelines
of employment or reasonable and customary corporate governance guidelines or
policies, including without limitation any business code of ethics adopted by
the Board, or to follow the lawful directives of the Board (provided such
directives are consistent with the terms of this Agreement), which, in any such
case, continues for thirty (30) days after written notice from the Board
to the Executive. For purposes of this Section 7(b), no act, or failure to
act, on the Executive’s part will be deemed “willful” unless done, or omitted
to be done, by the Executive not in good faith and without a reasonable belief
that the Executive’s act, or failure to act, was in the best interest of the
Company. The parties agree that in order to terminate the Executive pursuant to
Subsections (ii) and (iii) hereof, the Company shall first be
required to prove to the reasonable satisfaction of the Executive that he
engaged in improper conduct under these Subsections, and if the Executive shall
not agree with the Company’s assessment of his conduct, then the Executive
shall not be terminated until an arbitrator, as provided for in
Section 13(b), has determined that the Executive’s conduct constituted
improper conduct under the applicable Subsection.

 

(c)           WITHOUT CAUSE; WITHOUT GOOD REASON. At the
election of the Company, without Cause, and at the election of the Executive,
without Good Reason, in either case upon thirty (30) days prior written
notice to the Executive or the Company, as the case may be.

 

(d)           FOR GOOD REASON. At the election of the
Executive, for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean any of the following actions or omissions occurring without the Executive’s
written consent, provided the Executive notifies the Company of his
determination that

 

4

 

Good
Reason exists, with such notification to occur within 60 days of the time
at which the Executive knows or should know of the action or omission on which
such determination is based:

 

(i)    failure
by the Company to renew this Agreement on at least comparable terms at the
conclusion of the Initial Term or of either Successor Term,

 

(ii)   a
material reduction of the Executive’s duties, responsibilities or reporting
requirements, or the assignment to the Executive of any duties,
responsibilities, or reporting requirements that are inconsistent with his
positions as Executive Vice-President, as the case may be,

 

(iii)  a
reduction by the Company in the Executive’s annual Base Salary,

 

(iv)  a
material reduction or loss of employee benefits or material fringe benefits,
both in terms of the amount of the benefit and the level of the Executive’s
participation therein, enjoyed by the Executive under the employee benefit and
welfare plans of the Company, including without limitation such benefits as
group health, dental, 401(k), accident, disability insurance, or group life
insurance, that is caused by the Company except as is required by applicable
law,

 

(v)   absent
the Executive’s prior written consent, the requirement by the Company that the
principal place of business at which the Executive performs his duties be
changed to a location that is outside of a 35 mile radius of Newtown Square,
Pennsylvania.

 

(vi)  a
material breach by the Company of any provision of this Agreement that
continues for a period of thirty (30) days after Executive provides
written notice to the Company of such breach.

 

8.             EFFECTS OF TERMINATION.

 

(a)           BY THE COMPANY WITHOUT CAUSE; BY THE
EXECUTIVE FOR GOOD REASON. In the event of a termination of the Executive’s
employment by the Company without Cause (including for these purposes
non-renewal of this Agreement pursuant to Section 2 as termination without
Cause) or by the Executive for Good Reason, then the Company shall pay the
Executive as follows:

 

(i)    an
amount equal to two (2) times (three (3) times if, in connection with
a Change of Control, either the Executive terminates employment with the
Company for Good Reason or the Company terminates the Executive without Cause),
the Executive’s Base Salary and Annual Incentive Bonus (determined at the
Superior Level for both compensation and individual performance for the year in
which the termination of employment occurs) (the “Applicable Amount”),
provided, however, that in the event of a resignation by the Executive for Good
Reason pursuant to Section 7(d)(i) after notice of non-renewal of the
Agreement by the Company with respect to the second Successor Term, the
multiplier shall be limited to one (1) times the Applicable Amount, and

 

(ii)   the
prorated amount of the Annual Incentive Bonus at the Superior Level for both
corporate and individual performance for the year in which the termination of
employment occurs, pro rated for the portion of such year during which the
Executive was employed prior to the effective date of his termination, and

 

(iii)  an
amount equal to accrued but unpaid Base Salary through the date of termination
plus any other compensation then due and owing from the Company.

 

(iv)  The
sum of the amounts payable under subsections (i), (ii) and
(iii) hereof is referred to herein as his “Severance Payment.”

 

(v)   The
Severance Payment shall be made in a single, lump sum cash payment no later
than ten (10) days after the effective date of the Executive’s termination
of employment.

 

(vi)  The
Company shall allow the Executive to continue to participate during the
three-year period commencing on the date of termination (the “Severance Period”)
in any healthcare, dental,

 

5

 

vision and prescription drug
plans in which the Executive was entitled to participate immediately prior to
his termination, to the same extent and upon the same terms as the Executive
participated in such plans prior to his termination, provided that the
Executive’s continued participation is permissible or otherwise practicable
under the general terms and provisions of such benefit plans and programs.
During the Severance Period, the Company shall pay for the Executive’s
continued participation in said healthcare, dental, vision and prescription
drug plans, including but not limited to premiums for such programs. To the
extent that continued participation is neither permissible nor practicable, the
Company shall take such actions as may be necessary to provide the Executive
with substantially comparable benefits (without additional cost to the
Executive) outside the scope of such plans, including, without limitation,
reimbursing the Executive for his costs in obtaining such coverage, such as
COBRA premiums paid by the Executive and/or his eligible dependents. If the
Executive engages in regular employment after his termination of employment
(whether as an executive or as a self-employed person), any employee benefit
and welfare benefits received by the Executive in consideration of such
employment which are similar in nature to the healthcare, dental, vision and
prescription drug plans provided by the Company will relieve the Company of its
obligation under this Section 8(a)(vi) to provide comparable benefits
to the extent of the benefits so received.

 

(vii) The
Executive’s stock options, if any, awarded under the Equity Incentive Plan (or
any other or successor plan) shall immediately become 100% vested and he shall
have at least a two-year period following the effective date of his termination
of employment in which to exercise his vested stock options, including those
stock options that vested upon his termination of employment.

 

(viii) The
Executive’s restricted Common Shares awarded under the Equity Incentive Plan
(or any other or successor plan) shall immediately become 100% vested and all
restrictions shall lapse.

 

(b)           TERMINATION ON DEATH OR PERMANENT DISABILITY.
Upon a termination of employment due to the Executive’s death or his becoming
subject to Permanent Disability, the Company shall pay the Executive (or his
estate or beneficiary) an amount equal to one (1) time the sum of the
Executive’s Base Salary and Annual Incentive Bonus (determined at the Superior
Level for both compensation and individual performance for the year in which
the termination of employment occurs), payable within ten (10) business
days of the occurrence of the relevant event. The Executive shall become 100%
vested in his stock options and restricted Common Shares awarded under the
Equity Incentive Plan. The Executive (or his estate or beneficiary) shall have
a one-year period following the occurrence of the relevant event in which to
exercise his vested stock options, including those stock options that vested on
such event. The Company shall pay to the Executive (or his estate or
beneficiary) any Base Salary, Incentive Bonus, expense reimbursements and all
other compensation related payments that are payable as of the date of the
occurrence of the relevant event and that are related to his period of
employment preceding such date. The Company shall pay to the Executive (or his
estate or beneficiary) the prorated amount of Incentive Bonus at the Target Level
for both corporate and individual performance for the year in which such event
occurs, prorated for the portion of the year during which the Executive was
employed prior to the occurrence of the relevant event.

 

(c)           BY THE COMPANY FOR CAUSE OR BY THE EXECUTIVE
WITHOUT GOOD REASON. In the event that the Executive’s employment is terminated
by the Company for Cause or by the Executive without Good Reason, the Company
shall pay the Executive his accrued Base Salary and, with respect to a
termination by the Executive without Good Reason, any amount of Annual
Incentive Bonus fully earned and payable through the date of termination and
payable under the applicable Incentive Bonus policy, expense reimbursements and
all other compensation related payments that are payable as of his termination
of employment date and that are related to his period of employment preceding
his termination date. The Executive shall be entitled to exercise his vested
stock options, determined as of his termination date, pursuant to the terms of
the option grant. Unless the Company

 

6

 

and
the Executive agree otherwise, the Executive shall forfeit all unvested options
and any unvested Restricted Share Grants not acquired by the Executive for
consideration, subject to Section 9(b) below, and the Company has the
right to repurchase any unvested Restricted Share Grants that the Executive
acquired for consideration in accordance with the terms of the Equity Incentive
Plan (with the result that if the Executive acquired such unvested Restricted
Share Grants for any consideration, the Executive shall at most be entitled to
a return of such consideration). The Executive shall also be entitled to all
benefits accrued and vested under any employee benefit plan of the Company.

 

(d)           TERMINATION OF AUTHORITY. Immediately upon
the Executive terminating or being terminated from his employment with the
Company for any reason, notwithstanding anything else appearing in this
Agreement or otherwise, the Executive will stop serving the functions of his
terminated or expired positions, and shall be without any of the authority or
responsibility for such positions. On request of the Board, at any time
following his termination of employment for any reason, the Executive shall
resign from the Board if then a member. Notwithstanding any contrary provision
in this Agreement, the Company shall continue to indemnify the Executive and
hold the Executive harmless to the extent specified under the by-laws or other
corporate documents of the Company or the Partnership (as applicable) and
permitted by applicable law.

 

9.             CHANGE OF CONTROL.

 

(a)           CHANGE OF CONTROL. For purposes of this
Agreement, a “Change of Control” will be deemed to have taken place upon the
occurrence of any of the following events:

 

(i)    the
acquisition by any person, entity or affiliated group, excluding the Company or
any employee benefit plan of the Company or any entity controlled directly or
indirectly by the Company, of more than 50% of the then outstanding voting
shares of the Company,

 

(ii)   the
consummation of any merger or consolidation of the Company into another
company, such that the holders of the voting shares of the Company immediately
prior to such merger or consolidation hold less than 50% of the voting power of
the securities of the surviving company or the parent of such surviving
company,

 

(iii)  the
complete liquidation of the Company or the sale or disposition of all or
substantially all of the Company’s assets, such that after the transaction, the
holders of the voting shares of the Company immediately prior to the
transaction hold less than 50% of the voting securities of the acquiror or the
parent of the acquiror, or

 

(iv)  trustees
of the Company are elected such that a majority of the members of the Board
shall have been members of the Board for less than two years, unless the
election or nomination for election of each new trustee who was not a trustee
at the beginning of such two-year period was approved by a vote of at least two-thirds
of the trustees then still in office who were trustees at the beginning of such
period, or

 

(v)   a
majority of the Board of the Company votes in favor of a decision that a Change
of Control has occurred.

 

(b)           CERTAIN BENEFITS UPON A CHANGE OF CONTROL. In
the event of a termination of the Executive’s employment by the Executive or by
the Company (or its successor) for any reason other than Cause following a
Change of Control, the Executive shall become 100% vested in all unvested stock
options and restricted Common Shares awarded under the Equity Incentive Plan
(or any other or successor plan) and the Executive shall have a two
(2) year period following the termination of his employment in which to
exercise his vested stock options, including those stock options that vested
upon the Change of Control.

 

7

 

(c)           EXCISE TAX.

 

(i)    In
the event that any payment or benefit received or to be received by the
Executive in connection with a change in control or a termination of the
Executive’s employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any person whose actions
result in a change in control or any person affiliated with the Company or such
person) (all such payments and benefits being hereinafter called “Total
Payments”), is in an amount such that the Executive will be subject (in whole
or in part) to the excise tax imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended (“Excise Tax”) on such payments and benefits,
then the Company shall pay to the Executive an additional amount (the “Gross-Up
Payment”) such that the net amount retained by the Executive, after deduction
of the Excise Tax and any federal, state and local tax on the Gross-Up Payment,
will be equal to the Total Payments. For purposes of determining the amount of
the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes
at the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rate of taxation in the state and locality of the
Executive’s residence on such date, net of the maximum deduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.

 

(ii)   The
Executive or the Company may request, prior to the time any payments under this
Agreement are made, a determination of whether any or all of the Total Payments
will be subject to the Excise Tax and, if so, the amount of such Excise Tax and
the federal, state and local tax imposed on the Gross-Up Payment. If such a
determination is requested, it shall be made promptly, at the Company’s
expense, by tax counsel selected by the Executive and approved by the Company
(with such approval not being unreasonably withheld), and such determination
shall be conclusive and binding on both parties. The Company agrees to provide
any information reasonably requested by such tax counsel. Tax counsel may
engage accountants or other experts, at the Company’s expense, to the extent
deemed necessary or advisable for them to reach a determination. For these
purposes, the term “tax counsel” shall mean a law firm with expertise in
federal income tax matters.

 

(iii)  In
the event that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder, the Executive will repay to the Company,
at the time that the amount of such reduction in Excise Tax is finally determined,
the portion of the Gross-Up Payment attributable to such reduction plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment, without any
interest thereon. In the event that the Excise Tax is determined to exceed the
amount taken into account hereunder, the Company will make an additional
Gross-Up Payment in respect of such excess and in respect of any portion of the
Excise Tax with respect to which the Company had not previously made a Gross-Up
Payment (plus any interest, penalties or additions to tax payable by the
Executive with respect to such excess and such portion) at the time that the
amount of such excess or such portion is finally determined, without any
interest thereon.

 

(iv)  Each
party agrees to notify the other party, in writing, of any claim that, if
successful, would require the payment by the Company of a Gross-Up Payment or
might entitle the Company to a refund of all or part of any previous Gross-Up
Payment. Such notification shall be given as soon as practicable but no later
than ten (10) business days after the Executive or Company is informed in
writing of such claim or otherwise becomes aware of such claim. If notice of
the claim arose as a result of a claim made against the Executive by a taxing
authority, Executive shall not pay such claim prior to the expiration of the
thirty (30) day period following the date on which he gives notice to the
Company. If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall: (A) give the Company any information reasonably requested by the
Company relating to such claim, (B) take

 

8

 

such action in connection
with contesting such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney selected by the
Executive and approved by the Company (with such approval not being
unreasonably withheld), (C) cooperate with the Company in good faith in
order to effectively contest such claim, and (D) permit the Company to
reasonably participate in any proceedings relating to such claim. The Company
shall bear and pay directly all costs and expenses (including legal fees and
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax (including interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and expenses.

 

(v)   Notwithstanding
the foregoing, the Company shall control all audits and proceedings taken in
connection with any claim, audit or proceeding involving Excise Taxes or
Gross-Up Payments and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of any such claim, audit or proceeding and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the tax in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such tax
and sue for a refund, the Company shall advance the amount of such payment to
the Executive, (including interest or penalties with respect thereto) and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance. The Company shall be required to consult with and keep
the Executive fully apprised of developments and actions being considered or
taken with respect to such claim, audit or proceeding. The Company’s control of
the contest shall be limited to issues with respect to which such a Gross-Up
Payment would be payable or refundable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue. Each party
agrees to keep the other party fully apprised of developments concerning such
claim, audit or proceeding and to cooperate with the other in good faith in
order to effectively resolve such claim, audit or proceeding.

 

(vi)  For
purposes of this Subsection (c), a determination of whether a payment is
subject to Excise Tax, including but not limited to, a determination of change
in control, shall be made pursuant to Section 280G of the Internal Revenue
Code of 1986, as amended.

 

10.           CONFIDENTIAL INFORMATION. The Executive
recognizes and acknowledges that certain assets of the Company constitute
Confidential Information. The term “Confidential Information” as used in this
Agreement shall mean all information which is known only to the Executive or
the Company, other employees of the Company, or others in a confidential
relationship with the Company, and relating to the Company’s business
including, without limitation, information regarding clients, customers,
pricing policies, methods of operation, proprietary Company programs, sales
products, profits, costs, markets, key personnel, formulae, product
applications, technical processes, and trade secrets, as such information may
exist from time to time, which the Executive acquired or obtained by virtue of
work performed for the Company, or which the Executive may acquire or may have
acquired knowledge of during the performance of said work. The Executive shall
not, during the Term or for a two (2) year period after the Term, disclose
all or any part of the Confidential Information to any person, firm,
corporation, association, or any other entity for any reason or purpose
whatsoever, directly or indirectly, except as may be required by law or
pursuant to his employment hereunder, unless and until such Confidential
Information becomes publicly available other than as a consequence of the
breach by the Executive of his confidentiality obligations hereunder by law or
in any judicial or

 

9

 

administrative
proceeding (in which case, the Executive shall provide the Company with
notice). In the event of the termination of his employment, whether voluntary
or involuntary and whether by the Company or the Executive, the Executive shall
deliver to the Company all documents and data pertaining to the Confidential
Information and shall not take with him any documents or data of any kind or
any reproductions (in whole or in part) or extracts of any items relating to
the Confidential Information. The Company acknowledges that prior to his
employment with the Company, the Executive has lawfully acquired extensive
knowledge of the industries and businesses in which the Company engages in
business, and that the provisions of this Section 10 are not intended to
restrict the Executive’s use of such previously acquired knowledge.

 

In
the event that the Executive receives a request or is required (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process) to disclose all or any part of the Confidential Information,
the Executive agrees to (a) promptly notify the Company in writing of the
existence, terms and circumstances surrounding such request or requirement,
(b) consult with the Company on the advisability of taking legally
available steps to resist or narrow such request or requirement, and
(c) assist the Company in seeking a protective order or other appropriate
remedy. In the event that such protective order or other remedy is not obtained
or that the Company waives compliance with the provisions hereof, the Executive
shall not be liable for such disclosure unless disclosure to any such tribunal
was caused by or resulted from a previous disclosure by the Executive not
permitted by this Agreement.

 

11.           NON-COMPETITION AND NONSOLICITATION. During
the Term and for a period of 18 calendar months after the termination of the
Executive’s employment (the “Noncompete Period”), the Executive shall not,
directly or indirectly, either as a principal, agent, employee, employer,
stockholder, partner, member, director, trustee or in any other capacity
whatsoever: (a) engage or assist others engaged, in whole or in part, in
any business which is engaged in a business or enterprise that is substantially
similar to any primary segment of the business of the Company that the Company
was engaged in during the period of the Executive’s employment with the
Company, or (b) without the prior consent of the Board, employ or solicit
the employment of, or assist others in employing or soliciting the employment
of, any individual employed by the Company (other than the Executive’s personal
assistant or Executive’s secretary) at any time during the six (6) month
period prior to any termination of the Executive’s employment with the Company;
provided, however, that the
provisions of this Section 11 shall not apply in the event the Company
materially breaches this Agreement.

 

10

 

Further,
nothing in this Section 11 shall prohibit (a) Executive from making
any investment in a public company, or where he is the owner of five percent
(5%) or less of the issued and outstanding voting securities of any entity,
provided such ownership does not result in his being obligated or required to
devote any substantial amount of managerial efforts; or (b) Executive from
being engaged in activities permitted under Section 1(c).

 

The
Executive agrees that the restraints imposed upon him pursuant to this
Section 11 are necessary for the reasonable and proper protection of the
Company and its subsidiaries and affiliates, and that each and every one of the
restraints is reasonable in respect to subject matter, length of time and
geographic area. The parties further agree that, in the event that any
provision of this Section 11 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its being extended over too great
a time, too large a geographic area or too great a range of activities, such
provision shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.

 

12.           INTELLECTUAL PROPERTY. During the Term, the
Executive shall promptly disclose to the Company or any successor or assign,
and grant to the Company and its successors and assigns without any separate
remuneration or compensation other than that received by him in the course of
his employment, his entire right, title and interest in and to any and all
inventions, developments, discoveries, models, or any other intellectual
property of any type or nature whatsoever (“Intellectual Property”), whether
developed by him during or after business hours, or alone or in connection with
others, that is in any way related to the business of the Company, its
successors or assigns. This provision shall not apply to (a) any
Intellectual Property developed by the Executive prior to the Term; and
(b) books or articles authored by the Executive during non-work hours,
consistent with his obligations under this Agreement, so long as such books or
articles (i) are not funded in whole or in part by the Company, and
(ii) do not contain any Confidential Information or Intellectual Property
of the Company. The Executive agrees, at the Company’s expense, to take all
steps necessary or proper to vest title to all such Intellectual Property in
the Company, and cooperate fully and assist the Company in any litigation or
other proceedings involving any such Intellectual Property.

 

13.           DISPUTES.

 

(a)           EQUITABLE RELIEF. The Executive acknowledges
and agrees that upon any breach by the Executive of his obligations under
Sections 10, 11, or 12 hereof, the Company will have no adequate remedy at law,
and accordingly will be entitled to specific performance and other appropriate
injunctive and equitable relief.

 

(b)           ARBITRATION. Excluding only requests for
equitable relief by the Company under Section 13(a), in the event that
there is any claim or dispute arising out of or relating to this Agreement or
the breach hereof, and the parties hereto shall not have resolved such claim or
dispute within 60 days after written notice from one party to the other
setting forth the nature of such claim or dispute, then such claim or dispute
shall be settled exclusively by binding arbitration in Montgomery County,
Pennsylvania, in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association (“Rules”), by an arbitrator mutually agreed
upon by the parties hereto or, in the absence of such agreement, by an
arbitrator selected according to such Rules. Notwithstanding the foregoing, if
either the Company or the Executive shall request, such arbitration shall be
conducted by a panel of three (3) arbitrators, one selected by the
Company, one selected by the Executive and the third selected by agreement of
the first two arbitrators, or, in the absence of such agreement, in accordance
with such Rules. Judgment upon the award rendered by such arbitrator(s) shall
be entered in any Court having jurisdiction thereof upon the application of
either party. The parties agree to use their reasonable best efforts to have
such arbitration completed as soon as is reasonably practicable.
Notwithstanding anything herein to the contrary, except as provided in
(c) below, each party shall bear its own costs and expenses incurred in
connection with the arbitration.

 

11

 

(c)           LEGAL FEES. The Company shall pay or promptly
reimburse the Executive for the reasonable legal fees and expenses incurred by
the Executive in successfully enforcing or defending any right of the Executive
pursuant to this Agreement even if the Executive does not prevail on each
issue.

 

14.           INDEMNIFICATION. The Company shall indemnify
the Executive, to the maximum extent permitted by applicable law, against all
costs, charges and expenses incurred or sustained by the Executive, including
the cost of legal counsel selected and retained by the Executive in connection
with any action, suit or proceeding to which the Executive may be made a party
by reason of the Executive being or having been an officer, director, trustee,
or employee of the Company or the Partnership.

 

15.           COOPERATION IN FUTURE MATTERS. The Executive
hereby agrees that for a period of 18 months following his termination of
employment he shall cooperate with the Company’s reasonable requests relating
to matters that pertain to the Executive’s employment by the Company,
including, without limitation, providing information or limited consultation as
to such matters, participating in legal proceedings, investigations or audits
on behalf of the Company, or otherwise making himself reasonably available to
the Company for other related purposes. Any such cooperation shall be performed
at scheduled times taking into consideration the Executive’s other commitments,
and the Executive shall be compensated at a reasonable hourly or per diem rate
(based on the Executive’s Base Salary as of his termination date). The
Executive shall not be required to perform such cooperation to the extent it
conflicts with any requirements of exclusivity of services for another employer
or otherwise, nor in any manner that in the good faith belief of the Executive
would conflict with his rights under or ability to enforce this Agreement.

 

16.           GENERAL.

 

(a)           NOTICES. All notices and other communications
hereunder shall be in writing or by written telecommunication, and shall be
deemed to have been duly given if delivered personally or if sent by overnight
courier, to the relevant address set forth below or to such other address as
the recipient of such notice or communication shall have specified in writing
to the other party hereto, in accordance with this Section 16(a). 

 

	
  If
  to the Company, to:

  	
   

  	
  GMH
  Communities Trust

  10 Campus Drive

  Newtown Square, PA 19073

  Attn: Board of Trustees

  
	
   

  	
   

  	
   

  
	
  With
  a Mandatory copy to:

  	
   

  	
  GMH
  Communities Trust

  10 Campus Drive

  Newtown Square, PA 19073

  Attn: General Counsel

  

 

If
to Executive, at his last residence shown on the records of the Company.

 

Any
such notice shall be effective (i) if delivered personally, when received,
and (ii) if sent by overnight courier, when receipted for, provided a copy
of such communication is sent, as described above.

 

(b)           SEVERABILITY. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any respect under
any law, the validity, legality and enforceability of the remaining provisions
hereof shall not in any way be affected or impaired.

 

(c)           WAIVERS. No delay or omission by either party
hereto in exercising any right, power or privilege hereunder shall impair such
right, power or privilege, nor shall any single or partial exercise of any such
right, power or privilege preclude any further exercise thereof or the exercise
of any other right, power or privilege.

 

12

 

(d)           COUNTERPARTS. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. In making proof of
this Agreement, it shall not be necessary to produce or account for more than
one such counterpart.

 

(e)           ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the Company’s successors and the Executive’s
personal or legal representatives, executors, administrators, heirs,
distributees, devisees and legatees. This Agreement shall not be assignable by
the Executive, it being understood and agreed that this is a contract for the
Executive’s personal services. This Agreement shall not be assignable by the
Company except that the Company shall assign it in connection with a
transaction involving the succession by a third party to all or substantially
all of the Company’s business and/or assets (whether direct or indirect and
whether by purchase, merger, consolidation, liquidation or otherwise). When
assigned to a successor, the assignee shall assume this Agreement and expressly
agree to perform this Agreement in the same manner and to the same extent as
the Company would be required to perform it in the absence of such an
assignment. For all purposes under this Agreement, the term “Company” shall
include any successor to the Company’s business and/or assets that executes and
delivers the assumption agreement described in the immediately preceding
sentence or that becomes bound by this Agreement by operation of law.

 

(f)            ENTIRE AGREEMENT. This Agreement contains the
entire understanding of the parties, supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter hereof
and may not be amended except by a written instrument hereafter signed by the
Executive and a duly authorized representative of the Board (other than the
Executive).

 

(g)           GOVERNING LAW. This Agreement and the
performance hereof shall be construed and governed in accordance with the laws
of the Commonwealth of Pennsylvania, without giving effect to principles of
conflicts of law.

 

(h)           CONSTRUCTION. The language used in this
Agreement shall be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction shall be applied
against any party. The headings of sections of this Agreement are for
convenience of reference only and shall not affect its meaning or construction.
Whenever any word is used herein in one gender, it shall be construed to include
the other gender, and any word used in the singular shall be construed to
include the plural in any case in which it would apply and vice versa.

 

(i)            PAYMENTS AND EXERCISE OF RIGHTS AFTER DEATH.
Any amounts payable hereunder after the Executive’s death shall be paid to the
Executive’s designated beneficiary or beneficiaries, whether received as a
designated beneficiary or by will or the laws of descent and distribution. The
Executive may designate a beneficiary or beneficiaries for all purposes of this
Agreement, and may change at any time such designation, by notice to the
Company making specific reference to this Agreement. If no designated
beneficiary survives the Executive or the Executive fails to designate a
beneficiary for purposes of this Agreement prior to his death, all amounts
thereafter due hereunder shall be paid, as and when payable, to his spouse, if
she survives the Executive, and otherwise to his estate.

 

(j)            CONSULTATION WITH COUNSEL. The Executive
acknowledges that he has had a full and complete opportunity to consult with
counsel or other advisers of his own choosing concerning the terms,
enforceability and implications of this Agreement, and that the Company has not
made any representations or warranties to the Executive concerning the terms,
enforceability and implications of this Agreement other than as are reflected
in this Agreement. The Company will pay the reasonable legal fees and expenses
incurred in the drafting and negotiation of this Agreement.

 

(k)           WITHHOLDING. Any payments provided for in
this Agreement shall be paid net of any applicable income tax withholding
required under federal, state or local law.

 

13

 

(l)            CONSUMER PRICE INDEX. For purposes of this
Agreement, the term “CPI” refers to the Consumer Price Index as published by
the Bureau of Labor Statistics of the United States Department of Labor, U.S.
City Average, All Items for Urban Wage Earners and Clerical Workers
(1982-1984=100). If the CPI is hereafter converted to a different standard
reference base or otherwise revised, the determination of the CPI adjustment
shall be made with the use of such conversion factor, formula or table for
converting the CPI, as may be published by the Bureau of Labor Statistics, or,
if the bureau shall no longer publish the same, then with the use of such
conversion factor, formula or table as may be published by an agency of the
United States, or failing such publication, by a nationally recognized
publisher of similar statistical information.

 

(m)          SURVIVAL. The provisions of Sections 8, 9,
10, 11, 12, 13, 14 and 15 shall survive the termination of this Agreement.

 

IN
WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto
have caused this Agreement to be duly executed as of the date first above
written. 

 

	
  GMH
  COMMUNITIES TRUST

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gary M. Holloway

  	
   

  	
  /s/ Bruce F. Robinson

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  BRUCE
  F. ROBINSON

  
	
   

  	
  Name:

  	
  Gary M. Holloway

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:
  November 2, 2004

  	
   

  	
  Dated:
  November 2, 2004

  

 

14

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