Document:

Exhibit 10.6

 

EMPLOYMENT AGREEMENT

BETWEEN

JOHN DERIGGI

AND

GMH COMMUNITIES TRUST

 

This Employment Agreement (the “Agreement”),
effective as of July 1, 2006 (“Effective Date”), between GMH Communities Trust
(the “Company”), and John DeRiggi (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 effective as of the Effective Date shall be $300,000
annually.  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 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 without the written agreement of the
Executive.  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.  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 and
Superior 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 (during the
first 120 days for the 2006 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 or Superior percentage) x individual goals allocation percentage (20%) x
Base Salary

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

 

The
percentages established for the Executive for the performance bonus levels for
2006 shall be 40% for Threshold Level and 80% for Target Level and 120% for
Superior Level.  Except to the 

 

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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.  For 2006 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 the 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.

5.             STOCK
BASED AWARDS.

(a)           OPTION
GRANTS.  The Company has established 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; provided, however, that the Executive can never accrue more
than ten (10) weeks of paid and unused vacation time during the Term of this
Agreement.

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

 

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(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 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 and the amount of coverage provided shall be
determined by the Company and/or the Board, in its or their sole discretion.

(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:

 

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(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.

 

 

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(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 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 substantially similar 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 position 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 or by the Executive for
Good Reason, then the Company shall pay the Executive as follows:

(i)            an amount equal to two (2) times (and
two (2) 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 corporate 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

 

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(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 thirty (30) 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 two-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),
including without limitation the Restricted Share Grants, shall immediately
become 100% vested and all restrictions shall lapse.

 

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(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
corporate and individual performance for the year in which the termination of
employment occurs), payable within thirty (30) 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 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.

 

 

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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 Gary M. Holloway or any entity controlled
or member/partner managed directly or indirectly by Gary M. Holloway, 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 (unless such company is
controlled or member/partner managed directly or indirectly by Gary M.
Holloway), 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 (unless the
acquiror or parent of the acquiror is Gary M. Holloway or an entity controlled
or member/partner managed directly or indirectly by Gary M. Holloway), 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.

(c)           EXCISE TAX.  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), 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, 

 

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the Executive acknowledges and agrees that the Company shall not be
responsible to pay to the Executive any increase in any such payment or benefit
to offset the Excise Tax.

 

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 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 24 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 

 

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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).

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.

 

11

 

(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 prevails on one or more, but not all, of such issues.

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.

 

12

 

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 Boulevard

  	
   

  	
   

  
	
   

  	
   

  	
  Newtown
  Square, PA 19073

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:
  Board of Trustees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  With a
  Mandatory copy to:

  	
   

  	
  GMH
  Communities Trust

  	
   

  	
   

  
	
   

  	
   

  	
  10
  Campus Boulevard

  	
   

  	
   

  
	
   

  	
   

  	
  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
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 

 

13

 

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.

 

14

 

(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 6(d)(iv), 8, 9,
10, 11, 12, 13, 14, 15 and 16 shall survive the termination of this Agreement.

 

15

 

                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/John DeRiggi

  
	
  Name:
  Gary M. Holloway

  	
  JOHN DERIGGI

  
	
  Its:
  Chairman, CEO and President

  	
   

  
	
   

  	
   

  
	
  Dated: July 6, 2006

  	
  Dated:  July 6, 2006

  

 

 

16Exhibit 10.7

 

EMPLOYMENT AGREEMENT

BETWEEN

JOSEPH M. MACCHIONE

AND

GMH COMMUNITIES TRUST

 

This Employment Agreement (the “Agreement”),
effective as of July 1, 2006 (“Effective Date”), between GMH Communities Trust
(the “Company”), and Joseph Macchione (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 and General Counsel.  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 and General Counsel 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 effective as of January 1, 2006 shall be $250,000. 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 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 without the written agreement
of the Executive.  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.  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 120 days of the 2006 calendar year and during the first 90 days of
each calendar year thereafter) containing individual performance goals for
participants and corporate performance goals set at Threshold, Target and
Superior 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 (during the
first 120 days for the 2006 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) x individual goals allocation
percentage (40%) x Base Salary

        corporate
performance bonus = corporate performance level achieved (Threshold,
Target, Superior or Outperformance percentage) x corporate goals allocation percentage
(60%) x Base Salary

 

2

The
percentages established for the Executive for the performance bonus levels for
2006 shall be 40% for Threshold Level and 80% for Target Level and 120% for
Superior 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.  For 2006 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 the 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.

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; provided, however, that the Executive can never accrue more
than ten (10) weeks of paid and unused vacation time during the Term of this
Agreement.

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

 

3

 

 

(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.

(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 $650 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 $5,000
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 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 and the amount of coverage provided shall be
determined by the Company and/or the Board, in its or their sole discretion.

(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:

 

4

 

(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.

 

5

 

(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 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 substantially similar 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 or by the Executive for
Good Reason, then the Company shall pay the Executive as follows:

(i)            an amount equal to two (2) times (and
two (2) 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

 

6

 

(ii)           the prorated amount of the Annual
Incentive Bonus at the Superior Level for both corporate and individual
performance based off of the prior calendar year’s performance (except in the
case where the Executive was not employed with the Company in the prior year,
in which case it will be based off of 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 thirty (30) 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 two-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.

 

7

 

(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
corporate and individual performance based off of the prior calendar year’s
performance (except in the case where the Executive was not employed with the
Company in the prior year, in which case it will be based off of the year in
which the termination of employment occurs), payable within thirty (30) 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, 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.

 

8

 

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 Gary M. Holloway or any entity controlled
or member/partner managed directly or indirectly by Gary M. Holloway, 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 (unless such company is
controlled or member/partner managed directly or indirectly by Gary M.
Holloway), 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 (unless the
acquiror or parent of the acquiror is Gary M. Holloway or an entity controlled
or member/partner managed directly or indirectly by Gary M. Holloway), 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.

(c)           EXCISE TAX.  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), 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, 

 

9

 

the Executive acknowledges and agrees that the Company shall not be
responsible to pay to the Executive any increase in any such payment or benefit
to offset the Excise Tax.

 

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 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 24 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 

 

10

 

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).

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.

 

11

 

(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 only
if the Executive prevails on such 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.

 

12

 

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 Boulevard

  
	
   

  	
   

  	
  Newtown
  Square, PA 19073

  
	
   

  	
   

  	
  Attn:
  Board of Trustees

  
	
   

  	
   

  	
   

  
	
  With a
  Mandatory copy to:

  	
   

  	
  GMH
  Communities Trust

  
	
   

  	
   

  	
  10
  Campus Boulevard

  
	
   

  	
   

  	
  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
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 

 

13

 

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.

 

14

 

(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.

 

15

 

                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. Macchione

  
	
  Name:
  Gary M. Holloway

  	
  JOSEPH M. MACCHIONE

  
	
  Its:
  Chairman, CEO and President

  	
   

  
	
   

  	
   

  
	
  Dated: July 6, 2006

  	
  Dated:  July 6, 2006

  

 

 

16

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