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                                                                   Exhibit 10.28

                         AMERICAN FINANCIAL REALTY TRUST

                           2002 EQUITY INCENTIVE PLAN

               (As Amended and Restated, Effective April 12, 2003)

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                                TABLE OF CONTENTS

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                                                                                          Page No.
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ARTICLE 1. DEFINITIONS........................................................................1
     1.1      General.........................................................................1
ARTICLE 2. COMMON SHARES SUBJECT TO PLAN......................................................5
     2.1      Common Shares Subject to Plan...................................................5
     2.2      Add-back of Grants..............................................................5
ARTICLE 3. ELIGIBILITY; GRANTS; AWARD AGREEMENTS..............................................6
     3.1      Eligibility.....................................................................6
     3.2      Grants..........................................................................6
     3.3      Provisions Applicable to Section 162(m) Participants............................6
     3.4      Award Agreement.................................................................7
ARTICLE 4. OPTIONS............................................................................8
     4.1      Award Agreement for Option Grant................................................8
     4.2      Option Price....................................................................8
     4.3      Qualification for Incentive Stock Options.......................................8
     4.4      Change in Incentive Stock Option Grant..........................................8
     4.5      Option Term.....................................................................8
     4.6      Option Vesting..................................................................9
     4.7      Fair Market Value...............................................................9
ARTICLE 5. EXERCISE OF OPTIONS...............................................................10
     5.1      Partial Exercise...............................................................10
     5.2      Manner of Exercise.............................................................10
     5.3      Conditions to Issuance of Common Shares........................................12
     5.4      Rights as Shareholders.........................................................12
     5.5      Ownership and Transfer Restrictions............................................12
     5.6      Limitations on Exercise of Options.............................................12
ARTICLE 6. AWARD OF RESTRICTED COMMON SHARES.................................................13
     6.1      Award Agreement................................................................13
     6.2      Award of Restricted Common Shares..............................................13
     6.3      Rights as Shareholders.........................................................14
     6.4      Restriction....................................................................14
     6.5      Lapse of Restrictions..........................................................14
     6.6      Repurchase of Restricted Common Shares.........................................15
     6.7      Escrow.........................................................................15
     6.8      Legend.........................................................................15
ARTICLE 7. ADMINISTRATION....................................................................15
     7.1      Committee......................................................................15
     7.2      Duties and Powers of Committee.................................................15
     7.3      Compensation; Professional Assistance; Good Faith Actions......................15
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                                       (i)

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ARTICLE 8. MISCELLANEOUS PROVISIONS..........................................................16
     8.1      Not Transferable...............................................................16
     8.2      Amendment, Suspension or Termination of this Plan..............................16
     8.3      Changes in Common Shares or Assets of the Company, Acquisition or
                 Liquidation of the Company and Other Corporate Events.......................17
     8.4      Approval of Plan by Shareholders...............................................19
     8.5      Continued Employment...........................................................19
     8.6      Tax Withholding................................................................19
     8.7      Loans..........................................................................20
     8.8      Forfeiture Provisions..........................................................20
     8.9      Limitations Applicable to Section 16 Persons and Performance-Based
                 Compensation................................................................20
     8.10     Restrictions...................................................................20
     8.11     Restrictive Legend.............................................................21
     8.12     Effect of Plan Upon Option and Compensation Plans..............................22
     8.13     Compliance with Laws...........................................................22
     8.14     Titles.........................................................................22
     8.15     Governing Law..................................................................22
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                                      (ii)

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                         AMERICAN FINANCIAL REALTY TRUST
                           2002 EQUITY INCENTIVE PLAN
               (As Amended and Restated, Effective April 12, 2003)

     American Financial Realty Trust, a Maryland real estate investment trust
(the "Company"), initially adopted the American Financial Realty Trust 2002
Equity Incentive Plan (the "Plan"), effective September 10, 2002, for the
benefit of Employees, Consultants and Trustees of the Company and First States
Group, L.P. The Company hereby amends and restates the Plan, effective April 12,
2003, as set forth herein.

     The purposes of this Plan are (a) to recognize and compensate selected
Employees, Consultants and Trustees who contribute to the development and
success of the Company and its Affiliates and Subsidiaries, (b) to maintain the
competitive position of the Company and its Affiliates and Subsidiaries by
attracting and retaining, Employees, Consultants and Trustees, and (c) to
provide incentive compensation to Employees, Consultants and Trustees based upon
the Company's and/or Affiliate's and Subsidiary's performance.

                             ARTICLE 1. DEFINITIONS

     1.1 General. Wherever the following initially capitalized terms are used in
this Plan they shall have the meanings specified below, unless the context
clearly indicates otherwise.

     "Administrator" shall mean the President and Chief Executive Officer of the
Company.

     "Affiliate" shall mean any entity that directly or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with the Company, including without limitation, FS OP.

     "Award" shall mean the grant or award of Options or Restricted Common
Shares under this Plan.

     "Award Agreement" shall mean the agreement granting Options or awarding
Restricted Common Shares. Such Award Agreement shall be executed by an officer
of the Company and the Employee, Consultant or Trustee receiving such grant.

     "Award Limit" shall mean 1,516,000 of Common Shares subject to an Option
and 600,000 shares of Restricted Common Shares awarded to a Participant in any
Plan Year.

     "Board" shall mean the Board of Trustees of the Company, as comprised from
time to time.

     "Cause" shall, except as otherwise defined in the Participant's Employment
Agreement, mean (i) the conviction of the Employee of, or the entry of a plea of
guilty or nolo contendere by the Employee 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 Employee on a per se basis due to
the Company offices held by the Employee, so long as any act or omission of the
Employee with respect to such matter was not taken or omitted in contravention
of any applicable policy or

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directive of the Board), (ii) a willful breach of his duty of loyalty which is
materially detrimental to the Company, (iii) a willful failure to perform or
adhere to explicitly stated duties that are consistent with the terms of his
position with the Company, 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 the Participant's Employment
Agreement), which, in any such case, continues for thirty (30) days after
written notice from the Board to the Employee, or (iv) gross negligence or
willful misconduct in the performance of the Employee's duties. No act, or
failure to act, on the Employee's part will be deemed "gross negligence" or
"willful misconduct" unless done, or omitted to be done, by the Employee not in
good faith and without a reasonable belief that the Employee's act, or failure
to act, was in the best interest of the Company. The Committee shall determine,
in good faith, if an Employee has been terminated for Cause.

     "Change in Control" shall, except as otherwise defined in the Participant's
Employment Agreement, mean the occurrence of any of the following events: (a)
any person, entity or affiliated group, excluding the Company or any employee
benefit plan of the Company, acquiring more than 50% of the then outstanding
voting shares of the Company, (b) the consummation of any merger or
consolidation of the Company into another company, such that the holders of the
voting shares of the Company immediately after such merger or consolidation are
less than 50% of the voting power of the surviving company or the parent of the
surviving company, (c) 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 is less than 50% of the voting securities of the
acquiror or the parent of the acquiror, or (d) a majority of the Board votes in
favor of a decision that a Change in Control has occurred.

     "Code" shall mean the Internal Revenue Code of 1986, as amended.

     "Committee" shall mean the Compensation Committee of the Board.

     "Common Shares" shall mean the common shares of beneficial ownership, par
value $0.001 per share, of the Company.

     "Company" shall mean American Financial Realty Trust, a Maryland real
estate investment trust, or any business organization which succeeds to its
business and elects to continue this Plan. For purposes of this Plan, the term
Company shall include, where applicable, the employer of the Employee or
Consultant, including without limitation FS OP or such other Affiliate or
Subsidiary who employs the Employee or the Consultant.

     "Consultant" shall mean a professional or technical expert, consultant or
independent contractor who provides services to the Company or an Affiliate or
Subsidiary, and who may be selected to participate in the Plan.

     "Employee" shall mean any employee (as defined in accordance with the
regulations and revenue rulings then applicable under Section 2401(c) of the
Code) of the Company or an

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Affiliate or Subsidiary of the Company, whether such employee is so employed at
the time this Plan is adopted or becomes so employed subsequent to the adoption
of this Plan.

     "Employment Agreement" shall mean the employment, consulting or similar
contractual agreement entered into by the Employee or the Consultant, as the
case may be, and the Company governing the terms of the Employee's or
Consultant's employment with the Company, if any.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Fair Market Value" of a share of Commons Shares, as of a given date, shall
be determined pursuant to Section 4.7.

     "FS OP" means First State Group, L.P., of which the Company is a limited
partner and the sole owner of the general partner.

     "Good Reason" shall only apply, and shall only have the meaning, as
contained in the Participant's Employment Agreement. Any provision herein that
relates to a Termination of Employment by the Participant for Good Reason shall
have no effect if there is no Employment Agreement or the Employment Agreement
does not contain a provision permitting the Participant to terminate for Good
Reason.

     "Grant" shall mean the granting of Options and/or Restricted Common Shares
by the Committee to an eligible Employee, Consultant or Trustee.

     "Incentive Stock Option" shall mean an option which conforms to the
applicable provisions of Section 422 of the Code and which is designated as an
Incentive Stock Option by the Committee.

     "Independent Trustee" shall mean a member of the Board who would not
otherwise be classified as an Employee except for his or her position as a
member of the Board.

     "Non-Qualified Stock Option" shall mean an Option which the Committee does
not designate as an Incentive Stock Option.

     "144A Offering" means the private placement of Common Shares of beneficial
ownership of the Company pursuant to the formation of the Company.

     "Option" shall mean an option to purchase Common Shares that is granted
under Article 4 of this Plan. An option granted under this Plan shall, as
determined by the Committee, be either a Non-Qualified Stock Option or an
Incentive Stock Option; provided, however, that Options granted to Independent
Trustees and Consultants shall be Non-Qualified Stock Options.

     "Option Period" shall have the meaning ascribed thereto in Section 8.10.

     "Participant" shall mean an Employee, Consultant or Trustee who has been
determined as eligible to receive a Grant pursuant to Section 3.2.

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     "Permanent Disability" or "Permanently Disabled" shall, except as otherwise
defined in the Participant's Employment Agreement, mean the inability of an
Employee, Consultant or a Trustee due to a physical or mental impairment to
perform the material services of his position with the Company for a period of
six (6) months, whether or not consecutive, during any 365-day period. A
determination of Permanent Disability shall be made in good faith by the
Committee. Notwithstanding the foregoing, if a Participant is determined to be
Permanently Disabled pursuant to the terms of his Employment Agreement, he shall
be Permanently Disabled for purposes of this Plan.

     "Plan" shall mean the American Financial Realty Trust 2002 Equity Incentive
Plan, as embodied herein and as amended from time to time.

     "Plan Year" shall mean the fiscal year of the Company.

     "Restricted Common Shares" shall mean Common Shares awarded under Article 6
of this Plan.

     "Retirement" or "Retire" shall, except as otherwise defined in the
Participant's Employment Agreement, mean a Participant's Termination of
Employment with the Company on or after his 65 birthday.

     "Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such rule may be amended from time to time.

     "Section 162(m) Participant" shall mean any Employee the Committee
designates to receive a Grant whose compensation for the fiscal year in which
the Employee is so designated or a future fiscal year may be subject to the
limit on deductible compensation imposed by Section 162(m) of the Code, as
determined by the Committee in its sole discretion.

     "Subsidiary" shall mean an entity in an unbroken chain beginning with the
Company if each of the entities other than the last entity in the unbroken chain
owns 50 percent or more of the total combined voting power of all classes of
equity in one of the other entities in such chain.

     "Termination of Employment" shall mean the date on which the
employee-employer, contractual or similar relationship between a Participant and
the Company is terminated for any reason, with or without Cause, including, but
not by way of limitation, a termination of employment by resignation, discharge,
death, Permanent Disability or Retirement, but excluding (i) termination of
employment where there is a simultaneous reemployment or continuing employment
of a Participant by the Company, and (ii) at the discretion of the Committee,
termination of employment which result in a temporary severance of the
employee-employer relationship. The Committee, in its absolute discretion, shall
determine the effect of all matters and questions relating to a Termination of
Employment (subject to the provisions of any Employment Agreement between a
Participant and the Company), including, but not limited to all questions of
whether particular leaves of absence constitute a Termination of Employment;
provided, however, that, unless otherwise determined by the Committee in its
discretion, a leave of absence, change in status from an employee to an
independent contractor or other change the employee-employer, contractual or
similar relationship shall constitute a Termination of

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Employment if, and to the extent that, such leave of absence, change in status
or other change interrupts employment for the purposes of Section 422(a)(2) of
the Code and the then applicable regulations and revenue rulings under said
Section.

     "Trustee" shall mean a member of the Company's Board.

     "Vest", "Vested" or "Vesting" shall mean the percentage by which a
Participant shall vest in his Grant in accordance with his Award Agreement.

                    ARTICLE 2. COMMON SHARES SUBJECT TO PLAN

     2.1 Common Shares Subject to Plan.

          2.1.1     The Common Shares subject to an Option or award of
                    Restricted Common Shares shall be shares of the Company's
                    authorized but unissued, reacquired, or treasury Common
                    Shares. The aggregate number of such shares which may be
                    issued upon exercise of such Options is 3,125,000 Common
                    Shares (which includes any restricted Common Shares received
                    by the Participant as a result of the early exercise of an
                    Option pursuant to Section 4.6.3) and the number of such
                    shares which may be granted as Restricted Common Shares is
                    1,500,000 (which does not include any restricted Common
                    Shares received by the Participant as a result of the early
                    exercise of an Option pursuant to Section 4.6.3).

          2.1.2     The maximum number of Common Shares which may be awarded to
                    any individual in any calendar year shall not exceed the
                    Award Limit. To the extent required by Section 162(m) of the
                    Code, Common Shares subject to Options which are canceled
                    continue to be counted against the Award Limit and if, after
                    grant of an Option, the price of Common Shares subject to
                    such Option is reduced, the transaction is treated as a
                    cancellation of the Option and a grant of a new Option, both
                    the Option deemed to be canceled and the Option deemed to be
                    granted are counted against the Award Limit.

     2.2 Add-back of Grants. If any Option expires or is canceled without having
been fully exercised, is exercised in whole or in part for cash as permitted by
this Plan, or is exercised prior to becoming vested as permitted under Section
4.6.3 and is forfeited prior to becoming vested, the number of Common Shares
subject to such Option but as to which such Option or other right was not
exercised or vested prior to its expiration, cancellation or exercise may again
be optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Furthermore, any Common Shares subject to a Grant which are adjusted
pursuant to Section 8.3 and become exercisable with respect to shares of stock
of another entity shall be considered canceled and may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1. Shares
of Common Shares which are delivered by the Participant or withheld by the
Company upon the exercise of any Option or other award under this Plan, in
payment of the exercise price thereof, may again be optioned, granted or awarded
hereunder, subject to the

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limitations of Section 2.1. If any share of Restricted Common Shares is
forfeited by the Participant, such Common Shares may again be optioned, granted
or awarded hereunder, subject to the limitations of Section 2.1. Notwithstanding
the provisions of this Section 2.2, no shares of Common Shares may again be
optioned, granted or awarded pursuant to an Incentive Stock Option if such
action would cause such Option to fail to qualify as an Incentive Stock Option
under Section 422 of the Code.

                ARTICLE 3. ELIGIBILITY; GRANTS; AWARD AGREEMENTS

     3.1 Eligibility. Any Employee, Consultant or Trustee selected to
participate pursuant to Section 3.2 shall be eligible to participate in the
Plan.

     3.2 Grants. The Administrator shall determine which Employees, Consultants
and/or Trustees, other than himself, shall receive a Grant, whether the
Employee, Consultant or Trustee will receive Options and/or Restricted Common
Shares, whether the Option Grant shall be of Incentive Stock Options and/or
Non-Qualified Stock Options, and the number of Common Shares subject to such
Grant, subject to Committee review and approval. The Committee shall determine
the terms of any Grant to the Administrator, the number of Common Shares subject
to such Grant, whether the Administrator shall receive Options and/or Restricted
Common Shares, and whether the Option Grant shall be of Incentive Stock Options
and/or Non-Qualified Stock Options, in accordance with the terms of the
Participant's Employment Agreement, if any. Notwithstanding the foregoing, the
terms and conditions of a Grant intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall include, but
not be limited to, such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code.

     3.3 Provisions Applicable to Section 162(m) Participants.

          3.3.1     Notwithstanding anything in the Plan to the contrary, the
                    Committee may grant Options and/or Restricted Common Shares
                    to a Section 162(m) Participant that Vest upon the
                    attainment of performance targets for the Company which are
                    related to one or more of the following performance goals:
                    (i) pre-tax income, (ii) operating income, (iii) cash flow,
                    (iv) earnings per share, (v) return on equity, and/or (vi)
                    return on invested capital or assets, (vii) cost reductions
                    or savings, (vii) such other identifiable and measurable
                    performance objectives, as determined by the Committee or,
                    if applicable, the Administrator, pursuant to the terms of a
                    Participant's Employment Agreement and subject to Committee
                    review and approval.

          3.3.2     To the extent necessary to comply with the performance-based
                    compensation requirements of Section 162(m)(4)(C) of the
                    Code, no later than ninety (90) days following the
                    commencement of any fiscal year in question or any other
                    designated fiscal period (or such other time as may be
                    required or permitted by Section 162(m) of the Code), the
                    Committee or, if applicable, the Administrator pursuant to a
                    Participant's

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                    Employment Agreement and subject to Committee review and
                    approval, shall, in writing, (i) designate one or more
                    Section 162(m) Participants, (ii) select the performance
                    goal or goals applicable to the fiscal year or other
                    designated fiscal period, (iii) establish the various
                    targets and bonus amounts which may be earned for such
                    fiscal year or other designated fiscal period and (iv)
                    specify the relationship between performance goals and
                    targets and the amounts to be earned by each Section 162(m)
                    Participant for such fiscal year or other designated fiscal
                    period. Following the completion of each fiscal year or
                    other designated fiscal period, the Committee or if
                    applicable, the Administrator, shall certify in writing
                    whether the applicable performance targets have been
                    achieved for such fiscal year or other designated fiscal
                    period. In determining the amount earned by a Section 162(m)
                    Participant, the Committee or, if applicable, the
                    Administrator, shall have the right to reduce (but not to
                    increase) the amount payable at a given level of performance
                    to take into account additional factors that the Committee
                    or, if applicable, the Administrator, may deem relevant to
                    the assessment of individual or corporate performance for
                    the fiscal year or other designated fiscal period.

     3.4 Award Agreement. Upon the selection of an Employee, Consultant or
Trustee to become a Participant and receive a Grant, the Committee shall cause a
written Award Agreement to be issued to such individual encompassing the terms
and conditions of such Grant, as determined by the Committee in its sole
discretion; provided, however, that if applicable, the terms of such Award
Agreement shall comply with the terms of such Participant's Employment
Agreement, if any. Such Award Agreement shall provide for the exercise price for
Options and the purchase price for Restricted Common Shares, the exercisability
and Vesting schedule, payment terms and such other terms and conditions of such
Grant, as determined by the Committee in its sole discretion. Notwithstanding
the foregoing, the Committee may, in its discretion and on such terms as it
deems appropriate, require as a condition on the grant of an Option that the
Participant surrender for cancellation some or all of the unexercised Options or
awards of Restricted Common Shares which have been previously granted to him
under this Plan or otherwise. An Option, the grant of which is conditioned upon
such surrender, may have an Option price lower (or higher) than the exercise
price of such surrendered Option, may cover the same (or a lesser or greater)
number of Common Shares as such surrendered Option or other award, may contain
such other terms as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of Common Shares, price,
exercise period or any other term or condition of such surrendered Option or
award of Restricted Common Shares. Each Award Agreement shall be executed by the
Participant and an officer or a Director (other than the Participant) of the
Company authorized to sign such Award Agreement and shall contain such terms and
conditions that are consistent with the Plan, including but not limited to the
exercisability and Vesting schedule, if any, as the Committee in its sole
discretion shall determine. All Grants shall be made conditional upon the
Participant's acknowledgment, in writing in the Award Agreement or otherwise or
by acceptance of the Grant, that all decisions and determinations of the
Committee shall be final and binding on the Participant, his beneficiaries and
any other person having or claiming an interest under such Grant.

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                               ARTICLE 4. OPTIONS

     4.1 Award Agreement for Option Grant. Option grants shall be evidenced by
an Award Agreement, pursuant to Section 3.4. Award Agreements evidencing Options
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the Code. Award
Agreements evidencing Incentive Stock Options shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section 422
of the Code.

     4.2 Option Price. The price per share of the Common Shares subject to each
Option shall be set by the Committee; provided, however, that such price shall
be no less than the par value of a share of Common Shares, unless otherwise
permitted by applicable state law, and (i) in the case of Incentive Stock
Options and Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code, such price shall not be less than
100% of the Fair Market Value of a share of Common Shares on the date the Option
is granted, (ii) in the case of Incentive Stock Options granted to an individual
then owning (within the meaning of Section 424(d) of the Code) more than 10% of
the total combined voting power of all classes of shares of the Company or any
Subsidiary or parent corporation thereof (within the meaning of Section 422 of
the Code) such price shall not be less than 110% of the Fair Market Value of a
share of Common Shares on the date the Option is granted, and (iii) in the case
of Non-Qualified Stock Options granted to Independent Trustees after the Company
is subject to the Exchange Act, such price shall equal 100% of the Fair Market
Value of a share of Common Shares on the date the Option is granted.

     4.3 Qualification for Incentive Stock Options. The Committee may grant an
Incentive Stock Option to an individual if such person is an Employee of the
Company or is an Employee of an Affiliate or Subsidiary as permitted under
Section 422(a)(2) of the Code.

     4.4 Change in Incentive Stock Option Grant. Any Incentive Stock Option
granted under this Plan may be modified by the Committee to disqualify such
Option from treatment as an Incentive Stock Option under Section 422 of the
Code. To the extent that the aggregate Fair Market Value of Common Shares with
respect to which Incentive Stock Options (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by a Participant during any calendar year (under the Plan and all
other Incentive Stock Option plans of the Company) exceeds $100,000, such
Options shall be treated as Non-Qualified Stock Options to the extent required
or permitted by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were Granted. For purposes of this Section 4.4, the Fair Market Value of
Common Shares shall be determined as of the time the Option with respect to such
Common Shares is granted, pursuant to Section 4.7.

     4.5 Option Term. The term of an Option shall be set by the Committee in its
discretion; provided, however, in the case of Incentive Stock Options, the term
shall not be more than ten (10) years from the date the Incentive Stock Option
is granted, or five (5) years from such date if the Incentive Stock Option is
granted to an Employee then owning (within the

                                      -8-

<PAGE>

meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of shares of the Company or any Subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code). Such
Incentive Stock Options shall be subject to Section 5.6, except as limited by
the requirements of Section 422 of the Code and regulations and rulings
thereunder applicable to Incentive Stock Options.

     4.6 Option Exercisability and Vesting.

          4.6.1     The period during which Options in whole or in part become
                    exercisable and vest in the Participant shall be set by the
                    Committee and shall be as provided for in the Award
                    Agreement. At any time after the grant of an Option, the
                    Committee may, in its sole and absolute discretion and
                    subject to whatever terms and conditions it selects,
                    accelerate the period during which an Option becomes
                    exercisable and Vests.

          4.6.2     In each Award Agreement, the Committee shall indicate
                    whether the portion of the Options, if any, that remains
                    non-exercisable and non-vested upon the Participant's
                    Termination of Employment with the Company are forfeited. In
                    so specifying, the Committee may differentiate between the
                    reason for the Participant's Termination of Employment.

          4.6.3     At any time on or after the grant of an Option, the
                    Committee may provide in an Award Agreement that the
                    Participant may elect to exercise part or all of an Option
                    before it otherwise has become exercisable. Any Common
                    Shares so purchased shall be restricted Common Shares and
                    shall be subject to a repurchase right in favor of the
                    Company during a specified restriction period, with the
                    repurchase price equal to the lesser of (i) the price per
                    share paid by the Participant for the Common Shares, or (ii)
                    the Fair Market Value of such Common Shares at the time of
                    repurchase, or such other restrictions as the Committee
                    deems appropriate. The Participant shall have, unless
                    otherwise provided by the Committee in the Award Agreement,
                    all the rights of an owner of Common Shares, subject to the
                    restrictions and provisions of his Award Agreement,
                    including the right to vote such Common Shares and to
                    receive all dividends and other distributions paid or made
                    with respect to Common Shares.

          4.6.4     Any Options which are not exercisable and Vested upon the
                    occurrence of a Change in Control, including restricted
                    Common Shares received upon the exercise of an Option as
                    described in Section 4.6.3 above, shall become 100%
                    exercisable, if not previously exercised, and 100% Vested,
                    unless the Award Agreement or the Participant's Employment
                    Agreement provides otherwise.

     4.7 Fair Market Value. The Fair Market Value of a share of Commons Shares
as of a given date shall be (i) the closing price of a share of Common Shares on
the principal exchange

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on which shares of Common Shares are then trading, if any (or as reported on any
composite index which includes such principal exchange), on the trading day
previous to such date, or if Common Shares were not traded on the trading day
previous to such date, then on the next preceding date on which a trade
occurred, or (ii) if Common Shares are not traded on an exchange but are quoted
on NASDAQ or a successor quotation system, either the (a) closing sale price, or
(b) the mean between the closing representative bid and asked prices for the
Common Shares on the trading day previous to such date as reported by NASDAQ or
such successor quotation systems, as may be appropriate, or (iii) if Common
Shares are not publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the Fair Market Value of a share of Common Shares as
established by the Company acting in good faith. The Fair Market Value as
determined by the Company in good faith and in the absence of fraud shall be
binding and conclusive upon all parties hereto, and in any event the Participant
agrees to accept and shall not challenge any determination of Fair Market Value
made by the Company. If the Company subdivides (by split, dividend or otherwise)
the Common Shares into a greater number of Common Shares, or combines (by
reverse split or otherwise) the Common Shares into a smaller number of Common
Shares after the Company shall have determined the Fair Market Value for the
Common Shares subject to a Grant (without taking into consideration such
subdivision or combination) and prior to the consummation of the purchase, the
Fair Market Value shall be appropriately adjusted to reflect such subdivision or
combination, and the Company's good faith determination as to any such
adjustment shall be binding and conclusive on all parties hereto.

                         ARTICLE 5. EXERCISE OF OPTIONS

     5.1 Partial Exercise. At any time and from time to time prior to the time
when any exercisable Option or portion thereof becomes unexercisable under the
Plan or the Award Agreement, such Option or portion thereof may be exercised in
whole or in part; provided, however, that the Company shall not be required to
issue fractional Common Shares and the Committee may, by the terms of the
Option, require any partial exercise to be with respect to a minimum number of
Common Shares.

     5.2 Manner of Exercise. An exercisable Option, or any exercisable portion
thereof, may be exercised solely by delivery to the Company of all of the
following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the Award Agreement:

          5.2.1     A written notice signed by the Participant or other person
                    then entitled to exercise such Option or portion thereof,
                    stating that such Option or portion is being exercised,
                    provided such notice complies with all applicable rules
                    established by the Committee from time to time;

          5.2.2     Such representations and documents as the Committee, in its
                    absolute discretion, deems necessary or advisable to effect
                    compliance with all applicable provisions of the Securities
                    Act of 1933, as amended, and any other federal or state
                    securities laws or regulations. The Committee may, in its
                    absolute discretion, also take whatever additional actions
                    it deems

                                      -10-

<PAGE>

                    appropriate to effect such compliance including, without
                    limitation, causing legends to be placed on Common Share
                    certificates and issuing stop-transfer notices to agents and
                    registrars;

          5.2.3     In the event that the Option shall be exercised pursuant to
                    Section 8.1 by any person or persons other than the
                    Participant, appropriate proof of the right of such person
                    or persons to exercise the Option or portion thereof; and

          5.2.4     Full payment (in cash or by a certified check) for the
                    Common Shares with respect to which the Option or portion
                    thereof is exercised, including the amount of any
                    withholding tax due, unless with the prior written consent
                    of the Committee:

                    5.2.4.1.  payment is delayed for up to thirty (30) days from
                              the date the Option or portion thereof is
                              exercised;

                    5.2.4.2.  payment, in whole or in part, is made through the
                              delivery of shares of Common Shares owned by the
                              Participant, duly endorsed for transfer to the
                              Company with a Fair Market Value on the date of
                              delivery equal to the aggregate exercise price of
                              the Option or exercised portion thereof, provided,
                              that shares of Common Shares used to exercise the
                              Option have been held by the Participant for the
                              requisite period of time to avoid adverse
                              accounting consequences to the Company with
                              respect to the Option;

                    5.2.4.3.  payment, in whole or in part, is made through the
                              surrender of shares of Common Shares then issuable
                              upon exercise of the Option having a Fair Market
                              Value on the date of Option exercise equal to the
                              aggregate exercise price of the Option or
                              exercised portion thereof;

                    5.2.4.4.  payment, in whole or in part, is made through the
                              delivery of property of any kind which constitutes
                              good and valuable consideration;

                    5.2.4.5.  payment, in whole or in part, is made through the
                              delivery of a full recourse promissory note
                              bearing interest (at no less than such rate as
                              shall then preclude the imputation of interest
                              under the Code) and payable upon such terms as may
                              be prescribed by the Committee in its sole
                              discretion;

                    5.2.4.6.  after a public offering of the Common Shares,
                              payment through a broker at the time required in
                              accordance with procedures permitted by Regulation
                              T of the Federal Reserve Board; or

                                      -11-

<PAGE>

                    5.2.4.7.  payment is made through any combination of the
                              consideration provided for in this Section 5.2.4
                              or such other method approved by the Committee
                              consistent with applicable law. In the case of a
                              promissory note, the Committee may also prescribe
                              the form of such note and the security to be given
                              for such note. The Option may not be exercised,
                              however, by delivery of delayed payment, a
                              promissory note or by a loan from the Company when
                              or where such delayed payment, loan or other
                              extension of credit is prohibited by law.

     5.3 Conditions to Issuance of Common Shares. The Company shall not be
required to issue or deliver any certificate or other indicia evidencing
ownership of shares of Common Shares purchased upon the exercise of any Option
or portion thereof prior to fulfillment of all of the following conditions:

          5.3.1     The obtaining of any approval or other clearance from any
                    state or federal governmental agency which the Committee
                    shall, in its sole discretion, determine to be necessary or
                    advisable;

          5.3.2     The lapse of such reasonable period of time following the
                    exercise of the Option as the Committee may establish from
                    time to time for reasons of administrative convenience;

          5.3.3     The receipt by the Company of full payment for such Common
                    Shares, including payment of any applicable withholding tax;
                    and

          5.3.4     The Participant agreeing to the terms and conditions of the
                    Plan and the Award Agreement.

     5.4 Rights as Shareholders. The holders of Options shall not be, nor have
any of the rights or privileges of, shareholders of the Company in respect of
any Common Shares purchasable upon the exercise of any part of an Option unless
and until certificates or other indicia representing such Common Shares have
been issued by the Company to such holders.

     5.5 Ownership and Transfer Restrictions. The Committee, in its absolute
discretion, may impose at the time of Grant such restrictions on the ownership
and transferability of the Common Shares purchasable upon the exercise of an
Option as it deems appropriate. Any such restriction shall be set forth in the
Award Agreement and may be referred to on the certificates or other indicia
evidencing such Common Shares.

     5.6 Limitations on Exercise of Options.

          5.6.1     Vested Incentive Stock Options may not be exercised after
                    the earlier of (i) their expiration date, (ii) twelve (12)
                    months from the date of the Participant's death, (iii)
                    twelve (12) months from the date of the Participant's
                    Termination of Employment by reason of his Permanent
                    Disability, or (iv) the expiration of three (3) months from
                    the date of the

                                      -12-

<PAGE>

                    Participant's Termination of Employment for any reason other
                    than such Participant's death or Permanent Disability,
                    unless the Participant dies within said three-month period.
                    Leaves of absence for less than 90 days shall not cause a
                    Termination of Employment for purposes of Incentive Stock
                    Options.

          5.6.2     Non-Qualified Stock Options may be exercised up until their
                    expiration date, unless the Committee provides otherwise in
                    the Award Agreement.

                  ARTICLE 6. AWARD OF RESTRICTED COMMON SHARES

     6.1 Award Agreement. Grants of Restricted Common Shares shall be evidenced
by an Award Agreement, pursuant to Section 3.4. Award Agreements evidencing
Restricted Common Shares intended to qualify as performance-based compensation
as described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code.

     6.2 Award of Restricted Common Shares.

          6.2.1     The Committee may from time to time, in its absolute
                    discretion, consistent with this Plan:

                    6.2.1.1.  Determine the aggregate number of Common Shares to
                              be awarded as Restricted Common Shares to
                              Employees, Consultants and/or Trustees;

                    6.2.1.2.  Determine the purchase price, if any, and other
                              terms and conditions applicable to such Restricted
                              Common Shares, and

                    6.2.1.3.  Determine when the restrictions lapse.

                    6.2.1.4.  The Administrator shall determine which Employees,
                              Consultants and/or Trustees shall receive a Grant
                              of Restricted Common Shares and the amount of such
                              Grant, subject to Committee review and approval.

          6.2.2     Notwithstanding the foregoing, and excluding a Grant of
                    Restricted Common Shares to Independent Trustees in
                    connection with the 144A Offering, no Restricted Common
                    Share Awards shall be made until the date immediately after
                    the closing of any private or public offering or series of
                    offerings of Common Shares effected subsequent to the 144A
                    Offering and in connection with raising new equity capital
                    for the Company or any Affiliate, or Common Shares are
                    issued in connection with the acquisition or any series of
                    acquisitions of real estate assets, or any combination
                    thereof, with aggregate net proceeds or an aggregate net
                    value of at least $150 million, or any combination of
                    offerings or

                                      -13-

<PAGE>

                    acquisitions with aggregate net proceeds or an aggregate net
                    value of at least $150 million.

          6.2.3     The Committee may establish the purchase price, if any, and
                    form of payment for Restricted Common Shares. If the
                    Committee establishes a purchase price, the purchase price
                    shall be no less than the par value of the Common Shares to
                    be purchased, unless otherwise permitted by applicable state
                    law.

          6.2.4     Upon the selection of an Employee, Consultant or Trustee to
                    be awarded Restricted Common Shares, the Committee shall
                    instruct the Secretary of the Company to issue such
                    Restricted Common Shares and may impose such conditions on
                    the issuance of such Restricted Common Shares as it deems
                    appropriate.

          6.2.5     Restricted Common Share Grants shall vest pursuant to the
                    Award Agreement.

     6.3 Rights as Shareholders. Upon delivery of the shares of Restricted
Common Shares to the Participant or the escrow holder pursuant to Section 6.7,
the Participant shall have, unless otherwise provided by the Committee in the
Award Agreement, all the rights of an owner of Common Shares, subject to the
restrictions and provisions of his Award Agreement, including the right to
receive all dividends and other distributions paid or made with respect to the
Common Shares; provided, however, that in the discretion of the Committee, any
extraordinary distributions with respect to the Common Shares shall be subject
to the restrictions set forth in Section 6.4.

     6.4 Restriction. All shares of Restricted Common Shares issued under this
Plan (including any Common Shares received by holders thereof with respect to
shares of Restricted Common Shares as a result of stock dividends, stock splits
or any other form of recapitalization, if any) shall at the time of Grant, in
the terms of each individual Award Agreement, be subject to such restrictions as
the Committee shall, in its sole discretion, determine, which restrictions may
include, without limitation, restrictions concerning voting rights,
transferability, Vesting, Company performance and individual performance;
provided, however, that by action taken subsequent to the time Restricted Common
Shares are issued, the Committee may, on such terms and conditions as it may
determine to be appropriate, remove any or all of the restrictions imposed by
the terms of the Award Agreement. Restricted Common Shares may not be sold or
encumbered until all restrictions are terminated or expire.

     6.5 Lapse of Restrictions. The restrictions shall lapse in accordance with
the terms of the Award Agreement. In the Award Agreement, the Committee shall
indicate whether Restricted Common Shares then subject to restrictions are
forfeited or if the restrictions shall lapse upon the Participant's Termination
of Employment. In so specifying, the Committee may differentiate between the
reason for the Participant's Termination of Employment.

                                      -14-

<PAGE>

     6.6 Repurchase of Restricted Common Shares. The Committee may provide in
the terms of the Award Agreement awarding Restricted Common Shares that the
Company shall have call rights, a right of first offer and/or a right of refusal
regarding Restricted Common Shares then subject to restrictions.

     6.7 Escrow. The Company may appoint an escrow holder to retain physical
custody of each certificate or control of each other indicia representing
Restricted Common Shares until all of the restrictions imposed under the Award
Agreement with respect to the Common Shares evidenced by such certificate expire
or shall have been removed.

     6.8 Legend. In order to enforce the restrictions imposed upon shares of
Restricted Common Shares hereunder, the Committee shall cause a legend or
restrictions to be placed on certificates of Restricted Common Shares that are
still subject to restrictions under Award Agreements, which legend or
restrictions shall make appropriate reference to the conditions imposed thereby.

                            ARTICLE 7. ADMINISTRATION

     7.1 Committee. The Plan shall be administered by the Compensation Committee
of the Board, except to the extent otherwise provided for herein with respect to
the Administrator. The Board may remove members, add members, and fill vacancies
on the Committee from time to time, all in accordance with the Company's
Articles of Incorporation, by-laws, and with applicable law. The majority vote
of the Committee, or for acts taken in writing without a meeting by the
unanimous written consent of the members of the Committee, shall be valid acts
of the Committee. Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board.

     7.2 Duties and Powers of Committee. It shall be the duty of the Committee
to conduct the general administration of this Plan in accordance with its
provisions. The Committee shall have the power to interpret this Plan and the
agreements pursuant to which Options or Restricted Common Shares are granted or
awarded, and to adopt such rules for the administration, interpretation, and
application of this Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Any such Grant or Award under this Plan need not be the
same with respect to each Participant. Any such interpretations and rules with
respect to Incentive Stock Options shall be consistent with the provisions of
Section 422 of the Code.

     7.3 Compensation; Professional Assistance; Good Faith Actions. Unless
otherwise determined by the Board, members of the Committee shall receive no
compensation for their services. All expenses and liabilities which members of
the Committee incur in connection with the administration of this Plan shall be
borne by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. The
Committee, the Company and the Company's officers and Trustees shall be entitled
to rely upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Committee or the
Board in good faith shall be final and binding upon all Participants, the
Company and all other interested persons.

                                      -15-

<PAGE>

No members of the Committee or Board shall be personally liable for any action,
determination or interpretation made in good faith with respect to this Plan and
any Grants made hereunder, and all members of the Committee and the Board shall
be fully protected by the Company in respect of any such action, determination
or interpretation.

                       ARTICLE 8. MISCELLANEOUS PROVISIONS

     8.1 Transferability.

          8.1.1     Not Transferable. No Option or Restricted Common Share or
                    any right therein or part thereof shall be liable for the
                    debts, contracts or engagements of the Participant or his
                    successors in interest or shall be subject to disposition by
                    transfer, alienation, anticipation, pledge, encumbrance,
                    assignment or any other means, whether such disposition be
                    voluntary or involuntary or by operation of law by judgment,
                    levy, attachment, garnishment or any other legal or
                    equitable proceedings (including bankruptcy), and any
                    attempted disposition thereof shall be null and void and of
                    no effect; provided, however, that nothing in this Section
                    8.1.1 shall prevent transfers by will or by the applicable
                    laws of descent and distribution or as permitted in Section
                    8.1.2 below. The Committee shall not be required to
                    accelerate the exercisabilty of a Grant or otherwise take
                    any action pursuant to a divorce or similar proceeding in
                    the event Participant's spouse is determined to have
                    acquired a community property interest in all or any portion
                    of a Grant. Except as provided below, during the lifetime of
                    the Participant, only he may exercise a Grant (or any
                    portion thereof) granted to him under the Plan. After the
                    death of the Participant, any exercisable portion of a
                    Grant, prior to the time when such portion becomes
                    unexercisable under the Plan or the applicable Award
                    Agreement or other agreement, may be exercised by his
                    personal representative or by any person empowered to do so
                    under the deceased Participant's will or under the then
                    applicable laws of descent and distribution.

          8.1.2     Transfer of Non-Qualified Stock Options. Notwithstanding the
                    foregoing, the Committee may provide in an Award Agreement,
                    or amend an otherwise outstanding Award Agreement to
                    provide, that a Participant may transfer Non-Qualified Stock
                    Options to family members, or one or more trusts or other
                    entities for the benefit of or owned by family members,
                    consistent with applicable securities laws, according to
                    such terms as the Committee may determine; provided that the
                    Participant receives no consideration for the transfer of a
                    Non-Qualified Stock Option and the transferred Non-Qualified
                    Stock Option shall continue to be subject to the same terms
                    and conditions as were applicable to the Non-Qualified Stock
                    Option immediately before the transfer.

     8.2 Amendment, Suspension or Termination of this Plan.

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<PAGE>

          8.2.1     Except as otherwise provided in this Section 8.2, this Plan
                    may be wholly or partially amended or otherwise modified,
                    suspended or terminated at any time or from time to time by
                    the Board or the Committee; provided, however, no action of
                    the Board or the Committee may be taken that would otherwise
                    require shareholder approval as a matter of applicable law,
                    regulation or rule, without the consent of the shareholders.
                    No amendment, suspension or termination of this Plan shall,
                    without the consent of the Participant, impair any rights or
                    obligations under any Grant theretofore made to the
                    Participant, unless such right has been reserved in the Plan
                    or the Award Agreement. No Grant may be made during any
                    period of suspension or after termination of this Plan. In
                    no event may any Grant be made under this Plan after the
                    first to occur of the following events:

                    8.2.1.1.  the expiration of ten (10) years from the initial
                              date the Plan is adopted by the Board; or

                    8.2.1.2.  the expiration of ten (10) years from the date the
                              Plan initially is approved by the Company's
                              shareholders under Section 8.4.

          8.2.2     Notwithstanding the foregoing, the Board or the Committee
                    may take any action necessary to comply with a change in
                    applicable law, irrespective of the status of any Grant as
                    Vested or unvested, exercisable or unexercisable, at the
                    time of such change in applicable law.

     8.3 Changes in Common Shares or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.

          8.3.1     In the event that the Committee determines, in its sole
                    discretion, that any dividend or other distribution (whether
                    in the form of cash, Common Shares, other securities, or
                    other property), on account of a recapitalization,
                    reclassification, stock split, reverse stock split,
                    reorganization, merger, consolidation, split-up, spin-off,
                    combination, repurchase, liquidation, dissolution, or sale,
                    transfer, exchange or other disposition of all or
                    substantially all of the assets of the Company, or exchange
                    of Common Shares or other securities of the Company,
                    issuance of warrants or other rights to purchase Common
                    Shares or other securities of the Company, or other similar
                    event, affects the Common Shares such that an adjustment is
                    appropriate in order to prevent dilution or enlargement of
                    the benefits or potential benefits intended to be made
                    available under the Plan, then the Committee may, in such
                    manner as it may deem equitable, adjust any or all of the
                    following:

                    8.3.1.1.  the number and kind of Company shares with respect
                              to which a Grant may be made under the Plan;

                                      -17-

<PAGE>

                    8.3.1.2.  the number and kind of Company shares subject to
                              an outstanding Grant; and

                    8.3.1.3.  the exercise price or purchase price with respect
                              to any Grant.

          8.3.2     In the event of any transaction or event described in
                    Section 8.3.1 or any unusual or nonrecurring transactions or
                    events affecting the Company, any Affiliate, or the
                    financial statements of the Company or any Affiliate, or of
                    changes in applicable laws, regulations, or accounting
                    principles, the Committee in its discretion is hereby
                    authorized to take any one or more of the following actions
                    whenever the Committee determines, in its sole discretion,
                    that such action is appropriate in order to prevent dilution
                    or enlargement of the benefits or potential benefits
                    intended to be made available under the Plan or with respect
                    to any Grant, right or other award under this Plan, to
                    facilitate such transactions or events or to give effect to
                    such changes in laws, regulations or principles:

                    8.3.2.1.  the Committee may provide, either by the terms of
                              the Award Agreement or by action taken prior to
                              the occurrence of such transaction or event and
                              either automatically or upon the Participant's
                              request, for (i) the purchase of any such Grant
                              for the payment of an amount of cash equal to the
                              amount that could have been attained upon the
                              exercise of such Grant or realization of the
                              Participant's rights had such Grant been currently
                              exercisable, payable, fully Vested or the
                              restrictions lapsed, or (ii) the replacement of
                              such Grant with other rights or property selected
                              by the Committee;

                    8.3.2.2.  the Committee may provide in the terms of such
                              Award Agreement that the Grant cannot be exercised
                              after such event;

                    8.3.2.3.  the Committee may provide, by the terms of such
                              Grant or by action taken prior to the occurrence
                              of such transaction or event, that for a specified
                              period of time prior to such transaction or event,
                              such Grant shall be exercisable, notwithstanding
                              anything to the contrary in Section 4.6 or the
                              provisions of such Grant;

                    8.3.2.4.  the Committee may provide, by the terms of such
                              Grant or by action taken prior to the occurrence
                              of such transaction or event, that upon such
                              event, such Grant be assumed by the successor or
                              survivor corporation, or a parent or subsidiary
                              thereof, or shall be substituted for by similar
                              Grants covering the shares of the successor or
                              survivor corporation, or a parent or subsidiary
                              thereof, with appropriate adjustments as to the
                              number and kind of shares and prices;

                                      -18-

<PAGE>

                    8.3.2.5.  the Committee may make adjustments in the number
                              and type of shares of Common Shares subject to
                              outstanding Options and in the number and kind of
                              outstanding Restricted Common Shares and/or in the
                              terms and conditions of (including the grant or
                              exercise price), and the criteria included in,
                              outstanding Grants, and rights and awards which
                              may be granted in the future; and

                    8.3.2.6.  the Committee may provide either by the terms of a
                              Restricted Common Share Award or by action taken
                              prior to the occurrence of such event that, for a
                              specified period of time prior to such event, the
                              restrictions imposed under an Award Agreement upon
                              some or all shares of the Restricted Common Shares
                              may be terminated, and some or all shares of such
                              Restricted Common Shares may cease to be subject
                              to forfeiture under Section 6.5 or repurchase
                              under Section 6.6 after such event.

          8.3.3     Subject to Section 8.8, the Committee may, in its sole
                    discretion, at the time of Grant, include such further
                    provisions and limitations in any Award Agreement or
                    certificate, as it may deem appropriate and in the best
                    interests of the Company; provided, however, that no such
                    provisions or limitations shall be contrary to the terms of
                    the Participant's Employment Agreement or the terms of this
                    Plan.

          8.3.4     Notwithstanding the foregoing, in the event of a transaction
                    or event described in Sections 8.3.1 or any unusual or
                    nonrecurring transactions or events affecting the Company,
                    no action pursuant to this Section 8.3 shall be taken that
                    is specifically prohibited under applicable law, the rules
                    and regulations of any governing governmental agency or
                    national securities exchange, or the terms of the
                    Participant's Employment Agreement.

     8.4 Approval of Plan by Shareholders. This Plan will be submitted for the
approval of the Company's shareholders within twelve (12) months after the date
of the Board's initial adoption of this Plan. If the shareholders fail to
approve this Plan, all Options granted hereunder shall be Non-Qualified Stock
Options.

     8.5 Continued Employment. Nothing in this Plan or in any Award Agreement
hereunder shall confer upon any Participant any right to continue his
employment, consulting or similar relationship with the Company or an Affiliate,
whether as an Employee, Consultant, Trustee or otherwise, or shall interfere
with or restrict in any way the rights of the Company or an Affiliate, which are
hereby expressly reserved, to discharge or terminate the relationship with any
Participant at any time for any reason whatsoever, subject to the terms of any
Employment Agreement entered into by the Participant and the Company or
Affiliate.

     8.6 Tax Withholding. The Company shall be entitled to require payment in
cash or deduction from other compensation payable to each Participant of any
sums required by federal, state or local tax law to be withheld with respect to
the issuance, Vesting, exercise of any Option,

                                      -19-

<PAGE>

or the lapse of restrictions on Restricted Common Shares. The Committee may, in
its sole discretion and in satisfaction of the foregoing requirement, allow such
Participant to elect to have the Company withhold shares of Common Shares
otherwise issuable under such Option (or allow the return of shares of Common
Shares) having a Fair Market Value equal to the sums required to be withheld;
provided, however, that any Common Shares withheld shall be no greater than an
amount that does not exceed the Participant's minimum applicable withholding tax
rate for federal (including FICA), state and local tax liabilities.

     8.7 Loans. The Committee may, in its discretion, extend one or more loans
to Participants in connection with the exercise or receipt of an Option granted
under this Plan, or the issuance of Restricted Common Shares awarded under this
Plan; provided, however, that no such loan shall be made if prohibited by law.
The terms and conditions of any such loan shall be set by the Committee.

     8.8 Forfeiture Provisions. Pursuant to its general authority to determine
the terms and conditions applicable to Grants, the Committee shall have the
right to provide, in the terms of such Grant, or to require the recipient to
agree by separate written instrument, that (i) any proceeds, gains or other
economic benefit actually or constructively received by the recipient upon any
receipt or resale of any Common Shares underlying such Grant, must be paid to
the Company until such time the Company becomes publicly traded, and (ii) the
Grant shall terminate and any unexercised portion of such Grant (whether or not
Vested) shall be forfeited, if (a) a Termination of Employment occurs prior to a
specified date, or within a specified time period following receipt or exercise
of the Grant, (b) the recipient at any time, or during a specified time period,
engages in any activity in competition with the Company, or which is inimical,
contrary or harmful to the interests of the Company, as further defined by the
Committee or as specified in the Participant's Employment Agreement, or (c) the
Company terminates the Employee with or without Cause.

     8.9 Limitations Applicable to Section 16 Persons and Performance-Based
Compensation. Notwithstanding any other provision of this Plan, any Option and
Restricted Common Shares granted or awarded to any individual who is then
subject to Section 16 of the Exchange Act shall be subject to any additional
limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act). To the
extent permitted by applicable law, Options granted or awarded hereunder shall
be deemed amended to the extent necessary to conform to such applicable
exemptive rule. Furthermore, notwithstanding any other provision of this Plan to
the contrary, any Grant which is granted to a Section 162(m) Participant and is
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the
extent necessary to conform to such requirements.

     8.10 Restrictions.

                                      -20-

<PAGE>

          8.10.1    Except as otherwise provided for in the Award Agreement,
                    upon any Termination of Employment, for a one year period
                    thereafter, the Company shall have the right, but not the
                    obligation, to purchase all Vested Common Shares awarded
                    hereunder or acquired pursuant to a Grant, for their Fair
                    Market Value at the time of purchase by the Company. These
                    rights shall be in addition to the right of first refusal
                    pursuant to Section 8.10.2; provided, however, that in the
                    event the Company decides not to exercise its rights
                    pursuant to Section 8.10.2, the provisions of this Section
                    8.10.1 shall cease to apply with respect to those Common
                    Shares that were offered to the Company and sold in
                    accordance with the provisions of Section 8.10.2.

          8.10.2    Except as otherwise provided for in the Award Agreement, if
                    an individual desires and is permitted to sell, encumber, or
                    otherwise dispose of shares of Common Shares awarded
                    hereunder or acquired pursuant to a Grant, the individual
                    shall first offer the shares to the Company by giving the
                    Company written notice disclosing: (i) the name of the
                    proposed transferee of the Common Shares, (ii) the
                    certificate number and number of shares of Common Shares
                    proposed to be transferred or encumbered, (iii) the proposed
                    price, (iv) all other terms of the proposed transfer, and
                    (v) a written copy of the proposed offer. Within 60 days
                    after receipt of such notice, the Company shall have the
                    option to purchase all or part of such Common Shares same
                    price and on the same terms as contained in such notice (the
                    "Option Period"). In the event the Company does not exercise
                    the option to purchase the Common Shares, as provided above,
                    the individual shall have the right to sell, encumber or
                    otherwise dispose of his shares of Common Shares on the
                    terms of the transfer set forth in the written notice to the
                    Company, provided such transfer is effected within 30 days
                    after the expiration of the Option Period. If the transfer
                    is not effected within such period, the Company must again
                    be given an option to purchase, as provided above.

          8.10.3    On and after the date a class of the Company's securities
                    are registered under Sections 12(b) or 12(g) of the
                    Securities Exchange Act of 1934, as amended, the Company
                    shall have no further right to purchase shares of Common
                    Shares under this Section 8.10, and its limitations shall be
                    null and void.

          8.10.4    Notwithstanding the foregoing, the Committee may require
                    that a Participant execute any other documents it deems
                    necessary or desirable with respect to any Common Shares
                    distributed or purchased pursuant to this Plan.

     8.11 Restrictive Legend. All of the Common Shares now outstanding or
hereafter issued and/or owned shall be held and transferred subject to the terms
of the restrictions herein contained and every certificate representing a share
of Common Shares shall contain the

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<PAGE>

following legend: "These shares are held subject to the terms of a certain
Company plan and such shares may only be transferred in accordance with the
terms thereof. A copy of such plan is available at the office of the Company."

     8.12 Effect of Plan Upon Option and Compensation Plans. The adoption of
this Plan shall not affect any other compensation or incentive plans in effect
for the Company. Nothing in this Plan shall be construed to limit the right of
the Company (i) to establish any other forms of incentives or compensation for
Employees, Consultants or Trustees, or (ii) to grant or assume options or other
rights otherwise than under this Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.

     8.13 Compliance with Laws. This Plan, the granting and Vesting of Grants
under this Plan and the issuance and delivery of shares of Common Shares and the
payment of money under this Plan or under Grants awarded hereunder are subject
to compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.

     8.14 Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Plan.

     8.15 Governing Law. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the laws of the Commonwealth of
Pennsylvania, without regard to conflicts of laws thereof.

                                   * * * * * *

     I hereby certify that the foregoing Plan, as amended and restated, was duly
adopted by the Board of Trustees of American Financial Realty Trust on April 12,
2003.

     Executed on this      day of April, 2003
                      ----


                                          --------------------------------------
                                          Nicholas S. Schorsch
                                          President, Chief Executive Officer and
                                          Vice Chairman of the Board of Trustees

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