Document:

First Amendment to Revolving Credit Agreement

 Exhibit 10.4 
 FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT 
 THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
(this “Amendment”) is made as of December 11, 2006, among RAIT INVESTMENT TRUST, a Maryland trust (“RAIT”), RAIT PARTNERSHIP, L.P., a Delaware limited partnership (“RAIT OP”), and RAIT ASSET HOLDINGS,
LLC, a Delaware limited liability company (“RAIT SPE”) (RAIT, RAIT OP and RAIT SPE are hereinafter referred to individually as a “Borrower” and collectively as the “Borrowers”), KEYBANK NATIONAL
ASSOCIATION, as Administrative Agent (the “Administrative Agent”), and the LENDERS party to this Amendment (the “Lenders”). 
 WITNESSETH: 
 WHEREAS, capitalized terms used in this Amendment without definition have the meanings
provided therefor in that certain Revolving Credit Agreement dated as of October 24, 2005, by and among the Borrowers, the Administrative Agent and the Lenders (the “Credit Agreement”); and 
 WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders agree to amend, and to waive certain provisions of, the Credit
Agreement, and the Administrative Agent and the Lenders have agreed to amend, and to waive certain provisions of, the Credit Agreement, on, and subject to, the terms and conditions set forth herein, 
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrowers, the Administrative
Agent and the Lenders agree as follows: 
 1. Amendments to Credit Agreement. As of the Effective Date (as hereinafter defined), the
Credit Agreement is hereby amended as follows: 
 (a) The following definitions are hereby added to Section 1.1 of the
Credit Agreement in the proper alphabetical sequence: 
 “Excluded Subsidiary” means any Consolidated
Subsidiary (other than a Borrower) whose Debt consists solely of Debt issued or incurred pursuant to a securitization transaction, provided in each case such Debt is not Recourse Debt of the Borrowers or Taberna. 
 “Excluded Debt” means Debt issued or incurred by a Borrower or a Subsidiary of a Borrower pursuant to any loan or
warehouse facility provided that such Debt is not Recourse Debt of the Borrowers or Taberna.” 
 “Taberna” means Taberna Realty Finance Trust, a Maryland real estate investment trust. Upon the occurrence of the Taberna Closing Date, Taberna shall be a Subsidiary of RAIT and a Consolidated Party. 

 “Taberna Acquisition” means the acquisition by RAIT of all of the
Capital Stock of Taberna (excluding certain shares of Capital Stock which will be retained by Persons not affiliated with the Borrowers for the purpose of compliance with REIT regulations) by means of a merger by and between a Subsidiary of RAIT and
Taberna. 
 “Taberna Closing Date” means the date on which the closing of the Taberna Acquisition occurs.

 (b) The definition of “Adjusted Earnings” in Section 1.1 of the Credit Agreement is hereby amended by
changing the phrase “Net Income” therein to “REIT taxable income of the Consolidated Parties calculated in accordance with the Code, before giving effect to the dividends paid deduction”. 
 (c) The definition of “Borrowing Base Availability” in Section 1.1 of the Credit Agreement is hereby amended by changing
the phrase in clause (y)(ii) thereof from “2:00 to 1:00” to “1.50 to 1.00.” 
 (d) The definition of
“EBITDA” in Section 1.1 of the Credit Agreement is hereby amended by adding the following phrase at the end thereof: “ All amounts determined in clauses (i) through and including (v) shall be determined (i) as if
all Excluded Subsidiaries were not included in the Consolidated Parties and were instead accounted for using the equity method of accounting and (ii) all Interest Expense relating to Excluded Debt and all income relating to assets securing
Excluded Debt were not included and were instead accounted for using the equity method of accounting.” 
 (e) The
definition of “Interest Expense” in Section 1.1 of the Credit Agreement is hereby amended by adding the following phrase at the end thereof: “; and provided further, that, on and after the Taberna Closing Date, for the purposes
of calculating the Interest Coverage Ratio under 5.8(b) and the Fixed Charge Coverage Ratio under 5.8(c), “Interest Expense” shall not include any interest expense relating to any Excluded Subsidiary or Excluded Debt.” 
 (f) The definition of “Fixed Charge Coverage Ratio” in Section 1.1 of the Credit Agreement is hereby amended by adding the
following phrase at the end thereof: “All amounts determined in clauses (a) through and including (b) shall be determined as if (i) all Excluded Subsidiaries were not included in the Consolidated Parties and were instead
accounted for using the equity method of accounting and (ii) all Excluded Debt and assets securing Excluded Debt were not included and were instead accounted for using the equity method of accounting. 
 (g) The definition of “Secured Debt” in Section 1.1 of the Credit Agreement is hereby deleted in its entirety. 

(h) The definition of “Total Assets” in Section 1.1 of the Credit Agreement is hereby amended by adding the following
phrase at the end thereof: “; and provided further, that, on and after the Taberna Closing Date, for the purposes of calculating the Leverage Ratio under Section 5.8(a), Total Assets (i) shall be determined as if the assets 

  

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of Excluded Subsidiaries or assets securing Excluded Debt were not included in the Total Assets and (ii) shall include investments of the Consolidated
Parties in such Excluded Subsidiaries and assets securing Excluded Debt using the equity method of accounting.” 
 (i)
The definition of “Total Liabilities” in Section 1.1 of the Credit Agreement is hereby amended by adding the following phrase at the end thereof: “; and provided further, that, on and after the Taberna Closing Date, for the
purposes of calculating the Leverage Ratio under Section 5.8(a), Total Liabilities (i) shall be determined as if all Debt of the Excluded Subsidiaries and Excluded Debt were not included in the Total Liabilities and (ii) shall not
include Debt constituting subordinated debentures or trust preferred securities (“TruPS”) issued by Borrowers or Taberna or a Wholly-Owned Subsidiary of Taberna that are approved by the Administrative Agent in its discretion.”

 (j) The definition of “Unsecured Debt” in Section 1.1 of the Credit Agreement is hereby deleted in its
entirety. 
 (k) Section 2.18 of the Credit Agreement is hereby amended by changing the phrase in clause (a) thereof
from “$80,000,000” to “$165,000,000”. 
 (l) Section 5.8(a) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows: “(a) Leverage Ratio. At all times the Leverage Ratio will be less than or equal to sixty percent (60%).” 
 (m) Section 5.8(d) of the Credit Agreement is hereby amended and restated to read as follows: “[Reserved]”. 
 (n) Section 5.8(e) of the Credit Agreement is hereby amended and restated to read as follows: “(e) Recourse Debt to Total
Assets. At all times, the ratio of (i) the Debt of the Consolidated Parties that is Recourse Debt to RAIT or RAIT OP to (ii) the Consolidated Tangible Net Worth of the Consolidated Parties shall be less than or equal to 0.35 to
1.00.” 
 (o) Section 5.8(f) of the Credit Agreement is hereby amended and restated to read as follows:
“[Reserved]”. 
 (p) Section 5.8(g) of the Credit Agreement is hereby amended by changing the phrase
“$500,000,000.00” in clause (i) thereof to “85% of tangible Net Worth on the Effective Date”. 
 (q)
Section 5.8(j) of the Credit Agreement is hereby amended by changing the phrase “Net Income” therein to “REIT taxable income of the Consolidated Parties calculated in accordance with the Code, before giving effect to the
dividends paid deduction”. 
 (r) Section 5.14 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows: “Section 5.14 Liens; Release of Liens. The Borrowers shall not at any time during the Term directly or indirectly create, incur, assume or permit 
  

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to exist any Lien on or with respect to any Borrowing Base Asset or any Capital Stock of RAIT OP, RAIT SPE or any SPE Subsidiary for borrowed monies or any
other Lien (other than Liens in favor of the Administrative Agent and the Lenders), unless the same is being contested in good faith or the same is discharged, bonded off or paid within thirty (30) days of filing of such Lien.” 

(t) Section 5.17 of the Credit Agreement is hereby amended by adding the following phrase at the end of the first sentence
thereof: “and those businesses in which Taberna is engaged on the Taberna Closing Date”. 
 2. Waiver. On and subject to the
terms and conditions of this Amendment, compliance by the Borrowers with the covenants contained in Section 5.9 of the Credit Agreement is hereby waived, solely to permit the Taberna Acquisition; provided, however, such Taberna
Acquisition shall occur by December 31, 2006. The waiver granted pursuant to this Section 2 is referred to herein as the “Taberna Acquisition Waiver.” The Taberna Acquisition Waiver shall terminate on December 31,
2006 (unless extended by the Administrative Agent in its discretion), if the Taberna Acquisition has not been consummated by such date. 
 3.
Conditions Precedent. This Amendment shall be effective on December 11, 2006 (the “Effective Date”) upon the satisfaction by the Borrowers of, or written waiver by Administrative Agent of, the following conditions, failing
which this Amendment and all related documents shall be null and void at the option of the Administrative Agent: 
 (a) The
Administrative Agent shall have received the following: 
 (i) This Amendment, duly executed by the Borrowers. 
 (ii) A Pledge Agreement in substantially the form of Exhibit A to this Amendment duly executed by RAIT OP whereby RAIT OP, as security for
the punctual payment and performance of all of the Borrowers’ Obligations, shall pledge and grant and security interest in and to one hundred percent (100%) of the Capital Stock of RAIT SPE to the Administrative Agent for the benefit of
the Administrative Agent and the Lenders. 
 (iii) A certificate of the Secretary of RAIT as of the date of this Amendment
concerning: 
 (A) Each Borrower’s authority to enter into this Amendment. 
 (B) The identity and incumbency of the person(s) authorized on behalf of each Borrower to execute and deliver this Amendment. 

(b) No Default or Event of Default will exist as of the Effective Date, or as of the Taberna Closing Date (including on a proforma
basis after giving effect to the closing of the Taberna Acquisition). 
 (c) In addition to all other expense payment and
reimbursement obligations of the Borrowers under the Credit Agreement and other Loan Documents, the Borrowers 

  

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will pay or reimburse the Administrative Agent its costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses and
disbursements) incurred in connection with the preparation of this Amendment and any other documents in connection herewith and the matters addressed in and contemplated by, this Amendment. 
 (d) The Administrative Agent shall have received, for its or any other Lender’s account, all fees due and payable pursuant to a fee
letter between Borrowers and KeyBank dated on or about the date of this Amendment, as amended, supplemented or otherwise modified from time to time. 
 4. Waiver of Claims. The Borrowers acknowledge, confirm and agree that none of them has any offsets, defenses, claims, counterclaims or causes of action of any kind or nature against the Administrative Agent
and/or any Lender with respect to any of their respective liabilities and obligations owing to the Administrative Agent and/or any Lender, and, in any event, each Borrower specifically WAIVES, RELEASES, and forever relinquishes all
claims, demands, obligations, liabilities, and causes of action of whatever kind or nature, whether known or unknown, which it has or may have as of the date hereof against the Administrative Agent and/or the Lenders, or their respective affiliates,
officers, directors, employees, agents, attorneys, independent contractors, and predecessors, together with their successors and assigns, directly or indirectly arising out of or based upon any matter connected with the Credit Agreement or the
administration thereof or the Obligations created thereby. 
 5. Acknowledgments by Borrowers. Each Borrower acknowledges, confirms,
represents and warrants, and agrees that: 
 (a) Except as provided herein, the terms and conditions of the Credit Agreement
and the other Loan Documents remain in full force and effect, and each Borrower hereby (x) ratifies, confirms and reaffirms all and singular of the terms and conditions of the Credit Agreement and the other Loan Documents, and
(y) represents and warrants that: 
 (i) as of the date the Borrower executes this Amendment, no Default or Event of
Default exists, and no Default or Event of Default will exist as of the Effective Date or as of the Taberna Closing Date. 
 (ii) the representations and warranties made by the Borrowers in the Credit Agreement and the other Loan Documents are true and correct in all material respects as of the date hereof, and will be true and correct in all material respects as
of the Effective Date and as of the Taberna Closing Date, except as to matters which speak to a specific date and for changes in the ordinary course to the extent permitted and contemplated by the Credit Agreement and this Amendment. 
 (iii) the Borrower has the power and authority and legal right to execute, deliver and perform this Amendment, and has taken all necessary
action to authorize the execution, delivery, and performance of this Amendment, and the 

  

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person executing and delivering this Amendment on behalf of the Borrower is duly authorized to do so. 
 (iv) this Amendment has been duly executed and delivered on behalf of the Borrower and constitutes the legal, valid and binding obligation
of the Borrower, enforceable against the Borrower in accordance with its terms, subject to the effect of applicable bankruptcy and other similar laws affecting the rights of creditors generally and the effect of equitable principles whether applied
in an action at law or a suit in equity. 
 (b) The consummation of the Taberna Acquisition does not and will not constitute a
breach of or default under any agreement to which any Borrower is a party or by which any Borrower or its assets may be bound, other than those as to which written waivers have been obtained (copies of which shall have been provided by the Borrowers
to the Administrative Agent). 
 (c) The Borrowers shall promptly pay upon receipt of an invoice or statement therefor the
reasonable attorneys’ fees and expenses and disbursements incurred by the Administrative Agent in connection with this Amendment and all previous matters relating to the Credit Agreement and the Borrowers’ relationship with the
Administrative Agent and the Lenders. 
 6. Miscellaneous. 
 (a) This Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one instrument. Signatures transmitted electronically (including by fax or e-mail) shall have the same legal effect as the originals, but each party nevertheless shall
deliver original signed counterparts of this Amendment to each other party. 
 (b) This Amendment expresses the entire
understanding of the parties with respect to the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof. 
 (c) This Amendment shall be governed in accordance with the internal laws of the State of New York (without regard to conflict of laws
principles). 
 (d) After giving effect to increases in the Facility Amount pursuant to Section 2.18 of Credit that have
occurred prior to the Effective Date, the “Facility Amount” as of the Effective Date is three hundred and thirty-five million dollars ($335,000,000). The Commitments of the Lenders on the Effective Date are, with respect to each Lender,
the amount set forth opposite the name of such Lender on the signature pages of this Amendment. 
 [Remainder of page intentionally left
blank] 
  

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 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written. 
  

									
		 		 	BORROWERS:
			
		 		 	RAIT INVESTMENT TRUST, a Maryland trust
				
		 		 	By:	 	 /s/ Ellen J. Di Stefano

		 		 	Name:	 	Ellen J. Di Stefano
		 		 	Title:	 	Chief Financial Officer and Executive Vice President
			
		 		 	RAIT PARTNERSHIP, L.P., a Delaware limited partnership
				
		 		 	By:	 	RAIT General, Inc., a Maryland corporation, its general partner
					
		 		 		 	By:	 	 /s/ Ellen J. Di Stefano

		 		 		 	Name:	 	Ellen J. Di Stefano
		 		 		 	Title:	 	Chief Financial Officer and Executive Vice President
			
		 		 	RAIT ASSET HOLDINGS, LLC, a Delaware limited liability company
				
		 		 	By:	 	RAIT Partnership, L.P., a Delaware limited partnership, its sole member
				
		 		 	By:	 	RAIT General, Inc., a Maryland corporation, its general partner
					
		 		 		 	By:	 	 /s/ Ellen J. Di Stefano

		 		 		 	Name:	 	Ellen J. Di Stefano
		 		 		 	Title:	 	Chief Financial Officer and Executive Vice President
			
		 		 	KEYBANK NATIONAL ASSOCIATION, as Administrative Agent
				
	Facsimile Number:	 	617-385-6292	 	By:	 	 /s/ Kathleen M. Ahern

	Address:	 	225 Franklin Street, 18th Floor Boston,	 	Name:	 	Kathleen M. Ahern
		 	Massachusetts 02110	 	Title:	 	Senior Banker
	Attn:	 	Ms. Kathleen M. Ahern	 		 		 	

  

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 Commitment: $50,000,000.00 
  

			
	KEYBANK NATIONAL ASSOCIATION, as a Lender and as Swing Lender
		
	By:	 	 /s/ Kathleen M. Ahern

	Name:	 	Kathleen M. Ahern
	Title:	 	Senior Banker

  

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 Commitment: $50,000,000.00 
  

			
	BANK OF AMERICA, N.A., as a Lender
		
	By:	 	/s/ Michael W. Edwards
		 	 
	Name:	 	Michael W. Edwards
	Title:	 	Senior Vice President

  

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 Commitment $40,000,000.00 
  

			
	TD BANKNORTH, N.A., as a Lender
		
	By:	  	/s/ John Mercier
		  	 
	Name:	  	John Mercier
	Title:	  	Senior Vice President

  

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 Commitment: $35,000,000.00 
  

			
	 BMO CAPITAL MARKETS FINANCING, INC.,
 as a Lender

		
	By:	 	/s/ Paul Rubrich
		 	 
	Name:	 	Paul Rubrich
	Title:	 	Vice President

  

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 Commitment: $30,000,000.00 
  

			
	EMIGRANT SAVINGS BANK, as a Lender
		
	By:	 	 /s/ Thomas G. Devine

	Name:	 	 Thomas G. Devine

	Title:	 	 Managing Director & Vice President

  

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 Commitment: $25,000,000.00 
  

			
	CIBC INC., as a Lender
		
	By:	 	 /s/ Joel Gershkon

	Name:	 	Joel Gershkon
	Title:	 	Authorized Signatory

  

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 Commitment: $25,000,000.00 
  

			
	CITICORP NORTH AMERICA, INC., as a Lender
		
	By:	 	 /s/ Malav Kakad

	Name:	 	Malav Kakad
	Title:	 	Vice President

  

 S-8 

 Commitment: $25,000,000.00 
  

			
	RAYMOND JAMES BANK, FSB, as a Lender
		
	By:	 	 /s/ Laurens F. Schaad Jr.

	Name:	 	Laurens F. Schaad Jr.
	Title:	 	Vice President

  

 S-9 

 Commitment: $25,000,000.00 
  

			
	SIGNATURE BANK, as a Lender
		
	By:	 	 /s/ James P. Gay

	Name:	 	James P. Gay
	Title:	 	Vice President

  

 S-10 

 Commitment: $10,000,000.00 
  

			
	BANK OF TAIWAN, LOS ANGELES BRANCH, as a Lender
		
	By:	 	 /s/ Ton-Yuan Yeh

	Name:	 	Ton-Yuan Yeh
	Title:	 	Vice President and General Manager

  

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 Commitment: $10,000,000.00 
  

			
	FIRST COMMERCIAL BANK NEW YORK AGENCY, as a Lender
		
	By:	 	 /s/ Bruce M.J. Ju

	Name:	 	Bruce M.J. Ju
	Title:	 	SVP & General Manager

  

 S-12Taberna Realty Finance Trust 2005 Equity Incentive Plan

 Exhibit 10.5 
 TABERNA REALTY FINANCE TRUST 
 2005 EQUITY INCENTIVE PLAN 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	1.	  	DEFINITIONS	  	1
			
	2.	  	EFFECTIVE DATE AND TERMINATION OF PLAN	  	4
			
	3.	  	ADMINISTRATION OF PLAN	  	5
			
	4.	  	SHARES AND UNITS SUBJECT TO THE PLAN	  	5
			
	5.	  	PROVISIONS APPLICABLE TO STOCK OPTIONS	  	6
			
	6.	  	PROVISIONS APPLICABLE TO RESTRICTED SHARES	  	9
			
	7.	  	PROVISIONS APPLICABLE TO PHANTOM SHARES	  	11
			
	8.	  	PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS	  	14
			
	9.	  	OTHER EQUITY-BASED AWARDS	  	15
			
	10.	  	PERFORMANCE GOALS	  	15
			
	11.	  	TAX WITHHOLDING	  	15
			
	12.	  	REGULATIONS AND APPROVALS	  	17
			
	13.	  	INTERPRETATION AND AMENDMENTS; OTHER RULES	  	17
			
	14.	  	CHANGES IN CAPITAL STRUCTURE	  	18
			
	15.	  	MISCELLANEOUS	  	19

  

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 TABERNA REALTY FINANCE TRUST 
 2005 EQUITY INCENTIVE PLAN 
 Taberna Realty Finance Trust, a Maryland real estate investment trust,
wishes to attract and retain qualified key employees, trustees, directors, officers, advisors, consultants and other personnel and encourage them to increase their efforts to make the Company’s business more successful whether directly or
through its Subsidiaries or other Affiliates. In furtherance thereof, the Taberna Realty Finance Trust 2005 Equity Incentive Plan is designed to provide equity-based incentives to certain Eligible Persons. Awards under the Plan may be made to
Eligible Persons in the form of Options, Restricted Shares, Share Appreciation Rights, Dividend Equivalent Rights, Performance Awards, Phantom Shares and other forms of equity-based compensation. 
  

	 	1.	DEFINITIONS. 

 Whenever used herein,
the following terms shall have the meanings set forth below: 
 “Affiliate” means any entity other than a Subsidiary
that is controlled by or under common control with the Company that is designated as an “Affiliate” by the Committee in its discretion. 
 “Award”, except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Restricted Shares, Share Appreciation Rights, Dividend
Equivalent Rights, Performance Awards, Phantom Shares and other equity-based Awards as contemplated herein. 
 “Award
Agreement” means a written agreement in a form approved by the Committee as provided in Section 3. 
 “Board” means the Board of Trustees of the Company. 
 “Cause” means, unless otherwise provided
in the Participant’s Award Agreement, (i) engaging in (A) willful or gross misconduct or (B) willful or gross neglect; (ii) the commission of a felony or a crime of moral turpitude, dishonesty, breach of trust or unethical
business conduct, or any crime involving the Company or any Affiliate thereof; (iii) engaging in the performance of his duties in fraud, misappropriation or embezzlement; (iv) a material breach of the Participant’s employment
agreement (if any) with the Company or its Affiliates; (v) acts or omissions constituting a material failure to perform substantially and adequately the duties assigned to the Participant; (vi) any illegal act detrimental to the Company or
its Affiliates; or (vii) repeated failure to adhere to the directions of superiors or the Board, to adhere to the Company’s written policies and practices or to devote substantially all of the Participant’s business time and efforts
to the Company and its Affiliates if required by Participant’s employment agreement; provided, however, that, if at any particular time the Participant is subject to an effective employment agreement with the Company, then, in lieu of the
foregoing definition, “Cause” shall at that time have such meaning as may be specified in such employment agreement. 
 “Change of Control” means, unless otherwise provided in an Award Agreement, the happening of any of the following: 
 (i)
any “person,” including a “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding the Company), any entity controlling, controlled by or under common control with the Company, any
trustee, fiduciary or other 

 
person or entity holding securities under any employee benefit plan or trust of the Company or any such entity, and with respect to any particular
Participant, the Participant and any “group” (as such term is used in Section 13(d)(3) of the Exchange Act) of which the Participant is a member, is or becomes the “beneficial owner” (as defined in Rule 13(d)(3) under the
Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of either (A) the combined voting power of the Company’s then outstanding securities or (B) the then outstanding Shares (in either such case
other than as a result of an acquisition of securities directly from the Company); provided, however, that, in no event shall a Change of Control be deemed to have occurred upon an initial public offering of the Common Shares under the Securities
Act; or 
 (ii) any consolidation or merger of the Company where the shareholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate 50% or more of the combined voting power
of the securities of the corporation issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any); or 
 (iii) there shall occur (A) any sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company,
other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by “persons” (as defined above) in
substantially the same proportion as their ownership of the Company immediately prior to such sale or (B) the approval by shareholders of the Company of any plan or proposal for the liquidation or dissolution of the Company; or 
 (iv) the members of the Board at the beginning of any consecutive 24-calendar-month period (the “Incumbent Trustees”) cease for any reason other
than due to death to constitute at least a majority of the members of the Board; provided that any trustee whose election, or nomination for election by the Company’s shareholders, was approved or ratified by a vote of at least a majority of
the members of the Board then still in office who were members of the Board at the beginning of such 24-calendar-month period, shall be deemed to be an Incumbent Trustee. 
 Notwithstanding the foregoing, no event or condition shall constitute a Change of Control to the extent that, if it were, a 20% tax would be imposed under Section 409A of the Code; provided that, in such a case,
the event or condition shall continue to constitute a Change of Control to the maximum extent possible (e.g., if applicable, in regard of vesting without an acceleration of distribution) without causing the imposition of such 20% tax.

 “Code” means the Internal Revenue Code of 1986, as amended. 
 “Committee” means the Compensation Committee of the Board or another Committee of the Board appointed in accordance with
Section 3(a) hereof. 
 “Common Shares” means the Company’s common shares of beneficial interest, par
value $.01 per share, either currently existing or authorized hereafter. 
  

 2 

 “Company” means Taberna Realty Finance Trust, a Maryland real estate investment
trust. 
 “Disability” means, unless otherwise provided by the Committee in the Participant’s Award Agreement,
a disability which renders the Participant incapable of performing all of his or her material duties for a period of at least 180 consecutive or non-consecutive days during any consecutive twelve-month period. Notwithstanding the foregoing, no
circumstances or condition shall constitute a Disability to the extent that, if it were, a 20% tax would be imposed under Section 409A of the Code; provided that, in such a case, the event or condition shall continue to constitute a Disability
to the maximum extent possible (e.g., if applicable, in regard of vesting without an acceleration of distribution) without causing the imposition of such 20% tax. 
 “Dividend Equivalent Right” means a right awarded under Section 8 of the Plan to receive (or have credited) the equivalent
value of dividends paid on Common Shares. 
 “Eligible Person” means a key employee, trustee, non-employee trustee,
director, officer, advisor, consultant or other personnel of the Company or a Subsidiary or other person expected to provide significant services (of a type expressly approved by the Committee as covered services for these purposes) to the Company
or its Subsidiaries. The Committee may provide that Affiliates of the Company and employees thereof may be Eligible Persons, and may make such arrangements with the foregoing entities as it may consider appropriate, in light of tax and other
considerations, in the case of grants directly or indirectly to such employees. 
 “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
 “Fair Market Value” per Share as of a particular date means
(i) if Shares are then listed on a national stock exchange, the closing sales price per Share on the exchange for the last preceding date on which there was a sale of Shares on such exchange, as determined by the Committee, (ii) if Shares
are not then listed on a national stock exchange but are then traded on an over-the-counter market, the average of the closing bid and asked prices for the Shares in such over-the-counter market for the last preceding date on which there was a sale
of such Shares in such market, as determined by the Committee, or (iii) if Shares are not then listed on a national stock exchange or traded on an over-the-counter market, such value as the Committee in its discretion may in good faith
determine; provided that, where the Shares are so listed or traded, the Committee may make such discretionary determinations where the Shares have not been traded for 10 trading days. 
 “Grantee” means an Eligible Person granted Restricted Shares, Share Appreciation Rights, Dividend Equivalent Rights, Performance
Awards, Phantom Shares or such other equity-based Awards (other than an Option) as may be granted pursuant to Section 9. 
 “Incentive Stock Option” means an “incentive stock option” within the meaning of Section 422(b) of the Code. 
 “Non-Qualified Stock Option” means an Option which is not an Incentive Stock Option. 
 “Offering” shall have the meaning set forth in Section 4.1(a) of the Plan. 
 “Option” means
the right to purchase, at a price and for the term fixed by the Committee in accordance with the Plan, and subject to such other limitations and restrictions in the Plan and the applicable Award Agreement, a number of Shares determined by the
Committee. 
  

 3 

 “Optionee” means an Eligible Person to whom an Option is granted, or the
Successors of the Optionee, as the context so requires. 
 “Option Price” means the price per Share, determined by
the Board or the Committee, at which an Option may be exercised. 
 “Participant” means a Grantee or Optionee.

 “Phantom Share” means a right, pursuant to the Plan, of the Grantee to payment of the Phantom Share Value.

 “Phantom Share Value,” per Phantom Share, means the Fair Market Value of a Share or, if so provided by the
Committee, such Fair Market Value to the extent in excess of a base value established by the Committee at the time of grant (which base value may not be less than the Fair Market Value of the underlying Shares at the date of grant). 
 “Plan” means the Company’s 2005 Equity Incentive Plan, as set forth herein and as the same may from time to time be
amended. 
 “Restricted Shares” means an award of Shares that are subject to restrictions hereunder. 
 “Retirement” means, unless otherwise provided by the Committee in the Participant’s Award Agreement, the Termination of
Service (other than for Cause) of a Participant on or after the Participant’s attainment of age 65 or on or after the Participant’s attainment of age 55 with five consecutive years of service with the Company or any Subsidiaries or
Affiliates. 
 “Securities Act” means the Securities Act of 1933, as amended. 
 “Settlement Date” means the date determined under Section 7.4(c). 
 “Shares” means shares of beneficial interest of the Company. 
 “Subsidiary” means any corporation (other than the Company) that is a “subsidiary corporation” with respect to the
Company under Section 424(f) of the Code. In the event the Company becomes a subsidiary of another company, the provisions hereof applicable to subsidiaries shall, unless otherwise determined by the Committee, also be applicable to any company
that is a “parent corporation” with respect to the Company under Section 424(e) of the Code. 
 “Successor
of the Optionee” means the legal representative of the estate of a deceased Optionee or the person or persons who shall acquire the right to exercise an Option by bequest or inheritance or by reason of the death of the Optionee. 
 “Termination of Service” means a Participant’s termination of employment or other service, as applicable, with the Company,
its Subsidiaries and, as applicable, Affiliates. 
 “Trustee” means a non-employee trustee of the Company or its
Subsidiaries. 
  

	 	2.	EFFECTIVE DATE AND TERMINATION OF PLAN. 

 The effective date of the Plan is April 28, 2005. The Plan shall terminate on, and no Award shall be granted hereunder on or after, the 10-year anniversary of the earlier of the approval of the Plan by (i) the Board or
(ii) the shareholders of the Company; provided, however, that the Board may at any time prior to that date terminate the Plan. 
  

 4 

	 	3.	ADMINISTRATION OF PLAN. 

 (a) The
Plan shall be administered by the Committee appointed by the Board. The Committee, upon and after such time as it is covered in Section 16 of the Exchange Act, shall consist of at least two individuals each of whom shall be a “nonemployee
director” as defined in Rule 16b-3 as promulgated by the Securities and Exchange Commission (“Rule 16b-3”) under the Exchange Act and shall, at such times as the Company is subject to Section 162(m) of the Code (to the
extent relief from the limitation of Section 162(m) of the Code is sought with respect to Awards), qualify as “outside directors” for purposes of Section 162(m) of the Code; provided that no action taken by the Committee
(including, without limitation, grants) shall be invalidated because any or all of the members of the Committee fails to satisfy the foregoing requirements of this sentence. The acts of a majority of the members present at any meeting of the
Committee at which a quorum is present, or acts approved in writing by a majority of the entire Committee, shall be the acts of the Committee for purposes of the Plan. If and to the extent applicable, no member of the Committee may act as to matters
under the Plan specifically relating to such member. Notwithstanding the other foregoing provisions of this Section 3(a), any Award under the Plan to a person who is a member of the Committee shall be made and administered by the Board. If no
Committee is designated by the Board to act for these purposes, the Board shall have the rights and responsibilities of the Committee hereunder and under the Award Agreements. 
 (b) Subject to the provisions of the Plan, the Committee shall in its discretion as reflected by the terms of the Award Agreements
(i) authorize the granting of Awards to Eligible Persons; and (ii) determine the eligibility of Eligible Persons to receive an Award, as well as determine the number of Shares to be covered under any Award Agreement, considering the
position and responsibilities of the Eligible Persons, the nature and value to the Company of the Eligible Person’s present and potential contribution to the success of the Company whether directly or through its Subsidiaries or Affiliates and
such other factors as the Committee may deem relevant. 
 (c) The Award Agreement shall contain such other terms, provisions
and conditions not inconsistent herewith as shall be determined by the Committee. In the event that any Award Agreement or other agreement hereunder provides (without regard to this sentence) for the obligation of the Company or any Subsidiary or
Affiliate thereof to purchase or repurchase Shares from a Participant or any other person, then, notwithstanding the provisions of the Award Agreement or such other agreement, such obligation shall not apply to the extent that the purchase or
repurchase would not be permitted under governing state law. The Participant shall take whatever additional actions and execute whatever additional documents the Committee may in its reasonable judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions imposed on the Participant pursuant to the express provisions of the Plan and the Award Agreement. 
  

	 	4.	SHARES AND UNITS SUBJECT TO THE PLAN. 

 4.1 In General. 
 (a) Subject to adjustments as provided in Section 14, the total number of Shares
subject to Awards granted under the Plan (including securities convertible into or exchangeable for Shares), in the aggregate, may not exceed (x) upon completion of the Company’s offering of Shares in transactions exempt from the
registration requirements of the Securities Act in accordance with the terms and conditions of that certain Purchase/Placement Agreement between the Company and Friedman, Billings, Ramsey & Co., Inc. (“FBR”) dated April 21,
2005 (the “Offering”), 1,107,500 Shares, or (y) 1,107,500 

  

 5 

 
Shares plus an additional amount of Shares proportionate to any exercise of an over-allotment option of the initial purchaser in the Offering; provided that
such limitation set forth in (x) or (y) above, as applicable, shall be increased by 50,000 Shares on an annual basis to provide for annual Awards of Restricted Shares that shall be made to the Company’s non-excluded trustees. Shares
distributed under the Plan may be treasury Shares or authorized but unissued Shares. Any Shares that have been granted as Restricted Shares or that have been reserved for distribution in payment for Options, Phantom Shares or other equity-based
Awards but are later forfeited or for any other reason are not payable under the Plan (other than as a result of a cash payment in lieu thereof) may again be made the subject of Awards under the Plan. 
 (b) If any Awards are paid out in cash, then the underlying Shares may not again be made the subject of Awards under the Plan. 

(c) The certificates for Shares issued hereunder may include any legend which the Committee deems appropriate to reflect any rights of
first refusal or other restrictions on transfer hereunder or under the Award Agreement, or as the Committee may otherwise deem appropriate. 
 (d) Unless otherwise determined by the Board, no Award may be granted under the Plan to any person who, assuming exercise of all Options and payment of all Awards held by such person, would own or be deemed to own
more than 7.7% in value or in number of Shares, whichever is more restrictive, of the outstanding Common Shares or the outstanding Shares of beneficial interest. 
  

	 	5.	PROVISIONS APPLICABLE TO STOCK OPTIONS. 

 5.1 Grant of Option. 
 Subject to the other terms of the Plan, the Committee shall, in its discretion as
reflected by the terms of the applicable Award Agreement: (i) determine and designate from time to time those Eligible Persons to whom Options are to be granted and the number of Shares to be optioned to each Eligible Person;
(ii) determine whether to grant Options intended to be Incentive Stock Options, or to grant Non-Qualified Stock Options, or both (to the extent that any Option does not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option); provided that Incentive Stock Options may only be granted to employees of the Company, its Subsidiaries or other Affiliates; (iii) determine the time or times when and the manner and condition in which each Option
shall be exercisable and the duration of the exercise period; (iv) designate each Option as one intended to be an Incentive Stock Option or as a Non-Qualified Stock Option; and (v) determine or impose other conditions to the grant or
exercise of Options under the Plan as it may deem appropriate. 
 5.2 Option Price. 
 The Option Price shall be determined by the Committee on the date the Option is granted and reflected in the Award Agreement, as the same
may be amended from time to time. Any particular Award Agreement may provide for different Option Prices for specified amounts of Shares subject to the Option; provided that, to the extent necessary to comply with the requirements to exempt such
Option from Section 162(m) of the Code, the Option Price shall not be less than the Fair Market Value of the underlying Shares on the date of grant. 
 5.3 Period of Option and Vesting. 
 (a) Unless earlier expired, forfeited or otherwise
terminated, each Option shall expire in its entirety upon the 10th anniversary of the date of grant or shall have such other term (which may be 

  

 6 

 
shorter, but not longer, in the case of Incentive Stock Options) as is set forth in the applicable Award Agreement (except that, in the case of an individual
described in Section 422(b)(6) of the Code (relating to certain more than 10% owners) who is granted an Incentive Stock Option, the term of such Option shall be no more than five years from the date of grant). The Option shall also expire, be
forfeited and terminate at such times and in such circumstances as otherwise provided hereunder or under the Award Agreement. 
 (b) Each Option, to the extent that the Optionee has not had a Termination of Service and the Option has not otherwise lapsed, expired, terminated or been forfeited, shall first become exercisable according to the terms and conditions set
forth in the Award Agreement, as determined by the Committee at the time of grant. Unless otherwise provided in the Award Agreement, no Option (or portion thereof) shall ever be exercisable if the Optionee has a Termination of Service before the
time at which such Option (or portion thereof) would otherwise have become exercisable, and any Option that would otherwise become exercisable after such Termination of Service shall not become exercisable and shall be forfeited upon such
termination. Notwithstanding the foregoing provisions of this Section 5.3(b), Options exercisable pursuant to the schedule set forth by the Committee at the time of grant may be fully or more rapidly exercisable or otherwise vested at any time
in the discretion of the Committee. Upon and after the death of an Optionee, such Optionee’s Options, if and to the extent otherwise exercisable hereunder or under the applicable Award Agreement after the Optionee’s death, may be exercised
by the Successors of the Optionee. 
 5.4 Exercisability Upon and After Termination of Optionee. 
 (a) Subject to provisions of the Award Agreement, in the event the Optionee has a Termination of Service other than by the Company or its
Subsidiaries, or as applicable, an Affiliate, for Cause, or other than by reason of death, Retirement or Disability, no exercise of an Option may occur after the expiration of the three-month period to follow the termination, or if earlier, the
expiration of the term of the Option as provided under Section 5.3(a); provided that, if the Optionee should die after the Termination of Service, such termination being for a reason other than Disability or Retirement, but while the Option is
still in effect, the Option (if and to the extent otherwise exercisable by the Optionee at the time of death) may be exercised until the earlier of (i) one year from the date of the Termination of Service of the Optionee, or (ii) the date
on which the term of the Option expires in accordance with Section 5.3(a). 
 (b) Subject to provisions of the Award
Agreement, in the event the Optionee has a Termination of Service on account of death, Disability or Retirement, the Option (whether or not otherwise exercisable) may be exercised until the earlier of (i) one year from the date of the
Termination of Service of the Optionee, or (ii) the date on which the term of the Option expires in accordance with Section 5.3. 
 (c) Notwithstanding any other provision hereof, unless otherwise provided in the Award Agreement, in the event the Optionee has a Termination of Service by the Company, a Subsidiary or Affiliate for Cause, the
Optionee’s Options, to the extent then unexercised, shall thereupon cease to be exercisable and shall be forfeited forthwith (whether or not the Options were exercisable previously). 
 5.5 Exercise of Options. 
 (a) Subject to vesting, restrictions on exercisability and other restrictions provided for hereunder or otherwise imposed in accordance herewith, an Option may be exercised, and payment in full of the aggregate Option
Price made, by an Optionee only by written notice (in the form prescribed by the Committee) to the Company or its designee specifying the number of Shares to be purchased. 
  

 7 

 (b) Without limiting the scope of the Committee’s discretion hereunder, the
Committee may impose such other restrictions on the exercise of Options (whether or not in the nature of the foregoing restrictions) as it may deem necessary or appropriate. 
 5.6 Payment. 
 (a) The aggregate Option Price shall be paid in full upon the exercise of the Option. Payment must be made by one of the following methods: 
 (i) a certified or bank cashier’s check; 
 (ii) subject to Section 12(e), the proceeds of a Company loan program or
third-party sale program or a notice acceptable to the Committee given as consideration under such a program, in each case if permitted by the Committee in its discretion, if such a program has been established and the Optionee is eligible to
participate therein; 
 (iii) if approved by the Committee in its discretion, previously owned Common Shares, which have been previously owned
for more than six months, having an aggregate Fair Market Value on the date of exercise equal to the aggregate Option Price; or 
 (iv) by any
combination of such methods of payment or any other method acceptable to the Committee in its discretion. 
 (b) Except in the
case of Options exercised by certified or bank cashier’s check, the Committee may impose limitations and prohibitions on the exercise of Options as it deems appropriate, including, without limitation, any limitation or prohibition designed to
avoid accounting consequences which may result from the use of Common Shares as payment upon exercise of an Option. 
 (c) The
Committee may provide that no Option may be exercised with respect to any fractional Share. Any fractional Shares resulting from an Optionee’s exercise that is accepted by the Company shall in the discretion of the Committee be paid in cash.

 5.7 Share Appreciation Rights. 
 The Committee, in its discretion, may also permit (taking into account, without limitation, the application of Section 409A of the
Code, as the Committee may deem appropriate) the Optionee to elect to receive upon the exercise of an Option a combination of Shares and cash, or, in the discretion of the Committee, either Shares or cash, with an aggregate Fair Market Value (or, to
the extent of payment in cash, in an amount) equal to the excess of the Fair Market Value of the Shares with respect to which the Option is being exercised over the aggregate Option Price, as determined as of the day the Option is exercised.

 5.8 Exercise by Successors. 
 An Option may be exercised, and payment in full of the aggregate Option Price made, by the Successors of the Optionee only by written
notice (in the form prescribed by the Committee) to the Company specifying the number of Shares to be purchased. Such notice shall state that the aggregate Option Price will be paid in full, or that the Option will be exercised as otherwise provided
hereunder, in the discretion of the Company or the Committee, if and as applicable. 
  

 8 

 5.9 Nontransferability of Option. 
 Except if provided in the applicable Award Agreement, each Option granted under the Plan shall be nontransferable by the Optionee except
by will or the laws of descent and distribution of the state wherein the Optionee is domiciled at the time of his death; provided, however, that the Committee may (but need not) permit other transfers, where the Committee concludes that such
transferability (i) does not result in accelerated U.S. federal income taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Section 422(b) of the Code, (iii) complies with
applicable law, including securities laws, and (iv) is otherwise appropriate and desirable. 
 5.10 Deferral.

 The Committee (taking into account, without limitation, the possible application of Section 409A of the Code, as the
Committee may deem appropriate) may establish a program under which Participants will have Phantom Shares subject to Section 7 credited upon their exercise of Options, rather than receiving Shares at that time. 
 5.11 Certain Incentive Stock Option Provisions. 
 (a) The aggregate Fair Market Value, determined as of the date an Option is granted, of the Common Shares for which any Optionee may be
awarded Incentive Stock Options which are first exercisable by the Optionee during any calendar year under the Plan (or any other stock option plan required to be taken into account under Section 422(d) of the Code) shall not exceed $100,000.
To the extent the $100,000 limit referred to in the preceding sentence is exceeded, a Stock Option will be treated as a Non-Qualified Stock Option. 
 (b) If Shares acquired upon exercise of an Incentive Stock Option are disposed of in a disqualifying disposition within the meaning of Section 422 of the Code by an Optionee prior to the expiration of either two
years from the date of grant of such Option or one year from the transfer of Shares to the Optionee pursuant to the exercise of such Option, or in any other disqualifying disposition within the meaning of Section 422 of the Code, such Optionee
shall notify the Company in writing as soon as practicable thereafter of the date and terms of such disposition and, if the Company (or any Affiliate thereof) thereupon has a tax-withholding obligation, shall pay to the Company (or such Affiliate)
an amount equal to any withholding tax the Company (or Affiliate) is required to pay as a result of the disqualifying disposition. 
 (c) The Option Price with respect to each Incentive Stock Option shall not be less than 100%, or 110% in the case of an individual described in Section 422(b)(6) of the Code (relating to certain more than 10% owners), of the Fair
Market Value of a Share on the day the Option is granted. In the case of an individual described in Section 422(b)(6) of the Code who is granted an Incentive Stock Option, the term of such Option shall be no more than five years from the date
of grant. 
  

	 	6.	PROVISIONS APPLICABLE TO RESTRICTED SHARES. 

 6.1 Grant of Restricted Shares. 
 (a) In connection with the grant of Restricted Shares, whether or not
performance goals (as provided for under Section 10) apply thereto, the Committee shall establish one or more vesting periods with respect to the Restricted Shares granted, the length of which shall be determined in the discretion of the
Committee. Subject to the provisions of this Section 6, the applicable Award Agreement and the other provisions of the Plan, restrictions on Restricted Shares shall lapse if the Grantee satisfies all applicable employment or other service
requirements through the end of the applicable vesting period. 
  

 9 

 (b) Subject to the other terms of the Plan, the Committee may, in its discretion as
reflected by the terms of the applicable Award Agreement: (i) grant Restricted Shares to Eligible Persons; (ii) provide a specified purchase price for the Restricted Shares (whether or not the payment of a purchase price is required by any
state law applicable to the Company); (iii) determine the restrictions applicable to Restricted Shares and (iv) determine or impose other conditions, including any applicable performance goals, to the grant of Restricted Shares under the
Plan as it may deem appropriate. 
 6.2 Certificates. 
 (a) Unless otherwise provided by the Committee, each Grantee of Restricted Shares shall be issued a share certificate in respect of
Restricted Shares awarded under the Plan. Each such certificate shall be registered in the name of the Grantee. Without limiting the generality of Section 4.1(c), the certificates for Restricted Shares issued hereunder may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer hereunder or under the Award Agreement, or as the Committee may otherwise deem appropriate, and, without limiting the generality of the foregoing, shall bear a legend
referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form: 
 THE TRANSFERABILITY OF
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE TABERNA REALTY FINANCE TRUST 2005 EQUITY INCENTIVE PLAN AND AN AWARD AGREEMENT APPLICABLE TO THE GRANT OF THE SHARES REPRESENTED
BY THIS CERTIFICATE. COPIES OF SUCH PLAN AND AWARD AGREEMENTS ARE ON FILE IN THE OFFICES OF TABERNA REALTY FINANCE TRUST AT 1818 MARKET STREET, 28TH FLOOR, PHILADELPHIA, PENNSYLVANIA 19103. 
 (b) The Committee shall require
that any share certificates evidencing such Shares be held in custody by the Company until the restrictions hereunder shall have lapsed, and that, as a condition of any Award of Restricted Shares, the Grantee shall have delivered a share power,
endorsed in blank, relating to the share covered by such Award. If and when such restrictions so lapse, the share certificates shall be delivered by the Company to the Grantee or his or her designee as provided in Section 6.3 (and the share
power shall be so delivered or shall be discarded). 
 6.3 Restrictions and Conditions. 
 Unless otherwise provided by the Committee, the Restricted Shares awarded pursuant to the Plan shall be subject to the following
restrictions and conditions: 
 (i) Subject to the provisions of the Plan and the Award Agreements, during a period commencing with the date
of such Award and ending on the date the period of forfeiture with respect to such Shares lapses, the Grantee shall not be permitted voluntarily or involuntarily to sell, transfer, pledge, anticipate, alienate, encumber or assign Restricted Shares
awarded under the Plan (or have such Shares attached or garnished). Subject to the provisions of the Award Agreements and clauses (iii) and (iv) below, the period of forfeiture with respect 

  

 10 

 
to Shares granted hereunder shall lapse as provided in the applicable Award Agreement. Notwithstanding the foregoing, unless otherwise expressly provided by
the Committee, the period of forfeiture with respect to such Shares shall only lapse as to whole Shares. 
 (ii) Except as provided in the
foregoing clause (i), below in this clause (ii), in Section 14, or as otherwise provided in the applicable Award Agreement, the Grantee shall have, in respect of the Restricted Shares, all of the rights of a holder of common shares of
beneficial interest of the Company, including the right to vote the Shares and the right to receive dividends as and when such dividends are declared and paid by the Company. 
 (iii) Except if otherwise provided in the applicable Award Agreement, and subject to clause (iv) below, if the Grantee has a Termination of Service
by the Company and its Subsidiaries (or, if applicable, its Affiliates) for Cause, or by the Grantee for any reason, during the applicable period of forfeiture, then (A) all Shares still subject to restriction shall thereupon, and with no
further action, be forfeited by the Grantee, and (B) the Company shall pay to the Grantee as soon as practicable (and in no event more than 30 days) after such termination an amount, if any, equal to the lesser of (x) the amount paid by
the Grantee for such forfeited Restricted Shares as contemplated by Section 6.1, and (y) the Fair Market Value on the date of termination of the forfeited Restricted Shares. 
 (iv) Subject to the provisions of the Award Agreement, in the event the Grantee has a Termination of Service on account of death, Disability or
Retirement, or the Grantee has a Termination of Service by the Company and its Subsidiaries for any reason other than Cause, or in the event of a Change of Control (regardless of whether a Termination of Service follows thereafter), during the
applicable period of forfeiture, then restrictions under the Plan will immediately lapse on all Restricted Shares granted to the applicable Grantee. 
  

	 	7.	PROVISIONS APPLICABLE TO PHANTOM SHARES. 

 7.1 Grant of Phantom Shares. 
 Subject to the other terms of the Plan, the Committee shall, in its discretion
as reflected by the terms of the applicable Award Agreement: (i) authorize the granting of Phantom Shares to Eligible Persons and (ii) determine or impose other conditions to the grant of Phantom Shares under the Plan as it may deem
appropriate. 
 7.2 Term. 
 The Committee may provide in an Award Agreement that any particular Phantom Share shall expire at the end of a specified term. 

7.3 Vesting. 
 Phantom Shares shall vest as provided in the applicable Award Agreement. 
  

 11 

 7.4 Settlement of Phantom Shares. 
 (a) Each vested and outstanding Phantom Share shall be settled by the transfer to the Grantee of one Share; provided that, the Committee
at the time of grant may provide that a Phantom Share may be settled (i) in cash at the applicable Phantom Share Value, (ii) in cash or by transfer of Shares as elected by the Grantee in accordance with procedures established by the
Committee or (iii) in cash or by transfer of Shares as elected by the Company. 
 (b) Phantom Shares shall be settled
with a single-sum payment by the Company; provided that, with respect to Phantom Shares of a Grantee which have a common Settlement Date, the Committee may permit the Grantee to elect in accordance with procedures established by the Committee
(taking into account, without limitation, Section 409A of the Code, as the Committee may deem appropriate) to receive installment payments over a period not to exceed 10 years. 
 (c) (i) Unless otherwise provided in the applicable Award Agreement, the “Settlement Date” with respect to a Phantom Share is as
soon as practicable after (but not later than the first day of the month to follow) the date on which the Phantom Share vests; provided that a Grantee may elect, in accordance with procedures to be established by the Committee, that such Settlement
Date will be deferred as elected by the Grantee to as soon as practicable after (but not later than the first day of the month to follow) the Grantee’s Termination of Service, or such other time as may be permitted by the Committee. Unless
otherwise determined by the Committee, elections under this Section 7.4(c)(i) must, except as may otherwise be permitted under the rules applicable under Section 409A of the Code, (A) be effective at least one year after they are
made, or, in the case of payments to commence at a specific time, be made at least one year before the first scheduled payment and (B) defer the commencement of distributions for at least five years. 
 (ii) Notwithstanding the foregoing, the Settlement Date, if not earlier pursuant to this Section 7.4(c), is the date of the
Grantee’s death. 
 (d) Notwithstanding the other provisions of this Section 7, in the event of a Change of Control,
the Settlement Date shall be the date of such Change of Control and all amounts due with respect to Phantom Shares to a Grantee hereunder shall be paid as soon as practicable (but in no event more than 30 days) after such Change of Control, unless
such Grantee elects otherwise in accordance with procedures established by the Committee. 
 (e) Notwithstanding any other
provision of the Plan, a Grantee may receive any amounts to be paid in installments as provided in Section 7.4(b) or deferred by the Grantee as provided in Section 7.4(c) in the event of an “Unforeseeable Emergency.” For these
purposes, an “Unforeseeable Emergency,” as determined by the Committee in its sole discretion, is a severe financial hardship to the Grantee resulting from a sudden and unexpected illness or accident of the Grantee or
“dependent,” as defined in Section 152(a) of the Code, of the Grantee, loss of the Grantee’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the
control of the Grantee. The circumstances that will constitute an Unforeseeable Emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved: 
 (i) through reimbursement or compensation by insurance or otherwise, 
 (ii) by liquidation of the Grantee’s assets, to the extent the liquidation of such assets would not itself cause severe financial
hardship, or 
  

 12 

 (iii) by future cessation of the making of additional deferrals under Section 7.4
(b) and (c). 
 Without limitation, the need to send a Grantee’s child to college or the desire to purchase a home shall not constitute an
Unforeseeable Emergency. Distributions of amounts because of an Unforeseeable Emergency shall be permitted to the extent reasonably needed to satisfy the emergency need. 
 7.5 Other Phantom Share Provisions. 
 (a) Rights to payments with respect to Phantom Shares granted under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, garnishment,
levy, execution, or other legal or equitable process, either voluntary or involuntary; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish, or levy or execute on any right to payments or other
benefits payable hereunder, shall be void. 
 (b) A Grantee may designate in writing, on forms to be prescribed by the
Committee, a beneficiary or beneficiaries to receive any payments payable after his or her death and may amend or revoke such designation at any time. If no beneficiary designation is in effect at the time of a Grantee’s death, payments
hereunder shall be made to the Grantee’s estate. If a Grantee with a vested Phantom Share dies, such Phantom Share shall be settled and the Phantom Share Value in respect of such Phantom Shares paid, and any payments deferred pursuant to an
election under Section 7.4(c) shall be accelerated and paid, as soon as practicable (but no later than 60 days) after the date of death to such Grantee’s beneficiary or estate, as applicable. 
 (c) The Committee may establish a program under which distributions with respect to Phantom Shares may be deferred for periods in addition
to those otherwise contemplated by foregoing provisions of this Section 7. Such program may include, without limitation, provisions for the crediting of earnings and losses on unpaid amounts, and, if permitted by the Committee, provisions under
which Participants may select from among hypothetical investment alternatives for such deferred amounts in accordance with procedures established by the Committee. 
 (d) Notwithstanding any other provision of this Section 7, any fractional Phantom Share will be paid out in cash at the Phantom Share
Value as of the Settlement Date. 
 (e) No Phantom Share shall be construed to give any Grantee any rights with respect to
Shares or any ownership interest in the Company. Except as may be provided in accordance with Section 8, no provision of the Plan shall be interpreted to confer upon any Grantee any voting, dividend or derivative or other similar rights with
respect to any Phantom Share. 
 7.6 Claims Procedures. 
 (a) To the extent that the Plan is determined by the Committee to be subject to the Employee Retirement Income Security Act of 1974, as
amended, the Grantee, or his beneficiary hereunder or authorized representative, may file a claim for payments with respect to Phantom Shares under the Plan by written communication to the Committee or its designee. A claim is not considered filed
until such communication is actually received. Within 90 days (or, if special circumstances require an extension of time for processing, 180 days, in which case notice of such special circumstances should be provided within the initial 90-day
period) after the filing of the claim, the Committee will either: 
 (i) approve the claim and take appropriate steps for satisfaction of the
claim; or 
  

 13 

 (ii) if the claim is wholly or partially denied, advise the claimant of such denial by furnishing to him
a written notice of such denial setting forth (A) the specific reason or reasons for the denial; (B) specific reference to pertinent provisions of the Plan on which the denial is based and, if the denial is based in whole or in part on any
rule of construction or interpretation adopted by the Committee, a reference to such rule, a copy of which shall be provided to the claimant; (C) a description of any additional material or information necessary for the claimant to perfect the
claim and an explanation of the reasons why such material or information is necessary; and (D) a reference to this Section 7.6 as the provision setting forth the claims procedure under the Plan. 
 (b) The claimant may request a review of any denial of his claim by written application to the Committee within 60 days after receipt of
the notice of denial of such claim. Within 60 days (or, if special circumstances require an extension of time for processing, 120 days, in which case notice of such special circumstances should be provided within the initial 60-day period)
after receipt of written application for review, the Committee will provide the claimant with its decision in writing, including, if the claimant’s claim is not approved, specific reasons for the decision and specific references to the Plan
provisions on which the decision is based. 
  

	 	8.	PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS. 

 8.1 Grant of Dividend Equivalent Rights. 
 Subject to the other terms of the Plan, the
Committee shall, in its discretion as reflected by the terms of the Award Agreements, authorize the granting of Dividend Equivalent Rights to Eligible Persons based on the regular cash dividends declared on Common Shares, to be credited as of the
dividend payment dates, during the period between the date an Award is granted, and the date such Award is exercised, vests or expires, as determined by the Committee. Such Dividend Equivalent Rights shall be converted to cash or additional Shares
by such formula and at such time and subject to such limitation as may be determined by the Committee. With respect to Dividend Equivalent Rights granted with respect to Options intended to be qualified performance-based compensation for purposes of
Section 162(m) of the Code, such Dividend Equivalent Rights shall be payable regardless of whether such Option is exercised. If a Dividend Equivalent Right is granted in respect of another Award hereunder, then, unless otherwise stated in the
Award Agreement, in no event shall the Dividend Equivalent Right be in effect for a period beyond the time during which the applicable portion of the underlying Award is in effect. 
 8.2 Certain Terms. 
 (a) The term of a Dividend Equivalent Right shall be set by the Committee in its discretion. 
 (b) Unless otherwise determined by the Committee, except as contemplated by Section 8.4, a Dividend Equivalent Right is exercisable or payable only while the Participant is an Eligible Person. 
 (c) Payment of the amount determined in accordance with Section 8.1 shall be in cash, in Common Shares or a combination of the two,
as determined by the Committee. 
 (d) The Committee may impose such employment-related conditions on the grant of a Dividend
Equivalent Right as it deems appropriate in its discretion. 
  

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 8.3 Other Types of Dividend Equivalent Rights. 
 The Committee may establish a program under which Dividend Equivalent Rights of a type whether or not described in the foregoing
provisions of this Section 8 may be granted to Participants. For example, and without limitation, the Committee may grant a dividend equivalent right in respect of each Share subject to an Option or with respect to a Phantom Share, which right
would consist of the right (subject to Section 8.4) to receive a cash payment in an amount equal to the dividend distributions paid on a Share from time to time. 
 8.4 Deferral. 
 The Committee may establish a program (taking into account, without limitation, the possible application of Section 409A of the Code, as the Committee may deem appropriate) under which Participants (i) will have Phantom Shares
credited, subject to the terms of Sections 7.4 and 7.5 as though directly applicable with respect thereto, upon the granting of Dividend Equivalent Rights, or (ii) will have payments with respect to Dividend Equivalent Rights deferred. In
the case of the foregoing clause (ii), such program may include, without limitation, provisions for the crediting of earnings and losses on unpaid amounts, and, if permitted by the Committee, provisions under which Participants may select from
among hypothetical investment alternatives for such deferred amounts in accordance with procedures established by the Committee. 
  

	 	9.	OTHER EQUITY-BASED AWARDS. 

 The
Committee shall have the right to grant other Awards based upon the Common Shares having such terms and conditions as the Committee may determine, including, without limitation, the grant of shares based upon certain conditions, the grant of
securities convertible into Common Shares and the grant of share appreciation rights. 
  

	 	10.	PERFORMANCE GOALS. 

 The Committee,
in its discretion, (i) may establish one or more performance goals as a precondition to the issuance or vesting of Awards, and (ii) provide, in connection with the establishment of the performance goals, for predetermined Awards to those
Participants (who continue to meet all applicable eligibility requirements) with respect to whom the applicable performance goals are satisfied. In the case of any grant intended to qualify as performance based compensation under Section 162(m)
of the Code (including, for these purposes, grants constituting performance based compensation, as determined without regard to certain shareholder approval and disclosure requirements by virtue of an applicable transition rule), the Committee shall
establish goals intended to be performance goals as contemplated by Section 162(m) and the regulations thereunder. 
  

	 	11.	TAX WITHHOLDING. 

 11.1 In
General. 
 The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding
determined by the Committee to be required by law. Without limiting the generality of the foregoing, the Committee may, in its discretion, require the Participant to pay to the Company at such time as the Committee determines the amount that the
Committee deems necessary to satisfy the Company’s obligation to withhold federal, state or local income or other taxes incurred by reason of (i) the exercise of any Option, (ii) the lapsing of any restrictions applicable to any
Restricted Shares, (iii) the receipt of a distribution in respect of Phantom Shares or Dividend Equivalent Rights or (iv) any other applicable income-recognition event (for example, an election under Section 83(b) of the Code).

  

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 11.2 Share Withholding. 
 (a) Upon exercise of an Option, the Optionee may, if approved by the Committee in its discretion, make a written election to have Shares
then issued withheld by the Company from the Shares otherwise to be received, or to deliver previously owned Shares, in order to satisfy the liability for such withholding taxes. In the event that the Optionee makes, and the Committee permits, such
an election, the number of Shares so withheld or delivered shall have an aggregate Fair Market Value on the date of exercise sufficient to satisfy the minimum applicable withholding taxes. Where the exercise of an Option does not give rise to an
obligation by the Company to withhold federal, state or local income or other taxes on the date of exercise, but may give rise to such an obligation in the future, the Committee may, in its discretion, make such arrangements and impose such
requirements as it deems necessary or appropriate. 
 (b) Upon lapsing of restrictions on Restricted Shares (or other
income-recognition event), the Grantee may, if approved by the Committee in its discretion, make a written election to have Shares withheld by the Company from the Shares otherwise to be released from restriction, or to deliver previously owned
Shares (not subject to restrictions hereunder), in order to satisfy the liability for such withholding taxes. In the event that the Grantee makes, and the Committee permits, such an election, the number of Shares so withheld or delivered shall have
an aggregate Fair Market Value on the date of exercise sufficient to satisfy the applicable withholding taxes. 
 (c) Upon the
making of a distribution in respect of Phantom Shares or Dividend Equivalent Rights, the Grantee may, if approved by the Committee in its discretion, make a written election to have amounts (which may include Shares) withheld by the Company from the
distribution otherwise to be made, or to deliver previously owned Shares (not subject to restrictions hereunder), in order to satisfy the liability for such withholding taxes. In the event that the Grantee makes, and the Committee permits, such an
election, any Shares so withheld or delivered shall have an aggregate Fair Market Value on the date of exercise sufficient to satisfy the applicable withholding taxes. 
 11.3 Withholding Required. 
 Notwithstanding anything contained in the Plan or the Award Agreement to the contrary, the Participant’s satisfaction of any tax-withholding requirements imposed by the Committee shall be a condition precedent to
the Company’s obligation as may otherwise be provided hereunder to provide Shares to the Participant and to the release of any restrictions as may otherwise be provided hereunder, as applicable; and the applicable Option, Restricted Shares,
Phantom Shares, Dividend Equivalent Rights or any other applicable Award granted hereunder shall be forfeited upon the failure of the Participant to satisfy such requirements with respect to, as applicable, (i) the exercise of the Option,
(ii) the lapsing of restrictions on the Restricted Shares (or other income-recognition event) or (iii) distributions in respect of any Phantom Share or Dividend Equivalent Right. 
  

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	 	12.	REGULATIONS AND APPROVALS. 

 (a) The
obligation of the Company to sell Shares with respect to an Award granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by the Committee. 
 (b) The Committee may make
such changes to the Plan as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain tax benefits applicable to an Award. 
 (c) Each grant of Options, Restricted Shares, Phantom Shares (or issuance of Shares in respect thereof) or Dividend Equivalent Rights (or
issuance of Shares in respect thereof), or other Award under Section 9 (or issuance of Shares in respect thereof), is subject to the requirement that, if at any time the Committee determines, in its discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance of Options, Restricted Shares, Phantom Shares, Dividend Equivalent Rights, other Awards or other Shares, no payment shall be made, or Phantom Shares or Shares issued or grant of Restricted Shares or other Award made, in
whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions in a manner acceptable to the Committee. 
 (d) In the event that the disposition of shares acquired pursuant to the Plan is not covered by a then current registration statement
under the Securities Act, and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required under the Securities Act, and the Committee may require any individual receiving Shares pursuant to
the Plan, as a condition precedent to receipt of such Shares, to represent to the Company in writing that such Shares are acquired for investment only and not with a view to distribution and that such Shares will be disposed of only if registered
for sale under the Securities Act or if there is an available exemption for such disposition. 
 (e) Notwithstanding any other
provision of the Plan, the Company shall not be required to take or permit any action under the Plan or any Award Agreement which, in the good-faith determination of the Company, would result in a material risk of a violation by the Company of
Section 13(k) of the Exchange Act. 
  

	 	13.	INTERPRETATION AND AMENDMENTS; OTHER RULES. 

 The Committee may make such rules and regulations and establish such procedures for the administration of the Plan as it deems appropriate. Without limiting the generality of the foregoing, the Committee may (i) determine the extent,
if any, to which Options, Phantom Shares or Shares (whether or not Restricted Shares) or Dividend Equivalent Rights shall be forfeited (whether or not such forfeiture is expressly contemplated hereunder); (ii) interpret the Plan and the Award
Agreements hereunder, with such interpretations to be conclusive and binding on all persons and otherwise accorded the maximum deference permitted by law; and (iii) take any other actions and make any other determinations or decisions that it
deems necessary or appropriate in connection with the Plan or the administration or interpretation thereof. In the event of any dispute or disagreement as to the interpretation of the Plan or of any rule, regulation or procedure, or as to any
question, right or obligation arising from or related to the Plan, the decision of the Committee shall be final and binding upon all persons. Unless otherwise expressly provided hereunder, the Committee, with respect to any grant, may exercise its
discretion 

  

 17 

 
hereunder at the time of the Award or thereafter. Notwithstanding the foregoing, no repricing of an Award shall be permitted. The Board may amend or
terminate the Plan as it shall deem advisable, except that no amendment may adversely affect a Participant with respect to an Award previously granted without such Participant’s written consent unless such amendments are required in order to
comply with applicable laws and the restrictions limiting when an Award may be paid in cash and precluding Shares covered by Awards paid in cash from being available again for other Awards may not be changed; provided, however, that the Plan may not
be amended without shareholder approval in any case in which such an amendment in the absence of shareholder approval would cause the Plan to fail to comply with any applicable legal requirement or applicable exchange or similar rule. 
  

	 	14.	CHANGES IN CAPITAL STRUCTURE. 

 (a)
If (i) the Company or its Subsidiaries shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or shares of the Company or its
Subsidiaries or a transaction similar thereto, (ii) any share dividend, share split, reverse share split, share combination, reclassification, recapitalization or other similar change in the capital structure of the Company or its Subsidiaries,
or any distribution to holders of Common Shares other than cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Committee necessitates action by way of adjusting the terms of the outstanding Awards,
then: 
 (x) the maximum aggregate number and kind of Shares which may be made subject to Options and Dividend Equivalent Rights under the
Plan, the maximum aggregate number and kind of Restricted Shares that may be granted under the Plan, the maximum aggregate number of Phantom Shares and other Awards which may be granted under the Plan may be appropriately adjusted by the Committee
in its discretion; and 
 (y) the Committee may take any such action as in its discretion shall be necessary to maintain each
Participants’ rights hereunder (including under their Award Agreements) with respect to Options, Phantom Shares, and Dividend Equivalent Rights (and, as appropriate, other Awards under the Plan), so that they are substantially proportionate to
the rights existing in such Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under the Plan) without dilution or enlargement thereof prior to such event, including, without limitation, adjustments in (A) the number of
Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under the Plan) granted, (B) the number and kind of shares or other property to be distributed in respect of Options, Phantom Shares and Dividend Equivalent Rights (and
other Awards under the Plan, as applicable), (C) the Option Price and Phantom Share Value, and (D) performance-based criteria established in connection with Awards; provided that, in the discretion of the Committee, the foregoing
clause (D) may also be applied in the case of any event relating to a Subsidiary if the event would have been covered under this Section 14(a) had the event related to the Company. 
 To the extent that such action shall include an increase or decrease in the number of Shares (or units of other property then available) subject to all outstanding
Awards, the number of Shares (or units) available under Section 4 shall be increased or decreased, as the case may be, proportionately, as may be determined by the Committee in its discretion. 
 (b) Any Shares or other securities distributed to a Grantee with respect to Restricted Shares or otherwise issued in substitution of
Restricted Shares shall be subject to the restrictions and requirements imposed by Section 6, including depositing the certificates therefor with the Company together with a share power and bearing a legend as provided in Section 6.2(a).

  

 18 

 (c) If the Company shall be consolidated or merged with another corporation or other
entity, each Grantee who has received Restricted Shares that is then subject to restrictions imposed by Section 6.3 may be required to deposit with the successor corporation the certificates, if any, for the shares or securities or the other
property that the Grantee is entitled to receive by reason of ownership of Restricted Shares in a manner consistent with Section 6.2(b), and such stock, securities or other property shall become subject to the restrictions and requirements
imposed by Section 6.3, and the certificates therefor or other evidence thereof shall bear a legend similar in form and substance to the legend set forth in Section 6.2(a). 
 (d) If a Change of Control shall occur, then subject to the provisions of the Plan, the Committee may make such adjustments to Awards as
it, in its discretion, determines are necessary or appropriate in light of the Change of Control which adjustments may include, but are not limited to, the substitution of shares other than shares of the Company as the shares optioned hereunder, and
the acceleration of the exercisability of the Options, provided that the Committee determines that such adjustments do not have an adverse economic impact on the Participant as determined at the time of the adjustments. 
 (e) The judgment of the Committee with respect to any matter referred to in this Section 14 shall be conclusive and binding upon each
Participant without the need for any amendment to the Plan. 
  

	 	15.	MISCELLANEOUS. 

 15.1 No Rights
to Employment or Other Service. 
 Nothing in the Plan or in any grant made pursuant to the Plan shall confer on any
individual any right to continue in the employ or other service of the Company or its Subsidiaries or interfere in any way with the right of the Company or its Subsidiaries and its shareholders to terminate the individual’s employment or other
service at any time. 
 15.2 Right of First Refusal; Right of Repurchase. 
 At the time of grant, the Committee may provide in connection with any grant made under the Plan that Shares received hereunder shall be
subject to a right of first refusal pursuant to which the Company shall be entitled to purchase such Shares in the event of a prospective sale of the Shares, subject to such terms and conditions as the Committee may specify at the time of grant or
(if permitted by the Award Agreement) thereafter, and to a right of repurchase, pursuant to which the Company shall be entitled to purchase such Shares at a price determined by, or under a formula set by, the Committee at the time of grant or (if
permitted by the Award Agreement) thereafter. 
 15.3 No Fiduciary Relationship. 
 Nothing contained in the Plan (including without limitation Sections 7.5(c) and 8.4), and no action taken pursuant to the provisions
of the Plan, shall create or shall be construed to create a trust of any kind, or a fiduciary relationship between the Company or its Subsidiaries, or their officers or the Committee, on the one hand, and the Participant, the Company, its
Subsidiaries or any other person or entity, on the other. 
  

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 15.4 No Fund Created. 
 Any and all payments hereunder to any Participant under the Plan shall be made from the general funds of the Company (or, if applicable, a
Participating Company), no special or separate fund shall be established or other segregation of assets made to assure such payments, and the Phantom Shares (including for purposes of this Section 15.4 any accounts established to facilitate the
implementation of Section 7.4(c)) and any other similar devices issued hereunder to account for Plan obligations do not constitute Common Shares and shall not be treated as (or as giving rise to) property or as a trust fund of any kind;
provided, however, that the Company may establish a mere bookkeeping reserve to meet its obligations hereunder or a trust or other funding vehicle that would not cause the Plan to be deemed to be funded for tax purposes or for purposes of Title I of
the Employee Retirement Income Security Act of 1974, as amended. The obligations of the Company under the Plan are unsecured and constitute a mere promise by the Company to make benefit payments in the future and, to the extent that any person
acquires a right to receive payments under the Plan from the Company, such right shall be no greater than the right of a general unsecured creditor of the Company. (If any Affiliate of the Company is or is made responsible with respect to any
Awards, the foregoing sentence shall apply with respect to such Affiliate.) Without limiting the foregoing, Phantom Shares and any other similar devices issued hereunder to account for Plan obligations are solely a device for the measurement and
determination of the amounts to be paid to a Grantee under the Plan, and each Grantee’s right in the Phantom Shares and any such other devices is limited to the right to receive payment, if any, as may herein be provided. 
 15.5 Notices. 
 All notices under the Plan shall be in writing, and if to the Company, shall be delivered to the Committee or mailed to its principal office, addressed to the attention of the Committee; and if to the Participant, shall be delivered
personally, sent by facsimile transmission or mailed to the Participant at the address appearing in the records of the Company. Such addresses may be changed at any time by written notice to the other party given in accordance with this
Section 15.5. 
 15.6 Exculpation and Indemnification. 
 The Company shall indemnify and hold harmless the members of the Board and the members of the Committee from and against any and all
liabilities, costs and expenses incurred by such persons as a result of any act or omission to act in connection with the performance of such person’s duties, responsibilities and obligations under the Plan, to the maximum extent permitted by
law. 
 15.7 Captions. 
 The use of captions in this Plan is for convenience. The captions are not intended to provide substantive rights. 
 15.8 Governing Law. 
 THE PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK. 
  

 20

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