Document:

Exhibit

Exhibit 10.4
GOLDMAN SACHS & CO. LLC | 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 | TEL:  212-902-1000
Opening Transaction
	
		
	To:
	

Invacare Corporation 
One Invacare Way, P.O. Box 4028 
Elyria, Ohio 44036 
Attention:    Chief Financial Officer 
Telephone No.:   (440) 329-6000

	A/C:
	52072527

	From:
	

Goldman Sachs & Co. LLC

	Re:
	Additional Warrant Transaction

	Ref. No:
	SDB3300879356

	Date:
	June 9, 2017

Dear Ladies and Gentlemen:
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Warrants issued by Invacare Corporation (“Company”) to Goldman Sachs & Co. LLC (“Dealer”) as of the Trade Date specified below (the “Transaction”).  This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.  This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc. (“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern.  
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
1.This Confirmation evidences a complete and binding agreement between Dealer and Company as to the terms of the Transaction to which this Confirmation relates.  This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but without any Schedule except for the election of the laws of the State of New York as the governing law (without reference to choice of law doctrine)) on the Trade Date.  In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates.  The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
2.    The Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions.  The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms.
		
	Trade Date:
	June 9, 2017

		
	Effective Date:
	The third Exchange Business Day immediately prior to the Premium Payment Date, subject to Section ‎9(w).

		
	Warrants:
	Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement Terms” below.  For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option.

		
	Warrant Style:
	European

		
	Seller:
	Company

		
	Buyer:
	Dealer

		
	Shares:
	The common shares of Company, without par value (Exchange symbol “IVC”)

		
	Number of Warrants:
	924,143.  For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder.  In no event will the Number of Warrants be less than zero.

		
	Warrant Entitlement:
	One Share per Warrant

		
	Strike Price:
	USD 21.4375.

Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment  to the extent that, after giving effect to such adjustment,  the Strike Price would be less than USD 12.42, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to Company’s capitalization.
		
	Premium: 
	USD 1,762,500

		
	Premium Payment Date: 
	June 14, 2017

		
	Exchange: 
	The New York Stock Exchange

		
	Related Exchange(s): 
	All Exchanges

Procedures for Exercise.
		
	Expiration Time: 
	The Valuation Time

		
	Expiration Dates: 
	Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 220th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall, acting in good faith and in a commercially reasonable manner, make adjustments, if 

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applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine acting in good faith and using commercially reasonable means.
		
	First Expiration Date:
	September 1, 2022 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below.

		
	Daily Number of Warrants:
	For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Dates”.

		
	Automatic Exercise: 
	Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants for such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date.

		
	Market Disruption Event:
	Section 6.3(a) of the Equity Definitions is hereby amended by replacing clause (ii) in its entirety with “(ii) an Exchange Disruption, or” and inserting immediately following clause (iii) the phrase “; in each case that the Calculation Agent determines is material.”

Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the words “Scheduled Closing Time” in the fourth line thereof.
Valuation Terms.
		
	Valuation Time:
	Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.

		
	Valuation Date:
	Each Exercise Date. 

Settlement Terms.
		
	Settlement Method:
	Net Share Settlement.

		
	Net Share Settlement:
	On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery 

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Quantity for such Settlement Date to the account specified herein free of payment through the Clearance System, and Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date, and Company shall pay to Dealer cash in lieu of any fractional Share based on the Settlement Price on the relevant Valuation Date. 
		
	Share Delivery Quantity:
	For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement Date. 

		
	Net Share Settlement Amount:
	For any Settlement Date, an amount equal to the product of (i) the number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the Warrant Entitlement. 

		
	Settlement Price:
	For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IVC <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent, acting in good faith and in a commercially reasonable manner).  Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate, acting in a commercially reasonable manner, using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event.

		
	Settlement Dates:
	As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section ‎9(k)(i) hereof.

		
	Other Applicable Provisions: 
	The provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Net Share Settled.” “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to that Warrant.

		
	Representation and Agreement:
	Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations 

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arising from Company’s status as issuer of the Shares under applicable securities laws.
		
	3.
	Additional Terms applicable to the Transaction.

Adjustments applicable to the Transaction:
		
	Method of Adjustment: 
	Calculation Agent Adjustment.  For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement.  Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section ‎9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions.

Extraordinary Events applicable to the Transaction:
		
	New Shares:
	Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are publicly quoted, traded or listed) on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person that is a corporation organized under the laws of the United States, any State thereof or the District of Columbia that (x) also becomes Company under the Transaction or (y) directly or indirectly wholly owns Company and fully and unconditionally guarantees Company’s obligations under the Transaction, in either case, following such Merger Event or Tender Offer”.

Consequence of Merger Events:
		
	Merger Event:
	Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section ‎9(h)(ii)(B) of this Confirmation, the provisions of Section ‎9(h)(ii)(B) will apply.

		
	Share-for-Share:
	Modified Calculation Agent Adjustment

		
	Share-for-Other:
	Cancellation and Payment (Calculation Agent Determination)

		
	Share-for-Combined:
	Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination) for all or any portion of the Transaction.

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Consequence of Tender Offers:
		
	Tender Offer:
	Applicable; provided that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under Section 9(h)(ii)(A) of this Confirmation, the provisions of Section 9(h)(ii)(A) will apply; provided further that Section 12.1(d) of the Equity Definitions is hereby amended by replacing “10%” with “15%”.

		
	Share-for-Share:
	Modified Calculation Agent Adjustment

		
	Share-for-Other:
	Modified Calculation Agent Adjustment

		
	Share-for-Combined:
	Modified Calculation Agent Adjustment

		
	Consequences of Announcement Events:
	Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the Equity Definitions; provided that, in respect of an Announcement Event, (x) references to “Tender Offer” shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall be replaced by references to “date of such Announcement Event”, (y) the word “shall” in the second line shall be replaced with “may” and the fifth and sixth lines shall be deleted in their entirety and replaced with the words “effect on the Warrants of such Announcement Event solely to account for changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or the Warrants”, and (z) for the avoidance of doubt, the Calculation Agent may determine whether the relevant Announcement Event has had a material effect on the Transaction (and, if so, shall adjust the terms of the Transaction accordingly) on one or more occasions on or after the date of the Announcement Event up to, and including, the Expiration Date, any Early Termination Date, any date of cancellation and/or any other date with respect to which the Announcement Event is cancelled, withdrawn, discontinued or otherwise terminated, as applicable, it being understood that any adjustment in respect of an Announcement Event shall take into account any earlier adjustment relating to the same Announcement Event.  An Announcement Event shall be an “Extraordinary Event” for purposes of the Equity Definitions, to which Article 12 of the Equity Definitions is applicable.

		
	Announcement Event:
	(i) The public announcement by (w) any entity of any transaction or event that is reasonably likely to be completed (as determined by the Calculation Agent taking into account the effect of such announcement on the market for the Shares and/or options on the Shares) and, if completed, would constitute a Merger Event or Tender Offer, (x) Issuer or any subsidiary thereof of any potential acquisition by Issuer and/or its subsidiaries where the aggregate consideration exceeds 40% of the market capitalization of Issuer as of the date of such announcement (an “Acquisition Transaction”), (y) any entity of the intention to enter into a Merger Event or Tender Offer or (z) Issuer or any 

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subsidiary thereof of the intention to enter into an Acquisition Transaction, (ii) the public announcement by Issuer of an intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, a Merger Event or Tender Offer or an Acquisition Transaction or (iii) any subsequent public announcement by the relevant entity making such previous announcement or Issuer (or a subsidiary thereof) of a change to a transaction or intention that is the subject of an announcement of the type described in clause (i) or (ii) of this sentence (including, without limitation, a new announcement, whether or not by such party or Issuer (or a subsidiary thereof), relating to such a transaction or intention or the announcement of a withdrawal from, or the abandonment or discontinuation of, such a transaction or intention), as determined by the Calculation Agent.  For the avoidance of doubt, the occurrence of an Announcement Event with respect to any transaction or intention shall not preclude the occurrence of a later Announcement Event with respect to such transaction or intention. For purposes of this definition of “Announcement Event,” the remainder of the definition of “Merger Event” in Section 12.1(b) of the Equity Definitions following the definition of “Reverse Merger” therein shall be disregarded.
		
	Nationalization, Insolvency or Delisting:
	Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange.

Additional Disruption Events:
		
	Change in Law:
	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the word “Shares” with the phrase “Hedge Positions” in clause (X) thereof and (ii) inserting the parenthetical “(including, for the avoidance of doubt and without limitation, adoption or promulgation of new regulations authorized or mandated by existing statute)” at the end of clause (A) thereof.

		
	Failure to Deliver:
	Not Applicable

		
	Insolvency Filing:
	Applicable

		
	Hedging Disruption:
	Applicable; provided that:

		
	(i)
	Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a) inserting the following words 

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at the end of clause (A) thereof:  “in the manner contemplated by the Hedging Party on the Trade Date” and (b) inserting the following two phrases at the end of such Section:
“For the avoidance of doubt, the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing terms.”; and
		
	(ii)
	Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof,  after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”.

		
	Increased Cost of Hedging:
	Not Applicable

		
	Loss of Stock Borrow:
	Applicable

		
	Maximum Stock Loan Rate:
	100 basis points

		
	Increased Cost of Stock Borrow:
	Applicable

		
	Initial Stock Loan Rate:
	0 basis points until June 1, 2022 and 25 basis points thereafter.

		
	Hedging Party:
	For all applicable Additional Disruption Events, Dealer.

		
	Determining Party:
	For all applicable Extraordinary Events, Dealer.

		
	Non-Reliance:
	Applicable 

Agreements and Acknowledgments 
		
	Regarding Hedging Activities:
	Applicable

		
	Additional Acknowledgments:
	Applicable

4.    Calculation Agent.     
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner; provided that, following the occurrence and during the continuance of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligation of the Calculation Agent hereunder and such failure continues for five (5) Exchange Business Days following notice to the Calculation Agent by Company of such failure, Company shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the date such Event of Default occurred and ending on the Early Termination Date 

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with respect to such Event of Default (or, if earlier, the date on which such Event of Default is no longer continuing), as the Calculation Agent. Following any determination or calculation by the Calculation Agent hereunder, upon a request by Company, the Calculation Agent shall promptly (but in any event within three Scheduled Trading Days) provide to Company by e-mail to the e-mail address provided by Company in such request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such determination or calculation (including any assumptions used in making such determination or calculation), it being understood that the Calculation Agent shall not be obligated to disclose any proprietary or confidential models used by it for such determination or calculation or any information that may be proprietary or confidential or subject to an obligation not to disclose such information.
		
	5.
	Account Details.

		
	(a)
	Account for payments to Company:     

To be provided.
Account for delivery of Shares from Company:
To be provided.
		
	(b)
	Account for payments to Dealer:

Chase Manhattan Bank New York
For A/C Goldman Sachs & Co. LLC
A/C #930-1-011483
ABA:  021-000021

Account for delivery of Shares to Dealer:
DTC 0005
		
	6.
	Offices.

		
	(a)
	The Office of Company for the Transaction is:  Inapplicable, Company is not a Multibranch Party.

		
	(b)
	The Office of Dealer for the Transaction is: 200 West Street, New York, New York 10282-2198

		
	7.
	Notices.  

		
	(a)
	Address for notices or communications to Company:

Invacare Corporation 
One Invacare Way, P.O. Box 4028 
Elyria, Ohio 44036 
Attention:     Chief Financial Officer 
Telephone No.:    (440) 329-6000

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	(b)
	Address for notices or communications to Dealer:

To:        Goldman Sachs & Co. LLC
200 West Street
New York, NY 10282-2198
		
	Attn:
	Joshua Murray, 

Equity Capital Markets
		
	Telephone: 
	212-902-3291

		
	Facsimile: 
	646-835-3576       

Email:         joshua.murray@gs.com
		
	8.
	Representations and Warranties of Company.

Company hereby represents and warrants to Dealer on the date hereof, on and as of the Premium Payment Date and, in the case of the representations in Section ‎8(d), at all times until termination of the Transaction, that:
		
	(a)
	Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.

		
	(b)
	Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by‐laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as updated by any subsequent filings, to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.

		
	(c)
	No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws.

		
	(d)
	A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company.  The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights.

		
	(e)
	Company is not and, after consummation of the transactions contemplated hereby, will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

		
	(f)
	Company is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(18)(C) of the Commodity Exchange Act).

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	(g)
	Company is not, on the date hereof, in possession of any material non-public information with respect to Company or the Shares.

		
	(h)
	To Company’s actual knowledge, no state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the Shares, other than Ohio Rev. Code §1701.831 and Ohio Rev. Code Chapter 1704, would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares.

		
	(i)
	Company (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least $50 million.

		
	(j)
	Prior to the Trade Date, Company represents that Company’s board of directors have authorized the Transaction, and approved the Transaction and any related hedging activity for purposes of Chapter 1704 of the Ohio Revised Code and agrees to deliver to Dealer a copy of the resolutions of Company’s board of directors covering the foregoing authorization and approvals.

		
	9.
	Other Provisions.

		
	(a)
	Opinions.  Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections ‎8(a) through ‎(d) of this Confirmation (except as to whether this Confirmation constitutes Company’s valid and binding obligation or is enforceable in accordance with its terms); provided that any such opinion of counsel may contain customary exceptions and qualifications.  Delivery of such opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement.

		
	(b)
	Repurchase Notices.  Company shall, on or prior to the date that is one Scheduled Trading Day following any date on which Company obtains actual knowledge that it has effected any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 32.18 million (in the case of the first such notice) or (ii) thereafter more than 685,000 less than the number of Shares included in the immediately preceding Repurchase Notice.  Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and reasonable expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, in each case, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing.  If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the reasonable fees and expenses of such counsel related to such proceeding.  Company shall not be liable for any settlement of any such proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment.  Company shall not, without 

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the prior written consent of the Indemnified Person, effect any settlement of any such proceeding that is pending or threatened in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person.  If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities.  The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity.  The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction.
		
	(c)
	Regulation M.  Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M.  Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution.

		
	(d)
	No Manipulation.  Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act.

		
	(e)
	Transfer or Assignment.  Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer.  Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party; provided that, under the applicable law effective on the date of such assignment, Company will not, as a result of such transfer or assignment, be required to pay the transferee or assignee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Company would have been required to pay to Dealer in the absence of such transfer or assignment.  If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 22.97%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists.  In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section ‎9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party).  The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and any of its affiliates or any other person subject to aggregation with Dealer for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act, or any “group” (within the meaning of Section 13 of the Exchange Act) of which Dealer is or may be deemed to be a part beneficially owns (within the meaning of Section 13 of the Exchange Act), without duplication, on such day (or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and regulations thereunder results in a higher number, such higher number) and (B) the denominator of which is the number of Shares outstanding on such day.  The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the 

12

product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of which is the number of Shares outstanding.  The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company that are, in each case, applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership under any Applicable Restriction, as determined by Dealer in its reasonable discretion.  The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filing requirements on Form 13F, Schedule 13D or Schedule 13G under the Exchange Act, in each case, as in effect on the Trade Date) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding.  Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities, or make or receive any payment in cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations.  Dealer shall be discharged of its obligations to Company solely to the extent of any such performance. 
		
	(f)
	Dividends.  If at any time during the period from and including the Effective Date, to and including the last Expiration Date, (i) an ex-dividend date for a cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”), and that dividend differs from the Regular Dividend on a per Share basis or (ii) if no Ex-Dividend Date for a cash dividend occurs with respect to the Shares in any quarterly dividend period of Company, then the Calculation Agent will adjust, in a commercially reasonable manner, any of the Strike Price, Number of Warrants, Daily Number of Warrants and/or any other variable relevant to the exercise, settlement or payment of the Transaction to preserve the fair value of the Warrants after taking into account such dividend or lack thereof.  “Regular Dividend” shall mean for any calendar quarter, USD 0.0125 for the first regular cash dividend or distribution on the Shares for which the Ex-Dividend Date falls within such calendar quarter, and zero for any other dividend or distribution on the Shares for which the Ex-Dividend Date falls within the same calendar quarter.  

		
	(g)
	[Reserved].

		
	(h)
	Additional Provisions.

		
	(i)
	Amendments to the Equity Definitions:

		
	(A)
	Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “a material”; and adding the phrase “or Warrants” at the end of the sentence.

		
	(B)
	Section 11.2(c) of the Equity Definitions is hereby amended by (w) replacing the words “a diluting or concentrative” with “a material” in the fifth line thereof, (x) adding the phrase “or Warrants” after the words “the relevant Shares” in the same sentence, (y) deleting the words “diluting or concentrative” in the sixth to last line thereof and (z) deleting the phrase “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing it with the phrase “(and, for the avoidance of doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares).”

13

		
	(C)
	Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence.

		
	(D)
	Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that Issuer.”

		
	(E)
	Section 12.9(b)(iv) of the Equity Definitions is hereby amended by:

		
	(x)
	deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and

		
	(y)
	replacing the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares” with the phrase “such Lending Party does not lend Shares” in the penultimate sentence.

		
	(F)
	Section 12.9(b)(v) of the Equity Definitions is hereby amended by:

		
	(x)
	adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and

		
	(y)
	(1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C), (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other.” and (4) deleting clause (X) in the final sentence.

		
	(ii)
	Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) the Calculation Agent shall have the right, in good faith and its commercially reasonable discretion, to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction, or, at the election of Dealer in its sole discretion, any portion of the Transaction, shall be deemed the sole Affected Transaction; provided that if Dealer so designates an Early Termination Date with respect to a portion of the Transaction, (a) a payment shall be made pursuant to Section 6 of the Agreement as if an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants included in the terminated portion of the Transaction, and (b) for the avoidance of doubt, the Transaction shall remain in full force and effect except that the Number of Warrants shall be reduced by the number of Warrants included in such terminated portion:

		
	(A)
	A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of all classes of the common equity of Company entitled to vote generally in the election of Company’s board of directors.

		
	(B)
	Consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, 

14

other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property or assets or (III) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of Company and its subsidiaries, taken as a whole, to any person other than one of Company’s wholly owned subsidiaries.  Notwithstanding the foregoing, any transaction or transactions set forth in clause (A) above and/or this clause (B) shall not constitute an Additional Termination Event if (x) at least 90% of the consideration received or to be received by holders of the Shares, excluding cash payments for fractional Shares and cash payments made pursuant to dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions, and (y) as a result of such transaction or transactions, the Shares will consist of such consideration, excluding cash payments for fractional Shares and cash payments made pursuant to dissenters’ appraisal rights.
		
	(C)
	[Reserved].

		
	(D)
	Default by Company or any of its Significant Subsidiaries with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $5,000,000 (or its foreign currency equivalent) in the aggregate of Company and/or any such subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, in each case, if such default is not cured or waived, or such acceleration is not rescinded, within 30 days after a written notice is delivered to Company. A “Significant Subsidiary” is a subsidiary of Company that is a “significant subsidiary” as defined under Rule 1-02(w) of Regulation S-X under the Exchange Act; provided that, in the case of a subsidiary that meets the criteria of clause (3) of the definition thereof but not clause (1) or (2) thereof, such subsidiary shall not be deemed to be a Significant Subsidiary unless the subsidiary’s income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principle exclusive of amounts attributable to any non-controlling interests for the last completed fiscal year prior to the date of such determination exceeds $5,000,000.

		
	(E)
	A final judgment or judgments for the payment of $5,000,000 (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) in the aggregate rendered against Company or any of its subsidiaries, which judgment is not discharged, paid, bonded, waived or stayed within 60 days after (I) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (II) the date on which all rights to appeal have been extinguished.

		
	(F)
	Dealer reasonably determines based on advice of counsel that, despite using commercially reasonable efforts, it is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect to the Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer); provided that such policies and 

15

procedures have been adopted by Dealer in good faith and are generally applicable in similar situations and applied in a non-discriminatory manner.
		
	(i)
	No Collateral or Setoff.  Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral.  Obligations under the Transaction shall not be set off by Company against any other obligations of the parties, whether arising under the Agreement, this Confirmation, under any other agreement between the parties hereto, by operation of law or otherwise.  Any provision in the Agreement with respect to the satisfaction of Company’s payment obligations to the extent of Dealer’s payment obligations to Company in the same currency and in the same Transaction (including, without limitation Section 2(c) thereof) shall not apply to Company and, for the avoidance of doubt, Company shall fully satisfy such payment obligations notwithstanding any payment obligation to Company by Dealer in the same currency and in the same Transaction. In calculating any amounts under Section 6(e) of the Agreement, notwithstanding anything to the contrary in the Agreement, (1) separate amounts shall be calculated as set forth in such Section 6(e) with respect to (a) the Transaction and (b) all other Transactions, and (2) such separate amounts shall be payable pursuant to Section 6(d)(ii) of the Agreement.  For the avoidance of doubt and notwithstanding anything to the contrary provided in this Section ‎9(i), in the event of bankruptcy or liquidation of either Company or Dealer, neither party shall have the right to set off any obligation that it may have to the other party under the Transaction against any obligation such other party may have to it, whether arising under the Agreement, this Confirmation or any other agreement between the parties hereto, by operation of law or otherwise.

		
	(j)
	Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to the Transaction or (b) the Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a Nationalization, Insolvency or Merger Event in which the consideration to be paid to holders of Shares consists solely of cash, (ii) a Merger Event or Tender Offer that is within Company’s control, or (iii) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company is the Affected Party other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside Company’s control), and if Company would owe any amount to Dealer pursuant to Section 6(d)(ii) of the Agreement or any Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a “Payment Obligation”), then Company shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless (a) Company gives irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 5:00 p.m. (New York City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable, of its election that the Share Termination Alternative shall not apply, (b) Company remakes the representation set forth in Section ‎8(g) as of the date of such election and (c) Dealer agrees, in its sole discretion, to such election, in which case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of Section 6(d)(ii) of the Agreement, as the case may be, shall apply.

		
	Share Termination Alternative: 
	If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section ‎9(k)(i) below, in satisfaction, subject to Section ‎9(k)(ii) below, of the relevant Payment Obligation, in the manner reasonably requested by Dealer free of payment. 

16

Share Termination Delivery 
		
	Property: 
	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price.  The Calculation Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price (without giving effect to any discount pursuant to Section ‎9(k)(i)).

		
	Share Termination Unit Price: 
	The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means.  In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in Section ‎9(k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units.  In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section ‎9(k)(ii) below, notwithstanding the foregoing, the Share Termination Unit Price shall be the Settlement Price on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable.  The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section ‎9(k)(i).  

		
	Share Termination Delivery Unit: 
	One Share or, if the Shares have changed into cash or any other property or the right to receive cash or any other property as the result of a Nationalization, Insolvency or Merger Event (any such cash or other property, the “Exchange Property”), a unit consisting of the type and amount of Exchange Property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency or Merger Event.  If such Nationalization, Insolvency or Merger Event involves a choice of Exchange Property to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.

		
	Failure to Deliver: 
	Inapplicable

17

		
	Other applicable provisions: 
	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.11 and 9.12 (as modified above) of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”.  “Share Termination Settled” in relation to the Transaction means that the Share Termination Alternative is applicable to the Transaction.

		
	(k)
	Registration/Private Placement Procedures.  If, in the reasonable opinion of Dealer, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below.  Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the first applicable Expiration Date, a Private Placement Settlement or Registration Settlement, consistent with a transaction of similar size, for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all remaining Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants.  The Calculation Agent shall make reasonable adjustments, consistent with transactions of a similar size, to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder.

		
	(i)
	If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in customary private placement procedures with respect to such Restricted Shares reasonably acceptable to Dealer; provided that Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer).  The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and such other documentation as is customary for private placement agreements of similar size, all reasonably acceptable to Dealer.  In the case of a Private Placement Settlement, Dealer shall determine a commercially reasonable discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to Section ‎9(j) above) or premium to any Settlement Price (in the case of settlement of Shares pursuant to Section ‎2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder, which discount or premium, as the case may be, shall only take into account the illiquidity resulting from the fact that the Restricted Shares will not 

18

be registered for resale and any commercially reasonable fees and expenses of Dealer (and any affiliate thereof) in connection with such resale.  Notwithstanding  anything to the contrary in the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company of such applicable discount or premium, as the case may be, and the number of Restricted Shares to be delivered pursuant to this clause (i).  For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to Section ‎9(j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section ‎2 above). 
		
	(ii)
	If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements of similar size, all reasonably acceptable to Dealer.  If Dealer, in its sole reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply.  If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section ‎9(j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the Exchange Business Day on which Dealer completes the sale of all Restricted Shares in a commercially reasonable manner or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above).  If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following such resale the amount of such excess (the “Additional Amount”) in cash or in a number of Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price on such day (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount.  The Resale Period shall continue to enable the sale of the Make-whole Shares.  If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply.  This provision shall be applied successively until the Additional Amount is equal to zero.  In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares.

		
	(iii)
	Without limiting the generality of the foregoing, Company agrees that (A) any Restricted Shares delivered to Dealer may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed in respect of any Restricted Shares delivered to Dealer, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer). Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities 

19

Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property.
		
	(iv)
	If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party.

		
	(l)
	Limit on Beneficial Ownership.  Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder and after taking into account any Shares deliverable to Dealer under the letter agreement dated June 8, 2017 between Dealer and Company regarding Base Warrants (the “Base Warrant Confirmation”), (i) the Section 16 Percentage would exceed 8.0%, or (ii) the Share Amount would exceed the Applicable Share Limit, plus 0.5% of the number of Shares outstanding.  Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery and after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation, (i) the Section 16 Percentage would exceed 8.0%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 8.0%, and (ii) the Share Amount would not exceed the Applicable Share Limit. 

		
	(m)
	Share Deliveries. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary.  

		
	(n)
	Waiver of Jury Trial.   Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction.  Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.

		
	(o)
	Tax Disclosure.  Effective from the date of commencement of discussions concerning the Transaction, Company and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Company relating to such tax treatment and tax structure.

		
	(p)
	Maximum Share Delivery.  

		
	(i)
	Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than 1,848,286 (the “Maximum Number of Shares”) to Dealer in connection with the Transaction.  

		
	(ii)
	In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the 

20

Transaction because Company has insufficient authorized but unissued Shares that are not reserved for other transactions (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section ‎9(p)(ii), when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares previously reserved for issuance in respect of other transactions become no longer so reserved or (C) Company additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section ‎9(p)(ii) to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares.  Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter.
		
	(iii)
	The Maximum Number of Shares shall only be subject to adjustment on account of (w) adjustments of the type specified in Section ‎9(f), (x) Potential Adjustment Events of the type specified in (1) Section 11.2(e)(i) through (vi) of the Equity Definitions or (2) Section 11.2(e)(vii) of the Equity Definitions as long as, in the case of this sub-clause (2), such event is within Company’s control, (y) Merger Events or Tender Offers requiring corporate action of Company and (z) Announcement Events that are within the Company’s control; provided that, for the avoidance of doubt, the number of Shares (or Share Termination Delivery Units, assuming solely for purposes of this proviso that Section ‎9(j) applied to all Early Termination Dates hereunder) deliverable under this Confirmation shall be limited to the Maximum Number of Shares.

		
	(q)
	[Reserved].

		
	(r)
	Right to Extend.  The Calculation Agent may postpone or add, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment, based on advice of counsel, that such extension is reasonably necessary or appropriate to preserve commercially reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions (but only if liquidity as of the relevant time is less than the Calculation Agent’s commercially reasonable expectations of liquidity at such time as of the Trade Date) or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer; provided that no such Expiration Date or other date of valuation or delivery may be postponed or added more than 220 Scheduled Trading Days after the original Expiration Date or other date of valuation or delivery, as the case may be.

		
	(s)
	Status of Claims in Bankruptcy.  Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction.

		
	(t)
	Securities Contract; Swap Agreement.  The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be entitled to the protections 

21

afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.
		
	(u)
	Wall Street Transparency and Accountability Act.  In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)).

		
	(v)
	Agreements and Acknowledgements Regarding Hedging. Company understands, acknowledges and agrees that: (A) at any time on and prior to the last Expiration Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction;  (B) Dealer and its affiliates also may be active in the market for Shares other than in connection with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of Issuer shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Settlement Prices; and (D) any market activities of Dealer and its affiliates with respect to Shares may affect the market price and volatility of Shares, as well as the Settlement Prices, each in a manner that may be adverse to Company.

		
	(w)
	Early Unwind. In the event the sale of the “Option Securities” (as defined in the Purchase Agreement dated as of June 8, 2017, between Company and J.P. Morgan Securities LLC, as representative of the Initial Purchasers party thereto (the “Initial Purchasers”)) is not consummated with the Initial Purchasers for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section ‎9(a), in each case by 5:00 p.m. (New York City time) on the Premium Payment Date, or such later date as agreed upon by the parties (the Premium Payment Date or such later date the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early Unwind”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Dealer and Company under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date.  Each of Dealer and Company represents and acknowledges to the other that, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.

		
	(x)
	Payment by Dealer. In the event that (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a Termination Event or an Event of Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Dealer owes to Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.

		
	(y)
	Listing of Warrant Shares.  Company shall have submitted an application for the listing of the Warrant Shares on the Exchange, and such application and listing shall have been approved by the Exchange, subject only to official notice of issuance, in each case, on or prior to the Premium Payment Date. Company agrees and acknowledges that such submission and approval shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement. 

22

		
	(z)
	Adjustments.  For the avoidance of doubt, whenever the Calculation Agent or Determining Party is called upon to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions to take into account the effect of an event, the Calculation Agent or Determining Party shall make such adjustment by reference to the effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable hedge position.

		
	(aa)
	Delivery or Receipt of Cash.  For the avoidance of doubt, other than receipt of the Premium by Company, nothing in this Confirmation shall be interpreted as requiring Company to cash settle the Transaction, except in circumstances where cash settlement is within Company’s control (including, without limitation, where Company elects to deliver or receive cash, or where Company has made Private Placement Settlement unavailable due to the occurrence of events within its control) or in those circumstances in which holders of Shares would also receive cash.

		
	(bb)
	Risk Disclosure Statement.  Company represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement provided by Dealer and a copy of the most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized Options”.

		
	(cc)
	Conduct Rules.  Each party acknowledges and agrees to be bound by the Conduct Rules of the Financial Industry Regulatory Authority, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.

		
	(dd)
	FATCA and Dividend Equivalent Tax. “Indemnifiable Tax” as defined in Section 14 of the Agreement shall not include (i) any tax imposed or collected pursuant to Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”) or (ii) any tax imposed on amounts treated as dividends from sources within the United States under Section 871(m) of the Code (or the United States Treasury Regulations or other guidance issued thereunder). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement.  

		
	(ee)
	Taxes After Transfer.  If Dealer transfers or assigns all or any part of its rights or obligations under the Transaction without Company’s consent, Company shall not be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than the amount that Company would have been required to pay to Dealer in the absence of such transfer or assignment, except to the extent the greater amount is due to a Change in Tax Law after the date of such transfer or assignment; provided that if such transferee does not, on or before such transfer, provide to Company a United States Internal Revenue Service Form W-9 or W-8ECI, Company shall not be required to pay the transferee any amount under Section 2(d)(i)(4) of the Agreement with respect to any U.S. federal withholding taxes.  If such transferee does not provide a United States Internal Revenue Service Form W-9 or W-8ECI pursuant to the prior sentence and, at any time, Company is required to remit an amount of tax in respect of any such U.S. federal withholding tax with respect to a payment (or deemed payment or deemed distribution) under the Transaction, then without duplication for any amount that Company has deducted on account of such tax from any amount paid to such transferee pursuant to the Transaction, the amount so required to be remitted shall be payable by such transferee to Company within 10 business days of written demand by Company.  

23

		
	(ff)
	Part 3(a) of the ISDA Schedule – Tax Forms.

	
			
	Party Required to Deliver Document
	Form/Document/Certificate
	Date by which to be Delivered

	Company
	A complete and duly executed United States Internal Revenue Service Form W-9 (or successor thereto.)
	(i) Upon execution and delivery of this Agreement; (ii) promptly upon reasonable demand by Dealer; and (iii) promptly upon learning that any such Form previously provided by Company has become obsolete or incorrect.

	Dealer
	A complete and duly executed United States Internal Revenue Service Form W-9 (or successor thereto) with any required attachments.
	(i) Upon execution and delivery of this Agreement; (ii) promptly upon reasonable demand by Company; and (iii) promptly upon learning that any such Form previously provided by Dealer has become obsolete or incorrect.

24

Company hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Company with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Goldman Sachs & Co. LLC, Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.

Very truly yours,
Goldman Sachs & Co. LLC

By:  /s/ Daniela Rouse
 
Name:  Daniela Rouse
Title:  Vice President

    

Accepted and confirmed 
as of the Trade Date:
	
		
	Invacare Corporation

	By:
	/s/ Robert K. Gudbranson

	Authorized Signatory

	Name:  Robert K. Gudbranson

	 
	Senior Vice President and Chief Financial OfficerExhibit

Exhibit 10.1
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (“Agreement”), is made effective [•], 2017 (the “Effective Date”), by and between Forest City Employer, LLC (the “Company”), and [•] (“Employee”).
1.    Term.  Except as otherwise provided below, the “Term” of this Agreement shall commence on the Effective Date and end on the second anniversary thereof.  The Term shall be automatically renewed for successive one-year periods, on the terms and subject to the conditions of this Agreement, commencing on the second anniversary of the Effective Date, and on each anniversary date thereafter, unless either the Company or Employee gives the other party written notice (in accordance with Section 9 hereof), at least 180 calendar days prior to the end of such initial or extended Term, of its or his intention not to renew this Agreement.  Notwithstanding the foregoing, in no event shall the Term expire before the second anniversary of a “Change of Control” (as defined in Section 16) that occurs during the Term.  For purposes of this Agreement, any reference to the Term of this Agreement shall include the original term and any extension thereof.
2.    Nature of Agreement.  In order to induce Employee to remain in the employ of the Company and in consideration of Employee’s continued employment, the Company agrees, under the conditions described herein, to pay Employee the “Severance Benefits” (as defined in Section 5) and the other payments and benefits described in this Agreement.  No Severance Benefits shall be payable under this Agreement unless there shall have been a “Qualified Termination” (as defined in Section 16) during the Term.  This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between Employee and the Company, Employee shall not have any right to be retained in the employ of the Company.
3.    Termination of Employment.  
(a)    Death and Disability.  Employee’s employment shall terminate automatically upon Employee’s death.  If the Company determines in good faith that the “Disability” (as defined in Section 16) of Employee has occurred during the Term, it may give to Employee written notice in accordance with Section 9 of this Agreement of its intention to terminate Employee’s employment, provided that such notice is given no later than 150 calendar days following the determination of Employee’s Disability.  In such event, Employee’s employment shall terminate effective on the 30th calendar day after receipt of such notice by Employee (the “Disability Effective Date”), provided that, within the 30 calendar days after such receipt, Employee shall not have returned to full-time performance of Employee’s duties.  
(b)    Cause.  Employee’s employment with the Company may be terminated by the Company with or without “Cause” (as defined in Section 16).  
(c)    Good Reason.  Employee’s employment with the Company may be terminated by Employee with or without “Good Reason” (as defined in Section 16).  
(d)    Notice of Termination.  Any termination by the Company for Cause, or by  Employee for Good Reason, shall be communicated by Notice of Termination (as defined in Section 16) to the other party in accordance with Section 9.  
(e)    Resignation from All Positions.  Notwithstanding any other provision of this Agreement, upon the termination of Employee’s employment for any reason, Employee shall immediately resign from all 

1

positions that he holds or has ever held with the Company and its affiliates, including all board of directors, managers or equivalent positions with any affiliate.  Employee hereby agrees to execute any and all documentation to effectuate such resignations upon request by the Company, but he shall be treated for all purposes as having so resigned upon termination of his employment, regardless of when or whether he executes any such documentation.
4.    Compensation Other Than Severance Benefits.   
(a)    Accrued Rights.  If Employee’s employment shall terminate for any reason following a Change of Control and during the Term, the Company shall pay, or cause to be paid, to Employee (or his estate) the sum of:  (i) the portion of Employee’s base salary earned through the “Date of Termination” (as defined in Section 16), to the extent not previously paid; (ii) the amount of any annual bonus that has been earned by Employee for a completed fiscal year or other measuring period preceding the Date of Termination, but has not yet been paid to Employee; and (iii) any accrued paid time-off, to the extent not previously paid (the sum of the amounts described in clauses (i), (ii) and (iii) shall be referred to as the “Accrued Benefits”).  The Accrued Benefits described in clauses (i) and (iii) shall be paid in a single lump sum within 30 calendar days after the Date of Termination.  The Accrued Benefits described in clause (ii) shall be paid at the same time that annual bonuses are paid to other similarly situated employees for the applicable fiscal year, but in no event later than two and one half months following the end of such fiscal year.
(b)    Other Benefits.   If Employee’s employment shall terminate for any reason following a Change of Control and during the Term, the Company shall pay or provide, or cause to be paid or provided, to Employee (or his estate) any other amounts or benefits required to be paid or provided or which Employee is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company or its affiliates in accordance with the terms and normal procedures of each such plan, program, policy or practice or contract or agreement as in effect immediately prior to the Date of Termination or, if more favorable to Employee, as in effect immediately prior to the Change of Control, based on accrued and vested benefits through the Date of Termination. Without limiting the generality of the foregoing, Employee’s resignation under this Agreement, with or without Good Reason, shall in no way affect Employee’s ability to terminate employment by reason of Employee’s retirement under, or to be eligible to receive retirement benefits under, any compensation and benefits plans, programs or arrangements of the Company or its affiliates, and any termination which otherwise qualifies as Good Reason shall be treated as such even if it is also a retirement for purposes of any such plan, program or arrangement.
5.    Severance Benefits.  If Employee shall incur a Qualified Termination during the Term, then, subject to Employee’s compliance with Sections 5(f) and 8 of this Agreement, the Company shall pay or provide to Employee (or his estate) the amounts and  benefits described in this Section 5 (collectively, the “Severance Benefits”) in addition to any payments and benefits to which Employee is entitled under Section 4 of this Agreement.  
(a)    Cash Severance.  In lieu of any severance benefit otherwise payable to Employee, the Company shall pay to Employee a lump sum severance payment, in cash, equal to two times the sum of Employee’s “Annual Base Salary” and “Average Bonus” (each as defined in Section 16), which amount shall be payable within 60 calendar days following the Date of Termination (provided that if the 60-day payment period begins in one calendar year and ends in the next calendar year, then to the extent required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) the payment shall be made in the second calendar year).  
(b)    Health Benefits.  For the 18-month period immediately following the Date of Termination, the Company shall arrange to provide Employee and his dependents medical, dental and vision insurance 

2

benefits on a monthly basis that is substantially similar to such benefits as provided to Employee and his dependents immediately prior to the Date of Termination at a cost to Employee equal to 35% of the applicable COBRA premiums (with the Company subsidizing the remaining 65% of the applicable premiums).  An amount equal to the Company-provided COBRA subsidy (or such other amounts as may be required by law) will be included in Employee’s income for tax purposes to the extent required by applicable law and the Company may withhold taxes from Employee’s other compensation for this purpose. Benefits otherwise receivable by Employee pursuant to this Section 5(b) shall be reduced to the extent benefits of the same type are received by or made available by a subsequent employer to Employee during the 18-month period following the Date of Termination (and any such benefits received by or made available to Employee shall be reported to the Company by Employee).
(c)    Incentive Plans.  With respect to any of the Company’s outstanding (i) short-term or long-term cash incentive awards held by Employee (other than any annual bonus described in Section 4(a)(ii) of this Agreement), or (ii) performance-based equity awards held by the Employee, in each case if and only if the Date of Termination occurs after at least one-half of the applicable performance period has elapsed (and Employee is not otherwise entitled to benefits thereunder due to his retirement), the amount that would have been payable to Employee for that particular performance period (and only that performance period), determined as if Employee had remained employed for the entire performance period (and any additional period of time necessary to be eligible to receive payment for the performance period), based on actual performance during the entire performance period and without regard to any discretionary adjustments that have the effect of reducing the amount of payment (other than discretionary adjustments applicable to all senior executives who did not terminate employment), pro-rated based on the number of days in the applicable performance period through (and including) the Date of Termination, and paid in a single lump sum at the same time that payments are made to other participants who did not terminate employment.  Notwithstanding the foregoing, this paragraph (c) shall not apply in the event that the Company terminates Employee’s employment due to Disability.  
(d)    Restricted Shares and Units.  All outstanding and unvested Company restricted shares and restricted share units that are subject to a vesting schedule based solely on continued service (and specifically excluding any awards with respect to which the number of shares earned depends upon performance) shall become immediately vested.  
(e)    Outplacement.  The Company shall provide Employee with outplacement services for a period of one year following the Date of Termination and at a cost to the Company of not more than $25,000, such services to be provided by an outplacement services firm selected by the Company and in accordance with the Company’s practices as in effect on the Date of Termination.  
(f)    Release of Claims.  Notwithstanding anything contained herein to the contrary, the Company shall not be obligated to pay or provide any of the Severance Benefits unless (i) Employee (or his legal representative) first executes, within 45 calendar days after the Date of Termination, a release of claims agreement in the form attached hereto as Exhibit A1, with such changes as the Company may determine to be required or reasonably advisable in order to make the release enforceable and otherwise compliant with applicable, and (ii) the release becomes effective and irrevocable in accordance with its terms.  
6.    Section 280G.   Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or distribution by the Company or any of its affiliated companies to or for the benefit of Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be an excess parachute payment within the meaning of section 280G of the Code (such excess only, an “Excess Payment”), then the Employee shall forfeit all Excess Payments if the after-tax value to Employee of the Payments as reduced by such forfeiture would be 

3

greater than the after-tax value to Employee of the Payments absent such forfeiture.  The forfeiture of Excess Payments, if applicable, shall be applied by: (i) first reducing the cash Severance Benefits (with cash Severance Benefits having different payment terms being reduced on a pro-rata basis); (ii) then cancellation of accelerated vesting of performance-based equity awards (based on the reverse order of the date of grant); (iii) then cancellation of accelerated vesting of other equity awards (based on the reverse order of the date of grant); and (iv) finally reduction of any other benefits or payments due to Employee (with benefits or payments in any group having different payment terms being reduced on a pro-rata basis).  All determinations required to be made under this Section 6, and the assumptions to be utilized in arriving at such determination, shall be made by a major accounting firm with expertise in such matters designated by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and Employee within 15 business days of the receipt of notice from Employee that there has been a Payment, or such earlier time as is requested by the Company. Any determination by the Accounting Firm shall be binding upon the Company and Employee.  All fees and expenses of the Accounting Firm for services performed pursuant to this Section 6 shall be borne solely by the Company.   
7.    Full Settlement.  Except as otherwise provided in Section 5(b) or Section 8 of this Agreement or an applicable clawback policy maintained by the Company or its affiliates, the Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or any of its affiliates may have against Employee or others.  In no event shall Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Employee under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Employee obtains other employment. Provided that Employee prevails on any material claim made by him, and disputed by the Company, under the terms of this Agreement, the Company agrees to pay (within 14 business days following the Company’s receipt of an invoice from Employee) at any time from the date of the Change of Control through Employee’s remaining lifetime, (or, if longer, through the 10th anniversary of the Change of Control), to the full extent permitted by law, all legal fees and expenses which Employee (or his heirs or legal representatives) may reasonably incur as a result of any contest by either party (including, as the case may be, the Company, any of its affiliates or their respective predecessors, successors or assigns, or Employee, his estate, beneficiaries or their respective successors and assigns) of the validity or enforceability of, or liability under, any provision of this Agreement (including as a result of any contest by Employee about the amount of any payment pursuant to this Agreement).   
8.    Restrictive Covenants.
(a)    Confidentiality.   During the Term and thereafter, Employee agrees to keep secret and confidential, and not to use or disclose to any third parties, except as directly required for Employee to perform Employee’s responsibilities for the Company under this Agreement, any of the Company’s Confidential Information (as defined in paragraph (j) below) acquired by Employee during the course of, or in connection with, Employee’s employment with the Company.   Employee acknowledges that the Confidential Information is the exclusive property of the Company.  Upon termination of Employee’s employment with the Company for any reason, or at the request of the Company at any time, Employee shall promptly return to the Company all property then in Employee’s possession, custody or control belonging to the Company, including all Confidential Information.  Employee shall not retain any copies of correspondence, memoranda, reports, notebooks, drawings, photographs or other documents in any form whatsoever (including information contained in computer or other electronic memory or on any computer or electronic storage device) relating in any way to the affairs of the Company and which were entrusted to Employee or obtained by Employee at any time during the Term.   

4

(b)    Non-Competition.   Employee and the Company agree that Employee is being employed in an important fiduciary capacity with the Company and that the Company is engaged in a highly competitive business.  Employee and the Company further agree that it is appropriate to place reasonable limits as set forth herein on Employee’s ability to compete with the Company to protect and preserve the legitimate business interests and goodwill of the Company.  Employee agrees that, during the Term and thereafter during the Protection Period (as defined in paragraph (j) below), Employee will not, directly or indirectly (in a capacity where Employee could use specialized knowledge, training, skill or expertise, Confidential Information, or customer contacts obtained from the Company to the detriment of the Company), own, manage, operate, join, control, finance or participate in the ownership, management, operation, control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative, or consultant to any business or activity that is Competitive with the Company (as defined in paragraph (j) below).  After the end of the Term, the covenant in this Section 8(b) shall restrict Employee’s conduct within the Restricted Area (as defined in paragraph (j) below).  Employee agrees that in his position, it is expected that Employee will receive Confidential Information related to the Restricted Area and if Employee was permitted to engage in competition with the Company within the Restricted Area, it would lead to unfair competition and it would be a significant disadvantage to the Company that would likely cause irreparable harm.  Notwithstanding the foregoing, the ownership of not more than two percent (2%) of the outstanding securities of any company listed on any public exchange or regularly traded in the over-the-counter market, assuming Employee’s involvement with any such company is solely that of a security holder, shall not constitute a violation of this Section 8(b).   
(c)    Customer Non-Solicitation.  Employee agrees that, during the Term and thereafter during the Protection Period, Employee will not, directly or indirectly (in a capacity where Employee could use specialized knowledge, training, skill or expertise, Confidential Information, or customer contacts or information obtained from the Company to the detriment of the Company): (i) solicit, attempt to solicit, call on, or accept business from any Customer (as defined in paragraph (j) below); or (ii) in any manner cause or attempt to cause any Customer to divert, terminate, limit, modify or fail to enter into any existing or potential business relationship with the Company.  
(d)    Employee Non-Solicitation.  Employee agrees that, during the Term and thereafter during the Protection Period, Employee will not directly or indirectly engage, solicit, hire, attempt to hire, or encourage any current employee or former employee (limited to former employees whose employment has been terminated or concluded for less than 6 months) of the Company to leave or terminate his or her employment relationship with the Company.
(e)    Non-Disparagement.  Employee agrees that he will not do or say anything that could reasonably be expected to disparage or impact negatively the name or reputation in the marketplace of the Company or any of its affiliates, employees, officers, directors, stockholders, members, principals or assigns. Subject to Employee’s continuing obligations to comply with Section 8(a) hereof as provided herein, nothing in this Section 8(e) shall preclude Employee from responding truthfully to any legal process or truthfully testifying in a legal or regulatory proceeding, provided that, to the extent permitted by law and not contrary to Section 8(h) below, Employee promptly informs the Company of any such obligation prior to participating in any such proceedings.  The Company likewise agrees that it will not release any information or make any statements, and its officers and directors shall not do or say anything that could reasonably be expected to disparage or impact negatively the name or reputation in the marketplace of Employee. Nothing herein shall preclude the Company or any of its affiliates, employees, officers, directors, stockholders, members, principals or assigns from responding truthfully to any legal process or truthfully testifying in a legal or regulatory proceeding, provided that to the extent permitted by law, the Company will promptly inform 

5

Employee in advance if it has reason to believe such response or testimony will directly relate to Employee, or preclude the Company from complying with applicable disclosure requirements.
(f)    Divisible Provisions. The individual terms and provisions of this Section 8 are intended to be separate and divisible provisions and if, for any reason, any one or more of them is held to be invalid or unenforceable, neither the validity nor the enforceability of any other provision of this Section 8 shall thereby be affected.  It is the intention of Employee and the Company that the potential restrictions on Employee’s solicitation and future employment imposed by this Section 8 be reasonable in both duration and geographic scope and in all other respects.  If for any reason any court of competent jurisdiction shall find any provisions of this Section 8 unreasonable in duration or geographic scope or otherwise, Employee and the Company agree that the restrictions and prohibitions contained herein may be modified by a court of competent jurisdiction and shall be effective to the fullest extent allowed under applicable law in such jurisdiction.
(g)    Injunctive Relief and Remedies.  In event of a breach or threatened breach of any of Employee’s duties and obligations under this Section 8, the Company shall be entitled, in addition to any other legal or equitable remedies it may have in connection therewith (including any right to damages it may suffer), to (i) temporary, preliminary and permanent injunctive relief restraining such breach or threatened breach, (ii) cease making payments or providing benefits under Section 5 of this Agreement (other than Section 5(a) thereof), and (iii) any other relief obtainable through statutory or common law means (including, but not limited to, applicable trade secrets law).  Employee hereby expressly acknowledges that the harm that might result to the Company’s business as a result of any noncompliance by Employee with the provisions of this Section 8 would be largely irreparable.  Employee specifically agrees that if there is a question as to the enforceability of any of the provisions of this Section 8, Employee will not engage in any conduct inconsistent with or contrary to this Section 8 until after the question has been resolved by a final judgment of a court of competent jurisdiction.  The restrictions stated in this Section 8 are in addition to and not in lieu of protections afforded to trade secrets and confidential information under applicable law.  Nothing in this Section 8 is intended to or shall be interpreted as diminishing or otherwise limiting the Company’s right under applicable law to protect its trade secrets and confidential information.
(h)    Protected Activity.  Nothing contained in this Agreement, or any other agreement, policy, practice, procedure, directive or instruction maintained by the Company shall prohibit Employee from reporting possible violations of federal, state or local laws or regulations to any federal, state or local governmental agency or commission (a “Government Agency”) or from making other disclosures that are protected under the whistleblower provisions of federal, state or local laws or regulations.  Employee does not need prior authorization of any kind to make any such reports or disclosures to any Government Agency and Employee is not required to notify the Corporation that Employee has made such reports or disclosures.  Nothing in this Agreement limits any right Employee may have to receive a whistleblower award or bounty for information provided to any Government Agency.  Employee hereby acknowledges that the Company has informed Employee, in accordance with 18 U.S.C. § 1833(b), that Employee may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret where the disclosure: (i) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(i)    Notification.  To enable the Company to monitor Employee’s compliance with the obligations imposed by this Section 8, Employee agrees to inform the Company during the Protection Period, of the identity of any subsequent employer and Employee’s new job title.  Employee agrees that he will disclose the existence of this Section 8 to any subsequent employer.  

6

(j)    Definitions.  As used in this Section 8, the following definitions shall apply
“Company” means the Company and its affiliates.
“Competitive with the Company” means any person or entity (including any joint venture, partnership, firm, corporation, or limited liability company) that conducts a real estate business that is competitive with the commercial office, retail rental, and/or multifamily residential portfolios owned or managed by the Company as of the Date of Termination (or any significant business that is being actively pursued as of the Date of Termination by the Company).
“Confidential Information” means information pertaining to the business of the Company that is generally not known to or readily ascertainable to the industry in which the Company competes, and that gives or tends to give the Company a competitive advantage over persons who do not possess such information or the secrecy of which is otherwise of value to the Company in the conduct of its business regardless of when and by whom such information  was  developed  or  acquired,  and  regardless  of  whether any  of these  are described in writing, copyrightable or considered copyrightable, patentable or considered patentable.  Confidential Information includes, but is not limited to, the Company’s trade secrets, information related to present and potential customers, vendors and suppliers (including, but not limited to, lists, contact information, requirements, contract terms, and pricing), methods of operations, research and development, product information, business technical information, including technical data, techniques, solutions, test methods, quality control systems, processes, design specifications, technical formulas, procedures and information, sales plans and strategies, pricing and profit information, financial information, marketing data, all agreements, schematics, manuals, studies, reports, and statistical information relating to the Company, all formulations, database files, information technology, strategic alliances, products, services, programs and processes used or sold, and all software licensed or developed by the Company, computer programs, systems and/or software, ideas, inventions, business information, know-how, improvements, designs, redesigns, creations, discoveries and developments of the Company.  Confidential Information includes all forms of the information, whether oral, written or contained in electronic or any other format.
“Customer” means any actual or potential customer or client of the Company that (i) Employee knows to have been engaged as a customer or client of the Company during the one-year period prior to the Date of Termination, (ii) Employee knows to have been contacted by the Company during the one-year period prior to the Date of Termination or (iii) about which Employee had been provided or had access to Confidential Information during his employment with the Company.
“Protection Period” means the period commencing on the Date of Termination and ending on the first anniversary of the Date of Termination; provided, however, that such period shall be extended for an additional period of time equal to the time that elapses from the commencement of a breach of the covenants contained in this Section 8 to the later of (i) the termination of such breach or (ii) the final resolution of any litigation stemming from such breach.   
“Restricted Area” means the geographic area or areas where Employee conducted activities on behalf of the Company at or within a one-year period of time prior to the Date of Termination.  It is intended as of the Effective Date that the Restricted Area will include the entire United States, as Employee is engaged to provide services and has duties related to this entire geographic area.
9.    Notices.   Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by reputable overnight carrier or mailed by first class mail, return receipt requested, postage prepaid, to the recipient.  Notices to Employee shall be sent to the address of Employee most recently provided to the Company.  Notices to the Company should be sent to: Forest City Employer, LLC, Attention: 

7

Chief Executive Officer at the then-current corporate headquarters of Forest City Realty Trust, Inc.  Notice and communications shall be effective on the date of delivery if delivered personally, on the first business day following the date of dispatch if delivered utilizing overnight courier, or three business days after having been mailed, if sent by registered or certified mail.
10.    Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
11.    Successors and Assigns. 
(a)    This Agreement is personal to Employee, and, without the prior written consent of the Company, shall not be assignable by Employee other than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by Employee’s legal representatives.
(b)    This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.  Except as provided in Section 11(c), this Agreement shall not be assignable by the Company without the prior written consent of Employee, except to an affiliate of the Company.
(c)    The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  “Company” means the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law or otherwise.
12.    Choice of Law.  This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of Ohio, without regard to conflicts of law principles.  The parties hereto irrevocably agree to submit to the jurisdiction and venue of the federal courts located in the Northern District of Ohio or state courts located in Cuyahoga County, Ohio in any court action or proceeding brought with respect to or in connection with this Agreement.
13.    Amendment and Waiver.  The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and Employee, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.
14.    Miscellaneous.  Any payments to Employee under this Agreement shall be paid from the Company’s general assets.  The Company and its affiliates may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as the Company and its affiliates are required to withhold pursuant to any law or government regulation or ruling.  This Agreement may be executed in separate counterparts, each of which shall be deemed to be an original and both of which taken together shall constitute one and the same agreement.  This Agreement embodies the complete agreement and understanding between the parties with respect to the subject matter hereof and effective as of its date supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.  Any Severance Benefits received by Employee under this Agreement shall be in lieu of payments or benefits otherwise available under a general severance policy 

8

or other severance plan maintained by the Company or its affiliates, including, without limitation, the Forest City Employer, LLC Severance Plan, or any employment agreement, if any, between the Company or its affiliates and Employee.  
15.    Section 409A Compliance.  
(a)    In General.  Section 409A of the Code (“Section 409A”) imposes payment restrictions on “nonqualified deferred compensation” (i.e., potentially including payments owed to Employee upon termination of employment).  Failure to comply with these restrictions could result in negative tax consequences to Employee, including immediate taxation, interest and a 20% additional income tax. It is the Company’s intent that this Agreement be exempt from the application of, or otherwise comply with, the requirements of Section 409A.  Specifically, any taxable benefits or payments provided under this Agreement are intended to be separate payments that qualify for the “short-term deferral” exception to Section 409A to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the involuntary separation pay exceptions to Section 409A, to the maximum extent possible.  If neither of these exceptions applies, and if Employee is a “specified employee” within the meaning of Section 409A, then notwithstanding any provision in this Agreement to the contrary and to the extent required to comply with Section 409A, all amounts that would otherwise be paid or provided during the first six months following the Date of Termination shall instead be accumulated through and paid or provided (without interest), on the first business day following the six-month anniversary of the Date of Termination.
(b)    Separation from Service.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and Employee is no longer providing services (at a level that would preclude the occurrence of a “separation from service” within the meaning of Section 409A) to the Company or its affiliates as an employee or consultant, and for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” within the meaning of Section 409A. 
(c)    Reimbursements.  With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last business day of Employee’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder.
16.    Definitions.  Capitalized terms not otherwise defined above shall have the meanings set forth in this Section 16.
(a)    “Annual Base Salary” shall mean Employee’s annual base salary at the rate in effect immediately prior to a Change of Control, or such higher rate as may be in effect at any time on or after the Change of Control. 
(b)    “Average Bonus” shall mean the average of the bonuses payable under the Company’s annual bonus program, or any comparable annual bonus under any predecessor program, for the last three full fiscal years prior to the Change of Control, or if Employee was eligible to earn such a bonus for less than the last three full fiscal years, for the fiscal years during which Employee was eligible to earn such a bonus immediately prior to the Change of Control (and annualized in the event that Employee was not employed by the Company 

9

or its affiliates (or was not eligible to earn such a bonus) for the whole of each such fiscal year).  If Employee was not eligible to earn such an annual bonus for any fiscal year ending on or before the Change of Control, then the Average Bonus shall be deemed to equal Employee’s target annual bonus opportunity as in effect immediately prior to the Change of Control.
(c)    “Cause” shall mean (i) the willful and continued failure of Employee to perform substantially Employee’s duties with the Company or any of its affiliates (other than any such failure resulting from any medically determined physical or mental impairment), that is not cured by Employee within 20 calendar days after a written demand for substantial performance is delivered to Employee by the Chief Executive Officer of the Company (the “CEO”) which specifically identifies the manner in which the CEO believes that Employee has not substantially performed Employee’s duties; (ii) Employee’s illegal conduct, gross misconduct, gross insubordination or gross negligence that is materially and demonstrably injurious to the Company’s business or financial condition; or (iii) Employee’s conviction, guilty plea or plea of nolo contendere for any crime involving dishonesty or for any felony.
(d)    “Change of Control” shall mean a “change of control” of Forest City Realty Trust, Inc. as defined in the Forest City Realty Trust, Inc. 1994 Stock Plan, as in effect on the Effective Date; provided that in any case, the transaction also constitutes a “change in control event” within the meaning of Treasury Regulation § 1.409A-3(i)(5). 
(e)    “Date of Termination” shall mean, as applicable, the date of Employee’s death, the Disability Effective Date, the date on which the termination of Employee’s employment by the Company for Cause or without Cause or by Employee for Good Reason or without Good Reason is effective.  
(f)    “Disability” shall mean Employee is disabled in accordance with the long-term disability insurance plan maintained by the Company for which Employee is eligible or a determination by the U.S. Social Security Administration that Employee is totally disabled.
(g)    “Good Reason” shall mean the occurrence of any of the following without Employee’s consent: (i) any reduction of Employee’s Annual Base Salary (as defined in this Section 16), other than in connection with across-the-board reductions that apply to other similarly-situated executives; (ii) a material reduction in Employee’s title, authority, responsibilities or reporting relationship as in effect immediately prior to the Change of Control; (iii) the Company’s material breach of any of its obligations to Employee under this Agreement; or (iv) the Company’s requirement that in order to perform his obligations to the Company, Employee must relocate his residence to a location more than 50 miles from Employee’s office location immediately prior to a Change in Control. A termination of Employee’s employment by Employee shall not be deemed to be for Good Reason unless (x) Employee gives notice to the Company of the existence of the event or condition constituting Good Reason within 60 calendar days after such event or condition initially occurs or exists, and (y) the Company fails to cure such event or condition within 30 calendar days after receiving such notice.
(h)    “Notice of Termination” shall mean a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provision so indicated, and (iii) if the Date of Termination is other than the date of receipt of such notice, specifies the Date of Termination (which date shall be not more than 30 calendar days after the giving of such notice).  
(i)    “Qualified Termination” shall mean the termination of Employee’s employment within two years after a Change of Control: (i) by the Company and its affiliates for Disability or other than for Cause; or (ii) by Employee for Good Reason.  

10

(Signatures are on the following page)

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above.
	
	
	FOREST CITY EMPLOYER, LLC

By:____________________________________
        [Name][Title]

	EMPLOYEE

_______________________________________
[•]

11

EXHIBIT A1
GENERAL RELEASE

This General Release (this “Release”) is made and entered into as of this [•] day of [•], 20[•], by and between Forest City Employer, LLC (the “Company”) and [•] (“Employee”).  
1.    Employment Status. Employee’s employment with the Company and its affiliates terminated effective as of [•], 20[•] (the “Separation Date”).
2.    Payments and Benefits.  Upon the effectiveness of the terms set forth herein, the Company shall provide Employee with the benefits set forth in Section 5 of the Change of Control Agreement between Employee and the Company dated as of [•], 2017 (the “Change of Control Agreement”), upon the terms, and subject to the conditions, of the Change of Control Agreement.  Employee agrees that Employee is not entitled to receive any additional payments as wages, vacation or bonuses except as otherwise provided under Section 5 of the Change of Control Agreement.
3.    No Liability. This Release does not constitute an admission by the Company, or any of its parents, subsidiaries, affiliates, divisions, officers, directors, partners, agents, or employees, or by Employee, of any unlawful acts or of any violation of federal, state or local laws.
4.    Release.  In consideration of the payments and benefits set forth in Section 2 above, Employee for himself, his heirs, administrators, representatives, executors, successors and assigns does hereby irrevocably and unconditionally release, acquit and forever discharge the Company and each of its parents, subsidiaries, affiliates, divisions, successors, assigns, officers, directors, partners, agents, attorneys, and former and current employees, including without limitation all persons acting by, through, under or in concert with any of them (collectively, “Company Releasees”), and each of them, from any and all claims, demands, actions, causes of action, costs, attorney fees, and all liability whatsoever, whether known or unknown, fixed or contingent, which Employee has, had, or may ever have against the Company Releasees relating to or arising out of Employee’s employment or separation from employment with the Company, from the beginning of time and up to and including the date Employee executes this Release. This Release includes, without limitation, (i) law or equity claims; (ii) contract (express or implied) or tort claims; (iii) claims for wrongful discharge, retaliatory discharge, whistle blowing, libel, slander, defamation, unpaid compensation, intentional infliction of emotional distress, fraud, public policy, contract or tort, and implied covenant of good faith and fair dealing; (iv) claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, disability, religion, veteran, military status, sexual orientation, or any other form of discrimination, harassment, or retaliation (including without limitation under the Age Discrimination in Employment Act of 1967 as amended by the Older Workers Benefit Protection Act (“ADEA”), the National Labor Relations Act, Executive Order 11246, the Employee Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act, Title VII of the Civil Rights Act of 1964 as amended by the Civil Rights Act of 1991, Section 1981 of the Civil Rights Act of 1966, the Equal Pay Act of 1962, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973, the Family and Medical Leave Act of 1993, the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Genetic Information Non-discrimination Act, the Sarbanes-Oxley Act, the Employee Polygraph Protection Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Equal Pay Act, the Lilly Ledbetter Fair Pay Act, the Post-Civil War Civil Rights Act (42 U.S.C. §§1981-1988), the Ohio Civil Rights Act, or any other foreign, federal, state or local law or judicial decision), (v) claims arising under the Employee Retirement Income Security Act (excluding claims for amounts that are vested benefits or that Employee is otherwise entitled to receive under any employee benefit plan of the Company or any of its affiliates in accordance with the terms of such plan and applicable law), and (vi) any other statutory or common law claims related to Employee’s employment with the Company or the separation of Employee’s employment with the Company; 

12

provided, however, that nothing herein shall release any obligation of the Company under the Change of Control Agreement.
5.    Protected Activity.  Nothing contained in this Release limits Employee’s ability to file a charge or complaint with any federal, state or local governmental agency or commission (a “Government Agency”).  In addition, nothing in this Release or any other Company agreement, policy, practice, procedure, directive or instruction shall prohibit Employee from reporting possible violations of federal, state or local laws or regulations to any Government Agency or making other disclosures that are protected under the whistleblower provisions of federal, state or local laws or regulations.  Employee does not need prior authorization of any kind to make any such reports or disclosures and Employee is not required to notify the Company that Employee has made such reports or disclosures.  If Employee files any charge or complaint with any Government Agency, and if the Government Agency pursues any claim on Employee’s behalf, or if any other third party pursues any claim on Employee’s behalf, Employee waives any right to monetary or other individualized relief (either individually, or as part of any collective or class action) that arises out of alleged facts or circumstances on or before the effective date of this Release; provided that nothing in this Release limits any right Employee may have to receive a whistleblower award or bounty for information provided to the Securities and Exchange Commission or other Government Agency.
6.    Bar. Employee and the Company acknowledge and agree that if he or it should hereafter make any claim or demand or commence or threaten to commence any action, claim or proceeding against the other party with respect to any cause, matter or thing which is the subject of the releases under Section 4 of this Release, this Release may be raised as a complete bar to any such action, claim or proceeding, and the applicable Releasee may recover from the other party all costs incurred in connection with such action, claim or proceeding, including attorneys’ fees.
7.    Governing Law. This Release shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws principles.
8.    Acknowledgment. Employee has read this Release, understands it, and voluntarily accepts its terms, and Employee acknowledges that he has been advised by the Company to seek the advice of legal counsel before entering into this Release, and has been provided with a period of at least twenty-one (21) days in which to consider entering into this Release.  Employee acknowledges and agrees that the payments and benefits provided under Section 2 of this Release represent substantial value over and above that to which Employee would otherwise be entitled.
9.    Revocation. Employee has a period of seven (7) days following the execution of this Release during which Employee may revoke this Release by delivering written notice to the Company, and this Release shall not become effective or enforceable until such revocation period has expired.  Employee understands that if he revokes this Release, it will be null and void in its entirety, and he will not be entitled to any payments or benefits provided in this Release, including without limitation those under Section 2 above.
10.    Miscellaneous. This Release is the complete understanding between Employee and the Company in respect of the subject matter of this Release and supersedes all prior agreements relating to the same subject matter. Employee has not relied upon any representations, promises or agreements of any kind except those set forth herein in signing this Release. In the event that any provision of this Release should be held to be invalid or unenforceable, each and all of the other provisions of this Release shall remain in full force and effect. If any provision of this Release is found to be invalid or unenforceable, such provision shall be modified as necessary to permit this Release to be upheld and enforced to the maximum extent permitted by law.

13

11.    Counterparts. This Release may be executed by the parties hereto in counterparts, which taken together shall be deemed one original.
	
		
	 
	FOREST CITY EMPLOYER, LLC
[Form of release - Do not sign]

____________________________________
By:
Its:

	 
	EMPLOYEE
[Form of release - Do not sign]
____________________________________
[•]

14

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