Document:

Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (this
"Agreement") is made and entered into as of July 5, 2017 (the "Effective Date"), by and
among Sterling Bancorp, a Delaware corporation (the "Company"), Sterling National Bank, a
national banking association organized and existing under the laws of the United States of America (the
"Bank"; and together with the Company, "Sterling"), and Christina M. Favilla
("Executive").

 

WITNESSETH:

 

WHEREAS, the
Company and the Bank desire to employ Executive as Senior Executive Vice President, Chief Operating Officer; and

 

WHEREAS, Executive
desires to serve in such positions; and

 

WHEREAS, Executive desires to serve
in such positions pursuant to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration
of the premises and the mutual covenants and obligations hereinafter set forth, the Company, the Bank and Executive hereby agree
as follows:

 

1.            Employment.

 

Subject to the terms set forth herein, the
Company and the Bank agree to employ Executive as Chief Operating Officer of the Company and the Bank, and Executive hereby accepts
such employment. As Chief Operating Officer of the Company and the Bank, Executive shall have such authority, perform such duties,
and fulfill such responsibilities commonly incident to such positions, as well as those that are delegated to Executive by the
Chief Executive Officer of the Bank. While employed, Executive shall report to the Chief Executive Officer, and Executive shall
devote her full business time and attention to the business and affairs of the Company and the Bank, and shall use her best efforts
to advance the interests of the Company and the Bank; provided that, Executive may engage in outside activities in accordance
with Section 5.

 

2.            Employment
Period.

 

(a)          Duration.
Executive's period of employment with Sterling under this Agreement shall begin on the Effective Date and shall continue until
December 31, 2018 (or, if a Change in Control occurs prior to such anniversary, the second anniversary of the date of the

 

     

     

    

 

Change in Control, if later), unless terminated
prior thereto by either Sterling or Executive in accordance with Section 6 hereof (such period of employment being the "Employment
Period").

 

(b)          Employment
Following Termination of Employment Period. Nothing in this Agreement shall mandate or prohibit a continuation of Executive's
employment following the expiration of the Employment Period upon such terms and conditions as the Company, the Bank and Executive
may agree.

 

3.           Compensation.
In exchange for the on-going services of Executive hereunder, the Bank shall provide the following:

 

(a)          Base
Salary. In consideration for the services performed by Executive during the Employment Period, the Bank shall pay to Executive
an annual salary ("Base Salary") of $450,000. The Base Salary shall be paid in approximately equal installments
in accordance with the Bank's customary payroll practices. Executive's Base Salary shall be reviewed at least annually during the
Employment Period for possible upward adjustment, and Executive's Base Salary shall not be reduced without Executive's consent.
The term Base Salary, as utilized in this Agreement, shall refer to Base Salary as it may be increased.

 

(b)          Annual
Bonus. For each fiscal year of the Company during the Employment Period, Executive shall be eligible to participate in the
Company's Short-Term Incentive Plan (or any successor thereto) (the "Annual Bonus Plan"). Executive's target annual
bonus under the Annual Bonus Plan shall be determined by the Compensation Committee of the Company Board and shall be commensurate
with the target annual bonus opportunity available to other similarly situated senior executives of Sterling generally (the "Target
Bonus"). The actual amount of Executive's annual bonus shall depend upon the achievement of performance goals established
by the Compensation Committee of the Company Board, with the actual bonus to be determined by the Compensation Committee of the
Company Board. The terms and conditions of the Annual Bonus Plan and the payments to Executive thereunder shall be applied on a
basis not less favorable to Executive than to other similarly situated senior executives of Sterling generally. The Compensation
Committee of the Company Board shall periodically review Executive's Target Bonus percentage and may in its discretion increase
Executive's annual bonus opportunity. The term Target Bonus, as utilized in this Agreement, shall refer to the Target Bonus as
it may be increased. Annual bonuses awarded to Executive under the Annual Bonus Plan are referred to herein as "Annual
Bonuses." The payment of any such Annual Bonus shall be subject to all the terms and conditions of the applicable Annual
Bonus Plan.

 

(c)          Long-Term
Compensation. During the Employment Period, Executive shall be eligible to participate in any equity and/or other long-term
compensation programs established by the Company from time to time for senior executive officers. Executive's target annual equity
award opportunity shall be determined by the Compensation Committee of the Company Board and shall be no less favorable than the
target equity award opportunity available to other similarly situated senior executives of Sterling generally, with the actual
award to be determined by the Compensation Committee of the Company Board on a basis not less favorable to Executive than to other
similarly situated senior executives of Sterling generally.

 

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(d)          Employee
Benefit Plans; Paid Time Off.

 

(i)    Benefit
Plans. During the Employment Period, Executive shall be an employee of the Company and the Bank, and shall be entitled to participate,
on terms and conditions not less favorable to Executive than other similarly situated senior executives of Sterling generally,
in Sterling's (A) tax-qualified defined contribution retirement plans (currently, Sterling's 401(k) and Profit Sharing Plan);
(B) group life, health and disability insurance plans; and (C) any other employee benefit plans and programs and perquisites
in accordance with Sterling's customary practices with respect to other similarly situated senior executives of Sterling generally;
provided that Executive's participation shall be subject to the terms of such plans and programs (including being a member
of the class of employees currently eligible to commence participation in the plan or program); and provided, further,
that nothing herein shall limit Sterling's right to amend or terminate any such plans or programs.

 

(ii)    Paid
Time Off. Executive shall be entitled to four (4) weeks of paid vacation time each year during the Employment Period (measured
on a fiscal or calendar year basis, in accordance with Sterling's usual practices), as well as sick leave, holidays and other paid
absences in accordance with Sterling's policies and procedures for senior executives. Any unused paid time off during an annual
period may be carried forward into the following year to the extent permitted under Sterling's policies and procedures and Executive
shall be compensated for any unused paid time off to the extent provided for under Sterling's policies and procedures as applicable
to other similarly situated senior executives of Sterling generally.

 

(e)          Expenses.
The Bank shall reimburse Executive for Executive's ordinary and necessary business expenses and travel and entertainment expenses
incurred in connection with the performance of Executive's duties under this Agreement upon presentation to the Bank of an itemized
account of such expenses in such form as the Bank may reasonably require.

 

4.            Principal
Place of Employment.

 

Executive's principal place of employment
during the Employment Period shall be at the Company's principal executive offices or at such other location upon which the Company
and Executive may mutually agree, and subject to travel to such other locations as shall be necessary to fulfill the employment
duties.

 

5.            Outside
Activities and Board Memberships

 

During the Employment Period, Executive
shall not provide services on behalf of any financial institution or other entity or business that competes with the Company, the
Bank or any of their affiliates (each, a "competitive business"), or any subsidiary or affiliate of any such competitive
business, as an employee, consultant, independent contractor, agent, sole proprietor, partner, joint venturer, corporate officer
or director; nor shall Executive acquire, by reason of purchase during the Employment Period, the ownership of more than one percent
(1%) of the outstanding equity interest in any such competitive business. In addition, during the Employment Period, Executive
shall not, directly or indirectly, acquire a beneficial interest, or engage in any joint venture in real estate with Sterling.
Subject to the foregoing, Executive may serve on boards of directors of unaffiliated corporations, subject to approval by the Company

 

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Board, which shall not be unreasonably withheld,
and boards of directors of not-for-profit organizations and trade associations, subject to approval by the Company in accordance
with Sterling's policies and procedures. Except as specifically set forth herein, Executive may engage in personal business and
investment activities, including real estate investments and personal investments in the stocks, securities and obligations of
other financial institutions (or their holding companies). Notwithstanding the foregoing, in no event shall Executive's outside
activities, services, personal business and investments materially interfere with the performance of Executive's duties under this
Agreement. Nothing in this Section 5 shall limit any of Executive's obligations under Section 9 hereof.

 

6.            Termination
of Employment.

 

(a)          Termination
by Sterling without Cause.

 

(i)     Sterling
shall have the right to terminate Executive's employment at any time during the Employment Period without Cause by giving notice
to Executive as described in Section 6(f). For sake of clarity, neither termination of Executive's employment pursuant to
Section 6(e) nor upon or after expiration of the Employment Period shall constitute a termination without Cause for purposes
of this Section 6.

 

(ii)    In
the event that Sterling terminates Executive's employment during the Employment Period without Cause:

 

(A)         The
Bank shall pay or provide to Executive any Accrued Obligations;

 

(B)         If
such termination occurs other than as provided in Section 6(a)(ii)(C) below, then, subject to Section 6(g), the Bank
shall pay to Executive, (I) within sixty (60) days following the date of termination, a lump sum cash payment (the "Severance
Payment") in an amount equal to one (1) year of Executive's Base Salary (in the amount in effect immediately prior to
termination of employment) and the amount of Executive's Target Bonus for the fiscal year that includes Executive's date of termination
of employment, and (II) eighteen (18) consecutive monthly cash payments (commencing with the first month following Executive's
termination of employment, and continuing until the eighteenth month following Executive's termination of employment) each equal
to the monthly COBRA premium in effect as of the date of Executive's termination of employment for the level of coverage in effect
for Executive under Sterling's group health plan (the "COBRA Payments" and, together with the Severance Payment,
the "Severance Benefits"); and

 

(C)         If
such termination occurs upon or within twenty-four (24) months after a Change in Control, or Executive reasonably demonstrates
(or the Bank agrees) that such termination was at the request of a third party who had indicated an intention or taken steps reasonably
calculated to effect a Change in Control, then, subject to Section 6(g), the Bank shall (I) pay to Executive, within
sixty (60) days following the date of termination, a lump sum cash payment (the "CIC Severance Payment") equal
to two (2) times the sum of Executive's Base Salary immediately prior to termination of employment plus (2) times  the
amount of Executive's Target Bonus for the fiscal year that includes Executive's date of termination of

 

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employment, and (II) pay to Executive
on a monthly basis commencing with the first month following Executive's termination of employment, and continuing until the eighteenth
month following Executive's termination of employment, the COBRA Payments (together with the CIC Severance Payment, the "CIC
Severance Benefits").

 

(b)          Termination
by the Company for Cause. Sterling shall have the right to terminate Executive's employment at any time during the Employment
Period for Cause by giving notice to Executive as provided in Section 6(f) hereof. In the event Executive's employment is
terminated for Cause, Sterling's sole obligation shall be to pay or provide to Executive any Accrued Obligations.

 

(c)          Resignation
by Executive without Good Reason. Executive may resign from employment during the Employment Period without Good Reason at
any time by giving notice to the Bank as described in Section 6(f). In the event Executive resigns from employment without
Good Reason, Sterling's sole obligation shall be to pay or provide to Executive any Accrued Obligations.

 

(d)          Resignation
by Executive for Good Reason. Executive may resign from employment under this Agreement for Good Reason by giving notice to
the Bank as described in Section 6(f). In the event Executive resigns from employment for Good Reason, (i) the Bank shall
pay or provide to Executive any Accrued Obligations, and (ii) if such resignation occurs upon or within twenty-four (24) months
after a Change in Control, Executive shall, subject to Section 6(g), be entitled to the CIC Severance Benefits to the same
extent as if Executive's employment was terminated by Sterling without Cause pursuant to Section 6(a)(ii)(C) as of the date
of Executive's termination of employment for Good Reason.

 

(e)          Termination
by Reason of Death or Disability of Executive.

 

(i)    In
the event of Executive's death during the Employment Period, Sterling's sole obligation shall be to pay to Executive's legal representatives
any Accrued Obligations.

 

(ii)    Sterling
shall be entitled to terminate Executive's employment due to Executive's Disability. If Executive's employment hereunder is terminated
due to Executive's Disability, Sterling's sole obligation shall be to pay or provide to Executive any Accrued Obligations.

 

(f)          Notice;
Effective Date of Termination. Notice of termination of employment under this Agreement shall be communicated by or to Executive
(on one hand) or Sterling (on the other hand) in writing in accordance with Section 14. Termination of Executive's employment
pursuant to this Agreement (the "Termination Date") shall be effective on the earliest of:

 

(i)     immediately
after Sterling gives notice to Executive of Executive's termination without Cause, unless the parties agree to a later date, in
which case, termination shall be effective as of such later date;

 

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(ii)    immediately
upon approval by the Company Board of termination of Executive's employment for Cause;

 

(iii)    immediately
upon Executive's death;

 

(iv)   in
the case of termination by reason of Executive's Disability, the date on which Executive is determined to be permanently disabled
for purposes of Sterling's long-term disability plan or policy that covers Executive; or

 

(v)    thirty (30)
days after Executive gives written notice to Sterling of Executive's resignation from employment under this Agreement (including
for Good Reason), provided that the Company or the Bank may set an earlier termination date at any time prior to the date
of termination of employment, in which case Executive's resignation shall be effective as of such other date.

 

(g)          General
Release of Claims. Executive shall not be entitled to any of the Severance Benefits pursuant to Section 6(a)(ii)(B) or
the CIC Severance Benefits pursuant to Section 6(a)(ii)(C) or 6(d) in the event Executive's employment terminates without
Cause or for Good Reason, unless, in each case, (A) Executive has executed and delivered to the Company a general release
of claims (in the form attached hereto as Exhibit A) (the "Release") and (B) such Release has
become irrevocable under the Age Discrimination in Employment Act not later than fifty-six (56) days after the Termination
Date. Executive's entitlement to the Severance Benefits or CIC Severance Benefits, as applicable, are further conditioned upon
complying with the terms of Sections 6(k), 8, 9(a) and 9(b) hereof, subject to written notice by the Bank and a reasonable
opportunity for Executive to cure, if subject to cure. Sterling shall deliver to Executive a copy of the Release not later than
three (3) days after the Termination Date pursuant to Section 6(a) or 6(d) hereof. In the event that the fifty-six (56)
day period referenced above begins and ends in different taxable years of Executive, any payments or benefits under this Agreement
that constitute nonqualified deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code") and the payment or settlement of which is conditioned on the effectiveness of the Release shall be paid
in the later taxable year.

 

(h)          No
Other Severance Benefits. Executive acknowledges and agrees the Severance Benefits or CIC Severance Benefits, as applicable,
and other rights and benefits provided under this Agreement upon termination are in lieu of, and not in addition to, any payments
and/or benefits to which Executive may otherwise be entitled under any severance plan, policy or program of Sterling.

 

(i)          Payment
of Obligations. Notwithstanding anything to the contrary herein, any payment obligation of the Bank under this Agreement may
be satisfied in whole or in part by payment by the Company, the Bank or any affiliate, and any such payment shall, for purposes
of this Agreement, be treated as if made by the Bank.

 

(j)          Resignation
from Positions. Upon termination of Executive's employment for any reason, Executive shall promptly (i) resign from all
positions (including, without limitation, any management, officer or director position) with Sterling and its affiliates and (ii) relinquish
any power of attorney, signing authority, trust authorization or bank account

 

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signatory authorization that Executive may
hold on behalf of Sterling or its affiliates. Executive's execution of this Agreement shall be deemed the grant by Executive to
the officers of the Company and the Bank of a limited power of attorney to sign in Executive's name and on Executive's behalf such
documentation as may be necessary or appropriate for the limited purposes of effectuating such resignations and relinquishments.

 

(k)          Return
of Property. On or before the Termination Date, Executive shall return to the Company any and all Company or Bank property,
including but not limited to any computer or other electronic equipment, and any documents, files, computer records, or other materials
belonging to, or containing confidential or proprietary information obtained from, the Company that are in Executive's possession,
custody, or control, including but not limited to any such materials that may be at Executive's home or that may be stored on any
electronic devices not belonging to the Company. Upon Company's request, Executive shall destroy any copies, including electronic
copies, of any Company information, including any Company confidential information, as described in Section 8 of this Agreement.

 

(l)          Golden
Parachute Limit. Notwithstanding any other provision of this Agreement , in the event that any portion of the CIC Severance
Benefits or any other payment or benefit received or to be received by Executive in connection with a "change in ownership
or control" (within the meaning of Section 280G of the Code) of the Company occurring following the Effective Date (whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (collectively, the "Total Benefits")
would be subject to the excise tax imposed under Section 4999 of the Code (the "Excise Tax"), the Total Benefits
shall be reduced to the extent necessary so that no portion of the Total Benefits is subject to the Excise Tax; provided,
however, that no such reduction in the Total Benefits shall be made if by not making such reduction, Executive's Retained
Amount (as hereinafter defined) would be greater than Executive's Retained Amount if the Total Benefits are so reduced. All determinations
required to be made under this Section 6(l) shall be made by tax counsel or a nationally recognized certified public accounting
firm or other professional organization that is a certified public accounting firm recognized as an expert in determinations and
calculations for purposes of Section 280G of the Code selected by the Company prior to a Change in Control and reasonably acceptable
to Executive ("Tax Counsel"), which determinations shall be conclusive and binding on Executive and the Company
absent manifest error. All fees and expenses of Tax Counsel shall be borne solely by the Company. Prior to any reduction in Executive's
Total Benefits pursuant to this Section 6(l), Tax Counsel shall provide Executive and the Company with a report setting forth
its calculations and containing related supporting information. In the event any such reduction is required, the Total Benefits
shall be reduced in the following order: (i) the COBRA Payments, (ii) the CIC Severance Payment, (iii) any other
portion of the Total Benefits that are not subject to Section 409A of the Code (other than Total Benefits resulting from any
accelerated vesting of equity awards), (iv) Total Benefits that are subject to Section 409A of the Code in reverse order of
payment, and (v) Total Benefits that are not subject to Section 409A and arise from any accelerated vesting of equity awards.
The parties hereto hereby elect to use the applicable federal rate that is in effect on the date this Agreement is entered into
for purposes of determining the present value of any payments provided for hereunder for purposes of Section 280G of the Code.
"Retained Amount" shall mean the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii)
and 280G(d)(4) of the Code) of the Total Benefits net of all federal, state and local taxes imposed on Executive with respect thereto.
In connection

 

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with making determinations under this Section 6(l),
the Tax Counsel shall take into account the value of any reasonable compensation for services to be rendered by Executive before
or after the Change in Control, including any noncompetition provisions that may apply to Executive, and Sterling shall cooperate
in the valuation of any such services, including any noncompetition provisions.

 

7.            Certain
Definitions.

 

(a)          "Accrued
Obligations" means (i) any accrued and unpaid Base Salary of Executive through the date of termination of employment,
payable pursuant to the Bank's standard payroll policies, (ii) any earned and unpaid bonus of Executive under the Annual Bonus
Plan for any completed fiscal year prior to the date of termination of employment, (iii) any compensation and benefits to
the extent payable to Executive based on Executive's participation in any compensation or benefit plan, program or arrangement
of Sterling through the date of termination of employment, payable in accordance with the terms of such plan, program or arrangement,
and (iv) any expense reimbursement to which Executive is entitled under Sterling's standard expense reimbursement policy (as
applicable) and Sections 3(e) and 10 hereof.

 

(b)          "Cause"
means Executive's failure or refusal to substantially perform Executive's duties hereunder, personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit, breach of the Bank's Code of Ethics, material violation
of the Sarbanes-Oxley requirements for officers of public companies that in the reasonable opinion of the Company Board will likely
cause substantial financial harm or substantial injury to the reputation of the Company or the Bank, willfully engaging in actions
that in the reasonable opinion of the Company Board will likely cause substantial financial harm or substantial injury to the business
reputation of the Company or the Bank, willful violation of any law, rule or regulation (other than routine traffic violations
or similar offenses) or final cease-and-desist order, or material breach of any provision of this Agreement. The cessation of employment
of Executive shall not be deemed to be for Cause unless and until there shall have been delivered to Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Company Board at a meeting
of the Company Board called and held for such purpose (after reasonable notice is provided to Executive and Executive is given
an opportunity, together with counsel for Executive, to be heard before the Company Board), finding that, in the good faith opinion
of the Board, Executive is guilty of the conduct described in first sentence of this Section 7(b), and specifying the particulars
thereof in detail. For purposes hereof, no act or failure to act, on the part of Executive, shall be considered "willful"
unless it is done, or omitted to be done, by Executive in bad faith or without an objectively reasonable belief that Executive's
action or omission was in the best interests of the Company and the Bank. Any act, or failure to act, based upon the direction
of the Company Board or the Bank Board based upon the advice of counsel for the Company or the Bank shall be conclusively presumed
to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company or the Bank.

 

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(c)          "Change
in Control" means the occurrence of any of the following with respect to the Company occurring after the Effective Date:

 

(i)     any
"person" (as the term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), other than any employee benefit plan of Sterling or any affiliate, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the combined voting power of Company's outstanding securities; or

 

(ii)    individuals
who constitute the Company Board on the date hereof (the "Incumbent Board") cease for any reason to constitute
at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved
by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company's
stockholders was approved by the Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (ii),
considered as though such person were a member of the Incumbent Board; or

 

(iii)    the
Company consummates a merger, consolidation, share exchange, division or other reorganization or transaction of the Company (a
"Fundamental Transaction") with any other corporation, other than a Fundamental Transaction that results in the
voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power
immediately after such Fundamental Transaction of (A) the Company's outstanding securities, (B) the surviving entity's outstanding
securities, or (C) in the case of a division, the outstanding securities of each entity resulting from the division; or

 

(iv)   the
shareholders of the Company approve a plan of complete liquidation or winding up of the Company; or

 

(v)    the
consummation of an agreement for the sale or disposition (in one transaction or a series of transactions) of all or substantially
all of the Company's or the Bank's assets.

 

(d)          "Disability"
means that Executive is deemed disabled for purposes of Sterling's long-term disability plan or policy that covers Executive.

 

(e)          "Good
Reason" means the occurrence of any of the following events (without Executive's consent):

 

(i)     a
material reduction of any element of the compensation and benefits required to be provided to Executive in accordance with any
of the provisions of Section 3;

 

(ii)    a
material adverse change in Executive's functions, duties, or responsibilities with the Company or the Bank, which change would
cause Executive's position to become one of materially lesser responsibility, importance or scope;

 

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(iii)   Sterling
requiring Executive to be based at any office or location other than as provided in Section 4 resulting in an increase in
Executive's commute of thirty (30) miles or more; or

 

(iv)   a
material breach of this Agreement by the Company or the Bank.

 

Notwithstanding the foregoing, no such event shall constitute
"Good Reason" unless (A) Executive shall have given written notice of such event to the Bank within ninety (90)
days after the initial occurrence thereof, (B) the Bank shall have failed to cure the situation within thirty (30) days following
the delivery of such notice (or such longer cure period as may be agreed upon by the parties), and (C) Executive terminates employment
within thirty (30) days after expiration of such cure period.

 

8.            Confidentiality.
In the course of Executive's employment with and involvement with Sterling and its affiliates, Executive has obtained, or may obtain,
secret or confidential information, knowledge or data concerning Sterling's and its affiliates' businesses, strategies, operations,
clients, customers, prospects, financial affairs, organizational and personnel matters, policies, procedures and other nonpublic
matters, or concerning those of third parties. Executive shall hold in a fiduciary capacity for the benefit of Sterling and its
affiliates, all secret or confidential information, knowledge or data relating to Sterling or any of its affiliated companies,
and their respective businesses, which shall have been obtained by Executive during Executive's employment by Sterling or any of
its affiliates and which shall not be or become public knowledge (other than by acts by Executive or representatives of Executive
in violation of this Agreement). All records, files, memoranda, reports, customer lists, documents and the like (whether in paper
or electronic format) that Executive has used or prepared during Executive's employment shall remain the sole property of Sterling
and shall be promptly returned to Sterling's premises upon any termination of employment. After termination of Executive's services
with Sterling, Executive shall not, without the prior written consent of the Bank or as may otherwise be required by law or legal
process, communicate or divulge any such information, knowledge or data to anyone other than the Bank and those designated by it.
The confidentiality provision contained herein is in addition to and not in limitation of Executive's duties as an officer and
director under applicable law. For purposes of this Section 8 and Section 9, references to the Company, the Bank, Sterling
and their affiliates shall include their predecessor and any successor entities. Notwithstanding the foregoing, Executive will
not be held criminally or civilly liable under any federal or state trade secret law for a disclosure of a trade secret that (a)
is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney;
and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other
document filed in a lawsuit or other proceeding, if such filing is made under seal and protected from public disclosure. Further,
nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any governmental
agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress, and
any federal Inspector General, or from making other disclosures that are protected under the whistleblower provisions of federal
law or regulation. Executive does not need the prior authorization of the Company to make any such reports or disclosures and is
not required to notify the Company that he has made such reports or disclosures.

 

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9.            Nonsolicitation;
Noncompetition; Post-Termination Cooperation.

 

(a)          Executive
hereby covenants and agrees that, while employed and for a period of eighteen (18) months following her termination of
employment with Sterling for any reason, Executive shall not, without the prior written consent of the Bank, either directly or
indirectly, (i) induce or attempt to induce any employee or independent contractor of the Company, the Bank or any of their
respective affiliates to leave the Company, the Bank or any such affiliate, (ii) hire any person who was an employee or independent
contractor of the Company, the Bank or any of their respective affiliates until six (6) months after such individual's relationship
with the Company, the Bank or such affiliate has been terminated, (iii) induce or attempt to induce any client, customer or other
business relation (whether (A) current, (B) former, within the six (6) months after such relationship has been terminated or (C)
prospective, provided that there are demonstrable efforts or plans to establish such relationship) of the Company, the Bank
or any of their respective affiliates to cease doing business or to reduce the amount of business they have customarily done or
contemplate doing with the Company, the Bank or any such affiliate, whether or not the relationship between the Company, the Bank
or any such affiliate and such client, customer or other business relation was originally established, in whole or in part, through
Executive's efforts, or in any way interfere with the relationship between any such client, customer or business relation, on the
one hand, and the Company, the Bank or any such affiliate, on the other hand.

 

(b)          Executive
acknowledges that, in the course of Executive's employment with the Company, the Bank and their respective affiliates (including
their predecessor and any successor entities), Executive has become familiar, or will become familiar, with the Company's, the
Bank's and their respective affiliates' trade secrets and with other confidential information, knowledge or data concerning the
Company, the Bank, their respective affiliates and their respective predecessors, and that Executive's services have been and will
be of special, unique and extraordinary value to the Company, the Bank and their respective affiliates. Therefore, Executive agrees
that, while employed and for a period of twelve (12) months following her termination of employment with Sterling for any
reason (the "Noncompetition Period"), Executive shall not, directly or indirectly, own, manage, operate, control,
be employed by (whether as an employee, director consultant, independent contractor or otherwise, and whether or not for compensation)
or render services in any capacity to a Competing Business (as defined below), in any country in which the Company, the Bank or
any of their respective affiliates conducts business. For purposes of this Agreement, a "Competing Business" shall
mean any person, firm, corporation or other entity, in whatever form, engaged in the business in which the Company, the Bank and
their respective affiliates engage, including the sale or servicing of banking and financial products and services, including business
and consumer lending, asset-based financing, residential mortgage warehouse funding, factoring/accounts receivable management services,
equipment financing, commercial and residential mortgage lending and brokerage, deposit services (including municipal deposit services)
and trade financing, sale of annuities, life and health insurance products, title insurance services, real estate investment trusts
and investment advisory services. Nothing herein shall prohibit Executive from being a passive owner of not more than one percent
(1%) of the outstanding equity interest in any entity which is publicly traded, so long as Executive has no active participation
in the business of such entity.

 

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(c)          Executive
hereby agrees that prior to accepting employment with any other person or entity during the Noncompetition Period, Executive shall
provide such prospective employer with written notice of this Section 9, with a copy of such notice delivered promptly to
the Bank.

 

(d)          During
the Employment Period and following the cessation of Executive's employment for any reason, Executive shall, upon reasonable notice,
(i) furnish such information and assistance to the Company, the Bank and/or their respective affiliates, as may reasonably be requested
by the Company, the Bank or such affiliates, with respect to any matter, project, initiative or effort for which Executive is or
was responsible or has relevant knowledge or had substantial involvement in while employed by the Company or the Bank under this
Agreement, and (ii) cooperate with the Company, the Bank and their respective affiliates during the course of all third-party proceedings
arising out of the Company, the Bank and their respective affiliates' business about which Executive has knowledge or information.

 

(e)          Executive
acknowledges and agrees that: (i) the purposes of the foregoing covenants, including without limitation the noncompetition covenant
of Section 9(b), are to protect the goodwill and trade secrets and confidential information of the Company, the Bank and their
respective affiliates; and (ii) because of the nature of the business in which the Company, the Bank and their respective affiliates
are engaged, and because of the nature of the trade secrets and confidential information to which Executive has access, it would
be impractical and excessively difficult to determine the actual damages of the Company and its affiliates in the event Executive
breached any of the covenants of Section 8 or this Section 9. Executive understands that the covenants may limit Executive's
ability to earn a livelihood in a Competing Business during the Noncompetition Period. Executive acknowledges that the Company
would be irreparably injured by a violation of Section 8 or this Section 9, and that it is impossible to measure in money
the damages that will accrue to the Company by reason of a failure by Executive to perform any of Executive's obligations under
Section 8 or this Section 9. Accordingly, if the Company or its affiliates institutes any action or proceeding to enforce
any of the provisions of Section 8 or this Section 9, to the extent permitted by applicable law, Executive hereby waives the claim
or defense that the Company or its affiliates have an adequate remedy at law, and Executive shall not urge in any such action or
proceeding the defense that any such remedy exists at law. Furthermore, in addition to other remedies that may be available (including,
without limitation, termination of the obligation for the Company and the Bank to pay compensation or benefits hereunder due to
Executive's failure to comply in all material respects with the restrictive covenants in Section 8, 9(a) or 9(b), subject
to written notice by the Bank and a reasonable opportunity for Executive to cure, if subject to cure), the Company and its affiliates
shall be entitled to specific performance and other injunctive relief, without the requirement to post a bond. If any of the covenants
set forth in Section 8 or this Section 9 are finally held to be invalid, illegal or unenforceable (whether in whole or
in part), such covenant shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability,
and the remaining covenants shall not be affected thereby. Any termination of Executive's services or of this Agreement shall have
no effect on the continuing operation of Section 8 and this Section 9, which shall survive in accordance with their terms.

 

    -12-

     

    

 

10.          Section
409A of the Code

 

This Agreement is intended to comply with
the requirements of Section 409A of the Code (including the exceptions thereto), to the extent applicable, and the Company
shall administer and interpret this Agreement in accordance with such requirements. If any provision contained in this Agreement
conflicts with the requirements of Section 409A of the Code (or the exemptions intended to apply under this Agreement), this
Agreement shall be deemed to be reformed to comply with the requirements of Section 409A of the Code (or the applicable exemptions
thereto). Notwithstanding anything to the contrary herein, for purposes of determining Executive's entitlement to the payment or
receipt of amounts or benefits that constitute nonqualified deferred compensation within the meaning of Section 409A of the
Code, Executive's employment shall not be deemed to have terminated unless and until Executive incurs a "separation from service"
as defined in Section 409A of the Code. Reimbursement of any expenses provided for in this Agreement shall be made promptly
upon presentation of documentation in accordance with Sterling's policies with respect thereto as in effect from time to time (but
in no event later than the end of the calendar year following the year such expenses were incurred); provided, however,
that in no event shall the amount of expenses eligible for reimbursement hereunder during a calendar year affect the expenses eligible
for reimbursement in any other taxable year. Notwithstanding anything to the contrary herein, if a payment or benefit under this
Agreement that constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code is payable or provided
due to a "separation from service" for purposes of the rules under Treas. Reg. § 1.409A-3(i)(2) (payments to specified
employees upon a separation from service) and Executive is determined to be a "specified employee" (as determined under
Treas. Reg. § 1.409A-1(i) and related Company procedures), such payment shall, to the extent necessary to comply with the
requirements of Section 409A of the Code, be made on the date that is six (6) months after the date of Executive's separation
from service (or, if earlier, the date of Executive's death). Any installment payments that are delayed pursuant to this Section 10
shall be accumulated and paid in a lump sum on the first day of the seventh month following the date of Executive's separation
from service (or, if earlier, upon Executive's death), and the remaining installment payments shall begin on such date in accordance
with the schedule provided in this Agreement. The Severance Benefits and CIC Severance Benefits are intended not to constitute
deferred compensation subject to Section 409A of the Code to the extent such Severance Benefits or CIC Severance Benefits
are covered by (a) the "short-term deferral exception" set forth in Treas. Reg. § 1.409A-1(b)(4), (b) the
"two times severance exception" set forth in Treas. Reg. § 1.409A-1(b)(9)(iii), or (c) the "limited
payments exception" set forth in Treas. Reg. § 1.409A-1(b)(9)(v)(D). The short-term deferral exception, the two times
severance exception and the limited payments exception shall be applied to the Severance Benefits or CIC Severance Benefits, as
applicable, in order of payment in such manner as results in the maximum exclusion of such Severance Benefits or CIC Severance
Benefits, as applicable, from treatment as deferred compensation under Section 409A of the Code. Each installment of the Severance
Benefits or CIC Severance Benefits, as applicable, and any other payments or benefits that constitute nonqualified deferred compensation
within the meaning of Section 409A of the Code shall be deemed to be a separate payment for purposes of Section 409A of the
Code. In no event may Executive, directly or indirectly, designate the calendar year of any payment under this Agreement.

 

    -13-

     

    

 

11.          Additional
Termination and Suspension Provisions

 

(a)          If
Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served
under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act, as amended (12 U.S.C. §§ 1818(e)(3) and (g)(1)),
all obligations of the Company and the Bank under this Agreement shall be suspended as of the date of service unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Company and the Bank may in their discretion (but subject
in all events to the requirements of Code Section 409A), (i) pay Executive all of the compensation withheld while the Company's
and the Bank's obligations under this Agreement were suspended and (ii) reinstate (in whole) any of the Company's and the Bank's
obligations which were suspended, and in exercising such discretion, the Company and the Bank shall consider the facts and make
a decision promptly following such dismissal of charges and act in good faith in deciding whether to pay any withheld compensation
to Executive, and to reinstate any suspended obligations of the Company and the Bank.

 

(b)          If
Executive is removed and/or permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, as amended (12 U.S.C. §§ 1818(e)(4) or (g)(1)),
all obligations of the Company and the Bank under this Agreement shall terminate as of the effective date of the order, but vested
rights of the parties shall not be affected.

 

(c)          If
the Bank is in default, as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, as amended (12 U.S.C. §§ 1813(x)(1)),
all obligations of the Company and the Bank under this Agreement shall terminate as of the date of default, but this provision
shall not affect any vested rights of the parties.

 

(d)          All
obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank, (i) by the Office of the Comptroller of the Currency or other applicable banking regulator
(the "Regulator"), at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance
to or on behalf of the Bank under the authority contained in Section 13(c) of the Federal Deposit Insurance Act, as amended; or
(ii) by the Regulator, at the time the Regulator approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Regulator to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.

 

(e)          If,
after the Effective Date:

 

(i)     any
regulation applicable to the Company or the Bank is amended or modified, or if any new regulation applicable to the Company or
the Bank becomes effective, and such amended, modified, or new regulation requires the inclusion in this Agreement of a provision
not presently included in this Agreement, then the foregoing provisions of this Section shall be deemed amended to the extent necessary
to give effect in this Agreement to any such amended, modified or new regulation; and

 

    -14-

     

    

 

(ii)    any
regulation applicable to the Company or the Bank is amended or modified, or if any new regulation applicable to the Company or
the Bank becomes effective, and such amended, modified, or new regulation permits the exclusion of a limitation in this Agreement
on the payment to Executive of an amount or benefit provided for presently in this Agreement, then the foregoing provisions of
this Section shall be deemed amended to the extent permissible to exclude from this Agreement any such limitation previously required
to be included in this Agreement by a regulation prior to its amendment, modification or repeal.

 

12.          Arbitration.
Any dispute or controversy arising out of, under, in connection with, or relating to this Agreement or any amendment hereof shall
be submitted to binding arbitration before one arbitrator in New York County, New York, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association for expedited arbitration, and any judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.

 

13.          Indemnification
and Insurance

 

(a)          To
the extent that Sterling provides its senior executive officers with coverage under a directors' and officers' liability insurance
policy, Sterling shall provide such coverage to Executive on substantially the same basis. Sterling shall indemnify Executive (and
Executive's heirs, executors and administrators) to the fullest extent permitted under applicable law against all expenses and
liabilities reasonably incurred by Executive in connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of Executive's having been an officer of the Company or the Bank (whether or not Executive continues to be
an officer at the time of incurring such expenses or liabilities and for a period of six years following Executive's termination
of employment with Sterling), such expenses and liabilities to include, but not be limited to, judgments, court costs and attorneys'
fees and the cost of reasonable settlements (such settlements must be approved by the Company Board). Any such indemnification
shall be made consistent with Regulations and Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. § 1828(k),
and the regulations issued thereunder in 12 C.F.R. Part 359.

 

(b)          Notwithstanding
the foregoing, no indemnification shall be made by the Bank unless the Bank gives the Regulator, to the extent required, at least
sixty (60) days' notice of its intention to make such indemnification. Such notice shall state the facts on which the action
arose, the terms of any settlement and any disposition of the action by a court. Such notice, a copy thereof, and a certified copy
of the resolution containing the required determination by the Company Board shall be sent to the Regulator, to the extent required.
The notice period for any such notice shall run from the date of such receipt. No such indemnification shall be made if the Regulator
advises the Bank in writing within such notice period, of its objection thereto.

 

14.         Notices.
The persons or addresses to which notices, mailings or deliveries shall be made may change from time to time by notice given pursuant
to the provisions of this Section. Any notice or other communication given pursuant to the provisions of this Section shall be
deemed to have been given (a) if sent by messenger, upon personal delivery to the party to whom the notice is directed; (b) if
sent by reputable overnight courier, one business day after

 

    -15-

     

    

 

delivery to such courier; (c) if sent by facsimile
or email, on the date it is actually received; and (d) if sent by mail, three business days following deposit in the United States
mail, properly addressed, postage prepaid, certified or registered mail with return receipt requested. All notices required or
permitted to be given hereunder shall be addressed as follows:

 

	If to Executive:	 	At the address most recently on the
    books and records of the Bank.
	 	 	 
	If to the Company or the Bank:	 	Sterling Bancorp or Sterling National
        Bank, as applicable

        21 Scarsdale Road

        Yonkers, New York 10707

        Attention: General Counsel

 

15.          Amendment.
No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto.

 

16.          Miscellaneous

 

(a)          Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon Executive, her legal representatives and estate
and intestate distributees, and the Company and the Bank and their successors and assigns, including any successor by merger or
consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets
and business of the Company or the Bank, as applicable, may be sold or otherwise transferred. Any such successor of the Company
or the Bank shall be deemed to have assumed this Agreement and to have become obligated hereunder to the same extent as the Company
or the Bank, as applicable, and Executive's obligations hereunder shall continue in favor of such successor.

 

(b)          Severability.
A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability
of any other provision hereof.

 

(c)          Waiver.
Failure to insist upon strict compliance with any terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed
by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or
more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

 

(d)          Counterparts.
This Agreement may be executed in two or more counterparts by original signature, facsimile or any generally accepted electronic
means (including transmission of a pdf containing executed signature pages), each of which shall be deemed an original, and all
of which shall constitute one and the same Agreement.

 

    -16-

     

    

 

(e)          Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without
reference to conflicts of law principles, except to the extent governed by federal law in which case federal law shall govern.
Any payments made to Executive pursuant to this Agreement or otherwise are subject to all applicable banking laws and regulations,
including, without limitation, 12 U.S.C. § 1828(k) and any regulations promulgated thereunder.

 

(f)          Withholding.
The Company and the Bank may withhold from any amounts payable to Executive hereunder all federal, state, city or other taxes that
the Company or the Bank may reasonably determine are required to be withheld pursuant to any applicable law or regulation (it being
understood, that Executive shall be responsible for payment of all taxes in respect of the payments and benefits provided herein).

 

(g)          Headings
and Construction. The headings of sections in this Agreement are for convenience of reference only and are not intended to
qualify the meaning of any Section. Any reference to a Section number shall refer to a Section of this Agreement, unless otherwise
specified.

 

(h)          Entire
Agreement. This Agreement contains the entire agreement of the parties relating to the subject matter hereof, and supersedes
in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof.

 

[Signature Page Follows]

 

    -17-

     

    

 

IN WITNESS WHEREOF, the Company and
the Bank have caused this Agreement to be executed and Executive has hereunto set her hand, all as of June 6, 2017.

 

	 	STERLING BANCORP
	 	 	 
	 	By:	/s/ Jack L. Kopnisky
	 	 	Name:  Jack L. Kopnisky
	 	 	Title: President and Chief Executive Officer
	 	 	 
	 	STERLING NATIONAL BANK
	 	 	 
	 	By:	/s/ Jack L. Kopnisky
	 	 	Name: Jack L. Kopnisky
	 	 	Title: President and Chief Executive Officer
	 	 	 
	 	EXECUTIVE
	 	 
	 	/s/ Christina M. Favilla
	 	Christina M. FavillaExhibit 10.1

 

SEVERANCE
AND CHANGE OF CONTROL AGREEMENT

 

THIS AGREEMENT, effective
as of the 7th day of June, 2017, is by and between Innovative Industrial Properties, Inc., a Maryland corporation (the “Company”),
IIP Operating Partnership, LP, a Delaware limited partnership (the “Partnership”), and Catherine Hastings (the
“Employee”).

 

WHEREAS, to induce
the Employee to remain as an executive officer of the Company and a key employee of the Partnership, the Company, the Partnership
and the Employee desire to enter into this Severance and Change Of Control Agreement (the “Agreement”); and

 

WHEREAS, the parties
agree that the restrictive covenants underlying certain of the Employee’s obligations under this Agreement are necessary
to protect the goodwill or other business interests of the Innovative Industrial Entities (as defined below) and that such restrictive
covenants do not impose a greater restraint than is necessary to protect such goodwill or other business interests.

 

NOW, THEREFORE, in
consideration of the premises and other good and valuable consideration, including the Employee’s agreement to continue as
an executive officer of the Company and as an employee of the Partnership, the Employee’s agreement to provide consulting
services following termination of employment pursuant to the terms hereof, and the restrictive covenants contained herein, the
Employee, the Company, and the Partnership agree as follows:

 

1.                 
Definitions. The following words, when capitalized in this Agreement, shall have the meanings ascribed below and
shall supersede the meanings given to any such terms in any other award agreement or related plan document in effect prior to the
date of this Agreement, including but not limited to the definitions of “Cause,” “Change of Control,” or
“Good Reason”:

 

(a)              
“Affiliate” shall have the meaning given to such term in Rule 12b-2 of the General Rules and Regulations
of the Exchange Act.

 

(b)              
“Average Annual Cash Bonus” means the average of the annual cash bonus, if any, paid or payable to the
Employee with respect to the three (3) most recently completed calendar years prior to termination of employment (or the period
of the Employee’s employment, if shorter).

 

(c)              
“Base Performance Share Value” means the fair market value as of the date of the Change of Control of
the number of unvested shares underlying the Employee’s outstanding performance share awards that would have been earned
pursuant to the terms of the award if the performance period for each such award ended immediately prior to the Change of Control.
For such purposes, the level of achievement of the performance goals established for each such award will be determined on the
date immediately prior to the Change of Control as follows: (X) if the goal is a market-based goal, such as total stockholder return
or stock price, then the actual performance to date shall be used, and (Y) if the goal is not a market-based goal, then the annualized
forecasted number for such goal as most recently prepared by the Company prior to the date of the Change of Control shall be used
and treated as if it were actual performance.

 

     

     

    

 

(d)              
“Base Restricted Share Value” means the fair market value as of the date of the Change of Control of
the shares underlying all of the Employee’s unvested time-vesting restricted stock awards, restricted stock units or stock
rights awards outstanding immediately prior to the Change of Control.

 

(e)              
“Board” means the Board of Directors of the Company.

 

(f)               
“Cause” means the termination of the Employee’s employment with all Innovative Industrial Entities
by action of the Board or its delegate for one or more of the following reasons:

 

(i)                
The Employee’s willful and continued failure substantially to perform his duties
with the Innovative Industrial Entities (other than any such failure resulting from the Employee’s incapacity due to physical
or mental illness), after a written demand for substantial performance is delivered to the Employee by the Board, which demand
specifically identifies the manner in which the Board believes that the Employee has not substantially performed his duties;

 

(ii)             
The Employee’s willful commission of an act of fraud or dishonesty resulting
in economic or financial damage to the Innovative Industrial Entities;

 

(iii)           
The Employee’s conviction of, or entry by the Employee of a guilty or no contest
plea to, the commission of a felony or a crime involving moral turpitude;

 

(iv)            
A willful breach by the Employee of his fiduciary duty to the Company which results
in economic or other damage to the Innovative Industrial Entities; or

 

(v)              
The Employee’s willful and material breach of the Employee’s covenants
set forth in this Section 16 of this Agreement.

 

(g)              
“Change of Control” means the occurrence of an event or series of events which qualify as a change in
control event for purposes of Code Section 409A and Treasury Regulation §1.409A-3(i)(5), including:

 

(i)                
A change in the ownership of the Company, which shall occur on the date that any one Person, or more than one Person Acting
as a Group (as defined below), other than Excluded Person(s) (as defined below), acquires ownership of the stock of the Company
that, together with the stock then held by such Person or group, constitutes more than fifty percent (50%) of the total fair market
value of the stock of the Company. However, if any one Person or more than one Person Acting as a Group is considered to own more
than fifty (50%) of the total fair market value of the stock of the Company, the acquisition of additional stock by the same Person
or Persons is not considered to cause a Change of Control.

 

    	 	2	 

     

    

 

(ii)             
A change in the effective control of the Company, which shall occur on the date that:

 

(1)              
Any one Person, or more than one Person Acting as a Group, other than Excluded Person(s), acquires (or has acquired during
the twelve (12) month period ending on the date of the most recent acquisition by such Person or Persons) ownership of stock of
the Company possessing thirty percent (30%) or more of the total voting power of the stock of the Company. However, if any one
Person or more than one Person Acting as a Group is considered to own more than thirty percent (30%) of the total voting power
of the stock of the Company, the acquisition of additional voting stock by the same Person or Persons is not considered to cause
a Change of Control; or

 

(2)              
A majority of the members of the Board is replaced during any twelve (12) month period by directors whose appointment or
election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.

 

(iii)           
A change in the ownership of a substantial portion of the Company’s assets, which shall occur on the date that any
one Person, or more than one Person Acting as a Group, other than Excluded Person(s), acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition by such Person or Persons) assets from the Company that have
a total Gross Fair Market Value (as defined below) equal to more than fifty percent (50%) of the total Gross Fair Market Value
of all the assets of the Company immediately prior to such acquisition or acquisitions, other than an Excluded Transaction (as
defined below).

 

For purposes of this Subsection (g):

 

“Gross Fair
Market Value” means the value of the assets of the Company, or the value of the assets being disposed of, as applicable,
determined without regard to any liabilities associated with such assets.

 

Persons will not be
considered to be “Acting as a Group” solely because they purchase or own stock of the Company at the same time,
or as a result of the same public offering, or solely because they purchase assets of the Company at the same time, or as a result
of the same public offering, as the case may be. However, Persons will be considered to be Acting as a Group if they (i) are owners
of an entity that enters into a merger, consolidation, purchase or acquisition of assets, or similar business transaction with
the Company, or (ii) do so within the meaning of Section 13(d) of the Exchange Act, including any group acting for the purpose
of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).

 

    	 	3	 

     

    

 

The term “Excluded Transaction”
means any transaction in which assets are transferred to: (A) a stockholder of the Company (determined immediately before the asset
transfer) in exchange for or with respect to its stock; (B) an entity, fifty percent (50%) or more of the total value or voting
power of which is owned, directly or indirectly, by the Company (determined after the asset transfer); (C) a Person, or more than
one Person Acting as a Group, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power
of all the outstanding stock of the Company (determined after the asset transfer); or (D) an entity at least fifty percent (50%)
of the total value or voting power of which is owned, directly or indirectly, by a Person described in clause (C) (determined after
the asset transfer).

 

The term “Excluded Person(s)”
means (A) the Company or any Innovative Industrial Entity; (B) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any Innovative Industrial Entity; (C) an underwriter temporarily holding securities pursuant to
an offering of such securities; or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of stock in the Company.

 

The term “Change
of Control” as defined above shall be construed in accordance with Code Section 409A and the regulations promulgated
thereunder. In no event shall a transaction described above constitute a “Change of Control” for purposes of this Agreement
unless such transaction also satisfies the requirement to be a change in the ownership or effective control of a corporation, or
a change in the ownership of a substantial portion of the assets of a corporation, as each of those terms are defined under Code
Section 409A and the regulations promulgated thereunder.

 

(h)              
“Code” means the Internal Revenue Code of 1986, as amended.

 

(i)                
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(j)                
“General Release” means (i) a release of the Innovative Industrial Entities, in such form as the Partnership
may reasonably request, of all claims against the Innovative Industrial Entities relating to the Employee’s employment and
termination thereof, and (ii) an agreement to continue to comply with, and be bound by, the provisions of Section 16 hereof.

 

(k)              
“Good Reason” means any one or more of the following conditions:

 

(i)                
any material diminution of the Employee’s authority, duties or responsibilities;

 

(ii)             
a material diminution of the Employee’s annual base salary;

 

(iii)           
a material change in the geographic location at which the Employee must perform the Employee’s duties and responsibilities;
or

 

(iv)            
any other action or inaction by the Company or the Partnership that constitutes a material breach of this Agreement or any
other agreement pursuant to which the Employee provides services to the Company or the Partnership.

 

    	 	4	 

     

    

 

A termination of the Employee’s employment
for Good Reason shall be effective only if (X) such condition was not consented to by the Employee in advance or subsequently ratified
by the Employee in writing, (Y) such condition remains in effect thirty (30) days after the Employee gives written notice to the
Board of the Employee’s intention to terminate his employment for Good Reason, which notice specifically identifies such
condition, and (Z) the Employee gives the notice referred to in (Y) above within ninety (90) days of the initial existence of such
condition. If the Company or the Partnership, as applicable, does not cure the condition within the thirty (30) day cure period
described in (Y) above, then the Employee’s termination will occur on the day immediately following the end of the cure period.
If the Company or the Partnership, as applicable, cures the condition within such thirty (30) day cure period, then the Employee
will be deemed to have withdrawn his notice of termination effective as of the date the cure is effected.

 

(l)                
“Innovative Industrial Entity” or “Innovative Industrial Entities” means the Company,
the Partnership, any of their Affiliates, and any other entities that along with the Company or the Partnership is considered a
single employer pursuant to Code Section 414(b) or (c) and the Treasury regulations promulgated thereunder, determined by applying
the phrase “at least 50 percent” in place of the phrase “at least 80 percent” each place it appears in
such Treasury regulations or Code Section 1563(a).

 

(m)            
“Medical Benefits” shall mean the monthly fair market value of benefits provided to the Employee and
the Employee’s dependents under the major medical, dental and vision benefit plans sponsored and maintained by the Partnership,
at the level of coverage in effect for such persons immediately prior to the Employee’s termination of employment date. The
“monthly fair market value” of such benefits shall be equal to the monthly cost (including any applicable administrative
fee) to the Employee as if the Employee elected COBRA continuation coverage at the level of coverage in effect at such time for
the Employee and the Employee’s dependents at their own expense.

 

(n)              
“Person” means a “person” as used in Sections 3(a)(9) and 13(d) of the Exchange Act or any
group of Persons acting in concert that would be considered “persons acting as a group” within the meaning of Treasury
Regulation §1.409A-3(i)(5).

 

(o)              
“Prime Rate” means an annual rate, compounding annually, equal to the prime rate, as reported in The
Wall Street Journal on the date of the Change of Control, or if not reported on that date, the last preceding date on which so
reported, which rate shall be adjusted on each January 1 to the prime rate then in effect and shall remain in effect for the year.

 

(p)              
“Qualifying Retirement” means the Employee’s voluntary termination of employment after the Employee
has (i) attained (X) age sixty-five (65), (Y) age fifty-five (55) with ten (10) Years of Service as a full-time employee of the
Partnership or any of its Affiliates, or (Z) an age which, when added to such Years of Service of the Employee equals at least
seventy-five (75), and (ii) previously delivered a written notice of retirement to the Partnership and on the date of retirement
the Employee has satisfied the minimum applicable advance written notice requirement set forth below:

 

    	 	5	 

     

    

 

	
        Age at

        Voluntary Termination
	
        Number of Years of

        Advance Notice

	
        58 or younger

        59

        60 or older
	
        3 years

        2 years

        1 year

 

By way of illustration, and without limiting
the foregoing, if (i) the Employee is eligible to retire at age fifty-nine (59) after ten (10) Years of Service, (ii) the Employee
gives two (2) years notice at age fifty-eight (58) that the Employee intends to retire at age sixty (60), and (iii) the Employee
later terminates employment at age fifty-nine (59), then the Employee’s retirement at age fifty-nine (59) would not constitute
a Qualifying Retirement. However, if (i) the Employee is eligible to retire at age fifty-nine (59) after ten (10) Years of Service,
(ii) the Employee gives two (2) years notice at age fifty-eight (58) that the Employee intends to retire at age sixty (60), and
(iii) the Employee terminates employment upon reaching age sixty (60), then the Employee’s retirement at age sixty (60) would
constitute a Qualifying Retirement.

 

(q)              
 “Separation from Service” means the termination of the Employee’s employment with all Innovative
Industrial Entities, provided that, notwithstanding such termination of the employment relationship between the Employee and all
Innovative Industrial Entities, the Employee shall not be deemed to have had a Separation from Service where it is reasonably anticipated
that the level of bona fide services that the Employee will perform (whether as an employee or independent contractor) following
such termination from the Partnership and all Innovative Industrial Entities would be twenty percent (20%) or more of the average
level of bona fide services performed by the Employee (whether as an employee or independent contractor) for the Innovative Industrial
Entities over the immediately preceding thirty-six (36) month period (or such lesser period of actual service). In such event,
Separation from Service shall mean the permanent reduction of the level of bona fide services to be performed by the Employee (whether
as an employee or independent contractor) to a level that is less than twenty percent (20%) of the average level of bona fide services
performed by the Employee (whether as an employee or independent contractor) during the thirty-six (36) month period (or such lesser
period of actual service) immediately prior to the termination of the Employee’s employment relationship. A Separation from
Service shall not be deemed to have occurred if the Employee is absent from active employment due to military leave, sick leave,
or other bona fide leave of absence if the period of such leave does not exceed the greater of (i) six (6) months or (ii) the period
during which the Employee’s right to reemployment by any Innovative Industrial Entity is provided either by statute or contract.

 

(r)               
“Specified Employee” means an employee of any Innovative Industrial Entity who is a “specified
employee” as defined in Code Section 409A(a)(2)(b)(i) and Treasury Regulation §1.409A-1(i). If the Employee is a key
employee as of the applicable identification date, the Employee shall be treated as a Specified Employee for the twelve (12) month
period beginning on the first day of the fourth month following such identification date. The applicable identification date for
purposes of this Agreement shall be September 30 of each year.

 

(s)               
“Unvested Equity Award” has the meaning given to such term in Section 6(a).

 

    	 	6	 

     

    

 

(t)                
“Years of Service” means the Employee’s total complete years of employment with an Innovative Industrial
Entity, including years of employment with an entity that is acquired by an Innovative Industrial Entity prior to such acquisition.
For this purpose, a “complete year of employment” shall begin on the Employee’s date of hire and end on each
subsequent anniversary of such date.

 

2.                 
Term of the Agreement. The term of this Agreement shall begin on the date hereof and end at 11:59 p.m. on December
31, 2019 and thereafter shall automatically renew for successive three (3) year terms unless either party delivers written notice
of non-renewal to the other party at least ninety (90) days prior to the end of the then current term; provided, however, that
if a Change of Control has occurred during the original or any extended term (including any extension resulting from a prior Change
of Control), the term of the Agreement shall end no earlier than twenty-four (24) calendar months after the end of the calendar
month in which the Change of Control occurs.

 

3.                 
No Change of Control – Severance. Except in circumstances in which the Employee would be entitled to payments
and benefits in connection with a Change of Control as provided in Section 4 below, in the event that during the term of this Agreement
the Employee has a Separation from Service as a result of the Innovative Industrial Entities terminating the Employee’s employment
without Cause or the Employee terminating the Employee’s employment for Good Reason, subject to Sections 11, 15 and 16 below:

 

(a)              
The Partnership shall pay to the Employee an amount equal to (i) two (2) times the sum of (A) the Employee’s annual
base salary in effect on the date the Employee’s employment terminates, plus (B) the Employee’s Average Annual Cash
Bonus, plus (ii) eighteen (18) months of the Employee’s Medical Benefits. Payment shall be made in a lump sum on the first
business day after sixty (60) days following the Employee’s Separation from Service;

 

(b)              
All of the Employee’s outstanding unvested stock options, restricted stock awards, restricted stock units and stock
rights awards that vest solely on the basis of time shall become vested on a pro-rated basis, based on the portion of the vesting
period that has elapsed as of the date of the Employee’s Separation from Service; and

 

(c)              
All of the Employee’s outstanding performance share awards shall be earned as of the date of Separation from Service
based on the level of achievement of the performance goals established for such awards as of such date, but then pro-rated based
on the portion of the performance period that has elapsed as of the date of the Employee’s Separation from Service. For purposes
hereof, the level of achievement of the performance goals established for each such award will be determined on the date immediately
prior to the Separation from Service as follows: (i) if the goal is a market-based goal, such as total stockholder return or stock
price, then the actual performance to date shall be used, and (ii) if the goal is not a market-based goal, then the level of achievement
of such goal shall be (X) based on the most recently reported number(s) by the Company in its reports filed with the Securities
and Exchange Commission or (Y) if such numbers are not so filed, based on the numbers as prepared internally by the Company for
the quarter ending prior to the date of the Separation from Service.

 

    	 	7	 

     

    

 

Any shares issuable under
awards that vest or are earned pursuant to subsections (b) and (c) shall be issued on the same date as the cash severance payment
is made pursuant to subsection (a).

 

Notwithstanding anything
in this Agreement to the contrary, if a Separation of Service that would otherwise entitle the Employee to benefits under Sections
3(a), (b) and (c) above occurs during a transition period through December 31, 2019, and solely as it applies to (x) payments of
the amounts to the Employee pursuant to Section 3(a) above (and not, for purposes of clarification, for payments made pursuant
to Section 4(a) below) and (y) the number of equity awards that vest pursuant to Sections 3(b) and 3(c) above (and not, for purposes
of clarification, for equity awards that vest pursuant to Sections 4(b) and 4(c) below), (i) the Partnership shall be obligated
to pay to the Employee only a percentage of the amount calculated pursuant to Section 3(a) and (ii) only a percentage of the outstanding
equity awards under Sections 3(b) and 3(c) shall vest, based on the date of the Employee's Separation of Service, as follows:

 

	
         

         

        Date of Separation
        of Service
	Percentage Payout of Amount Calculated

                                                                                Under Section 3(a) and Equity Vesting

                                                                                Under Sections 3(b) and 3(c)

	Before 3/31/17	0.0%
	From 4/1/17 through 6/30/17	8.3%
	From 7/1/17 through 9/30/17	16.7%
	From 10/1/17 through 12/31/17	25.0%
	From 1/1/18 through 3/31/18	33.3%
	From 4/1/18 through 6/30/18	41.7%
	From 7/1/18 through 9/30/18	50.0%
	From 10/1/18 through 12/31/18	58.3%
	From 1/1/19 through 3/31/19	66.7%
	From 4/1/19 through 6/30/19	75.0%
	From 7/1/19 through 9/30/19	83.3%
	From 10/1/19 through 12/31/19	91.7%
	From 1/1/20	100.0%

 

For the avoidance of
doubt, nothing in the preceding paragraph shall affect the time of payment of any amount under this Agreement.

 

4.                 
Change of Control – Severance. In the event that during the term of this Agreement the Innovative Industrial
Entities terminate the Employee’s employment without Cause or the Employee terminates the Employee’s employment for
Good Reason, in each case within two (2) years following a Change of Control, the following provisions shall apply:

 

(a)              
The Partnership shall pay to the Employee the amount set forth in Section 3(a);

 

(b)              
All outstanding unvested stock options, restricted stock, restricted stock units, stock rights awards and performance share
awards then held by the Employee will vest (at the greater of actual performance to-date or target, for any awards subject to performance
goals), and all outstanding equity awards that have not vested at the time of the Change of Control or been converted to the right
to receive a cash payment pursuant to Section 6(c) will vest on the date the General Release in Section 15 becomes effective, and,
if applicable, will be paid on the tenth (10th) business day following such time. Notwithstanding the foregoing, all such awards
which are subject to Code Section 409A will be paid on the first (1st) business day after sixty (60) days following the Employee’s
Separation from Service, provided the General Release in Section 15 has become effective; and

 

    	 	8	 

     

    

 

(c)              
With respect to those Unvested Equity Awards that have been exchanged pursuant to Sections 6(b) and 6(c) for the right to
receive a contingent cash payment, subject to Section 11 below, the Employee shall receive a cash payment made in a lump sum on
the first business day after sixty (60) days following the Employee’s Separation from Service equal to any portion of the
unpaid Base Performance Share Value and Base Restricted Share Value that has not been paid pursuant to Sections 6(b) and 6(c),
together with accrued but unpaid interest at the Prime Rate on such unpaid amount from the date of the Change of Control to the
date of payment.

 

5.                 
Entitlement to Severance.

 

(a)              
If the Employee becomes entitled to receive any severance payments or benefits described in Section 3 or Section 4 after
the Employee has delivered written notice of what would otherwise have been a Qualifying Retirement to the Partnership had the
Employee continued to be employed by the Partnership through the date of retirement set forth in the notice, then the amount of
such payments and benefits shall be limited to (i) those that the Employee would have otherwise received had such employment continued
through such date of retirement, and (ii) those provided by Section 9, if any.

 

(b)              
If the Employee dies after receiving notice from the Company that the Employee is being terminated without Cause, or after
providing notice of termination for Good Reason, but prior to the date the Employee receives the payments and benefits described
in Section 3 or Section 4, as the case may be, then the Employee’s estate, heirs and beneficiaries shall be entitled to the
payments and benefits described in Section 3 or Section 4, as the case may be, at the same time such payments and benefits would
have been paid or provided to the Employee had the Employee lived.

 

6.                 
Change of Control – Effect on Stock Rights.

 

(a)              
Except as otherwise provided in Sections 6(b) and 6(c) below (or in Sections 4(b) or 4(c), if applicable), the occurrence
of a Change of Control shall not impact any existing unvested stock options, restricted stock awards, restricted stock units, stock
rights awards or performance share awards (collectively, “Unvested Equity Awards”) unless such rights are cashed
out pursuant to the terms of the applicable merger agreement or other agreement(s) pursuant to which such Change of Control is
effected.

 

(b)              
With respect to Unvested Equity Awards that are performance share awards (“Performance Awards”), notwithstanding
anything to the contrary contained in the related plan or award agreement, all of the Employee’s outstanding unvested Performance
Awards shall be cancelled and, in consideration for the cancellation of such awards, the Employee shall receive a deferred contingent
cash payment with respect to each such cancelled award equal to (X) the Base Performance Share Value determined for such cancelled
award, plus (Y) interest on such unpaid Base Performance Share Value from the date of the Change of Control to the date of payment
at the Prime Rate, such cash payment to be made on the last day of the applicable performance period for such award, provided that
the Employee remains employed by the Partnership, an Affiliate, or one of their successors through the last day of the applicable
performance period.

 

    	 	9	 

     

    

 

(c)              
With respect to Unvested Equity Awards that are not Performance Awards, if the stock underlying such awards is not readily
tradable on an established securities market immediately after the Change of Control (after giving effect to any conversion, exchange
or replacement pursuant to the applicable plan or award agreement of the stock underlying Unvested Equity Awards as a result of
a reorganization, merger, consolidation, combination or other similar corporate transaction or event), then notwithstanding anything
to the contrary contained in the related plan or award agreement, all of the Employee’s outstanding Unvested Equity Awards
shall be cancelled and, in consideration for the cancellation of such awards, the Employee shall receive:

 

(i)                
a cash payment equal to (X) the fair market value of the shares underlying all of the Employee’s unvested stock options
as of the date of the Change of Control, less (Y) the aggregate exercise price of such stock options, such cash payment to be made
within thirty (30) days after the Change of Control; and

 

(ii)             
a deferred contingent cash payment equal to (X) the Base Restricted Share Value, plus (Y) interest on the unpaid Base Restricted
Share Value from the date of the Change of Control to the date of payment at the Prime Rate, such cash payment of the Base Restricted
Share Value to be made in installments on the applicable vesting dates with respect to the number of shares that would have been
issued on that vesting date, plus all accrued but unpaid interest on the unpaid Base Restricted Share Value through such vesting
date, provided that the Employee remains employed by the Partnership, an Affiliate, or one of their successors through the applicable
date of vesting.

 

7.                 
Change of Control – Excise Tax.

 

(a)              
If in the opinion of Tax Counsel (as defined in Section 7(b)) the Employee will be subject to an excise tax under Code Section
4999 with respect to all or any portion of the payments and benefits to be made by the Company or any of its Affiliates to the
Employee, whether upon a Change of Control or following a termination of the Employee’s employment, under this Agreement
or otherwise (in the aggregate, “Total Payments”), then such parties agree that the Total Payments shall either
be (i) delivered in full, or (ii) reduced to two (2) times the Employee’s “base amount” for purposes of Code
Section 280G, less $1.00 (“Scaled Back Amount”), whichever of the foregoing results in the receipt by the Employee
of the greatest benefit on an after-tax basis (taking into account the applicable federal, state and local income taxes and the
excise tax). If the Employee is entitled to the Scaled Back Amount, then such payments and benefits shall be reduced or eliminated
by applying the following principles, in order: (1) the payment or benefit with the higher ratio of the parachute payment value
to present economic value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before a payment or
benefit with a lower ratio; (2) the payment or benefit with the later possible payment date shall be reduced or eliminated before
a payment or benefit with an earlier payment date; and (3) cash payments shall be reduced prior to non-cash benefits; provided
that if the foregoing order of reduction or elimination would violate Code Section 409A, then the reduction shall be made pro rata
among the payments or benefits to be received by the Employee (on the basis of the relative present value of the parachute payments).

 

    	 	10	 

     

    

 

(b)              
For purposes of this Section 7, within forty (40) days after delivery of a written notice of termination by the Employee
or by the Company pursuant to this Agreement within two (2) years of a Change of Control with respect to the Company (or, if an
event other than termination of employment results in payment of parachute payments under Code Section 280G and it is reasonably
possible that such parachute payments could result in an excise tax, within forty (40) days after such other event), the Company
shall obtain, at its expense, the opinion (which need not be unqualified) of nationally recognized tax counsel (“Tax Counsel”)
selected by the Compensation Committee of the Board, which sets forth (i) the “base amount” within the meaning of Code
Section 280G; (ii) the aggregate present value of the payments in the nature of compensation to the Employee as prescribed in Code
Section 280G(b)(2)(A)(ii); (iii) the amount and present value of any “excess parachute payment” within the meaning
of Code Section 280G(b)(1); and (iv) as applicable, (X) the net after-tax proceeds to the Employee, taking into account the tax
imposed by Code Section 4999 if the Total Payments were delivered in full, and (Y) the amount and nature of the parachute payments
to be reduced or forfeited according to Section 7(a) in order for the total payments and benefits to equal the Scaled Back Amount.
For purposes of such opinion, the value of any non-cash benefits or any deferred payment or benefit shall be determined by the
Company’s independent auditors in accordance with the principles of Code Section 280G and regulations thereunder, which determination
shall be evidenced in a certificate of such auditors addressed to the Company and the Employee. Such opinion shall be addressed
to the Company and the Employee and shall be binding upon the Company, its Affiliates, and the Employee.

 

8.                 
Plan of Liquidation. If the stockholders of the Company approve a complete plan of liquidation or dissolution of
the Company (“Approved Liquidation Plan”), all Unvested Equity Awards that are not Performance Awards will fully
vest on the date of such approval and all such awards that are Performance Awards shall vest to the extent the performance goals
established under such awards have been achieved on such date (as if the Employee had satisfied all employment conditions required
to vest), with the corresponding performance period for such award(s) deemed completed as of the date immediately preceding the
date of such approval. Shares of common stock that so vest will be deemed outstanding as of the close of business on the date of
such approval, and certificates representing such shares shall be delivered to the Employee as promptly as practicable thereafter.
Any Performance Awards not vesting on the date of such approval shall be immediately cancelled without consideration therefor.
In addition, unless the Approved Liquidation Plan shall have been rescinded, if the Partnership terminates the Employee’s
employment without Cause or the Employee terminates the Employee’s employment for Good Reason in each case following stockholder
approval of the Approved Liquidation Plan, then the Employee shall receive the benefits provided in Sections 4(a), 4(b) and 4(c),
as applicable.

 

    	 	11	 

     

    

 

9.                 
Retirement and Performance Shares. If the Employee’s termination of employment constitutes a Qualifying Retirement,
then the Employee’s unvested stock options, restricted stock, restricted stock units and stock rights awards (other than
performance shares) will vest on the date of retirement set forth in the notice thereof, and if the Qualifying Retirement occurs
on or after a Change of Control, then the provision of Section 4(c) shall also apply. Notwithstanding anything to the contrary
in any related plan or award agreement, the Employee shall be entitled to exercise all vested stock options until the earlier of
(a) three (3) years after the date of Qualifying Retirement, and (b) the original terms of the options. Unless an award agreement
provides for more favorable treatment, upon a Qualifying Retirement, the Employee shall continue to have the right to earn unvested
performance shares upon the achievement of the applicable performance goals over any remaining performance period, as if the Employee’s
employment had not been terminated.

 

10.             
Death and Disability. In no event shall a termination of the Employee’s employment due to death or Disability
constitute a termination by the Partnership without Cause or a termination by the Employee for Good Reason; however, upon termination
of employment due to the Employee’s death or Disability, the Employee’s estate or the Employee, as applicable, shall
receive the benefits provided in Section 4(b) or 4(c) with respect to unvested stock options, restricted stock, restricted stock
units and stock rights awards (other than performance shares), and the Employee’s estate or the Employee, as applicable,
shall continue to have the right to earn unvested performance shares upon the achievement of the applicable performance goals over
any remaining performance period, as if the Employee’s employment had not been terminated. Notwithstanding anything to the
contrary in any related plan or award agreement, (a) the Employee’s estate shall be entitled to exercise all vested stock
options until the earlier of (i) three (3) years after termination of employment due to death, and (ii) the original term of the
option, and (b) the Employee shall be entitled to exercise all vested stock options until the earlier of (i) one (1) year after
termination of employment due to Disability, and (ii) the original term of the option. For purposes of this Agreement, “Disability”
shall mean the absence of the Employee from the Employee’s duties with the Innovative
Industrial Entities on a full-time basis for ninety (90) consecutive days or on a total of one hundred eighty (180) days
in any twelve (12) month period, in either case as a result of incapacity due to mental or physical illness which is determined
to be total and permanent by a physician selected by the Company and reasonably acceptable to the Employee or the Employee’s
legal representative.

 

11.             
Payments to Specified Employees. Notwithstanding any other Section of this Agreement, if the Employee is a Specified
Employee at the time of the Employee’s Separation from Service, payments or distribution of property to the Employee provided
under this Agreement, to the extent considered amounts deferred under a non-qualified deferred compensation plan (as defined in
Code Section 409A) shall be deferred until the six (6) month anniversary of such Separation from Service to the extent required
in order to comply with Code Section 409A and Treasury Regulation 1.409A-3(i)(2).

 

12.             
Reductions in Base Salary. For purposes of this Agreement, in the event there is a reduction in the Employee’s
base salary that would constitute the basis for a termination for Good Reason, the base salary used for purposes of calculating
the severance payable pursuant to Sections 3 or 4(a), as the case may be, shall be the amounts in effect immediately prior to such
reduction.

 

    	 	12	 

     

    

 

13.             
Other Payments and Benefits. On any termination of employment, including, without limitation, termination due to
the Employee’s death or Disability (as defined in Section 10) or for Cause, the Employee shall receive any accrued but unpaid
salary, reimbursement of any business or other expenses incurred prior to termination of employment but for which the Employee
had not received reimbursement (provided that such expenses have been previously approved in writing or comply with the terms of
any expense reimbursement policy then in effect), and any other rights, compensation and/or benefits as may be due the Employee
in accordance with the terms and provisions of any agreements, plans or programs of the Company or the Partnership (but in no event
shall the Employee be entitled to duplicative rights, compensation and/or benefits).

 

14.             
Set Off; Mitigation. The obligation of the Company or the Partnership to pay or provide the Employee the amounts
or benefits under this Agreement shall be subject to set-off, counterclaim or recoupment of amounts owed by the Employee to the
Company or the Partnership. In addition, except as provided in Section 7 with respect to the Scaled Back Amount, if applicable,
the Employee shall not be required to mitigate the amount of any payments or benefits provided to the Employee hereunder by securing
other employment or otherwise, nor will such payments and/or benefits be reduced by reason of the Employee securing other employment
or for any other reason.

 

15.             
Release. Notwithstanding any provision herein to the contrary, none of the Innovative Industrial Entities shall have
any obligation to pay any amount or provide any benefit (other than those amounts set forth in Section 13), as the case may be,
under this Agreement, unless the Employee executes, delivers to the Partnership, and does not revoke (to the extent the Employee
is allowed to do so as set forth in the General Release), a General Release within sixty (60) days of the Employee’s termination
of employment.

 

16.             
Restrictive Covenants and Consulting Arrangement.

 

(a)              
The Employee will hold in a fiduciary capacity all secret or confidential information, knowledge or data relating to any
Innovative Industrial Entity, and each of their respective businesses (the “Confidential Information”), except
in furtherance of the business of the Innovative Industrial Entities or except as may be required by law. Additionally, and without
limiting the foregoing, the Employee agrees not to participate in or facilitate the dissemination to the media or any other third
party (i) of the Confidential Information, or (ii) of any damaging or defamatory information concerning any Innovative Industrial
Entity or the Employee’s experiences as an employee of any Innovative Industrial Entity, without the Company’s prior
written consent, except as may be required by law. Notwithstanding the foregoing, this Section 16(a) does not apply to information
which is already in the public domain other than pursuant to acts of the Employee or representatives of the Employee in violation
of this Agreement.

 

(b)              
During the Employee’s employment and during the one (1) year period after the date that the Employee ceases to be
employed by any of the Innovative Industrial Entities for any reason (the “Termination Date”), the Employee
agrees that the Employee shall not directly or knowingly and intentionally through another party recruit, induce, solicit or assist
any other Person in recruiting, inducing or soliciting (A) any other employee of any Innovative Industrial Entity to leave such
employment or (B) any other Person with which any Innovative Industrial Entity was actively conducting negotiations for employment
on the Termination Date.

 

    	 	13	 

     

    

 

(c)              
For a six (6) month period following any termination of employment, the Employee agrees to make himself available and, upon
and as requested by the Company or the Partnership from time to time, to provide consulting services with respect to any projects
the Employee was involved in prior to such termination and/or to provide such other consulting services as the Company or the Partnership
may reasonably request. The Employee will be reimbursed for reasonable travel and miscellaneous expenses incurred in connection
with the provision of requested consulting services hereunder. The Company or the Partnership will provide the Employee reasonable
advance notice of any request to provide consulting services, and will make all reasonable accommodations necessary to prevent
the Employee’s commitment hereunder from materially interfering with the Employee’s employment obligations, if any.
In no event will the Employee be required to provide more than twenty (20) hours of consulting services in any one month to the
Company and the Partnership pursuant to this provision.

 

(d)              
The parties agree that any breach of this Section 16 will result in irreparable harm to the non-breaching party which cannot
be fully compensated by monetary damages and accordingly, in the event of any breach or threatened breach of this Section 16, the
non-breaching party shall be entitled to injunctive relief. Should any provision of this Section 16 be determined by a court of
law or equity to be unreasonable or unenforceable, the parties agree that to the extent it is valid and enforceable, they shall
be bound by the same, the intention of the parties being that the parties be given the broadest protection allowed by law or equity
with respect to such provision.

 

17.             
Survival. The provisions of Sections 3 through 22 shall survive the termination of this Agreement to the extent necessary
to enforce the rights and obligations described therein.

 

18.             
Compliance with Code Section 409A. For purposes of applying the provisions of Code Section 409A to this Agreement,
each separately identified amount to which the Employee is entitled under this Agreement shall be treated as a separate payment.
In addition, to the extent permissible under Code Section 409A, any series of installment payments under this Agreement shall be
treated as a right to a series of separate payments. Whenever a payment under this Agreement specifies a payment period with reference
to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company
or the Partnership, as the case may be.

 

19.             
Withholding. The Company or the Partnership shall be entitled to withhold from all payments to the Employee hereunder
all amounts required to be withheld under applicable local, state or federal income and employment tax laws.

 

20.             
Clawbacks. All incentive-based compensation paid to the Employee hereunder will be subject to the policies of the
Company and the Partnership regarding clawbacks of erroneously awarded incentive-based compensation triggered by an accounting
restatement, as required by law and approved by the Board in the case of the Company.

 

    	 	14	 

     

    

 

21.             
Dispute Resolution. Any dispute, controversy or claim between the Company or the Partnership and the Employee or
other Person arising out of or relating to this Agreement shall be settled by arbitration conducted in San Diego, California, in
accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association then in force
and California law within thirty (30) days after written notice from one party to the other requesting that the matter be submitted
to arbitration; provided that this Section 21 shall not apply to, and the Company and the Partnership shall be free to seek, injunctive
or other equitable relief with respect to any actual or threatened violation by the Employee of his or her obligations under Section
16 hereof in any court of competent jurisdiction. The arbitration decision or award shall be binding and final upon the parties.
The arbitration award shall be in writing and shall set forth the basis thereof. The parties hereto shall abide by all awards rendered
in such arbitration proceedings, and all such awards may be enforced and executed upon in any court having jurisdiction over the
party against whom enforcement of such award is sought. Each party shall be responsible for its own costs and expenses in any dispute
or proceeding regarding the enforcement of this Agreement.

 

22.             
Miscellaneous. This Agreement shall be construed and enforced in accordance with the laws of the State of California
(exclusive of conflict of law principles). In the event that any provision of this Agreement shall be invalid, illegal or unenforceable,
the remainder shall not be affected thereby. This Agreement supersedes and terminates any prior employment agreement, severance
agreement, change of control agreement or non-competition agreement between the Company or the Partnership and the Employee. It
is intended that the payments and benefits provided under this Agreement are in lieu of, and not in addition to, termination, severance
or change of control payments and benefits provided under the other termination or severance plans, policies or agreements, if
any, of the Company or the Partnership. This Agreement shall be binding upon and inure to the benefit of the Employee and the Employee’s
heirs and personal representatives, the Company and the Partnership, and their successors, assigns and legal representatives. Headings
herein are inserted for convenience and shall not affect the interpretation of any provision of the Agreement. References to sections
of the Exchange Act or the Code, or rules or regulations related thereto, shall be deemed to refer to any successor provisions,
as applicable. The Company and the Partnership will require any successors thereto (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to expressly assume and agree to perform under this Agreement in the same manner and to the same extent
that the Company and the Partnership would be required to perform if no such succession had taken place. This Agreement may not
be terminated, amended, or modified except by a written agreement executed by the parties hereto or their respective successors
and legal representatives.

 

23.             
Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.

 

 

(Signature pages
to follow)

 

    	 	15	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the day and year first above written.

 

	 	INNOVATIVE INDUSTRIAL PROPERTIES, INC.
	 	 
	 	 
	 	By:	/s/ Paul Smithers
	 	 	Paul Smithers
	 	 	President and Chief Executive Officer
	 	 
	 	 
	 	 
	 	IIP OPERATING PARTNERSHIP, LP
	 	 
	 	 
	 	By:	INNOVATIVE INDUSTRIAL PROPERTIES, INC.
	 	 	Its General Partner
	 	 
	 	 
	 	By:	/s/ Paul Smithers
	 	 	Paul Smithers
	 	 	President and Chief Executive Officer
	 	 
	 	 
	 	 
	 	EMPLOYEE
	 	 
	 	 
	 	/s/ Catherine Hastings
	 	Catherine Hastings

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}]]