EXHIBIT 10.7

ALESCO FINANCIAL INC.

2006 LONG-TERM INCENTIVE PLAN

RESTRICTED SHARE AWARD AGREEMENT

RESTRICTED SHARE AWARD AGREEMENT by and between Alesco Financial Inc., a
Maryland corporation (the “Company”), and             (the “Grantee”), dated as
of the      day of                     , 200  .

WHEREAS, the Company maintains the Alesco Financial Inc. 2006 Long-Term
Incentive Plan (as amended from time to time, the “Plan”);

AND WHEREAS, the Grantee is an                      of the Company;

AND WHEREAS, capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto in the Plan.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

  1. Grant of Restricted Shares.

The Company hereby grants the Grantee              Restricted Shares of the
Company, subject to the terms of the Plan and the following terms and
conditions. The Plan is hereby incorporated herein by reference as though set
forth herein in its entirety.

 

  2. Restrictions and Conditions.

The Restricted Shares awarded to the Grantee shall be subject to the following
restrictions and conditions:

(i) During the period of restriction with respect to Shares granted hereunder
(the “Restriction Period”), the Grantee shall not be permitted voluntarily or
involuntarily to sell, transfer, pledge, anticipate, alienate, encumber or
assign the Shares (or have such Shares attached or garnished); provided,
however, that the Grantee may transfer the Shares to a trust established for the
sole benefit of the Grantee’s immediate family so long as, prior to such
transfer, such trust delivers a written instrument to the Company pursuant to
which such trust agrees to be bound by the Restriction Period to the same extent
as the Grantee. Subject to clause (iii) below, the Restriction Period shall
begin on the date hereof and lapse                     .

Notwithstanding the foregoing, unless otherwise expressly provided by the
Committee, the Restriction Period with respect to such Shares shall only lapse
as to whole Shares.

(ii) During the Restriction Period, the Grantee shall have, in respect of the
Restricted Shares, all of the rights of a holder of common shares of beneficial
interest of the Company, including the right to vote the Shares and the right to
receive dividends as and when such dividends are declared and paid by the
Company (or as soon as practicable thereafter).

(iii) The effect on the Restriction Period of a termination of the Grantee’s
service with the Company and a Change in Control (as defined in the Plan) shall
be governed by the Plan. In addition, if the Grantee’s service with the Company
is terminated by the Company for Cause (as defined in the Plan), then all Shares
still subject to restriction shall thereupon, and with no further action, be
forfeited by the Grantee.

 

  3. Certain Terms of Shares.

 

  (a)

The Grantee shall be issued a share certificate in respect of Shares awarded
under this Agreement. Such certificate shall be registered in the name of the
Grantee. The certificates for Shares issued hereunder may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer
hereunder, or as the Committee may otherwise deem appropriate, and, without
limiting the generality

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of the foregoing, shall bear a legend referring to the terms, conditions, and
restrictions applicable to such Shares, substantially in the following form:

 

 

    

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE
SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE ALESCO
FINANCIAL INC. 2006 LONG-TERM INCENTIVE PLAN AND AN AWARD AGREEMENT APPLICABLE
TO THE GRANT OF THE SHARES REPRESENTED BY THIS CERTIFICATE. COPIES OF SUCH
DOCUMENTS ARE ON FILE IN THE OFFICES OF ALESCO FINANCIAL INC. LOCATED AT CIRA
CENTRE, 2929 ARCH STREET, 17th FLOOR, PHILADELPHIA, PENNSYLVANIA 19104.

 

  (b) Share certificates evidencing the Shares granted hereby shall be held in
custody by the Company until the restrictions thereon shall have lapsed, and, as
a condition to the grant of any Shares, the Grantee shall have delivered a share
power, endorsed in blank, relating to the Shares covered by such Award. If and
when such restrictions so lapse, the share certificates shall be delivered by
the Company to the Grantee or his designee.

 

  4. Miscellaneous.

 

  (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF
LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN
THE STATE OF NEW YORK.

 

  (b) The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect. This Agreement may not be amended or modified
except by a written agreement executed by the parties hereto or their respective
successors and legal representatives. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.

 

  (c) The Committee may make such rules and regulations and establish such
procedures for the administration of this Agreement as it deems appropriate,
subject to the terms of the Plan. Without limiting the generality of the
foregoing, and to the extent not inconsistent with the Plan, the Committee may
interpret this Agreement, with such interpretations to be conclusive and binding
on all persons and otherwise accorded the maximum deference permitted by law and
take any other actions and make any other determinations or decisions that it
deems necessary or appropriate in connection with the Plan, this Agreement or
the administration or interpretation thereof. In the event of any dispute or
disagreement as to interpretation of the Plan or this Agreement or of any rule,
regulation or procedure, or as to any question, right or obligation arising from
or related to the Plan or this Agreement, the decision of the Committee shall be
final and binding upon all persons.

 

  (d) All notices hereunder shall be in writing, and if to the Company or the
Committee, shall be delivered to the Board or mailed to its principal office,
addressed to the attention of the Board; and if to the Grantee, shall be
delivered personally, sent by facsimile transmission or mailed to the Grantee at
the address appearing in the records of the Company. Such addresses may be
changed at any time by written notice to the other party given in accordance
with this paragraph 4(d).

 

  (e) The failure of the Grantee or the Company to insist upon strict compliance
with any provision of this Agreement or the Plan, or to assert any right the
Grantee or the Company, respectively, may have under this Agreement or the Plan,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement or the Plan.

 

  (f) Nothing in this Agreement shall confer on the Grantee any right to
continue in the service of the Company or its Subsidiaries or interfere in any
way with the right of the Company or its Subsidiaries and their shareholders to
terminate the Grantee’s service at any time.

 

  (g) This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.

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

 

ALESCO FINANCIAL INC.

By:

 

 

Name:   Title:  

 

[Grantee]