EXHIBIT 10.34
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of the
2nd day of March, 2005, by and between SAXON CAPITAL, INC., a Maryland
corporation (the “Company”), and DAVID L. DILL ("Executive").

RECITALS

WHEREAS, Executive and Saxon Capital wish to enter into this Agreement in order
to set forth the terms and conditions of Executive’s employment by the Company;

NOW, THEREFORE, in consideration of the mutual agreements set forth herein, the
parties hereto agree as follows:

AGREEMENT

ARTICLE I.

EMPLOYMENT

1.1. Term. This Agreement shall be effective from the Effective Date and shall
remain in effect until midnight on the first anniversary of the Effective Date
(the "Initial Term"), and will automatically be renewed for successive one-year
terms (each an "Additional Term" and referred to herein together with the
Initial Term as the "Term"), unless either the Company or Executive notifies the
other in writing of its intention to terminate the Agreement as of the end of
the then current Initial Term or Additional Term, as applicable, at least ninety
(90) days prior to the end thereof.

1.2. Position and Duties. The Company hereby engages and employs Executive as an
Executive Vice President of the Company. The Board may provide such additional
designations of title to Executive as the Board, in its discretion, may deem
appropriate. Executive shall perform the executive duties and functions related
to the above positions, subject to the limitations of authority set forth from
time to time in any resolution of the Board or applicable law.

1.3. Best Efforts. Executive agrees to devote his full time and attention to the
Company, to use his best efforts to advance the business and welfare of the
Company, to render his services under this Agreement fully, faithfully,
diligently, competently and to the best of his ability, and not to engage in any
other employment activities. Notwithstanding anything herein to the contrary,
Executive shall not be precluded from: (i) engaging in charitable activities and
community affairs and managing his personal investments and affairs; provided,
that such activities do not materially interfere with the proper performance of
his duties and responsibilities under this Agreement; or (ii) owning up to 1% of
a publicly-held company engaged in the same or similar business as the Company.

ARTICLE II.

COMPENSATION AND BENEFITS

2.1. Base Salary. For all services to be rendered by Executive under this
Agreement, the Company agrees to pay Executive an annual base salary ("Base
Salary") of $250,000 (subject to adjustment upward as recommended by the
Compensation Committee of the Board (the "Compensation Committee"), less
deductions required by law, payable in accordance with the normal payroll
practices of the Company.

2.2. Annual Performance Bonus.

(a) Payment of Performance Bonus. The Company shall pay to Executive an annual
cash bonus with a target opportunity equal to 100% of Executive’s Base Salary
(“Target Bonus”) and a maximum opportunity equal to 200% of Executive’s Base
Salary, as approved by the Board, or the Compensation Committee, based on
Executive’s performance and the performance of the Company during the prior
fiscal year (“Bonus”). On or before March 1 of each year, the Company shall pay
to Executive the estimated amount of such Bonus (the “Estimated Bonus”) based on
the unaudited financial statements of the Company for the prior fiscal year. On
or before April 15 on each year, the Estimated Bonus shall be adjusted in
accordance with the audited financial statements of the Company for the prior
fiscal year. The Board, or the Compensation Committee, shall promptly notify
Executive in writing of the amount of adjustment, if any. If the Bonus is
greater than the Estimated Bonus, the Company shall pay to Executive and
additional cash payment equal to the amount by which the Bonus exceeds the
Estimated Bonus. If the Bonus is less that the Estimated Bonus, Executive shall
pay to the Company a cash payment equal to the amount by which the Estimated
Bonus exceeds the Bonus. Any amount required to be paid pursuant to the
preceding two sentences shall be made by the responsible party within ten (10)
business days of the delivery of notice of adjustment to executive. Except as
provided in Section 2.2(b), the Company shall not be obligated to pay Executive
any Bonus for his performance or the Company’s performance during any year,
unless Executive is employed through December 31 of such year.

(b) Pro-Rated Bonus Upon Change in Control or Death. Within fifteen (15) days
following (i) the consummation of a Change in Control (as defined below), (ii)
Executive's death, or (iii) termination of Executive’s employment due to
disability, the Company shall pay to Executive or to his estate or heirs an
amount equal to 100% of Executive's annual Base Salary, pro-rated from January 1
of the year in which such Change in Control or death or termination of
employment due to disability occurs through and including the date of such
Change in Control or death or termination of employment due to disability (the
"Pro-Rated Bonus").

2.3. Other Benefits. The Company will further provide to Executive, at the
Company's expense, the following other benefits ("Other Benefits"):

(a) An annual vacation leave of a minimum of five (5) weeks per calendar year at
full pay;

(b) Full participation, on a basis commensurate with his position with the
Company, in all plans of life, accident, disability and health insurance that
generally are made available to senior executives of the Company; and

(c) The Company has granted certain restricted stock units and dividend
equivalent rights to Executive pursuant to the terms of the Saxon Capital, Inc.
2001 Stock Incentive Plan. Executive acknowledges that the Company has no
commitment to grant additional equity-based compensation to Executive during the
Initial Term, any Additional Term or thereafter.

2.4. Expense Reimbursement. The Company shall promptly reimburse Executive for
all reasonable business expenses incurred by Executive in promoting the business
of the Company, including expenditures for entertainment, travel, or other
expenses; provided, that (i) such expenditures are of a nature qualifying them
as legitimate business expenses and (ii) Executive furnishes to the Company
adequate records and other documentary evidence reasonably required by the
Company to substantiate such expenditures in accordance with the Company's
policies and procedures.

ARTICLE III.

TERMINATION, SEVERANCE PAY AND CHANGE IN CONTROL

3.1. Termination by the Company.

(a) Severance Pay.

(i) In the event that Executive's employment with the Company is terminated by
the Company for Cause (as defined below), Executive shall not be entitled to any
Severance Pay (as defined below) or employee benefits (including Other
Benefits).

(ii) In the event that Executive's employment with the Company is terminated by
the Company other than for Cause, or Executive becomes entitled to Severance Pay
pursuant to Section 3.1(b)(ii), then, subject to Section 3.5 and in
consideration of Executive's compliance with his obligations under Articles IV
and V and Executive's execution of a general release in favor of the Company and
its affiliates, Executive shall be entitled to severance pay in the form of
monthly payments to Executive in an amount equal to 1/12th of the sum of
(A) Executive's annual Base Salary plus (B) 100% of the Target Bonus for the
fiscal year in which termination occurs, less deductions required by law
("Severance Pay") payable in accordance with the normal payroll practices of the
Company, for twelve (12) months following such termination (the "Severance
Payout Period"). Alternatively, provided that Executive executes and delivers
the said general release within fifteen (15) days following such a termination
of employment by the Company other than for Cause, at Executive's sole election
Executive's Severance Pay shall be payable at the time of such delivery of the
general release and shall consist of a lump sum equal to 100 percent (100%) of
the sum of the amounts described in clauses (A) and (B) of this subsection.
Executive acknowledges and agrees that in the event Executive breaches any
provision of Articles IV or V or the general release, his right to receive
Severance Pay under this Section 3.1(a)(ii) shall automatically terminate and
Executive shall repay all Severance Pay received.

(b) Benefits. Following the effective date of termination, Executive shall cease
to be a Company employee and shall not be entitled to any employee benefits
(including Other Benefits), except as set forth in this Section 3.1(b). In the
event that the Company terminates Executive's employment other than for Cause
(or, as provided in Section 3.2(b)(ii)) or Executive voluntarily terminates his
employment for Good Reason (as defined below), for the longer or (A) twelve (12)
months after Executive's date of termination, or (B) the Severance Payout Period
in the event Executive has not elected a the lump sum payment described in
Section 3.1(a)(ii), Company shall continue to provide benefits to Executive
and/or Executive's family at least equal to those which would have been provided
to them in accordance with the plans, programs, practices and policies described
in Section 2.3(b) of this Agreement if Executive's employment had not been
terminated or, if more favorable to Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
affiliated companies, PROVIDED, HOWEVER, that if Executive becomes reemployed
with another employer and is eligible to receive medical or other welfare
benefits under another employer-provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under such other
plan. Notwithstanding anything herein to the contrary, Executive's termination
shall not preclude Executive from exercising his rights under COBRA to pay for
the continuation of benefits previously provided by the Company. In the event
that the Company terminates Executive's employment other than for Cause (or, as
provided in Section 3.2(b)(ii)), or Executive voluntarily terminates his
employment for Good Reason (as defined below), equity-based compensation granted
pursuant to the Plan or other shareholder-approved compensation plan (each a ,
“Shareholder-Approved Plan”) shall vest as of the effective date of such
termination and the underlying shares shall be delivered in accordance with the
terms of the applicable grant documents and Shareholder-Approved Plan.

(c) Cause. For purposes of this Agreement, "Cause" shall mean (i) an act or acts
of personal dishonesty by Executive that were intended to result in substantial
personal enrichment of Executive at the expense of the Company; (ii) Executive's
conviction of any felony; or (iii) Executive's gross negligence, willful
insubordination or misconduct, intentional or persistent failure to perform
stated duties or abide by the Company's policies, or material breach of any
provision of this Agreement, including without limitation any representation or
covenant contained in Articles IV or V.

3.2. Termination by Executive.

(a) Notice. Executive shall have the right to voluntarily terminate his
employment with the Company for whatever reason by providing the Company with at
least sixty (60) days prior written notice.

(b) Severance Pay.

(i) In the event Executive voluntarily terminates his employment with the
Company without Good Reason, Executive shall not be entitled to any Severance
Pay or employee benefits (including Other Benefits).

(ii) In the event Executive voluntarily terminates his employment with the
Company for Good Reason, Executive shall be entitled, subject to Section 3.5, to
Severance Pay and all RSUs granted pursuant to Section 2.3(c) shall vest as of
the effective date of such termination to the same extent as if Executive's
employment with the Company had been terminated other than for Cause as provided
in Sections 3.1(a) and 3.1(b); provided, that (i) Executive gives written notice
of his resignation within thirty (30) days of the occurrence of such Good Reason
and advises, as part of such resignation, that he is resigning because of the
Good Reason, and (ii) the occurrence of the Good Reason was not based on Cause.
Executive acknowledges and agrees that in the event Executive breaches any
provision of Articles IV or V or the general release, his right to receive
Severance Pay under this Section 3.2(b)(ii) shall automatically terminate and
Executive shall repay all Severance Pay received.

(iii) For purposes of this Agreement, a resignation tendered by Executive
pursuant to a direct request of the Board or another officer with higher
executive status shall, for purposes of this Agreement, be treated as an
involuntary termination, entitling Executive to Severance Pay and RSU vesting in
accordance with the provisions of Sections 3.1(a) and 3.1(b) so long as the
request was not based on Cause.

(c) Good Reason. For purposes of this Agreement, "Good Reason" shall include
(i) the material reduction or material adverse modification without Executive's
prior written consent of Executive's authority or duties (i.e., the substantial
diminution or adverse modification in Executive's title, overall position,
responsibilities, or reporting relationship) (ii) any reduction in Executive's
Base Salary or Bonus opportunity or any material reduction in employee benefits;
(iii) any requirement to move Executive's principal place of employment to a
location that is more than a 50 mile radius from its current location; or (iv)
any material breach of this Agreement by the Company that is not cured within
thirty (30) days following demand for the cure thereof.

3.3. Death. In the event of Executive's death, this Agreement shall
automatically terminate and equity-based compensation shall be of no further
force and effect. Termination of Executive's employment as a result of his death
shall not result in any obligation by the Company to pay to Executive's estate
or heirs any Severance Pay or employee benefits (including Other Benefits)
except as set forth in Section 2.2(b). To the extent not inconsistent with the
terms of the applicable grant documents and Shareholder-Approved Plan,
Executive's equity-based compensation shall vest as of the date of his death and
the underlying shares, as applicable, shall be delivered in accordance with the
terms of the applicable grant documents and Shareholder-Approved Plan.

3.4. Disability. In the event of Executive's Disability (as defined below)
during the Term for any period of at least three (3) consecutive months, the
Company shall have the right, which may be exercised in its sole discretion, to
terminate this Agreement. In the event the Company elects to terminate this
Agreement due to Executive's Disability, Executive shall not be entitled to any
Severance Pay or employee benefits (including Other Benefits) at any time, but
Executive shall be entitled to disability benefits to the extent provided in
accordance with the policies and plans described in Section 2.3(c) of this
Agreement as established from time to time by the Company. To the extent not
inconsistent with the terms of the applicable grant documents and
Shareholder-Approved Plan, Executive's equity-based compensation (all grants and
awards under any Shareholder-Approved Plan) shall vest as of the date of the
termination of his employment and the underlying shares of such vested portion
shall be delivered in accordance with the terms of the applicable grant
documents and Shareholder-Approved Plan. For purposes of this Agreement,
"Executive's Disability" shall mean the permanent inability of Executive to
perform all of his employment services hereunder by reason of physical or mental
illness or incapacity as determined by a physician chosen by the Company and
reasonably satisfactory to Executive or his legal representative.

3.5. Change in Control. 

(a) Upon the consummation of a Change in Control, Executive shall be entitled to
pay in the form of monthly payments to Executive in an amount equal to 1/12th of
the sum of (A) Executive's annual Base Salary plus (B) the Target Bonus for the
fiscal year in which the consummation of a Change in Control occurs, less
deductions required by law, payable in accordance with the normal payroll
practices of the Company, for twelve (12) months following consummation of such
Change in Control ("Change in Control Payment"). Alternatively, at Executive's
sole election, Executive's Change in Control Payment shall consist of a lump sum
equal to 100 percent (100%) of the sum of the amounts described in clauses (A)
and (B) of this subsection. The Change in Control Payment shall be in addition
to, and not in lieu of, Executive's Base Salary and Bonus, if any, payable in
accordance with the terms of this Agreement. In addition, upon the consummation
of a Change in Control, all of the equity-based compensation shall immediately
vest and the underlying shares shall be delivered in accordance with the terms
of the applicable grant documents and Shareholder-Approved Plan. Following the
consummation of a Change in Control, Executive shall not be entitled to receive,
and hereby waives all right to, Severance Pay pursuant to Section 3.1 or 3.2 in
the event Executive's employment with the Company is terminated for any reason.
For purposes of this Section 3.5, "Change in Control" shall mean an acquisition,
merger or consolidation of the Company or the sale of voting control or all or
substantially all of the assets of the Company with, by or to any person or
entity in which the stockholders of the Company immediately prior to the
effective date of such Change in Control do not own a majority of the
outstanding shares of the capital stock of the surviving entity after such
Change in Control. If Executive's employment with the Company is terminated by
the Company other than for Cause at any time following the public announcement
of a prospective Change in Control, then, notwithstanding such termination, the
Company shall pay to Executive, the Change in Control Payment based on
Executive's Base Salary in effect on the date of such termination; provided,
however, that such Change in Control Payment shall be reduced by the total
amount of any Severance Pay received by Executive, and Executive thereafter
shall not be entitled to any further payments of Severance Pay.

(b) In the event that any payments, distributions or benefits provided or to be
provided to Executive, whether pursuant to this Agreement or from other plans or
arrangements maintained by the Company or any of the Consolidated Subsidiaries
(excluding the Gross Up Payment and Additional Gross Up Payment (as such terms
are hereinafter defined)) (collectively, the "Payment") would be subject to
excise tax under Section 4999 of the Code (such excise tax and any penalties and
interest collectively, the "Penalty Tax"), the Company shall pay to Executive in
cash an additional amount equal to the Gross Up Payment. The "Gross Up Payment"
shall be an amount such that after payment by Executive of all federal, state,
local, employment and Medicare taxes thereon (and any penalties and interest
with respect thereto), Executive retains on an after tax basis an amount equal
to the amount that Executive would have retained if he had not been subject to
the Penalty Tax at all.

  (i) For purposes of determining the amount of the Gross
Up Payment, the value of any non-cash benefits and deferred payments or benefits
subject to the Penalty Tax shall be determined by the Company's tax and
financial advisors in accordance with the principles of Section 280G(d)(3) and
(4) of the Code. In the event that, after the Gross Up Payment is made,
Executive becomes entitled to receive a refund of any portion of the Penalty
Tax, Executive shall promptly pay to the Company 100% of such Penalty Tax refund
attributable to the Payment (together with 100% of any interest paid or credited
thereon by the Internal Revenue Service) and 100% of the Penalty Tax refund
attributable to the Gross Up Payment (together with 100% of any interest paid or
credited thereon by the Internal Revenue Service).

(ii) As a result of the uncertainty regarding the application of Section 4999 of
the Code, it is possible that the Internal Revenue Service may assert that the
Penalty Tax due is in excess of the amount of the anticipated Penalty Tax used
in calculating the Gross Up Payment (such excess amount is hereafter referred to
as the “Underpayment"). In such event, the Company shall pay to Executive, in
immediately available funds, at the time the Underpayment is assessed or
otherwise determined, an additional amount equal to the Additional Gross Up
Payment. The "Additional Gross Up Payment" shall be an amount such that after
payment by Executive of the Underpayment plus all federal, state, local,
employment and Medicare taxes thereon (and any penalties and interest with
respect thereto), Executive retains on an after tax basis an amount equal to
$1.00.

ARTICLE IV.

NONDISCLOSURE OF INFORMATION

4.1. Nondisclosure of Proprietary Information. At all times during and after
Executive's employment with the Company (whether or not such termination is
voluntary or involuntary, with or without Cause or Good Reason or by Executive's
Disability), Executive agrees to keep in strict confidence and trust all
Proprietary Information (as defined below) and not to use or disclose (or induce
or assist in the use or disclosure of) any Proprietary Information without the
prior express written consent of the Company, except as may be necessary in the
ordinary course of performing Executive's duties as an officer of the Company.
Executive acknowledges that irreparable injury will result to the Company from
Executive's violation or continued violation of the terms of this Article IV,
and Executive expressly agrees that the Company shall be entitled, in addition
to damages and any other remedies provided by law, to an injunction or other
equitable remedy respecting such violation or continued violation. For purposes
of this Agreement, "Proprietary Information" shall mean information generally
unavailable to the public that has been created, discovered, developed or
otherwise become known to the Company or in which property rights have been
assigned or otherwise conveyed to the Company, including any modifications or
enhancements thereto, which information has material economic value or potential
material economic value to the Company or the business in which the Company is
or will be engaged. Proprietary Information shall include, but not be limited
to, financial, sales and distribution information; business plans, strategies
and forecasts; lists of employees, contractors, customers, agents and
independent brokers; trade secrets; processes; formulas; data; know-how;
negative know-how; improvements; discoveries; developments; designs; inventions;
techniques; proposals; reports; client information; and software programs and
information (whether or not expressed in written form). Such restrictions on the
use or disclosure of Proprietary Information do not extend to any item of
information which (i) is publicly known immediately prior to the time of its
disclosure, (ii)  is lawfully received from a third party not bound in a
confidential relationship to the Company or (iii) is published or otherwise made
known to the public by the Company.

4.2. Return of Proprietary Information and Property. Upon termination of
Executive's employment for any reason, Executive will deliver to the Company all
Proprietary Information and any equipment, supplies, facilities and other
tangible property owned, leased or contracted for by the Company which property
is in Executive's possession as of the date of such termination.

ARTICLE V.

NON-COMPETITION AND NON-SOLICITATION

5.1 Non-Competition. Executive agrees that, so long as he is employed by the
Company and for a period of one (1) year after termination of his employment for
any reason except termination by the Company for Cause, he shall not, without
the prior written consent of the Company, either directly or indirectly,
including, without limitation, through a partnership, joint venture, corporation
or other entity or as a consultant, director or employee, engage in any activity
which the Company shall determine in good faith to be in competition with the
Company, including, without limitation, any business activities conducted by the
Company as of the date hereof within those geographic areas in which the Company
conducts active business operations. The parties hereto agree that both the
scope and nature of the covenant and the duration and area for which the
covenant not to compete set forth in this Article V is to be effective are
reasonable in light of all facts and circumstances.

5.2 Non-Solicitation. Executive agrees that, so long as he is employed by the
Company and for a period of one (1) year after termination of his employment for
any reason except termination by the Company for Cause, he shall not
(i) directly or indirectly solicit, induce or attempt to solicit or induce any
Company employee to discontinue his or her employment with the Company,
(ii) usurp any opportunity of the Company that Executive became aware of during
his tenure at the Company or which is made available to him on the basis of the
belief that Executive is still employed by the Company, or (iii) directly or
indirectly solicit or induce or attempt to influence any person or business that
is an account, customer or client of the Company to restrict or cancel the
business of any such account, customer or client with the Company.

5.3 Specific Performance. Because of the difficulty of measuring economic losses
to the Company as a result of a breach of the foregoing covenants, and because
of the immediate and irreparable damage that could be caused to the Company for
which it would have no other adequate remedy, Executive agrees that the
foregoing covenants, in addition to and not in limitation of any other rights,
remedies or damages available to the Company at law, in equity or under this
Agreement, may be enforced by the Company in the event of the breach or
threatened breach by Executive, by injunctions and/or restraining orders. If the
Company is involved in court or other legal proceedings to enforce the covenants
contained in this Article V, then, in the event the Company prevails in such
proceedings, Executive shall be liable for the payment of reasonable attorneys'
fees, costs and ancillary expenses incurred by the Company in enforcing its
rights hereunder.

ARTICLE VI.

MISCELLANEOUS

6.1. Successors and Assigns; Binding Agreement. This Agreement shall inure to
the benefit of and shall be binding upon the Company, its successors and
assigns. The obligations and duties of Executive hereunder are personal and
otherwise not assignable. This Agreement shall inure to the benefit of and be
enforceable by Executive's legal representatives. This Agreement shall not be
terminated by the voluntary or involuntary dissolution of the Company or by any
Change in Control. In the event of any such Change in Control, the provisions of
this Agreement shall bind and inure to the benefit of the surviving or resulting
entity, or the entity to which such assets shall have been transferred, as the
case may be; provided, however, that the Company will require any successor to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to Executive, to expressly assume
and agree to perform under this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.

6.2. Arbitration. Other than with respect to Articles IV and V hereof, any and
all disputes arising out of the interpretation, application or breach of this
Agreement shall be subject to arbitration pursuant to the Company's Mutual
Agreement to Arbitrate Claims, a copy of which is attached hereto as Exhibit A
and incorporated herein by this reference.

6.3. No Waiver. The waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed as a waiver of any subsequent
breach thereof.

6.4. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws and decisions of the Commonwealth of Virginia (regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof).

6.5. Notice. All notices and other communications under this Agreement shall be
in writing and shall be given by hand delivery, or first-class mail, certified
or registered with return receipt requested, or by commercial overnight courier
or by fax and shall be deemed to have been duly given upon hand delivery,
receipt if mailed, the first business day following delivery to a commercial
overnight courier or upon receipt of a fax, and addressed, if to the Company, to
its then principal office, attention Chairman of the Board; and if to Executive,
at Executive's address appearing below on the signature page hereto or at such
other address as Executive may designate from time to time in accordance with
the terms of this Section 6.5.

6.6. Amendments. No amendment or modification of the terms of this Agreement
shall be valid unless made by written agreement executed by the parties hereto
or their respective successors and legal representative.

6.7. Severability. In the event that any provision of this Agreement, including
without limitation any provision of Article IV or Article V, shall to any extent
be held invalid, unreasonable or unenforceable, in any circumstances, the
parties hereto agree that the remainder of this Agreement and the application of
such provision of this Agreement to other circumstances shall be valid and
enforceable to the fullest extent permitted by law, but only to the extent that
such enforceability is in accordance with the intent of the parties as evidenced
by this Agreement. If any provision, or any part thereof, is held to be
unenforceable because of the scope or duration of or the area covered by such
provision, the parties hereto agree that the court making such determination
shall have the power, and is hereby asked by the parties, to reduce the scope,
duration and/or area of such provisions (and to substitute appropriate
provisions for any such unenforceable provisions) in order to make such
provisions enforceable to the fullest extent permitted by law, and/or to delete
specific words and phrases, and such modified provisions shall then be
enforceable and shall be enforced.

6.8. Entire Agreement. This Agreement constitutes the entire agreement between
the parties regarding the subject matter hereof, and supersedes all prior or
contemporaneous negotiations, understandings or agreements of the parties,
whether written or oral, with respect to such subject matter.

6.9. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one and the
same agreement.

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

SAXON CAPITAL, INC.:

By: 
Name:  
Its:  

EXECUTIVE:

 
David L. Dill
Address:

 

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EXHIBIT A

MUTUAL AGREEMENT TO ARBITRATE CLAIMS

Executive recognizes that differences may arise between the Company and
Executive during or following Executive's employment with the Company, and that
those differences may or may not be related to Executive's employment. Executive
understands and agrees that by entering into the Employment Agreement (the
"Employment Agreement") with the Company into which this Mutual Agreement to
Arbitrate Claims is incorporated by reference (this "Arbitration Agreement"),
Executive anticipates gaining the benefits of a speedy, impartial
dispute-resolution procedure.

Executive understands that any capitalized terms used but not defined in this
Arbitration Agreement shall have the meanings ascribed thereto in the Employment
Agreement, provided that any reference in this Arbitration Agreement to the
Company will also be a reference to all subsidiary and affiliated entities; all
benefit plans; the benefit plans' sponsors, fiduciaries, administrators,
affiliates; and all successors and assigns of any of them.

Claims Covered by this Arbitration Agreement

The Company and Executive mutually consent to the resolution by arbitration of
all claims ("claims"), whether or not arising out of Executive's employment (or
its termination), that the Company may have against Executive or that Executive
may have against the Company or against its officers, directors, employees or
agents in their capacity as such or otherwise. The claims covered by this
Arbitration Agreement include, but are not limited to, claims for wages or other
compensation due; claims for breach of any contract or covenant (express or
implied); tort claims; claims for discrimination (including, but not limited to,
race, sex, religion, national origin, age, marital status, medical condition, or
disability); claims for benefits (except where an employee benefit or pension
plan specifies that its claims procedure shall culminate in an arbitration
procedure different from this one), and claims for violation of any federal,
state, or other governmental law, statute, regulation, or ordinance, except
claims excluded in the Claims Not Covered section below.

Except as otherwise provided in this Arbitration Agreement, both the Company and
Executive agree that neither shall initiate or prosecute any lawsuit or
administrative action (other than an administrative charge of discrimination) in
any way related to any claim covered by this Arbitration Agreement.

Claims Not Covered by this Arbitration Agreement

Claims Executive may have for workers' compensation or unemployment compensation
benefits are not covered by this Arbitration Agreement.

Also not covered are claims by the Company for injunctive and/or other equitable
relief for unfair competition and/or the use and/or unauthorized disclosure of
trade secrets or confidential information, as to which Executive understands and
agrees that the Company may seek and obtain relief from a court of competent
jurisdiction.

Required Notice of All Claims and Statutes of Limitations

The Company and Executive agree that the aggrieved party must give written
notice of any claim to the other party within one (1) year of the date the
aggrieved party first has knowledge of the event giving rise to the claim;
otherwise the claim shall be void and deemed waived even if there is a federal
or state statute of limitations which would have given more time to pursue the
claim.

Written notice to the Company, or its officers, directors, employees or agents,
shall be sent to its General Counsel at the Company's then-current address.
Executive will be given written notice at the last address recorded in
Executive's personnel file.

The written notice shall identify and describe the nature of all claims asserted
and the facts upon which such claims are based. The notice shall be sent to the
other party by certified or registered mail, return receipt requested.

Discovery

Each party shall have the right to take the deposition of one individual and any
expert witness designated by another party. Each party also shall have the right
to propound requests for production of documents to any party. The subpoena
right specified below shall be applicable to discovery pursuant to this
paragraph. Additional discovery may be had only where the Arbitrator selected
pursuant to this Agreement so orders, upon a showing of substantial need.

Designation of Witnesses

At least thirty (30) days before the arbitration, the parties must exchange
lists of witnesses, including any expert, and copies of all exhibits intended to
be used at the arbitration.

Subpoenas

Each party shall have the right to subpoena witnesses and documents for the
arbitration.

Arbitration Procedures

The Company and Executive agree that, except as provided in this Arbitration
Agreement, any arbitration shall be in accordance with the then-current Model
Employment Arbitration Procedures of the American Arbitration Association
("AAA") before an Arbitrator who is licensed to practice law in the Commonwealth
of Virginia ("Arbitrator"). The arbitration shall take place at the Company's
headquarters in Richmond, Virginia.

The Arbitrator shall be selected as follows. The AAA shall give each party a
list of eleven (11) arbitrators drawn from its panel of labor-management dispute
arbitrators. Each party may strike all names on the list it deems unacceptable.
If only one common name remains on the lists of all parties, that individual
shall be designated as the Arbitrator. If more than one common name remains on
the lists of all parties, the parties shall strike names alternately until only
one remains. The party who did not initiate the claim shall strike first. If no
common name remains on the lists of all parties, the AAA shall furnish an
additional list or lists until the Arbitrator is selected.

The Arbitrator shall apply the substantive law (and the law of remedies, if
applicable) of the state in which the claim arose, or federal law, or both, as
applicable to the claim(s) asserted. The Federal Rules of Evidence shall apply.
The Arbitrator, and not any federal, state, or local court or agency, shall have
exclusive authority to resolve any dispute relating to the interpretation,
applicability, enforceability or formation of this Agreement, including but not
limited to any claim that all or any part of this Agreement is void or voidable.
The arbitration shall be final and binding upon the parties.

The Arbitrator shall have jurisdiction to hear and rule on pre-hearing disputes
and is authorized to hold pre-hearing conferences by telephone or in person as
the Arbitrator deems necessary. The Arbitrator shall have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by any party
and shall apply the standards governing such motions under the Federal Rules of
Civil Procedure.

Either party, at its expense, may arrange for and pay the cost of a court
reporter to provide a stenographic record of proceedings.

Either party, upon request at the close of hearing, shall be given leave to file
a post-hearing brief. The time for filing such a brief shall be set by the
Arbitrator.

The Arbitrator shall render an award and opinion in the form typically rendered
in labor arbitrations.

Arbitration Fees and Costs

The Company and Executive shall equally share the fees and costs of the
Arbitrator. Each party will deposit funds or post other appropriate security for
its share of the Arbitrator's fee, in an amount and manner determined by the
Arbitrator, 10 days before the first day of hearing. Each party shall pay for
its own costs and attorneys' fees, if any. However, if any party prevails on a
statutory claim which affords the prevailing party attorneys' fees, or if there
is a written agreement providing for fees, the Arbitrator may award reasonable
fees to the prevailing party.

Judicial Review

Either party may bring an action in any court of competent jurisdiction to
compel arbitration under this Agreement and to enforce an arbitration award. A
party opposing enforcement of an award may not do so in an enforcement
proceeding, but must bring a separate action in any court of competent
jurisdiction to set aside the award, where the standard of review will be the
same as that applied by an appellate court reviewing a decision of a trial court
sitting without a jury.

Interstate Commerce

Executive understands and agrees that the Company is engaged in transactions
involving interstate commerce and that Executive's employment involves such
commerce.

Requirements for Modification or Revocation

This Arbitration Agreement shall survive the termination of Executive's
employment. It can only be revoked or modified by a writing signed by the
parties which specifically states an intent to revoke or modify this Arbitration
Agreement.

Sole and Entire Agreement

This is the complete agreement of the parties on the subject of arbitration of
disputes, except for any arbitration agreement in connection with any pension or
benefit plan. This Agreement supersedes any prior or contemporaneous oral or
written understanding on the subject. No party is relying on any
representations, oral or written, on the subject of the effect, enforceability
or meaning of this Arbitration Agreement, except as specifically set forth in
this Arbitration Agreement.

Construction

If any provision of this Arbitration Agreement is adjudged to be void or
otherwise unenforceable, in whole or in part, such adjudication shall not affect
the validity of the remainder of this Arbitration Agreement.

Consideration

The promises by the Company and by Executive to arbitrate differences, rather
than litigate them before courts or other bodies, provide consideration for each
other.

Employment Agreement

This Arbitration Agreement is not, and shall not be construed to create, any
contract of employment, express or implied.

Voluntary Agreement

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS CAREFULLY READ THIS ARBITRATION
AGREEMENT, THAT EXECUTIVE UNDERSTANDS ITS TERMS, THAT ALL UNDERSTANDINGS AND
AGREEMENTS BETWEEN THE COMPANY AND EXECUTIVE RELATING TO THE SUBJECTS COVERED IN
THIS ARBITRATION AGREEMENT ARE CONTAINED IN IT, AND THAT EXECUTIVE HAS ENTERED
INTO THIS ARBITRATION AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES
OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS ARBITRATION
AGREEMENT ITSELF.

EXECUTIVE FURTHER ACKNOWLEDGES THAT EXECUTIVE HAS BEEN GIVEN THE OPPORTUNITY TO
DISCUSS THIS ARBITRATION AGREEMENT WITH EXECUTIVE'S PRIVATE LEGAL COUNSEL AND
HAS AVAILED HIM/HERSELF OF THAT OPPORTUNITY TO THE EXTENT EXECUTIVE WISHES TO DO
SO.