INDEMNIFICATION
AGREEMENT 

     THIS
INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into
as of the 7th day of February, 2013, by and between ZAIS Financial
Corp., a Maryland corporation (the “Company”), and James Zinn
(“Indemnitee”). 

     WHEREAS, at the request of the
Company, Indemnitee currently serves as a director and/or officer of the Company
and may, therefore, be subjected to claims, suits or proceedings arising as a
result of his service; and 

     WHEREAS, as an inducement to
Indemnitee to continue to serve as such director and/or officer, the Company has
agreed to indemnify and to advance expenses and costs incurred by Indemnitee in
connection with any such claims, suits or proceedings, to the maximum extent
permitted by law; and 

     WHEREAS, the parties by this
Agreement desire to set forth their agreement regarding indemnification and
advance of expenses; and 

     NOW, THEREFORE, in consideration of
the premises and the covenants contained herein, the Company and Indemnitee do
hereby covenant and agree as follows: 

     Section 1. Definitions. For purposes of this Agreement: 

     (a)
“Change in
Control” means a change in control of the
Company occurring after the Effective Date of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such
reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred if, after the Effective Date
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) 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 15% or more of the combined voting power of all of the Company’s
then-outstanding securities entitled to vote generally in the election of
directors without the prior approval of at least two-thirds of the members of
the Board of Directors in office immediately prior to such person’s attaining
such percentage interest; (ii) the Company is a party to a merger,
consolidation, sale of assets, plan of liquidation or other reorganization not
approved by at least two-thirds of the members of the Board of Directors then in
office, as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or (iii) at any time, a majority of the
members of the Board of Directors are not individuals (A) who were directors as
of the Effective Date or (B) whose election by the Board of Directors or
nomination for election by the Company’s stockholders was approved by the
affirmative vote of at least two-thirds of the directors then in office who were
directors as of the Effective Date or whose election or nomination for election
was previously so approved. 







     (b) “Corporate Status” means the status of a person as a present or former
director, officer, employee or agent of the Company or as a director, trustee,
officer, partner, manager, managing member, fiduciary, employee or agent of any
other foreign or domestic corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise that such person
is or was serving in such capacity at the request of the Company. As a
clarification and without limiting the circumstances in which Indemnitee may be
serving at the request of the Company, service by Indemnitee shall be deemed to
be at the request of the Company if Indemnitee serves or served as a director,
trustee, officer, partner, manager, managing member, fiduciary, employee or
agent of any corporation, partnership, limited liability company, joint venture,
trust, employee benefit plan or other enterprise (i) of which a majority of the
voting power or equity interest is owned directly or indirectly by the Company
or (ii) the management of which is controlled directly or indirectly by the
Company. 

     (c)
“Disinterested
Director” means a director of the Company who
is not and was not a party to the Proceeding in respect of which indemnification
and/or advance of Expenses is sought by Indemnitee. 

     (d)
“Effective
Date” means the date set forth in the first
paragraph of this Agreement. 

     (e)
“Expenses” means any and all reasonable
and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
federal, state, local or foreign taxes imposed on Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement, ERISA excise
taxes and penalties and any other disbursements or expenses incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in or otherwise participating
in a Proceeding. Expenses shall also include Expenses incurred in connection
with any appeal resulting from any Proceeding including, without limitation, the
premium, security for and other costs relating to any cost bond, supersedes bond
or other appeal bond or its equivalent.

     (f)
“Independent
Counsel” means a law firm, or a member of a
law firm, that is experienced in matters of corporation law and neither is, nor
in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning Indemnitee under this Agreement or of other indemnitees
under similar indemnification agreements), or (ii) any other party to or
participant or witness in the Proceeding giving rise to a claim for
indemnification or advance of Expenses hereunder. Notwithstanding the foregoing,
the term “Independent Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement.

     (g)
“Proceeding” means any threatened,
pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any other
proceeding, whether brought by or in the right of the Company or otherwise and
whether of a civil (including intentional or unintentional tort claims),
criminal, administrative or investigative (formal or informal) nature, including
any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.


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     Section
2. Services by
Indemnitee. Indemnitee will serve as a
director and/or officer of the Company. However, this Agreement shall not impose
any independent obligation on Indemnitee or the Company to continue Indemnitee’s
service to the Company. This Agreement shall not be deemed an employment
contract between the Company (or any other entity) and Indemnitee. 

     Section 3. General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as
provided in this Agreement and (b) otherwise to the maximum extent permitted by
the laws of the State of Maryland in effect on the Effective Date and as amended
from time to time; provided, however, that no change in the laws of the State of
Maryland shall have the effect of reducing the benefits available to Indemnitee
hereunder based on the laws of the State of Maryland as in effect on the
Effective Date. The rights of Indemnitee provided in this Section 3 shall
include, without limitation, the rights set forth in the other sections of this
Agreement, including any additional indemnification permitted by Section
2-418(g) of the Maryland General Corporation Law (the “MGCL”). 

     Section 4. Standard for
Indemnification. If, by reason of
Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a
party to any Proceeding, Indemnitee shall be indemnified against all judgments,
penalties, fines and amounts paid in settlement and all Expenses actually and
reasonably incurred by him or on his behalf in connection with any such
Proceeding unless it is established that (a) the act or omission of Indemnitee
was material to the matter giving rise to the Proceeding and (i) was committed
in bad faith or (ii) was the result of active and deliberate dishonesty, (b)
Indemnitee actually received an improper personal benefit in money, property or
services or (c) in the case of any criminal Proceeding, Indemnitee had
reasonable cause to believe that his conduct was unlawful. 

     Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of this
Agreement (other than Section 6), Indemnitee shall not be entitled to:


     (a)
indemnification hereunder if the Proceeding was
one by or in the right of the Company and Indemnitee is adjudged to be liable to
the Company;

     (b)
indemnification hereunder if Indemnitee is
adjudged to be liable on the basis that personal benefit was improperly received
in any Proceeding charging improper personal benefit to Indemnitee, whether or
not involving action in the Indemnitee’s Corporate Status; or 

     (c)
indemnification or advance of Expenses hereunder
if the Proceeding was brought by Indemnitee unless: (i) the Proceeding was
brought to enforce indemnification under this Agreement, and then only to the
extent in accordance with and as authorized by Section 12 of this Agreement, or
(ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled
to vote generally in the election of directors or of the Board of Directors or
an agreement approved by the Board of Directors to which
the Company is a party expressly provide otherwise. 

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     Section
6. Court-Ordered Indemnification.
Notwithstanding any other provision of this Agreement, a court of appropriate
jurisdiction, upon application of Indemnitee and such notice as the court shall
require, may order indemnification in the following circumstances: 

     (a)
if it determines Indemnitee is entitled to
reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order
indemnification, in which case Indemnitee shall be entitled to recover the
Expenses of securing such reimbursement; or 

     (b)
if it determines that Indemnitee is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not Indemnitee (i) has met the standards of conduct
set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for
receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the
court may order such indemnification as the court shall deem proper. However,
indemnification with respect to any Proceeding by or in the right of the Company
or in which liability shall have been adjudged in the circumstances described in
Section 2-418(c) of the MGCL shall be limited to Expenses. 

     Section 7. Indemnification for Expenses of a
Party Who is Wholly or Partly Successful. Notwithstanding
any other provision of this Agreement, and without limiting any such provision,
to the extent that Indemnitee was or is, by reason of his Corporate Status, made
a party to (or otherwise becomes a participant in) any Proceeding and is
successful, on the merits or otherwise, in the defense of such Proceeding,
Indemnitee shall be indemnified for all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all
Expenses actually and reasonably incurred by him or on his behalf in connection
with each such claim, issue or matter, allocated on a reasonable and
proportionate basis. For purposes of this Section 7 and, without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter. 

     Section 8. Advance of Expenses for a
Party. If, by reason of Indemnitee’s
Corporate Status, Indemnitee is, or is threatened to be, made a party to any
Proceeding, the Company shall, without requiring a preliminary determination of
Indemnitee’s ultimate entitlement to indemnification hereunder, advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
such Proceeding within ten days after the receipt by the Company of a statement
or statements requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and
shall include or be preceded or accompanied by a written affirmation by
Indemnitee of Indemnitee’s good faith belief that the standard of conduct
necessary for indemnification by the Company as authorized by law and by this
Agreement has been met and a written undertaking by or on behalf of Indemnitee,
in substantially the form attached hereto as Exhibit A or in such form as may be
required under applicable law as in effect at the time of the execution thereof,
to reimburse the portion of any Expenses advanced to
Indemnitee relating to claims, issues or matters in the Proceeding as to which
it shall ultimately be established that the standard of conduct has not been met
by Indemnitee and which have not been successfully resolved as described in
Section 7 of this Agreement. To the extent that Expenses advanced to Indemnitee
do not relate to a specific claim, issue or matter in the Proceeding, such
Expenses shall be allocated on a reasonable and proportionate basis. The
undertaking required by this Section 8 shall be an unlimited general obligation
by or on behalf of Indemnitee and shall be accepted without reference to
Indemnitee’s financial ability to repay such advanced Expenses and without any
requirement to post security therefor. 

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     Section
9. Indemnification and Advance of Expenses of a Witness. Notwithstanding any other provision of this Agreement, to
the extent that Indemnitee is or may be, by reason of his Corporate Status, made
a witness or otherwise asked to participate in any Proceeding, whether
instituted by the Company or any other party, and to which Indemnitee is not a
party, he shall be advanced all reasonable Expenses and indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection
therewith within ten days after the receipt by the Company of a statement or
statements requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee. 

     Section 10. Procedure for Determination of
Entitlement to Indemnification. 

     (a)
To obtain indemnification under this Agreement,
Indemnitee shall submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. Indemnitee may submit one or more
such requests from time to time and at such time(s) as Indemnitee deems
appropriate in his sole discretion. The officer of the Company receiving any
such request from Indemnitee shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification. 

     (b)
Upon written request by Indemnitee for
indemnification pursuant to Section 10(a) above, a determination, if required by
applicable law, with respect to Indemnitee’s entitlement thereto shall promptly
be made in the specific case: (i) if a Change in Control shall have occurred, by
Independent Counsel, in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee, which Independent Counsel shall be
selected by the Indemnitee and approved by the Board of Directors in accordance
with Section 2-418(e)(2)(ii) of the MGCL, which approval will not be
unreasonably withheld; or (ii) if a Change in Control shall not have occurred,
(A) by the Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors or, if such a quorum cannot be obtained, then by a
majority vote of a duly authorized committee of the Board of Directors
consisting solely of one or more Disinterested Directors, (B) if Independent
Counsel has been selected by the Board of Directors in accordance with Section
2-418(e)(2)(ii) of the MGCL and approved by the Indemnitee, which approval shall
not be unreasonably withheld, by Independent Counsel, in a written opinion to
the Board of Directors, a copy of which shall be delivered to Indemnitee or (C)
if so directed by a majority of the members of the Board of Directors, by the
stockholders of the Company. If it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made
within ten days after such determination. Indemnitee shall cooperate with the
person, persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination in the
discretion of the Board of Directors or Independent Counsel if retained pursuant
to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in
so cooperating with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company shall indemnify and
hold Indemnitee harmless therefrom. 

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     (c) The
Company shall pay the reasonable fees and expenses of Independent Counsel, if
one is appointed. 

     Section 11. Presumptions and Effect of Certain
Proceedings. 

     (a)
In making any determination with respect to
entitlement to indemnification hereunder, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 10(a) of this Agreement, and the Company shall have
the burden of proof to overcome that presumption in connection with the making
of any determination contrary to that presumption.

     (b) The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, upon a plea of nolo contendere or its
equivalent, or entry of an order of probation prior to judgment, does not create
a presumption that Indemnitee did not meet the requisite standard of conduct
described herein for indemnification. 

     (c)
The knowledge and/or actions, or failure to act,
of any other director, officer, employee or agent of the Company or any other
director, trustee, officer, partner, manager, managing member, fiduciary,
employee or agent of any other foreign or domestic corporation, partnership,
limited liability company, joint venture, trust, employee benefit plan or other
enterprise shall not be imputed to Indemnitee for purposes of determining any
other right to indemnification under this Agreement. 

     Section 12. Remedies of Indemnitee. 

     (a)
If (i) a determination is made pursuant to
Section 10(b) of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advance of Expenses is not timely
made pursuant to Section 8 of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 10(b) of
this Agreement within 60 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section
7 of this Agreement within ten days after receipt by the Company of a written
request therefor, or (v) payment of indemnification pursuant to any other
section of this Agreement or the charter or Bylaws of the Company is not made
within ten days after a determination has been made that Indemnitee is entitled
to indemnification, Indemnitee shall be entitled to an adjudication in an
appropriate court located in the State of Maryland, or
in any other court of competent jurisdiction, of his entitlement to such
indemnification or advance of Expenses. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Indemnitee shall commence a proceeding seeking an adjudication or
an award in arbitration within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 12(a);
provided, however, that the foregoing clause shall not apply to a proceeding
brought by Indemnitee to enforce his rights under Section 7 of this Agreement.
Except as set forth herein, the provisions of the laws of the State of Maryland
(without regard to its conflicts of laws rules) shall apply to any such
arbitration. The Company shall not oppose Indemnitee’s right to seek any such
adjudication or award in arbitration.

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     (b) In any
judicial proceeding or arbitration commenced pursuant to this Section 12,
Indemnitee shall be presumed to be entitled to indemnification or advance of
Expenses, as the case may be, under this Agreement and the Company shall have
the burden of proving that Indemnitee is not entitled to indemnification or
advance of Expenses, as the case may be. If Indemnitee commences a judicial
proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be
required to reimburse the Company for any advances pursuant to Section 8 of this
Agreement until a final determination is made with respect to Indemnitee’s
entitlement to indemnification (as to which all rights of appeal have been
exhausted or lapsed). The Company shall, to the fullest extent not prohibited by
law, be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 12 that the procedures and presumptions of
this Agreement are not valid, binding and enforceable and shall stipulate in any
such court or before any such arbitrator that the Company is bound by all of the
provisions of this Agreement. 

     (c)
If a determination shall have been made pursuant
to Section 10(b) of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 12, absent
a misstatement by Indemnitee of a material fact, or an omission of a material
fact necessary to make Indemnitee’s statement not materially misleading, in
connection with the request for indemnification. 

     (d)
In the event that Indemnitee, pursuant to this
Section 12, seeks a judicial adjudication of or an award in arbitration to
enforce his rights under, or to recover damages for breach of, this Agreement,
Indemnitee shall be entitled to recover from the Company, and shall be
indemnified by the Company for, any and all Expenses actually and reasonably
incurred by him in such judicial adjudication or arbitration. If it shall be
determined in such judicial adjudication or arbitration that Indemnitee is
entitled to receive part but not all of the indemnification or advance of
Expenses sought, the Expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be appropriately prorated.

     (e)
Interest shall be paid by the Company to
Indemnitee at the maximum rate allowed to be charged for judgments under the
Courts and Judicial Proceedings Article of the Annotated Code of Maryland for
amounts which the Company pays or is obligated to pay for the period commencing
with the date on which the Company was requested to advance expenses in
accordance with Section 8 of this Agreement or to make the determination of
entitlement to indemnification under Section 12(a)
above. Indemnitee requests indemnification, reimbursement or advance of any
Expenses and ending on the date such payment is made to Indemnitee by the
Company. 

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     Section
13. Defense of
the Underlying Proceeding. 

     (a)
Indemnitee shall notify the Company promptly in
writing upon being served with any summons, citation, subpoena, complaint,
indictment, request or other document relating to any Proceeding which may
result in the right to indemnification or the advance of Expenses hereunder and
shall include with such notice a description of the nature of the Proceeding and
a summary of the facts underlying the Proceeding. The failure to give any such
notice shall not disqualify Indemnitee from the right, or otherwise affect in
any manner any right of Indemnitee, to indemnification or the advance of
Expenses under this Agreement unless the Company’s ability to defend in such
Proceeding or to obtain proceeds under any insurance policy is materially and
adversely prejudiced thereby, and then only to the extent the Company is thereby
actually so prejudiced. 

     (b)
Subject to the provisions of the last sentence of
this Section 13(b) and of Section 13(c) below, the Company shall have the right
to defend Indemnitee in any Proceeding which may give rise to indemnification
hereunder; provided, however, that the Company shall notify Indemnitee of any
such decision to defend within 15 calendar days following receipt of notice of
any such Proceeding under Section 13(a) above. The Company shall not, without
the prior written consent of Indemnitee, which shall not be unreasonably
withheld or delayed, consent to the entry of any judgment against Indemnitee or
enter into any settlement or compromise which (i) includes an admission of fault
of Indemnitee, (ii) does not include, as an unconditional term thereof, the full
release of Indemnitee from all liability in respect of such Proceeding, which
release shall be in form and substance reasonably satisfactory to Indemnitee or
(iii) would impose any Expense, judgment, fine, penalty or limitation on
Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by
Indemnitee under Section 12 of this Agreement. 

     (c)
Notwithstanding the provisions of Section 13(b)
above, if in a Proceeding to which Indemnitee is a party by reason of
Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon
an opinion of counsel approved by the Company, which approval shall not be
unreasonably withheld, that he may have separate defenses or counterclaims to
assert with respect to any issue which may not be consistent with other
defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon
an opinion of counsel approved by the Company, which approval shall not be
unreasonably withheld, that an actual or apparent conflict of interest or
potential conflict of interest exists between Indemnitee and the Company, or
(iii) if the Company fails to assume the defense of such Proceeding in a timely
manner, Indemnitee shall be entitled to be represented by separate legal counsel
of Indemnitee’s choice, subject to the prior approval of the Company, which
shall not be unreasonably withheld, at the expense of the Company. In addition,
if the Company fails to comply with any of its obligations under this Agreement
or in the event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any Proceeding to deny or to
recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s
choice, subject to the prior approval of the Company,
which shall not be unreasonably withheld, at the expense of the Company (subject
to Section 12(d) of this Agreement), to represent Indemnitee in connection with
any such matter. 

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     Section
14. Non-Exclusivity; Survival of Rights; Subrogation. 

     (a)
The rights of indemnification and advance of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the charter or Bylaws of the Company, any agreement or a resolution of the
stockholders entitled to vote generally in the election of directors or of the
Board of Directors, or otherwise. Unless consented to in writing by Indemnitee,
no amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal, regardless of whether a claim with
respect to such action or inaction is raised prior or subsequent to such
amendment, alteration or repeal. No right or remedy herein conferred is intended
to be exclusive of any other right or remedy, and every other right or remedy
shall be cumulative and in addition to every other right or remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion of any right or remedy hereunder, or otherwise, shall not prohibit the
concurrent assertion or employment of any other right or remedy. 

     (b)
In the event of any payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights. 

     Section 15. Insurance. The Company will use its reasonable best efforts to acquire directors
and officers liability insurance, on terms and conditions deemed appropriate by
the Board of Directors, with the advice of counsel, covering Indemnitee or any
claim made against Indemnitee by reason of his Corporate Status and covering the
Company for any indemnification or advance of Expenses made by the Company to
Indemnitee for any claims made against Indemnitee by reason of his Corporate
Status. Without in any way limiting any other obligation under this Agreement,
the Company shall indemnify Indemnitee for any payment by Indemnitee arising out
of the amount of any deductible or retention and the amount of any excess of the
aggregate of all judgments, penalties, fines, settlements and Expenses incurred
by Indemnitee in connection with a Proceeding over the coverage of any insurance
referred to in the previous sentence. The purchase, establishment and
maintenance of any such insurance shall not in any way limit or affect the
rights or obligations of the Company or Indemnitee under this Agreement except
as expressly provided herein, and the execution and delivery of this Agreement
by the Company and the Indemnitee shall not in any way limit or affect the
rights or obligations of the Company under any such insurance policies. If, at
the time the Company receives notice from any source of a Proceeding to which
Indemnitee is a party or a participant (as a witness or otherwise) the Company
has director and officer liability insurance in effect, the Company shall give
prompt notice of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies. 

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     Section
16. Coordination of Payments. The Company
shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and
to the extent that Indemnitee has otherwise actually received such payment under
any insurance policy, contract, agreement or otherwise. 

     Section 17. Reports to
Stockholders. To the extent required by the
MGCL, the Company shall report in writing to its stockholders the payment of any
amounts for indemnification of, or advance of Expenses to, Indemnitee under this
Agreement arising out of a Proceeding by or in the right of the Company with the
notice of the meeting of stockholders of the Company next following the date of
the payment of any such indemnification or advance of Expenses or prior to such
meeting. 

     Section 18. Duration of Agreement; Binding
Effect. 

     (a)
This Agreement shall continue until and terminate
on the later of (i) ten years after the date that Indemnitee shall have ceased
to serve as a director, officer, employee or agent of the Company or as a
director, trustee, officer, partner, manager, managing member, fiduciary,
employee or agent of any other foreign or domestic corporation, real estate
investment trust, partnership, limited liability company, joint venture, trust,
employee benefit plan or other enterprise that such person is or was serving in
such capacity at the request of the Company and (ii) the date that Indemnitee is
no longer subject to any actual or possible Proceeding due to the lapse of all
applicable statutes of limitations or otherwise (including any rights of appeal
thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of
this Agreement).

     (b)
The indemnification and advance of Expenses
provided by, or granted pursuant to, this Agreement shall be binding upon and be
enforceable by the parties hereto and their respective successors and assigns
(including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of the
Company), shall continue as to an Indemnitee who has ceased to be a director,
officer, employee or agent of the Company or a director, trustee, officer,
partner, manager, managing member, fiduciary, employee or agent of any other
foreign or domestic corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise that such person is or
was serving in such capacity at the request of the Company, and shall inure to
the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors
and administrators and other legal representatives. 

     (c)
The Company shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise) to
all, substantially all or a substantial part, of the business and/or assets of
the Company, by written agreement in form and substance satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. 

     (d)
The Company and Indemnitee agree herein that a
monetary remedy for breach of this Agreement, at some later date, may be
inadequate, impracticable and difficult of proof, and further agree that such
breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto
agree that Indemnitee may enforce this Agreement by seeking injunctive relief
and/or specific performance hereof, without any
necessity of showing actual damage or irreparable harm and that by seeking
injunctive relief and/or specific performance, Indemnitee shall not be precluded
from seeking or obtaining any other relief to which he may be entitled.
Indemnitee shall further be entitled to such specific performance and injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions, without the necessity of posting bonds or other
undertakings in connection therewith. The Company acknowledges that, in the
absence of a waiver, a bond or undertaking may be required of Indemnitee by a
court, and the Company hereby waives any such requirement of such a bond or
undertaking. 

- 10 - 







     Section
19. Severability. If any provision or
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, without
limitation, each portion of any Section, paragraph or sentence of this Agreement
containing any such provision held to be invalid, illegal or unenforceable that
is not itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby and shall remain enforceable to the fullest extent
permitted by law; (b) such provision or provisions shall be deemed reformed to
the extent necessary to conform to applicable law and to give the maximum effect
to the intent of the parties hereto; and (c) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of any
Section, paragraph or sentence of this Agreement containing any such provision
held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested thereby. 

     Section 20. Identical Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall for all purposes be deemed to be an original but all of
which together shall constitute one and the same Agreement. One such counterpart
signed by the party against whom enforceability is sought shall be sufficient to
evidence the existence of this Agreement. 

     Section 21. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof. 

     Section 22. Modification and
Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.


     Section 23. Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by
hand and receipted for by the party to whom said notice or other communication
shall have been directed or (ii) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed: 

     (a)
If to Indemnitee, to the address set forth on the
signature page hereto. 

- 11 - 







     (b) If to
the Company, to: 

                    General
Counsel 
                    Two Bridge Avenue, Suite 322
                    Red
Bank, New Jersey 07701-1106
                    Facsimile:
(732) 978-7507 

or to such other address as may have been
furnished in writing to Indemnitee by the Company or to the Company by
Indemnitee, as the case may be. 

     Section 24. Governing Law. The parties agree that this Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Maryland, without regard to its conflicts of laws rules. 

     Section 25. Miscellaneous. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate. 

[SIGNATURE PAGE FOLLOWS] 

- 12 - 







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



	ZAIS FINANCIAL CORP.
	 
	 
	By:  	   /s/ Michael Szymanski
	Name:	Michael Szymanski
	Title:	Chief Executive Officer and President
	 
	 
	INDEMNITEE
	 
	 
	          /s/
      James Zinn
	Name:	James Zinn
	Address:     	
	 	




[Signature Page to James Zinn Indemnification Agreement] 







EXHIBIT A 

FORM OF UNDERTAKING TO REPAY EXPENSES
ADVANCED 

The Board of Directors of ZAIS Financial
Corp. 

Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen: 

     This
undertaking is being provided pursuant to that certain Indemnification Agreement
dated the 7th day of February, 2013, by and between ZAIS Financial Corp., a
Maryland corporation (the “Company”), and the undersigned Indemnitee (the
“Indemnification Agreement”), pursuant to
which I am entitled to advance of Expenses in connection with [Description of Proceeding]
(the “Proceeding”). 

     Terms used herein and not otherwise
defined shall have the meanings specified in the Indemnification Agreement.


     I am subject to the Proceeding by
reason of my Corporate Status or by reason of alleged actions or omissions by me
in such capacity. I hereby affirm my good belief that at all times, insofar as I
was involved as [a director] [an officer]
of the Company, in any of the facts or events
giving rise to the Proceeding, I (1) did not act with bad faith or active or
deliberate dishonesty, (2) did not receive any improper personal benefit in
money, property or services and (3) in the case of any criminal proceeding, had
no reasonable cause to believe that any act or omission by me was unlawful.


     In consideration of the advance of
Expenses by the Company for reasonable attorneys’ fees and related Expenses
incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree
that if, in connection with the Proceeding, it is established that (1) an act or
omission by me was material to the matter giving rise to the Proceeding and (a)
was committed in bad faith or (b) was the result of active and deliberate
dishonesty or (2) I actually received an improper personal benefit in money,
property or services or (3) in the case of any criminal proceeding, I had
reasonable cause to believe that the act or omission was unlawful, then I shall
promptly reimburse the portion of the Advanced Expenses relating to the claims,
issues or matters in the Proceeding as to which the foregoing findings have been
established.

     IN
WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ___
day of ____________________, 20____.



	 	 



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