INDEMNIFICATION
AGREEMENT 

     THIS INDEMNIFICATION AGREEMENT
(“Agreement”) is made and entered into as of the 20th day of March, 2013,
by and between ZAIS Financial Corp., a Maryland corporation (the
“Company”),
and Nisha Motani (“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 her 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 her or on her 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 her 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 her
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 her or on her 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 her or on her
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 her 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, she shall be
advanced all reasonable Expenses and indemnified against all Expenses actually
and reasonably incurred by her or on her 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 her 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 her entitlement to such indemnification or advance of
Expenses. Alternatively, Indemnitee, at her 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 her 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 her 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 her 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 she 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 her 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 her 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 her 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 her 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 she 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/
      Nisha Motani
	
      Name:
	Nisha
      Motani
	
	Address:     	
      




[Signature Page to Nisha Motani 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 ___ day of _______,
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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