Exhibit
10.22


**EMPLOYMENT
AGREEMENT**
  This
EMPLOYMENT AGREEMENT is made and entered into this 24th day of March, 2004,
between Capital Lease Funding, Inc., a Maryland corporation (the “Company”), and
[Paul H. McDowell/William R. Pollert/Shawn P. Seale/Robert C. Blanz/Michael J.
Heneghan] (the “Executive”).
   **RECITALS**
  **WHEREAS,** the
Company desires to employ the Executive, and the Executive desires to be
employed by the Company, all on the terms and subject to the conditions set
forth herein; and
  **WHEREAS,** the
Executive is willing to enter into this Agreement in consideration of the
benefits which the Executive will receive under the terms hereof.
  **NOW,
THEREFORE,** in
consideration of the mutual covenants contained herein, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
   1. **Term** . The
employment of the Executive by the Company will commence on the date of closing
of the Company’s initial public offering of common shares (the “Effective Date”)
and end on December 31, 2006 (the “Initial Term”), and shall be automatically
extended for one additional year each December 31 following the Effective Date,
unless at least 90 days immediately preceding such December 31, the Company or
the Executive provides written notice to the other that it does not wish to
extend this Agreement. The Initial Term, together with any such extensions,
shall be referred to herein as the “Employment Period.”
   2. **Position
and Duties** **.** The
Executive shall be employed by the Company as [Chief Executive
Officer/President/Senior Vice President, Chief Financial Officer and
Treasurer/Senior Vice President and Chief Investment Officer/Senior Vice
President and General Counsel]. During the Employment Period, the Executive
shall perform such duties on behalf of the Company as are normally associated
with his position and such other duties as may be assigned by the Board of
Directors from time to time. The Executive shall also serve without additional
compensation in such other offices of the Company or its subsidiaries to which
the Executive may be elected or appointed by the Board of
Directors.
   3. **Extent
of Services** **.**
  (a) During
the Employment Period, the Executive shall devote [substantially all] [the
substantial majority of - Pollert only] his business time, energy, skill and
best efforts to the performance of his duties hereunder in a manner that will
faithfully and diligently further the business and interests of the Company.
Notwithstanding the foregoing, the Executive may (i) make
any investment where he is not obligated or required to, and shall not in fact,
devote significant managerial efforts, (ii) participate in charitable,
academic or community activities, and in trade or professional organizations, or
(iii) hold directorships in other companies consistent with the Company’s
conflict of interest policies and corporate governance guidelines as in effect
from time to time .
  
 (b) Corporate
Opportunities . The
Executive agrees that he will not take personal advantage of any business
opportunity which arises during his employment with the Company and which may be
of benefit to the Company unless all material facts regarding such opportunity
are promptly reported by the Executive to the Board of Directors for
consideration by the Company and the disinterested members of the Board of
Directors decide to reject the opportunity.
  4.**** Compensation
and Related Matters.
  (a) Annual
Base Salary . During
the Employment Period, the Company shall pay to the Executive an annual base
salary of [McDowell, $300,000, Pollert, $200,000, Seale, $265,000, Blanz,
$200,000, and Heneghan, $170,000] (less all applicable deductions, the “Base
Salary”) for all services rendered by the Executive to the Company. The Base
Salary shall be payable in equal installments in accordance with the practice of
the Company in effect from time to time for the payment of salaries to officers
of the Company. The Executive’s Base Salary shall be reviewed annually by the
Compensation Committee of the Board of Directors (the “Compensation Committee”).
During the Employment Period and as of each anniversary of the Effective Date,
the Base Salary shall be increased by (i) the product of (A) the Base Salary as
then in effect and (B) the percentage increase in the Consumer Price Index for
the prior calendar year (as defined in Section 14(c)) and (ii) the amount, if
any, determined by the Compensation Committee.
  (b) Annual
Bonuses . The
Executive shall be eligible for an annual bonus (“Annual Bonus”) for each
calendar year, payable no later than March 31 of the following year, based on
his performance and the performance of the Company during such period as
determined by the Compensation Committee. During the Employment Period, there
shall be no maximum limit on the Annual Bonus awardable to the Executive. During
the Initial Term, the Annual Bonus shall not be less than [McDowell, $150,000,
Pollert, $75,000, Seale, $85,000, Blanz, $100,000 and Heneghan,
$80,000].
  (c) Restricted
Stock . The
Executive shall initially be granted under the stock plan of the Company
[McDowell, 49,625, Pollert, 49,286, Seale, 49,286, Blanz, 26,172 and Heneghan,
18,695] restricted common shares of the Company. The grant date shall be
immediately prior to the effective time of the Company’s initial public
offering.
  (d) Expenses . The
Company shall pay or reimburse the Executive for all reasonable expenses
actually paid or incurred by the Executive during the Employment Period in the
performance of the Executive’s duties under this Agreement in accordance with
the Company’s employee business expense reimbursement policies in effect from
time to time.
  (e) Other
Benefits . During
the Employment Period, the Executive shall be eligible to receive such employee
benefits including, without limitation, participation in the Company’s
retirement and welfare plans, as the Company may provide from time to time to
similarly situated employees, and such other benefits as the Board of Directors
may from time to time establish for the Company’s executive officers. In
addition, the Company shall endeavor to provide at its sole expense a whole life
insurance policy or policies to the Executive with a death benefit aggregating
at least [$2 million for McDowell, $1.5 million for Seale, $1 million Pollert,
$750 thousand Blanz and $500 thousand Heneghan], as well as disability insurance
providing for income replacement upon termination of at least 95% of the Base
Salary, subject to such insurance being available at reasonable cost. The
Company agrees to indemnify the Executive for any income tax he incurs as a
result of the Company’s payment of these premiums. The Company also agrees to
reimburse the Executive for the cost of tax preparation and financial planning
up to $10,000 annually and indemnify the Executive for any income tax he incurs
as a result of reimbursement of these costs. [For McDowell and Seale
only]
  2
 (f) Vacations . The
Executive shall be entitled to at least five (5) weeks vacation in each calendar
year, together with leave of absence and leave for illness or temporary
disability in accordance with the policies of the Company in effect from time to
time.
  5. **Termination** **.** Each
party shall have the right to terminate the Executive’s employment hereunder
before the Employment Period expires to the extent, and subject to the
provisions, set forth in this Section 5:
  (a) Death . The
Executive’s employment hereunder shall terminate upon his death.
  (b) Disability . The
Company shall have the right to terminate the Executive’s employment if the
Board of Directors determines that the Executive is unable to perform his duties
by reason of Disability. As used herein, “Disability” shall mean the inability
of the Executive due to physical or mental illness or injury to perform his
duties hereunder for any period of 180 consecutive days and the return of the
Executive to his duties for periods of 15 days or less shall not interrupt such
180 day period.
  (c) Cause . The
Company shall have the right to terminate the Executive’s employment at any time
upon delivery of a Notice of Termination (as defined in subsection (f) below)
for Cause (as defined below) to Executive, such employment to terminate
immediately upon delivery of such notice unless otherwise specified by the Board
of Directors. For purposes of this Agreement, the term “Cause” means that the
Executive: (i) has been convicted of, or entered a plea of guilty or
“ *nolo
contendere* ” to, a
felony (excluding any felony relating to the negligent operation of an
automobile), (ii) has intentionally failed to substantially perform (other
than by reason of illness or temporary disability) his reasonably assigned
material duties hereunder, (iii) has engaged in willful misconduct in the
performance of his duties or (iv) has materially breached any non-competition or
non-disclosure agreement in effect between the Executive and the Company,
including such agreements in this Agreement.
  (d) Without
Cause . The
Company may at any time terminate the Executive’s employment
hereunder.
  (e) Termination
by the Executive .
  (i) The
Executive may terminate his employment hereunder (A) for Good Reason, or (B)
without Good Reason at any time after the date hereof by giving thirty (30)
days’ prior notice of his intention to terminate.
  3
 (ii) For
purposes of this Agreement, “Good Reason” shall mean (A) any reduction by the
Company in the Base Salary, (B) a material reduction in the Executive’s titles,
duties and responsibilities, or the assignment to the Executive of any duties
materially inconsistent with the Executive’s position with the Company without
the consent of the Executive, (C) a requirement by the Company that the
Executive relocate to a location other than the New York, New York metropolitan
area, or (D) a material breach of this Agreement by the Company, which, with
respect to (B) and (D), has not been cured within thirty (30) days after written
notice of such action or breach has been given by the Executive to the
Company.
  (f) Notice
of Termination . Any
termination of the Executive’s employment by the Company or by the Executive
(other than termination pursuant to subsection (a) hereof) shall be communicated
by written Notice of Termination to the other party hereto in accordance with
Section 14(a). For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.
  (g) Date
of Termination . The
“Date of Termination” shall mean (i) if the Executive’s employment is terminated
by his death, the date of his death, (ii) if the Executive’s employment is
terminated pursuant to subsection (b) or (c) above, upon delivery of the Notice
of Termination unless otherwise specified in such notice, and (iii) if the
Executive’s employment is terminated for any other reason, the date thirty (30)
days following the date on which a Notice of Termination is given.
  6.**** Compensation
Upon Termination, Death or During Disability.
  (a) Death . If the
Executive’s employment is terminated by his death, the Company shall, within ten
(10) days following the Date of Termination, pay any earned and accrued but
unpaid installment of Base Salary through the Date of Termination at the rate
then in effect and any other accrued and unpaid amounts due to the Executive
under Section 4, together with any other amounts to which the Executive is
entitled pursuant to death benefit plans, programs and policies. In addition,
subject to compliance with Section 6(f), upon the Executive’s termination, (i)
the Executive’s estate shall be paid a Pro rata Portion of the Executive’s
Maximum Bonus (each as defined below), and (ii) all of the Executive’s
outstanding options, restricted share awards and any other equity rights granted
by the Company to the Executive shall continue to be governed by the applicable
grant agreement and related plan. For purposes of this Agreement, (i) “Maximum
Bonus” means the highest aggregate Annual Bonus or incentive payment paid by the
Company (or any predecessor of the Company) to the Executive for any of the
three calendar years prior to the year the Date of Termination occurs and (ii)
the “Pro rata Portion” of the Executive’s Maximum Bonus shall be calculated by
multiplying the Maximum Bonus by a fraction, the numerator of which shall be the
number of calendar days elapsed in the year in which the Date of Termination
occurs, up to and including the Date of Termination, and the denominator of
which shall be 365.
  (b) Disability . During
any period that the Executive fails to perform his duties hereunder as a result
of his incapacity due to a physical or mental illness, the Executive shall
continue to receive his Base Salary at the rate then in effect for such period
(and shall not receive his disability insurance benefits) until his employment
is terminated pursuant to Section 5(b) hereof, and upon the Date of Termination,
the Company shall, within ten (10) days of such termination, pay the Executive
any earned and accrued but unpaid installment of Base Salary through the Date of
Termination at the rate then in effect and any other accrued and unpaid amounts
due to the Executive under Section 4. In addition, subject to compliance with
Section 6(f), upon the Executive’s termination, (i) the Executive shall be paid
a Pro rata Portion of his Maximum Bonus and (ii) all of the Executive’s
outstanding options, restricted share awards and any other equity rights granted
by the Company to the Executive shall continue to be governed by the applicable
grant agreement and related plan.
  4
 (c) Cause
or other than Good Reason . If the
Executive’s employment shall be terminated by the Company for Cause or by the
Executive for other than Good Reason, the Company shall, within ten (10) days
following the Date of Termination, pay the Executive any earned and accrued but
unpaid installment of Base Salary through the Date of Termination at the rate
then in effect at the time Notice of Termination is given and any other accrued
and unpaid amounts due to the Executive under Section 4, and the Company shall
have no further obligations to the Executive under this Agreement. All of the
outstanding options, restricted share awards and any other equity rights granted
by the Company to the Executive shall continue to be governed by the applicable
grant agreement and related plan.
  (d) Decision
by the Company not to Extend the Agreement . In the
event the Company determines not to extend this Agreement by giving written
notice in accordance with Section 1, the Executive shall be entitled to receive,
at the end of the Employment Period and subject to compliance with Section 6(f),
a lump sum payment equal to his annual Base Salary, at the rate in effect on the
last day of the Employment Period.
  (e) Termination
by the Company without Cause or by the Executive for Good Reason . If the
Company shall terminate the Executive’s employment other than for death,
Disability pursuant to Section 5(b) or Cause (and other than in connection with
a decision not to extend the Agreement), or the Executive shall terminate his
employment for Good Reason, then the Company shall, within ten (10) days of the
Date of Termination, pay the Executive any earned and accrued but unpaid
installment of Base Salary through the Date of Termination at the rate then in
effect and any other accrued and unpaid amounts due to the Executive under
Section 4. In addition, subject to compliance with Section 6(f), upon the
Executive’s termination, the Executive shall be entitled to
receive:
  (i) a lump
sum payment equal to [Pollert, Blanz and Heneghan two (2)][McDowell and Seale
three (3)] times his Base Salary, at the rate in effect on the Date of
Termination;
  (ii) a lump
sum payment equal to [Pollert, Blanz and Heneghan two (2)][McDowell and Seale
three (3)] times his average Annual Bonus for the three (3) years preceding the
year in which the Date of Termination occurs;
  5
 (iii) a Pro
rata Portion of his Maximum Bonus;
  (iv) continued
payment by the Company of his life, health and disability insurance coverage
during the twenty-four (24) month period following the Date of Termination to
the same extent that the Company paid for such coverage immediately prior to the
Date of Termination, subject to the eligibility requirements and other terms and
conditions of such insurance coverage, provided that if any such insurance
coverage shall become unavailable during such twenty-four (24) month period, the
Company thereafter shall be obliged only to pay to the Executive an amount
which, after reduction for income and employment taxes, is equal to the employer
premiums for such insurance for the remainder of such severance period;
and
  (v) all of
the outstanding options, restricted share awards and any other equity rights
granted by the Company to the Executive shall continue to be governed by the
applicable grant agreement and related plan.
  (f) Release .
Payments by the Company required under this Section 6 following termination or
expiration of the Executive’s employment for any reason (other than payments of
accrued but unpaid amounts) shall be conditioned on and shall not be payable
until receipt of a written release in form and substance reasonably acceptable
to the Company of any and all past, present or future claims that the Executive
(or, in the event of his death, his estate) may have against the Company or any
of its affiliates and any of their respective officers, directors, members or
managers. The Company agrees to provide the Executive with the release within 15
days of (i) the Date of Termination or (ii) the last day of the Employment
Period.
  7. **Change
in Control** **.**
  (a) Change
in Control . For
purposes of this Agreement, a “Change in Control” shall mean any of the
following events:
  (i) the
ownership or acquisition (whether by a merger or otherwise) by any Person (other
than a Qualified Affiliate), in a single transaction or a series of related or
unrelated transactions, of Beneficial Ownership of more than fifty percent (50%)
of the Company’s then outstanding voting securities (the “Outstanding Voting
Securities”);
  (ii) the
merger or consolidation of the Company with or into any other Person (other than
a Qualified Affiliate), if, immediately following the effectiveness of such
merger or consolidation, Persons who did not Beneficially Own Outstanding Voting
Securities immediately before the effectiveness of such merger or consolidation
directly or indirectly Beneficially Own more than fifty percent (50%) of the
outstanding shares of voting stock of the surviving entity of such merger or
consolidation (including for such purpose in both the numerator and denominator,
shares of voting stock issuable upon the exercise of then outstanding rights
(including conversion rights), options or warrants) (“Resulting Voting
Securities”), provided that, for purposes of this subsection, if a Person who
Beneficially Owned Outstanding Voting Securities immediately before the merger
or consolidation Beneficially Owns a greater number of the Resulting Voting
Securities immediately after the merger or consolidation than the number the
Person received solely as a result of the merger or consolidation, that greater
number will be treated as held by a Person who did not Beneficially Own
Outstanding Voting Securities before the merger or consolidation, and provided
further that such merger or consolidation would also constitute a Change in
Control if it would satisfy the foregoing test if rights, options and warrants
were not included in the calculation;
  6
 (iii) any one
or a series of related sales or conveyances to any Person or Persons (including
a liquidation) other than any one or more Qualified Affiliates of all or
substantially all of the assets of the Company;
  (iv) the
complete liquidation or dissolution of the Company; or
  (v) Incumbent
Directors cease to be a majority of the members of the Board of Directors, where
an “Incumbent Director” is (1) an individual who is a member of the Board of
Directors on the Effective Date or (2) any new director whose appointment
by the Board of Directors was approved by a majority of the persons who were
already Incumbent Directors at the time of such appointment, election or
approval, other than any individual who assumes office initially as a result of
an actual or threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board of Directors or as a result of
an agreement to avoid or settle such a contest or solicitation.
  (b) Certain
Benefits upon a Change in Control . In the
event of a Change in Control, all of the Executive’s outstanding options,
restricted share awards and any other equity rights granted by the Company to
the Executive shall continue to be governed by the applicable grant agreement
and related plan.
  (c) Termination
of Executive . If (i)
there is a Change in Control during the Employment Period, and within 12 months
following the Change in Control, the Company (or its successor) terminates the
Executive’s employment without Cause or the Executive terminates his employment
for Good Reason, (ii) the Company terminates the Executive’s employment without
Cause while the Company is negotiating a transaction that reasonably could
result in a Change in Control, or (iii) the Company terminates the Executive’s
employment without Cause and a Change in Control occurs within three (3) months
following the Date of Termination, the Executive shall be entitled to receive
the items referenced in Section 6(e)(i) through 6(e)(iv) (collectively, the
“Control Change Severance Payment”).
  (d) Additional
Payments by the Company .
  (i) In the
event that any Control Change Severance Payment or other benefit payable to the
Executive (under this Agreement or otherwise), shall (1) constitute
“parachute payments” within the meaning of Section 280G (as it may be
amended or replaced) of the Internal Revenue Code (the “Code”) (“Parachute
Payments”) and (2) be subject to the excise tax imposed by
Section 4999 (as it may be amended or replaced) of the Code (“the Excise
Tax”), then the Company shall pay to the Executive an additional amount (the
“Gross-Up Amount”) such that the net benefits retained by the Executive after
the deduction of the Excise Tax (including interest and penalties) and any
federal, state or local income and employment taxes (including interest and
penalties) upon the Gross-Up Amount shall be substantially equal to the benefits
that would have been delivered hereunder had the Excise Tax not been applicable
and the Gross-Up Amount not been paid.
  7
 (ii) For
purposes of determining the Gross-Up Amount, the Executive shall be deemed
to pay federal, state and local income taxes at the highest marginal rate of
taxation for the Executive’s taxable year in which the Parachute Payments are
includable in the Executive’s income for purposes of federal, state and local
income taxation.
  (iii) The
determination of whether the Excise Tax is payable, the amount thereof, and the
amount of any Gross-Up Amount shall be made in writing in good faith by a
nationally recognized independent certified public accounting firm selected by
the Company and approved by the Executive, such approval not to be unreasonably
withheld (the “Accounting Firm”). If such determination is not finally accepted
by the Internal Revenue Service (or state or local revenue authorities) on
audit, then appropriate adjustments shall be computed based upon the amount of
Excise Tax and any interest or penalties so determined; provided, however, that
the Executive in no event shall owe the Company any interest on any portion of
the Gross-Up Amount that is returned to the Company. For purposes of making the
calculations required by this Section 7(d)(iii), to the extent not otherwise
specified herein, reasonable assumptions and approximations may be made with
respect to applicable taxes and reasonable, good faith interpretations of the
Code may be relied upon. The Company and the Executive shall furnish such
information and documents as may be reasonably requested in connection with the
performance of the calculations under this Section 7(d)(iii). The Company shall
bear all costs incurred in connection with the performance of the calculations
contemplated by this Section 7(d)(iii). The Company shall pay the Gross-Up
Amount to the Executive no later than sixty (60) days following receipt of the
Accounting Firm’s determination of the Gross-Up Amount.
  (e) Definitions . For
purposes of this Agreement, the following definitions shall apply:
  (i) “Beneficial
Ownership,” “Beneficially Owned” and “Beneficially Owns” shall have the meanings
provided in Exchange Act Rule 13d-3;
  (ii) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended;
  (iii) “Person”
shall mean any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act), including any natural person,
corporation, trust, association, company, partnership, joint venture, limited
liability company, legal entity of any kind, government, or political
subdivision, agency or instrumentality of a government, as well as two or more
Persons acting as a partnership, limited partnership, syndicate or other group
for the purpose of acquiring, holding or disposing of the Company’s securities;
and
  (iv) “Qualified
Affiliate” shall mean (i) any directly or indirectly wholly owned subsidiary of
the Company, (ii) any employee benefit plan (or related trust) sponsored or
maintained by the Company or by any entity controlled by the Company, or (iii)
any Person controlled by the Executive or one or more individuals who are then
the Company’s Chief Executive Officer or any other named executive officer (as
defined in Item 402 of Regulation S-K under the Securities Act of 1933) of the
Company as indicated in its most recent securities filing made before the date
of the transaction. For purposes of this definition, “controlled by” shall
mean having possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise .
  8
 8.**** **Confidentiality.**
  (a) Definition
of Proprietary Information . The
Executive acknowledges that he may be furnished or may otherwise receive or have
access to confidential information which relates to the Company’s past, present
or future business activities, strategies, services or products, research and
development; financial analysis and data; improvements, inventions, processes,
techniques, designs or other technical data; profit margins and other financial
information; fee arrangements; terms and contents of loans, leases, asset
management agreements and other contracts; borrower, tenant and vendor lists or
other compilations for marketing or development; confidential personnel and
payroll information; or other information regarding administrative, management,
financial, marketing, lending, leasing or sales activities of the Company, or of
a third party which provided proprietary information to the Company on a
confidential basis. All such information, including any materials or documents
containing such information, shall be considered by the Company and the
Executive as proprietary and confidential (the “Proprietary
Information”).
  (b) Exclusions .
Notwithstanding the foregoing, Proprietary Information shall not include
information in the public domain not as a result of a breach of any duty by the
Executive or any other person.
  (c) Obligations . Both
during and after the Employment Period, the Executive agrees to preserve and
protect the confidentiality of the Proprietary Information and all physical
forms thereof, whether disclosed to him before this Agreement is signed or
afterward. In addition, both during and after the Employment Period, the
Executive shall not (i) disclose or disseminate the Proprietary Information to
any third party, including employees of the Company (or their affiliates)
without a legitimate business need to know, (ii) remove the Proprietary
Information from the Company’s premises without a valid business purpose, or
(iii) use the Proprietary Information for his own benefit or for the benefit of
any third party.
  (d) Return
of Proprietary Information. The
Executive acknowledges and agrees that all the Proprietary Information used or
generated during the course of working for the Company is the property of the
Company. The Executive agrees to deliver to the Company all documents and other
tangibles (including diskettes and other storage media) containing the
Proprietary Information at any time upon request by the Board of Directors
during his employment and immediately upon termination of his
employment.
  9
 9. **Non-Competition.**
  (a) Restriction
on Competition . During
the Employment Period and for twelve (12) months thereafter or following the
Date of Termination (the “Restricted Period”), the Executive agrees not to
engage, directly or indirectly, as an owner, director, trustee, manager, member,
employee, consultant, partner, principal, agent, representative, stockholder, or
in any other individual, corporate or representative capacity, in any of the
following: (i) any public or private specialty finance company focused on
financing and investing in net leased commercial real estate or (ii) any
other business that is substantially similar to the business of the Company
during the Employment Period. Notwithstanding the foregoing, the Executive shall
not be deemed to have violated this Section 9(a) solely by reason of his passive
ownership of 1% or less of the outstanding stock of any publicly traded
corporation or other entity.
  (b) Non-Solicitation
of Clients . During
the Restricted Period, the Executive agrees not to solicit, directly or
indirectly, on his own behalf or on behalf of any other Person, any client of
the Company to whom the Company had provided services at any time during the
Executive’s employment with the Company in any line of business that the Company
conducts as of the termination of such Executive’s employment or that the
Company is actively soliciting, for the purpose of marketing or providing any
service competitive with any service then offered by the Company. In addition,
during the Restricted Period, the Executive agrees not to encourage any client
of the Company as of the termination of such Executive’s employment to reduce
its patronage to the Company.
  (c) Non-Solicitation
of Employees . During
the Restricted Period, the Executive agrees that he will not, directly or
indirectly, hire or attempt to hire or cause any Person, other than an affiliate
of the Company, to hire any person who is then or was at any time during the
preceding six (6) months an employee of the Company.
  (d) Acknowledgement . The
Executive acknowledges that he will acquire much Proprietary Information
concerning the past, present and future business of the Company as the result of
his employment, as well as access to the relationships between the Company and
its clients and employees. The Executive further acknowledges that the business
of the Company is very competitive and that competition by him in that business
during his employment, or after his employment terminates, would severely injure
the Company. The Executive understands and agrees that the restrictions
contained in this Section 9 are reasonable and are required for the Company’s
legitimate protection, and do not unduly limit his ability to earn a
livelihood.
  (e) Rights
and Remedies upon Breach . The
Executive acknowledges and agrees that any breach by him of any of the
provisions of Sections 8 and 9 (the “Restrictive Covenants”) would result in
irreparable injury and damage for which money damages would not provide an
adequate remedy. Therefore, if the Executive breaches, or threatens to commit a
breach of, any of the provisions of the Restrictive Covenants, the Company and
its affiliates shall have the following rights and remedies, each of which
rights and remedies shall be independent of the other and severally enforceable,
and all of which rights and remedies shall be in addition to, and not in lieu
of, any other rights and remedies available to the Company and its affiliates,
under law or in equity (including, without limitation, the recovery of
damages):
  10
 (i) the right
and remedy to have the Restrictive Covenants specifically enforced (without
posting bond and without the need to prove damages) by any court of competent
jurisdiction, including, without limitation, the right to an entry against the
Executive of restraining orders and injunctions (preliminary, mandatory,
temporary and permanent) against violations, threatened or actual, and whether
or not then continuing, of such covenants; and
  (ii) the right
and remedy to require the Executive to account for and pay over to the Company
and its affiliates all compensation, profits, monies, accruals, increments or
other benefits (collectively, “Benefits”) derived or received by him as the
result of any transactions constituting a breach of the Restrictive Covenants,
and the Executive shall account for and pay over such Benefits to the Company
and, if applicable, its affected affiliates.
  (f) If any
court or other decision-maker of competent jurisdiction determines that any of
the Restrictive Covenants, or any part thereof, is unenforceable because of the
duration, scope of activities or geographical scope of such provision, then,
after such determination has become final and unappealable, the duration or
scope of such provision, as the case may be, shall be reduced so that such
provision becomes enforceable and, in its reduced form, such provision shall
then be enforceable and shall be enforced.
  10. **Executive
Representation** **.** The
Executive represents and warrants to the Company that he is not now under any
obligation of a contractual or other nature to any person, business or other
entity which is inconsistent or in conflict with this Agreement or which would
prevent him from performing his obligations under this Agreement.
   11. **Continued
Performance** **.** Provisions of this Agreement shall survive any termination or expiration of this
Agreement if so provided herein or if necessary or desirable fully to accomplish
the purposes of such provisions, including, without limitation, the obligations
of the Executive under the terms and conditions of Sections 8 and 9. Any
obligation of the Company to make payments to or on behalf of the Executive
under Section 6 is expressly conditioned upon the Executive’s continued
performance of the Executive’s obligations under Sections 8 and 9 for the time
periods stated in Sections 8 and 9. The Executive recognizes that, except to the
extent, if any, provided in Section 6, the Executive will earn no compensation
from the Company after the Date of Termination or expiration of this
Agreement.
  12. **Arbitration** **.**
  (a) Except as
provided in Section 12(b), any disputes between the Company and the Executive in
any way concerning the Executive’s employment, the termination of his
employment, this Agreement or its enforcement shall be submitted at the
initiative of either party to mandatory arbitration in New York, New York before
a single arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association, or its successor, then in effect. All proceedings under
this Section 12(a) shall be maintained in confidence by the Company and the
Executive. The decision of the arbitrator shall be rendered in writing, shall be
final, and may be entered as a judgment in any court in the State of New York.
The parties irrevocably consent to the jurisdiction of the federal and state
courts located in New York for this purpose. Each party shall be responsible for
its or his own costs incurred in such arbitration and in enforcing any
arbitration award, including attorneys’ fees and expenses.
  11
 (b) Notwithstanding
the foregoing, the Company, in its sole discretion, may bring an action in any
court of competent jurisdiction to seek injunctive relief and such other relief
as the Company shall elect to enforce the Restrictive Covenants. If the courts
of any one or more of such jurisdictions hold the Restrictive Covenants wholly
unenforceable by reason of breadth of scope or otherwise it is the intention of
the Company and the Executive that such determination not bar or in any way
affect the Company’s right, or the right of any of its affiliates, to the relief
provided in Section 9(e) above in the courts of any other jurisdiction within
the geographical scope of such Restrictive Covenants, as to breaches of such
Restrictive Covenants in such other respective jurisdictions, such Restrictive
Covenants as they relate to each jurisdiction being, for this purpose,
severable, diverse and independent covenants, subject, where appropriate, to the
doctrine of *res
judicata* . The
parties hereby agree to waive any right to a trial by jury for any and all
disputes hereunder (whether or not relating to the Restrictive
Covenants).
   13. **Consultation
With Counsel** . The
Executive acknowledges that he has had a full and complete opportunity to
consult with counsel or other advisers of his own choosing concerning the terms,
enforceability and implications of this Agreement, and that the Company has not
made any representations or warranties to the Executive concerning the terms,
enforceability and implications of this Agreement other than as are reflected in
this Agreement.
   14. **Miscellaneous.**
  (a) Notices . Any
notice or other communication required, permitted, or desirable hereunder shall
be hand delivered (including delivery by a commercial courier service) or sent
by United States registered or certified mail, postage prepaid, addressed as
follows:
  If to the
Executive:
 
 __________________
 __________________
 __________________
   If to the
Company:
  Capital
Lease Funding, Inc.
 110
Maiden Lane
 New York,
New York 10005
 Attention:
Chair of the Compensation Committee
 
  or such
other addresses as shall be furnished in writing by the parties. Any such notice
or communication shall be deemed to have been given as of the date so delivered
in person or three business days after so mailed.
  12
 (b) Applicable
Law . This
Agreement shall be construed and interpreted according to the laws of the State
of New York, without regard to the conflicts of law rules thereof.
  (c) Consumer
Price Index . For
purposes of this Agreement, the term “CPI” refers to the Consumer Price Index as
published by the Bureau of Labor Statistics of the United States Department of
Labor, U.S. City Average, All Items for Urban Wage Earners and Clerical
Workers (1982-1984=100). If the CPI is hereafter converted to a different
standard reference base or otherwise revised, the determination of the CPI
adjustment shall be made with the use of such conversion factor, formula or
table for converting the CPI, as may be published by the Bureau of Labor
Statistics, or, if the bureau shall no longer publish the same, then with the
use of such conversion factor, formula or table as may be published by an agency
of the United States, or failing such publication, by a nationally recognized
publisher of similar statistical information.
  (d) Assigns . This
Agreement shall be binding upon and inure to the benefit of the Company’s
successors and the Executive’s personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees. This Agreement shall
not be assignable by the Executive, it being understood and agreed that this is
a contract for the Executive’s personal services. This Agreement shall not be
assignable by the Company except that the Company may assign it to a Qualified
Affiliate. When assigned to a Qualified Affiliate, the assignee shall assume
this Agreement and expressly agree to perform this Agreement in the same manner
and to the same extent as the Company would be required to perform it in the
absence of such an assignment.
  (e) Construction;
Headings . The
language used in this Agreement shall be deemed to be the language chosen by the
parties to express their mutual intent, and no rule of strict construction shall
be applied against any party. The headings of sections of this Agreement are for
convenience of reference only and shall not affect its meaning or construction.
  (f) Entire
Agreement; Amendments . This
Agreement sets forth the entire agreement and understanding of the parties with
respect to the subject matter hereof, and there are no other contemporaneous
written or oral agreements, undertakings, promises, warranties, or covenants not
specifically referred to or contained herein. This Agreement specifically
supersedes any and all prior agreements and understandings of the parties with
respect to the subject matter hereof, all of which prior agreements and
understandings (if any) are hereby terminated and of no further force and
effect. This Agreement may be amended, modified, or terminated only by a written
instrument signed by the parties hereto.
  (g) Severability . If any
provision, clause or part of this Agreement, or the applications thereof under
certain circumstances, is held invalid or unenforceable for any reason, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
  (h) Waivers . No
delay or omission by either party hereto in exercising any right, power or
privilege hereunder shall impair such right, power or privilege, nor shall any
single or partial exercise of any such right, power or privilege preclude any
further exercise thereof or the exercise of any other right, power or
privilege.
  13
 (i) Counterparts . This
Agreement may be executed in two or more counterparts, each of which shall
deemed an original but all of which together will constitute one and the same
instrument.
   14
  **IN
WITNESS WHEREOF,** the
parties have executed this Agreement on the date and year first above
written.
  **Capital Lease
      Funding, Inc**By:Name:Title:
 
 ****[Executive]
 
  15