Exhibit 10.12

Exhibit
    10.12

    EMPLOYMENT
      AGREEMENT 2006

     

    AS
      RESTATED AND AMENDED

     

    THIS
      EMPLOYMENT AGREEMENT
      (“Agreement”) is and entered into effective as of the 1st
      day of
      September 2006, by and between TRUSTREET
      PROPERTIES, INC.,
      a
      Maryland corporation (“TSY”), and Michael
      Shepardson
      (“Executive”).

     

    Preliminary
      Statement

     

    WHEREAS,
      Executive is currently employed by TSY as its Executive Vice President, CNL
      Restaurant Capital, LP; and

     

    WHEREAS,
      TSY
      desires to continue to employ Executive, and Executive desires to continue
      to be
      employed by TSY; and

     

    WHEREAS,
      TSY and
      Executive desire to enter into this Agreement which sets forth the terms and
      conditions of Executive’s continued employment by TSY.

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants set forth below, TSY and Executive agree
      as follows:

     

    1. Employment.
      TSY
      hereby employs the Executive, and Executive agrees to serve TSY, for the period
      and upon terms and conditions set forth below. Except as otherwise provided
      in
      this Agreement, Executive’s employment shall be subject to the employment
      policies and practices of TSY in effect from time to time during the term of
      Executive’s employment.

     

    2. Term
      of Agreement.
      The
      term of Executive’s employment pursuant to this Agreement shall commence on
      September 1, 2006 (the “Effective Date”), and shall continue in effect for a
      period of thirty-six (36) months to and including September 1, 2009, unless
      terminated earlier in accordance with Section 5 below. Thereafter, this
      Agreement will be automatically renewed by TSY for additional one-year terms,
      unless written notice is given by TSY to Executive no later than one hundred
      and
      eighty (180) days prior to the termination date of any such term, unless
      terminated sooner in accordance with Section 5 below. 

     

    3. Position
      and Duties.
      Executive shall serve as the Executive Vice President, CNL Restaurant Capital,
      LP, of TSY and shall have such duties, authority and responsibilities as are
      normally associated with and appropriate for such position, and shall perform
      such other services for TSY consistent with such position as may be reasonably
      assigned to him by the Chief Executive Officer or President of TSY. Executive
      shall devote substantially all of his working time and efforts to the business
      and affairs of TSY, except that Executive may engage in personal or charitable
      activities which do not interfere with Executive’s employment duties. Executive
      shall comply with the policies, standards, and regulations established from
      time
      to time by TSY.

     

    4. Compensation
      and Related Matters.

     

    4.1. Base
      Salary.
      During
      the term of this Agreement, TSY shall pay to Executive a base salary at an
      annual rate as specified in Attachment “A” to this Agreement (“Base Salary”).
      The Base Salary shall be paid in equal installments in accordance with TSY’s
      usual and customary payroll practices, but not less frequently than monthly.
      The
      Base Salary may be adjusted as deemed appropriate in the sole and absolute
      discretion of TSY’s Board of Directors.

     

    4.2. Bonus
      and Long-Term Compensation.
      In
      addition to his Base Salary, Executive may be entitled to an annual bonus (the
      “Annual Bonus”) as set forth in Attachment “A” to this Agreement. Pending TSY’s
      approval, Executive may also be entitled to participate in any long-term
      compensation program implemented by TSY. 

     

    4.3. Benefit
      Plans and Arrangements.
      Executive shall be entitled, to the extent Executive is eligible, to participate
      in and to receive benefits under all existing and future employee benefit plans,
      perquisites and fringe benefit programs of TSY that are provided generally
      to
      other similarly situated Executives of TSY, on terms similar to those provided
      to such other Executives.

     

    4.4. Expenses.
      TSY
      shall reimburse Executive for all reasonable and customary expenses incurred
      by
      Executive in performing services for TSY, including all reasonable and customary
      expenses of travel while away from home on business or at the request of and
      in
      the service of TSY, provided that such expenses are incurred and accounted
      for
      by Executive in accordance with the policies and procedures established from
      time to time by TSY.

     

    4.5. Paid
      Time Off. 
      Executive shall be entitled to no fewer than twenty (20) days of paid time
      off
      (PTO) per year. 

     

    5. Termination.
      The
      term of Executive’s employment pursuant to this Agreement may be terminated
      under the following circumstances:

     

    5.1. Death.
      The
      term of Executive’s employment shall terminate upon his death.

     

    5.2. Disability.
      TSY may
      terminate the term of Executive’s employment as a result of Executive’s
      Disability. For purposes of this Agreement, “Disability” is defined as the
      inability, by reason of illness or other physical or mental incapacity or
      limitation, of Executive substantially to perform the duties of his employment
      with the Company, as determined in good faith by TSY, which inability continues
      for at least one hundred twenty (120) consecutive days, or for shorter periods
      aggregating one hundred twenty (120) days during any consecutive twelve (12)
      month period.

     

    5.3. By
      TSY for Cause.
      TSY may
      terminate the term of Executive’s employment for “Cause” upon written notice to
      Executive. For purposes of this Agreement, TSY shall have “Cause” to terminate
      Executive’s employment upon any of the following events:

     

    
      	 	
              (a)

            	
              Executive’s
                continued failure to perform, or his habitual neglect of, his duties
                and
                obligations hereunder;

            


    

     

    
      	 	
              (b)

            	
              Executive’s
                conviction of, or plea of guilty or nolo contendere to, an indictment
                or
                information, or an indictment or information is filed against Executive
                and is not discharged or otherwise resolved within twelve (12) months
                thereafter, and said indictment or information charged Executive
                with a
                felony, any crime involving moral turpitude, or any crime which is
                likely
                to result in material injury to
                TSY;

            


    

     

    
      	 	
              (c)

            	
              Executive’s
                breach of a fiduciary duty relating to the Executive’s employment with
                TSY, including but not limited to an act of fraud, theft or dishonesty;
                or

            


    

     

    
      	 	
              (d)

            	
              Executive’s
                material breach of this Agreement;

            


    

     

    Notwithstanding
      the foregoing, Executive shall not be deemed to have been terminated for Cause
      under subsections (a) or (d) unless TSY provided written notice to the Executive
      setting forth in reasonable detail the reasons for TSY’s intention to terminate
      for Cause, and Executive failed within thirty (30) days to cure the event or
      deficiency set forth in the written notice.

     

    5.4. By
      TSY Without Cause.
      TSY may
      terminate the term of Executive’s employment other than for Cause, death or
      Disability at any time upon thirty (30) days prior written notice to
      Executive.

     

    5.5. By
      Executive for Good Reason.
      Executive may terminate the term of his employment for “Good Reason” upon
      written notice to TSY. For purposes of this Agreement, “Good Reason” shall
      include the following events unless otherwise consented to by
      Executive:

     

    
      	 	
              (a)

            	
              The
                assignment to Executive of any duties materially inconsistent with
                Executive’s position, duties, responsibilities and status within
                TSY;

            


    

     

    
      	 	
              (b)

            	
              A
                material and substantial reduction in Executive’s reporting
                responsibilities not pertaining to job performance
                issues;

            


    

     

    
      	 	
              (c)

            	
              A
                reduction in the Base Salary of the Executive not pertaining to job
                performance issues;

            


    

     

    
      	 	
              (d)

            	
              A
                requirement by TSY that Executive’s work location be moved more than fifty
                (50) miles from TSY’s principal place of business in Orlando,
                Florida;

            


    

     

    
      	 	
              (e)

            	
              TSY’s
                material breach of this Agreement; 

            


    

     

    
      	 	
              (f)

            	
              TSY’s
                failure to obtain an agreement from any successor to the business
                of TSY
                by which the successor assumes and agrees to perform this Agreement;
                or

            


    

     

    
      	 	
              (g)

            	
              A
                “Change in Control” (as defined below) of TSY occurs and
                within twelve (12) months thereafter one of the events set forth
                in
                subsection (a)-(f) above occurs. 

            


    

     

    Notwithstanding
      the foregoing, Executive shall not be deemed to have terminated his employment
      for Good Reason under subsections (a), (b), (c), (d), or (e) unless Executive
      provided written notice to TSY setting forth in reasonable detail the reasons
      for Executive’s intention to terminate his employment for Good Reason, and TSY
      failed within thirty (30) days to cure the event or deficiency set forth in
      the
      written notice.

     

    For
      purposes of this Agreement, a “Change in Control” means any one of the following
      has occurred: (i) a merger, consolidation, or reorganization of TSY with one
      or
      more other corporations, partnerships, limited liability companies, joint
      ventures or other organizations or entities (individually, an “Entity” and
      collectively, the “Entities”), whether or not TSY is the surviving Entity, if
      immediately after such transaction (A) the stockholders of TSY immediately
      prior
      to such transaction do not own, directly or indirectly, more than fifty (50%)
      of
      the voting securities of the surviving Entity, and (B) a majority of the Board
      of Directors of TSY immediately prior to such transaction are not a majority
      of
      the Board of Directors of the surviving Entity immediately after such
      transaction; (ii) a sale of all or substantially all of the assets of TSY (on
      a
      consolidated basis) to one or more individuals or Entities who are not an
      Affiliate (as defined in Section 8.1 below); (iii) the acquisition by any
      individual or Entity (or group of related or affiliated individuals and/or
      Entities) of direct or indirect beneficial ownership of fifty percent (50%)
      or
      more of TSY’s voting securities; (iv) a majority of the Board of Directors of
      TSY elected at any annual or special meeting are not individuals nominated
      by
      the then incumbent Board of Directors (or its Nominating Committee); or (v)
      the
      dissolution or liquidation of TSY. 

     

    5.6. By
      Executive Without Good Reason.
      Executive may terminate the term of Executive’s employment other than for Good
      Reason at any time upon thirty (30) days prior written notice to
      TSY

     

    6. Compensation
      in the Event of Termination.
      Upon the
      termination of this Agreement (the “Termination Date”), TSY shall pay Executive
      compensation as set forth below:

     

    6.1.By
      TSY Without Cause; By Executive for Good Reason.
      In the
      event that Executive’s employment is terminated by TSY without Cause, or by the
      Executive for Good Reason, TSY shall pay the Executive a cash payment equal
      to
      two (2) times the sum of (a) the Executive’s Base Salary, which is in effect on
      the Termination Date, and (b) the Executive’s average Annual Bonus paid for the
      two (2) calendar years immediately preceding the Termination Date (the
“Severance Payment”). The Severance Payment shall be made payable in equal
      installments over a twenty-four (24) month period in accordance with TSY’s usual
      and customary payroll practices, commencing on the first payday following the
      Termination Date; provided,
      however,
      that if
      Executive is a "key employee" (within the meaning of Section 409A of the
      Internal Revenue Code of 1986, as amended), payment shall not commence until
      six
      (6) months following Executive's “separation from service” (within the meaning
      of Section 409A) to the extent necessary to avoid the imposition of the
      additional tax under Section 409A (in which such case the first payment shall
      include all installment payments of the Severance Payment that otherwise would
      have been made during such six (6) month period). In addition, TSY shall pay,
      or
      reimburse Executive for, the cost of the premiums Executive incurs for the
      continuation of his health benefits under the Consolidated Omnibus Budget
      Reconciliation Act of 1986 (COBRA) for up to eighteen (18) months following
      the
      Termination Date; provided,
      however,
      that
      TSY shall in no event be required to pay, or reimburse Executive for, the cost
      of such premiums after such time as Executive becomes entitled to receive health
      benefit from another employer or recipient of Executive’s services (determined
      without regard to any individual waivers or other arrangements). Within thirty
      (30) days of the Termination Date, TSY shall also pay Executive a lump sum
      equal
      to the sum of: (a) any accrued but unpaid Base Salary and PTO due Executive
      as
      of the Termination Date; (b) any Annual Bonus earned for the prior year but
      not
      paid to Executive as of the Termination Date; and (c) reimbursements for
      appropriately submitted expenses which have been incurred, but have not been
      paid by TSY, as of the Termination Date. 

     

    6.2. By
      TSY for Cause; By Executive Without Good Reason.
      In the
      event that TSY terminates Executive’s employment for Cause, or Executive
      terminates his employment without Good Reason, all compensation or benefits
      to
      which Executive may otherwise be entitled to shall cease on the Termination
      Date, except for (a) any accrued but unpaid Base Salary due Executive as of
      the
      Termination Date, and (b) reimbursements for appropriately submitted expenses
      which have been incurred, but have not been paid by TSY, as of the Termination
      Date.

     

    6.3. Death
      or Disability.
      In the
      event that TSY terminates Executive’s employment due to his death or Disability,
      TSY shall pay the Executive or his estate a lump sum equal to one (1) times
      Executive’s Base Salary, payable within thirty (30) days of Executive’s
      termination. This payment shall be in addition to, rather than in lieu of,
      the
      entitlement of Executive or his estate to any other insurance or benefit
      proceeds under any insurance policy paid for by TSY and payable as a result
      of
      his death or Disability. All other compensation or benefits to which Executive
      maybe entitled to shall cease on the Termination Date except for (a) any accrued
      but unpaid Base Salary and PTO due Executive as of the Termination Date, and
      (b)
      reimbursements for appropriately submitted expenses which have been incurred,
      but have not been paid by TSY, as of the Termination Date.

     

    6.4. Natural
      Termination.
      In the
      event that Executive’s employment by TSY pursuant to this Agreement naturally
      terminates at the end of any term due to non-renewal by TSY (a “Natural
      Termination”), all compensation or benefits to which Executive may otherwise be
      entitled to shall cease on the Termination Date, except for (a) any accrued
      but
      unpaid Base Salary due Executive as of the Termination Date, and (b)
      reimbursements for appropriately submitted expenses which have been incurred,
      but have not been paid by TSY, as of the Termination Date; provided,
      however,
      that at
      the election of TSY in its sole and absolute discretion and upon written notice
      to the Executive on or prior to the Termination Date, TSY shall pay the
      Executive a cash payment equal to one (1) times the Executive’s Base Salary
      which is in effect on the Termination Date, which cash payment shall be made
      payable over a twelve (12) month period in equal installments in accordance
      with
      TSY’s usual and customary payroll practices, commencing on the first payday
      following the Termination Date (the “Optional Severance Payment”); provided,
      further,
      that if
      Executive is a "key employee" (within the meaning of Section 409A of the
      Internal Revenue Code of 1986, as amended), payment shall not commence until
      six
      (6) months following Executive's “separation from service” (within the meaning
      of Section 409A) to the extent necessary to avoid the imposition of the
      additional tax under Section 409A (in which such case the first payment shall
      include all installment payments of the Severance Payment that otherwise would
      have been made during such six (6) month period). 

     

    7. Acceleration
      of Vesting. In
      the
      event of a Change in Control (as defined in Section 5.5 above), any unvested
      rights Executive has as a result of his employment by TSY to any: (a) common
      or
      preferred stock, (b) partnership or member interest, (c) other equity interest,
      (d) stock or equity option, (e) phantom stock compensation, or (f) any other
      stock plan, stock option plan, or other deferred compensation plan that is
      subject to vesting or restriction (other than a right of first refusal), shall
      become immediately vested, but the originally selected distribution option
      under
      the deferred compensation plan shall govern; and to the extent an option is
      exercisable, it shall remain exercisable for the lesser of ninety (90) days
      or
      the balance of the term of the option. Notwithstanding the foregoing, all
      distributions under a deferred compensation plan shall be in accordance with
      the
      existing plan.

     

    8. Non-Competition;
      Non-Solicitation; and Confidentiality.

     

    8.1. Confidential
      Information.
      Executive acknowledges that TSY has provided, and during the term of this
      Agreement it will provide, Executive with confidential and proprietary
      information regarding the business in which TSY and the current or future
      Affiliates (as defined below) of TSY (collectively the “TSY Affiliates”) are
      involved, and that TSY has provided, and will provide, Executive with “trade
      secrets”, as defined in Section 688.002(4) of the Florida Statutes, of TSY and
      the TSY Affiliates (hereinafter all such confidential and proprietary
      information and trade secretes are referred to as the “Confidential
      Information”). For purposes of this Agreement, “Confidential Information”
includes, but is not limited to:

     

    
      	 	
              (a)

            	
              Information
                related to the business of TSY and the TSY Affiliates, including
                but not
                limited to marketing strategies and plans, sales procedures, operating
                policies and procedures, pricing and pricing strategies, business
                and
                strategic plans, financial statements and projections, accounting
                and tax
                positions and procedures, and other business and financial information
                of
                TSY and the TSY Affiliates;

            


    

     

    
      	 	
              (b)

            	
              Information
                regarding the customers of TSY and the TSY Affiliates which Executive
                acquired as a result of his employment with TSY, including but not
                limited
                to, customer contracts, work performed for customers, customer contacts,
                customer requirements and needs, data used by TSY and the TSY Affiliates
                to formulate customer bids, customer financial information and other
                information regarding the customer’s
                business;

            


    

     

    
      	 	
              (c)

            	
              Information
                regarding the vendors of TSY and the TSY Affiliates which Executive
                acquired as a result of his employment with TSY, including but not
                limited
                to, product and service information and other information regarding
                the
                business activities of such
                vendors;

            


    

     

    
      	 	
              (d)

            	
              Training
                materials developed by and utilized by TSY and the TSY
                Affiliates;

            


    

     

    
      	 	
              (e)

            	
              Any
                other information which Executive acquired as a result of his employment
                with TSY and which Executive has a reasonable basis to believe TSY
                or the
                TSY Affiliates, as the case may be, would not want disclosed to a
                business
                competitor or to the general public; and


            


    

     

    
      	 	
              (f)

            	
              Information
                which:

            


    

     

    
      	 	
              (i)

            	
              is
                proprietary to, about or created by TSY or the TSY
                Affiliates;

            


    

     

    
      	 	
              (ii)

            	
              gives
                TSY or any of the TSY Affiliates some competitive advantage, the
                opportunity of obtaining such advantage or the disclosure of which
                could
                be detrimental to the interests of TSY or the TSY
                Affiliates;

            


    

     

    
      	 	
              (iii)

            	
              is
                not typically disclosed to non-executives by TSY or otherwise is
                treated
                as confidential by TSY or the TSY Affiliates;
                or

            


    

     

    
      	 	
              (iv)

            	
              is
                designated as Confidential Information by TSY or from all the relevant
                circumstances should reasonably be assumed by Executive to be confidential
                to TSY or any TSY Affiliates.

            


    

     

    For
      purposes of this Agreement, the term “Affiliate” has the meaning set forth in
      Rule 12b-2 of the regulations promulgated under the Securities Exchange Act
      of
      1934, as amended.

     

    8.2. Covenant
      Not to Compete.
      While
      employed by TSY or any TSY Affiliate and for a period of twenty-four (24) months
      following the termination of this Agreement or the termination of Executive’s
“at will” employment by TSY or any TSY Affiliate, whichever is last to occur, in
      consideration of the obligations of TSY hereunder, including without limitation
      the disclosure of Confidential Information to Executive, Executive shall not,
      directly or indirectly, for compensation or otherwise: (a) engage in any
      activity that, or (b) have any interest in any sole proprietorship, partnership,
      corporation, company, association, business or any other person or entity
      (whether as an employee, officer, director, shareholder, member, partner,
      corporation creditor, consultant or otherwise) that, directly or indirectly,
      competes with any of the business enterprises in which TSY and the TSY
      Affiliates (collectively, the “TSY Group”) are now or during Executive’s
      employment become engaged in including, but not limited to, all aspects of
      commercial real estate development, leasing and financing (collectively, “TSY’s
      Business”) in any and all states in which the TSY Group conducts such business
      while Executive is employed by TSY or any TSY Affiliate; provided,
      however,
      Executive may continue to hold securities of TSY or any TSY Affiliate or
      acquire, solely as an investment, shares of capital stock or other equity
      securities of any company which are traded on any national securities exchange
      or are regularly quoted in the over the counter market, so long as Executive
      does not control, acquire a controlling interest in, or become a member of
      a
      group which exercises direct or indirect control of more than five percent
      (5%)
      of any class of capital stock of such corporation. Notwithstanding the
      foregoing, in the event that Executive’s employment by TSY terminates due to a
      Natural Termination (as defined in Section 6.4 above) and TSY elects not to
      pay
      Executive the Optional Severance Payment pursuant to Section 6.4 above, then
      the
      prohibitions contained in this Section 8.2 shall terminate on the Termination
      Date.

     

    8.3. Nonsolicitation
      of Clients.
      While
      employed by TSY or any TSY Affiliate and for a period of twenty-four (24) months
      following the termination of this Agreement or the termination of Executive’s
“at will” employment by TSY or any TSY Affiliate, whichever is last to occur, in
      consideration of the obligations of TSY hereunder, including without limitation
      the disclosure of Confidential Information to Executive, Executive shall not,
      directly or indirectly, for himself or as principal, agent, independent
      contractor, consultant, director, shareholder, partner, officer, member, or
      employee of any other person, firm, corporation, partnership, company,
      association, business or other entity, solicit, attempt to contract with, sell
      to, or enter into a contractual or business relationship of any kind pertaining
      to any aspect of TSY’s Business (as defined in Section 8.2), or any other
      business conducted by the TSY Group, with any person or entity with which the
      TSY Group had any contractual or business relationship or engaged in
      negotiations toward a contract or business relationship in the previous twenty
      four (24) months. 

     

    8.4. Nonsolicitation
      of Employees.
      While
      employed by TSY or any TSY Affiliate and for a period of twenty-four (24) months
      following the termination of this Agreement or the termination of Executive’s
“at will” employment by TSY or any TSY Affiliate, whichever is last to occur, in
      consideration of the obligations of TSY hereunder, including without limitation
      the disclosure of Confidential Information to Executive, Executive shall not
      directly or indirectly, for himself or as principal, agent, independent
      contractor, consultant, director, officer, shareholder, partner, member, or
      employee of any other person, firm, corporation, partnership, company,
      association or other entity, either (a) hire, attempt to employ, contact,
      solicit with respect to hiring or enter into any contractual arrangement with
      any employee or former employee of the TSY Group (as defined in Section 8.2),
      or
      (b) induce or otherwise advise or encourage any employee of the TSY Group to
      leave his or her employment unless, in each such case, such employee or former
      employee has not been employed by the TSY Group for a period in excess of six
      (6) months prior to such hire, attempt to employ, employment contract,
      solicitation, or inducement.

     

    8.5. Nondisparagement.
      While
      employed by TSY or any TSY Affiliate and after Executive’s employment
      terminates, in consideration of the obligations of TSY hereunder, including
      without limitation the disclosure of Confidential Information to Executive,
      Executive shall not disparage, denigrate or comment negatively upon, either
      orally or in writing, TSY, any TSY Affiliate, or any of their officers or
      directors (collectively, the “Benefited Persons”), to or in the presence of any
      person or entity unless compelled to act by a valid subpoena or other legal
      mandate; provided, however, if Executive receives such a subpoena or other
      legal
      mandate he shall provide TSY with written notice of same at least ten (10)
      business days prior to the date on which Executive is required to make the
      disclosure. Unless Executive is terminated for Cause, TSY shall not disparage,
      denigrate or comment negatively upon, either orally or in writing, Executive
      to
      any prospective employer or third party after Executive’s employment terminates
      unless compelled to do so by subpoena or other legal mandate; provided however,
      if TSY receives such a subpoena or other legal mandate it shall provide
      Executive with written notice of same at least ten (10) business days prior
      to
      the date on which TSY is required to make the disclosure.

     

    8.6. Confidentiality.
      While
      employed by TSY or any TSY Affiliate and after Executive’s employment
      terminates, in consideration of the obligations of TSY hereunder, including
      without limitation the disclosure of Confidential Information to Executive,
      Executive shall keep secret and retain in strictest confidence, and shall not
      disclose to any third-party or use for his benefit or the benefit of others,
      except in connection with the business affairs of TSY or any other Benefited
      Persons, any Confidential Information, including, without limitation,
      information concerning the financial condition, prospects, methods of doing
      business, marketing and promotion of services of TSY or any TSY Affiliate,
      disclosed to or known by the Executive as a consequence of his employment by
      TSY
      or any TSY Affiliate, which information is not generally known or otherwise
      lawfully obtainable in the public domain, unless compelled to do so by a valid
      subpoena or other legal mandate. In the event Executive receives such a subpoena
      or other legal mandate, he shall provide TSY with written notice of same at
      least ten (10) business days prior to the date Executive is required to make
      such disclosure.

     

    9. Tangible
      Items.
      All
      files, records, documents, manuals, books, forms, reports, memoranda, studies,
      data, calculations, recordings, or correspondence, in whatever form they may
      exist, and all copies, abstracts and summaries of the foregoing, and all
      physical items related to the business of TSY or any TSY Affiliate, whether
      of a
      public nature or not, and whether prepared by Executive or not, are and shall
      remain the exclusive property of TSY or such TSY Affiliate, as the case may
      be,
      and shall not be removed from their premises, except as required in the course
      of Executive’s employment by TSY, without the prior written consent of TSY. Such
      items, including any copies or other reproductions thereof, shall be promptly
      returned by Executive upon the termination of Executive’s employment with TSY or
      any TSY Affiliate, or at any earlier time upon the written request of
      TSY.

     

    10. Remedies. TSY
      and
      Executive acknowledge and agree that a breach by Executive of any of the
      covenants contained in Sections 8 or 9 of this Agreement will cause immediate
      and irreparable harm and damage to TSY and/or any other Benefited Person, and
      that monetary damages will be inadequate to compensate TSY, and/or any other
      Benefited Person, as the case may be, for such breach. Accordingly, Executive
      acknowledges that TSY and/or any other Benefited Person affected shall, in
      addition to any other remedies available to them at law or in equity (including
      the recovery of damages), be entitled to an injunction from any court of
      competent jurisdiction enjoining and restraining any violation of said covenants
      by Executive or any of his affiliates, associates, partners, employees or
      agents, either directly or indirectly, without the necessity of posting bond
      or
      proving the inadequacy of legal remedies or irreparable harm. In the event
      of
      Executive’s breach of any of the provisions of Sections 8 or 9 of this
      Agreement, in addition to any other remedies TSY may have, TSY may cease making
      the balance of the payments specified in Section 6.1 or 6.4, if any, and recover
      in full from Executive any such payments previously made. The rights and
      obligations of Sections 8 and 9 hereof are covenants independent of any other
      rights or obligations of this Agreement and no claim, or defense based on a
      claim, that TSY is in breach of this Agreement shall be a defense to the
      enforcement of TSY ’s rights under Sections 8 or 10 hereof.

     

    11. Arbitration.
      Except
      with regard to a breach by Executive of any of his covenants in Sections 8
      or 9
      of this Agreement, all disputes between the parties or any claims concerning
      the
      performance, breach, construction or interpretation of this Agreement, or in
      any
      manner arising out of this Agreement, shall be submitted to binding arbitration
      in accordance with the Commercial Arbitration Rules, as amended from time to
      time, of the American Arbitration Association (the “AAA”), which arbitration
      shall be carried out in the manner set forth below:

     

    
      	 	
              (a)

            	
              Within
                fifteen (15) days after written notice by one party to the other
                party of
                its demand for arbitration, which demand shall set forth the name
                and
                address of its designated arbitrator, the other party shall appoint
                its
                designated arbitrator and so notify the demanding party. Within fifteen
                (15) days thereafter, the two arbitrators so appointed shall appoint
                the
                third arbitrator. If the two appointed arbitrators cannot agree on
                the
                third arbitrator, then the AAA shall appoint an independent arbitrator
                as
                the third arbitrator. The dispute shall be heard by the arbitrators
                within
                ninety (90) days after appointment of the third
                arbitrator.

            


    

     

    
      	 	
              (b)

            	
              The
                arbitration proceedings shall take place in Orlando, Florida. The
                decision
                of any two or all three of the arbitrators shall be binding upon
                the
                parties without any right of appeal, and the decision of the arbitrators
                shall be final and binding upon TSY, its successors and assigns,
                and upon
                Executive, his heirs, personal representatives, and legal representatives.
                Judgment upon any award rendered by the arbitrators may be entered
                into by
                any court having competent jurisdiction without any right of
                appeal.

            


    

     

    
      	 	
              (c)

            	
              Each
                party shall pay its or his own expenses of arbitration, and the expenses
                of the arbitrators and the arbitration proceeding shall be shared
                equally.
                However, if in the opinion of a majority of the arbitrators any claim
                or
                defense was unreasonable, the arbitrators may assess, as part of
                their
                award, all or any part of the arbitration expenses of the other party
                (including reasonable attorneys’ fees) and of the arbitrators and the
                arbitration proceeding. 

            


    

     

    12. Attorneys’
      Fees.
      In the
      event any legal or equitable action is instituted by TSY or any Benefited Person
      due to Executive’s breach of any of the covenants contained in Sections 8 or 9
      of this Agreement, the prevailing party in such action shall be entitled to
      recover reasonable attorneys’ fees and other costs and expenses from the
      non-prevailing party, whether incurred at the trial level or in any appellate
      proceeding. 

     

    13. Severability.
      As the
      provisions of this Agreement are independent of and severable from each other,
      TSY and Executive agree that if, in any action before any court or agency
      legally empowered to enforce this Agreement, any term, restriction, covenant,
      or
      promise hereof is found to be unreasonable or otherwise unenforceable, then
      such
      invalid term, restriction, covenant, or promise shall be deemed modified to
      the
      extent necessary to make it enforceable, and the remaining provisions of this
      Agreement shall remain in full force and effect if the essential provisions
      of
      this Agreement for each party remain valid, binding and
      enforceable.

     

    14. Notice.
      For
      purposes of this Agreement, notices, demands and all other communications
      provided for in the Agreement shall be in writing and shall be deemed to have
      been duly given when received if delivered in person, the next business day
      if
      delivered by overnight commercial courier (e.g. FedEx), or the third (3rd)
      business day if mailed by United States certified mail, return receipt
      requested, postage prepaid, to the following addresses:

     

    If
      to
      Executive:

     

    Michael
      Shepardson

    2319
      Sherbrooke Road

    Winter
      Park, FL 32792

     

    If
      to
      TSY:

     

    Trustreet
      Properties, Inc. 

    450
      South
      Orange Avenue - 11th Floor

    Orlando,
      Florida 32801

    Attn:
       Chief
      Executive Officer

     

    Either
      party may change its address for notices in accordance with this Section 14
      by
      providing written notice of such change to the other party.

     

    15. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Florida without regard to principals of Conflicts of Law. 

     

    16. Benefits;
      Binding Effect; Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective heirs, personal representatives, legal representatives,
      successors and permitted assigns. Executive shall not assign this Agreement.
      However, TSY may assign this Agreement to a TSY Affiliate upon written notice
      to
      Executive, provided that the assignee assumes all of the obligations of TSY
      under this Agreement.

     

    17. Withholding.
      All
      payments of compensation due to Executive under this Agreement including, but
      not limited to, Base Salary, Annual Bonus, Severance Payment, and Optional
      Severance Payment, if any, shall be subject to applicable federal and state
      income tax withholding and payroll taxes (e.g. FICA, FUTA, and Medicare
      tax).

     

    18. Entire
      Agreement.
      This
      Agreement, including its incorporated Attachment ”A”, constitutes the entire
      agreement between the parties, and all prior understandings, agreements or
      undertakings between the parties concerning Executive’s employment or the other
      subject matters of this Agreement [including but not limited to that certain
      Employment Agreement between Executive and CNL Restaurant Capital GP, Corp.
      dated as of September 15, 2004], are superseded in their entirety by this
      Agreement. This Agreement may not be modified or amended other than by an
      agreement in writing executed and delivered by both parties hereto.

     

    19. Survival.
      Except
      where the context otherwise provides, all of the terms, conditions, and
      prohibitions of this Agreement shall survive the termination of this Agreement,
      including but not limited to, Sections 7, 8, and 9.

     

    20. Interpretation.
      As both
      parties having had the opportunity to consult with legal counsel, no provision
      of this Agreement shall be construed against or interpreted to the disadvantage
      of any party by reason of such party having, or being deemed to have, drafted,
      devised, or imposed such provision.

     

    21. Notice
      to TSY; Cure Periods.
      TSY
      shall not be deemed to be in breach or violation of this Agreement for any
      purpose unless Executive provided written notice to TSY setting forth in
      reasonable detail the reasons for Executive’s claim that TSY has breached or
      violated this Agreement and TSY failed within thirty (30) days of such notice
      to
      cure the breach or violation alleged therein.

     

    22. Representations
      by Executive.
      Executive represents and warrants to TSY that he is not a party to or bound
      by
      any litigation, judgment, consent decree or any other agreement, covenant,
      or
      instrument that would prohibit Executive from performing his duties or
      obligations hereunder or conflict with any of the terms or conditions of this
      Agreement.

     

    


     

    IN
      WITNESS WHEREOF,
      the
      undersigned have executed this Agreement to be effective as of the date first
      above written.

     

    
      	 	
              “Executive”

            
	 	 
	 	 
	
              /s/
                Anita Simpson

              Witness

            	
              /s/
                Michael Shepardson   

               

              Michael
                Shepardson

            
	 	 
	 	 
	 	 
	 	 
	 	
              “TSY”

            
	 	 
	 	
              Trustreet
                Properties, Inc.

            
	 	 
	 	 
	 	 
	 	 
	
              /s/
                Constance Brown

              Witness

            	
              By: /s/
                Curtis B. McWilliams  

              Curtis
                B. McWilliams

              Chief
                Executive Officer

            


    

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      EMPLOYMENT
        AGREEMENT OF MICHAEL T. SHEPARDSON

       

      2006
        ATTACHMENT “A”

       

      


       

      1.  Base
        Salary:
        Executive’s Base Salary shall be $260,000.00 per year. 

       

      2.  Annual
        Bonus Compensation:
        Executive may receive annual bonus compensation targeted at fifty percent
        (50%)
        of Executives’ Base Salary with a maximum annual bonus of one hundred percent
        (100%) of the Executive’s current Base Salary. Executive’s bonus compensation
        shall be based, in part, on his achieving his Key Performance Indicators
        (KPIs)
        for the year, TSY’s performance for the year, and determined in accordance with
        TSY executive compensation policies.

       

      3.  Long-Term
        Compensation:
        Executive is currently participating in a long-term incentive plan, and would
        be
        eligible to participate in additional plans as applicable.