Document:

Exhibit 10.17

 

 

CAPMARK
FINANCIAL GROUP INC.

 

DIVIDEND EQUIVALENT RIGHTS PLAN

 

 

ARTICLE I

INTRODUCTION

 

The Plan was
established effective as of October 25, 2006 by Capmark Financial Group
Inc. for the purpose of providing dividend equivalent rights to employees of
Capmark Financial Group Inc. and its Subsidiaries and Affiliates:

 

ARTICLE II

DEFINITIONS

 

The following
capitalized terms used in the Plan have the respective meanings set forth in
this Article II:

 

2.1.          “Affiliate” shall mean with respect to any Person,
any entity directly or indirectly controlling, controlled by or under common
control with such Person.

 

2.2.          “Beneficiary” shall mean such person or legal entity
as may be designated by a Participant under Section 5.2 to receive
benefits hereunder after such Participant’s death or Disability.

 

2.3.          “Board” shall mean the board of directors of the
Company.

 

2.4.          “Cause” shall mean “Cause” as such term may be
defined in any employment agreement between the Participant and the Company or
any other Service Recipient (the “Employment Agreement”), or, if there
is no such Employment Agreement (or if such term is not defined therein), “Cause”
shall exist if the Board reasonably determines that any one or more of the
following events has occurred while employed by the Company or any other
Service Recipient: (i) the Participant’s willful and continued failure
(except where due to a physical or mental incapacity) to substantially perform
his material duties with respect to the Company or any of its Subsidiaries
which continues beyond ten (10) days after a written demand for
substantial performance is delivered to the Participant by the applicable
Service Recipient (such ten-day period, the “Cure Period”); (ii) any
gross misconduct of the Participant that causes material and demonstrable
injury, monetarily or otherwise, to any Service Recipient; (iii) conviction
of, or plea of guilty or nolo contendere to, the commission of (x) a
felony by the Participant or (y) any misdemeanor involving theft, fraud,
misappropriation or moral turpitude (other than in connection with any traffic
violations); (iv) the Participant’s disqualification or bar by any
governmental or self-regulatory authority from serving in his position with the
applicable Service Recipient or the Participant’s loss of any governmental or
self-regulatory license that is reasonably necessary for the Participant to
perform his material duties with respect to the applicable Service Recipient in
any such case, as a result of misconduct by the Participant; (v) the
Participant’s willful obstruction of, or willful failure to cooperate with
(except where due to a physical or mental incapacity), any investigation
authorized by the Board; provided that exercise by the Participant of his
constitutional rights under the Fifth Amendment of the United States
Constitution in the event of any criminal investigation of the Participant
shall not be treated as obstruction of or failure to cooperate with any such
investigation; (vi) the Participant’s material breach of the applicable
Service Recipient’s written code of conduct and business ethics, which breach
is customarily punishable by termination of employment by the applicable
Service 

 

 

Recipient; or (vii) a material breach by the Participant of the
restrictive covenants applicable to the Participant pursuant to the Participant’s
Management Stockholders’ Agreement or other agreements, if any, which continues
beyond the Cure Period (to the extent that, in the Board’s reasonable judgment,
such breach can be cured).

 

2.5.          “Change in Control” shall mean (i) the sale of
all or substantially all of the assets of Investor LLC, the Company, or GMAC
Mortgage Corporation to an Unaffiliated Person; or (ii) a sale by the
Company or Investor LLC, in a single transaction or in a related series of
transactions, of the voting stock of the Company resulting in more than 50% of
the voting stock of the Company being held (either directly or indirectly
through Investor LLC, and which for the avoidance of doubt includes the
distribution of any interests in the Investor LLC being distributed to any
limited partners of any Investor, which are not Affiliates of that Investor) by
an Unaffiliated Person; or (iii) a sale by the Company or Investor LLC, in
an unrelated series of transactions, of the voting stock of the Company, as a
result of which an Unaffiliated Person is (either directly or indirectly
through Investor LLC, and which for the avoidance of doubt includes the
distribution of any interests in the Investor LLC being distributed to any limited
partners of any Investor, which are not Affiliates of that Investor) the single
largest holder of voting stock of the Company; or (iv) a merger or
consolidation of the Company or Investor LLC into an Unaffiliated Person;  if and
only if any such event (or as a result of any such event) listed in (i) –
(iv) above results in the inability of the Investors and any of their
respective Affiliates, either as a Group or individually (through Investor LLC
or otherwise), to elect a majority of the Board or board of directors of the
resulting entity; provided, however, to the extent any such event
listed in (i) – (iv) above occurs but at such time neither the
Investors and their Affiliates as a Group, nor any of the Investors or their
respective Affiliates individually (through Investor LLC or otherwise) retain
the ability to elect a majority of the Board or the board of directors of the
resulting entity, a Change of Control shall be deemed to have occurred upon any
later date on which neither the Investors and their respective Affiliates as a
Group nor any of the Investors or their Affiliates individually retain such
ability. For purposes of this definition, the term “Unaffiliated Person”
means any Person or Group who is not (x) a Investor or any member of a Investor,
(y) an Affiliate of an Investor or any member of a Investor or (z) an entity in
which a Investor or any member of an Investor holds, directly or indirectly, a
majority of the economic interests in such entity.  Notwithstanding the foregoing, if any of the
transactions described in (i), (ii) or (iv) of the preceding sentence
shall occur and the other Person or Group involved in such transaction (or its
parent entity) is an Affiliate of any Investor because it is under common
control by an ultimate parent entity, but
the day-to-day operations of, and key business decisions regarding, such
Affiliate are controlled by an entity that is, or individuals who are,
principally engaged in a business other than the management or operations of
private equity funds (any such Affiliate, a “Strategic Business Affiliate”),
then the determination of whether a Change of Control has occurred shall be
made by applying the relevant test in clause (i), (ii) or (iv) above
(along with the test of whether the Investors and their Affiliates as a Group
any of the Investors or their Affiliates individually (through Investor LLC or
otherwise) lose the ability to elect a majority of the Board) as if the
Strategic Business Affiliate was not an Affiliate of any of the Investors and by
treating the voting power of the Strategic Business Affiliate in the Company
(or the resulting entity) as if it were held by a Person or Group unaffiliated
with any of the Investors.

 

2.6.          “Code” shall mean the Internal Revenue Code of 1986,
as amended.

 

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2.7.          “Committee” shall mean the compensation committee of
the Board  or, if no such committee
is appointed, the Board.

 

2.8.          “Common Stock” or “Share” shall mean common
stock of the Company.

 

2.9.          “Company” shall mean Capmark Financial Group Inc.,
its successors and assigns.

 

2.10.        “Disability” shall mean “Disability” as such term is
defined in the Employment Agreement, or if there is no such Employment
Agreement (or if such term is not defined therein), “Disability” shall mean the
Participant’s physical or mental disability or infirmity that prevents the
performance of such Participant’s duties for a period of (i) one hundred
twenty (120) consecutive days or (ii) one hundred eighty (180)
non-consecutive days during any twelve (12) month period, in either case, as
evidenced by a written statement of a physician licensed to practice medicine
in any state in the United States mutually agreed upon by the applicable
Service Recipient.  The determination of
Disability made in writing to the applicable Service Recipient shall be final
and conclusive for all purposes of this Plan.

 

2.11.        “Dividend Equivalent Account” shall mean the notional
account established and maintained by the Company for each Participant, as
described in Article IV of the Plan. 
Dividend Equivalent Accounts shall be maintained solely as bookkeeping
entries to evidence unfunded obligations of the Company.

 

2.12.        “Dividend Equivalent Amount” shall mean an Ordinary
Dividend Equivalent Amount and/or an Extraordinary Dividend Equivalent Amount,
as applicable.

 

2.13.        “Effective Date” shall mean October 25, 2006,
the effective date of the Plan; provided, however, that the amendments and
modifications contained herein are effective upon the date upon which such
amendments and modifications are approved by the Committee.

 

2.14.        “Eligible Employee” shall mean an active Employee who
holds outstanding Options as of the Effective Date, and any other Employee
selected by the Committee in its sole discretion.

 

2.15.        “Employee” shall mean a person, including an officer,
who is eligible to receive stock option awards under the Equity Plan.

 

2.16.        “Employer” shall mean the Company and any other
Service Recipient designated by the Company that employs one or more Eligible
Employees who have become Participants in accordance with Article III.

 

2.17.        “Equity Plan” shall mean the 2006 Equity Plan for Key
Employees of Capmark Financial Group Inc. and its Affiliates, as amended from
time to time.

 

2.18.        “Exchange Act” shall mean The Securities Exchange Act
of 1934, as amended, or any successor thereto.

 

2.19.        “Extraordinary Dividend Equivalent Amount” shall mean
a bookkeeping entry representing a hypothetical dividend paid on the number of
shares of Common Stock subject to a 

 

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Participant’s outstanding Options on a given Record Date, as defined
and provided for in Section 4.2(b) of the Plan.

 

2.20.        “Good Reason” shall mean “Good Reason” as such term
is defined in the Employment Agreement, or if there is no such Employment
Agreement (or if such term is not defined therein), “Good Reason” shall mean,
without the Participant’s consent, (i) the material reduction of the
Participant’s annual rate of base salary (excluding any general salary
reduction affecting substantially all of the full-time, salaried employee
population of the applicable Service Recipient) or annual bonus opportunity
(excluding reductions in the value of any performance bonus pool as a result of
Company or business unit’s performance or changes in the goal amount or type of
performance targets of the applicable bonus arrangement), (ii) a material
diminution in the Participant’s employment duties or responsibilities, in each
case, following a reasonable period by the applicable Service Recipient to cure
such event following receipt of written notice by the Participant indicating
the event giving rise to Good Reason; or (iii) relocation of the
Participant’s primary workplace to a location more than 50 miles away from his
prior office location.   The Participant
may terminate his employment with Good Reason by providing the Company ten (10) days’
written notice setting forth in reasonable specificity the event that
constitutes Good Reason, within one hundred eighty (180) days after the
occurrence of such event.

 

2.21.        “Group” shall mean “group,” as such term is used for
purposes of Section 13(d) or 14(d) of the Exchange Act.

 

2.22.        “Investor Group” shall mean, collectively, Investor
LLC, its members, the Investors, and any of the foregoing entity’s respective
Affiliates.

 

2.23.        “Investor LLC” shall mean GMACCH Investor LLC, a
Delaware limited liability company.

 

2.24.        “Investors” shall mean, collectively, Kohlberg Kravis
Roberts & Co., Five Mile Capital Partners, The Goldman Sachs Company, Inc.,
and Dune Capital Management LP.

 

2.25.        “Management Stockholders’ Agreement” shall mean that
certain Management Stockholders’ Agreement of even date herewith between the
Participant and the Company.

 

2.26.        “Options” shall mean those outstanding, unexercised
options to purchase Common Stock granted to and held by any Participant under
the Equity Plan.

 

2.27.        “Option Shares” shall mean those shares of Common
Stock subject to outstanding but unexercised Options held by a Participant from
time to time.

 

2.28.        “Ordinary Dividend Equivalent Amount” shall mean a
bookkeeping entry representing a hypothetical dividend paid on the number of
shares of Common Stock subject to a Participant’s vested Options on a given
Record Date, as defined and provided for in Section 4.2(a) of the
Plan.

 

2.29.        “Participant” shall mean an Eligible Employee who is
selected by the Committee to participate in the Plan.

 

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2.30.        “Person” shall mean a “person,” as such term is used
for purposes of Section 13(d) or 14(d) of the Exchange Act.

 

2.31.        “Plan” shall mean this Capmark Financial Group Inc.
Dividend Equivalent Rights Plan, as amended from time to time.

 

2.32.        “Record Date” shall mean any given record date established
by the Board for purposes of calculating and paying dividends on the
outstanding shares of Common Stock.

 

2.33.        “Service Recipient” shall mean, the Company, any
Subsidiary of the Company, or any Affiliate of the Company that satisfies the
definition of “service recipient” within the meaning of Proposed Treasury
Regulation Section 1.409A-1(g) (or any successor regulation), with
respect to which an Employee is a “service provider” (within the meaning of
Proposed Treasury Regulation Section 1.409A-1(f) (or any successor
regulation).

 

2.34.        “Subsidiary” shall mean any corporation or other
entity in an unbroken chain of corporations or other entities beginning with
the Company if each of the corporations or other entities, or group of commonly
controlled corporations or other entities, other than the last corporation or
other entity in the unbroken chain then owns stock or other equity interests
possessing 50% or more of the total combined voting power of all classes of
stock or other equity interests in one of the other corporations or other
entities in such chain.

 

ARTICLE III

PARTICIPATION BY ELIGIBLE EMPLOYEES

 

3.1.          Participation.  Participation in the Plan is limited to
Eligible Employees.  An Eligible Employee
shall be selected to participate in the Plan as determined by the Committee in
its sole discretion.

 

3.2.          Continuity of Participation.  A Participant who separates from service with
all of the Employers shall cease participation hereunder on the last date on
which all vested Options held by the Participant have expired in accordance
with their terms, or otherwise have been cancelled or repurchased in accordance
with the Equity Plan and/or the Management Stockholder’s Agreement (any such
date on which such Options so expire, are cancelled or repurchased, the “Option
Expiration Date”).  Unless otherwise
determined by the Committee, however, the separation from service of a
Participant with one Employer will not interrupt the continuity of the
Participant’s participation in the Plan if, concurrently with or immediately
after such separation, the Participant is employed by one or more of the other
Employers.

 

ARTICLE IV

DIVIDENDS AND DIVIDEND EQUIVALENT ACCOUNTS

 

4.1.          Establishment of Dividend
Equivalent Accounts.  A Dividend Equivalent Account will be
established for each Participant, as determined by the Committee.

 

4.2.          Crediting of Dividend Equivalent
Amounts.  On each Record Date, a Dividend Equivalent
Amount will be credited to each Participant’s Dividend Equivalent Account in
respect of each of such Participant’s Options as of each such Record Date as
follows:

 

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(a)           if the Company declares and pays
an ordinary dividend on issued and outstanding shares of Common Stock in the
form of cash or other property (other than shares of Common Stock), then an Ordinary Dividend Equivalent Amount shall be
credited to a Participant’s Dividend Equivalent Account no later than the third
business day following the Record Date of such dividend, equal to (i) the
number of a Participant’s then outstanding and vested Option Shares on the
Record Date for such dividend, multiplied by (ii) the amount of
cash and/or the fair market value of any property (other than shares of Common
Stock)) actually paid as an ordinary dividend in respect of one share of Common
Stock issued and outstanding on the Record Date; and

 

(b)           if the Company declares and pays
an extraordinary dividend on issued and outstanding shares of Common Stock in
the form of cash or shares of Common Stock, and the
Company, in its reasonable judgment after consultation with its legal counsel,
tax accountants, and senior management, determines that making adjustments to
any outstanding Options held by all Participants to take into account the
effect of such extraordinary dividend on such Options under Section 8 of
the Equity Plan would violate Section 409A of the Code or otherwise would
give rise to adverse accounting consequences to the Company, then an Extraordinary Dividend Equivalent Amount shall be
credited to a Participant’s Dividend Equivalent Account no later than the third
business day following the Record Date of such dividend, equal to (i) the
number of a Participant’s then outstanding Option Shares (whether vested or
unvested) on the Record Date for such dividend, multiplied by (ii) the
amount of cash and/or the Fair Market Value (as such term is defined in the
Equity Plan) of the shares of Common Stock actually paid as an extraordinary
dividend in respect of one share of Common Stock issued and outstanding on the
Record Date.

 

4.3.          Crediting of Interest.  On each anniversary of the Effective Date, a
Participant’s Dividend Equivalent Account shall be credited with interest,
calculated using the Company’s average borrowing rate for the 12-month period
immediately preceding such anniversary of the Effective Date for the period
during which the balance of such Account has been outstanding.

 

4.4.          Vesting of Dividend Equivalent
Account.

 

(a)           A Participant shall vest in the
relevant portion of his or her Dividend Equivalent Account that is comprised of
Ordinary Dividend Equivalent Amounts (and interest credited thereon as provided
in Section 4.3 above) (such portion, together with such interest, the “Ordinary
Dividend Portion”) as follows:

 

(i)            to the same extent, and at the same
time(s), as either (A) the Participant exercises his or her vested Options
to which such Ordinary Dividend Portion relates (e.g., if at a given time the
Participant exercises 50% of his or her vested Options at any time, the
Participant shall at that same time become vested in 50% of his or her Ordinary
Dividend Portion) or (B) the Participant’s vested Options are purchased by
the Company pursuant to the terms of the Management Stockholders’ Agreement in
connection with a termination of the Participant’s employment; provided,
however, that, in the event of a termination of employment with all
Service Recipients by the Participant without Good Reason, 

 

6

 

such Participant shall only vest in his or her Ordinary Dividend
Portion if the purchase price under the terms of the Management Stockholders’
Agreement for the Participant’s vested Options is greater than zero (such
vesting event is hereinafter referred to as a “Qualifying Resignation”);
and

 

(ii)           as
to 100% of any such unvested portion upon the first to occur of (i) a
Change in Control or (ii) the Participant’s “separation of service”
(within the meaning of Section 409A of the Code) from all Service
Recipients due to the Participant’s death or Disability.

 

(b)           A Participant shall vest in the
relevant portion of his or her Dividend Equivalent Account that is comprised of
Extraordinary Dividend Amounts (and interest credited thereon as provided in Section 4.3
above) (such portion, together with such interest, the “Extraordinary
Dividend Portion”) to the same extent, and at the same time(s), as the
Participant’s Options to which such Extraordinary Dividend Portion relates
(e.g., if on a given Record Date for an extraordinary dividend, the Participant
is 20% vested in his or her Options, then he shall, on such Record Date, be
immediately vested in 20% of the Extraordinary Dividend Equivalent Amount (and
any future interest credited thereon) credited to his or her Dividend
Equivalent Account on such date, and shall become vested as to an additional
20% of such amount on the next date on which the Participant becomes 20% vested
in his or her Options in respect of which such amount was originally
credited).  For the avoidance of doubt, a
Participant shall vest in the Extraordinary Dividend Portion of his or her
Dividend Equivalent Account to the same extent, and at the same time, as the
Participant’s Options become vested upon the occurrence of a Change in Control.

 

(c)           Unvested amounts (including any
interest accrued thereon pursuant to Section 4.3 above) held in a
Participant’s Dividend Equivalent Account shall be forfeited by the Participant
upon the date that his or her vested Options to which the relevant portion of
such Dividend Equivalent Account relates otherwise expire in accordance with
the terms of the Equity Plan and the grant agreement(s) thereunder.

 

ARTICLE V

DISTRIBUTIONS

 

5.1.          Distribution Date.  Subject to Section 8.7 of the Plan, a
distribution in settlement of vested amounts held in any Participant’s Dividend
Equivalent Account shall be made to the Participant on the tenth (10th) anniversary of the Effective
Date, unless such distribution is accelerated as follows:

 

(a)           (x) upon the Participant’s “separation
of service” with all Service Recipients within the meaning of Section 409A
of the Code (i) by all Service Recipients without Cause, (ii) by the
Participant for Good Reason, (iii) due to the death, Disability or
Retirement of the Participant, (iv) upon a Qualifying Resignation (any of
the foregoing, a “Separation from Service”), or (y) as otherwise
provided by the Committee, all then vested amounts held in any Participant’s
Dividend Equivalent Account shall be distributed in the manner set forth in Section 5.3;
and

 

7

 

(b)           with respect to any
amounts (i) held in the Participant’s Dividend Equivalent Account as of
the date of the Separation from Service that are not vested at such date (and
which are not otherwise forfeited by the Participant pursuant to Section 5.1(c) below),
but which become vested pursuant to Section 4.4 between the date of the
Separation from Service and the Option Expiration Date applicable to the vested
Options with respect to which such amounts relate and (ii) that become
credited to the Participant’s Dividend Equivalent Account pursuant to Sections
4.2 and 4.3 and vested pursuant to Section 4.4 between the Separation from
Service and the Option Expiration Date applicable to the vested Options with
respect to which such amounts relate, all such vested amounts shall be
distributed on the Option Expiration Date applicable to the vested Options with
respect to which such amounts relate, in the manner set forth in Section 5.3.

 

For purposes
of this Plan, the term “Distribution Date” shall mean any of the
foregoing dates on which amounts held in a Participant’s Dividend Equivalent
Account are distributed.

 

(c)           Upon a separation of service by the Service Recipients for
Cause, the Participant shall forfeit all amounts held in his or her Dividend
Equivalent Account.

 

5.2.          Distributions on Death or
Disability.  Subject to Section 8.7 of the Plan, in
the event of a Participant’s death or Disability, all vested amounts held in
the Participant’s Dividend Equivalent Account shall be made to the Participant
or the Beneficiary selected by the Participant in accordance with Section 5.3.

 

5.3.          Method and Timing of Payment.  Subject to Section 8.7 of the Plan, all
distributions under the Plan shall be in the form of a lump sum cash payment,
on the fifteenth (15th) business days following the applicable Distribution
Date.  A Participant may from time to
time change the Participant’s designated Beneficiary without the consent of
such Beneficiary by filing a new designation in writing with the Company or its
designee.  If no Beneficiary designation
is in effect at the time of the Participant’s death, or if the designated
Beneficiary is missing or has predeceased the Participant, distribution shall
be made to the Participant’s estate or the Participant, as applicable.

 

ARTICLE VI

FUNDING AND PARTICIPANT’S INTEREST

 

The Plan shall be unfunded and the Company
shall pay all distributions from its general assets.  A Participant (or the Participant’s
Beneficiary) shall have the rights of a general, unsecured creditor against the
Company for any distributions due hereunder.

 

ARTICLE VII

ADMINISTRATION AND INTERPRETATION;

AMENDMENT AND TERMINATION

 

7.1.          Administration.  The Committee shall administer the Plan; provided,
however, that the Committee may delegate its duties and powers in whole
or in part as it determines.  To 

 

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the extent permitted under Section 409A of the Code, the Committee
has full discretionary authority to construe and interpret the terms and
provisions of the Plan; to adopt, alter and repeal administrative rules,
guidelines and practices governing the Plan; to perform all acts, including the
delegation of its administrative responsibilities to advisors or other persons
who may or may not be employees of the Employers; and to rely upon the
information or opinions of legal counsel or experts selected to render advice
with respect to the Plan, as it shall deem advisable, with respect to the
administration of the Plan.

 

7.2.          Interpretation.  The Committee may take any action, correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
in any election hereunder, in the manner and to the extent it shall deem
necessary to carry the Plan into effect or to carry out the Company’s purposes
in adopting the Plan.  Any decision,
interpretation or other action made by the Committee arising out of or in
connection with the Plan, shall be final, conclusive and binding on the
Employers and all Participants and Beneficiaries and their respective heirs,
executors, successors and assigns.  The
Committee’s determinations hereunder need not be uniform, and may be made
selectively among Eligible Employees, whether or not they are similarly
situated.

 

7.3.          Amendment and Termination.  The Committee shall have the right, at any
time, to amend or terminate the Plan, in whole or in part, provided that
such amendment or termination shall not materially adversely affect the rights
of any Participant or Beneficiary under the Plan, except with respect to Section 8.3.  Notwithstanding the foregoing, the Committee
shall have the right to amend the Plan in such manner as it deems necessary to
preserve all applicable laws and/or favorable accounting treatment by the
Company of the benefits provided under this Plan.  Notwithstanding anything set forth in this Section 7.3
to the contrary, this Plan may not be terminated prior to the date upon which
no Options are outstanding under the Equity Plan.

 

ARTICLE VIII

MISCELLANEOUS PROVISIONS

 

8.1.          Right to Employment.  The adoption and maintenance of the Plan
shall not be deemed to constitute a contract between an Employer and any
Eligible Employee, or to be consideration for, or an inducement or condition
of, the employment of any individual. 
Nothing contained herein, or any action hereunder, shall be deemed to
give any Eligible Employee the right to be retained in the employ of an
Employer or to interfere with the right of any Employer to terminate any
Eligible Employees at any time.

 

8.2.          Alienation or Assignment of
Benefits.  Other than by will, the laws of descent and
distribution, or by appointing a Beneficiary, a Participant’s rights and
interest under the Plan shall not be assigned or transferred except as
otherwise permitted by the Committee, and a Participant’s rights to benefit
payments under the Plan shall not be subject to alienation, pledge or
garnishment by or on behalf of creditors (including heirs, beneficiaries, or
dependents) of the Participant or of a Beneficiary.  The Company may assign its rights and
obligations under the Plan to a person or entity, which is an affiliate or a
successor in interest to substantially all of the business operations of the
Company, in which event such affiliate or successor in interest shall expressly
agree to assume all of the Company’s rights and obligations under the Plan.

 

9

 

8.3.          Adjustments.  In the event of any change in, or exchange
of, the outstanding shares of Common Stock after the Effective Date by reason
of any stock split, reorganization, recapitalization, merger, consolidation,
spin-off, combination or transaction or exchange of shares of Common Stock or
other corporate event, or any transaction similar to the foregoing, the
Committee, in its sole discretion and without liability to any person, may make
such substitution or adjustment, if any, as it deems to be equitable, as to the
number and/or kind of shares of Common Stock or other securities on which this
Plan is based, including, without limitation, for purposes of the
determinations made under Article IV hereof or otherwise, and subject to
any Participant’s Options, in accordance with the terms of Section 8 or 9
of the Equity Plan.

 

8.4.          Severability.  In the event that any provision of the Plan
shall be declared illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of the Plan but shall be
fully severable, and the Plan shall be construed and enforced as if said
illegal or invalid provision had never been inserted herein.

 

8.5.          Right to Withhold.  To the extent required by applicable law in
effect at the time a distribution is made from the Plan, the Company, any
Employer or their respective agents shall have the right to withhold or deduct
from any distributions or payments hereunder any taxes required to be withheld
by federal, state or local governments prior to making any such distributions
or payments.

 

8.6.          Governing Law.  The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of laws to the extent not pre-empted by
federal law.

 

8.7.          Compliance with Section 409A.  Notwithstanding anything herein to the
contrary, (i) if at the time of the Participant’s termination of
employment with any Service Recipient the Participant is a “specified employee”
as defined in Section 409A of the Code, and the deferral of the
commencement of any payments or benefits otherwise payable hereunder as a
result of such termination of employment is necessary in order to prevent the
imposition of any accelerated or additional tax under Section 409A of the
Code, then the Company will defer the commencement of the payment of any such
payments or benefits hereunder (without any reduction in such payments or
benefits ultimately paid or provided to the Participant) until the date that is
six months following the Participant’s termination of employment with all
Service Recipients (or the earliest date as is permitted under Section 409A
of the Code) and (ii) if any other payments of money or other benefits due
to the Participant hereunder would cause the application of an accelerated or
additional tax under Section 409A of the Code, such payments or other
benefits shall be deferred if deferral will make such payment or other benefits
compliant under Section 409A of the Code, or otherwise such payment or
other benefits shall be restructured, to the extent possible, in a manner,
determined by the Board, that does not cause such an accelerated or additional
tax or result in an additional cost to the Company.  The Company shall consult with its
legal counsel and tax accountants in good faith regarding the implementation of the provisions
of this Section 8.7, which shall be done only in a manner that
is reasonably acceptable to the senior executives of the Company; provided that none of the
Service Recipients nor any of its employees or representatives shall have any
liability to any Participant with respect thereto.

 

10Exhibit 10.18

 

FORM OF AMENDED AND RESTATED 

MANAGEMENT STOCKHOLDER’S AGREEMENT

 

This Amended
and Restated Management Stockholder’s Agreement (this “Agreement”) is
entered into as of                     
       , 2007 (the “Effective Date”) between
Capmark Financial Group Inc., a Nevada corporation (the “Company”), and
the undersigned person (the “Management Stockholder”) (the Company and
the Management Stockholder being hereinafter collectively referred to as the “Parties”).  All capitalized terms not immediately defined
are hereinafter defined in Section 7(b) of this Agreement.

 

WHEREAS, the
Company entered into that certain Stock Purchase Agreement, dated as of August 2,
2005, by and among General Motors Acceptance Corporation, a Delaware
corporation (“GMAC”), GMAC Mortgage Group, Inc., a Michigan
corporation, the Company and GMACCH Investor LLC, a Delaware limited liability
company (“Investor LLC”) (which is owned by affiliates of each of
Kohlberg Kravis Roberts & Co. L.P. (“KKR”), Five Mile Capital
Partners LLC (“FMCP”), Dune Capital Management L.P. (“Dune”), The
Goldman Sachs Group, Inc. (“GSCP” and, collectively with KKR, FMCP,
and Dune, the “Investors”)) (as amended, including the amendment and
restatement thereof dated as of January 16, 2006, the “Stock Purchase
Agreement”), pursuant to which Investor LLC acquired on March 23, 2006
approximately 78% of the outstanding common stock, par value $0.001 per share
of the Company (such transaction, the “Acquisition”);

 

WHEREAS, the
Management Stockholder has been selected by the Company to purchase shares of
Common Stock and in connection therewith may receive an option to purchase
shares of Common Stock (the “Option”) pursuant to the terms set forth
below and the terms of the 2006 Equity Plan for Key Employees of Capmark
Financial Group Inc. and Its Affiliates (the “Option Plan”) and, if
applicable, the Stock Option Agreement, dated as of the date hereof, entered
into by and between the Company and the Management Stockholder (the “Stock
Option Agreement”);

 

WHEREAS, in
connection with the Management Stockholder’s subscription for Common Stock and,
if applicable, the grant of the Option, the Management Stockholder will be
required to execute and deliver a Sale Participation Agreement between the
Management Stockholder and Investor LLC (the “Sale Participation Agreement”),
the Stock Option Agreement, a Form W-9, and other documents and
instruments deemed necessary or desirable by the Company to effect the
transactions contemplated hereby (this Agreement, the Sale Participation
Agreement, the Stock Option Agreement, the Form W-9 and such other
documents and instruments being referred to herein, collectively, as the “Management
Stockholder Documents”);

 

WHEREAS, this
Agreement is one of several other agreements (“Other Management Stockholders’
Agreements”) which have been, or which in the future will be, entered into
between the Company and individuals other than the Management Stockholder who
are or will be key employees of the Company or one of its subsidiaries (collectively,
the “Other Management Stockholders”);

 

 

WHEREAS, the
Management Stockholder has received a Confidential Information Memorandum
relating to the offering of the Common Stock by the Company to the Management
Stockholder and the other Management Stockholders (the “Memorandum”).

 

NOW THEREFORE,
to implement the foregoing and in consideration of the grant of the Option and
of the mutual agreements contained herein, the Parties do hereby agree as
follows:

 

1.                                       Subscription for Common Stock;
Issuance of Option; Certain Acknowledgments and Agreements of the Management
Stockholder.

 

(a)                                  Subject to the terms and
conditions hereinafter set forth, the Management Stockholder agrees to purchase
from the Company the number of newly issued shares of Common Stock set forth
under the caption “Base Share Amount” on the signature page of this
Agreement (the “Master Signature Page”) at a price per share equal to $           .     
(the “Share Price”).  The shares
of Common Stock subscribed for hereunder are referred to herein as the “Shares”
or “Purchased Stock” and the aggregate purchase price for the Shares
subscribed for hereunder is referred to herein as the “Investment Amount”.

 

(b)                                 The Management Stockholder
acknowledges and agrees that the subscription of the Management Stockholder
hereunder constitutes an irrevocable agreement by the Management Stockholder to
purchase the Shares for the Investment Amount and the Management Stockholder is
not entitled to cancel, terminate or revoke this subscription or any agreements
of the Management Stockholder hereunder, including the power of attorney
granted hereby.  The Management
Stockholder further acknowledges and agrees that except as otherwise set forth
in this Section 1, the subscription of the Management Stockholder hereunder,
including the power of attorney, survives (i) changes in the Management
Stockholder Documents which in the aggregate are not material and (ii) the
death or Disability of the Management Stockholder.

 

(c)                                  Subject to the terms and
conditions hereinafter set forth and as set forth in the Option Plan, as of the
Closing Date, the Company shall issue to the Management Stockholder (if
applicable), an Option to acquire shares of Common Stock at an initial exercise
price per share equal to $     .     
per share (the “Base Price”).  The
number of shares of Common Stock subject to the Stock Option Agreement, if any,
will be set forth on the Master Signature Page. 
The Management Stockholder acknowledges and agrees that the Company will
fill in the number of shares subject to the Stock Option Agreement, if any,
following the closing of the Management Stockholder’s purchase of Common Stock
hereunder.

 

(d)                                 The Management Stockholder
hereby irrevocably makes, constitutes and appoints the Company (and any
designee of, substitute for, or successor to, the Company) as the Management
Stockholder’s true and lawful attorney and authorized signatory in the
Management Stockholder’s name, place and stead, (i) to receive and pay
over to the Company on behalf of the Management Stockholder, to the extent set
forth in this Agreement, all funds received hereunder, (ii) to execute and
deliver, on behalf of the Management Stockholder amendments, restatements,
cancellations, or modifications of the Management Stockholder Documents, including,
without limitation, (A) filling in or amending amounts, dates and other
pertinent information provided that such changes in the aggregate are not
material, and (B) amendments, restatements and 

 

2

 

modifications that have been approved in accordance with the provisions
of Section 18 hereof and (iii) to make, execute, acknowledge,
deliver, swear to, file or record any instrument, including without
limitation any stock power, or filing which the Company considers necessary or
desirable to carry out the purposes of this Agreement or the other Management
Stockholder Documents or that may be required under the laws of any state or
local government or of any other jurisdiction; and any and all amendments,
restatements, cancellations, or modifications of such instruments.  This power of attorney shall be deemed
coupled with an interest, shall be irrevocable and shall survive any transfer
of some or all of the Management Stockholder’s shares of Common Stock.

 

(e)                                  The Management Stockholder
acknowledges and agrees that his subscription for Common Stock contained herein
may be accepted or rejected, in whole or in part, by the Company in its sole
and absolute discretion.  No subscription
shall be deemed accepted until the Company has delivered to the Management
Stockholder an executed counterpart of this Agreement indicating on the Master
Signature Page of the Company the amount of the subscription accepted by
the Company.  In the event of the Company’s
complete rejection of the Management Stockholder’s subscription, this Agreement
and the other Management Stockholder Documents will terminate and neither the
Company nor the Management Stockholder will have any rights or obligations
hereunder or thereunder.

 

(f)                                    The Management Stockholder agrees
to pay the full Investment Amount by wire transfer of immediately available
funds to an escrow account maintained by the Company and identified in the
covering letter accompanying this Agreement (the “Escrow Account”).  Any interest earned on funds paid by the
Management Stockholder to the Escrow Account will be paid to the Management
Stockholder promptly following the earlier to occur of (i) the Closing or (ii) the
termination of this Agreement by the Company pursuant to the provisions
hereof.  The Investment Amount will be
held in the Escrow Account until the closing of the issuance and sale of the
Shares to the Management Stockholder pursuant to this subscription (the “Closing”).  The Closing shall be held on the date determined
by the Company (the “Closing Date”). 
At the Closing, the Investment Amount (or if the Company accepts less
than all of the Management Stockholder’s subscription, a portion of the
Investment Amount equal to the number of Shares to be sold to the Management
Stockholder multiplied by the Share Price) will be transferred from the Escrow
Account into the Company’s operating account and the Company will issue to the
Management Stockholder a number of Shares equal to the portion of the
Investment Amount transferred to the Company divided by the Share Price.  In the event that the Company accepts less
than all of the Management Stockholder’s subscription, the Company will return
to the Management Stockholder the portion of the Investment Amount paid by the
Management Stockholder into the Escrow Account that exceeds the aggregate
purchase price for the Shares purchased.

 

(g)                                 The Master Signature Page constitutes
the Management Stockholder’s signature page for this Agreement, the Sale
Participation Agreement, and the Stock Option Agreement.

 

3

 

2.                                       Management Stockholder’s
Representations, Warranties and Agreements.

 

(a)                                  In addition to agreeing to the
restrictions on transfer of Stock set forth in Sections 3 and 4, if the
Management Stockholder is a Rule 405 Affiliate, the Management Stockholder
also agrees and acknowledges that he will not transfer any shares of Stock
unless:

 

(i)  the
transfer is pursuant to an effective registration statement under the
Securities Act of 1933, as amended, and the rules and regulations in
effect thereunder (the “Act”), and in compliance with applicable
provisions of state securities laws; or

 

(ii)  (A) counsel
for the Management Stockholder (which counsel shall be reasonably satisfactory
to the Company) shall have furnished the Company with an opinion, reasonably
satisfactory in form and substance to the Company, that no such registration is
required because of the availability of an exemption from registration under
the Act and (B) if the Management Stockholder is a citizen or resident of
any country other than the United States, or the Management Stockholder desires
to effect any transfer in any such country, counsel for the Management
Stockholder (which counsel shall be reasonably satisfactory to the Company)
shall have furnished the Company with an opinion or other advice reasonably
satisfactory in form and substance to the Company to the effect that such
transfer will comply with the securities laws of each relevant jurisdiction.

 

Notwithstanding
the foregoing, the Company acknowledges and agrees that any of the following
transfers are deemed to be in compliance with the Act and this Agreement
(including without limitation any restrictions or prohibitions herein) and no
opinion of counsel is required in connection therewith: (x) a transfer
made pursuant to Section 3, 4, 5, 6 or 9 hereof, (y) a transfer upon
the death or Disability of the Management Stockholder to the Management
Stockholder’s Estate or a transfer to the executors, administrators,
testamentary trustees, legatees or beneficiaries of a person who has become a
holder of Stock in accordance with the terms of this Agreement; provided
that it is expressly understood that any such transferee shall be bound by the
provisions of this Agreement, and (z) a transfer made after the Effective
Date in compliance with the federal securities laws to a Management Stockholder’s
Trust or any of the Management Stockholder’s Family Members, provided
that such transfer is made expressly subject to this Agreement, that the
transferee agrees in writing to be bound by the terms and conditions hereof and
the transfer agreement is in a form approved by the Company.

 

(b)                                 The certificate (or
certificates) representing the Stock, if any, shall bear the following legend:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE AMENDED AND RESTATED MANAGEMENT
STOCKHOLDER’S AGREEMENT DATED AS OF                          
         , 2007 BETWEEN CAPMARK
FINANCIAL GROUP INC. (THE “COMPANY”) AND THE MANAGEMENT STOCKHOLDER NAMED 

 

4

 

ON THE FACE HEREOF (A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF THE COMPANY).”

 

(c)                                  The Management Stockholder
acknowledges that he has been advised that (i) a restrictive legend in the
form heretofore set forth shall be placed on the certificates representing the
Stock, if any, and (ii) a notation shall be made in the appropriate
records of the Company indicating that the Stock is subject to restrictions on
transfer and, if applicable, appropriate stop transfer restrictions will be
issued to the Company’s transfer agent with respect to the Stock.  If the Management Stockholder is a Rule 405
Affiliate, the Management Stockholder also acknowledges that (1) the Stock
must be held indefinitely and the Management Stockholder must continue to bear
the economic risk of the investment in the Stock unless it is subsequently
registered under the Act or an exemption from such registration is available, (2) when
and if shares of the Stock may be disposed of without registration in reliance
on Rule 144 of the rules and regulations promulgated under the Act,
such disposition can be made only in limited amounts in accordance with the
terms and conditions of Rule 144 and (3) if the Rule 144
exemption is not available, public sale without registration will require
compliance with some other exemption under the Act.

 

(d)                                 If any shares of the Stock are
to be disposed of in accordance with Rule 144 under the Act or otherwise,
the Management Stockholder shall promptly notify the Company of such intended
disposition and shall deliver to the Company at or prior to the time of such
disposition such documentation as the Company may reasonably request in
connection with such sale and, in the case of a disposition pursuant to Rule 144,
shall deliver to the Company an executed copy of any notice on Form 144
required to be filed with the SEC.

 

(e)                                  The Management Stockholder
agrees that, if any shares of the Stock are offered to the public pursuant to
an effective registration statement under the Act (other than registration of
securities issued on Form S-8, S-4 or any successor or similar form), the
Management Stockholder will not effect any public sale or distribution of any
shares of the Stock not covered by such registration statement from the time of
the receipt of a notice from the Company that the Company has filed or
imminently intends to file such registration statement to, or within
180 days (or such shorter period as may be consented to by the managing
underwriter or underwriters) in the case of the initial Public Offering and
ninety (90) days (or in an underwritten offering such shorter period as
may be consented to by the managing underwriter or underwriters, if any) in the
case of any other Public Offering after, the effective date of such
registration statement, unless otherwise agreed to in writing by the Company.

 

(f)                                    The Management Stockholder
represents and warrants that (i) with respect to the Stock, he has
received and reviewed the available information relating to the Stock,
including having received and reviewed the documents related thereto, certain
of which documents set forth the rights, preferences and restrictions relating
to the Options and the Stock underlying the Options and (ii) he has been
given the opportunity to obtain any additional information or documents and to
ask questions and receive answers about such information, the Company and the
business and prospects of the Company which he deems necessary to evaluate the
merits and risks related to his investment in the Stock and to verify the information
contained in the information received as indicated in this Section 2(f),
and he has relied solely on such information.

 

5

 

(g)                                 The Management Stockholder
further represents and warrants that (i) his financial condition is such
that he can afford to bear the economic risk of holding the Stock for an
indefinite period of time and has adequate means for providing for his current
needs and personal contingencies, (ii) he can afford to suffer a complete
loss of his or her investment in the Stock, (iii) he understands and has
taken cognizance of all risk factors related to the purchase of the Stock and (iv) his
knowledge and experience in financial and business matters are such that he is
capable of evaluating the merits and risks of his purchase of the Stock as
contemplated by this Agreement.

 

3.                                       Transferability of Stock.  The Management Stockholder agrees that he
will not directly or indirectly, offer, transfer, sell, assign, pledge,
hypothecate or otherwise dispose of (any of the foregoing acts being referred
to herein as a “transfer”), any Purchased Stock or Common Stock otherwise
acquired and/or held by the applicable Management Stockholder Entities, or at
the time of exercise, any shares of the Common Stock issuable or issued upon
exercise of the Options (“Option Stock”; together with any other
Purchased Stock, Net Settled Stock and Common Stock otherwise acquired and/or
held by the applicable Management Stockholder Entities, collectively referred
to as “Stock”) at any time during the period commencing on the Effective
Date and ending on the first to occur of (i) the fifth anniversary of the
Effective Date or (ii) the occurrence of a Change in Control (the first
such event to occur being the “Lapse Date”); provided, however,
that the Management Stockholder may transfer shares of Stock during such time
pursuant to one of the following exceptions: (a) transfers permitted by Section 4,
5 or 6; (b) transfers permitted by clauses (y) and (z) of Section 2(a);
(c) a sale of shares of Common Stock pursuant to an effective registration
statement under the Act filed by the Company, including without limitation a
sale pursuant to Section 9 (excluding any registration on Form S-8, S-4
or any successor or similar form); (d) transfers permitted pursuant to the
Sale Participation Agreement; or (e) transfers permitted by the
Board.  No transfer of any such shares in
violation hereof shall be made or recorded on the books of the Company and any
such transfer shall be void ab initio and of no effect; provided, that
in the event the Management Stockholder elects not to participate in any Sale
Agreement entered into by the Investor or any of its affiliates that is
consummated after a Qualified Public Offering, the Company shall immediately
waive the restrictions on transfer that would otherwise be imposed on the
Management Stockholder pursuant to this Section 3 solely with respect to
those shares of Common Stock which could have been sold by the Management
Stockholder in such Sale Agreement.

 

4.                                       Right of First Refusal.  (a)  If, at any time prior to the first
occurrence of a Lapse Date, the Management Stockholder receives a bona fide
offer to purchase any or all of his Stock (the “Third Party Offer”) from
a third party (which, for the avoidance of doubt, shall not include any
transfers pursuant to clause (y) or (z) of Section 2(a), or pursuant
to clause (c) or (d) of Section 3) (the “Offeror”), which
the Management Stockholder wishes to accept, the Management Stockholder shall
cause the Third Party Offer to be reduced to writing and shall notify the
Company in writing of his wish to accept the Third Party Offer.  The Management Stockholder’s notice to the
Company shall contain an irrevocable offer to sell such Stock to the Company
(in the manner set forth below) at a purchase price equal to the price
contained in, and on the same terms and conditions of, the Third Party Offer,
and shall be accompanied by a copy of the Third Party Offer (which shall
identify the Offeror).  At any time within
fifteen (15) days after the date of the receipt by the Company of the
Management Stockholder’s notice, the 

 

6

 

Company shall have the right and option to purchase, or to arrange for
a third party to purchase, all (but not less than all) of the shares of Stock
covered by the Third Party Offer, pursuant to Section 4(b).

 

(b)                                 The Company shall have the right
and option to purchase, or to arrange for a third party to purchase, all of the
shares of Stock covered by the Third Party Offer at the same price and on
substantially the same terms and conditions as the Third Party Offer (or, if
the Third Party Offer includes any consideration other than cash, then at the
sole option of the Company, at the equivalent all cash price, determined in
good faith by the Board), by delivering a check or checks in the appropriate
amount (or, at the discretion of the Company, by wire transfer of immediately
available funds, if the Management Stockholder Entities timely provide to the
Company wire transfer instructions) (and any such non-cash consideration to be
paid) to the Management Stockholder at one of the Company’s primary offices (as
specified by the Company) against delivery of any certificates or other
instruments representing the shares of Stock so purchased, appropriately
endorsed by the Management Stockholder; provided that if the Management
Stockholder does not agree with the Board’s determination of “equivalent all
cash price”, the Management Stockholder shall have the right to so notify the
Company, the Company shall not have the right to purchase such shares and the
Management Stockholder shall not have any right to sell such shares to a third
party without initiating the process set forth in the first sentence of Section 4(a).  If at the end of the 15-day period, the
Company has not tendered the purchase price for such shares in the manner set
forth above, the Management Stockholder may, during the succeeding 60-day
period, sell not less than all of the shares of Stock covered by the Third
Party Offer, to the Offeror on terms no less favorable to the Management
Stockholder than those contained in the Third Party Offer.  Promptly after such sale, the Management
Stockholder shall notify the Company of the consummation thereof and shall
furnish such evidence of the completion and time of completion of such sale and
of the terms thereof as may reasonably be requested by the Company.  If, at the end of sixty (60) days
following the expiration of the 15-day period during which the Company is
entitled hereunder to purchase the Stock, the Management Stockholder has not
completed the sale of such shares of the Stock as aforesaid, all of the
restrictions on sale, transfer or assignment contained in this Agreement shall,
to the extent applicable, again be in effect with respect to such shares of the
Stock.

 

(c)                                  Notwithstanding anything in this
Agreement to the contrary, this Section 4 shall terminate and be of no
further force or effect upon the earlier to occur of a Change in Control or a
Qualified Public Offering.

 

5.                                       The Management Stockholder
Entities’ Right to Resell Stock and Options to the Company.

 

(a)                                  Except as otherwise provided
herein, if, prior to the fifth anniversary of the Effective Date, the
Management Stockholder is still in the employ of the Company (and/or, if
applicable, any other Service Recipient) and the Management Stockholder’s
employment is terminated as a result of the death or Disability of the
Management Stockholder, then the applicable Management Stockholder Entity,
shall, for one year (the “Put Period”) following the date of such
termination for death or Disability, have the right to:

 

7

 

(i)  With
respect to all shares of Stock held consecutively by the Management Stockholder
Entities for at least six (6) months and one day, sell to the Company, and
the Company shall be required to purchase, on one occasion, all such shares of
Stock then held by the applicable Management Stockholder Entities at a per
share price equal to the Fair Market Value Per Share as of the date of such
purchase (the “Section 5 Repurchase Price”); and

 

(ii)  With
respect to any outstanding Options: (A) sell to the Company, and the
Company shall be required to purchase, on one occasion, all of the exercisable
Options then held by the applicable Management Stockholder Entities for an
amount equal to the product of (x) the excess, if any, of the Section 5
Repurchase Price over the Option Exercise Price and (y) the number of
Exercisable Option Shares, which Options shall be terminated in exchange for
such payment; or (B) receive from the Company, on one occasion, in
exchange for all of the exercisable Options then held by the applicable
Management Stockholder Entities, if any, a number of shares of Stock equal to
the quotient of (x) the product of (1) the excess, if any, of the Fair
Market Value Per Share as of the date of such exchange, over the Option
Exercise Price, and (2) the number of Exercisable Option Shares, divided
by (y) the Fair Market Value Per Share as of the date on which such
exchange occurs, which Options shall be terminated in exchange for such shares
(the “Net Settled Stock”).  In the
event the foregoing Option Excess Price is zero or a negative number, all
outstanding exercisable stock options granted to the Management Stockholder
under the Option Plan shall be automatically terminated without any payment in
respect thereof at the time of such proposed settlement of Options.  In the event that the Management Stockholder
Entities do not exercise the foregoing rights, all exercisable but unexercised
Options shall terminate pursuant to the terms of Section 3.2(a) of
the Stock Option Agreement.  All
unexercisable Options held by the applicable Management Stockholder Entities
shall terminate without payment immediately upon termination of employment.

 

(b)                                 For 30 days following the date
that is six months after the receipt by the applicable Management Stockholder
Entities of the Net Settled Stock (the “Settled Stock Put Period”) (which
period may, for the avoidance of doubt, extend after the expiration of the Put
Period), the applicable Management Stockholder Entities shall have the right to
sell to the Company, and the Company shall be required to purchase, on one
occasion, all such Net Settled Stock held by the applicable Management
Stockholder Entities, at a per share price equal to the Fair Market Value Per
Share as of the date of such purchase.

 

(c)                                  In the event the applicable
Management Stockholder Entities intend to exercise their rights pursuant to Section 5(a) or
5(b), such Management Stockholder Entities shall send written notice to the
Company, (i) at any time during the Put Period, of their intention to sell
shares of Stock in exchange for the payment referred to in Section 5(a)(i) and/or
to sell such Options or exchange such Options for Net Settled Stock or (ii) at
any time during the Settled Stock Put Period, of their intention to sell the
Net Settled Stock in exchange for the payment referred to in Section 5(b) and
shall indicate the number of shares of Stock to be sold and the number of
Options to be sold with payment in respect thereof (the “Redemption Notice”).  The completion of the purchases or exchanges
shall take place at one of the primary offices of the Company (as specified by
the Company) on or before the tenth business day after 

 

8

 

the giving of the Redemption Notice. 
The applicable Repurchase Price (including any payment with respect to
the Options as described above) shall be paid by delivery to the applicable
Management Stockholder Entities of a check or checks in the appropriate amount
payable to the order of each of the applicable Management Stockholder Entities
(or, at the discretion of the Company, by wire transfer of immediately
available funds, if the Management Stockholder Entities timely provide to the
Company wire transfer instructions) and the Net Settled Stock shall be
delivered to the applicable Management Stockholder Entities, both against
delivery of any certificates or other instruments representing the Stock so
purchased and appropriate documents canceling the Options so terminated
appropriately endorsed or executed by the applicable Management Stockholder
Entities or any duly authorized representative.

 

(d)                                 Notwithstanding anything in Section 5(a) or
5(b) to the contrary and subject to Section 11(a), if there exists
and is continuing a default or an event of default on the part of the Company
or any subsidiary of the Company under any loan, guarantee or other agreement under
which the Company or any subsidiary of the Company has borrowed money or if the
repurchase referred to in Section 5(a) would result in a default or
an event of default on the part of the Company or any subsidiary of the Company
under any such agreement or if a repurchase would not be permitted under the
Nevada Revised Statutes Chapter 78m Section 288 (the “NRS”) or
would otherwise violate the NRS (or if the Company reincorporates in another
state, the business corporation law of such state) (each such occurrence being
an “Event”), the Company shall not be obligated to repurchase any of the
Stock or the Options from the applicable Management Stockholder Entities until
the first business day which is ten (10) calendar days after all of
the foregoing Events have ceased to exist (the “Repurchase Eligibility Date”);
provided, however, that (i) the number of shares of Stock
subject to repurchase under this Section 5(d) shall be that number of
shares of Stock, and (ii) in the case of a repurchase pursuant to Section 5(a)(ii),
the number of Exercisable Option Shares for purposes of calculating the Option
Excess Price payable under this Section 5(d) shall be the number of
Exercisable Option Shares, in each case as specified in the Redemption Notice
and held by the applicable Management Stockholder Entities at the time of
delivery of the Redemption Notice in accordance with Section 5(c) hereof.  All Options exercisable as of the date of a
Redemption Notice, in the case of a repurchase pursuant to Section 5(a),
shall continue to be exercisable until the actual repurchase of such Options
pursuant to such Redemption Notice, provided that to the extent any
Options are exercised after the date of such Redemption Notice, the number of
Exercisable Option Shares for purposes of calculating the Option Excess Price
shall be reduced accordingly. 
Notwithstanding the foregoing and subject to Section 6(d), if an
Event exists and is continuing for ninety (90) days, the Management
Stockholder Entities shall be permitted by written notice to rescind any
Redemption Notice.

 

(e)                                  Effect of Change in Control.  Notwithstanding anything in this Agreement to
the contrary, except for any payment obligation of the Company which has arisen
prior to such termination pursuant to this Section 5(e), this Section 5
shall terminate and be of no further force or effect upon the occurrence of a
Change in Control.

 

9

 

6.                                           The Company’s Option to Purchase
Stock and Options of Management Stockholder Entities Upon Certain Terminations
of Employment.

 

(a)                                  Termination
for Cause by the Company, Termination by the Management Stockholder without
Good Reason and other Call Events.  Except as otherwise
provided herein, if, prior to the fifth anniversary of the Effective Date, (i) the
Management Stockholder’s employment with the Company and all other Service
Recipients is terminated by the Company (and/or, if applicable, all other
Service Recipients) for Cause, (ii) the Management Stockholder’s active
employment with the Company (and/or, if applicable, all other Service
Recipients) is terminated by the Management Stockholder without Good Reason, (iii) the
beneficiaries of a Management Stockholder’s Trust shall include any person or
entity other than the Management Stockholder, his spouse (or ex-spouse) or his
lineal descendants (including adopted children) or (iv) the Management
Stockholder shall otherwise effect a transfer of any of the Stock other than as
permitted in this Agreement (other than as may be required by applicable law or
an order of a court having competent jurisdiction) after notice from the
Company of such impermissible transfer and a reasonable opportunity to cure
such transfer (each, a “Section 6(a) Call Event”), then,
during the one-year period following any such Section 6(a) Call Event
(or through the occurrence of a Change in Control, if such event occurs
earlier):

 

(A)                              With
respect to the Stock, the Company may purchase all or any portion of the shares
of the Stock then held by the applicable Management Stockholder Entities at a
per share purchase price equal to the lesser of (x) the Fair Market Value
Per Share and (y) the Book Value Per Share, each as of the date of such
purchase (any such applicable repurchase price, the “Section 6(a) Repurchase
Price”); and

 

(B)                                With
respect to the Options if the event described in clause 6(a)(i), (iii) or
(iv) has occurred, all such Options (whether or not then exercisable) held
by the applicable Management Stockholder Entities will terminate immediately
without payment in respect thereof; and

 

(C)                                With
respect to the Options if the event described in clause 6(a)(ii) has
occurred, the Company may purchase all or any portion of the exercisable
Options held by the applicable Management Stockholder Entities for an amount
equal to the product of (x) the excess, if any, of the Section 6(a) Repurchase
Price over the Option Exercise Price and (y) the number of Exercisable
Option Shares, which Options shall be terminated in exchange for such
payment.  In the event the foregoing
Option Excess Price is zero or a negative number, all outstanding exercisable
stock options granted to the Management Stockholder under the Option Plan shall
be automatically terminated without any payment in respect thereof.  In the event that the Company does not
exercise the foregoing rights, all exercisable but unexercised Options shall
terminate pursuant to the terms of Section 3.2(a) of the Stock Option
Agreement.  All unexercisable Options
held by the applicable Management Stockholder Entities shall also terminate
without payment immediately upon termination of employment.

 

(b)                                 Termination
without Cause by the Company, and Termination by the Management Stockholder
with Good Reason.  Except as otherwise provided herein, if, prior
to the fifth anniversary of the Effective Date, (i) the Management
Stockholder’s active employment with the Company (and/or, if applicable, all
other Service Recipients) is terminated by the Company (and/or, if applicable,
all other Service Recipients) without Cause, or (ii) the Management
Stockholder’s active employment with the Company (and/or, if applicable, all
other Service Recipients) is terminated by the Management Stockholder with Good
Reason, (each, a 

 

10

 

“Section 6(b) Call Event”), then, during the one-year
period following any such Section 6(b) Call Event (or through the
occurrence of a Change in Control, if such event occurs earlier):

 

(A)                              With
respect to the Stock, the Company may purchase all or any portion of the shares
of Stock then held by the applicable Management Stockholder Entities at a per
share price equal to the Fair Market Value Per Share as of the date of such
purchase; and

 

(B)                                With
respect to the Options, the Company may purchase all or any portion of the
exercisable Options held by the applicable Management Stockholder Entities for
an amount equal to the product of (x) the excess, if any, of the price
equal to the Fair Market Value Per Share as of the date of such purchase over the
Option Exercise Price and (y) the number of Exercisable Option Shares,
which Options shall be terminated in exchange for such payment.  In the event the foregoing Option Excess
Price is zero or a negative number, all outstanding exercisable stock options
granted to the Management Stockholder under the Option Plan shall be
automatically terminated without any payment in respect thereof.  In the event of the occurrence of a Section 6(b) Call
Event, the Company shall provide the applicable Management Stockholder Entities
with written notice, not less than ten (10) business days prior to the
expiration date of the applicable Management Stockholder Entities’ exercisable
Options then held, whether it intends to exercise its right to repurchase the
applicable Management Stockholder Entities’ exercisable Options hereunder and
shall include, if available, the repurchase price that the Company proposes to
pay for such Options.  In the event that
the Company does not exercise such foregoing rights, all exercisable but
unexercised Options shall terminate pursuant to the terms of Section 3.2(a),
of the Stock Option Agreement.  All
unexercisable Options held by the applicable Management Stockholder Entities
shall terminate without payment immediately upon termination of employment or
on such later date as may otherwise be provided in the Stock Option Agreement.

 

(c)                                  Termination
for Death, Disability or Retirement.  Except as otherwise
provided herein, if, prior to the fifth anniversary of the Effective Date, the
Management Stockholder’s employment with the Company (and/or, if applicable,
all other Service Recipients) is terminated as a result of the death,
Disability or Retirement of the Management Stockholder (each a “Section 6(c) Call
Event”), then, during the one-year period following any such Section 6(c) Call
Event (or through the occurrence of a Change in Control, if such event occurs
earlier):

 

(A)                              With
respect to the Stock, the Company may purchase all or any portion of the shares
of Stock then held by the applicable Management Stockholder Entities at a per
share price equal to the Fair Market Value Per Share as of the date of such
purchase; and

 

(B)                                With
respect to the Options held by the applicable Management Stockholder Entities, the
Company may purchase all or any portion of the exercisable Options for an
amount equal to the product of (x) the excess, if any, of the Fair Market
Value Per Share as of the date of such purchase over the Option Exercise Price
and (y) the number of Exercisable Option Shares, which Options shall be
terminated in exchange for such payment. 
In the event the foregoing Option Excess Price is zero or a negative
number, all outstanding exercisable stock options granted to the Management
Stockholder under the Option Plan shall be automatically terminated without any
payment in respect thereof.  In the event
that the Company does not exercise the foregoing rights all exercisable but
unexercised Options shall terminate pursuant to 

 

11

 

the terms of Section 3.2(a) of
the Stock Option Agreement.  All
unexercisable Options held by the applicable Management Stockholder Entities
shall terminate without payment immediately upon termination of employment or
on such later date as may otherwise be provided in the Stock Option Agreement.

 

(d)                                 Call Notice.  The Company shall have a period of (i) one
year from the date of any Call Event (or, if later, with respect to a Section 6(a) Call
Event, the date after discovery of, and the applicable cure period for, an impermissible
transfer constituting a Section 6(a) Call Event) and (ii) thirty (30)
days from the date the applicable Management Stockholder Entities rescinds a
Redemption Notice pursuant to the last sentence of Section 5(d), in which
to give notice in writing to the applicable Management Stockholder Entities of
its election to exercise its rights and obligations pursuant to this Section 6
(“Call Notice”); provided, that in the case of a Section 6(b) Call
Event, such Call Notice shall be delivered to the applicable Management
Stockholder Entities not less than ten (10) business days prior to the
expiration of the applicable Management Stockholder Entities’ exercisable
Options; provided  further, that in the case of a Section 6(c) Call
Event, the Company shall have a period of up to one year from the last day of
the fiscal year in which the Management Stockholder’s employment terminates,
but solely with respect to Options that become exercisable following the
Management Stockholder’s termination of employment.  The completion of the purchases pursuant to
the foregoing shall take place at one of the primary offices of the Company (as
specified by the Company) on or before the tenth business day after the giving
of the Call Notice.  The applicable
Repurchase Price (including any payment with respect to the Options as
described in this Section 6) shall be paid by delivery to the applicable
Management Stockholder Entities of a check or checks in the appropriate amount
payable to the order of each of the applicable Management Stockholder Entities
(or, at the discretion of the Company,  by wire transfer of immediately available
funds, if the applicable Management Stockholder Entities timely provide to the
Company wire transfer instructions) against delivery of any certificates or
other instruments representing the Stock so purchased and appropriate documents
canceling the Options so terminated, appropriately endorsed or executed by the
applicable Management Stockholder Entities or any duly authorized
representative.

 

(e)                                  Delay of Call.  Notwithstanding any other provision of this Section 6
to the contrary and subject to Section 11(a), if there exists and is
continuing any Event, the Company shall delay the repurchase of any of the
Stock or the Options (pursuant to a Call Notice timely given in accordance with
Section 6(d) hereof) from the applicable Management Stockholder
Entities until the Repurchase Eligibility Date; provided, however,
that (i) the number of shares of Stock subject to repurchase under this Section 6
shall be that number of shares of Stock, and (ii) in the case of a
repurchase pursuant to Section 6(a), 6(b) or 6(c), the number of
Exercisable Option Shares for purposes of calculating the Option Excess Price
payable under this Section 6 shall be the number of Exercisable Option
Shares, in each case held by the applicable Management Stockholder Entities at
the time of delivery of (and as set forth in) a Call Notice in accordance with Section 6(d) hereof.  All Options exercisable as of the date of a
Call Notice, in the case of a repurchase pursuant to Section 6(a), 6(b) or
6(c), shall continue to be exercisable until the actual repurchase of such
Options pursuant to such Call Notice, provided that to the extent that
any Options are exercised after the date of such Call Notice, the number of
Exercisable Option Shares for purposes of calculating the Option Excess Price
shall be reduced accordingly. 
Notwithstanding the foregoing, if an Event exists and is continuing for
ninety (90) 

 

12

 

days, the Management Stockholder Entities shall be permitted by written
notice to cause the Company to rescind any Call Notice but the Company shall
have another thirty (30) days from the date the Event ceases to exist to
give another Call Notice on the terms applicable to the first Call Notice.

 

(f)                                    Effect of Change in Control.  Notwithstanding anything in this Agreement to
the contrary, except for any payment obligation of the Company which has arisen
prior to termination pursuant to this Section 6(f), this Section 6
shall terminate and be of no further force or effect upon the occurrence of a
Change in Control.

 

7.                                       Adjustment of Repurchase Price;
Definitions.

 

(a)                                  Adjustment of
Repurchase Price.  In determining the applicable repurchase
price of the Stock and Options, as provided for in Sections 5 and 6,
above, appropriate adjustments shall be made for any stock dividends, splits,
combinations, recapitalizations or any other adjustment in the number of
outstanding shares of Stock in order to maintain, as nearly as practicable, the
intended operation of the provisions of Sections 5 and 6.

 

(b)                                 Definitions.  All capitalized terms used in this Agreement
and not defined herein shall have such meaning as such terms are defined in the
Option Plan.  Terms used herein and as
listed below shall be defined as follows:

 

“Acquisition”
shall have the meaning set forth in the first “whereas” clause.

 

“Act”
shall have the meaning set forth in Section 2(a)(i) hereof.

 

“Agreement”
shall have the meaning set forth in the introductory paragraph.

 

“Base Price” shall
have the meaning set forth in Section 1(c) hereof.

 

“Base Share Amount” shall have the meaning
set forth in Section 1(a) hereof.

 

“Board” shall mean the Board of Directors of
the Company.

 

“Book
Value Per Share” shall mean the quotient of (a)(i) the sum of
consolidated stockholders’ equity plus equity presented outside of consolidated
stockholders’ equity as mezzanine equity, as reflected in the most recent
fiscal quarter-end consolidated balance sheet of the Company approved by the
Board (or relevant Board committee), prepared in accordance with United States
generally accepted accounting principles, plus (ii) consideration that
would be received upon the exercise of all outstanding stock options and other
rights to acquire Common Stock and the conversion of all securities convertible
into Common Stock and other stock equivalents (but only to the extent that the
per share conversion prices of such options and other securities are less than
the Book Value Per Share resulting from this definition), divided by (b) the
sum of the number of shares of Common Stock then outstanding and the number of
shares of Common Stock issuable upon the exercise of all outstanding stock
options and other rights to acquire Common Stock (but only to the extent that
the per share conversion prices of such options and other securities are less
than the Book Value Per Share resulting from this definition).

 

13

 

“Call Events” shall mean, collectively, Section 6(a) Call
Events, Section 6(b) Call Events and Section 6(c) Call
Events.

 

“Call Notice” shall have the meaning set
forth in Section 6(d) hereof.

 

“Cause”
shall mean “Cause” as such term may be defined in any employment agreement
between the Management Stockholder and the Company or any other Service
Recipient (the “Employment Agreement”), or, if there is no such
Employment Agreement (or if such term is not defined therein), “Cause” shall
exist if the Board reasonably determines that any one or more of the following
events has occurred while employed by the Company or any other Service
Recipient: (i) the Management Stockholder’s willful and continued failure
(except where due to a physical or mental incapacity) to substantially perform
his material duties with respect to the Company or any Service Recipient which
continues beyond ten (10) days after a written demand for substantial
performance is delivered to the Management Stockholder by the applicable
Service Recipient (such ten-day period, the “Cure Period”); (ii) any
gross misconduct of the Management Stockholder that causes material and
demonstrable injury, monetarily or otherwise, to any Service Recipient; (iii) conviction
of, or plea of guilty or nolo contendere to, the commission of (x) a
felony by the Management Stockholder or (y) any misdemeanor involving theft,
fraud, misappropriation or moral turpitude (other than in connection with any
traffic violations); (iv) the Management Stockholder’s disqualification or
bar by any governmental or self-regulatory authority from serving in his
position with the applicable Service Recipient or the Management Stockholder’s
loss of any governmental or self-regulatory license that is reasonably
necessary for the Management Stockholder to perform his material duties with
respect to the applicable Service Recipient in any such case, as a result of
misconduct by the Management Stockholder; (v) the Management Stockholder’s
willful obstruction of, or willful failure to cooperate with (except where due
to a physical or mental incapacity), any investigation authorized by the Board;
provided that exercise by the Management Stockholder of his constitutional
rights under the Fifth Amendment of the United States Constitution in the event
of any criminal investigation of the Management Stockholder shall not be
treated as obstruction of or failure to cooperate with any such investigation; (vi) the
Management Stockholder’s material breach of the applicable Service Recipient’s
written code of conduct and business ethics, which breach is customarily
punishable by termination of employment by the applicable Service Recipient; or
(vii) a material breach by the Management Stockholder of the restrictive
covenants applicable to the Management Stockholder pursuant to the Management
Stockholder’s Management Stockholders’ Agreement or other agreements, if any,
which continues beyond the Cure Period (to the extent that, in the Board’s
reasonable judgment, such breach can be cured).

 

“Change in Control” shall mean (i) the
sale of all or substantially all of the assets of Investor LLC, the Company, or
Capmark Finance Inc. to an Unaffiliated Person; or (ii) a sale by the
Company or Investor LLC, in a single transaction or in a related series of
transactions, of the voting stock of the Company resulting in more than 50% of
the voting stock of the Company being held (either directly or indirectly
through Investor LLC, and which for the avoidance of doubt includes the
distribution of any interests in Investor LLC being distributed to any limited
partners of any Investor, which are not Affiliates of that Investor) by an
Unaffiliated Person; or (iii) a sale by the Company or Investor LLC, in an
unrelated series of transactions, of the voting stock of the Company, as a
result of which an Unaffiliated Person is (either directly or indirectly
through Investor LLC, and which for the avoidance of doubt includes the
distribution of any 

 

14

 

interests in Investor LLC being distributed
to any limited partners of any Investor, which are not Affiliates of that
Investor) the single largest holder of voting stock of the Company; or (iv) a
merger or consolidation of the Company or Investor LLC into an Unaffiliated
Person;  if and only
if any such event (or as a result of any such event) listed in (i) –
(iv) above results in the inability of the Investors and any of their
respective Affiliates, either as a Group or individually (through Investor LLC
or otherwise), to elect a majority of the Board or board of directors of the
resulting entity; provided, however, to the extent any such event
listed in (i) – (iv) above occurs but at such time either the
Investors and their Affiliates as a Group, or any of the Investors or their
respective Affiliates individually (through Investor LLC or otherwise) retain
the ability to elect a majority of the Board or the board of directors of the
resulting entity, a Change in Control shall be deemed to have occurred upon any
later date on which either the Investors and their respective Affiliates as a
Group or any of the Investors or their Affiliates individually retain such
ability. For purposes of this definition, the term “Unaffiliated Person”
means any Person or Group who is not (x) an Investor or any member of an
Investor, (y) an Affiliate of an Investor or any member of an Investor or (z)
an entity in which an Investor or any member of an Investor holds, directly or
indirectly, a majority of the economic interests in such entity.

 

Notwithstanding
the foregoing, if any of the transactions described in (i), (ii) or (iv) of
the preceding paragraph shall occur and the other Person or Group involved in
such transaction (or its parent entity) is an Affiliate of any Investor because
it is under common control by an ultimate parent entity, but
the day-to-day operations of, and key business decisions regarding, such
Affiliate are controlled by an entity that is, or individuals who are,
principally engaged in a business other than the management or operations of
private equity funds (any such Affiliate, a “Strategic Business Affiliate”),
then the determination of whether a Change in Control has occurred shall be
made by applying the relevant test in clause (i), (ii) or (iv) above
(along with the test of whether the Investors and their Affiliates as a Group
or any of the Investors or their Affiliates individually (through Investor LLC
or otherwise) lose the ability to elect a majority of the Board) as if the
Strategic Business Affiliate was not an Affiliate of any of the Investors and
by treating the voting power of the Strategic Business Affiliate in the Company
(or the resulting entity) as if it were held by a Person or Group unaffiliated
with any of the Investors.

 

“Closing”
shall have the meaning set forth in Section 1(f) hereof.

 

“Closing
Date” shall have the meaning set forth in Section 1(f) hereof.

 

“Common
Stock” shall mean the Company’s outstanding common stock, par value $0.001
per share.

 

“Company”
shall have the meaning set forth in the introductory paragraph.

 

“Confidential
Information” shall mean all non-public information concerning trade
secrets, know-how, software, developments, inventions, processes, technology,
designs, financial data, strategic business plans or any proprietary or
confidential information, documents or materials in any form or media,
including any of the foregoing relating to research, operations, finances,
current and proposed products and services, vendors, customers, advertising and
marketing, and other non-public, proprietary, and confidential information of
the Restricted Group. For purposes of this Agreement, on and after any
termination of the Management 

 

15

 

Stockholder’s
employment with any Service Recipient for any reason, the term “Confidential
Information” shall not include the names, addresses or phone numbers of the
Management Stockholder’s principal contacts at any client (whether current,
prospective or former) of the Company or any other Service Recipient, with
respect to which the Management Stockholder has personally contacted to
solicit business for the Company or any other Service Recipient within the
three (3) month period immediately preceding any such termination of
employment.

 

“Custody
Agreement and Power of Attorney” shall have the meaning set forth in Section 9(e) hereof.

 

“Disability”
shall mean “Disability” as such term is defined in the Employment Agreement, or
if there is no such Employment Agreement (or if such term is not defined
therein), “Disability” shall mean the Management Stockholder’s physical or
mental disability or infirmity that prevents the performance of such Management
Stockholder’s duties for a period of (i) one hundred twenty (120)
consecutive days or (ii) one hundred eighty (180) non-consecutive days during
any twelve (12) month period, in either case, as evidenced by a written
statement of a physician licensed to practice medicine in any state in the
United States mutually agreed upon by the applicable Service Recipient.

 

“Dune”
shall have the meaning set forth in the first “whereas” paragraph.

 

“Effective
Date” shall have the meaning set forth in the sixth “whereas” paragraph.

 

“Employment
Agreement” shall have the meaning set forth in this Section 7(b).

 

“Escrow
Account” shall have the meaning set forth in Section 1(f) hereof.

 

“Event”
shall have the meaning set forth in Section 5(d) hereof.

 

“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended (or any
successor statute thereto).

 

“Exercisable
Option Shares” shall mean the shares of Common Stock that could be
purchased by the Management Stockholder upon exercise of his or her outstanding
and exercisable Options.

 

“Fair
Market Value Per Share” shall mean (i) if there has been a Qualified
Public Offering, the price per share equal to the average of the high and low
closing bid prices of the shares of Common Stock on such stock exchange on
which the shares are principally trading on the date in question, or, if there
were no sales on such date, on the closest preceding date on which there were
sales of shares, or (ii) if there has been no Qualified Public Offering,
the fair market value per share of the shares of Common Stock on an entity
basis (i.e., without minority discount) as determined in good faith by
the Board.

 

“FMCP” shall have the meaning set forth in
the first “whereas” paragraph.

 

“Good
Reason” shall mean “Good Reason” as such term is defined in the Employment
Agreement, or if there is no such Employment Agreement (or if such term is not
defined therein), 

 

16

 

“Good Reason”
shall mean, without the Management Stockholder’s consent, (i) the material
reduction of the Management Stockholder’s annual rate of base salary (excluding
any general salary reduction affecting substantially all of the full-time,
salaried employee population of the applicable Service Recipient) or annual
bonus opportunity (excluding reductions in the value of any performance bonus
pool as a result of Company or business unit’s performance or changes in the
goal amount or type of performance targets of the applicable bonus arrangement)
or the material reduction of the Management Stockholder’s commission
opportunity, on an annual basis (excluding any reductions due to the Management
Stockholder’s individual performance (or lack thereof) or due to any change in
the structure of the commission plan or program in which the Management
Stockholder participates to reflect the market conditions as they exist from
time to time), (ii) a material diminution in the Management Stockholder’s
employment duties or responsibilities, in each case, following a reasonable
period by the applicable Service Recipient to cure such event following receipt
of written notice by the Management Stockholder indicating the event giving
rise to Good Reason; or (iii) relocation of the Management Stockholder’s
primary workplace to a location more than 50 miles away from his prior office
location.   The Management Stockholder
may terminate his employment with Good Reason by providing the Company ten (10) days’
written notice setting forth in reasonable specificity the event that
constitutes Good Reason, within one hundred eighty (180) days after the
occurrence of such event.

 

“GMAC”
shall have the meaning set forth in the first “whereas” paragraph.

 

“Group”
shall mean “group,” as such term is used for purposes of Section 13(d) or
14(d) of the Exchange Act.

 

“GSCP” shall have the
meaning set forth in the first “whereas” paragraph.

 

“Holders”
shall have the meaning set forth in Section 9(d) hereof.

 

“Investment
Amount” shall have the meaning set forth in Section 1(a) hereof.

 

“Investor
Group” shall mean, collectively, Investor LLC, its members, the Investors,
and any of their respective Affiliates.

 

“Investor
LLC” shall have the meaning set forth in the first “whereas” paragraph.

 

“Investors”
shall have the meaning set forth in the first “whereas” paragraph.

 

“KKR”
shall have the meaning set forth in the first “whereas” paragraph.

 

“Lapse Date”
shall have the meaning set forth in Section 3 hereof.

 

“Management
Stockholder” shall have the meaning set forth in the introductory
paragraph.

 

“Management
Stockholders” shall mean collectively the Management Stockholder and the
Other Management Stockholders (including, without duplication, any applicable 

 

17

 

Management
Stockholder Entities that acquired and/or held Common Stock pursuant to Section 2(a) hereof).

 

“Management
Stockholder Documents” shall have the meaning set forth in the third “whereas”
paragraph.

 

“Management
Stockholder Entities” shall mean the Management Stockholder’s Trust, the
Management Stockholder, the Management Stockholder’s Family Members and the
Management Stockholder’s Estate, collectively.

 

“Management
Stockholder’s Estate” shall mean the conservators, guardians, executors,
administrators, testamentary trustees, legatees or beneficiaries of the
Management Stockholder.

 

“Management
Stockholder’s Family Members” shall mean the Management Stockholder’s
spouse (or ex-spouse, as applicable) or his lineal descendants (including
adopted descendants).

 

“Management
Stockholder’s Trust” shall mean a partnership, limited liability company,
corporation, trust or custodianship, the beneficiaries, partners, members or
shareholders, as applicable, of which may include only the Management
Stockholder, his spouse (or ex-spouse) or his lineal descendants (including
adopted) or, if at any time after any such transfer there shall be no then
living spouse or lineal descendants, then to the ultimate beneficiaries, partners,
members or shareholders, as applicable, of any such partnership, limited
liability company, corporation, trust or custodianship or to the estate of a
deceased beneficiary.

 

“Master
Signature Page” shall have the meaning set forth in Section 1(a) hereof.

 

“Maximum
Repurchase Amount” shall have the meaning set forth in Section 11(a) hereof.

 

“Memorandum”
shall have the meaning set forth in the fourth “whereas” paragraph.

 

“Net
Settled Stock” shall have the meaning set forth in Section 5(a)(ii) hereof.

 

“NRS”
shall have the meaning set forth in Section 5(d) hereof.

 

“Notice”
shall have the meaning set forth in Section 9(b) hereof.

 

“Offeror”
shall have the meaning set forth in Section 4(a) hereof.

 

“Option”
shall have the meaning set forth in the second “whereas” paragraph.

 

“Option
Excess Price” shall mean the aggregate amount paid or payable by the
Company in respect of Exercisable Option Shares pursuant to Section 5 or
6, as applicable.

 

“Option
Exercise Price” shall mean the then-current exercise price of the shares of
Common Stock covered by the applicable Option.

 

“Option
Plan” shall have the meaning set forth in the second “whereas” paragraph.

 

18

 

“Option
Stock” shall have the meaning set forth in Section 3 hereof.

 

“Other
Management Stockholders” shall have the meaning set forth in the third “whereas”
paragraph.

 

“Other
Management Stockholders’ Agreements” shall have the meaning set forth in
the third “whereas” paragraph.

 

“Parties”
shall have the meaning set forth in the introductory paragraph.

 

“Person”
shall mean “person,” as such term is used for purposes of Section 13(d) or
14(d) of the Exchange Act.

 

“Piggyback
Registration Rights” shall have the meaning set forth in Section 9(a) hereof.

 

“Prior
Agreement” shall have the meaning set forth in the sixth “whereas”
paragraph.

 

“Proposed
Registration” shall have the meaning set forth in Section 9(b) hereof.

 

“Public
Offering” shall mean the sale of shares of Common Stock to the public
subsequent to the date hereof pursuant to a registration statement under the
Act which has been declared effective by the SEC (other than a registration
statement on Form S-4, S-8 or any other similar form).

 

“Purchased
Stock” shall have the meaning set forth in Section 1(a) hereof.

 

“Put Period”
shall have the meaning set forth in Section 5(a) hereof.

 

“Qualified
Public Offering” shall mean any Public Offering (whether an initial or
subsequent offering) after which at least 35% of the Company’s or any
affiliated holding company’s, outstanding common stock is listed on the New
York Stock Exchange or the Nasdaq National Market or other nationally
recognized stock exchange or listing system.

 

“Redemption
Notice” shall have the meaning set forth in Section 5(c) hereof.

 

 “Repurchase Eligibility Date” shall
have the meaning set forth in Section 5(d) hereof.

 

“Repurchase
Price” shall mean the amount to be paid in respect of the Stock and Options
to be purchased by the Company pursuant to Section 5(a), Section 5(b),
Section 6(a), 6(b), or 6(c), as applicable.

 

“Request”
shall have the meaning set forth in Section 9(b) hereof.

 

“Restricted
Group” shall mean, collectively, the Company, its subsidiaries, the
Investors and their respective Rule 405 Affiliates.

 

“Retirement”
shall mean a Management Stockholder’s termination of employment other than for
Cause, at or after (i) attaining age 62 or such other age as the Board in
consultation with the Chief Executive Officer of the Company determines and (ii) completing
at least three years 

 

19

 

of continuous
service with the Company and/or any of its subsidiaries following the date of
the Stock Purchase Closing or earlier with the consent of the Compensation
Committee of the Board.

 

“Rule 405
Affiliate” shall mean an affiliate of the Company as defined under Rule 405
of the rules and regulations promulgated under the Act and as interpreted
in good faith by the Board.

 

“Sale
Agreement” shall have the meaning set forth in the Sale Participation Agreement.

 

“Sale
Participation Agreement” shall have the meaning set forth in the third “whereas”
paragraph.

 

“SEC”
shall mean the Securities and Exchange Commission.

 

“Section 5
Repurchase Price” shall have the meaning set forth in Section 5(a)(i) hereof.

 

“Section 6(a) Call
Event” shall have the meaning set forth in Section 6(a) hereof.

 

“Section 6(a) Repurchase
Price” shall have the meaning set forth in Section 6(a) hereof.

 

“Section 6(b) Call
Event” shall have the meaning set forth in Section 6(b) hereof.

 

“Section 6(c) Call
Event” shall have the meaning set forth in Section 6(c) hereof.

 

“Service
Recipient” shall mean, the Company, any subsidiary of the Company, or any affiliate
of the Company that satisfies the definition of “service recipient” within the
meaning of Proposed Treasury Regulation Section 1.409A-1(g) (or any
successor regulation), with respect to which the Management Stockholder is a “service
provider” (within the meaning of Proposed Treasury Regulation Section 1.409A-1(f) (or
any successor regulation)).

 

“Settled
Stock Put Period” shall have the meaning set forth in Section 5(b) hereof.

 

“Share
Price” shall have the meaning set forth in Section 1(a) hereof.

 

“Shares”
shall have the meaning set forth in Section 1(a) hereof.

 

“Stock”
shall have the meaning set forth in Section 3 hereof.

 

“Stockholders’
Agreement” shall have the meaning set forth in Section 9(a) hereof.

 

“Stock
Option Agreement” shall have the meaning set forth in the second “whereas”
paragraph.

 

“Stock
Purchase Agreement” shall have the meaning set forth in the first “whereas”
paragraph.

 

“Stock
Purchase Closing” shall have the meaning set forth in the Stock Purchase
Agreement.

 

20

 

“Strategic
Business Affiliate” shall have the meaning set forth in this Section 7(b).

 

“Third
Party Offer” shall have the meaning set forth in Section 4(a) hereof.

 

“Transfer”
shall have the meaning set forth in Section 3.

 

8.                                       The Company’s Representations
and Warranties.

 

(a)                                  The Company represents and
warrants to the Management Stockholder that (i) this Agreement has been
duly authorized, executed and delivered by the Company and is enforceable
against the Company in accordance with its terms and (ii) the Stock, when
issued and delivered in accordance with the terms hereof and the other
agreements contemplated hereby, will be duly and validly issued, fully paid and
nonassessable.

 

(b)                                 If the Company becomes subject
to the reporting requirements of Section 12 of the Exchange Act, the
Company will file the reports required to be filed by it under the Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder,
to the extent required from time to time to enable the applicable Management
Stockholder Entities to sell shares of Stock without registration under the
Exchange Act within the limitations of the exemptions provided by (A) Rule 144
under the Act, as such rule may be amended from time to time, or (B) any
similar rule or regulation hereafter adopted by the SEC.  Notwithstanding anything contained in this Section 8(b),
the Company may de-register under Section 12 of the Exchange Act if it is
then permitted to do so pursuant to the Exchange Act and the rules and
regulations thereunder and, in such circumstances, shall not be required hereby
to file any reports which may be necessary in order for Rule 144 or any
similar rule or regulation under the Act to be available.  Nothing in this Section 8(b) shall
be deemed to limit in any manner the restrictions on sales of Stock contained in
this Agreement.

 

9.                                       “Piggyback” Registration Rights.  Effective as of the Closing Date:

 

(a)                                  The Management Stockholder
hereby agrees to be bound by all of the terms, conditions and obligations of
the piggyback registration rights contained in Section 4.2 of the
Stockholders’ Agreement (the “Stockholders’ Agreement”) entered into by
and among Investor LLC, the Company and GMAC Mortgage Group, Inc. (the “Piggyback
Registration Rights”), as in effect on the date hereof (as amended from
time to time), and, if Investor LLC is selling stock following the expiration
of Investor LLC’s underwriter’s lock-up in connection with any Public Offering,
shall have all of the rights and privileges of the Piggyback Registration
Rights (including, without limitation, the right to participate in a public
offering and any rights to indemnification and/or contribution from the Company
and/or Investor LLC) and all of the obligations of a Stockholder thereunder
with respect such Piggyback Registration Rights, in each case as if the
Management Stockholder were a Stockholder thereunder, subject to applicable and
customary underwriter restrictions; provided, however, that at no
time shall any applicable Management Stockholder Entities have any rights to
request registration under Section 4.1 of the Stockholders’
Agreement.  All Stock purchased or held
by the applicable Management Stockholder Entities pursuant to this Agreement
shall be deemed to be “Registrable Securities” as defined in the Stockholders’
Agreement.

 

21

 

(b)                                 In the event of a sale of Common
Stock by Investor LLC in accordance with the terms of the Stockholders’
Agreement, the Company will promptly notify the applicable Management
Stockholder Entities in writing (a “Notice”) of any proposed
registration (a “Proposed Registration”).  If within fifteen (15) days of the
receipt by the applicable Management Stockholder Entities of such Notice, the
Company receives from the applicable Management Stockholder Entities a written
request (a “Request”) to register shares of Stock held by the applicable
Management Stockholder Entities (which Request will be irrevocable unless
otherwise mutually agreed to in writing by the applicable Management
Stockholder Entities and the Company), shares of Stock will be so registered as
provided in this Section 9; provided, however, that for each
such registration statement only one Request, which shall be executed by the
applicable Management Stockholder Entities, may be submitted for all
Registrable Securities held by the applicable Management Stockholder Entities.

 

(c)                                  The maximum number of shares of
Stock which will be registered pursuant to a Request will be the lower of (i) the
number of shares of Stock then held by the Management Stockholder Entities,
including all shares of Stock which the Management Stockholder Entities are
then entitled to acquire under an unexercised Option to the extent then
exercisable, multiplied by a fraction, the numerator of which is the number of
shares of Stock being sold, directly or indirectly, by the Investors and any
affiliated or unaffiliated investment partnerships and investment limited
liability companies investing with the selling Investors and the denominator of
which is the aggregate number of shares of Stock owned by the selling Investors
and any investment partnerships and investment limited liability companies
investing with the selling Investors or (ii) the maximum number of shares
of Stock which the Company can register in the Proposed Registration without
adverse effect on the offering in the view of the managing underwriters
(reduced pro rata as more fully described in subsection (d) of this Section 9).

 

(d)                                 If a Proposed Registration
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number of shares of Stock
requested to be included in the Proposed Registration exceeds the number which
can be sold in such offering, so as to be likely to have an adverse effect on
the price, timing or distribution of the shares of Stock offered in such Public
Offering as contemplated by the Company, then the Company will include in the
Proposed Registration (i) first, 100% of the shares of Stock the Company
proposes to sell and (ii) second, to the extent of the number of shares of
Stock requested to be included in such registration which, in the opinion of
such managing underwriter, can be sold without having the adverse effect
referred to above, the number of shares of Stock which the selling Investors (whether
selling directly or through Investor LLC) and any affiliated or unaffiliated
investment partnerships and investment limited liability companies investing
with the selling Investors and the Management Stockholders (together, the “Holders”)
have requested to be included in the Proposed Registration, such amount to be
allocated pro rata among all requesting Holders on the basis of the relative
number of shares of Stock then held by each such Holder (including upon
exercise of all exercisable Options) (provided that any shares thereby
allocated to any such Holder that exceed such Holder’s request will be
reallocated among the remaining requesting Holders in like manner).

 

(e)                                  Upon delivering a Request the applicable
Management Stockholder Entities will, if requested by the Company, execute and
deliver a custody agreement and power 

 

22

 

of attorney having customary terms and in form and substance reasonably
satisfactory to the Company with respect to the shares of Stock to be
registered pursuant to this Section 9 (a “Custody Agreement and Power
of Attorney”).  The Custody Agreement
and Power of Attorney will provide, among other things, that the applicable
Management Stockholder Entities will deliver to and deposit in custody with the
custodian and attorney-in-fact named therein a certificate or certificates (to
the extent applicable) representing such shares of Stock (duly endorsed in
blank by the registered owner or owners thereof or accompanied by duly executed
stock powers in blank) and irrevocably appoint said custodian and
attorney-in-fact as the applicable Management Stockholder Entities’ agent and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on the applicable Management Stockholder
Entities’ behalf with respect to the matters specified therein.

 

(f)                                    The Management Stockholder
agrees that he will execute such other agreements as the Company may reasonably
request to further evidence the provisions of this Section 9.

 

10.                                 Co-Investment Right.  The Management Stockholder shall have the
right to invest in the future in any new securities of the Company on the same
terms as any member of the Investor Group, as applicable, Investor LLC or the
Investors, as applicable,  is offered the
right to purchase such securities, on a pro rata basis based on the number of
shares of Purchased Stock then owned by such applicable Management Stockholder
Entities compared to the number of shares of Common Stock then owned by the
members of the Investor Group, Investor LLC and the Investors as a group, except
that any such investment by the Management Stockholder shall be subject to the
transfer restrictions applicable generally to Option Stock and Purchased Stock,
and not entitled to any more favorable terms than those granted to the
Investors.  The Company shall provide the
applicable Management Stockholder Entities with advance written notice of any
such investment opportunity in accordance with applicable securities laws, but
in no event later than fifteen (15) days prior to the closing of any such
investment by Investor LLC or the Investors, as applicable.

 

11.                                 Pro Rata Repurchases; Dividends.  (a)  Notwithstanding anything to the
contrary contained in Section 5 or 6, if at any time consummation of any
purchase or payment to be made by the Company pursuant to this Agreement and
the Other Management Stockholders Agreements would result in an Event, then the
Company shall make purchases from, and payments to, the Management Stockholders
pro rata (on the basis of the proportion of the number of shares of Stock each
of the Management Stockholders have elected or are required to sell to the
Company) for the maximum number of shares of Stock permitted without resulting
in an Event (the “Maximum Repurchase Amount”).  The provisions of Section 5(d) and
6(d) shall apply in their entirety to payments and repurchases with
respect to shares of Stock which may not be made due to the limits imposed by
the Maximum Repurchase Amount under this Section 11(a).  Until all of such Stock is purchased and paid
for by the Company, each of the Management Stockholders whose Stock is not
purchased in accordance with this Section 11(a) shall have priority,
on a pro rata basis, over other purchases of Stock by the Company pursuant to
this Agreement and Other Management Stockholders’ Agreements.

 

(b)                                 In the event any dividends are
paid with respect to the Stock, the applicable Management Stockholder Entities
will be treated in the same manner as all other 

 

23

 

holders of Common Stock with respect to shares of Stock then owned by
the applicable Management Stockholder Entities, and, with respect to any
Options held by the applicable Management Stockholder Entities, in accordance,
as applicable, with Section 2.4 of the Stock Option Agreement or as
otherwise provided under the Capmark Financial Group Inc. Dividend Equivalent
Rights Plan.

 

12.                                 Rights to Negotiate Repurchase
Price.  Nothing in this Agreement shall be deemed to
restrict or prohibit the Company from purchasing, redeeming or otherwise
acquiring for value shares of Stock or Options from the Management Stockholder,
at any time, upon such terms and conditions, and for such price, as may be
mutually agreed upon in writing between the Parties, whether or not at the time
of such purchase, redemption or acquisition circumstances exist which
specifically grant the Company the right to purchase, or the Management
Stockholder the right to sell, shares of Stock or any Options under the terms
of this Agreement; provided that no such purchase, redemption or
acquisition shall be consummated, and no agreement with respect to any such
purchase, redemption or acquisition shall be entered into, without the prior
approval of the Board.

 

13.                                 Covenant Regarding 83(b) Election.  Except as the Company may otherwise agree in
writing, the Management Stockholder hereby covenants and agrees that he will
make an election provided pursuant to Treasury Regulation Section 1.83-2
with respect to the Stock, including without limitation, the Stock to be
acquired upon each exercise of the Management Stockholder’s Options; and the
Management Stockholder further covenants and agrees that he will furnish the
Company with copies of the forms of election the Management Stockholder files
within thirty (30) days after each transfer of Stock by the Company to the
Management Stockholder pursuant to this Management Stockholder’s Agreement, and
within thirty (30) days after each exercise of the Management Stockholder’s
Options and with evidence that each such election has been filed with the
Internal Revenue Service in a timely manner.

 

14.                                 Notice of Change of Beneficiary.  Immediately prior to any transfer of Stock to
a Management Stockholder’s Trust, the Management Stockholder shall provide the
Company with a copy of the instruments creating the Management Stockholder’s
Trust and with the identity of the beneficiaries of the Management Stockholder’s
Trust.  The applicable Management
Stockholder Entity shall notify the Company as soon as practicable prior to any
change in the identity of any beneficiary of the Management Stockholder’s
Trust.

 

15.                                 Recapitalizations, etc. 
The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Stock or the Options, to any and all shares of
capital stock of the Company or any capital stock, partnership units or any
other security evidencing ownership interests in any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or substitution of the Stock or
the Options by reason of any stock dividend, split, reverse split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.

 

16.                                 Management Stockholder’s
Employment by the Company.  Nothing contained in this Agreement or in any
other agreement entered into by the Company and the Management Stockholder
contemporaneously with the execution of this Agreement (subject to, and except
as set forth in, the applicable provisions of any offer letter or letter of
employment 

 

24

 

provided to the Management Stockholder by the Company or any employment
agreement entered by and between the Management Stockholder and the Company) (i) obligates
the Company or any subsidiary of the Company to employ the Management
Stockholder in any capacity whatsoever or (ii) prohibits or restricts the
Company (or any such subsidiary) from terminating the employment of the
Management Stockholder at any time or for any reason whatsoever, with or
without Cause, and the Management Stockholder hereby acknowledges and agrees
that neither the Company nor any other person has made any representations or
promises whatsoever to the Management Stockholder concerning the Management
Stockholder’s employment or continued employment by the Company or any subsidiary
of the Company.

 

17.                                 Binding Effect.  The provisions of this Agreement shall be
binding upon and accrue to the benefit of the Parties and their respective
heirs, legal representatives, successors and assigns.  In the case of a transferee permitted under Section 2(a) (other
than Section 3 (c) or (d) thereof) hereof, such transferee shall
be deemed the Management Stockholder hereunder; provided, however,
that no transferee (including without limitation, transferees referred to in Section 2(a) hereof)
shall derive any rights under this Agreement unless and until such transferee
has delivered to the Company a valid undertaking and becomes bound by the terms
of this Agreement.

 

18.                                 Amendment.  Except as otherwise provided herein, any modification,
amendment or waiver of any provision of this Agreement shall require and shall
become effective upon approval in writing (i) by the Company, (ii) the
Management Stockholders representing a majority of the Common Stock held by all
Management Stockholders and (iii) Investor LLC.  The Company shall provide notice of any such
modification amendment or waiver promptly after any approval thereof as
provided in this Section 18.   Notwithstanding
anything in this Agreement to the contrary, in the event it is determined by
the Company (in consultation with its auditors) that any provision in this
Agreement results in any share of Common Stock or other share-based award (or
any portion hereof) being classified as a liability as contemplated by FASB
Statement No. 123R, Share-Based Payment, including any amendments and
interpretations thereto, then the Board (or designated members thereof) and the
senior management of the Company shall work together in good faith to modify
such provision to avoid the share or award being classified as a liability and
to maintain economic advantages of the applicable share of Common Stock or
other share-based award to the Management Stockholder that are similar to those
provided under this Agreement as currently written.

 

25

 

19.                                 Closing.

 

(a)                                  Except as otherwise provided in Section 19(b),
the closing of each purchase and sale of shares of Stock pursuant to this Agreement
shall take place at one of the Company’s primary offices (as specified by the
Company) on or before the tenth business day following delivery of the notice
by either Party to the other of its exercise of the right to purchase or sell
such Stock hereunder.

 

(b)                                 The closing of any repurchase of
the Stock by the Company pursuant to this Agreement will be deemed to have
occurred after written notice of the repurchase has been sent to the applicable
Management Stockholder Entities and upon the earlier of (i) the Company irrevocably
depositing or setting aside the full repurchase price as determined by this
Agreement and (ii) the Company making payment to the applicable Management
Stockholder Entities of the full repurchase price as determined by this
Agreement (less applicable withholding) by transmittal of a check by mail or
overnight delivery service to the address of the Management Stockholder
specified in Section 24(b) hereof (or, at the discretion of the
Company,  by wire transfer of funds, if
the Management Stockholder Entities timely provide to the Company wire transfer
instructions).

 

(c)                                  Upon satisfaction of all
applicable closing conditions in Section 19(b), all of the Management
Stockholder’s right, title, and interest in the Stock shall be transferred and
assigned to the Company and no further action or consent by either party
will be required to effectuate this transfer and assignment; and the Management
Stockholder Entities waive any claim of ownership that they may have with
respect to the Stock.

 

20.                                 Applicable Law; Jurisdiction;
Arbitration; Legal Fees.

 

(a)                                  The laws of the State of
Delaware applicable to contracts executed and to be performed entirely in such
state shall govern the interpretation, validity and performance of the terms of
this Agreement.

 

(b)                                 In the event of any controversy
among the Parties arising out of, or relating to, this Agreement which cannot
be settled amicably by the Parties, such controversy shall be finally,
exclusively and conclusively settled by mandatory arbitration conducted
expeditiously in accordance with the American Arbitration Association rules by
a single independent arbitrator.  Such
arbitration process shall take place within 100 miles of the New York City
metropolitan area.  The decision of the
arbitrator shall be final and binding upon all Parties and shall be rendered
pursuant to a written decision, which contains a detailed recital of the
arbitrator’s reasoning.  Judgment upon
the award rendered may be entered in any court having jurisdiction thereof.

 

(c)                                  Notwithstanding the foregoing,
the Management Stockholder acknowledges and agrees that the Company, its subsidiaries,
the Investors and any of their respective Rule 405 Affiliates shall be
entitled to injunctive or other relief in order to enforce the covenant not to
solicit and/or confidentiality covenants as set forth in Section 25(a) of
this Agreement.

 

26

 

(d)                                 In the event of any arbitration
or other disputes with regard to this Agreement or any other document or
agreement referred to herein, each Party shall pay its own legal fees and
expenses, unless otherwise determined by the arbitrator.  Notwithstanding anything herein to the
contrary, if the Employment Agreement contains a similar provision relating to
arbitration and/or dispute resolution, such provision in the Employment
Agreement shall govern any controversy hereunder.

 

21.                                 Assignability of Certain Rights
by the Company.  The Company shall have the right to assign
any or all of its rights or obligations to purchase shares of Stock pursuant to
Sections 4, 5 and 6 hereof.

 

22.                                 Miscellaneous.

 

(a)                                  In this Agreement all references
to “dollars” or “$” are to United States dollars and the masculine pronoun
shall include the feminine and neuter, and the singular the plural, where the
context so indicates

 

(b)                                 If any provision of this
Agreement shall be declared illegal, void or unenforceable by any court of
competent jurisdiction, the other provisions shall not be affected, but shall
remain in full force and effect.

 

23.                                 Withholding.  The Company or its subsidiaries shall have
the right to deduct from any cash payment made under this Agreement to the
applicable Management Stockholder Entities any minimum federal, state or local
income or other taxes required by law to be withheld with respect to such
payment.

 

24.                                 Notices.  All notices and other communications provided
for herein shall be in writing.  Any
notice or other communication hereunder shall be deemed duly given (i) upon
confirmation of facsimile, (ii) one business day following the date sent
when sent by overnight delivery and (iii) five (5) business days
following the date mailed when mailed by registered or certified mail return
receipt requested and postage prepaid, in each case as follows:

 

(a)                                  If to the Company, to it at the
following address:

 

Capmark Financial Group Inc.

116 Welsh Road

Horsham, PA
19044

Attention: 
General Counsel

 

with copies to:

 

Kohlberg Kravis Roberts & Co. L.P.

9 West 57th
Street

New York, New
York 10019

Attention:  Scott C. Nuttall

 

27

 

and

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention:  Sean D. Rodgers, Esq.

Telecopy: 
(212) 455-2502

 

(b)                                 If to the Management
Stockholder, to him at the address in the Company’s records;

 

or at such other address as either party shall have specified by notice
in writing to the other.

 

25.                                 Confidential Information;
Covenant Not to Solicit.

 

(a)                                  In consideration of the Company
entering into this Agreement with the Management Stockholder, the Management
Stockholder hereby agrees effective as of the date of the Management
Stockholder’s commencement of employment with the Company or its subsidiaries,
without the Company’s prior written consent, the Management Stockholder shall
not, directly or indirectly, (i) at any time during or after the
Management Stockholder’s employment with the Company or its subsidiaries,
disclose any Confidential Information pertaining to the business of the Company
or any of its subsidiaries, except when required to perform his or her duties
to the Company or one of its subsidiaries, by law or judicial process; or (ii) at
any time during the Management Stockholder’s employment with the Company or its
subsidiaries and for a period of one year thereafter, directly or indirectly
solicit or offer employment to any person who has been employed by the Company
or any of its subsidiaries at any time during the twelve (12) months
immediately preceding the termination of the Management Stockholder’s
employment.  If the Management
Stockholder is bound by any other agreement with the Company regarding the use
or disclosure of confidential information, the provisions of that agreement
shall control with respect to the use or disclosure of confidential
information, and this Section 25(a) shall not apply.

 

(b)                                 Notwithstanding clause (a) above,
if at any time a court holds that the restrictions stated in such clause (a) are
unreasonable or otherwise unenforceable under circumstances then existing, the Parties
agree that the maximum period, scope or geographic area determined to be
reasonable under such circumstances by such court will be substituted for the
stated period, scope or area.  Because
the Management Stockholder’s services are unique and because the Management
Stockholder has had access to Confidential Information, the Parties agree that
money damages will be an inadequate remedy for any breach of this
Agreement.  In the event of a breach or
threatened breach of this Agreement, the Company or its successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of competent jurisdiction for specific performance and/or injunctive
relief in order to enforce, or prevent any violations of, the provisions hereof
(without the posting of a bond or other security).

 

(c)                                  In
the event that the Management Stockholder breaches any of the provisions of Section 25(a),
in addition to all other remedies that may be available to the Company, such
Management Stockholder shall be required to pay to the Company any amounts 

 

28

 

actually paid to him or her by the Company in respect
of any repurchase by the Company of Options or shares of Common Stock
underlying the Options held by such Management Stockholder, in excess of any
amounts paid by the Management Stockholder for such shares of Common Stock
(whether upon exercise of vested Options or otherwise).

 

26.                                 Counterparts; Master Signature Page.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which together shall constitute one and the
same instrument.  The Master Signature Page,
when duly executed and delivered by the Management Stockholder in accordance
with the terms hereof and thereof, shall supplement and form a part of this
Agreement, and references to this Agreement shall be construed accordingly.  The due execution of the Master Signature Page by
the Management Stockholder shall be deemed to constitute the execution by the
Management Stockholder of this Agreement.

 

IN
WITNESS WHEREOF, upon due execution and delivery by the Management Stockholder
of the Master Signature Page to the Company, the Management Stockholder
has executed this Agreement, and the Company has executed this Agreement upon
completion and delivery by the Company of such Master Signature Page to
the Management Stockholder, and as of the date set forth above.

 

29

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