Document:

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT ("Agreement")
effective as of the 1st day of January 2005, by and between Doug W.
Naidus (the "Executive") and MortgageIT
Holdings, Inc. ("the Company").

WITNESSETH

WHEREAS, the Company and the Executive
previously entered into an Employment Agreement approved by the Board
of Directors on April 1, 2004 (the "April 1
Agreement") with the understanding that upon completion of
an initial public offering of the Company, the Compensation Committee
of the Board of Directors would consider an increase in the
Executive's compensation; and,

WHEREAS, the
Company's initial public offering was consummated on August 4,
2004; and,

WHEREAS, based on its review of the matter, the
Compensation Committee has recommended and the Board of Directors has
approved an increase in the Executive's compensation; and,

WHEREAS, the Company desires to assure itself of the services of the
Executive as its Chairman and Chief Executive Officer for the period
provided in this Agreement, and the Executive is willing to serve in
the employ of the Company for such period, all in accordance with the
terms and conditions contained in this Agreement.

NOW,
THEREFORE, in consideration of the mutual covenants herein set forth,
Executive and the Company do agree to the terms of employment as
follows:

1.    Definitions.    The following words
and terms shall have the meanings set forth below for the purposes of
this Agreement:

(a)    Affiliate.    Affiliate of any person
or entity means any stockholder or person or entity controlling,
controlled by under common control with such person or entity, or any
director, officer or key executive of such entity or any of their
respective relatives. For purposes of this definition,
"control," when used with respect to any
person or entity, means the power to direct the management and policies
of such person or entity, directly or indirectly, whether through
ownership of voting securities, by contracting or otherwise; and the
terms "controlling" and
"controlled" have meanings that correspond to
the foregoing.

(b)    Base Salary.    "Base
Salary" shall have the meaning set forth in Section 3(a)
hereof.

(c)    Cause.    "Cause"
shall mean (i) with regard to the Company or its Affiliates, personal
dishonesty or willful misconduct having a material adverse affect upon
the Company, (ii) material breach of fiduciary duty with regard to the
Company, (iii) grossly negligent failure to perform the
Executive's material duties, provided that a refusal to approve
any financials or execute any documents based on such financials shall
not be Cause if Executive in good faith believes that the accounting in
such financials is not appropriate and so notifies the Chairman of the
Audit Committee of the Board of Directors, (iv) conviction of, or
pleading guilty or nolo contendere to, any felony involving moral
turpitude (other than traffic violations or as a result of vicarious
liability) and/or (v) a material breach of any provision of this
Agreement which is not cured within ten (10) days after the giving of
written notice thereof.

(d)    Code.    "Code" shall mean the
Internal Revenue Code of 1986, as amended.

(e)    Confidential
and Proprietary Information.    "Confidential and
Proprietary Information" shall mean any and all (i)
confidential or proprietary information or material not in the public
domain about or relating to the business, operations, assets or
financial condition of the Company or any Affiliate of the Company or
any of the Company's or any such Affiliate's trade secrets;
and (ii) information, documentation or material not in the public
domain by virtue of any action by or on the part of the Executive, the
knowledge of which gives or may give the Company or any Affiliate of
the Company an advantage over any person not possessing such
information. For purposes hereof, the term Confidential and Proprietary
Information shall not include any information or material (i) that is
known to the general public other than due to a breach of this
Agreement by the Executive or (ii) was disclosed to the Executive by a
person who the Executive did not reasonably believe was bound to a
confidentiality or similar agreement with the Company.

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(f)    Date of
Termination.    "Date of Termination" shall
mean the date the Company terminated the Executive's employment
for any reason, or, if the Executive's employment is terminated
by the Executive, the date on which a Notice of Termination is given or
as specified in such Notice.

(g)    Disability.    "Disability"
shall mean termination because of any physical or mental impairment
that has prevented Executive from performing his material duties for
the Company for six (6) consecutive months.

(h)    Good
Reason.    Termination by the Executive of the Executive's
employment for "Good Reason" shall mean
termination by the Executive because of one of the following, without
the Executive's express written consent:

(i)    A change in Executive's title;

(ii)    An adverse change, other than a change that is
insignificant, made by the Company which would reduce the
Executive's then functions, authority, duties or
responsibilities;

(iii)    Assignment to Executive
of duties inconsistent with his position;

(iv)    Any reduction by the Company in any of the
Executive's Base Salary, Annual Bonus opportunity or Incentive
Compensation opportunity as the same may be increased from time to
time; or

(v)    A breach by the Company of any
provision of this Agreement, other than an insignificant breach, which
is not cured within ten (10) days after the giving of notice
thereof.

(i) IRS.    IRS shall mean the Internal Revenue
Service.

(j) Notice of Termination.    Any termination of the
Executive's employment by the Company for any reason, including
without limitation for Cause or Disability and any termination of the
Executive's employment by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written
"Notice of Termination" to the other party.
For purposes of this Agreement, a "Notice of
Termination" shall mean a dated notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under
the provision so indicated, and (iii) specifies a date of Termination,
which shall be not less than thirty (30) nor more than ninety (90) days
after such Notice of Termination is given.

2.    Term
of Employment.

(a)    The Company hereby employs the
Executive as the Chairman of the Board of Directors and Chief Executive
Officer of the Company, and the Executive hereby accepts said
employment and agrees to render such services to the Company, on the
terms and conditions set forth in this Agreement. The term of
employment under this Agreement shall be for a term of three years,
commencing as of January 1, 2005, unless such term is extended as
provided in this Section 2 or ends sooner as provided in this
Agreement. On the third annual anniversary of January 1, 2005 and on
each annual anniversary thereafter, the term of employment under this
Agreement shall automatically be extended for an additional one-year,
unless the Executive or the Company gives written notice to the other
party of such party's election not to extend the term, with such
notice to be given not less than ninety (90) days prior to any such
anniversary date. If any party gives timely notice that the term will
not be extended, then such employment under this Agreement shall
terminate at the conclusion of its remaining term. References herein to
the term shall refer both to the initial term and successive terms. Any
notice of nonrenewal by the Company shall be treated as a termination
without Cause as of the end of the then term.

(b)    During
the term of this Agreement, the Executive shall report to the Board of
Directors (the "Board") and perform executive
services for the Company as reasonably prescribed by the Board,
consistent with his position or positions and have the authority,
duties and responsibilities commensurate with his position or
positions.

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3.    Compensation and
Benefits.

(a)    Compensation.

(i)    Base Salary.    The Company shall pay the Executive for his
services during the term of this Agreement a minimum base salary of
$495,000 per year (as increased, "Base
Salary"), which may be increased from time to time in such
amounts as may be determined by the Board or the Compensation
Committee, as the case may be, in its sole discretion.

(ii)    Annual Bonus Beginning in 2005. For the year
commencing January 1, 2005 and for each year thereafter, the Executive
shall be eligible to receive a bonus ("Annual
Bonus") up to three times his Base Salary.
Executive's Target Bonus shall be at least equal to his Base
Salary (the "Target Bonus").

(iii)    Incentive Compensation Beginning in 2005. In
addition to the Base Salary set forth in Section 3(a)(i) hereof and the
Annual Bonus set forth in Section 3(a)(ii) hereof, the Executive shall
be eligible to receive each calendar year beginning with 2005 incentive
compensation of $1,200,000 ("Incentive
Compensation"), such Incentive Compensation to be granted
(x) one-half in the form of Restricted Stock, which shares shall vest
in equal parts, the first third to vest at the end of the year of the
date of grant, the second third to vest at the end of the year
following year of the date of grant and the last third to vest at the
end of the second year following the year of the date of grant, each
pursuant to the Plan, and (y) one-half in the form of performance
shares of Common Stock subject to reasonable performance goals as
established by the Compensation Committee ("Performance
Shares"), which shares shall be earned over a period of no
longer than three years. Performance Shares shall be fully vested when
earned.

(b)    During the term, the Executive shall be
entitled to take four (4) weeks paid annual vacation in accordance with
the Company's established policies. The Executive shall not be
entitled to receive any additional compensation from the Company for
failure to take a vacation, nor shall the Executive be able to
accumulate unused vacation time from one year to the next, except to
the extent authorized by the Company or as Company policies or practice
may otherwise provide.

(c)    During the Term, the Executive
shall be entitled to participate in such benefit plans and fringe
programs as provided to other senior executives of the Company at a
level commensurate with his position and such other fringes as agreed
upon by the Executive and the Company. In addition, Executive shall be
provided life insurance coverage of five (5) times his Base Salary and
current Target Bonus and long term disability coverage at sixty percent
(60%) of Base Salary and Target Bonus;

(d)    The
parties have established the compensation levels set out in this
Section 3 based on the Company's present business model and
profile as of January 1, 2005, including consideration of the market
capitalization, revenues and income of the Company.

4.    Expenses.    The Company shall reimburse the
Executive or otherwise provide for or pay for all reasonable expenses
incurred by the Executive in furtherance of or in connection with the
business of the Company, including, but not by way of limitation,
professional dues, subject to such reasonable documentation and other
limitations as may be established by the Company. If such expenses are
paid in the first instance by the Executive, the Company shall
reimburse the Executive therefor.

5.    Termination.

(a)    Subject to the notice
requirements of Section 1(b), the Company shall have the right, at any
time, to terminate the Executive's employment hereunder for any
reason, including, without limitation, termination for Cause or, for
Disability, and the Executive shall have the right to terminate his
employment hereunder for any reason or no reason.

(b)    In
the event that (i) the Executive's employment is terminated by
the Company for Cause, death, Disability or retirement, or (ii) the
Executive terminates his employment hereunder other than for Good
Reason, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable date
of Termination other than for Base Salary accrued 

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through the date of Termination, incurred but
unreimbursed business expenses, accrued but unused vacation in
accordance with Company policy, any bonus earned for any prior
completed fiscal year, any amounts or benefits due under any benefit,
fringe or equity plans or program in accordance with their terms and
any rights to indemnification and directors' and officers'
liability insurance coverage ("Accrued
Obligations").

(c)    In the event that (i) the
Executive's employment is terminated by the Company other than
for Cause, death, Disability or retirement, or (ii) such employment is
terminated by the Executive for Good Reason, then the Company
shall:

(A)    pay to the Executive a cash severance
equal to two times the sum of his Base Salary and the greater of his
Target Bonus or the average of his Annual Bonus for the two years
preceding the termination (the "Two-Year Average
Bonus") is higher than the Target Bonus, the Two-Year
Average Bonus. Any payment of cash severance under this Agreement shall
be made in equal installments on the first business day of the first
six months following the termination of Executive's
employment;

(B)    pay or provide to Executive his
Accrued Obligations, if any; and

(C)    maintain and
provide, subject to any applicable laws, rules or regulations, for a
period ending at the earlier of (i) the second anniversary of the
termination or (ii) the date of the Executive's employment by
another employer, at the same cost to the Executive as had been in
effect during his employment, the Executive's continued
participation in all life insurance and health benefit plans in which
the Executive was participating immediately prior to termination;
and

(D)    fully vest Executive in (i) any unvested
portion of the Restricted Stock previously granted to Executive at any
time or granted to Executive pursuant to Section 3(a)(ii) and (iii) any
unvested options to purchase Common Stock, if any.

(d)    Release and Satisfaction.    With respect to the
Executive (and his heirs, successors and assigns), payment by the
Company of the severance amounts provided under this Section 5 shall
release, relinquish and forever discharge the Company and any director,
officer, employee, shareholder, corporate parent, or agent of the
Company from any and all claims, damages, losses, costs, expenses,
liabilities or obligations, whether known or unknown (other than any
such claims, damages, losses, costs, expenses, liabilities or
obligations to the extent covered by any indemnification arrangement of
the Company with respect to the Executive) which the Executive has
incurred or suffered or may incur or suffer as a result of the
Executive's employment by the Company or the termination of such
employment. The foregoing shall not affect Executive's
entitlements upon termination hereunder or any rights to
indemnification or directors' and officers' liability
insurance coverage.

(e)    No Mitigation/No Offset.    With
regard to any termination, the Executive shall have no obligation to
mitigate the amounts due hereunder and the amounts due hereunder shall
be paid without offset for any other amounts earned by Executive. The
amounts due hereunder shall be paid without setoff, counterclaim or
affirmative defense.

6.    Special
Provision.    Exhibit A hereto shall apply.

7.    Restrictions Respecting Competing Businesses,
Confidential Information, etc.

(a)    The Executive
acknowledges and agrees that by virtue of the Executive's
position and involvement with the business and affairs of the Company,
the Executive has developed substantial expertise and knowledge with
respect to all aspects of the Company's business, affairs and
operations and has access to all significant aspects of the business
and operations of the Company and to Confidential and Proprietary
Information.

(b)    The Executive hereby covenants and agrees
that, during the term of employment and thereafter, unless otherwise
authorized by the Company in writing, the Executive shall not, directly
or indirectly, under any circumstance: (i) disclose to any other person
or entity (other than in the regular 

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course of business of the Company) any
Confidential and Proprietary Information, other than pursuant to
applicable law, regulation or subpoena or with the prior written
consent of the Company; (ii) act or fail to act so as to impair the
confidential or proprietary nature of any Confidential and Proprietary
Information; (iii) use any Confidential and Proprietary Information
other than for the sole and exclusive benefit of the Company; or (iv)
offer or agree to, or cause or assist in the inception or continuation
of, any such disclosure, impairment or use of any Confidential and
Proprietary Information. Following the term of employment, upon request
the Executive shall return all documents, records and other items
containing any Confidential and Proprietary Information to the Company
(regardless of the medium in which maintained or stored).
Notwithstanding the foregoing, Executive may disclose information as he
deems appropriate in the good faith performance of his duties while
employed pursuant to this Agreement, may comply with legal process and
regulatory inquiry after notifying the General Counsel of the Company
of his intention to do so, and may retain his rolodex and similar
address books.

(c)    The Executive covenants and agrees that
while the Executive is employed by the Company, and for the two (2)
year period following a termination of Executive's employment,
but only if such termination is by the Company for Cause or by the
Executive for other than Good Reason, the Executive shall not, directly
or indirectly, manage, operate or control, any Competing Business or,
directly or indirectly, except in the good faith performance of his
duties, induce or influence any customer or other Person that has a
business relationship with the Company, or any Affiliate of the
Company, to discontinue or reduce the extent of such relationship. For
purposes of this Agreement, the Executive shall be deemed directly or
indirectly interested in a business if he is engaged or interested in
that business as a stockholder, director, officer, or executive, agent,
partner, individual proprietor, consultant, advisor or otherwise, but
not if the Executive's interest is limited solely to the
ownership of not more than 5% of the securities of any class of
equity securities of a corporation or other person whose shares are
listed or admitted to trade on a national securities exchange or are
quoted on The NASDAQ Stock Market or a similar means if The NASDAQ
Stock Market is no longer providing such information. For purposes of
this section, Competing Business means any publicly traded residential
mortgage real estate investment trust.

(d)    While the
Executive is employed by the Company and for two (2) years after the
Executive ceases to be employed by the Company, but only if such
termination is by the Company for Cause or by the Executive for other
than Good Reason, the Executive shall not, directly or indirectly, for
himself or on behalf of any other person, firm or entity, solicit or
attempt to solicit, employ, engage or retain any person who is or was,
at any time during the three (3) month period preceding the termination
of Executive's employment with the Company, an employee of the
Company or an Affiliate, provided the foregoing shall not be violated
by advertising not specifically targeted at the Company's
employees.

(e)    The parties agree that nothing in this
agreement shall be construed to limit or negate the common law of
torts, confidentiality, trade secrets, fiduciary duty and obligations
where such laws provide the Company with any broader, further or other
remedy or protection than those provided herein.

(f)    Because the breach of any of the provisions of this Section
7 will result in immediate and irreparable injury to the Company for
which the Company will not have an adequate remedy at law, the Company
shall be entitled, in addition to all other rights and remedies, to
seek a degree of specific performance of the restrictive covenants
contained in this Section 7 and to a temporary and permanent injunction
enjoining such breach, without posting bond or furnishing similar
security.

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8.    Withholding.    All
payments required to be made by the Company hereunder to the Executive
shall be subject to the withholding of such amounts, if any, relating
to tax and other payroll deductions as the Company may reasonably
determine should be withheld pursuant to any applicable law or
regulation.

9.    Assignability.    The Company may
assign this Agreement and its rights and obligations hereunder in
whole, but not in part, to any corporation or other entity with or into
which the Company may hereafter merge or consolidate or to which the
Company may transfer all or substantially all of their respective
assets, if in any such case said corporation or other entity shall by
operation of law or expressly in writing (delivered to Executive)
assume all obligations of the Company hereunder as fully as if it had
been originally made a party hereto, but may not otherwise assign this
Agreement or its rights and obligations hereunder. The Executive may
not assign or transfer this Agreement or any rights or obligations
hereunder, except as provided in any benefit plan and all rights to
receive payments shall upon his death be available to his estate.

10.    Notice.    For the purposes of this Agreement,
notices and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return receipt
requested, postage prepaid, or properly delivered to Federal Express
(or a comparable overnight delivery service), addressed to the
respective addresses set forth on the signature page hereto. Any
notice, request, demand or other communication delivered or sent in the
manner aforesaid shall be deemed given or made (as the case may be)
upon the earliest of (a) the date it is actually received, (b) the
business day after the day on which it is delivered by hand, (c) the
business day after the day on which it is properly delivered to Federal
Express (or a comparable overnight delivery service), or (d) the third
business day after the day on which it is deposited in the United
States mail. The Company or the Executive may change their respective
addresses by notifying the other party or parties of the new addresses
in any manner permitted by this Section 10.

11.    Amendment; Waiver.    No provisions of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the
Executive and such officer, officers or directors as may have
apparently been designated by the Board of Directors of the Company to
sign on their behalf. No waiver by any party hereto at any time of any
breach by any other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.

12.    Governing Law.    The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the United States where applicable and otherwise by the
substantive laws of the State of New York, without regard to any
conflicts of laws provisions thereof. Each party to this Agreement
hereby irrevocably consents to the jurisdiction of the United States
District Court for the Southern District of New York and the courts of
the state of New York located in the County of New York in any action
to enforce, interpret or construe any provision of this Agreement or of
any other agreement or document delivered in connection with this
Agreement, and also hereby irrevocably waives any defense of improper
venue, forum non conveniens or lack of personal jurisdiction to any
such action brought in those courts. Each party further irrevocably
agrees that any action to enforce, interpret or construe any provision
of this Agreement will be brought only in one of those courts. Each
party hereby waives its right to trial by jury.

13.    Legal Fees

(a)    The Company shall pay
the reasonable legal fees and disbursements of all attorneys in
connection with the negotiation and entering into of this
Agreement.

(b)    In the event of any controversy or dispute
pursuant to Section 12 hereof, the court shall award the Executive his
costs and legal fees and disbursements if it determines, in its sole
discretion, that the Executive has prevailed in such dispute or
controversy and that an award of reasonable legal fees is appropriate
under the circumstances.

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14.    Indemnification.    The
Company shall indemnify Executive to the fullest extent permitted by
law for any action or inaction as an officer, director or fiduciary of
the Company, any Affiliate or any benefit plan of either. Both during
and after the term while liability exists the Company shall cover the
Executive under directors' and officers' liability
insurance to the greatest extent any other officer or director is
covered.

15.    Nature of Obligations.    Nothing
contained herein shall create or require the Company to create a trust
of any kind to fund any benefits which may be payable hereunder, and to
the extent that the Executive acquires a right to receive benefits from
the Company hereunder, such right shall be no greater than the right of
any unsecured general creditor of the Company.

16.    Headings.    The section headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.

17.    Validity.    The invalidity, illegality or
unenforceability of any provision of this Agreement, in whole or in
part, shall not affect the validity, legality or enforceability of any
other provisions of this Agreement, which shall remain in full force
and effect.

18.    Code Section 409A.    The
parties recognize that the application of the punitive provisions of
Section 409A of the Internal Revenue Code of 1986, as amended
("Code") to this Agreement is uncertain at
the time this Agreement is entered into. It is the intent of the
parties that no provision of this Agreement operate so as to result in
imposition of any tax under Section 409A of the Code. The parties agree
that before the end of calendar year 2005 they will modify the
Agreement upon advice of counsel for each of the Company and Executive
so that any payments or benefits provided to or in respect of Executive
will not be subject to any tax under Section 409A of the Code, but such
modifications shall not include reducing the value of any such payments
or benefits but rather will address the timing of payment or provision
of payments and benefits.

19.    Counterparts.    This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same
instrument.

20.    Entire Agreement.    This
Agreement embodies the entire agreement between the Company and the
Executive with respect to the matters agreed to herein. All prior
agreements between the Company and the Executive with respect to the
matters agreed to herein are hereby superseded and shall have no force
or effect.

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IN WITNESS WHEREOF, this Agreement has been
executed as of the date first above written.

											
	MortgageIT
Holdings, Inc.		 
	By:		/s/ William L.
Collins		 
	 		William L.
Collins
Chairman
Compensation Committee of the
 Board of
Directors
 33 Maiden Lane
New York, New York
10038	
	Executive		 
	By:
/s/ Doug W. Naidus		 
	Doug W.
Naidus		 
	At the last address
on
 therecords of the Company	
	

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EXHIBIT A TO

EMPLOYMENT
AGREEMENT

EXCISE TAX TREATMENT

(a)    In the
event that the Executive shall become entitled to payments and/or
benefits provided by this Agreement or any other amounts in the
"nature of compensation" (whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement
with the Company, any person whose actions result in a change of
ownership or effective control covered by Section 280G(b)(2) of the
Code or any person affiliated with the Company or such person) as a
result of such change in ownership or effective control (collectively
the "Company Payments"), and such Company
Payments will be subject to the tax (the "Excise
Tax") imposed by Section 4999 of the Code (and any similar
tax that may hereafter be imposed by any taxing authority), the Company
shall make the Additional Payments (defined below) either directly to
Executive in cash or, with respect to Excise Taxes or other taxes
subject to withholding, by payment of such taxes to the appropriate
taxing authority on Executive's behalf, notwithstanding any
contrary provision in this Agreement.

(b)    The term
"Additional Payment" means a payment in an
amount equal to the sum of (1) the Excise Taxes payable by Executive on
any payment or acceleration right pursuant to this Agreement which is
treated as an excess parachute payment, plus (2) the additional Excise
Taxes, federal and state income taxes and employment taxes to the
extent such taxes are imposed in respect of the Additional Payment,
such that Executive shall be in the same after-tax position and shall
have received the same benefits that he would have received if the
Excise Taxes had not been imposed. For purposes of calculating the
income taxes attributable to the Additional Payment, Executive shall be
deemed for all purposes to pay federal income taxes at the highest
marginal rate of federal income taxation for individuals in the
calendar year in which the Additional Payment is to be made, and, if
applicable, at the highest marginal state income tax rate to which
Executive is subject with respect to the Additional Payment, net of the
maximum reduction in federal income taxes that could be obtained from
deduction of such state taxes. An example of the calculation of an
Additional Payment is set forth below. Assume that the Excise Tax rate
is 20%, the highest marginal federal income tax rate is
40%, Executive is subject to federal employment taxes at a rate
of 1.45% and Executive is not subject to state income taxes.
Further assume that Executive has received an excess parachute payment
in the amount of $200,000, on which $40,000 ($200,000 x 20%) in
Excise Taxes are payable. The amount of the required Additional Payment
is thus computed to be $103,761, i.e., the Additional Payment of
$103,761, less additional Excise Taxes on the Additional Payment of
$20,752 (i.e., 20% x $103,761), income taxes of $41,504 (i.e.,
40% x $103,761), employment taxes of $1,505 (i.e., 1.45%
x $103,761) yields $40,000, the amount of the Excise Taxes payable in
respect of the original excess parachute payment.

(c)    If
(i) no excise tax would be imposed under Section 4999 of the Code if
the amount of payments in the nature of compensation described above
were not more than 10% less than the payments to be made without
regard to this paragraph and (ii) reduction of such payments would
actually result in no such excise tax being imposed on any payments,
then the payments in the nature of compensation will be reduced by the
smallest amount possible in order that no excise tax under Section 4999
of the Code be imposed on any payments. If a reduction in payments is
to be made, Executive may select which payments are to be
reduced.

9EXECUTION COPY

                               SECOND AMENDMENT TO
                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is made and entered into as of August 25, 2005, with an Effective
Date (as defined below) determined in accordance with Section 3 below, by and
among SUBURBAN PROPANE, L.P., a Delaware limited partnership (the "Borrower"),
the financial institutions from time to time party to the Initial Credit
Agreement referred to below (the "Lenders") pursuant to written authorization
(in the form attached hereto as Exhibit A, the "Authorization") and WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative
Agent for the Lenders (the "Administrative Agent").

                              Statement of Purpose

     The Borrower, the Lenders and the Administrative Agent are parties to that
certain Third Amended and Restated Credit Agreement dated as of October 20, 2004
(as amended by that certain First Amendment to Third Amended and Restated Credit
Agreement, dated as of March 17, 2005, the "Initial Credit Agreement") pursuant
to which the Lenders have extended certain credit facilities to the Borrower.

     The Borrower has requested that the Lenders amend the Initial Credit
Agreement to (a) eliminate the Stand-Alone L/C Facility, (b) increase the
Revolving Credit Commitment to $175,000,000, (c) extend the Revolving Credit
Termination Date to match the Term Loan Termination Date, (d) make related
amendments necessary for such purposes and (e) make such other amendments as are
described below. The Initial Credit Agreement, as amended by this Amendment is
hereinafter referred to as the "Amended Credit Agreement". Subject to the terms
and conditions of this Amendment, the Administrative Agent and the Lenders
hereby agree to the requested amendments.

     NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:

     SECTION 1. Definitions. All capitalized, undefined terms used in this
Amendment shall have the meanings assigned thereto in the Initial Credit
Agreement.

     SECTION 2. Amendment to Initial Credit Agreement.

     (a) Amendment to Initial Credit Agreement. Effective on the Effective Date,
the Initial Credit Agreement shall be amended in the form attached hereto as
Exhibit B.

     (b) Amendment to Schedule 1.1(a). Effective on the Effective Date, Schedule
1.1(a) to the Initial Credit Agreement shall be deleted in its entirety and the
information formerly contained therein shall be reflected in the Register, as
provided in the Amended Credit Agreement.

     SECTION 3. Effectiveness. This Amendment shall become effective on the date
(the "Effective Date") upon which the following conditions have been satisfied:

     (a) receipt by the Administrative Agent of (i) a duly executed counterpart
of this Amendment from the Administrative Agent, the Borrower and each
Guarantor, (ii) duly executed Authorizations from the Required Lenders and (iii)
duly executed Authorizations from each of the Lenders holding a Revolving Credit
Commitment;

     (b) receipt by the Administrative Agent of a duly executed Revolving Credit
Note for each Lender requesting a Revolving Credit Note to reflect such Lender's
Revolving Credit Commitment;

     (c) receipt by the Administrative Agent (in form and substance reasonably
satisfactory thereto) of a certificate of the secretary or assistant secretary
of the Borrower (i) containing a representation that the partnership agreement
provided in connection with the Initial Credit Agreement remains unchanged, (ii)
attaching resolutions duly adopted by the respective governing body of the
Borrower authorizing, as applicable, the execution, delivery and performance of
this Amendment and approving the transactions contemplated hereby and (iii)
attaching a certificate as of a recent date of the good standing of the Borrower
from its jurisdiction of organization;

     (d) receipt by the Administrative Agent (in form and substance reasonably
satisfactory thereto) of a legal opinion of counsel to the Borrower addressed to
the Administrative Agent and the Lenders with respect to the Borrower, this
Amendment and such other matters as the Administrative Agent shall reasonably
request; and

     (e) the payment of all outstanding fees and expenses of the Administrative
Agent (including without limitation, legal fees and expenses) incurred in
connection with the preparation and negotiation of this Amendment and all
documents, certificates and other instruments delivered in connection therewith.

     SECTION 4. Effect of Amendment on Letters of Credit. On and after the
Effective Date, all of the Revolver Letters of Credit and Stand-Alone Letters of
Credit (as such terms are defined in the Initial Credit Agreement) shall be
Letters of Credit under the Amended Credit Agreement.

     SECTION 5. Limited Consent and Amendment. Except as expressly provided in
this Amendment, the Initial Credit Agreement and each other Loan Document shall
continue to be, and shall remain, in full force and effect. This Amendment shall
not be deemed or otherwise construed (a) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of the Initial Credit
Agreement or any other Loan Document, (b) to prejudice any other right or
remedies that the Administrative Agent or the Lenders, or any of them, may now
have or may have in the future under or in connection with the Initial Credit
Agreement or the Loan Documents, as such documents may be amended, restated or
otherwise modified from time to time, (c) to be a commitment or any other
undertaking or expression of any willingness to engage in any further discussion
with the Borrower, the Guarantors or any other person, firm or corporation with
respect to any waiver, amendment, modification or any other change to the
Initial Credit Agreement or the Loan Documents or any rights or remedies arising
in favor of the Lenders or the Administrative Agent, or any of them, under or
with respect to any such documents or (d) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of any other agreement
by and among the Borrower, any Guarantor or any of

                                       2

its respective Subsidiaries, on the one hand, and the Administrative Agent or
any other Lender, on the other hand.

     SECTION 6. Representations and Warranties/No Default. By their execution
hereof, and after giving effect to this Amendment, the Borrower and the
Guarantors hereby certify that (a) each of the representations and warranties
set forth in the Amended Credit Agreement and the other Loan Documents is true
and correct as of the date hereof as if fully set forth herein (other than
representations and warranties which speak as of a specific date pursuant to the
Initial Credit Agreement, which representations and warranties shall have been
true and correct as of such specific dates) and that as of the date hereof
(after giving effect to the provisions of this Amendment) no Default or Event of
Default has occurred and is continuing, and (b) the execution, delivery and
performance of this Amendment have been authorized by all requisite corporate
action on the part of the Borrower and the Guarantors.

     SECTION 7. Acknowledgement by Guarantors. By their execution hereof, each
of the Guarantors hereby expressly (a) consents to the modifications and
amendments set forth in this Amendment, (b) reaffirms all of its respective
covenants, representations, warranties and other obligations set forth in each
of the Loan Documents to which it is a party and (c) acknowledges, represents
and agrees that its respective covenants, representations, warranties and other
obligations set forth in each of the Loan Documents to which it is a party
remain in full force and effect.

     SECTION 8. Expenses. The Borrower shall pay all reasonable out-of-pocket
expenses of the Administrative Agent in connection with the preparation,
execution and delivery of this Amendment, including, without limitation, the
reasonable fees and disbursements of counsel for the Administrative Agent.

     SECTION 9. Governing Law. This Amendment shall be governed by, construed
and enforced in accordance with the laws of the State of New York.

     SECTION 10. Counterparts. This Amendment may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.

     SECTION 11. Fax Transmission. A facsimile, telecopy or other reproduction
of this Amendment may be executed by one or more parties hereto, and an executed
copy of this Amendment may be delivered by one or more parties hereto by
facsimile or similar instantaneous electronic transmission device pursuant to
which the signature of or on behalf of such party can be seen, and such
execution and delivery shall be considered valid, binding and effective for all
purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Amendment as well as any facsimile, telecopy or
other reproduction hereof.

                            [Signature Pages Follow]

                                       3

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal by their duly authorized representatives, all as of the
day and year first above written.

                         BORROWER AND GUARANTORS:

                         SUBURBAN PROPANE, L.P., as Borrower

                         By:
                             ---------------------------------------------------
                             Name: Robert M. Plante
                             Title: Vice President, Chief Financial Officer

                         SUBURBAN PROPANE GAS CORPORATION
                         PARGAS, INC.
                         VANGAS, INC.
                         PLATEAU, INC.
                         GAS CONNECTION, INC.
                         SUBURBAN @ HOME, INC.
                         SUBURBAN HOLDINGS, INC.
                         SUBURBAN FRANCHISING, INC.
                         SUBURBAN @ HOME HOLDINGS, INC.
                         SUBURBAN PLUMBING NEW JERSEY, LLC

                         Each of the above,

                         By:
                             ---------------------------------------------------
                             Name: Robert M. Plante
                             Title: Vice President, Finance

[Second Amendment to Credit Agreement - Suburban Propane, L.P.]

                         SUBURBAN HEATING OIL PARTNERS, LLC
                         AGWAY ENERGY SERVICES, LLC SUBURBAN
                         ALBANY PROPERTY, LLC SUBURBAN BUTLER
                         MONROE STREET PROPERTY, LLC SUBURBAN
                         CANTON BUCK STREET PROPERTY, LLC
                         SUBURBAN CANTON ROUTE 11 PROPERTY,
                         LLC SUBURBAN CHAMBERSBURG FIFTH
                         AVENUE PROPERTY, LLC SUBURBAN
                         COLONIE PROPERTY LLC SUBURBAN
                         ELLENBURG DEPOT PROPERTY, LLC
                         SUBURBAN GETTYSBURG PROPERTY, LLC
                         SUBURBAN LEWISTOWN PROPERTY, LLC
                         SUBURBAN MA SURPLUS PROPERTY, LLC
                         SUBURBAN MARCY PROPERTY, LLC
                         SUBURBAN MIDDLETOWN NORTH STREET
                         PROPERTY, LLC SUBURBAN NEW MILFORD
                         SMITH STREET PROPERTY, LLC SUBURBAN
                         NJ PROPERTY ACQUISITIONS, LLC
                         SUBURBAN NJ SURPLUS PROPERTY, LLC
                         SUBURBAN NY PROPERTY ACQUISITIONS,
                         LLC SUBURBAN NY SURPLUS PROPERTY,
                         LLC SUBURBAN PA PROPERTY
                         ACQUISITIONS, LLC SUBURBAN PA
                         SURPLUS PROPERTY, LLC SUBURBAN
                         ROCHESTER PROPERTY, LLC SUBURBAN
                         SODUS PROPERTY, LLC SUBURBAN TEMPLE
                         PROPERTY, LLC SUBURBAN TONAWANDA
                         PLANT PROPERTY, LLC SUBURBAN TOWANDA
                         PROPERTY, LLC SUBURBAN VERBANK
                         PROPERTY, LLC SUBURBAN VINELAND
                         PROPERTY, LLC SUBURBAN VT PROPERTY
                         ACQUISITIONS, LLC SUBURBAN WALTON
                         PROPERTY, LLC SUBURBAN WASHINGTON
                         PROPERTY, LLC

                         Each of the above,

                         By: GAS CONNECTION, INC., as Manager

                         By:
                             ---------------------------------------------------
                             Name: Robert M. Plante
                             Title: Vice President, Chief Financial Officer

[Second Amendment to Credit Agreement - Suburban Propane, L.P.]

                         SUBURBAN PIPELINE LLC

                         By: SUBURBAN PROPANE, L.P. as Manager

                         By:
                             ---------------------------------------------------
                             Name: Robert M. Plante
                             Title:Vice President, Chief Financial Officer

[Second Amendment to Credit Agreement - Suburban Propane, L.P.]

                         ADMINISTRATIVE AGENT:

                         WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative
                         Agent, as Lender, as Swingline Lender and as an Issuing
                         Lender, on behalf of itself and the Lenders pursuant
                         to the Authorizations

                         By:
                             ---------------------------------------------------
                         Name:
                               -------------------------------------------------
                         Title:
                                ------------------------------------------------

[Second Amendment to Credit Agreement - Suburban Propane, L.P.]

                                    EXHIBIT A

                          Form of Lender Authorization

                                  AUTHORIZATION

                                 August __, 2005

Wachovia Bank, National Association,
as Administrative Agent
Charlotte Plaza, CP-8
201 South College Street
Charlotte, North Carolina 28288-0608
Attention:  Syndication Agency Services

     Re:  Second Amendment dated as of August 25, 2005 (the "Amendment") to that
          certain Third Amended and Restated Credit Agreement dated as of
          October 20, 2004 (as amended by that certain First Amendment to Third
          Amended and Restated Credit Agreement, dated as of March 17, 2005, the
          "Credit Agreement") by and among Suburban Propane, L.P. (the
          "Borrower"), the financial institutions from time to time party
          thereto (the "Lenders") and Wachovia Bank, National Association, as
          Administrative Agent for the Lenders (the "Administrative Agent")

     This letter acknowledges our receipt and review of the Amendment in the
form posted to SyndTrak Online. By executing this letter, we hereby approve the
Amendment and authorize the Administrative Agent to execute and deliver the
Amendment on our behalf.

     Each financial institution executing this Authorization agrees or reaffirms
that it shall be a party to the Credit Agreement and the other Loan Documents to
which Lenders are parties and shall have the rights and obligations of a Lender
under each such agreement.

                         -------------------------------------------------------
                         [Insert name of applicable financial institution]

                          By:
                               -------------------------------------------------
                          Name:
                                ------------------------------------------------
                          Title:
                                 -----------------------------------------------

                                    EXHIBIT B

                        Form of Amended Credit Agreement

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