Document:

Employment Agreement

 EXHIBIT 10.45 
  
  
 EMPLOYMENT AGREEMENT 
 BETWEEN 
 LEE S. SALTZMAN 
 AND 
 FIRST STATES GROUP, L.P. 
  
  
 This Employment Agreement (the “Agreement”), dated as of July 3, 2003, between First States Group, L.P., a Delaware limited partnership (the “Company”), and Lee S. Saltzman (the “Executive”): 
  
 WHEREAS, American Financial Realty Trust, a Maryland real estate investment
trust (the “REIT”), is a limited partner and the sole owner of the general partner of the Company; 
  
 WHEREAS, the Company wishes to employ the Executive in the capacities and on the terms and conditions set out below, and the Executive has agreed to
accept such employment, in the capacities and on the terms and conditions set forth below. 
  
 NOW, THEREFORE, the Company and the Executive, in consideration of the respective covenants set out below, hereby agree as follows: 
  

	 	1.	 	EMPLOYMENT. 

  
 (a)  POSITIONS. Beginning on such date as the Executive and the Chief Executive Officer shall mutually agree (the “Effective Date”), the Executive shall be employed by the Company as Senior Vice
President and Chief Investment Officer. The Executive shall also be an officer of the REIT as its Senior Vice President and Chief Investment Officer. 
  
 (b)  DUTIES. The Executive shall report to the Chief Executive Officer of the Company (the “Chief Executive Officer”) and his
principal employment duties and responsibilities shall be those duties and responsibilities consistent with this position as are assigned by the Chief Executive Officer or the Board of Trustees of the REIT (the “Board”). 
  
 (c)  EXTENT OF SERVICES. Except for illnesses and vacation periods,
the Executive shall devote all of his working time and attention and his best efforts to the performance of his duties and responsibilities under this Agreement. Notwithstanding the foregoing, the Executive may (i) make any passive investment where
he is not obligated or required to, and shall not in fact, devote any managerial efforts, (ii) participate in charitable, academic or community activities, and in trade or professional organizations, or (iii) hold directorships in other companies
consistent with the Company’s conflict of interest policies and corporate governance guidelines as in effect from time to time. 
  
 2.     TERM. This Agreement shall be effective as of the Effective Date and shall continue in full force and effect thereafter for a
term of three (3) years following the Effective Date (the “Initial Term”), and shall be automatically extended for an additional one (1) year term at the end of the Initial Term, and an additional one (1) year term on each one-year
anniversary of the one (1) year term (the last day of each such term is referred to herein as a “Term Date”), unless either party terminates this Agreement not later than sixty (60) days prior to a Term Date by providing written notice to
the other party of such party’s intent not to renew, or it is sooner 
  

 1 

 terminated pursuant to Section 7. For purposes of this Agreement, “Term” shall mean the actual duration of the
Executive’s employment hereunder, taking into account any extensions pursuant to this Section 2 or early termination of employment pursuant to Section 7. 
  

3.     BASE SALARY. The Company shall pay the Executive a base salary annually (the “Base Salary”), which shall be
payable in periodic installments according to the Company’s normal payroll practices. The initial Base Salary shall be $200,000. The Board or the Compensation and Human Resources Committee of the REIT (the “Compensation Committee”)
shall review the Base Salary at least once a year to determine whether the Base Salary should be increased effective January 1 of each year during the Term; provided, however, that on each January 1 during the Term, the Base Salary shall be
increased by a minimum positive amount equal to the Base Salary in effect on January 1 of the prior year multiplied by the percentage increase in the Consumer Price Index for such year, except that on January 1, 2004, the amount shall be the
percentage increase from the first day of the month in which the Effective Date occurs to January 1, 2004. The amount of the increase shall be determined before March 31 of each year and shall be retroactive to January 1. The Base Salary, including
any increases, shall not be decreased during the Term. For purposes of this Agreement, the term “Base Salary” shall mean the amount established and adjusted from time to time pursuant to this Section 3. 
  

	 	4.	 	INCENTIVE AWARDS. 

  
 (a)  ANNUAL INCENTIVE BONUS. The Executive shall be entitled to receive an annual cash incentive bonus for each fiscal year during the Term of
this Agreement consistent with a bonus policy adopted by the Compensation Committee (the “Bonus Policy”). For the period beginning on the Effective Date and ending on December 31, 2003, if the Executive or the Company, as the case may be,
satisfies the performance criteria contained in such Bonus Policy for the 2003 fiscal year, the Executive shall receive an annual incentive bonus in an amount equal to two (2) times his Base Salary, with his Base Salary for this purpose being pro
rated and adjusted to reflect the portion of the fiscal year that the Executive was employed by the Company. Beginning January 1, 2004, and for each year thereafter, if Executive or the Company, as the case may be, satisfies the performance criteria
contained in such Bonus Policy for a fiscal year, he shall receive an annual incentive bonus of up to two (2) times his Base Salary, as in effect for such fiscal year, as recommended by the Chief Executive Officer and subject to approval by the
Compensation Committee. If Executive or the Company, as the case may be, fails to satisfy the performance criteria contained in such Bonus Policy for a fiscal year, he may be eligible to receive an incentive bonus for such fiscal year, in such
amount as is recommended by the Chief Executive Officer and subject to approval by the Compensation Committee. Beginning January 1, 2004, the Bonus Policy shall contain both individual and group goals established by the Compensation Committee.
Notwithstanding the foregoing, in no event shall the annual incentive bonus payable to Executive be less than a guaranteed bonus amount, irrespective of whether the Executive satisfies the performance criteria contained in the Bonus Policy as in
effect for such fiscal year (the “Guaranteed Bonus”), or exceed two (2) times his Base Salary as in effect for such fiscal year. The Guaranteed Bonus shall be $22,916.67 per month. The Board or the Compensation Committee shall review the
Guaranteed Bonus at least once a year to determine whether the Guaranteed Bonus should be increased effective January 1 of each year during the Term. The Guaranteed Bonus portion of the annual incentive bonus shall be paid during the fiscal year
pursuant to the Company’s normal payroll practices. The balance 
  

 2 

 of the annual incentive bonus (the incremental portion of the annual incentive bonus in excess of the Guaranteed Bonus
amount, if any) shall be paid to the Executive no later than thirty (30) days after the date the Compensation Committee approves the annual incentive bonus payable to the Executive for such fiscal year. For purposes of this Agreement, the term
“Incentive Bonus” shall mean the amount established pursuant to this Section 4(a). 
  
 (b)  OUTPERFORMANCE PLAN BONUS. The REIT has established the 2003 Outperformance Plan (the “OPP”) as an incentive compensation plan for key employees with awards determined based on the annual and
the three-year total return to shareholders of the REIT. The Executive shall be eligible to participate in the OPP as of the Effective Date in an amount as determined by the Compensation Committee. 
  

	 	5.	 	STOCK BASED AWARDS. 

  
 (a)  OPTION GRANTS. The REIT has established the 2002 Equity Incentive Plan (“Equity Incentive Plan”). The Company agrees that on the
Effective Date, Executive will receive an initial grant of options (the “Initial Grant Options”) to purchase 75,000 common shares of beneficial ownership of the REIT (“Common Shares”) under the Equity Incentive Plan. The grant of
the Initial Grant Options will be made pursuant to an Award Agreement (the “Award Agreement”) that will contain the terms and conditions of the grant, subject to the terms of the Equity Incentive Plan. The Award Agreement will contain
provisions stating that the Initial Grant Options will have a term of ten (10) years and will vest and become exercisable with respect to 25% of the underlying Common Shares on the one-year anniversary of the date of grant and 6.25% of the
underlying Common Shares on the last day of each fiscal quarter thereafter until fully vested; provided, however, that, upon any of the following events the Executive will be 100% vested in the Initial Grant Options: (i) a Change in
Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), (iii) his death, or (iv) his becoming Permanently Disabled (as defined herein). Executive will forfeit all unvested Initial Grant Options if he is
terminated at any time for Cause, or if he voluntarily terminates his employment with the Company for any reason. The exercise price of the Initial Grant Options shall be the market value of the REIT’s shares on the Effective Date, except to
the extent otherwise required for the Initial Grant Options to be treated as ISOs (as defined below). The Executive shall be eligible to receive future option grants as recommended by the Chief Executive Officer and approved by the Compensation
Committee. 
  
 The Initial Grant Options are intended to meet the
qualifications of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code” and “ISO” respectively) to the fullest extent possible and in excess of that amount, they will be treated as stock options that do not
meet the terms of Code Section 422 (“NQSO”). 
  
 (b)  RESTRICTED SHARE AWARDS. The Executive shall be eligible to receive restricted Common Shares of the REIT (“Restricted Share Grants”) as recommended by the Chief Executive Officer and approved by the Compensation
Committee, but only to the extent that restricted shares become available for issuance under the Equity Incentive Plan. If the REIT obtains shareholder approval of an increase in the number of restricted shares authorized for issuance to employees
under the Equity Incentive Plan, then the Company will submit a recommendation to the Compensation Committee to award to the Executive, subject to review 
  

 3 

 and approval by the Compensation Committee, a Restricted Share Grant for 25,000 Common Shares (the “Initial
Restricted Share Grant”). Awards of Restricted Share Grants shall be on the following terms: vesting at the rate of 33.33% of the underlying Common Shares on the one-year anniversary of the effective date of the grant of Common Shares as
Restricted Share Grants and 8.33% of the underlying Common Shares on the last day of each fiscal quarter thereafter until fully vested; provided, however, that, upon any of the following events the Executive will be 100% vested in the Restricted
Share Grants: (i) a Change in Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), (iii) his death, or (iv) his becoming Permanently Disabled (as defined herein). Executive will forfeit all unvested
Restricted Share Grants if he is terminated for Cause or if he voluntarily terminates his employment with the Company for any reason. Any Common Shares issued as Restricted Share Grants will have voting and dividend rights. If the Initial Restricted
Share Grant has not been issued to the Executive by the record date for the dividend for the third quarter of 2003, then the Company will pay the Executive a dividend equivalent payment on the payment date for the dividend for the third quarter of
2003, and on each dividend payment date thereafter, until such time as either the Initial Restricted Share Grant is awarded or the Executive’s employment is terminated for any reason. 
  

	 	6.	 	BENEFITS. 

  
 (a)  VACATION. The Executive shall be entitled to four (4) weeks paid vacation per full calendar year, which shall accrue during the Executive’s employment with the Company. 
  
 (b)  SICK AND PERSONAL DAYS. The Executive shall be entitled to
sick and personal days pursuant to Company policy. 
  
 (c)  EMPLOYEE BENEFIT PLANS. The Executive and his spouse and eligible dependents, if any, and their respective designated beneficiaries where applicable, will be eligible for and entitled to participate in any Company sponsored
employee benefit plans, including but not limited to benefits such as group health, dental, accident, disability insurance, group life insurance, and a 401(k) plan, as such benefits may be offered from time to time, on a basis no less favorable than
that applicable to other executives of the Company. 
  
 (d)  OTHER BENEFITS. 
  

	 	(i)	 	ANNUAL PHYSICAL. The Company shall provide, at its cost, a medical examination for the Executive on an annual basis by a licensed physician in the Philadelphia, Pennsylvania or the
New York, New York area selected by the Executive. 

  

	 	(ii)	 	CAR ALLOWANCE. The Company shall pay Executive a monthly car allowance that is not less than $750.00 per month. 

  

	 	(iii)	 	DIRECTORS AND OFFICERS INSURANCE. During the Term and the Severance Period, the Executive shall be entitled to directors and officers insurance coverage for his acts and omissions
while an officer of the Company and the REIT on a basis no less favorable to him than the coverage provided to current officers and trustees. 

  

 4 

	 	(iv)	 	EXPENSES, OFFICE AND SECRETARIAL SUPPORT. The Executive shall be entitled to reimbursement of all reasonable expenses, in accordance with the Company’s policy as in effect from
time to time and on a basis no less favorable than that applicable to other executives of the Company, including, without limitation, telephone, reasonable travel and reasonable entertainment expenses incurred by the Executive in connection with the
business of the Company, promptly upon the presentation by the Executive of appropriate documentation. The Executive shall also be entitled to appropriate office space, administrative support, and such other facilities and services as are suitable
to the Executive’s positions and adequate for the performance of the Executive’s duties. 

  

	 	(v)	 	PROFESSIONAL LICENSES; CONTINUING EDUCATION. The Company shall pay for the Executive’s New York real estate license and the professional licenses of the Executive in all states
in which he is licensed to practice law, and shall reimburse the Executive for all reasonable costs incurred in his complying with any continuing legal education or other requirements required to maintain his licenses. 

  

	 	(vi)	 	REAL ESTATE ORGANIZATIONS. The Company shall pay for the Executive to be a member of real estate organizations that have been approved by the Chief Executive Officer.

  

	 	(vii)	 	HOUSING ALLOWANCE. The Company shall pay for or provide long-term extended stay housing for the Executive during the Term. On a year-to-year basis during the Term, the Chief
Executive Officer and the Executive shall review the housing allowance and determine the form it shall take for the following year. 

  
 7.     TERMINATION. The employment of the Executive by the Company pursuant to this Agreement shall terminate upon the occurrence of
any of the following: 
  
 (a)  DEATH OR PERMANENT
DISABILITY. Immediately upon death or Permanent Disability of the Executive. As used in this Agreement, “Permanent Disability” shall mean an inability due to a physical or mental impairment to perform the material services contemplated
under this Agreement for a period of six (6) months, whether or not consecutive, during any 365-day period. A determination of Permanent Disability shall be made by a physician satisfactory to both the Executive and the Company, provided that if the
Executive and the Company do not agree on a physician, the Executive and the Company shall each select a physician and these two together shall select a third physician, whose determination as to Permanent Disability shall be binding on all parties.
The appointment of one or more individuals to carry out the offices or duties of the Executive during a period of the Executive’s inability to perform such duties and pending a determination of Permanent Disability shall not be considered a
breach of this Agreement by the Company. 
  
 (b)  FOR
CAUSE. At the election of the Company and subject to the provisions of this Section 7(b), immediately upon written notice by the Company to the Executive of his termination for Cause. For purposes of this Agreement, “Cause” for termination
shall be deemed to exist solely in the event of (i) the conviction of the Executive of, or the entry of a plea of guilty or nolo contendere by the Executive to, a felony (exclusive of any felony relating to negligent operation of a motor
vehicle and not including a conviction, plea of guilty or nolo 
  

 5 

 contendere arising solely under a statutory provision imposing criminal liability upon the Executive on a per se
basis due to the Company offices held by the Executive, so long as any act or omission of the Executive with respect to such matter was not taken or omitted in contravention of any applicable policy or directive of the Board or the Chief Executive
Officer), (ii) a willful breach of his duty of loyalty which is materially detrimental to the Company, (iii) a willful failure to perform or adhere to explicitly stated duties that are consistent with the terms of this Agreement, or the
Company’s reasonable and customary guidelines of employment or reasonable and customary corporate governance guidelines or policies, including without limitation any business code of ethics adopted by the Board, or to follow the lawful
directives of the Board (provided such directives are consistent with the terms of this Agreement) which, in any such case, continues for thirty (30) days after written notice from the Chief Executive Officer to the Executive, or (iv) gross
negligence or willful misconduct in the performance of the Executive’s duties. For purposes of this Section 7(b), no act, or failure to act, on the Executive’s part will be deemed “gross negligence” or “willful
misconduct” unless done, or omitted to be done, by the Executive not in good faith and without a reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company. The parties agree that in order to
terminate the Executive pursuant to Subsections (ii) and (iv) hereof, the Company shall first be required to prove to the reasonable satisfaction of the Executive that he engaged in improper conduct under these Subsections, and if the Executive
shall not agree with the Company’s assessment of his conduct, then the Executive shall not be terminated until an arbitrator, as provided for in Section 13(b), has determined that the Executive’s conduct constituted improper conduct under
the applicable Subsection. 
  
 (c)  WITHOUT CAUSE;
VOLUNTARY RESIGNATION. At the election of the Company without Cause, and at the election of the Executive for any reason, in either case upon thirty (30) days prior written notice to the Executive or the Company, as the case may be. 
  

	 	8.	 	EFFECTS OF TERMINATION. 

  
 (a)  TERMINATION ON PERMANENT DISABILITY OR BY THE COMPANY WITHOUT CAUSE. If, at any time after the date of this Agreement, the employment of
the Executive should terminate by reason of his becoming Permanently Disabled or should terminate at the election of the Company without Cause, then the Company shall pay all compensation and benefits for the Executive as follows: 
  

	 	(i)	 	any Base Salary, Guaranteed Bonus, Incentive Bonus, expense reimbursements and all other compensation related payments that are payable as of his termination of employment date that
are related to his period of employment preceding his termination date, and 

  

	 	(ii)	 	the prorated amount of the maximum Incentive Bonus for the year in which the termination of employment occurs, prorated for the portion of such year during which the Executive was
employed prior to the effective date of the termination, and subtracting out all Guaranteed Bonus payments received by the Executive during such year, and 

  

	 	(iii)	 	the amount equal to his (A) Base Salary, plus (B) his Guaranteed Bonus, at the rates in effect on the effective date of his termination of employment, that would

  

 6 

 have been paid or payable for the duration of the Term of this Agreement, or if greater, for 12 months (the
“Severance Period”). 
  
 The sum of the amount payable
under subsections (ii) and (iii) hereof is referred to herein as his “Severance Payment”. 
  

	 	(iv)	 	The Severance Payment shall be made in a single, lump sum cash payment before the later of (x) thirty (30) days after the effective date of the Executive’s termination of
employment, and (y) the delivery of the signed Release (as defined below) to the Company and the expiration of the Executive’s statutory period to revoke the Release. With respect to any Severance Payment attributable to a period after the
expiration of 24 calendar months after the termination of the Executive’s employment, such payment shall be reduced for compensation earned from other employment or self-employment after that date, and the Executive shall refund to the Company
any amount due as a result of such reduction. 

  

	 	(v)	 	The Company shall allow the Executive to continue to participate during the Severance Period in any healthcare, dental, vision and prescription drug plans in which the Executive was
entitled to participate immediately prior to his termination, to the same extent and upon the same terms as the Executive participated in such plans prior to his termination, provided that the Executive’s continued participation is permissible
or otherwise practicable under the general terms and provisions of such benefit plans and programs. During the Severance Period, the Company shall pay for the Executive’s continued participation in said healthcare, dental, vision and
prescription drug plans, including but not limited to premiums for such programs. To the extent that continued participation is neither permissible nor practicable, the Company shall take such actions as may be necessary to provide the Executive
with substantially comparable benefits (without additional cost to the Executive) outside the scope of such plans, including, without limitation, reimbursing the Executive for his costs in obtaining such coverage, such as COBRA premiums paid by the
Executive and/or his eligible dependents. If the Executive engages in regular employment after his termination of employment (whether as an executive or as a self-employed person), any employee benefit and welfare benefits received by the Executive
in consideration of such employment which are similar in nature to the healthcare, dental, vision and prescription drug plans provided by the Company will relieve the Company of its obligation under this Section 8(a)(v) to provide comparable
benefits to the extent of the benefits so received. 

  

	 	(vi)	 	The Executive’s Initial Grant Options awarded under the Equity Incentive Plan shall immediately become 100% vested, and he shall have a two-year period following the effective
date of his termination of employment in which to exercise his vested stock options, including those stock options that vested upon his termination of employment. 

  

	 	(vii)	 	The Executive’s restricted Common Shares awarded under the Equity Incentive Plan shall immediately become 100% vested, and all restrictions shall lapse on the vested portion of
the Restricted Stock Grants. 

  

	 	(viii)	 	The Executive would be entitled to vest in and receive a percentage of his total OPP allocation for the 3-year term of the OPP (the “OPP Allocation”) equal to (x) the
number of complete months the Executive had participated in the OPP from the Effective Date 

  

 7 

 through the effective date of his termination of employment, divided by (y) 36 (representing the total number of months
in the OPP term), in lieu of the scheduled vesting of his OPP Allocation under the OPP. This percentage of his OPP Allocation would be paid to the Executive (less any cash OPP payments previously received by the Executive) after the OPP reward is
determined at the end of the OPP plan term. 
  
 (ix)  If
the Severance Period is less than 24 months, then the Noncompete Period in Section 11 shall be reduced to be equal to the Severance Period. 
  
 (x)  All Severance Payments and other severance benefits under this Section 8(a) are contingent on Executive signing a release of claims,
substantially in the form attached hereto as Exhibit A (the “Release”). 
  
 (b)  TERMINATION ON DEATH. Upon a termination of employment due to the Executive’s death, the Executive shall become 100% vested in the Initial Grant Options and Restricted Share Grants awarded to the
Executive under the Equity Incentive Plan. The Executive’s personal representative shall have a one-year period following the Executive’s death in which to exercise his vested stock options, including those stock options that vested on
death. The Company shall pay to the Executive’s personal representative any Base Salary, Guaranteed Bonus, expense reimbursements and all other compensation related payments that are payable as of his date of death and that are related to his
period of employment preceding his date of death, and within 60 days after the Executive’s death, shall pay to the Executive’s personal representative a prorated amount of maximum Incentive Bonus for the year in which the Executive’s
death occurs, prorated for the portion of the year during which the Executive was employed prior to his death, and subtracting out all Guaranteed Bonus payments received by the Executive during such year. 
  
 (c)  BY THE COMPANY FOR CAUSE OR VOLUNTARILY BY THE EXECUTIVE. In
the event that the Executive’s employment is terminated by the Company for Cause or voluntarily by the Executive, the Company shall pay the Executive his Base Salary, Guaranteed Bonus, expense reimbursements and all other compensation related
payments that are payable as of his termination of employment date and that are related to his period of employment preceding his termination date. The Executive shall forfeit all unvested options and restricted Common Shares if he is terminated by
the Company for Cause, and, subject to Section 9(b) below, he shall forfeit all unvested options and restricted Common Shares if he voluntarily terminates his employment with the Company. 
  
 (d)  TERMINATION OF AUTHORITY. Immediately upon the Executive terminating or being terminated from his employment
with the Company for any reason, notwithstanding anything else appearing in this Agreement or otherwise, the Executive will stop serving the functions of his terminated or expired position(s) and shall be without any of the authority or
responsibility for such position(s). 
  

	 	9.	 	CHANGE OF CONTROL. 

  
 (a)  CHANGE OF CONTROL. For purposes of this Agreement, a “Change of Control” will be deemed to have taken place upon the occurrence
of any of the following events: 
  

 8 

	 	(i)	 	any person, entity or affiliated group, excluding the REIT or any employee benefit plan of the REIT, acquiring more than 50% of the then outstanding voting shares of the REIT,

  

	 	(ii)	 	the consummation of any merger or consolidation of the REIT into another company, such that the holders of the voting shares of the REIT immediately prior to such merger or
consolidation is less than 50% of the voting power of the securities of the surviving company or the parent of such surviving company, 

  

	 	(iii)	 	the complete liquidation of the REIT or the sale or disposition of all or substantially all of the REIT’s assets, such that after the transaction, the holders of the voting
shares of the REIT immediately prior to the transaction is less than 50% of the voting securities of the acquiror or the parent of the acquiror, or 

  

	 	(iv)	 	a majority of the Board of the REIT votes in favor of a decision that a Change of Control has occurred. 

  
 (b)  CERTAIN BENEFITS UPON A CHANGE OF CONTROL. In the event of a Change of Control, the Executive shall become
100% vested in the Initial Grant Options and Restricted Share Grants awarded to the Executive under the Equity Incentive Plan and if the Executive voluntarily terminates his employment for any reason after the Change of Control, then the Executive
shall have a one-year period following the Change of Control in which to exercise his vested stock options, including those stock options that vested upon the Change of Control. 
  
 (c)  EXCISE TAX. 
  

	 	(i)	 	In the event that any payment or benefit received or to be received by the Executive in connection with a change in control or a termination of the Executive’s employment
(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 in control or any person affiliated with the Company or such person) (all such payments and
benefits being hereinafter called “Total Payments”), such that the Executive will be subject (in whole or in part) to the excise tax imposed under Code Section 4999 (“Excise Tax”) on such payments and benefits, then the Company
shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive, after deduction of the Excise Tax and any federal, state and local tax on the Gross-Up Payment, will be equal to
the Total Payment. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment
is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on such date, net of the maximum deduction in federal income taxes which could be obtained from
deduction of such state and local taxes. 

  

	 	(ii)	 	The Executive or the Company may request, prior to the time any payments under this Agreement are made, a determination of whether any or all of the Total Payments will be subject
to the Excise Tax and, if so, the amount of such Excise Tax and the 

  

 9 

 federal, state and local tax imposed on the Gross-Up Payment. If such a determination is requested, it shall be made
promptly, at the Company’s expense, by tax counsel selected by the Executive and approved by the Company (with such approval not being unreasonably withheld), and such determination shall be conclusive and binding on both parties. The Company
agrees to provide any information reasonably requested by such tax counsel. Tax counsel may engage accountants or other experts, at the Company’s expense, to the extent deemed necessary or advisable for them to reach a determination. For these
purposes, the term “tax counsel” shall mean a law firm with expertise in federal income tax matters. 
  

	 	(iii)	 	In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder, the Executive will repay to the Company, at the time that the
amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed
on the Gross-Up Payment, without any interest thereon. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder, the Company will make an additional Gross-Up Payment in respect of such excess and in respect of
any portion of the Excise Tax with respect to which the Company had not previously made a Gross-Up Payment (plus any interest, penalties or additions payable by the Executive with respect to such excess and such portion) at the time that the amount
of such excess is finally determined, without any interest thereon. 

  

	 	(iv)	 	Each party agrees to notify the other party, in writing, of any claim that, if successful, would require the payment by the Company of a Gross-Up Payment or might entitle the
Company to a refund of all or part of any previous Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after the Executive or Company is informed in writing of such claim or otherwise
becomes aware of such claim. If notice of the claim arose as a result of a claim made against the Executive by a taxing authority, Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which
he gives notice to the Company. If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (A) give the Company any information reasonably requested by the
Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such
claim by an attorney selected by the Executive and approved by the Company (with such approval not being unreasonably withheld), (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to
reasonably participate in any proceedings relating to such claim. The Company shall bear and pay directly all costs and expenses (including legal fees and additional interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. 

  

	 	(v)	 	Notwithstanding the foregoing, the Company shall control all audits and proceedings taken in connection with any claim, audit or proceeding involving Excise Taxes or Gross-Up
Payments and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of any such 

  

 10 

 claim, audit or proceeding and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the tax in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company
shall determine; provided, however, that if the Company directs the Executive to pay such tax and sue for a refund, the Company shall advance the amount of such payment to the Executive, (including interest or penalties with respect
thereto) and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income
with respect to such advance. The Company shall be required to consult with and keep the Executive fully apprised of developments and actions being considered or taken with respect to such claim, audit or proceeding. The Company’s control of
the contest shall be limited to issues with respect to which such a Gross-Up Payment would be payable or refundable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue. Each party agrees to keep
the other party fully apprised of developments concerning such claim, audit or proceeding and to cooperate with the other in good faith in order to effectively resolve such claim, audit or proceeding. 
  

	 	(vi)	 	For purposes of this Subsection (c), a determination of whether a payment is subject to Excise Taxes, including but not limited to, a determination of change in control, shall be
made pursuant to Code Section 280G. 

  
 10.     CONFIDENTIAL INFORMATION. The Executive recognizes and acknowledges that certain assets of the Company constitute Confidential Information. The term “Confidential Information” as used in this Agreement
shall mean all information which is known only to the Executive or the Company, other employees of the Company, or others in a confidential relationship with the Company, and relating to the Company’s business including, without limitation,
information regarding clients, customers, pricing policies, methods of operation, proprietary Company programs, sales products, profits, costs, markets, key personnel, formulae, product applications, technical processes, and trade secrets, as such
information may exist from time to time, which the Executive acquired or obtained by virtue of work performed for the Company, or which the Executive may acquire or may have acquired knowledge of during the performance of said work. The Executive
shall not, during or after the Term, disclose all or any part of the Confidential Information to any person, firm, corporation, association, or any other entity for any reason or purpose whatsoever, directly or indirectly, except as may be required
pursuant to his employment hereunder, unless and until such Confidential Information becomes publicly available other than as a consequence of the breach by the Executive of his confidentiality obligations hereunder by law or in any judicial
administrative proceeding (in which case, the Executive shall provide the Company with notice). In the event of the termination of his employment, whether voluntary or involuntary and whether by the Company or the Executive, the Executive shall
deliver to the Company all documents and data pertaining to the Confidential Information and shall not take with him any documents or data of any kind or any reproductions (in whole or in part) or extracts of any items relating to the Confidential
Information. The Company acknowledges that prior to his employment with the Company, the Executive has lawfully acquired extensive knowledge of the industries and businesses in which the Company engages in business, and that the provisions of this
Section 10 are not intended to restrict the Executive’s use of such previously acquired knowledge. 
  

 11 

 In the event that the Executive receives a request or is required (by deposition, interrogatory, request
for documents, subpoena, civil investigative demand or similar process) to disclose all or any part of the Confidential Information, the Executive agrees to (a) promptly notify the Company in writing of the existence, terms and circumstances
surrounding such request or requirement, (b) consult with the Company on the advisability of taking legally available steps to resist or narrow such request or requirement, and (c) assist the Company in seeking a protective order or other
appropriate remedy. In the event that such protective order or other remedy is not obtained or that the Company waives compliance with the provisions hereof, the Executive shall not be liable for such disclosure unless disclosure to any such
tribunal was caused by or resulted from a previous disclosure by the Executive not permitted by this Agreement. 
  
 11.     NON-COMPETITION AND NONSOLICITATION. During the Term and for a period of 24 calendar months after the termination of the
Executive’s employment (the “Noncompete Period”), the Executive shall not, directly or indirectly, either as a principal, agent, employee, employer, stockholder, partner or in any other capacity whatsoever: (a) engage or assist others
engaged, in whole or in part, in any business which is engaged in a business or enterprise that is substantially similar to the business that the Company was engaged in during the period of the Executive’s employment with the Company, or (b)
without the prior consent of the Board, employ or solicit the employment of, or assist others in employing or soliciting the employment of, any individual employed by the Company at any time while the Executive was also so employed; provided,
however, that the provisions of this Section 11 shall not apply in the event the Company materially breaches this Agreement or the Release. 
  
 Nothing in this Section 11 shall prohibit Executive from making any passive investment in a public company, or where he is the owner of five percent (5%)
or less of the issued and outstanding voting securities of any entity, provided such ownership does not result in his being obligated or required to devote any managerial efforts. 
  
 The Executive agrees that the restraints imposed upon him pursuant to this Section 11 are necessary for the reasonable and
proper protection of the Company and its subsidiaries and affiliates, and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area. The parties further agree that, in the event that any
provision of this Section 11 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, such provision shall
be deemed to be modified to permit its enforcement to the maximum extent permitted by law. 
  
 12.     INTELLECTUAL PROPERTY. During the Term, the Executive shall promptly disclose to the Company or any successor or assign, and grant to the Company and its successors and assigns without any
separate remuneration or compensation other than that received by him in the course of his employment, his entire right, title and interest in and to any and all inventions, developments, discoveries, models, or any other intellectual property of
any type or nature whatsoever (“Intellectual Property”), whether developed by him during or after business hours, or alone or in connection with others, that is in any way related to the business of the Company, its successors or assigns.
This provision shall not apply to books or articles authored by the Executive during non-work hours, consistent with his obligations under this Agreement, 
  

 12 

 so long as such books or articles (a) are not funded in whole or in part by the Company, and (b) do not contain any
Confidential Information or Intellectual Property of the Company. The Executive agrees, at the Company’s expense, to take all steps necessary or proper to vest title to all such Intellectual Property in the Company, and cooperate fully and
assist the Company in any litigation or other proceedings involving any such Intellectual Property. 
  

	 	13.	 	DISPUTES. 

  
 (a)  EQUITABLE RELIEF. The Executive acknowledges and agrees that upon any breach by the Executive of his obligations under Sections 10, 11, or 12 hereof, the Company will have no adequate remedy at law, and
accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief. 
  
 (b)  ARBITRATION. Excluding only requests for equitable relief by the Company under Section 13(a), in the event that there is any claim or
dispute arising out of or relating to this Agreement or the breach hereof, and the parties hereto shall not have resolved such claim or dispute within 60 days after written notice from one party to the other setting forth the nature of such claim or
dispute, then such claim or dispute shall be settled exclusively by binding arbitration in Montgomery county, Pennsylvania, in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association (“Rules”), by an
arbitrator mutually agreed upon by the parties hereto or, in the absence of such agreement, by an arbitrator selected according to such Rules. Notwithstanding the foregoing, if either the Company or the Executive shall request, such arbitration
shall be conducted by a panel of three (3) arbitrators, one selected by the Company, one selected by the Executive and the third selected by agreement of the first two arbitrators, or, in the absence of such agreement, in accordance with such Rules.
Judgment upon the award rendered by such arbitrator(s) shall be entered in any Court having jurisdiction thereof upon the application of either party. The parties agree to use their reasonable best efforts to have such arbitration completed as soon
as is reasonably practicable. Notwithstanding anything herein to the contrary, except as provided in 13(c) below, the losing party shall pay the reasonable costs and expenses (including reasonable attorney fees and expenses) of the prevailing party
with respect to such arbitration, except the Executive, if he is the losing party, shall not be required to pay such expenses and costs if the claim relates to statutory discrimination claims that he would not otherwise be required to pay if such
claim had been brought in a court of competent jurisdiction. 
  
 (c)  LEGAL FEES. The Company shall pay or promptly reimburse the Executive for the reasonable legal fees and expenses incurred by the Executive in successfully enforcing or defending any right of the Executive pursuant to this
Agreement, even if the Executive does not prevail on each issue. 
  
 14.     INDEMNIFICATION. The Company shall indemnify the Executive, to the maximum extent permitted by applicable law, against all costs, charges and expenses incurred or sustained by the Executive, including the cost of
legal counsel selected and retained by the Executive in connection with any action, suit or proceeding to which the Executive may be made a party by reason of the Executive being or having been an officer, director, or employee of the Company or the
REIT. 
  

 13 

 15.     COOPERATION IN FUTURE MATTERS. The Executive hereby agrees that for a period
of 18 months following his termination of employment he shall cooperate with the Company’s reasonable requests relating to matters that pertain to the Executive’s employment by the Company, including, without limitation, providing
information or limited consultation as to such matters, participating in legal proceedings, investigations or audits on behalf of the Company, or otherwise making himself reasonably available to the Company for other related purposes. Any such
cooperation shall be performed at scheduled times taking into consideration the Executive’s other commitments, and the Executive shall be compensated at a reasonable hourly or per diem rate to be agreed upon by the parties to the extent such
cooperation is required on more than an occasional and limited basis. The Executive shall not be required to perform such cooperation to the extent it conflicts with any requirements of exclusivity of services for another employer or otherwise, nor
in any manner that in the good faith belief of the Executive would conflict with his rights under or ability to enforce this Agreement. 
  

	 	16.	 	GENERAL. 

  
 (a)  NOTICES. All notices and other communications hereunder shall be in writing or by written telecommunication, and shall be deemed to have been duly given if delivered personally or if sent by overnight
courier or by certified mail, return receipt requested, postage prepaid or sent by written telecommunication or telecopy, to the relevant address set forth below, or to such other address as the recipient of such notice or communication shall have
specified in writing to the other party hereto, in accordance with this Section 16(a). 
  

	 If to the Company, to:
	  	 First States Group, L.P.
 1725 The
Fairway
 Jenkintown, PA 19046
 Attn:  NicholasS. Schorsch, President and
             Chief Executive Officer
 Facsimile:  215-887-2585

  
 If to Executive, at
his last residence shown on the records of the Company. 
  
 Any
such notice shall be effective (i) if delivered personally, when received, (ii) if sent by overnight courier, when receipted for, (iii) if mailed, five (5) days after being mailed, and (iv) on confirmed receipt if sent by written telecommunication
or telecopy, provided a copy of such communication is sent by regular mail, as described above. 
  
 (b)  SEVERABILITY. If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. 
  
 (c)  WAIVERS. No delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power
or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege. 
  

 14 

 (d)  COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument. In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. 
  
 (e)  ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the Company’s successors and the Executive’s personal or legal representatives, executors, administrators, heirs, distributees, devisees and legatees. This Agreement shall not be assignable by the Executive, it being understood
and agreed that this is a contract for the Executive’s personal services. This Agreement shall not be assignable by the Company except that the Company shall assign it in connection with a transaction involving the succession by a third party
to all or substantially all of the Company’s business and/or assets (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise). When assigned to a successor, the assignee shall assume this Agreement
and expressly agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform it in the absence of such an assignment. For all purposes under this Agreement, the term “Company” shall
include any successor to the Company’s business and/or assets that executes and delivers the assumption agreement described in the immediately preceding sentence or that becomes bound by this Agreement by operation of law. 
  
 (f)  ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties, supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter hereof and may not be amended except by a written instrument hereafter signed by the Executive and the Chief
Executive Officer or a duly authorized representative of the Board (other than the Executive). 
  
 (g)  GOVERNING LAW. This Agreement and the performance hereof shall be construed and governed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts
of law. 
  
 (h)  CONSTRUCTION. The language used in this
Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party. The headings of sections of this Agreement are for convenience of reference
only and shall not affect its meaning or construction. Whenever any word is used herein in one gender, it shall be construed to include the other gender, and any word used in the singular shall be construed to include the plural in any case in which
it would apply and vice versa. 
  

	 	(i)	 	PAYMENTS AND EXERCISE OF RIGHTS AFTER DEATH. Any amounts payable hereunder after the Executive’s death shall be paid to the Executive’s designated beneficiary or
beneficiaries, whether received as a designated beneficiary or by will or the laws of descent and distribution. The Executive may designate a beneficiary or beneficiaries for all purposes of this Agreement, and may change at any time such
designation, by notice to the Company making specific reference to this Agreement. If no designated beneficiary survives the Executive or the Executive fails to designate a beneficiary for purposes of this Agreement prior to his death, all amounts
thereafter due hereunder shall be paid, as and when payable, to his spouse, if she survives the Executive, and otherwise to his estate. 

  

 15 

 (j)  CONSULTATION WITH COUNSEL. The Executive acknowledges that he has had a full and complete
opportunity to consult with counsel or other advisers of his own choosing concerning the terms, enforceability and implications of this Agreement, and that the Company has not made any representations or warranties to the Executive concerning the
terms, enforceability and implications of this Agreement other than as are reflected in this Agreement. 
  
 (k)  WITHHOLDING. Any payments provided for in this Agreement shall be paid net of any applicable income tax withholding required under federal,
state or local law. 
  
 (l)  CONSUMER PRICE INDEX. For
purposes of this Agreement, the term “CPI” refers to the Consumer Price Index as published by the Bureau of Labor Statistics of the United States Department of Labor, U.S. City Average, All Items for Urban Wage Earners and Clerical Workers
(1982-1984=100). If the CPI is hereafter converted to a different standard reference base or otherwise revised, the determination of the CPI adjustment shall be made with the use of such conversion factor, formula or table for converting the CPI, as
may be published by the Bureau of Labor Statistics, or, if the bureau shall no longer publish the same, then with the use of such conversion factor, formula or table as may be published by an agency of the United States, or failing such publication,
by a nationally recognized publisher of similar statistical information. 
  
 (m)  SURVIVAL. The provisions of Sections 8, 9, 10, 11, 12, 13, 14 and 15 shall survive the termination of this Agreement. 
  

 16 

 IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused this
Agreement to be duly executed as of the date first above written. 
  
  

	FIRST STATES GROUP, L.P.	  	LEE S. SALTZMAN
			
	 By:
	 	First States Group, LLC	  	 
	 	 	Its general partner	  	 
			
	 By:
	 	  

	  	  

	 	 	Name:	  	Nicholas S. Schorsch	  	 
	 	 	Title:	  	President and Chief Executive Officer	  	 
		
	 Dated:  July 3, 2003
	  	Dated:  July 3, 2003

  
  
 GUARANTEE: 
  
 For good and valuable consideration, including the Executive’s agreement to serve as an officer of American Financial Realty Trust, the obligations of First States Group, L.P. under this Employment Agreement,
dated July, 2003, with Lee S. Saltzman, shall be guaranteed by American Financial Realty Trust. 
  
  

	AMERICAN FINANCIAL REALTY TRUST
		
	 By:
	 	  

	 	 	Name:	 	Nicholas S. Schorsch
	 	 	Title:	 	President and Chief Executive Officer

  
  
 Dated: July 3, 2003 
  
  

 17 

 EXHIBIT A 
  
 RELEASE AND WAIVER 
  
  
 This release and waiver (the “Termination Release”) is made as of the
             day of             , 200             by
             (the “Executive”). 
  
 WHEREAS, the Executive and First States Group, L.P. (the “Company”) have entered into an Employment Agreement (the “Agreement”) dated
as of             , 2003 that provides for certain compensation and severance amounts upon his termination of employment; and 
  
 WHEREAS, the Executive has agreed, pursuant to the terms of the Agreement, to execute a release and waiver in the form set
forth in this Release and Waiver (“Termination Release”) in consideration of the Company’s agreement to provide the compensation and severance amounts upon his termination of employment set out in the Agreement; and 
  
 WHEREAS, the Executive has incurred a termination of employment effective as
of             , 20            ; and 
  
 WHEREAS, the Company and the Executive desire to settle all rights, duties and obligations between them, including without limitation all such rights,
duties, and obligations arising under the Agreement or otherwise out of the Executive’s employment by the Company. 
  
 NOW THEREFORE, intending to be legally bound and for good and valid consideration the sufficiency of which is hereby acknowledged, the Executive agrees as
follows: 
  
 1.    RELEASE. In consideration
for the payments to be made pursuant to the Agreement: 
  
 (a)  Executive knowingly and voluntarily releases, acquits and forever discharges the Company, and its respective owners, parents, stockholders, predecessors, successors, assigns, agents, directors, officers, employees,
representatives, divisions and subsidiaries (collectively, the “Releasees”) from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, damages, causes of action, suits, rights, costs, losses, debts and
expenses of any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured, against them which the Executive or any of his heirs, executors, administrators, successors and assigns (“Executive
Persons”) ever had, now has or at any time hereafter may have, own or hold by reason of any matter, fact, or cause whatsoever from the beginning of time up to and including the date of this Termination Release, including without limitation all
claims for salary, bonuses, severance pay, vacation pay or any benefits arising under the Employee Retirement Income Security Act of 1974, as amended; any claims of sexual harassment, or discrimination based upon race, color, national origin,
ancestry, religion, marital status, sexual orientation, citizenship status, medical condition or disability under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the American with Disabilities Act, Section 1981 of the Civil
Rights Acts of 1866 and 1871, the Equal Pay Act, The Rehabilitation Act, The Consolidated Omnibus Budget Reconciliation Act, as amended, The Fair Labor Standards Act, as amended, and any other federal, state or local law prohibiting discrimination
in 
  

 A-1 

 employment; any claims of age discrimination under the Age Discrimination in Employment Act, as amended by the Older
Workers Benefit Protection Act, or under any other federal, state or local law prohibiting age discrimination; claims of breach of implied or express contract, breach of promise, misrepresentation, negligence, fraud, estoppel, defamation, infliction
of emotional distress, violation of public policy, wrongful or constructive discharge, or any other employment-related tort; any claim for costs, fees, or other expenses, including attorneys fees; and all claims under any other federal, state or
local laws relating to employment, except in any case to the extent such release is prohibited by applicable federal, state and/or local law. 
  
 (b)  Executive represents that he has not filed or permitted to be filed against the Releasees, any complaints, charges or lawsuits and
covenants and agrees that he will not seek or be entitled to any personal recovery in any court or before any governmental agency, arbitrator or self-regulatory body against any of the Releasees arising out of any matters set forth in Section 1(a)
hereof. If Executive has filed a complaint, charge, grievance, lawsuit or similar action, he agrees to remove, dismiss or take similar action to eliminate such complaint, charge, grievance, lawsuit or similar action within five (5) days of signing
this Termination Release. 
  
 (c)  Notwithstanding the
foregoing, this Termination Release is not intended to interfere with Executive’s right to file a charge with the Equal Employment Opportunity Commission (hereinafter referred to as the “EEOC”) in connection with any claim he believes
he may have against the Company. However, Executive hereby agrees to waive the right to recover money damages in any proceeding he may bring before the EEOC or any other similar body or in any proceeding brought by the EEOC or any other similar body
on his behalf. This Termination Release does not release, waive or give up any claim for workers’ compensation benefits, vested retirement or welfare benefits he is entitled to under the terms of the Company’s retirement and welfare
benefit plans, as in effect from time to time, any right to unemployment compensation that Executive may have, or his right to enforce his rights under the Agreement. 
  
 2.    CONFIRMATION OF OBLIGATIONS. Executive hereby confirms and agrees to his continuing obligation
under the Agreement after termination of employment not to directly or indirectly disclose to third parties or use any Confidential Information (as defined in the Agreement) that he may have acquired, learned, developed, or created by reason of his
employment with the Company. 
  
 3.    CONFIDENTIALITY; NO COMPETITION; NONSOLICITATION. Executive hereby confirms and agrees to his confidentiality, nonsolicitation and non-competition obligations under the Agreement. 
  
 4.    NO DISPARAGEMENT. Each of the Executive and the
Company agree not to disparage the other, including making any statement or comments or engaging in any conduct that is disparaging or derogatory toward the Executive or the Company, as the case may be, whether directly or indirectly, by name or
innuendo; provided, however, that nothing in this Termination Release shall restrict communications protected as privileged under federal or state law to testimony or communications ordered and required by a court or an administrative agency of
competent jurisdiction. 
  

 A-2 

 5.    CONFIDENTIALITY. Each of the Executive and the Company agree to keep the terms
of this Termination Release confidential and shall not disclose the fact or terms to third parties, except as required by applicable law or regulation or by court order; provided, however, that Executive may disclose the terms of this
Termination Release to members of his immediate family, his attorney or counselor, and persons assisting him in financial planning or tax preparation, provided these people agree to keep such information confidential; provided,
further, however, that the Company may disclose the terms of this Termination Release to its certified public accounts, outside counsel or others on a need to know basis, provided these people agree to keep such information
confidential. 
  
 6.    ACKNOWLEDGMENT. The
Company has advised the Executive to consult with an attorney of his choosing prior to signing this Termination Release and the Executive hereby represents to the Company that he has been offered an opportunity to consult with an attorney prior to
signing this Termination Release. The Executive shall have forty-five (45) days to consider the waiver of his rights in this Termination Release, although he may sign this Termination Release sooner if he chooses. Once he has signed this Termination
Release, the Executive shall have seven (7) additional days from the date of execution to revoke his consent to the waiver of his rights. If no such revocation occurs, the Executive’s waiver of rights in this Termination Release shall become
effective seven (7) days from the date of execution by the Executive. In the event that the Executive revokes his waiver of rights in this Termination Release, this Termination Release will have no force and effect and no Severance Payments (as
defined in the Agreement) shall be due or payable. 
  
 7.    GOVERNING LAW. This Termination Release shall be governed and construed in accordance with the laws of Commonwealth of Pennsylvania, without giving effect to principles of conflicts law. 
  
 IN WITNESS WHEREOF, the Executive has executed this Termination Release as of
the day and year first above written. 
  
  
  
  
  

 A-3REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

                  THIS REGISTRATION RIGHTS AGREEMENT, dated as of , 2003 by and
between CI Sell Cars, Inc., a Texas corporation (the "Company"), and the person
whose name appears on the signature page attached hereto (individually a
"Holder" and collectively, with the holders of other Shares issued in the
Offering, the "Holders").

                  WHEREAS, pursuant to a Confidential Private Placement
Memorandum dated April 1, 2003 (the "Confidential Memorandum"), the Company has
offered (the "Offering") a minimum of 100,000 Shares and a maximum of 250,000
Shares (collectively, the "Shares"), at $.10 per Shares.

                  WHEREAS, pursuant to the terms of and in order to induce the
Holders to enter into a certain subscription agreement dated the date hereof
between the Company and the Holders (the "Subscription Agreement") to purchase
the Shares, the Company and the Holders have agreed to enter into this
Agreement;

                  WHEREAS, it is intended by the Company and the Holders that
this Agreement shall become effective immediately upon the acquisition by the
Holders of the Shares;

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and in the Confidential Memorandum, the
Company hereby agrees as follows:

A.       REGISTRATION RIGHTS.

1.       Registration Rights
         -------------------

                  (a) "Piggyback Registration". If the Company at any time
                       ----------------------
proposes to register any of its securities under the Securities Act of 1933, as
amended (the "1933 Act") (other than in connection with a merger, in connection
with the proposed warrant registration to be undertaken by the Company or
pursuant to Form S-8 or other comparable form), the Company shall request that
the managing underwriter (if any) of such underwritten offering include any
Common Shares (the "Registerable Securities") in such registration. If such
managing underwriter agrees to include any of the Registerable Securities in the
underwritten offering, the Company shall at such time give prompt written notice
to all Holders of its intention to effect such registration and of such Holders'
rights under such proposed registration, and upon the request of any Holder
delivered to the Company within twenty (20) days after giving of such notice
(which request shall specify the Registerable Securities intended to be disposed
of by such Holder and the intended method of disposition thereof), the Company
shall include such Registerable Securities held by each such Holder requested to
be included in such registration; provided, however, that:

                           (i) If, at any time after giving such written notice
of the Company's intention to register any of the Holder's Registerable
Securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to register or to delay the registration of such Registerable Securities, at
its sole election, the Company may give written notice of such determination to
each Holder and thereupon shall be relieved of its obligation to register any
Registerable Securities issued or issuable in connection with such registration
(but not from its obligation to pay registration expenses in connection
therewith or to register the Registerable Securities in a subsequent
registration); and in the case of a determination to delay a registration shall
thereupon be permitted to delay registering any Registerable Securities for the
same period as the delay in respect of securities being registered for the
Company's own account.

                           (ii) If the managing underwriter in such underwritten
offering shall advise the Company that it declines to include a portion or all
of the Registerable Securities requested by the Holders to be included in the
registration statement, then (A) registration of all of the Registerable
Securities shall be excluded from such registration statement on the condition
that all securities to be registered by other selling security holders, if any,
are also excluded and (B) registration of a portion of such Registerable
Securities shall be excluded if, such portion is allocated among the Holders and
any other selling security holders in proportion to the respective numbers of
securities to be registered by each such Holder and other selling security
holder. In such event the Company shall give the Holder prompt notice of the
number of Registerable Securities excluded.

                  (b) Demand Registration. In the event that the Holders have
not had all of their Registerable Securities registered in a registration
statement pursuant to Section 1(a) within one (1) year from the date hereof, the
Holders of the Registerable Securities Shares representing at least a Majority
(as hereinafter defined) of such securities shall have the right, exercisable by
written notice to the Company, to have the Company prepare and file with the
Securities and Exchange Commission (the "Commission"), on one (1) occasion, a
registration or offering statement on Form SB-1 or such other form, and such
other documents, including a prospectus, as may be necessary in the opinion of
both counsel for the Company, in order to comply with the provisions of the Act,
so as to permit a public offering and sale, for a period of nine (9) months, by
such Holders and any other Holders of Registerable Securities who notify the
Company within fifteen (15) business days after receipt of the notice described
in this section. The demand rights of this Section 1(c) shall not be available
to any Holder that has been offered an opportunity to include Registerable
Securities in a registration statement under Section 1(a) who has either
declined an opportunity to include such Shares in a registration or requested
that such Shares which were included in such filing be withdrawn.

                  The Company covenants and agrees to give written notice of any
registration request under this Section 1(b) to any Holder(s) to all other
registered Holders of the Registerable Securities within ten (10) days from the
date of the receipt of any such registration request.

                  (c) Cooperation with Company. Holders will cooperate with the
Company in all respects in connection with this Agreement, including, timely
supplying all information reasonably requested by the Company and executing and
returning all documents reasonably requested in connection with the registration
and sale of the Registerable Securities. In addition, Holders will comply with
all applicable provisions of State and Federal Securities Law, including rule
10b-6 and will not, during the course of a distribution purchase any of the
securities being distributed.

                  (d) Majority. For purposes of this Agreement, the term
"Majority" in reference to the Holders of the Registerable Securities, shall
mean in excess of fifty percent (50%) of the then outstanding Registerable
Securities that (i) are not held by the Company, an affiliate, officer,
creditor, employee or agent thereof or any of their respective affiliates,
members of their family, persons acting as nominees or in conjunction therewith,
or (ii) have not been resold to the public pursuant to a registration statement
filed with the Commission under the 1933 Act.

                  2. Registration Procedures. If and whenever the Company is
required by any of the provisions of this Agreement to use its best efforts to
file a registration statement within 60 days of any demand therefor and to
effect the registration of any of the Registerable Securities under the 1933
Act, the Company shall (except as otherwise provided in this Agreement), as
expeditiously as possible:

                  (a) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement and shall use its best
efforts to cause such registration statement to become effective and remain
effective until all the Registerable Securities are sold or become capable of
being publicly sold without registration under the 1933 Act.

                  (b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the 1933 Act with respect to the sale or other
disposition of all securities covered by such registration statement whenever
the Holder or Holders of such securities shall desire to sell or otherwise
dispose of the same (including prospectus supplements with respect to the sales
of securities or the exercise of Warrants from time to time in connection with a
registration statement pursuant to Rule 415 of the Commission);

                  (c) furnish to each Holder such numbers of copies of a summary
prospectus or other prospectus, including a preliminary prospectus or any
amendment or supplement to any prospectus, in conformity with the requirements
of the 1933 Act, and such other documents, as such Holder may reasonably request
in order to facilitate the public sale or other disposition of the securities
owned by such Holder;

                  (d) use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as each Holder shall request, and do any and
all other acts and things which may be necessary or advisable to enable such
Holder to consummate the public sale or other disposition in such jurisdictions
of the securities owned by such Holder, except that the Company shall not for
any such purpose be required to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified or to file therein any
general consent to service of process;

                  (e) use its best efforts to list such securities on any
securities exchange on which any securities of the Company is then listed, if
the listing of such securities is then permitted under the rules of such
exchange;

                  (f) enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering;

                  (g) notify each Holder of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under the
1933 Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing; and

                  (h) furnish, at the request of any Holder on the date such
Registerable Securities are delivered to the underwriters for sale pursuant to
such registration or, if such Registerable Securities are not being sold through
underwriters, on the date the registration statement with respect to such
Registerable Securities becomes effective, (i) an opinion, dated such date, of
the counsel representing the Company for the purpose of such registration,
addressed to the underwriters, if any, and to the Holder making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as the Holder of such Registerable Securities may
reasonably request and are customarily included in such an opinion and (ii)
letters, dated, respectively, (1) the effective date of the registration
statement and (2) the date such Registerable Securities are delivered to the
underwriters, if any, for sale pursuant to such registration, from a firm of
independent certified public accountants of recognized standing selected by the
Company, addressed to the underwriters, if any, and to the Holder making such
request, covering such financial, statistical and accounting matters with
respect to the registration in respect of which such letters are being given as
the Holder of such Registerable Securities may reasonably request and are
customarily included in such letters; and

                  (j) take such other actions as shall be reasonably requested
by any Holder to facilitate the registration and sale of the Registerable
Securities; provided, however, that the Company shall not be obligated to take
any actions not specifically required elsewhere herein which in the aggregate
would cost in excess of $5,000.

                  (k) furnish each Holder participating in an offering
requesting the correspondence, copies of all correspondence between the
Commission and the Company, its counsel or auditors with respect to the
registration statement and permit each Holder to do such investigation, upon
reasonable advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such Holder shall reasonably request.

                  3. Restrictions on Transfer of Registerable Securities. The
                     ---------------------------------------------------
Holder agrees that he will not sell or transfer any of the Conversion Shares for
a period of twelve (12) months from the effective date of the registration
statement on Form SB-2 filed with the Commission (the "Registration Statement")
by which such securities are registered without the prior written consent of
Royal Hutton Securities Corp.

                  4. Expenses. All expenses incurred in any registration of the
                     --------
Holders' Registerable Securities under this Agreement shall be paid by the
Company, including, without limitation, printing expenses, fees and
disbursements of counsel for the Company and each participating Holder, expenses
of any audits to which the Company shall agree or which shall be necessary to
comply with governmental requirements in connection with any such registration,
all registration and filing fees for the Holders' Registerable Securities under
federal and State securities laws, and expenses of complying with the securities
or blue sky laws of any jurisdictions pursuant to Section 2(h)(i); provided,
however, the Company shall not be liable for (a) any discounts or commissions to
any underwriter; (b) any stock transfer taxes incurred with respect to
Registerable Securities sold in the offering or (c) the fees and expenses of
counsel for any Holder, provided that the Company will pay the costs and
expenses of Company counsel when the Company's counsel is representing any or
all selling security holders.

                           If the Company shall fail to use its best efforts to
file a registration statement and to effect the registration of any of the
Registerable Securities under the 1933 Act (except as otherwise provided in this
Agreement) pursuant to Section 1, in addition to any other equitable or other
relief available to the Holders, the Company shall be liable for any or all
incidental, special and consequential damages and damages due to loss of profit
sustained by the Holder(s) requesting registration of their Registerable
Securities.

                  5. Indemnification. In the event any Registerable Securities
                     ---------------
are included in a registration statement pursuant to this Agreement:

                  (a) Company Indemnity. Without limitation of any other
                      -----------------
indemnity provided to any Holder, either in connection with the Offering or
otherwise, to the extent permitted by law, the Company shall indemnify and hold
harmless each Holder, the affiliates, officers, directors and partners of each
Holder, any underwriter (as defined in the 1933 Act) for such Holder, and each
person, if any, who controls such Holder or underwriter (within the meaning of
the 1933 Act or the Securities Exchange Act of 1934 (the "Exchange Act"),
against any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the 1933 Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
                                         ---------
or alleged untrue statement of a material fact contained in such registration
statements including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, (iii) any violation or alleged violation
by the Company of the 1933 Act, the Exchange Act, or (iv) any state securities
law or any rule or regulation promulgated under the 1933 Act, the Exchange Act
or any state securities law, and the Company shall reimburse each such Holder,
affiliate, officer or director or partner, underwriter or controlling person for
any legal or other expenses incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable to any Holder in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out of or
is based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder or any other officer, director or controlling
person thereof.

                  (b) Holder Indemnity. Each Holder shall indemnify and hold
                      ----------------
harmless the Company, its affiliates, its counsel, officers, directors,
shareholders and representatives, any underwriter (as defined in the 1933 Act)
and each person, if any, who controls the Company or the underwriter (within the
meaning of the 1933 Act or the Exchange Act), against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the 1933 Act, the Exchange Act or any state securities law, and the
Company shall reimburse each such Holder, affiliate, officer or director or
partner, underwriter or controlling person for any legal or other expenses
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; insofar as such losses, claims, damages or
liabilities (or actions and respect thereof) arise out of or are based upon any
statements or information provided by such Holder to the Company in connection
with the offer or sale of Registerable Securities.

                  (c) Notice; Right to Defend. Promptly after receipt by an
                      -----------------------
indemnified party under this Section 5 of notice of the commencement of any
action (including any governmental action), such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 5, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in and if the indemnifying party agrees in writing that it will be
responsible for any costs, expenses, judgments, damages and losses incurred by
the indemnified party with respect to such claim, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if the indemnified party reasonably
believes that representation of such indemnified party by the counsel retained
by the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall relieve such indemnifying party of any liability to the
indemnified party under this Agreement only if and to the extent that such
failure is prejudicial to its ability to defend such action, and the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Agreement.

                  (d) Contribution. If the indemnification provided for in this
                      ------------
Agreement is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount any Holder shall be obligated to
contribute pursuant to the Agreement shall be limited to an amount equal to the
proceeds to such Holder of the Registerable Securities sold pursuant to the
registration statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which the Holder has otherwise been required
to pay in respect of such loss, claim, damage, liability or action or any
substantially similar loss, claim, damage, liability or action arising from the
sale of such Registerable Securities).

                  (e) Survival of Indemnity. The indemnification provided by
                      ---------------------
this Agreement shall be a continuing right to indemnification and shall survive
the registration and sale of any Registerable Securities by any person entitled
to indemnification hereunder and the expiration or termination of this
Agreement.

                  6. Assignment of Registration Rights. The rights of the
                     ---------------------------------
Holders under this Agreement, including the rights to cause the Company to
register Registerable Securities may not be assigned without the written prior
consent of the Company.

                  7. Limitations on Other Registration Rights. Except as
                     ----------------------------------------
otherwise set forth in this Agreement, the Company shall not, without the prior
written consent of the Holders of Registerable Securities representing a
majority thereof held by all the Holders, file any registration statement filed
on behalf of any person (including the Company) other than a Holder to become
effective during any period when the Company is not in compliance with this
Agreement.

                  8. Remedies.
                     --------

                  (a) Time is of Essence. The Company agrees that time is of the
                      ------------------
essence of each of the covenants contained herein and that, in the event of a
dispute hereunder, this Agreement is to be interpreted and construed in a manner
that will enable the Holders to sell their Registerable Securities as quickly as
possible after such Holders have indicated to the Company that they desire their
Registerable Securities to be registered. Any delay on the part of the Company
not expressly permitted under this Agreement, whether material or not, shall be
deemed a material breach of this Agreement.

                  (b) Remedies Upon Default or Delay. The Company acknowledges
                      ------------------------------
the breach of any part of this Agreement may cause irreparable harm to a Holder
and that monetary damages alone may be inadequate. The Company therefore agrees
that the Holder shall be entitled to injunctive relief or such other applicable
remedy as a court of competent jurisdiction may provide. Nothing contained
herein will be construed to limit a Holder's right to any remedies at law,
including recovery of damages for breach of any part of this Agreement.

                  9. Notices.
                     -------

                  (a) All communications under this Agreement shall be in
writing and shall be mailed by first class mail, postage prepaid, or telegraphed
or telexed with confirmation of receipt or delivered by hand or by overnight
delivery service,

                           i.     If to the Company, at:

                                  CI Sell Cars, Inc.
                                  25402 Chapel Ridge
                                  Spring, Texas
                                  (832)465-6763

                  or at such other address as it may have furnished in writing
to the Holders of Registerable Securities at the time outstanding, or

                           ii. if to any Holder of any Registerable Securities,
to the address of such Holder as it appears in the stock or warrant ledger of
the Company.

                  (b) Any notice so addressed, when mailed by registered or
certified mail shall be deemed to be given three days after so mailed, when
telegraphed or telexed shall be deemed to be given when transmitted, or when
delivered by hand or overnight shall be deemed to be given when delivered.

                  10. Successors and Assigns. Except as otherwise expressly
                      ----------------------
provided herein, this Agreement shall inure to the benefit of and be binding
upon the successors and permitted assigns of the Company and each of the
Holders.

                  11. Amendment and Waiver. This Agreement may be amended, and
                      --------------------
the observance of any term of this Agreement may be waived, but only with the
written consent of the Company and the Holders of securities representing a
Majority of the Registerable Securities; provided, however, that no such
amendment or waiver shall take away any registration right of any Holder of
Registerable Securities or reduce the amount of reimbursable costs to any Holder
of Registerable Securities in connection with any registration hereunder without
the consent of such Holder; further provided, however, that without the consent
of any other Holder of Registerable Securities, any Holder may from time to time
enter into one or more agreements amending, modifying or waiving the provisions
of this Agreement if such action does not adversely affect the rights or
interest of any other Holder of Registerable Securities. No delay on the part of
any party in the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any party of any
right, power or remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy.

                  12. Counterparts. One or more counterparts of this Agreement
                      ------------
may be signed by the parties, each of which shall be an original but all of
which together shall constitute one and same instrument.

                  13. Governing Law. This Agreement shall be construed in
                      -------------
accordance with and governed by the internal laws of the State of Texas, without
giving effect to conflicts of law principles.

                  14. Invalidity of Provisions. If any provision of this
                      ------------------------
Agreement is or becomes invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.

                  15. Headings. The headings in this Agreement are for
                      --------
convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.

<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the ___ day of _____, 2003.

CI SELL CARS, INC.                          /s/
                                                   Signature of Holder

By:
                                                   Print Name of Holder

                                           ---------------------------
                                                   Address of Holder

ECOLOGIC\RAGREGISTRTSAGR
ECOLOGIC\RAGREGISTRTSAGR

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}]]