Document:

Exhibit
10.6

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

BETWEEN

GREGG A. SEIBERT AND SPIRIT FINANCE CORPORATION

THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (the “Agreement”), dated as of October 16, 2006 (“Effective
Date”), is by and between SPIRIT FINANCE
CORPORATION, a Maryland corporation (the “Company”), and GREGG A. SEIBERT (the “Executive”):

W I T N E S S E T H :

WHEREAS, the Company entered into an Employment
Agreement with Executive dated as of December 15, 2003 (the “Original
Employment Agreement”) for the employment of the Executive as the Company’s
Senior Vice President - Underwriting; and

WHEREAS, the Company and the Executive desire to amend
and restate the Original Employment Agreement in its entirety subject to the
terms and conditions set forth below, and the Executive has agreed to 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 forth below, hereby agree as follows:

Section
1.  Employment.

(a)           Positions.  The Executive shall be employed by the
Company during the Term (defined below) as its Senior Vice President –
Underwriting, Assistant Secretary and Assistant Treasurer.

(b)           Duties.  The Executive’s principal employment duties
and responsibilities shall be those duties and responsibilities customary for
the positions of Senior Vice President – Underwriting, Assistant Secretary and
Assistant Treasurer and such other executive duties and responsibilities as the
Chief Executive Officer or the Board of Directors of the Company (the “Board”)
shall from time to time reasonably assign to the Executive.  The Executive shall report directly to the
Chief Executive Officer.

(c)           Extent of Services.  Except for illnesses and vacation periods,
the Executive shall devote substantially all of his business time and attention
and his best efforts to the performance of his duties and responsibilities
under this Agreement.  Notwithstanding
the foregoing, Executive (i) shall be permitted to continue to manage,
operate and devote time and attention to those properties and businesses he
owned, operated or controlled at the time of the Company’s 2003 private
offering of common stock (the “144A Offering”) that were not transferred
to or purchased by the Company in connection with the 144A Offering;
(ii) may make any investment where he is not obligated or required to, and
shall not in fact, devote any substantial managerial efforts; (iii) may
participate in charitable, academic or community activities, and in trade or
professional organizations; or (iv) may 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 (the activities in clauses (i) through (iv) above are
collectively referred to herein as the “Excluded Businesses”); provided that
none of the Excluded Businesses individually or in the aggregate interfere with
the performance of the Executive’s duties under this Agreement.

Section 2.  Term.  This
Agreement shall be effective as of the Effective Date and, unless terminated
earlier as provided herein, shall continue in full force and effect thereafter
until October 16, 2009 (the “Term”); provided, that on each annual anniversary
of the Effective Date the Term shall be automatically extended for one
additional year unless either party gives the other party at least 90 days
prior written notice of non-extension or the Agreement is sooner 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.

Section 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 no less than $275,000. 
The Board or the Compensation Committee of the Board (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 any
year during the Term.  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.

Section 4.  Annual Incentive Bonus.  The Executive shall be entitled to receive an
annual cash incentive bonus (the “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”). 
If the Executive or the Company, as the case may be, satisfies the
threshold performance criteria contained in such Bonus Policy for a fiscal
year, he shall receive an annual Incentive Bonus equal to at least 40% of the
Executive’s Base Salary.  If the
Executive or the Company, as the case may be, satisfies the target performance
criteria contained in the Bonus Policy for a fiscal year, he shall receive an
annual Incentive Bonus equal to at least 75% of the Executive’s Base
Salary.  If the Executive or the Company,
as the case may be, satisfies the maximum target performance criteria contained
in the Bonus Policy for a fiscal year, he shall receive an annual Incentive
Bonus equal to at least 110% of the Executive’s Base Salary (the “Maximum
Target Bonus”).  If the Executive or the
Company, as the case may be, fails to satisfy the threshold performance
criteria contained in the Bonus Policy for a fiscal year, the Compensation
Committee may determine whether any Incentive Bonus shall be payable to the
Executive for that year.  As of the
Effective Date, the Bonus Policy shall contain both individual and/or Company
goals established by the Compensation Committee.  The Board or the Compensation Committee shall
review the Bonus Policy at least once a year to determine whether the Maximum
Target Bonus should be increased effective January 1 of any year during
the Term, or whether any additional changes should be made to the Bonus Policy
effective January 1 of any year.  The
annual Incentive Bonus, if any, shall be paid to the Executive no later than
30 days after the date the Compensation Committee determines whether the
criteria in the 

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Bonus Policy for such fiscal year were satisfied and the amount of the
actual bonus, but no later than March 15th of
each year.  For purposes of this
Agreement, the term “Incentive Bonus” shall mean the amount established
pursuant to this Section 4.

Section
5.  Stock Based Awards.

(a)           2003 Stock Option and Incentive Plan Option Grants.  The Company has established the 2003 Stock
Option and Incentive Plan (the “Stock Option Plan”).  The Executive shall be eligible to receive
restricted share grants, grants of stock options and other awards under the
Stock Option Plan as determined by the Compensation Committee.

Section
6.  Benefits.

(a)           Vacation.  The Executive shall be entitled to four weeks
of vacation each full calendar year in accordance with the Company’s policies
and procedures related to vacation time.

(b)           Sick and Personal Days.  The Executive shall be entitled to sick and
personal days on an as needed basis in accordance with the Company’s policies,
procedures and limits related to sick and personal time.

(c)           Employee Benefits.

(i)            Participation
in 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 pursuant to the terms of such benefit plans,
on a basis no less favorable than that applicable to any other executive of the
Company.

(ii)           Disability
Insurance.  The Company shall
maintain, at its cost, supplemental renewable long-term disability
insurance consistent with the policies of the Company unless determined in good
faith by the Compensation Committee to be unreasonable in cost.

(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 Scottsdale or Phoenix, Arizona area
selected by the Executive.

(ii)           Country
Club Dues.  The Company shall
reimburse Executive for the monthly country club membership dues actually
incurred by the Executive for one country club membership maintained by the
Executive provided such membership dues are approved in advance by the
Compensation Committee.

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(iii)          Directors
and Officers Insurance. 
During the Term and for a period that ends 12 months after termination
of employment, the Executive shall be entitled to director and officer insurance
coverage for his acts and omissions while an officer and director of the
Company on a basis no less favorable to him than the coverage provided to any
other current officers and directors during the time the Executive is a
director or officer, provided, however, that all insurance policies providing
such director and officer coverage shall provide coverage for any claim made
related to any time the Executive was a director or officer of the Company or
any subsidiary, except for any period prior to the date of this Agreement for
which no coverage need be provided or any period after which customary tail
coverage shall lapse.

(iv)          Life
Insurance.  The Executive
agrees the Company may purchase on the life of the Executive key man life
insurance with the Company as the beneficiary of the death benefit as the
Company deems appropriate.

(v)           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 any other
executive 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
reasonably suitable to the Executive’s positions and adequate for the
performance of the Executive’s duties.

Section 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 have the same meaning as such term
has under any Company Long Term Disability Plan.  If the Company has no Long Term Disability
Plan, “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 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 pending a determination of
Permanent Disability shall not be considered a breach of this Agreement by the
Company.

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(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 (not including a conviction,
plea of guilty or nolo contendere arising solely under a statutory provision
imposing criminal liability upon the Executive on a strict liability basis due
to the position 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); (ii) a breach of his duty
of loyalty which has a material adverse effect upon the Company; (iii) a
failure to perform or adhere to 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 30 days after written notice from the Board to the
Executive; (iv) negligence or misconduct in the performance of the
Executive’s duties which has a material adverse effect upon the Company; or (v)
a material breach of this Agreement by the Executive that continues for 30 days
after written notice from the Board to the Executive.  For purposes of this Section 7(b), no
act, or failure to act, on the Executive’s part will be deemed “negligence” or “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
clauses (ii), (iv) and (v) hereof, a determination shall be made by a
majority of the independent members of the Board.

(c)           Without Cause; Without Good Reason.  At the election of the Company, without
Cause, and at the election of the Executive, without Good Reason, in either
case upon 30 days’ prior written notice to the Executive or the Company,
as the case may be.

(d)           For Good Reason.  At the election of the Executive, for Good
Reason.  For purposes of this Agreement, “Good
Reason” shall mean any of the following actions or omissions, provided the
Executive notifies the Company of his determination that Good Reason exists
within 60 days of the action or omission on which such determination is
based:

(i)            a material reduction of or adverse
change in the Executive’s duties, titles, responsibilities or reporting
requirements, or the assignment to the Executive of any duties,
responsibilities or reporting requirements that are materially inconsistent
with his position as Senior Vice President – Underwriting, Assistant Secretary
and Assistant Treasurer, as the case may be;

(ii)           a reduction by the Company in the
Executive’s annual Base Salary or Maximum Target Bonus;

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(iii)          Executive not being offered employee
benefits or material fringe benefits, both in terms of the amount of the
benefit and the level of the Executive’s participation therein, enjoyed by the
Executive under the employee benefit and welfare plans of the Company,
including, without limitation, such benefits as group health, dental, 401(k),
accident, disability insurance or group life insurance, on the same terms and
conditions as other similar executives of the Company except as is required by
applicable law;

(iv)          absent the Executive’s prior written
consent, the requirement by the Company that the principal place of business at
which the Executive performs his duties be changed to a location that is
outside of a 35-mile radius of Scottsdale, Arizona (or a substantial
increase in the amount of travel that the Executive is required to do because
of a relocation of the Company’s headquarters from Scottsdale, Arizona).  The parties acknowledge that for these
purposes, Executive’s principal place of business will be Scottsdale, Arizona;

(v)           a breach by the Company of any
provision of this Agreement that continues for a period of 30 days after
Executive provides written notice to the Company of such breach; or

(vi)          on and after the occurrence of a
Change of Control (as defined herein):

(A)          a change in duties, responsibilities,
status or positions (including, without limitation, the appointment of a
co-Senior Vice President – Underwriting or a change in Executive’s status to
co-Senior Vice President – Underwriting) with the Company that does not
represent a promotion from or maintaining of Executive’s duties, responsibilities,
status or position as in effect immediately prior to the Change of Control, or
any removal of Executive from or any failure to reappoint or reelect Executive
to such positions, except in connection with the termination of Executive’s
employment for Cause, disability, retirement or death;

(B)           the failure by the Company to
continue in effect any of the benefit plans, including but not limited to
ongoing stock option and equity awards in annual amounts that have a fair
market value on the date of grant equal to or higher than the average fair
market value of such grants made during the two fiscal years prior to the
Change of Control (measured as of the respective dates of grant), in which
Executive is participating at the time of the Change of Control of the Company
(unless Executive is permitted to participate in any substitute benefit plan
with substantially the same terms and to the same extent and with the same
rights as Executive had with respect to the benefit plan that is discontinued)
other than as a result of the normal expiration of any such benefit plan in
accordance with its terms as in effect at the time of the Change of Control, or
the taking of any action, or the failure to act, by the Company which would
adversely affect Executive’s continued participation in any of such benefit
plans on 

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at least as favorable a
basis to Executive as was the case on the date of the Change of Control or
which would materially reduce Executive’s benefits in the future under any of
such benefit plans or deprive Executive of any material benefits enjoyed by
Executive at the time of the Change of Control; 
provided, however, that any such action or inaction on the part of the
Company, including any modification, cancellation or termination of any
benefits plan, undertaken in order to maintain such plan in compliance with any
federal, state or local law or regulation governing benefits plans, including,
but not limited to, the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), shall not constitute Good Reason for the purposes of this
Agreement; or

(C)           any failure by the Company to obtain
from any successor to the Company an agreement reasonably satisfactory to
Executive to assume and perform this Agreement, as contemplated by Section
17(e), which has not been cured within 15 days after the notice of the failure
has been given by Executive to the Company;

Notwithstanding
the foregoing, in the event that Executive provides the Company with a notice
of termination stating Good Reason, the Company shall have 30 days thereafter
in which to cure or resolve the behavior otherwise constituting Good Reason.

Section
8.  Effects of Termination.

(a)           Termination By the Company Without Cause; By the
Executive for Good Reason.  If the employment of the Executive should
terminate by reason of termination by the Company for any reason other than
Cause, or by the Executive for Good Reason, then the Company shall pay all
compensation and benefits for the Executive as follows:

(i)            any Base Salary, Incentive Bonus,
expense reimbursements and all other compensation related payments that are
payable as of the date of his termination of employment that are related to his
period of employment preceding his termination date, including pay in lieu of
accrued, but unused, vacation;

(ii)           the prorated amount of the Maximum
Target Bonus for the year in which the termination of employment occurs, pro
rated for the portion of such year during which the Executive was employed
prior to the effective date of his termination and subtracting all Incentive
Bonus payments received by Executive during such year that relate only to such
year;

(iii)          the amount equal to two times the sum
of (A) Base Salary in effect on the date of termination, plus (B) the
average of the actual bonus received by Executive during the previous two
years.  For purposes of this section,
actual bonus shall mean the sum of the annual cash Incentive Bonus, plus the
fair market value, measured as of the grant date, of the annual long-term
incentive awards the Company has granted to or agreed to grant to (if such
grant has not yet been 

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made) the Executive
during the applicable fiscal year.  The
sum of the amount payable under clauses (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 six months following the effective date of the
Executive’s termination of employment in accordance with Section 409A(a)(2)(B)
of the Code.

(v)           the Company shall allow the Executive
to continue to participate during the 24 month period following termination
(the “Severance Period”) in any and all of the employee benefit and welfare
plans and programs of the Company, excluding any 401(k) plan, 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 pursuant to the terms of such plans and 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
employee benefit and welfare plans, including, but not limited to, premiums for
group health, dental, accident, directors and officers insurance, group life
insurance, and his country club allowance, but excluding any 401(k) plan
or disability insurance.  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, including any additional taxes) 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, provided such costs are consistent with the policies
of the Company unless such costs are determined in good faith to be
unreasonable by the Compensation Committee. 
If the Executive engages in regular employment after his termination of
employment (whether as an executive or as a self-employed person but
excluding his management or operation of the Excluded Businesses), any employee
benefit and welfare benefits received by the Executive in consideration of such
employment which are the same type as the employee benefit and welfare benefits
provided by the Company will relieve the Company of its obligation under this
Section 8(a)(v) to provide such type of benefits;

(vi)          the Executive’s stock options awarded
under the Stock Option Plan (or any other or successor 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; and

(vii)         the Executive’s restricted Common
Shares awarded under the Stock Option Plan (or any other or successor plan)
shall immediately become 100% vested and all restrictions shall lapse.

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(b)           Termination on Death or Permanent Disability.  Upon a
termination of employment due to the Executive’s death or Permanent Disability,
the Company shall have no further liability or further obligation to the
Executive except as follows:  the
Executive (and his estate or designated beneficiaries under any
Company-sponsored employee benefit plan in the event of his death) shall be
entitled to receive:

(i)            within 30 days of such termination
of employment any Base Salary, Incentive Bonus, expense reimbursements and all
other compensation related payments that are payable as of his date of death or
Permanent Disability and that are related to his period of employment preceding
his date of death;

(ii)              
within 30 days after such termination of employment, the prorated
amount of the Maximum Target 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 or Permanent Disability, and subtracting out all
Incentive Bonus payments related to that year received by the Executive during
such year;

(iii)          within 30 days of such termination of
employment, a severance payment in an amount equal to the Executive’s Base
Salary at the time of termination;

(iv)          all non-vested bonus and long-term
incentive awards previously granted to the executive, including but not limited
to restricted stock, deferred share awards and stock options, shall earn and
fully vest and become nonforfeitable.  In
the case of death, 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; and

(v)           the group health plan then provided
to senior executives of the Company shall be continued following the date of
termination pursuant to the Executive’s COBRA continuation rights.  The Company shall provide for the cost of
such coverage for a period of two years and, during such period, if Executive
is precluded from participating in such group health plan by its terms or
applicable law, the Company shall pay to the Executive in cash the premiums or
other contributions that the Company would otherwise pay as of the date of the
Executive’s termination to continue the Executive’s participation in the group
health plan for two years. Notwithstanding the foregoing, the continuation
period for group health benefits under Section 4980B of the Code by reason of
the Executive’s termination of employment with the Company shall be measured
from his actual date of termination of employment.

(c)           By the Company for Cause or By the Executive Without
Good Reason.  In
the event that the Executive’s employment is terminated by the Company for
Cause or by the Executive without Good Reason, the Company shall pay the
Executive his Base Salary, Incentive Bonus, expense reimbursements and all
other compensation related payments that are payable as of his termination of
employment date and that are related 

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to his period of
employment preceding his termination date. 
The Executive shall be entitled to exercise his vested stock options,
determined as of his termination date, pursuant to the terms of the option
grant.  All unvested options and unvested
restricted Common Shares shall be forfeited on his termination date.

(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
positions, and shall be without any of the authority or responsibility for such
positions.  On request of the Board at
any time following his termination of employment for any reason, the Executive
shall resign from the Board if then a member. 
Upon termination of employment, the Executive shall also be entitled to
all benefits accrued and vested under any employee benefit plan of the Company.

(e)           Release. 
Prior to the payment by the Company of the Executive’s Severance
Payment, the Company, as a condition to such payments, shall request a
customary release from the Executive with respect to all potential claims the
Executive may have against the Company related to the Executive’s employment
with the company prior to the date of payment by the Company of the Executive’s
Severance Payment.  If the Executive does
not deliver such release, the Company shall not be required to pay the
Executive all or any portion of the Severance Payment; provided, however, if
the Executive shall bring legal action related to his Employment, nothing in
this subsection (e) shall prevent the Executive from receiving the Severance
Payment as an award in such legal action provided the Executive gives such
release at the time of payment of the award.

Section
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:

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

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

(iii)          the complete liquidation of the
Company or the sale or disposition of all or substantially all of the Company’s
assets, such that after the transaction, the holders of the voting shares of
the Company immediately prior to the 

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transaction is less than
50% of the voting securities of the acquiror or the parent of the acquiror;

(iv)          the members of the Board of the
Company at the beginning of any consecutive 24-calendar-month period commencing
on or after the date hereof (the “Incumbent Directors”) cease for any reason
other than death to constitute at least a majority of the members of the
Board;  provided that any director whose
election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the members of the Board then
still in office who were members of the Board at the beginning of such
24-calendar-month period, shall be deemed to be an Incumbent Director; or

(v)           a majority of the independent members
of the Board of the Company 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 stock options and restricted Common
Shares awarded under the Stock Option Plan (or any other or successor plan) and
if the Executive voluntarily terminates his employment without Good 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.

Section
10.  Excess Parachute Excise Tax.

(a)           If it is determined (as hereafter
provided) that any payment or distribution by the Company to or for the benefit
of Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise pursuant to or by reason of any
other agreement, policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or similar right, or the
lapse or termination of any restriction on or the vesting or exercisability of
any of the foregoing (a “Payment”), would be subject to the excise tax imposed
by Section 4999 of the Code by reason of being “contingent on a change in
ownership or control” of the Company, within the meaning of Section 280G
of the Code (or any successor provision thereto) or to any similar tax imposed
by state or local law, or any interest or penalties with respect to such excise
tax (such tax or taxes, together with any such interest and penalties, are
hereafter collectively referred to as the “Excise Tax”), then Executive shall
be entitled to receive an additional payment or payments (a “Gross-Up
Payment”) in an amount such that, after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.

(i)            Subject to the provisions of this
Section 10 hereof, all determinations required to be made under this
Section 10, including whether an Excise Tax is payable by Executive and
the amount of such Excise Tax and whether a Gross-Up Payment is required
and the amount of such Gross-Up 

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Payment, shall be made by
the nationally recognized firm of certified public accountants (the “Accounting
Firm”) used by the Company prior to the Change of Control (or, if such
Accounting Firm shall be a nationally recognized firm of certified public
accountants, as selected by Executive). 
The Accounting Firm shall be directed by the Company or Executive to
submit its preliminary determination and detailed supporting calculations to
both the Company and Executive within 15 calendar days after the date of
termination of employment, if applicable, and any other such time or times as
may be requested by the Company or Executive. 
If the Accounting Firm determines that any Excise Tax is payable by
Executive, the Company shall pay the required Gross-Up Payment to, or for
the benefit of, Executive within five business days after receipt of such
determination and calculations.  If the
Accounting Firm determines that no Excise Tax is payable by Executive, it
shall, at the same time as it makes such determination, furnish Executive with
an opinion that he has substantial authority not to report any Excise Tax on
his/her federal, state, local income or other tax return.  Any determination by the Accounting Firm as
to the amount of the Gross-Up Payment shall be binding upon the Company
and Executive absent a contrary determination by the Internal Revenue Service
or a court of competent jurisdiction; provided, however, that no such
determination shall eliminate or reduce the Company’s obligation to provide any
Gross-Up Payment that shall be due as a result of such contrary
determination or the Executive’s obligation to repay any amounts as a result of
such contrary determination.

(ii)           The federal, state and local income
or other tax returns filed by Executive (or any filing made by a consolidated
tax group which includes the Company) shall be prepared and filed on a
consistent basis with the determination of the Accounting Firm with respect to
the Excise Tax payable by Executive. 
Executive shall make proper payment of the amount of any Excise Tax, and
at the request of the Company, provide to the Company true and correct copies
(with any amendments) of his/her federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such payment.

(b)           In the event that the Internal
Revenue Service claims that any payment or benefit received under this
Agreement constitutes as “excess parachute payment”, within the meaning of
Section 280G(b)(1) of the Code, Executive shall notify the Company in
writing of such claim.  Such notification
shall be given as soon as practicable but no later than 10 business days after
Executive is informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid.  Executive shall not pay such claim
prior to the expiration of the 30 day period following the date on which
Executive gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due).  If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall (1) give the Company any information reasonably requested
by the Company relating to such claim; (2) take such action in connection
with contesting such claim as the Company shall reasonably 

 12
 

 

 

request in writing from
time to time, including without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company and
reasonably satisfactory to Executive; (3) cooperate with the Company in
good faith in order to effectively contest such claim; and (4) permit the
Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and expenses
(including, but not limited to, additional interest and penalties and related
legal, consulting or other similar fees) incurred in connection with such
contest and shall indemnify and hold Executive harmless, on an after-tax
basis, for and against any Excise Tax or other tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
any payment of costs and expenses.

(i)            The Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the tax authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest 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 Executive to pay such
claim and sue for a refund, the Company shall advance the amount of such
payment to Executive on an interest-free basis, and shall indemnify and
hold Executive harmless, on an after-tax basis, from any Excise Tax or
other tax (including interest and penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and provided, further, that if Executive is required to extend
the statute of limitations to enable the Company to contest such claim,
Executive may limit this extension solely to such contested amount.  The Company’s control of the contest shall be
limited to issues with respect to which a corporate deduction would be
disallowed pursuant to Section 280G of the Code and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.  In addition, no position may be taken nor any
final resolution be agreed to by the Company without Executive’s consent if
such position or resolution could reasonably be expected to adversely affect
Executive (including adversely affecting any other tax position of Executive
unrelated to matters covered hereby).

(ii)           If, after the receipt by Executive of
any amount advanced by the Company in connection with the contest of the Excise
Tax claim, Executive becomes entitled to receive any refund with respect to
such claim, Executive shall promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto).

(c)           The Company and Executive shall each
provide the Accounting Firm access to and copies of any books, records and
documents in the possession of the Company or Executive, as the case may be,
reasonably requested by the Accounting 

 13
 

 

 

Firm, and otherwise
cooperate with the Accounting Firm in connection with the preparation and
issuance of the determination contemplated by this Section 10.

(d)           The fees and expenses of the
Accounting Firm for its services in connection with the determinations and
calculations contemplated by this Section 10 hereof shall be borne by the Company.  If such fees and expenses are initially
advanced by Executive, the Company shall reimburse Executive the full amount of
such fees and expenses within five business days after receipt from Executive
of a statement therefor and reasonable evidence of his payment thereof.

Section 11.  Confidential Information.  At any time during or after Executive’s
employment with the Company, Executive shall not, without the prior written
consent of the Company, use, divulge, disclose or make accessible to any other
person, firm, partnership, corporation or other entity any confidential or
proprietary information pertaining to the business of the Company or any of its
subsidiaries (“Confidential Information”), pursuant to the policies set forth
in the Company’s employee handbook and compliance manual, as amended from time
to time.  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 the Company’s customers, and that the provisions of this
Section 11 are not intended to restrict the Executive’s use of such
previously acquired knowledge.  Upon
termination of the Executive’s employment with the Company for any reason, the
Executive shall return to the Company all Company property and all written
Confidential Information in the possession of the Executive.

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.

Section 12.  Noncompetition and Nonsolicitation.  During the Term and for a period of 12
calendar months after the termination of the Executive’s employment (the “Non-compete
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 and in competition with the business of the Company
that the Company was engaged in, or a planned business of the Company that had
been proposed in writing to senior officers of the Company or the Board and had
not been rejected by the Company or the Board, 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 (other than the 

 14
 

 

 

Executive’s personal assistant or Executive’s secretary) at any time
while the Executive was also so employed; provided, however, that the
provisions of this Section 12 shall not apply in the event the Company
materially breaches this Agreement.  For
purposes of this Section 12, a business shall be in competition with the
Company only if a significant portion of its business is to originate mortgage
loans to or purchase real estate from and lease such real estate back to
operators of single-tenant retail, distribution or service companies in the
United States.  Notwithstanding any other
provision of this Agreement, in the event the Executive’s employment is
terminated “For Cause,” the Non-Compete Period shall be 12 calendar months.

Nothing in this Section 12 shall impede, restrict
or otherwise interfere with the Executive’s management and operation of the
Excluded Businesses.  Further, nothing in
this Section 12 shall prohibit Executive from making any passive
investment in a public company, or where he is the owner of 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 12 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 12 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.

Section 13.  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 developed
solely during the Term (“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, so long as such books or
articles (a) are not funded in whole or in part by the Company, (b) do not
interfere with the performance of the Executive’s duties under this Agreement,
and (c) 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.

Section
14.  Disputes.

(a)           Equitable Relief.  The Executive acknowledges and agrees that
upon any breach by the Executive of his obligations under Section 11, 12
or 13 hereof, the 

 15
 

 

 

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 14(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 if
mutually agreed by binding arbitration in Maricopa County, Arizona, 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
mutually agreeable arbitration shall be conducted by a panel of three
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 paragraph (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 all
issues; provided, however, the Company shall have no obligation to reimburse
the Executive unless the amount recovered by the Executive from the Company is
the greater of (a) $10,000 or (b) 25% of the amount claimed by the Executive in
any demand letter, arbitration or judicial proceeding.

Section 15.  Indemnification. 
The Company shall indemnify the Executive, to the maximum extent
permitted by applicable law and the governing instruments of the Company,
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.

Section 16.  Cooperation in Future Matters.  The Executive hereby agrees that for a period
of 12 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 

 16
 

 

 

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.

Section
17.  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 facsimile, 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 17(a).

to the Company:

Spirit Finance
Corporation

14631 N. Scottsdale Road

Suite 200

Scottsdale, AZ  85254 Facsimile:  (480) 606-0826

Attention:  President

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 days after being mailed; and (iv) on
confirmed receipt if sent by written telecommunication or facsimile; 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. 
It is the intent of both parties for all payments made in connection
with this Agreement to comply with Section 409A of the Code and all provisions
of this Agreement shall be construed accordingly.

(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.

 17
 

 

 

(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 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 State of
Arizona, without giving effect to principles of conflicts of law. Each of the parties hereto hereby
irrevocably submits to the jurisdiction of any state or federal court located
in Phoenix or Scottsdale, Arizona in respect of any suit, action or proceeding
arising out of or relating to this Agreement, and irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. 
Each of the parties hereto irrevocably waives, to the fullest extent it
may effectively do so under applicable law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.

(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.

 18
 

 

 

(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.

(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 after deduction for any applicable income tax withholding
required under federal, state or local law.

(l)            No Mitigation of Damages.  Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise after the termination
of his employment hereunder.

(m)          Survival.  The provisions of Sections 8, 9, 10, 11,
12, 13, 14, 15 and 16 shall survive the termination of this Agreement.

 19
 

 

 

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

 

 

	
   

  	
  SPIRIT FINANCE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Christopher
  H. Volk

  
	
   

  	
   

  	
  Christopher H.
  Volk, President and Chief

  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gregg A.
  Seibert

  
	
   

  	
  Gregg A. Seibert

  

 

 20Exhibit
10.1

Amended and Restated
Master Repurchase Agreement

Bond Market Association September 1996 Version

Dated as of:  October 13, 2006

Between: Goldman Sachs
Mortgage Company (“Buyer”)  

and Gramercy Warehouse
Funding II LLC and GKK Trading Warehouse II, LLC (collectively, “Seller”)

1.              Applicability

This Agreement amends and restates that certain Master
Repurchase Agreement, dated January 3, 2005, between Gramercy Warehouse Funding
II LLC and Goldman Sachs Mortgage Company (as such agreement was amended from
time to time, the “Original Agreement”). From time to time the parties hereto
may enter into transactions in which one party (“Seller”) agrees to transfer to
the other (“Buyer”) securities or other assets (“Securities”) against the
transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer
to Seller such Securities at a date certain or on demand, against the transfer
of funds by Seller. Each such transaction shall be referred to herein as a “Transaction”
and, unless otherwise agreed in writing, shall be governed by this Agreement,
including any supplemental terms or conditions contained in Annex I hereto and
in any other annexes identified herein or therein as applicable hereunder.

2.              Definitions

(a)          “Act of Insolvency”,
with respect to any party, (i) the commencement by such party as debtor of any
case or proceeding under any bankruptcy, insolvency, reorganization,
liquidation, moratorium, dissolution, delinquency or similar law, or such party
seeking the appointment or election of a receiver, conservator, trustee,
custodian or similar official for such party or any substantial part of its
property, or the convening of any meeting of creditors for purposes of
commencing any such case or proceeding or seeking such an appointment or election,
(ii) the commencement of any such case or proceeding against such party, or
another seeking such an appointment or election, or the filing against a party
of an application for a protective decree under the provisions of the
Securities Investor Protection Act of 1970, which (A) is consented to or not
timely contested by such party, (B) results in the entry of an order for
relief, such an appointment or election, the issuance of such a protective
decree or the entry of an order having a similar effect, or (C) is not
dismissed within 15 days, (iii) the making by such party of a general
assignment for the benefit of creditors, or (iv) the admission in writing by
such party of such party’s inability to pay such party’s debts as they become
due;

(b)         “Additional Purchased
Securities”, Securities provided by Seller to Buyer pursuant to Paragraph 4 (a)
hereof,

 1
 

 

 

(c)          “Buyer’s Margin Amount”,
with respect to any Transaction as of any date, the amount obtained by
application of the Buyer’s Margin Percentage to the Repurchase Price for such
Transaction as of such date;

(d)         “Buyer’s Margin
Percentage”, with respect to any Transaction as of any date, a percentage
(which may be equal to the Seller’s Margin Percentage) agreed to by Buyer and
Seller or, in the absence of any such agreement, the percentage obtained by
dividing the Market Value of the Purchased Securities on the Purchase Date by
the Purchase Price on the Purchase Date for such Transaction;

(e)          “Confirmation”, the
meaning specified in Paragraph 3(b) hereof;

(f)            “Income”, with respect
to any Security at any time, any principal thereof and all interest, dividends
or other distributions thereon;

(g)         “Margin Deficit”, the
meaning specified in Paragraph 4(a) hereof;

(h)         “Margin Excess”, the
meaning specified in Paragraph 4(b) hereof;

(i)             “Margin Notice
Deadline”, the time agreed to by the parties in the relevant Confirmation,
Annex I hereto or otherwise as the deadline for giving notice requiring same-day
satisfaction of margin maintenance obligations as provided in Paragraph 4
hereof (or, in the absence of any such agreement, the deadline for such
purposes established in accordance with market practice);

(j)             “Market Value”, with
respect to any Securities as of any date, the price for such Securities on such
date obtained from a generally recognized source agreed to by the parties or
the most recent closing bid quotation from such a source, plus accrued Income
to the extent not included therein (other than any Income credited or
transferred to, or applied to the obligations of, Seller pursuant to Paragraph
5 hereof) as of such date (unless contrary to market practice for such
Securities);

(k)          “Price Differential”,
with respect to any Transaction as of any date, the aggregate amount obtained
by daily application of the Pricing Rate for such Transaction to the Purchase
Price for such Transaction on a 360 day per year basis for the actual number of
days during the period commencing on (and including) the Purchase Date for such
Transaction and ending on (but excluding) the date of determination (reduced by
any amount of such Price Differential previously paid by Seller to Buyer with
respect to such Transaction);

(1)          “Pricing Rate”, the per
annum percentage rate for determination of the Price Differential;

(m)       “Prime Rate”, the prime
rate of U.S. commercial banks as published in The Wall Street Journal (or, if
more than one such rate is published, the average of such rates);

(n)         “Purchase Date”, the date
on which Purchased Securities are to be transferred by Seller to Buyer;

(o)         “Purchase Price”, (i) on
the Purchase Date, the price at which Purchased Securities are transferred by
Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree
otherwise, such price increased by the amount of any cash transferred by Buyer
to Seller pursuant to Paragraph 4(b) hereof and decreased by the amount of any
cash 

 2
 

 

 

                        transferred
by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce
Seller’s obligations under clause (ii) of Paragraph 5 hereof;

(p)         “Purchased Securities”,
the Securities transferred by Seller to Buyer in a Transaction hereunder, and
any Securities substituted therefor in accordance with Paragraph 9 hereof. The
term “Purchased Securities” with respect to any Transaction at any time also
shall include Additional Purchased Securities delivered pursuant to Paragraph
4(a) hereof and shall exclude Securities returned pursuant to Paragraph 4(b)
hereof;

(q)         “Repurchase Date”, the
date on which Seller is to repurchase the Purchased Securities from Buyer,
including any date determined by application of the provisions of Paragraph
3(c) or 11 hereof;

(r)            “Repurchase Price”,
the price at which Purchased Securities are to be transferred from Buyer to
Seller upon termination of a Transaction, which will be determined in each case
(including Transactions terminable upon demand) as the sum of the Purchase
Price and the Price Differential as of the date of such determination;

(s)          “Seller’s Margin Amount”,
with respect to any Transaction as of any date, the amount obtained by
application of the Seller’s Margin Percentage to the Repurchase Price for such
Transaction as of such date;

(t)            “Seller’s Margin
Percentage”, with respect to any Transaction as of any date, a percentage
(which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and
Seller or, in the absence of any such agreement, the percentage obtained by
dividing the Market Value of the Purchased Securities on the Purchase Date by
the Purchase Price on the Purchase Date for such Transaction.

3.              Initiation;
Confirmation; Termination

(a)          An agreement to enter
into a Transaction may be made orally or in writing at the initiation of either
Buyer or Seller. On the Purchase Date for the Transaction, the Purchased
Securities shall be transferred to Buyer or its agent against the transfer of
the Purchase Price to an account of Seller.

(b)         Upon agreeing to enter
into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed,
shall promptly deliver to the other party a written confirmation of each
Transaction (a “Confirmation”). The Confirmation shall describe the Purchased
Securities (including CUSIP number, if any), identify Buyer and Seller and set
forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase
Date, unless the Transaction is to be terminable on demand, (iv) the Pricing
Rate or Repurchase Price applicable to the Transaction, and (v) any additional
terms or conditions of the Transaction not inconsistent with this Agreement.
The Confirmation, together with this Agreement, shall constitute conclusive
evidence of the terms agreed between Buyer and Seller with respect to the
Transaction to which the Confirmation relates, unless with respect to the
Confirmation specific objection is made promptly after receipt thereof. In the
event of any conflict between the terms of such Confirmation and this
Agreement, this Agreement shall prevail.

(c)          In the case of
Transactions terminable upon demand, such demand shall be made by Buyer or
Seller, no later than such time as is customary in accordance with market
practice, by telephone or otherwise on or prior to the business day on which
such termination will be effective. On the date specified in such demand, or on
the date fixed for termination in the case of Transactions having a fixed term,
termination of 

 3
 

 

 

                        the
Transaction will be effected by transfer to Seller or its agent of the
Purchased Securities and any Income in respect thereof received by Buyer (and
not previously credited or transferred to, or applied to the obligations of, Seller
pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to
an account of Buyer.

4.              Margin Maintenance

(a)          If at any time the
aggregate Market Value of all Purchased Securities subject to all Transactions
in which a particular party hereto is acting as Buyer is less than the
aggregate Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”),
then Buyer may by notice to Seller require Seller in such Transactions, at
Seller’s option, to transfer to Buyer cash or additional Securities reasonably
acceptable to Buyer (“Additional Purchased Securities”), so that the cash and
aggregate Market Value of the Purchased Securities, including any such
Additional Purchased Securities, will thereupon equal or exceed such aggregate
Buyer’s Margin Amount (decreased by the amount of any Margin Deficit as of such
date arising from any Transactions in which such Buyer is acting as Seller).

(b)         If at any time the
aggregate Market Value of all Purchased Securities subject to all Transactions
in which a particular party hereto is acting as Seller exceeds the aggregate
Seller’s Margin Amount for all such Transactions at such time (a “Margin Excess”),
then Seller may by notice to Buyer require Buyer in such Transactions, at Buyer’s
option, to transfer cash or Purchased Securities to Seller, so that the
aggregate Market Value of the Purchased Securities, after deduction of any such
cash or any Purchased Securities so transferred, will thereupon not exceed such
aggregate Seller’s Margin Amount (increased by the amount of any Margin Excess
as of such date arising from any Transactions in which such Seller is acting as
Buyer).

(c)          If any notice is given
by Buyer or Seller under subparagraph (a) or (b) of this Paragraph at or before
the Margin Notice Deadline on any business day, the party receiving such notice
shall transfer cash or Additional Purchased Securities as provided in such
subparagraph no later than the close of business in the relevant market on such
day. If any such notice is given after the Margin Notice Deadline, the party
receiving such notice shall transfer such cash or Securities no later than the
close of business in the relevant market on the next business day following
such notice.

(d)         Any cash transferred
pursuant to this Paragraph shall be attributed to such Transactions as shall be
agreed upon by Buyer and Seller.

(e)          Seller and Buyer may
agree, with respect to any or all Transactions hereunder, that the respective
rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this
Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the
case may be, exceeds a specified dollar amount or a specified percentage of the
Repurchase Prices for such Transactions (which amount or percentage shall be
agreed to by Buyer and Seller prior to entering into any such Transactions).

(f)            Seller and Buyer may
agree, with respect to any or all Transactions hereunder, that the respective
rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to
require the elimination of a Margin Deficit or a Margin Excess, as the case may
be, may be exercised whenever such a Margin Deficit or Margin Excess exists
with respect to any single Transaction hereunder (calculated without regard to
any other Transaction outstanding under this Agreement).

 4
 

 

 

5.              Income Payments

Seller shall be entitled to receive an amount equal to
all Income paid or distributed on or in respect of the Securities that is not
otherwise received by Seller, to the full extent it would be so entitled if the
Securities had not been sold to Buyer. Buyer shall, as the parties may agree
with respect to any Transaction (or, in the absence of any such agreement, as
Buyer shall reasonably determine in its discretion), on the date such Income is
paid or distributed either (i) transfer to or credit to the account of Seller
such Income with respect to any Purchased Securities subject to such
Transaction or (ii) with respect to Income paid in cash, apply the Income
payment or payments to reduce the amount, if any, to be transferred to Buyer by
Seller upon termination of such Transaction. Buyer shall not be obligated to
take any action pursuant to the preceding sentence (A) to the extent that such
action would result in the creation of a Margin Deficit, unless prior thereto
or simultaneously therewith Seller transfers to Buyer cash or Additional
Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an
Event of Default with respect to Seller has occurred and is then continuing at
the time such Income is paid or distributed.

6.            Security Interest

Although the parties intend that all Transactions
hereunder be sales and purchases and not loans, in the event any such
Transactions are deemed to be loans, Seller shall be deemed to have pledged to
Buyer as security for the performance by Seller of its obligations under each
such Transaction, and shall be deemed to have granted to Buyer a security
interest in, all of the Purchased Securities with respect to all Transactions
hereunder and all Income thereon and other proceeds thereof.

7.            Payment and Transfer

Unless otherwise mutually agreed, all transfers of
funds hereunder shall be in immediately available funds. All Securities
transferred by one party hereto to the other party (i) shall be in suitable form
for transfer or shall be accompanied by duly executed instruments of transfer
or assignment in blank and such other documentation as the party receiving
possession may reasonably request, (ii) shall be transferred on the book-entry
system of a Federal Reserve Bank, or (iii) shall be transferred by any other
method mutually acceptable to Seller and Buyer.

8.            Segregation of
Purchased Securities

To the extent required by applicable law, all
Purchased Securities in the possession of Seller shall be segregated from other
securities in its possession and shall be identified as subject to this
Agreement. Segregation may be accomplished by appropriate identification on the
books and records of the holder, including a financial or securities
intermediary or a clearing corporation. All of Seller’s interest in the
Purchased Securities shall pass to Buyer on the Purchase Date and, unless
otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude
Buyer from engaging in repurchase transactions with the Purchased Securities or
otherwise selling, transferring, pledging or hypothecating the Purchased
Securities, but no such transaction shall relieve Buyer of its obligations to
transfer Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11 hereof,
or of Buyer’s obligation to credit or pay Income to, or apply Income to the
obligations of, Seller pursuant to Paragraph 5 hereof.

	
   

  	
  Required Disclosure for Transactions in Which the Seller Retains
  Custody of the Purchased Securities

  Seller is not permitted to substitute other securities for those
  subject to this Agreement and therefore must keep Buyer’s securities
  segregated at all times unless in this Agreement Buyer grants Seller the
  right to substitute other securities. If Buyer grants 

  

 

 5
 

 

 

	
   

  	
  the
  right to substitute, this means that Buyer’s securities will likely be
  commingled with Seller’s own securities during the trading day. Buyer is
  advised that during any trading day that Buyer’s securities are commingled
  with Seller’s securities, they [will]* [may]** be subject to liens granted by
  Seller to [its clearing bank]* [third parties]” and may be used by Seller for
  deliveries on other securities transactions. Whenever the securities are
  commingled, Seller’s ability to resegregate substitute securities for Buyer
  will be subject to Seller’s ability to satisfy [the clearing] * [any]** lien
  or to obtain substitute securities.

  

*                 Language to be
used under 17 C.F.R, §403.4 (e) if Seller is a government securities broker or
dealer other than a financial institution.

**          Language to be used
under 17 C.F.R. §403.5 (d) if Seller is a financial institution.

9.            Substitution

(a)          Seller may, subject to
agreement with and acceptance by Buyer, substitute other Securities for any
Purchased Securities. Such substitution shall be made by transfer to Buyer of
such other Securities and transfer to Seller of such Purchased Securities.
After substitution, the substituted Securities shall be deemed to be Purchased
Securities.

(b)         In Transactions in which
Seller retains custody of Purchased Securities, the parties expressly agree
that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph,
to have agreed to and accepted in this Agreement substitution by Seller of other
Securities for Purchased Securities; provided, however, that such other
Securities shall have a Market Value at least equal to the Market Value of the
Purchased Securities for which they are substituted.

10.       Representations

Each of Buyer and Seller represents and warrants to
the other that (i) it is duly authorized to execute and deliver this Agreement,
to enter into Transactions contemplated hereunder and to perform its
obligations hereunder and has taken all necessary action to authorize such execution,
delivery and performance, (ii) it will engage in such Transactions as principal
(or, if agreed in writing, in the form of an annex hereto or otherwise, in
advance of any Transaction by the other party hereto, as agent for a disclosed
principal), (iii) the person signing this Agreement on its behalf is duly
authorized to do so on its behalf (or on behalf of any such disclosed
principal), (iv) it has obtained all authorizations of any governmental body
required in connection with this Agreement and the Transactions hereunder and
such authorizations are in full force and effect and (v) the execution,
delivery and performance of this Agreement and the Transactions hereunder will
not violate any law, ordinance, charter, bylaw or rule applicable to it or any agreement
by which it is bound or by which any of its assets are affected. On the
Purchase Date for any Transaction Buyer and Seller shall each be deemed to
repeat all the foregoing representations made by it.

11.
Events of Default

In the event that (i) Seller fails to transfer or
Buyer fails to purchase Purchased Securities upon the applicable Purchase Date,
(ii) Seller fails to repurchase or Buyer fails to transfer Purchased Securities
upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply with
Paragraph 4 hereof, (iv) Buyer fails, after one business day’s notice, to
comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to
Seller or Buyer, (vi) any representation made by Seller or Buyer shall have
been incorrect or untrue in any material respect when made or repeated or
deemed to have been made or repeated, 

 6
 

 

 

or (vii) Seller or Buyer shall admit to the other its
inability to, or its intention not to, perform any of its obligations hereunder
(each an “Event of Default”):

(a)          The nondefaulting party
may, at its option (which option shall be deemed to have been exercised
immediately upon the occurrence of an Act of Insolvency), declare an Event of
Default to have occurred hereunder and, upon the exercise or deemed exercise of
such option, the Repurchase Date for each Transaction hereunder shall, if it
has not already occurred, be deemed immediately to occur (except that, in the
event that the Purchase Date for any Transaction has not yet occurred as of the
date of such exercise or deemed exercise, such Transaction shall be deemed
immediately canceled). The nondefaulting party shall (except upon the
occurrence of an Act of Insolvency) give notice to the defaulting party of the
exercise of such option as promptly as practicable.

(b)         In all Transactions in
which the defaulting party is acting as Seller, if the nondefaulting party
exercises or is deemed to have exercised the option referred to in subparagraph
(a) of this Paragraph, (i) the defaulting party’s obligations in such
Transactions to repurchase all Purchased Securities, at the Repurchase Price
therefor on the Repurchase Date determined in accordance with subparagraph (a)
of this Paragraph, shall thereupon become immediately due and payable, (ii) all
Income paid after such exercise or deemed exercise shall be retained by the
nondefaulting party and applied to the aggregate unpaid Repurchase Prices and
any other amounts owing by the defaulting party hereunder, and (iii) the
defaulting party shall immediately deliver to the nondefaulting party any
Purchased Securities subject to such Transactions then in the defaulting party’s
possession or control.

(c)          In all Transactions in
which the defaulting party is acting as Buyer, upon tender by the nondefaulting
party of payment of the aggregate Repurchase Prices for all such Transactions,
all right, title and interest in and entitlement to all Purchased Securities
subject to such Transactions shall be deemed transferred to the nondefaulting
party, and the defaulting party shall deliver all such Purchased Securities to
the nondefaulting party.

(d)         If the nondefaulting
party exercises or is deemed to have exercised the option referred to in
subparagraph (a) of this Paragraph, the nondefaulting party, without prior
notice to the defaulting party, may:

(i)          as to Transactions in
which the defaulting party is acting as Seller, (A) immediately sell, in a
recognized market (or otherwise in a commercially reasonable manner) at such
price or prices as the nondefaulting party may reasonably deem satisfactory,
any or all Purchased Securities subject to such Transactions and apply the
proceeds thereof to the aggregate unpaid Repurchase Prices and any other
amounts owing by the defaulting party hereunder or (B) in its sole discretion
elect, in lieu of selling all or a portion of such Purchased Securities, to
give the defaulting party credit for such Purchased Securities in an amount
equal to the price therefor on such date, obtained from a generally recognized
source or the most recent closing bid quotation from such a source, against the
aggregate unpaid Repurchase Prices and any other amounts owing by the
defaulting party hereunder; and

(ii)       as to Transactions in which
the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized
market (or otherwise in a commercially reasonable manner) at such price or
prices as the nondefaulting party may reasonably deem satisfactory, securities
(“Replacement Securities”) of the same 

 7
 

 

 

                     class and
amount as any Purchased Securities that are not delivered by the defaulting
party to the nondefaulting party as required hereunder or (B) in its sole
discretion elect, in lieu of purchasing Replacement Securities, to be deemed to
have purchased Replacement Securities at the price therefor on such date,
obtained from a generally recognized source or the most recent closing offer
quotation from such a source.

Unless otherwise provided in Annex 1, the parties
acknowledge and agree that (1) the Securities subject to any Transaction
hereunder are instruments traded in a recognized market, (2) in the absence of
a generally recognized source for prices or bid or offer quotations for any
Security, the nondefaulting party may establish the source therefor in its sole
discretion and (3) all prices, bids and offers shall be determined together
with accrued Income (except to the extent contrary to market practice with
respect to the relevant Securities).

(e)          As to Transactions in
which the defaulting party is acting as Buyer, the defaulting party shall be
liable to the nondefaulting party for any excess of the price paid (or deemed
paid) by the nondefaulting party for Replacement Securities over the Repurchase
Price for the Purchased Securities replaced thereby and for any amounts payable
by the defaulting party under Paragraph 5 hereof or otherwise hereunder.

(f)            For purposes of this
Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of
which the defaulting party is acting as Buyer shall not increase above the
amount of such Repurchase Price for such Transaction determined as of the date
of the exercise or deemed exercise by the nondefaulting party of the option
referred to in subparagraph (a) of this Paragraph.

(g)         The defaulting party
shall be liable to the nondefaulting party for (i) the amount of all reasonable
legal or other expenses incurred by the nondefaulting party in connection with
or as a result of an Event of Default, (ii) damages in an amount equal to the
cost (including all fees, expenses and commissions) of entering into replacement
transactions and entering into or terminating hedge transactions in connection
with or as a result of an Event of Default, and (iii) any other loss, damage,
cost or expense directly arising or resulting from the occurrence of an Event
of Default in respect of a Transaction.

(h)         To the extent permitted
by applicable law, the defaulting party shall be liable to the nondefaulting
party for interest on any amounts owing by the defaulting party hereunder, from
the date the defaulting party becomes liable for such amounts hereunder until
such amounts are (i) paid in full by the defaulting party or (ii) satisfied in
full by the exercise of the nondefaulting party’s rights hereunder. Interest on
any sum payable by the defaulting party to the nondefaulting party under this
Paragraph 11(h) shall be at a rate equal to the greater of the Pricing Rate for
the relevant Transaction or the Prime Rate.

(i)             The nondefaulting
party shall have, in addition to its rights hereunder, any rights otherwise
available to it under any other agreement or applicable law.

12.
Single Agreement

Buyer and Seller acknowledge that, and have entered
hereinto and will enter into each Transaction hereunder in consideration of and
in reliance upon the fact that, all Transactions hereunder constitute a single
business and contractual relationship and have been made in consideration of
each other. Accordingly, each of Buyer and Seller agrees (i) 

 8
 

 

 

to perform all of its obligations in respect of each
Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set off claims and apply
property held by them in respect of any Transaction against obligations owing
to them in respect of any other Transactions hereunder and (iii) that payments,
deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted.

13.
Notices and Other Communications

Any and all notices, statements, demands or other
communications hereunder may be given by a party to the other by mail,
facsimile, telegraph, messenger or otherwise to the address specified in Annex
11 hereto, or so sent to such party at any other place specified in a notice of
change of address hereafter received by the other. All notices, demands and
requests hereunder may be made orally, to be confirmed promptly in writing, or
by other communication as specified in the preceding sentence.

14.       Entire Agreement;
Severability

This Agreement shall
supersede any existing agreements between the parties containing general terms
and conditions for repurchase transactions. Each provision and agreement herein
shall be treated as separate and independent from any other provision or
agreement herein and shall be enforceable notwithstanding the unenforceability
of any such other provision or agreement.

15.       Non-assignability;
Termination

(a)          The rights and
obligations of the parties under this Agreement and under any Transaction shall
not be assigned by either party without the prior written consent of the other
party, and any such assignment without the prior written consent of the other
party shall be null and void. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns. This Agreement may be
terminated by either party upon giving written notice to the other, except that
this Agreement shall, notwithstanding such notice, remain applicable to any
Transactions then outstanding.

(b)         Subparagraph (a) of this
Paragraph 15 shall not preclude a party from assigning, charging or otherwise
dealing with all or any part of its interest in any sum payable to it under
Paragraph 11 hereof.

16.
Governing Law

This Agreement
shall be governed by the laws of the State of New York without giving effect to
the conflict of law principles thereof.

17. No
Waivers, Etc.

No express or
implied waiver of any Event of Default by either party shall constitute a
waiver of any other Event of Default and no exercise of any remedy hereunder by
any party shall constitute a waiver of its right to exercise any other remedy
hereunder. No modification or waiver of any provision of this Agreement and no
consent by any party to a departure herefrom shall be effective unless and
until such shall be in writing and duly executed by both of the parties hereto.
Without limitation on an of the foregoing, the failure to give a notice
pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any
right to do so at a later date.

 9
 

 

 

18.       Use of Employee Plan Assets

(a)          If assets of an employee
benefit plan subject to any provision of the Employee Retirement Income
Security Act of 1974 (“ERISA) are intended to be used by either party hereto
(the “Plan Party”) in a Transaction, the Plan Party shall so notify the other
party prior to the Transaction. The Plan Party shall represent in writing to
the other party that the Transaction does not constitute a prohibited
transaction under ERISA or is otherwise exempt therefrom, and the other party
may proceed in reliance thereon but shall not be required so to proceed.

(b)         Subject to the last
sentence of subparagraph (a) of this Paragraph, any such Transaction shall
proceed only if Seller furnishes or has furnished to Buyer its most recent
available audited statement of its financial condition and its most recent
subsequent unaudited statement of its financial condition.

(c)          By entering into a
Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent
to Buyer that since the date of Seller’s latest such financial statements,
there has been no material adverse change in Seller’s financial condition which
Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with
future audited and unaudited statements of its financial condition as they are
issued, so long as it is a Seller in any outstanding Transaction involving a
Plan Party.

19.       Intent

(a)          The parties recognize
that each Transaction is a “repurchase agreement” as that term is defined in
Section 101 of Title 11 of the United States Code, as amended (except insofar
as the type of Securities subject to such Transaction or the term of such
Transaction would render such definition inapplicable), and a “securities
contract” as that term is defined in Section 741 of Title 11 of the United
States Code, as amended (except insofar as the type of assets subject to such
Transaction would render such definition inapplicable).

(b)         It is understood that
either party’s right to liquidate Securities delivered to it in connection with
Transactions hereunder or to exercise any other remedies pursuant to Paragraph
11 hereof is a contractual right to liquidate such Transaction as described in
Sections 555 and 559 of Title 11 of the United States Code, as amended.

(c)          The parties agree and
acknowledge that if a party hereto is an “insured depository institution,” as
such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”),
then each Transaction hereunder is a “qualified financial contract,” as that
term is defined in FDIA and any rules, orders or policy statements thereunder
(except insofar as the type of assets subject to such Transaction would render
such definition inapplicable).

(d)         It is understood that this
Agreement constitutes a “netting contract” as defined in and subject to Title
IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”)
and each payment entitlement and payment obligation under any Transaction
hereunder shall constitute a “covered contractual payment entitlement” or 11 “covered
contractual payment obligation”, respectively, as defined in and subject to
FDICIA (except insofar as one or both of the parties is not a “financial
institution” as that term is defined in FDICIA).

20.       Disclosure Relating to
Certain Federal Protections

The parties
acknowledge that they have been advised that:

 10
 

 

 

(a)          in the case of
Transactions in which one of the parties is a broker or dealer registered with
the Securities and Exchange Commission (“SEC”) under Section 15 of the
Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor
Protection Corporation has taken the position that the provisions of the
Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other
party with respect to any Transaction hereunder;

(b)         in the case of
Transactions in which one of the parties is a government securities broker or a
government securities dealer registered with the SEC under Section 15C of the
1934 Act, SIPA will not provide protection to the other party with respect to
any Transaction hereunder; and

(c)          in the case of
Transactions in which one of the parties is a financial institution, funds held
by the financial institution pursuant to a Transaction hereunder are not a deposit
and therefore are not insured by the Federal Deposit Insurance Corporation or
the National Credit Union Share Insurance Fund, as applicable.

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 11
 

 

 

	
  

  	
  GOLDMAN SACHS MORTGAGE COMPANY,

  a New York limited liability partnership

  	
   

  
	
   

  	
   

  	
  By:

  	
  Goldman Sachs Real
  Estate Funding Corp.,

  	
   

  
	
   

  	
   

  	
   

  	
  its general partner

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  GRAMERCY WAREHOUSE FUNDING II
  LLC,

  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
  By:

  	
  GRAMERCY INVESTMENT
  TRUST, a Maryland real estate investment trust, its sole member and manager

  	
   

  
	
   

  	
   

  	
  By:

  	
  GKK CAPITAL LP, a
  Delaware limited partnership, its sole shareholder

  	
   

  
	
   

  	
   

  	
  By: 

  	
  GRAMERCY CAPITAL CORP.,
  a Maryland corporation, its general partner

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  GKK TRADING WAREHOUSE II LLC,

  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
  By:

  	
  GRAMERCY INVESTMENT
  TRUST, a Maryland real estate investment trust, its sole member and manager

  	
   

  
	
   

  	
   

  	
  By:

  	
  GKK CAPITAL LP, a Delaware
  limited partnership, its sole shareholder

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  GRAMERCY CAPITAL CORP.,
  a Maryland corporation, its general partner

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  
								

 

 

 12

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