Document:

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                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is executed on this 5th day of
October, 1999 by and between RESOURCE AMERICA, INC., a Delaware corporation
having its principal place of business at 1521 Locust Street, Philadelphia,
Pennsylvania 19102 ("RAI") and DANIEL G. COHEN ("Cohen").

                                   BACKGROUND

         A. Since 1997, Cohen has been an officer of RAI and currently he serves
as the President and Chief Operating Officer of RAI.

         B. Cohen and RAI desire to formally set forth the terms, conditions and
agreements regarding Cohen's employment as President and Chief Operating Officer
of RAI.

                                      TERMS

         NOW, THEREFORE, in consideration of the mutual promises set forth
herein, and intending to be legally bound hereby, RAI and Cohen agree as
follows:

         1.  Employment. During the term of this Agreement, Cohen shall be
employed as the President and Chief Operating Officer of RAI.

         2.  Duties. Cohen shall report to and accept direction from the
Chairman of the Board of Directors of RAI and from the Board. Cohen shall serve
RAI diligently and to the best of his abilities, but Cohen shall be required to
devote only so much of his time and attention to the business of RAI as may be
required to fulfill his duties. It is recognized that Cohen in the past has
participated, and it is agreed that Cohen in the future may participate in
business endeavors separate and apart from RAI.

         3.  Term. Cohen's employment hereunder shall continue in full force and
effect for a period of three (3) years, unless sooner terminated in accordance
with the provisions hereof. Such term shall automatically extend so that on any
day that this Agreement is in effect, it shall have a then current term of three
(3) years. Such automatic extensions shall cease upon RAI's written notice to
Cohen of its election to terminate this Agreement at the end of the three (3)
year period then in effect.

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         4.  Compensation.

             (a) Base Compensation. During the period of employment, RAI shall
pay to Cohen "Base Compensation" to be established by the Board, initially in an
amount equal to Four Hundred Twenty-Five Thousand Dollars ($425,000.00) per
annum base compensation which Cohen, under existing arrangements approved by the
Board, is to receive during calendar 1999 (the "Initial Level"). The Base
Compensation will be payable in accordance with the general payroll practices by
which RAI pays its executive officers, and the historical practice of RAI's
compensation of Cohen. It is understood that RAI, through the compensation
committee of the Board, will review Cohen's performance on an annual basis and
increase or decrease (but in no event below the Initial Level) such Base
Compensation, based upon Cohen's performance.

             (b) Incentive Compensation. During the period of employment Cohen
may receive incentive compensation in the form of cash bonus payments, stock
option grants and other forms of incentive compensation, based upon Cohen's
performance.

             (c) Reimbursement of Expenses. RAI shall reimburse Cohen for all
reasonable expenses incurred by Cohen in the performance of his duties,
including (without limitation) expenses incurred during business-related travel.

         5.  Benefits.

             Cohen shall be entitled to receive the following benefits from RAI
independent of any other benefits which Cohen may receive from RAI or otherwise:

             (a) Participation in Benefit Plans. Cohen will participate in all
employee benefit plans in effect during the term of Cohen's employment
hereunder.

             (b) Temporary Disability. During any period that Cohen fails to
perform his duties hereunder as a result of incapacity due to physical or mental
illness Cohen shall continue to receive his full compensation at the rate then
in effect for such period until his employment is terminated pursuant to
paragraph 6(b) hereof.

         6.  Termination.

             Cohen's employment hereunder shall terminate as follows:

             (a) Death. Cohen's employment shall terminate automatically upon
the death of Cohen.

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             (b) Disability. RAI may terminate this Agreement if Cohen becomes
disabled by reason of any physical or mental disability whatsoever for more than
two hundred forty (240) days in the aggregate during any calendar year and the
Board determines, that Cohen, by reason of such physical or mental disability,
is rendered unable to perform his duties and services hereunder (a
"Disability");

             (c) Termination by Cohen for Cause. Cohen may terminate his
employment for cause upon thirty (30) days' prior written notice to RAI, with
opportunity to cure any condition reasonably susceptible of cure. For the
purposes of this paragraph 6(c), cause shall be deemed to exist if any of the
following shall occur: (i) without the written consent of Cohen, a substantial
change in the services or duties required of Cohen hereunder or the imposition
of any services or duties substantially inconsistent with, or in diminution of
Cohen's current position, services or duties, or status with RAI; (ii) failure
to continue Cohen's coverage under any RAI benefit plan as required under
paragraph 5(a) except pursuant to a change to a benefit plan that applies to
senior executives of RAI generally or is required by law or regulation; or (iii)
any material breach by RAI of any provision of this Agreement;

             (d) Termination by Cohen Without Cause. Cohen may terminate this
Agreement without cause upon one hundred eighty (180) days prior written notice
to RAI.

             (e) Change of Control. Cohen may, in his discretion, terminate his
employment upon a Change in Control or Potential Change in Control by sending a
Notice of Termination.

             (f) Termination by RAI. In accordance with paragraph 3 hereof, RAI
may terminate this Agreement at the end of the then current three (3) year term.

         7.  Effect of Termination.

             (a) Death. Upon the termination of Cohen's employment pursuant to
paragraph 6(a) hereof due to Cohen's death, a death benefit shall be paid to
Cohen's estate equal to the total amount payable to Cohen under this Agreement
until expiration of the term then in effect, assuming that Cohen's total
compensation for each year would be equal to the Average Compensation. The death
benefit shall be paid in thirty-six (36) equal, consecutive monthly
installments, beginning the first month following the month in which Cohen shall
have died.

             (b) Disability. Upon the termination of Cohen's employment pursuant
to paragraph 6(b) hereof due to Cohen's disability, Cohen shall be entitled to
receive a monthly disability benefit equal to one twelfth (1/12) of the product
of (i) the Average Compensation, multiplied by (ii) seventy-five percent (75%).
The disability benefit described above shall be paid to Cohen, beginning the
first month following the termination pursuant to paragraph 6(b). Cohen's

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disability benefit shall cease if he resumes his employment with RAI on the
terms provided in this Agreement. Disability payments made under this paragraph
shall not be reduced by any payments made directly to Cohen by an insurance
company.

             (c) For Cause; Change of Control. Upon the termination of this
Agreement either (i) by Cohen for cause pursuant to paragraph 6(c) hereof, (ii)
by Cohen pursuant to paragraph 6(e) after a Change in Control or Potential
Change of Control or (iii) by RAI pursuant to section 6(f) hereof, then RAI
shall provide to Cohen the benefits described in Section 7(c)(1) and 7(c)(2)
below (the "Severance Benefits").

                 (1) Lump-Sum Severance Payment. In lieu of any further
compensation payments to Cohen for periods subsequent to the Date of
Termination, RAI shall pay to Cohen a lump sum severance payment, in cash,
without discount, equal to the sum of the total amount payable to Cohen under
this Agreement until expiration of the term then in effect, assuming that
Cohen's total compensation for each year would be equal to the Average
Compensation.

                 (2) Continued Benefits. For a thirty-six (36) month period
after the Date of Termination (the "Benefits Period"), RAI shall provide Cohen
with group term life insurance, health insurance, accident and long-term
disability insurance benefits (collectively, "Welfare Benefits") substantially
similar in all respects to those that Cohen was receiving immediately prior to
the Date of Termination (without giving effect to any reduction in such benefits
subsequent to a Change in Control). During the Benefits Period, Cohen shall be
entitled to elect to change his level of coverage and/or his choice of coverage
options with respect to the Welfare Benefits to be provided by RAI to Cohen to
the same extent that actively employed senior executives of RAI are permitted to
make such changes.

                 (3) Vesting of Options. Upon any termination of this Agreement,
the vesting of all options to purchase securities of RAI granted to Cohen during
his employment with RAI shall be accelerated to the later of the effective date
of termination of this Agreement, or six months after the date such option was
granted, and any provision contained in the agreements under which such options
were granted that is inconsistent with such acceleration is hereby modified to
the extent necessary to provide for such acceleration; such acceleration shall
not apply to any option that by its terms would vest prior to the date provided
for in this paragraph 7(d).

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         8.  Gross-Up Payment.

             (a) In the event that (i) Cohen becomes entitled to any benefits or
payments in connection with the termination of Cohen's employment, whether
pursuant to the terms of this Agreement or otherwise, including without
limitation the Severance Benefits (collectively, the "Total Benefits"), and (ii)
any of the Total Benefits will be subject to the Excise Tax, RAI shall pay to
Cohen an additional amount (the "Gross-Up Payment") such that the net amount
retained by Cohen, after deduction of any Excise Tax on the Total Benefits and
any federal, state and local income taxes, Excise Tax, and FICA and Medicare
withholding taxes upon the payment provided for by this paragraph 8(a), shall be
equal to the Total Benefits. For purposes of determining whether any of the
Total Benefits will be subject to the Excise Tax and the amount of such Excise
Tax, the amount of the Total Benefits that shall be treated as subject to the
Excise Tax shall be equal to the amount of the Total Benefits reduced by the
amount of such Total Benefits that, in the opinion of tax counsel selected by
Cohen, at RAI's expense and reasonably acceptable to RAI ("Tax Counsel"), are
not excess parachute payments (within the meaning of Section 28OG(b)(1) of the
Code).

             (b) For purposes of this Section 8, Cohen shall be deemed to pay
federal income taxes at the highest marginal rate of federal income taxation in
the calendar year in which the Excise Tax is (or would be) payable and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of Cohen's residence on the Date of Termination, net of the reduction
in federal income taxes which could be obtained from deduction of such state and
local taxes (calculated by assuming that any reduction under Section 68 of the
Code in the amount of itemized deductions allowable to Cohen applies first to
reduce the amount of such state and local income taxes that would otherwise be
deductible by Cohen). Except as otherwise provided herein, all determinations
required to be made under this Section 8 shall be made by Tax Counsel.

             (c) In the event that the Excise Tax is subsequently determined to
be less than the amount taken into account hereunder at the time of termination
of Cohen's employment, Cohen shall repay to RAI, at the time that the amount of
such reduction in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax, federal, state and local income taxes
and FICA and Medicare withholding taxes imposed on the Gross-Up Payment being
repaid by Cohen to the extent that such repayment results in a reduction in
Excise Tax, FICA and Medicare withholding taxes and/or a federal, state or local
income tax deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder at the time of
the termination of Cohen's employment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-Up

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Payment), RAI shall make an additional Gross-Up Payment to Cohen in respect of
such excess (plus any interest, penalties or additions payable by Cohen with
respect to such excess) at the time that the amount of such excess is finally
determined.

         9.  Indemnification.

             (a) If Cohen is made a party or is threatened to be made a party to
or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (herein a "proceeding"), by reason of the fact
that he is or was an employee (which term includes officer, director, agent and
any other capacity) of RAI or is or was serving at the request of RAI as an
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as an employee or agent or in any other capacity while serving as an
employee or agent, Cohen shall be indemnified and held harmless by RAI to the
fullest extent authorized by applicable law, against all expense, liability and
loss (including, but not limited to, attorneys' fees, judgments, fines, ERISA
excise taxes and penalties and amounts paid or to be paid in settlement)
incurred or suffered by Cohen in connection therewith and such indemnification
shall continue as to Cohen after he has ceased to be a director, officer,
employee or agent and shall inure to the benefit of Cohen's heir, executors, and
administrators; provided, however, that RAI shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by Cohen (other than a proceeding to enforce this paragraph 9) only if
such proceeding (or part thereof) was authorized directly or indirectly by the
Board of RAI. The right to indemnification conferred in this paragraph shall be
a contract right and shall include the right to be, promptly upon request, paid
by RAI the expenses incurred in defending any such proceeding in advance of its
final disposition; provided, however, that if the Business Corporation Law of
the Commonwealth of Pennsylvania requires the payment of such expenses incurred
by an employee in his capacity as an employee (and not in any other capacity in
which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, payment shall be made only upon
delivery to RAI of an undertaking, by or on behalf of Cohen, to repay all
amounts so advanced if it shall ultimately be determined that such employee is
not entitled to be indemnified under this paragraph or otherwise.

             (b) The indemnification provided by this paragraph shall not be
limited or exclude any rights, indemnities or limitations of liability to which
Cohen may be entitled, whether as a matter of law, under the Certificate of
Incorporation, By-laws of RAI, by agreement, vote of the stockholders or
disinterested directors of RAI or otherwise.

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             (c) Cohen, in seeking indemnification under this Agreement (an
"Indemnitee"), shall give the other party or parties (the "Indemnitor") prompt
written notice of any claim, suit or demand that the Indemnitee believes will
give rise to indemnification under this Agreement; provided, however, that the
failure to give such notice shall not affect the liability of the Indemnitor
under this Agreement unless the failure to give such notice materially and
adversely affects the ability of the Indemnitor to defend itself against or to
cure or mitigate the damages. Except as hereinafter provided, the Indemnitor
shall have the right (without prejudice to the right of the Indemnitee to
participate at its expense through counsel of its own choosing) to defend and to
direct the defense against any such claim, suit or demand, at the Indemnitor's
expense and with counsel chosen jointly by Indemnitor and Indemnitee, and the
right to settle or compromise any such claim, suit or demand; provided, however,
that the Indemnitor shall not, without the Indemnitee's written consent, which
shall not be unreasonably withheld, settle or compromise any claim or consent to
any entry of judgment. The Indemnitee shall, at the Indemnitor's expense,
cooperate in the defense of any such claim, suit or demand. If the Indemnitor,
within a reasonable time after notice of a claim fails to defend the Indemnitee,
the Indemnitee shall be entitled to undertake the defense, compromise or
settlement of such claim at the expense of and for the account and risk of the
Indemnitor.

             (d) Cohen will be covered during the entire term of this Agreement
by Officer and Director liability insurance in amounts and on terms similar to
that afforded to other executives and/or directors of RAI or its affiliates,
which such insurance shall be paid by RAI.

         10. Payments. RAI will make payments to Cohen described in this
Agreement within ten (10) business days after receiving written notice from
Cohen describing such payment, referring to the provision of this Agreement
under which such payment is claimed and certifying that all conditions for such
payment, as set forth in this Agreement, have been satisfied. The information so
furnished to RAI by Cohen shall be presumed to be correct, subject to rebuttal
by RAI after making payment. Failure by RAI to timely make payments in
accordance herewith shall entitle Cohen to liquidated damages in an amount equal
to two times the amount of such payment. The entire amount due (i.e., the
payment plus the liquidated damages of two times such payment) shall accrue
interest at the rate of 15% per annum until paid. RAI shall also pay, on demand
Cohen's legal fees and expenses incurred in connection with enforcement of this
Agreement

         11. Definitions. Any terms not otherwise defined herein shall have the
following meaning:

                  (a) "Average Compensation" means the average of the three
highest amounts of annual total compensation received by Cohen during any of the
then current calendar year (on an annualized basis) and the then preceding eight
(8) calendar years.

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             (b) "Board" means the Board of Directors of RAI.

             (c) A "Change in Control" means the occurrence of any of the
following events:

                 (1) RAI's shareholders approve (or, in the event no approval of
RAI's shareholders is required, RAI consummates) a merger, consolidation, share
exchange, division or other reorganization or transaction of RAI (a "Fundamental
Transaction") with any other corporation, other than a Fundamental Transaction
which would result in the voting securities of RAI outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least sixty percent
(60%) of the combined voting power immediately after such Fundamental
Transaction of (i) RAI's outstanding securities, (ii) the surviving entity's
outstanding securities, or (iii) in the case of a division, the outstanding
securities of each entity resulting from the division;

                 (2) the shareholders of RAI approve a plan of complete,
liquidation or winding-up of RAI or an agreement for the sale or disposition (in
one transaction or a series of transactions) of all or substantially all of
RAI's assets; or

                 (3) during any period of twenty-four consecutive months,
individuals who at the beginning of such period constituted the Board (including
for this purpose any new director whose election or nomination for election by
RAI's shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board.

             (d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.

             (e) "Control Effort" means any acting together or undertaking
efforts to act together by any Person or Persons, excluding employee benefit
plans of RAI, who are, or seek in any direct or indirect manner to become, the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act
or any successor provisions thereto), directly or indirectly, of securities of
RAI representing twenty-five percent (25%) or more of the combined voting power
of RAI's then outstanding securities.

             (f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.

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             (g) "Excise Tax" means any excise tax imposed under Section 4999 of
the Code or a similar provision that may later be enacted.

             (h) "Notice of Termination" After a Potential Change in Control or
a Change in Control, Cohen may terminate this Agreement by sending a written
notice to RAI that shall (i) specify the date of termination (the "Date of
Termination") which shall not be more than sixty (60) days from the date such
Notice of Termination is given, (ii) indicate the specific provisions of this
Agreement that will apply upon such termination and (iii) set forth in
reasonable detail the facts and circumstances for the application of the
provisions indicated.

                  (i) "Person" shall have the meaning given in Section 3(a)(9)
of the Exchange Act and shall also include any syndicate or group deemed to be a
"person" under Section 13(d)(3) of the Exchange Act.

             (j) "Potential Change in Control" means the occurrence of any of
the following:

                 (1) the Board approves a transaction described in Subsection
(2) of the definition of Change in Control contained in paragraph 10(c) hereof;

                 (2) the commencement of a proxy or other contest or effort to
effectuate a Change in Control; or

                 (3) a Control Effort.

             (k) "RAI" means Resource America, Inc., a Delaware corporation and
any direct or indirect subsidiary of RAI by which Cohen is employed. References
to payments, benefits, privileges or other rights to be provided by RAI or such
subsidiary by which Cohen is employed, as the case may be, will correspond to
the corporate entity obligated to make payments or provide benefits, privileges
or other rights pursuant to employee benefit plans affected by the provisions
hereof, and in the absence of any such existing plans or provisions, such
reference shall be deemed to be to RAI. RAI shall also mean any successor by
merger or other business combination to more than one-half of the assets or
ownership of RAI.

         12. Miscellaneous.

             (a) Severability. In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect such validity, illegality or unenforceability shall
not affect any other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision(s) had never
been contained herein, provided that such invalid, illegal or unenforceable

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provision(s) shall first be curtailed, limited or eliminated only to the extent
necessary to remove such invalidity, illegality or unenforceability with respect
to the applicable law as it shall then be applied.

             (b) Modification of Agreement. This Agreement shall not be modified
by any oral agreement, either expressed or implied, and all modifications
thereof shall be in writing and signed by the parties hereto.

             (c) Waiver. The waiver of any right under this Agreement by any of
the parties hereto shall not be construed as a waiver of the same right at a
future time or as a waiver of any other rights under this Agreement.

             (d) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving affect to the principles of conflicts of laws.

             (e) Notices. Any notice to be given pursuant to this Agreement
shall be sufficient if in writing and mailed by certified or registered mail,
postage-prepaid, to the addresses listed below, or to such other address as
either party may notify the other of in accordance with this section.

             If to RAI:

             Resource America, Inc.
             1521 Locust Street
             Suite 400
             Philadelphia, PA  19102

             If to Cohen:

             Daniel G. Cohen
             1521 Locust Street; Ste. 400
             Philadelphia, PA 19102

             (f) Duplicate Originals and Counterparts. This Agreement may be
executed in any number of duplicate originals or counterparts or facsimile
counterparts, each of such duplicate original or counterpart or facsimile
counterpart shall be deemed to be an original and all taken together shall
constitute but one and the same instrument.

                           [INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement on the date first above written.

                                                 RESOURCE AMERICA, INC.

                                                 By:____________________________

                                                 DANIEL G. COHEN

                                                 _______________________________

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STATE OF PENNSYLVANIA      :
                           :
COUNTY OF PHILADELPHIA     :

         On this ___ day of October, 1999, before me, the undersigned, a Notary
Public in and for said state personally appeared Edward E. Cohen and Daniel G.
Cohen, on behalf of Resource America, Inc., a Delaware corporation, known to me
or proved to me to be the persons who executed the within instrument of behalf
of said corporation and acknowledged to me that they executed the same for the
purposes therein stated.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year last above written.

                                            ____________________________________
                                                        Notary Public

My Commission Expires:<PAGE>

                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is executed on this ____ day of
October, 1999 by and between RESOURCE AMERICA, INC., a Delaware corporation
having its principal place of business at 1521 Locust Street, Philadelphia,
Pennsylvania 19102 ("RAI") and STEVEN J. KESSLER ("Kessler").

                                   BACKGROUND

         A. Since 1997, Kessler has been an officer of RAI and currently he
serves as the Senior Vice President and Chief Financial Officer of RAI.

         B. Kessler and RAI desire to formally set forth the terms, conditions
and agreements regarding Kessler's employment as Senior Vice President and Chief
Financial Officer of RAI.

                                      TERMS

         NOW, THEREFORE, in consideration of the mutual promises set forth
herein, and intending to be legally bound hereby, RAI and Kessler agree as
follows:

         1.  Employment. During the term of this Agreement, Kessler shall be
employed as the Senior Vice President and Chief Financial Officer of RAI.

         2.  Duties. Kessler shall report to and accept direction from the
Chairman of the Board of Directors of RAI and from the Board. Kessler shall
serve RAI diligently and to the best of his abilities.

         3.  Term. Kessler's employment hereunder shall continue in full force
and effect for a period of three (3) years, unless sooner terminated in
accordance with the provisions hereof. Such term shall automatically extend so
that on any day that this Agreement is in effect, it shall have a then current
term of three (3) years. Such automatic extensions shall cease upon RAI's
written notice to Kessler of its election to terminate this Agreement at the end
of the three (3) year period then in effect.

         4.  Compensation.

             (a) Base Compensation. During the period of employment, RAI shall
pay to Kessler "Base Compensation" to be established by the Board, initially in
an amount equal to Three Hundred Thousand Dollars ($300,000.00) per annum base
compensation which Kessler, under existing arrangements approved by the Board,
is to receive during calendar 1999 (the "Initial Level"). The Base Compensation
will be payable in accordance with the general payroll practices by which RAI
pays its executive officers, and the historical practice of RAI's compensation
of Kessler. It is understood that RAI, through the compensation committee of the

<PAGE>

Board, will review Kessler's performance on an annual basis and increase or
decrease (but in no event below the Initial Level) such Base Compensation, based
upon Kessler's performance.

             (b) Incentive Compensation. During the period of employment Kessler
may receive incentive compensation in the form of cash bonus payments, stock
option grants and other forms of incentive compensation, based upon Kessler's
performance.

             (c) Reimbursement of Expenses. RAI shall reimburse Kessler for all
reasonable expenses incurred by Kessler in the performance of his duties,
including (without limitation) expenses incurred during business-related travel.

         5.  Benefits.

             Kessler shall be entitled to receive the following benefits from
RAI independent of any other benefits which Kessler may receive from RAI or
otherwise:

             (a) Participation in Benefit Plans. Kessler will participate in all
employee benefit plans in effect during the term of Kessler's employment
hereunder.

             (b) Temporary Disability. During any period that Kessler fails to
perform his duties hereunder as a result of incapacity due to physical or mental
illness Kessler shall continue to receive his full compensation at the rate then
in effect for such period until his employment is terminated pursuant to
paragraph 6(b) hereof.

         6.  Termination.

             Kessler's employment hereunder shall terminate as follows:

             (a) Death. Kessler's employment shall terminate automatically upon
the death of Kessler.

             (b) Disability. RAI may terminate this Agreement if Kessler becomes
disabled by reason of any physical or mental disability whatsoever for more than
two hundred forty (240) days in the aggregate during any calendar year and the
Board determines, that Kessler, by reason of such physical or mental disability,
is rendered unable to perform his duties and services hereunder (a
"Disability");

             (c) Termination by Kessler for Cause. Kessler may terminate his
employment for cause upon thirty (30) days' prior written notice to RAI, with
opportunity to cure any condition reasonably susceptible of cure. For the
purposes of this paragraph 6(c), cause shall be deemed to exist if any of the
following shall occur: (i) without the written consent of Kessler, a substantial
change in the services or duties required of Kessler hereunder or the imposition

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of any services or duties substantially inconsistent with, or in diminution of
Kessler's current position, services or duties, or status with RAI; (ii) failure
to continue Kessler's coverage under any RAI benefit plan as required under
paragraph 5(a) except pursuant to a change to a benefit plan that applies to
senior executives of RAI generally or is required by law or regulation; or (iii)
any material breach by RAI of any provision of this Agreement;

             (d) Termination by Kessler Without Cause. Kessler may terminate
this Agreement without cause upon one hundred eighty (180) days prior written
notice to RAI.

             (e) Change of Control. Kessler may, in his discretion, terminate
his employment upon a Change in Control by sending a Notice of Termination.

             (f) Termination by RAI. In accordance with paragraph 3 hereof, RAI
may terminate this Agreement at the end of the then current three (3) year term.

         7.  Effect of Termination.

             (a) Death. Upon the termination of Kessler's employment pursuant to
paragraph 6(a) hereof due to Kessler's death, a death benefit shall be paid to
Kessler's estate equal to the total amount payable to Kessler under this
Agreement until expiration of the term then in effect, assuming that Kessler's
total compensation for each year would be equal to the Average Compensation. The
death benefit shall be paid in thirty-six (36) equal, consecutive monthly
installments, beginning the first month following the month in which Kessler
shall have died.

             (b) Disability. Upon the termination of Kessler's employment
pursuant to paragraph 6(b) hereof due to Kessler's disability, Kessler shall be
entitled to receive a monthly disability benefit equal to one twelfth (1/12) of
the product of (i) the Average Compensation, multiplied by (ii) seventy-five
percent (75%). The disability benefit described above shall be paid to Kessler,
beginning the first month following the termination pursuant to paragraph 6(b).
Kessler's disability benefit shall cease if he resumes his employment with RAI
on the terms provided in this Agreement. Disability payments made under this
paragraph shall not be reduced by any payments made directly to Kessler by an
insurance company.

             (c) For Cause; Change of Control. Upon the termination of this
Agreement either (i) by Kessler for cause pursuant to paragraph 6(c) hereof,
(ii) by Kessler pursuant to paragraph 6(e) after a Change in Control or (iii) by
RAI pursuant to section 6(f) hereof, then RAI shall provide to Kessler the
benefits described in Section 7(c)(1) and 7(c)(2) below (the "Severance
Benefits").

                                       3
<PAGE>

                 (1) Lump-Sum Severance Payment. In lieu of any further
compensation payments to Kessler for periods subsequent to the Date of
Termination, RAI shall pay to Kessler a lump sum severance payment, in cash,
without discount, equal to the sum of the total amount payable to Kessler under
this Agreement until expiration of the term then in effect, assuming that
Kessler's total compensation for each year would be equal to the Average
Compensation.

                 (2) Continued Benefits. For a thirty-six (36) month period
after the Date of Termination (the "Benefits Period"), RAI shall provide Kessler
with group term life insurance, health insurance, accident and long-term
disability insurance benefits (collectively, "Welfare Benefits") substantially
similar in all respects to those that Kessler was receiving immediately prior to
the Date of Termination (without giving effect to any reduction in such benefits
subsequent to a Change in Control). During the Benefits Period, Kessler shall be
entitled to elect to change his level of coverage and/or his choice of coverage
options with respect to the Welfare Benefits to be provided by RAI to Kessler to
the same extent that actively employed senior executives of RAI are permitted to
make such changes.

                 (3) Vesting of Options. Upon any termination of this Agreement,
the vesting of all options to purchase securities of RAI granted to Kessler
during his employment with RAI shall be accelerated to the later of the
effective date of termination of this Agreement, or six months after the date
such option was granted, and any provision contained in the agreements under
which such options were granted that is inconsistent with such acceleration is
hereby modified to the extent necessary to provide for such acceleration; such
acceleration shall not apply to any option that by its terms would vest prior to
the date provided for in this paragraph 7(d).

                                       4
<PAGE>

         8.  Gross-Up Payment.

             (a) In the event that (i) Kessler becomes entitled to any benefits
or payments in connection with the termination of Kessler's employment, whether
pursuant to the terms of this Agreement or otherwise, including without
limitation the Severance Benefits (collectively, the "Total Benefits"), and (ii)
any of the Total Benefits will be subject to the Excise Tax, RAI shall pay to
Kessler an additional amount (the "Gross-Up Payment") such that the net amount
retained by Kessler, after deduction of any Excise Tax on the Total Benefits and
any federal, state and local income taxes, Excise Tax, and FICA and Medicare
withholding taxes upon the payment provided for by this paragraph 8(a), shall be
equal to the Total Benefits. For purposes of determining whether any of the
Total Benefits will be subject to the Excise Tax and the amount of such Excise
Tax, the amount of the Total Benefits that shall be treated as subject to the
Excise Tax shall be equal to the amount of the Total Benefits reduced by the
amount of such Total Benefits that, in the opinion of tax counsel selected by
Kessler, at RAI's expense and reasonably acceptable to RAI ("Tax Counsel"), are
not excess parachute payments (within the meaning of Section 28OG(b)(1) of the
Code).

             (b) For purposes of this Section 8, Kessler shall be deemed to pay
federal income taxes at the highest marginal rate of federal income taxation in
the calendar year in which the Excise Tax is (or would be) payable and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of Kessler's residence on the Date of Termination, net of the reduction
in federal income taxes which could be obtained from deduction of such state and
local taxes (calculated by assuming that any reduction under Section 68 of the
Code in the amount of itemized deductions allowable to Kessler applies first to
reduce the amount of such state and local income taxes that would otherwise be
deductible by Kessler). Except as otherwise provided herein, all determinations
required to be made under this Section 8 shall be made by Tax Counsel.

             (c) In the event that the Excise Tax is subsequently determined to
be less than the amount taken into account hereunder at the time of termination
of Kessler's employment, Kessler shall repay to RAI, at the time that the amount
of such reduction in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax, federal, state and local income
taxes and FICA and Medicare withholding taxes imposed on the Gross-Up Payment
being repaid by Kessler to the extent that such repayment results in a reduction
in Excise Tax, FICA and Medicare withholding taxes and/or a federal, state or
local income tax deduction) plus interest on the amount of such repayment at the
rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the time
of the termination of Kessler's employment (including by reason of any payment
the existence or amount of which cannot be determined at the time of the

                                       5
<PAGE>

Gross-Up Payment), RAI shall make an additional Gross-Up Payment to Kessler in
respect of such excess (plus any interest, penalties or additions payable by
Kessler with respect to such excess) at the time that the amount of such excess
is finally determined.

         9.  Indemnification.

             (a) If Kessler is made a party or is threatened to be made a party
to or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (herein a "proceeding"), by reason of the fact
that he is or was an employee (which term includes officer, director, agent and
any other capacity) of RAI or is or was serving at the request of RAI as an
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as an employee or agent or in any other capacity while serving as an
employee or agent, Kessler shall be indemnified and held harmless by RAI to the
fullest extent authorized by applicable law, against all expense, liability and
loss (including, but not limited to, attorneys' fees, judgments, fines, ERISA
excise taxes and penalties and amounts paid or to be paid in settlement)
incurred or suffered by Kessler in connection therewith and such indemnification
shall continue as to Kessler after he has ceased to be a director, officer,
employee or agent and shall inure to the benefit of Kessler's heir, executors,
and administrators; provided, however, that RAI shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by Kessler (other than a proceeding to enforce this paragraph 9) only
if such proceeding (or part thereof) was authorized directly or indirectly by
the Board of RAI. The right to indemnification conferred in this paragraph shall
be a contract right and shall include the right to be, promptly upon request,
paid by RAI the expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that if the Business Corporation Law
of the Commonwealth of Pennsylvania requires the payment of such expenses
incurred by an employee in his capacity as an employee (and not in any other
capacity in which service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, payment shall be made only
upon delivery to RAI of an undertaking, by or on behalf of Kessler, to repay all
amounts so advanced if it shall ultimately be determined that such employee is
not entitled to be indemnified under this paragraph or otherwise.

             (b) The indemnification provided by this paragraph shall not be
limited or exclude any rights, indemnities or limitations of liability to which
Kessler may be entitled, whether as a matter of law, under the Certificate of
Incorporation, By-laws of RAI, by agreement, vote of the stockholders or
disinterested directors of RAI or otherwise.

                                       6
<PAGE>

             (c) Kessler, in seeking indemnification under this Agreement (an
"Indemnitee"), shall give the other party or parties (the "Indemnitor") prompt
written notice of any claim, suit or demand that the Indemnitee believes will
give rise to indemnification under this Agreement; provided, however, that the
failure to give such notice shall not affect the liability of the Indemnitor
under this Agreement unless the failure to give such notice materially and
adversely affects the ability of the Indemnitor to defend itself against or to
cure or mitigate the damages. Except as hereinafter provided, the Indemnitor
shall have the right (without prejudice to the right of the Indemnitee to
participate at its expense through counsel of its own choosing) to defend and to
direct the defense against any such claim, suit or demand, at the Indemnitor's
expense and with counsel chosen jointly by Indemnitor and Indemnitee, and the
right to settle or compromise any such claim, suit or demand; provided, however,
that the Indemnitor shall not, without the Indemnitee's written consent, which
shall not be unreasonably withheld, settle or compromise any claim or consent to
any entry of judgment. The Indemnitee shall, at the Indemnitor's expense,
cooperate in the defense of any such claim, suit or demand. If the Indemnitor,
within a reasonable time after notice of a claim fails to defend the Indemnitee,
the Indemnitee shall be entitled to undertake the defense, compromise or
settlement of such claim at the expense of and for the account and risk of the
Indemnitor.

             (d) Kessler will be covered during the entire term of this
Agreement by Officer and Director liability insurance in amounts and on terms
similar to that afforded to other executives and/or directors of RAI or its
affiliates, which such insurance shall be paid by RAI.

         10. Definitions. Any terms not otherwise defined herein shall have the
following meaning:

             (a) "Average Compensation" means the average of the three highest
amounts of annual total compensation received by Kessler during any of the then
current calendar year (on an annualized basis) and the then preceding eight (8)
calendar years.

             (b) "Board" means the Board of Directors of RAI.

             (c) A "Change in Control" means the occurrence of any of the
following events:

                 (1) RAI's shareholders approve (or, in the event no approval of
RAI's shareholders is required, RAI consummates) a merger, consolidation, share
exchange, division or other reorganization or transaction of RAI (a "Fundamental
Transaction") with any other corporation, other than a Fundamental Transaction
which would result in the voting securities of RAI outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being

                                       7
<PAGE>

converted into voting securities of the surviving entity) at least sixty percent
(60%) of the combined voting power immediately after such Fundamental
Transaction of (i) RAI's outstanding securities, (ii) the surviving entity's
outstanding securities, or (iii) in the case of a division, the outstanding
securities of each entity resulting from the division;

                 (2) the shareholders of RAI approve a plan of complete,
liquidation or winding-up of RAI or an agreement for the sale or disposition (in
one transaction or a series of transactions) of all or substantially all of
RAI's assets;

                 (3) during any period of twenty-four consecutive months,
individuals who at the beginning of such period constituted the Board (including
for this purpose any new director whose election or nomination for election by
RAI's shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board; or

                 (4) the commencement of a proxy or other contest or effort to
effectuate the events set forth in the foregoing subparagraphs (c)(1), (2) or
(3) above.

             (d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.

             (e) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.

             (f) "Excise Tax" means any excise tax imposed under Section 4999 of
the Code or a similar provision that may later be enacted.

             (g) "Notice of Termination" After a Change in Control, Kessler may
terminate this Agreement by sending a written notice to RAI that shall (i)
specify the date of termination (the "Date of Termination") which shall not be
more than sixty (60) days from the date such Notice of Termination is given,
(ii) indicate the specific provisions of this Agreement that will apply upon
such termination and (iii) set forth in reasonable detail the facts and
circumstances for the application of the provisions indicated.

             (h) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act and shall also include any syndicate or group deemed to be a
"person" under Section 13(d)(3) of the Exchange Act.

             (i) "RAI" means Resource America, Inc., a Delaware corporation and
any direct or indirect subsidiary of RAI by which Kessler is employed.

                                       8
<PAGE>

References to payments, benefits, privileges or other rights to be provided by
RAI or such subsidiary by which Kessler is employed, as the case may be, will
correspond to the corporate entity obligated to make payments or provide
benefits, privileges or other rights pursuant to employee benefit plans affected
by the provisions hereof, and in the absence of any such existing plans or
provisions, such reference shall be deemed to be to RAI. RAI shall also mean any
successor by merger or other business combination to more than one-half of the
assets or ownership of RAI.

         11. Miscellaneous.

             (a) Severability. In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect such validity, illegality or unenforceability shall
not affect any other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision(s) had never
been contained herein, provided that such invalid, illegal or unenforceable
provision(s) shall first be curtailed, limited or eliminated only to the extent
necessary to remove such invalidity, illegality or unenforceability with respect
to the applicable law as it shall then be applied.

             (b) Modification of Agreement. This Agreement shall not be modified
by any oral agreement, either expressed or implied, and all modifications
thereof shall be in writing and signed by the parties hereto.

             (c) Waiver. The waiver of any right under this Agreement by any of
the parties hereto shall not be construed as a waiver of the same right at a
future time or as a waiver of any other rights under this Agreement.

             (d) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving affect to the principles of conflicts of laws.

             (e) Notices. Any notice to be given pursuant to this Agreement
shall be sufficient if in writing and mailed by certified or registered mail,
postage-prepaid, to the addresses listed below, or to such other address as
either party may notify the other of in accordance with this section.

             If to RAI:

             Resource America, Inc.
             1521 Locust Street
             Suite 400
             Philadelphia, PA  19102

                                       10
<PAGE>

             If to Kessler:

             Steven J. Kessler
             1521 Locust Street; Ste. 400
             Philadelphia, PA 19102

             (f) Duplicate Originals and Counterparts. This Agreement may be
executed in any number of duplicate originals or counterparts or facsimile
counterparts, each of such duplicate original or counterpart or facsimile
counterpart shall be deemed to be an original and all taken together shall
constitute but one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement on October ___, 1999.

                                                 RESOURCE AMERICA, INC.

                                                 By:____________________________

                                                 STEVEN J. KESSLER

                                                 _______________________________

                                       11

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