Related Party Transactions and Outside Related Director Information

Spirit Finance Corporation (SFC)

3/21/2006 Proxy Information

From time to time our senior management may be presented with various real estate investment opportunities related to our business. In order to mitigate potential conflicts, if one of our affiliates has an investment opportunity that fits within our real estate investment objectives and a majority of our independent directors determines that it is in our best interests, we will not permit our affiliates to make that investment. Our affiliates generally consist of our directors, our officers, our employees, Spirit Finance Holdings, LLC, Fleischer Ranches, LLC, any entity controlled by these individuals or entities and any entity or person that becomes affiliated with us in the future. Generally, we will permit our affiliates to make these real estate investments if:

the real estate investment does not fit our investment objectives;

the investment would create too great a concentration of our real estate investments in a single tenant, a single type of tenant, a particular geographic area, a particular property or a particular property type;

the investment would cause us, or would potentially cause us, to fail to qualify as a REIT;

the investment would require us to incur debt greater than our targeted leverage ratio; or

a majority of our independent directors determines that the investment is not an appropriate real estate investment for us for any other reason.

Spirit Finance purchased four Flying J interstate travel plaza facilities for approximately $37,500,000 in December 2003. The properties were leased back to the seller under an operating lease; rental revenues totaled $3,598,000 in 2005, $3,556,000 in 2004 and $96,000 in 2003 under this lease. Mr. Morton Fleischer, our Chief Executive Officer until September 2005, and the Company's Chairman of the Board, is a member of the board of directors of Flying J.

One of the Company's independent directors, Jim Parish, was a member of the board of directors of Taco Bueno, Inc. from 2001 until July, 2005. Taco Bueno, Inc. is a customer operating the underlying properties that secure approximately $23,280,000 of our real estate and mortgage loan investments held at December 31, 2005. Interest income on the mortgage loans receivable and rental revenue on the lease aggregated $2,204,000 in 2005, $2,012,000 in 2004 and $46,000 in 2003.